<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>
FIDELITY NATIONAL CORPORATION
- --------------------------------------------------------------------------------
(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
FIDELITY NATIONAL CORPORATION
3490 PIEDMONT ROAD
ATLANTA, GEORGIA 30305
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 16, 1998
The Annual Meeting of Shareholders of Fidelity National Corporation
("Company") will be held on Thursday, April 16, 1998, at 3:00 P.M. at its office
at ONE SECURITIES CENTRE, 3490 PIEDMONT ROAD, SUITE 1550, ATLANTA, GEORGIA
30305, for the purposes of considering and voting upon:
1. The election of eleven directors to constitute the Board of
Directors to serve until the next Annual Meeting and until
their successors are elected and qualified.
2. Such other matters as may properly come before the meeting or
any adjournment thereof.
Only holders of Common Stock and Preferred Stock of record at the close
of business on March 10, 1998, will be entitled to notice of and to vote at the
meeting or any adjournment thereof.
A Proxy Statement and a Proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the Proxy promptly in the
enclosed business reply envelope. If you attend the meeting you may, if you
wish, withdraw your Proxy and vote in person.
Also enclosed is a copy of the Company's 1997 Annual Report to
Shareholders.
By Order of the Board of Directors,
Martha C. Fleming
Secretary
March 24, 1998
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR
VOTE MAY BE RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE> 3
FIDELITY NATIONAL CORPORATION
3490 PIEDMONT ROAD
ATLANTA, GEORGIA 30305
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Directors of Fidelity National Corporation
("Company") for use at the Annual Meeting of Shareholders ("Annual Meeting") of
the Company to be held at its office at ONE SECURITIES CENTRE, 3490 PIEDMONT
ROAD, SUITE 1550, ATLANTA, GEORGIA 30305, on April 16, 1998, at 3:00 P.M. and
any adjournment thereof, for the purposes set forth in the accompanying Notice
of the Annual Meeting. The expenses of this solicitation, including the cost of
preparing and mailing this Proxy Statement, will be paid by the Company. Copies
of solicitation materials may be furnished to banks, brokerage houses and other
custodians, nominees and fiduciaries for forwarding to beneficial owners of
shares of the Company's Common Stock ("Common Stock") and Non-Cumulative 8%
Convertible Preferred Stock, Series A ("Preferred Stock"), and normal handling
charges may be paid for such forwarding service. In addition, directors,
officers, and other employees of the Company, who will not be additionally
compensated therefor, may solicit Proxies in person or by telephone. It is
anticipated that this Proxy Statement and the accompanying Proxy will first be
mailed to shareholders on March 24, 1998.
The record date of holders of Common Stock and Preferred Stock
(collectively "Capital Stock") entitled to vote at the Annual Meeting was taken
as of the close of business on March 10, 1998. On that date, the Company had
outstanding and entitled to vote 8,116,316 shares of Common Stock, no par value
with each share entitled to one vote, and 984,000 shares of Preferred Stock with
each share entitled to .86926 of a vote.
A Proxy given pursuant to this solicitation may be revoked by the
holder of the Capital Stock who attends the meeting and gives oral notice of his
or her election to vote in person, without compliance with any other
formalities. In addition, any Proxy given pursuant to this solicitation may be
revoked prior to the meeting by delivering an instrument revoking it or a duly
executed Proxy bearing a later date to the Secretary of the Company. If the
Proxy is properly completed and returned by the holder of the Capital Stock and
is not revoked, it will be voted at the meeting in the manner specified thereon.
If the Proxy is returned but no choice is specified thereon, it will be voted
"FOR" all the persons named below under the caption "Information about Nominees
for Director," and upon such other matters as may properly come before the
meeting or any adjournment thereof in accordance with the best judgment of the
holders of the Proxy.
The presence of a majority of the votes entitled to be cast at the
Annual Meeting represented in person or by proxy at the Annual Meeting will
constitute a quorum. The eleven nominees receiving the highest vote totals will
be elected as directors of the Company. All other matters will be decided by the
affirmative vote of the majority of the votes entitled to be cast present or
represented at the Annual Meeting.
Abstentions, withheld votes, and broker non-votes will be included in
the calculation of the number of votes represented in person or by proxy at the
Annual Meeting in determining whether the quorum requirement is satisfied, but
will not be counted as votes cast for any matter to be voted upon. Broker
"non-votes" occur when a broker holding shares of Capital Stock for a beneficial
owner votes on one matter pursuant to the broker's discretionary authority or
pursuant to instructions from the beneficial owner, but does not vote on another
matter for the reason that the broker does not have discretionary authority to
vote such shares on such other matter and has not received voting instructions
from the beneficial owner. Broker non-votes will not affect the votes required
to elect the directors, which is the only matter known to Management of the
Company which will be presented at the Annual Meeting.
2
<PAGE> 4
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth as of March 10, 1998, beneficial
ownership of the Company's Capital Stock by each "person" known by the Company
to be the beneficial owner of more than 5% of the Company's voting securities,
by each director and Named Officer and by all directors and executive officers
of the Company as a group.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENT OF CLASS
OF BENEFICIAL OWNER OWNED BENEFICIALLY OUTSTANDING
- ------------------- ------------------ ----------------
<S> <C> <C>
James B. Miller, Jr. 2,680,810 (1) 29.9%
David R. Bockel 1,100 *
Dr. Edward G. Bowen 11,000 (2) *
Kevin S. King 1,000 *
Larry D. Peterson 1,000 *
Robert J. Rutland 148,764 1.7%
W. Clyde Shepherd, Jr. 128,722 1.4%
Gordon M. Sherman 173,852 (3) 1.9%
R. Phillip Shinall III 8,887 (4) *
Rankin Smith, Jr. 17,474 (5) *
Felker W. Ward, Jr. 7,920 *
Sharon R. Denney 19,259 *
M. Howard Griffith, Jr. 6,954 (6) *
H. Palmer Proctor, Jr. 1,000 *
All directors and executive officers
as a group (14 persons) 3,207,742 (7) 35.8%
</TABLE>
- -------------------------
(1) Includes 51,111 shares of Common Stock owned of record by Mr. Miller's
wife, 330,520 shares held by Fidelity National Bank ("FNB") as trustee
under five trusts for Mr. Miller's children and 180,433 shares held by
BAC Properties, a partnership of which Mr. Miller and his wife own 40%.
Also includes 34,770 shares of Common Stock issuable upon conversion of
shares of Preferred Stock owned by his spouse. Mr. Miller's business
address is 3490 Piedmont Road, Atlanta, Georgia 30305.
(2) Includes 10,560 shares of Common Stock held by Dr. Bowen as trustee for
Target Benefit Plan.
(3) Represents 173,852 shares of Common Stock issuable upon conversion of
shares of Preferred Stock.
(4) Includes 1,232 shares owned by Mr. Shinall's wife.
(5) Includes 7,823, 1,390 and 2,607 shares of Common Stock issuable upon
conversion of shares of Preferred Stock owned by Mr. Smith, his spouse
and Mr. Smith as custodian for family members, respectively.
(6) Represents 6,954 shares of Common Stock issuable upon conversion of
shares of Preferred Stock.
(7) Includes 227,396 shares of Common Stock issuable upon conversion of
shares of Preferred Stock.
* Less than one percent.
ITEM 1 - NOMINATION AND ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall
consist of from three to 24 directors. The number of directors is currently set
at eleven by board resolution. The number of directors may be increased or
decreased from time to time by resolution of the Board of Directors or of the
shareholders, but
3
<PAGE> 5
no decrease shall have the effect of shortening the term of an incumbent
director. The terms of office for directors continue until the next annual
meeting of shareholders and until their successors are elected and qualified.
In the event that any nominee withdraws or for any reason is not able
to serve as a director, the Proxy will be voted for such other person as may be
designated by the Board of Directors as substitute nominee unless the Board of
Directors or shareholders by resolution provide for a lesser number of
directors, but in no event will the Proxy be voted for more than eleven
nominees. Management of the Company has no reason to believe that any nominee
will not serve if elected. All the nominees are currently directors of the
Company.
INFORMATION ABOUT NOMINEES FOR DIRECTOR
The following information as of March 10, 1998, has been furnished by
the respective nominees for director. Except as otherwise indicated, each
nominee has been engaged in his present principal employment, in the same
position, for more than five years.
<TABLE>
<CAPTION>
Year Business Experience During Past
Name Age Elected Five Years And Other Information
- ---- --- ------- --------------------------------
<S> <C> <C> <C>
James B. Miller, Jr.(3) 57 1979 Chairman of the Board, President and Chief
Executive Officer of the Company since 1979.
A director of FNB since 1976; President and
Chief Executive Officer of FNB from 1977 to
1997; and Chairman of FNB since 1998.
Chairman of the Boards of Fidelity National
Mortgage Corporation ("FNMC") and Fidelity
National Capital Investors, Inc. ("FNCI").
David R. Bockel 53 1997 President of Bockel & Company, an advertising
agency in Atlanta, Georgia, since 1997.
President of the predecessor companies since
1971. He is also a Brigadier General, U.S.
Army Reserve.
Dr. Edward G. Bowen(1) 62 1989 Gynecologist and obstetrician in Atlanta, Georgia.
A director of FNB since 1989.
Kevin S. King 50 1998 Partner in the law firm of King & Carragher,
Atlanta, Georgia. A director of FNB since
January 1998.
Larry D. Peterson 49 1997 President and Chief Executive Officer, FNB, and
Vice President of the Company since 1997. Senior
Vice President and Senior Segment Manager of
KeyCorp. from 1995 to 1997. President, Central
Indiana Region of Society National Bank from
1992 to 1995.
Robert J. Rutland (1)(2)(3) 56 1979 Chairman and Chief Executive Officer of Allied
Holdings, Inc., ("Allied") a transportation company
located in Decatur, Georgia, since 1995. President and
Chief Executive Officer of Allied from 1986 to 1995.
A director of FNB since 1974.
</TABLE>
4
<PAGE> 6
<TABLE>
<S> <C> <C> <C>
W. Clyde Shepherd, Jr.(2)(3) 83 1979 Secretary/Treasurer of Shepherd Construction
Company, a general contracting company located in
Atlanta, Georgia. A director of FNB since 1974
and Chairman of the Board of Directors of FNB
from 1989 to 1998.
Gordon M. Sherman 65 1997 Regional Commissioner of the Social Security
Administration for eight southeastern states.
R. Phillip Shinall III(2) 51 1979 Partner of the law firm of Holland & Knight LLP,
Atlanta, Georgia, since 1997. Partner of the law
firm of Glass, McCullough, Sherrill & Harrold, LLP
from 1988 to 1997. A director of FNB since 1979.
Rankin Smith, Jr. 50 1987 Advisor to the Atlanta Falcons football team. A
director of FNB since 1987.
Felker W. Ward, Jr.(1) 64 1996 President of Ward & Associates, Inc., an investment
banking firm, since 1991; principal of Pinnacle In-
vestment Advisors, Inc., an investment advisory firm
in Atlanta, Georgia, since 1991. A director of AGL
Resources, Inc., a natural gas distributing utility;
Abrams Industries, Inc., a construction and property
management company and a manufacturer of
fixtures. A director of FNB since 1996.
</TABLE>
- --------------------------
(1) Member of the Audit Committee of the Board of Directors
(2) Member of the Compensation Committee of the Board of Directors
(3) Member of the Executive Committee of the Board of Directors
There are no family relationships between any director, executive
officer or nominee for director of the Company or any of its subsidiaries except
that W. Clyde Shepherd III, a director of FNB and FNCI is the son of W. Clyde
Shepherd, Jr., a director of the Company; Karina Miller, a director of FNCI, is
the spouse of James B. Miller, Jr., Chairman of the Board, President, and Chief
Executive Officer.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE
NOMINEES FOR DIRECTOR.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Messrs. Bockel and Sherman inadvertently filed late Form 3 initial
statement of beneficial ownership of securities with the Securities and Exchange
Commission.
Messrs. Bockel, Miller, Peterson and Smith each inadvertently filed
late one Form 4 statement of changes in beneficial ownership of securities with
the Securities and Exchange Commission.
EXECUTIVE COMPENSATION
The following table sets forth the annual and other compensation paid
by the Company and its subsidiaries to James B. Miller, Jr., Larry D. Peterson,
Sharon R. Denney, M. Howard Griffith, Jr. and H. Palmer Proctor, Jr.,
5
<PAGE> 7
the only executive officers of the Company whose salary and bonus was $100,000
or more for 1997 (Messrs. Miller, Peterson, Denney, Griffith and Proctor are
individually referred to herein as a "Named Officer").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
Name and All Other
Principal Position Year Salary Bonus Compensation
------------------ ---- ------ ----- ------------
<S> <C> <C> <C> <C>
James B. Miller, Jr. 1997 $600,000 - $50,107 (1)
Chairman of the Board 1996 600,000 - 44,529 (1)
President and Chief 1995 600,000 - 46,304 (1)
Executive Officer
Larry D. Peterson 1997 88,654 $50,000(2) 1,172 (2)
President and Chief
Executive Officer, FNB
Sharon R. Denney 1997 210,000 - 5,043 (3)
Executive Vice President 1996 210,000 - 32,522 (3)
1995 210,000 - 32,731 (3)
M. Howard Griffith, Jr. 1997 118,750 - 1,080 (4)
Chief Financial Officer 1996 90,000 - 1,010 (4)
1995 90,000 10,000 1,808 (4)
H. Palmer Proctor, Jr. 1997 100,010 - 3,410 (5)
Vice President 1996 94,000 - 3,513 (5)
1995 70,016 10,000 920 (5)
</TABLE>
- -------------------------
(1) Includes Company contributions of $1,425, $1,350, and $2,250 to Mr. Miller's
account in the Company's 401(k) Plan for 1997, 1996 and 1995, respectively, and
$39,582 paid by the Company for life insurance premiums for Mr. Miller for each
of the three years ended December 31, 1997, under a split-dollar insurance
benefit plan. Upon the termination of the plan, the Company will receive from
the proceeds of the life insurance policy the insurance premiums paid by the
Company.
(2) Employment commenced on September 18, 1997. Includes a lump sum payment of
$50,000 upon commencement of employment. Includes Company contribution of $1,172
to Mr. Peterson's account in the Company's 401(k) Plan for 1997.
(3) Includes Company contributions of $1,425, $1,350, and $2,361 to Mr. Denney's
account in the Company's 401(k) Plan for 1997, 1996, and 1995, respectively. The
Company entered into an agreement with Mr. Denney in 1985, which was extended in
1994, to pay him $30,000 a year for 10 years commencing upon his retirement. The
Company has accrued $24,000 in 1995 to provide for this liability, which is also
included in All Other Compensation.
(4) Includes Company contributions of $1,072, $846 and $1,608 to Mr. Griffith's
account in the Company's 401(k) Plan for 1997, 1996, and 1995, respectively.
(5) Includes Company contributions of $900, $846, and $720 to Mr. Proctor's
account in the Company's 401(k) Plan for 1997, 1996, and 1995, respectively.
6
<PAGE> 8
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with James B.
Miller, Jr. and Larry D. Peterson.
The employment agreement with Mr. Miller is for a three-year period
commencing on January 1, 1998. It provides for an annual base salary of $300,000
and annual incentive compensation of up to $400,000 based upon the attainment by
the Company of certain net income targets.
The employment agreement with Mr. Peterson is for a three-year period
commencing on September 15, 1997. It provides for an annual base salary of
$300,000. The employment agreement further provides that FNB will adopt, prior
to September 15, 1998, a deferred compensation program which will include all
senior executives of FNB. Mr. Peterson was paid a lump sum of $50,000 within 30
days of the commencement of his employment. Also, the Company agreed to
reimburse Mr. Peterson for premiums on a $1 million term life insurance policy
and a disability insurance policy which will provide disability benefits at the
annual rate of $210,000.
The employment agreements with Messrs. Miller and Peterson each provide
that if the executive terminates his employment or is terminated by the Company
for cause, such executive is subject to a non-compete provision for a period of
one year.
STOCK OPTION GRANTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997(1)
<TABLE>
<CAPTION>
Grant Date
Individual Grants Value
- ----------------------------------------------------------------------------------------------
% of Total
Number Options Granted Exercise Market Value Grant Date
of Options to Employees Price Expiration on Present
Name Granted in Fiscal Year ($/Sh) Date Grant Date Value(2)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James B. Miller, Jr. 40,400 16% 9.90 9/02 $9.00 $169,276
109,600 44% 9.00 9/02 $9.00 $557,864
Larry D. Peterson 100,000 40% 9.00 9/05 $9.00 $805,000
</TABLE>
- -------------------------
(1) No stock appreciation rights have been granted by the Company.
(2) The Company used a modified Black-Scholes model of option valuation to
determine grant date present value. The Company does not represent that
the Black-Scholes model can properly determine the value of an option.
Assumptions used for valuation are: interest rate (risk free rate of
return of 5.12%), no annual dividend, and volatility of 27.5%.
7
<PAGE> 9
The following table sets forth, with respect to the Named Officers, information
concerning each exercise of stock options and all unexercised stock options held
as of December 31, 1997.
AGGREGATE STOCK OPTION EXERCISES IN FISCAL YEAR ENDED
DECEMBER 31, 1997 AND FISCAL YEAR END STOCK OPTION VALUES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Value Realized
Number of ($)(Market
Shares Price at Time of Number of Value of Unexercised
Acquired Exercise less Unexercised Stock In-the-Money Stock
Name on Exercise Exercise Price) Options at FY-End Options at FY-End(1)
- ---------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James B. Miller, Jr. - - - 150,000 - $27,400
Larry D. Peterson - - - 100,000 - $25,000
</TABLE>
- -------------------------
(1) The fair market value of a share of Common Stock of the Company on December
31, 1997 was $9.25.
401(K) PLAN
The Company has adopted a tax-qualified savings plan ("401(k) Plan")
which is intended to qualify under Section 401(k) of the Internal Revenue Code
of 1986 ("Code"). Employees may elect to contribute to the 401(k) Plan through
payroll deductions, up to the statutory limitation and may direct the investment
of their accounts into various investment funds. Under Section 401(k) of the
Code, the employee's contributions to the 401(k) Plan are not taxable to the
employee until such amounts are distributed to the employee. The Company pays
the administrative expenses of the 401(k) Plan and makes voluntary contributions
from time to time which are allocated to each eligible employee's account as
required by the Code. The Company's voluntary contributions become fully vested
at the earlier of six years of service or at normal retirement age.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company was paid $2,000 for the Board
of Directors' meeting attended and $500 for committee meetings attended on a day
which was not a regularly scheduled Board meeting date in January 1997. Director
and committee fees were suspended from February through September 1997 and
reinstituted commencing October 1997 at $1,000 for attending each regularly
scheduled Board of Directors' meeting and $250 for attending each committee
meeting held on a day which was not a regularly scheduled Board meeting date.
Directors, who are employees, do not receive a fee for attending Board or
committee meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee ("Committee") are
W. Clyde Shepherd, Jr., Chairman, Robert J. Rutland, and R. Phillip Shinall III.
No member of the Committee is an employee of the Company or any subsidiary.
8
<PAGE> 10
FNB leases office space from Allied Holdings, Inc. of which Mr. Rutland
is Chief Executive Officer. Mr. Rutland is a member of the Compensation and
Executive Committees of the Company. FNB leases approximately 35,000 square feet
at an average annual rate of approximately $17 per square foot, subject to a pro
rata increase for any increase in taxes, insurance, utilities, or maintenance.
FNB also leases space from a corporation of which Mr. Shepherd, a director and
member of the Compensation and Executive Committees, is the majority
shareholder. FNB leases approximately 2,200 square feet at an average annual
rate of approximately $11 per square foot subject to a pro rata increase for
increases in taxes and insurance. The lease agreements were made substantially
on the same terms as those prevailing at the time for comparable leases for
similar facilities.
Mr. Shinall has been a partner in the law firm of Holland & Knight LLP,
Atlanta, Georgia, since October 1997. Holland & Knight LLP provided legal
services to the Company in 1997. In addition, Mr. Shinall provided legal and
other services to the Company prior to October 1997 for which he was paid
approximately $100,000.
FNB, FNMC and FNCI have had, and expect to have in the future, banking
and other business transactions in the ordinary course of business with
directors (including members of the Committee) and officers of the Company and
their affiliates, including members of their families or corporations,
partnerships or other organizations in which such officers or directors have a
controlling interest, on substantially the same terms (including price, or
interest rates and collateral) as those prevailing at the time for comparable
transactions with unrelated parties. Such transactions have not and will not
involve more than the normal risks of collectibility, nor present other
unfavorable features. As of December 31, 1997, FNB and FNMC had direct or
indirect loans outstanding to officers and directors and their affiliates
aggregating approximately $4.6 million.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission
("SEC"), the Company is required to provide certain information with respect to
compensation provided to the Company's Chairman of the Board, President and
Chief Executive Officer ("CEO") and to the Company's other executive officers.
The Committee is responsible for evaluating the remuneration of executives
of the Company to provide competitive levels of compensation which take into
account the Company's annual and long-term performance goals, whether there has
been above average corporate performance, the levels of an individual's
initiative, responsibility and achievements, and the Company's need to attract
and retain well trained and highly motivated executives. The Committee fixes the
compensation of the CEO and generally reviews the compensation of the other
executive officers. All decisions by the Committee relating to the compensation
of the Company's CEO are reviewed by the full Board of Directors.
Executive officers' overall compensation is intended to be consistent with
the compensation paid to executives of financial institutions and of other
companies similar in size, complexity, and character to the Company, provided
that the Company's performance warrants the compensation being paid. The annual
salary of the CEO was established at $600,000 by the Committee in 1994 after
considering the experience required to manage a company which is growing
rapidly, the levels of compensation that would be required to be paid to attract
a person to lead the Company in the future and comparable levels of compensation
paid to chief executive officers of local entrepreneurial companies and
financial institutions. There were no changes in Mr. Miller's compensation for
1997. During 1997 the Company successfully raised over $6 million in the private
placement of its Preferred Stock and over $26 million in a public offering of
its Common Stock. The Committee took into account the Company's performance in
determining Mr. Miller's salary without specific reference being made to
qualitative or quantitative performance factors. In addition, the Committee in
recent years had not granted a bonus to the CEO. However, there are no
assurances that this practice will continue in the future. The Committee granted
to the CEO stock options in 1997. This was the first ever stock option
9
<PAGE> 11
grant to the CEO.
Compensation paid to the Company's executive officers in 1997, as
reflected in the foregoing compensation tables, consisted of the following
elements: base salary, stock option grant, matching contributions paid with
respect to the Company's 401(k) Plan and certain perquisites. In addition, the
Company has adopted certain broad-based employee benefit plans in which
executive, and other officers together with employees, have the option to
participate. Benefits under these plans generally are not directly or indirectly
tied to the Company's performance, except that contributions by the Company to
the 401(k) Plan are voluntary, at the election of the Board of Directors. In
light of the level of earnings of the Company in 1997, no bonuses were granted
to the executive officers for 1997 performance.
The Chief Executive Officer establishes and administers the compensation
of all other executive officers.
COMPENSATION COMMITTEE
W. Clyde Shepherd, Jr., Chairman
Robert J. Rutland
R. Phillip Shinall III
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative shareholder return on the Company's Common Stock with the cumulative
Total Return on The NASDAQ Stock Market (U.S. Companies) index and the NASDAQ
Bank Stocks index for the period commencing on October 31, 1994, the date the
Company's Common Stock began trading on The NASDAQ Stock Market under the symbol
LION.
The graph assumes $100 invested on October 31, 1994, in the Common
Stock of the Company and in each of the two indexes. The comparison assumes that
all dividends are reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
THE NASDAQ STOCK MARKET (U.S.) AND NASDAQ BANK STOCKS.
<TABLE>
<CAPTION>
Period Ending
---------------------------------------------------
Index 10/31/94 12/31/94 12/31/95 12/31/96 12/31/97
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fidelity National Corporation 100.00 84.43 152.68 126.11 95.22
NASDAQ - Total US 100.00 96.95 137.12 168.65 206.95
NASDAQ Bank Index 100.00 95.27 141.88 187.32 316.46
</TABLE>
10
<PAGE> 12
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1997, the Board of Directors of the Company held nineteen
meetings. During 1997, with the exception of one Board member, each of the
directors attended approximately seventy-five percent (75%) of the aggregate
meetings of the Board of Directors and the committees on which the director
served. The Company does not have a nominating committee. All nominees for the
Board of Directors are nominated by the entire Board of Directors.
Audit Committee. The primary functions of the Company's Audit Committee are to
see that an audit program is in place to protect the assets of the Company,
assure that adequate internal controls exist, review SEC filings, and recommend
the independent auditors for appointment by the Board of Directors. During 1997,
the Audit Committee held ten meetings.
Compensation Committee. The primary functions of the Compensation Committee are
to evaluate and administer the compensation of the Company's Chief Executive
Officer, and to review the general compensation programs of the Company. During
1997, the Compensation Committee held one meeting.
Executive Committee. The Executive Committee is authorized to exercise any and
all the powers of the Company's Board of Directors in the management of the
business and affairs of the Company except where specific power is limited to
the Board of Directors by the Company's Bylaws or by applicable law. During
1997, the Executive Committee held four meetings.
AUDITORS
Ernst & Young LLP audited the Company's financial statements for 1997.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so and will respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's
1999 Annual Meeting must be received by the Company addressed to the President
at 3490 Piedmont Road, Suite 1550, Atlanta, Georgia 30305, by December 24, 1998,
in order to be eligible for inclusion in the Company's Proxy Statement and Proxy
for that meeting.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Company knows of no matters other than those stated
above that are to be brought before the meeting. If any other matters should be
presented for consideration and voting, however, it is the intention of the
persons named as proxies in the enclosed Proxy to vote in accordance with their
judgment as to what is in the best interest of the Company.
By order of the Board of Directors,
Martha C. Fleming
Secretary
March 24, 1998
11
<PAGE> 13
ANNEX A
FIDELITY NATIONAL CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1998 ANNUAL MEETING
OF SHAREHOLDERS
The undersigned hereby appoints Gordon M. Sherman and R. Phillip Shinall III, or
either of them with power of substitution to each, the proxies of the
undersigned to vote all of the shares of Common Stock and Preferred Stock owned
of record by the undersigned at the Annual Meeting of Shareholders of Fidelity
National Corporation to be held on April 16, 1998, or any adjournment thereof as
herein specified and in accordance with their best judgment with respect to any
other matters that may properly come before the meeting.
<TABLE>
<S> <C> <C>
Item 1. ELECTION OF DIRECTORS [ ] FOR all nominees [ ] WITHHOLD AUTHORITY for all nominees
NOMINEES: James B. Miller, Jr.; David R. Bockel; Dr. Edward G. Bowen; Kevin S. King; Larry D. Peterson; Robert J. Rutland;
W. Clyde Shepherd, Jr.; Gordon M. Sherman; R. Phillip Shinall III; Rankin Smith, Jr.; Felker W. Ward, Jr.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED
BELOW.)
___________________________________________________
THIS PROXY WILL BE VOTED "FOR" ITEM 1 UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED.
</TABLE>
Please sign this Proxy exactly as name appears on the Proxy:
__________________________________________________
Date:_______________________________________, 1998
Note: When signing as an attorney, trustee, administrator or guardian,
please give your title as such.
