<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
- --------------------------------------------------------------------------------
(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)(1) 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:
(4) Date Filed:
<PAGE> 2
April 1, 1998
To the Shareholders of FIRST BANKING COMPANY OF SOUTHEAST GEORGIA:
You are cordially invited to attend the Annual Meeting of the
Shareholders of First Banking Company of Southeast Georgia (the "Company") to be
held in the Community Room of the Statesboro Mall branch of First Bulloch Bank &
Trust Company, U.S. Highway 80 East, Thursday, April 23, 1998, at 2:00 p.m. The
official notice of the Annual Meeting and the Company's Proxy Statement and
Annual Report accompany this letter.
The principal business of the meeting will be to elect directors of the
Company. We will also review the operations of the Company and its subsidiary
banks, First Bulloch Bank & Trust Company, Metter Banking Company and First
National Bank of Effingham, for the past year.
The Board of Directors of the Company is divided into three classes:
Class I, Class II and Class III. The term of one class of directors (Class I)
expires in 1998, and four of those directors (E. Raybon Anderson, A. M.
Braswell, Jr., W. A. Crider, Jr., and Dan Parrish, Jr.), have been nominated for
election to serve as Class I directors for a three-year term.
Whether or not you plan to attend the Annual Meeting, please mark, date
and sign the enclosed form of proxy, and return it to the Company in the
envelope provided as soon as possible.
Very truly yours,
/s/ James Eli Hodges
----------------------
James Eli Hodges
President
<PAGE> 3
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
40 North Main Street
Statesboro, Georgia 30458
(912) 764-6611
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 23, 1998
To the Shareholders of FIRST BANKING COMPANY OF SOUTHEAST GEORGIA:
Notice is hereby given that the Annual Meeting of Shareholders of First
Banking Company of Southeast Georgia (the "Company") will be held on Thursday,
April 23, 1998, at 2:00 p.m., in the Community Room of the Statesboro Mall
branch of First Bulloch Bank & Trust, U.S. Highway 80 East, Statesboro,
Georgia, for the following purposes:
(1) To elect four directors for a three-year term;
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 12,
1998, as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting.
All shareholders are requested to mark, date, sign and return the
enclosed form of proxy as soon as possible. If you attend the meeting and wish
to vote your shares in person, you may do so at any time before the proxy is
exercised.
By Order of the Board of Directors,
/s/ James Eli Hodges
-------------------------
James Eli Hodges
President
April 1, 1998
<PAGE> 4
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
40 North Main Street
Statesboro, Georgia 30458
(912) 764-6611
PROXY STATEMENT
-------------------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of First Banking Company of Southeast
Georgia (the "Company"), for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held on Thursday, April 23, 1998, at 2:00 p.m., in the
Community Room of the Statesboro Mall branch of First Bulloch Bank & Trust
Company, U.S. Highway 80 East, Statesboro, Georgia, and at any adjournments
thereof.
The Proxy Statement and form of proxy are first being mailed to
shareholders on or about April 1, 1998. If the enclosed proxy is properly
executed, returned and not revoked, it will be voted in accordance with the
specifications made by the shareholder. If the form of proxy is signed and
returned and specifications are not made, the proxy will be voted FOR the
election of the directors listed therein, and in accordance with the best
judgment of the proxyholders as to any other matters that may properly come
before the meeting.
Shareholders who sign proxies have the right to revoke them at any time
before they are voted by delivering to Dwayne E. Rocker, Secretary of the
Company, at the principal office of the Company, either an instrument revoking
the proxy or a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person.
The principal executive offices of the Company are located at 40 North
Main Street, Statesboro, Georgia 30458.
VOTING AT THE ANNUAL MEETING
The close of business on March 12, 1998, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting. As of the close of business on March 12, 1998, the
authorized common stock of the Company consisted of 10,000,000 shares, $1.00 par
value (the "Stock"), of which 3,762,468 shares were issued, outstanding and held
of record by 1,132 shareholders.
A quorum will be present if a majority of the votes entitled to be cast
are present in person or by valid proxy. Abstentions and broker non-votes will
be counted for the purpose of determining the presence or absence of a quorum.
Directors are elected by a plurality of the votes cast by the shares entitled to
be voted in such election. Only votes actually cast will be counted for the
purpose of determining whether a particular nominee received more votes than the
persons, if any, nominated for the same seat on the Board of Directors.
Accordingly, if authority to vote for one or more director nominees is withheld
by a shareholder represented by proxy, no vote will be cast and the outcome of
the election will not be affected. Broker "non-votes" do not exist in the
context of an election of directors and will therefore not affect the outcome of
the election.
<PAGE> 5
All other matters that may be considered and acted upon by the
shareholders at the Annual Meeting require that the number of shares voted in
favor of the proposal exceed the number of shares voted against the proposal,
provided a quorum is present. Only votes actually cast will be counted for the
purpose of determining whether a proposal is approved by the shareholders.
Abstentions and broker "non-votes" are treated as "true abstentions" under
Georgia law and not as negative votes. Consequently, abstentions and broker
non-votes will have no effect on the outcome of the vote on other proposals.
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees and Continuing Directors
Pursuant to the Company's Articles of Incorporation, its Board of
Directors is divided into three classes: Class I, Class II and Class III. The
current terms of the Class I directors expire in 1998; those of the Class II
directors expire in 1999; and those of the Class III directors expire in 2000.
The Board of Directors proposes that E. Raybon Anderson, A. M.
Braswell, Jr., W. A. Crider, Jr. and Dan J. Parrish, Jr. be elected as Class I
directors of the Company to serve for three years and until their successors are
duly elected and qualified. If any of the foregoing nominees should become
unavailable to serve as a director (which is not now anticipated), then the
persons named as proxies reserve full discretion to vote for any other person or
persons as may be nominated.
The table set forth below shows for each director nominee and each
continuing director (a) his proposed or current class and term of office, (b)
his name, (c) his age at December 31, 1997, (d) the year he was first elected as
a director of the Company, (e) any positions held by him with the Company or its
subsidiary banks, First Bulloch Bank & Trust Company (the "Bulloch Bank"),
Metter Banking Company (the "Metter Bank") and First National Bank of Effingham
(the "Effingham Bank"), other than as a director, and (f) his business
experience for the past five years. See the section entitled "Compensation of
Directors" for a discussion of the directorships of the Bulloch Bank, the Metter
Bank, and the Effingham Bank held by each of the persons listed below.
- 2 -
<PAGE> 6
CLASS I - DIRECTOR NOMINEES
To Serve a Term of Three Years Until 2001
<TABLE>
<CAPTION>
Year First Positions with Company
Name Age Elected and Business Experience
- ---- --- ---------- -----------------------
<S> <C> <C> <C>
E. Raybon Anderson(1) 59 1981 Chairman of the Board, Bulloch
Fertilizer Co., Inc.
A. M. Braswell, Jr.(2) 77 1981 Chairman of the Board, A. M.
Braswell, Jr. Food Company, Inc.
(Manufacturer of Preserves and
Other Condiments)
W. A. Crider, Jr.(1) 58 1986 Chairman, Crider Poultry, Inc.
(Wholesale Poultry Processor)
Dan J. Parrish, Jr.(1,2) 62 1986 Owner, Candler Computers
(Computer Consulting); Vice
President of the Metter Bank
and Senior Vice President of
the Company until April 1993
</TABLE>
CLASS II - CONTINUING DIRECTORS
Current Term Expires in 1999
<TABLE>
<CAPTION>
Year First Positions with Company
Name Age Elected and Business Experience
- ---- --- ---------- -----------------------
<S> <C> <C> <C>
James Eli Hodges 56 1981 President of the Company and the
Bulloch Bank
C. Arthur Howard(1) 56 1984 President, Claude Howard
Lumber Company, Inc.
Lanier A. Hunnicutt(2) 70 1986 Retired Farmer
Joe P. Johnston(2) 63 1981 Realtor
Harry S. Mathews(1) 46 1996 Private investor since April 1994;
President, Statesboro Telephone
Company until April 1994
</TABLE>
- 3 -
<PAGE> 7
CLASS III - CONTINUING DIRECTORS
Current Term Expires in 2000
<TABLE>
<CAPTION>
Year First Positions with Company
Name Age Elected and Business Experience
- ---- --- ---------- -----------------------
<S> <C> <C> <C>
Julian C. Lane, Jr. 49 1988 Vice President of the Company
and President of the Metter Bank
Charles M. Robbins, Jr.(2) 77 1981 Retired Chairman of the Board,
Robbins Packing Company (Meat
Packing & Distribution)
Larry D. Weddle(2) 57 1996 Retired District Sales Manager,
Purina Mills, Inc.; President,
Harvest Properties, Inc.
Alvin Williams(2) 70 1986 Retired Executive Vice President
of the Metter Bank
John M. Wilson, Jr. 64 1985 Vice President of the Company
and Executive Vice President of
the Bulloch Bank
</TABLE>
Footnotes
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers and persons who own beneficially more than 10%
of the Company's outstanding Stock to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
their Stock ownership. Executive officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the Company with copies
of all such forms they file. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended December 31, 1997, its executive officers, directors and greater than 10%
shareholders complied with all applicable Section 16(a) filing requirements,
except that Mr. Howard filed a late report to correct his previously reported
Stock ownership and that Mr. Johnston filed one late report with respect to one
transaction.
Meetings and Committees
During the year ended December 31, 1997, the Board of Directors of the
Company held five meetings. During his term as a director during 1997, each
director of the Company attended at least
- 4 -
<PAGE> 8
75% of (a) the total number of meetings of the Board of Directors of the Company
and (b) the total number of meetings held by committees of which he was a
member, except A. M. Braswell, Jr., who attended 40% of the meetings of the
Board and 50% of the meetings of the Committee of which he is a member, and
Lanier A. Hunnicutt, who attended 60% of the meetings of the Board.
The Audit Committee of the Board of Directors of the Company is
responsible for reviewing and making recommendations regarding the Company's
employment of independent auditors, the annual audit of the Company's financial
statements and the Company's internal accounting policies and practices. The
Audit Committee met four times during 1997.
The Compensation Committee of the Board of Directors of the Company is
responsible for recommending and reviewing the compensation, including fringe
benefits, of the senior management and directors of the Company. It also
recommends nominees for membership on the Board of Directors. No formal
procedure whereby individual shareholders may submit recommendations of persons
to be considered as directors of the Company has been adopted; however, the
Compensation Committee would consider any such recommendation if delivered in
writing to: Chairman, Compensation Committee, First Banking Company of Southeast
Georgia, 40 North Main Street, Statesboro, Georgia 30458. The Compensation
Committee met eight times during 1997.
Compensation of Directors
During 1997, the following directors and director nominees also served
as directors of the Bulloch Bank: Messrs. Anderson, Braswell, Hodges, Howard,
Johnston, Mathews, Parrish, Robbins, and Wilson. Also during 1997, the following
directors and director nominees served as directors of the Metter Bank: Messrs.
Hodges, Hunnicutt, Lane, Parrish and Williams. Messrs. Hodges and Weddle also
served as directors of the Effingham Bank during 1997. During 1997, Mr. Crider
served only as a director of the Company, for which he was paid an aggregate
amount of $2,000. Each non-employee director of the Company who was also a
director of the Bulloch Bank during 1997 was paid an aggregate amount of $6,800
for his service as a director of the Bulloch Bank, and each non-employee
director of the Company who was also a director of the Metter Bank during 1997
was paid an aggregate amount of $6,800 for his service as a director of the
Metter Bank. Mr. Weddle was paid an aggregate amount of $6,800 for his service
as director of the Effingham Bank during 1997. Directors of the Company who also
serve as directors of the Bulloch, Metter and/or Effingham Banks were not
separately compensated for their service as directors of the Company or for
their service as members of committees.
As of January 1, 1998, directors of the Company have been compensated
separately for their services to the Company and to the Bank subsidiaries. Each
non-employee director of the Company is paid a retainer of $725 per quarter,
$300 per meeting of the Board of Directors, and $50 per meeting of the
committees of which he is a member. Payment of each of the meeting fees is
conditioned upon attendance at the meeting. Each non-employee director of the
Company who is also a director of any of the Bank subsidiaries is compensated in
like manner for his services as a director of the Bank subsidiary.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED IN
PROPOSAL ONE.
- 5 -
<PAGE> 9
EXECUTIVE OFFICERS
The following table sets forth for each executive officer of the
Company (a) the person's name, (b) his age at December 31, 1997, (c) the year he
was first elected as an executive officer of the Company, and (d) his position
with the Company and its subsidiary banks. Unless otherwise indicated, each
executive officer has been employed by the Bulloch or Metter Bank for more than
five years.
<TABLE>
<CAPTION>
Year Positions with the Company
First and the Bulloch or Metter
Name Age Elected Banks; Business Experience
- ---- --- ------- --------------------------
<S> <C> <C> <C>
James Eli Hodges 56 1981 President of the Company and the
Bulloch Bank
Julian C. Lane, Jr. 49 1985 Vice President of the Company
and President of the Metter Bank
John M. Wilson, Jr. 64 1985 Vice President of the Company
and Executive Vice President of
the Bulloch Bank
Dwayne E. Rocker 33 1992 Secretary and Treasurer of the
Company; Vice President and
Secretary of the Bulloch Bank
</TABLE>
- 6 -
<PAGE> 10
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation earned by the Company's Chief Executive Officer and its only other
executive officer who earned over $100,000 in salary and bonus in 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------
Annual Compensation Awards Payouts
-------------------------------------- ------------------------- -------
Securities
Name and Other Restricted Underlying All
Principal Annual Stock Options/ LTIP Other
Position Year Salary Bonus Compensation (1) Award(s) SARs Payouts Compensation
-------- ---- ------ ------- ---------------- -------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James Eli Hodges 1997 $204,000 $ 0 -- $ 0 31,250 $ 0 $25,907(2)
Chief Executive 1996 $174,000 $59,272 -- $ 0 0 $ 0 $25,596(3)
Officer; President 1995 $166,860 $75,087 -- $ 0 0 $ 0 $25,785(4)
of the Company and
the Bulloch Bank
Julian C. Lane, Jr. 1997 $115,000 $ 0 -- $ 0 20,000 $ 0 $23,805(5)
Vice President of the 1996 $100,000 $19,418 -- $ 0 0 $ 0 $23,746(6)
Company and President 1995 $ 94,554 $24,820 -- $ 0 0 $ 0 $22,888(7)
of the Metter Bank
==================================================================================================================================
</TABLE>
(1) This column would include the value of certain personal benefits only
where the value of such benefits is greater than the lower of $50,000
or 10% of the executive's salary and bonus for the year. Such threshold
was not exceeded in any of the years reported.
(2) Includes $13,787 in Company contributions to Mr. Hodges' account under
the Company's 401(k) Plan and $12,120 in Company contributions to his
account under the Target Benefit Plan.
(3) Includes $15,555 in Company contributions to Mr. Hodges' account under
the Company's 401(k) Plan and $10,041 in Company contributions to his
account under the Target Benefit Plan.
(4) Includes $16,650 in Company contributions to Mr. Hodges' account under
the Company's 401(k) Plan and $9,135 in Company contributions to his
account under the Target Benefit Plan.
(5) Includes $17,458 in Company contributions to Mr. Lane's account under
the Company's 401(k) Plan and $6,347 in Company contributions to his
account under the Target Benefit Plan.
(6) Includes $18,215 in Company contributions to Mr. Lane's account under
the Company's 401(k) Plan and $5,531 in Company contributions to his
account under the Target Benefit Plan.
(7) Includes $18,162 in Company contributions to Mr. Lane's account under
the Company's 401(k) Plan and $4,726 in Company contributions to his
account under the Target Benefit Plan.
- 7 -
<PAGE> 11
The following tables set forth certain information at December 31,
1997, and for the fiscal year then ended, concerning stock options granted to
the executive officers named in the Summary Compensation Table. The Company has
never granted any stock appreciation rights.
STOCK OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
-------------------------------------------------------- --------------------
PERCENTAGE OF
NUMBER OF TOTAL OPTIONS
SECURITIES GRANTED TO ALL
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED 1997 PER SHARE DATE 5% 10%
---- ---------- -------------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
James Eli Hodges 31,250 61.0% (2) 12-31-2001 $711,978 $891,352
Julian C. Lane, Jr 20,000 39.0% (2) 12-31-2001 455,666 570,465
</TABLE>
1. The dollar amounts under these columns are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission
and therefore are not intended to forecast future possible
appreciation, if any, of the price of the Company's Common Stock. Since
options are granted at market price, a zero percent gain in the stock
price will result in no realizable value to the option holders.
2. The options were granted on February 25, 1997 and vest in annual 20%
increments, with the first 20% being exercisable immediately on the
date of grant and the remaining increments becoming exercisable on
January 1, 1998, 1999, 2000 and 2001. At the close of business on
December 31, 1997, 1998, 1999 and 2000, 20% of any options that vested
but were not exercised during the calendar year expire, with the
remaining 80% of such options continuing in effect until December 31,
2001. The exercise price of the options was $18.80 per share on the
date of grant and increases by 10% with respect to all unexercised
options on each January 1 following the date of grant.
- 8 -
<PAGE> 12
AGGREGATED OPTION EXERCISES
IN FISCAL 1997 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Underlying
Unexercised
Shares Options at December 31, Value of Unexercised
Acquired ----------------------- In-the-Money Options
On Exercise Value Realized 1997 at December 31, 1997(1)
----------- -------------- ---- -----------------------
Name # $ Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
James Eli Hodges 6,250 $45,000 0 / 25,000 $0 / $225,125
Julian C. Lane, Jr. 4,000 $28,800 0 / 16,000 $0 / $144,080
</TABLE>
(1) The closing price of the Company's common stock, as reported by the
Nasdaq Stock Market on December 31, 1997 was $33 per share. The value
is calculated on the basis of the difference between the option per
share exercise price and $33 per share, multiplied by the number of
shares of common stock underlying the option.
EMPLOYMENT AGREEMENTS
As of February 20, 1996, Mr. Hodges entered into an employment
agreement with the Company and the Bulloch Bank. The agreement provides for an
annual base salary of $174,000, which may be increased annually in such amounts
as may be determined by the Board of Directors. Mr. Hodges is also entitled to
participate in such option, bonus and other executive compensation programs and
to receive such other employee benefits as are made available to members of
senior management from time to time. During the term of his employment and, in
the event of termination under clauses (ii) and (iii) below, for a period of six
months thereafter, Mr. Hodges may not engage in the commercial banking business
or solicit clients, prospective customers or employees within Bulloch County and
Candler County, Georgia.
The initial term of the agreement expires on February 20, 1999. At the
end of the first twelve months, however, and at the end of each successive
twelve month period thereafter, the agreement will automatically be extended for
a successive twelve month period following the then two-year remaining term
unless either party gives written notice of its intent not to extend the term at
least 90 days prior to the end of such twelve month period. If such notice is
properly given, the agreement will terminate at the end of the remaining term
then in effect. The agreement terminates automatically upon Mr. Hodges' death or
permanent disability and may be terminated: (i) by the Company or the Bulloch
Bank for just cause (as defined in the agreement) upon written notice to Mr.
Hodges; (ii) by the Company or the Bulloch Bank without cause upon 30 days'
prior written notice to Mr. Hodges; (iii) by Mr. Hodges for cause without prior
written notice except as required in connection with notice of a material breach
of the terms of the agreement; (iv) by Mr. Hodges without cause upon 60 days'
prior written notice; (v) by Mr. Hodges upon written notice within six months
following a change in control (as defined in the agreement) of the Company or
the Bulloch Bank; or (vi) at any time upon mutual written agreement of the
parties. In the event of termination under the circumstances described in
clauses (ii), (iii) or (vi)
- 9 -
<PAGE> 13
above, Mr. Hodges will continue to receive his base salary for a period of 24
months following his termination.
As of April 9, 1996, Mr. Lane entered into an employment agreement with
the Company and the Metter Bank. The agreement provides for an annual base
salary of $100,000, which may be increased annually in such amounts as may be
determined by the Board of Directors. The initial term of the agreement expires
on April 9, 1999. All other provisions of the agreement, including provisions
regarding automatic renewal, termination, change of control payment and
non-competition, are the same as those contained in Mr. Hodges' agreement as
described above.
INDEBTEDNESS OF DIRECTORS AND OFFICERS
The Company's directors and officers and certain business organizations
and individuals associated with them have been customers of and have had banking
transactions with the Company's subsidiary banks and are expected to continue
such relationships in the future. Pursuant to such transactions, the Company's
directors and officers from time to time have borrowed funds from the Company's
subsidiary banks for various business and personal reasons. The extensions of
credit made by the Company's subsidiary banks to its directors and officers (a)
were made in the ordinary course of business, (b) were made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and (c) did not involve more
than a normal risk of collectibility or present other unfavorable features.
STOCK OWNERSHIP
On March 12, 1998, the Company had 1,132 shareholders of record. The
following table sets forth the number and percentage of outstanding shares of
stock beneficially owned as of March 12, 1998 by (i) each person who
beneficially owned 5% or more of the outstanding shares of stock to the best
information and knowledge of the Company, (ii) each director and director
nominee, (iii) each executive officer named in the Summary Compensation Table,
and (iv) all directors and executive officers of the Company, as a group. Unless
otherwise indicated, each person has sole voting and investment powers over the
indicated shares. An asterisk (*) represents beneficial ownership of less than
one percent of the outstanding shares of stock.
<TABLE>
<CAPTION>
Name of Nominee Number of Shares Percentage
or Director Beneficially Owned Of Total
- ------------------ ------------------ ----------
<S> <C> <C>
E. Raybon Anderson 15,954(1) *
A. M. Braswell, Jr 10,320(2) *
W. A. Crider, Jr 169,938(3) 4.52%
James Eli Hodges 29,092(4) *
C. Arthur Howard 50,604(5) 1.34%
Lanier A. Hunnicutt 30,730(6) *
</TABLE>
- 10 -
<PAGE> 14
<TABLE>
<S> <C> <C>
Joe P. Johnston 13,128(7) *
Julian C. Lane, Jr 16,901(8) *
Harry S. Mathews 18,726(9) *
Dan J. Parrish, Jr 231,374(10) 6.15%
Charles M. Robbins, Jr 6,448(11) *
Larry D. Weddle 18,693 *
Alvin Williams 72,353(12) 1.92%
John M. Wilson, Jr 7,946(13) *
All Directors and Executive
Officers as a Group
(15 persons) 697,911(14) 18.55%
</TABLE>
Footnotes to Stock Ownership Table
(1) Consists of 13,845 shares owned by Mr. Anderson and 2,109
shares owned by Mr. Anderson's wife, as to which Mr. Anderson
disclaims beneficial ownership.
(2) Consists of 8,520 shares owned by Mr. Braswell and 1,800
shares owned jointly by Mr. and Mrs. Braswell, as to which
voting and investment powers are shared.
(3) Consists of 41,776 shares owned by Mr. Crider and 128,162
shares owned by the Crider Family Trust.
(4) Consists of (a) 12,516 shares owned by Mr. Hodges, (b) 96
shares owned by Mr. Hodges' wife, as to which Mr. Hodges
disclaims beneficial ownership, (c) 23 shares owned by Mr.
Hodges as custodian for his child, (d) 10,207 shares held for
Mr. Hodges's benefit and owned by the 401(k) Plan, as to which
Mr. Hodges disclaims beneficial ownership, and (e)6,250 shares
subject to vested options.
(5) Consists of (a) 26,151 shares owned by Mr. Howard, (b) 3,691
shares owned by Mr. Howard's wife, as to which Mr. Howard
disclaims beneficial ownership and (c) 20,762 shares owned by
the Claude Howard Lumber Company, Inc., of which Mr. Howard is
President.
(6) Consists of 26,640 shares owned by Mr. Hunnicutt and 4,090
shares owned by Mr. Hunnicutt's wife, as to which Mr.
Hunnicutt disclaims beneficial ownership.
(7) Consists of 13,032 shares owned by Mr. Johnston and 96 shares
owned by Mr. Johnston's wife, as to which Mr. Johnston
disclaims beneficial ownership.
(8) Consists of 4,000 shares owned by Mr. Lane, 5,497 shares owned
jointly by Mr. and Mrs. Lane, as to which voting and
investment powers are shared, 3,404 shares held for Mr. Lane's
benefit and owned by the 401(k) Plan, as to which Mr. Lane
disclaims beneficial ownership, and 4,000 shares subject to
vested options.
- 11 -
<PAGE> 15
(9) Consists of (a) 9,883 shares owned by Mr. Mathews, (b) 2,200
shares owned by Mr. Mathews' wife, as to which Mr. Mathews
disclaims beneficial ownership, and (c ) 6,643 shares owned by
Mr. Mathews as custodian for his children.
(10) Consists of (a) 8,880 shares owned jointly with Mr. Parrish's
wife, as to which voting and investment powers are shared, (b)
2,220 shares owned by his wife, as to which Mr. Parrish
disclaims beneficial ownership, (c) 168,345 shares owned by
Parrish Properties, an affiliate of Mr. Parrish, (d) 50,671
shares owned by Mr. Parrish, and (e) 1,258 shares held for Mr.
Parrish's benefit and owned by the 401(k) Plan, as to which
Mr. Parrish disclaims beneficial ownership. Mr. Parrish's
address is P.O. Box 564, Metter, Georgia 30439.
(11) Consists of 126 shares owned jointly by Mr. and Mrs. Robbins,
as to which voting and investment powers are shared, and 6,322
shares owned by Mr. Robbins' wife, as to which Mr. Robbins
disclaims beneficial ownership.
(12) Consists of (a) 6,807 shares owned by Mr. Williams, (b) 62,146
shares owned jointly by Mr. and Mrs. Williams, as to which
voting and investment powers are shared, and (c) 3,400 shares
owned by Mr. Williams' wife, as to which Mr. Williams
disclaims beneficial ownership.
(13) Consists of (a) 2,931 shares owned by Mr. Wilson, (b) 121
shares owned by Mr. Wilson's wife, as to which Mr. Wilson
disclaims beneficial ownership, and (c) 4,894 shares held for
Mr. Wilson's benefit and owned by the 401(k) Plan, as to which
Mr. Wilson disclaims beneficial ownership.
(14) Includes shares as to which the persons in the group disclaim
beneficial ownership as indicated above.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists of Messrs. Anderson,
Crider, Howard, Matthews and Parrish. Mr. Parrish is a former Senior Vice
President of the Company and former Vice President of the Metter Bank.
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the Board of Directors
of the Company is comprised of E. Raybon Anderson, W. A. Crider, C. Arthur
Howard, Harry S. Mathews and Dan J. Parrish, Jr.. Mr. Howard serves as Chairman.
All members of the Committee are non-employee directors.
- 12 -
<PAGE> 16
The Committee generally is responsible for the Company's benefit plans
and for the compensation of Mr. Hodges and Mr. Lane, the President and a Vice
President, respectively, of the Company. The Committee is directly accountable
for reviewing and monitoring compensation and benefit plans and payment and
awards under those plans for the Company's senior executives, including the
Chief Executive Officer and other executive officers. In carrying out these
responsibilities, the Committee reviews the design of all compensation and
benefit plans applicable to executive officers, and determines base salaries and
bonuses. In all of these matters, the Committee's decisions are reviewed and
approved by the full Board of Directors.
Base Salaries
The Chief Executive Officer, with the approval of the Committee,
annually sets the base salaries for all executive officers other than Messrs.
Hodges and Lane, whose salaries are established solely by the Committee. In each
case, salaries are based principally on a subjective review of the executive's
individual performance and degree of experience and are also designed to be
competitive with salaries paid to executives in similar positions in financial
institutions of comparable asset size.
Annual Incentives
One of the Committee's objectives in managing executive compensation is
to link directly a significant portion of executive pay to Company performance.
Messrs. Hodges and Lane are therefore eligible to receive bonuses based upon the
Company's achievement of annual earnings targets established by the Committee.
Long-term Incentives
On February 25, 1997, the Company adopted the First Banking Company of
Southeast Georgia 1997 Stock Option Plan (the "Plan"). The purpose of the Plan
is to reward executives for increasing the value of the Company stock, which it
accomplishes by providing Messrs. Hodges and Lane with opportunities to earn and
acquire additional ownership interests in the Company. Accordingly, in fiscal
1997 the Committee granted Messrs. Hodges and Lane the options described above
under "Stock Option Grants in 1997."
Benefits
In general, the benefit plans provided to key employees, such as
profit-sharing, life insurance and health care, are intended to provide an
adequate retirement income as well as financial protection against illness,
disability or death. Benefits offered to the named executive officers and other
executives are substantially the same as provided to all employees, with some
variation.
- 13 -
<PAGE> 17
Chief Executive Officer Compensation
In determining the compensation of the Chief Executive Officer, the
Committee is guided by the Company's compensation philosophy as described in
this report, the Company's performance generally and competitive practices. In
1998, Mr. Hodges received an increase in base salary of approximately 10%.
Summary
The Company's executive compensation program encourages executives to
manage the Company profitably and to increase the value of the business to the
shareholders. The increasing emphasis on annual and long-term incentives is
consistent with the Committee's policy of linking pay to performance and
increasing shareholder value. The Committee believes this approach provides
competitive compensation and is in the best interest of the shareholders. The
Committee will continue to monitor the effectiveness of the executive
compensation program and will initiate changes as it deems appropriate.
Submitted by the Compensation Committee of the Board of Directors of
First Banking Company of Southeast Georgia.
E. Raybon Anderson
W. A. Crider
C. Arthur Howard
Harry S. Mathews
Dan J. Parrish, Jr.
PERFORMANCE GRAPH
The following graph indicates the Company's cumulative total return to
shareholders from December 31, 1992 through December 31, 1997, as compared to
cumulative total returns for the Nasdaq Stock Market index and The Carson Medlin
Company's Independent Bank Index, which consists of 20 independent community
banks located in Florida, Georgia, North Carolina, South Carolina, Tennessee and
Virginia.
- 14 -
<PAGE> 18
<TABLE>
<CAPTION>
Data Points: 1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
First Banking Company of
Southeast Georgia 100 118 141 260 292 544
Independent Bank Index 100 125 153 208 248 358
Nasdaq Index 100 115 112 159 195 240
</TABLE>
- 15 -
<PAGE> 19
ACCOUNTING MATTERS
Deloitte & Touche LLP, independent public accountants, audited the
financial statements of and provided various services to the Company and its
subsidiary banks for the year ended December 31, 1997. A representative of
Deloitte & Touche LLP is expected to be present at the Annual Meeting to respond
to appropriate questions and to make a statement if he or she desires to do so.
SHAREHOLDER PROPOSALS
Any shareholder of the Company wishing to submit a proposal for action
at the next annual meeting of shareholders of the Company and desiring inclusion
of the same in management's proxy materials must provide a written copy of the
proposal to management of the Company not later than December 2, 1998. Any such
proposal must comply in all respects with the rules and regulations of the
Securities and Exchange Commission.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which
may be brought before the Annual Meeting. If, however, any matter other than the
election of directors or matters incident thereto should properly come before
the Annual Meeting, votes will be cast pursuant to the proxies in accordance
with the best judgment of the proxyholders.
EXPENSES AND SOLICITATION OF PROXIES
All expenses of the proxy solicitation will be paid by the Company. In
addition to solicitation by mail, certain directors, officers and regular
employees of the Company and its subsidiary banks may solicit proxies by
telephone, telegram or personal interview for which they will receive no
compensation in addition to their regular salaries. The Company may request
brokerage houses and custodians, nominees and fiduciaries to forward soliciting
material to the beneficial owners of stock held of record by such persons and,
if requested, will reimburse them for their reasonable out-of-pocket expenses in
connection therewith.
- 16 -
<PAGE> 20
APPENDIX
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 1998
The undersigned hereby appoints James Eli Hodges and Julian C. Lane,
Jr., or either of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them or any of them to represent and to vote,
as designated below, all of the Common Stock of First Banking Company of
Southeast Georgia, 40 North Main Street, Statesboro, Georgia 30458, which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders (the "Meeting") to be held at the Community Room of the
Statesboro Mall branch of First Bulloch Bank & Trust, U. S. Highway 80 East,
Statesboro, Georgia, on Thursday, April 23, 1998, at 2:00 p.m., and at any
adjournments thereof, upon the proposals described in the accompanying Notice of
the Annual Meeting and the Proxy Statement relating to the Meeting, receipt of
which are hereby acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR THE FOLLOWING PROPOSAL:
PROPOSAL ONE: To elect the following nominees as directors of the Company:
CLASS I (to serve a term of three years until 2001):
E. Raybon Anderson, A. M. Braswell, Jr.,
W. A. Crider, Jr. and Dan J. Parrish, Jr.
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
above (except as indicated to vote for all
to the contrary below). nominees listed above.
INSTRUCTION: To withhold authority for any individual nominee, mark
"FOR" above, but write that nominee's name here:
--------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION TO THE
CONTRARY IS INDICATED, IT WILL BE VOTED FOR PROPOSAL ONE.
DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS TO ALL OTHER
MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING.
If stock is held in the name of more than one person, all holders
should sign. Signatures should correspond exactly with the name or names
appearing on the stock certificate(s). When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Dated: _____________________, 1998
(Be sure to date your Proxy) ------------------------------------
Name(s) of Shareholder(s)
------------------------------------
Signature(s) of Shareholder(s)
Please mark, date and sign this Proxy, and return it in the enclosed
return-addressed envelope. No postage is necessary.
PLEASE RETURN YOUR PROXY PROMPTLY .
