<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
FRONTIER NATIONAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO OF FRONTIER NATIONAL CORPORATION APPEARS HERE]
April 14, 2000
To the Shareholders of
FRONTIER NATIONAL CORPORATION
You are cordially invited to attend the Annual Meeting of Shareholders of
Frontier National Corporation ("Frontier") to be held at 3:00 p.m. Central
Daylight Time on Monday, May 15, 2000, at the B. B. Comer Memorial Library, 314
North Broadway, in Sylacauga, Alabama.
At the meeting you will be asked to:
. Elect the board of directors to serve until the next annual meeting of
shareholders;
. Ratify the appointment of Schauer, Taylor, Cox & Vise, P.C. as
Frontier's independent accountant's and auditors for fiscal year 2000;
and
. Transact such other business as may properly come before the meeting or
any adjournment thereof.
We have enclosed a notice of annual meeting of shareholders, a proxy
statement, and a form of proxy. The matters listed in the notice of annual
meeting are more fully described in the proxy statement. Our Annual Report,
although not a part of these proxy materials, is also included to provide
information about our activities and performance during 1999. In addition, upon
request, we will provide to you, without charge, a copy of our annual report on
Form 10-K for the year ended December 31, 1999, as filed with the Securities
and Exchange Commission. Requests should be directed to Brenda Williamson,
Frontier National Corporation, Post Office Drawer 630, Sylacauga, Alabama
35150, (256) 249-1629.
It is important that your shares are represented and voted at the meeting,
regardless of the size of your holdings. Whether or not you plan to attend the
meeting, it is important that you promptly complete, sign, date and return the
enclosed form of proxy in the postage-paid envelope enclosed for that purpose.
If you are present at the meeting and desire to vote your shares personally,
your form of proxy will be withheld from voting upon your request.
Very truly yours,
/s/ Harry I. Brown, Jr. /s/ Steven R. Townson
----------------------- -----------------------------
Harry I. Brown, Jr. Steven R. Townson
Chairman of the Board Vice-Chairman of the Board,
President and
Chief Executive Officer
<PAGE>
Frontier National Corporation
43 North Broadway
Sylacauga, Alabama 35150
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 15, 2000
Notice is hereby given that the Annual Meeting of Shareholders of Frontier
National Corporation will be held on May 15, 2000, at 3:00 p.m., Central
Daylight Time, at the B. B Comer Memorial Library, 314 North Broadway,
Sylacauga, Alabama 35150, for the following purposes:
1. To elect the board of directors to serve until the next annual meeting
of shareholders or until their successors have been duly elected and
qualified.
2. To ratify the appointment of Schauer, Taylor, Cox & Vise, P.C. as
Frontier's independent accountants and auditors for fiscal year 2000.
3. To transact such other business as may properly come before the
meeting or any adjournment of the meeting.
Only shareholders of record at the close of business on March 20, 2000, are
entitled to notice of and to vote at the annual meeting and any adjournment
thereof.
By Order of the Board of Directors,
/s/ Kerri C. Newton
_____________________________________
Kerri C. Newton, Secretary
April 14, 2000
YOUR VOTE IS IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK, SIGN, DATE,
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE PAID ENVELOPE. IN THE EVENT YOU ATTEND THE MEETING, YOU MAY REVOKE
YOUR PROXY AT ANY TIME BEFORE BALLOTING AND VOTE YOUR SHARES IN PERSON.
<PAGE>
Frontier National Corporation
43 North Broadway
Sylacauga, Alabama 35150
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
Your vote is very important. For this reason, the board of directors is
requesting that, if you are not able to attend the annual meeting of
shareholders, you allow your common stock to be represented at the meeting by
the proxies named in the enclosed proxy card. This proxy statement, the form
of proxy and our annual report will be mailed to all stockholders on or about
April 14, 2000. Our annual report is not a part of this proxy statement.
Frontier is a two-bank holding company with banks headquartered in Lanett
and Sylacauga, Alabama. During 1999, the names of both Valley National Bank
and First National--America's Bank were officially changed to Frontier
National Bank. However, for clarity, we will refer to the banks as Valley
National and First National in this proxy statement. In addition, the
information in this proxy statement relating to number of shares reflect a 3
for 2 stock split which we issued in May of 1999.
INFORMATION ABOUT THE ANNUAL MEETING
When is the annual meeting?
May 15, 2000, 3:00 p.m. Central Daylight Time.
Where will the annual meeting be held?
B.B. Comer Memorial Library, 317 North Broadway, Sylacauga, Alabama.
What items will be voted upon at the annual meeting?
You will be voting upon the following matters:
1. Election of Directors. To elect the board of directors to serve until
the next annual meeting of shareholders or until their successors have
been duly elected and qualified.
2. Ratification of Auditors. To ratify the appointment of Schauer, Taylor,
Cox, & Vise, P.C. as our independent accountants and auditors for fiscal
year 2000.
3. Other Business. To transact such other business as may properly come
before the annual meeting or any adjournment of the annual meeting.
Who can vote?
You are entitled to vote your common stock if our records show that you held
your shares as of the close of business on March 20, 2000, the record date.
Each shareholder is entitled to one vote for each share of common stock held
on March 20, 2000. On that date, there were 3,415,863 shares of common stock
outstanding and entitled to vote. The common stock is our only class of
outstanding voting securities.
How do I vote by proxy?
If you sign, date and return your signed proxy card before the annual
meeting, we will vote your shares as you direct. For the election of
directors, you may vote for (1) all of the nominees, (2) none of the nominees,
or (3) all of the nominees except those you designate. For the ratification of
Frontier's auditors, you may vote "for" or "against" or you may "abstain" from
voting.
1
<PAGE>
If you return your signed proxy card but do not specify how you want to vote
your shares, we will vote them "for" the election of the nominees for
directors and "for" the ratification of Schauer, Taylor, Cox & Vise, P.C. as
Frontier's auditors.
The board of directors knows of no other business to be presented at the
annual meeting. If any matters other than those set forth above are properly
brought before the annual meeting, the individuals named in your proxy card
may vote your shares in accordance with their best judgement.
How do I change or revoke my proxy?
You can change or revoke your proxy at any time before it is voted at the
annual meeting by:
1. submitting another proxy with a more recent date than that of the proxy
first given; or
2. attending the annual meeting and voting in person; or
3. sending written notice of revocation to our corporate secretary, Kerri
C. Newton at Frontier National Corporation, 43 North Broadway,
Sylacauga, Alabama 35150.
If I return my proxy can I still attend the annual meeting?
You are encouraged to mark, sign and date the enclosed form of proxy and
return it promptly in the enclosed postage-paid envelope, so that your shares
will be represented at the annual meeting. However, returning a proxy does not
affect your right to attend the annual meeting and vote your shares in person.
How many votes are required?
If a quorum is present at the annual meeting,
. the director nominees will be elected by a plurality of the votes cast
in person or by proxy at the meeting, and
. the ratification of the independent auditors and any other matters
submitted to the shareholders will require the affirmative vote of a
majority of the shares of common stock present or represented by proxy
at the meeting.
What constitutes as a "quorum" for the meeting?
A majority of the outstanding shares of common stock, present or represented
by proxy, constitutes a quorum. A quorum is necessary to conduct business at
the annual meeting. You are part of the quorum if you have voted by proxy.
Abstentions will be treated as present for purposes of determining a quorum,
but as unvoted shares for purposes of determining the approval of any matter
submitted to the shareholders for a vote. If a broker indicates that it does
not have discretionary authority as to certain shares to vote on a particular
matter, such shares will not be considered as present and entitled to vote
with respect to such matter.
Who pays for the solicitation of proxies?
This proxy statement is being furnished in connection with the solicitation
of proxies by the board of directors of Frontier. We will pay the cost of
preparing, printing and mailing material in connection with this solicitation
of proxies. In addition to being solicited through the mails, proxies may be
solicited personally or by telephone, facsimile, electronic mail, or telegraph
by officers, directors, and employees of Frontier who will receive no
additional compensation for such activities. Arrangements will also be made
with brokerage houses and other custodians, nominees, and fiduciaries to
forward solicitation materials to the beneficial owners of shares held of
record by such persons. Such brokerage houses and other custodians, nominees,
and fiduciaries will be reimbursed for their reasonable expenses incurred in
such connection. We have retained The Trust Company of Sterne, Agee & and
Leach, Inc. to assist in the solicitation for a fee of approximately $500 plus
reasonable out-of-pocket expenses.
2
<PAGE>
When are shareholders proposals for the 2001 annual meeting due?
It is currently contemplated that Frontier's 2001 Annual Meeting of
Shareholders will be held on or about May 21, 2001. Proposals by shareholders
to be considered for inclusion in the proxy materials solicited by the
directors for the annual meeting in 2001 must be received by Frontier's
Secretary, no later than December 14, 2000. The use of certified mail, return
receipt requested, is advised. To be eligible for inclusion, a proposal must
comply with Rule 14a-8 and all other applicable provisions of Regulation 14A
under the Securities Exchange Act of 1934.
If a shareholder, rather than placing a proposal in our proxy as discussed
above, commences his or her own proxy solicitation for the 2001 annual meeting
or seeks to nominate a candidate for election or propose business for
consideration at such meeting, the shareholder must notify Frontier of such
proposal by or before February 28, 2001. If notice is not received by this
date, Frontier may exercise discretionary voting authority as to that matter
under proxies solicited for the 2001 annual meeting.
Proposal 1. ELECTION OF DIRECTORS
At the annual meeting, the board of directors will be elected to hold office
for a term of one year or until their successors are elected and qualified.
The following persons have been nominated to serve as directors: Wesley
Bowden, Harry Brown, Jr., Harry Brown, Sr., Charles Reeves, Steven Sprayberry,
Raymond Styres, Steven Townson and Christopher Zodrow. Although the board of
directors anticipates that the nominees will be available to serve as our
directors, if any nominee should be unable or unwilling to accept nomination
or election as a director, the proxies may be voted with discretionary
authority for a substitute designated by the board of directors.
Director nominees will be elected by a plurality of the votes cast in person
or by proxy at the meeting. Information about the individuals nominated as
directors is provided below:
<TABLE>
<CAPTION>
Director
Name of Director Age Since Principal Occupation for Past 5 Years
---------------- --- -------- ------------------------------------------
<C> <C> <C> <S>
Wesley L. Bowden 64 1998 Bowden Oil Company, Inc.--Chairman,
President & CEO, January 1967 to present.
Harry I. Brown, Jr. 52 1998 Frontier--Chairman, August 1998 to
present; President & CEO, August 1998 to
May 1999. First National Sylacauga
Corporation--President & CEO, February
1998 to August 1998; President & COO,
February 1992 to August 1998.
Harry I. Brown, Sr. 79 1998 First National--Chairman, 1966 to present;
CEO, 1966 to February 1998. First National
Sylacauga Corporation--Chairman, November
1984 to August 1998; CEO, November 1984 to
February, 1998.
Charles M. Reeves, Jr. 75 1997 Valley National--Chairman, August 1998 to
Present. Valley National Corporation--
Chairman, February 1997 to August 1998.
Skinner Furniture Corporation--Vice-
chairman, until August 1998.
Steven E. Sprayberry 48 1998 The Frontier Agency, Inc. /dba/ Wright &
Sprayberry Insurance--President & CEO,
November 1998 to present. Wright-
Sprayberry, Inc.--co-owner until November
1998.
Raymond C. Styres 61 1998 Reiter Corporation--Regional Sales
Manager, January 1993 to present.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Director
Name of Director Age Since Principal Occupation for Past 5 Years
---------------- --- -------- -------------------------------------------
<C> <C> <C> <S>
Steven R. Townson 42 1997 Frontier--Vice Chairman, President & CEO,
May 1998 to present; Vice Chairman & COO,
August 1998 to May 1999. Valley National
Corporation--President & CEO, February 1997
to August 1998. First National--CEO, May
1999 to present. Valley National--President
& CEO, August 1996 to present. BancAlabama,
Inc. and BankAlabama--President & COO, and
President & CEO, respectively, June 1995 to
August 1996.
Christopher N. Zodrow 53 1998 West Point Stevens, Inc.--Vice president,
Secretary and Assistant General Counsel,
1995 to present.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
ELECTION OF THE NOMINEES SET FORTH ABOVE.
The board of directors currently consists of the above-named eight
directors. Mr. Reeves and Mr. Townson were charter members of the board of
Valley National Corporation which was organized in 1997. Upon Valley National
Corporation's merger with First National Sylacauga Corporation in 1998, the
other directors became part of the board of Valley National Corporation, which
was renamed Frontier National Corporation. Harry I. Brown, Sr. is the father
of Harry I. Brown, Jr. There are no other family relationships among the
members of our board of directors. None of our directors is a director of any
other company that has a class of securities registered under the Securities
Exchange Act of 1934.
Our board of directors has the power to appoint our officers. Each officer
will hold office for such term as may be prescribed by the board of directors
and until such person's successor is chosen and qualified or until such
person's death, resignation, or removal.
<TABLE>
<CAPTION>
Executive Officers Age Principal Occupation for Past 5 Years
------------------ --- -----------------------------------------------------
<C> <C> <S>
Benjamin B. McMillan 34 First National--Executive Vice President, March 1999
to present. Union Planters Bank, N.A., Decatur, AL:--
Area Lending Office, August 1996 to February, 1999.
First Bank of the Villages, Lady Lake, Florida--
Senior Lending Officer, May 1995 to August 1996.
Kerri C. Newton 30 Valley National--Senior Vice President and Chief
Financial Officer, February 1997 to present. The
County Bank, Greenwood, SC--Vice President and
Financial Officer, May 1993 to January 1997.
Mark A. Payne 35 First National--Executive Vice President 1998 to
present; Senior Vice President, 1995 to 1998: Vice
President 1993 to 1995.
</TABLE>
INFORMATION ABOUT THE BOARD OF DIRECTORS
Role of the Board
Pursuant to Alabama law, our business, property and affairs are managed
under the direction of our board of directors. The board of directors has
responsibility for establishing broad corporate policies and for our overall
performance and direction, but is not involved in day-to-day operations.
Members of the board of directors keep informed of our business by
participating in board and committee meetings, by reviewing analyses and
reports sent to them regularly, and through discussions with our executive
officers.
4
<PAGE>
1999 Board Meetings
During 1999 our board of directors held 12 meetings. All directors attended
100% of the meetings held by Frontier during 1999.
Board Committees
The Board has three committees: the audit committee, the compensation
committee and the executive committee.
. The audit committee, consisting of directors Reeves, Styres and Zodrow,
is responsible for the review and evaluation of our internal controls
and accounting procedures. It also periodically reviews audit reports
with our independent auditors and recommends the annual appointment of
auditors. The audit committee met two times during 1999.
. The compensation committee is composed of directors Brown, Sr., Reeves,
Styres and Zodrow. The compensation committee establishes salary and
compensation guidelines for our employees and sets executive
compensation. The compensation committee held one meeting during 1999.
. The executive committee consists of directors Bowden, Brown, Jr., Brown,
Sr. Reeves, Styres, Townson and Zodrow. The executive committee
considers certain strategic planning issues for Frontier and did not
meet during 1999.
Director Compensation
Each director received a fee of $750 for each board meeting he attended
during 1999 and $250 for each committee meeting he attended.
Proposal 2. RATIFICATION OF THE APPOINTMENT OF SCHAUER, TAYLOR, COX & VISE,
P.C. AS FRONTIER'S INDEPENDENT ACCOUNTANTS AND AUDITORS FOR FISCAL
2000
The board of directors has confirmed the appointment by the audit committee
of Schauer, Taylor, Cox & Vise, P.C. as Frontier's independent accountants and
auditors for fiscal 2000. Schauer, Taylor, Cox & Vise, P.C. served as
independent accountants and auditors of Frontier for the years ended December
31, 1998 and 1999. Representatives of the firm will be present at the annual
meeting will have an opportunity to make a statement if they so desire, and
are expected to be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the outstanding shares
of common stock represented at the annual meeting and entitled to vote is
required to ratify the appointment of Schauer, Taylor, Cox & Vise, P.C. as
Frontier's independent accountants and auditors for fiscal year 2000.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" RATIFICATION OF THE APPOINTMENT
OF SCHAUER, TAYLOR, COX & VISE, P.C. AS FRONTIER'S INDEPENDENT ACCOUNTANTS AND
AUDITORS FOR FISCAL 2000.
5
<PAGE>
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND LEGAL PROCEEDINGS
Certain directors and executive officers of Frontier, and certain associates
and members of the immediate family of these individuals, were customers of,
and had loan transactions with, Frontier and its subsidiaries in the ordinary
course of business during 1999. In the our opinion, all such transactions were
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions of other persons
and corporations and did not involve more than the normal risk of
collectability or present other unfavorable features. Transactions of a
similar nature will, in all probability, occur in the future in the ordinary
course of business.
In April 1999, Frontier entered into an agreement to purchase two building
lots in Chelsea, Alabama. The agreement allocated the purchase price between
the two lots. Frontier then assigned, for no monetary consideration, its right
to purchase one of the lots for the agreed purchase price to Wesley L. Bowden.
Mr. Bowden is a director of Frontier and of First National.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires
our executive officers and directors and persons who own more than 10% of our
common stock to file initial reports of ownership and changes in ownership
with the Securities and Exchange Commission, as well as to furnish us with a
copy of such report. Additionally, SEC regulations require us to identify in
our proxy statement those individuals for whom one of the referenced reports
was not filed on a timely basis during the most recent fiscal year. During
1999, all directors and/or executive officers of Frontier made timely filings
of all required forms, except that director Reeves made one late filing for
one transaction and director Styres made two late filings for two
transactions.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS
Harry I. Brown, Jr. and Steven R. Townson entered into employment agreements
with Frontier after the merger of First National Sylacauga Corporation and
Valley National Corporation. Mr. Brown's current agreement is for him to serve
as Chairman of our board of directors. Mr. Townson's agreement is for him to
serve as Vice-Chairman of the Board, President, and Chief Executive Officer of
Frontier and President and Chief Executive Officer of both banks. Mr. Brown's
current annual salary is $131,000 while Mr. Townson's salary is $157,601. Both
agreements are for five (5) years, and are automatically extended each year by
one (1) additional year unless one hundred twenty (120) days prior to each
year-end our board of directors gives notice that the agreement will not be
extended. Upon a "change of control" as defined in the agreements, in addition
to any remaining payments due under the agreements, Mr. Brown and Mr. Townson
may be eligible for an additional payment equal to the present value of 2.99
times their average annual compensation payable under the agreement for the
most recent five (5) taxable years ending before the "change of control."
Finally, as additional compensation at the time of the merger in 1998, both
Mr. Brown and Mr. Townson received options to purchase 75,000 shares of Class
A Common Stock at $6.67 per share for a period of ten (10) years. Mr. Brown
exercised 15,000 of his options in 1998.
In addition, Mr. Brown and Mr. Townson have salary continuation agreements
which provide for certain payments upon death or retirement. The board of
directors have decided to reduce the amounts payable under these plans. Both
agreements include vesting schedules that provide payment of the benefit
amount upon the officer's retirement if the officer remains employed until he
is fully vested. With regard to Mr. Brown, the new agreement will provide for
15 annual payments of up to $175,000 upon retirement. With regard to Mr.
Townson, the new agreement will provide for 15 annual payments of up to
$275,000 upon retirement.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the total amount of compensation paid by
Frontier to or for the account of Harry I. Brown, Jr., our Chairman and Steven
R. Townson, our President and CEO for the fiscal years ended December 31,
1999, 1998 and 1997 (no other executive officers of Frontier received annual
compensation in excess of $100,000):
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation
------------------------------------- ---------------------
Other Annual Securities Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Option Awards (#) Compensation
- --------------------------- ---- ---------- --------- ---------------- --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Harry I. Brown, Jr. ..... 1999 135,037 0 11,033(2) 0 16,500(1)
Chairman of the Board 1998 125,000 0 0 75,000 5,250(6)
1997(4) 114,849 15,431 6,865 0 7,200(6)
Steven R. Townson........ 1999 133,577 10,000 0 0 15,825(1)
Vice-Chairman, President 1998 125,000 0 7,200(3) 75,000 5,650(6)
& CEO 1997(5) 83,135 0 8,580 90,000 3,900(6)
</TABLE>
- --------
(1) Director fees and KSOP contribution
(2) Automobile allowance and club dues
(3) Automobile allowance
(4) This compensation is from Mr. Brown's employment as President and CEO of
First National Sylacauga Corporation and First National
(5) This compensation is from Mr. Townson's employment as Chief Executive
Officer of Valley National Corporation and Valley National
(6) Director Fees
OPTIONS GRANTED IN LAST FISCAL YEAR
No stock options were granted to any directors, officers or employees during
1999.
AGGREGATE OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
Although no options were granted or exercised during 1999, the following
table provides the number of securities underlying unexercised options at
fiscal year end and their values.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Number of Options at Fiscal Year End at Fiscal Year End (1)
Shares Acquired Value Realized -------------------------------- -------------------------
Name on Exercise Upon Exercise Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- -------------- -------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harry I. Brown, Jr. .... 0 0 60,000 0 559,800 0
Steven R. Townson....... 0 0 75,000 0 699,750 0
</TABLE>
- --------
(1) Based on the closing price of our common stock on December 31, 1999 of
$16.00 per share and an exercise price of $6.67 per share
REPORT OF THE COMPENSATION COMMITTEE
The compensation committee met once during 1999, to determine executive
officers' salaries. Based on Mr. Townson's additional responsibilities at both
banks his salary was raised $32,601 to $157,601. Mr. Brown salary was
increased $6,000 to $131,000 pursuant to a decrease in his salary continuation
plan. The compensation committee does not use any formal policy or standard in
making its decisions on compensation.
7
<PAGE>
COMPENSATION INTERLOCK AND INSIDER PARTICIPATION
The compensation committee consists of directors Brown, Sr., Reeves, Styres
and Zodrow. No member of the compensation committee is a current officer or
employee of Frontier. Mr. Brown, Sr. is Chairman of First National and is the
father of Mr. Brown Jr., who is Chairman of Frontier. None of our executive
officers have served as a director or member of the compensation committee of
any other entity whose executive officers served on our board of directors or
compensation committee.
COMMON STOCK PERFORMANCE GRAPH
The following graph shows the cumulative return since our common stock began
trading on the NASD's Over-the-Counter Bulletin Board in October 1998 as
compared to The Nasdaq National Market (US Companies) and Nasdaq Bank Stocks:
[GRAPH OF TOTAL RETURN TO STOCKHOLDERS APPEARS HERE]
Total Return Analysis
<TABLE>
<CAPTION>
10/6/98 12/31/98 12/31/99
------- -------- --------
<S> <C> <C> <C>
Frontier National............................... $100.00 $ 95.65 $104.35
Nasdaq Banks.................................... $100.00 $115.55 $108.85
Nasdaq Composite................................ $100.00 $145.26 $270.36
</TABLE>
Source: Carl Thompson Associates www.ctaonline.com (800) 959-
9677. Data from Bloomberg Financial Markets.
8
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table reflects the number of shares of our common stock
beneficially owned by (1) each of our directors and nominees for director, (2)
certain executive officers who are not directors, (3) all persons who
beneficially own 5% or more of our common stock, and (4) our directors,
nominees, and executive officers as a group:
<TABLE>
<CAPTION>
Amount and Nature of Percent of Total
Beneficial Ownership(1) Common Stock
Name of Beneficial Owner(2) As of March 20, 1999 Outstanding
- --------------------------- ----------------------- ----------------
<S> <C> <C>
Wesley L. Bowden, Director............ 17,869(3) *
Harry I. Brown, Jr., Director and
Executive Officer.................... 94,927(4) 2.73%
Harry I. Brown, Sr., Director......... 310,285(5) 9.08%
Benjamin B. McMillan, Executive
Officer.............................. 15,293(10) *
Kerri C. Newton, Executive Officer.... 10,971(11) *
Mark A. Payne, Executive Officer...... 3,322(12) *
Charles M. Reeves, Jr., Director...... 879,614(8) 25.75%
Steven E. Sprayberry, Director........ 19,776(7) *
Raymond C. Styres, Director........... 8,164 *
Steven R. Townson, Director and
Executive Officer.................... 144,677(6) 4.14%
Christopher N. Zodrow, Director....... 22,880(9) *
Directors/Nominees and Executive
Officers as a Group (11 Persons)..... 1,527,778 43.03%
</TABLE>
- --------
* Represents less than one percent.
1. The number of shares of common stock reflected are shares that, under
applicable regulations of the Securities and Exchange Commission, are
deemed to be beneficially owned. Under the rules of the Securities and
Exchange Commission, a person is deemed to beneficially own a security if
the person has or shares the power to vote or direct the voting of such
security, or the power to dispose or to direct the disposition of such
security. A person is also deemed to beneficially own any shares to which
that person has the right to acquire beneficial ownership within 60 days.
Shares of Common Stock subject to options exercisable within 60 days are
deemed outstanding for computing the percentage of class of the person
holding such options that are not deemed outstanding for computing the
percentage of class for any other person. The total number of shares
beneficially owned is divided, where applicable, into two categories:
shares as to which voting/investment power is held solely, and shares as
to which voting/investment power is shared.
2. The address of each of the following shareholders is c/o Frontier National
Corporation, 43 North Broadway, Sylacauga, Alabama 35150.
3. Includes 1,500 shares held by Mr. Bowden as custodian for his
grandchildren over which Mr. Bowden has sole voting and dispositive power.
4. Includes 1,665 shares held by Mr. Brown as custodian for his son, 8,626
shares held by The Harry Brown Foundation, Inc., over which Mr. Brown has
sole voting and dispositive power, and 60,000 shares which may be acquired
within 60 days pursuant to stock options, and 1,101 shares held in the
Frontier National Corporation KSOP plan.
5. These shares are held by Harry I. Brown, Sr. Family, LLC, in which Mr.
Brown has sole voting and dispostitive power.
6. All of Mr. Townson's shares are, subject to regulatory approval, subject
to a voting agreement between Mr. Townson and CM/FS Reeves Investments, LP
dated August 1998, which require Mr. Townson and the LP to vote their
shares together. This total also includes 75,000 shares which could be
acquired within 60 days pursuant to stock options and which are also
subject to the voting agreement, and 1,092 shares held in the Frontier
National Corporation KSOP plan.
7. These shares do not include 18,501 shares owned by Mr. Sprayberry's wife
over which Mr. Sprayberry has no voting or investment power and as to
which he disclaims beneficial ownership. Includes 1,349 shares held in
Frontier National Corporation KSOP Plan.
9
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8. Includes 845,854 shares controlled through the CM/FS Reeves Investments,
LP. All shares are subject to a voting agreement between Mr. Townson and
CM/FS Reeves Investments, LP, dated August 1998, which requires Mr.
Townson and the LP to vote their shares together.
9. Includes 3,480 shares owned by Mr. Zodrow's wife and 1,920 shares owned by
Mr. Zodrow's children.
10. Includes 10,000 shares held by the Benjamin B. McMillan Living Trust, in
which Mr. McMillan has sole and dispositive power and 5,293 shares owned
jointly by Mr. McMillan and his wife under a dividend reinvestment plan
held by Sterne, Agee & Leach, Inc.
11. Includes 997 shares held in the Frontier National Corporation KSOP Plan.
12. Includes 490 shares held in the Frontier National Corporation KSOP Plan.
OTHER MATTERS
The board of directors, at the time of the preparation of this proxy
statement, knows of no business to come before the meeting other than that
referred to herein. If any other business should come before the meeting, the
persons named in the enclosed proxy will have discretionary authority to vote
all proxies in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
/S/ Kerri C. Newton
_____________________________________
Kerri C. Newton, Secretary
Sylacauga, Alabama
April 14, 2000
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PROXY
Frontier National Corporation
43 North Broadway
Sylacauga, Alabama 35150
(256) 249-0341
ANNUAL MEETING OF SHAREHOLDERS
May 15, 2000
(1) As to the election of the board of directors listed in the Proxy Statement
delivered in connection with the Annual Meeting:
[_] FOR all nominees [_] WITHHOLD AUTHORITY to vote for all nominees
listed below listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below)
Wesley L. Bowden, Harry I. Brown, Jr., Harry I. Brown, Sr., Charles M. Reeves,
Jr., Steven E. Sprayberry, Raymond C. Styres, Steven R. Townson, Christopher N.
Zodrow
(2) As to the ratification of the appointment of Schauer, Taylor, Cox & Vise,
P.C. as Frontier's independent accountants and auditors for fiscal 2000.
[_] FOR [_] AGAINST [_] ABSTAIN
(3) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(continued on other side)
PLEASE SIGN BELOW AND RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
THIS IS THE ONLY DOCUMENT YOU NEED TO RETURN AT THIS TIME.
The undersigned hereby appoints Harry I. Brown, Jr. or Steven R. Townson as
proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all of the shares of common
stock of Frontier National Corporation, which the undersigned is entitled to
vote at the Annual Meeting of Shareholders to be held at the B. B. Comer
Memorial Library, 314 North Broadway, Sylacauga, Alabama 35150, on Monday, May
15, 2000, at 3:00 p.m. Central Daylight Time, or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is made, this proxy will be
voted for proposals 1, 2, and 3.
Date:
--------------------------
-------------------------------
Signature of Shareholder(s)
Date:
--------------------------
-------------------------------
Signature of Joint Sharehold-
er(s)
PLEASE SIGN AND RETURN PROMPTLY IN THE SELF-ADDRESSED ENVELOPE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
