<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:
[ ] 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
COMMERCIAL NATIONAL FINANCIAL CORP
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, APRIL 22, 1997
================================================================================
The annual meeting of shareholders of Commercial National Financial
Corporation will be held at the Ithaca Community Center, 120 North Maple
Street, Ithaca, Michigan 48847, on Tuesday, April 22, 1997, at 4:00 p.m. to
consider and vote upon:
1. Election of Directors.
2. To transact any other business that may come before the meeting.
Shareholders of record at the close of business on March 7, 1997, are
entitled to notice of and to vote at the meeting or any adjournment of the
meeting.
By Order of the Board of Directors,
Dean E. Milligan
President and Chief Executive Officer
March 24, 1997
================================================================================
It is important that your shares be represented at the
meeting. Even if you expect to attend the meeting,
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY.
<PAGE> 3
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
COMMERCIAL NATIONAL FINANCIAL CORPORATION
P.O. Box 280
101 North Pine River Street
Ithaca, Michigan 48847
This proxy statement is being furnished to holders of common stock, $1
par value ("Common Stock"), of Commercial National Financial Corporation (the
"Corporation") in connection with the solicitation of proxies by the
Corporation's board of directors for use at the annual meeting of shareholders
to be held on April 22, 1997, and at any adjournment of that meeting. The
annual meeting will be held at the Ithaca Community Center, 120 North Maple
Street, Ithaca, Michigan 48847, at 4:00 p.m. for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This proxy statement
and form of proxy are first being sent to shareholders on or about March 24,
1997.
If a proxy in the form distributed by the Corporation is properly
executed and returned to the Corporation, the shares represented by that proxy
will be voted at the annual meeting of shareholders and at any adjournment of
that meeting. Where a shareholder specified 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 nominees to the board of directors.
Management does not know of any other matters to be presented at the annual
meeting. If other matters are presented, all proxies will be voted in
accordance with the judgment of the persons named as proxies, who will consider
management's recommendations.
A proxy may be revoked at any time prior to its exercise by written
notice delivered to the President of the Corporation, by a subsequent dated
proxy, or by voting the shares represented by the proxy at the annual meeting.
Solicitation of proxies will be made initially by mail. Officers,
directors and employees of the Corporation and its wholly owned subsidiary,
Commercial Bank (the "Bank"), may also solicit proxies in person or by
telephone without additional compensation. In addition, proxies may be
solicited by nominees and other fiduciaries, who may mail material to or
otherwise communicate with the beneficial owners of shares held by them. All
expenses of solicitation of proxies will be paid by the Bank.
ELECTION OF DIRECTORS
The board of directors of the Corporation has nominated the following
11 persons for election to the board of directors at the annual meeting:
Richard F. Abbott Kenneth R. Luneack Russell M. Simmet
Jefferson P. Arnold Dean E. Milligan Joseph B. Simon
Don J. Dewey Kim C. Newson Scott E. Sheldon
David A. Ferguson Howard D. Poindexter
Directors are to be elected at the annual meeting of shareholders to
serve until the next following annual meeting of shareholders. The proposed
nominees are willing to be elected and to serve. In the event that any nominee
is unable to serve or is otherwise unavailable for election, which is not now
contemplated, the incumbent Corporation board of directors may or may not
select a substitute nominee. If a substitute nominee is selected, all proxies
will be voted for the person so selected. If a substitute nominee is not so
selected, all proxies will be voted for the election of the remaining nominees.
Proxies will not be voted for a greater number of persons than the number of
nominees named.
<PAGE> 4
A vote of shareholders holding a plurality of shares is required to
elect directors. For the purpose of counting votes on this proposal,
abstentions, broker non-votes, and other shares not voted will not be counted
as shares voted, and the number of votes of which a plurality is required will
be reduced by the number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES AS
DIRECTORS
VOTING SECURITIES
Holders of record of Common Stock, at the close of business on March
7, 1997, will be entitled to vote at the annual meeting of shareholders on
April 22, 1997, and any adjournment of that meeting. As of March 7, 1997,
there were 877,900.58 shares of Common Stock issued and outstanding. Each
share of Common Stock entitles its holder to one vote upon each matter to be
voted upon at the meeting.
The following table shows certain information concerning the number of
shares of Common Stock held as of December 31, 1996, by the only shareholder
who is known to management to have been the beneficial owner of more than 5% of
the outstanding shares as of that date:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1)
--------------------------------
Shared Voting Total
Name and Address of or Investment Beneficial Percent
Beneficial Owner Power (2) Ownership of Class
-------------------- ------------- --------- --------
<S> <C> <C> <C>
Robert M. Sheldon 48,688 48,688 5.58%
1055 Riverview
Alma, Michigan 48801
</TABLE>
The following table sets forth information concerning the number of
shares of Common Stock held as of December 31, 1996, by each of the
Corporation's directors and nominees, the named executive officers of the
Corporation, and by all directors and executive officers of the Corporation as
a group:
2
<PAGE> 5
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1)
--------------------------------
Sole Voting Shared Voting Total
and Investment or Investment Stock Beneficial Percent
Power Power(2) Options(3) Ownership of Class
--------------- ------------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Richard F. Abbott -- 24,912(4) 5,165 30,077 3.45%
Jefferson P. Arnold 8,996 16,685 558 26,239 3.00%
Don J. Dewey 942 1,942 706 3,590 0.41%
David A. Ferguson 5,106 842 687 6,635 0.76%
Kenneth R. Luneack 36,693 1,683 319 38,695 4.43%
Dean E. Milligan 7,245 347(4) 9,194 16,786 1.92%
Kim C. Newson 1,990 1,494 704 4,188 0.48%
Howard D. Poindexter 15,240 14,890 645 30,775 3.53%
Scott E. Sheldon 6,865 -- 706 7,571 0.87%
Russell M. Simmet -- 15,817 337 16,154 1.85%
Joseph B. Simon -- 6,246 653 6,899 0.79%
All directors and
executive officers
as a group 83,077 84,858 19,674 187,609 21.49%
</TABLE>
_________________________
(1) The number of shares stated is based on information furnished by the
officers and directors and includes shares personally owned of record
by each person and shares which under applicable regulations are
deemed to be otherwise beneficially owned by each 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
investment power with respect to the security. Voting power includes
the power to vote or to direct the voting of the security. Investment
power includes the power to dispose or to direct the disposition of
the security. A person is also considered to be 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 as to which the indicated person is
legally entitled to share voting or investment power by reason of
joint ownership, trust or other contract or property right, and shares
held by a family member over whom the indicated person may have
substantial influence by reason of relationship.
(3) These numbers include vested stock options, granted under the
Corporation's 1989 and 1991 Stock Option Plans, which entitle the
holder to acquire beneficial ownership of such shares within sixty
days.
(4) These numbers include shares that are allocated to the member's
individual account under the Commercial Bank Employee Savings and
Stock Ownership Plan.
3
<PAGE> 6
DIRECTORS AND EXECUTIVE OFFICERS
Biographical information concerning executive officers and directors
who are nominated for election to the board of directors at the annual meeting
is presented below. Except as otherwise indicated, all directors and executive
officers have had the same principal employment for over 5 years and have held
their positions with the Corporation since January, 1992. All eleven nominees
are incumbent directors. All nominees were last elected to the Corporation's
board of directors at the last annual meeting of shareholders that was held on
April 23, 1996.
Richard F. Abbott (age 62) has been a director of the Corporation and
the Bank since 1989. He had been interim president and chief
executive officer of the Bank from September 15, 1993, until March 16,
1994, and of the Corporation from September 15, 1993 until May 18,
1994. From May, 1990 to September 15, 1993, and from March 16, 1994
until December 31, 1996, Mr. Abbott served as executive vice president
of the Bank and of the Corporation.
Jefferson P. Arnold (age 57) has been a director of the Corporation
since May 18, 1994. Mr. Arnold is an attorney at law and has
practiced law with the Arnold Law Offices for 29 years.
Don J. Dewey (age 59) has been a director of the Corporation since
1988 and a director of the Bank since 1987. He is a funeral director
and the owner and president of Dewey Funeral Homes, Inc.
David A. Ferguson (age 47) has been a director of the Corporation
since 1988 and a director of the Bank since 1985. He is vice
president of Ashcraft's Market, Inc., a retail grocery store.
Kenneth R. Luneack (age 65) has been a director of the Corporation and
of the Bank since May, 1991. He is owner and operator of Ken Luneack
Construction, Inc., a building materials manufacturer.
Dean E. Milligan (age 53) is president and chief executive officer of
the Corporation and the Bank. He has been a director of the
Corporation and the Bank since May 18, 1994. He has been president
and chief executive officer of the Bank since March 16, 1994, and of
the Corporation since May 18, 1994. Prior to joining the Corporation
he was CEO and President of Old First National Bank in Bluffton,
Indiana, from January 1986 to March 1994.
Kim C. Newson (age 46) has been director of the Corporation since 1988
and a director of the Bank since 1987. He is president of Alma
Hardware Company and general manager of Alma True Value Hardware, both
of which are in the retail hardware business.
Howard D. Poindexter (age 61) has been chairman of the board of the
Corporation since February of 1993. He has been a director of the
Corporation since 1988 and a director of the Bank since 1973. He is
manager of Poindexter Farms, an independent farming
4
<PAGE> 7
business. From 1954 until his retirement in 1992, he was a soil
conservationist for the U.S. Department of Agriculture.
Scott E. Sheldon (age 41) has been a director of the Corporation since
1988 and a director of the Bank since 1985. He is the owner of
Kernen-Sheldon Agency and Shepherd Insurance Agency, both of which are
insurance agencies.
Russell M. Simmet (age 62) has been a director of the Corporation
since 1988 and a director of the Bank since 1976. He is the owner of
Simmet Insurance Agency, an insurance agency.
Joseph B. Simon (age 68) has been a director of the Corporation since
1988 and a director of the Bank since 1987. He is chairman of Alma
Iron & Metal Company, Inc., a scrap metal processor.
Dean E. Milligan serves as the chief executive officer of the
Corporation. Biographical information for Mr. Milligan is presented above.
Effective January 1, 1997, the Corporation appointed Jeffery S. Barker to the
position of Corporate Secretary and Treasurer. Mr. Barker serves the Bank as
Senior Vice President-Lending. Mr. Patrick G. Duffy has been appointed as Vice
President-Chief Financial Officer effective February 19, 1997. Mr. Duffy
previously served as Assistant Controller and Compliance Officer for Shoreline
Financial Corporation.
The Corporation's executive officer serves in his capacity without
receiving specific compensation for his services from the Corporation. The
Corporation's executive officer continues to serve as an executive officer of
the Bank. All officers serve at the pleasure of the boards of directors of the
Corporation and the Bank respectively.
The Corporation's board has two standing committees, the human
resources committee and the audit committee. The human resources committee
includes Messrs. Ferguson, Arnold, Abbott, Luneack, Milligan, Poindexter and
Sheldon. The human resources committee makes compensation recommendations.
The human resources committee met seven times in 1996. A sub-committee of the
human resources committee consisting of Messrs. Ferguson, Luneack, and
Poindexter administers the 1989 and 1991 Stock Option Plans.
The audit committee recommends to the board the employment of
independent certified public accountants to examine the financial statements of
the Corporation and its subsidiary, makes such additional examinations as the
committee deems advisable, reviews reports of examination of the Corporation
and its subsidiary received from regulatory authorities, reports to the board
at least once each calendar year on the results of examinations made and offers
such conclusions and recommendations as the committee deems appropriate.
Messrs. Dewey, Milligan, Newson, Simmet, Poindexter, and Simon serve on the
audit committee. The audit committee met four times during 1996.
The Corporation's entire board of directors performs the functions of
nominating and compensation committees.
The Corporation's board of directors will consider the nomination of
candidates for election as directors of the Corporation at any meeting of
shareholders called for the purpose of electing directors submitted by any
shareholder entitled to vote at that meeting. Any shareholder desiring to
nominate a
5
<PAGE> 8
candidate for director must deliver a notice to the Secretary of the
Corporation, not less than 14 nor more than 50 days prior to the meeting,
setting forth: the name, age, business address and residence address of the
nominee; the principal occupation or employment of the nominee; the number of
shares of Common Stock beneficially owned by the nominee; the total number of
shares of Common Stock that will be voted for each nominee; the name, business
address and residence address of the nominating shareholder; the number of
shares of Common Stock owned by the nominating shareholder; a statement that
the nominee is willing to be nominated; and such other information regarding
the nominee as would be required under the rules of the Securities and Exchange
Commission to be included in proxy statement soliciting proxies for the
election of the nominee.
The board of directors of the Corporation held 14 meetings during
1996. All incumbent directors attended at least 75% of the aggregate number of
meetings of the board of directors and meetings of committees on which they
served while they served in such capacities.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows certain information concerning the
compensation of the named executive officers of the Corporation and the Bank
for the three years ended December 31, 1996. For the same period, the annual
salary and bonus of no other executive officer of the Corporation or Bank
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
------------
Securities
Underlying
Annual Compensation(1) Options
------------------------------------ (No. of All Other
Year Salary Bonus Shares)(4) Compensation(2)
---- ------ ----- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Dean E. Milligan 1996 $116,710 $16,400 3,431 $10,287
President 1995 $111,878 $30,810 3,550 $ 9,871
and Chief Executive 1994 $ 86,325 $24,375 3,308 $ 440
Officer of the
Corporation and
Bank
Richard F. Abbott (3) 1996 $ 87,526 $11,678 1,436 $ 8,207
Executive Vice President 1995 $ 82,250 $18,000 1,940 $ 7,728
of the Corporation and Bank 1994 $ 80,354 $24,000 291 $ 7,387
</TABLE>
(1) Includes compensation deferred under the Commercial Bank Employee
Savings and Stock Ownership Plan and directors' fees.
(2) All other compensation for Mr. Milligan includes the Corporation
matching and base contributions under the Commercial Bank Employee
Savings and Stock Ownership Plan ($9,354
6
<PAGE> 9
for 1996 and $9,028 for 1995) and the amount paid by the Corporation
for his life insurance ($933 for 1996, $843 for 1995 and $440 for
1994). All other compensation for Mr. Abbott includes Corporation
matching and base contributions under the Commercial Bank Employee
Savings and Stock Ownership Plan ($7,538 for 1996, $7,076 for 1995 and
$6,813 for 1994) and the amount paid by the Corporation for his life
insurance ($669 for 1996, $652 for 1995, and $574 for 1994).
(3) Mr. Abbott retired as Executive Vice President of the Corporation and
the Bank on December 31, 1996.
(4) Shares have been adjusted for 5% stock dividend paid in November of
1996.
It is the Corporation's practice to award stock options annually to
key policy making members of management. Stock options have been an important
component of the Corporation's executive compensation program for several
years. Stock options are believed to help align the interests of senior
management with the interests of shareholders by promoting stock ownership by
senior executive officers and by rewarding them for appreciation in the price
of the Corporation's Common Stock. Stock options which were granted,
exercised, or outstanding during 1996 were granted under either the 1989 Stock
Option Plan or the 1991 Stock Option Plan. Both Stock Option Plans have been
approved by the Corporation's shareholders.
The Corporation's 1989 and 1991 Stock Option Plans provide that stock
options, stock appreciation rights, and tax benefit rights may be issued to
directors, officers, and key employees. Stock options entitle a participant to
buy shares of Common Stock of the Corporation during a specified time period at
a specified price. Subject to restrictions imposed by the Plans, the stock
option committee in its discretion determines who will be granted options, how
many shares will be subject to options, and the form of consideration that may
be paid upon exercise of an option. As of December 31, 1996, a maximum of
17,354 authorized shares are subject to the exercise of options under the
plans. As of December 31, 1996, no stock appreciation rights had been granted
under either plan. By its terms, the 1989 Stock Option Plan will terminate on
April 26, 1999. The 1991 Stock Option Plan will terminate by its terms on
April 22, 2001.
The following tables set forth information concerning stock options
granted to and exercised or retained by the named executive officers of the
Corporation and Bank during 1996. In 1996, the Corporation granted options
only under the 1991 Stock Option Plan. As indicated in the following table,
some options awarded in 1996 are exercisable for two years while the remaining
options are exercisable for five years.
7
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
Potential Realizable Value
Percent of at Assumed Annual Rates
No. of Total of Stock Price
Securities Options Appreciation for
Underlying Granted To Option Term
Options Employees Exercise ----------------------------
Granted In Fiscal Price Expiration
(#) Year ($/Shr) Date 0% 5% 10%
----------- ---------- ------------ ---------------- ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Dean E. Milligan 3,431 30.5% $26.67 3,150 @ 7/17/03 0 $34,209 $79,695
281 @ 7/17/98 $ 767 $ 1,574
Richard F.
Abbott 1,436 12.8% $26.67 1,155 @ 7/17/03 0 $12,543 $29,222
281 @ 7/17/98 $ 767 $ 1,574
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number Unexercised
Unexercised In-the-Money
Options at Options at
Year End Year End
Number of -------------- ------------------
Shares Acquired Value Exercisable/ Exercisable/
on Exercise Realized Unexercisable Unexercisable
----------------- -------- ------------- ------------------
<S> <C> <C> <C> <C>
Dean E. Milligan 1,260 $ 5,807 5,763 / 3,431 $128,226 / $91,493
Richard F. Abbott 1,355 $13,008 3,729 / 4,676 $ 73,399 / $94,797
</TABLE>
- -------------------
(1) The per share exercise price of each option is equal to the market
value of the Common Stock on the date each option was granted. The
option information has been adjusted to reflect the 5% stock dividend
in November of 1996. All outstanding options were granted for a term
of ten or fewer years. Options terminate, subject to certain limited
exercise provisions, in the event of death, retirement, or other
termination of employment. In the event of a change in control of the
Corporation, a participant may exercise tax benefit rights granted in
tandem with the options. Such tax benefit rights would entitle an
optionee to cash payments at the time of exercise to partially
reimburse the optionee for tax liability.
COMPENSATION OF DIRECTORS
The board of directors of the Bank holds regular monthly meetings.
The Bank compensates its directors at the rate of $550 per month. The Chairman
of the board is paid $1,100 per month. Directors of the Bank who are not
executive officers are paid $100 for each committee meeting attended. The
Corporation's board of directors meetings customarily coincide with Bank board
of directors meetings. No separate cash compensation is paid to directors for
Corporation board of directors meetings.
8
<PAGE> 11
The directors of the Corporation and Bank may receive stock options
under the Corporation's 1991 Stock Option Plan. The number of shares of Common
Stock covered by each option equals the number of shares the director could
purchase if he had purchased shares with the directors fees that the director
earned during the year. The options awarded to the directors are exercisable
after six months from the date of grant and expire two years from the date of
grant.
CERTAIN RELATIONSHIPS
Directors and officers of the Corporation and members of their
immediate families and businesses controlled by them were customers of and had
certain transactions with the Bank in the ordinary course of business since
January 1, 1996. It is anticipated that such transactions will take place in
the future in the ordinary course of business. All loans and commitments
included in such transactions were made on substantially the same terms,
including interest rates, fees, and collateral, as those prevailing at the time
for comparable transactions with other persons and did not involve more than
normal risk of collectibility or present any unfavorable features.
David A. Ferguson, a director of the Corporation, is Vice President of
Ashcraft's Market, Inc. Mr. Ferguson is also related by marriage to the owners
of Ashcraft's Market, Inc. During 1995, Ashcraft's entered into two lease
agreements with the Corporation with respect to the Corporation's Alma
Ashcraft's Supermarket Branch and the Midland Ashcraft's Supermarket Branch.
The lease payments payable under these leases are comparable to payments that
would have been paid to non-affiliated persons for similar facilities.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors appointed Crowe, Chizek and Company LLP as
independent auditors for the Corporation for the year ending December 31, 1996.
Crowe, Chizek and Company LLP has also been appointed to serve as the
Corporation's independent auditors for the year ending December 31, 1997.
BDO Seidman, LLP performed audits of the Corporation's financial
statements for the two years ended December 31, 1995 and 1994. Their reports
did not contain an adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
On December 13, 1995, the Corporation appointed the firm of Crowe, Chizek and
Company LLP as independent certified accountants for the Corporation. The
change of independent certified accountants was approved by the Corporation's
Board of Directors and its Audit Committee.
During the two years ended December 31, 1995 and from December 31,
1995 through the effective date of the BDO Seidman, LLP termination, there have
been no disagreements between the Corporation and BDO Seidman, LLP on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements would have caused BDO
Seidman, LLP to make reference to the subject matter of such disagreements in
connection with their report.
During the two years ended December 31, 1995 and from December 31,
1995 until the effective date of BDO Seidman, LLP's dismissal, BDO Seidman, LLP
did not advise the Corporation with respect to any of the "reportable events"
described in Item 304(a)(1)(v) of Regulation S-K.
9
<PAGE> 12
BDO Seidman, LLP furnished a letter to the Securities and Exchange
Commission dated December 22, 1995 stating that they agree with the above
statements.
During the two years ended December 31, 1995 and from December 31,
1995 through the effective date of the termination of BDO Seidman, LLP neither
the Corporation nor anyone on its behalf had consulted Crowe, Chizek and
Company LLP with respect to any accounting or auditing issues involving the
Corporation other than discussions with regard to the engagement. In
particular, there were no discussions with the Corporation regarding the
application of accounting principles to a specific transaction, the type of
audit opinion that might be rendered on the financial statements or any related
item.
A representative of Crowe, Chizek and Company LLP is expected to be
present at the annual meeting, will have an opportunity to make a statement,
and will be available to respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the annual
meeting scheduled to be held April 28, 1998, must be received by the
Corporation for inclusion in its proxy statement and form of proxy relating to
that meeting by November 24, 1997. Proposals of shareholders should be made in
accordance with Securities and Exchange Commission Rule 14a-8.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and certain officers and persons who own more than ten
percent of the Corporation's common stock, to file with the SEC initial reports
of ownership and reports of changes in ownership of the Corporation's common
stock. These officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Corporation with copies of these
reports.
To the Corporation's knowledge, based solely on review of the copies
of such reports furnished to the Corporation, during the fiscal year ended
December 31, 1996 all Section 16(a) filing requirements were satisfied, with
respect to the applicable officers, directors and greater than ten percent
beneficial owners.
10
<PAGE> 13
PROXY COMMERCIAL NATIONAL FINANCIAL CORPORATION PROXY
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1997
The undersigned acknowledges receipt of notice of and a proxy
statement for the annual meeting of shareholders of Commercial National
Financial Corporation to be held on April 22, 1997, and hereby appoints Edward
Hooper and Richard S. Prestage, and each of them, proxies of the undersigned,
each with full power of substitution, to vote all shares of the undersigned in
Commercial National Financial Corporation at the annual meeting of its
shareholders to be held on April 22, 1997, and at any adjournment thereof, with
all powers which the undersigned would have if personally present. The
undersigned hereby instructs Commercial National Financial Corporation to vote
any and all shares held for the account of the undersigned under the Commercial
National Financial Corporation Dividend Reinvestment Plan in accordance with
the specifications, if any, made in this proxy.
Election of Directors:
[ ] VOTE FOR all nominees (except as [ ] WITHHOLD AUTHORITY to vote
marked to the contrary). for all nominees listed below.
Richard F. Abbott, Jefferson P. Arnold, Don J. Dewey, David A.
Ferguson, Kenneth R. Luneack, Dean E. Milligan, Kim C. Newson, Howard D.
Poindexter, Scott E. Sheldon, Russell M. Simmet, and Joseph B. Simon.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space below.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
COMMERCIAL NATIONAL FINANCIAL CORPORATION. IF THIS PROXY IS PROPERLY EXECUTED
AND DELIVERED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED.
IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" ELECTION OF ALL
NOMINEES NAMED ON THIS PROXY. THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS WHICH MAY COME
BEFORE THE MEETING.
Number of Shares:_________________ Dated:____________________, 1997
X______________________________________
Signature
X______________________________________
Signature, if held jointly
Please sign exactly as your name(s)
appear(s). Joint owners should
each sign personally. Executors,
administrators, trustees and persons
signing for corporations or
partnerships should give their title as
such. If a corporation, please sign in
full corporate name by president or
authorized officer. If partnership,
please sign in partnership name by
properly authorized person.
PLEASE SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE TO:
COMMERCIAL NATIONAL FINANCIAL CORPORATION
P.O. BOX 280
101 NORTH PINE RIVER STREET
ITHACA, MICHIGAN 48847
