SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
CNB HOLDINGS, INC.
__________________
(Name of Registrant as Specified In Its Charter)
N.A.
__________________
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
Not Applicable.
[ ] 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.
Not Applicable.
CNB HOLDINGS, INC.
P.O. BOX 1060
900 MEMORIAL DRIVE
PULASKI, VIRGINIA 24301
<PAGE>
CNB HOLDINGS, INC.
P.O. Box 1060
900 Memorial Drive
Pulaski, Virginia 24301
This Proxy is solicited by the Board of Directors of CNB Holdings, Inc. (the
"Company") for the 1997 Annual Meeting of Shareholders to be held on April
17, 1997 (the "Annual Meeting").
The undersigned hereby appoints David W. Ratcliff, Jr. and A. Carole Pratt
and each of them, with full power of substitution, as proxies to vote all of
the shares of Common Stock of the Company which the undersigned may be
entitled to vote at the Annual Meeting, and at any adjournments thereof, on
the following matters in the following manner:
1. Election of three directors of the Company to serve until the 2000
Annual Meeting of Shareholders.
FOR all nominees listed below (except as marked to
the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below
Jack W. Bowling, Jackson M. Bruce, and Nathaniel Tuck, D.C.
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name below.)
________________________________________________________________________________
2. In accordance with their judgment, upon such other matters as may properly
come before the Annual Meeting or any adjournment thereof.
When this Proxy is properly executed and returned, and not revoked, the shares
it represents will be noted at the meeting in accordance with the choices
specified above. If no choice is specified, it will be voted for the election
of the nominees listed above.
PLEASE DATE AND SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW.
Date: ___________________ , 1997
________________________________
(Signature of Shareholder)
________________________________
(Signature of Shareholder)
NOTE: When signing as attorney, trustee, administrator, executor or guardian,
please give your full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. In the case of
joint tenants, each joint owner must sign.
<PAGE>
CNB HOLDINGS, INC.
P. O. Box 1060
900 Memorial Drive
Pulaski, Virginia 24301
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of CNB Holdings, Inc., (the "Company") will be held on Thursday,
April 17, 1997, at 10:00 a.m., local time in Room 206, Edwards Hall, New
River Community College, Dublin, Virginia, for the purpose of considering
and voting upon:
1. The election of three directors of the Company to serve until the
2000 Annual Meeting of Shareholders.
2. Such other matters as may properly come before the Annual Meeting
or any adjournment thereof.
Only shareholders of record at the close of business on Monday, March l7,
1997, are entitled to notice of and to vote at the meeting or any adjournment
thereof.
A Proxy Statement and a proxy solicited by the Board of Directors are enclosed
herewith. To ensure a quorum for the meeting, please sign, date and return the
proxy promptly in the enclosed envelope. If you attend the meeting, you may
revoke your proxy and vote in person. The Company's 1996 Annual Report to
Shareholders is enclosed for your information.
By Order of the Board of Directors
A. Carole Pratt
Secretary
March 21, 1997
Please complete and return the enclosed proxy promptly. If you attend the
meeting in person, you may withdraw your proxy and vote your own shares.
<PAGE>
CNB HOLDINGS, INC.
P.O. BOX 1060
900 MEMORIAL DRIVE
PULASKI, VIRGINIA 24301
_________________________
PROXY STATEMENT
_________________________
1997 ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 17, 1997
This Proxy Statement is furnished to the shareholders of CNB Holdings, Inc.
(the "Company") in connection with the solicitation of proxies by the Board
of Directors of the Company to be voted at the 1997 Annual Meeting of Share-
holders of the Company (the "Annual Meeting") and any adjournment thereof.
The Annual Meeting will be held on Thursday, April 17, 1997 at 10:00 a.m.,
local time in Room 206, Edwards Hall, New River Community College, Dublin,
Virginia. This Proxy Statement and the accompanying proxy are being mailed
to shareholders on or about March 21, 1997.
VOTING
GENERAL
The securities that can be voted at the Annual Meeting consist of the common
stock, $5.00 par value per share, of the Company (the "Common Stock"), with
each share entitling its owner to one vote on each matter submitted to the
shareholders. The record of shareholders entitled to vote at the Annual
Meeting was taken as of the close of business on Monday, March 17, 1997. On
that date the company had outstanding and entitled to vote 437,225 shares of
Common Stock, with each share entitled to one vote.
PROXIES
All properly executed proxy cards delivered pursuant to this solicitation
and not revoked will be voted at the Annual Meeting in accordance with the
directions given. Shareholders should specify their choices with regard to
the election of directors on the accompanying proxy card. If no specific
instructions are given with regard to the matters to be voted upon, then
the shares represented by a signed proxy card will be voted "FOR" the
election of all director nominees. If any other matters properly come before
the Annual Meeting, the persons named as proxies will vote upon such matters
according to their judgment.
All proxy cards delivered pursuant to this solicitation are revocable at any
time at the option of the persons executing them by giving written notice to
the Secretary of the Company at P.O. Box 1060, 900 Memorial Drive, Pulaski,
Virginia 24301, or by executing and delivering to the Secretary a later dated
proxy, or by voting in person at the Annual Meeting.
All expenses incurred in connection with the solicitation of proxies will be
borne by the Company. Such costs include charges by brokers, fiduciaries and
custodians for forwarding proxy materials to beneficial owners of stock held
in their names. Solicitation may be undertaken by mail, telephone and personal
contact by directors, officers and employees of the Company without additional
compensation.
<page1>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Common Stock
by the directors, executive officers and holders of 5% or more of the out-
standing shares of the Common Stock and all directors and executive officers
of the Company as a group as of March 1, 1997.
<TABLE>
<CAPTION>
Principal Percentage
Occupation Shares of
Name, Age & Address Director During the Beneficially Shares
of Beneficial Owner Since Past Five Years Owned Outstanding
(1)
___________________ _____ _______________ _____ ___________
NOMINEES FOR ELECTION AS
DIRECTORS TO SERVE UNTIL 2000
<S> <C> <C> <C> <C>
Jack W. Bowling, 50 1993 President 26,720(3) 6.1%
Radford, Virginia H. T. Bowling, Inc.
Jackson M. Bruce, 54 1993 Partner, law firm of 22,000 5.0%
Pulaski, Virginia Gilmer, Sadler,
Ingram, Sutherland,
& Hutton
Nathaniel R. Tuck, 1993 President and Owner, 15,010 3.4%
D.C., 44 Tuck Clinic of
Pulaski, Virginia Chiropractic, P.C.
DIRECTORS TO SERVE UNTIL 1999
Wayne L. Carpenter, 50 1993 President, Chief 16,320 3.7%
Pulaski, Virginia Executive Officer,
Vice President and
Relationship Manager,
NationsBank
Hiawatha Nicely, Jr., 47 1993 Chairman of the Board; 22,100 5.1%
Dublin, Virginia President, New Century
Consultants, Inc.
A. Carole Pratt, 1993 Secretary of the 12,020(4) 2.8%
D.D.S., 45 Company; General
Pulaski, Virginia Dentistry
David W. Ratcliff,
Jr., 52 1993 Director of Finance 10,264(5) 2.3%
Pulaski, Virginia and Administration
Alliant Techsystems, Inc.
DIRECTORS TO SERVE UNTIL 1998
Sybil S. Atkinson, 50 1993 Mediaid of America, 12,263(2) 2.8%
Pulaski, Virginia Inc., Parish
Administrator of Christ
Episcopal Church
Randolph V. Chrisley,49 1993 Vice President of 22,000 5.0%
Draper, Virginia Sales, Pulaski
Furniture Corporation
<page2>
Principal
Occupation Shares Percentage
Name, Age & Address Director During the Beneficially of Shares
of Beneficial Owner Since Past Five Years Owned Outstanding
(1)
____________________ _____ _____________________ _________ __________
<S> <C> <C> <C> <C>
James L. Webb, 1993 Vice President in 10,079 2.3%
Jr., 45 Charge of Marketing,
Pulaski, Virginia Old Dominion Insurance
Services, Inc.
J. David Wine, 48 1993 Founder, New River 23,000(6) 5.3%
Pulaski, Virginia Oxygen Therapy, Inc.
and Advance Health-
Care Services, Inc.
Co-founder of Bay State
Medical, Inc., Home
Pharmacy, Inc. and
Home Care Solutions, Inc.
All Directors and 191,776 43.9%
Executive Officers
as a Group (11Persons)
__________________________
</TABLE>
(1) Percentage is determined on the basis of 437,225 shares of Common Stock
issued and outstanding, plus in each case shares subject to currently
exercisable options deemed to he outstanding pursuant to Rule 13d-3(d)(1)
of the Securities Exchange Act of 1934.
(2) Includes 1,011 shares owned by Ms. Atkinson's minor children.
(3) Includes 26,720 shares held by an investment company affiliate of Mr.
Bowling.
(4) Includes 304 shares held by Ms. Pratt's minor children.
(5) Includes 300 shares held jointly with Mr. Ratcliff's children.
(6) Includes 2,515 shares owned by an individual retirement account for the
benefit of Mr. Wine's wife.
ELECTION OF DIRECTORS
NOMINEES
By resolution of the Board of Directors, the Board shall consist of eleven
directors. The terms of the directors are staggered so that each year approx-
imately one-third of the Board of Directors is elected and each director serves
until the third Annual Meeting following his or her election and thereafter
until a successor has been elected and has qualified. This year, the terms of
three directors are expiring and thus three directors will be elected.
Certain information concerning the nominees for election of directors at this
Annual Meeting who will serve until the 2000 Annual Meeting of Shareholders is
set forth above, as certain information about the other classes of directors
whose terms will expire at the 1998 and 1999 Annual Meetings of Shareholders.
All of the nominees are currently directors of the Company and Community
National Bank, the Company's subsidiary bank (the "Bank").
In the event that any nominee withdraws or for any reason is not able to
serve as a director, the proxy will be voted for such other person as may be
designated by the Board of Directors as substitute nominee, but in no event
will the proxy be voted for more than three nominees. The Board of Directors
has no reason to believe that any nominee will not serve if elected.
DIRECTOR COMPENSATION
The Company or the Bank did not pay directors' fees during the last fiscal
year, and does not presently intend to pay directors' fees in the initial
years of operation. Directors of the Company participate in the Company's
stock option plan. See "Stock Option Plan."
COMPANY BOARD AND COMMITTEE MEETINGS AND ATTENDANCE
The Board of Directors of the Company held four meetings during the fiscal
year. All directors attended at least 75% of all meetings of the Board.
The Board of the Company has no committees.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1994, the Company acquired an undeveloped 4.9 acre plot at the corner of
Memorial Drive and Lee Highway (U.S. Route 11) in Pulaski, Virginia for the
site of the Bank's main office from a partnership 100% owned by Jack W.
Bowling, a director, and five members of his immediate family. The Company
acquired the property in exchange for 25,000 shares of common stock valued
at $250,000. The purchase price for the site was determined by the Company
after receiving three independent appraisals of the site which averaged
approximately $284,500. This land has been owned by members of Mr. Bowling's
immediate family for more than twenty years. In connection with the sale of
the property, Mr. Bowling and the other sellers agreed to provide for rough
grading of the site.
The Company has purchased three insurance policies (a general business policy,
a worker's compensation policy and a key man term life policy covering Wayne
L. Carpenter) through James L. Webb, Jr., a director. The premiums for these
policies totaled less than $1,000.
The Company and the Bank have had and expect to have banking and other trans-
actions in the ordinary course of business with directors and officers of the
Company and the Bank and their affiliates, including members of their families
or corporations, partnerships or other organizations in which such directors
or officers have a controlling interest, on substantially the same terms
(including price, interest rates and collateral) as those prevailing at the
time for comparable transactions with unrelated parties. Such transactions
are not expected to involve more than the normal risk of collectibility nor
present other unfavorable features to the Company and the Bank. The Bank is
subject to a limit on the aggregate amount it could lend to its and the
Company's directors and officers as a group equal to its unimpaired capital
and surplus (or, under a regulatory exemption available to bans with less
than $100 million in deposits, twice that amount), loans to individual
directors and officers must also comply with the Bank's lending policies and
statutory lending limits, and directors with a personal interest in any
loan application are excluded from the consideration of such loan application.
The executive officers of the Company are elected by the Board of Directors
and serve at the pleasure of the Board. There are no family relationships
among any of the directors or executive officers.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
TO ELECT THE THREE NOMINEES LISTED ABOVE AS DIRECTORS OF THE COMPANY.
EXECUTIVE COMPENSATION
The following table shows the cash compensation paid by the Company to the
Company's Chief Executive Officer for the years ended December 31, 1994 -
1996.
<page4>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
_________________________
Other Annual
Name and Principal Position Year Salary
Compensation(1)
_______________________________________ ____ ________ _______________
<S> <C> <C> <C>
Wayne L. Carpenter 1996 $ 60,000 $2,915
President and CEO 1995 $ 58,900 $2,599
1994 $ 47,364 $3,284
</TABLE>
_________________________
(1) Includes payments by the Company of health insurance premiums for Mr.
Carpenter and 401k contributions.
The following table lists the stock options granted during fiscal year 1996
to Wayne L. Carpenter, the President and Chief Executive Officer of the
Company and Bank. The options listed below were granted under the CNB
Holdings, Inc. 1995 Stock Option Plan, pursuant to which directors, executive
officers and certain other key employees of the Company and the Bank can
receive options to purchase shares of the Company's Common Stock. See "Stock
Option Plan."
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
Percent of Total
Options
Granted to
Options Employees in Exercise or Expiration
Name Granted Fiscal Year(1) Base Price Date
__________________ _______ ______________ __________ ______________
<S> <C> <C> <C> <C>
Wayne L. Carpenter 475 9.1% $10.00 April 12, 2005
</TABLE>
_______________________
(1) Options for a total of 51,225 shares of Company Common Stock were granted
under the Stock Option Plan. Each director of the Company received shares
under the plan.
EMPLOYMENT AGREEMENTS
Mr. Carpenter is a party to an Employment Agreement with the Bank pursuant to
which he is employed as President and Chief Executive Officer of the Bank.
The Employment Agreement provides for the initial term to expire five years
after the Bank opens for business (August 28, 1999). The Employment Agreement
provides for a base salary of $60,000 and for bonuses to be paid to Mr.
Carpenter based upon the achievement by the Bank of specified levels of pre-
tax income. Beginning with the fourth fiscal year of the Bank's operations,
Mr. Carpenter will receive a cash bonus equal to 5% of the Bank's pretax
income, up to a maximum of 50% of his annual base salary. The Employment
Agreement also provides Mr. Carpenter with group benefit packages to the
extent provided to other employees, reimbursement of Bank related expenses,
including dues for a business or civic club, payment for a life insurance
policy in the amount of three times Mr. Carpenter's base salary with him
named as beneficiary, and a 401 (k) savings plan with matching contributions
up to 3% of his base salary.
The Bank may terminate Mr. Carpenter's employment without cause, but in such
an event or if Mr. Carpenter's employment is terminated due to a sale, merger
or dissolution of the Company and/or the Bank, the Bank will be obligated to
continue his salary and benefits for six months, but not pay any bonus.
Subject to the foregoing, the Bank may terminate Mr. Carpenter's employment
with cause, as defined in the Employment Agreement, without paying any
additional compensation. In addition, the Employment Agreement provides that
following termination of his employment with the Bank, Mr. Carpenter may not
be employed in the banking business in Pulaski County, any county that borders
Pulaski County, or the cities of Radford or Galax for a period of two years
following termination.
<page5>
STOCK OPTION PLAN
The Company's Stock Option Plan (the "Plan") provides for the issuance of
stock options and restricted stock covering an aggregate of 275,500 shares
to directors, officers and certain key employees of the Company and the Bank
and other participants designated under the Plan (collectively, the
"Participants"). The Plan provides for the issuance of incentive stock
options to officers and key employees of the Company and the Bank and
nonqualified stock options and restricted stock to all Plan Participants.
The Plan is administered by the Stock Option Committee of the Board of
Directors, which consists of Messrs. Bruce, Chrisley, Nicely and Wine and
Ms. Pratt.
Incentive Stock Options. The Plan provides for the issuance of incentive
stock options covering a maximum of 50,000 shares of the Common Stock,
subject to future adjustment for any stock splits, stock dividends,
combinations or exchanges, or other changes which affect the Common Stock.
As discussed below, incentive stock options afford certain tax benefits to
the recipients. In general, to qualify as an incentive stock option, the
option must be granted only to employees of the Company, be granted within
ten years of the earlier of the date the Plan is adopted by the Board or
the date of approval of the Plan by the Company's shareholders, not be
exercisable more than ten years after the date of grant, have an exercise
price of not less than the fair market value of the Common Stock at the
time of grant, not be transferable other than by will or the laws of
descent and distribution, and be granted to a person who does not own more
than 10% of the total combined voting power of all classes of stock of the
Company or its subsidiaries at the time of grant. In addition, the
Internal Revenue Code limits the value of shares that can be exercised for
the first time by an employee in any one year under an incentive stock
option to $100,000.
Nonqualifed Stock Options. Beginning in 1996, the Plan provides for
automatic annual grants of nonqualified stock options to the directors of
the Company on the day following each annual meeting of shareholders based
on a formula that reflects his or her performance during the year as judged
by certain objective criteria (the "Annual Director Grants"). The formula
provides that the number of shares of Common Stock covered by each Annual
Director Grant is 500 shares, subject to adjustment (i) downward by 25
shares, if the director has missed more than one meeting of the Board of
Directors since the last annual meeting, (ii)downward by 25 shares if
the director has failed to complete a director education seminar since
the last annual meeting, and (iii) upward or downward by not more than
25 shares based on the percentage by which the Bank exceeds or fails to
exceed its performance goals.
In 1995, the Company provided a one-time grant of options to the directors
based on performance criteria relating to their participation as directors
in the success of the Company and the Bank, including service in leadership
positions on committees of the Bank's Board of Directors and other
contributions. The aggregate amount of shares covered by such options was
165,000.
All of the nonqualified options issuable to directors described above provide
that the options are forfeited should the Company or the Bank be required to
increase its equity capital pursuant to a capital directive issued by the
Office of Comptroller of the Currency and the holder does not exercise the
options with certain time frames.
Restricted Stock. The Plan permits the issuance of shares of Common Stock
to Participants subject to vesting requirements based on continued service
to the Company or the Bank, the Company's or the Bank's performance, the
individual performance of the grantee and other conditions deemed appropriate
by the Stock Option Committee. Shares of restricted stock are not transferable
until vested. Assuming the maximum option grants described above are made
based on the Company's current management structure, there will be 2,750 shares
of restricted stock available for issuance under the Plan. There are no
present plans to issue any shares of restricted stock.
<page6>
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Based on a review of the reports of changes in beneficial ownership of Company
Common Stock furnished to the Company, the Company believes that its officers
and directors filed on a timely basis the reports required to be filed under
Section 16 of the Securities Exchange Act of 1934 during the fiscal year
ended December 31, 1995, except that a Form 5 was inadvertently filed late
for each of Messrs. Nicely and Wine.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Larrowe, Cardwell & Company, L.C., Galax, Virginia, acted as the Company's
principal independent certified public accountants for the fiscal years ended
December 31, 1993 through 1996. No company has been selected by the Board of
Directors to act as the Company's independent certified public accountants
for the current fiscal year. The Board will make this decision later in the
year. Representatives of Larrowe, Cardwell & Company, L.C. are expected to
be present at the shareholders' meeting and will have the opportunity to make
a statement if they desire to do so and to respond to appropriate questions.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
The Board of Directors knows of no matters other than those stated above
which are to be brought before the meeting. However, if any other matter
should be presented for consideration and voting, it is the intention of the
persons named in the enclosed form of Proxy to vote the Proxy in accordance
with their judgment of what is in the best interest of the Company.
ANNUAL REPORT ON FORM 10-K
A copy of the Company's Annual Report filed with the Securities and Exchange
Commission for the year ended December 31, 1996 on Form 10-K can be obtained
without charge by writing to the Corporate Secretary at P.O. Box 1060, 900
Memorial Drive, Pulaski, Virginia 24301.
By order of the Board of Directors
s/A. CAROLE PRATT
_____________________
A. CAROLE PRATT
Secretary
Pulaski, Virginia
March 21, 1997
<page7>
