<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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 240.14a-11(c) or 240.14a-12
TEXARCANA FIRST FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(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)(1)
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>
TEXARKANA FIRST FINANCIAL CORPORATION
3RD AND OLIVE STREETS
TEXARKANA, ARKANSAS 71854
(501) 773-1103
December 23, 1996
Dear Fellow Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders of Texarkana First Financial Corporation. The meeting will be
held at the Four Points Hotel located at 5301 North State Line Avenue,
Texarkana, Texas 75503 on Tuesday, January 21, 1997 at 3:00 p.m., Central
Time. The matters to be considered by stockholders at the Annual Meeting are
described in the accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign, and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
Your continued support of and interest in Texarkana First Financial
Corporation are sincerely appreciated.
Sincerely,
/s/ JAMES W. MCKINNEY
James W. McKinney, President and
Chief Executive Officer
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
3RD AND OLIVE STREETS
TEXARKANA, ARKANSAS 71854
(501) 773-1103
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on January 21, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Texarkana First Financial Corporation (the "Company") will be
held at the Four Points Hotel located at 5301 North State Line Avenue,
Texarkana, Texas 75503 on Tuesday, January 21, 1997 at 3:00 p.m., Central
Time, for the following purposes, all of which are more completely set forth
in the accompanying Proxy Statement:
(1) To elect two directors for terms of three years or until their
successors have been elected and qualified;
(2) To ratify the appointment of Wilf & Henderson, P.C. as the Company's
independent auditors for the fiscal year ending September 30, 1997;
and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof. Except with respect to procedural
matters incident to the conduct of the meeting, management is not
aware of any other such business.
Stockholders of record of the Company as of the close of business on
December 13, 1996 are entitled to notice of and to vote at the Annual Meeting
or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ JAMES W. MCKINNEY
James W. McKinney, President and
` Chief Executive Officer
Texarkana, Arkansas
December 23, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN
TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY
VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 21, 1997
This Proxy Statement is furnished to holders of common stock, par value
$.01 per share ("Common Stock"), of Texarkana First Financial Corporation
(the "Company"), which acquired all of the common stock of First Federal
Saving and Loan Association of Texarkana (the "Association"), issued in
connection with the conversion of the Association from a federally chartered
mutual savings and loan association to a federally chartered stock savings
and loan association in July 1995 (the "Conversion").
Proxies are being solicited on behalf of the Board of Directors of the
Company to be used at the Annual Meeting of Stockholders ("Annual Meeting")
to be held at the Four Points Hotel located at 5301 North State Line Avenue,
Texarkana, Texas 75503 on Tuesday, January 21, 1997 at 3:00 p.m., Central
Time, and at any adjournment thereof for the purposes set forth in the Notice
of Annual Meeting of Stockholders. This Proxy Statement is first being
mailed to stockholders on or about December 23, 1995.
Each proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with
the instructions contained therein. IF NO CONTRARY INSTRUCTIONS ARE GIVEN,
EACH PROXY RECEIVED WILL BE VOTED FOR EACH OF THE MATTERS DESCRIBED HEREIN
AND, UPON THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING, IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS APPOINTED AS
PROXIES.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company
written notice thereof (Debbie Rose, Secretary, Texarkana First Financial
Corporation); (ii) submitting a duly executed proxy bearing a later date; or
(iii) appearing at the Annual Meeting and giving the Secretary notice of his
or her intention to vote in person. Proxies solicited hereby may be
exercised only at the Annual Meeting and any adjournment thereof and will not
be used for any other meeting.
VOTING AND REQUIRED VOTES
Only stockholders of record at the close of business on December 13, 1996
("Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 1,834,563 shares of Common Stock issued
and outstanding, and the Company had no other class of equity securities
outstanding. Each share of Common Stock outstanding is entitled to one vote
at the Annual Meeting on each matter properly presented at the Annual Meeting.
Directors are elected by a plurality of the votes cast with a quorum
present. A quorum consists of stockholders representing, either in person or
by proxy, a majority of the outstanding Common Stock entitled to vote at the
meeting. Abstentions are considered in determining the presence of a quorum
and will not affect the plurality vote required for the election of
directors. The affirmative vote of the holders of a majority of the total
votes present in person or by proxy is required to ratify the appointment of
the independent auditors. Under rules of the New York Stock Exchange, the
proposal for ratification of the auditors is considered a "discretionary"
item upon which brokerage firms may vote in their discretion on behalf of
their clients if such clients have not furnished voting instructions and for
which there will not be "broker non-votes."
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR, DIRECTORS
WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Bylaws of the Company presently provide that the Board of Directors
shall consist of six members, and the Articles of Incorporation and Bylaws of
the Company presently provide that the Board of Directors shall be divided
into three classes as nearly equal in number as possible. The members of
each class are to be elected for a term of three years or until their
successors are elected and qualified, with one class of directors to be
elected annually. There are no arrangements or understandings between the
Company and any person pursuant to which such person has been elected a
director. Josh R. Morriss, Jr. is the father of Donald N. Morriss and the
uncle of John E. Harrison. No other director or nominee for director is
related to any other director, nominee for director or executive officer of
the Company by first cousin or closer.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director
listed below. If any person named as a nominee should be unable or unwilling
to stand for election at the time of the Annual Meeting, the proxies will
nominate and vote for any replacement nominee or nominees recommended by the
Board of Directors. At this time, the Board of Directors knows of no reason
why any of the nominees listed below may not be able to serve as a director
if elected. Ages are shown as of December 13, 1996 and the service as a
director includes service as a director of the Association.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 1999
POSITION WITH THE COMPANY AND THE
ASSOCIATION AND PRINCIPAL OCCUPATION DIRECTOR
NAME AGE DURING THE PAST FIVE YEARS SINCE
- --------------- ----- ------------------------------------ ---------
John M. Andres 62 Director; Managing Partner of Thomas 1980
Since & Thomas, Texarkana, Arkansas,
since 1964. Mr. Andres is a Certified
Public Accountant.
Arthur L. McElmurry 73 Director; Retired; Former Chief 1973
Executive Officer of Wadley Regional
Medical Center.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ELECTION OF THE ABOVE
NOMINEES FOR DIRECTOR.
-2-
<PAGE>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 1997
POSITION WITH THE COMPANY AND THE
ASSOCIATION AND PRINCIPAL OCCUPATION DIRECTOR
NAME AGE DURING THE PAST FIVE YEARS SINCE
- --------------- ----- ------------------------------------ ---------
Josh R. Morriss, Jr. 71 Chairman of the Board of the Company 1969
and the Association since 1995 and
1982, respectively. Retired Chairman of
the Board of F.W. Offenhauser & Co.,
Inc., Texarkana, Texas, an independent
insurance agency.
John E. Harrison 49 Director; Executive Vice President of 1986
the Company and the Association since
1995 and 1982, respectively.
DIRECTORS WHOSE TERMS EXPIRE IN 1998
POSITION WITH THE COMPANY AND THE
ASSOCIATION AND PRINCIPAL OCCUPATION DIRECTOR
NAME AGE DURING THE PAST FIVE YEARS SINCE
- --------------- ----- ------------------------------------ ---------
James W. McKinney 66 President, Chief Executive Officer 1968
and Director of the Company and
President of the Association since
1995 and 1970, respectively.
Donald N. Morriss 42 Director; Chairman and President of 1988
F.W. Offenhauser & Co., Inc.,
Texarkana,Texas, an independent
insurance agency. Mr. Morriss is also
a registered representative of
Fortis Investors, Inc., Netherlands.
-3-
<PAGE>
STOCKHOLDER NOMINATIONS
Article VII.D of the Company's Articles of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder who
has complied with the notice provisions in that section. The Articles of
Incorporation set forth specific requirements with respect to stockholder
nominations.
BOARD MEETINGS AND COMMITTEES
Regular meetings of the Board of Directors of the Company and the
Association are held on at least a monthly basis and special meetings of the
Board of Directors are held from time-to-time as needed. The Board of Directors
of the Company met 14 times during the year ended September 30, 1996. Directors
of the Company do not receive any compensation from the Company for attending
Board of Directors meetings or committee meetings. There were 14 meetings of
the Board of Directors held during the year ended September 30, 1996. No
director of the Company or the Association attended fewer than 75% in the
aggregate of the meetings of the Board of Directors held during fiscal 1996 and
the total number of meetings held by all committees of the Board on which he
served during the year.
The Board of Directors of the Company has established various committees,
including Audit and Personnel.
The Audit Committee reviews (i) the independent auditors' reports and
results of their examination, subject to review by the entire Board of
Directors, (ii) the internal audit function, which is under the control of and
reports directly to the Audit Committee, and (iii) the examination reports of
the OTS and the FDIC and other regulatory reports, subject to review by the
entire Board of Directors. The Audit Committee currently consists of Mr.
McElmurry (Chairman) and Mr. Andres. The Audit Committee met once during the
year ended September 30, 1996.
The Personnel Committee reviews the compensation of the Company's officers
and employees, and serve as trustees of the Texarkana First Financial
Corporation Employee Stock Ownership Plan ("ESOP") and as administrators of the
1996 Key Employee Stock Compensation Program ("Employee Stock Program") and the
1996 Management Recognition Plan for Officers ("Management Recognition Plan").
The current members of the committee are Messrs. Donald Morriss and McElmurry,
and the committee met three times during the year ended September 30, 1996.
-4-
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table includes, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) the only persons or
entities, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("1934 Act"), who or which were
known to the Company to be the beneficial owner of more than 5% of the issued
and outstanding Common Stock, (ii) the directors of the Company, and (iii) all
directors and executive officers of the Company and the Association as a group.
COMMON STOCK
BENEFICIALLY OWNED AS OF
DECEMBER 13, 1996(1)
------------------------
NAME OF BENEFICIAL OWNER AMOUNT %
- ---------------------------------------- ------------- ---------
Texarkana First Financial Corporation 131,919(2) 7.2%
Employee Stock Ownership Plan Trust
3rd and Olive Streets
Texarkana, Arkansas 71854
First Manhattan Co. 175,886(3) 9.6
437 Madison Avenue
New York, New York 10022
Directors:
Josh R. Morriss, Jr. 11,785 *
James W. McKinney 12,339(4) *
John E. Harrison 13,148(5) *
John M. Andres 3,785 *
Arthur L. McElmurry 6,785 *
Donald N. Morriss 12,585(6) *
All directors and executive officers
of the Company and the Association
as a group (7 persons) 60,427(2) 3.3%
- -----------------------------
* Represents less than 1% of the outstanding Common Stock.
(1) For purposes of this table, pursuant to rules promulgated under the 1934
Act, an individual is considered to beneficially own shares of Common Stock
if he directly or indirectly has or shares (i) voting power, which includes
the power to vote or to direct the voting of the shares; or (ii) investment
power, which includes the power to dispose or direct the disposition of the
shares. Unless otherwise indicated, an individual has sole voting power
and sole investment power with respect to the indicated shares. Shares
which may be acquired by the exercise of stock options which are
exercisable within 60 days of the Voting Record Date are deemed to be
beneficially owned by the holder and are outstanding for the purpose of
computing the percentages of Common Stock beneficially owned by the
respective individual and group. The shares reflected as beneficially
owned by Messrs. Josh R. Morriss, Jr., Andres, McElmurry and Donald N.
Morriss include 1,785 shares which are exercisable within 60 days of the
Voting Record Date pursuant to the Company's Employee Stock Program.
-5-
<PAGE>
(2) The Texarkana First Financial Corporation Employee Stock Ownership Plan
Trust ("Trust") was established pursuant to the ESOP by an agreement
between the Company and Messrs. McElmurry, Donald Morriss, and McKinney,
who act as trustees of the plan ("Trustees"). As of the Voting Record
Date, 6,944 shares held in the Trust had been allocated to the accounts of
participating employees. Under the terms of the ESOP, the Trustees must
vote all allocated shares held in the ESOP in accordance with the
instructions of the participating employees, and allocated shares for which
employees do not give instructions will be voted in the same ratio on any
matter as to those shares for which instructions are given. Unallocated
shares held in the ESOP will be voted by the ESOP Trustees in accordance
with their fiduciary duties as trustees. The amount of Common Stock
beneficially owned by each individual trustee or all directors and
executive officers as a group does not include the shares held by the
Trust.
(3) First Manhattan Co. is the general partner of both First Save Associates,
L.P. and Second First Save Associates, L.P., which beneficially owns 93,000
and 82,886 shares of Common Stock, respectively.
(4) Includes 1,239 vested shares allocated pursuant to the ESOP.
(5) Includes 1,160 shares held jointly with Mr. Harrison's spouse, with whom
voting and dispositive power is shared and 828 vested shares allocated
pursuant to the ESOP.
(6) Includes 800 shares held by Mr. Morriss as custodian for his children.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the 1934 Act, the Company's directors, officers and
any persons holding more than 10% of the Common Stock are required to report
their ownership of the Common Stock and any changes in that ownership to the
Securities and Exchange Commission ("Commission") and the American Stock
Exchange ("AMEX") by specific dates. Based on representations of its directors
and officers and copies of the reports that they have filed with the Commission
and the AMEX, the Company believes that all of these filing requirements were
satisfied by the Company's directors and officers in the fiscal year ended
September 30, 1996.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Company has not yet paid separate compensation directly to its
officers. The following table sets forth a summary of certain information
concerning the compensation paid by the Association for services rendered in all
capacities during the indicated periods to the two executive officers of the
Company and the Association.
<TABLE>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------ ----------------------
NAME AND FISCAL OTHER ANNUAL STOCK NUMBER OF ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION(2) GRANTS(3) OPTIONS(4) COMPENSATION(5)
------------------ ------ --------- ----- --------------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
James W. McKinney 1996 $164,000 $ 6,250 $ -- $280,212 49,594 $ 17,500
President and Chief 1995 139,600 38,114 15,517 -- -- --
Executive Officer 1994 125,430 27,590 15,574 -- -- --
John E. Harrison 1996 103,250 3,750 -- 186,103 49,594 11,695
Executive Vice President 1995 86,800 19,057 4,158 -- -- --
1994 76,850 13,795 4,191 -- -- --
</TABLE>
- ------------------------------
(1) Includes directors' fees during each of the respective fiscal years shown.
-6-
<PAGE>
(2) Such amounts consist of life insurance premiums and contributions on behalf
of Messrs. McKinney and Harrison pursuant to the Association's 401(k)
benefit plan. Other annual compensation does not include amounts
attributable to other miscellaneous benefits received by Messrs. McKinney
and Harrison, including automobile expenses and the payment of civic club
dues. The costs to the Association of providing such benefits did not
exceed 10% of the total salary and bonus paid to or accrued for the benefit
of such individual executive officer in any of the fiscal years shown.
(3) Represents the grant of 19,838 and 13,225 shares of restricted Common Stock
to Messrs. McKinney and Harrison, respectively, pursuant to the Management
Recognition Plan during the year ended September 30, 1996. The fair market
value of awarded shares was $272,772 and $181,844, respectively, at
September 30, 1996. Awarded shares become vested and distributable over a
five-year period at the rate of 20% per year, commencing February 27, 1997,
the first annual anniversary of the award date. Award recipients are
entitled to voting and other stockholder rights (including dividends) as
awarded shares become vested.
(4) Consists of awards granted pursuant to the Company's Employee Stock Program
which options vest and are exercisable over a five year period at the rate
of 20% per year commencing September 12, 1997, the first annual anniversary
of the date of grant.
(5) Consists of amounts allocated during the year ended September 30, 1996
pursuant to the ESOP based on a per share price of $14.125 per share on the
date of allocation.
STOCK OPTIONS
The following table discloses the total options granted to Messrs. McKinney
and Harrison during the year ended September 30, 1996:
NUMBER % OF TOTAL
OF OPTIONS
OPTIONS GRANTED TO EXERCISE
NAME GRANTED EMPLOYEES(1) PRICE(2)(3) EXPIRATION DATE
- ----------------- ------- ------------ ----------- ---------------
James W. McKinney 49,594 39.3% $13.75 September 12, 2006
John E. Harrison 49,594 39.3 13.75 September 12, 2006
______________________
(1) Percentage of options granted to all employees and directors during fiscal
1996.
(2) In all cases, the exercise price was based on the closing market price of a
share of the Company's Common Stock on the date of grant.
The following table discloses the options exercised for the year ended
September 30, 1996, and held at year-end, by Messrs. McKinney and Harrison.
<TABLE>
SHARES ACQUIRED VALUE NUMBER OF OPTIONS AT VALUE OF OPTIONS AT
NAME ON EXERCISE REALIZED SEPTEMBER 30, 1996 SEPTEMBER 30, 1996(1)
----- --------------- -------- -------------------- ---------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James W. McKinney --- --- --- 49,594 --- $24,797
John E. Harrison --- --- --- 49,594 --- $24,797
</TABLE>
- --------------------
(1) Based on a per share market price of $14.25 at September 30, 1996.
-7-
<PAGE>
DIRECTOR COMPENSATION
Directors of the Company are not paid for attendance of Company Board
meetings or committee meetings. Each director of the Company is also a director
of the Association, and each member of the Board of Directors of the Association
was paid $1,000 per regular monthly Board meeting. The respective fee was paid
for unattended meetings, if absences did not exceed three per year. Directors
of the Association do not receive any fees for committee meetings.
EMPLOYMENT AGREEMENTS
The Company and the Association (collectively, the "Employers") entered
into employment agreements with each of Messrs. McKinney and Harrison effective
July 7, 1995 in connection with the Conversion. The Employers have agreed to
employ Messrs. McKinney and Harrison for a term of three years in their current
positions. The term of the employment agreements will be extended each year for
an additional one-year period unless the Employers or the officer elect, not
less than 30 days prior to the annual anniversary date, not to extend the
employment term.
Each employment agreement is terminable with or without cause by the
Employers. The officer shall have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary termination
or termination by the Employers for cause, disability, retirement or death,
provided, however, that (i) in the event that the officer terminates his
employment because of the failure of the Employers to comply with any material
provision of the employment agreement or (ii) the employment agreement is
terminated by the Employers other than for cause, disability, retirement or
death or by the officer as a result of certain adverse actions which are taken
with respect to the officer's employment following a Change in Control of the
Company, as defined, the respective officer will be entitled to a cash severance
amount equal to three times his average annual compensation over the most recent
five taxable years (or such shorter time as he has been employed by the
Employers), payable in equal monthly installments over 36 months. In addition,
the respective officer will be entitled to a continuation of benefits similar to
those he is receiving at the time of such termination for the remaining term of
the agreement or until the officer obtains full-time employment with another
employer, whichever occurs first.
A Change in Control is generally defined in the employment agreements to
include any change in control required to be reported under the federal
securities laws, as well as (i) the acquisition by any person of 25% or more of
the Company's outstanding voting securities and (ii) a change in a majority of
the directors of the Company during any two-year period without the approval of
at least two-thirds of the persons who were directors of the Company at the
beginning of such period.
Each employment agreement provides that in the event that any of the
payments to be made thereunder or otherwise upon termination of employment are
deemed to constitute a "parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), then such payments
and benefits received thereunder shall be reduced, in the manner determined by
the employee, by the amount, if any, which is the minimum necessary to result in
no portion of the payments and benefits being non-deductible by the Employers
for federal income tax purposes. Parachute payments generally are payments
equal to or exceeding three times the base amount, which is defined to mean the
recipient's average annual compensation from the employer includable in the
recipient's gross income during the most recent five taxable years ending before
the date on which a change in control of the employer occurred (or such lesser
time as the recipient has been employed). Recipients of parachute payments are
subject to a 20% excise tax on the amount by which such payments exceed the base
amount, in addition to regular income taxes, and payments in excess of the base
amount are not deductible by the employer as compensation expense for federal
income tax purposes.
Although the above-described employment agreements could increase the cost
of any acquisition of control of the Company, management of the Company does not
believe that the terms thereof would have a significant anti-takeover effect.
-8-
<PAGE>
EMPLOYEE STOCK OWNERSHIP PLAN
The Company has established the ESOP for employees of the Company and the
Association. Employees of the Company and the Association who have been
credited with at least 1,000 hours of service during a twelve month period and
who have attained age 18 are eligible to participate in the ESOP.
As part of the Conversion, the ESOP borrowed funds from the Company to
purchase 138,863 shares of Common Stock issued in the Conversion. The loan to
the ESOP will be repaid principally from the Association's contributions to the
ESOP over a period of 10 years, and the collateral for the loan will be the
Common Stock purchased by the ESOP. The loan to the ESOP bears a fixed interest
rate of 9.0%. The Company may, in any plan year, make additional discretionary
contributions for the benefit of plan participants in either cash or shares of
Common Stock, which may be acquired through the purchase of outstanding shares
in the market or from individual stockholders, upon the original issuance of
additional shares by the Company or upon the sale of treasury shares by the
Company. Such purchases, if made, would be funded through additional borrowings
by the ESOP or additional contributions from the Company. The timing, amount
and manner of future contributions to the ESOP will be affected by various
factors, including prevailing regulatory policies, the requirements of
applicable laws and regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan will be held in
a suspense account and released on a pro rata basis as debt service payments are
made. Discretionary contributions to the ESOP and shares released from the
suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be reallocated among remaining participating
employees and may reduce any amount the Company might otherwise have contributed
to the ESOP. Participants will vest in their right to receive their account
balances within the ESOP at the rate of 20% per year starting with the
completion of three years of service and will be 100% vested upon the completion
of seven years of service. Credit is given for years of service with the
Association prior to adoption of the ESOP. Benefits may be payable upon
retirement, early retirement, disability or separation from service. The
Company's contributions to the ESOP are not fixed, so benefits payable under the
ESOP cannot be estimated.
Messrs. McElmurry, Donald Morriss and McKinney serve as trustees of the
ESOP. Under the ESOP, the trustee must vote all allocated shares held in the
ESOP in accordance with the instructions of the participating employees, and
allocated shares for which employees do not give instructions will be voted in
the same ratio on any matter as to those shares for which instructions are
given. Unallocated shares held in the ESOP will be voted by the ESOP Trustees
in accordance with their fiduciary duties as trustees.
INDEBTEDNESS OF MANAGEMENT
The Association's policy provides that all loans made by the Association to
its directors and officers are made in the ordinary course of business, are made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons and
do not involve more than the normal risk of collectibility or present other
unfavorable features.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Wilf & Henderson, P.C.
("Wilf & Henderson"), independent certified public accountants, to perform the
audit of the Company's consolidated financial statements for the year ending
September 30, 1997, and further directed that the selection of auditors be
submitted for ratification by the stockholders at the Annual Meeting.
The Company has been advised by Wilf & Henderson that neither that firm nor
any of its associates has any relationship with the Company or its subsidiaries
other than the usual relationship that exists between
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<PAGE>
independent certified
public accountants and clients. Wilf & Henderson will have one or more
representatives at the Annual Meeting who will have an opportunity to make a
statement, if they so desire, and who will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF WILF & HENDERSON, P.C. AS INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 1997.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which is scheduled to be held in January 1998, must be received at
the principal executive offices of the Company, 3rd and Olive Streets,
Texarkana, Arkansas 71854, Attention: Debbie Rose, Secretary, no later than
August 27, 1997. If such proposal is in compliance with all of the requirements
of Rule 14a-8 under the 1934 Act, it will be included in the proxy statement and
set forth on the form of proxy issued for such annual meeting of stockholders.
It is urged that any such proposals be sent by certified mail, return receipt
requested.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
September 30, 1996 accompanies this Proxy Statement. Such annual report is not
part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED SEPTEMBER 30, 1996 AND A LIST OF THE EXHIBITS THERETO
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE 1934
ACT. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO DEBBIE ROSE, SECRETARY,
TEXARKANA FIRST FINANCIAL CORPORATION, 3RD AND OLIVE STREETS, TEXARKANA,
ARKANSAS 71854. THE FORM 10-K IS NOT PART OF THE PROXY SOLICITATION MATERIALS.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the approval
of the minutes of the last meeting of stockholders, the election of any person
as a director if the nominee is unable to serve or for good cause will not
serve, matters incident to the conduct of the meeting, and upon such other
matters as may properly come before the Annual Meeting. Management is not aware
of any business that may properly come before the Annual Meeting other than
those matters described above in this Proxy Statement. However, if any other
matters should properly come before the Annual Meeting, it is intended that the
proxies solicited hereby will be voted with respect to those other matters in
accordance with the judgment of the persons voting the proxies.
The cost of the 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 the proxy
materials to the beneficial owners of the Company's Common Stock. In addition
to solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY
CARD AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
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<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TEXARKANA
FIRST FINANCIAL CORPORATION FOR USE ONLY AT THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 21, 1997 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of the Company, or
any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Four Points Hotel, 5301 North State Line Avenue,
Texarkana, Texas 75503 on January 21, 1997 at 3:00 p.m., Central Time, or at
any adjournment thereof, with all the powers that the undersigned would possess
if personally present, as follows:
1. Election of Directors
/ / FOR all nominees listed below / / WITHHOLD authority to
(except as marked to the vote for all nominees
contrary below) listed below
Nominees for a three-year term John M. Andres and Arthur L.
expiring in 1999: McElmurry
To withhold authority to vote for any individual nominee, write the name of
the nominee in the space provided below:
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2. Proposal to ratify the appointment of Wilf & Henderson, P.C. as the
Company's independent auditors for the fiscal year ending September 30, 1997.
/ / FOR / / AGAINST / / ABSTAIN
In their discretion, the proxies are authorized to vote with respect to
approval of the minutes of the last meeting of stockholders, the election of any
person as a director if the nominee is unable to serve or for good cause will
not serve, matters incident to the conduct of the meeting, and upon such other
matters as may properly come before the meeting.
The Board of Directors recommends that you vote FOR the Board of Directors'
nominees listed above and FOR Proposal 2. Shares of common stock of the Company
will be voted as specified. IF NO SPECIFICATION IS MADE, SHARES WILL BE VOTED
FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS
AND FOR PROPOSAL 2 AND OTHERWISE AT THE DISCRETION OF THE PROXIES. This proxy
may not be voted for any person who
<PAGE>
is not a nominee of the Board of Directors of the Company. THIS PROXY MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders of Texarkana First Financial Corporation called for January 21,
1997, a Proxy Statement for the Annual Meeting and the 1996 Annual Report to
Stockholders.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE
ENCLOSED ENVELOPE.
Dated: , 199
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Signature(s)
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS
PROXY. ONLY ONE SIGNATURE IS REQUIRED IN THE CASE
OF A JOINT ACCOUNT. WHEN SIGNING IN A
REPRESENTATIVE CAPACITY, PLEASE GIVE TITLE.
