<PAGE>
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:
/ / 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-12
Magna Bancorp, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(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:
------------------------------------------------------------------------
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>
LOGO
September 30, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Magna Bancorp,
Inc., I cordially invite you to attend the Annual Meeting of Stockholders of
the Company to be held at 2:00 p.m. on October 23, 1996, at the Holiday Inn,
6563 U.S. Highway 49 North, Hattiesburg, Mississippi. The attached Notice of
Annual Meeting of Stockholders and Proxy Statement discuss the business to be
conducted at the Meeting. We have also enclosed a copy of Magna Bancorp,
Inc.'s Annual Report. At the Meeting we will also report on the Company's
operations and the outlook for the year ahead.
I encourage you to attend the Meeting in person. Whether or not you plan
to attend, however, PLEASE READ THE ENCLOSED PROXY STATEMENT AND THEN
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT IN THE ACCOMPANYING
POSTPAID RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the Meeting.
Thank you for your attention to this important matter.
Very truly yours,
/s/ Robert S. Duncan
ROBERT S. DUNCAN
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
100 West Front Street/P.O. Box 1858/Hattiesburg, MS 39403-1858/(601) 545-4700
<PAGE>
MAGNA BANCORP, INC.
100 WEST FRONT STREET
HATTIESBURG, MISSISSIPPI 39401
(601) 545-4722
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 23, 1996
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Magna Bancorp, Inc. (the "Company") will be held at 2:00 p.m.
on October 23, 1996 at the Holiday Inn, 6563 U.S. Highway 49 North,
Hattiesburg, Mississippi.
A proxy card and a Proxy Statement for the Meeting are enclosed. The
Meeting is for the purpose of considering and acting upon the election of two
directors of the Company and such other matters as may properly come before
the Meeting or any adjournments or postponements thereof. The Board of
Directors is not aware of any other business to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record at the close of business on
August 30, 1996 are the stockholders entitled to vote at the Meeting and any
adjournments or postponements thereof.
You are requested to complete, sign and date the enclosed proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed postpaid return envelope. The proxy will not be used if you attend
and vote at the Meeting in person.
By Order of the Board of Directors
/s/ H.A. Moore, III
H. A. Moore, III
SECRETARY
Hattiesburg, Mississippi
September 30, 1996
- - - -------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
PRE-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
- - - -------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
MAGNA BANCORP, INC.
100 WEST FRONT STREET
HATTIESBURG, MISSISSIPPI 39401
(601) 545-4722
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 23, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Magna Bancorp, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company
(the "Meeting"), to be held at the Holiday Inn, 6563 U.S. Highway 49 North,
Hattiesburg, Mississippi, on October 23, 1996 at 2:00 p.m., and at all
adjournments or postponements of the Meeting. The accompanying Notice of
Meeting and this Proxy Statement are first being mailed to stockholders on or
about September 27, 1996. Certain of the information provided herein relates
to Magnolia Federal Bank for Savings ("Magnolia Federal" or the "Bank"), a
wholly-owned subsidiary of the Company.
At the Meeting, the stockholders of the Company are being asked to
consider and vote upon the proposal to elect two directors of the Company.
VOTING RIGHTS AND PROXY INFORMATION
All shares of common stock, par value $.01 per share, of the Company (the
"Common Stock") represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for election of the
nominees for directors named below and for the amendment to the Certificate
of Incorporation. The Company does not know of any matters, other than as
described in the Notice of Meeting, that are to come before the Meeting. If
any other matters are properly presented at the Meeting for action, the
persons named in the enclosed form of proxy will have the discretion to vote
on such matters in accordance with their best judgment.
Directors shall be elected by a plurality of the votes present in person
or represented by proxy at the Meeting and entitled to vote on the election
of directors. In all other matters, the affirmative vote of the majority of
shares present in person or represented by proxy at the Meeting and entitled
to vote on the matter shall be the act of the stockholders. Proxies marked
to abstain with respect to a proposal have the same effect as votes against
the proposal. Broker non-votes will have no effect. One-third of the shares
of the Common Stock, present in person or represented by proxy, shall
constitute a quorum for purposes of the Meeting. Abstentions and proxies
received as broker non-votes are counted for purposes of determining a quorum.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary
of the Company at or before the Meeting a written notice of revocation
bearing a later date than the proxy, (ii) duly executing a subsequent proxy
relating to the same shares and delivering it to the Secretary of the Company
at or before the Meeting, or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be
delivered to H. A. Moore, III, Esq., Secretary, Magna Bancorp, Inc., P.O. Box
1858, Hattiesburg, Mississippi 39403-1858.
<PAGE>
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Stockholders of record as of the close of business on August 30, 1996
will be entitled to one vote for each share then held on the matters brought
before the Meeting. As of that date, the Company had 13,741,018 shares of
Common Stock issued and outstanding.
The following table sets forth, as of August 30, 1996, certain
information as to (i) those persons who were known by management to be
beneficial owners of more than 5% of the Company's outstanding shares of
Common Stock, (ii) the shares of Common Stock beneficially owned by the Chief
Executive Officer and the four other highest paid executive officers who
earned in excess of $100,000 during fiscal 1996 (the "named officers") and
(iii) all executive officers and directors of the Company and the Bank as a
group.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT OF
BENEFICIAL OWNER (1) OWNED CLASS
- - - -------------------- ------------- --------------
<S> <C> <C>
Robert S. Duncan . . . . . . . . . . . . . . 778,562 (2) 5.67%
Lou Ann Poynter . . . . . . . . . . . . . . 569,616 (3) 4.15
Hershel Parker . . . . . . . . . . . . . . . 197,669 (4) 1.44
Thomas L. Cousins . . . . . . . . . . . . . 61,390 (5) 0.45
Barbara S. Ellender . . . . . . . . . . . . 74,644 (6) 0.54
All directors and executive officers
as a group (24 persons)(7) . . . . . . . . . 4,251,791 (8) 30.94
</TABLE>
- - - --------------------
(1) The address of each of the beneficial owners is 100 West Front Street,
Hattiesburg, Mississippi 39401.
(2) Mr. Duncan shares voting and investment power over 334,080 shares
with his wife and shares with the 401(k) Trustee investment power over 566
shares allocated to his account under the 401(k). The number of shares
reported for Mr. Duncan includes 68,000 shares held by the Irrevocable Trust
for Lou Ann and Louis G. Poynter, a family trust for which he serves as
Trustee, which, under applicable securities laws, may be deemed to be
beneficially owned by Mr. Duncan.
(3) Ms. Poynter shares voting and investment power over 138,936 shares
with her husband and 960 shares with her daughter. She shares with the
401(k) Trustee investment power over 430 shares allocated to her account
under the 401(k). Ms. Poynter is also deemed to beneficially own 61,976
shares held in her husband's IRA and 39,998 shares for which she serves as
custodian for her daughter's trust established under the Mississippi Uniform
Gift to Minors Act. The number of shares reported for Ms. Poynter includes
90,400 shares held by the Irrevocable Trust for Robert S. and Judy W. Duncan,
a family trust for which she serves as Trustee, which, under applicable
securities laws, may be deemed to be beneficially owned by Ms. Poynter.
(4) Mr. Parker shares voting and investment power over 48,480 shares
with his wife and shares with the 401(k) Trustee investment power over 349
shares allocated to his account under the 401(k). Mr. Parker is deemed to
beneficially own 19,410 shares held in his wife's IRA.
(5) Mr. Cousins shares with the 401(k) Trustee investment power over 232
shares allocated to his account under the 401(k). Mr. Cousins is deemed to
beneficially own 7,102 shares held in his wife's IRA.
(6) Ms. Ellender shares voting and investment power over 17,208 shares
with her husband and shares with the 401(k) Trustee investment power over 276
shares allocated to her account under the 401(k). Ms. Ellender is deemed to
beneficially own 7,080 shares held in her husband's IRA and 1,920 shares held
collectively by her two children.
(7) Includes directors and executive officers of the Company and the
Bank.
2
<PAGE>
(8) Includes shares held directly, as well as 132,384 shares subject to
options which are exercisable within 60 days of August 30, 1996 granted under
the 1990 Stock Option and Incentive Plan ("the Stock Option Plan"), as well
as shares held in retirement accounts, held by certain members of the named
individuals' families, or held by trusts of which the named individual is a
trustee or substantial beneficiary, with respect to which shares the
respective directors and officers may be deemed to have sole or shared voting
or investment power. The number of shares reported includes 675,376 shares
held by the Defined Benefit Pension Plan for Employees of Magnolia Federal
Bank for Savings Trust (the "Pension Plan") which, under applicable
securities laws, may be deemed to be beneficially owned by those officers who
serve as Trustees for the Trust.
I. ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors currently consists of five members. The
Board is divided into three classes, each of which contains approximately
one-third of the Board. Approximately one-third of the directors are elected
annually. Directors of the Company are generally elected to serve for
three-year terms or until their respective successors are elected and
qualified.
The table below sets forth certain information, as of August 30, 1996,
regarding the composition of the Company's Board of Directors, including
terms of office. On July 17, 1996, the Nominating Committee recommended and
the Board approved the nominees identified below. It is intended that the
proxies solicited on behalf of the Board of Directors (other than proxies in
which the vote is withheld as to a nominee) will be voted at the Meeting FOR
the election of the nominees identified below. If the nominee is unable to
serve, the shares represented by all valid proxies will be voted for the
election of such substitute as the Board of Directors may recommend. At this
time, the Board of Directors knows of no reason why the nominees might be
unable to serve if elected. There are no arrangements or understandings
between any director or nominee and any other person pursuant to which such
director or the nominee was selected.
<TABLE>
<CAPTION>
SHARES
OF
POSITION(S) COMMON
HELD TERM STOCK PERCENT
IN THE DIRECTOR TO BENEFICIALLY OF
NAME AGE COMPANY SINCE (1) EXPIRE OWNED CLASS
- - - --------------------- ---- ---------- --------- ------ ------------ -------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Robert S. Duncan 60 Director 1974 1999 778,562 5.67%
and
Chairman
Zach T. Hederman, Jr. 48 Director 1983 1999 371,726 (2) 2.71
DIRECTORS CONTINUING IN OFFICE
H. A. Moore, III 47 Director 1990 1997 428,884 (3) 3.12
and
Secretary
Lou Ann Poynter 50 Director 1990 1998 569,616 4.15
and
President
George P. Hopkins, Jr. 70 Director 1981 1998 151,296 (4) 1.10
</TABLE>
- - - --------------------
(1) Includes service as a director of the Bank.
(2) Mr. Hederman shares voting and investment power over 266,648 shares
with Trustmark National Bank, custodian for the ZTH Trust for
Zach Hederman, Jr.
3
<PAGE>
(3) Mr. Moore shares voting and investment power over 11,520 shares with
one of his sons, and he is deemed to beneficially own 44,672 shares held
collectively by his three children. As a partner in the law firm of Moore &
Jones, Mr. Moore has a beneficial interest in 57,030 shares held by Legg
Mason Wood Walker, Inc. as fund manager for the Trust for the Moore & Jones
Profit Sharing Plan, a self-directed plan for which Mr. Moore serves as one
of three trustees and as designated administrator; he has no ownership
interest in or investment control or voting power over 92,942 shares held for
other participants in the plan.
(4) Includes 38,496 shares subject to a presently exercisable option
granted under the Stock Option Plan.
The business experience of each director of the Company is set forth
below. All directors have held their present position for at least six years
unless otherwise indicated.
ROBERT S. DUNCAN is Chairman of the Board and Chief Executive Officer of
the Company and Chairman of the Board of Magnolia Federal. Mr. Duncan joined
the Bank in 1968 as an Assistant Secretary, became Executive Vice President
in 1972, and President in 1977. He was Chief Executive Officer of the Bank
from 1983 until March 1996, and has served as Chairman of the Board of the
Bank since 1984. For eight years prior to joining Magnolia Federal, Mr.
Duncan served as a manager for the accounting firm of KPMG Peat Marwick LLP.
Mr. Duncan is a past Director of the FHLB of Dallas, and former State
Director of the Savings and Loan Foundation and the Institute of Financial
Education. He is past President of the Mississippi League of Savings
Institutions and the Mississippi Financial Managers Society and currently
serves on the Legislative Committee of the Mississippi Bankers Association.
He has been active with the America's Community Bankers organization, serving
several years on the Executive Committee, and as Co-Chairman of the
Governmental Affairs Committee. Mr. Duncan has served on the Thrift
Institutions Advisory Council of the Federal Reserve Board, the SAIF of the
FDIC and the Federal Reserve Board of Atlanta. He is a member of the Alabama
Society of Certified Public Accountants. Mr. Duncan holds a B.S. degree from
Auburn University. He has attended the Graduate School of Savings and Loans
at Indiana University and the Savings and Loan School for Executive
Development at the University of Georgia.
ZACH T. HEDERMAN, JR. is President of Zach T. Hederman, Jr. Properties,
Inc., which engages in land development and utilities. He is the General
Partner of Baycastle Properties, L.P., Annandale Properties, L.P. and Cypress
Lake Properties, L.P. He received a Bachelor of Arts degree from the
University of Mississippi, an M.B.A. from Mississippi College and a P.M.D.
(Program for Management Development) from the Harvard University Graduate
School of Business.
H. A. MOORE, III is Secretary of the Company and has served as outside
General Counsel to the Bank since 1976. Mr. Moore is the managing partner of
the law firm of Moore and Jones, Hattiesburg, Mississippi, and has practiced
law with the firm since 1972. He received his B.A. and J.D. degrees from the
University of Mississippi in 1970 and 1972, respectively. He is a member of
Omicron Delta Kappa honorary fraternity and Phi Alpha Delta legal fraternity.
Mr. Moore has actively participated as a member and officer of the South
Central Mississippi Bar Association and as a member and director of the
Mississippi Bar Association. He has served as President of the Young Lawyers
Division of the Mississippi Bar Association and has served on several
committees of the Mississippi Bar, including the Ethics Committee. He is a
member of the Mississippi Bar Foundation and has served as one of its
directors. Mr. Moore is also a member of the American College of Mortgage
Attorneys, the American Judicature Society, the American Bar Association and
the South Mississippi Estate Planning Association. Mr. Moore has been an
active member of the Attorney's Committee of the America's Community Bankers.
LOU ANN POYNTER is President and Chief Operating Officer of the Company
and President and Chief Executive Officer of Magnolia Federal. She joined the
Bank in 1972, became Treasurer in 1975, and Senior Vice President in 1985.
She became Executive Vice President and Treasurer in 1988 and served in that
capacity until she became President on July 1, 1993. Ms. Poynter was
appointed Chief Executive Officer of the Bank in March, 1996. She has served
on the Thrift Industry Accounting Committee and as a National Director of the
Financial Managers Society, Inc. She is past President of the Mississippi
Financial Managers Society and has served on the Mississippi State Board of
Public Accountancy. She currently serves as a member of the Accounting
Committee and the Government Affairs Council of the America's Community
Bankers. She serves on the Federal Legislative
4
<PAGE>
Committee of the Mississippi Bankers Association and is a member of the
Mississippi Society of Certified Public Accountants and the American
Institute of Certified Public Accountants. Ms. Poynter received her B.S.
degree in Business Administration and M.S. degree in Accounting from the
University of Southern Mississippi.
GEORGE P. HOPKINS, JR. is owner and President of George P. Hopkins, Inc.
Contractors-Engineers, a general contractor. He holds a B.S. degree in Civil
Engineering from the University of Mississippi. He served as a Director of
Coast Federal Savings and Loan Association from 1961 until 1981, when it was
merged into Magnolia Federal Bank for Savings. He is a past Director of the
New Orleans Branch of the Federal Reserve Bank of Atlanta and has served as a
Director and Member of the Executive Committee of the former Gulf National
Bank, Gulfport, Mississippi. He is currently President and a Director of
Mississippi Coast Marine, Inc., Gulfport, Mississippi.
The Board of Directors of the Bank currently consists of 11 directors,
including four of the directors of the Company. The Board is divided into
three classes and approximately one-third of the directors are elected
annually. Because the Company owns all of the issued and outstanding shares
of capital stock of the Bank, the Company elects the directors of the Bank.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Meetings of the Company's Board of Directors are generally held on a
monthly basis. The Board of Directors met 12 times during the fiscal year
ended June 30, 1996. During fiscal 1996, no incumbent director of the
Company attended fewer than 75% of the aggregate of the total number of Board
meetings and the total number of meetings held by the committees of the Board
of Directors on which he or she served. Directors of the Company are paid
$2,000 per month for services as directors of the Company.
The Board of Directors of the Company has standing Audit and Nominating
Committees.
The Audit Committee recommends independent auditors to the Board, reviews
the results of auditors' services, reviews with management and the internal
auditors the systems of internal control and internal audit reports and
assures that the books and records of the Company are maintained in
accordance with applicable accounting principles and standards. The members
of the Audit Committee are Zach T. Hederman, Jr. and George P. Hopkins, Jr.
In fiscal 1996, the Committee met twice. Members of the Audit Committee are
paid an annual retainer fee of $18,000 for services on the Committee in
addition to their monthly fee for services as Board members.
The Nominating Committee consists of three members, one of whom is the
Chairman and CEO of the Company. The current members of the Nominating
Committee are Robert S. Duncan, Lou Ann Poynter and H. A. Moore, III. The
Nominating Committee recommends to the Board nominees for election as Company
directors. In fiscal 1996, the Committee met once. While the Board of
Directors of the Company will consider nominees recommended by stockholders,
the Board has not actively solicited such nominations. Pursuant to the
Company's By-laws, nominations by stockholders must be delivered in writing
to the Secretary of the Company at least 30 days before the date of the
annual meeting.
The Bank's Board of Directors generally meets monthly. The Board met 12
times during the year ended June 30, 1996. During fiscal 1996, no incumbent
director of the Bank attended fewer than 75% of the aggregate of the total
number of Board meetings and the total number of meetings held by the
committees of the Board of Directors on which he or she served. All
Directors of the Bank are paid $1,500 per month for services as Directors of
the Bank and an annual fee of $6,000 for services on committees is paid to
Bank directors who are not also officers.
5
<PAGE>
All compensation and personnel matters are the responsibility of the
Bank. The Human Resources Committee for the Bank recommends employee
compensation, benefits and personnel policies. The members of this Committee
are Harry H. Bell, Jr., David M. Thomas and Emmett A. Carlisle, III. In
fiscal 1996, the Committee met twice.
EXECUTIVE COMPENSATION
The Company's officers did not receive any compensation from the Company
in fiscal 1996 for services performed in their capacities as officers of the
Company.
The following table sets forth information concerning the compensation of
the named officers for services in all capacities to the Company and Magnolia
Federal for the years ended June 30, 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
- - - ------------------------------------------------------------------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITIONS YEAR SALARY BONUS (1) COMPENSATION (2) COMPENSATION
(3)
- - - ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert S. Duncan,
Chairman of the Board 1996 $199,000 $ 97,000 $ -- $30,197
and Director of the 1995 199,000 130,000 171,542 71,050
Company and the Bank 1994 206,389 95,000 159,155 55,125
- - - -------------------------------------------------------------------------------
Lou Ann Poynter
President and
Director of the 1996 190,385 90,000 -- 29,002
Company and 1995 156,199 80,000 86,251 50,141
the Bank 1994 161,373 60,000 79,982 53,083
- - - -------------------------------------------------------------------------------
Hershel Parker
Executive Vice
President of the
Bank and President 1996 130,003 38,000 -- 3,360
of Magna Mortgage 1995 124,499 36,000 64,245 27,342
Company 1994 125,404 36,000 59,568 30,710
- - - -------------------------------------------------------------------------------
Thomas
L. Cousins
Executive Vice 1996 120,000 38,000 -- 2,761
President of the 1995 108,499 36,000 21,105 22,422
Bank 1994 108,692 30,000 19,577 23,494
- - - -------------------------------------------------------------------------------
Barbara S. Ellender 1996 81,000 26,000 -- 1,615
Senior Vice President 1995 73,000 25,000 21,105 11,769
of the Bank 1994 72,558 25,000 19,577 12,806
- - - -------------------------------------------------------------------------------
</TABLE>
- - - --------------
(1) Paid pursuant to the Bank's incentive compensation plan. See "Human
Resources Committee Report" below.
(2) Restricted stock granted to the named executives under the Stock
Option Plan and RRP vested 20% per year over five years and at June 30, 1996
all restricted stock granted under both plans was fully vested. Other Annual
Compensation for fiscal 1994 and 1995 represents a cash bonus paid to the
named officers in accordance with the terms of the Stock Option Plan approved
by the stockholders on November 13, 1991, which provided for a pass-through
to plan participants of the tax benefit received by the Company as a result
of the ordinary income recognized and tax paid by the recipients as the
restricted stock granted under the Plan vested. All participants elected
each year to have the cash bonus paid directly to the state and federal
governments as partial satisfaction of income taxes due and, accordingly, no
cash was paid directly to the named officers.
(3) Amount includes $744, $329, $494, $387 and $235 contributed by
Magnolia Federal to the ESOP for fiscal 1996 and $3,828, $3,738, $1,740,
$1,694 and $1,154 contributed to the 401(k) Plan for fiscal 1996 on behalf of
Mr. Duncan, Ms. Poynter, Mr. Parker, Mr. Cousins and Ms. Ellender, plus the
imputed value of employee life insurance reported to the IRS as income in the
amount of $1,125, $435, $1,125, $680 and $226, respectively. The amount also
includes director fees paid by the Company and the Bank in the amount of
$24,500 each to Mr. Duncan and Ms. Poynter.
6
<PAGE>
RETIREMENT PLANS
DEFINED BENEFIT PENSION PLAN. The Bank sponsors the Pension Plan, a
defined benefit pension plan. Eligible employees participate in the Plan
after they attain age 21 and following the completion of 12 months of
service, provided the employee has completed at least 1,000 hours of work
during such 12-month period. The Pension Plan is funded solely through
contributions made by Magnolia Federal.
<TABLE>
<CAPTION>
ANNUAL PENSION BENEFIT BASED ON
YEARS OF SERVICE
------------------------------------------
AVERAGE ANNUAL
COMPENSATION 10 20 30 40
--------------- --------- -------- -------- --------
<S> <C> <C> <C> <C>
$100,000 $20,708 $41,415 $46,415 $51,415
150,000 31,958 63,915 71,415 78,915
200,000 31,958 63,915 71,415 78,915
250,000 31,958 63,915 71,415 78,915
300,000 31,958 63,915 71,415 78,915
350,000 31,958 63,915 71,415 78,915
</TABLE>
The preceding table sets forth, as of June 30, 1996, estimated annual
pension benefits for individuals at age 65 payable in the form of a life
annuity under the most advantageous plan provisions for various levels of
compensation and years of service. The figures in this table are based upon
the assumption that the Pension Plan continues in its present form and
reflects offsets for Social Security benefits. At June 30, 1996, the
estimated credited years of service of Robert S. Duncan, Lou Ann Poynter,
Hershel Parker, Thomas L. Cousins and Barbara S. Ellender were 27, 24, 23, 12
and 10, respectively.
Compensation covered by the Pension Plan includes base salary and bonus
paid pursuant to the Bank's incentive compensation plan and excludes the
value of any restricted stock awards and the related income tax benefit
pass-through paid as other annual compensation. Based on the amounts
reported as salary and bonus in the Summary Compensation Table for each of
the named officers, the benefits payable at normal retirement at age 65
determined in accordance with the plan benefit formula applicable to each
would be as follows: Robert S. Duncan, $87,547; Lou Ann Poynter, $54,781;
Hershel Parker, $71,136; Thomas L. Cousins, $43,996; and Barbara S. Ellender,
$29,287.
SALARY CONTINUATION PLAN. The Board of Directors of the Bank adopted a
Salary Continuation Plan (the "Salary Plan"), a non-qualified, executive
benefit plan, effective as of July 1, 1994. The Bank executed a
non-qualified deferred compensation agreement with each of the 14 executives
designated by the Board of Directors of the Bank to participate in the Salary
Plan. Supplemental retirement benefits payable under the Salary Plan range
from 40% to 60% of final base salary, less benefits payable to each executive
under the Pension Plan. Single-premium universal life insurance policies on
the covered executives were purchased by the Bank in connection with
establishing the Salary Plan. The Bank is the owner and beneficiary of the
policies and carries the cash surrender value of the policies as an asset on
its books. The benefit percentage provided in the Salary Plan for Robert S.
Duncan, Lou Ann Poynter, Hershel Parker, Thomas L. Cousins and Barbara S.
Ellender is 60% of final base salary. Applying the benefit percentage to the
base salary reported in the Summary Compensation Table for each of the named
officers and subtracting the benefits payable under the Pension Plan, the
estimated annual benefits payable under the Salary Plan at normal retirement
at age 65 would be as follows: Robert S. Duncan, $31,853; Lou Ann Poynter,
$59,450; Hershel Parker, $6,866; Thomas L. Cousins, $28,004 and Barbara S.
Ellender, $19,313.
7
<PAGE>
EMPLOYMENT AGREEMENTS
Employment Agreements (the "Agreements") were entered into between the
Company and its two senior executives, Robert S. Duncan and Lou Ann Poynter,
effective December 20, 1995. The Agreements provide for salaries as
determined by the Board of Directors, but in no event shall the salaries be
less than the salaries as of the Agreements' commencement date. The
Agreements provide for participation in benefit plans to the same extent as
executive officers of the Company generally. In the event of involuntary
termination, Mr. Duncan and Ms. Poynter would be entitled to receive
liquidated damages on a monthly basis for the remaining term of the Agreement
equal to one-twelfth of the average annual amount of salary, bonus and
incentive compensation earned during the two fiscal years prior to the date
of termination. In the event of involuntary termination within 24 months
following a change in control, Mr. Duncan and Ms. Poynter would be entitled
to, in addition to any liquidated damages due, (i) a lump sum payment equal
to 299% of the executive's "base amount" for purposes of Section 280G of the
Internal Revenue Code of 1986 and (ii) in the event Mr. Duncan or Ms. Poynter
would receive any "excess parachute payments" for purposes of Section 280G, a
"gross-up" payment to compensate the executive for the cost of any excise
taxes and taxes attributable to the gross-up. In addition, the Agreements
provide for lifetime life insurance and medical benefits in the event of any
separation of service from the Company (other than for cause). The
Agreements currently have an expiration date of December 19, 1999, and will
be automatically extended for one year in addition to the Agreements' then
remaining term at each anniversary unless the Board elects not to extend.
KEY EMPLOYEES SEVERANCE PLAN
In December 1995, the Company and the Bank adopted a severance plan (the
"Severance Plan") for selected key employees as designated by the Board from
time to time. The amount to be paid in the event of termination in
conjunction with a 25% or more change in control of the Company is based on a
formula that includes base salary, years of service and corporate title.
Other benefits under the Severance Plan include an extension of health and
welfare benefits for one and a half years after termination. Mr. Duncan and
Ms. Poynter are excluded from the Severance Plan. Termination benefits
payable to Mr. Parker, Mr. Cousins and Ms. Ellender, based on the calculation
as of June 30, 1996, would be $136,500, $75,600 and $30,100, respectively.
HUMAN RESOURCES COMMITTEE REPORT
Executive compensation is recommended by the Human Resources Committee
("Committee"), which is comprised of three non-employee Directors of the
Bank: Messrs. Harry H. Bell, Jr., Chairman, David M. Thomas, and Emmett A.
Carlisle, III. The Committee recommendations are subsequently reviewed for
final approval by the entire Board of Directors of the Bank. Employee
directors abstain from consideration of their own compensation.
DETERMINATION OF EXECUTIVE OFFICERS' COMPENSATION
The Bank's executive compensation policy is designed to attract and
retain quality management by providing adequate competitive levels of base
salary and the opportunity to earn bonuses predicated first on the Company's
level of profitability and, secondly, on individual performance.
For the purpose of evaluating the total compensation of executive
officers, the Committee reviews annual compensation studies from comparable
banks and thrifts prepared by The Wyatt Company (Cole Survey) and the
America's Community Bankers. To provide additional benchmarks, the Committee
periodically engages independent consultants to review and recommend
executive compensation levels. The most recent independent study to include
the senior executives was performed by KPMG Peat Marwick LLP in June 1992.
An independent study was performed in March 1996 to determine the appropriate
current compensation level for Chairman Duncan and President Poynter.
8
<PAGE>
Using the annual comparative compensation data and available independent
studies, a competitive compensation range is established for each executive.
Base salary is targeted toward the lower end of the executive's competitive
compensation range, and through an incentive plan described below, the
executive is provided an opportunity to qualify for a cash bonus that may
increase total compensation toward the upper end of the compensation range.
Actual incentive compensation is subject to the Company's earnings and
individual performance. In establishing the 1996 levels of base salaries for
the Bank's executive officers (excluding the Chief Executive Officer), the
Committee considered several factors, including the executive's individual
contribution and performance, as well as the overall salary increase for Bank
personnel and comparative competitive industry data. The general salary
increase for Bank non-executive employees for 1996 was primarily dependent
upon the Bank's earnings level, the national inflation rate and the
competitive compensation ranges established.
Under the incentive compensation plan, annual cash bonuses are paid from
a corporate bonus pool created when the Company's net earnings before tax
exceeds a threshold return on beginning assets. The bonus accrual
percentages and thresholds are established by the Board of Directors at the
beginning of the fiscal year. The corporate bonus pool accrual for fiscal
1996 was approved as follows: The Company must earn at least .72% before tax
on beginning assets to qualify for the Tier I Bonus Pool accrual and 1%
before tax on beginning assets to qualify for the Tier II Bonus Pool accrual.
The accrual percentages of base salary vary from 10% to 35% and are
established based upon the participating employee's position in the Company.
If the earnings requirement for a Tier I Bonus Pool accrual is met, the
applicable accrual percentage is multiplied by the midpoint of the
participant's salary range; if the earnings requirement for a Tier II Bonus
Pool accrual is met, the applicable accrual percentage is multiplied by the
amount at the upper end of the salary range. The Bonus Pool is awarded to
participants annually based on a combination of factors including the
individual's position, responsibility and the Committee's assessment of the
individual's performance and is paid over a two-year period. The Company's
net earnings before tax for fiscal 1996 qualified for the Tier II Bonus Pool
accrual.
During fiscal 1996, executive officers did not receive any grants of
restricted stock or stock options. Executives participate in the
tax-qualified Pension Plan and the non-tax-qualified Salary Plan. Executives
do not receive any perquisites such as automobiles, vacation homes or
financial counseling.
Compensation paid to the executive officers in fiscal year 1996, as shown
in the foregoing tables, was comprised of the following elements: Base
salary, cash bonus, contributions under the ESOP, matching funds to the
401(k), directors' fees and the imputed value of the life insurance coverage
as reported to the IRS.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
In considering the compensation of the Chief Executive Officer, the
Committee adheres to the same basic methodology and approach described above
for executive officers generally. In addition, the Committee considered a
number of other factors in determining the Chief Executive Officer's
compensation. Recognition was given to Mr. Duncan's personal ability and job
performance, the Company's consistent earnings performance under his
leadership and anticipated future contributions to the Company's future.
Special consideration was given to the Company's continued attainment of its
operating goals and resulting enhancement of stockholder value as reflected
in the stock performance graph included herein.
In establishing Mr. Duncan's base salary for fiscal year 1996, the
Committee reviewed The Wyatt Company Cole Survey data which indicated a
current comparative compensation range of $336,100 to $421,300. The
Committee also took into consideration Mr. Duncan's personal philosophy
regarding compensation, which is to maintain his salary below competitive
levels and increase his incentive cash bonus award when the Committee deems
appropriate based on the Company's earnings and other performance measures.
Accordingly, the Committee established the Chief Executive Officer's
compensation range for fiscal year 1996 at $255,000 to $345,000 and, in
accordance with Mr. Duncan's wishes, recommended no change in base salary of
$199,000 for the fiscal year.
9
<PAGE>
In March 1996, Mr. Duncan recommended to the Board of Directors of the
Bank that Lou Ann Poynter be named as Chief Executive Officer of the Bank and
assume the responsibilities of that position. Mr. Duncan continues to serve
as Chief Executive Officer of the Company and as Chairman of the Board of the
Bank and the Company. KPMG Peat Marwick LLP was engaged to perform an
independent review to determine the appropriate compensation levels for Mr.
Duncan and Ms. Poynter in their new positions. Based on the competitive
analysis performed, Ms. Poynter's salary was established at $225,000 and Mr.
Duncan's salary was continued at $199,000. Mr. Duncan and Ms. Poynter were
awarded incentive cash bonuses of $97,000 and $90,000, respectively, for
fiscal year 1996, which were paid prior to June 30, 1996.
The Company believes the Company's executive compensation policy
adequately reflects its objective to align such compensation with overall
business strategy, values and management initiative, and to ensure that the
Company's goals and performance are consistent with the long-term interest of
its stockholders.
HUMAN RESOURCES COMMITTEE
-------------------------
Harry H. Bell, Jr., Chairman
David M. Thomas Emmett A. Carlisle, III
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The line graph below compares the cumulative total stockholder return on
the Company's Common Stock to the cumulative total return of the Nasdaq
Market Index and Media General Savings and Loan Index for the period from
July 1, 1991 through June 30, 1996. The presentation assumes that $100 was
invested on July 1, 1991 and that all dividends were reinvested.
GRAPHIC GRAPH PLOTTED TO POINTS LISTED IN CHART BELOW
<TABLE>
<CAPTION>
7/01/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
<S> <C> <C> <C> <C> <C> <C>
NASDAQ Index 100 108 132 145 170 214
S&L Index 100 134 170 199 230 292
Magna 100 145 347 398 488 740
</TABLE>
10
<PAGE>
CERTAIN TRANSACTIONS WITH EXECUTIVE OFFICERS OR DIRECTORS
The Bank has followed a policy of granting to officers, directors and
employees only loans that are secured by the borrower's personal residence
and small consumer loans. Loans to senior officers and directors must be
approved by the Board of Directors and loans to other employees must be
approved by the Bank's Chairman of the Board, President or Executive Vice
President. All loans to the Bank's officers, directors and employees have
been in the past and will continue to be made in the future in the ordinary
course of business and on the same terms and conditions as those of
comparable transactions prevailing at the time, and do not involve more than
the normal risk of collectibility or present other unfavorable features. All
loans by the Bank to its directors and executive officers are subject to
regulations of the Office of Thrift Supervision restricting loans and other
transactions with affiliated persons of the Bank.
H. A. Moore, III, Secretary and Director of the Company, is also a
partner in the law firm of Moore and Jones, which is comprised of six
practicing lawyers. The firm received total fees of $273,946 for general
legal services to the Company, the Bank and their affiliates. In addition,
the firm also received fees in an amount in excess of 5% of the firm's gross
revenues for title work, bankruptcies, foreclosures and repossessions that
pass through the Bank or a subsidiary of the Company and which fees are
substantially collected from Bank customers.
David K. Hemeter, Director of the Bank, has performed architectural
services for the Bank for several years and received $157,235 in
architectural fees during fiscal 1996. Payments to Mr. Hemeter were based on
a percentage of the construction cost at the standard rates suggested by the
American Institute of Architects.
INDEPENDENT AUDITORS
The Company's independent auditors are KPMG Peat Marwick LLP, independent
certified public accountants. Representatives of KPMG Peat Marwick LLP are
expected to attend the Meeting to respond to appropriate questions and to
make a statement if they so desire.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy
materials for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Company's
executive offices, 100 West Front Street, Hattiesburg, Mississippi 39401, no
later than June 2, 1997. Any such proposals shall be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of Company Common Stock. In addition to
solicitation by mail, directors and officers of the Company and regular
employees of the Bank may solicit proxies personally or by telegraph or
telephone, without additional compensation.
By Order of the Board of Directors
/s/ H.A. Moore, III
H.A. Moore, III
SECRETARY
Hattiesburg, Mississippi
September 30, 1996
11
<PAGE>
MAGNA BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
to be held October 23, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the Board of Directors of Magna Bancorp,
Inc. (the "Company"), with full powers of substitution, to act as attorneys
and proxies for the undersigned to vote all shares of capital stock of the
Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting") to be held at the Holiday Inn, 6563 U.S. Highway
49 North, Hattiesburg, Mississippi, on October 23, 1996, at 2:00 p.m., and at
any and all adjournments and postponements thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
A /X/ Please mark your
votes as in this example.
The Board of Directors recommends a vote "FOR" each of the nominees.
<TABLE>
<S> <C> <C> <C> <C> <C>
1. Election of directors. FOR all nominees VOTE WITHHELD Nominees: Robert S. Duncan In their discretion, the proxies are
listed at right Zach T. Hederman, Jr. authorized to vote on any other
(except as marked to business that may properly come
the contrary) before the Meeting or any adjournment
or postponement thereof
THIS PROXY WILL BE VOTED AS
/ / / / DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE
VOTED FOR EACH OF THE NOMINEES
LISTED ABOVE. IF ANY OTHER BUSINESS
IS PRESENTED AT THE MEETING, THIS
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL PROXY WILL BE VOTED BY THOSE NAMED
NOMINEE, STRIKE A LINE IN THAT NOMINEE'S NAME IN THE LIST IN THIS PROXY IN THEIR BEST
AT RIGHT. JUDGMENT. AT THE PRESENT TIME, THE
BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE
MEETING.
Should the undersigned be
present and elect to vote at the
Meeting or at any adjournments or
postponements thereof, and after
notification to the Secretary of the
Company at the Meeting of the
stockholder's decision to terminate
this proxy, then the power of such
attorneys or proxies shall be deemed
terminated and of no further force
and effect. This proxy may also be
revoked by filing a written notice
of revocation with the Secretary of
the Company or by duly executing a
proxy bearing a later date.
The undersigned acknowledges
receipt from this Company, prior to
the execution of this proxy, of
notice of the Meeting, a Proxy
Statement dated September 30, 1996
and an Annual Report to Stockholders.
PLEASE COMPLETE, DATE, SIGN AND
MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
- - - -----------------------------------------------------------------------------------------------------Date:-------------------, 1996
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
NOTE: Please sign exactly as your name(s) appear(s) above. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title. If shares are held jointly, each holder should sign.
</TABLE>
