UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14 A
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:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under Rule 14a-12
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PEOPLES FINANCIAL
CORPORATION
(Exact 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):
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No fee requirement.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0 -11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price other or 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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Fee paid previously with preliminary materials.
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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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Form, Schedule or Registration Statement No:
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Filing Party:
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Date Filed:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS GIVEN that, pursuant to a call of its Directors, the Annual Meeting of Shareholders of Peoples Financial Corporation (the Company) will
be held in The Swetman Building at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, on April 26, 2017, at 6:30 P.M., local time, for the purpose of considering and voting upon the following matters:
1.
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Election of five (5) Directors to hold office for a term of one (l) year, or until their successors are elected and shall have qualified.
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Ratification of the appointment of Porter Keadle Moore, LLC, as the independent registered public accounting firm for the Company.
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Transaction of such other business as may properly come before the meeting or any adjournments thereof.
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Only
those shareholders of record at the close of business on February 17, 2017, will be entitled to notice of, and to vote at, the meeting or any adjournments thereof.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on
April 26, 2017
Pursuant to rules
promulgated by the Securities and Exchange Commission (the SEC), we are providing access to our proxy materials both by sending you this full set of proxy materials, including a notice of annual meeting, form of Proxy and 2016 Annual
Report to Shareholders, and by notifying you of the availability of our proxy materials on the Internet.
The notice of annual meeting, proxy statement, the form of Proxy and the 2016 Annual Report to Shareholders are available at the following
website address:
https://www.shareholderaccountingsoftware.com/tspweb/peoples/pxsignon.asp
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In accordance with the SEC rules, the materials on the site are searchable, readable and printable and the site does not have
cookies or other tracking devices which identify visitors.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE, SIGN AND
RETURN PROMPTLY THE ACCOMPANYING PROXY. IF YOU DO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON. THE PROXY ALSO MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE BY WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY OR BY EXECUTION OF
A SUBSEQUENTLY DATED PROXY.
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By Order of the Board of Directors
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Chevis C. Swetman
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March 21, 2017
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Chairman, President and Chief Executive Officer
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1
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
I. General
This Proxy Statement is
furnished in connection with the solicitation by the Board of Directors of Peoples Financial Corporation (the Company) of Proxies for the Annual Meeting of Shareholders (the Annual Meeting) to be held in The Swetman Building
at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, on April 26, 2017, at 6:30 P.M., local time, and any adjournment thereof, for the purposes stated
in the foregoing Notice of Annual Meeting of Shareholders.
The
mailing address of the principal executive offices of the Company is P.O. Box 529, Biloxi, Mississippi 39533-0529. The notice of annual meeting, Proxy Statement, form of Proxy and 2016 Annual Report to Shareholders will be mailed to shareholders of
record on or about March 21, 2017.
Shareholders of record of the Companys Common Stock (the Common Stock), at the close of business on
February 17, 2017 (the Record Date), are entitled to receive notice of and to vote at the Annual Meeting or any adjournments thereof. On the Record Date, the Company had outstanding 5,123,186 shares entitled to vote at the Annual
Meeting. A majority of the outstanding shares constitutes a quorum. Except in the election of directors, each share of Common Stock entitles the holder thereof to one vote on each matter presented at the Annual Meeting for shareholder approval.
Action on a matter is approved if the votes cast in favor of the action exceed the votes cast opposing the action. Abstentions, which include broker
non-votes,
are counted for purposes of determining a
quorum, but are otherwise not counted.
Any person giving a Proxy has the right to revoke it at any time before it is exercised. A shareholder may
revoke his or her Proxy (l)
by revoking it in person
at the Annual Meeting, (2) by written notification to the Secretary of the Company which is received prior to the exercise of the Proxy, or (3) by a subsequent Proxy
presented to the Company prior to the exercise of the Proxy. All properly executed Proxies, if not revoked, will be voted as directed. If the shareholder does not direct to the contrary, the shares will be voted FOR
the nominees
listed in Item 1
and FOR Item 2 described in the Notice of Annual Meeting of Shareholders. Solicitation of Proxies will be primarily by mail. Officers, directors, and employees of The Peoples Bank (hereinafter referred to as the
Bank) also may solicit Proxies personally. The Company will reimburse brokers and other persons holding shares in their names, or in the names of nominees, for the expense of transmitting Proxy materials. The cost of soliciting Proxies
will be borne by the Company.
The Board of Directors is not aware of any matters other than as set forth herein which are likely to be brought before the
meeting. If other matters do come before the meeting, the person named in the accompanying Proxy or his substitute will vote the shares represented by such Proxies in accordance with the recommendations of the Board of Directors.
II. Management Proposals
Item 1:
Election of Directors
The following nominees have been designated by the Nominating Committee and are proposed by the Board of Directors for election
at the Annual Meeting. The shares represented by
properly executed
Proxies will, unless authority to vote is withheld, be voted in favor of these persons.
In the election of directors, each shareholder may vote his shares cumulatively by
multiplying the number of shares he is entitled to vote by the number of directors to be elected. This product shall be the number of votes the shareholder may cast for one nominee or by distributing this number of votes among any number of
nominees. If a shareholder withholds authority for
2
one or more nominees and does not direct otherwise, the total number of votes that the shareholder is entitled to cast will be distributed equally among the remaining nominees. Should any of
these nominees be unable to accept the nomination, the shares voted in favor of the nominee will be voted for such other persons as the Board of Directors shall nominate.
Each director is elected to hold office until the next Annual Meeting of
Shareholders and until his successor is elected and qualified.
The persons who will be elected to the Board of Directors will be the five nominees
receiving the largest number of votes.
A majority of the persons nominated are independent as defined in the NASDAQ listing standards. No family
relationship exists between any director, executive officer or person nominated to become a director of the Company.
None of the persons nominated held
directorship at any time during the past five years at any public company, with the exception of the Company, or registered investment company.
Drew
Allen
Mr. Allen, age 65, has served as an independent director of the Company since 1996 and of the Bank since 1993. He earned his Bachelor of
Science degree with an emphasis in Marketing from Mississippi State University. Mr. Allen is President of Allen Beverages, Inc., a beverage distributor headquartered in Gulfport, MS. He holds numerous leadership positions
in professional, civic and charitable organizations on both a local and state level and has received regional and local recognition for his service. The Company believes that Mr. Allens qualifications to serve on the Board include his
executive leadership and management experience.
Rex E. Kelly
Mr. Kelly, age 69, has served as an independent director of the Company since 2002 and of the Bank since 1996. Until his retirement in 2005, he was the
Director of Corporate Communications of Mississippi Power Company, a subsidiary of The Southern Company, Gulfport, MS. Mr. Kelly earned his Bachelor of Science degree in American Studies from the University of Southern Mississippi and has held
leadership positions in professional, civic and community organizations and has received national and regional recognition for outstanding leadership. He is currently a consultant in the area of strategic communications/corporate and public
relations. The Company believes that Mr. Kellys qualifications to serve on the Board include his corporate strategy, communications and organizational acumen.
Dan Magruder
Mr. Magruder, age 69, has served as an
independent director of the Company since 2000 and of the Bank since 1993 and has also served as Vice Chairman of the Company board since 2003. Mr. Magruder earned his Bachelor of Engineering degree from Vanderbilt
University. During his service in the U.S. Navy, he attended the Navy Nuclear Power School, Nuclear Submarine Prototype School and Submarine School. Subsequently, Mr. Magruder assumed executive positions with several
organizations before joining Rex Distributing Co., Inc., a beverage distributor headquartered in Gulfport, MS, as president in 1987. He retired from Rex Distributing Co., Inc. in 2016. Mr. Magruder has provided leadership to a variety of
professional, civic and charitable organizations. The Company believes that Mr. Magruders qualifications to serve on the Board include his executive leadership and management experience.
3
Jeffrey H. OKeefe
Mr. OKeefe, age 60, has served as an independent director of the Company since 2011 and of the Bank since 1986. Mr. OKeefe earned his
Bachelor of Science in Business Administration from the University of Southern Mississippi. He has been with
Bradford-OKeefe
Funeral Homes, Inc. since 1970 and has served as its President and Chief
Executive Officer since 1983. During his career, he has held leadership positions with a number of professional, community and civic organizations. The Company believes that Mr. OKeefes qualifications to serve
on the Board include his executive leadership and management experience.
Chevis C. Swetman
Mr. Swetman, age 68, has served as a director of the Company since 1984 and of the Bank since 1975. He has served as Chairman of the Company since 1994.
Mr. Swetman is President and Chief Executive Officer of the Company and the Bank and has been employed with the Bank since 1971. He earned a Bachelor of Science in Finance degree and a Master of Business Administration degree from the
University of Southern Mississippi. In addition to his role with the Company, Mr. Swetman has been recognized numerous times for his leadership in professional, civic and community organizations. The Company believes that
Mr. Swetmans qualifications to serve on the Board encompasses his 45 years of experience in banking, including serving as Chairman for more than 20 years.
Item 2: Appointment of Independent Registered Public Accounting Firm
Porter Keadle Moore, LLC, of Atlanta, Georgia, has served as the independent registered public accounting firm for the Company since 2006 and the Board of
Directors has appointed the firm as auditors for the fiscal year ending December 31, 2017.
The Company has been advised that neither the firm nor
any of its partners has any direct or any material indirect financial interest in the securities of the Company or any of its subsidiaries, except as auditors and consultants on accounting procedures and tax matters. The Board does not anticipate
that representatives of Porter Keadle Moore, LLC, will attend the Annual Meeting.
Although not required to do so, the Board of Directors has chosen to
submit its appointment of Porter Keadle Moore, LLC, for ratification by the Companys shareholders. It is the intention of the person named in the Proxy to vote such Proxy FOR the ratification of this appointment. If this proposal
does not pass, the Board of Directors will reconsider the matter.
The Board of Directors unanimously recommends that shareholders vote FOR
this appointment of Porter Keadle Moore, LLC.
III. Corporate Governance
General
The Company has a long-standing commitment to
strong corporate governance practices. The practices provide an important framework within which our Board of Directors and Management can pursue the strategic objectives of the Company and ensure long-term vitality for the benefit of our
shareholders. The cornerstone of our practices is an independent and qualified board of directors. All directors are elected annually by the shareholders, and the membership of all board committees are composed entirely of independent directors. The
Companys Code of Conduct, which is posted on its website,
www.thepeoples.com
, applies to all directors, officers and employees.
4
Board Independence
Messrs. Allen, Kelly, Magruder and OKeefe are independent as defined by NASDAQ listing standards.
Board Composition
The Companys Nominating
Committee Charter defines the process and criteria for selecting individuals to be nominated for election to the Board of Directors. It is the Companys intention that all nominees, including those recommended by shareholders, be considered
using this same process and criteria.
In accordance with the
by-laws
of the Company, the Nominating Committee
determines, subject to the Companys
by-laws,
the size of the Board and develops a slate of nominees to stand for election at the annual meeting of shareholders. In developing the slate, the Nominating
Committee considers the qualifications set forth in its Charter. Minutes of all Nominating Committee meetings are maintained. The Nominating Committee reports its recommendations regarding the slate of nominees to the Board of Directors for this
ratification. Once the slate is ratified, the Board of Directors instructs the President of the Company to take such actions as are required to distribute proxy materials to the shareholders in accordance with the Companys
by-laws
and applicable regulatory requirements.
Further, it is the Companys intention that the minimum
qualifications for nominees be those individuals who have an understanding of the Companys role in the local economy and who have demonstrated integrity and good business judgment. The Committee is encouraged to consider geographic and
demographic diversity among candidates with financial, regulatory and/or business experience, but not so as to compromise the goal of attracting the most qualified individual candidates.
Director Nomination
Since the Company was founded in
1984, there has never been a conflict or dispute regarding director nominations. Accordingly, the Company does not feel that it is necessary at this time to provide a process whereby nominations may be made directly to the Nominating Committee, and
this committee does not have a policy for considering candidates recommended by shareholders. However, in accordance with the Companys
by-laws,
shareholders may make nominations for election to the Board
by delivering written nominations to the Companys President not less than 14 days or not more than 50 days prior to the meeting when the election is to be held. If the Company does not give at least 21 days notice of the meeting,
shareholders are allowed to make nominations by mailing or delivering same to the President not later than the close of business on the seventh day following the day on which the notice of meeting is mailed. The Company welcomes nominations from its
shareholders; however, nominations not made in accordance with the
by-laws
may be disregarded by the Chairman of the meeting. The Company has never received nominations from shareholders.
Shareholder nominations shall include 1) the name, age, business address and residence address of the nominee, 2) the principal occupation or employment of
the nominee, 3) the number of shares of the Companys common stock which are beneficially owned by the nominee, 4) written consent from the potential nominee, and 5) other information relating to the nominee that may be required under federal
law and regulations governing such interests. The written notice shall also include the 1) name and address of the shareholder making the nomination, and 2) the number of shares of the Companys common stock which are beneficially owned by the
shareholder making the nomination.
Of the five directors recommended for election at the 2017 Annual Meeting, all nominees were elected as directors at
our 2016 Annual Meeting.
5
Board Attendance
There were five meetings of the Board of Directors of the Company held during 2016. All directors attended 75% or more of the total number of meetings of the
Board of Directors and the total number of meetings held by the committees on which they served. The Board of Directors, at its discretion, meets on a periodic basis in executive session with only
non-employee
directors in attendance.
The Company does not have a written policy that members of the Board of Directors attend the Annual Meeting of Shareholders, but
they are encouraged to do so. All of the directors of the Company were in attendance at the 2016 Annual Meeting.
Board Leadership
The Chairman leads the Board of Directors and oversees board meetings and the delivery of information necessary for the Board of Directors informed
decision-making. The Chairman also serves as the principal liaison between the Board of Directors and our Management. The Board of Directors determines whether the role of the Chairman and the Chief Executive Officer should be separated or combined
based on its judgment as to the structure that best serves the interests of the Company. Currently, the Board of Directors believes that the positions of Chairman and Chief Executive Officer should be held by the same person as this combination has
served and is serving the Company well by providing unified leadership and direction. The Vice Chairman of the Board of Directors is designated as the lead independent director and calls and presides over executive sessions of the Board of
Directors.
Board Committees
The Company has the
following standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee.
The Companys Audit Committee is currently
composed of independent directors Drew Allen, Rex E. Kelly, Dan Magruder and Jeffrey H. OKeefe. The Companys Board of Directors has determined that Drew Allen is an audit committee financial expert as that term is defined in pertinent
SEC regulations. The Board based its determination on the experience of Mr. Allen as the chief executive officer of his company in analyzing and evaluating financial statements and consulting with his companys auditors as well as his long
tenure on the Companys Audit Committee. Mr. Magruder serves as chairman of the Audit Committee, which met eight times during 2016. The Audit Committee may, from time to time, call upon certain advisors or consultants as it deems
necessary. The Audit Committee acts pursuant to its Audit Committee Charter. The Audit Committee submits its report to the shareholders in Section X below. The Audit Committees Charter is available for review on the Companys website at
www.thepeoples.com
.
The Compensation Committees primary responsibility is to aid the Board of Directors in discharging its duties by
recommending to the full Board the compensation of the Companys Chief Executive Officer and other named executive officers of the Company. The Chief Executive Officer may attend meetings of the Compensation Committee to discuss executive
performance and compensation. The Executive Vice-President attends each meeting of the Compensation Committee and presents his insights and suggestions. The Executive Vice-President and Chief Financial Officer each provide information and analysis
to the Compensation Committee that is used in determining the named executive officers compensation. The Compensation Committee has been authorized by the Board of Directors to engage consultants, experts, and/or other advisors that are
knowledgeable regarding compensation practices within the financial services industry.
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The hiring of such consultants is at the discretion of the Committee. The Compensation Committee did not engage
any consultants during 2016. The Committee, composed of independent directors Drew Allen, Rex E. Kelly, Dan Magruder and Jeffrey H. OKeefe, met one time during 2016 to review the executive officers performance and consider bonuses for
the preceding year and salaries for the upcoming year. Mr. Allen serves as chairman of the Compensation Committee. The Compensation Committees Charter is available for review on the Companys website at
www.thepeoples.com.
The Companys Nominating Committee is composed of independent directors Drew Allen, Rex E. Kelly, Dan Magruder and Jeffrey H. OKeefe.
Mr. Kelly serves as chairman of the Nominating Committee. The Nominating Committee acts pursuant to a charter which is available on the Companys website at
www.thepeoples.com
. The Nominating Committee met two times during 2016 and
2017 to nominate individuals to stand for election as directors of the Company.
Boards Role in Risk Management
Risk is an integral part of the deliberations of the Board of Directors and its committees throughout the year. The Audit Committee and the Board of Directors
annually review the Companys risk assessments, considering managements plan for mitigating these risks. The Board receives monthly written reports relating to the Companys risk management and meets frequently with the Chief Risk
Officer and other members of Management. The Audit Committee at its discretion meets on a periodic basis with managers from the Audit, Compliance, Security, I/T Security and Loan Review Departments.
Shareholder Communication
The Company has implemented a
shareholder communication process to facilitate communications between shareholders and the Board of Directors. Any shareholder of the Company who wishes to communicate with the Board of Directors, a committee of the Board, the independent directors
as a group, or any individual member of the Board, may contact Greg M. Batia, Vice President and Auditor, P. O. Box 1172, Biloxi, MS 39533-1172, or at his
e-mail
address:
gbatia@thepeoples.com
.
Mr. Batia will compile and submit on a periodic basis all shareholder correspondence to the entire Board of Directors, or, if and as designated in the communication, to a committee of the Board, the independent directors as a group or an
individual Board member.
7
IV. Voting Securities and Principal Holders Thereof
On February 17, 2017, the Company had outstanding 5,123,186 shares of its Common Stock, $1.00 par value, owned by 448 shareholders. The following is certain
information about the shareholders beneficially owning more than five percent of the outstanding shares of the Company.
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Name and Address of Beneficial Owner
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Amount of
Beneficial Ownership
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Nature of
Beneficial Ownership
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Percent
of Class
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Peoples Financial Corporation Employee Stock Ownership Plan
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275,427
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(1)
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5.38
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P. O. Box 529
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Biloxi, MS 39533
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Thomas E. Quave
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502,013
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(2) (3)
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9.80
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%
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P. O. Box 529
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Biloxi, MS 39533
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A. Tanner Swetman
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867,589
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(2) (4)
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16.93
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%
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P. O. Box 529
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Biloxi, MS 39533
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Chevis C. Swetman
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398,811
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(2) (5)
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7.78
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%
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P. O. Box 529
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Biloxi, MS 39533
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Shares held by the Employee Stock Ownership Plan (ESOP) are allocated to the participants account. The participants retain voting rights and the trustee of the ESOP, The Asset Management and Trust
Services Division of The Peoples Bank, Biloxi, Mississippi, has dispositive powers.
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(2)
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Participants with shares allocated to their ESOP account have voting rights but no dispositive powers. Participants with shares allocated to their 401(k) account have voting rights and dispositive powers.
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(3)
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Includes (i) shares allocated to Mr. Quaves ESOP account; (ii) shares allocated to Mr. Quaves 401(k) account; (iii) shares owned by Mr. Quaves wife, of which
Mr. Quave has neither voting rights nor dispositive powers; (iv) shares owned by Mr. Quave and his wife jointly, of which Mr. Quave shares voting rights and dispositive powers with his wife; (v) shares owned by
Mr. Quaves minor children, of which Mr. Quave has voting rights and dispositive powers and (vi) shares owned by trust accounts for which Mr. Quaves wife is trustee and of which Mr. Quave has neither voting rights
nor dispositive powers.
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Includes (i) shares allocated to Mr. Swetmans ESOP account; (ii) shares allocated to Mr. Swetmans 401(k) account; (iii) shares owned by Mr. Swetman and his wife jointly, of
which Mr. Swetman shares voting rights and dispositive powers with his wife; (iv) shares owned by Mr. Swetmans minor children, of which Mr. Swetman has voting rights and dispositive powers; (v) shares owned by
Mr. Swetmans IRA account, of which Mr. Swetman has voting rights and dispositive powers; (vi) shares owned by the IRA account of Mr. Swetmans wife, of which Mr. Swetman has neither voting rights nor dispositive
powers and (vii) shares owned by a private company, in which Mr. Swetman has a 94% ownership interest, of which Mr. Swetman has both voting rights and dispositive powers.
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(5)
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Includes (i) shares allocated to Mr. Swetmans ESOP account; (ii) shares allocated to Mr. Swetmans 401(k) account; (iii) shares owned by Mr. Swetman and his wife jointly, of
which Mr. Swetman shares voting rights and dispositive powers with his wife; (iv) shares owned by Mr. Swetmans IRA account, of which Mr. Swetman has voting rights and dispositive powers; and (v) shares owned by the IRA
account of Mr. Swetmans wife, of which Mr. Swetman has neither voting rights nor dispositive powers.
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8
V. Ownership of Equity Securities by Directors and Executive Officers
The table below sets forth the beneficial ownership of the Companys Common Stock as of February 17, 2017, by persons who are currently serving as
directors, persons nominated for election at the Annual Meeting and all named executive officers. Also shown is the ownership by all directors and executive officers as a group. The persons listed have sole voting and dispositive power as to all
shares except as indicated. Percent of outstanding shares of Common Stock owned is not shown where less than one percent.
Beneficial
Ownership of Equity Securities by Directors and Executive Officers
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Amount and Nature
of Beneficial Ownership
of Common Stock
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Percent of
Outstanding Shares
of Common Stock
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Drew Allen
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5,440
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A. Wes Fulmer
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12,594
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(1) (2)
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Rex E. Kelly
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2,036
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Dan Magruder
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6,981
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(3)
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Jeffrey H. OKeefe
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32,238
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(4)
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Chevis C. Swetman
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398,811
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(1) (5)
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7.78
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Lauri A. Wood
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7,199
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(1) (6)
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All directors and executive officers of the Company
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488,367
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9.53
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(1)
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Participants with shares allocated to their ESOP account have voting rights but no dispositive powers. Participants with shares allocated to their 401(k) account have voting rights and dispositive powers.
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(2)
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Includes shares allocated to Mr. Fulmers ESOP account and shares allocated to Mr. Fulmers 401(k) account.
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(3)
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Includes shares owned by a limited liability company of which Mr. Magruder and his wife are the only members and share voting rights and dispositive powers.
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(4)
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Includes shares held by Mr. OKeefes minor children of which Mr. OKeefe is the custodian and has voting rights and dispositive powers.
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(5)
|
See Note (5) at Section IV.
|
(6)
|
Includes shares allocated to Miss Woods ESOP account.
|
VI. Compensation of
Executive Officers and Directors
Compensation Discussion and Analysis
The Compensation Committee determines the salaries, bonuses and all other compensation of the named executive officers identified in the Summary Compensation
Table on page 15 of this Proxy Statement, including the Chief Executive Officer. The Committee is also charged with ensuring that policies and practices are in place to facilitate the development of the Companys management talent, ensure
management succession and enhance the Companys corporate governance and social responsibility.
A. Guiding Philosophy and Objectives:
The Compensation Committees guiding philosophy is to attract and retain highly qualified executives, to motivate them to maximize long-term shareholder
value while balancing both short-term and long-term objectives, and to pay for performance. The following objectives serve as guiding principles for all compensation decisions:
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|
|
Provide reasonable levels of total compensation that will enable the Company to attract, retain, and motivate high caliber executives who are capable of optimizing and maintaining the Companys performance for the
benefit of its shareholders.
|
9
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|
|
Maintain executive compensation that is fair and consistent with the Companys size and the compensation practices of the financial services industry.
|
|
|
|
Provide compensation plans that align with the objective of achieving the mission of being a community bank offering the highest quality products and services.
|
|
|
|
Align performance bonus opportunities with long-term shareholder interests by making the payment of performance bonuses dependent on the Companys performance with respect to Return on Assets (ROA).
|
|
|
|
Provide an incentive for personal performance by allocation of discretionary additional bonus opportunities dependent on the executives individual performance.
|
B. Responsibility of the Compensation Committee:
The primary
responsibility of the Compensation Committee is to aid the Board in discharging its duties by recommending to the full Board the compensation of the Companys Chief Executive Officer and other named executive officers of the Company.
C. Role of Executive Officers:
The Chief Executive Officer may
attend the meetings of the Compensation Committee to discuss executive performance and compensation. The Executive Vice-President attends each meeting of the Compensation Committee and presents his insights and suggestions. The Executive
Vice-President and Chief Financial Officer each provide information and analysis to the Compensation Committee that is used in determining the named executive officers compensation.
D. Consultants, Experts and/or Other Advisors:
The Compensation
Committee has been authorized by the Board of Directors to engage consultants, experts, and/or other advisors that are knowledgeable regarding compensation practices within the financial services industry. The hiring of such consultants is at the
discretion of the Committee. The Committee did not engage any consultants in 2016.
E. Factors used to Determine Compensation:
The Compensation Committees considerations consist of, but are not limited to, analysis of the following factors: financial performance of the Company,
including ROA, return on equity, and management of assets, liabilities, capital and risk. Additionally, the Compensation Committee uses annual compensation surveys to compare the compensation of positions in similar financial institutions of
comparable asset size. Specifically, the Bank Administration Institute (BAI) Bank Cash Compensation Survey, which includes compensation data obtained from banks with assets between $500 million and $1 billion in a region that
includes Alabama, Arkansas, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota and Tennessee and the Mississippi Bankers Association (MBA) Salary Survey, which
includes compensation data obtained from banks in Mississippi with assets between $500 million and $1 billion, are used as reference material in evaluating the compensation of the named executive officers; however, the Company does not
benchmark compensation to any specific company or companies. The Company does not have access to the identity of the specific companies included in these surveys.
In determining total compensation, the Committee also considers the performance of the individual named executive officers in areas such as: the scope of
responsibility of the executive; leadership within the Company, the community and the financial services industry; achievement of work goals; and whether the Company, under the executives leadership, has been a good corporate citizen while
enhancing shareholder value.
10
All of these factors are considered in the context of the complexity and the difficulty of managing business
risks in the prevailing economic conditions and regulatory environment. The analysis is conducted with respect to each of the executive officers, including the Chief Executive Officer.
F. Compensation Components:
The named executive officers
total compensation package includes several components. The Company rewards current performance and achievement of short-term goals primarily through salaries and bonuses. Other deferred compensation elements, including the
Executive Supplemental Income Plan and Deferred Compensation Plan, are designed to meet long-term objectives including retaining high-performing executives and to plan for management succession as well as to reward loyalty.
Salaries
Salaries are the foundation of each named
executive officers total compensation package and are normally the largest single component. Salary is the only guaranteed cash payment a named executive officer receives. The Companys goal is to provide an assured level of cash
compensation in the form of salary to attract and retain high caliber executives. Job specific knowledge and experience as well as leadership ability are recognized with salary.
In establishing the salary of the Chief Executive Officer for 2016, the Committee primarily considered Mr. Swetmans performance and the performance
of the Company during 2015 and the compensation levels of chief executive officers of comparable financial institutions. In considering the performance of the Company, the Committee considered the Companys ROA, the change in problem assets and
asset growth, but utilized no objective criteria. The Committee utilized asset size peer group compensation data as provided by the MBA and the BAI.
For
other named executive officers, the Committees recommendation concerning salaries was based upon the compensation levels of executive officers of comparable financial institutions, the performance of the Company during 2015 and the individual
performance of these named executive officers. The performance of the Company for purposes of establishing salaries was evaluated based on ROA. Individual performance was measured using criteria such as level of job responsibility, achievement of
work goals and management skills. Among the goals considered was the reduction of problem assets. The Committee also considered asset size peer group compensation data as provided by the MBA and BAI for executive officers with similar duties and
responsibilities.
Bonuses
The Compensation
Committee awards performance bonuses based upon
pre-determined
performance objectives in accordance with The Peoples Bank Bonus Plan (The Bonus Plan). Performance bonuses are generally the other
cash component paid to named executive officers on an annual basis and may be determined by The Bonus Plan. The Chief Executive Officer and all other named executive officers are eligible to receive a bonus which is based on the financial
performance of the Company. The specific formula and
pre-determined
goals under The Bonus Plan were established by the Compensation Committee using the Companys ROA. The
11
performance bonus calculation, which is approved by the Compensation Committee, allows the executive officer to earn up to a maximum percentage of their salary on established ROA targets. The
targets and bonus calculations as a percentage of salary and targets are:
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Base
|
|
|
Base + 1
|
|
|
Base + 2
|
|
|
Base + 3
|
|
|
Maximum
|
|
ROA Target
|
|
|
.670
|
%
|
|
|
.800
|
%
|
|
|
.925
|
%
|
|
|
1.050
|
%
|
|
|
1.175
|
%
|
Chief Executive Officer
|
|
|
15.000
|
%
|
|
|
18.750
|
%
|
|
|
22.500
|
%
|
|
|
26.250
|
%
|
|
|
30.000
|
%
|
Executive Vice-President
|
|
|
12.500
|
%
|
|
|
15.630
|
%
|
|
|
18.750
|
%
|
|
|
21.880
|
%
|
|
|
25.000
|
%
|
Other Named Executive officer
|
|
|
10.000
|
%
|
|
|
12.500
|
%
|
|
|
15.000
|
%
|
|
|
17.500
|
%
|
|
|
20.000
|
%
|
The Compensation Committee may, at its discretion, also recommend to the Board that the named executive officers receive an
additional bonus which is determined on a subjective basis. If this additional discretionary bonus is recommended, the Committee documents its actions in the minutes of their committee meetings. No performance based or discretionary bonuses were
awarded to named executive officers for 2016 due to the performance of the Company.
Executive Supplemental Income Plan
The Company maintains an Executive Supplemental Income Plan (ESI) which provides executives with salary continuation benefits upon their
retirement, or death benefits to their named beneficiary in the event of their death. Executives of the Company and the Bank are selected to participate in the plan at the discretion of the Board of Directors. All named executive officers of the
Company have been selected to participate in the plan. ESI benefits are based upon position and salary of the named executive officer at retirement, disability or death. Normal retirement benefits under the plan are equal to 67% of salary for the
Chief Executive Officer, 58% of salary for the Executive Vice-President and 50% of salary for the other named executive officer at the time of normal retirement, and are payable monthly over a period of 15 years. The ESI is
administered by Banc Consulting Partners, who also provide guidance to the Company relating to the valuation method and assumptions.
The ESI was
established in 1988, at which time Mr. Swetman became a participant. Miss Wood and Mr. Fulmer became participants after their date of hire at the discretion of the Board.
Benefits are also available in the event of death, disability or early retirement. Under early retirement provisions, if separation from service occurs on or
after the early retirement date and prior to the normal retirement date, the Company will pay the named executive officer a reduced benefit. The annual benefit set forth for normal retirement will be reduced by
one-half
percent (0.5%) for each month or partial month between separation from service and the normal retirement date. The benefit will be paid monthly over a period of 15 years. Benefits will commence on the
last day of the month following the named executive officers separation from service. The early retirement date means the date the named executive officer attains at least age 55, has at least 15 years of employment at the Company, and has
participated in this plan for a minimum of five years. As of December 31, 2016, Mr. Fulmer is the only named executive officer eligible to receive this benefit. The normal retirement date means the date the named executive officer attains
age 65.
If separation from service occurs prior to the early retirement date or prior to the normal retirement date, the Company will pay the named
executive officer his or her executive benefit accrual balance as of his or her separation from service. The benefit will be paid in a single
lump-sum
within 60 days of separation from service. As of
December 31, 2016, Miss Wood is the only named executive officer eligible to receive this benefit.
12
If a named executive officer becomes disabled prior to the normal retirement date, the Company will pay the named
executive officer his or her annual benefit as defined under normal retirement. The benefit will begin the last day of the month commencing with the month following the named executive officers normal retirement date and the benefits will be
paid monthly over a period of 15 years.
If the named executive officer dies prior to early retirement, normal retirement or disability, the named
executive officers named beneficiary is entitled to full benefits under the ESI. If the named executive officer dies while receiving benefits, the named beneficiary is entitled to the remainder of any unpaid benefits.
Upon a change of control prior to separation from service, the Company will pay the named executive officer his or her annual benefit as defined under normal
retirement. The benefit will begin the last day of the month commencing with the month following the named executive officers normal retirement date, or, for named executive officers who have already attained their normal retirement date,
their separation from service, and the benefits will be paid monthly over a period of 15 years.
Each named executive officers agreement under the
ESI may be terminated by the Company. In the event the named executive officers agreement under the ESI is terminated, the Company will pay the named executive officer his or her executive accrual balance as of the termination of the
agreement, or, if a change of control has occurred, the normal retirement benefit. The benefit will begin on the first date allowable under the ESI and the benefit will be paid over a period of 15 years, or, in some special circumstances, paid in
one lump sum.
If any amount is required to be included in the income of a named executive officer due to a failure of his or her ESI agreement to meet
the requirements of Section 409A of the Internal Revenue Code, the named executive officer may petition the plan administrator for a distribution of that portion of his or her executive benefit accrual that is required to be included in the named
executive officers income. Upon the grant of such a petition, which will not be unreasonably withheld, the Company will distribute to the named executive officer an amount equal to the portion of the executive benefit accrual required to be
included in his or her income, which amount cannot exceed the named executive officers unpaid executive benefit accrual. Any distribution will affect and reduce the named executive officers benefits to be paid under his or her ESI
agreement.
The benefits will be paid out of the general assets of the Company. The Company has elected to purchase life insurance contracts, more
specifically Bank Owned Life Insurance (BOLI), each of which it may use as a source to fund these future benefits. The Company is the owner and beneficiary of these life insurance policies, which are a general asset of the Company.
Deferred Compensation Plan
The Company maintains a
Deferred Compensation Plan for those executives of the Bank holding the title of vice-president, senior vice-president or executive vice-president and approved for participation in the plan by the Board of Directors. Except
for the Chief Executive Officer, all named executive officers participated in the plan in 2016. The plan provides each named executive officer a fixed benefit upon his or her early retirement, normal retirement or disability, or a death benefit to a
named beneficiary in the event of the named executive officers death. The benefit under the plan is $100,000, payable monthly over a 15 year period, upon the named executive officers early retirement, normal retirement or disability and,
in the event of a named executive officers death, the benefits will be paid to his or her beneficiary. Should the named executive officer separate from service prior to his or her early retirement, normal retirement,
disability or death, he or she forfeits all benefits under the plan. In addition, if within three years following his or her separation from service, a named executive officer becomes engaged in the banking business within a certain geographic area
around the Company, the named executive officer will forfeit all benefits under the plan.
13
The Company has purchased life insurance contracts which it may use as a source to fund these future benefits.
The Company is the owner and beneficiary of these life insurance policies, which is a general asset of the Company.
The Deferred Compensation Plan was
established in 1992, at which time Miss Wood became a participant. Mr. Fulmer became a participant upon his promotion to vice-president of the Bank.
If separation from service occurs prior to a named executive officers normal retirement date, the named executive officer will be entitled to full
benefits provided he or she has met the early retirement eligibility. The early retirement date means the first day of any month coincident with or following the month in which the named executive officer attains at least age 55 and has at least 10
years of employment at the Company. The normal retirement date means the date the named executive officer attains age 65. As of December 31, 2016, Mr. Fulmer is the only named executive officer eligible to receive benefits under the
Deferred Compensation Plan.
If a named executive officer becomes disabled, he or she is entitled to full benefits under the Deferred Compensation Plan.
If the named executive officer dies prior to early retirement, normal retirement or disability, the named executive officers named beneficiary is
entitled to full benefits under the Deferred Compensation Plan. If the named executive officer dies while receiving benefits, the named beneficiary is entitled to the remainder of any unpaid benefits.
In the event of a change of control, unless the Deferred Compensation Plan is terminated by the transferee, purchaser or successor entity within 120 days of
the change of control, no named executive officer will be entitled to a distribution under this plan as a result of the change in control. If the Deferred Compensation Plan is terminated within 120 days of a change of control, then each named
executive officer will become immediately eligible to receive the present value of his or her benefits under this plan. In addition, in the event the Deferred Compensation Plan is continued but a named executive officer is involuntarily terminated
within 180 days of a change of control, the terminated named executive officer will be eligible to receive his or her benefits under this plan. Such benefits will be calculated by taking the present value of the benefits provided and such benefits
will be paid in a lump sum within 180 days of the change in control.
Split-Dollar Agreement
The Company owns endorsement split-dollar policies, of which the Bank is the owner and beneficiary, which provide a guaranteed death benefit of $150,000 to the
Chief Executive Officers beneficiaries.
Employee Stock Ownership Plan
The Company maintains an Employee Stock Ownership Plan covering all eligible employees of the Company. The Board determines the total contribution to the Plan,
which is allocated to all participants based on their compensation.
401(k) Plan
The Company maintains a 401(k) Plan in which eligible employees of the Company may choose to participate. The Board determines the formula for the matching
contribution to the Plan, which is currently 75% of the employees contribution (up to 6% of compensation).
14
G. Accounting and Tax Treatment:
While the Compensation Committee considers the accounting and tax implications in the design of the compensation program, these have not had a significant
impact in their decision-making process.
H. Shareholder Approval of Compensation of Named Executive Officers:
At our 2016 annual meeting of shareholders, the Company held its second advisory
(non-binding)
vote on the compensation
of the named executive officers. A majority of our shareholders voted in favor of the resolution approving the 2015 compensation of the named executive officers. The Compensation Committee considered these shareholders votes in determining the
2016 compensation of the named executive officers. Shareholders will be provided their next opportunity to cast an advisory
(non-binding)
vote on the compensation of the named executive officers at the 2019
annual meeting of shareholders, at which time the frequency of submitting the compensation of the named executive officers to the shareholders in the future will be submitted for an advisory
(non-binding)
vote
as well.
There are no employment contracts with the executive officers.
Summary Compensation Table
The Summary Compensation
Table below displays the total compensation awarded to, earned by or paid to the named executive officers for 2016 and 2015.
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|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal Position
|
|
Year
|
|
Salary (2)
|
|
|
Bonus
|
|
|
Change in
Pension Value
and Nonqualified
Compensation
Earnings
|
|
|
All Other
Compensation
(1)
|
|
|
Total
|
|
Chevis C. Swetman
|
|
2016
|
|
$
|
285,577
|
|
|
$
|
|
|
|
$
|
43,873
|
|
|
$
|
11,925
|
|
|
$
|
341,375
|
|
President and Chief Executive Officer
|
|
2015
|
|
|
275,000
|
|
|
|
|
|
|
|
52,665
|
|
|
|
11,925
|
|
|
|
339,590
|
|
|
|
|
|
|
|
|
A. Wes Fulmer
|
|
2016
|
|
|
174,462
|
|
|
|
|
|
|
|
78,041
|
|
|
|
7,851
|
|
|
|
260,354
|
|
Executive Vice-President
|
|
2015
|
|
|
168,000
|
|
|
|
|
|
|
|
75,289
|
|
|
|
7,560
|
|
|
|
250,849
|
|
|
|
|
|
|
|
|
Lauri A. Wood
|
|
2016
|
|
|
142,788
|
|
|
|
|
|
|
|
52,080
|
|
|
|
6,790
|
|
|
|
201,658
|
|
Chief Financial Officer
|
|
2015
|
|
|
136,692
|
|
|
|
|
|
|
|
49,163
|
|
|
|
6,502
|
|
|
|
192,357
|
|
(1)
|
Includes contributions and allocations pursuant to Employee Stock Ownership Plan and 401(k) Plan.
|
(2)
|
The named executive officers did not receive a raise in 2016. Salaries are paid
bi-weekly.
In 2016, an additional pay period was included in the named executive officers
compensation.
|
15
Estimated Payments from the Executive Supplemental Income Plan
The table below indicates the amount of compensation payable to each named executive officer under the Executive Supplemental Income Plan, as applicable upon
different termination events. The amounts shown assume a termination date of December 31, 2016 and present total amounts for each scenario.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Event
|
|
|
|
|
Early Termination
|
|
|
Early Retirement
|
|
|
Disability
|
|
|
Change in Control
|
|
|
Pre-
Retirement
Death
Benefit
|
|
Method of Payment (2)
|
|
|
|
|
Lump Sum Benefit
Amount Payable at
Separation From
Service
|
|
|
Annual Benefit
Amount Payable At
Separation from
Service
|
|
|
Annual Benefit
Amount Payable at
Normal Retirement
Age
|
|
|
Annual Benefit
Amount Payable at
Normal Retirement
Age
|
|
|
Annual
Benefit
|
|
Name and Principal
Position
|
|
Benefit
Level (1)
|
|
|
Vesting
|
|
|
Based On
Accrual
|
|
|
Vesting
|
|
|
Based On
Benefit
|
|
|
Vesting
|
|
|
Based On
Benefit
|
|
|
Vesting
|
|
|
Based On
Benefit
|
|
|
Based On
Benefit
|
|
Chevis C. Swetman
|
|
$
|
184,250
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
100
|
%
|
|
$
|
184,250
|
|
|
|
100
|
%
|
|
$
|
184,250
|
|
|
$
|
184,250
|
|
President & Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A. Wes Fulmer
|
|
|
97,440
|
|
|
|
|
|
|
|
|
|
|
|
30.16
|
%
|
|
|
29,388
|
|
|
|
100
|
%
|
|
|
97,440
|
|
|
|
100
|
%
|
|
|
97,440
|
|
|
|
97,440
|
|
Executive Vice-President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lauri A. Wood
|
|
|
68,750
|
|
|
|
100
|
%
|
|
|
432,436
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
68,750
|
|
|
|
100
|
%
|
|
|
68,750
|
|
|
|
68,750
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on 67%, 58% or 50% of current compensation for the Chief Executive Officer, Executive Vice-President and other named executive officer, respectively.
|
(2)
|
The annual benefit amount will be distributed in 12 equal monthly installments for 15 years to a total of 180 monthly payments.
|
16
Estimated Payments from the Deferred Compensation Plan
The table below indicates the amount of compensation payable to each named executive officer under the Deferred Compensation Plan, as applicable upon different
termination events. The amounts shown assume a termination date of December 31, 2016 and present total amounts for each scenario.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Event
|
|
|
|
|
Early Termination
|
|
|
Early Retirement
|
|
|
Disability
|
|
|
Change in Control
|
|
|
Pre-
Retirement
Death
Benefit
|
|
Method of Payment (2)
|
|
|
|
|
|
|
|
Total Benefit
Amount Payable at
Separation from
Service
|
|
|
Total Benefit
Amount Payable at
Normal Retirement
Age
|
|
|
Lump Sum Benefit
Amount Payable at
Separation From
Service
|
|
|
Total
Benefit
|
|
|
|
Benefit
Level (1)
|
|
|
Vesting
|
|
|
Based On
Accrual
|
|
|
Vesting
|
|
|
Based On
Benefit
|
|
|
Vesting
|
|
|
Based On
Benefit
|
|
|
Vesting
|
|
|
Based On
Accrual
|
|
|
Based On
Benefit
|
|
A. Wes Fulmer
|
|
$
|
100,000
|
|
|
|
|
|
|
$
|
|
|
|
|
100
|
%
|
|
$
|
100,000
|
|
|
|
100
|
%
|
|
$
|
100,000
|
|
|
|
100
|
%
|
|
$
|
40,054
|
|
|
$
|
100,000
|
|
Executive Vice-President
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Lauri A. Wood
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100,000
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100
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%
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100,000
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100
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%
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35,233
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100,000
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Chief Financial Officer
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(1)
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The benefit is the total benefit.
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(2)
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The total benefit will be distributed in 12 equal monthly installments for a total of 180 monthly payments.
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Directors Compensation
During 2016, directors who
are employees of the Bank did not receive any compensation for serving on the Board of the Bank or the Company or on any Board committee. All
non-employee
directors received an annual
retainer of $3,500.
Non-employee
directors additionally receive $500 per board meeting attended and $300 per committee meeting attended. The chairman of the Audit Committee received $500 per audit committee
meeting attended. The chairman of all other committees received $400 per committee meeting attended.
The Company offers a Directors Deferred Income
Plan whereby directors of the Company and the Bank are given an opportunity to defer receipt of their annual directors fees. For those who choose to participate, benefits are payable monthly for 10 years beginning on the first day of the month
following the later of the directors normal retirement age or separation from service. Normal retirement age is 65. The amount of the benefit will vary depending on the fees the director has deferred and the length of time the fees have been
deferred. Interest on deferred fees accrues at an annual rate of 10%, compounded annually. After payments have commenced, interest accrues at an annual rate of 7.50%, compounded monthly. In the event of the directors
death, benefits are payable to the directors named beneficiary. The Company has purchased life insurance contracts which it may use as a source to fund these future benefits. The Company is the owner and beneficiary of these life insurance
policies, which are a general asset of the Company.
The Company also offers an Outside Directors Supplemental Income Plan to provide a benefit to
its
non-employee
directors. The benefit is based upon the age of the Outside Director upon his appointment to the board. Directors Drew Allen and Dan Magruder are entitled to receive $5,000 annually for 10
years, Director Rex E. Kelly is entitled to receive $4,000 annually for 10 years and Director
17
Jeffrey H. OKeefe is entitled to receive $6,000 annually for 10 years. The benefit is payable upon the later of the Outside Directors attainment of age sixty-five or cessation of
service as a director. An Outside Director must serve as an Outside Director until the earlier of his death or 10 consecutive years as an Outside Director to be entitled to any benefit. In the event of the death of the Outside Director, their
beneficiary shall receive a death benefit totaling the remainder of benefits due the Outside Director. The death benefit will be paid in a single lump sum within 90 days following the Outside Directors death. The Company has purchased life
insurance contracts which it may use as a source to fund these future benefits. The Company is the owner and beneficiary of these life insurance policies, which are a general asset of the Company.
Director Compensation Table
The Director Compensation
Table below presents information on fees earned or paid to directors in 2016.
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Name
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Fees Earned or
Paid In Cash
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Change in Pension
Value and Nonqualified
Deferred Compensation
Earnings
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Total
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Drew Allen
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$
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15,000
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$
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41,179
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$
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56,179
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Rex E. Kelly
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19,800
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32,180
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51,980
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Dan Magruder
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20,000
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22,631
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42,631
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Jeffrey H. OKeefe
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23,800
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2,565
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26,365
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Chevis C. Swetman (1)
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(70,154
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(70,154
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(1) In prior years, Mr. Swetman had received fees for serving on the Board of Directors and had deferred such fees under
the Directors Deferred Income Plan.
VII. Transactions with Related Parties
In the ordinary course of business, the Company, through its bank subsidiary, extends loans in the ordinary course of business to certain officers and
directors and their personal business interests at, in the opinion of Management, the same terms including interest rates and collateral, as those prevailing at the same time for comparable loans of similar credit risk with persons not related to
the Company or its subsidiaries. These loans, which are subject to approval by the Companys Board of Directors, do not involve more than normal risk of collectability and do not include other unfavorable features. Other than these
transactions, there were no material transactions with any such persons during the year ended December 31, 2016.
VIII. Section
16(a) Beneficial Ownership Reporting Compliance
Directors, executive officers of the Company and holders of more than 10 percent of the
Companys outstanding shares are required to file reports under Section 16 of the Securities Exchange Act of 1934. Federal
regulations require disclosure of any failures to file these reports on a timely basis. Based solely upon a
review of Forms 3, 4 and 5 furnished to the Company, the Company believes that during 2016 its officers, directors and greater than 10 percent beneficial owners complied with all filing requirements.
18
IX. Executive Officers
The following sets forth certain information with respect to the executive officers of the Company who are not also directors as of December 31, 2016:
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Name (Age)
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Position
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A. Wes Fulmer (57)
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Executive Vice-President, Peoples Financial Corporation, since 2006; Director, The Peoples Bank since 2011; Executive Vice-President, The Peoples Bank, since 2006
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Lauri A. Wood (55)
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Chief Financial Officer and Controller, Peoples Financial Corporation, since 1994; Senior Vice-President/Cashier, The Peoples Bank, since 1996
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Ann F. Guice (69)
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First Vice-President, Peoples Financial Corporation, since 2015; Second Vice-President, Peoples Financial Corporation, 2013 - 2015; Vice-President and Secretary, Peoples Financial Corporation, 2006 - 2012; Senior Vice-President, The
Peoples Bank, since 2006
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J. Patrick Wild (54)
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Second Vice-President, Peoples Financial Corporation, since 2015; Vice-President and Secretary, Peoples Financial Corporation, 2013 - 2015; Vice-President, Peoples Financial Corporation, 2009 - 2012; Senior Vice-President, The
Peoples Bank, since 2008
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Evelyn R. Herrington (62)
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Vice-President and Secretary, Peoples Financial Corporation, since 2015; Vice-President, Peoples Financial Corporation, 2011 - 2015; Senior Vice-President, The Peoples Bank, since 2011
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X. Audit Committee Report
The Board of Directors has established an Audit Committee, whose responsibilities are set forth in the Audit Committee Charter. All members of the Audit
Committee are deemed to be independent, as such term is defined by NASDAQ. The Audit Committee oversees the operation of the Companys Audit Department. The Audit Committee also periodically meets with the independent public accountants for the
Company and its subsidiaries, and makes recommendations to the Board of Directors concerning any matters related to the independent public accountants.
The Audit Committee has reviewed and discussed the audited financial statements with Management. The Audit Committee has also discussed with the independent
auditors the matters required to be discussed by SAS 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee has discussed with the independent auditors the auditors independence, and has
received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors communication with the Audit Committee
concerning independence. The Audit Committee has considered whether the independent auditors provision of
non-audit
services is compatible with maintaining the auditors independence.
The Audit Committee has discussed with Management and the independent auditors the process used for certifications by the Companys chief executive
officer and chief financial officer which are required for certain periodic filings by the Company with the SEC. The Board of Directors maintains an Audit Committee Charter, which meets the requirements of the Sarbanes-Oxley Act of 2002, and rules
promulgated by the SEC.
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Based upon the reviews and discussions with Management and the independent auditors as referenced above, the
Audit Committee has recommended to the Board of Directors that the financial statements be included in the Annual Report on Form
10-K
for the fiscal year ended December 31, 2016 for filing with the SEC.
This report is presented by the Audit Committee, consisting of the following persons:
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Dan Magruder, Chairman
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Drew Allen
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Rex E. Kelly
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Jeffrey H. OKeefe
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XI. Independent Accountants Fees
The Companys Audit and
Non-Audit
Service
Pre-Approval
Policy stipulates
that all services provided by the independent accountants are subject to specific
pre-approval
by the Audit Committee. During 2016, the Company was in compliance with this Policy.
The following table sets forth the aggregate fees billed by Porter Keadle Moore, LLC, for the years ended December 31, 2016 and 2015 for professional
services rendered for: Audit Fees, Audit-Related Fees and Tax Fees. Audit Fees includes aggregate fees billed for professional services rendered by Porter Keadle Moore, LLC, for the audit of the Companys annual consolidated financial
statements for the years ended December 31, 2016 and 2015, a review of the annual report on Form
10-K
and limited reviews of quarterly condensed consolidated financial statements included in periodic
reports filed with the SEC during 2016 and 2015, including out of pocket expenses. Audit-Related Fees include fees billed for professional services rendered by Porter Keadle Moore, LLC, during the years ended December 31, 2016 and 2015, which
relate to the audit of the Companys employee benefit plans for the years ended December 31, 2015 and 2014. Tax Fees include the aggregate fees billed for tax services rendered by Porter Keadle Moore, LLC, during the years ended
December 31, 2016 and 2015. These services consisted of tax compliance and tax consultation services. There were no other fees paid to Porter Keadle Moore, LLC, during 2016 and 2015.
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Audit Fees
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Audit-Related Fees
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Tax Fees
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Total Fees
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2016
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$
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213,093
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$
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21,000
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$
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28,960
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$
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263,053
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2015
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222,307
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20,000
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27,465
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269,772
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XII. Proposals of Shareholders
In order for a shareholder proposal to be included in a Proxy Statement and form of Proxy prepared by the Board of Directors, it must meet the requirements of
Rule
14a-8
of the Securities Exchange Act of 1934 and be received at the principal executive offices of the Company not less than 120 days in advance of the date the previous years Proxy Statement and
form of Proxy were mailed to shareholders. Thus, a shareholder proposal must be received before November 22, 2017 in order to be included in the Proxy Statement and form of Proxy for the 2018 annual meeting.
In accordance with the Companys
by-laws,
shareholders may make proposals for consideration at the annual meeting
by delivering their written proposal to the Companys President not less than 14 days or more than 50 days prior to the 2017 annual meeting. If the Company does not give at least 21 days notice of the meeting, shareholders are allowed to
make proposals by mailing or delivering their proposal to the President not later than the close of business on the seventh day following the day on which the notice of meeting is mailed.
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BY ORDER OF THE BOARD OF DIRECTORS
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Chevis C. Swetman
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Chairman
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PEOPLES FINANCIAL CORPORATION
PROXY FOR 2017 ANNUAL MEETING OF SHAREHOLDERS
April 26, 2017
The undersigned hereby
appoint Chevis C. Swetman, the true and lawful
attorney-in-fact
for the undersigned, with full power of substitution, to vote as proxy for the undersigned at the Annual
Meeting of Shareholders of Peoples Financial Corporation (the Company) to be held at The Swetman Building at The Peoples Bank, Suite 204, 727 Howard Avenue, Biloxi, Mississippi, 39530, at 6:30 P.M., local time, on April 26, 2017, and at
any and all adjournments thereof, the number of shares which the undersigned would be entitled to vote if then personally present, for the following purposes:
Item 1.
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Election of the following five persons as directors.
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(INSTRUCTIONS: AUTHORITY
TO VOTE FOR ANY NOMINEE MAY BE WITHHELD BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE.)
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Drew Allen
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Rex E. Kelly
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Dan Magruder
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Jeffrey H. OKeefe
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Chevis C. Swetman
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For all nominees except as indicated
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Against all nominees
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Item 2.
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Approval of the appointment of Porter Keadle Moore, LLC, as the independent registered public accounting firm for the Company.
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Item 3.
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To transact such other business as may properly come before the Annual Meeting or any adjournments thereof.
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THIS PROXY, WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY, WILL BE VOTED FOR THE NOMINEES
LISTED IN ITEM 1 AND FOR ITEM 2, UNLESS A CONTRARY DIRECTION IS INDICATED, IN WHICH CASE IT WILL BE VOTED AS DIRECTED. IF AUTHORITY IS GRANTED PURSUANT TO PROPOSAL 3 ABOVE, THE PROXY INTENDS TO VOTE ON ANY OTHER BUSINESS COMING BEFORE THE ANNUAL
MEETING IN ACCORDANCE WITH THE DIRECTION OF A MAJORITY OF THE BOARD OF DIRECTORS OF THE COMPANY.
Please date the Proxy and sign your name exactly as
it appears on the stock records of the Company. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full titles as such. If signed as a corporation or other
entity, please sign in entitys name by authorized person.
You may also access the proxy materials and vote your proxy online by using your 12
digit control number found below at
https://www.shareholderaccountingsoftware.com/tspweb/peoples/pxsignon.asp
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Signature
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Signature
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Date
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# of shares
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