<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[_] Confidential, for Use of Commission Only (as permitted by rule 14a-6(e)(2))
Citizens Holding Company
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required pursuant to Exchange Act Rule 14a-6(i)(2)
[_] $125 per Exchange Act Rules 0.11(c)(1))(ii), 14a-6(i)(I), 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
CITIZENS HOLDING COMPANY
521 Main Street
Philadelphia, Mississippi 39350
March 24, 2000
Dear Fellow Shareholder:
On behalf of the Board of Directors, we cordially invite you to attend the
2000 Annual Meeting of shareholders of Citizens Holding Company. The Annual
Meeting will be held beginning at 3:30 p.m. local time, on Tuesday, April 25,
2000, at the Main Office of The Citizens Bank of Philadelphia, 521 Main Street,
Philadelphia, Mississippi 39350. The formal notice of the Annual Meeting appears
on the next page.
Enclosed is our proxy statement for the 2000 Annual Meeting in which we
seek your support for the election of three directors and the approval and
ratification of the Company's independent auditors for the fiscal year ending
December 31, 2000. For a detailed discussion of these proposals, you are urged
to review the material in the enclosed proxy statement.
We urge you to review this proxy statement and each of the proposals
carefully. Regardless of the number of shares you own, it is important that your
views be represented whether or not you are able to be present at the Annual
Meeting. Please take a moment now to sign, date and mail the enclosed proxy card
in the postage prepaid envelope. Your Board of Directors recommends a vote "FOR"
each proposal.
We are gratified by our shareholders' continued interest in Citizens
Holding Company and pleased that in the past so many of you have voted your
shares either in person or by proxy. We hope that you will continue to do so and
again urge you to return your proxy card as soon as possible.
Sincerely,
/s/ Steve Webb
Chairman, President and
Chief Executive Officer
<PAGE>
CITIZENS HOLDING COMPANY
521 Main Street
Philadelphia, Mississippi 39350
___________
Notice of Annual Meeting of Shareholders
to be held on Tuesday, April 25, 2000
___________
Notice is hereby given that the Annual Meeting of shareholders of Citizens
Holding Company will be held at the Main Office of The Citizens Bank of
Philadelphia, 521 Main Street, Philadelphia, Mississippi 39350, on Tuesday,
April 25, 2000, at 3:30 p.m. local time, for the following purposes:
(1) To elect three Class I Directors to serve until the expiration of the
applicable three year term or until their successors are elected and
qualified.
(2) To consider and act upon a proposal to ratify and approve the
selection of Horne CPA Group as the Company's independent auditors for
the fiscal year ending December 31, 2000.
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on Friday, March 17,
2000, as the record date for the determination of the shareholders entitled to
notice of and to vote at the Annual Meeting.
Your attention is directed to and you are encouraged to carefully read the
proxy statement accompanying this Notice of Annual Meeting for a more complete
description of the proposals to be presented and acted upon at the Annual
Meeting.
The Board of Directors has unanimously approved all of the foregoing
proposals and recommends that the shareholders vote "FOR" each of the proposals.
Proxies solicited by the Company will be voted "FOR" each of the proposals
unless a vote against, or an abstention from, one or more of the proposals is
specifically indicated on the proxy card.
Your participation in the Annual Meeting is important. Regardless of
whether you plan to attend the Annual Meeting, please sign and date the enclosed
proxy card and return it in the envelope provided as promptly as possible. A
proxy may be revoked at any time before it is voted at the Annual Meeting, as
more completely described in the accompanying proxy statement.
By Order of the Board of Directors
/s/ Carolyn K. McKee, Secretary
Philadelphia, Mississippi
March 24, 2000
<PAGE>
CITIZENS HOLDING COMPANY
_________________
PROXY STATEMENT
_________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 25, 2000
This Proxy Statement is furnished to the shareholders of Citizens Holding
Company in connection with the solicitation of proxies by the Board of Directors
of the Company, for use at the Annual Meeting of Shareholders to be held at 3:30
p.m. local time on Tuesday, April 25, 2000, at the Main Office of The Citizens
Bank of Philadelphia, 521 Main Street, Philadelphia, Mississippi 39350, and any
adjournments or postponements. This proxy statement, the attached proxy card and
the Notice of Annual Meeting were mailed to shareholders beginning March 24,
2000.
Throughout this Proxy Statement, Citizens Holding Company will be referred
to as the Company while The Citizens Bank of Philadelphia will be referred to as
the Bank. Additionally, references to the Board or the Board of Directors will
mean the Board of Directors of the Company unless specifically stated otherwise.
Any reference to the Annual Meeting will be a reference to the annual meeting of
the shareholders to be held on April 25, 2000.
The purpose of the Annual Meeting is:
(1) To elect three Class I Directors to serve until the expiration of the
applicable three year term or until their successors are elected and
qualified.
(2) To consider and act upon a proposal to ratify and approve the
selection of Horne CPA Group as the Company's independent auditors for
the fiscal year ending December 31, 2000.
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The proposals set forth in clauses (1) and (2) above are sometimes referred
to herein collectively as the "Proposals."
The Board of Directors has fixed the close of business on Friday, March 17,
2000, as the record date for the Annual Meeting. Only shareholders of record at
the close of business on that date will be entitled to notice of and to vote at
the Annual Meeting. On March 24, 2000, the Company's only outstanding class of
securities was its common stock, $.20 par value per share. The Company's common
stock will be referred to throughout this Proxy Statement as the "Common Stock."
As of March 17, 2000, the Company had 15,000,000 shares authorized of which
3,308,750 shares of Common Stock are issued and outstanding.
<PAGE>
Proxy Procedure
The Board of Directors solicits proxies so that each shareholder has the
opportunity to vote on the Proposals. When a proxy card is returned properly
signed and dated by a shareholder, the shares represented thereby will be voted
in accordance with the instructions on the proxy card. If a shareholder attends
the Annual Meeting, he or she may vote by ballot. If a shareholder neither
returns a signed proxy card nor attends the Annual Meeting and votes in person,
his or her shares will not be voted.
If a shareholder returns a properly signed and dated proxy card but does
not mark the boxes located on the card, the shares represented by that proxy
card will be voted "FOR" each of the Proposals. Otherwise, the signed proxy card
will be voted as indicated on the card. The proxy card also gives the
individuals named as proxies discretionary authority to vote the shares
represented on any other matter that is properly presented for action at the
Annual Meeting. A shareholder may revoke his or her proxy at any time before it
is voted by (i) giving notice in writing to the Secretary of the Company; (ii)
granting a subsequent proxy; or (iii) appearing in person and voting at the
Annual Meeting.
Voting Procedures
A majority of the votes entitled to be cast at the Annual Meeting
constitute a quorum. A share, once represented for any purpose at the Annual
Meeting, is deemed present for purposes of determining a quorum for the
remainder of the Annual Meeting and for any adjournment of the Annual Meeting,
unless a new record date is set for the adjourned meeting. This is true even if
the holder of the share abstains from voting with respect to any matter brought
before the Annual Meeting.
Shareholders will be entitled to one (1) vote for each share held, which
may be given in person or by proxy authorized in writing, except that
shareholders may cumulate their votes in the election of directors. Cumulative
voting entitles a shareholder to give one candidate a number of votes equal to
the number of directors to be elected, multiplied by the number of shares held
by that shareholder, or to distribute the total votes, computed on the same
principle, among as many candidates as the shareholder chooses. For example, if
the number of directors to be elected is three (3), a shareholder owning ten
(10) shares may cast ten (10) votes for each of three (3) nominees, cast thirty
(30) votes for one (1) nominee, or allocate the thirty (30) votes among several
nominees. The candidates receiving the highest number of votes cast, up to the
number of directors to be elected, will be elected.
With respect to all matters brought before the Annual Meeting, other than
the election of Directors, each Proposal or other matter will be approved if the
votes cast favoring the Proposal or other matters exceed the votes cast opposing
the Proposal or other matter. Abstentions and broker non-votes are counted as
present only for purposes of determining whether a quorum is present at the
meeting; abstentions and broker non-votes are not counted for purposes of the
election of Directors.
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PROPOSAL I:
ELECTION OF CLASS I DIRECTORS
-----------------------------
Effective as of the 1999 Annual Meeting, the Board of Directors is divided
into three approximately equal classes with members of each class elected for
three year terms. Class I and Class II each consist of three directors and Class
III consists of four directors. This year, you are being asked to elect three
Class I directors. The original term of the Class I Directors was for an initial
period of one year and is therefore due to expire at this Annual Meeting. This
Annual Meeting, all future Class I directors will be elected to serve three year
terms. The Board has nominated Don L. Fulton, Herbert A. King and David P. Webb
for election as Class I Directors to serve until the 2003 annual meeting or
until their successors are duly elected and qualified. All three of the Director
nominees are currently Directors of the Company.
Unless authority is expressly withheld on the proxy card, the proxy holders
will vote the proxies received by them for the three nominees listed above,
while reserving the right, however, to cumulate their votes and distribute them
among the nominees, in their discretion. If, for any reason, one or more of the
nominees named above should not be available as a candidate for Director, an
event that the Board of Directors does not anticipate, the proxy holders will
vote for such other candidate or candidates as may be nominated by the Board of
Directors and discretionary authority to do so is included in the proxy card. If
shareholders attending the Annual Meeting accumulate their votes such that all
of the nominees above cannot be elected, then the official proxy holders will
accumulate votes to elect as many of the nominees listed above as possible.
Nominees (Class I Directors)
Don L. Fulton, age 53, residing at 207 Woodbriar Lane, Philadelphia, MS 39350.
Board member since 1994. President and General Manager, Nemanco, Inc.
Herbert A. King, age 47, residing at 101 Little John Lane, Starkville, MS 39759.
Board member since 1997. Engineer, King Engineering, Inc.
David P. Webb, age 40, residing at 613 Inglenook Court, Madison, MS 39110. Board
member since 1998. Attorney, Phelps Dunbar, L.L.P.
Continuing Directors (Class II and Class III Directors)
M. G. Bond, age 67, residing at 412 Saint Matthew St., Carthage, MS 39051. Board
member since 1986. Retired, Mississippi State Senator.
Karl Brantley, age 63, residing at #1 Brantley Ave., Madden, MS 39109. Board
member since 1992. Plant Manager, U. S. Electrical Motors
David A. King, age 45, residing at 1006 Edgewater Drive, Philadelphia, MS 39350.
Board member since 1997. Proprietor, Philadelphia Motor Company.
3
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George R. Mars, age 60, residing at 304 Azalea Drive, Philadelphia, MS 39350.
Board member since 1977/(1)/. Retired Proprietor, Mars Department Store.
William M. Mars, age 62, residing at Route 1, Box 204, Philadelphia, MS 39350.
Board member since 1977/(1)/. Attorney, Mars, Mars & Mars, Attorneys.
Willis W. Dungan, age 66, residing at P.O. Box 686, Philadelphia, MS 39350.
Board member since 1981/(1)/. Partner, McDaniel Timber Company.
Steve Webb, age 67, residing at 534 Poplar Ave., Philadelphia, MS 39350. Board
member since 1970/(1)/. Chairman, President and CEO, Citizens Holding Company
and The Citizens Bank of Philadelphia.
/(1)/ This is the year the Director was elected to the Board of Directors of The
Citizens Bank of Philadelphia. These Directors were all elected to the
Board of Citizens Holding Company at the time it was formed in 1982.
Meetings and Committees of the Board of Directors
The Board meets monthly, generally in a joint session with the Board of
Directors of the Bank. During the fiscal year ended December 31, 1999, the Board
met thirteen times. There were twelve regular monthly meetings and one special
meeting. Each director attended at least 75% of all meetings held by the Board
and the committees on which he served.
The Board has established jointly with the Bank, various committees,
including the Audit Committee, the Trust Committee, Directors Deferred Fee Plan
Administrative Committee, and the Directors Loan Committee. These committees
meet monthly and at call, except that the Directors Deferred Fee Plan Committee
and the Audit Committee meet at least annually and at call. The reports and
minutes of the committees are received and considered by the Board at its
regular meetings.
Karl Brantley, David P. Webb, and Herbert A. King are members of the Audit
Committee. No member of the Audit Committee is an employee of either the Company
or the Bank. The Audit Committee is responsible for the engagement of
independent auditors, review of audit fees, supervision of matters relating to
audit functions, review and establishment of internal policies and procedures
regarding audits, accounting and other financial controls, and reviewing related
party transactions. During 1999, the Audit Committee held one meeting.
The Trust Committee exercises general oversight of the Trust activities of
the Bank.
The Loan Committee oversees the lending and credit functions of the
Company's banking subsidiary. The Committee's responsibilities include, among
other things to (i) review and approve the overall credit policies and
procedures of the Bank; (ii) review and approve the lending authorities and
exceptions; and (iii) review and approve the policy and methodology for the
reserve for possible loan losses and certain aspects of the Bank's strategic
plans.
4
<PAGE>
The Directors' Deferred Compensation Plan Committee exercises general
oversight of the Directors' Deferred Compensation Plan for the Company.
The Board has not formally established either a compensation or a
nominating committee; however, the full Board generally performs the functions
of these committees. The Board, among other things, (i) approves remuneration
arrangements for executive officers of the Company, (ii) reviews compensation
plans relating to Executive Officers and Directors, (iii) determines other
benefits under the Company's compensation plans, and (iv) performs general
reviews of the Company's employees' compensation policies. Any Director who also
serves as an Executive Officer of the Company and the Bank does not participate
in any Board determination regarding salaries for and other compensation to
Executive Officers.
Compensation of Directors
During 1999, all Directors of the Company received a $775 monthly retainer
plus an additional $125 for each Board meeting attended. Directors that serve on
the Loan Committee received an additional $50 per month.
Eight of the current Directors and one retired Director participate in the
Citizens Holding Company Deferred Compensation Plan that was established in June
1986. The Plan provides that a Director may defer a portion of his monthly
retainer fee for ten years in return for a benefit to be paid when he attains
the retirement age of 70. After the ten-year deferral period, the Director
resumes receiving his full fee. The deferral amount is increased each year by a
percentage of the Moody's Average Corporate Bond Rate for the month of October
of that year. Four Directors, (Messrs. S. Webb, W. Dungan, G. Mars and M.G.
Bond) receive a rate of 130% of the Moody's rate and four Directors (D. King, H.
King, K. Brantley and D. Fulton) receive a rate of 100% of the Moody's rate. Due
to his age at the time of acceptance into the Plan, Allan King's benefits are
defined and are not subject to the increases in the Moody's rate. The Moody's
Average Corporate Bond Rate for October 1999 was 7.93%. To fund the Plan, the
Company purchased individual life insurance policies for each of the
participants.
Directors' Stock Compensation Plan
The Citizens Holding Company Directors' Stock Compensation Plan, which will
be referred to herein as the "Directors' Plan," effective as of January 1, 1999,
provides for the grant of shares of $0.20 par value voting common stock issued
by the Company.
Since the Company is now a reporting company, the Directors' Plan provides
that the price of any option granted shall be equal to the fair market value of
the common stock as of the grant date. All such options shall be evidenced by a
written agreement between the Committee and each non-employee director. The
options granted under the Directors' Plan shall first be exercisable six months
and one day from the date of grant and shall expire 10 years from the date of
grant, unless subject to earlier termination as provided for in the Directors'
Plan. If a director ceases to serve as a member of the Board of Directors on
account of Cause, options granted under the Directors' Plan that are unexercised
as of the occurrence of such Cause will be forfeited, where Cause is defined as
5
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meaning a non-employee director is found guilty by a court of competent
jurisdiction, pleads guilty or pleads nolo contendere to any felony or to a
misdemeanor which involves fraud or dishonesty or that a non-employee director
willfully engages in conduct which is materially injurious to the Company or its
Affiliates. The Board of Directors shall determine whether Cause has occurred
and notify the affected non-employee director.
All non-employee directors are eligible to receive options under the
Directors' Plan. To provide for utilization of the Directors' Plan, 70,000
shares of Common Stock, (determined immediately after the five-for-one (5:1)
stock split approved by the Board of Directors effective as of January 1, 1999)
were made available for grants under the Directors' Plan. Such shares are
authorized but unissued shares, treasury shares or shares acquired on the open
market, as the same may be adjusted for stock splits, dividends or other
adjustments in the capitalization of this Company.
The Board of Directors will administer the Directors' Plan.
Option Grants under the Directors' Plan During Fiscal Year 1999
Pursuant to the Directors' Plan, effective January 1, 1999, the non-
employee directors were compensated with the grant of certain options. For the
years of service prior to January 1, 1999, options were granted at the rate of
100 per year of service, otherwise the grants were all on the same terms and
conditions at an exercise price of $10.72 per share. On April 14, 1999, each
director was granted 1,000 options at an exercise price of $11.02 per share for
the annual option grant provided for in the Directors' Plan.
Aggregated Option Exercises to Date
The initial grant options under the Directors' Plan could not be exercised
earlier than July 2, 1999 and the annual grant options could not be exercised
until October 15, 1999. As of March 24, 2000, no director has exercised any of
either his initial or annual grant options.
Stock Ownership of Directors and Executive Officers
The following table shows, as of December 31, 1999, the number of shares of
the Company's Common Stock beneficially owned by (i) all directors and nominees,
(ii) all executive officers whose total annual salary and bonus exceed $100,000,
and (iii) all directors and executive officers as a group. Unless otherwise
noted, the named persons have sole voting and investment power with respect to
the shares indicated (subject to any applicable community property laws).
6
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<TABLE>
<CAPTION>
NAME OF COMMON STOCK Percent
Beneficial Owner Beneficially Owned of Class
- ---------------- ------------------ --------
<S> <C> <C>
M. G. Bond 33,085 1.00%
Karl Brantley 10,160 *
Willis W. Dungan 140,625 (1) 4.25
Don L. Fulton 5,250 *
David A. King 52,021 (2) 1.57
Herbert A. King 239,015 (3) 7.22
George R. Mars 171,710 (4) 5.19
William M. Mars 12,735 (5) *
David P. Webb 14,075 (6) *
Steve Webb 90,305 (7) 2.73
------- -----
All Directors and Executive Officers
as a group (10 persons) 768,981 (8) 23.24%
</TABLE>
* Less than 1%
________________________________________________________________________
(1) Includes 64,625 shares owned by Mr. Dungan's spouse and 76,000 shares held
in a limited partnership of which Mr. Dungan is the managing general
partner and as to which he exercises sole voting and investment power.
(2) Includes 890 shares owned by Mr. King's spouse and 3,126 shares owned by
his children.
(3) Includes 7,275 shares owned jointly by Mr. King's spouse, 42,920 owned by
his children; also includes 147,260 shares held in trust for his children.
(4) Includes 20,000 shares owned by Mr. Mars' spouse and includes 45,745 shares
owned by the Estate of Mr. Mars' mother of which he is executor and as to
which he exercises sole voting and investment power.
(5) Includes 3,785 shares owned by Mr. Mars' spouse.
(6) David P. Webb is the son of Steve Webb.
(7) Includes 170 shares owned by Mr. Webb's spouse and 90,000 shares held in a
limited partnership of which Mr. Webb is the managing general partner and
as to which he exercises sole voting and investment power.
(8) Includes 7,275 shares owned jointly with or of record by others with
Directors and Executive Officers; also includes 313,260 shares in various
entities controlled by Directors and 45,745 controlled by Power of
Attorney.
7
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Executive Officers
The following table sets forth certain information with respect to the
executive officer of the Company.
Officer
Name Since Age Position with the Company
---- ----- --- --------------------------
Steve Webb 1978 67 Chairman, President, Chief Executive
Officer, and Director of the Company and
the Bank
The following is a brief summary of the business experience of the
executive officer of the Company:
Steve Webb has served as a member of the Board of Directors of the Company
from 1982 until the present and of the Bank from 1970 until present. In 1978,
Mr. Webb assumed the responsibilities of President and Chief Executive Officer
of the Company and the Bank.
Executive Compensation
No executive officer ceased to serve as such at any time during the 1999
fiscal year. The following table sets forth the compensation of Steve Webb, the
Company's Chairman, President and Chief Executive Officer, for the services
rendered in all capacities to the Company for the fiscal years ending December
31, 1997, 1998 and 1999:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Name and Securities All
Principal All Other underlying LTIP other
Position Year Salary Bonus Compensation Options Payouts Compensation
- -------- ---- ------ ----- ------------ ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Steve Webb 1999 $138,000 $35,000 $23,228(1) 3,900 0 0
President and CEO 1998 $132,000 $30,000 $25,158(2) 0 0 0
of the Company 1997 $125,000 $25,000 $23,640(3) 0 0 0
and the Bank
</TABLE>
(1) Represents matching contributions of $10,536 under The Citizens Bank
Profit Sharing and Savings Plan (the 401-k plan), Directors fees in
the amount of $11,575, and includes the value of the use of a company
automobile in the amount of $1,117.
(2) Represents matching contributions of $13,151 under The Citizens Bank
Profit Sharing and Savings Plan (the 401-k plan), Directors fees in
the amount of $10,925, and includes the value of the use of a company
automobile in the amount of $1,082.
(3) Represents matching contributions of $12,264 under The Citizens Bank
Profit Sharing and Savings Plan (the 401-k plan), Directors fees in
the amount of $10,275, and includes the value of the use of a company
automobile in the amount of $1,101.
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Employees' Long-Term Incentive Plan
On April 13, 1999, the Company adopted the Citizens Holding Company
Employees' Long-Term Incentive Plan, referred to herein as the "Employees'
Plan." The Employees' Plan is administered by the Board of Directors and is
intended to provide for the grant of shares of Common Stock in the form of stock
options and restricted stock, in accordance with usual and customary terms and
conditions. To that end, a number of shares of the Company's Common Stock equal
to seven percent (7%) of the issued and outstanding Common Stock, as the same
may be determined from time to time, is available to be granted under the
Employees Plan, which shares are authorized but unissued shares, treasury shares
or shares acquired on the open market. The only options granted during this
fiscal year were to Steve Webb. See the table below.
Option Grants under Employee Plan During 1999 Fiscal Year
The following table presents information on the stock option grants that
were made during fiscal year 1999 to the executive officer of the Company,
pursuant to the Employee Plan. (Numbers of options and per share exercise prices
have been adjusted to reflect the five for one (5:1) split that occurred January
1, 1999).
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Potential Realizable Value at
No. of % of Annual Rates of Stock Price
Options Options Exercise Expiration Appreciation for Option Term (2)
----------------------------------
Granted Granted Price (1) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Steve Webb-Initial Grant 2,900 13.12% 10.72 01/01/09 19,551.08 49,546.27
Annual Grant 1,000 4.52% 11.02 04/14/09 6,930.42 17,563.04
</TABLE>
(1) Each stock option shall be exercisable at such time or times during
its term as may be determined by the Board of Directors; provided,
however, that no option shall be exercisable later than 10 years after
the date of grant and no option shall be exercisable earlier than six
months and one day after the date of grant.
(2) The amounts in the table are not intended to forecast possible future
appreciation, if any, of the Company's Common Stock. Actual gains, if
any, are dependent upon the future market price of the Company's
Common Stock and there can be no assurance that the amounts reflected
in this table will be achieved. Furthermore, because there was no
established market for the shares of Common Stock of the Company on
the date of the grant of the option, there was no accurate market
value to assign as of the date of the grant.
Aggregated Option Exercises to Date
At the time of the mailing of these Proxy materials, no options have been
exercised under the Employee Plan.
9
<PAGE>
Pension Plan
The Company maintains a 401-k plan, The Citizens Bank Profit Sharing and
Savings Plan and Trust, which will be referred to herein simply as the "401-k
plan." All Employees who have attained the age of 21 and completed one year of
service are eligible to participate in the 401-k plan. The Company matches
employee deferrals up to 6% of total compensation (including any overtime and
bonuses) and a discretionary contribution to each participant is made regardless
of deferral. This contribution for 1999 was 2.7% of total compensation. The 401-
k plan recognizes a participant to be fully vested after five years in which the
employee has at least 1,000 hours of service.
Stock Performance Graph
The following performance graph compares the performance of the Company's
Common Stock to the AMEX Index and to a peer group of 46 other regional bank
holding companies for the Company's reporting period. The graph assumes that the
value of the investment in the Company's Common Stock and each index was $100 at
October 19, 1999 (the date trading of the Common Stock began on the American
Stock Exchange) and that all dividends were reinvested. The bank holding
companies included in the peer group are as follows: Acadiana Bancshares Inc,
Admiralty Bancorp CL B, Alabama National Bancorp, AmSouth Bancorporation, Area
Bancshares Corp, Auburn National Banc Inc, Banc Corporation, Bancorpsouth Inc,
Bank of the Ozarks Inc, Bankfirst Corporation, Britton & Koontz CAP CP, Cardinal
Financial Corp, CNB Florida Bankshares, Colonial Bancgroup CL A, Community
Financial GRP, Community Trust ENCP Inc, Compass Bancshares Inc, Crescent
Banking Company, Eastern Virginia Bankshares, Eufaula Banccorp Inc, Farmers
Capital Bank CP, First M&F Corporation, First Tennessee Natl CP, First United
Bancshares, Florida Banks Inc, FNB Corporation (VA), Hancock Holding Co,
Hibernia Corp A, ISB Financial Corp, Lamar Capital Corp, Mid-America Bancorp KY,
Midsouth Bancorp, National Commerce Bancorp, Peoples Banctrust Co, The Peoples
Holding Co, Premier Financial Bancorp, Regions Financial Corp, Republic Bancorp
Inc CLA, S.Y. Bancorp Inc, Simmons First Natl Corp, South Alabama Bancorp,
Southtrust Corp, Trustmark Corp, Union Planters Corp, United Financial Holding,
Whitney Holding Corp.
Citizens Holding Company Stock Performance
October 19, 1999 - December 31, 1999
Cumulative Total Shareholder Return Comparison Among Citizens
Holding Company, Regional-Southeast Banks Peer Group and AMEX Market Index
10/19/99 12/31/99
------------------------------------
Citizens Holding Company 100.00 83.38
Regional-Southeast Banks 100.00 87.42
AMEX Market Index 100.00 110.59
Source: Media General Financial Services, Richmond Virginia
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Certain Relationships and Related Transactions
For the past several years, the Company has employed the legal services of
Phelps Dunbar, L.L.P., of which Mr. David Webb, a current Director of the
Company and Bank, is a partner. Phelps Dunbar has represented the Company in
various legal areas, including tax audits, pension plan administration, civil
lawsuit defense, and general corporate law. The Company expects that the firm
will continue to represent the Company in similar matters in the future.
Indebtedness of Related Parties
Certain directors and officers of the Company, businesses with which they
are associated, and members of their immediate families are customers of the
Bank and have had transactions with the Bank in the ordinary course of the
Bank's business. The indebtedness (including unfunded commitments) of the
directors, officers and related parties, to the Bank was equal to 4.83% of the
Company's shareholders' equity at December 31, 1999. This indebtedness comprised
.77% of the total currently outstanding loans net of unearned interest made by
the Bank as of December 31, 1999. In the opinion of the Board of Directors and
except as otherwise set forth below, such transactions were made in the ordinary
course of business, were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and do not involve more than the normal risk of
collectibility.
Compliance with Section 16(a) of the Exchange Act
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, the Company's directors, executive officers, and any person
beneficially owning more than ten percent of the Company's Common Stock are
required to report their initial ownership of the Company's Common Stock and any
subsequent changes in that ownership to the Securities and Exchange Commission.
The registration of the Company's Common Stock under the Exchange Act became
effective on August 20, 1999, and at that time, these persons became subject to
the Section 16(a) filing requirements.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during fiscal 1999, and any Form 5s and amendments
thereto furnished to the Company with respect to fiscal 1999, and certain
written representations made by the Company's directors and officers, the
Company has determined that all required filings have been made.
Board Recommendation
Shareholders will be entitled to one (1) vote for each share held, which
may be given in person or by proxy authorized in writing, except that
shareholders may cumulate their votes in the election of directors, as described
previously herein. The three candidates receiving the highest number of votes
cast, will be elected to serve as your Class I Directors.
The Board of Directors recommends a vote "FOR" the election of each of the
nominees for Class I Director on the Board of Directors.
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PROPOSAL II
RATIFY AND APPROVE THE SELECTION OF INDEPENDENT AUDITORS
--------------------------------------------------------
As shareholders of the Company, you are being asked to ratify the Company's
appointment of Horne CPA Group as its independent auditors for the year 2000.
On or about December 31, 1998, A. T. Williams, CPA declined to stand as
external auditor for the Company based solely on his opinion that it would be in
the best interest of the Company to engage an accounting firm experienced with
the accounting and reporting requirements of the Securities and Exchange
Commission and The American Stock Exchange. As a result, Horne CPA Group was
engaged to provide audit and tax services for the Company beginning December 31,
1998.
The firm of Horne CPA Group was the Company's independent auditor for the
year 1999, and the Board of Directors has appointed Horne as independent
auditors for the Company for the year 2000. Although the appointment of
independent auditors does not require approval by the shareholders, the Board of
Directors has chosen to submit its selection for ratification by the
shareholders. The Board of Directors, however, reserves the right to change
independent auditors at any time notwithstanding shareholder approval.
Representatives of Horne CPA Group will be present at the Annual Meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
Vote Required and Board Recommendation.
An affirmative vote by the holders of a majority of the shares of Common
Stock voted at the Annual Meeting is required for the ratification of the
appointment of the independent auditors.
The Board of Directors recommends that you vote "FOR" ratification of the
appointment of Horne CPA Group as the Company's independent auditors for the
year 2000.
SOLICITATION OF PROXIES
The Board of Directors of the Company is soliciting the enclosed proxy. The
cost of soliciting proxies in the form enclosed will be borne by the Company.
Directors, officers and employees of the Company may, but without compensation
other than their regular compensation, solicit proxies by telephone, telegraph
or personal interview. In addition, the Company has retained American Stock
Transfer & Trust Company, referred to in this Proxy Statement as simply
"American Stock," to assist in the solicitation of the proxies. The Company pays
American Stock a monthly fee for all their services as registrar and transfer
agent. According to the agreement, American Stock does not charge a fee directly
related to the solicitation of proxies other than postage and other reasonable
out-of-pocket costs and expenses. It is anticipated that banks, brokerage houses
and other institutions, nominees or fiduciaries will be requested to forward
proxy materials to beneficial owners and to obtain authorization for the
execution of proxies, and the Company may, upon request, reimburse them for
their related expenses.
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PROPOSALS OF SHAREHOLDERS FOR THE 2001 ANNUAL MEETING
At the annual meeting each year, the Board of Directors submits to
shareholders its nominees for election as directors. In addition, the Board of
Directors may submit other matters to the shareholders for action at the annual
meeting. Shareholders of the Company may also submit proposals for inclusion in
the proxy materials. Shareholders intending to submit proposals for presentation
at the 2001 annual meeting and inclusion in the proxy statement and form of
proxy for the annual meeting should forward their proposals to Steve Webb,
President, Citizens Holding Company, 521 Main Street, Philadelphia, Mississippi
39350. Proposals must be in writing and must be received by the Company prior to
November 23, 2000, for inclusion in the Company's 2001 proxy materials.
Proposals should be sent to the Company by certified mail, return receipt
requested.
OTHER MATTERS
Management of the Company is not aware of any other matters to be brought
before the Annual Meeting. However, if any other matters are properly brought
before the Annual Meeting, the persons named in the enclosed form of proxy will
have discretionary authority to vote all proxies with respect to such matters in
accordance with their best judgment.
AVAILABILITY OF
ANNUAL REPORT ON FORM 10-K
The annual report to shareholders containing financial statements for the
Company's 1999 fiscal year has been mailed to shareholders prior to or with this
Proxy Statement. However, the annual report does not form any part of the
material for the solicitation of proxies.
Upon written request of any record holder or beneficial owner of the shares
entitled to vote at the annual meeting, the Company, without charge, will
provide a copy of the Company's Annual Report for year ended December 31, 1999
on form 10-K, as filed with the Securities and Exchange Commission. Requests
should be mailed to Steve Webb, President, Citizens Holding Company, 521 Main
Street, Philadelphia, MS 39350.
By Order of the Board of Directors
/s/ Steve Webb, Chairman
Philadelphia, Mississippi
March 24, 2000
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PROXY
This Proxy is Solicited on Behalf of the Board of Directors of
CITIZENS HOLDING COMPANY
------------------------
The undersigned does hereby nominate, constitute and appoint STEVE WEBB and
WILLIAM M. MARS, or any of them (each with full power to act alone and with
power of substitution), as their true and lawful attorney, to vote this Proxy.
The undersigned also hereby authorizes said individuals to represent the
undersigned, and to vote upon all matters that may properly come before the
meeting, including the matters described in the Proxy Statement furnished
herewith, subject to any directions indicated on the reverse side, with full
power to vote, and to cumulate votes on, all shares of Common Stock of Citizens
Holding Company held of record by the undersigned on March 17, 2000, at the
annual meeting of shareholders to be held on April 25, 2000, or any
adjournment(s) thereof (the "Annual Meeting"). I acknowledge receipt of the
Company's notice and accompanying Proxy Statement.
PROPOSAL NO. (I) TO ELECT DIRECTORS
- ----------------
To Elect Three Class I Directors
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
contrary below) below
(INSTRUCTION: To withhold authority to vote for any individual nominee check
the box to vote "FOR" all nominees and strike a line through the nominee's
name in the list below.)
Herbert A. King Don L. Fulton David P. Webb
PROPOSAL NO. (II) TO RATIFY AND APPROVE THE INDEPENDENT AUDITORS
- ----------------
To Ratify And Approve The Selection of The Horne CPA Group as The Company's
Independent Auditors for Year 2000.
[_] FOR [_] AGAINST [_] ABSTAIN
PROPOSAL NO. (III) IN THEIR DISCRETION, TO VOTE UPON SUCH OTHER BUSINESS AS
- ------------------
MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE PROPOSALS
LISTED ABOVE AND "FOR" EACH OF THE NOMINEES FOR DIRECTORS.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no specific directions are given your
shares will be voted by management "for" the nominees and the proposals. The
individuals designated above will vote in their discretion on any other matter
that may properly come before the Meeting.
Date: ,2000
-----------------------------------
___________________________________
Signature of Shareholder
___________________________________
Signature if held jointly
Please sign exactly as name appears
on the certificate or certificates
representing shares to be voted by
this proxy, as shown on the label to
the left. When signing as executor,
administrator, attorney, trustee, or
guardian please give full title as
such. If a corporation, please sign
full corporation name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person(s).
Please mark, sign, date and return this proxy promptly using the enclosed
envelope.
