- 2 -
SCHEDULE 14A
Information Required in Proxy Statement
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:
[ ] 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 240.14a-11(c) or 240.14a-12
Community National Bancorporation
(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:
COMMUNITY NATIONAL BANCORPORATION
(the "Company")
561 East Washington Avenue
Ashburn, Georgia 31714
April 16, 1999
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
DATE: Wednesday, May 12, 1999
TIME: 10:30 a.m.
PLACE: The Thrasher House
720 Hudson Avenue
Ashburn, Georgia 31714
Dear Shareholders:
At our 1999 Annual Shareholders Meeting (the "Annual Meeting"), we will
ask you to:
(1) Approve proposals to amend the Company's Articles of Incorporation,
as described in the Proxy Statement;
(2) Elect directors, in the number and for the terms described in the
Proxy Statement; and
(3) Transact any other business, including shareholder proposals, that
may properly come before the Annual Meeting.
If you were a shareholder of record at the close of business on April 6,
1999, you may vote at the Annual Meeting. A copy of the Company's Annual
Report is enclosed with this Notice.
It is important that your shares be represented and voted at the Annual
Meeting. Whether or not you plan to attend, please sign, date and return the
enclosed proxy card promptly in the accompanying postage-paid envelope. You
may revoke any proxy in the manner described in the Proxy Statement at any
time prior to its exercise at the Annual Meeting. If you attend the Annual
Meeting and prefer to vote in person, you may do so.
By Order of the Board of Directors,
/S/ T. Brinson Brock, Sr.
___________________________________
T. Brinson Brock, Sr.
Executive Vice President and Acting
Chief Executive Officer
<PAGE>
COMMUNITY NATIONAL BANCORPORATION
561 East Washington Avenue
Ashburn, Georgia 31714
PROXY STATEMENT FOR THE
1999 ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 12, 1999 Beginning at 10:30 a.m.
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why did you send me this proxy statement?
-----------------------------------------
We sent you this proxy statement and the enclosed proxy card
because the Board of Directors of Community National
Bancorporation, a Georgia corporation (the "Company") is
soliciting your proxy to vote at the Annual Meeting of the
Company's shareholders on May 12, 1999 beginning at 10:30 a.m.
(the "Annual Meeting"). The Annual Meeting will be held at The
Thrasher House, 720 Hudson Avenue, Ashburn, Georgia 31714. This
proxy statement summarizes the information that you need to know
to vote intelligently at the Annual Meeting. However, you do not
need to attend the Annual Meeting to vote your shares. Instead,
you may simply complete, sign and return the enclosed proxy card.
We will begin sending this proxy statement, the attached Notice
of Annual Meeting and the enclosed proxy card on April 16, 1999,
to all shareholders entitled to vote. Only shareholders who
owned the Company's common stock at the close of business on
April 6, 1999 (the "Record Date") are entitled to vote. On the
Record Date there were 1,518,871 shares of the Company's common
stock issued and outstanding. The common stock is the Company's
only class of voting stock.
How many votes do I have?
------------------------
Each share of the Company's common stock that you own
entitles you to one vote. The enclosed proxy card indicates the
number of shares of the Company's common stock that you own.
How do I vote by proxy?
----------------------
Whether or not you plan to attend the Annual Meeting, we
urge you to complete, sign and return the enclosed proxy card and
return it to us promptly in the accompanying envelope. Returning
the proxy card will not affect your right to attend and vote at
the Annual Meeting.
If you properly complete and sign the proxy card and send it
to us in advance of the Annual Meeting, your "proxy" (the
individual named on your proxy card) will vote your shares as you
have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares as recommended
by the Board as follows:
(1) "FOR" the amendment of the Company's Articles of
Incorporation to provide for three classes of directors with
staggered terms;
(2) "FOR" the amendment of the Company's Articles of
Incorporation to require two-thirds vote of the outstanding
shares to approve certain transactions, amend the Articles of
Incorporation or remove a director;
(3) "FOR" the amendment of the Company's Articles of
Incorporation to authorize the issuance of 50,000,000 shares of
no par value common stock and 10,000,000 shares of no par value
preferred stock, and to empower the Board of Directors to
authorize the issuance and fix the terms of any preferred stock
in its sole discretion; and
(4) "FOR" the election of all 13 nominees for director.
If any other matter is presented at the Annual Meeting, your
proxy will vote your shares in accordance with his best judgment.
At the time this proxy statement went to press, we knew of no
other matters to be raised at the Annual Meeting.
May I revoke my proxy?
---------------------
If you give a proxy, you may revoke it at any time before it
is exercised. You may revoke your proxy in any of three ways:
* You may send in another proxy with a later date.
* You may notify the Company's Secretary in writing before the
Annual Meeting that you have revoked your proxy.
* You may vote in person at the Annual Meeting.
How do I vote in person?
-----------------------
If you plan to attend the Annual Meeting and vote in person,
we will give you a ballot when you arrive. However, if your
shares are held in the name of your broker, bank or other
nominee, you must bring an account statement or letter from the
nominee indicating that you are the beneficial owner of the
shares on the Record Date.
What vote is required to approve each proposal?
----------------------------------------------
Proposals 1, 2 and 3: Approve Provisions Amending and Restating
the Articles of Incorporation.
The affirmative vote of a majority of the outstanding shares
of common stock is required to approve each of the proposed
amendments to the Company's Articles of Incorporation. So, if
you do not vote, or "abstain" from voting, this will have the
same effect as if you voted "against" a proposal.
A "broker non-vote" will affect the outcome since a majority
of shares entitled to vote is required to amend the Articles of
Incorporation.
Proposal 4: Elect directors.
The 13 nominees for director who receive the most votes will
be elected. So, if you do not vote for a particular nominee, or
you indicate "withhold authority" to vote for a particular
nominee on your proxy card, your vote will not count either "for"
or "against" the nominee.
A "broker non-vote" will also have no effect on the outcome
since only a plurality of votes actually cast is required to
elect a director.
Is voting confidential?
----------------------
We keep all the proxies, ballots and voting tabulations
private as a matter of practice. We let only our Inspectors of
Election (Registrar and Transfer Company) examine these
documents. We will not disclose your vote to management unless
it is necessary to comply with legal requirements. We will,
however, forward to management any written comments that you
make, on the proxy card or elsewhere.
What are the costs of soliciting these proxies?
----------------------------------------------
The Company will pay all the costs of soliciting these
proxies. In addition to mailing proxy-soliciting material, our
directors and employees may also solicit proxies in person, by
telephone or by other electronic means of communication. We will
ask banks, brokers and other institutions, nominees and
fiduciaries to forward the proxy material to their principals and
to obtain authority to execute proxies. We will then reimburse
them for expenses. We have also retained Registrar & Transfer
Company to assist us in the distribution and solicitation of
proxies. We have agreed to pay them a fee of approximately
$3,600, including out-of-pocket expenses.
How do I obtain an Annual Report on Form 10-KSB?
-----------------------------------------------
If you would like a copy of our Annual Report for the year
ended December 31, 1998, which we filed with the Securities and
Exchange Commission ("SEC") on Form 10-KSB, we will send you one
without charge. Please write to:
T. Brinson Brock, Sr.
Executive Vice President and Acting Chief Executive Officer
Community National Bancorporation
561 East Washington Avenue
Ashburn, Georgia 31714
OWNERS OF MORE THAN FIVE PERCENT OF THE COMPANY'S SHARES
The following table shows all persons whom we know to be
"beneficial owners" of more than five percent of the Company's
common stock as of April 6, 1999. We base this information on
reports that each person listed below has filed with the SEC.*
If you wish, you may obtain these reports from the SEC:
Security Ownership of Certain Beneficial Owners
Name and Address of Beneficial Owner Number of Shares
Percent of Class(1)
T. Brinson Brock, Sr. 84,636(2) 5.4%
1252 Brock Road
Arabi, Georgia 31712
Willis R. Collins 92,165(3) 5.9%
9655 Georgia Highway 112 East
Rebecca, Georgia 31783
Gene Stallings Crawford 111,452(4) 7.1%
56 South Academy Street
Rebecca, Georgia 31783
Grady Elmer Moore 81,050(5) 5.2%
5580 Highway 33 North
Arabi, Georgia 31712
Benjamin E. Walker 79,861(6) 5.1%
P.O. Box 185
Ashburn, Georgia 31714
* Information relating to beneficial ownership of common stock
is based upon "beneficial ownership" concepts set forth in rules
of the SEC under Section 13(d) of the Securities Exchange Act of
1934, as amended. Under such rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares
"voting power," which includes the power to vote or direct the
voting of such security, or "investment power," which includes
the power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of
any security of which that person has the right to acquire
beneficial ownership within sixty (60) days. Under the rules,
more than one person may be deemed to be a beneficial owner of
the same securities, and a person may be deemed to be a
beneficial owner of securities as to which he has no beneficial
interest. For instance, beneficial ownership includes spouses,
minor children and other relatives residing in the same
household, and trusts, partnerships, corporations or deferred
compensation plans which are affiliated with the principal.
(1) The percentages are based on 1,518,871 shares of common
stock outstanding, plus shares of common stock that may be
acquired by the beneficial owner within 60 days of April 6,
1999, by exercise of options and/or warrants.
(2) Includes 935 shares held as custodian for Brent Brock, 921
shares held as custodian for Kristen Brock, 600 shares held
as custodian for Hunter Chess Brock, and 1,024 shares owned
by Mr. Brock's wife, as to all of which Mr. Brock disclaims
beneficial ownership. Does not include 3,000 shares owned
by Mr. Brock's father, and 3,150 shares owned by his mother.
Also includes the right to acquire 21,000 shares pursuant to
currently exercisable warrants and the right to acquire
21,120 shares pursuant to currently exercisable options.
(3) Includes 40,411 shares owned by Mr. Collins's wife, as to
which he disclaims beneficial ownership. Also includes the
right to acquire 25,752 shares pursuant to currently
exercisable warrants.
(4) Includes 18,750 shares owned by Mr. Crawford's wife as to
which he disclaims beneficial ownership, 8,115 shares held
as custodian for his son Gene Scott Crawford and 8,115
shares held as custodian for his son Phillip Andrew
Crawford. Also includes the right to acquire 30,000 shares
pursuant to currently exercisable warrants.
(5) Includes 5,000 shares owned by Mr. Moore's wife, as to which
he disclaims beneficial ownership. Also includes the right
to acquire 36,750 shares pursuant to currently exercisable
warrants.
(6) Includes 12,300 shares owned by Mr. Walker's wife, as to
which he disclaims beneficial ownership. Also includes the
right to acquire 30,000 shares pursuant to currently
exercisable warrants.
SHARE OWNERSHIP OF THE COMPANY'S OFFICERS, DIRECTORS AND NOMINEES
The following chart shows the number of shares of the
Company's common stock that each executive officer, director and
nominee for director of the Company beneficially owns, and the
total common stock that such persons own as a group:
Security Ownership of Management
Name and Address
of Beneficial Owner Number of Shares Percent of Class(1)
T. Brinson Brock, Sr. 84,636(2) 5.4%
1252 Brock Road
Arabi, Georgia 31712
Willis R. Collins 92,165(3) 5.9%
9655 Georgia Highway 112 East
Rebecca, Georgia 31783
Gene Stallings Crawford 111,452(4) 7.1%
56 South Academy Street
Rebecca, Georgia 31783
Donald M. Crews 15,000 0.9%
2001 Osborne Road
St. Marys, Georgia 31558
Benny Warren Denham 38,700(5) 2.5%
424 East Inaha Road
Sycamore, Georgia 31790
Lloyd Greer Ewing 39,211(6) 2.5%
545 East Monroe
Ashburn, Georgia 31714
Bobby Y. Franklin 16,000 1.0%
Route 3, Box 6560
Hilliard, Florida 32046
Ava Lovett 81(7) --
401 East Highway 32
Sycamore, Georgia 31790
Grady Elmer Moore 81,050(8) 5.2%
5580 Highway 33 North
Arabi, Georgia 31712
Sara Ruth Raines 70,359(9) 4.5%
130 Lamont Street
Ashburn, Georgia 31714
Joe Sheppard 11,000 0.7%
555 Charlie Smith Sr. Highway
Suite 8193
St. Marys, Georgia 31558
Theron G. Reed 72,363(10) 4.6%
2945 Georgia Highway 90 West
Rebecca, Georgia 31783
Benjamin E. Walker 79,861(11) 5.1%
P.O. Box 185
Ashburn, Georgia 31714
Jimmie Ann Ward 75,000(12) 4.8%
1330 Warwick Highway
Ashburn, Georgia 31714
Freddie J. Weston, Jr. 15,000 0.9%
828 West Madison Avenue ------- ----
Ashburn, Georgia 31714
All directors and named 801,877 shares 43.9%
executive officers ======= ====
as a group(13)
(15 persons)
_______________________________
(1) The percentages are based on 1,518,871 shares of common
stock outstanding, plus shares of common stock that may be
acquired by the beneficial owner, or group of beneficial
owners, within 60 days of April 6, 1999, by exercise of
options and/or warrants. The percentage total differs from
the sums of the individual percentages due to the differing
denominators with respect to each calculation.
(2) Includes 935 shares held as custodian for Brent Brock, 921
shares held as custodian for Kristen Brock, 600 shares held
as custodian for Hunter Chess Brock, and 1,024 shares owned
by Mr. Brock's wife, as to all of which Mr. Brock disclaims
beneficial ownership. Does not include 3,000 shares owned
by Mr. Brock's father, and 3,150 shares owned by his mother.
Also includes the right to acquire 21,000 shares pursuant to
currently exercisable warrants and the right to acquire
21,120 shares pursuant to currently exercisable options.
(3) Includes 41,411 shares owned by Mr. Collins's wife as to
which he disclaims beneficial ownership. Also includes the
right to acquire 25,752 shares pursuant to currently
exercisable warrants.
(4) Includes 18,750 shares owned by Mr. Crawford's wife as to
which he disclaims beneficial ownership, 8,115 shares held
as custodian for his son Gene Scott Crawford and 8,115
shares held as custodian for his son Phillip Andrew
Crawford. Also includes the right to acquire 30,000 shares
pursuant to currently exercisable warrants.
(5) Includes 4,788 shares owned by Mr. Denham's wife as to which
he disclaims beneficial ownership. Also includes the right
to acquire 18,000 shares pursuant to currently exercisable
warrants.
(6) Includes 3,000 shares owned by his daughter, Mary Margaret
Ewing, 3,000 shares owned by his son, Lloyd Scott Ewing, and
3,000 shares owned by his daughter, Jennifer L. Ewing, as to
all of which Mr. Ewing disclaims beneficial ownership. Also
includes the right to acquire 15,000 shares pursuant to
currently exercisable warrants.
(7) Includes 81 shares owned by Mrs. Lovett's daughter, as to
which Mrs. Lovett disclaims beneficial ownership.
(8) Includes 5,000 shares owned by Mr. Moore's wife, as to
which he disclaims beneficial ownership. Also includes the
right to acquire 36,750 shares pursuant to currently
exercisable warrants.
(9) Includes 1,500 shares owned by Ruth's of Ashburn, Inc., 900
shares owned by Georgia Produce Exchange, Inc. and 24,119
shares owned by Mrs. Raines's husband. Does not include
1,200 shares owned by Mrs. Raines's son John D. Raines, III
and 600 shares owned by her son Mitchell Davis Raines. Also
includes the right to acquire 30,000 shares pursuant to
currently exercisable warrants.
(10) Includes 1,200 shares held as custodian for his son, Jeff
Reed, as to which Mr. Reed disclaims beneficial ownership.
Also includes the right to acquire 32,680 shares pursuant to
currently exercisable options and the right to acquire
15,000 shares pursuant to currently exercisable warrants.
(11) Includes 12,300 shares owned by Mr. Walker's wife as to
which he disclaims beneficial ownership. Also includes the
right to acquire 30,000 shares pursuant to currently
exercisable warrants.
(12) Includes 15,000 shares owned by Mrs. Ward's son as to which
she disclaims beneficial ownership. Also includes the right
to acquire 30,000 shares pursuant to currently exercisable
warrants.
(13) Warrants to purchase common stock of the Company at the
original offering price were issued to each director of the
Company and the Bank on the basis of one warrant for each
share of common stock that they purchased in the initial
offering. The stock purchase warrants entitle the holder of
the warrants to purchase Company stock at $3.33 per share at
any time during the term of the warrant. None of the
warrants were exercisable until December 14, 1991 (which
date is one year from the date the offering was completed).
The warrants have a term of ten years from August 6, 1990
(the date the bank opened for business). One-third of each
director's warrants became vested on December 14, 1991; an
additional one-third became vested on December 14, 1992, and
the final one-third became vested on December 14, 1993. The
warrants exercisable on or after December 14, 1993, are
reflected in the beneficial ownership table.
COMPLIANCE WITH SECTION 16(A) REPORTING REQUIREMENTS
Because the Company had no class of equity securities
registered pursuant to Section 12 of the Exchange Act during
1998, its securities were not subject to the reporting
requirements of Section 16(a) of the Exchange Act.
INFORMATION ABOUT DIRECTORS
AND EXECUTIVE OFFICERS
The Board of Directors
The Company and the Bank have separate Boards of Directors
with common membership. The Boards oversee the business and
affairs of the Company and the Bank and monitor the performance
of their management. In accordance with corporate governance
principles, the Boards do not involve themselves in the day-to-
day operations of the Company or the Bank. The directors keep
themselves informed through discussions with key executives and
the Company's principal external advisers, including legal
counsel and outside auditors, by reading reports and other
materials that the Company's management sends to them and by
participating in Board and committee meetings.
The Board of Directors of the Company held 14 meetings, and
the Board of Directors of the Bank held 14 meetings, during the
year ended December 31, 1998. Each director attended at least
75% of the aggregate of such meetings and the meetings of each
Board committee on which he or she served.
The Board of Directors of the Bank has a standing Audit and
Compliance Committee composed of Lloyd G. Ewing, Grady Elmer
Moore and Freddie J. Weston, Jr. The Audit and Compliance
Committee met independently four times during the year ended
December 31, 1998 in addition to meeting in conjunction with
regular Board meetings. The Committee has the responsibility of
reviewing the financial statements, evaluating internal
accounting controls, reviewing reports of regulatory authorities
and determining that all audits and examinations required by law
are performed. It recommends to the Board the appointment of the
independent auditors for the next fiscal year, reviews and
approves audit plans and reviews with the independent auditors
the results of the audit and management's response thereto. This
Committee also reviews the adequacy of the internal audit budget
and personnel, the internal audit plan and schedule and results
of audits and loan reviews performed by the internal audit staff.
The Audit and Compliance Committee is responsible for overseeing
the entire audit function and appraising the effectiveness of
internal and external audit efforts.
Neither the Company nor the Bank has a standing nominating
or compensation committee of its Board of Directors.
Executive Officers of the Company and the Bank
Each Board of Directors elects executive officers for one-
year terms in May of each year. These are the biographies of the
current executive officers of the Company and the Bank:
Theron G. Reed - Age 56. Mr. Reed has been President and a
director of the Company since November 1989. Prior to March 24,
1998, he also served as Chief Executive Officer of the Company,
and between August 1990 and March 24, 1998, he also served as
President, Chief Executive Officer and a director of the Bank.
Mr. Reed was employed by the Ashburn Bank from 1965 until his
resignation in April 1989. He served as President and Chief
Executive Officer of that institution from March 1980 until April
1989, and prior to that he served in various other capacities
ranging from Assistant Vice President to Vice President -
Lending.
T. Brinson Brock, Sr. - Age 42. Mr. Brock has been involved
in the supervision of and actually lending in the agricultural
sector for the past twenty years. He is presently serving as
Executive Vice President and Acting Chief Executive Officer of
the Company since March 24, 1998, Secretary of the Company Since
November 1989, a director of the Company since August 1989,
President and Chief Executive Officer of the Bank since March 24,
1998, and a director and Secretary of the Bank since August 1990.
Prior to his promotion, Mr. Brock served as the Bank's Executive
Vice President in charge of the Bank's lending, business and
professional development activities. Mr. Brock raises beef cattle
out of which he places many FFA and 4H show calves for club
members across the state. He also raises quarter and registered
miniature horses, which his children show and sell. He serves as
Vice President of the Turner County Cattlemen's Association. He
is an active member of Georgia Banker's Association Agricultural
Committee and is an instructor in various AIB and bank training
programs. Mr. Brock is a member of both the Turner and Crisp
County Chambers of Commerce. He is a deacon, and he and his
family are active members, of Ashburn First Baptist Church.
Ava Lovett - Age 53. Ms. Lovett has been Senior Vice
President and Chief Financial Officer of the Bank since March 24,
1998, and Vice President and Cashier of the Bank since May 1990.
Previously, Ms. Lovett served in various management functions at
several other Georgia banks. Ms. Lovett also served for four
years as a financial examiner with the Georgia Department of
Banking and Finance, Atlanta, Georgia (District Office, Douglas,
Georgia). She performed safety and soundness examinations of
state chartered banks, credit unions and bank holding companies.
Her responsibilities included examiner-in-charge duties, credit
analysis and detail (audit) functions.
Compensation of Executive Officers and Directors
1. Executive Officers.
The following table sets forth the compensation paid to the
executive officers of the Company for each of the Company's last
three completed fiscal years:
Summary Compensation Table
ANNUAL LONG TERM COMPENSATION
COMPENSATION AWARDS PAYOUTS
----------------------------- ------------------------------------
Secur-
ities
Name and Other Re- Under- All
Principa Annual tricted lying LTIP Other
Principal Compen- Stock Options/ Pay- Compen-
Position Year Salary Bonus sation Award SARS outs sation
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- --------- ------- ------ ------- ------- -------- ------- ------- --------
Theron 1998 $38,000 $0 $9,390(1) $0 $0 $0 $0
G. Reed, 1997 $100,000 $27,500 $39,381(2) $0 $0 $0 $0
President 1996 $100,000 $27,500 $34,726(3) $0 $0 $0 $0
of the
Company
T. Brinson 1998 $113,233 $27,500 $44,981(4) $0 $0 $0 $0
Brock, Sr., 1997 $89,000 $27,000 $38,967(5) $0 $0 $0 $0
Executive 1996 $84,000 $23,500 $33,053(6) $0 $0 $0 $0
Vice
President
and Acting
CEO of the
Company
Ava 1998 $80,222 $25,000 $21,063(7) $0 $0 $0 $0
Lovett, 1997 n/a
Senior 1996 n/a
Vice
President
and Chief
Financial
Officer
of the Bank
(1) Includes $4,425 in profit sharing contributions.
(2) Includes $18,959 in profit sharing contributions.
(3) Includes $17,155 in profit sharing contributions.
(4) Includes $21,035 in profit sharing contributions.
(5) Includes $17,255 in profit sharing contributions.
(6) Includes $14,521 in profit sharing contributions.
(7) Includes $15,783 in profit sharing contributions.
The Company granted no stock options or warrants during fiscl year 1998,
and the Company does not have any Long Term Incentive Plans in effect.
Aggregated Option/SAR Exercises
in Last Fiscal Year and Fiscal Year End Option/SAR Values
---------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options/SAR's Options/SAR's
Shares at FY-End at FY-End
Acquired Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercidable
(a) (b) (c) (d) (e)(1)
- -------------- -------- ------- ------------- -------------
Theron G. Reed 10,560 $70,435 31,680/0 $231,305/$0
T. Brinson 10,560 $70,435 21,120/0 $140,870/$0
Brock, Sr.
(1) Dollar values calculated by determining the difference
between the estimated fair market value of the Company's
Common Stock at December 31, 1998 (i.e., $10.00 per share)
and the exercise price of such options (i.e., $3.33).
Each director of the Company received $500 for each meeting
of the Board of Directors that he or she attended. In addition,
each director of the Company who is a member of the Bank's Loan
Committee received $100 per month and $50 for each Loan Committee
meeting that he or she attended. In December 1998, each director
of the Bank received a $2,000 holiday bonus.
Certain Relationships and Related Transactions
During 1998, 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 collectibility
or present other unfavorable features.
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD
Proposal 1: To amend the Company's Articles of Incorporation
to provide for three classes of directors with staggered terms.
Pursuant to its unanimous resolution dated February 16,
1999, the Board of Directors will recommend to the shareholders
that the Company's Articles of Incorporation be amended and
restated to divide the Board into three equal classes, with the
term of each class staggered so that in any given year no more
than one-third of the total Board membership shall stand for
election.
The Board of Directors believes that this provision,
together with the provisions described in Proposals 2 and 3
below, is prudent and will reduce the Company's vulnerability to
takeover attempts and certain other transactions that may not be
negotiated with and approved by the Board. Although the
Company's management is not presently aware of any specific
effort to accumulate the Company's common stock or otherwise
obtain control of the Company, the Board believes that it is in
the best interest of the Company and its shareholders to
encourage potential acquirers to negotiate directly with the
Board and that these provisions will encourage such negotiations
and discourage hostile takeover attempts and other proposed
transactions that do not reflect the true value of the Company or
are otherwise not in the best interest of the shareholders.
Instituting staggered terms for directors would make it more
difficult for shareholders to change a majority of directors.
Under the proposed classification, it could take at least two
years for shareholders to vote in a new majority of directors, as
compared to one year under the Company's existing Articles of
Incorporation. This may have the effect of discouraging a
merger, tender offer or proxy contest, the assumption of control
by a holder of a large block of the Company's common stock and
the removal of the incumbent management. However,
notwithstanding the adoption of this provision, the Board of
Directors would continue to have a fiduciary obligation to act in
the best interest of the shareholders and the Company in
determining corporate action.
The Company's existing Articles of Incorporation contain no
provisions having an anti-takeover effect, except for their
omission of a provision for cumulative voting for directors.
Section 14-2-728 of the Georgia Business Corporation Code (the
"Georgia Code") prohibits cumulative voting for directors unless
the corporation's articles of incorporation so provide. The
Georgia Code also permits corporations to adopt bylaw provisions
imposing certain voting rules and fair price requirements on
business combinations with beneficial owners of ten percent or
more of the corporation's shares ("Interested Shareholders").
These optional provisions, set forth in Sections 14-2-1111 and 14-
2-1112 of the Georgia Code, require business combinations with
Interested Shareholders to meet one of three criteria designed to
protect minority shareholders: (a) the transaction must be
unanimously approved by directors who served prior to the time
that the Interested Shareholder acquired ten percent ownership
and who are unaffiliated with such Interested Shareholder (each
such director, a "Continuing Director"); or (b) the transaction
must be approved by two-thirds of the Continuing Directors and a
majority of shares held by shareholders other than the Interested
Shareholder; or (c) the terms of the transaction must meet
specified pricing criteria that are intended to ensure that all
shareholders receive equal consideration for their shares. The
Company's bylaws do not presently contain the provisions
permitted by Sections 14-2-111 and 14-2-1112, but under both the
existing and proposed Amended and Restated Articles of
Incorporation, the Board may amend the Company's bylaws without
the necessity of shareholder approval.
The Board recommends that you vote "FOR" Proposal 1.
Proposal 2: To amend the Company's Articles of Incorporation
to require two-thirds vote of the outstanding shares to approve
certain transactions, amend the Articles of Incorporation or
remove a director.
Pursuant to its unanimous resolution dated February 16,
1999, the Board of Directors will recommend to the shareholders
that the Company's Articles of Incorporation be amended and
restated to require the affirmative vote of at least two-thirds
of the outstanding shares of capital stock to approve or
authorize any merger, consolidation, sale, lease or liquidation
of substantially all of the assets of the Company or any of its
subsidiaries or amendment of the Articles of Incorporation or
removal of a director, unless two-thirds of the Board of
Directors has approved such action, in which case the affirmative
vote of a majority of the outstanding shares of capital stock
shall suffice.
The Board of Directors believes that this provision is
prudent and will reduce the Company's vulnerability to takeover
attempts and certain other transactions that may not be
negotiated with and approved by the Board. See discussion of
anti-takeover provisions under Proposal 1.
Instituting this supermajority voting requirement would give
management veto power over mergers regardless of whether the
transaction is desired by or beneficial to a majority of the
Company's shareholders. However, notwithstanding the adoption of
this provision, the Board of Directors would continue to have a
fiduciary obligation to act in the best interest of the
shareholders and the Company in determining corporate action.
The Board recommends that you vote "FOR" Proposal 2.
Proposal 3: To amend the Company's Articles of Incorporation to
authorize the issuance of 50,000,000 shares of no par value
common stock and 10,000,000 shares of no par value preferred
stock, and to empower the Board of Directors to authorize the
issuance and fix the terms of any preferred stock in its sole
discretion.
Under the existing Articles of Incorporation, the Company is
authorized to issue 10,000,000 shares of no par value common
stock, of which 1,518,871 are presently issued and outstanding.
Pursuant to its unanimous resolution dated February 16, 1999, the
Board of Directors will recommend to the shareholders that the
Company's Articles of Incorporation be amended and restated to
increase the number of authorized shares to 60,000,000,
consisting of 50,000,000 shares of no par value common stock and
10,000,000 shares of no par value preferred stock. In conformity
with the existing Articles of Incorporation, the proposed
amendment would not require, and the Board of Directors does not
presently plan to solicit, further authorization by the
shareholders for any issuance of the authorized shares.
The adoption of this provision would give the Board of
Directors flexibility in managing the Company's capital
structure, by making stock available for the purposes of mergers,
acquisitions and the raising of additional capital. It would be
possible for the Board of Directors to use its power to issue
additional stock generally, and to fix the terms of any preferred
stock in particular, to dilute the stock ownership of persons
seeking to obtain control of the Company, and, incidentally,
thereby dilute the stock ownership of the remaining shareholders.
However, notwithstanding the adoption of this provision, the
Board of Directors would continue to have a fiduciary obligation
to act in the best interests of the shareholders and the Company
in determining corporate action.
The Board recommends that you vote "FOR" Proposal 3.
Proposal 4: To elect directors.
A. General Information
Currently, the Board of Directors is composed of thirteen
members, including two vacancies. Directors of the Company are
elected at the annual meeting of the Company's shareholders. In
the event that the shareholders approve Proposal 1 set forth
above, effective upon the filing of Amended and Restated Articles
of Incorporation, the Board of Directors will be divided into
three classes, Class I, Class II and Class III, whose terms will
expire on the date of the first, second and third successive
annual meetings, respectively. (In the event that the
shareholders do not approve Proposal 1, all directors elected at
the Annual Meeting will serve until the Company's next annual
meeting.) Under both the Company's current bylaws and the
proposed Amended and Restated Articles of Incorporation,
vacancies occurring on the Board of Directors between annual
shareholders' meetings may be filled by the vote of a majority of
the directors then in office to serve for the unexpired term of
the director whose vacancy is being filled.
Directors are elected by a plurality of the shares of Common
Stock present and entitled to vote at the Annual Meeting. In
tallying the election results, the Board will disregard
abstentions and "broker non-votes."
Each Proxy that a shareholder executes and returns will be
voted according to its terms. If a Proxy does not otherwise
specify, it will be voted for the election of the nominees named
below to constitute the entire Board of Directors. The
management of the Company has received the consent of the
nominees named in this Proxy Statement and their agreement to
serve as directors if elected.
B. Information Concerning Nominees for Directors
Except for Theron G. Reed, all current directors have been
nominated for re-election. The biography of each nominated
director of the Company follows. Except as otherwise indicated,
each nominee has been or was engaged in his/her present or last
principal occupation, in the same or a similar position, for more
than five years.
Name Age Position with Company and
Bank and Principal Occupation
Class I (Terms expiring in 2000)
T. Brinson
Brock, Sr. 42 Mr. Brock has been involved in lending to the
agricultural sector for the past twenty years. He
has served as Executive Vice President and Acting
Chief Executive Officer of the Company since March
24, 1998, Secretary of the Company since November
1989, a director of the Company since August 1989,
President and Chief Executive Officer of the Bank
since March 24, 1998, and a director and Secretary
of the Bank since August 1990. Prior to his
promotion, Mr. Brock served as the Bank's
Executive Vice President in charge of the Bank's
lending, business and professional development
activities. Mr. Brock raises beef cattle out of
which he places many FFA and 4H show calves for
club members across the state. He also raises
quarter and registered miniature horses, which his
children show and sell. He serves as Vice
President of the Turner County Cattlemen's
Association. He is an active member of Georgia
Banker's Association Agricultural Committee and is
an instructor in various AIB and bank training
programs. Mr. Brock is a member of both the Turner
and Crisp County Chambers of Commerce. He is a
deacon, and he and his family are active members,
of Ashburn First Baptist Church.
Willis R.
Collins 53 Mr. Collins has been a director of the
Company since August 1989 and of the Bank since
August 1990. Mr. Collins served as a Commissioner
of Turner County, Georgia from 1986 to 1993. He
organized Cotton Warehouse, Inc. in 1988 and is a
partner and manager of Arabi Gin Company.
Gene Stallings
Crawford 70 Mr. Crawford has been a director of the
Company since August 1989 and of the Bank since
August 1990. For over forty years Mr. Crawford
has been active in developing Crawford Cattle
Company, a beef and feeder cattle production
business.
Donald M.
Crews 50 Mr. Crews has been the owner and operator of
Furniture Factory Outlet, St. Marys, Georgia,
since 1985. Mr. Crews also owns and manages real
estate. Mr. Crews is a past director of the
Camden/Kingsbay Chamber of Commerce and the
Camden/Kingsbay Navy League and has served for
four years on the Better Business Committee for
Camden County.
Benny Warren
Denham 68 Mr. Denham has been a director of the Company
since August 1989 and of the Bank since August
1990. Mr. Denham is a co-owner of Denham Farms
and has operated this farming business since 1951.
Mr. Denham has been a director of Oglethorpe Power
Company since 1988 and serves as its Vice-
Chairman. Mr. Denham serves on the Georgia
Electric Membership Corporation Executive
Committee and is a past President. He is also
director of Irwin Electric Membership Corporation
and served as Chairman for several years. Mr.
Denham served as a Commissioner of Turner County,
Georgia from 1980 to 1990.
Class II (Terms expiring in 2001)
Lloyd Greer
Ewing 54 Mr. Ewing has been a director of the Company
since August 1989 and of the Bank since August
1990. Mr. Ewing joined Ewing Buick, Pontiac, GMC
Trucks, Inc. in sales in 1973 and has held various
positions in the company. He is now its President
and General Manager. Mr. Ewing is a former member
of the Board of Directors at First Federal Savings
Bank of Turner County.
Grady Elmer
Moore 64 Mr. Moore has been a director of the Company
since August 1989 and of the Bank since August
1990. Mr. Moore runs a row crop operation, G.M.
Farms, Inc., which he has pursued for the past
thirty-five years.
Sara Ruth
Raines 53 Mrs. Raines has been a director of the
Company since August 1989 and of the Bank since
August 1990. Until recently, Mrs. Raines operated
a department (clothing) store in Ashburn. Mrs.
Raines is the President of Raines Investment
Group, Inc., which is a franchisee of Aaron's
Rental Purchase Stores.
Joe
Sheppard 64 Mr. Sheppard has been Chairman of the Board
of Resource Systems, Inc., an Atlanta-based
company engaged in the telecommunications
business, for more than five years. Previously,
he held Regional Manager and Sales Manager
positions at the Digital Telephone Systems
Division of Harris Corporation.
Class III (Terms expiring in 2002)
Bobby Y.
Franklin 51 Mr. Franklin has been the owner and operator
of B&D Tire Company in Kingsland, Georgia, since
1979 and the owner of Franklin Properties in
Hilliard, Florida, since 1979. Mr. Franklin
serves as director of the Georgia Tire and
Retreaders Dealers Association.
Benjamin E.
Walker 68 Mr. Walker has been a director of the Company
since August 1989 and of the Bank since August
1990. Mr. Walker is a part-owner of M & W
Sportswear, Inc., a local garment contracting
company. Mr. Walker is also a co-owner of SWS
Garment, Inc., a uniform manufacturing company in
Fitzgerald, Georgia. Mr. Walker is a former
Chairman of the Board of The Citizens Bank of
Ashburn.
Jimmie Ann
Ward 61 Mrs. Ward has been a director of the Company
since August 1989 and of the Bank since August
1990. Mrs. Ward is Vice President of Ward Land
Company and is a community volunteer in Turner
County.
Freddie J.
Weston, Jr. 61 Mr. Weston has been a director of the Company
since August 1989 and of the Bank since August
1990. Mr. Weston served in the U.S. Army for more
than twenty-five years, retiring in October 1981.
Since 1983, he has been the coordinator of
Vocational Academic Education at Turner County
High School where he is Assistant Principal and
teaches business and financial management.
The Board recommends that you vote "FOR" the election of all
thirteen nominees
for director.
INDEPENDENT PUBLIC ACCOUNTANTS
Francis & Company, CPAs served as the Company's independent
accounting firm for the year ended December 31, 1998, and has
been selected to serve as the independent accounting firm for the
current fiscal year. Representatives of Francis & Company, CPAs
are not expected to be present at the Annual Meeting.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The management of the Company knows of no matters other than
those above that are to be brought before the 1999 Annual
Meeting. However, if any other matter should be presented for
consideration and voting at the Annual Meeting or any adjournment
thereof, it is the intention of the person named in the enclosed
form of Proxy to vote the Proxy in accordance with his judgment
of what is in the best interest of the Company.
INFORMATION ABOUT SHAREHOLDER PROPOSALS
If you wish to submit proposals to be included in the
Company's 1999 Proxy Statement, the Company must receive them on
or before Wednesday, December 1, 1999. Please address your
proposals to Mr. Brock at the Company.
Under the Company's bylaws, if you wish to nominate
directors or bring other business before the shareholders:
* You must notify the Company's Secretary in writing not less
than 60 or more than 90 days before the Annual Meeting.
* If the Company gives you fewer than 70 days' notice or prior
public disclosure of the meeting date, however, you may notify
the Company within 10 days after the notice was mailed or
publicly disclosed.
* Your notice must contain the specific information that the
Company's bylaws require.
Please note that these requirements relate only to matters
that you wish to bring before your fellow shareholders at an
Annual Meeting. They are separate from the SEC's requirements to
have your proposal included in the Company's proxy statement.
If you would like a copy of the Company's bylaws, the
Company will send you one without charge at your request.
BY ORDER OF
THE BOARD OF DIRECTORS
/S/ T. Brinson Brock, Sr.
__________________________________
T. Brinson Brock, Sr.
Executive Vice President and Acting
Chief Executive Officer
PROXY
COMMUNITY NATIONAL This Proxy is Solicited on Behalf of the
BANCORPORATION Board of Directors. The undersigned
hereby appoints T. Brinson Brock, Sr.,
561 East Washington as Proxy with the power to appoint his
Avenue substitute, and hereby authorizes him to
Ashburn, Georgia 31714 represent and to vote as designated
below all the shares of common stock of
Community National Bancorporation held
of record by the undersigned on April 6,
1999, at the Annual Meeting of
Shareholders to be held on May 12, 1999,
or any adjournment thereof.
A. PROPOSALS (The Board of Directors recommends a vote "FOR"
Proposals 1 through 3.)
1. Provision for three classes of directors with staggered
terms.
[ ] FOR [ ] ABSTAIN
[ ] AGAINST
2. Requirement of supermajority vote to approve certain
transactions, amend the Articles or remove a director.
[ ] FOR [ ] ABSTAIN
[ ] AGAINST
3. Increase number of authorized shares and empower Board to
fix terms of preferred stock.
[ ] FOR [ ] ABSTAIN
[ ] AGAINST
B. ELECTION OF DIRECTORS (The Board of Directors recommends a
vote "FOR" all nominees listed below.)
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ] ABSTAIN
(except as marked to the
contrary below)
Class I Class II Class III
T. Brinson Brock, Sr. Lloyd Greer Ewing Bobby Y. Franklin
Willis R. Collins Grady Elmer Moore Benjamin E. Walker
Gene Stallings Crawford Sara Ruth Raines Jimmie Ann Ward
Donald M. Crews Joe Sheppard Freddie J. Weston, Jr.
Benny Warren Denham
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below.)
____________________________________________________________________
C. IN HIS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING. [ ] YES [ ] NO
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy
will be voted FOR each of Proposals 1 through 3, FOR the election of all
listed nominees and, at the Proxy's direction, on any other matter that may
properly come before the Annual Meeting. Please sign exactly as name appears
below. When joint tenants hold shares, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
______________________, 1999
PLEASE MARK, SIGN, DATE AND RETURN Date
THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
_________________________________
Signature
_________________________________
Signature if held jointly
