SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. N/A )
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box: |_|Confidential, for Use of
|_| Preliminary proxy statement the Commission Only (a
|X| Definitive proxy statement permitted by Rule 14a-6(e)(2)
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FLAG FINANCIAL CORPORATION
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than 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 transactions 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):
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(4)Proposed maximum aggregate value of transaction:
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(5)Total fee paid:
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|_| Fee paid previously with preliminary materials.
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|_| 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:
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(2)Form, Schedule or Registration Statement no.:
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(3)Filing Party:
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(4)Date Filed:
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<PAGE>
[FLAG Financial Corporation Logo]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 19, 2000
To the Shareholders of FLAG Financial Corporation:
The 2000 Annual Meeting of Shareholders of FLAG Financial Corporation (the
"Company") will be held at Eagle's Landing, 235 Corporate Center Drive,
Stockbridge, Georgia, on Wednesday, April 19, 2000 at 2:00 p.m., for the
purposes of:
(1) Electing four directors of the Company;
(2) Ratifying the appointment of Porter Keadle Moore, LLP as independent
accountants of the Company for the fiscal year ending December 31,
2000; and
(3) Transacting such other business as properly may come before the Annual
Meeting or any adjournments thereof.
March 1, 2000 is the record date for the determination of the shareholders
entitled to notice of and to vote at the meeting.
I hope that you will be able to attend the Annual Meeting. If you plan to
attend, please mark the appropriate box at the bottom of your proxy card so that
we can make proper arrangements for the anticipated number of guests. Whether or
not you plan to attend the Annual Meeting, please mark, date, sign and return
the enclosed form of proxy as soon as possible. If you attend the Annual Meeting
and wish to vote your shares in person, you may do so at any time before the
vote takes place.
By Order of the Board of Directors,
/s/ John S. Holle
John S. Holle
Chairman of the Board
Stockbridge, Georgia
March 20, 2000
Please read the attached proxy statement and then promptly complete,
execute and return the enclosed proxy card in the accompanying postage-paid
envelope. You can spare your company the expense of further proxy solicitation
by returning your proxy card promptly.
<PAGE>
FLAG FINANCIAL CORPORATION
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 19, 2000
INTRODUCTION
Time and Place of the Meeting
The Company's Board of Directors is furnishing this Proxy Statement to
solicit proxies for use at the 2000 Annual Meeting of Shareholders of the
Company to be held on Wednesday, April 19, 2000 at 2:00 p.m. local time at
Eagle's Landing, 235 Corporate Center Drive, Stockbridge, Georgia and at any
adjournment of the meeting.
Record Date and Mailing Date
The close of business on March 1, 2000 is the record date for the
determination of shareholders entitled to notice of and to vote at the meeting.
We first mailed this Proxy Statement and accompanying proxy card to shareholders
on or about March 20, 2000.
Number of Shares Outstanding
As of the close of business on the Record Date, the Company had 20,000,000
shares of Common Stock, $1.00 par value, authorized, of which 8,275,405 shares
were issued and outstanding, which includes 42,500 shares held in treasury..
Each such share is entitled to one vote on all matters to be presented at the
meeting.
VOTING AT THE ANNUAL MEETING
Procedures for Voting by Proxy
The accompanying proxy card is for use at the Annual Meeting if a
shareholder is unable to attend in person or is able to attend but does not wish
to vote in person. You should specify your choices with regard to the two
proposals on the proxy card. If you properly sign, return and do not revoke your
proxy, the persons named as proxies will vote your shares according to the
instructions you have specified on your proxy card. If you sign and return your
proxy card but do not specify how the persons appointed as proxies are to vote
your shares, the shares represented by a signed and dated proxy card will be
voted FOR the election of the four director nominees named in Proposal 1, and
FOR the ratification of the Board's selection of independent accountants as
described in Proposal 2. If any other matters properly come before the Annual
Meeting, the persons named as proxies will vote upon such matters according to
their judgment. The Board of Directors is not aware of any other business to be
presented to a vote of the shareholders at the Annual Meeting.
Requirements for Shareholder Approval
The presence, in person or by proxy, of a majority of the outstanding
shares of common stock is necessary to constitute a quorum at the Annual
Meeting. In counting the votes to determine whether a quorum exists at the
Annual Meeting, the Company will use the proposal receiving the greatest number
of all votes cast "for" or "against," as well as any abstentions (including
instructions to withhold authority to vote).
In accordance with Georgia law and the Company's Bylaws, the vote required
to elect directors (Proposal 1) is a plurality of the votes cast by the holders
of shares entitled to vote, provided a quorum is present. If you withhold your
vote as to one or more directors, it will have no effect on the outcome of the
election unless you cast that vote for a competing nominee. The proposal to
ratify the Board of Directors' appointment of independent accountants for the
Company (Proposal 2), will be approved if the votes cast in favor of the
proposal exceed the votes cast opposing the proposal, provided a quorum is
<PAGE>
present. As a result, abstentions and "broker non-votes" will have no effect
since they are treated as true abstentions and not as negative votes.
Revoking Your Proxy
The giving of a proxy does not affect the right to vote in person if you
attend the Annual Meeting. Any shareholder who has given a proxy has the power
to revoke it at any time before it is voted by giving written notice of
revocation to Thomas L. Redding, Secretary of the Company, at Eagle's Landing,
235 Corporate Center Drive, Stockbridge, Georgia 30281; by executing and
delivering to Mr. Redding a proxy card bearing a later date; or by voting in
person at the Annual Meeting.
Solicitation of Proxies
In addition to soliciting proxies directly, the Company has requested
brokerage firms, nominees, custodians and fiduciaries to forward proxy materials
to the beneficial owners of shares held of record by them. The Company also may
solicit proxies through its directors, officers and employees in person and by
telephone and facsimile, without payment of additional compensation to such
persons. The Company will pay the cost of proxy solicitation.
PROPOSAL 1 - ELECTION OF DIRECTORS
Nominees
The Bylaws of the Company provide that the Board of Directors of the
Company shall consist of not less than ten and not more than twenty-five
members. The Board of Directors of the Company fix the precise number of
directors. The directors are divided into three classes as nearly equal in
number as possible. The directors in each class are elected by the shareholders
for a term of three years or until their successors are elected and qualified.
The term of office of one of the classes of directors expires each year at the
Annual Meeting of Shareholders, and a new class of either four or five directors
is elected by the shareholders each year at that time.
At the Annual Meeting, the terms of H. Speer Burdette, III, John S. Holle,
John W. Stewart, Jr. and Robert W. Walters will expire. The Board of Directors
has nominated each of these four individuals to stand for re-election as
directors at the Annual Meeting. If elected by the shareholders, each of the
nominees will serve a three-year term that will expire at the 2003 Annual
Meeting of Shareholders. If any of the nominees should be unavailable to serve
for any reason (which we do not anticipate), the Board of Directors may
designate a substitute nominee or nominees (in which case the persons named as
proxies on the enclosed proxy card will vote the shares represented by all valid
proxy cards for the election of such substitute nominee or nominees), allow the
vacancy or vacancies to remain open until a suitable candidate or candidates are
located, or by resolution provide for a lesser number of directors.
The Board of Directors unanimously recommends that shareholders vote FOR
the proposal to re-elect H. Speer Burdette, III, John S. Holle, John W. Stewart,
Jr. and Robert W. Walters as directors of the Company for a three-year term
expiring at the 2003 Annual Meeting of Shareholders or until their successors
have been duly elected and qualified.
Information Regarding Nominees and Continuing Directors
The following table shows certain information regarding the four nominees
to serve as directors, as well as the nine incumbent directors whose terms as
directors will continue following the Annual Meeting. Except as otherwise
indicated, each of the named persons has been engaged in his or her present
principal occupation for more than five years.
2
<PAGE>
Persons Nominated For Election To Serve As Directors
Until The 2003 Annual Meeting Of Shareholders
Name Age Business Information
<TABLE>
<CAPTION>
<S> <C> <C>
H. Speer Burdette, III 47 Mr. Burdette is an owner, director, Vice President and
Treasurer of J.K. Boatwright & Co., P.C., an accounting firm
in LaGrange, Georgia. He has been a director of First Flag
Bank since 1993 and a director of the Company since 1994.
John S. Holle 49 Mr. Holle currently serves as Chairman of the Board of the
Company. Mr. Holle served as Chairman, President and Chief
Executive Officer of the Company from 1993 until March 31,
1998 when Middle Georgia Bankshares, Inc. merged with the
Company. Mr. Holle has been President, and a director of
First Flag Bank since 1985 and Chairman of the Board of
First Flag Bank since 1990. He is also a director of
Citizens Bank and Thomaston Federal Savings Bank. Mr. Holle
serves on the Board of Directors of the Federal Home Loan
Bank of Atlanta in Atlanta, Georgia.
John W. Stewart, Jr. 65 Mr. Stewart is an owner, Chairman of the Board and President
of Stewart Wholesale Hardware Company, a wholesale grocery
and hardware business in LaGrange, Georgia. He has been a
director of First Flag Bank since 1982 and a director of the
Company since 1994.
Robert W. Walters 67 Mr. Walters retired in March 1996 as owner and director of
The Mill Store, Inc., a retail and contract floor covering
business in LaGrange, Georgia. He has been a director of
First Flag Bank since 1982 and a director of the Company
since 1994.
</TABLE>
3
<PAGE>
Directors To Serve Until The 2001 Annual Meeting
Of Shareholders
Name Age Business Information
<TABLE>
<CAPTION>
<S> <C> <C>
Dr. A. Glenn Bailey 65 Dr. Bailey is a physician and surgeon in LaGrange, Georgia.
He is a director and served as President of Clark-Holder
Clinic, a medical clinic in LaGrange, Georgia. He has been a
director of First Flag Bank since 1982 and a director of the
Company since 1994.
John R. Hines, Jr. 65 Mr. Hines served as Chairman of the Board and President of
First Hogansville Bankshares, Inc. from January 1, 1982
until September 30, 1999 when First Hogansville Bankshares,
Inc. merged with the Company. Mr. Hines served as Chief
Executive Officer of The Citizens Bank, which was a
wholly-owned subsidiary of First Hogansville Bankshares,
Inc., from July 1, 1978 until The Citizens Bank merged with
First Flag Bank and was renamed to First Flag Bank
Hogansville on February 11, 2000. Mr. Hines currently serves
as Senior Vice President and a director of the Company and
as a director of First Flag Bank. He is President of the
First Flag Bank Hogansville division of First Flag Bank. He
is also a member of the Board of Trustees of West Georgia
Medical System.
Kelly R. Linch 57 Mr. Linch is owner of Linch's, Inc., a retail appliance and
electronics store in LaGrange, Georgia. He has been a
director of First Flag Bank since 1986 and a director of the
Company since 1994.
J. Daniel Speight, Jr. 43 Mr. Speight served as Chief Executive Officer and as a
director of Middle Georgia Bankshares, Inc. from 1989 until
March 31, 1998 when Middle Georgia Bankshares, Inc. merged
with the Company. Mr. Speight currently is President and
Chief Executive Officer of the Company. He has been
President, Chief Executive Officer and a director of
Citizens Bank since 1984. Mr. Speight became Chief Executive
Officer of First Flag Bank in October 1999. He is a director
of the Company, First Flag Bank and Citizens Bank. Mr.
Speight is also a director of The Bankers Bank in Atlanta,
Georgia and Towne Services, Inc. in Norcross, Georgia.
</TABLE>
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<PAGE>
Directors To Serve Until The 2002 Annual Meeting
Of Shareholders
Name Age Business Information
<TABLE>
<CAPTION>
<S> <C> <C>
Robert G. Cochran 63 Mr. Cochran served as President and Chief Executive Officer
of Thomaston Federal Savings Bank from February 22, 1982
until August 27, 1999 when Thomaston Federal Savings Bank
became a wholly-owned subsidiary of the Company. Mr. Cochran
currently serves as Senior Vice President of the Company and
as a director of the Company. He is President and a director
of Thomaston Federal Savings Bank. Mr. Cochran also serves
as trustee of the Foundation of Flint River Technical
Institute in Thomaston, Georgia.
Patti S. Davis 43 Ms. Davis served as Executive Vice President and Chief
Financial Officer of Middle Georgia Bankshares, Inc. from
1994 until March 31, 1998 when Middle Georgia Bankshares,
Inc. merged with the Company. Ms. Davis served as Senior
Vice President and Chief Financial Officer of Citizens Bank
from 1990 until January 2000. Ms. Davis served as Chief
Financial Officer of the Company from July 1998 until
January 2000. Ms. Davis currently serves as Senior Vice
President and Assistant Secretary of the Company and is a
director of the Company. She is also Senior Vice President
of the Citizens Bank.
Fred A. Durand, III 58 Mr. Durand is President, Chief Executive Officer and a
director of Durand-Wayland, Inc., a manufacturer of produce
sorting and spray equipment in LaGrange, Georgia. He has
been a director of First Flag Bank since 1990 and a director
of the Company since 1994.
James W. Johnson 58 Mr. Johnson is owner and President of McCranie Motor and
Tractor Company, Inc., a retail seller of tractors and
implement equipment in Unadilla, Georgia. He is the former
Chairman of the Board of Middle Georgia Bankshares, Inc. Mr.
Johnson became Chairman of the Board of Citizens Bank in
October 1999. He currently serves as director of Taylor
Regional Hospital in Hawkinsville, Georgia and Rock Tenn
Corporation in Norcross, Georgia. Mr. Johnson has served as
a director of the Company since 1998.
J. Preston Martin 46 Mr. Martin served as President of Three Rivers Bancshares,
Inc. from 1986 until May 8, 1998 when Three Rivers
Bancshares, Inc. merged with the Company. Mr. Martin served
as the President and Chief Executive Officer of Bank of
Milan, which was a wholly-owned subsidiary of Three Rivers
Bancshares, Inc., from 1985 until Bank of Milan merged with
Citizens Bank on January 1, 1999. Mr. Martin currently
serves as Senior Vice President of the Company and as a
director of the Company and Citizens Bank. Mr. Martin became
the President of Citizens Bank in October 1999 and serves as
the President of the Bank of Milan division of Citizens
Bank. Mr. Martin also owns 50% of Wheeler County Finance, a
small loan company in Alamo, Georgia.
</TABLE>
5
<PAGE>
Executive Officers
The persons listed below are Executive Officers of the Company who do not
serve on the Board of Directors.
Name Age Business Information
<TABLE>
<CAPTION>
<S> <C> <C>
Charlie O. Hinely 52 Mr. Hinely serves as Executive Vice President and Chief
Operating Officer of the Company. Mr. Hinely joined the
Company in December 1997. Prior to joining the Company, Mr.
Hinely was employed by The Citizens and Southern National
Bank in Atlanta, Georgia and was a principal of Bank
Management Resources, Inc. in Atlanta, Georgia and LSI
Partners, Inc. in Atlanta, Georgia.
Thomas L. Redding 41 Mr. Redding serves as Senior Vice President, Secretary and
Chief Financial Officer of the Company. He also serves as
the Chief Financial Officer of Citizens Bank and First Flag
Bank. Mr. Redding joined the Company in June 1999 as Senior
Vice President and Controller. From 1990 until June 1999
when he joined the Company, Mr. Redding was employed by
United Bank Corporation in Barnesville, Georgia as Chief
Financial Officer. Prior to Mr. Redding's employment with
United Bank Corporation, he was associated with an
accounting firm located in Blakely, Georgia concentrating in
the financial services industry.
</TABLE>
J. Daniel Speight and Patti S. Davis are first cousins.
Management Stock Ownership
The following table lists the number and percentage ownership of shares of
common stock beneficially owned by each director of the Company, each executive
officer and all executive officers and directors as a group as of the Record
Date. Information relating to beneficial ownership of Company common stock is
based upon "beneficial owner" concepts set forth in rules under the Securities
and 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 to direct the voting of such security, or
"investment power," which includes the power to dispose or to direct the
disposition of such security. Under the rules, more than one person may be
deemed to be a beneficial owner of the same securities.
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<PAGE>
Amount and
Nature of Beneficial Percent
Name Ownership of Total (%)
----- --------- ------------
(a) Directors
Dennis D. Allen 28,506.36 (1) .34
Dr. A. Glenn Bailey 99,718 (2) 1.20
H. Speer Burdette, III 25,706 (3) .31
Robert G. Cochran 114,470 (4) 1.38
Patti S. Davis 153,061.21 (5) 1.84
Fred A. Durand, III 33,879 (6) .41
John R. Hines, Jr. 286,282 (7) 3.46
John S. Holle 94,221.644 (8) 1.13
James W. Johnson 150,960 (9) 1.82
Kelly R. Linch 59,534 (10) .72
Preston Martin 304,137.07 (11) 3.67
J. Daniel Speight, Jr. 274,351.429 (12) 3.29
John W. Stewart, Jr. 31,102.531 (13) .37
Robert W. Walters 141,739.842 (14) 1.71
(b) Executive Officers
Charles O. Hinely 8,413.198 (15) .10
Thomas L. Redding 147.962 (16) .00
(c) All Directors and Executive
Officers as a group
(16 persons) 1,806,229.9 21.07
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(1) Consists of (i) 22,510 shares held by Mr. Allen, (ii) 4,590.361 shares held
in the Company's 401(k) Plan and (iii) 1,406 shares subject to immediately
exercisable options.
(2) Consists of (i) 36,555 shares held by Dr. Bailey, (ii) 35,055 shares held
by Dr. Bailey's spouse as to which beneficial ownership is shared, (iii)
7,059 shares held by Chattahoochee Land Investment as to which beneficial
ownership is shared, (iv) 1,325 shares held by a broker for the benefit or
Chattahoochee Land Investment as to which beneficial ownership is shared,
and (v) 19,724 shares subject to immediately exercisable options.
(3) Consists of (i) 5,982 shares held in Individual Retirement Accounts for the
benefit of Mr. Burdette, and (ii) 19,724 shares subject to immediately
exercisable options.
(4) Consists of (i) 33,624 shares held jointly by Mr. Cochran and his spouse,
(ii) 13,474 shares held in Individual Retirement Accounts of Mr. Cochran,
(iii) 51,825 shares issued pursuant to the Thomaston Federal Savings Bank
401(k) Plan, and (iv) 15,547 shares subject to immediately exercisable
stock options.
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<PAGE>
(5) Consists of (i) 108,439 shares held by Ms. Davis, (ii) 4,063 shares held in
an Individual Retirement Account for the benefit of Ms. Davis, (iii) 7,866
shares held by Speight Futures, Inc. as to which beneficial ownership is
shared, (iv) 6,443.210 shares issued pursuant to the Company's 401(k) Plan,
and (v) 26,250 shares subject to immediately exercisable options. Ms. Davis
is also an executive officer of the Company.
(6) Consists of (i) 14,155 shares held by a broker for the benefit of Mr.
Durand, and (ii) 19,724 shares subject to immediately exercisable options.
(7) Consists of (i) 232,555 shares held by Mr. Hines, (ii) 3,042 shares held by
Mr. Hine's spouse as to which beneficial ownership is shared, and (iii)
50,685 shares pursuant to The Citizens Bank 401(k) Profit Sharing Plan.
(8) Consists of (i) 15,000 shares held by Mr. Holle, (ii) 804.512 shares issued
to Mr. Holle pursuant to the Company's dividend reinvestment plan, (iii)
27,229.132 shares issued pursuant to the Company's Profit Sharing and
401(k) Plan, and (iv) 51,188 shares subject to immediately exercisable
options. Mr. Holle is also an executive officer of the Company.
(9) Consists of (i) 58,377 shares held by Mr. Johnson, (ii) 2,716 shares held
by Mr. Johnson's spouse as to which beneficial ownership is shared, (iii)
84,010 held by McCranie Motor and Tractor Company, Inc. Profit Sharing Plan
for the benefit of Mr. Johnson, and (iv) 5,857 shares subject to
immediately exercisable options.
(10) Consists of (i) 33,750 shares held by Mr. Linch, (ii) 6,060 shares held by
a broker for the benefit of Mr. Linch, and (iii) 19,724 shares subject to
immediately exercisable options.
(11) Consists of (i) 191,000 shares held by Mr. Martin, (ii) 96,000 shares held
by a broker for the benefit of Mr. Martin, (iii) 11,137.070 shares issued
pursuant to the Company's 401(k) Plan, and (iv) 6,000 shares subject to
immediately exercisable stock options. Mr. Martin is also an executive
officer of the Company.
(12) Consists of (i) 99,997 shares held by Mr. Speight, (ii) 49,498 shares held
by a broker for the benefit of Mr. Speight, (iii) 2,362 shares held by Mr.
Speight as trustee for Patricia Ruth Davis, (iv) 589 shares held by Mr.
Speight as trustee for Anna Davis, (v) 1,677 shares held by a broker for
the benefit of Mr. Speight as custodian for Alex Speight, (vi) 1,677 shares
held by a broker for the benefit of Mr. Speight as custodian for J. Daniel
Speight, III, (vii) 7,371 shares held in an Individual Retirement Account
for the benefit of Mr. Speight, (viii) 34,917 shares held by Sp8Co., Inc.
as to which beneficial ownership is shared, (ix) 8,575.429 shares issued
pursuant to the Company's 401(k) Plan, and (x) 67,688 shares subject to
immediately exercisable options. Mr. Speight is also an executive officer
of the Company.
(13) Consists of (i) 9,486 shares held by Mr. Stewart, (ii) 15 shares held by
Mr. Stewart as custodian for Tristain Daugherty, (iii) 1,876.924 shares
issued to Mr. Stewart pursuant to the Company's dividend reinvestment plan,
(iv) .607 shares issued to Mr. Stewart as custodian for Tristain Daugherty
pursuant to the Company's dividend reinvestment plan, and (v) 19,724 shares
subject to immediately exercisable options.
(14) Consists of (i) 37,875 shares held by Mr. Walters, (ii) 41,700 shares held
jointly by Mr. Walters and his spouse, (iii) 42,000 shares held by Mr.
Walters' spouse as to which beneficial ownership is shared, (iv) 375 shares
held by Mr. Walters as custodian for Myles D. Oliver, (v) 65.842 shares
issued to Mr. Walter's as custodian for Myles D. Oliver pursuant to the
Company's dividend reinvestment plan, and (vi) 19,724 shares subject to
immediately exercisable options.
(15) Consists of (i) 10 shares held by Mr. Hinely, (ii) 189.829 shares issued to
Mr. Hinely pursuant to the Company's dividend reinvestment plan, (iii) 90
shares held by a broker for the benefit of Mr. Hinely, (iv) 1,231 shares
held by a broker for the benefit of Mr. Hinely's spouse as to which
beneficial ownership is shared, (v) 274.9888 shares held by a broker for
the benefit of Mr. Hinely's spouse as custodian for Rebecca E. Hinely, (vi)
1,867.380 shares issued pursuant to the Company's 401(k) Plan, and (vii)
4,750 shares subject to immediately exercisable stock options.
8
<PAGE>
(16) Consists of 147.962 shares held in the Company's 401(k) Plan.
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the full Board and through joint committees of the Boards of
Directors of the Company and its subsidiary banks. The Company's committees
include an Audit and Exam Committee, a Benefits and Compensation Committee, and
an Executive Committee. During 1999, the Board of Directors held four meetings,
the Audit and Exam Committee held four meetings, the Benefits and Compensation
Committee held three meetings, and the Executive Committee held ten meetings.
Each director attended at least 75% of all meetings of the full Board of
Directors and of each committee of the Board of which he or she is a member.
The Audit and Exam Committee is responsible for reviewing with the
Company's independent accountants their audit plan, the scope and results of
their audit engagement and the accompanying management letter, if any; reviewing
the scope and results of the Company's internal auditing procedures; consulting
with the independent accountants and management with regard to the Company's
accounting methods and the adequacy of the Company's internal accounting
controls; approving professional services provided by the independent
accountants; reviewing the independence of the independent accountants; and
reviewing the range of the independent accountants' audit and non-audit fees.
The Audit and Exam Committee members are H. Speer Burdette, III, Fred A. Durand,
III, James W. Johnson and Kelly R. Linch.
The Benefits and Compensation Committee is responsible for setting the
compensation and benefits of the executive officers and other employees of the
Company and its subsidiaries. The Benefits and Compensation Committee members
are Dr. A. Glenn Bailey, Fred A. Durand, III and James W. Johnson.
The Executive Committee is authorized, within certain limitations, to
exercise all of the authority of the Board of Directors between Board meetings.
Among other functions, the Executive Committee reviews, on a monthly basis, the
reports of the loans made and savings activities during the preceding month. The
Executive Committee also reviews and ratifies any investments made by the
Company. The Executive Committee consists of H. Speer Burdette, III, John S.
Holle, James W. Johnson, J. Preston Martin, J. Daniel Speight, Jr. and John W.
Stewart, Jr. Charles O. Hinely serves as an Ex Officio Officer to the Executive
Committee.
The Board of Directors as a whole functions as a nominating committee to
select management's nominees for election as directors of the Company. The Board
of Directors will consider nominees recommended by shareholders if submitted to
the Company in accordance with the procedures set forth in Section 2.14 of the
Bylaws of the Company. See "Shareholders' Proposals for 2001 Annual Meeting"
below.
Director Compensation
The seven non-employee members of the Board of Directors receive $3,000 per
quarter, which includes all board meetings and assigned committee meetings for
the Company and any subsidiary bank board. Three directors serving on the
Executive Committee who are not also employees of the Company receive an
additional $750 per quarter. The Company paid a total of $90,000 in directors'
fees in 1999. Directors who are employees of the Company or its subsidiaries do
not receive directors' fees.
The Company's 1994 Directors Stock Incentive Plan (the "Directors Stock
Plan"), provides that each person who becomes a director of the Company and who
is not an employee of the Company or any of its subsidiaries will be granted an
option for the purchase of 5,000 shares of common stock upon the commencement of
his or her service as a director. Additionally, the Directors Stock Plan
provides that as of each March 1st, starting at March 1, 1995 and ending on
March 1, 2004, the non-employee directors as a group on each such date will be
entitled to receive options for the purchase of 6,000 shares of common stock
which shall be divided equally among them, but only if the Company's book value
as of the December 31st immediately preceding such March 1st equals or exceeds
106% of the Company's book value as of the prior December 31st. Since a change
of control of the Company (as defined in the Directors Stock Plan) occurred on
March 31, 1998 when Middle Georgia Bankshares, Inc. merged with the Company, all
9
<PAGE>
of the options that remained under the Directors Stock Plan at that time (72,936
shares) were granted to and divided equally among all of the non-employee
directors as of March 30, 1998. In December 1998, the Company added 15,000
shares to be issued under the Directors Stock Plan. In accordance with the
Directors Stock Plan, options for the purchase of 857 shares were granted to
each of the seven non-employee directors as of March 1, 1999. All options were
granted at an exercise price equal to the fair market value of a share of common
stock on the date of grant. The options vested when they were granted and have a
term of ten years. In October 1999, the Company added 1,000 shares under the
Directors Stock Plan.
Effective as of February 3, 1995, First Flag Bank established a Director
Indexed Fee Continuation Program (the "First Flag Bank Director Program") to
provide retirement benefits to the directors of First Flag Bank (as well as a
similar plan for certain executive officers of First Flag Bank). The index used
by the First Flag Bank Director Program is the earnings on life insurance
policies purchased on the directors' lives. First Flag Bank retains the tax-free
build-up of cash surrender value in the policies up to the after-tax opportunity
costs for premiums paid on the policies. Any remaining earnings from the
policies are accrued to deferred compensation liability accounts for the
directors. The earnings in a director's account are payable in ten annual
installments commencing 30 days following the director's retirement as a
director. As of December 31, 1999, First Flag Bank accrued $98,341 for the
benefit of directors and executive officers and expensed $53,720.
Effective February 13, 1995, Citizens Bank established a Director Indexed
Fee Continuation Program (the "Citizens Bank Director Program") to provide
retirement benefits to the directors of Citizens Bank (as well as a similar plan
for certain executive officers of Citizens Bank). The Citizens Bank Director
Program is substantially the same as the First Flag Bank Director Program. As of
December 31, 1999, Citizens Bank accrued $28,472 for the benefit of Citizens
Bank directors and executive officers and expensed $15,446.
Effective July 1985, The Citizens Bank (Hogansville) established a
Directors Deferred Compensation Plan to provide retirement benefits for
directors of The Citizens Bank (the "Hogansville Director Program"). The
Hogansville Director Program provides for an annual payment of a benefit for ten
years upon the director's retirement or in the event the director dies while he
is still serving as a director. The Citizens Bank has extended the Hogansville
Director Program to include certain key employees of the bank. As of December
31, 1999, The Citizens Bank accrued $240,529 for the benefit of directors and
executive officers and expensed $69,750.
Compensation Committee Interlocks and Insider Participation
The Benefits and Compensation Committee of the Board of Directors of the
Company establishes the general compensation policies of the Company,
establishes the compensation plans and specific compensation levels for
executive officers and awards stock-based compensation to executive officers and
employees of the Company. J. Daniel Speight, Jr., President and Chief Executive
Officer of the Company, John S. Holle, Chairman of the Board of the Company, and
Charles O. Hinely, Chief Operating Officer of the Company, participate in
compensation discussions and decisions affecting other executive officers of the
Company.
Benefits and Compensation Committee Reports
On Executive Compensation
The Benefits and Compensation Committee (the "Committee") of the Board of
Directors of the Company consists of three non-employee directors, Dr. A. Glenn
Bailey, Mr. Fred A. Durand, III, and Mr. James W. Johnson. Mr. Durand serves as
Chairman.
The Committee generally is responsible for the compensation and benefit
plans for all employees and is directly accountable for reviewing and monitoring
compensation and benefit plans, and payment and awards under those plans, for
the Company's senior executives, including the Chairman, President and Chief
Executive Officer, and the other named executive officers. In carrying out these
responsibilities, the Committee reviews the design of all compensation and
benefit plans applicable to executive officers, determines base salaries,
reviews incentive plan performance measures, establishes incentive targets,
approves cash incentive awards based on performance, grants stock options and
10
<PAGE>
other long-term incentives, and monitors the administration of the various
plans. In all of these matters, the Committee's decisions are reviewed and
approved or ratified by the Board of Directors.
Base Salaries
The salaries of the Chairman and President and Chief Executive Officer are
evaluated solely by the Committee. Salaries for the other named executive
officers generally are recommended by the Chairman and President and Chief
Executive Officer and reviewed by the Committee. The named executive officers
and their salaries are listed in the Summary Compensation Table. In each case,
salaries are based principally on a subjective review of the executive's
individual performance and degree of experience and are also designed to be
competitive with salaries paid to executives in similar positions in financial
institutions of comparable asset size.
Annual Incentives
One of the Committee's objectives in managing executive compensation is to
link directly a significant portion of executive pay to Company performance. Mr.
Holle and Mr. Speight and the other named executives are therefore eligible to
receive bonuses based upon the Company's achievement of annual earnings and goal
targets established by the Committee.
Long-term Incentives
Another major objective of the Committee in managing executive compensation
is to reward executives for increasing the value of the Company to its
shareholders. The FLAG Financial Corporation Employees Stock Incentive Plan (the
"Plan") was adopted by the Board of Directors on February 17, 1994 and approved
by shareholders as of April 20, 1994. The Plan accomplishes this objective by
providing executives with opportunities to earn and acquire a meaningful
ownership interest in the Company. The Committee is authorized to make awards of
stock options and other stock-based incentives and has the sole authority to
select the officers and other key employees to whom awards may be made under the
Plan. Because the value of stock options and other stock awards is determined by
the price of the common stock, the Committee believes these awards benefit
stockholders by linking a potentially significant portion of executive pay to
the performance of the common stock. In addition, the Plan assists the Company
in attracting and retaining key employees and providing a competitive
compensation opportunity. Awards made under the Plan for 1999 are disclosed in
the "Summary Compensation Table" and "Option Grants in Last Fiscal Year."
Benefits
In general, the benefit plans provided to key employees, such as health
care, life insurance, profit sharing and 401(k), are intended to provide an
adequate retirement income as well as financial protection against illness,
disability or death. Benefits offered to the named executive officers and other
executives are substantially the same as those provided to all employees, with
some variation.
Compensation of the President and Chief Executive Officer
In determining the compensation of the President and Chief Executive
Officer, the Committee is guided by the Company's compensation philosophy as
described in this report, the Company's performance and competitive practices.
There were no changes in the base salary for Mr. Speight during 1999. In 1999,
Mr. Speight received bonuses totaling $87,625. The bonuses consisted of a
$37,625 bonus for Mr. Speight's service to the Company, which was accrued in
1998 and payable in 1999. The remaining $50,000 related to the sale of stock
held by the Company through which the Company realized a large profit. The
Company desired to compensate Mr. Speight for the realized profit to the
Company.
11
<PAGE>
Summary
The Company's executive compensation program encourages executives to
manage the Company profitability and to increase the value of the business to
the shareholders. The increasing emphasis on annual and long-term incentives is
consistent with the Committee's policy of linking pay to performance and
increasing shareholder value. The Committee believes this approach provides
competitive compensation and is in the best interest of the stockholders. The
Committee will continue to monitor the effectiveness of the executive
compensation program and will initiate changes as it deems appropriate.
Submitted by the Benefits and Compensation Committee of the Board of
Directors of FLAG Financial Corporation.
Fred A. Durand, III
Chairman
Dr. A. Glenn Bailey
James W. Johnson
12
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the yearly percentage change in
the cumulative total shareholder return on the Company's common stock to the
cumulative total return on the Nasdaq Stock Market (U.S.) Index and the Nasdaq
Bank Stock Index for the past five years. The Performance Graph assumes
reinvestment of dividends, where applicable.
PERFORMANCE GRAPH
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
FLAG Financial Corporation
12/1994 12/1995 12/1996 12/1997 12/1998 12/1999
------- ------- ------- ------- ------- -------
FLAG Financial $100.00 $163.77 $124.64 $249.28 $200.00 $121.74
Corporation
Nasdaq Stock Market (US $100.00 $141.34 $173.89 $213.07 $300.25 $542.43
Companies)
Nasdaq Bank Stocks $100.00 $149.00 $196.73 $329.39 $327.12 $314.42
13
<PAGE>
EXECUTIVE COMPENSATION
Summary of Compensation
The following table shows certain information for the fiscal years
indicated concerning compensation paid or accrued by the Company and its
subsidiaries to or on behalf of the Company's Chief Executive Officer and the
four other most highly compensated executive officers who earned over $100,000
in salary and bonus during 1999 (the "Named Executive Officers").
John S. Holle served as Chairman of the Board, President and Chief
Executive Officer of the Company until March 31, 1998. Upon completion of the
merger of Middle Georgia Bankshares, Inc. with the Company on March 31, 1998,
Mr. Holle became Chairman of the Company and J. Daniel Speight, Jr. became
President and Chief Executive Officer of the Company. Ms. Davis became Senior
Vice President of the Company upon completion of the merger of Middle Georgia
Bankshares, Inc. with the Company. Mr. Speight and Patti S. Davis were not
executive officers of the Company prior to the merger of Middle Georgia
Bankshares Inc. with the Company.
J. Preston Martin became an executive officer of the Company on May 8, 1998
when Three Rivers Bancshares, Inc. merged with the Company. Mr. Hinely joined
the Company in December 1997 and currently serves as Executive Vice President
and Chief Operating Officer of the Company.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation(1) Compensation Awards
Securities
Name and Underlying Options All Other
Principal Position Year Salary ($) Bonus ($) (# of shares) Compensation
- ------------------ ---- ---------- --------- ------------- -------------
J. Daniel Speight, Jr.
- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
President and Chief Executive 1999 $215,000 $87,625 (2) 26,250 $8,420 (3)
Officer of the Company 1998 $215,000 $29,025 81,750 $5,963
John S. Holle
- --------------
Chairman of the Board of the 1999 $215,000 $80,625 (2) 26,250 $13,007 (4)
Company 1998 $175,000 $20,200 62,250 $17,461
1997 $144,200 $ 8,750 7,500 $16,348
Charles O. Hinely
- -----------------
Executive Vice President and Chief 1999 $160,000 $18,750 21,250 $6,094 (5)
Operating Officer of the Company 1998 $125,000 - 0 - 19,000 $4,545
J. Preston Martin
- ------------------
Senior Vice President of the 1999 $158,000 $61,887 21,250 $7,893 (6)
Company 1998 $158,000 $36,000 (7) 24,000 $ 325
Patti S. Davis
- ---------------
Senior Vice President and 1999 $125,000 $18,750 10,000 $6,618 (8)
Assistant Secretary of the Company 1998 $125,000 $21,625 28,500 $3,732
</TABLE>
14
<PAGE>
- -------------------
(1) We have omitted information on "perks" and other personal benefits because
the aggregate value of these items does not meet the minimum amount
required for disclosure under the Securities and Exchange Commission
regulations.
(2) Consists of bonuses accrued in 1998 and payable in 1999 and $50,000 bonus
paid to each of Mr. Speight and Mr. Holle relating to the sale of stock
held by the Company through which the Company realized a large profit. The
Company desired to compensate both Mr. Speight and Mr. Holle for the
realized profit to the Company.
(3) For 1999 and 1998, consists of contributions of $7,167 and $5,000,
respectively, to the Company's Profit Sharing Plan and 401(k) Plan and
$1,253 and $963, respectively, for insurance premiums for term and other
life insurance.
(4) For 1999, 1998 and 1997, consists of contributions of $10,000, $14,633 and
$13,734, respectively, to the Company's Profit Sharing Plan and 401(k) Plan
and $3,007, $2,828 and $2,614, respectively, for insurance premiums for
term and other life insurance.
(5) For 1999 and 1998, consists of contributions of $5,000 and $3,750,
respectively, to the Company's Profit Sharing Plan and 401(k) Plan and
$1,094 and $795, respectively, for insurance premiums for term and other
life insurance.
(6) For 1999 and 1998 consists of contributions of $7,242 to the Company's
Profit Sharing Plan and 401(k) Plan and $651 and $325, respectively, for
insurance premiums for term and other life insurance.
(7) The bonus for Mr. Martin was accrued in 1998 and paid in 1999.
(8) For 1999 and 1998, consists of contributions of $6,250 and $3,473,
respectively, to the Company's Profit Sharing Plan and 401(k) Plan and $368
and $259, respectively, for insurance premiums for term and other life
insurance.
15
<PAGE>
Option Grants in Last Fiscal Year
The following table provides details regarding stock options granted to the
Named Executive Officers in 1999.
Individual Option Grants
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rate of
Stock Price Appreciation
Individual for Option Term (3)
------------------------------------------------------------------ ---------------------------
% of Total
Securities Options
Underlying Granted to
Options Employees Exercise or
Date of Granted in Fiscal Base Price Expiration
Name Grant (#)(1) Year (%) ($/Sh)(2) Date 5% 10%
---- ----- ------ -------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Daniel Speight, Jr. 09/17/99 5,625 1.78 8.3130 09/17/09 76,168.38 121,284.90
09/17/99 15,000 4.74 8.3130 09/17/09 203,115.69 323,426.41
09/30/99 5,625 1.78 8.8750 09/30/09 81,317.74 129,484.36
John S. Holle 09/17/99 5,625 1.78 8.3130 09/17/09 76,168.38 121,284.90
09/17/99 11,600 3.67 8.3130 09/17/09 157,076.13 250,116.42
09/17/99 3,400 1.07 8.3130 09/17/09 46,039.55 73,309.98
09/30/99 5,625 1.78 8.8750 09/30/09 81,317.74 129,484.36
Charles O. Hinely 09/17/99 5,625 1.78 8.3130 09/17/09 76,168.38 121,284.90
09/17/99 10,000 3.16 8.3130 09/17/09 135,410.46 215,617.60
09/30/99 5,625 1.78 8.8750 09/30/09 81,317.74 129,484.34
J. Preston Martin 09/17/99 5,625 1.78 8.3130 09/17/09 76,168.38 121,284.90
09/17/99 10,000 3.16 8.3130 09/17/09 135,410.46 215,617.60
09/30/99 3,100 0.98 8.8750 09/30/09 44,815.11 71,360.27
09/30/99 2,525 0.80 8.8750 09/30/09 36,502.63 58,124.09
Patti S. Davis 09/17/99 10,000 3.16 8.3130 09/17/09 135,410.46 215,617.60
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All of the options were granted under the Company's 1994 Employees Stock
Incentive Plan and vest in 16.666% increments on anniversary of grant,
except for options granted to Ms. Davis' which vest in 25% increments on
anniversary of grant.
(2) Option holders can pay the exercise price by delivery of already-owned
shares. Option holders can pay tax withholding obligations related to
exercise of the options by offset of the underlying shares, subject to
certain conditions.
(3) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast future possible appreciation, if
any, of the price of the Company's common stock.
The executive officers did not exercise any options in 1999. The exercise
prices for the options granted to executive officers are higher than the market
value of the Company's Common Stock at December 31, 1999.
16
<PAGE>
Employment Agreements
The Company entered into employment agreements with J. Daniel Speight, Jr.,
John S. Holle and Patti S. Davis, effective as of April 1, 1998. The Company
entered into a similar employment agreement with Charles O. Hinely effective as
of April 1, 1999. Each of the Employment Agreements provide for an initial term
of three years. The three-year term automatically renews each day after the
effective date so that the term remains a three-year term until either party
notifies the other that the automatic renewals should discontinue. The
Employment Agreements provide for an annual salary which is reviewed at least
annually by the Board of Directors of the Company. The Employment Agreements
also provide for the employees to participate in any bonus, stock option or
other executive compensation programs available to senior management of the
Company. Information regarding the annual salary and bonus paid to J. Daniel
Speight, Jr., John S. Holle, Charles O. Hinely and Patti S. Davis for 1999
pursuant to the Employment Agreements is set forth in the Summary Compensation
Table above. The Employment Agreements provide that the employee is entitled to
the use of an automobile, reimbursement of club fees and dues, and participation
in all group employee benefit plans.
The Employment Agreements state that in the event the Company terminates
employment for any reason other than "cause" (as defined in the Employment
Agreements), the employee is entitled to receive a severance payment in a lump
sum amount equal to the employee's average monthly compensation multiplied by
the number of months remaining in the term of the Employment Agreement. If there
are less than twelve months remaining in the term of the Employment Agreement,
the employee will receive a lump sum payment of his or her average monthly
compensation multiplied by twelve. The employees also are entitled to receive
certain benefits for at least twelve months or until the end of the term of the
Employment Agreement, whichever is greater.
Pursuant to the terms of the Employment Agreements, during the term of the
Employment Agreement and for twelve months following the termination of the
Employment Agreement, the employee agrees not to compete with the Company or
solicit any of its customers or employees. The agreement not to compete and not
to solicit customers or employees does not apply if (i) the Company terminates
the employee without "cause," (ii) the Company experiences a "change of control"
(as defined in the Employment Agreement) or (iii) the employee terminates the
Employment Agreement for "cause."
The Company entered into a Separation Agreement with J. Preston Martin
effective May 13, 1998. Pursuant to the Separation Agreement, Mr. Martin will
receive severance payments equal to his annual base salary and bonus paid over
the previous three fiscal years in the event that Mr. Martin is involuntarily
terminated as such term is defined in the Separation Agreement. In the
Separation Agreement, Mr. Martin covenants not to compete with the Company
during the term of the Separation Agreement and for a 12-month period following
the termination of the Separation Agreement or the termination of Mr. Martin's
status as an employee of the Company.
Loans to Management
Directors, executive officers and principal shareholders of the Company
have been customers of the FLAG subsidiary banks from time to time in the
ordinary course of business, and additional transactions may be expected to take
place in the future. In accordance with applicable federal laws and regulations,
all loans by the FLAG Banks to such persons are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons, do not involve more than the
normal risk of collectibility or embody other unfavorable features, and comply
with specified quantitative limits imposed by such federal laws and regulations.
At December 31, 1999, the aggregate amount of loans and extensions of credit
outstanding to such persons was approximately $287,470, which represented .54%
of the total equity capital of the Company as of such date.
None of the loans outstanding at the FLAG subsidiary banks at any time
during or subsequent to 1999 to directors, executive officers or principal
shareholders of the Company is or has been on past due or non-accrual status,
has been restructured, or is considered by the FLAG subsidiary banks to be a
problem loan.
17
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
regulations of the Securities and Exchange Commission thereunder, require the
Company's directors and executive officers and any persons who beneficially own
more than 10% of the Company's common stock, as well as certain affiliates of
such persons, to file initial reports of their ownership of common stock and
subsequent reports of changes in such ownership with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Directors,
executive officers and persons beneficially owning more than 10% of such stock
are required by applicable regulations to furnish the Company with copies of all
Section 16(a) reports they filed. To the Company's knowledge, no person
beneficially owned more than 10% of the Company's common stock during 1999.
Based solely on its review of the copies of such reports received by it and
written representations that no other reports were required of those persons,
the Company believes that during 1999, all of its directors and executive
officers complied with applicable Section 16(a) filing requirements.
PRINCIPAL SHAREHOLDERS
There were no shareholders of record that directly or indirectly owned,
controlled, or held with power to vote 5% or more of the Company's common stock
as of December 31, 1999.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed the firm of Porter Keadle Moore, LLP
to serve as independent accountants of the Company for the fiscal year ending
December 31, 2000 and has directed that such appointment be submitted to the
shareholders for ratification at the Annual Meeting. Porter Keadle Moore, LLP is
being appointed as the Company's independent accountants for the fourth year and
is considered by management of the Company to be well qualified. If the
shareholders do not ratify the appointment of Porter Keadle Moore, LLP, the
Board of Directors will reconsider the appointment.
Representatives of Porter Keadle Moore, LLP will be present at the Annual
Meeting. They will have an opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions from shareholders.
The Board of Directors unanimously recommends that shareholders vote FOR
the proposal to ratify the appointment of Porter Keadle Moore, LLP as
independent accountants of the Company for the fiscal year ending December 31,
2000.
SHAREHOLDERS' PROPOSALS FOR 2001 ANNUAL MEETING
Shareholder proposals submitted for consideration at the next annual
meeting of Shareholders must be received by the Company no later than December
15, 2000, to be included in the 2001 proxy materials. A shareholder must notify
the Company before January 15, 2001 of a proposal for the 2001 Annual Meeting
that the shareholder intends to present other than by inclusion in the Company's
proxy material. If the Company does not receive such notice prior to January 15,
2001, proxies solicited by the management of the Company will confer
discretionary authority upon the management of the Company to vote upon any such
matter.
18
<PAGE>
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters other than those
referred to in the accompanying Notice of Annual Meeting of Shareholders which
may properly come before the Annual Meeting. However, if any other matter should
be properly presented for consideration and voting at the Annual Meeting or any
adjournments thereof, it is the intention of the persons named as proxies on the
enclosed form of proxy card to vote the shares represented by all valid proxy
cards in accordance with their judgment of what is in the best interest of the
Company.
By Order of the Board of Directors.
/s/ Thomas L. Redding
Thomas L. Redding
Secretary
Stockbridge, Georgia
March 20, 2000
-----------
The Company's 1999 Annual Report to Shareholders and Annual Report on Form
10-K, which include audited financial statements for the Company, has been
mailed to shareholders of the Company with these proxy materials. The Annual
Report to Shareholders and the Annual Report on Form 10-K do not form any part
of the material for the solicitation of proxies
<PAGE>
Revocable Proxy Common Stock
FLAG FINANCIAL CORPORATION
THIS PROXY IS SOLICITIED BY THE BOARD OF DIRECTORS FOR THE 2000 ANNUAL MEETING
OF SHAREHOLDERS
The undersigned hereby appoints, J. Daniel Speight, Jr. and John S. Holle,
and each of them, proxies, with full power of substitution, to act for and in
the name of the undersigned to vote all shares of Common Stock of FLAG Financial
Corporation (the "Company"), which the undersigned is entitled to vote at the
2000 Annual Meeting of Shareholders of the Company, to be held at Eagle's
Landing, 235 Corporate Center Drive, Stockbridge, Georgia,, on Wednesday, April
19, 2000, at 2:00 p.m., local time, and at any adjournments thereof, as
indicated below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
1. Election of Directors: Authority for the election of H. Speer Burdette,
III, John S. Holle, John W. Stewart, Jr. and Robert W. Walters. as a class of
directors, each to serve until the Annual Meeting of Shareholders in 2003 or
until their successors are elected and qualified.
{ } FOR ALL NOMINEES listed above { } WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below). nominees listed below.
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.
H. Speer Burdette, III, John S. Holle, John W. Stewart, Jr.and Robert W. Walters
2. Ratification of Appointment of Independent Accountants: Authority to ratify
the appointment of Porter Keadle Moore, LLP as independent accountants of the
Company for the fiscal year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting and any adjournments
thereof.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS RPOXY CARD IN THE
ENCLOSED PREPAID ENVELOPE
(Continued, and to be signed and dated, on the reverse side)
<PAGE>
(Continued from other side)
PROXY-SOLICITED BY THE BOARD OF DIRECTORS
THIS PROXY CARD WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY CARD WILL BE BOTED IN THE DISCRETION OF THE PROXIES "FOR"
THE ELECTION OF THE FOUR NOMINEES IN PROPOSAL 1 AND "FOR" PROPOSAL 2. If any
other business is presented to a vote of the shareholders at the Annual Meeting,
this proxy card will be voted by the proxies in their best judgement. At the
present time, the Board of Directors knows of no other business to be presented
to a vote of the shareholders at the Annual Meeting.
If the undersigned elects to withdraw this proxy card on or before the time
of the Annual Meeting or any adjournments thereof and notifies the Secretary of
the Company at or prior to the Annual Meeting of the decision of the undersigned
to withdraw this proxy card, then the power of said proxies shall be deemed
terminated and of no further force and effect. If the undersigned company
withdraws this proxy card in the manner described above and prior to the Annual
Meeting does not submit a duly executed and subsequently dated proxy card to the
Company, the undersigned may vote in person at the Annual Meeting all shares of
Common Stock of the Company owned by the undersigned as of the record date,
March 1, 2000
Please mark, date and sign exactly as your name appears on
this Proxy card. When shares are hold jointly, both holders
should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give your full
title. If the holder is a corporation or a partnership, the
full corporate or partnership name should be signed by a
duly authorized officer.
Date: ______________________, 1999
------------------------------------
Signature
-------------------------------------
Signature, if shares held jointly
Do you plan to attend the Annual Meeting? YES [ ] NO [ ]
