- 13 -
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:
[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 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 Amended and Restated Articles of Incorporation, containing
certain anti-takeover measures 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,
----------------------------------
T. Brinson Brock, Sr.
Executive Vice President and
Acting Chief Executive Officer
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 informa-
tion 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 approval of the Amended and Restated Articles of
Incorporation; and
(2) "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 thenominee indicating that you are the beneficial
owner of the shares on the Record Date.
What vote is required to approve each proposal?
-----------------------------------------------
Proposal 1: Approve Amended and Restated Articles of Incorporation.
The affirmative vote of a majority of the outstanding shares of common
stock is required to approve the Amended and Restated 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 2: 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 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, bene-
ficial 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 pur-
suant 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 compen-
sation 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
------------------------------ --------------- -----------
Securities
Re- under All
stric- lying Other
Name and Other ted Opt- LTIP Com-
Principal Annual Stock ions Pay- pen-
Position Year Salary Bonus Compensation Awards SARs outs tion
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------ ---- -------- ------- ------------ ------ ----- ----- ----
Theron G. 1998 $ 38,000 $ 00 $ 9,390(1) $0 $0 $0 $0
Reed, 1997 $100,000 $27,500 $39,381(2) $0 $0 $0 $0
President of 1996 $100,000 $27,500 $34,726(3) $0 $0 $0 $0
the Company
- ------------------------------------------------------------------------------
T. Brinson 1998 $113,233 $27,000 $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
- ------------------------------------------------------------------------------
Ave Lovett, 1998 $ 80,222 $25,000 $21,063(7) $0 $0 $0 $0
Senior, Vice 1997 n/a
President 1996 n/a
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 fiscal 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/SARs Options/SARs
Shares at FY-end at FY-End
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
(a) (b) (c) (d) (e)(1)
- ----------------- ----------- ----------- ------------- -------------
Theron G. Reed 10,560 $70,435 31/680/0 $231,305/$0
T. Brinson
Brock, Sr. 10,560 $70,435 21,120/0 $140,870/$0
- ------------------------------------------------------------------------
(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 RECOMMEND BY THE BOARD
Proposal 1:
- ----------
Amendment and Restatement of the Company's Articles of Incorporation.
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 provide for not fewer than seven
or more than 21 directors; 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; 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 common stock shall suffice; to continue to omit cumulative voting
rights in the election of directors; and to empower the Board of Directors
to authorize the issuance and fix the terms of any preferred stock in its
sole discretion.
The Board of Directors believes that the provisions described above are
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 other-
wise not in the best interest of the shareholders.
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 Share-
holder 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 the proposed Amended and Restated Articles of Incorporation, the Board
may amend the Company's bylaws on the vote of two-thirds of the directors
then in office, without the necessity of shareholder approval.
The adoption of the Amended and Restated Articles of Incorporation 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. The institution of
supermajority voting provisions gives management a veto power over mergers
regardless of whether the transaction is desired by or beneficial to a
majority of the Company's shareholders. Instituting staggered terms for
directors, and requiring a supermajority for the removal of a director with-
out cause, will make it more difficult for shareholders to change a majority
of the 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.
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. The proposed Amended and Restated
Articles of Incorporation would 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. The proposed Amended and
Restated Articles of Incorporation do not require, and the Board of Directors
does not presently intend to solicit, further authorization by the share-
holders 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. However, it
would be possible for the Board of Directors to use the issuance of preferred
shares to dilute the stock ownership of persons seeking to obtain control of
the Company.
Notwithstanding the adoption of the Amended and Restated Articles of
Incorporation, the Board of Directors will 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" the approval of the Amended and
Restated Articles of Incorporation.
Proposal 2:
- ----------
Election of 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 the above-described Amended and Restated Articles of Incorporation,
effective upon their filing, 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 above-described Amended and Restated Articles of
Incorporation are not approved, 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. Mary's, 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 2000)
=================================
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 2000)
==================================
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.
VI. 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
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 represent and to vote as designated
31714 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.
1. APPROVAL OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
[ ] FOR Approval of Amended and Restated Articles of Incorporation
[ ] AGAINST Approval of Amended and Restated Articles of Incorporation
2. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY
as marked to the contrary below) for all nominees listed
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.)
- -------------------------------------------
3. IN HIS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
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 the approval of the Amended and Restated Bylaws, 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
