<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 Section 240.14a-11(C) or Section 240.14a-12
CNB, INC.
(Name of Registrant as Specified in its Charter)
Not Applicable
(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 14(a)-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:
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<PAGE>
CNB, INC.
201 North Marion Street
Lake City, Florida 32055
April 15, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
CNB, Inc. ("CNB") to be held on Wednesday, May 19, 1999 commencing at 10:00 a.m.
Eastern Standard time at the Lake City Country Club which is located on Service
Road, off US 90 West by I-75, Lake City, Florida. A formal Notice setting forth
the business to come before the meeting and a Proxy Statement are attached. The
purpose of the meeting is to consider and vote upon the Proposals explained in
the Notice and the Proxy Statement.
It is important that your shares be represented at the Annual Meeting
whether or not you plan to attend the Annual Meeting in person. The Board of
Directors requests that you carefully review these materials before completing,
signing and dating the enclosed proxy and returning it in the postage paid
envelope provided for your use. If you later decide to attend the Annual Meeting
and vote in person, or if you wish to revoke your proxy for any reason prior to
the vote at the Annual Meeting, you may do so and your proxy will have no
further effect.
Sincerely,
K.C. Trowell
Chairman
<PAGE>
CNB, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 1999
To the Holders of Common Stock:
You are invited to attend the Annual Meeting of Shareholders of CNB,
Inc. (the "Company" or "CNB") which will be held on Wednesday, May 19, 1999
at 10:00 a.m. at the Lake City Country Club in Lake City, Florida to consider
and act upon the following matters:
1. Election of six directors of the Company, each for a one year term.
2. Authorization of an amendment to Article II of the Amended and
Restated Articles of Incorporation of the Company changing the
Company's name from "CNB, Inc." to "CNB ."
3. Such other business as may properly come before the Annual Meeting or
any adjournments thereof.
Only shareholders of record of the Company's common stock at the close of
business on March 31, 1999 are entitled to receive notice of, and to vote on,
all business that may come before the Annual Meeting.
Whether or not you plan to attend the meeting, please complete, sign, date
and return the enclosed proxy as promptly as possible in the postage paid
envelope provided for your use to the Company's transfer agent. You may revoke
the proxy at any time before it is exercised by following the instructions set
forth on the first page of the accompanying Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS:
Joyce Bruner
Corporate Secretary
Dated: April 15, 1999
<PAGE>
PROXY STATEMENT
Annual Meeting of Shareholders
CNB, INC.
P.O. Box 3239
Lake City, Florida 32056
GENERAL
This Proxy Statement is being furnished to holders of CNB, Inc. (the
"Company" or "CNB") common stock, $.01 par value (the "Common Stock"), in
connection with the solicitation of proxies by the Board of Directors of CNB for
use at the Annual Meeting of Shareholders. The Annual Meeting of Shareholders
will be held on Wednesday, May 19, 1999 commencing at 10:00 a.m., at the Lake
City Country Club in Lake City, Florida.
This Proxy Statement and the attached Notice and Form of Proxy are first
being mailed to holders of Common Stock on or about April 15, 1999.
VOTING OF PROXIES
Shares represented by proxies properly signed and returned, unless
subsequently revoked, will be voted at the Annual Meeting of Shareholders in
accordance with the instructions marked on the proxy. If a proxy is signed and
returned without indicating any voting instructions, the shares represented by
the proxy will be voted FOR approval of the proposals stated in this Proxy
Statement and in the discretion of the holders of the proxies on other matters
that may properly come before the Annual Meeting of Shareholders.
Any holder of Common Stock who has executed and delivered a proxy may
revoke such proxy at any time before it is voted by attending the Annual Meeting
of Shareholders and voting in person, by giving written notice of revocation of
the proxy or by submitting a signed proxy bearing a later date. Such notice of
revocation or later proxy should be sent to the Company's transfer agent. In
order for the notice of revocation or later proxy to revoke the prior proxy, the
Company's transfer agent must receive such notice or later proxy prior to the
vote of shareholders at the Annual Meeting of Shareholders. Attendance at the
Annual Meeting of Shareholders will not in itself revoke a proxy.
VOTING PROCEDURES
The Company's Amended and Restated Bylaws (the "Bylaws") provide that a
majority of shares entitled to vote and represented in person or by proxy at a
meeting of the shareholders constitutes a quorum. Under the Florida Business
Corporation Act (the "Act"), directors are elected by a plurality of the votes
cast at a meeting at which a quorum is present. Other matters are approved if
affirmative votes cast by the holders of the shares represented at a meeting at
which a quorum is present exceed votes opposing the action, unless a greater
number of affirmative votes or voting by classes is required by the Act or the
Company's Amended and Restated Articles of Incorporation (the "Articles of
Incorporation"). Therefore, abstentions and broker non-votes have no effect
under Florida law.
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<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS
The Board of Directors of CNB has fixed the close of business on March 31,
1999, as the Record Date for the determination of holders of Common Stock
entitled to receive notice of and to vote at the Annual Meeting of Shareholders.
At the close of business on March 31, 1999, there were issued and outstanding
6,107,970 shares of Common Stock entitled to vote at the Annual Meeting of
Shareholders held by approximately 576 registered holders. Holders of Common
Stock outstanding on March 31, 1999, are entitled to one vote for each share
held of record upon each matter properly submitted to CNB shareholders at the
Annual Meeting of Shareholders.
PURPOSE
The business that management anticipates will be transacted at the meetings
is as follows:
PROPOSAL 1: ELECTION OF DIRECTORS
The Directors nominated for election at the 1999 Annual Meeting of
Shareholders are Thomas R. Andrews, Audrey S. Bullard, Raymon Land, Sr., Marvin
H. Pritchett, William Streicher and K.C. Trowell. In order to be elected, each
nominee must receive a plurality of the votes cast, which shall be counted as
described in VOTING PROCEDURES. The accompanying proxy, unless otherwise
specified, will be voted FOR the election of the persons named above. If any
nominee should become unavailable, which is not now anticipated, the persons
voting the accompanying proxy may, in their discretion, vote for a substitute.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE NOMINEES.
The following table sets forth certain information with respect to the
nominees for director who are present Directors of the Company. Members of the
Board of Directors will serve until the next annual meeting of shareholders and
thereafter until their respective successors are elected and qualified. Except
as otherwise indicated, each person has been or was engaged in his present or
last principal occupation, in the same or a similar position, for more than five
years.
<TABLE>
<CAPTION>
NAME AGE POSITIONS HELD AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE
YEARS
- ---- --- -------------------------------------------------------------
<S> <C> <C>
Thomas R. Andrews 53 Mr. Andrews was elected to the Board of Directors of the Company
in March 1994 and serves on the Compensation and Audit
Committees of the Company's Board of Directors. Mr. Andrews
previously served as Chairman of the Board of Directors for the
former Bradford Bankshares, Inc. He is the owner of Belco
Enterprises, a commercial real estate company. Mr. Andrews is a
member of the Children's Home Society Foundation of Florida.
Audrey S. Bullard 56 Ms. Bullard was elected to the Board of Directors of the
Company in 1987 and serves on the Executive and Compensation
Committees of the Company's Board of Directors. A practicing
certified public accountant, Ms. Bullard is an officer and
part owner of Bullard Development Co. and A&R of Lake City,
Inc. as well as several partnerships and land development
firms. Ms. Bullard has been
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
NAME AGE POSITIONS HELD AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE
YEARS
- ---- --- -------------------------------------------------------------
<S> <C> <C>
active in numerous civic and service organizations,
including the Chamber of Commerce, the Lake Shore Hospital,
the Advent Christian Advisory Board, the Columbia County
Public School Foundation, the Lake City/Columbia County
Beautification Board, the North Florida Advisory Council and
the Board of Santa Fe Health Care, Inc.
Raymon Land, Sr. 59 Mr. Land was elected to the Board of Directors of the
Company in August 1988 and serves on the Audit Committee of
the Company's Board of Directors. He has served in the past
as President of the National Watermelon Association. He has
been in the watermelon producing business for 38 years. Mr.
Land is also presently President of Land Truck Brokers,
Inc., and serves as a Director of Melon Pac, Inc. In
addition, Mr. Land serves on various committees in an
advisory capacity which serve as liaison between the
Department of Agriculture and the produce industry. Mr. Land
is also a member of several horse associations and is a real
estate salesman for Land Brokerage Realty.
Marvin H. Pritchett 65 Mr. Pritchett was elected to the Board of
Directors of the Company in 1988 and serves on the Executive
and Compensation Committees of the Company's Board of
Directors. Since 1981, he has owned Pritchett Trucking,
Inc., a trucking and hauling firm, of which he also serves
as Chief Executive Officer, and Pritchett, Inc., a timber
firm. He is also in the business of hauling and selling rock
materials through his companies, Bulldog Truck Lines, Inc.
and GP Materials, Inc., and is owner of the MH Pritchett
Farm in Lake Butler, a cattle operation. Mr. Pritchett is
also Chief Executive Officer of Pritchett Investment Group
which owns Mack Truck dealerships in Jacksonville, Lake City, Tampa and
Orlando, Florida as well as Volvo dealerships in Lake City and Tampa, Florida.
William Streicher 63 Mr. Streicher was elected to the Board of Directors of the Company
in 1990 and serves on the Audit and Compensation Committees of the
Company's Board of Directors. He has owned and operated several McDonald's
restaurant franchises in the Company's primary service area and also has
served on the Board of Ronald McDonald House Charities at Shands Hospital in
Gainesville, Florida for over ten years. He is past chairman and a past
board member of the Lake City Community College Foundation, a past
member of the Lake City Rotary Club, past Vice President of McDonald's
Owner/Operator Advertising Co-Operative and a past representative
to the McDonald's Advertising Advisory Board of the State of Florida.
K.C. Trowell 60 Mr. Trowell is Chairman and CEO of the Company and of CNB
National Bank (the "Bank"), the Company's wholly owned
subsidiary. He was elected to the Board of Directors in 1987 and
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
NAME AGE POSITIONS HELD AND PRINCIPAL OCCUPATIONS DURING THE PAST FIVE
YEARS
- ---- --- -------------------------------------------------------------
<S> <C> <C>
serves as Chairman of the Executive Committee and on the
Compensation Committee of the Board of Directors of the Company.
He has served as the Chairman and CEO of the Company since its
inception in 1987. Mr. Trowell is a Lake City, Florida native and has
been actively involved in commercial banking management in North
Florida for over 25 years. He has also held management positions
with NationsBank of Lake City (and its predecessors), American
Bank of Jacksonville, and Barnett Banks, Inc. in Jacksonville. He is
former Chairman of the Board of Trustees of Florida Bankers
Insurance Trust. He is a past director of Community Bankers of
Florida, past director of the Columbia County Committee of 100, past
director of North Central Florida Areawide Development Company,
and a former board member and chairman of both Lake City Medical
Center and Columbia County Industrial Development Authority.
</TABLE>
PROPOSAL 2: CHANGE IN COMPANY NAME
The Board of Directors of the Company has unanimously approved a proposal
to change the name of the Company from "CNB, Inc." to "CNB ."
The Board of Directors believes that the Company's present name does not
adequately reflect the Company's business and its presence in the Florida
market. The Board of Directors believes that the proposed corporate name more
appropriately reflects the present geographic and business scope of the
Company's operations.
Assuming the name change is approved, it will be effected by the filing of
Articles of Amendment to the Articles of Incorporation amending Article II
thereof.
The change in corporate name will not affect the validity of
transferability of stock certificates presently outstanding, and the Company's
shareholders will not be required to exchange stock certificates to reflect the
new name. Shareholders should keep the certificates they now hold, which will
continue to be valid, and should not send them to the Company or its transfer
agent. Stock certificates issued in the future will bear the Company's new name.
If the number of affirmative votes cast by the holders of the shares
represented at the Annual Meeting exceeds the number of votes opposing the
action, then Proposal 2 will be approved.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors, and any
persons owning more than 10 percent of a class of the Company's stock, to file
certain reports or ownership and changes in ownership with the Securities and
Exchange Commission ("SEC"). During 1998, the executive
-5-
<PAGE>
officers and directors of the Company filed with the SEC on a timely basis all
required reports relating to transactions involving equity securities of the
Company beneficially owned by them.
BOARD OF DIRECTORS AND STANDING COMMITTEES; DIRECTOR COMPENSATION
If elected, the six nominees will constitute the Board of Directors of the
Company. During 1998, the Board held a total of nine meetings.
The Board of Directors maintains an Audit Committee, a Compensation
Committee and an Executive Committee, which are described below. Members of
these committees are elected annually at the Board meeting immediately following
the Annual Meeting of Shareholders. Under the Company's Bylaws, the Board of
Directors is authorized to designate other members of the Board to serve in the
place of absent members of any committee.
The Audit Committee is comprised of Messrs. Andrews, Land and Streicher,
none of whom is an officer of the Company. During 1998 the Audit Committee held
four meetings. The principal responsibilities of the Audit Committee are to: (1)
oversee the internal controls function with regard to the audit, consumer
compliance and loan review plan; (2) review the Company's credit quality review
functions and the methods used to test loan quality and the adequacy of the
allowance for loan losses; (3) review any significant audit conclusions;
(4) review internal assessments of the adequacy of internal controls; (5) review
the compliance of the Company with laws and regulations; and (6)
approve the selection of the Company's independent accountants.
The Compensation Committee is comprised of Messrs. Andrews, Pritchett,
Streicher and Trowell and Ms. Bullard. During 1998 this committee held three
meetings. The Compensation Committee is principally responsible for (1)
establishing and recommending to the Board of Directors the compensation of the
Chief Executive Officer of the Company; (2) establishing and recommending
to the Board of Directors the compensation of other senior management of
the Company; (3) periodically reviewing all salary administration and
employee benefits; (4) reviewing succession plans for executive positions; and
(5) developing and recommending to the Company's Board of Directors stock
incentive compensation for officers and employees.
The Executive Committee is comprised of Ms. Bullard, Mr. Pritchett, Mr.
Trowell and the Company's Executive Vice President and Chief Financial Officer,
G. Thomas Frankland. During 1998 this committee held three meetings. These
committee members other than Mr. Frankland also serve on the Executive Loan
Committee of the Bank. The Executive Committee is authorized to act on behalf of
and exercise all powers of the Board of Directors when the Board is not in
session, except as limited by Florida law and also recommends to the full Board
of Directors candidates for the Company and Bank Boards of Directors.
In 1998 all members of the Board attended at least 75% of all meetings of
the Board and committees on which they served.
Members of the Board of Directors are paid $300 for each meeting of the
Board and $150 for each committee meeting that they attend. In addition,
non-management directors may receive non-qualified stock options in accordance
with the Company's Performance-Based Incentive Plan.
-6-
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee presents the following report on compensation
for the Company's executive officers. Actual compensation during 1998 for the
named executives is shown in the Summary Compensation Table and other tables
following this report.
PHILOSOPHY. As more fully described below, the Compensation Committee of
the Company's Board of Directors administers the compensation programs for the
Company's executive officers. The Company's compensation structure is intended
to provide a compensation package that will attract, motivate and retain
qualified executives; to ensure a compensation mix that focuses executive
behavior on the fulfillment of annual and long-term business objectives; and to
create a sense of ownership in the Company that causes executive decisions to be
aligned with the best interests of the Company's shareholders.
The components of individual executive officer compensation are base
salary, annual bonus and long-term stock-based incentives.
SALARY. Base salary is assigned to positions based on job responsibilities,
sustained performance and a periodic informal review of base salary practices
for comparable positions at similar community banking companies. The Company's
Chief Executive Officer recommends (except with respect to his own salary) and
the Compensation Committee approves salary adjustments for executive officers
based on achievement of specific annual performance goals, including personal,
departmental and overall Company goals depending upon each officer's specific
job responsibilities. The Committee and the Chief Executive Officer also use
their subjective judgment to consider such criteria as the executive's knowledge
of and importance to the Company's business, willingness and ability to
accomplish the tasks for which he or she was responsible, professional growth
and potential, and the Company's financial performance in making salary
decisions. No particular weighting is applied to these factors.
ANNUAL BONUS. For the annual bonus plan, the Committee establishes
written, objective financial goals for executives at the beginning of each
year. Financial goals for the executive officers may include Company
earnings-per-share, return on equity, overhead ratio, asset quality and
return on assets. Goals are based on the Company's business plan as approved
by the Board of Directors of the Company.
Officers and senior management are also eligible to participate in the
annual incentive component of the Plan, but with accountability for various
business unit financial measures and specific individual objectives, as well
as Company financial goals. The annual incentive for senior management is
targeted at 50% of salary.
LONG-TERM INCENTIVES. Under the Performance-Based Incentive Plan, the
Company may provide performance-based incentive awards through the grant of
stock options, restricted stock, stock appreciation rights and performance
units. This plan is designed to increase the personal stake of participants in
both the annual and long-term success and growth of the Company and encourage
them to remain in the employ of the Company. Because awards of options and
restricted stock are keyed to the market value of the Company's stock at the
time of grant, the future value of those awards is entirely dependent on
increases in the market value of the Company's stock. In making stock option and
restricted stock grants in 1998, the Committee considered, without assigning a
particular weighting, the number of options previously granted to the executive,
the executive's
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<PAGE>
salary, the Company's financial results, the need for a long-term focus on
improving shareholder value and the executive's ability to positively impact the
Company's performance.
CHIEF EXECUTIVE OFFICER COMPENSATION. Under the Company's employment
agreement with the Chief Executive Officer, he is paid a base salary of
$250,000. The Compensation Committee (with Mr. Trowell abstaining) determined
this base salary based on amounts earned by the Chief Executive Officer in prior
years, his long-service to the Company, the Company's financial performance and
growth and the pay practices of other community banks.
The CEO is eligible for an annual bonus targeted at 50% of base salary. For
performance in 1998, he received an annual bonus of $122,647. In determining
this amount, the Committee (with Mr. Trowell abstaining) exercised its
subjective judgment and considered, among other factors and with no particular
weighting, the Company's progress in expanding to new markets and in completing
its initial public offering, its increase in loan volume and consolidated
assets, its strong capital position and the CEO's contribution to these
achievements.
In 1998, the CEO was granted options to purchase 80,000 shares of Common
Stock. The options have an exercise price of $8.00, the fair market value on the
date of grant and vest 25% on the date of grant and 75% vest in equal annual
increments on the next three anniversaries of the grant date. The Company also
granted the CEO 7,500 shares of restricted stock, 3,750 of which vest and become
nonforfeitable on the first anniversary of the date of grant, and 1,875 of which
vest and become nonforfeitable on each of the next two succeeding anniversaries.
The number of options and restricted shares granted was based on the subjective
judgment of the Committee (other than Mr. Trowell) of the appropriate number of
options to motivate the CEO, the importance of providing the CEO with long-term
incentives, and the other factors mentioned above which the Committee considers
in making stock-based grants to all executives.
The Committee will consider any federal income tax limitations on the
deductibility of executive compensation in reaching compensation decisions and
will seek shareholder approval where such approval will eliminate any
limitations on deductibility.
Thomas R. Andrews
Audrey S. Bullard
Marvin H. Pritchett
William Streicher
K.C. Trowell
April 15, 1999
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth for the
fiscal years ended December 31, 1998, 1997 and 1996, the cash compensation
paid or accrued by the Company, as well as certain other compensation paid or
accrued for those years, for services in all capacities to the Chief
Executive Officer of the Company. No executive officer of the Company, other
than the Chief Executive Officer, earned compensation in excess of $100,000
for the fiscal years indicated in the table.
-8-
<PAGE>
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
AWARDS
------
RESTRICTED SECURITIES
NAME AND STOCK UNDERLYING ALL OTHER
PRINCIPAL YEAR SALARY BONUS AWARD(S) OPTIONS/SARS COMPENSATION
POSITION ($) ($) ($) (#) ($)
--------- ---- ------ ----- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
K. C. Trowell, 1998 $250,000 $122,647 $60,000 (2) 80,000 $ 7,985 (3)
Chairman and 1997 $172,500 $122,647 -- 34,000 $ 7,405 (3)
Chief Executive 1996 $150,000 $106,650 -- -- $ 6,920 (3)
Officer
</TABLE>
(1) Columns relating, respectively, to "other annual compensation" and "LTIP
Payouts" have been deleted because no compensation required to be reported
in such columns was awarded to, earned by, or paid to the named executive
during the periods covered by such columns. Non-cash perquisites are not
disclosed in this table because the aggregate value does not exceed the
lesser of $50,000 or 10% of total annual salary and bonus.
(2) The Company granted 7,500 shares of restricted stock on December 10, 1998
at $8.00 per share. The market value of the Company Common Stock was not
readily discernable. Actual trades in the Company's Common Stock Closest
to December 10, 1998 were at $8.00 per share and that value is used
herein.
(3) The amounts shown in the column for 1998 consist of payment for term life
insurance premiums of $2,985 and Company's matching contribution to the
401(k) plan for Mr. Trowell of $5,000.
-9-
<PAGE>
STOCK OPTIONS. THE FOLLOWING TABLE SETS FORTH INFORMATION CONCERNING
OPTIONS WHICH WERE GRANTED DURING THE FISCAL YEAR ENDED DECEMBER 31, 1998.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
GRANT
INDIVIDUAL GRANTS DATE VALUE
------------------------------------------------------------------------------------------------- ----------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS/
UNDERLYING SARS GRANTED GRANT DATE
OPTIONS/SARS TO EMPLOYEES EXERCISE OR EXPIRATION PRESENT
NAME GRANTED (#) IN FISCAL YEAR BASE PRICE ($/SH) DATE VALUE $(3)
----- ------------ -------------- ----------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
K.C. Trowell 80,000(2) 41.5% $8.00 December 10, 2008 160,136
</TABLE>
(1) All information in this table relates to options. The Company has not
granted any SARs.
(2) Options become exercisable in the amount of 20,000 shares each year
beginning December 10, 1998 and continuing each year until December 10,
2001.
(3) This estimate is determined using the Black-Scholes model. This model was
developed to estimate the fair value of traded options, which have
different characteristics than employee stock options, and changes to the
subjective assumptions used in the model can result in material different
fair value estimates. This hypothetical value is based on the following
assumptions: exercise price is equal to the market value on day of grant;
estimated dividend yield of 2.50%; standard deviation of stock price
volatility of 0.25%; risk-free interest rate of 4.62%; and average option
term of 6 years.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTIONS. The following
table sets forth information concerning the exercise of stock options during the
last completed fiscal year by the named executive officer and the fiscal
year-end value of unexercised options.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTIONS/SAR
VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR END FISCAL YEAR END (2)
(#) ($)
---------------- --------------------
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
---- ------------- ----------- ---------------- --------------------
<S> <C> <C> <C> <C>
K.C. Trowell - - 136,100 / 85,016 $447,312/ $33,325
</TABLE>
(1) All information in this table relates to options. The Company has not
granted any stock appreciation rights ("SARs").
(2) As of December 31, 1998, the market value of the Company Common Stock was
not readily discernable. Actual trades in the Company's common stock
closest to December 31, 1998 were
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<PAGE>
at $8.00 per share and that value is used herein. Based on a market value
of $8.00 per share, all of the exercisable options were in-the-money, at a
value of $447,312. The unexercisable options have exercise prices at or
less than $8.00 per share, and are in-the-money, at a value of $33,325. The
Company became listed on the NASDAQ National Market on January 29, 1999.
LONG TERM INCENTIVE PLAN. The following table sets forth information
concerning awards of restricted stock under the Company's Performance-Based
Incentive Plan for the year ending December 31, 1998.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER
SHARES, UNITS PERIOD UNTIL
OR OTHER MATURATION
NAME RIGHTS (#) OR PAYOUT
---- ---------- ---------
<S> <C> <C>
K.C. Trowell 7,500 December 10, 2001 (1)
</TABLE>
(1) The Company awarded 7,500 shares of restricted stock, 3,750 of which vest
and become nonforfeitable on December 10, 1999, and 1,875 of which vest and
become nonforfeitable on each of the next two succeeding years, ending
December 10, 2001.
EMPLOYMENT AGREEMENTS
MR. TROWELL'S EMPLOYMENT AGREEMENT. On December 10, 1998, the Company
entered into an employment agreement with K.C. Trowell (the "Trowell Agreement")
which provides that Mr. Trowell will serve as the Chairman and Chief Executive
Officer of the Company. The Trowell Agreement has a rolling three year term,
provided Mr. Trowell's employment term ends on the first day of the month
following his 70th birthday. The Trowell Agreement provides for an annual base
salary of $250,000, participation in the Performance-Based Incentive Plan, and
participation in the Company's various incentive, savings, retirement and
welfare benefit plans. Mr. Trowell also is eligible to receive an annual bonus
targeted at 50% of his annual base salary. The Company also agreed to provide
Mr. Trowell with a company car. The Trowell Agreement also contains a
noncompetition provision. In the event Mr. Trowell's employment is terminated by
the Company for a reason other than for cause, death or disability, or if Mr.
Trowell terminates his employment for good reason (as defined in the Trowell
Agreement) then the Company must pay Mr. Trowell a lump sum equal to (i) the
amount of any earned but unpaid salary and bonus, deferred compensation and
vacation pay, plus (ii) an amount equal to 50% the sum of Mr. Trowell's annual
base salary and highest annual bonus from the date of termination until the end
of the employment period. In the event the Company terminates Mr. Trowell's
employment without cause, or if Mr. Trowell terminates his employment for good
reason, within two years of a change of control of the Company, then the Company
will pay Mr. Trowell 100% of the amount referred to in (ii) above. In addition,
all options to acquire shares of Common Stock and all restricted stock
previously granted to Mr. Trowell immediately become vested and non-forfeitable
upon a change in control.
MR. FRANKLAND'S EMPLOYMENT AGREEMENT. On November 30, 1998, the Company
entered into an employment agreement with G. Thomas Frankland (the "Frankland
Agreement") which provides
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<PAGE>
that Mr. Frankland will serve as the Executive Vice President and Chief
Financial Officer of the Company. The Frankland Agreement provides for an annual
base salary of $185,000, participation in the Performance-Based Incentive Plan,
and participation in the Company's various incentive, savings, retirement and
welfare benefit plans. Mr. Frankland also received a signing bonus of $35,000
and is eligible to receive an annual bonus targeted at 50% of his annual base
salary. The Company also agreed to grant Mr. Frankland options to purchase
40,000 shares of Common Stock at a price of $8.00 per share, 20,000 of which
vest one year from the first anniversary of the Frankland Agreement and 10,000
of which vest in each of the next two succeeding anniversary dates. The Company
also agreed to grant Mr. Frankland 5,000 shares of restricted stock, 2,500 of
which vest and become nonforfeitable on the first anniversary of the Frankland
Agreement and 2,500 of which vest and become nonforfeitable on the second
anniversary of the Frankland Agreement. In all other terms, the Frankland
Agreement is substantially similar to the Trowell Agreement.
PERFORMANCE GRAPH
Prior to the Company's initial public offering on January 29, 1999, the
market value of the Company's Common Stock was not readily discernable. The only
trades were through privately negotiated transactions between shareholders.
Accordingly, no comparative data is provided regarding the Company's stock price
performance over the past five fiscal years.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
<CAPTION>
NAME OF DIRECTOR AMOUNT AND NATURE OF PERCENT OF SHARES OF
OR EXECUTIVE OFFICER BENEFICIAL OWNERSHIP (1) COMMON STOCK OUTSTANDING
- --------------------- ------------------------ ------------------------
<S> <C> <C>
Thomas R. Andrews........................ 206,000 (2) 3.37%
Audrey S. Bullard........................ 217,861 (3) 3.57%
Raymon Land, Sr.......................... 125,074 (4) 2.05%
Marvin H. Pritchett...................... 878,576 (5) 14.38%
William Streicher........................ 151,842 (6) 2.49%
K.C. Trowell............................. 329,562 (7) 5.28%
Directors and Executive Officers
as a Group (10 persons) (8).............. 1,952,691 31.1%
Total
</TABLE>
(1) Pursuant to the rules of the Commission, the determinations of "beneficial
ownership" of Common Stock are based upon Rule 13d-3 under the Exchange
Act, which provides that shares will be deemed to be "beneficially owned"
where a person has, either solely or in conjunction with others, the power
to vote or to direct the voting of shares and/or the power to dispose, or
to direct the disposition of shares or where a person has the right to
acquire any such power within 60 days after the date such "beneficial
ownership" is determined. Shares of Common Stock that a beneficial owner
has the right to acquire within 60 days pursuant to the exercise of stock
options or warrants are deemed to be outstanding for the purpose of
computing the percentage ownership of such owner but are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person. All amounts are determined as of February 28, 1999.
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<PAGE>
(2) Includes currently exercisable options to purchase 2,000 shares.
(3) Includes 2,000 shares transferred to a revocable trust for benefit of her
daughter and currently exercisable options to purchase 2,000 shares.
(4) Includes currently exercisable options to purchase 2,000 shares.
(5) Includes 107,126 shares owned by New River Developers, 123,702 shares owned
by Pritchett Trucking, Inc., 77,692 shares owned by Mid-Florida Hauling,
Inc., 50,938 shares owned by Bulldog Trucking and 40,148 shares owned by
Mr. Pritchett's wife. Mr. Pritchett shares voting and investment power with
respect to all such shares. Also includes currently exercisable options to
purchase 2,000 shares.
(6) Includes currently exercisable options to purchase 2,000 shares.
(7) Includes 50,000 shares owned by Mr. Trowell's wife with respect to which he
shares voting and investment power. Also includes 136,100 shares underlying
options that are exercisable within 60 days of February 28, 1999.
(8) Based on a total of 6,107,970 shares of Common Stock outstanding, plus
shares of Common Stock which may be acquired by the beneficial owner, or
group of beneficial owners, within 60 days of February 28, 1999, by
exercise of 177,300 options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Trowell, the Company's Chief Executive Officer, serves on the
Compensation Committee. He does not participate in decisions regarding his own
compensation.
During the last two (2) fiscal years, the Bank loaned funds to certain of
the Company's executive officers and directors in the ordinary course of
business, on substantially the same terms as those prevailing at the time for
comparable transactions with other customers, and which did not involve more
than the normal risk of collectability or present other unfavorable features.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
On October 24, 1997, the Company terminated its relationship with its
independent certified public accountants, Osburn, Henning and Company, and on
October 24, 1997, engaged Arthur Andersen, LLP as its independent certified
public accountants. Osburn, Henning and Company's report on the consolidated
financial statements of the Company for the fiscal year 1996 contains no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles. The Company's Board of
Directors approved the decision to change accountants. With respect to the
Company's consolidated financial statements for fiscal year 1996 and subsequent
interim periods preceding the change in accountants, there were no disagreements
between the Company and Osburn, Henning and Company on any matter of accounting
principles or practices, financial statement disclosures, or auditing scope or
procedure, which, if not resolved to the satisfaction of Osburn, Henning and
Company, would have caused it to make reference to the subject matter of the
disagreement in connection with its report. The firm of Arthur Andersen, LLP
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<PAGE>
served as the independent accountants for the Company for the fiscal year ending
December 31, 1998. Representatives of Arthur Andersen, LLP will be present at
the Annual Meeting of Shareholders and will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
Shareholders who wish a proposal to be included in the Company's Proxy
Statement and form of proxy relating to the 2000 Annual Meeting should deliver a
written copy of their proposal to the principal executive offices of the Company
no later than December 17, 1999. Proposals should be directed to Joyce Bruner,
Corporate Secretary, CNB, Inc., P.O. Box 3239, Lake City, Florida 32056.
Proposals must comply with the SEC proxy rules relating to shareholder proposals
in order to be included in the Company's proxy materials. To be considered
timely, all other proposals of stockholders intended to be presented at the next
annual meeting of stockholders must be received by the Company by March 1, 2000.
Additionally, the Company may solicit proxies in connection with next year's
annual meeting which confer discretionary authority to vote on any stockholder
proposals of which the Company does not receive notice by March 1, 2000.
ANNUAL REPORT; FORM 10-K
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1998 is being provided to each shareholder simultaneously
with delivery of this Proxy Statement. Additional copies of the Annual Report to
Shareholders or copies of the Company's Annual Report on Form 10-K, filed with
the Securities and Exchange Commission, may be obtained by writing to Joyce
Bruner, Corporate Secretary, CNB, Inc., P.O. Box 3239, Lake City, Florida 32056.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of CNB does
not anticipate that other matters will be brought before the Annual Meeting of
Shareholders. If, however, other matters are properly brought before the Annual
Meeting of Shareholders, the persons appointed as proxies will have the
discretion to vote or act thereon according to their best judgment.
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company, including
expenses in connection with the preparation and mailing of this proxy statement.
In addition to the use of the mail, proxies may be solicited by personal
interview, telephone, facsimile or e-mail by Directors, officers or regular
employees of the Company, who will not receive additional compensation for such
solicitation but may be reimbursed for reasonable out-of-pocket expenses
incurred in connection therewith.
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<PAGE>
HOLDERS OF COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ACCOMPANYING FORM OF PROXY AND PROMPTLY RETURN IT TO THE COMPANY'S TRANSFER
AGENT IN THE ENCLOSED, ADDRESSED POSTAGE PAID ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
Joyce Bruner
Corporate Secretary
Dated: April 15, 1999
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
I, the undersigned shareholder of CNB, Inc. (the "Company"), Lake City,
Florida, do hereby nominate, constitute and appoint Mr. G. Thomas Frankland, and
Ms. Joyce Bruner, or any one or more of them my true and lawful proxy and
attorney(s) with full power of substitution for me and in my name, place and
stead, to represent and vote all of the common stock par value $.01 per share of
the Company, held in my name on its books on March 31, 1999 at the Annual
Meeting of Shareholders to be held on Wednesday, May 19, 1999.
PROPOSAL 1. Election of the following Directors:
<TABLE>
<S> <C>
[ ] FOR ALL NOMINEES LISTED BELOW (except as marked to [ ] WITHHOLD AUTHORITY to vote for all
the contrary below) nominees listed below
Thomas R. Andrews Marvin H. Pritchett
Audrey S. Bullard William Streicher
Raymon Land, Sr. K.C. Trowell
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee write the
name(s) of such nominee(s) below.)
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE NOMINEES.
PROPOSAL 2. Approval of the change of the name of the Company from "CNB,
Inc." to "CNB ."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE CHANGE OF
THE CHANGE IN THE COMPANY'S NAME.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting of Shareholders.
IMPORTANT: PLEASE SIGN AND DATE ON REVERSE
<PAGE>
This proxy, when property executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, the proxy will
be voted FOR Proposals 1 and 2. Should any other matter requiring a vote of the
shareholders arise, the proxies named above are authorized to vote in accordance
with their best judgment in the interest of the Company.
---------------------------------
Date
---------------------------------
Signature
---------------------------------
Signature (if jointly held)
---------------------------------
Print Name Here
IMPORTANT: Please sign exactly as your
name appears hereon. When shares are held
by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee
or guardian, please give full title as such. If
a corporation, please sign the full corporate
name by president or other authorized officer.
If a partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ADDRESSED ENVELOPE OR OTHERWISE TO SUNTRUST BANK, ATLANTA, N.A., MAIL CODE 258,
P.O. BOX 4625, ATLANTA, GEORGIA 30302.
IF YOU DO NOT SIGN AND RETURN A PROXY OR ATTEND THE MEETING AND VOTE, YOUR
SHARES CANNOT BE VOTED.
