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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CNB Holdings, Inc.
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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 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.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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.
[_] 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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Notes:
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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
13, 2000, at 10:00 a.m., local time in the Training Room at Community National
Bank, 900 Memorial Drive, Pulaski, Virginia, for the purpose of considering and
voting upon:
1. The election of three directors of the Company to serve until the 2003
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, February
28, 2000, 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 1999 Annual Report
to Shareholders is enclosed for your information.
By Order of the Board of Directors
A. Carole Pratt
Secretary
March 10, 2000
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
___________________________
2000 ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 13, 2000
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 2000 Annual Meeting of Shareholders
of the Company (the "Annual Meeting") and any adjournment thereof. The Annual
Meeting will be held on Thursday, April 13, 2000 at 10:00 a.m., local time at
Community National Bank, 900 Memorial Drive, Pulaski, Virginia. This Proxy
Statement and the accompanying proxy are being mailed to shareholders on or
about March 10, 2000.
VOTING
General
The securities that can be voted at the Annual Meeting consist of the
common stock 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 February 28, 2000. On that date the company had outstanding
and entitled to vote 926,399 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.
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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
outstanding shares of the Common Stock and all directors and executive officers
of the Company as a group as of February 28, 2000.
<TABLE>
<CAPTION>
Principal Occupation Shares Percentage of
Name, Age & Address Director During the Beneficially Shares
of Beneficial Owner Since Past Five Years Owned Outstanding(1)
- ----------------------------- ------------ ----------------------------- ----------------- ----------------------
DIRECTORS TO SERVE UNTIL 2002
<S> <C> <C> <C> <C>
Hiawatha Nicely, Jr., 50 1993 Chairman, President and CEO 57,001 4.9%
Dublin, Virginia of the Company, COO of the
Bank 1997-1999, Chairman of
the Bank 1993-1997
A. Carole Pratt, D.D.S., 48 1993 Secretary of the Company; 29,901(2) 2.6%
Pulaski, Virginia General Dentistry
David W. Ratcliff, Jr., 55 1993 Business Manager, Defense 27,706(3) 2.4%
Pulaski, Virginia Reconversion and Development
- Alliant Techsystems, Inc.
DIRECTORS TO SERVE UNTIL 2001
Sybil S. Atkinson, 53 1993 Mediaid of America, Inc.; 30,204(4) 2.7%
Pulaski, Virginia Parish Administrator of
Christ Episcopal Church
Randolph V. Chrisley, 52 1993 Vice President of Sales, 54,596 4.7%
Draper, Virginia Pulaski Furniture
Corporation
J. David Wine, 51 1993 Founder of Advance 55,970(5) 4.8%
Pulaski, Virginia Health-Care Services, Inc.;
and Advanced Health
Services, Inc.; cofounder of
Bay State Medical, Inc., and
Home Care Solutions, Inc.
</TABLE>
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<TABLE>
<CAPTION>
Principal Occupation Shares Percentage of
Name, Age & Address Director During the Beneficially Shares
of Beneficial Owner Since Past Five Years Owned Outstanding(1)
- ----------------------------- ------------ ----------------------------- ----------------- ----------------------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS
DIRECTORS TO SERVE UNTIL 2003
Jack W. Bowling, 53 1993 President, H. T. Bowling, 60,721(6) 5.2%
Dublin, Virginia Inc.
Jackson M. Bruce, 57 1993 Partner, law firm of Gilmer, 54,876 4.7%
Dublin, Virginia Sadler, Ingram,
Sutherland & Hutton
Chairman of the Bank 1999 -
present
Nathaniel R. Tuck, D.C., 47 1993 President and Owner, 33,638 2.9%
Pulaski, Virginia Tuck Clinic of
Chiropractic, P.C.
All Directors and 404,613 34.9%
Executive Officers
as a Group (9 Persons)
</TABLE>
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(1) For purposed of this table, beneficial ownership has been determined in
accordance with the provision of Rule 13d-3 of the Securities Exchange Act
of 1934 under which, in general, a person is deemed to be the beneficial
owner of a security if he has or shares the power to vote or direct the
voting of the security or the power to dispose of or direct the disposition
of the security, or if he has the right to acquire beneficial ownership of
the security within sixty days. Percentage is determined on the basis of
926,399 shares of Common Stock issued and outstanding, plus in each case
shares subject to currently exercisable options. The option ownership of the
directors reflected in this column is as follows: Mr. Nicely - 27,376; Dr.
Pratt - 14,876; Mr. Ratcliff - 14,876; Ms. Atkinson - 14,876; Mr. Chrisley -
27,096; Mr. Wine - 27,220; Mr. Bowling - 27,344; Mr. Bruce - 27,376; and Dr.
Tuck - 14,876.
(2) Includes 380 shares held by Ms. Pratt's minor children.
(3) Includes 374 shares held jointly with Mr. Ratcliff's children.
(4) Includes 1,263 shares owned by Ms. Atkinson's minor children.
(5) Includes 3,143 shares owned by an individual retirement account for the
benefit of Mr. Wine's wife.
(6) Includes 32,625 shares held by an investment company affiliate of Mr.
Bowling.
ELECTION OF DIRECTORS
Nominees
By resolution of the Board of Directors, the Board shall consist of nine
directors. The terms of the directors are staggered so that each year
approximately 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.
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Certain information concerning the nominees for election of directors at
this Annual Meeting who will serve until the 2003 Annual Meeting of Shareholders
is set forth above, as is certain information about the other classes of
directors whose terms will expire at the 2001 and 2002 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
Neither the Company nor the Bank paid directors' fees during the last
fiscal year. 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 five meetings during the fiscal
year. All directors attended at least 75% of all meetings of the Board. The
Company's only standing committee is the Stock Option Committee. See "Stock
Option Plan".
Certain Relationships and Related Transactions
The Company has purchased two insurance policies (a general business policy
and a worker's compensation policy) through James L. Webb, Jr., a former
director of the Company and the Bank (Mr. Webb resigned from the Board in May
1999). The premiums for these policies totaled approximately $25,000 in 1999.
The Company and the Bank have had and expect to have banking and other
transactions 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 may 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 banks 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.
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Executive Compensation
The following table shows the cash compensation paid by the Company to the
Company's Chief Executive Officer for the last three fiscal years.
Summary Compensation Table
<TABLE>
<CAPTION>
Other Annual
Name and Principal Position Year Salary(1) Compensation(2)
- --------------------------------------------------------- ---- --------- ---------------
<S> <C> <C> <C>
Hiawatha Nicely, Jr. 1999 $12,187 ---
Chairman, President and Chief Executive Officer 1998 $53,950 $ 62
1997 $22,232
Wayne L. Carpenter 1999 $62,893 ---
Chief Financial Officer 1998 $61,700 $2,790
Bank Chairman, President and Chief Executive Officer 1997 $62,096 $2,878
Phillip M. Baker 1999 $18,333 $2,000
Chief Financial Officer
</TABLE>
Acting President and Chief Executive Officer of Bank
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(1) Mr. Carpenter served as President and Chief Executive Officer of the Company
until August 1997. In August 1997, Hiawatha Nicely, Jr. was appointed as
President and Chief Executive Officer of the Company. Mr. Nicely served as
Chief Operations Officer of the Bank from 1997 until February 1999. Mr.
Carpenter served as President and Chief Executive Officer of the Bank through
August 1999. In September 1999 Phillip M. Baker was named as Acting President
and Chief Executive Officer. In November 1999 Mr. Baker was appointed Chief
Financial Officer and Chief Accounting Officer of the Company.
(2) Includes payments by the Company of health insurance premiums and 401(k)
contributions for Mr. Carpenter and Mr. Nicely.
The following table lists the stock options granted during fiscal year 1999
to Hiawatha Nicely, Jr., elected President and Chief Executive Officer of the
Company in August 1997, and Wayne L. Carpenter, the President and Chief
Executive Officer of the Company from 1993 through August 1997 and President and
Chief Executive Officer of the Bank through August 1999. 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 1999
<TABLE>
<CAPTION>
Percent of Total
Options
Granted to
Options Employees Exercise or Expiration
Name Granted in Fiscal Year(1) Base Price Date
- ---------------------- ------- ------------------- ----------- ----------
<S> <C> <C> <C> <C>
Hiawatha Nicely, Jr. 594 9.5% $9.13 April 2009
Wayne L. Carpenter 594 9.5% $9.13 April 2009
</TABLE>
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(1) Options for a total of 5,660 shares of Company Common Stock were granted
under the Stock Option Plan. Each director of the Company received shares
under the plan.
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Employment Agreements
Mr. Carpenter was a party to an Employment Agreement with the Bank pursuant
to which he was employed as President and Chief Executive Officer of the Bank.
The Employment Agreement provided for the initial term to expire five years
after the Bank opened for business (August 28, 1999). Mr. Carpenter's
Employment Agreement was not renewed upon expiration on August 28, 1999. The
Employment Agreement provided 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.
No other employee of the Company or the Bank has an employment agreement.
Stock Option Plan
The Company's Stock Option Plan (the "Plan") was approved by shareholders
at the 1995 Annual Meeting. The provides for the issuance of stock options and
restricted stock covering an aggregate of 344,375 shares (adjusted for the May
30, 1997 five-for four stock split) 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 Dr. Pratt.
Incentive Stock Options. The Plan provides for the issuance of incentive
stock options covering a maximum of 62,500 shares of the Common Stock (as
adjusted for the May 30, 1997 five-for four stock split), 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 plan to $100,000.
Nonqualified Stock Options. The Plan provides for automatic annual grants
of nonqualified stock options beginning in 1996 to the directors of the Company
on the day following the 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 625 shares,
subject to adjustment (i) downward by 31 shares if the director has missed more
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than one meeting of the Board of Directors since the last annual meeting, (ii)
downward by 31 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 31 shares based on the percentage by which the Bank exceeds or
fails to exceed its performance goals. The exercise price is the estimated
market price on the grant date.
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 the number of shares
purchased in the initial offering, 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 206,250, as adjusted for the May 30, 1997
five-for-four stock split, exercisable until 2005. The exercise price of those
options, as adjusted for the May 30, 1997 stock split, is $8.00 per share.
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 no shares of restricted
stock available for issuance under the Plan. There are no present plans to
issue any shares of restricted stock.
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, 1999.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Larrowe & Company, PLC, Galax, Virginia, acted as the Company's principal
independent certified public accountants for the fiscal years ended December 31,
1993 through 1999 and has been selected by the Board of Directors to act as the
Company's independent certified public accountants for the current fiscal year.
Representatives of Larrowe & Company, PLC 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.
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Information Relating to Shareholder Proposals
Proposals of shareholders intended to be presented at the 2001 Annual
Meeting of Shareholders of the Company must be received by the Company no later
than October 31, 2000 in order for such proposals to be included in the
Company's proxy statement and form of proxy relating to such meeting.
Availability of Form 10-KSB
On or about March 31, 2000, the Company will file with the Securities and
Exchange Commission an annual report (Form 10-KSB) for the year ended December
31, 1999. A copy of the Company's Form 10-KSB 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
A. CAROLE PRATT
Secretary
Pulaski, Virginia
March 10, 2000
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<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 2000 Annual Meeting of Shareholders to be held on
April 13, 2000 (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 2003 Annual
Meeting of Shareholders.
[ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote
as marked to the for all nominees listed
contrary below) below
Jack W. Bowling, Jackson M. Bruce, and Nathaniel R. Tuck, D.C.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name below.)
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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: ___________________ , 2000 ____________________________________
(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.
