<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
Century South Banks
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
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(2) Form, Schedule or Registration Statement No.:
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(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 CENTURY SOUTH BANKS]
April 20, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Century South Banks, Inc. ("CSBI") which will be held at 10:00 a.m.,
Gainesville, Georgia time, Wednesday, May 24, 2000, at the Georgia Mountains
Center Theatre, 301 Main Street, S.W., Gainesville, Georgia 30501. There will be
a reception in Room B beginning at 9:00 a.m., during which we hope you will join
us for refreshments and get a chance to meet and talk to the Directors and
Senior Officers of CSBI.
The enclosed Notice of Annual Meeting and Proxy Statement contain details
regarding the business to come before the shareholders at the Annual Meeting.
Please sign and return your proxy in the enclosed envelope at your earliest
convenience to assure that your shares will be represented and voted at the
Annual Meeting even if you cannot attend. If you do attend and wish to vote in
person, you may cancel the proxy at the Annual Meeting. It is important that
you complete and mail your proxy as soon as possible.
At the Annual Meeting, you will vote on proposals to (i) elect 11 directors to
serve for the ensuing year, and (ii) ratify the appointment of KPMG LLP as
independent certified public accountants of CSBI for the 2000 calendar year.
If you plan to attend the Annual Meeting, please mark the appropriate box on
your proxy card to help us make arrangements for the meeting.
CSBI's Board of Directors at present knows of no other business to be presented
at the Annual Meeting. If you should have questions concerning the Annual
Meeting, please feel free to call me at (678) 624-1366.
For the Board of Directors,
/s/ Susan J. Anderson
---------------------
Susan J. Anderson,
Senior Vice President
and Corporate Secretary
<PAGE>
CENTURY SOUTH BANKS, INC.
2325 Lakeview Parkway, Suite 450
Alpharetta, Georgia 30004-1976
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
TIME............................10:00 A.M. Gainesville, Georgia Time
Wednesday, May 24, 2000
PLACE...........................Georgia Mountains Center Theatre
301 Main Street, S.W.
Gainesville, Georgia 30501
ITEMS OF BUSINESS...............(1) To vote on a proposal to elect 11
directors to serve for the ensuing year.
(2) To vote on a proposal to ratify the
appointment of KPMG LLP to serve as the
certified public accountants for CSBI for
the 2000 calendar year.
(3) To transact such other business as may
properly come before the meeting and any
adjournments or postponements thereof.
RECORD DATE ....................Holders of CSBI common stock of record at the
close of business on April 10, 2000, are
entitled to vote at the meeting.
SUMMARY ANNUAL REPORT...........The Company's 1999 summary annual report, which
is not a part of the proxy soliciting material,
is enclosed.
PROXY VOTING ...................It is important that your shares be represented
and voted at the meeting. You can vote your
shares by completing and returning the proxy
card sent to you. You can revoke a proxy at any
time prior to its exercise at the meeting by
following the instructions in the accompanying
proxy statement.
/s/ Susan J. Anderson
---------------------
SUSAN J. ANDERSON
Senior Vice President and
April 20, 2000 Corporate Secretary
<PAGE>
[LOGO OF CENTURY SOUTH BANKS]
2325 Lakeview Parkway, Suite 450
Alpharetta, Georgia 30004-1976
PROXY STATEMENT
_____________________________________________________________________
Century South Banks, Inc. ("CSBI") is providing these proxy materials in
connection with the solicitation by the Board of Directors of CSBI of proxies to
be voted at CSBI's 2000 Annual Meeting of Shareholders and at any meeting
following adjournments or postponements thereof (the "Annual Meeting").
You are cordially invited to attend the Annual Meeting on May 24, 2000,
beginning at 10:00 a.m., Gainesville, Georgia time. The meeting will be held at
the Georgia Mountains Center Theatre, 301 Main Street, S.W., Gainesville,
Georgia 30501.
Solicitation, Voting and Revocability of Proxies
The cost of the solicitation of proxies will be borne by CSBI. In addition to
solicitation by mail, arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxy materials to their
principals, and CSBI will reimburse them for their expenses in so doing. CSBI
may use the services of its Directors, Officers and others to solicit proxies,
personally or by telephone, facsimile or other electronic means, without
additional compensation.
CSBI shareholders as of the close of business on April 10, 2000 are entitled to
notice of and to vote at the Annual Meeting. At the close of business on that
date, 13,799,050 shares of CSBI common stock, $1.00 par value per share, were
outstanding. Each share outstanding on the record date will be entitled to one
vote. Treasury shares are not voted. As of the record date, CSBI common stock
was held of record by 3,032 shareholders. The approximate date of the mailing of
this proxy statement and accompanying form of proxy is April 20, 2000.
Shareholders are urged to sign and date the enclosed proxy card and return it as
promptly as possible in the envelope enclosed for that purpose.
Any CSBI shareholder who has delivered a proxy may revoke it at any time before
it is voted by giving notice of revocation in writing or submitting to CSBI a
signed proxy card bearing a later date, provided that such notice or proxy card
is actually received by CSBI before the vote of shareholders. Any notice of
revocation should be sent to Century South Banks, Inc., c/o Registrar and
Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016. A proxy will
not be revoked by death or supervening incapacity of the shareholder executing
the proxy unless, before the vote, notice of such death or incapacity is filed
with the Corporate Secretary.
The shares of CSBI common stock represented by properly executed proxies
received at or prior to the Annual Meeting and not subsequently revoked will be
voted as directed in such proxies. If instructions are not given, shares
represented by proxies received will be voted for the election of the 11
nominees for director named in this proxy statement, for the ratification of
KPMG LLP as certified public accountants for the calendar year 2000 and, in the
discretion of the proxy holder, as to any other matters that properly may come
before the Annual Meeting.
<PAGE>
Each outstanding share of CSBI common stock on the record date is entitled to
one vote on all matters to be voted upon. Directors shall be elected by the
affirmative vote of a plurality of the votes cast by CSBI shareholders voting in
person or by proxy at the Annual Meeting. All other matters voted on at the
Annual Meeting shall require the affirmative vote of a majority of the votes
cast by CSBI shareholders voting in person or by proxy at the Annual Meeting.
Thus, abstentions and broker non-votes will not be included in the vote totals
and will not affect the outcome of the vote.
Shareholder Account Maintenance
CSBI's transfer agent is Registrar and Transfer Company of Cranford, New Jersey.
All communications concerning accounts of shareholders of record, including
address changes, name changes, inquiries as to requirements to transfer CSBI
stock and similar issues can be handled by calling Registrar and Transfer
Company's toll free number 1-800-368-5948. For other company information, you
can visit CSBI's internet site at http://www.csbi.com or write Susan J.
-------------------
Anderson, Senior Vice President and Corporate Secretary of CSBI. The mailing
address of the principal executive offices of CSBI is 2325 Lakeview Parkway,
Suite 450, Alpharetta, Georgia 30004-1976 and the telephone number at such
address is (678) 624-1366.
MATTERS TO BE VOTED UPON
The following matters will be voted upon at the Annual Meeting:
ITEM NUMBER 1 - ELECTION OF DIRECTORS
The members of the Board of Directors of CSBI are elected by CSBI's
shareholders. CSBI's Board of Directors presently consists of 11 members.
Approval of directors requires the affirmative vote of a plurality of the votes
cast by CSBI's shareholders.
CSBI's Board of Directors has nominated 11 persons for election as directors at
the Annual Meeting. If for any reason any nominee should become unable or
unwilling to accept nomination or election, the persons named on the enclosed
proxy card will have discretionary authority to vote proxies for the election of
another nominee designated by CSBI's Board of Directors. Management of CSBI
believes that each nominee will serve if elected.
The persons listed below have been nominated for election to CSBI's Board of
Directors. Each of the nominees currently serves as a director of CSBI. The
name, age, principal occupation and employment for the past five years of each
of the director nominees of CSBI are described below.
CSBI's Board of Directors recommends that CSBI's shareholders vote "FOR"
approval of Item Number 1 in order to elect the slate of 11 nominees.
2
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________________________________________________________________________________
WILLIAM H. ANDERSON, II
Director since 1997
Age 62
Mr. Anderson has been the Chairman of CSBI since December 1997. Until that
time, Mr. Anderson served as Chairman of Bank Corporation of Georgia ("BCG")
prior to its merger into CSBI in December 1997. Mr. Anderson is also the
Chairman of Southern Trust Insurance Company, Macon, Georgia.
________________________________________________________________________________
JAMES R. BALKCOM, JR.
Director since 1997
Age 55
Mr. Balkcom has been the Chairman of PAMECO Corp. ("PAMECO"), a distributor of
heating, ventilation and air conditioning equipment and parts, located in
Norcross, Georgia since February 1996. Mr. Balkcom served as Chairman and
President of Techsonic Industries, Inc., a manufacturer of depth finders, from
1977 through 1995.
________________________________________________________________________________
WILLIAM L. CHANDLER
Director since 1996
Age 77
Mr. Chandler owns Chandler Farm and is President of Chandler-Stovall, a real
estate investment and management company, in Ila, Georgia. Mr. Chandler has
owned Chandler Farm and served as President of Chandler-Stovall for more than
five years.
________________________________________________________________________________
Joseph W. Evans
Director since 1997
Age 50
Mr. Evans has been the President, Chief Operating Officer and Chief Financial
Officer of CSBI since December 1997. Mr. Evans was named Chief Executive
Officer of CSBI in January 2000. Prior to its merger into CSBI in December
1997, Mr. Evans was the President and Chief Executive Officer of BCG since 1984.
________________________________________________________________________________
JAMES A. FAULKNER
Director since 1981
Age 55
Mr. Faulkner has been the Vice Chairman of CSBI since December 1997. Mr.
Faulkner served as Chief Executive Officer of CSBI from 1991 until January 2000.
Prior to that time, Mr. Faulkner was the President of CSBI from 1989 until 1997.
________________________________________________________________________________
THOMAS T. FOLGER, JR.
Director since 1981
Age 65
Mr. Folger is a partner in Folger Poultry Farms, Dahlonega, Georgia, and has
held this position for more than five years.
________________________________________________________________________________
3
<PAGE>
________________________________________________________________________________
Quill O. Healey
Director since 1997
Age 60
Mr. Healey has been the Chairman of the United States affiliate of J&H Marsh &
McLennan, a multi-line insurance broker, since March 1999. Prior to that time,
Mr. Healey was the Chairman and Chief Executive Officer of Sedgwick, Inc., a
multi-line insurance broker with offices in Atlanta, Georgia since 1990.
________________________________________________________________________________
J. RUSSELL IVIE
Director since 1981
Age 64
Mr. Ivie has been the Vice Chairman of CSBI since December 1997. Prior to that
time, Mr. Ivie was Chairman of CSBI since 1989.
________________________________________________________________________________
Frank C. Jones
Director since 1997
Age 74
Mr. Jones is a partner in the law firm of King & Spalding, Atlanta, Georgia and
has held this position for more than five years.
________________________________________________________________________________
JOHN B. MCKIBBON, III
Director since 1997
Age 44
Mr. McKibbon is the Chief Executive Officer of McKibbon Brothers, Inc., a hotel
development and management company with holdings in six southeastern states, and
has held this position for more than five years. Mr. McKibbon is also a
director of HCI Communications, Inc. and Applied Innovations, Inc., both located
in Gainesville, Georgia.
________________________________________________________________________________
E. PAUL STRINGER
Director since 1981
Age 68
Mr. Stringer owns and operates Stringer Insurance Agency, Dahlonega, Georgia,
and has held this position for more than five years.
________________________________________________________________________________
Proxies received by CSBI will be voted "FOR" all of the above nominees unless a
shareholder specifies a contrary choice in his proxy.
BOARD COMMITTEES AND MEETINGS
The CSBI Board of Directors held seven meetings in 1999. All of the directors
except James R. Balkcom, Jr. and Quill O. Healey attended at least 75% of the
meetings.
Information regarding the functions of certain of the committees of the CSBI
Board of Directors and their present membership is presented below.
The Audit Committee annually reviews and recommends to the CSBI Board of
Directors the firm to be engaged as CSBI's independent certified public
accountants for the next calendar year, reviews the plan and results of the
audit engagement with the independent certified public accountants, inquires as
to the adequacy of CSBI's
4
<PAGE>
internal control structure, and considers each professional service provided by
the independent certified public accountants, and whether the providing of such
service impairs the independence of the accountants. The members of the Audit
Committee are: Frank C. Jones, Chairman, William L. Chandler, John B. McKibbon,
III and E. Paul Stringer. The Audit Committee met four times in 1999.
The Executive Committee, during the intervals between meetings of the CSBI Board
of Directors, may, subject to certain exceptions, exercise the powers of the
Board of Directors. The members of the Executive Committee are: William H.
Anderson, II, Joseph W. Evans, James A. Faulkner and J. Russell Ivie. The
Executive Committee met seven times in 1999.
All of the members of the CSBI Board of Directors serve as the Nominating
Committee, which nominates individuals to serve as members of the CSBI Board of
Directors. The Nominating Committee met once in 1999.
The Personnel and Compensation Committee (the "Compensation Committee")
periodically reviews the compensation and other benefits provided to personnel
of CSBI and advises the CSBI Board of Directors with respect to such
compensation. The members of the Compensation Committee are: James R. Balkcom,
Jr., Chairman, Thomas T. Folger, Jr. and Quill O. Healey. The Compensation
Committee met four times in 1999.
DIRECTOR COMPENSATION
Officers of CSBI who are also directors do not receive any fee or remuneration
for services as members of the CSBI Board of Directors. In 1999, non-management
directors of CSBI received a fee of $4,000 per quarter with the exception that
Thomas T. Folger, Jr. received an additional $100 for each Executive Loan
Committee meeting attended, William H. Anderson, II received fees of $85,000 for
serving as Chairman of the CSBI Board of Directors and J. Russell Ivie received
fees of $88,621 for serving as Vice Chairman of the CSBI Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, and related
regulations of the Securities and Exchange Commission ("SEC") require CSBI's
officers and directors, and persons who own more than 10% of CSBI's common
stock, to file reports of their ownership of CSBI's common stock with the SEC
and the Nasdaq National Market System ("Nasdaq"). The regulations also require
these persons to furnish CSBI with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of those reports furnished to CSBI,
CSBI believes that all filing requirements applicable to such persons were
complied with in 1999.
5
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of CSBI's outstanding
common stock by (i) the current director nominees and executive officers named
herein, and (ii) all executive officers and the current directors as a group, as
of March 15, 2000. Unless otherwise indicated, the listed persons are the
owners of record and have sole voting and investment powers over their shares.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Amount and Nature of
Name Beneficial Ownership Percent of Class
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
William H. Anderson, II 744,504/(1)/ 5.4
James B. Balkcom, Jr. 3,000/(2)/ *
William L. Chandler 202,000/(3)/ 1.5
Stephen W. Doughty 158,569/(4)/ 1.1
Joseph W. Evans 362,522/(5)/ 2.6
James A. Faulkner 145,446/(6)/ 1.1
Thomas T. Folger, Jr. 172,080/(7)/ 1.2
Quill O. Healey 10,000/(8)/ *
J. Russell Ivie 300,002/(9)/ 2.2
Frank C. Jones 7,500/(10)/ *
John B. McKibbon, III 12,800/(11)/ *
E. Paul Stringer 228,882/(12)/ 1.7
J. Thomas Wiley, Jr. 150,424/(13)/ 1.1
Sidney J. Wooten 46,500/(14)/ *
All Executive Officers and Current
Directors as a Group (17 persons) 2,631,589 19.0
</TABLE>
________________
* less than 1%
/(1)/ Includes 65,407 shares owned individually and an aggregate of 679,097
shares held by certain corporations, partnerships and trusts as to which
Mr. Anderson has voting and/or investment power. Does not include 3,019
shares owned by Mr. Anderson's wife individually, as to which he
disclaims beneficial ownership.
/(2)/ Includes 3,000 shares owned individually which are held in street name.
/(3)/ Includes 82,000 shares owned individually and 120,000 shares owned by a
corporation, which Mr. Chandler controls. Does not include 5,600 shares
owned by Mr. Chandler's wife individually, to which he disclaims
beneficial ownership.
/(4)/ Includes 12,599 shares owned individually, 83,151 shares owned
individually which are in street name, 21,319 shares held in a savings
plan and 40,000 shares subject to stock options under the ISO Plan as to
which Mr. Doughty disclaims beneficial ownership. Also includes 1,500
shares of restricted stock subject to forfeiture granted under CSBI's
Executive Stock Plan.
6
<PAGE>
/(5)/ Includes 188,403 shares owned individually, 36,625 shares owned
individually which are held in street name, 40,500 shares held in a
family partnership and 47,494 shares held in a savings plan and includes
47,250 shares subject to stock options under the ISO Plan as to which Mr.
Evans disclaims beneficial ownership. Also includes 2,250 shares of
restricted stock subject to forfeiture granted under CSBI's Executive
Stock Plan.
/(6)/ Includes 81,216 shares owned individually, 56 shares owned jointly with
Mr. Faulkner's wife, 3,350 shares held in street name, 18,574 shares held
in a savings plan, and 40,000 shares subject to stock options under the
ISO Plan as to which Mr. Faulkner disclaims beneficial ownership. Also
includes 2,250 shares of restricted stock subject to forfeiture granted
under the CSBI Executive Stock Plan.
/(7)/ Includes 165,195 shares owned individually, 5,234 shares held in a self
directed retirement account owned individually and 1,651 shares which are
held in street name in a retirement account owned individually. Does not
include 20,335 shares owned individually by Mr. Folger's wife and 4,866
shares owned by Mr. Folger's wife jointly with their children.
/(8)/ Includes 10,000 shares owned individually which are held in street name.
/(9)/ Includes 139,080 shares owned individually, 14,434 shares owned jointly
with Mr. Ivie's wife, 19,206 shares held in street name, 19,277 shares
owned by a trust of which he serves as the trustee and is a beneficiary,
14,429 shares which are held in street name owned individually in a
retirement account, 32,357 shares which are held in street name owned by
a limited partnership, 46,305 shares owned by a limited partnership of
which he is a limited partner and 14,914 shares held in a savings plan.
Does not include 125 shares owned by Mr. Ivie's wife as to which he
disclaims beneficial ownership.
/(10)/ Includes 7,500 shares owned individually which are held in street name.
Does not include 1,000 shares owned in street name by Mr. Jones' wife as
to which he disclaims beneficial ownership.
/(11)/ Includes 12,700 shares owned individually which are held in street name
and 100 shares owned by a corporation as to which Mr. McKibbon has voting
and/or investment power which are held in street name.
/(12)/ Includes 190,262 shares owned individually, 10,000 shares owned jointly
with Mr. Stringer's wife and children, 750 shares owned jointly with his
wife, 18,294 shares owned by a corporation as to which Mr. Stringer has
voting and/or investment power and 3,000 shares held in a retirement
account owned individually. Does not include 43,164 shares owned
individually by Mr. Stringer's wife and 1,904 shares in a retirement
account owned individually by Mr. Stringer's wife as to which he
disclaims beneficial ownership.
/(13)/ Includes 88,073 shares owned individually which are held in street name
and 20,851 shares held in a savings plan and 40,000 shares subject to
stock options under the ISO Plan as to which Mr. Wiley disclaims
beneficial ownership. Also includes 1,500 shares of restricted stock
subject to forfeiture granted under CSBI's Executive Stock Plan.
/(14)/ Includes 5,000 shares owned individually which are held in street name in
a retirement account and 40,000 shares subject to stock options under the
ISO Plan as to which Mr. Wooten disclaims beneficial ownership. Also
includes 1,500 shares earned of restricted stock subject to forfeiture
granted under CSBI's Executive Stock Plan.
7
<PAGE>
EXECUTIVE COMPENSATION
The following tables and narrative text discuss the compensation paid or accrued
over the past three years for CSBI's Chief Executive Officer and CSBI's four
other most highly compensated executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------- ---------------------------------------------
Restricted Stock Securities All Other
Salary Bonus Awards Underlying Compensation
Name and Principal Position Year ($) ($) ($)/(7)/ Options (#) ($)/(1)/
- --------------------------- ---- ------- ------ ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James A. Faulkner, Vice Chairman/(2)/ 1999 250,000 62,500 -0- -0- 7,643
1998 239,275 86,982 76,642 40,000 9,945
1997 210,000 84,000 -0- -0- 10,085
Joseph W. Evans, President, Chief Executive 1999 225,000 56,250 -0- -0- 5,405
Officer, Chief Operations Officer and Chief 1998 215,600 78,708 76,642 -0- 5,540
Financial Officer/(3)/ 1997 178,400 80,100 -0- -0- 15,106
Sidney J. Wooten, Executive Vice President 1999 180,000 41,410 -0- 15,000 5,621
and Regional Executive/(4)/ 1998 180,000 60,480 51,095 -0- 3,915
1997 52,500 40,000 -0- 25,000 226
Stephen W. Doughty, Executive Vice President 1999 175,000 21,875 -0- 40,000 5,405
and Chief Credit Officer/(5)/ 1998 170,350 32,844 51,095 -0- 5,518
1997 120,000 48,000 -0- -0- 40,243
J. Thomas Wiley, Jr. Executive Vice 1999 161,400 20,175 -0- 40,000 5,405
President and Chief Banking Officer/(6)/ 1998 145,883 29,325 51,095 -0- 5,518
1997 120,000 48,000 -0- -0- 38,541
</TABLE>
______________________________
/(1)/ For 1999 includes: for Mr. Faulkner, deferred compensation of $1,433,
insurance premiums paid by CSBI of $1,210 and contributions to a savings
plan of $5,000; for Mr. Evans, insurance premiums paid by CSBI of $405 and
contributions to a savings plan of $5,000; for Mr. Wooten insurance
premiums of $621 paid by CSBI and contributions to a savings plan of
$5,000; for Mr. Doughty, insurance premiums paid by CSBI of $405, and
contributions to a savings plan of $5,000; for Mr. Wiley, insurance
premiums paid by CSBI of $405 and contributions to a savings plan of
$5,000.
/(2)/ Mr. Faulkner served as Chief Executive Officer of CSBI until January 2000.
/(3)/ Mr. Evans began serving as Chief Executive Officer of CSBI in January
2000. Mr. Evans began serving as President, Chief Operating Officer and
Chief Financial Officer in December 1997. Amounts prior to such time were
paid by BCG which was merged into CSBI in December 1997.
/(4)/ Mr. Wooten assumed this position on September 15, 1997. Mr. Wooten was
previously employed with another bank holding company.
/(5)/ Mr. Doughty assumed this position in December 1997. Amounts prior to such
time were paid by BCG which was merged into CSBI in December 1997.
/(6)/ Mr. Wiley was elected as an executive officer of CSBI on July 22, 1998.
Mr. Wiley is paid by AmeriBank, N.A., a CSBI banking subsidiary. Mr. Wiley
served as President and Chief Executive Officer of AmeriBank, N.A. through
1999.
/(7)/ The earning of such awards is based upon CSBI attaining specific earnings
per share ("EPS") performance goals as established by CSBI's Compensation
Committee. Upon attaining various EPS levels, the awards are earned over a
five-year period. The earning of such awards is subject to a service
condition which shall be satisfied if the participant remains in the
continuous employ of CSBI and its subsidiaries from the grant date through
the earlier of the date the participant reaches age 62 or the 10th
anniversary of the date such grant is made. Upon a change in control of
CSBI, all awards or portions of awards earned up until such date become
vested and payable. Prior to vesting, the participant is eligible to
receive dividends on and to vote the restricted shares. For 1999, no
awards were earned.
8
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information concerning options granted
during 1999 to the named executives:
<TABLE>
<CAPTION>
Individual Grants
----------------- Potential Realizable Value
Number of % to Total At Assumed Annual Rates of
Securities Options Exercise Stock Price Appreciation
Underlying Granted to or Base for Option Term/(1)/
Options Employees in Price Expiration ---------------------------
Name Granted Fiscal Year ($/Share) Date 5%($) 10%($)
- ---- ----------- ------------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Stephen W. Doughty 40,000 28.1 23.875 11/24/09 600,594 1,522,024
J. Thomas Wiley, Jr. 40,000 28.1 23.875 11/24/09 600,594 1,522,024
Sidney J. Wooten, III 15,000 10.4 23.875 11/24/09 225,223 570,759
</TABLE>
___________________________________
/(1)/ The dollar gains under these columns result from calculations assuming 5%
and 10% growth rates as set by the SEC and are not intended to forecast
future price appreciation of CSBI Common Stock. The gains reflect a future
value based upon growth at these prescribed rates. CSBI did not use an
alternative formula for a grant date valuation, an approach which would
state gains at present, and therefore, lower, value. CSBI is not aware of
any formula, which will determine with reasonable accuracy a present value
based on future unknown or volatile factors.
It is important to note that options have value to recipients, including the
listed executives, only if the price of CSBI's common stock advances beyond the
exercise or base price shown in the table during the effective option period.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
The following table sets forth certain information regarding the exercise of
stock options during 1999 by the named executives and the value of options held
by such persons at the end of 1999.
<TABLE>
<CAPTION>
Securities Underlying Value of Unexercised
Unexercised In-the-Money
Shares Options at FY-end (#) Options at FY-end($)
Acquired on Value --------------------------------- -------------------------------
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------ ------------ --------------------------------- -------------------------------
<S> <C> <C> <C> <C>
James A. Faulkner 2,500 $57,188 0/0 $ 0/$0
3,000 $25,875 0/0 $ 0/$0
40,000/0 $ 0/$0
Joseph W. Evans -0- -0- 47,250/0 $ 832,219/$0
Sidney J. Wooten -0- -0- 5,000/20,000 $20,625/$82,500
-0- -0- 0/15,000 $ 0/$0
Stephen W. Doughty -0- -0- 0/40,000 $ 0/$0
J. Thomas Wiley, Jr. -0- -0- 0/40,000 $ 0/$0
</TABLE>
9
<PAGE>
PERFORMANCE GRAPH
CSBI has made previous filings with the SEC under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, that incorporate
future filings, including this Proxy Statement, in whole or in part. However,
the following Performance Graph and the Report of the Compensation Committee of
the Board of Directors of CSBI shall not be incorporated by reference in any
such filings. The following performance graph comparing CSBI's cumulative total
shareholder return with the total return of a performance indicator of broad
equity market index includes companies whose securities are traded on the Nasdaq
Stock Market. CSBI has selected the Nasdaq National Market (US Companies) as
the broad equity market index. This index includes all domestic common shares
traded on the NASDAQ National Market Value Index and a peer group comparison.
The peer group comparison is the Media General Industry Group, which was
comprised of 109 South Atlantic Banks.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG CENTURY SOUTH BANKS, INC.,
NASDAQ MARKET INDEX AND MG GROUP INDEX
[GRAPH GOES HERE]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Century South Banks, Inc. 100 134.68 151.91 205.73 243.97 199.71
MG Group Index 100 147.17 196.61 320.65 352.96 279.3
NASDAQ Market Index 100 129.71 161.18 197.16 278.08 490.46
</TABLE>
10
<PAGE>
Compensation Committee Report
- -----------------------------
The Compensation Committee of the Board of Directors of CSBI ("the Compensation
Committee") approves compensation objectives and policy for all employees and
sets compensation for CSBI's executive officers, including the individuals named
in the Summary Compensation Table. CSBI's executive compensation program, as
administered by the Compensation Committee, consists primarily of (i) annual
cash compensation, the components of which are base salary and an annual
variable cash incentive ("bonus"), and (ii) long-term equity-based incentive
compensation, consisting of stock options and stock awards.
The following is a report submitted by the Compensation Committee addressing
CSBI's compensation policy as it related to CSBI's Chief Executive Officer and
other executive officers during 1999.
Base Salary and Bonuses. CSBI does not have a formalized program regarding the
total compensation of executive officers. The base salary for CSBI's Chief
Executive Officer is set in accordance with his employment contract and may be
adjusted annually. See "Employment and Severance Agreements." Other officers
and employees are compensated within salary ranges that are generally based on
similar positions in companies of comparable size and complexity to CSBI.
Accordingly, the Compensation Committee's approach is to offer competitive
salaries in comparison with market practices. While base salary continues to be
a significant part of CSBI's total compensation package, CSBI has introduced a
pay-for-performance element through its Incentive Compensation Plan.
The Compensation Committee makes salary decisions for executive officers with
input from CSBI's Chief Executive Officer. The review considers, experience,
work performance, and CSBI's overall performance.
The payment of bonuses in 1999 to CSBI's Chief Executive Officer and other
executive officers was based upon CSBI's Incentive Compensation Plan, which
requires, among other things, that certain earnings goals be attained by CSBI.
Incentive Stock Option Plan. CSBI's Incentive Stock Option Plan (the "ISO
Plan") is CSBI's long-term incentive plan for executive officers and key
employees. The objective of the ISO Plan is to enable executive officers and
key employees to develop and maintain a significant long-term ownership position
in CSBI's common stock. The ISO Plan is administered by the Compensation
Committee. Grants have been generally based on factors such as CSBI's
performance, salary level and the individual's contribution to CSBI. During
1999, there were 142,941 options granted under the ISO Plan.
Executive Stock Plan. CSBI's 1998 Executive Stock Plan was designed to promote
the interests of CSBI through grants to key employees of options to purchase
stock, grants of stock appreciation rights and grants of restricted stock in
order (i) to attract and retain key employees, (ii) to provide an additional
incentive to each key employee to work to increase the value of CSBI's stock,
and (iii) to provide each key employee with a stake in the future of CSBI.
During 1999, 39,000 restricted stock awards were made under CSBI's Executive
Stock Plan.
Compensation of Chief Executive Officer. Amounts earned during 1999 by CSBI's
Chief Executive Officer, James A. Faulkner, are shown in the Summary
Compensation Table. Mr. Faulkner's base salary was set pursuant to the terms of
his employment agreement with CSBI. This agreement provides for a base annual
salary of $250,000, which may be adjusted annually by the agreement of the
parties. See "Employment and Severance Agreements." Mr. Faulkner received a
bonus of $62,500 in 1999. The amount of his bonus was based on CSBI's
Incentive Compensation Plan.
11
<PAGE>
The foregoing report on executive compensation is provided by the following non-
employee directors, who constituted the Compensation Committee during 1999:
James R. Balkcom, Jr., Chairman
Thomas T. Folger, Jr.
Quill O. Healey
Employment and Severance Agreements
- -----------------------------------
CSBI has entered into an employment agreement with James A. Faulkner.
Employment under the agreement ends on December 31, 2011, unless Mr. Faulkner
dies before such date. Mr. Faulkner's annual base compensation under the
agreement, for the period from January 1, 2000 to December 31, 2000, is
$250,000. For the period from January 1, 2001 to December 31, 2005, Mr.
Faulkner's annual base compensation shall be $200,000 and, for the period from
January 1, 2006 to December 31, 2011, Mr. Faulkner's annual base compensation
shall be an amount not less than $100,000.
Under the employment agreement, which commenced on November 1, 1995, Mr.
Faulkner served as Vice Chairman and Chief Executive Officer of CSBI until
January 1, 2000. For the period beginning on January 1, 2000 and ending on
December 31, 2005, Mr. Faulkner will serve as Vice-Chairman of CSBI and
Chairman of the Executive Committee of the Board of Directors of CSBI,
primarily focusing on mergers and acquisitions. In addition during this period,
Mr. Faulkner will serve as a member of the Board of Directors of up to five of
CSBI's bank subsidiaries. For the period beginning on January 1, 2006 and
ending on December 31, 2011, it is contemplated that Mr. Faulkner's services to
CSBI will be reduced. Mr. Faulkner's specific duties during this period shall
be determined by CSBI's Board of Directors on or before September 30, 2005.
Mr. Faulkner's employment agreement also provides that if he is terminated for
any reason other than for cause he will receive severance benefits equal to the
remaining term of the contract. If Mr. Faulkner terminates the agreement for
reasons such as a material change by CSBI in his duties and responsibilities or
as a result of the merger or consolidation of CSBI, he shall receive severance
benefits from CSBI equal to two and eleven- twelfths (2-11/12) multiplied by Mr.
Faulkner's annual compensation, including salary, bonuses, perquisites, and all
other forms of compensation for the fiscal year ended immediately preceding the
date of change of control.
Incentive Stock Option Plan
- ---------------------------
CSBI's ISO Plan authorizes CSBI to grant incentive stock options to eligible
employees as determined by the ISO Plan. The ISO Plan is administered by the
Compensation Committee, which determines those eligible employees to whom
options will be granted and the number of options granted to each eligible
employee. The Compensation Committee also prescribes the terms and conditions
of each option granted, including the purchase price per share as to each
option. During 1999, 142,941 options were granted under the ISO Plan.
Savings Plan
- ------------
CSBI has adopted a savings plan and permits all eligible employees to
participate. During 1998, as a result of the merger of BCG into CSBI, BCG merged
its 401(k) Savings Plan into CSBI's Amended and Restated Employee Stock
Ownership Plan. The resulting plan is called the Century South Banks, Inc.
Savings Plan (the "Savings Plan"). In conjunction with the merger of the two
plans, CSBI has ceased to make contributions to the employee stock ownership
feature of the Savings Plan and has elected to increase the percentage of
employee deferrals, which are then matched by CSBI. CSBI's contribution to the
Savings Plan for the year ended December 31, 1999 was $593,000. Contributions
made by CSBI during such year were $5,000 for each of
12
<PAGE>
Messrs. Faulkner, Evans, Doughty, Wiley and Wooten. Each of Messrs. Faulkner,
Evans, Doughty, Wiley and Wooten are fully vested pursuant to the terms of the
Savings Plan.
Deferred Compensation Plan
- --------------------------
CSBI has entered into salary continuation agreements with James A. Faulkner and
Tony E. Collins. These agreements provide for CSBI to pay death and disability
benefits to each of Messrs. Faulkner and Collins or their beneficiaries, subject
to certain vesting requirements and other limitations, and are funded by life
insurance policies. No benefits were paid under these agreements in 1999.
Executive Stock Plan
- --------------------
On April 1, 1998, the Board of Directors of CSBI adopted the Century South
Banks, Inc. 1998 Executive Stock Plan (the "Executive Stock Plan") which was
approved by the shareholders on May 13, 1998. The purpose of the Executive
Stock Plan is to encourage and provide an additional incentive to officers and
other key employees of CSBI to increase the value of CSBI and its common stock
by permitting them to acquire a significant equity interest in CSBI. The
Executive Stock Plan is also intended to aid CSBI in attracting and retaining
superior personnel and to strengthen their desire to remain in CSBI's employ.
Up to 3.5% of CSBI's outstanding common stock has been reserved for issuance in
connection with awards granted under the Executive Stock Plan. Such shares may
be awarded from authorized and unissued shares or from previously issued shares,
which are acquired in open market purchases. The Executive Stock Plan is
administered by the Compensation Committee, none of the members of which are
eligible to participate in the Executive Stock Plan.
The Executive Stock Plan provides for the issuance of shares of CSBI common
stock through grants of options to purchase CSBI common stock, grants of stock
appreciation rights and grants of restricted stock. The Executive Stock Plan
allows for the issuance of incentive stock options and options which will not be
treated as incentive stock options. Participants are not required to pay for
shares of CSBI common stock awarded as restricted stock. During 1999, 39,000
shares of CSBI common stock awards were granted under the Executive Stock Plan.
Certain Transactions
- --------------------
E. Paul Stringer, director, owns Stringer Insurance Agency in Dahlonega,
Georgia, which was paid insurance premiums during 1999 by CSBI and its
subsidiaries in an amount equal to $124,554. In the opinion of management,
these premiums are fair and reasonable and are as favorable to CSBI as those
which could have been obtained from unrelated third parties.
William H. Anderson, II, director, is a limited partner in a limited partnership
that owns two of the bank buildings which CSBI and its subsidiary, First South
Bank, N.A., lease at rates which, in the opinion of management, are fair and
reasonable and are as favorable to CSBI as those which could have been obtained
from unrelated third parties. CSBI and First South Bank, N.A. paid to Mr.
Anderson $124,690 in connection with such lease payments.
Frank C. Jones, director, is a partner in the law firm of King & Spalding. King
& Spalding rendered legal services to CSBI and its subsidiaries in 1999 and may
render legal services to CSBI and its subsidiaries in 2000.
In the ordinary course of banking business, CSBI and its subsidiaries have had,
and anticipate that they will continue to have, transactions with various
directors, officers, principal shareholders of CSBI, and their associates. All
loans and commitments to extend loans included in such transactions were made
substantially on the same terms, including interest rates and collateral, as
those prevailing
13
<PAGE>
from time to time for comparable transactions with other unaffiliated persons.
In the opinion of management, such loans and commitments do not involve more
than a normal risk of collectibility or present any other unfavorable features.
ITEM NUMBER 2 - RATIFICATION OF ACCOUNTANTS
CSBI's Board of Directors has appointed the firm of KPMG LLP to serve as
independent certified public accountants of CSBI for the calendar year ending
December 31, 2000, subject to ratification by the shareholders of CSBI. KPMG LLP
has served as independent certified public accountants of CSBI since 1983.
Ratification of the appointment of the independent certified public accountants
requires the affirmative vote of a majority of the votes cast by the holders of
the shares of CSBI common stock voting in person or by proxy at the Annual
Meeting. If CSBI's shareholders should not ratify the appointment of KPMG LLP,
CSBI's Board of Directors will reconsider the appointment. If CSBI's
shareholders ratify the appointment, CSBI's Board of Directors, in its sole
discretion, may still direct the appointment of new independent certified public
accountants at any time during 2000 if it believes that such a change would be
in the best interests of CSBI.
CSBI expects a representative of KPMG LLP to attend the Annual Meeting and
expects that the representative will have the opportunity to make a statement if
he desires to do so. It is further anticipated that such representative will be
available to respond to appropriate questions.
CSBI's Board of Directors recommends that CSBI's shareholders vote "FOR"
approval of Item Number 2 in order to ratify the appointment of KPMG LLP to
serve as independent certified public accountants for the year ending December
31, 2000.
SHAREHOLDER PROPOSALS FOR INCLUSION IN NEXT YEAR'S PROXY STATEMENT
Any shareholder proposal intended for inclusion in CSBI's Proxy Statement for
the 2001 Annual Meeting must be received at CSBI's principal executive offices
no later than December 21, 2000. Proposals should be addressed to Susan J.
Anderson, Corporate Secretary, Century South Banks, Inc., 2325 Lakeview Parkway,
Suite 450, Alpharetta, Georgia 30004-1976.
OTHER SHAREHOLDER PROPOSALS FOR PRESENTATION AT NEXT
YEAR'S ANNUAL MEETING
For any proposal that is not submitted for inclusion in next year's Proxy
Statement, but is instead sought to be presented directly at the 2001 Annual
Meeting of Shareholders, management will be able to vote proxies in its
discretion if CSBI (i) receives notice of the proposal before the close of
business on March 6, 2001, and advises shareholders in the 2001 Proxy Statement
about the nature of the matter and how management intends to vote on such
matter, or (ii) does not receive notice of the proposal prior to the close of
business on March 6, 2001. Notices of intention to present proposals at the 2001
Annual Meeting should be addressed to Susan J. Anderson, Corporate Secretary,
Century South Banks, Inc., 2325 Lakeview Parkway, Suite 450, Alpharetta, Georgia
30004-1976.
ANNUAL REPORT TO SHAREHOLDERS
Additional information concerning CSBI, including its financial statements, is
provided in CSBI's 1999 Annual Report on Form 10-K that accompanies this Proxy
Statement. Copies of exhibits filed with CSBI's Annual Report on Form 10-K or
referenced therein will be furnished to shareholders of record upon written
request and payment of CSBI's expenses in furnishing such documents. All such
requests should be made to Susan J. Anderson, Corporate Secretary, Century South
Banks, Inc., 2325 Lakeview Parkway, Suite 450, Alpharetta, Georgia 30004-1976.
14
<PAGE>
OTHER BUSINESS
Action will be taken on whatever other business may properly come before the
Annual Meeting. The CSBI Board of Directors is not aware of any other business
matters to be considered at the Annual Meeting. If other matters properly come
before the Annual Meeting, it is intended that the persons named in this proxy
will have discretionary authority to vote proxies with respect to such matters
and in accordance with the recommendations of the CSBI Board of Directors.
No director has informed CSBI that he intends to oppose any recommended action
as specified in this Proxy Statement. All directors have an interest in the vote
regarding the election of directors to office.
The CSBI Board of Directors urges you to sign and return the enclosed proxy as
promptly as possible, whether or not you plan to attend the Annual Meeting in
--------------
person. If you do attend, you may then withdraw your proxy.
/s/ Susan J. Anderson
---------------------
Susan J. Anderson
Senior Vice President
and Corporate Secretary
Alpharetta, Georgia
April 20, 2000
15
<PAGE>
CENTURY SOUTH BANKS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 24, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder(s) of Century South Banks, Inc. ("CSBI") appoint(s)
Susan J. Anderson, J. Marvin Anderson, and Robin Guthrie, and each of them, as
proxies with full power of substitution, acting by majority or by any of them if
only one is present and acting, to vote all shares of common stock of CSBI which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders to be held on May 24, 2000 at the Georgia Mountain
Center Theatre, 301 Main Street, S.W., Gainesville, Georgia 30501 at 10:00 a.m.
Gainesville, Georgia time, and any adjournments or postponements thereof, upon
the proposals described in the accompanying Notice of Annual Meeting and Proxy
Statement relating to the Annual Meeting, receipt of which is hereby
acknowledged.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE "FOR" THE FOLLOWING
PROPOSALS:
1. Proposal to elect the 11 directors named below for the ensuing year.
[ ] FOR all nominees listed below (except as marked to the contrary
below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
William H. Anderson, II; James R. Balkcom, Jr.; William L. Chandler; Joseph W.
Evans; James A. Faulkner; Thomas T. Folger, Jr.; Quill O. Healey; J. Russell
Ivie; Frank C. Jones; John B. McKibbon, III; and E. Paul Stringer
Instructions: To withhold authority to vote for any individual nominee write
that nominee's name on the space provide below:
2. Proposal to ratify the appointment of KPMG LLP to serve as independent
certified public accountants of CSBI for the 2000 calendar year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting and any
adjournments or postponements thereof.
[ ] Check here if you plan to attend the meeting.
PROXIES MUST BE RECEIVED BY CSBI PRIOR TO THE COMMENCEMENT OF THE ANNUAL MEETING
IN ORDER TO BE VOTED. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
EACH NOMINEE LISTED IN PROPOSAL 1 ABOVE AND FOR THE PROPOSAL SET OUT IN 2 ABOVE.
THIS PROXY MAY BE REVOKED BY ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON,
OR BY FILING A SUBSEQUENT PROXY WITH THE SECRETARY OF CSBI PRIOR TO OR AT THE
TIME OF THE ANNUAL MEETING.
___________________________ ___________________________
Signature of Shareholder(s) Signature of Shareholder(s)
<PAGE>
(Please date)
IF THE STOCK IS HELD BY JOINT TENANTS, OR IN THE NAME OF MORE THAN ONE PERSON,
ALL HOLDERS SHOULD SIGN. Signatures should correspond exactly with the name(s)
appearing on the label above. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please sign in
the partnership's name by authorized person(s). If signing as attorney,
executor, trustee, administrator, guardian or custodian, please indicate the
capacity in which you are acting. PLEASE MARK, DATE AND SIGN THIS PROXY AND
RETURN IT IN THE ENCLOSED POSTAGE PAID ENVELOPE.
