United
States
Securities
and Exchange Commission
Washington,
DC 20549
SCHEDULE
14A
(Rule
14a-101)
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by
the Registrant x
Filed by
a Party other than the Registrant o
Check the
appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to §240.14a-11(c) or §240.14a-12
FIRST
GUARANTY BANCSHARES, INC.
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
x No
fee required.
o Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was
determined):
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4)
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Proposed
maximum aggregate value of
transaction:
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5)
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Total
fee paid:
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o Fee
paid previously with preliminary materials
o 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
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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3)
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Filing
Party:
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4)
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Date
Filed:
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FIRST
GUARANTY BANCSHARES, INC.
400 East
Thomas Street
Hammond,
Louisiana 70401
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON MAY 21, 2009
To the
Shareholders of First Guaranty Bancshares, Inc.:
You are
cordially invited to attend the 2009 Annual Stockholders Meeting (the “Meeting”)
of First Guaranty Bancshares, Inc (the “Company”) which will be held in the
Auditorium, second floor, First Guaranty Square, 400 East Thomas Street,
Hammond, Louisiana, on Thursday, May 21, 2009, at 2:00 p.m., local time, for the
purpose of considering and voting upon the following matters:
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1.
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To
elect the Board of Directors to serve until the next Annual Meeting of
stockholders and until their successors are duly elected and
qualified.
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2.
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To
transact such other business as may properly come before the Meeting or
any adjournment or postponement
thereof.
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The Board of Directors has fixed April
3, 2009, as the record date for determining stockholders entitled to receive
notice of and to vote at the Meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on April 3, 2009, are
entitled to notice and to vote at the Meeting.
Your vote
is important regardless of the number of shares you own. All stockholders are
invited to attend the Meeting in person, but if you do not plan to attend this
Meeting, please mark, date, and
sign the enclosed proxy and return it promptly in the enclosed stamped
envelope. This proxy is solicited on behalf of the Board of Directors and
may be revoked by written notice to the Secretary of the Company at any time
prior to exercise thereof.
Our Proxy
Statement and Annual Report to Shareholders may be accessed on our website at
www.fgb.net.
We hope
that you will be able to attend the Meeting, and if you do, you may vote your
shares in person if you wish.
BY ORDER
OF THE BOARD OF DIRECTORS
/s/
Michele E. LoBianco
Michele
E. LoBianco
Secretary
Hammond,
Louisiana
May 4, 2009
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FIRST
GUARANTY BANCSHARES, INC.
400 East
Thomas Street
Hammond,
Louisiana 70401
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
To
Be Held on Thursday, May 21, 2009
The
following information is furnished in connection with the Annual Meeting of
Stockholders (the “Meeting”) of First Guaranty Bancshares, Inc. (the “Company”)
to be held on Thursday, May 21, 2009, at 2:00 p.m., central standard time, in
the Auditorium, First Guaranty Square, 400 East Thomas Street, Hammond,
Louisiana, and any adjournment or postponement thereof. This proxy statement and
proxy is first being given or mailed to stockholders on or about May 4,
2009.
SOLICITATION
OF PROXIES
The
enclosed proxy is being solicited by the Board of Directors of the Company. The
cost of soliciting the proxies will be borne by the Company. The directors,
officers and employees of the Company may solicit proxies by telephone or
personal interview. In addition, it is anticipated that banks, brokerage houses,
and other institutions, nominees, and fiduciaries will be requested to forward
the proxy materials to their principals and to obtain authorizations for the
execution of proxies. The Company shall, upon request, reimburse banks,
brokerage houses and other institutions, nominees and fiduciaries for their
expenses in forwarding proxy materials to their principals.
VOTING
OF PROXIES
The Board
of Directors of the Company has fixed the close of business on April 3, 2009 as
the record date for determining the stockholders entitled to vote at the
Meeting. Accordingly, only holders of record as of that date are entitled to
vote. At that date, the Company had issued and outstanding 5,559,644
shares of $1 par value common stock, which comprise all of the Company's
outstanding voting securities. Each share of common stock is entitled to one
vote.
All
proxies that are properly executed and returned to the Company will be voted at
the Meeting, and any adjournment thereof, as specified by the stockholders in
the proxies. A proxy may be revoked at any time before it is exercised by
revoking it in writing, submitting a later dated proxy or voting in person at
the meeting. If a stockholder (other than a broker holding shares in street
name) signs, dates and returns the proxy but does not indicate the manner in
which he desires his shares to be voted, the shares will be voted FOR the election of the
nominees named under “Election of Directors.”
The Board
of Directors of the Company is not aware of any business to be acted upon at the
Meeting other than the matters described in this proxy statement. If, however,
other proper matters are brought before the Meeting, or any adjournment or
postponement thereof, the persons appointed as proxy holders will have
discretion to vote or abstain from voting thereon according to their best
judgment.
Should
any nominee for director be unable or unwilling to serve, the proxy holders will
have discretionary authority to vote for a substitute. The Board of Directors
has no reason to believe that any nominee will be unable or unwilling to
serve.
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The
presence, in person or by proxy, of the holders of a majority of our total
voting power will constitute a quorum for the transaction of business at the
Meeting. Directors are elected by a plurality of votes cast. On any other matter
that may properly come before the Meeting, the affirmative vote of the holders
of a majority of the shares voted at the Meeting, in person or by proxy, will be
required for the approval of any proposal submitted and considered at the
Meeting. Brokers holding shares for clients in street name are
permitted, without receiving instructions from the client, to vote clients'
shares on routine, non-controversial matters, but are not permitted to vote on
non-routine matters. A vote that is not cast for this reason is a "broker
non-vote". Express abstentions and broker non-votes made at the Meeting, in
person or by proxy, will be counted toward a quorum but will have no effect with
respect to the vote on the matter to be considered at the Meeting.
ELECTION
OF DIRECTORS
The Board
of Directors of the Company has fixed the number of directors of the Company at
three. The persons named on the Proxy will vote only for the three named
nominees, except to the extent that authority to so vote is withheld as to one
or more nominees. The persons elected as directors are to serve until the next
Annual Stockholders Meeting or until their successors are duly elected and
qualified.
The
following persons are the current members of the Board of Directors of the
Company and have been nominated by the Board of Directors for election as
directors of the Company. Each nominee's name, age, present positions with the
Company, if any, principal occupation for the past five years, directorships in
other public companies, and the year each first became a director of the Company
are set forth below.
The
Board of Directors recommends a vote “FOR” all of the nominees listed below for
election as directors.
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Name
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Age
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Director Since1
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Principal
Occupation During the Past Five Years
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William
K. Hood
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58
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1977
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President
of Hood Automotive Group since 1977 and a director of Entergy Louisiana,
Inc. since 1987.
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Alton
B. Lewis, Jr.
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60
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2001
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Partner
of the law firm of Cashe, Lewis, Coudrain & Sandage and its
predecessor firm since January 1989.
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Marshall
T. Reynolds
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72
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1993
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Chairman
of the Company’s Board of Directors since inception in July 2007. Chairman
of First Guaranty Bank’s board of directors since May 1996. Chairman of
the board and chief executive officer since 1992 of Champion Industries,
Inc., a holding company for commercial printing and office products
companies. President of Champion Industries, Inc. from December 1992 to
September 2000. President and general manager of The Harrah and Reynolds
Corporation, predecessor of Champion Industries, Inc., from 1964 (and sole
shareholder from 1972) to present. Chairman of the board of River City
Associates, Inc (owner of Pullman Plaza Hotel) since 1989. Chairman of the
board of Premier Financial Bancorp, Inc. of Huntington, West Virginia
since 1996. Chairman of the board of Portec Rail Products, Inc.
in Pittsburgh, Pennsylvania since December 1997, director of Summit State
Bank in Santa Rosa, California since December 1998, director of Abigail
Adams National Bancorp, Inc., in Washington D.C. since 1995 and director
of First State Financial Corporation in Sarasota, Florida since 1999.
Chairman of the board of directors of Energy Services of America
Corporation in Huntington, WV since 2006.
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1 Includes
service as a director of First Guaranty Bank, a wholly owned subsidiary of First
Guaranty Bancshares, Inc.
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The
following persons are the current executive officers of the Company. Each
executive officer's name, age, present positions with the Company, principal
occupation for the past five years, directorships in other public companies, and
the year each first became a director of the Company are set forth
below.
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Name
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Age
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Executive
Officer
Since1
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Principal
Occupation During the Past Five Years
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Michael
R. Sharp
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61
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2005
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President
and Chief Executive Officer of the Company since July 27, 2007. President
and Chief Executive Officer of First Guaranty Bank since January 2005 and
First Guaranty Bank’s senior vice president and senior commercial lender
from December 1999 to January 2005.
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Michele
E. LoBianco
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41
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2002
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Chief
Financial Officer, Treasurer and Secretary of the Company since July 27,
2007. Chief Financial Officer of First Guaranty Bank since March 2002.
Vice President, Operations from October 2001 to March 2002.
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1 Includes
service as an executive officer of First Guaranty Bank, a wholly owned
subsidiary of First Guaranty Bancshares, Inc.
The
Company’s Board of Directors currently expects to vote its shares to re-elect
the following slate of Bank Board of Directors:
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F.
Fanancy Anzalone
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Daniel
P. Harrington
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Marshall
T. Reynolds
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Anthony
J. Berner, Jr.
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William
K. Hood
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Nicholas
A. Saladino
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Collins
Bonicard
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Edwin
L. Hoover, Jr.
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Sam
P. Scelfo, Jr.
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Charles
Brister
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Dennis
E. James
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Michael
R. Sharp
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Dr.
Phillip F. Fincher
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Alton
B. Lewis, Jr.
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Edgar
R. Smith, III
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Robert
H. Gabriel
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Morgan
S. Nalty
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F.
Jay Taylor
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Andrew
Gasaway, Jr.
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Daniel
F. Packer, Jr.
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OWNERSHIP
OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Principal
Stockholders
The
following table sets forth certain information regarding the only persons who
are known by the Company to own beneficially more than 5%
of any class of the outstanding stock of the Company. Each beneficial owner
exercises sole voting and investment power over the shares listed below except
as disclosed in the accompanying footnotes. Pursuant to Rule 13d-4 under the
Securities Exchange Act of 1934 (the “Exchange Act”), each principal stockholder
disclaims beneficial ownership of all shares owned by his spouse, a trust or
business entity with which he is affiliated, or of which he acts as
custodian.
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Amount
of Common Stock
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Name
of Beneficial
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Beneficially
Owned
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Owner
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Shares
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Percent
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Daniel
P. Harrington
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346,883
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1
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6.239%
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30195
Chagrin Blvd, Ste 310-N
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Pepper
Pike, OH 44124
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Douglas V. Reynolds2
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325,157
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5.849%
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P.
O. Box 4040
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Huntington,
WV 25729
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Marshall T. Reynolds3
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1,638,757
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29.476%
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P.
O. Box 4040
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Huntington,
WV 25729
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1
Includes 337,732 shares owned by TVI Corp. of which Mr. Daniel P.
Harrington is President and Director. The Board of Directors of TVI has
voting and investment power over such shares. Also includes 5,552 shares
owned by Brothers Capital Corp. over which Mr. Harrington has sole voting
and investment power and 3,333 shares of which Mr. Harrington is a joint
owner who has shared voting and investment power over such
shares.
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| 2 Mr. Douglas V. Reynolds is the son of Marshall T. Reynolds. |
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3Mr.
Marshall T. Reynolds is Chairman of the Board. Includes
31,925 shares owned by R-P Investments, Inc. and 4,000 shares owned by
Purple Cap, LLC, over all of which Mr. Reynolds has shared voting and
investment power. Also includes 4,133 shares owned by Champion Leasing
Corp., 5,333 shares owned by The Harrah & Reynolds Corporation and
9,667 shares owned by M. T. Reynolds Irrevocable Trust, over all of which
Mr. Reynolds has sole voting and investment power. Also includes 8,666
shares owned by Mr. Reynolds’s wife who exercises sole voting and
investments powers over such shares. Also, includes 112,000 shares owned
by one of Mr. Reynolds’s sons (Jack Reynolds) who exercises sole voting
and investment power over such
shares.
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Security
Ownership of Directors, Nominees, and Executive Officers
The
following table sets forth certain information concerning the beneficial
ownership of each class of the Company's outstanding capital stock by each
director, nominee for director and executive officer of the Company and by all
directors and executive officers of the Company as a group as of March 31, 2009.
Each director, nominee for director and executive officer exercises sole voting
and investment power over the shares listed below except as disclosed in the
accompanying footnotes. Pursuant to Rule 13d-4 under the Exchange Act, each
person listed below disclaims beneficial ownership of all shares owned by his or
her spouse, a trust or a business entity with which he or she is affiliated, or
of which he or she acts as custodian.
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Amount
of Common
Stock
Beneficially
Owned
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Name
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Title |
Shares
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Percent
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Marshall
T. Reynolds 1
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Chairman
of the Board of Directors
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1,638,757
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29.476%
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William
K. Hood 2
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Director
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136,021
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2.447%
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Alton
B. Lewis, Jr. 3
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Director
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17,906
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0.322%
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Michael
R. Sharp 4
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President
and Chief Executive Officer
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25,261
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0.454%
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Michele
E. LoBianco 5
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Chief
Financial Officer, Treasurer and Secretary
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2,805
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0.050%
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All
directors, nominee for director, and executive officers as a group (5 as a
group)
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1,820,750
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32.75%
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1 Includes
31,925 shares owned by R-P Investments, Inc. and 4,000 shares owned by
Purple Cap, LLC, over all of which Mr. Reynolds has shared voting and
investment power. Also includes 4,133 shares owned by Champion Leasing
Corp., 5,333 shares owned by The Harrah & Reynolds Corporation and
9,667 shares owned by M. T. Reynolds Irrevocable Trust, over all of which
Mr. Reynolds has sole voting and investment power. Also includes 8,666
shares owned by Mr. Reynolds’s wife who exercises sole voting and
investment powers over such shares. Also includes 112,000 shares owned by
one of Mr. Reynolds’s sons (Jack Reynolds) who exercises sole voting and
investment powers over such shares.
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| 2 Includes 484 shares of which Mr. Hood is a joint owner who has shared voting and investment power over such shares, 35,791 shares owned by Hood Investments, LLC. and 13,834 shares owned by WKH Management, Inc. as to which Mr. Hood exercises sole voting and investment power. |
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3 Includes
200 shares of which Mr. Lewis is a joint owner who has shared voting and
investment power over such shares.
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4 Includes
53 shares owned by Lakestar Land Company, owned by Mr. Sharp, as to which
Mr. Sharp exercises sole voting and investment
power.
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5 Includes
488 shares of which Ms. LoBianco is a joint owner who has shared voting
and investment power over such
shares.
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Change
in Control Arrangements
The
Corporation does not have any severance or change-in-control agreements with its
named executive officers.
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities
Exchange Act of 1934 requires the Company’s executive officers and directors,
and persons who own more than 10% of a registered class of the Company’s equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and greater than
ten-percent shareholders are required by the SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
The Company is aware of three instances
during 2008 in which executive officers of the Company failed to make timely
filings required by Section 16(a) of the Exchange Act. The Company relies on
written representations of its directors and executive officers and copies of
the reports that have been filed in making required disclosures concerning
beneficial ownership reporting.
BOARD
COMMITTEES AND MEETINGS
During 2008, there were 11 meetings of
the Company’s Board of Directors and eight meetings of the Company’s Audit
Committee. The Nominating and Corporate Governance and Compensation Committee
did not meet. There were 12 meetings of the Bank’s Board of Directors, six meetings of the Audit
and Examination Committee and 12 meetings of the
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Executive
Committee. All of the Company’s directors attended at least 75% of the aggregate
number of meetings of the Company’s Board of Directors. The Bank’s directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and committees thereof on which they sit held during their term as
directors of the Bank, except for Daniel F. Packer. The Company strongly
encourages all members of the Board of Directors to attend the Annual Meeting of
Shareholders each year. At the Company’s 2008 Annual Shareholder Meeting, all of
the Company’s Board of Directors were present and 15 of 20 Bank Board members
were present.
The Company’s Board of Directors has
three standing committees: an Audit Committee, a Nominating and Corporate
Governance Committee and a Compensation Committee. The Audit Committee met eight
times in 2008 and relies heavily on the Bank’s Audit Committee recommendations
and expertise. First Guaranty Bank’s (the “Bank”) Executive Committee fulfilled
the roles for the Nominating and Corporate Governance Committee as well as the
Compensation Committee.
The
members of the Company’s Audit Committee are William K. Hood, Chairman, Alton B.
Lewis and Marshall T. Reynolds. The Audit Committee does not currently have an
“audit committee financial expert” within the meaning of Item 401(h)(2) of SEC
Regulation S-K. Although currently none of the members of the committee
qualifies for that designation under the applicable Securities Exchange Act
rules, it is the judgment of the Board that the members of the committee are
financially literate and qualified directors to serve on the Audit Committee.
Members of the Audit Committee are independent directors within the meaning of
Rule 4200 of The NASDAQ Stock Market, LLC except Marshall T. Reynolds. However,
our Audit Committee does not meet the definition of independence within the
meaning of the Securities Exchange Act rules. The Company’s Audit Committee
Charter is published on www.fgb.net and is
attached as Exhibit A to this Proxy Statement.
The
functions of the Company’s Audit Committee include serving as a channel of
communication between the auditor and regulatory examiners and the Board of
Directors, reviewing examinations of the Company, reviewing the results of each
external audit of the Company, reviewing the Company's annual financial
statements, considering the adequacy of the Company’s internal financial
controls, and attending to other matters relating to the appropriate auditing
and accounting principles and practices to be used in the operation of the
Company in the preparation of its financial statements. This Committee also
supervises the activities of the Internal Auditor and approves the annual
program of work. In taking actions, the Company’s Audit Committee relies on the
Bank’s Audit Committee recommendations.
The
members of the Bank’s Audit and Examination Committee are William K. Hood,
Chairman, Anthony J. Berner, Jr., Collins Bonicard, Edwin L. Hoover, Jr., Dennis
E. James and Nicholas A. Saladino. Mr. Dennis James is considered an “audit
committee financial expert” within the meaning of Item 407(d)(5) of SEC
Regulation S-K. Mr. James has over 25 years experience as a CPA and is partner
of Durnin and James, CPAs P.C.
The
members of the Company’s Nominating and Corporate Governance Committee are
Marshall T. Reynolds, Chairman, William K. Hood and Alton B. Lewis. This
committee did not meet in 2008 rather matters were addressed by the Company’s
Board of Directors. Members are independent directors within the meaning of Rule
4200 of The NASDAQ Stock Market except Marshall T. Reynolds. The purpose of the
Nominating and Corporate Governance Committee of the Company shall be to
identify qualified individuals to become Board members; determining the size and
composition of the Board and its committees; monitoring a process to assess
Board effectiveness; developing and implementing the Company’s corporate
governance principles; and developing and implementing the Company’s Code of
Conduct and Ethics.
The
Nominating and Corporate Governance Committee shall have the authority
to:
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a.
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Lead
the search for individuals qualified to become members of the Board, and
to select director nominees to be presented to the Board for its approval,
and to stockholders for approval at the annual meeting of
stockholders. The Committee shall select individuals as
director nominees who shall have the highest personal and professional
integrity, who shall have demonstrated exceptional ability and judgment
and who shall be effective, in conjunction with the other nominees to the
Board, in collectively serving the long-term interests of the Company and
its stockholders. In addition, the Committee shall adopt
procedures for the submission of recommendations by stockholders as it
deems appropriate. The Committee shall conduct all necessary and
appropriate inquiries into the backgrounds and qualifications of possible
candidates.
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b.
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Review
and monitor the Board’s compliance with applicable NASDAQ Stock Market
listing standards for independence.
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c.
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Make
recommendations to the Board regarding the size and composition of the
Board and develop and recommend to the Board criteria (such as
independence, experience relevant to the needs of the Company, leadership
qualities, and stock ownership) for the selection of individuals to be
considered for election or re-election to the
Board.
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d.
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Review
the Board’s committee structure and recommend to the Board for its
approval directors (members and chairs) to serve on each
committee.
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e.
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Develop
corporate governance principles and a code of conduct and ethics, and
recommend such guidelines and code to the Board for its
approval. The Committee shall review the guidelines on an
annual basis, or more frequently if appropriate, and recommend changes as
necessary.
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f.
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Review,
as appropriate and in consultation with the Compensation Committee,
director compensation, and
benefits.
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g.
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Retain
and determine any search firm to assist in identifying director
candidates, and to retain outside counsel and any other advisors as the
Committee may deem appropriate in fulfilling its
responsibilities. The Committee shall notify the Board prior to
retaining any search firm, counsel or other advisors. The
Committee shall have sole authority to approve related fees and retention
terms.
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h.
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Report
to the full Board of Directors any actions taken for ratification by the
Board as necessary.
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The
Nominating and Corporate Governance Committee Charter is published on www.fgb.net. It is
expected that the Nominating Committee will use the same process to evaluate
potential candidates recommended by stockholders as it uses to evaluate any
other potential candidate. Stockholders wishing to propose a nominee
to the committee should send written notice to Mr. Marshall T. Reynolds at the
following address: P. O. Box 2009, Hammond, LA 70404. The notice
should include:
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Ø
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The
name, age, business and residence addresses, and principal occupation and
experience of each proposed
nominee;
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Ø
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All
other information relating to the person whom the shareholder proposes to
nominate that is required to be disclosed in solicitation of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended,
including such person’s written consent to being named in the proxy
statement as a nominee and to serving as a directors;
and
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Ø
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The
name and address of the shareholder giving the notice and the class and
number of shares of stock of the Company which the shareholder is the
record owner;
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In
evaluating director nominees, the Nominating and Corporate Governance Committee
considers the following factors:
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Ø
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The
appropriate size of the Company’s Board of
Directors;
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Ø
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The
needs of the Company with respect to the particular talents and experience
of its directors;
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Ø
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The
knowledge, skills and experience of nominees, including experience in
technology, business, finance, administration or public
service;
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Ø
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Experience
with accounting rules and
practices;
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Ø
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Appreciation
of the relationship of the Company’s business to the changing needs of
society; and
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Ø
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The
desire to balance the considerable benefit of continuity with the periodic
injection of the fresh perspective provided by new
members.
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The Nominating and Corporate Governance
Committee’s goal is to assemble a Board of Directors that
brings to the Company a variety of perspectives and skills
derived from high quality business and professional experience. In doing so, the
Nominating Committee also considers candidates with appropriate non-business
backgrounds.
Other than the aforementioned, there
are no stated minimum criteria for director nominees, although the Nominating
and Corporate Governance Committee may also consider such other factors as it
may deem are in the best interest of the Company and its stockholders. The
Committee also believes it appropriate for certain key members of the Company’s
management to participate as members of the Bank’s Board of
Directors.
The Nominating and Corporate Governance
Committee will identify nominees by first evaluating the current members of the
Board of Directors willing to serve an additional term. Current members of the
Board who are willing to continue to serve as a member will be considered for
re-nomination. If any member of the Board does not wish to continue to
- 9
-
serve on
the Board or if the Nominating Committee or the Board decides not to re-nominate
a member for re-election, the Committee may identify a new nominee. Current
Board members are polled for suggestions as to individuals meeting the criteria
of the Nominating and Corporate Governance Committee. Research may also be
performed to identify qualified individuals. Although the Company reserves the
right to do so, the Company has not engaged third parties to identify, evaluate,
or assist in identifying potential nominees.
The
Company’s By-Laws contain provisions that address the process by which a
stockholder may nominate an individual to stand for election to the Board of
Directors at the Company’s Annual Meeting of Stockholders. Those provisions are
discussed in more detail in this proxy statement below under the heading “2009
Annual Meeting”.
The
Company has established a formal process by which stockholders may communicate
with the Board of Directors. This process is may be accessed on our website at
www.fgb.net.
Every effort has been made to ensure that the views
of stockholders are heard by the Board or individual directors
and that appropriate responses are provided to stockholders in a timely
manner.
You can
contact our Directors by mail in care of the Recording Secretary to the Board of
Directors, First Guaranty Bank, P. O. Box 2009, Hammond, LA 70404. Mail
addressed to the “Board of Directors” will be forwarded or delivered to the
Chairman of the Board.
At the
direction of the Board of Directors, all mail received will be opened and
screened for security purposes. The mail will then be logged in. All mail, other
than trivial items, will be forwarded. Trivial items will be delivered to the
Chairman of the Board of Directors at the next scheduled Board
meeting.
The
Company’s Board of Directors fulfilled the functions of the Company’s Nominating
and Corporate Governance in 2008.
The
members of the Company’s Compensation Committee are Marshall T. Reynolds,
Chairman, William K. Hood and Alton B. Lewis. Members are independent directors
within the meaning of Rule 4200 of The NASDAQ Stock Market except Marshall T.
Reynolds. The purpose of the Compensation Committee of the Company will be to
fulfill its responsibilities relating to the compensation and benefits provided
to the Company’s directors and executive management. The Company’s Board of
Directors fulfilled the functions of the Company’s Compensation Committee in
2008 and in that capacity recommends the compensation arrangements for senior
management and directors and the adoption of compensation plans in which
officers and directors are eligible to participate and the oversight of any such
plans that are adopted by the Company.
During 2008, the Company’s Board of
Directors reviewed and set annually the salaries and bonuses of the executive
officers of the Company. In making salary and bonus decisions, the Board of
Directors considers past and current performance of those executive officers,
the Company’s performance and current market conditions.
The Compensation Committee has the
authority to delegate to any person or persons it chooses, including the
committee chairman or executive officers of the Company, the authority to review
and set the compensation of the President, other executive officers or other
employees. The Chairman of the Compensation Committee, alone, at his option, is
also granted the authority to delegate to any person this same authority. The
Company did not hire an outside consulting firm to determine or recommend the
amount or forms of any compensation in 2008.
BOARD
OF DIRECTORS INDEPENDENCE
The Board
has determined that all members of the Board are independent directors within
the meaning of Rule 4200 of The NASDAQ Stock Market except Marshall T. Reynolds.
The definition of an independent director can be found on www.fgb.net.
RELATIONSHIP
WITH INDEPENDENT ACCOUNTANTS
The firm
of Castaing, Hussey & Lolan, LLC serves as the Company’s independent
registered public accounting firm. The Company's consolidated financial
statements for the years ended December 31, 2008 and 2007 were audited by the
firm of Castaing, Hussey & Lolan, LLC. Representatives of Castaing, Hussey
& Lolan, LLC are expected to be present at the Meeting, will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
- 10
-
The Audit Committee anticipates that
the accounting firm of Castaing, Hussey & Lolan, LLC will be appointed as
independent auditors for the Company's financial statements for the year ending
December 31, 2009.
Audit
Fees
Castaing, Hussey & Lolan, LLC
provided audit services to the Company consisting of the annual audit of the
Company’s 2008 and 2007 consolidated financial statements contained in the
Company’s Annual Reports on Form 10-K and review of the financial statements
contained in the Company’s Quarterly Reports on Form 10-Q for 2008. Castaing,
Hussey & Lolan, LLC did not provide any services related to the financial
information systems design/implementation or internal audit outsourcing to the
Company during 2008 or 2007.
|
|
||||||||
|
Castaing,
Hussey & Lolan, LLC Fees
|
||||||||
|
Fiscal
Year
|
Percentage
|
Fiscal
Year
|
Percentage
|
|||||
|
Fee
Category
|
2008
|
of
Total
|
2007
|
of
Total
|
||||
|
Audit
Fees
|
$113,600
|
68%
|
$108,600
|
64%
|
||||
| Audit-Related Fees | 21,955 |
13%
|
12,600 |
7%
|
||||
|
Tax
Fees
|
20,500
|
12%
|
14,000
|
8%
|
||||
|
All
Other Fees
|
10,715
|
6%
|
35,000
|
21%
|
||||
|
Total
Fees
|
$166,770
|
100%
|
$170,200
|
100%
|
||||
Audit Fees. These are fees
related to professional services rendered in connection with the audit of the
Company’s annual financial statements filed on Form 10-K, reviews of the
financial statements included in each of the Company’s Quarterly Reports filed
on Form 10-Q and accounting consultations that relate to the audited financial
statements which are necessary to comply with generally accepted auditing
standards.
Audit-Related Fees. These
fees consisted primarily of audits of employee benefit plans, specific internal
control process reviews and consultations regarding accounting and financial
reporting.
Tax Fees. These are fees
billed for professional services related to tax compliance, tax advice and tax
planning, including the preparation and filing of tax returns.
All Other Fees. These are
fees for all other permissible services that do not meet the above category
descriptions.
Policy
on Audit and Examination Committee Pre-Approval of Audit and Non-Audit Services
of Independent Auditor
The Committee or the Chair of the
Committee under authority delegated by the Committee, will pre-approve all
services (audit and permissible non-audit services) performed by the external
auditors and the associated costs and fees, in order to assure that the
provision of such services does not impair the external auditors’ independence.
Any services approved by the Committee Chair or a delegated committee member of
the Committee will be brought to the full Committee for approval at the next
scheduled Committee meeting. Services which qualify under the de minimis exception to the
Sarbanes-Oxley Act of 2002, shall be approved by the Committee or a delegated
Committee Member prior to the completion of the audit.
REPORT
OF THE AUDIT COMMITTEE
The Company’s Audit Committee met eight
times in 2008. The Company’s Audit Committee relied heavily on the Bank’s Audit
and Examination Committee to fulfill its role, in fulfillment of the SEC’s
requirement for disclosure in proxy materials relating to the functioning of
Audit Committee. Below is a report from the Company’s Audit
Committee.
The Audit Committee’s primary duties
and responsibilities are to:
|
•
|
Monitor
the integrity of the Company’s accounting and financial reporting process
and systems of internal controls.
|
- 11
-
|
•
|
Monitor
the independence and performance of the Company’s external auditors,
internal auditors and outsourced internal audit
consultants.
|
|
•
|
Facilitate
communication among the external auditors, management, internal auditors,
and the outsourced internal audit
consultants.
|
|
•
|
Maintain
oversight of the external auditors, including the appointment,
compensation and, when considered necessary, the dismissal of the external
auditors.
|
The Audit Committee is governed by a
written charter. Each member of the Audit Committee is independent under the
definition of “Independent Director” set forth in Rule 4200(a)(15) of The NASDAQ
Stock Market except Marshall T. Reynolds.
The Audit Committee engaged the firm of
Castaing, Hussey & Lolan, LLC, New Iberia, Louisiana as the Company’s
independent outside auditors for the year 2008.
In performance of its obligations, the
Audit Committee has reviewed and discussed the Company’s audited financial
statements with management and its independent auditors, Castaing, Hussey &
Lolan, LLC, and has discussed with its independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61, as amended,
“Communications with Audit Committees.” In addition, the Audit Committee
received from the auditors written disclosures and the letter regarding the
auditors’ independence required by Independence Standards Board, Standard No. 1,
“Independence Discussion with Audit Committees,” and discussed with the auditors
their independence.
The Audit Committee received reports
throughout the year on the Company’s internal controls for compliance with the
requirements for Section 404 of the Sarbanes-Oxley Act of 2002 and the rules
promulgated there under. The Audit Committee will continue to receive updates
from the internal auditors and management on the process of the Company’s
internal controls.
Based on the above-mentioned review and
discussions, the Audit Committee approved the Company’s audited financial
statements to be included in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2008 for filing with the Securities and Exchange
Commission.
The Audit
and Examination Committee:
Marshall
T. Reynolds, Chairman
William
K. Hood
Alton B.
Lewis
DIRECTORS’
COMPENSATION
Annual
Compensation
Directors
of the Company are not paid director fees. Directors of the Bank who are not
also full-time employees of the Bank received $500 for each regular or special
Board meeting attended until May 2008 and then received $600 per meeting for the
remainder of the year. Directors of the Bank who are not full-time employees of
the Bank and are members of a Director’s Committee receive $125 for each
committee meeting attended, except for loan committee members who receive $225
per meeting attended. Advisory board members receive $500 per month. No other
payments are made to the directors for benefits, perquisites or compensation of
any other kind. The Board of Directors set the fees.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Introduction
This
Compensation Disclosure and Analysis (“CD&A”) gives an overview and analysis
of the Company’s compensation program and policies, the material compensation
decisions made under those programs and policies, and the material factors that
were considered in making those decisions. In this proxy statement, under the
heading “Summary Compensation Table”, is specific information about the
compensation earned or paid in 2008 to Michael R. Sharp, the President and Chief
Executive Officer and Michele E. LoBianco, Chief Financial Officer, Treasurer
and Secretary referred to as our “named executive officers.”
- 12
-
Objectives
of Executive Compensation Program
The objectives of the executive
compensation program covering the named executive officers are as
follows:
|
Ø
|
Motivate
and retain executives demonstrating superior performance and exceptional
talent, which in turn creates long term value for our
stockholders;
|
|
Ø
|
Reward
executives for financial performance;
and
|
|
Ø
|
Provide
a competitive package relative to peer group
banks.
|
Components
of Executive Officer Compensation
Named executive officers receive a
combination of base salary and annual cash bonus, in addition to other various
benefits. Base salaries are paid in order to provide executive
officers with sufficient, regularly-paid income and to attract, recruit and
retain executives with the knowledge, skills and abilities necessary to
successfully execute their job duties and responsibilities. The performance of
the Company’s executive officers in managing the Company, when considered in
light of general economic and specific company, industry and competitive
conditions, is the basis for determining their overall
compensation.
The
Company’s Board of Directors, fulfilling the duties of the Compensation
Committee, determined all compensation for each named executive officer for
2008. Compensation is paid based on the named executive officers’
individual and departmental performance, as well as the overall performance of
the Company. In assessing the performance of the Company for the purpose of
compensation decisions, numerous factors were considered, including earnings
during the past year relative to budget plans, asset growth, business plans for
the future direction of the Company, and safety and soundness of the Company.
Salaries paid by other financial institutions in the Company’s geographic market
area, with similar asset size, are also considered. An assessment of each
individual executive’s performance is based on the executive’s responsibilities
and a determination of the executive’s contribution to the performance of the
Company and the accomplishment of the Company’s strategic goals.
Base Salary. Base salary is
generally established by an individual’s performance, potential,
responsibilities, promotions, other compensation and peer group compensation
levels. In assessing performance for purposes of establishing base salaries, a
mechanical formula is not used, but instead the factors described above are
weighted as deemed appropriate in the circumstances.
The base
salary for the Chief Executive Officer for 2008 was based on the factors above,
including the current financial performance of the Company as measured by
earnings, asset growth, and overall financial soundness. Additional
considerations were the CEO’s leadership in setting high standards for financial
performance, motivating management, continued involvement in community affairs
and the satisfaction with the management of the Company.
Bonuses. Bonuses
are discretionary and are generally granted to named executive officers based on
the extent to which the Company achieves annual performance objectives as
established by the Compensation Committee. Bonuses are determined by the
Committee after an end of year assessment of the Company’s performance. The
performance criteria used by the Committee to determine the bonuses are not
established until the end of the year and are not necessarily communicated to
the officers. Company performance objectives may include net income, return on
average assets (“ROAA”) and return on average equity (“ROAE”) goals. ROAA
measures management’s overall effectiveness at managing and investing the
Company’s assets. ROAA is calculated by dividing net income by average total
assets. ROAE measures the net after-tax return provided to the
Company’s shareholders. ROAE is calculated by dividing net income by average
total equity.
Section 401(k) Profit Sharing Plan
(“401(k) plan”). The Company’s executive officers and most other Bank
employees are eligible to participate in the 401(k) plan. The 401(k) rewards and
motivates all employees, including the named executive officers and the
Company’s annual matching contributions to the plan create an incentive for
continued employment.
The
401(k) plan covers employees meeting certain eligibility requirements as to
minimum age and years of service. Employees may make voluntary
contributions to the 401(k) plan through payroll deductions on a pre-tax
basis. The Company’s contributions are subject to a vesting schedule
requiring the completion of five years of service with the Company, before these
benefits are fully vested. The vested portion of a participant’s account under
the 401(k) plan, together with investment earnings thereon, is normally
distributable, following retirement, death, disability or other termination of
employment, in a single lump-sum payment.
- 13
-
All
eligible employees, including executive officers, may contribute up to 20% of
their gross salary to the plan each year subject to federal limits. The Company
matches dollars up to the first six percent of the employee’s annual
contribution. The maximum employee contribution for 2008 was $15,500 plus an
additional $5,000 catch-up contribution for participants over 50 years of
age. These maximums are subject to additional limitations as stated
in the Internal Revenue Code. The Bank’s match is tiered based on the Bank’s
return on average assets. The Company’s stock is not offered as an investment
option in the 401(k) plan.
Employee Stock Ownership Plan
(“ESOP”). The ESOP aligns the interests of management with those of the
Company’s stockholders and in turn contributes to long-term stockholder value by
putting more stock into the hands of the employees. The ESOP is effective in
motivating employees and provides important retirement benefits with attractive
tax advantages upon retirement. The ESOP covers employees meeting
certain eligibility requirements as to minimum age and years of service. An
employee must be a participant for three years from enrollment before he or she
is 100% vested. Based on its earnings, the Company may make discretionary
contributions to the ESOP. The vested portion of a participant’s account
under the ESOP plan, together with investment earnings thereon, is normally
distributable, following retirement, death, disability or other termination of
employment, in a single lump-sum payment.
Stock Awards. The Company
issued quarterly bonuses in the form of stock awards to certain employees,
including executive officers. The stock awards do not have a vesting requirement
or any other restrictions and are expensed as awarded based on the fair value of
the stock. The Company acquires stock in the open market for the awards. These
awards were issued based on employee performance, are discretionary and are not
governed under a stock plan.
Perquisites and Other
Benefits. The Company’s Board of Directors, fulfilling the
duties of the Compensation Committee, believes that offering certain perquisites
helps in the operation of the business as well as assists the Company to recruit
and retain key executives. The Company offers health, life and disability
insurance, and in some cases, car allowances and country club memberships to our
management. The latter payments foster the management’s involvement in the
community and contribute to the Company’s business development efforts. The
Company also compensates for vacations and holidays.
Other. The Company did not
offer or have outstanding any of the following in 2008: option awards,
non-equity incentive plan compensation and nonqualified deferred compensation.
The Company offered two non-equity incentive plans to all employees, excluding
senior management. The first plan, offered from January 1, 2008 to June 30,
2008, was monitored on a scorecard in which points were assessed on loan growth,
deposit growth, fee income increases and various products and service sold.
Scorecard points were reduced for loans not renewed timely, loan charge-offs,
past dues and loan exceptions. This plan was terminated on June 30,
2008.
A new
non-equity incentive plan was offered from July 1, 2008 to December 31, 2008 to
all employees, excluding senior management. The plan was based on deposit growth
in our banking centers.
Compensation
Committee Report On Executive Compensation
The
Company’s Board of Directors, fulfilling the functions of the Compensation
Committee, has reviewed and discussed the Compensation Discussion and Analysis
with management. Base on this review, recommended to the Company’s
Board of Directors that the Compensation Discussion and Analysis be included in
this Proxy Statement for filing with the Securities and Exchange
Commission.
Compensation
of Executive Officers
The following table sets forth, on an
accrual basis, the aggregate cash and non-cash compensation paid by the Company
during the last two fiscal years to the Company’s Chief Executive Officer and
the other Executive Officers who received total compensation in
excess of $100,000 during the fiscal years ended December 31, 2008 and
2007.
- 14
-
|
Summary
Compensation Table*
|
||||||
|
Stock
|
All
Other
|
|||||
|
Name
and Principal Position
|
Year
|
Salary
|
Bonus 1
|
Awards
2
|
Compensation 3
|
Total
|
|
Michael
R. Sharp
|
2008
|
$145,006
|
$12,784
|
$2,500
|
$8,427
|
$166,217
|
|
President
and
|
2007
|
143,754
|
12,784
|
2,663
|
13,806
|
170,344
|
|
Chief
Executive Officer
|
||||||
|
Loy
F. Weaver
4
|
2008
|
-
|
-
|
-
|
150,186
|
150,186
|
|
Executive
Vice President
|
2007
|
125,003
|
12,400
|
1,085
|
35,992
|
173,395
|
|
Michele
E. LoBianco
|
2008
|
113,254
|
12,170
|
5,180
|
6,372
|
131,796
|
|
Chief
Financial Officer
|
2007
|
113,003
|
12,170
|
2,663
|
10,796
|
135,969
|
|
Treasurer
and Secretary
|
||||||
| * Includes service as executive officers of First Guaranty Bank, a wholly owned subsidiary of First Guaranty Bancshares, Inc. | |
|
|
(1)
Includes distributions under the company-wide annual bonus which
equaled one week’s base salary.
|
|
|
(2)
Includes stock grants all of which are not subject to vesting or
other restrictions when awarded.
|
|
|
(3)
Includes excess group life insurance coverage, employer matching
contributions to 401(k) savings plan, and ESOP contributions. Also
includes split-dollar life insurance coverage, country club dues and car
allowance for Mr. Weaver. Includes employer matching contributions to the
401(k) savings plan in the amounts of $2,297 and $4,619 for Mr. Sharp,
$2,812 and $4,122 for Mr. Weaver and $2,392 and $3,755 for Ms. LoBianco
for the years ended 2008 and 2007, respectively. Also included are
employer ESOP contributions in the amounts of $2,958 and $3,510 for Mr.
Sharp, $4,162 and $3,400 for Mr. Weaver and $2,392 and $2,800 for Mrs.
LoBianco for the years ended 2008 and 2007, respectively. The amounts
shown for Mr. Weaver include a car allowance totaling $8,400 and $8,524
for the years ended 2008 and 2007, respectively. Also includes amounts for
Mr. Weaver’s country club dues totaling $775 and $1,147 during each of the
years ended 2008 and 2007. Also included are premiums paid for excess
group life insurance coverage for Mr. Sharp in the amounts of $3,171 and
$3,014, Mr. Weaver in the amounts of $4,979 and $5,335, Ms. LoBianco in
the amounts of $1,587 and $1,578 for the years ended 2008 and 2007,
respectively. Also included for Mr. Weaver are premiums paid for
split-dollar life insurance coverage in the amount of $4,053 and $12,380
for the years ended 2008 and 2007, respectively. Also included for Mr.
Weaver is a severance totaling $125,005 for the year ended
2008.
|
|
|
(4)
Mr. Weaver resigned from the Company on January 28,
2008.
|
2008
Compensation Modifications
In 2008,
the Compensation Committee approved a base salary of $145,006 for the President
and Chief Executive Officer. There were no other compensation changes for any
other executive officer.
Tax
and Accounting Considerations
The Company evaluates the tax and
accounting treatment of each of our compensation programs at the time of
adoption and annually to ensure that we understand the financial impact of each
program on the Company. Our analysis includes a review of recently adopted and
pending changes in tax and accounting requirements.
Stock
Ownership Requirements
The
Company encourages directors and executive officers to purchase stock. The
Company has not adopted formal stock ownership requirements for its directors or
executive officers
Employment
Contracts, Termination of Employment and Change in Control
Arrangements
The Company had no employment
contracts, termination of employment or change in control arrangements as of
December 31, 2008.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The
members of the Company’s Board of Directors, which fulfills the functions of the
Company’s Compensation Committee, are Marshall T. Reynolds, Chairman, Alton B.
Lewis and William K. Hood. No member is or was an officer or employee of the
Company.
During the year ended 2008, the Company
paid approximately $504,000 for printing services and supplies and office
furniture and equipment to Champion Graphic Communications (or subsidiary
companies of Champion Industries, Inc.), of which Mr. Marshall T.
Reynolds, the Chairman of the Company’s Board of Directors, is President, Chief
- 15
-
Executive
Officer, Chairman of the Board of Directors and holder of 41.8% of the capital
stock as of January 16, 2009; approximately $1.3 million to participate in the
Champion Industries, Inc. employee medical benefit plan; and approximately
$183,000 to Sabre Transportation, Inc. for travel expenses of the Chairman and
other directors. These expenses include, but are not limited to, the utilization
of an aircraft, fuel, air crew, ramp fees and other expenses attendant to the
Company’s use. The Harrah and Reynolds Corporation, of which Mr. Reynolds is
President and Chief Executive Officer and sole shareholder, has a 99% ownership
interest in Sabre Transportation, Inc.
During the year ended 2008, the Company
paid approximately $30,100 to subsidiaries of Hood Automotive Group, of which
Mr. Hood is the President. Expenses include the purchase of a new Company
vehicle and services on Company owned vehicles.
During
the year ended 2008, the Company engaged the services of Cashe, Lewis, Coudrain
and Sandage, attorneys-at-law, of which Mr. Alton Lewis, a director of the
Company, is a partner, to represent the Company with certain legal matters. Mr.
Lewis has a 25% ownership interest in the law firm. The fees paid for these
legal services totaled $162,000.
TRANSACTIONS
WITH RELATED PARTIES
The
Company is engaged, and expects to engage in the future, in banking transactions
in the ordinary course of business with directors, officers, principal
stockholders and their associates and/or immediate family members, on
substantially the same terms, including interest rates and collateral on loans,
as those prevailing at the same time for comparable transactions with persons
not related to the Company and that do not involve more than the normal risk of
collectibility or present other unfavorable features. The Company has a formal
policy for the review and approval of related party transactions.
At March 31, 2009, the aggregate amount
of extensions of credit to directors, executive officers, principal stockholders
and their associates, as a group was $22.3 million or approximately 34.4% of
total equity.
During the year ended 2008, the Company
paid approximately $503,700 for printing services and supplies and office
furniture and equipment to Champion Graphic Communications (or subsidiary
companies of Champion Industries, Inc.), of which Mr. Marshall T. Reynolds, the
Chairman of the Company’s Board of Directors, is President, Chief Executive
Officer, Chairman of the Board of Directors and holder of 41.8% of the capital
stock as of January 16, 2009; approximately $1.3 million to participate in the
Champion Industries, Inc. employee medical benefit plan; and approximately
$182,800 to Sabre Transportation, Inc. for travel expenses of the Chairman and
other directors. These expenses include, but are not limited to, the utilization
of an aircraft, fuel, air crew, ramp fees and other expenses attendant to the
Company’s use. The Harrah and Reynolds Corporation, of which Mr. Reynolds is
President and Chief Executive Officer and sole shareholder, has a 99% ownership
interest in Sabre Transportation, Inc.
During the year ended 2008, the Company
paid approximately $30,100 to subsidiaries of Hood Automotive Group, of which
Mr. Hood is the President. Expenses include the purchase of a new Company
vehicle and services on Company owned vehicles.
During
the year ended 2008, the Company engaged the services of Cashe, Lewis, Coudrain
and Sandage, attorneys-at-law, of which Mr. Alton Lewis, a director of the
Company, is a partner, to represent the Company with certain legal matters. Mr.
Lewis has a 25% ownership interest in the law firm. The fees paid for these
legal services during 2008 totaled $162,000. The Board considered the Company’s
relationship with Cashe, Lewis Coudrain and Sandage and concluded that Alton
Lewis was an independent director.
The Company believes that the terms of
its related party transactions are no less favorable to the Company than could
be obtained with an independent third party.
- 16
-
STOCKHOLDER
PROPOSALS
2010
Annual Meeting
The
deadline for submission of stockholder proposals to be considered for inclusion
in the proxy materials relating to the 2010 Annual Meeting is December 29,
2009.
Stockholder
proposals to be presented at the 2010 Meeting, but not included in the proxy
materials for that Meeting, must be submitted not less than 30 or more than 90
days before the date of the Meeting (or within 10 days of the date of notice or
prior public disclosure of the date of the Meeting, if such notice or disclosure
is given or made less than 40 days before the date of the Meeting). Under the
Company’s By-Laws, a stockholder must furnish certain specified information in
writing about the matters proposed to be brought before the Meeting and about
the stockholder submitting the proposal and must be addressed to the Secretary
of the Bank at P. O. Box 2009, Hammond, Louisiana, 70404.
OTHER
MATTERS
As of the
date of this Proxy Statement, the Board of Directors does not know of any
matters to be presented at the Meeting other than those mentioned above.
However, if any other matters are properly brought before the Meeting, or any
adjournment of postponement thereof, it is the intention of the persons named in
the enclosed proxy to vote the shares represented by them in accordance with
their best judgment pursuant to discretionary authority granted in the
proxy.
Code
of Ethics
The
Company has adopted a Code of Ethics that applies to all employees as well as
all members of the Board of Directors. The Company also has adopted a Code of
Ethics related to financial reporting that applies to senior financial officers.
Both Codes of Ethics are available at www.fgb.net.
Form
10-K
Upon
written request by any stockholder who makes a good faith representation that he
or she is a stockholder of the Company as of April 3, 2009 and entitled to vote
at the Meeting, the Company will provide a copy of the 2008 Annual Report on
Form 10-K filed with the Securities and Exchange Commission, including
statements, schedules, and exhibits thereto. These documents, including proxy
materials may also be accessed on our website at www.fgb.net. Such
requests should be addressed to Michele E. LoBianco, Chief Financial Officer,
Treasurer and Secretary, First Guaranty Bancshares, Inc. P.O. Box 2009, Hammond,
Louisiana 70404-2009.
By Order
of the Board of Directors
/s/
Michele E. LoBianco
Michele
E. LoBianco
Secretary
Hammond,
Louisiana
May 4,
2009
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Exhibit
A
FIRST
GUARANTY BANCSHARES, INC.
CHARTER
OF THE AUDIT COMMITTEE
OF
THE
BOARD
OF DIRECTORS
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I.
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Audit
Committee Purpose
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The Audit
Committee (the “Committee”) and its designated Chair shall be appointed by the
Board of Directors of First Guaranty Bancshares, Inc. (collectively, the
Company) to assist the Board of each in fulfilling its oversight
responsibilities for these entities and its wholly-owned subsidiaries. The
Committee’s primary duties and responsibilities are to:
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•
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Monitor
the integrity of the Company’s accounting and financial reporting process
and systems of internal controls.
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•
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Monitor
the independence and performance of the Company’s external auditors,
internal auditors and outsourced internal audit consultants (including,
but not limited to Loan Review, Compliance, IT Audit,
etc).
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|
•
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Facilitate
communication among the external auditors, management, internal auditors,
and the outsourced internal audit
consultants.
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•
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Maintain
oversight of the external auditors, including the appointment,
compensation and, when considered necessary, the dismissal of the external
auditors.
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The
Committee has the authority to conduct any investigation appropriate to
fulfilling its responsibilities, and it has direct access to all auditors, as
well as anyone in the organization. The Committee has the ability to retain, at
the Company’s expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its duties.
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II.
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Committee
Composition and Meetings
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The
Committee shall be comprised of not less than two directors, each of whom shall
be independent, non-executive directors, free from any relationship that would
interfere with the exercise of his or her independent
judgment. Each member shall meet the independence requirements
of The Nasdaq Stock Market, Inc. (NASDAQ) and Section 10A(m)(3) of the
Securities Exchange Act of 1934. Each member must be able to read and
understand fundamental financial statements. In addition, the Chair of the
Committee shall have accounting or related financial management
expertise.
The
Committee shall meet no less than four times annually, or more frequently as
circumstances dictate. The Committee Chair shall prepare and/or approve an
agenda in advance of each meeting. The Committee will meet privately in
executive session each quarter with, the Bank’s Internal Auditor, and as
considered necessary by the Chair, management, the designated loan review,
compliance, IT audit function representatives and the external auditors to
discuss any matters that either the Committee or these groups believe should be
discussed. The Chief Executive Officer, Chief Financial Officer and
other officers, as necessary, of the Company may attend the meetings as invited
guests of the Committee. Minutes will be maintained in sufficient
detail of each meeting and records shall be kept of all action taken in exercise
of the authority or performance of duties of the Committee.
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III.
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Specific
Committee Responsibilities and
Duties
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Review
Procedures
The
Committee will:
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1.
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Review
and reassess the adequacy of this Charter at least annually and submit the
Charter to the Board of Directors for
approval.
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2.
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Review
the Company’s annual audited financial statements, and reports on the
evaluation of internal control over financial reporting by management and
the external auditors prior to filing or distribution, including
discussion with management and the external auditors of significant issues
regarding accounting principles, practices and
judgments.
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3.
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In
consultation with management, the external auditors and the Internal
Auditor, consider the integrity of the Company’s financial reporting
processes and controls. Discuss significant financial risk exposures and
the steps management has taken to monitor, control, and report such
exposures. Review significant findings prepared by the external auditors
and Internal Auditors together with management’s
responses.
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External
Auditors
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1.
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The
Committee will review the independence and performance of the external
auditors and annually recommend to the Board of Directors either their
appointment or discharge when circumstances
warrant. Notwithstanding the preceding sentence, the Committee
shall be directly responsible for the appointment, compensation, retention
and oversight of the work of the registered public accounting firm
(including resolution of disagreements between management and the auditor
regarding financial reporting) for the purpose of preparing or issuing an
audit report or performing other audit, review or attest services for the
Company, and the registered public accounting firm must report directly to
the Committee.
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2.
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The
Committee or the Chair of the Committee under authority delegated by the
Committee, will pre-approve all services (audit and permissible non-audit
services) performed by the external auditors and the associated costs and
fees, in order to assure that the provision of such services does not
impair the external auditors’ independence. Any services approved by the
Committee Chair or a delegated committee member of the Committee will be
brought to the full Committee for approval at the next scheduled Committee
meeting. Services which qualify under the de minimis exception to
the Sarbanes-Oxley Act of 2002, shall be approved by the Committee or a
delegated Committee Member prior to the completion of the
audit.
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3.
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On
an annual basis, the Committee will review and discuss with the external
auditors their report of any significant relationships they have with the
Company that could impair the auditors’
independence.
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4.
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The
Committee will review the external auditors’ audit plan—discuss scope,
staffing, level of reliance upon management and the Internal Auditor and
the general audit approach.
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5.
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Prior
to filing or distribution of the Company’s audited financial statements,
the Committee shall discuss the results of the audit with the external
auditors. Further, discussion of matters required to be communicated to
audit committees in accordance with accounting principles and auditing
standards, including Statement of Auditing Standards No. 61, as amended,
shall be conducted prior to the filing or distribution of such audited
financial statements.
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6.
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The
Committee will review the experience and qualifications of the senior
members of the external auditor team; review with the external auditor its
system of quality controls and procedures; request a copy of the most
recent third party independent quality control peer review report for the
external auditors; review the report to determine if any material
weaknesses or significant deficiencies were raised in the
report; and discuss with the external auditors the steps the firm has
taken to resolve any reported
problems.
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7.
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The
Committee will review with the external auditors and management any
correspondence with regulators or governmental agencies and any employee
complaints or published reports, which management deems to raise material
issues regarding the Company’s financial statements or accounting
policies.
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8.
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The
Committee will review and must approve, any proposed employment of a
current or former employee of the external audit firm for a financial
reporting position within the Company, as defined under the Sarbanes-Oxley
Act of 2002 and related implementing rules, regulations or published
guidance.
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9.
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The
Committee will review with the external auditor and management the effect
of significant regulatory and accounting/reporting
developments.
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10.
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The
Committee will review with management and the external auditor, if
necessary, off-balance sheet structures entered into by the Company and
the related disclosures in the financial
statements.
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Internal Auditors and Outsourced Audit
Consultants
The Committee will:
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1.
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Review
and approve the risk assessment and related methodology, audit plan and
related budgets, organizational structure, audit polices, programs and
qualifications of the Internal Auditor and Outsourced Audit Consultants at
least annually. The Committee will also approve any changes made during
the year to the risk assessment or audit plan/budgets. Any functions
normally performed by the Internal Auditor that are outsourced to a third
party will include monitoring of the relationship and a review
of the independence and qualifications of such firm/individuals to perform
their assignments.
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2.
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Maintain
oversight of the Internal Auditor, including the appointment, compensation
and, when considered necessary, the dismissal of the Internal
Auditor.
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3.
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On
at least a quarterly basis, review and approve significant reports
prepared by the Internal Auditor and outsourced third parties together
with management’s response and the Internal Auditor’s follow-up to these
reports. The Internal Auditor, on a quarterly basis, will
provide the Committee with a status of its audit plan and budgeted hours
as well as a report on the current status of significant deficiencies
noted by the Internal Auditor, outsourced audit consultants, external
auditors or regulators.
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Other Committee
Responsibilities
Additionally, the Committee will:
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1.
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Annually,
report to the Board of Directors of the Company that it: (i) has reviewed
and discussed the audited financial statements with management and the
external auditors; (ii) has discussed with the external auditors the
matters to be discussed by Statement of Auditing Standards No. 61; (iii)
has received the written disclosures and the letter from the external
auditors required by applicable requirements of the
Public Company Accounting Oversight Board regarding the independent
accountant’s communications with the audit committee concerning
independence; (iv) has discussed with the external auditors their
independence; and (iv) based on the review and discussion of the audited
financial statements with management and the external auditors, has
recommended to the Board of Directors that the audited financial
statements be filed with the appropriate regulatory
authorities.
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2.
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Report
to the Board of Directors at the next scheduled Board meeting on
significant results of the Committee’s
activities.
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3.
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Perform
any other activities consistent with this Charter, the Company’s by-laws,
and governing law, as the Committee or the Board deems necessary or
appropriate.
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4.
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Establish
and maintain procedures in accordance with applicable laws and regulations
for the receipt, retention and treatment of complaints and concerns
regarding the Company’s accounting, internal accounting controls or
auditing matters, including the confidential and anonymous submission by
Company employees of concerns regarding questionable accounting or
auditing matters.
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5.
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Review
and approve material related party transactions. The committee will
receive and review appropriate disclosure relating to any proposed related
party transaction.
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*****
Approved: April 15, 2009
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