SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934, as amended
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
INDEPENDENT BANKSHARES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
* Set forth amount on which the filing is calculated and state
how it was determined.
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
INDEPENDENT BANKSHARES, INC.
547 Chestnut Street
Abilene, Texas 79602
__________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 28, 1998
To the Shareholders of
Independent Bankshares, Inc.
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of
Shareholders (the "Annual Meeting") of Independent Bankshares,
Inc., a Texas corporation (the "Company"), will be held in the
lobby of First State Bank, N.A., Central Branch, 547 Chestnut
Street, Abilene, Texas on Tuesday, April 28, 1998, at 4:00 p.m.,
local time, for the purposes of considering and voting upon the
following:
1. To elect five (5) directors to hold office in the class
and for the terms specified or until their respective successors
have been duly elected and have qualified; and
2. To transact any and all other business that may properly
be presented at the Annual Meeting or any adjournment(s) thereof.
The items of business are more fully described in the Proxy
Statement accompanying this notice.
The Board of Directors has fixed March 16, 1998, as the record
date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting or any
adjournment(s) thereof. Only shareholders of record at the close of
business on the Record Date are entitled to notice of and to vote
at the Annual Meeting. The stock transfer books will not be
closed. A list of shareholders entitled to vote at the Annual
Meeting will be available for examination at the offices of the
Company for ten days prior to the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING.
HOWEVER, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN
PERSON, YOU ARE URGED TO PROMPTLY MARK, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED, SELF-ADDRESSED, STAMPED
ENVELOPE SO THAT YOUR SHARES OF STOCK MAY BE REPRESENTED AND VOTED
IN ACCORDANCE WITH YOUR DESIRES AND IN ORDER THAT THE PRESENCE OF
A QUORUM MAY BE ASSURED AT THE ANNUAL MEETING. YOUR PROXY WILL BE
RETURNED TO YOU IF YOU SHOULD BE PRESENT AT THE ANNUAL MEETING AND
SHOULD REQUEST SUCH RETURN OR IF YOU SHOULD REQUEST SUCH RETURN IN
THE MANNER PROVIDED FOR REVOCATION OF PROXIES ON THE INITIAL PAGES
OF THE ENCLOSED PROXY STATEMENT. PROMPT RESPONSE BY OUR
SHAREHOLDERS WILL REDUCE THE TIME AND EXPENSE OF SOLICITATION.
By Order of the Board of Directors
RANDAL N. CROSSWHITE,
Corporate Secretary
Abilene, Texas
March 31, 1998
<PAGE>
INDEPENDENT BANKSHARES, INC.
547 Chestnut Street
Abilene, Texas 79602
_______________________________
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 28, 1998
_______________________________
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement and the accompanying proxy are being
furnished to shareholders of Independent Bankshares, Inc. (the
"Company") in connection with the solicitation by the Board of
Directors of the Company of proxies to be voted at the 1998 Annual
Meeting of Shareholders (the "Annual Meeting") to be held on April
28, 1998, at the time and place and for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders and at
any adjournment(s) of the Annual Meeting. This Proxy Statement, the
accompanying proxy and the Company's Annual Report to Shareholders
for the year ended December 31, 1997, are first being sent to
shareholders of the Company on or about March 31, 1998.
The accompanying form of proxy is designed to permit each
holder of the Company's common stock, par value $0.25 per share
(the "Common Stock"), to vote for or withhold voting for any or all
of the nominees for election as directors of the Company listed
under proposal 1 and to authorize the proxies to vote in their
discretion with respect to any other proposal brought before the
Annual Meeting. When a shareholder's executed proxy card specifies
a choice with respect to a voting matter, the shares will be voted
accordingly. IF NO SUCH SPECIFICATIONS ARE MADE, THE PROXIES FOR
THE COMMON STOCK WILL BE VOTED BY THOSE PERSONS NAMED IN THE
PROXIES AT THE ANNUAL MEETING FOR THE ELECTION OF THE NOMINEES
UNDER THE CAPTION "ELECTION OF DIRECTORS." If any other matters
properly come before the Annual Meeting, the proxies will vote upon
such matters according to their judgment.
The Company encourages the personal attendance of its
shareholders at the Annual Meeting, and execution of the
accompanying proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote his or her shares in person. Any
shareholder giving a proxy has the right to revoke it by giving
written notice of revocation to Mr. Randal N. Crosswhite, Corporate
Secretary, Independent Bankshares, Inc., at the Company's principal
executive offices, 547 Chestnut Street, Abilene, Texas 79602, at
any time before the proxy is voted or by executing and delivering
a later-dated proxy, or by attending the Annual Meeting and voting
his or her shares in person. No such notice of revocation or
later-dated proxy, however, will be effective until received by the
Company at or prior to the Annual Meeting. Such revocation will not
affect a vote on any matters taken prior to the receipt of such
revocation. Mere attendance at the Annual Meeting will not of
itself revoke the proxy.
In addition to the solicitation of proxies by use of the mail,
officers, directors and regular employees of the Company may
solicit the return of proxies by personal interview, mail,
telephone and/or facsimile. These persons will not be additionally
compensated, but will be reimbursed for out-of-pocket expenses.
The Company will also request brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation
material to the beneficial owners of shares held of record by such
persons and will reimburse such persons and the Company's transfer
agent for their reasonable out-of-pocket expenses in forwarding
such materials. All expenses of the Company in connection with
this solicitation will be borne by the Company.
The Annual Report to Shareholders covering the Company's
fiscal year ended December 31, 1997 (the "Annual Report"),
including audited financial statements, is enclosed herewith. The
Annual Report does not form any part of the material for the
solicitation of proxies.
-2-
<PAGE>
PURPOSES OF THE MEETING
At the Annual Meeting, the shareholders of the Company will
consider and vote upon the following matters:
1. The election of five (5) directors to hold office in the
class and for the term specified or until their respective
successors have been duly elected and have qualified; and
2. Such other and further business as may properly be
presented at the Annual Meeting or any adjournment(s) thereof.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
GENERAL
The Board of Directors of the Company has fixed March 16,
1998, as the record date (the "Record Date") for the Annual
Meeting. Only holders of record of the outstanding shares of
Common Stock at the close of business on the Record Date are
entitled to notice of, and to vote at, the Annual Meeting or any
adjournment(s) thereof. At the close of business on the Record
Date, the Company had issued and outstanding 1,977,099 shares of
Common Stock. The Common Stock is the only class of stock entitled
to vote at the Annual Meeting. A shareholder is entitled to one
vote, in person or by proxy, at the Annual Meeting for each share
of Common Stock held of record in his or her name at the close of
business on the Record Date.
QUORUM AND REQUIRED VOTE; EFFECT OF ABSTENTIONS AND BROKER NONVOTE
The presence, in person or by proxy, of the holders of a
majority of the issued and outstanding shares of common stock
entitled to vote at the annual meeting or any adjournment(s) of the
annual meeting is necessary to constitute a quorum to transact
business at the annual meeting. Assuming the presence of a quorum,
the affirmative vote of the holders of the Record Date of a
plurality of the outstanding shares of Common Stock present, in
person or by proxy, at the Annual Meeting is necessary for the
election of directors.
Abstentions and broker nonvotes are counted for purposes of
determining the presence or absence of a quorum for the transaction
of business. However, abstentions and broker nonvotes do not have
any effect on the election of directors.
SECURITY OWNERSHIP OF MANAGEMENT
The following table and notes to the table set forth certain
information with respect to the shares of Common Stock beneficially
owned by (i) each director and nominee for director of the Company,
(ii) each executive officer of the Company included in the Summary
Compensation Table set forth under the caption "Executive
Compensation" below, (iii) each individual selected as an advisory
director of the Company and (iv) all directors and executive
officers of the Company as a group, as of the Record Date:
-3-
<PAGE>
Amount and
Nature of Percent of
Beneficial Class Owned
Name of Beneficial Owner Ownership(1) Beneficially(2)
------------------------ ------------ ---------------
John L. Beckham 1,500 0.08%
Lee Caldwell 17,706 0.90
Arlas Cavett* 25,575(3) 1.29
Mrs. Wm. R. (Amber) Cree 4,527 0.23
Randal N. Crosswhite 24,435(4) 1.24
Louis S. Gee 45,032(5) 2.26
Michael D. Jarrett 8,217(6) 0.42
Nancy E. Jones 0 --
Marshal M. Kellar 1,931(7) 0.10
Tommy McAlister 5,360(8) 0.27
L.H. Mosley* 55,039 2.78
J.E. Smith* 3,875(9) 0.20
Bryan W. Stephenson 107,697(10) 5.42
Scott L. Taliaferro 79,961(11) 4.04
James D. Webster, M.D. 885 0.04
C.G. Whitten 6,550 0.33
John A. Wright 89,250 4.51
All executive officers and directors
as a group (19 individuals, including
the executive officers and directors
listed above) 490,282(12) 24.53%
_________________
* Advisory Director
(1) Beneficial ownership as reported in the above table has been
determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Unless
otherwise indicated, each of the persons named has sole voting
and investment power with respect to the shares reported.
(2) The percentages of Common Stock indicated are based on
1,977,099 shares of Common Stock issued and outstanding on the
Record Date.
(3) Includes 17,956 shares owned by Cavett and Frost, a general
partnership in which Mr. Cavett is a 50% partner, and 971
shares owned by Cavett, Inc. Mr. Cavett is President and a 50%
shareholder of Cavett, Inc.
(4) Includes Mr. Crosswhite's beneficial ownership of 11,067
shares held by the Company's Employee Stock Ownership/401(k)
Plan (the "Plan").
(5) Includes 14,467 shares owned by Tippett & Gee, Inc. Mr. Gee is
the Chairman of the Board and majority shareholder of Tippett
& Gee, Inc. Also includes 11,484 shares that could be acquired
within 60 days through the conversion of the Company's Series
C Cumulative Convertible Preferred Stock ("Series C Preferred
Stock").
(6) Includes Mr. Jarrett's beneficial ownership of 4,412 shares
held by the Plan.
(7) Includes 1,931 shares owned by M & G Kellar Investment Limited
Partnership, a partnership in which Mr. Kellar is a general
partner.
(8) Includes 3,235 shares owned by McAlister Oil Co., Inc. Mr.
McAlister is President and sole shareholder of McAlister Oil
Co., Inc. Also includes 689 shares that could be acquired
within 60 days through the conversion of Series C Preferred
Stock owned by McAlister Oil Co., Inc.
(9) Includes 1,750 shares owned by Mr. Smith's wife.
-4-
<PAGE>
(10) Includes 15,808 shares owned by Mr. Stephenson's wife and
minor child and 9,624 shares that could be acquired within 60
days through the conversion of Series C Preferred Stock owned
by Mr. Stephenson's wife. Also includes Mr. Stephenson's
beneficial ownership of 12,122 shares held by the Plan.
(11) Includes 1,240 shares owned by Mr. Taliaferro's wife.
(12) Includes 21,797 shares that could be acquired within 60 days
through the conversion of Series C Preferred Stock. Also
includes such executive officers' beneficial ownership of
36,813 shares held by the Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information concerning the
beneficial ownership of shares of the Company's Common Stock by all
persons or entities known to the Company to be the beneficial
owners of more than 5% of the outstanding Common Stock on the
Record Date:
<TABLE>
<CAPTION>
Amount and
Nature of Percent of
Beneficial Class Owned
Name of Beneficial Owner Ownership(1) Beneficially(2)
------------------------------------------ ------------- ----------------
<S> <C> <C>
Independent Bankshares, Inc. 154,199 7.80%
Employee Stock Ownership/401(k) Plan
P.O. Box 3296
Abilene, Texas 79604
Bryan W. Stephenson 107,697(3) 5.42
P.O. Box 3296
Abilene, Texas 79604
Scott L. Taliaferro, Jr. 100,313(4) 5.07
P.O. Box 240
Abilene, Texas 79604
Farmers & Merchants Company 99,942(5) 5.05
c/o First National Bank Trust Department
P.O. Box 701
Abilene, Texas 79604
_______________
(1) Beneficial ownership as reported in the above table has been
determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended. Unless otherwise indicated,
each of the persons named has sole voting and investment power
with respect to the shares reported.
(2) The percentages of Common Stock indicated are based on
1,977,099 shares of Common Stock issued and outstanding on the
Record Date.
(3) Includes 15,808 shares owned by Mr. Stephenson's wife and
minor child and 9,624 shares that could be acquired within 60
days through the conversion of Series C Preferred Stock owned
by Mr. Stephenson's wife. Also includes Mr. Stephenson's
beneficial ownership of 12,122 shares held by the Plan.
(4) Includes 99,942 shares beneficially owned by Mr. Taliaferro
and held by Farmers and Merchants Company, Abilene, Texas, as
trustee for Mr. Taliaferro.
(5) Constitutes shares held in trust for the benefit of Scott L.
Taliaferro, Jr.
</TABLE>
-5-
<PAGE>
ITEM 1. ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company provide that the Board of Directors
shall consist of not fewer than seven nor more than 30 members
(exclusive of advisory directors) and that the number of directors,
within such limits, shall be determined by resolution of the Board
of Directors at any meeting or by the shareholders at the Annual
Meeting. The Board of Directors of the Company has set the number
of directors composing the Board of Directors at thirteen
(exclusive of advisory directors). The Articles of Incorporation
and the Bylaws also provide that the Board of Directors be
classified with respect to the time for which they hold office into
three classes as nearly equal in number as possible.
The Board of Directors has nominated for directors the five
individuals named below to be elected at the Annual Meeting to hold
office in the class and for the term indicated, or until their
respective successors have been duly elected and have qualified.
The tables below set forth for each nominee for director and
for each continuing director within each class of directors, the
name, age and the principal occupation of each nominee or
continuing director, the directorships of public companies, if any,
held by each nominee or continuing director and the year he or she
first became a director of the Company.
2001 CLASS--NOMINEES FOR DIRECTOR
TO SERVE UNTIL 2001 ANNUAL MEETING
<TABLE>
<CAPTION>
Year First
Became a Director Principal Occupation
Name and Age of the Company During the Last Five Years
------------------------ ----------------- ------------------------------------------------------
<S> <C> <C>
John L. Beckham (39) 1998 Attorney at Law, Beckham, Rector & Eargle, L.L.P
Nancy E. Jones (48) 1998 Executive Director of the Community Foundation of
Abilene
Bryan W. Stephenson (48) 1989 President and Chief Executive Officer of the
Company; Chairman of the Board of First State
Bank, N.A. (the "Bank")
Scott L. Taliaferro (75) 1980 Chairman of the Board of the Company and President
of Scott Oils, Inc. (oil and gas drilling)
C.G. Whitten (73) 1980 Attorney at Law, Whitten & Young, P.C. (1997-Present);
previously, Senior Vice President and General Counsel
of Pittencrieff Communications, Inc.
</TABLE>
Unless otherwise indicated on any duly executed and dated
proxy, the persons named in the enclosed proxy intend to vote the
shares that it represents for the election of the nominees listed
in the table above for the term specified. Although the Company
does not anticipate that any of the above-named nominees will
refuse or be unable to accept or serve as a director of the Company
for the class and the term specified, the persons named in the
enclosed proxy intend, if any nominee is unable or unwilling to
serve as a director, to vote the shares represented by the proxy
for the election of such other person or persons as may be
nominated or designated by management, unless they are directed by
the proxy to do otherwise.
-6-
<PAGE>
Assuming the presence of a quorum, the affirmative vote of the
holders of a plurality of the shares of Common Stock, present or
represented by proxy at the Annual Meeting, is required for the
election of directors. Assuming the receipt by each such person of
the affirmative vote of at least a plurality of the shares of
Common Stock present or represented at the Annual Meeting, the five
persons receiving the greatest number of votes will be elected as
directors. Proxies will be voted for the nominees in accordance
with specifications marked thereon and, if no specification is
made, will be voted "FOR" the above nominees in the class and for
the term noted.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF EACH OF THE INDIVIDUALS
NOMINATED FOR ELECTION AS A DIRECTOR
The following directors serve terms expiring at the 1999 and
2000 Annual Meeting of Shareholders:
1999 CLASS--CONTINUING FOR DIRECTORS
TO SERVE UNTIL 1999 ANNUAL MEETING
<TABLE>
<CAPTION>
Year First
Became a Director Principal Occupation
Name and Age of the Company During the Last Five Years
------------------------ ----------------- -------------------------------------------------
<S> <C> <C>
Mrs. Wm. R. (Amber) Cree (67) 1982 Entrepreneuse
Tommy McAlister (49) 1985 President of McAlister, Inc. (investments)
James D. Webster, M.D. (57) 1988 Physician
John A. Wright (78) 1980 Bank Consultant
</TABLE>
2000 CLASS--CONTINUING FOR DIRECTORS
TO SERVE UNTIL 2000 ANNUAL MEETING
<TABLE>
<CAPTION>
Year First
Became a Director Principal Occupation
Name and Age of the Company During the Last Five Years
------------------------ ----------------- ----------------------------------------------
<S> <C> <C>
Lee Caldwell (63) 1985 Attorney at Law
Randal N. Crosswhite (44) 1995 Senior Vice President, Chief Financial Officer
and Corporate Secretary of the Company; Director
of the Bank
Louis S. Gee (75) 1981 Chairman of the Board and Chief Executive Officer
of Tippett & Gee, Inc. (mechanical engineering)
Marshal M. Kellar (65) 1981 Chairman of the Board of West Texas Wholesale
Supply Company (hardware)
</TABLE>
-7-
<PAGE>
ADVISORY DIRECTORS
The Bylaws of the Company provide for advisory directors. The
Board of Directors, at its February 18, 1998, meeting, selected the
following individuals to serve as advisory directors of the
Company:
Arlas Cavett
L.H. Mosley
J.E. Smith
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings
of the Board of Directors and through its committees. In
accordance with the Bylaws of the Company, the Board of Directors
has established an Executive Committee, an Audit Committee and an
Employee Stock Ownership/401(k) Plan Committee. During the year
ended December 31, 1997, the Board of Directors held twelve regular
meetings; the Executive Committee had six meetings; the Audit
Committee had one meeting; and the Employee Stock Ownership/401(k)
Plan Committee had three meetings. Each director attended at least
75% of the total number of meetings of the Board of Directors and
the committees on which he or she served, except Lee Caldwell who
attended eight meetings of the Board of Directors and was unable to
attend the meeting of the Audit Committee.
EXECUTIVE COMMITTEE. The Executive Committee may exercise all
the authority of the Board of Directors in the management of the
business and affairs of the Company, except for matters related to
the composition of the Board of Directors, changes in the Bylaws
and certain other significant corporate matters. The Executive
Committee also functions as the Company's Compensation Committee in
that it reviews and makes recommendations to the Board of Directors
concerning major compensation policies and the compensation of
executive officers. Louis S. Gee and John A. Wright, directors, and
Bryan W. Stephenson, Scott L. Taliaferro and C.G. Whitten, nominees
for director, were the members of the Executive Committee during
1997 and were appointed members of the Executive Committee for 1998
at the February 18, 1998, meeting of the Board of Directors.
AUDIT COMMITTEE. The duties of the Audit Committee include
the making of recommendations to the Board of Directors for
engaging and discharging the Company's independent auditors;
reviewing the completed audit with the independent auditors
regarding the conduct of the audit, accounting adjustments,
recommendations for improving internal controls and any other
significant findings during the audit; meeting periodically with
management; monitoring accounting and financial controls; and
initiating and supervising any special investigations it deems
necessary. Lee Caldwell, Tommy McAlister and James D. Webster,
M.D., directors, were the members of the Audit Committee during
1997 and all were appointed members of the Audit Committee for 1998
at the February 18, 1998, meeting of the Board of Directors.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
See "Executive Compensation--Transactions with Management" for
certain transactions and relationships between directors and the
Company or its subsidiaries or affiliates.
ITEM 2.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company is not aware of any
matters, other than those referred to in the accompanying Notice of
Annual Meeting of Shareholders, which properly may come before the
Annual Meeting. However, if any other matter should be properly
presented for consideration and voting at the Annual Meeting or any
adjournment(s) thereof, it is the intention of the persons named as
proxies on the enclosed proxy card to vote the proxy cards in
accordance with their judgment.
-8-
<PAGE>
EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
The table below sets forth at the date of this Proxy Statement
the name, age, current positions with the Company, principal
occupation during the last five years of each principal executive
officer of the Company and the year he first became an executive
officer of the Company:
<TABLE>
<CAPTION>
Executive
Officer of
the Company or
Current Position with the Branch President Principal Occupation
Name and Age Company or the Bank of the Bank Since During Last Five Years
- ---------------------------- ------------------------- ----------------- -----------------------------------
<S> <C> <C> <C>
Bryan W. Stephenson (48) President, Chief Executive 1985 President and Chief Executive
Officer and Director of the Officer of the Company
Company and Chief Executive
Officer and Chairman of the
Board of the Bank
Randal N. Crosswhite (44) Senior Vice President, Chief 1985 Senior Vice President, Chief
Financial Officer, Corporate Financial Officer and Corporate
Secretary and Director of the Secretary of the Company
Company and Director of the
Bank
Thomas C. Darden (41) Lubbock Branch President of 1997 Lubbock Branch President
the Bank and Director of the of the Bank (1997-present);
Bank previously Executive Vice
President of Plains National
Bank, Lubbock, Texas
James G. Fitzhugh (48) Abilene Branch President of 1985 Abilene Branch President of
the Bank and Director of the the Bank (1997-present);
Bank previously President of the
Bank
Michael D. Jarrett (48) Odessa Branch President of 1992 Odessa Branch President of the
the Bank and Director of the Bank (1997-present); previously,
Bank President of First State Bank,
N.A., Odessa ("First State, N.A.,
Odessa"), a former subsidiary bank
</TABLE>
TERM OF OFFICE
Executive officers of the Company are elected by the Board of
Directors at its annual meeting and hold office until the next
annual meeting of the Board of Directors or until their respective
successors are duly elected and have qualified. The Branch
Presidents of the Bank are elected by the board of directors of the
Bank at its annual meeting and hold office until the next annual
meeting of such board of directors or until their respective
successors are duly elected and have qualified.
-9-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding
compensation paid during each of the Company's last three fiscal
years to the Company's Chief Executive Officer and other executive
officers of the Company (including those who are employed by the
Company's direct and indirect subsidiaries) whose cash compensation
exceeded $100,000 during the fiscal year ended December 31, 1997
(the "named executive officers").
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual Compensation Other Annual Securities
Fiscal ------------------- Compensation Underlying
Name and Principal Position Year Salary Bonus($) ($)(1) Options
- ---------------------------------- ------ --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Bryan W. Stephenson 1997 $ 135,000 $ 20,000 $ 3,500 0
President, Chief Executive Officer 1996 135,000 20,000 6,600 0
and Director of the Company 1995 126,000 20,000 6,500 0
Michael D. Jarrett 1997 $ 97,500 $ 7,500 3,500 0
Branch President and Director of 1996 92,500 5,000 3,300 0
the Bank 1995 85,000 5,000 3,300 0
Randal N. Crosswhite 1997 $ 92,000 $ 5,000 $ 3,500 0
Senior Vice President, Chief 1996 85,000 5,000 6,600 0
Financial Officer, Corporate 1995 80,000 4,500 6,500 0
Secretary and Director of the
Company
_________________________
(1) Constitutes directors fees paid by the Bank and its
predecessors.
</TABLE>
STOCK OPTION GRANTS IN FISCAL 1997
No stock options were granted to the Chief Executive Officer
or the named executive officers during fiscal 1997. The Company
has never granted stock appreciation rights.
AGGREGATE STOCK OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR END
OPTION VALUES
The following table provides information related to stock
options exercised by the Chief Executive Officer and the named
executive officers during fiscal 1997 and the number and value of
stock options held at fiscal year end.
<TABLE>
<CAPTION>
Number of Securities Value of
Shares Underlying Unexercised Unexercised In-the-Money
Acquired Value Options at Year-End (#) Options at Year-End ($)
Upon Option Realized ---------------------------- ----------------------------
Name Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bryan W. Stephenson 11,666 $139,700 0 0 $0 $0
Michael D. Jarrett 2,500 34,300 0 0 0 0
Randal N. Crosswhite 4,166(2) 30,000 0 0 0 0
________________________
(1) Market value of the underlying securities at exercise date,
minus the exercise price.
(2) Adjusted for the 5-for-4 stock split, effected in the form of
a 25% stock dividend, paid to stockholders on May 30, 1997.
</TABLE>
-10-
<PAGE>
DIRECTOR COMPENSATION
In 1997, each nonemployee director and advisory director was
paid $250 for each regular directors' meeting of the Company
attended and $100 for each meeting of the Executive Committee and
Audit Committee attended. The Board of Directors has set director
and committee fees for 1998 at $250 per meeting of the Board and
$100 per meeting of the Executive Committee and the Audit
Committee.
TRANSACTIONS WITH MANAGEMENT
The Bank had, during the period from January 1, 1997, to March
17, 1998, and expects to have in the future, loan transactions with
directors of the Company and the Bank and their respective
associates, which includes any immediate family member or any
corporation or firm of which such person is an executive officer or
partner or is, directly or indirectly, the beneficial owner of 10%
or more of any class of equity securities or any trusts of which
such person serves as trustee or in which he or she has a
substantial beneficial interest. These loan transactions have been
made in the ordinary course of the Bank's business and have been
and will continue to be on substantially the same terms, including
interest rates, collateral and repayment, as those prevailing at
the time for comparable transactions with unaffiliated persons and
did not involve more than the normal risk of collectibility or
present other unfavorable features. All loans made to directors and
nominees for director of the Company and their respective
associates are believed to be in compliance with the Financial
Institutions Regulatory and Interest Rate Control Act of 1978.
In 1985, a former subsidiary bank of the Company foreclosed on
the stock of Texas Bank & Trust Company, Sweetwater, Texas
("TB&T-Sweetwater"). TB&T-Sweetwater subsequently failed, resulting
in a legal action being brought in federal court against the
thirteen TB&T-Sweetwater directors (the "TB&T Directors"),
including John A. Wright, a director of the Company, by the FDIC.
All former TB&T-Sweetwater Directors requested that the Company
reimburse them for their expenses and settlement costs incurred by
them in their defense of the FDIC litigation. In December 1994, a
settlement was entered into between the FDIC and certain of the
TB&T Directors with certain of the TB&T Directors (the "Inside
Directors"), including Mr. Wright, paying the FDIC a total of
$450,000. Mr. Wright claimed approximately $340,000 in
indemnification expense. In March 1995, the Company agreed to
settle the indemnification requests of the Inside Directors, and
Mr. Wright received $150,000 cash and a promissory note in the
original principal amount of $152,300, which bore interest at 6%
per annum. The first principal payment of $50,800, plus accrued
interest of $9,100, was paid to Mr. Wright on March 1, 1996. The
second principal payment of $50,800 plus accrued interest of
$6,100, was paid to Mr. Wright on March 1, 1997. The third
principal payment of $50,700, plus accrued interest of $3,100, was
paid to Mr. Wright on January 2, 1998.
INDEPENDENT ACCOUNTANTS
On July 16, 1997, the Board of Directors of the Company
approved the recommendation of the Audit Committee of the Board of
Directors that the firm of Coopers & Lybrand L.L.P. be engaged as
the Company's independent public accountants for the year ended
December 31, 1997.
The Board of Directors of the Company has not yet selected
independent auditors to examine the Company's financial statements
for the year ended December 31, 1998. Representatives of Coopers
& Lybrand L.L.P., who audited the Company's financial statements
for the year ended December 31, 1997, are expected to be present at
the Annual Meeting with the opportunity to make a statement if they
desire to do so and to be available to respond to appropriate
questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Paragraph Section 16(a) of the Exchange Act requires the
Company's directors and officers, and persons who own more than 10%
of the Company's Common Stock, to file with the Securities and
Exchange Commission (the "Commission") initial reports of ownership
and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater
than 10% stockholders are required by Commission regulation to
furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company, during the fiscal
year ended
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<PAGE>
December 31, 1997, all Section 16(a) filing requirements applicable
to its officers, directors and greater than 10% beneficial owners
were complied with.
SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 of the Exchange Act, shareholders may
present proper proposals for inclusion in the Company's proxy
statement for consideration at its 1999 Annual Meeting of
Shareholders by submitting proposals to the Company in a timely
manner. In order to be so included for the 1999 Annual Meeting of
Shareholders, shareholder proposals must be received by the Company
by November 28, 1998, and must otherwise comply with the
requirements of Rule 14a-8.
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<PAGE>
COPIES OF THE ANNUAL REPORT ON FORM 10-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
THE COMPANY, WITHOUT CHARGE, WILL PROVIDE TO EACH SHAREHOLDER,
ON WRITTEN REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K, BUT WITHOUT EXHIBITS, REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1997. WRITTEN REQUESTS FOR SUCH FORM 10-K SHOULD BE
DIRECTED TO MR. RANDAL N. CROSSWHITE, SENIOR VICE PRESIDENT AND
CORPORATE SECRETARY, INDEPENDENT BANKSHARES, INC., 547 CHESTNUT
STREET, ABILENE, TEXAS 79602.
By Order of the Board of Directors
Randal N. Crosswhite,
Corporate Secretary
Abilene, Texas
March 31, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING AND
WISH THEIR STOCK TO BE VOTED ARE URGED TO DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
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<PAGE>
INDEPENDENT BANKSHARES, INC.
547 Chestnut Street
Abilene, Texas 79602
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Randal N. Crosswhite, Scott L.
Taliaferro and C.G. Whitten and each or any of them, as Proxies,
each with the power to appoint his substitute, and hereby
authorizes each of them to represent and vote, as designated below,
all of the shares of the Common Stock of Independent Bankshares,
Inc. (the "Company") held of record by the undersigned on March 16,
1998, at the Annual Meeting of Shareholders to be held on April 28,
1998, or any adjournment(s) thereof.
1. PROPOSAL TO ELECT AS DIRECTORS OF THE COMPANY THE
FOLLOWING PERSONS, TO HOLD OFFICE IN THE CLASS AND FOR THE TERM
INDICATED OR UNTIL THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND HAVE
QUALIFIED.
[ ] FOR ALL NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE
CONTRARY BELOW)
[ ] WITHHOLD AUTHORITY TO VOTE ALL NOMINEES LISTED BELOW
2001 Class - Class of Directors to hold office
until the 2001 Annual Meeting:
John L. Beckham, Nancy E. Jones,
Bryan W. Stephenson, Scott L. Taliaferro
and C.G. Whitten.
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name on
the space provided below.)
------------------------------------------
(Please sign on the other side)
<PAGE>
(Continued from front)
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please execute this proxy as your name appears hereon. When shares
are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full
corporate name by the president or other authorized officer. If a
partnership, please sign in partnership name by authorized persons.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
This proxy, when properly executed, will
be voted in the manner directed herein by
the undersigned shareholder(s). IF NO
DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEES
UNDER PROPOSAL 1 AND IN THE DISCRETION OF
THE PROXIES WITH RESPECT TO ANY OTHER
MATTER THAT IS PROPERLY PRESENTED AT THE
MEETING.
DATED:____________________________, 1998
________________________________________
Signature
________________________________________
Signature if Held Jointly
