<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:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CNB CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE> 2
CNB CORPORATION
303 North Main Street
Cheboygan, Michigan 49721
PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1997
This Proxy Statement and the enclosed Proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of CNB
Corporation (the "Corporation"), a Michigan bank holding company whose sole
subsidiary is Citizens National Bank of Cheboygan (the "Bank"), to be voted at
the Annual Meeting of Shareholders of the Corporation to be held on May 20,
1997, at 5:30 p.m., at the Knights of Columbus Hall, 9840 South Straits
Highway, Cheboygan, Michigan, or at any adjournment or adjournments thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders and in this Proxy Statement.
VOTING AT THE MEETING
This Proxy Statement has been mailed on or about April 18, 1997, to
all holders of record of common stock of the Corporation as of the record date.
The Board of Directors of the Corporation has fixed the close of business on
March 21, 1997, as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting of Shareholders and any
adjournment thereof.
The Corporation's only class of outstanding stock is its common stock,
par value $2.50 per share. There are presently 930,772 shares of common stock
of the Corporation outstanding. Each outstanding share will entitle the holder
thereof to one vote on each separate matter presented for vote at the meeting.
Votes cast at the meeting and submitted by proxy are counted by the inspectors
of the meeting, who are appointed by the Corporation.
If a Proxy in the enclosed form is properly executed and returned to
the Corporation, the shares represented by the Proxy will be voted at the
Annual Meeting and any adjournment thereof. If a shareholder specifies a
choice, the Proxy will be voted as specified. If no choice is specified, the
shares represented by the Proxy will be voted for the election of all of the
nominees named in this Proxy Statement and for the proposal to amend the
Corporation's Articles of Incorporation to increase its authorized common stock
as set forth in this Proxy Statement, and in accordance with the judgment of
the persons named as proxies with respect to any other matter which may come
before the meeting or any adjournment thereof.
A Proxy may be revoked before exercise by notifying the Secretary of
the Corporation in writing, or by submitting a Proxy of a later date or
attending the meeting and voting in person. All shareholders are encouraged to
date and sign the enclosed Proxy form, indicate your choice with respect to the
matters to be voted upon, and return it to the Corporation.
<PAGE> 3
ELECTION OF DIRECTORS
The Bylaws of the Corporation provide for a Board of Directors
consisting of a minimum of one and a maximum of seventeen members. The Bylaws
also provide that at each annual meeting, the shareholders shall elect
directors to hold office until the succeeding annual meeting. A director shall
hold office for the term for which he or she is elected and until his or her
successor is elected and qualified. Directors must be shareholders.
Nine persons have been nominated for election to the Board, each to
serve one year expiring at the 1998 Annual Meeting of Shareholders. The Board
has nominated Robert E. Churchill, James C. Conboy, Jr., Kathleen M. Darrow,
Thomas J. Ellenberger, Thomas J. Fisher, Vincent J. Hillesheim, John L.
Ormsbee, Francis J. VanAntwerp, Jr. and John P. Ward. All of the nominees are
incumbent directors previously elected by the Corporation's shareholders.
Unless otherwise directed by a shareholder's Proxy, the persons named
as proxy holders in the accompanying Proxy will vote for the nominees named
above. In the event any of such nominees shall become unavailable, which is not
anticipated, the Board of Directors in its discretion may designate substitute
nominees, in which event the enclosed Proxy will be voted for such substitute
nominees. Proxies cannot be voted for a greater number of persons than the
number of nominees named.
A plurality of the votes cast at the meeting is required to elect the
nominees as directors of the Corporation. Shares not voted at the meeting,
whether by abstention, broker non-vote, or otherwise, will not be treated as
votes cast at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES
AS DIRECTORS.
INFORMATION ABOUT DIRECTOR NOMINEES
The following table sets forth certain information regarding each
nominee, including name, age, principal occupation for the past five years,
other directorships with publicly-owned companies or with public institutions,
and term of service as a director of the Corporation. The information set forth
in the table is based in part on information provided by each nominee.
-2-
<PAGE> 4
<TABLE>
<CAPTION>
HAS SERVED
AS A DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE (1)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert E. Churchill, 56(3) President and CEO of the Corporation and the Bank. 1983
Chairman of the Economic Development Corporation of
the County of Cheboygan.
James C. Conboy, Jr., 49(2)(3) Attorney/Partner, Bodman, Longley & Dahling LLP. 1983
Chairman of the Cheboygan Building Authority.
Kathleen M. Darrow, 54 (2) Group Sales & Special Events Coordinator for the 1996 (4)
Mackinac State Historic Parks; President/Co-owner of
Darrow Bros. Excavating, Inc.
Thomas J. Ellenberger, 46(2)(3) Part owner, Vice President and Secretary of Albert 1995 (4)
Ellenberger Lumber Co. (retail lumber sales).
Thomas J. Fisher, 67 (2)(3) Chairman of the Board of the Corporation and the 1993
Bank. President/Owner of North Country Homes
Corporation (residential home builder/dealer).
Director of the Inland Lakes Educational Foundation.
Vincent J. Hillesheim, 46(2)(3) President of Crusoe's Rivertown Motors, Inc., d/b/a 1994
Anchor In Marina; President of Lincoln Bridge Plaza,
Inc. (commercial property leases). Director and
treasurer of the Cheboygan County Building
Authority.
John L. Ormsbee, 58 (2) Sole proprietor of Jack's Sales (auctioneering 1980
services, logging, and Christmas tree sales) and
Onaway Discount (retail sales).
Francis J. VanAntwerp, Jr., President/Owner, Durocher Dock & Dredge, Inc. 1990
52 (2) (marine construction); President/Owner of Salvor,
Ltd. (real estate and equipment leasing).
John P. Ward, 60 Senior Vice President and Secretary of the 1994
Corporation, and Senior Vice President and Cashier
of the Bank. Trustee of CMH Health Care, Inc. and
Community Memorial Hospital. Director of the
Cheboygan Downtown Development Authority.
</TABLE>
(1) Any service as a director prior to 1985, the year the Corporation was
formed, would have been as a director of the Bank. Since 1985, all
directors of the Corporation also have been directors of the Bank.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Service as a director prior to May, 1996 was as a director of the
Bank.
-3-
<PAGE> 5
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation established an Audit
Committee on March 27, 1997. Prior to such date, the functions of the
Corporation's Audit Committee were performed by the Bank's Audit Committee,
which has now been disbanded. The Corporation's Audit Committee is comprised of
directors Conboy, Darrow, Ellenberger, Fisher, Hillesheim, Ormsbee and
VanAntwerp. The members of the Corporation's Audit Committee had been the
members of the Bank's Audit Committee. Six meetings of the Bank's Audit
Committee were held during 1996. This Committee is responsible for the
recommendation of the independent accounting firm to be engaged for the
external audit, directing and supervising investigations into matters relating
to audit functions, reviewing with independent auditors the plan and results of
the external audit, the establishment and continued supervision of internal
auditing procedures, reviewing the degree of independence of the auditors, and
reviewing the adequacy of internal accounting controls.
The Board of Directors of the Bank established a Compensation
Committee on July 11, 1996. The Bank's Compensation Committee, comprised of
directors Churchill, Conboy, Ellenberger, Fisher and Hillesheim, met once
during 1996. This Committee reviews and makes recommendations to the Board
relating to remuneration, including benefit plans, to be paid to the directors
and officers of the Corporation and the Bank.
All directors of the Corporation also serve as the Board of Directors
of the Bank. The Board of Directors of the Corporation held a total of six
meetings during 1996, including the organizational meeting and one special
meeting. The Board of Directors of the Bank held a total of twenty-six
meetings during 1996, including the organizational meeting and one special
meeting. All directors attended 75% or more of the aggregate number of
meetings of the two Boards and the Committees on which they served during the
year, except for Mr. Conboy who attended 74% and Mr. VanAntwerp who attended
63%. There are no family relationships between or among any of the directors,
nominees or executive officers of the Corporation.
COMPENSATION OF DIRECTORS
Directors initially elected prior to January 1, 1994 participate in a
deferred compensation plan in lieu of current payment of director fees. The
plan was adopted by the Bank in 1985 and in 1993 participation in the plan was
closed to directors initially elected after January 1, 1994. The plan provides
for retirement and death benefits to be paid to the participating directors by
the Bank over a minimum of fifteen years. The Bank is the owner and
beneficiary of life insurance policies which are structured to fund the Bank's
obligations under the terms of the plan.
During 1996, directors participating in the deferred compensation plan
received a deferred annual retainer of $4,000 for service on the Board of
Directors of the Corporation and the Bank. Directors not eligible to
participate in the deferred compensation plan received a quarterly retainer of
$1,500 for service on the two Boards. The chairman of the board received an
additional quarterly
-4-
<PAGE> 6
retainer of $200. Directors are not compensated for attendance at Board or
Committee meetings, but are reimbursed for travel expenses for meetings
attended.
PROPOSAL TO AMEND ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED STOCK
The Corporation's Board of Directors has proposed that Article III of
the Corporation's Articles of Incorporation ("Articles") be amended to increase
the total authorized common stock, $2.50 par value of the Corporation to
2,000,000 shares. Article III of the Corporation's Articles currently provides
for authorized capital stock consisting of 1,000,000 shares of common stock,
$2.50 par value. No preferred stock is presently authorized or outstanding. As
of March 21, 1997, there were 930,772 shares of common stock issued and
outstanding, and 50,000 shares of common stock were reserved for issuance under
the Corporation's 1996 Stock Option Plan.
The proposed amendment would increase the Corporation's authorized
common stock, $2.50 par value from 1,000,000 to 2,000,000 shares. All of the
additional shares resulting from the increase in the Corporation's authorized
common stock would be of the same class with the same dividend, voting and
liquidation rights as the shares of common stock presently outstanding. No
further authorization for issuance of common shares by shareholder vote is
required under the Corporation's Articles and none would be required prior to
the issuance of the additional common shares by the Corporation. Shareholders
have no preemptive rights under the Articles to acquire any shares issued by
the Corporation, and shareholders would not acquire any such rights with
respect to any additional shares that may be issued if the proposed amendment
to the Articles is adopted. Issuance of common stock otherwise than on a pro
rata basis to all current shareholders would reduce the current shareholders'
proportionate ownership interests in the Corporation.
The Board of Directors believes that the authorization of an
additional 1,000,000 shares of common stock would provide increased flexibility
for future growth and provide the opportunity for enhanced marketability of the
Corporation's stock. The Board further believes that it is advisable to have
the additional shares of common stock authorized at this time in order to make
the shares available for possible future stock splits or stock dividends, and
also to enable the Corporation, as the need may arise, to take prompt advantage
of market conditions and the availability of favorable opportunities for future
equity financing, investment opportunities, acquisitions of other banks, bank
holding companies or other companies, or to accomplish other proper corporate
purposes, without the delay and expense incident to the holding of a special
meeting of the shareholders of the Corporation for such purpose at a future
date.
The increase in authorized common stock would also enhance the ability
of the Board of Directors to provide for the reservation of additional shares
for potential issuance under the Corporation's 1996 Stock Option Plan or other
stock plans as a means of retaining key personnel and attracting new personnel.
It is also possible that the additional shares of common stock could be
utilized by the Corporation as part of a defensive strategy to counter any
hostile takeover attempts.
-5-
<PAGE> 7
The additional shares could be utilized to render it more difficult for a
person seeking to effect a merger or otherwise gain control of the Corporation,
which could adversely affect the potential realizable value of the existing
shareholders' investment.
The Board of Directors will determine whether and on what terms the
issuance of shares of common stock may be warranted and appropriate. Subject
to shareholder approval of the proposed increase in authorized common stock,
the Board of Directors has declared a 5% stock dividend with the record date
and the payable date for such dividend to be determined by the Board at its
first regularly scheduled meeting following the Annual Meeting of Shareholders.
Other than the proposed stock dividend, the Corporation presently has no plan,
understanding or agreement with respect to the issuance of any of the
additional shares of common stock or series preferred stock.
The affirmative vote of the majority of the outstanding shares of
common stock, in person or by proxy, on the proposed amendment to Article III
is required for approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO INCREASE THE CORPORATION'S AUTHORIZED COMMON STOCK.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the
Corporation's President and Chief Executive Officer, who is the only executive
officer whose annual compensation exceeded $100,000, for each of the two years
ended December 31, 1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------------------------------
NAME AND PRINCIPAL OTHER ANNUAL
POSITION YEAR SALARY BONUS COMPENSATION
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert E. Churchill 1996 $129,000 (1) $52,477 $6,318 (2)
President and CEO
1995 $114,000 (1) $47,537 $5,860 (3)
</TABLE>
(1) Includes director fees of $4,000
(2) Includes employer's matching contribution of $5,176 under 401(k) plan.
(3) Includes employer's matching contribution of $4,249 under 401(k) plan..
-6-
<PAGE> 8
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the options granted under the CNB
Corporation 1996 Stock Option Plan during the fiscal year ended December 31,
1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------------------------
PERCENT OF TOTAL
NUMBER OF OPTIONS GRANTED TO
SHARES UNDERLYING EMPLOYEES IN FISCAL EXERCISE PRICE PER
NAME OPTIONS GRANTED YEAR SHARE EXPIRATION DATE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert E. Churchill 3,000 24% $32.00 07/11/2006
</TABLE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth the options exercised under the CNB
Corporation 1996 Stock Option Plan during the fiscal year ended December 31,
1996 and the value of unexercised options as of such date.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED OPTIONS UNEXERCISED IN-THE-MONEY
AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END
SHARES ------------------------------ ---------------------------
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Churchill N/A N/A 3,000 $96,000
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the directors and officers of the Corporation have had and
are expected to have in the future, transactions with the Bank, or have been
directors or officers of corporations, or members of partnerships, or sole
proprietors of businesses which have had and are expected to have in the
future, transactions with the Bank. In the opinion of management, all such
transactions with officers
-7-
<PAGE> 9
and directors and with such related businesses are made in the ordinary course
of business and substantially on the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable transactions
with other customers, and these transactions do not involve more than normal
risk of collectibility or present other unfavorable features.
The following table sets forth loan transactions in excess of $60,000
between the Bank and directors, executive officers, and their related interests
during the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
HIGHEST
TYPE OF BALANCE YEAR-END
NAME TRANSACTION TERM RATE OF INTEREST OUTSTANDING BALANCE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert E. Churchill Residential Mortgage 15 Years 7.00% Fixed $ 75,000 $ 72,561
- -----------------------------------------------------------------------------------------------------------
1 Yr. Treasury
James C. Conboy, Jr. Residential Mortgage 30 Years Bill + 3.25% $123,767 $117,349
- -----------------------------------------------------------------------------------------------------------
3 Yr. Treasury
John P. Ward Residential Mortgage 30 Years Bill + 3.75% $125,000 $123,810
- -----------------------------------------------------------------------------------------------------------
Darrow Bros. Line of Credit 1 Year Prime + 1.50% $ 10,000 $ 0
Excavating, Inc.(1) Equipment Loan 56 Months Prime + 1.50% $110,066 $ 85,220
- -----------------------------------------------------------------------------------------------------------
North Country Homes Line of Credit 1 Year Prime + 1.00% $536,041 $ 0
Corporation(2) Line of Credit 90 Days Prime + 1.00% $ 40,060 $ 0
- -----------------------------------------------------------------------------------------------------------
Lincoln Bridge Plaza, 3 Year CNB Base +
Inc.(3) Commercial Mortgage Balloon 1.50% $484,678 $471,318
- -----------------------------------------------------------------------------------------------------------
Secured Installment CNB Base +
Great Lakes Loan 27 Months 1.50% $ 6,950 $ 3,962
Accounting & Tax CNB Base +
Service, Inc.(3) Secured Term Loan 4 Months 1.50% $ 3,560 $ 3,560
- -----------------------------------------------------------------------------------------------------------
Equipment Loan 5 Years Prime + 1.75% $515,630 $445,306
Durocher Dock & Line of Credit 10 Months Prime + 1.75% $250,000 $237,499
Dredge, Inc.(4) Line of Credit 4 Months Prime + 1.50% $100,060 $ 0
- -----------------------------------------------------------------------------------------------------------
Equipment Loan 2 Years Prime + 1.75% $ 33,271 $ 22,899
Salvor, Ltd.(4) Commercial Mortgage 5 Years 9.75% Fixed $ 52,000 $ 51,106
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Director Darrow is President/Co-Owner of Darrow Bros. Excavating, Inc.
(2) Director Fisher is President/Owner of North Country Homes Corporation.
(3) Director Hillesheim is President of Lincoln Bridge Plaza, Inc. and
Vice President and Director of Great Lakes Accounting & Tax Service,
Inc.
(4) Director Van Antwerp is President/Owner of Durocher Dock & Dredge,
Inc. and President/Owner of Salvor, Ltd.
Director Conboy serves as general legal counsel for the Corporation
and the Bank on a fee for service basis.
-8-
<PAGE> 10
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of March 21,
1997 with respect to those persons known by the Corporation to be the
beneficial owner of more than five percent (5%) of the Corporation's
outstanding common stock.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
<TABLE>
<CAPTION>
SOLE VOTING SHARED VOTING TOTAL
NAME AND ADDRESS OF AND DISPOSITIVE OR DISPOSITIVE BENEFICIAL PERCENT OF
BENEFICIAL OWNER POWER POWER(2) OWNERSHIP CLASS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas A. Ellenberger
P.O. Box 190
Onaway, MI 49765 1,326 56,214 57,540 6.19%
Dessie M. Ormsbee
P.O. Box 5157
Cheboygan, MI 49721 27,820 27,820 55,640 5.97%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The numbers of shares stated include shares personally owned of record
by that person and shares which, under applicable regulations, are
considered to be otherwise beneficially owned by that person. Under
these regulations, a beneficial owner of a security includes any
person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power
or dispositive power with respect to the security. Voting power
includes the power to vote or direct the voting of the security.
Dispositive power includes the power to dispose or direct the
disposition of the security. A person will also be considered the
beneficial owner of a security if the person has a right to acquire
beneficial ownership of the security within sixty days.
(2) These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust, or other contract or property right, and shares held
by spouses and children over whom the listed person may have
substantial influence by reason of relationship.
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<PAGE> 11
The following table sets forth certain information as of March 21,
1997, as to the common stock of the Corporation owned beneficially by each
director, the executive named in the Summary Compensation Table above, and by
all directors and executive officers of the Corporation as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
---------------------------------------------------------------------------
SOLE VOTING SHARED VOTING TOTAL
NAME OF AND DISPOSITIVE OR DISPOSITIVE BENEFICIAL PERCENT OF
BENEFICIAL OWNER POWER POWER(2) OWNERSHIP CLASS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert E. Churchill 10,610 10,610 1.14%
James C. Conboy, Jr. 596 4,871 5,467 *
Kathleen M. Darrow 1,075 1,075 *
Thomas J. Ellenberger 885 2,194 3,079
Thomas J. Fisher 4,200 1,300 5,500 *
Vincent J. Hillesheim 1,095 1,095 *
John L. Ormsbee 10,248 10,248 20,496 2.20%
Francis J. VanAntwerp, Jr. 228 5,220 5,448 *
John P. Ward 3,132 3,132 *
All directors and
officers as a group 16,157 42,668 58,825 6.32%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
*Less than 1%.
(1) The numbers of shares stated include shares personally owned of record
by that person and shares which, under applicable regulations, are
considered to be otherwise beneficially owned by that person. Under
these regulations, a beneficial owner of a security includes any
person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power
or dispositive power with respect to the security. Voting power
includes the power to vote or direct the voting of the security.
Dispositive power includes the power to dispose or direct the
disposition of the security. A person will also be considered the
beneficial owner of a security if the person has a right to acquire
beneficial ownership of the security within sixty days.
(2) These numbers include shares over which the listed person is legally
entitled to share voting or dispositive power by reason of joint
ownership, trust, or other contract or property right, and shares held
by spouses and children over whom the listed person may have
substantial influence by reason of relationship.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Crowe, Chizek and Company, LLP examined and certified the
financial statements of the Corporation and the Bank for the year ended
December 31, 1996. Crowe, Chizek and
-10-
<PAGE> 12
Company, LLP have been the independent public accountants of the Bank since
1980 and for the Corporation since its formation in 1985. Pursuant to the
recommendation of the Audit Committee, the Board of Directors has reappointed
Crowe, Chizek and Company, LLP as the independent public accountants of the
Corporation and the Bank for the year ending December 31, 1997. A
representative of Crowe, Chizek and Company, LLP is not expected to be at the
Annual Meeting of Shareholders.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be considered by the Corporation for
inclusion in the 1998 Annual Meeting of Shareholders proxy materials must
comply with Rule 14a-8 under the Securities Exchange Act of 1934 and be
received by the Corporation no later than December 15, 1997.
OTHER BUSINESS
The Board of Directors is not aware of any matter to be presented for
action at the meeting, other than the matters set forth herein. If any other
business should come before the meeting, or any adjournment thereof, the Proxy
will be voted in respect thereof in accordance with the best judgment of the
persons authorized therein, and discretionary authority to do so is included in
the Proxy. The cost of soliciting proxies will be borne by the Corporation.
In addition to solicitation by mail, officers and other employees of the
Corporation and the Bank may solicit proxies by telephone or in person, without
compensation other than their regular compensation.
The Annual Report of the Corporation for 1996 is included with this
Proxy Statement. Copies of the report will also be available for all
shareholders attending the Annual Meeting.
Shareholders are urged to sign and return the enclosed proxy in the
enclosed envelope. A prompt response will be helpful and appreciated.
By order of the Board of Directors
JOHN P. WARD, Secretary
Dated: April 18, 1997
-11-
<PAGE> 13
CNB CORPORATION
303 North Main Street
Cheboygan, Michigan 49721
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas J. Ellenberger, Vincent J.
Hillesheim, and John L. Ormsbee, and each of them, as Proxies, each with the
power to appoint his substitute, and hereby authorizes them to represent and to
vote, as designated below, all the shares of common stock of CNB Corporation
held of record by the undersigned on March 21, 1997, at the Annual Meeting of
Shareholders to be held May 20, 1997, and at any adjournment thereof.
1. In the election of nine directors to be elected for terms expiring in 1998:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the nominees listed below
contrary below)
(INSTRUCTION: To withhold authority to vote for any individual nominee strike
a line through the nominee's name in the list below.)
Robert E. Churchill Thomas J. Ellenberger John L. Ormsbee
James C. Conboy, Jr. Thomas J. Fisher Francis J. VanAntwerp, Jr.
Kathleen M. Darrow Vincent J. Hillesheim John P. Ward
2. Proposal to amend Articles of Incorporation to Increase Authorized Stock:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
COMPLETE AND SIGN ON REVERSE
<PAGE> 14
The undersigned shareholder instructs the Proxies to vote as specified
in this Proxy on the matters described in the Proxy Statement dated April 18,
1997. This Proxy, when properly executed, will be voted by the Proxies in the
manner directed herein by the undersigned shareholder. IF NO CHOICE IS
SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND
FOR PROPOSAL 2. BY EXECUTION OF THIS PROXY, THE UNDERSIGNED SHAREHOLDER CONFERS
UPON THE ABOVE-APPOINTED PROXIES THE DISCRETIONARY AUTHORITY TO VOTE UPON ANY
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING, AND REVOKES ANY PRIOR
PROXIES.
The undersigned shareholder acknowledges receipt of the 1996 Annual
Report to Shareholders, and the Notice of Meeting and Proxy Statement, both
dated April 18, 1997.
The giving of this Proxy does not affect the right of the undersigned
shareholder to vote in person should the undersigned shareholder attend the
annual meeting. This Proxy may be revoked at any time before it is voted.
Each shareholder must sign exactly as his/her name appears below. For
shares held jointly, each joint owner must sign. If signing as attorney,
executor, trustee or in some other representative capacity, sign name and give
full title. If a corporation, sign in full corporate name by authorized
officer. If a partnership, sign in partnership name by authorized person.
Brokers executing proxies should indicate in the space below the number of
shares with respect to which authority is conferred by this Proxy if less than
all shares held by such brokers as nominees are to be voted.
The _________ shares represented by this Proxy are registered on our
books as follows:
Date:____________, 1997 ____________________________________
Signature
Brokers-Number of Shares ___________ ____________________________________
Signature
____________________________________
Signature
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
IN THE ENCLOSED ENVELOPE PROMPTLY.
