SOUTHWEST GEORGIA FINANCIAL CORPORATION
March 19, 1999
Dear Shareholder:
The annual meeting of the shareholders of Southwest Georgia
Financial Corporation will be held on Tuesday, April 27, 1999 in
Wright Auditorium at the Colquitt County Arts Center, Moultrie,
Georgia at 4:30 P.M. for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement.
Again this year, we will have a special drawing for share-
holders who attend the meeting. We will give away four $500.00
savings bonds - you must be present to win and you must be a
shareholder of Southwest Georgia Bank and Southwest Georgia Financial
Corporation (*Directors, officers, and staff of Southwest Georgia Bank
and Southwest Georgia Financial Corporation and their immediate families
are not eligible to participate in the drawing).
In order to ensure that your shares are voted at the meeting,
please complete, date, sign, and return the Proxy in the enclosed
postage-paid envelope at your earliest convenience. Every
shareholder's vote is important, no matter how many shares you own.
We encourage you to attend this annual meeting of the
shareholders and join us in the gallery immediately following the
meeting for refreshments. We look forward to your continued support
and another good year in 1999.
Very truly yours,
JOHN H. CLARK
Vice Chairman and Chief Executive Officer
* Immediate family is considered to be husband, wife,
and children living at home.
<PAGE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
P.O. Box 3488
201 First Street, S.E.
Moultrie, Georgia 31768
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 27, 1999
The annual meeting of shareholders of Southwest Georgia Financial Corporation
("the Company") will be held on Tuesday, April 27, 1999, at 4:30 p.m. at the
Colquitt County Arts Center, 401 Seventh Avenue, S.W., Moultrie, Georgia, for
the purposes of considering and voting upon:
1. The election of twelve directors to constitute the Board of Directors to
serve until the next annual meeting and until their successors are
elected and qualified; and
2. Such other matters as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on March 8, 1999, will be
entitled to notice of and to vote at the meeting or any adjournment thereof.
A Proxy Statement and a Proxy solicited by the Board of Directors are enclosed
herewith. Please sign, date and return the Proxy promptly in the enclosed
business reply envelope. If you attend the meeting you may, if you wish,
withdraw your Proxy and vote in person.
Also enclosed is the Company's 1998 Annual Report to Shareholders, which
contains financial data and other information about the Company.
By Order of the Board of Directors,
JOHN H. CLARK
Vice Chairman and
Chief Executive Officer
March 19, 1999
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE.
<PAGE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
P.O. Box 3488
201 First Street, S.E.
Moultrie, Georgia 31768
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of Southwest Georgia Financial Corporation
(the "Company") for use at the Annual Meeting of Shareholders of the Company
to be held on April 27, 1999, and any adjournment thereof, for the purposes
set forth in the accompanying notice of the meeting. The expenses of this
solicitation, including the cost of preparing and mailing this Proxy
Statement, will be paid by the Company. Copies of solicitation materials may
be furnished to banks, brokerage houses, and other custodians, nominees, and
fiduciaries for forwarding to beneficial owners of shares of the Company's
Common Stock, and normal handling charges may be paid for such forwarding
service. In addition to solicitations by mail, directors and regular
employees of the Company may solicit Proxies in person or by telephone. It is
anticipated that this Proxy Statement and the accompanying Proxy will first be
mailed to shareholders on March 19, 1999.
The record of shareholders entitled to vote at the Annual Meeting of
Shareholders was taken as of the close of business on March 8, 1999. On that
date, the Company had outstanding and entitled to vote 2,565,599 shares of
Common Stock, par value $1.00 per share.
Any Proxy given pursuant to this solicitation may be revoked by any shareholder
who attends the meeting and gives oral notice of his or her election to vote in
person, without compliance with any other formalities. In addition, any Proxy
given pursuant to this solicitation may be revoked prior to the meeting by
delivering a signed writing revoking it or a duly executed Proxy bearing a
later date to the Secretary of the Company at Southwest Georgia Financial
Corporation, P.O. Box 3488, Moultrie, Georgia 31776-3488. If the Proxy is
properly completed and returned by the shareholder and is not revoked, it will
be voted at the meeting in the manner specified thereon. If the Proxy is
returned but no choice is specified thereon, it will be voted for all the
persons named below under the caption "Information about Nominees for
Director".
The Company will furnish without charge a copy of its Annual Report on Form
10-K filed with the Securities and Exchange Commission for the fiscal year
ended December 31, 1998, including financial statements and schedules, to any
record or any beneficial owner of its Common Stock as of March 8, 1999, who
requests a copy of such report. Any request for the Form 10-K report should
be in writing addressed to:
Mr. George R. Kirkland
Southwest Georgia Financial Corporation
P.O. Box 3488
Moultrie, Georgia 31776-3488
If the person requesting the report was not a shareholder of record on March 8,
1999, the request must include a representation that the person was a
beneficial owner of Common Stock on that date. Copies of any exhibits to the
Form 10-K will also be furnished on request and upon the payment of the
Company's expense in furnishing the exhibits.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth as of March 1, 1999, beneficial ownership of
the Company's Common Stock by each "person" (as that term is defined by the
Securities and Exchange Commission) known by the Company to be the beneficial
owner of more than 5% of the Company's voting securities and by all directors
and officers of the Company as a group.
<TABLE>
<CAPTION>
Name And Address of Number of Shares
Beneficial Owner Owned Beneficially Percent of Class
<S> <C> <C>
The Employee Stock Ownership Plan 502,443 19.58%
and Trust of Southwest Georgia
Financial Corporation
201 First Street, S.E.
Moultrie, Georgia 31768
All Directors, Officers, and Nominees
as a Group (30 Persons) (1) 853,258 32.45%
</TABLE>
(1) Includes 172,463 shares owned by directors who will retire at the
Company's 1999 Annual Meeting.
NOMINATION AND ELECTION OF DIRECTORS
The bylaws of the Company provide that the Board of Directors shall consist of
not less than five nor more than twenty-five directors. The exact number of
directors is currently set at twelve by Board resolution. The number of
directors may be increased or decreased within the foregoing range from time to
time by the Board of Directors or resolution of the shareholders. The terms of
office for directors continue until the next Annual Meeting of Shareholders and
until their successors are elected and qualified or until earlier resignation,
removal from office, or death.
Each Proxy executed and returned by a shareholder will be voted as specified
thereon by the shareholder. If no specification is made, the Proxy will be
voted for the election of the nominees named below to constitute the entire
Board of Directors. In the event that any nominee withdraws or for any reason
is not able to serve as a director, the Proxy will be voted for such other
person as may be designated by the Board of Directors as substitute nominee,
but in no event will the Proxy be voted for more than twelve nominees.
Management of the Company has no reason to believe that any nominee will not
serve if elected.
Directors are elected by a plurality of the votes cast by the holders of the
shares entitled to vote in the election at a meeting at which a quorum is
present. A quorum is present when the holders of a majority of the shares
outstanding on the record date are present at a meeting in person or by proxy.
An abstention would not be considered to be one of the "votes cast" for
purposes of the first sentence of this paragraph, but would be included in
determining whether a majority of the outstanding shares is represented for
determining whether a quorum is present at a meeting.
<PAGE>
INFORMATION ABOUT NOMINEES FOR DIRECTOR
The following information as of March 1, 1999, has been furnished by the
respective nominees for Director. Except as otherwise indicated, each nominee
has been or was engaged in his present or last principal employment, in the
same or a similar position, for more than five years.
<TABLE>
<CAPTION>
Number of Shares
Information Owned Beneficially
Name (Age) About Nominee (Percent of Class)(1)
<S> <C> <C>
John H. Clark (61) Chief Executive Officer and 97,980
Director of Southwest Georgia (3.82%) (2)
Bank (the "Bank") and the Company.
Mr. Clark was named the Chief
Executive Officer and Vice Chairman
of the Board for both the Bank and
the Company in December 1996.
Previously, he has served as President
and Director of the Bank since 1978
and President and Director of the
Company since 1980.
Cecil W. Alvis (64) Chief Operating Officer and President 33,647
of the Bank and Company. Mr. Alvis (1.31%) (3)
was promoted to this position in
December 1996, and in 1997 he served
for the first time as Director of the
Bank and Company. Mr. Alvis has served
in various other positions with the
Bank and the Company since 1977.
Albert W. Barber (69) A Director of the Company and Bank 118,009
since 1990, Mr. Albert Barber is a (4.60%) (4)
general partner of South Georgia
Finance Company, a family investment
company. Also, he is Vice President
and Treasurer of South Georgia
Investment Company, a rental and
investment company.
Cecil H. Barber (34) Vice President of Barber Contracting, 20,225*
a general contracting company.
Mr. Barber is standing for election as
Director of the Company for the first
time at the Company's 1999 Annual
Meeting.
Robert M. Duggan (67) A Director of the Bank since 1980 and 42,042
of the Company since 1981, Mr. Duggan (1.64%) (5)
is a retired President of Davis Gas
Company and is currently self-employed
as a tree farmer.
<PAGE>
Michael J. McLean (52) A partner since 1975 of McLean 68,625
Engineering Company, Inc., a (2.67%) (6)
consulting engineering firm. Mr.
McLean is standing for election as
Director of the Company for the first
time at the Company's 1999 Annual
Meeting.
Richard L. Moss (47) A Director of the Bank since 1980 and 23,956*(7)
of the Company since 1981, Mr. Moss is
President of Moss Farms.
Lee C. Redding (52) A Director of the Bank and the Company 24,779*(8)
since 1995, Mr. Redding is a dentist
and owner of a family dental practice
since 1976.
Roy Reeves (39) A Director of the Bank and the Company 30,731
since 1991, Mr. Reeves is Secretary- (1.20%) (9)
Treasurer of Kelly-Reeves Furniture
Company and managing partner with
Reeves Properties, a property rental
company.
Johnny R. Slocumb (46) A Director of the Bank and the Company 31,286
since 1991, Mr. Slocumb is owner of (1.22%) (10)
the Slocumb Company, a company which
offers real estate and insurance
services.
Violet K. Weaver (63) Executive Vice President of the Bank 35,608
and the Company, Mrs. Weaver was (1.39%) (11)
promoted to this position in December
1996. Previously, she has served in
various other positions with the Bank
since 1959 and the Company since 1981.
Mrs. Weaver is standing for election as
Director of the Company for the first
time at the Company's 1999 Annual
Meeting.
C. Broughton Williams (62) Mr. Williams is a retired Senior Vice 12,459*(12)
President of the Bank and the Company.
He is owner of Williams Consulting &
Development Company. Mr. Williams is
standing for election as Director of
the Company for the first time at the
Company's 1999 Annual Meeting.
</TABLE>
* Less than one percent (1%)
(1) Based on 2,565,599 shares outstanding as of March 1, 1999 plus shares
underlying outstanding stock options exercisable within 60 days of the
record date, which are deemed to be outstanding for purposes of
calculating the percentage owned by a holder.
(2) Includes 56,680 shares allocated to the account of Mr. Clark in the
Employee Stock Ownership Plan and Trust, over which shares Mr. Clark
exercises voting power and 20,355 shares owned of record by Mr. Clark's
<PAGE>
wife as to which Mr. Clark disclaims beneficial ownership. Includes
2,500 presently exercisable stock options granted to Mr. Clark.
(3) Includes 25,847 shares allocated to the account of Mr. Alvis in the
Employee Stock Ownership Plan and Trust, over which shares Mr. Alvis
exercises voting power. Includes 2,800 shares owned of record by Mr.
Alvis's wife as to which Mr. Alvis disclaim beneficial ownership.
Includes 5,000 presently exercisable stock options granted to Mr. Alvis.
(4) Includes 2,710 shares owned of record by Mr. Barber's wife as to which
Mr. Barber disclaims beneficial ownership, 2,000 shares held by the
Paul B. Fontenot Trust and 2,000 shares held by the Richard T. Fontenot
Trust, of which Mr. Albert W. Barber is trustee, and 38,449 shares of
which Mr. Barber holds the power of attorney for Paul B. Fontenot.
Includes 2,500 presently exercisable stock options granted to Mr. Barber.
(5) Includes 1,111 shares owned of record by Mr. Duggan's wife as to which Mr.
Duggan disclaim benefical ownership. Includes 2,500 presently exercisable
stock options granted to Mr. Duggan.
(6) Includes 47,606 shares of which Mr. McLean holds the voting power of
attorney for E. J. McLean, Jr. and 20,000 shares of which Mr. McLean holds
the voting power of attorney for Robert A. Cooper, Jr.
(7) Includes 2,500 presently exercisable stock options granted to Mr. Moss.
(8) Includes 11,337 shares held jointly with Mr. Redding's wife and 3,841
shares owned of record by Mr. Redding's wife as to which Mr. Redding
disclaim beneficial ownership. Includes 2,500 presently exercisable stock
options granted to Mr. Redding.
(9) Includes 9,100 shares which are owned by Kelly Reeves Furniture Company,
Inc. and 9,000 shares which are owned by Reeves Properties, L.P., Mr.
Reeves possesses shared investment power and the power to vote as to all
shares owned by both the corporation and limited partnership. Includes
2,500 presently exercisable stock options granted to Mr. Reeves.
(10) Includes 2,500 presently exercisable stock options granted to Mr. Slocumb.
(11) Includes 25,131 shares allocated to the account of Mrs. Weaver in the
Employee Stock Ownership Plan and Trust, over which shares Mrs. Weaver
exercises voting power. Includes 5,000 presently exercisable stock
options granted to Mrs. Weaver.
(12) Includes 2,983 shares allocated to the account of Mr. Williams in the
Employee Stock Ownership Plan and Trust, over which shares Mr. Williams
exercises voting power. Includes 2,500 presently exercisable stock
options granted to Mr. Williams.
There are no family relationships between any director, executive officer, or
nominee for director of the Company or any of its subsidiaries with the
exception of director Albert W. Barber, and nominee for director Cecil H.
Barber, who are father and son, and retiring director Leo T. Barber, Jr. and
Albert W. Barber are brothers.
<PAGE>
Meetings and Committees of the Board of Directors
The Board of Directors held 12 regular meetings during 1998. All of the
directors attended at least seventy-five percent (75%) of the Board and
committee meetings held during their tenure as directors.
The Company has a personnel committee of the Board of Directors. This
committee is composed of five members, John H. Clark, Leo T. Barber, Jr.,
Jack Short, Cecil W. Alvis, and Violet K. Weaver. The committee, which
recommends compensation levels for the Bank's employees, held six meetings
during 1998. The Company has an audit committee of the Board of Directors
who is also the standing audit committee for the Bank's Board of Directors.
This committee is composed of four members, Albert W. Barber, E.J. McLean, Jr.,
Richard L. Moss, and Lee C. Redding. The Company has no standing nominating
committee of the Board of Directors or committee performing similar functions.
EXECUTIVE COMPENSATION
The Company did not pay any remuneration to its officers during the year ended
December 31, 1998. The following table sets forth the annual and other
compensation paid or accrued for each of the last three fiscal years, including
directors' fees, for both John H. Clark, who is Vice Chairman of the Board of
Directors and Chief Executive Officer of the Company and the Bank, and Cecil W.
Alvis, who is Chief Operating Officer and President of the Company and the
Bank. No other executive officers of the Company were paid $100,000 or more
in salary, bonus, and directors' fees during 1998.
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Securities
Name and Principal Underlying All Other
Position During 1998 Year Salary Bonus Other Options (#) Compensation
<S> <C> <C> <C> <C> <C> <C>
John H. Clark - Vice 1998 $ 164,385 $ 40,000 $ 3,000 (1) 2,500 $ 33,743 (2)
Chairman and CEO of the 1997 157,850 50,000 2,350 (1) 0 32,106
Company and the Bank 1996 148,700 50,000 1,800 (1) 0 28,350
Cecil W. Alvis 1998 110,728 10,400 0 5,000 20,767 (3)
COO and President of the 1997 105,300 15,000 0 0 18,786
Company and the Bank 1996 80,000 11,200 0 0 16,356
</TABLE>
(1) Amount represents fair market value of discount on stock purchased under
the Company's stock plan (Directors and Officers Stock Purchase Plan) for
officers and directors, which allows a participant to receive Common Stock
in lieu of salary and directors' fees, up to certain limits, with a value
of 150% of the cash compensation foregone by each participant.
(2) Mr. Clark's "other compensation" includes Bank's contributions to defined
contribution plan of $24,000, contribution to supplementary retirement
plan of $6,935, and premiums for group term life insurance of $2,808.
<PAGE>
(3) Mr. Alvis's "other compensation" includes Bank's contribution to defined
contribution plan of $17,959 and premiums for group term life insurance of
$2,808.
Option Grant Table
The following table sets forth certain information regarding the grant of stock
options in 1998 fiscal year to the persons named in the Summary Compensation
Table and the value of options held by such persons at the end of such fiscal
year.
<TABLE>
Option Grants in Last Fiscal Year
Individual Grants
<CAPTION>
% of Total
Number of Options
Securities Granted to Exercise Black-
Underlying Employees or Base Scholes
Options in Fiscal Price Expiration Grant Date
Table Granted (#) Year ( $/sh) Date Value $ (1)
<S> <C> <C> <C> <C> <C>
John H. Clark 2,500 4.3% $ 25.50 April 28, 2008 $ 14,200
Cecil W. Alvis 5,000 8.6% 25.50 April 28, 2008 28,400
</TABLE>
(1) The value shown reflect standard application of the Black-Scholes pricing
model using the following weighted-average assumptions: dividend yield of
2.10 percent, risk-free interest rate of 5 percent, expected lives of 5
years for the options, and a volatility rate of 21 percent.
Fiscal Year-End Option Value Table
The following table sets forth the value of options held at the 1998 fiscal
year end by the persons named in the Summary Compensation Table.
<TABLE>
Fiscal Year-end Option Values
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C>
John H. Clark 2,500/0 0/0 (1)
Cecil W. Alvis 3,900/1,100 0/0 (1)
</TABLE>
(1) Company's common stock price at year end was less than the exercise price.
Pension Plan Table
The following table sets forth the estimated annual benefits payable upon
retirement under the Company's Pension Plan (including amounts attributable to
the Company's Supplemental Retirement Plan) in the specified compensation and
years of service classifications indicated below.
<PAGE>
The compensation covered by the Pension Plan includes total annual compensation
including bonuses and overtime pay. The portion of compensation, which is
considered covered compensation under the Pension Plan for Mr. Clark and Mr.
Alvis equals the annual salary and bonus amounts indicated in the Summary
Compensation Table. As of January 1, 1999, the credited full years of service
under the Pension Plan for both Mr. Clark and Mr. Alvis were 21 years.
<TABLE>
<CAPTION>
Estimated annual normal retirement benefit assuming a
straight lifetime annuity and the years of service indicated (3)
Average Annual
Compensation 15 years 20 years 25 years 30 years 35 years
<S> <C> <C> <C> <C> <C>
Pension Plan
$ 100,000 $ 43,964 $ 46,952 $ 49,940 $ 52,928 $ 55,916
$ 150,000 66,864 71,652 76,440 81,228 86,016
$ 200,000 (1) 71,444 76,592 81,740 86,888 92,036
$ 250,000 (1) 71,444 76,592 81,740 86,888 92,036
Supplemental Retirement Plan
$ 200,000 (2) 18,320 19,760 21,200 22,640 24,080
$ 250,000 (2) 41,220 44,460 47,700 50,940 54,180
</TABLE>
(1) For the year ended December 31, 1998, the maximum covered compensation is
limited by federal law at $160,000.
(2) For Mr. Clark, who is covered under the Company's Supplemental Retirement
Plan, any excess annual retirement benefit which could not be paid under
the Pension Plan because of the federal law limitation described in
footnote will be payable under the Supplemental Retirement Plan.
(3) The benefits listed in the Pension Plan Table are not subject to any
deduction for Social Security or other offset amounts.
Compensation of Directors
The Board of Directors of the Bank consists of the same members as the Board
of Directors of the Company. In 1998, the Chairman, Vice Chairman, and each
Director of the Bank received an annual fee of $9,000, $6,000, and $3,000,
respectively, and $250 per Bank's Board meeting attended. Also, each Director
of the Bank received $100 per Bank's Board committee meeting attended. The
Directors of the Company are not compensated for membership on the Company's
Board of Directors. Also, any director who elects to fully participate in the
Directors and Officers Stock Purchase Plan can receive up to $3,000 annually
from the Bank for the purpose of purchasing the Company's Common Stock.
The Company has established a Key Individual Stock Option Plan which provides
for the issuance of options to executive officers and directors of the Company.
The Company granted non-qualified options to acquire 25,000 shares, in the
aggregate, to ten outside directors under the Key Individual Stock Option Plan
in fiscal year 1998 at an exercise price of $25.50. The plan provides for the
grant of non-qualified stock options to directors of the Company. The plan is
administered by the Personnel Committee of the Board of Directors.
<PAGE>
Employment Contracts and Termination of Employment and Change in Control
Arrangements
On December 23, 1997, the Company amended the employment agreement (the
"Agreement") with John H. Clark, dated November 21, 1989. This amendment
extended the term (the "Term") of the Agreement to January 2, 2003, or until
the Agreement is earlier terminated, and amended the termination payment
schedule. Under the Agreement the Board of Directors of the Bank or Company
has discretion to determine Mr. Clark's compensation, based upon the financial
successes of and the contribution of Mr. Clark to the Bank and the Company.
Benefits of the kind customarily granted to other executives of the Bank and
Company, including disability insurance, medical insurance for life, and life
insurance, identical to that provided to Mr. Clark at the commencement of the
Term, until age 65 and thereafter with life insurance comparable to that
provided to retirees at the commencement of the Term, will be granted to Mr.
Clark under the Agreement. In determining Mr. Clark's compensation under the
Agreement, the Board subjectively considers Mr. Clark's tenure with the Bank
and Company and the growth in assets and the results of operations of the
Company during Mr. Clark's tenure.
Mr. Clark's employment may be terminated for cause if Mr. Clark violates or
breaches any material term of the Agreement, habitually neglects his duties,
or is convicted of a felony. If Mr. Clark is terminated for cause, the Bank
and the Company will have no further financial obligation to Mr. Clark.
If Mr. Clark's employment terminates for any reason, Mr. Clark agrees not to
provide banking services or solicit certain bank customers within certain
geographical limits within five years of such termination. In consideration
for such non-compete agreement and services rendered, if Mr. Clark's
employment is terminated without cause prior to the end of the Term, Mr. Clark
will receive a termination payment annually during the remainder of the Term.
The amount of such annual payment will depend upon the year of termination and
can vary from an annual payment of $115,000 for the remaining five years of
the Term to a single payment of $140,000, if Mr. Clark were terminated during
the last year of the Term.
Compensation Committee Interlocks and Insider Participation
The members who served during 1998 on the Personnel Committee which recommends
compensation levels for the Company's executives and other employees were
Leo T. Barber, Jr., Jack Short, both of whom are current directors who are not
standing for re-election, John H. Clark, Cecil W. Alvis, and Violet K. Weaver,
not currently a director but who is nominated for election as director.
During 1998 the Company's Chief Executive Officer and Director, John H. Clark,
the Chief Operating Officer, President and Director, Cecil W. Alvis, and the
Executive Vice President and Secretary, Violet K. Weaver, as members of the
Personnel Committee, participated in deliberations concerning executive
compensation, other than deliberations concerning their own compensation.
The Company employs the law firm of Short & Fowler to provide legal services to
the Company and the Bank, which legal services include general legal services,
as well as loan closing services. The law firm receives fees for general legal
services, as well as fees earned in connection with loan closings, which fees
are collected from the persons making the loans from the Bank. Jack Short, a
director of the Company and the Bank who is not standing for re-election, is a
partner in the law firm. The Company believes the services obtained from the
<PAGE>
law firm are on terms as favorable to the Company as could have been obtained
from unaffiliated parties.
Committee Report on Executive Compensation
The Personnel Committee (the "Committee") of the Board of Directors consists
of five members, two outside directors and two inside directors who are also
executive officers and one executive officer who is not currently a director
of the Company. The Committee reviews, evaluates, and approves compensation
and benefits for all officers and also reviews general policy matters relating
to compensation and benefits of the other employees. A role of the executive
officers on the Committee is to provide the Committee with competitive
information with respect to salaries and other compensation of other financial
institutions, review each individual officer's performance, and make
recommendations to the Committee for salaries of officers other than
themselves.
The Personnel Committee's intent is to maintain the following standards:
. Attract, motivate, reward, and retain high-performing and dedicated
management employees.
. Balance competitive need, corporate, individual, and business unit
performance, and affordability.
. Provide competitive financial security for executives and dependents in
the event of death, disability, or retirement.
Base Salary and Bonus
Executive officer base salary and bonus awards are determined with reference to
Company-wide, divisional, and individual performance for the previous fiscal
year based on a wide range of measures which includes comparisons with
competitors' performance and internal goals set before the start of each fiscal
year and by comparison to the level of executive officers' compensation of
other financial institutions of comparable size. No relative weights were
assigned for these factors. Comparisons with competitors' performance included
some but not all of the institutions included in the Independent Bank Index,
to which the Company's total return is compared in this Proxy Statement. The
Committee believes that the most meaningful performance and pay equity
comparisons are made against companies of similar size and similar business
interests. In keeping with this belief, the Committee consistently
participates in and uses compensation and benefit surveys from the Georgia
Bankers Association and the Bank Administration Institute.
Stock Options
Effective March 19, 1997, the Company has established a Key Individual Stock
Option Plan which provides for the issuance of options to key employees and
directors of the Company. In April 1997, the plan was approved by the
Company's shareholders, and it will be effective for ten years. A maximum of
150,000 shares of common stock have been authorized for issuance with respect
to options granted under the plan. The Company granted both incentive and non-
qualified options to acquire 58,500 shares, in the aggregate, to 41 employees
under the Key Individual Stock Option Plan in fiscal year 1998 at an exercise
<PAGE>
price of $25.50. The plan provides for the grant of incentive stock options
and non-qualified stock options to key employees and directors of the Company.
The plan is administered by the Personnel Committee of the Board of Directors.
Compensation of Chief Executive Officer
The Chief Executive Officer's base salary and bonus for 1998 were determined
with reference to the same measures used for all executive officers of the
Company, but the primary measurement is Company-wide performance. The Company
exceeded its target goals on all of the Company's performance measures. The
Committee believes the returns on assets (ROA) and equity (ROE) are the most
appropriate measures for evaluating the Company's results. In 1998, the
Company's net income increased over 5.50 percent from the previous year's net
income, the ROA was 1.66 percent, and ROE was 13.74 percent, compared to ROA
of 1.62 percent and ROE of 14.37 percent in 1997.
In December 1997, the company amended the employment agreement with Mr. Clark
dated November 21, 1989. This amendment extended the term of the employment
agreement to January 2, 2003 or until the employment agreement is earlier
terminated, and amended the termination payment schedule as described earlier
under "Employment Contracts and Termination of Employment and Change in
Control Agreement".
In keeping with the Committee's belief that the most meaningful performance and
pay equity comparisons are made against companies of similar size and business
interests, the Committee consistently uses the Federal Financial Institution
Examining Council Peer Group Report. The earnings performance for the Company
placed it in the 87th percentile when compared to other similar one-bank
holding companies in the peer group.
Leo T. Barber, Jr. Jack Short Violet K. Weaver
John H. Clark Cecil W. Alvis
Performance Graph
The following graph compares the cumulative total shareholder return of the
Company's Common Stock with The Carson Medlin Company's Independent Bank Index
and the S&P 500 Index. The Independent Bank Index is the compilation of the
total return to shareholders over the past five years of a group of 23
independent community banks located in the southeastern states of Florida,
Georgia, North Carolina, South Carolina, Tennessee, Virginia, and West
Virginia. The comparison assumes $100 was invested January 1, 1993, and that
all semi-annual and quarterly dividends were reinvested each period. This
comparison takes into consideration changes in stock price, cash dividends,
stock dividends, and stock splits.
The comparisons in the graph are required by the Securities and Exchange
Commission and are not intended to forecast or be indicative of possible
future performance of the Company's Common Stock.
<TABLE>
SOUTHWEST GEORGIA FINANCIAL CORPORATION
Five Year Performance Index
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Southwest Georgia Financial Corporation 100 115 151 262 304 371
Independent Bank Index 100 119 151 191 280 296
S&P 500 Index 100 101 139 171 228 294
</TABLE>
<PAGE>
OTHER MATTERS RELATING TO EXECUTIVE OFFICERS, DIRECTORS, AND PRINCIPAL
SHAREHOLDERS
The Bank from time to time has had, and expects to have in the future, banking
transactions in the ordinary course of business with officers and directors of
the Company and their related interests, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons. Such transactions have not
involved more than the normal risk of collectibility or presented other
unfavorable features. At December 31, 1998, loans to officers, directors, and
principal shareholders of the Company and the Bank and to certain of their
related interests amounted to $846,656.
INFORMATION CONCERNING THE COMPANY'S ACCOUNTANTS
Draffin & Tucker was the principal independent public accountant for the
Company during the year ended December 31, 1998. Representatives of Draffin
& Tucker are expected to be present at the annual meeting and will have the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions. The Company anticipates that Draffin & Tucker will be
the Company's accountants for the current fiscal year.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's 2000
Annual Meeting of Shareholders must be received by November 25, 1999, in order
to be eligible for inclusion in the Company's Proxy Statement and Proxy for
that meeting. The Company must be notified of any other matter intended to be
presented by a shareholder at the 2000 Annual Meeting not later than
February 9, 2000, or else proxies may be voted on such proposal at the
discretion of the persons named in the Proxy.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Company knows of no matters other than those stated above
that are to be brought before the meeting. If any other matters should be
presented for consideration and voting, however, it is the intention of the
persons named as proxies in the enclosed Proxy to vote in accordance with
their judgment as to what is in the best interest of the Company.
By order of the Board of Directors,
John H. Clark
Vice Chairman and
Chief Executive Officer
March 19, 1999
<PAGE>
COMMON STOCK
OF
SOUTHWEST GEORGIA FINANCIAL CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1999 ANNUAL MEETING
OF SHAREHOLDERS.
The undersigned hereby appoint(s) E. J. McLean, Jr. and John J. Cole,
Jr., or either of them with power of substitution to each, as Proxies of the
undersigned to vote the Common Stock of the undersigned at the Annual Meeting
of Shareholders of SOUTHWEST GEORGIA FINANCIAL CORPORATION (the "Company") to
be held on April 27, 1999, and any adjournment thereof.
1. Election of Directors (Please check either A or B)
A. _____ I (we) grant authority to vote FOR all nominees for
director listed below except as marked to the contrary
in the space provided:
Cecil W. Alvis; Albert W. Barber; Cecil H. Barber;
John H. Clark; Robert M. Duggan; Michael J. McLean;
Richard L. Moss; Lee C. Redding; Roy H. Reeves;
Johnny R. Slocumb; Violet K. Weaver; and
C. Broughton Williams, Jr.
Instructions: To withhold authority to vote for any of the
individual nominees listed above, write the name(s) of the
nominee(s) on the lines provided below.
___________________________________________________________
___________________________________________________________
B. _____ I (we) withhold authority to vote for all of the nominees
listed above.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION AS DIRECTORS
OF THE PERSONS NAMED IN THE PROXY AND ACCOMPANYING PROXY STATEMENT AND,
UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED,
THIS PROXY WILL BE SO VOTED.
2. Other Matters to Come Before the Meeting
I (we) grant the Proxies authority to vote in accordance with their best
judgment with respect to any other matters that may properly come before
the meeting.
X__________________________
X__________________________
Please sign this Proxy exactly as name appears
at left. In the case of joint tenants, each
joint owner must sign. Note: When signing as
an attorney, trustee, administrator or
guardian, please give your title as such.
Date Signed: ________________
<PAGE>
COMMON STOCK OF SOUTHWEST GEORGIA FINANCIAL CORPORATION
DIRECTIONS FOR VOTING COMMON STOCK ALLOCATED
TO A PARTICIPANT'S ACCOUNT PURSUANT TO THE
SOUTHWEST GEORGIA FINANCIAL CORPORATION
EMPLOYEE STOCK OWNERSHIP TRUST
A PROXY IS SOLICITED FROM SOUTHWEST GEORGIA BANK TRUST DEPARTMENT AS TRUSTEE
BY THE BOARD OF DIRECTORS FOR THE 1999 ANNUAL MEETING OF SHAREHOLDERS.
The undersigned participant in the Employee Stock Ownership Plan
("ESOP") hereby directs Southwest Georgia Bank Trust Department as Trustee of
the Southwest Georgia Financial Corporation Employee Stock Ownership Trust to
vote those shares of Common Stock of Southwest Georgia Financial Corporation
allocated to the undersigned's account in connection with the Annual Meeting
of Shareholders of SOUTHWEST GEORGIA FINANCIAL CORPORATION (the "Company") to
be held on April 27, 1999, and any adjournment thereof.
1. Election of Directors (Please check either A or B)
A. _____ I grant authority to vote FOR all nominees for
director listed below except as marked to the
contrary in the space provided:
Cecil W. Alvis; Albert W. Barber; Cecil H. Barber;
John H. Clark; Robert M. Duggan; Michael J. McLean;
Richard L. Moss; Lee C. Redding; Roy H. Reeves;
Johnny R. Slocumb; Violet K. Weaver; and
C. Broughton Williams, Jr.
Instructions: To withhold authority to vote for any
of the individual nominees listed above, write the
name(s) of the nominee(s) on the lines provided below.
_______________________________________________________
_______________________________________________________
B. _____ I withhold authority to vote for all of the nominees
listed above.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION AS DIRECTORS
OF THE PERSONS NAMED IN THE PROXY AND ACCOMPANYING PROXY STATEMENT AND,
UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED,
THIS PROXY WILL BE SO VOTED.
2. Other Matters to Come Before the Meeting
I grant the Trustee authority to vote in accordance with their best
judgment with respect to any other matters that may properly come
before the meeting.
X_______________________________
Please sign this Proxy exactly as name appears
at left. Note: When signing as an attorney,
trustee, administrator or guardian, please give
your title as such.
Date Signed: _____________________
<PAGE>
