<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
Merchants Capital Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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 0-12.
(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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] 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> 2
MERCHANTS CAPITAL CORPORATION, VICKSBURG, MISSISSIPPI
TO THE HOLDERS OF SHARES OF COMMON STOCK
NOTICE IS HEREBY GIVEN that pursuant to call of its Directors, the Annual
Meeting of Shareholders of Merchants Capital Corporation (the "Corporation")
will be held in the Board Room of Merchants Bank, third floor of the main
office, 820 South Street, Vicksburg, Mississippi, on April 21, 1998 at 4:30
P.M., local time, for the purpose of considering and voting upon the following
matters:
1. To set the number of Directors to be elected at 15.
2. To elect 15 Directors to hold office for a term of one year or until
their successors are elected and qualified.
3. Whatever other business may be properly brought before the meeting or
any adjournments thereof.
Only those shareholders of record at the close of business on February 27,
1998 shall be entitled to notice of the meeting and to vote at the meeting.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, PLEASE
DATE, SIGN, AND RETURN PROMPTLY THE ACCOMPANYING PROXY. IF YOU DO ATTEND THE
MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
By Order of the Board Of Directors
Date: March 24, 1998 /s/ HOWELL N. GAGE
------------------------------
Howell N. Gage,
Chairman of the Board
<PAGE> 3
MERCHANTS CAPITAL CORPORATION
820 SOUTH STREET
VICKSBURG, MISSISSIPPI 39180
(601) 636-3752
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
Board of Directors of Merchants Capital Corporation, Vicksburg, Mississippi (the
"Corporation"), of Proxies for the Annual Meeting of Shareholders (the "Annual
Meeting") to be held in the Board Room of Merchants Bank, third floor of the
main office, 820 South Street, on April 21,1998, at 4:30 P.M., local time, and
any adjournments thereof, for the purposes stated below. It is anticipated that
the Proxy Statement and Proxy first will be sent or given to shareholders on
March 24, 1998.
Holders of record of the Corporation's Common Stock, par value $5.00
per share (the "Common Stock"), as of February 27, 1998, (the "Record Date") are
entitled to vote at the Annual Meeting or any adjournments thereof. On February
27,1998, there were 742,651 shares of Common Stock outstanding and of this
total, 84,882 shares (11.43%) of the Common Stock of the Corporation were held
in various trust accounts by the Trust Department of the Corporation's
wholly-owned subsidiary, Merchants Bank, (the "Bank"), in a fiduciary capacity
as trustee. It is expected that these 84,882 shares (11.43%) will be voted in
favor of the proposal to fix the number of Directors to be elected at fifteen
(15); and the elections of the nominees listed on pages 4 through 6. The
Corporation's insiders control approximately 30.12% of the voting Common Stock
outstanding and management is uncertain as to how these shares will be voted on
the various proposals.
Shareholders of the Corporation have cumulative voting rights. This
means that a shareholder, as provided for by law, has the right to vote the
number of shares owned by him for as many persons as there are Directors to be
elected, or to cumulate such shares and give one candidate as many votes as the
number of Directors to be elected multiplied by the number of such shares shall
equal, or to distribute them on the same principle among as many candidates as
he thinks fit; and, in deciding all other questions, each shareholder will be
entitled to one vote for each share held by him.
(1)
<PAGE> 4
Pursuant to Mississippi law, directors are elected by a plurality of
the votes cast in the election of directors. A "plurality" means that the
individuals with the largest number of favorable votes are elected as directors,
up to the maximum number of directors to be chosen at the meeting.
Pursuant to Mississippi law, action on a matter (other than the
election of directors) is approved if the votes cast favoring the action exceed
the votes cast opposing that action, unless the Corporation's Articles of
Incorporation or Mississippi law specifically requires a greater number of
affirmative votes on a particular matter. Broker non-voters and shareholder
abstentions are not counted in determining whether or not a matter has been
approved by shareholders.
Any person giving a Proxy has the right to revoke it at any time before
it is exercised. A shareholder may revoke his Proxy by personally appearing at
the Annual Meeting or by written notification to the Corporation which is
received prior to the exercise of the Proxy. All properly executed Proxies, if
not revoked, will be voted as directed. On all matters proposed by the Board of
Directors, and, if the shareholder does not direct to the contrary, the shares
will be voted "For" as stated below. The Corporation will act as its own
solicitation agent for Proxies. Directors, officers, and employees of the
Corporation and Bank may also solicit Proxies for the Corporation's Annual
Meeting. The cost of soliciting Proxies will be borne by the Corporation.
ITEM ONE - NUMBER OF DIRECTORS
The number of Directors to be elected at the Annual Meeting will be
determined under Mississippi law by the vote of shareholders. The Board of
Directors recommends that the number of Directors be set at fifteen (15), and it
is the intent of the persons named in the Proxy to vote such Proxy "FOR" the
proposal. The proposal will be ratified if the votes cast favoring the number of
Directors exceed the votes cast opposing it.
(2)
<PAGE> 5
ITEM TWO - ELECTION OF DIRECTORS
The Board of Directors, by a vote of a majority of the full Board,
nominates the persons named below for election to serve as Directors until the
1999 Annual Meeting of Shareholders and until their successors have been elected
and qualified. It is the intent of the persons named in the Proxy to vote such
Proxy "For" the election of the nominees listed below, unless otherwise
specified in the Proxy. In the event that any such nominee should be unable to
accept the office of Director, which is not anticipated, it is intended that the
persons named in the Proxy will vote for the election of such person in the
place of such nominee as the Board of Directors may recommend.
(3)
<PAGE> 6
INFORMATION CONCERNING NOMINEES
<TABLE>
<CAPTION>
Name Age Principal Occupation For Director of Amount and Nature of Percent of
the Last Five Years and Corporation Beneficial Ownership Common Stock
Bank or Corporation Since of Common Stock as Beneficially
Offices Currently Held of 2/27/98 (a) Owned (a)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James E. Blackburn, Jr. 53 President, 1994 38,393 (1) 5.17
Blackburn Motor Company,
Vicksburg, MS
Rodney E. Bounds 47 City Planner, 1995 3,581 0.48
City of Vicksburg, MS
Michael J. Chaney 54 President, CEO, 1994 1,363 (2) 0.18
Chaney Oil Company
Vicksburg, MS
Howell N. Gage 50 Chairman and Chief 1982 21,358 (3) 2.88
Executive Officer, 51,724 (4) 6.96
Merchants Bank and
Merchants Capital Corporation,
Vicksburg, MS
Dr. W. B. Hopson, Jr. 60 President, 1981 2,397 (5) 0.32
The Street Clinic,
Surgeon, Street Clinic and
Parkview Regional Medical Center,
Vicksburg, MS
Joel H. Horton 46 President and Chief 1992 2,548 (6) 0.34
Operating Officer,
Merchants Bank and
Merchants Capital Corporation,
Vicksburg, MS
C. Hays Latham 44 President and Owner, 1994 8,383 1.13
L & H Investments, Inc.
Vicksburg, MS
Martin S. Lewis 43 Executive Vice President, 1988 1,033 0.14
Anderson-Tully Company,
Vicksburg, MS
Robert P. McConnell 59 Investor 1993 21,899 (7) 2.95
Fred G. Peyton 54 President and Owner, 1995 242 0.03
Peyton Distributing Co., Inc.
Vicksburg, MS
Robert E. Pickett 61 Superintendent, 1994 266 0.04
Vicksburg Warren School District,
Vicksburg, MS
Landman Teller, Jr. 56 Attorney-at-Law, Partner, 1992 2,300 (8) 0.31
Teller, Martin, Chaney,and Hassell,
Vicksburg, MS
</TABLE>
(4)
<PAGE> 7
INFORMATION CONCERNING NOMINEES
<TABLE>
<CAPTION>
Name Age Principal Occupation For Director of Amount and Nature of Percent of
the Last Five Years and Corporation Beneficial Ownership Common Stock
Bank or Corporation Since of Common Stock as Beneficially
Offices Currently Held of 2/27/98 (a) Owned (a)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ernest G. Thomas 56 President and Owner, 1982 52,514 7.07
Ernest Thomas Associates Realty
Vicksburg, MS
James R. Wilkerson, Jr. 52 Executive Vice President 1992 677 (9) 0.09
and Cashier, Merchants Bank,
Secretary, Merchants Capital
Corporation, Vicksburg, MS
Robert C. Wilkerson III 58 Executive, 1984 15,000 (10) 2.02
R.C. Wilkerson, Jones of Mississippi,
Inc. (Insurance Agency). Vicksburg, MS
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP 223,678 (11) 30.12
</TABLE>
(5)
<PAGE> 8
INFORMATION CONCERNING NOMINEES
(a) Constitutes sole ownership unless otherwise indicated.
(1) Includes 8,784 shares held as custodian for children and 2,992 shares
owned solely by spouse.
(2) Includes 185 shares owned jointly with spouse.
(3) Includes 490 shares held as custodian for children.
(4) Represents 51,724 shares held by the Bank's Employee Stock Ownership
Stock Bonus Plan and Trust, over which Mr. Gage has primary voting
power, but no power of disposition. The individual allocation under
this plan on behalf of Mr. Gage was not available at the time of
mailing of the proxy materials; however, this amount is not expected
to be materially different from the previous year.
(5) Includes 555 shares owned jointly with spouse.
(6) Includes 2,280 shares owned jointly with spouse.
(7) Includes 21,567 shares owned by McConnell Partners, Ltd., of which Mr.
McConnell is a limited partner and owns 37% of said partnership and
his spouse owns 37% of said partnership.
(8) Includes 200 shares owned solely by spouse.
(9) Includes 30 shares owned solely by spouse.
(10) Includes 4,000 shares owned solely by spouse.
(11) As of February 27, 1998, all of the Directors and Executive Officers
of the Corporation and the Bank as a group (consisting of 15 persons)
beneficially owned, in the aggregate, 223,678 shares (30.12%) of
Common Stock of the Corporation.
None of the Directors is a director of another company with a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Act"), or subject to the reporting requirements of
Section 15 (d) of the Act, or registered as an investment company under the
Investment Company Act of 1940.
(6)
<PAGE> 9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and Executive Officers to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock. Executive Officers and Directors are required by
Securities and Exchange Commission Regulations to furnish the Corporation with
copies of all Section 16(a) forms they file. To the Corporation's knowledge,
based solely on a review of the copies of such reports furnished to the
Corporation and written representations that no other reports were required,
during the fiscal year ended December 31, 1997 all Section 16(a) filing
requirements applicable to the Corporation's Executive Officers and Directors
were complied with.
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the number of shares of
Common Stock of the Corporation held as of February 27, 1998, by the only
shareholders who are known to management to be the beneficial owners of more
than five percent (5%) of the Corporation's outstanding shares:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
James E. Blackburn, Jr. 38,393 (1) 5.17
2011 Washington St
Vicksburg, MS 39180
Howell N. Gage 21,358 (2) 2.88
6023 Castle Road 51,724 (3) 6.96
Vicksburg, MS 39180
Ernest G. Thomas 52,514 7.07
3318 Highland Drive
Vicksburg, MS 39180
(1) Includes 26,617 shares owned solely. Includes 2,992 shares owned by spouse
and 8,784 shares held as custodian for children.
(2) Includes 490 shares held as custodian for children.
(3) Represents 51,724 shares held by the Bank's Employee Stock Ownership Stock
Bonus Plan and Trust, over which Mr. Gage has primary voting power and no power
of disposition. The individual allocation under this plan on behalf of Mr. Gage,
was not available at the time of mailing of the proxy materials; however, this
amount is not expected to be materially different from the previous year.
(7)
<PAGE> 10
COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation and the Bank have, among other committees, a standing Audit
Committee and Trust Committee which meet monthly, and an Executive Committee
which meets twice a week.
The Audit Committee oversees the operation of the audit function of the
Bank, and reviews the work and findings on a monthly basis. This Committee also
approves modifications of most Bank policies other than lending policies. The
Audit Committee met eleven (11) times during the year ended December 31, 1997.
C. Hays Latham, Robert P. McConnell, Fred G. Peyton, and Robert E. Pickett, are
members of this Committee. Howell N. Gage, Jr. and James R. Wilkerson, Jr. are
ex-officio members of this Committee.
The Executive Committee oversees the management of the Corporation and the
Bank on a daily basis and acts on behalf of the Board of Directors on routine
matters. This Committee also approves all extensions of credit from the Bank
over $50,000. The Executive Committee met eighty-six (86) times during the year
ended December 31, 1997. J. E. Blackburn, Jr., Ernest G. Thomas, Howell N. Gage,
Joel H. Horton, and R. C. Wilkerson III, are members of this Committee. In
addition, two different members of the regular Board of Directors serve for a
three-month period, rotating every quarter.
The Trust Committee directs, supervises, reviews, and approves all actions
and functions of the Trust Department. The Trust Committee met eleven (11) times
during the year ended December 31, 1997. Michael J. Chaney, Martin S. Lewis,
Joel H. Horton, Dr. W. B. Hopson, Jr., Rodney E. Bounds, and Landman Teller,
Jr., are members of this Committee.
The Board of Directors of the Corporation met a total of twelve (12) times
during the year ended December 31, 1997, (including regularly scheduled and
special meetings). During 1997, all Directors, except Martin Lewis, attended 75
percent or more of the total number of meetings of the Board of Directors and of
Committees of the Board on which they served.
The Directors of the Corporation are also Directors of the Bank.
(8)
<PAGE> 11
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Executive Officers of the Corporation and the Bank as of December 31, 1997:
<TABLE>
<CAPTION>
Name (Age) Present Position
---- ---- ----------------
<S> <C> <C>
Howell N. Gage (50) Director of the Corporation and Bank
since 1982; Chairman and Chief Executive
Officer of the Bank and the Corporation
since 1992.
Joel H. Horton (46) Director of the Corporation and Bank
since 1992; President and Chief
Operating Officer of the Bank and the
Corporation since 1992.
James R. Wilkerson, Jr (52) Director and Secretary of the
Corporation and Director of the Bank
since 1992, Executive Vice President of
the Bank since 1992, and Cashier of the
Bank since 1974.
</TABLE>
- ----------
No family relationships exist among the Executive Officers of the Corporation or
the Bank.
(9)
<PAGE> 12
SUMMARY COMPENSATION TABLE
The following table shows the annual compensation for 1997, 1996 and 1995 for
the Chief Executive Officer of the Corporate (serving in the position of
Chairman) and all Executive Officers of the Corporation whose annual
compensation for 1997 exceeded $100,000 collectively, the "Named Executive
Officers".
<TABLE>
<CAPTION>
Annual Base Compensation
------------------------
Long Term
Name Other Compen- All
and Annual sation Other
Principal Compen- Awards Compen-
Position Year Salary ($) Bonus ($) sation($) Options # sation($)
- -------------- ---- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Howell N. Gage 1997 144,123 24,925 11,933 (1) 1,088 (6)
Chairman 1,275 (2) N/A (7)
Bank and
Corporation
1996 135,210 25,228 11,598 (1) 965 (3)
1,278 (2) 965 (4)
2,406 (5)
1,029 (6)
1995 125,004 25,200 11,301 (1) 1,183 (3)
1,087 (2) 1,183 (4)
1,875 (5)
1,176 (6)
Joel H. Horton 1997 105,630 18,197 1,400 (2) 1,000 N/A (7)
President
Bank and
Corporation
1996 99,654 17,172 1,525 (2) 756 (3)
756 (4)
3,505 (5)
1995 91,254 16,800 1,112 (2) 871 (3)
871 (4)
2,737 (5)
</TABLE>
(1) Deferred Compensation
(2) Automobile
(3) Profit Sharing Plan Contribution
(4) Employee Stock Ownership Plan Contribution
(5) 401-(k) Plan Contribution
(6) Dollar value of insurance premiums paid by Corporation on behalf of Mr.
Gage.
(7) The individual allocation under the plans listed in (3), (4) and (5) were
not available at the time of mailing of the proxy materials; however, these
amounts are not expected to be materially different from the previous year.
(10)
<PAGE> 13
OPTION GRANTS
Shown below is information on grants of stock options pursuant to the
Corporation's Incentive Stock Option Plan during 1997 to the Named Executive
Officers.
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS GRANTED TO EXERCISE
OPTIONS GRANTED EMPLOYEES IN PRICE (2)
NAME IN 1997 (#)(1) 1997 ($ PER SHARE) EXPIRATION DATE
------ --------------- ------------------ ------------- ---------------
<S> <C> <C> <C> <C>
JOEL H. HORTON 1,000 100% $35.00 4/15/07
</TABLE>
(1) Option is exercisable on the fifth anniversary of the date of the
grant.
(2) The exercise price was equal to the fair market value of the shares
on the date of the grant.
OPTION EXERCISES AND YEAR END VALUE
The following table provides information as to the options exercised
during 1997, and the unexercised options to purchase the Corporation's Common
Stock previously granted to the Named Executive Officers and held by them at
the end of 1997.
OPTIONS EXERCISED IN 1997 AND YEAR END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF
SHARES ACQUIRED UNEXERCISED OPTIONS UNEXERCISED IN THE
ON EXERCISE IN VALUE AT YEAR END (#)(1) MONEY OPTIONS
NAME 1997(#) REALIZED EXERCISABLE/UNEXCERCISABLE AT YEAR END ($)(2)
------ --------------- ------------------ -------------------------- ------------------
<S> <C> <C> <C> <C>
JOEL H. HORTON 0 0 0/1000 $9,500
</TABLE>
(1) Option is exercisable on the fifth anniversary of the date of the
grant.
(2) Based on the fair market value of the shares on December 31, 1997
($44.50 per share).
(11)
<PAGE> 14
Director's Fees
Both officer and non-officer Directors of the Corporation and the Bank are
paid $2,000 per year, plus $100 for each meeting attended. The non-officer
Directors of the Corporation who are members of the Audit and Trust Committees
of the Board of Directors are paid $75 per committee meeting attended.
Non-officer Directors who are non-rotating members of the Executive Committee
are paid $10,000 per year, plus $75 for each meeting attended. Directors who are
rotating members of the Executive Committee are paid $150 per committee meeting
attended.
(12)
<PAGE> 15
Profit Sharing Plan
The Bank maintains a Profit Sharing Plan (the "Plan") for the benefit of
all employees. The Plan was established on January 1, 1956, and amended January
1, 1986, with a plan year ending December 31. The Plan is administered by an
Administrative Committee elected by the Board of Directors of the Bank. The
duties of the Administrative Committee consist of making all decisions relative
to investments and payments of Plan benefits. The Bank is trustee of the Plan
and implements the decisions of the Administrative Committee.
Contributions to the Plan are made from profits of the Bank at the
direction of the Board of Directors. During the year ended December 31, 1997,
$17,313 was contributed for the benefit of all Plan participants. Allocation to
participants is based on the following point formula: three (3) points for each
year of service and one (1) point for each $100 of salary earned. The amount of
contributions allocated in 1997 to the accounts of Messrs. Gage, Horton, and
Wilkerson were not available at the time of mailing of the proxy materials;
however, these amounts are not expected to be materially different from the
previous year.
Eligibility for participation in the Plan becomes effective for the
calendar year in which an employee completes at least 1,000 hours of service.
The vesting schedule for all employee benefit plans is listed on page 16.
Forfeitures arising out of the termination of employment are re-allocated
among the remaining participants in the Plan. No forfeitures occur as a result
of death, disability, or retirement.
The method of payment to participants is at the discretion of the
Administrative Committee, except in the case of the death of the participant, in
which case a lump sum payment is made to the participant's designated
beneficiary. A participant's interest must be paid out over a period not to
exceed ten years.
Since the contributions to the Plan are not actuarially computed, a
participant has no assurance as to the amount which will be available upon
retirement other than the balance in his or her individual account.
(13)
<PAGE> 16
Employee Stock Ownership Stock Bonus Plan and Trust
An Employee Stock Ownership Stock Bonus Plan and Trust (the "ESOP") was
adopted by the Board of Directors of the Corporation and the Bank on January 11,
1983, effective as of January 1, 1983, providing eligibility for all persons
employed by the Corporation and the Bank who have worked a minimum of 1,000
hours during the year and are employed on December 31 of each year for which a
contribution is made.
Contributions to the ESOP for the year ended December 31, 1997, totaled
$17,313. Each participant has an account which is maintained by the trustee of
the ESOP, Howell N. Gage. Funds in each account will be invested in the Common
Stock of the Corporation. The amount of retirement benefit is based upon the
fair market value of the participant's account.
Normal retirement age for the ESOP is sixty-five (65) years, but
participants may be given early retirement within the ten-year period
immediately preceding the normal retirement age. A participant becomes vested
with respect to contributions made by the Corporation and the Bank according to
the vesting schedule on page 16.
The individual allocation of the contributions under the ESOP for 1997 on
behalf of Messrs. Gage, Horton, and Wilkerson were not available at the time of
mailing of the proxy materials; however, these amounts are not expected to be
materially different from the previous year.
ESOP participants will have the right to direct the voting of all
Corporation stock in the fund allocated to their accounts. Any nonallocated
stock will be voted in the discretion of the trustee.
(14)
<PAGE> 17
401 (k) Plan
The Bank has established Merchants Bank 401 (k) Plan and Trust, effective
July 1, 1989, to recognize and reward the efforts of its employees. Employees
(including Executive Officers of the Corporation who are also employees of the
Bank) who have completed 1 year of service are eligible to participate in the
Plan. Employees may become participants in the Plan on the first day of the
month coinciding with or next following the date they satisfy the eligibility
requirements. Participants may elect to defer a percentage of their compensation
each year instead of receiving that amount in cash. This percentage, however,
may not exceed the limitations prescribed by law. Additionally, the total
deferrals of a participant in any calendar year or plan year may not exceed a
dollar limit which is set by law. The limit for 1997 was $9,500. Each year the
Bank will contribute to the Plan a matching contribution equal to 50% of the
amount of the salary reduction each participant elected to defer. In applying
this matching percentage, only salary reduction up to 6% of the participant's
compensation will be considered. In addition, the Employer may make
discretionary contributions for each plan year in an amount to be determined
each year by the Employer.
All salary deferral contributions are 100% vested. All of the Employer's
discretionary contributions and matching contributions are subject to the
vesting schedule on page 16.
Participants are allowed to withdraw vested benefits in the event of death,
disability, termination of employment, or in the event of undue financial
hardship. The Plan has a normal retirement date of 65 years of age. The bank's
contributions to the 401 (k) Plan for the year ended December 31, 1997, totaled
$68,374. The individual allocation of the contributions to the 401 (k) for 1997
on behalf of Messrs. Gage, Horton, and Wilkerson were not available at the time
of mailing of the proxy materials; however, these amounts are not expected to be
materially different from the previous year.
(15)
<PAGE> 18
Vesting Schedule for All Employee Benefit Plans (1)
<TABLE>
<CAPTION>
If his completed Years The vested The percentage
of Credited Service percentage of of his share
shall have been his share shall be to be forfeited
- ---------------------- ------------------ ---------------
<S> <C> <C>
less than 3 years 0% 100%
3 full years but less than 4 20% 80%
4 full years but less than 5 40% 60%
5 full years but less than 6 60% 40%
6 full years but less than 7 80% 20%
7 full years and more 100% 0%
</TABLE>
(1) Messrs. Gage, Horton, and Wilkerson all have 7 or more years of credited
service and, thus, are fully vested.
CERTAIN TRANSACTIONS WITH MANAGEMENT
During the fiscal year, and up to the date of this Proxy Statement,
extensions of credit, both direct and indirect, to individual Directors,
executive officers, and principal shareholders of the Corporation, and their
associates, were made only in the ordinary course of the Bank's business; terms,
interest rates, and collateral requirements were substantially the same for
comparable transactions with other persons doing business with the Bank. These
extensions of credit, in the opinion of the Bank's management, do not involve
more than the normal risk of collectibility or present any other unfavorable
features. At December 31, 1997, the aggregate amount of such loans and
extensions of credit outstanding was approximately $ 6,589,172.
For the calendar year 1997, R. C. Wilkerson, Jones of Mississippi Inc., of
which Mr. R. C. Wilkerson III, a Director, is President, was paid $ 91,927 in
insurance premiums by the Bank. The Board of Directors believes this payment was
reasonable and comparable to or lower than premiums charged by other insurance
agencies who customarily provide such service. Teller, Martin, Chaney and
Hassell Law Firm, of which Landman Teller, Jr., a Director, is Senior Partner,
was paid $90,817 in legal fees by the Bank. The Board of Directors believes this
payment was reasonable and comparable to or lower than legal fees charged by
other law firms who customarily provide such service.
(16)
<PAGE> 19
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed May & Co., Vicksburg, Mississippi, a
firm of independent certified public accountants, as auditors for the fiscal
year ending December 31, 1997, and until their successors are selected. May &
Co. have been auditors for the Corporation since April 16, 1991.
The Corporation has been advised that neither the firm nor any of its
partners has any direct or any material indirect financial interest in the
securities of the Corporation or any of its subsidiaries, except as auditors and
consultants on accounting procedures and tax matters. The Board does not
anticipate that representatives of May & Co. will attend the Annual Meeting.
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Annual Meeting other than those specifically set forth in the Notice of Annual
Meeting of Shareholders, nor does it know of any matters to be brought before
the Annual Meeting by others. If, however, any other matters properly come
before the Annual Meeting, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy in accordance with the judgment of the
Board on any such matters.
THE ANNUAL REPORT OF THE CORPORATION FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997, IS ENCLOSED. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING
MATERIAL. ANY SHAREHOLDER WHO HAS NOT RECEIVED AN ANNUAL REPORT MAY OBTAIN ONE
FROM THE CORPORATION. THE CORPORATION ALSO WILL PROVIDE, ON REQUEST, WITHOUT
CHARGE, COPIES OF ITS ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1997, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SHAREHOLDERS WISHING
TO RECEIVE A COPY OF THE ANNUAL REPORT ON FORM 10-K ARE DIRECTED TO WRITE TO THE
UNDERSIGNED AT THE ADDRESS OF THE CORPORATION. IT IS ANTICIPATED THAT THE FORM
10-K WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OR ABOUT MARCH
24, 1998.
(17)
<PAGE> 20
PROPOSALS FOR 1999 ANNUAL MEETING
Any shareholder who wishes to present a proposal at the Corporation's next
Annual Meeting, now scheduled for April 20, 1999, and who wishes to have the
proposal included in the Corporation's Proxy Statement and form of Proxy for
that meeting, must submit the proposal to the undersigned at the address of the
Corporation no later than November 17, 1998.
THE ACCOMPANYING PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE.
By Order of the Board of Directors
Dated: March 24, 1998
/s/ HOWELL N. GAGE
----------------------------------
Howell N. Gage
Chairman of the Board
(18)
<PAGE> 21
PROXY FOR ANNUAL MEETING
MERCHANTS CAPITAL CORPORATION, VICKSBURG, MISSISSIPPI
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS that the undersigned shareholder of
MERCHANTS CAPITAL CORPORATION, VICKSBURG, MISSISSIPPI, does hereby nominate,
constitute, and appoint James E. Blackburn, Jr., and Ernest G. Thomas as proxies
or either one of them (with full power of substitution), and hereby authorizes
them to represent and vote, as designated below, all the shares of Merchants
Capital Corporation held of record as of February 27, 1998, by the undersigned,
at the annual meeting of its shareholders to be held in the Board Room of
Merchants Bank, third floor of the main office, 820 South Street, Vicksburg,
Mississippi, on April 21,1998, at 4:30 P.M., or any adjournments thereof, with
all the powers the undersigned would possess if personally present, as follows:
1. Fixing the number of directors to be elected at 15.
FOR _________ AGAINST __________ ABSTAIN ___________
2. The election of the following 15 persons as directors
(INSTRUCTION: AUTHORITY TO VOTE FOR ANY NOMINEE MAY BE
WITHHELD BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME
OF ANY NOMINEE).
FOR all nominees AGAINST all
except as indicated ________ nominees __________
James E. Blackburn, Jr. Robert P. McConnell
Rodney E. Bounds Fred G. Peyton
Michael J. Chaney Robert E. Pickett
Howell N. Gage Landman Teller, Jr.
W.B. Hopson, Jr. Ernest G. Thomas
Joel H. Horton James R. Wilkerson, Jr.
C. Hays Latham Robert C. Wilkerson III
Martin S. Lewis
<PAGE> 22
3. In their discretion, proxies are authorized to vote upon such
other business as may be properly brought before the meeting
or any adjournments thereof.
FOR ________ AGAINST ________ ABSTAIN _________
This Proxy, when properly executed, will be voted in accordance with the
specific indications above. IN THE ABSENCE OF SUCH INDICATIONS, THIS PROXY WILL
BE VOTED "FOR" ITEM 1; THE NOMINEES LISTED IN ITEM 2; AND ITEM 3. If any other
matters shall properly come before the meeting, it is the intention of the
persons named as proxy holders to vote on such matters in accordance with their
judgment.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
DATE:
------------------------ ---------------------------------
Signature of Shareholder
---------------------------------
Signature of Shareholder
When signing as attorney, executor, trustee, or guardian, please give full
title. If more than one trustee, all should sign. All joint owners must sign.
IF YOU PLAN TO ATTEND THE MEETING, PLEASE PLACE A CHECK MARK HERE
_____. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE SIGN AND RETURN THIS
PROXY AT ONCE IN THE POSTAGE PAID ENVELOPE PROVIDED.
