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. __)
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 Under Rule 14a-12
CCF Holding Company
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
----------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
_________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which
the filing fee is calculated and state how it was determined):
_________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_________________________________________________________
(5) Total fee paid:
_________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
_____________________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________________
(3) Filing Party:
_____________________________________________________
(4) Date Filed:
_____________________________________________________
[CCF HOLDING COMPANY LETTERHEAD]
April 5, 2002
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of CCF Holding
Company (the "Company"), I cordially invite you to attend the Annual Meeting of
Stockholders to be held at the Heritage Bank office located at 440 N. Jeff Davis
Drive, Fayetteville, Georgia 30214, on Thursday, May 16, 2002, at 9:00 a.m. The
attached Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Annual Meeting. During the Annual Meeting, I
will report on the operations of the Company. Directors and officers of the
Company, as well as a representative of Porter Keadle Moore, LLP, the Company's
independent auditors, will be present to respond to any questions stockholders
may have.
The matters to be considered by stockholders at the Annual Meeting are
described in the accompanying Notice of Annual Meeting and Proxy Statement. The
Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
its stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each director nominee and for each
other matter to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID
RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from voting
in person at the Annual Meeting, but will assure that your vote is counted if
you are unable to attend the Annual Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/David B. Turner
David B. Turner
President and Chief Executive Office
--------------------------------------------------
CCF HOLDING COMPANY
101 NORTH MAIN STREET
JONESBORO, GEORGIA 30236
--------------------------------------------------
--------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 16, 2002
--------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of CCF Holding Company (the "Company") will be held at the Heritage
Bank office located at 440 N. Jeff Davis Drive, Fayetteville, Georgia 30214, on
Thursday, May 16, 2002, at 9:00 a.m. or at any adjournment or adjournments
thereof. A proxy card and a proxy statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon the
following matters:
1. Election of three directors of the Company;
2. Ratification of the appointment of Porter Keadle Moore, LLP, as independent
auditors of the Company for the fiscal year ending December 31, 2002; and
3. Such other business as may properly come before the Annual Meeting or any
adjournment or adjournments thereof. Execution of a proxy in the form
enclosed also permits the proxy holders to vote, in their discretion, upon
such other matters that may come before the Annual Meeting. As of the date
of mailing, the Board of Directors is not aware of any other matters that
may come before the Annual Meeting.
Any action may be taken on the foregoing proposals at the Annual Meeting on the
date specified above or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned. Stockholders of record at the
close of business on March 25, 2002, are the stockholders entitled to vote at
the Annual Meeting and any adjournments thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. ANY PROXY YOU GIVE MAY BE REVOKED BEFORE THE VOTE AT THE ANNUAL
MEETING BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A
DULY EXECUTED PROXY BEARING A LATER DATE. IF YOU ARE PRESENT AT THE ANNUAL
MEETING YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT
BEFORE THE ANNUAL MEETING UPON GIVING ORAL NOTICE OF YOUR INTENTION TO VOTE IN
PERSON. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN
YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO
VOTE IN PERSON AT THE ANNUAL MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Charles S. Tucker
Charles S. Tucker
Secretary
Jonesboro, Georgia
April 5, 2002
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE ANNUAL MEETING.
A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
CCF HOLDING COMPANY
ANNUAL MEETING OF STOCKHOLDERS
May 16, 2002
-------------------------------------------------------
GENERAL
-------------------------------------------------------
This Proxy Statement is being delivered to the Company's stockholders
in connection with the solicitation of proxies by the Board of Directors of the
Company to be voted at the Annual Meeting of Stockholders of the Company, which
will be held at the office of Heritage Bank (the "Bank"), the wholly-owned
subsidiary of the Company, located at 440 N. Jeff Davis Drive, Fayetteville,
Georgia 30214, on Thursday, May 16, 2002, at 9:00 a.m. The accompanying Notice
of Annual Meeting and this Proxy Statement are being first mailed to
stockholders on or about April 5, 2002.
At the Annual Meeting, stockholders will consider and vote upon (i) the
election of three directors and (ii) the ratification of the appointment of
Porter Keadle Moore, LLP, as independent auditors of the Company for the fiscal
year ending December 31, 2002. The Board of Directors of the Company knows of no
additional matters that will be presented for consideration at the Annual
Meeting. Execution of a proxy, however, confers on the designated proxy holders
discretionary authority to vote the shares represented by the proxy in
accordance with their best judgment on other business, if any, that may properly
come before the Annual Meeting or any adjournment or adjournments thereof.
-------------------------------------------------------
VOTING AND REVOCABILITY OF PROXIES
-------------------------------------------------------
Stockholders who execute proxies retain the right to revoke such
proxies at any time prior to a vote being taken at the Annual Meeting. Unless so
revoked, the shares represented by those proxies will be voted at the Annual
Meeting and any adjournment or adjournments thereof. Proxies may be revoked by
submitting written notice to the Secretary of the Company at 101 North Main
Street, Jonesboro, Georgia 30236, or by the filing of a later dated proxy prior
to a vote being taken on a particular proposal at the Annual Meeting. A proxy
will not be voted if a stockholder attends the Annual Meeting and gives oral or
written notice of his or her intention to vote in person. Proxies solicited by
the Board of Directors will be voted in accordance with the directions given
therein. Where no instructions are indicated, signed proxies will be voted "FOR"
the nominees for director set forth below and "FOR" the ratification of the
appointment of independent auditors. The proxy confers discretionary authority
on the persons named therein to vote with respect to the election of any person
as a director where the nominee is unable to serve, or will not serve, and
matters incident to the conduct of the Annual Meeting. The proxy also confers on
the designated proxy holders discretionary authority to vote the shares
represented by the proxy in accordance with their best judgment on other
business, if any, that may properly come before the Annual Meeting or any
adjournment or adjournments thereof.
-------------------------------------------------------
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
-------------------------------------------------------
The Board of Directors has set March 25, 2002, as the Record Date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. Stockholders of record as of the close of business on Record
Date are entitled to one vote for each share of common stock of the Company then
held. As of the Record Date, the Company had 979,206 shares of common stock
issued and outstanding.
The Articles of Incorporation of the Company (the "Articles") provide
that in no event will any record owner of any outstanding shares of common stock
that is beneficially owned, directly or indirectly, by a person who beneficially
owns in excess of 10% of the then outstanding shares of common stock (the
"Limit") be entitled or permitted to any vote with respect to the shares held in
excess of the Limit. Beneficial ownership is determined pursuant to the
definition in the Articles and includes shares beneficially owned by the person
or any of his or her affiliates or associates (as those terms are defined in the
Articles), shares which the person or his or her affiliates or associates have
the right to acquire upon the exercise of conversion rights or options and
shares as to which the person and his or her affiliates or associates have or
share investment or voting power, but does not include shares beneficially owned
by any employee stock ownership plan or similar plan of the issuer or any
subsidiary.
The presence either in person or by proxy of at least a majority of the
outstanding shares of common stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. With respect to any matter, any
shares for which a broker indicates on the proxy that it does not have
discretionary authority to vote on the matter (the "broker non-votes") will not
be considered present for purposes of determining whether a quorum is present.
In the event there are not sufficient votes for a quorum or to ratify any
proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit the further solicitation of proxies.
As to the election of directors, as set forth in Proposal I, the proxy
being provided by the Board of Directors enables a stockholder to vote for the
election of the nominees proposed by the Board, or to withhold authority to vote
for any or all of the nominees being proposed. Directors are elected by a
plurality of votes of the shares present in person or represented by proxy at a
meeting and entitled to vote in the election of directors.
As to the ratification of independent auditors as set forth in Proposal
II, by checking the appropriate box a stockholder may: vote "FOR" the item, (ii)
vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on the item. Proxies marked
"ABSTAIN" will be treated as a vote cast for purposes of determining whether a
quorum is present. The ratification of independent auditors, and all other
matters that may properly come before the meeting, unless otherwise required by
law, will be determined by a majority of votes cast affirmatively or negatively
without regard to (a) broker non-votes or (b) proxies marked "ABSTAIN" as to
that matter.
Persons and groups owning in excess of 5% of the common stock are
required to file with the Securities and Exchange Commission certain reports
regarding their ownership pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The following table sets forth, as of the Record
Date, persons or groups who own more than 5% of the common stock. Other than as
noted below, management knows of no person or group that owns more than 5% of
the outstanding shares of common stock at the Record Date.
Name and Address of Amount and Nature of Percent of Shares of
Beneficial Owner Beneficial Ownership Common Stock Outstanding
---------------- -------------------- ------------------------
Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109 142,538 (1) 14.55%
Heritage Bank Employee Stock Ownership Plan
101 North Main Street
Jonesboro, Georgia 30236 78,773 (2) 8.0%
David B. Turner
101 North Main Street
Jonesboro, Georgia 30236 79,574 (3) 7.8%
_______________________
(1) Based on an amended Schedule 13G filed on February 12, 2002. The amount
shown includes shares owned of record by First Financial Fund, Inc., a
registered closed-end investment company.
(2) Based on an amended Schedule 13G filed on March 13, 2002.
(3) Based on an amended Schedule 13G filed on March 13, 2002. The amount shown
includes 36,900 shares issuable upon the exercise of presently exercisable
options, 8,169 shares held indirectly through the Heritage Bank Employee
Stock Ownership Plan, and 2,103 shares held indirectly by Mr. Turner's
spouse, including shares issuable upon the exercise of presently
exercisable options.
2
-----------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-----------------------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of the common stock, to
file reports of ownership and changes in ownership of the common stock, on Forms
3, 4, and 5, with the Securities and Exchange Commission (the "SEC") and to
provide copies of those Forms 3, 4, and 5 to the Company. Other than as set
forth in the stock ownership table above, the Company is not aware of any
beneficial owner, as defined under Section 16(a), of more than ten percent of
the common stock.
Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that all Section 16(a) filing requirements
of the Exchange Act applicable to its executive officers, directors and greater
than 10% beneficial owners were complied with during the fiscal year ended
December 31, 2001.
3
-------------------------------------------------------
PROPOSAL I - ELECTION OF DIRECTORS
-------------------------------------------------------
The Articles require that the Board of Directors be divided into three
classes, each of which contains approximately one-third of the members of the
Board. The directors are elected by the stockholders of the Company for
staggered three-year terms, or until their successors are elected and qualified.
The term of one class of directors expires at each annual meeting of
stockholders. During 2001, Joe B. Mundy retired as a director of the Company. As
a result of Mr. Mundy's retirement, the Board of Directors currently consists of
seven members with two classes comprised of three directors and one class
comprised of one director. In order to make the number of directors in each
class as equal as possible, at the meeting, two directors will be elected for
three year terms and one director will be elected to a one year term. This
reappointionment among director classes will result in two classes comprised of
two directors and one class comprised of three directors. A director serves
until his or her successor has been elected and qualified.
David B. Turner and Charles S. Tucker have each been nominated by the
Board of Directors to serve as a director of the Company for three year terms to
expire in 2005. John T. Mitchell has been nominated by the Board of Directors to
serve as a director of the Company for a one year term to expire in 2003. Each
of the nominees is currently a member of the Board of Directors. If any of the
nominees is unable to serve, the shares represented by all valid proxies will be
voted for the other named nominees and for such substitute or substitutes, if
any, as the Board of Directors may recommend to replace such nominee. At this
time, the Board of Directors knows of no reason why any of the nominees might be
unavailable to serve.
The following table sets forth the nominees and the directors of the
Company continuing in office, their name, age, the year they first became a
director of the Company or the Bank, the expiration date of their current term
as a director, and the number and percentage of shares of the outstanding common
stock beneficially owned. Each director of the Company is also a director of the
Bank.
Shares of Common
Year First Elected Current Term to Stock Beneficially Percent
Name Age(1) or Appointed (2) Expire Owned (3) of Class
---- ------ ---------------- ------ --------- --------
BOARD NOMINEE FOR TERM TO EXPIRE IN 2003
John T. Mitchell 61 1997 2002 34,077 (4) 3.5%
BOARD NOMINEES FOR TERM TO EXPIRE IN 2005
Charles S. Tucker 76 1978 2002 12,908 (5)(6) 1.3%
David B. Turner 53 1992 2002 79,574 (7) 7.8%
DIRECTORS CONTINUING IN OFFICE
Edwin S. Kemp, Jr. 54 1988 2003 22,479 (5)(6) 2.3%
Roy V. Hall 56 2000 2004 2,530 (8) *
John B. Lee, Jr. 74 1975 2004 13,403 (5)(6) 1.4%
Leonard A. Moreland 40 1996 2004 31,818 (9) 3.2%
All directors and
executive officers as a
group (13 persons) 267,993 (10) 24.5%
______________________
* Indicates beneficial ownership of less than 1%.
(1) At December 31, 2001.
(2) Refers to the year the individual first became a director of the Company or
the Bank. All persons who were directors of the Bank during March 1995
became directors of the Company when it was incorporated in March 1995.
(3) Beneficial ownership is as of the Record Date.
(4) Includes 4,700 shares of common stock that the individual has the right to
acquire through the exercise of options within 60 days of the Record Date.
(5) Includes 7,500 shares of common stock that the individual has the right to
acquire through the exercise of options within 60 days of the Record Date.
(6) Excludes 78,773 shares of common stock held under the Heritage Bank
Employee Stock Ownership Plan ("ESOP") and 4,950 shares held under the
Management Stock Bonus Plan ("MSBP") for which the individual serves as a
member of the ESOP or MSBP Committee or Trustee Committee. The individual
disclaims beneficial ownership of these shares held in a fiduciary
capacity. See "Director and Executive Officer
4
Compensation - Benefits - Employee Stock Ownership Plan" and "Director and
Executive Officer Compensation - Benefit Employee Stock Ownership Plan".
(7) Includes 36,900 shares issuable upon the exercise of presently exercisable
options, 8,169 shares held indirectly through the ESOP, and 2,103 shares
held indirectly by Mr. Turner's spouse, including shares issuable upon the
exercise of presently exercisable options.
(8) Includes 2,300 shares of common stock that the individual has the right to
acquire through the exercise of options within 60 days of the Record Date.
(9) Includes 15,710 shares of common stock that the individual was the right to
acquire through the exercise of options within 60 days of the Record Date.
(10) Excludes 51,949 shares of common stock held under the ESOP (78,773 shares
minus the 26,824 shares allocated to executive officers) and 4,950 shares
held in the MSBP for which Messrs. Kemp, Lee and Tucker serve as members of
the ESOP or MSBP Committee or Trustee Committee. These individuals disclaim
beneficial ownership of these shares held in a fiduciary capacity. See
"Director and Executive Officer Compensation - Benefits - Employee Stock
Ownership Plan" and "Directors and Executive Officer Compensation -
Benefits - Management Stock Bonus Plan." Includes 113,965 shares of common
stock that the individuals have the right to acquire through the exercise
of options within 60 days of the Record Date.
Biographical Information
Set forth below is certain information with respect to the directors
and executive officers of the Company. All directors and executive officers have
held their present positions for five years unless otherwise stated.
David B. Turner has been President, Chief Executive Officer and a
director of the Company since its incorporation in March 1995. Mr. Turner has
served as Vice-Chairman and Chief Executive Officer of the Bank since January 1,
2001 and was President and Chief Executive Officer of the Bank from 1989 until
January 1, 2001. He has been a director of the Bank since 1992 and an officer of
the Bank since 1971, having held other positions with the Bank such as Assistant
Vice President, Vice President, and Executive Vice President. Mr. Turner also is
a board member of Hope Shelter, a board member of the Clayton County Convention
and Visitors Bureau, an advisory board member of Habitat for Humanity, a member
of the Jonesboro Historical Committee, a mentor and Admission Board Director for
the Clayton County Alternative School, and Chairman and Chief Executive Officer
of Historical Jonesboro/Clayton County, Inc.
Leonard A. Moreland has been Executive Vice President and Chief
Administrative Officer of the Company since July 1996. He has been President of
the Bank since January 1, 2001 and was Executive Vice President and Chief
Administrative Officer of the Bank from July 1996 until January 1, 2001. Mr.
Moreland has been a director of the Bank since August 1996 and a director of the
Company since May 1999. Prior to joining the Bank, Mr. Moreland served as a
senior vice president and chief financial officer of Southern Crescent Bank,
Morrow, Georgia from 1991 until joining the Company in 1996. Mr. Moreland serves
as a director and member of the Southlake Kiwanis Club and a member of the
Lovejoy High School Advisory Committee. Mr. Moreland also serves as a member of
the Board of Trustees of Clayton State Athletics Association Incorporated.
John B. Lee, Jr. has been a director of the Bank since 1975 and of the
Company since its incorporation in March 1995 and currently serves as Chairman
of the Board of Directors of both the Company and the Bank. Mr. Lee is employed
as Public Relations Representative of Spartan Lincoln-Mercury, Inc., Morrow,
Georgia, and, until December 1996, was employed by Loewen Group International,
Inc., Burnaby, B.C., Canada, as a public relations consultant. Mr. Lee is also
an inspector for the Bank and a past director and president of the Clayton
County Chamber of Commerce.
Roy V. Hall has been a director of the Bank since 1999. He is a
Certified Public Accountant and has been a principal in the accounting firm of
Roy V. Hall, P.C. in Jonesboro, Georgia since 1981. In 1989, Mr. Hall was one of
the organizers of Southern Crescent Bank in Morrow and served as Chairman of the
Board from its inception until the time of the merger of Southern Crescent and
Tucker Federal Bank in 1996. Mr. Hall serves on the Board of Directors of the
Macedonian Call Foundation, a non-profit organization serving Southern Baptist
missionaries. Mr. Hall is also involved with Calvary Refuge Center, an emergency
and transitional housing facility for the homeless. He has been an active member
of First Baptist Church of Jonesboro since 1976, serving in various leadership
capacities.
5
Edwin S. Kemp, Jr. has been a director of the Bank since 1988 and of
the Company since its incorporation in March 1995. He has had his own law
practice in Jonesboro, Georgia since 1982. He has been counsel to the Bank since
1983. He is vice-chairman of the Administrative Board of the Jonesboro First
United Methodist Church. He has also served as an attorney for Habitat for
Humanity and for Historical Jonesboro.
John T. Mitchell has been a director of the Bank since June 1997 and a
director of the Company since May 1999. Mr. Mitchell has been the president and
a principal of Adams-Mitchell Realty, Inc., Jonesboro, Georgia since 1983.
Charles S. Tucker has been a director of the Bank since 1978 and the
Treasurer, Secretary and a director of the Company since its incorporation in
March 1995. Mr. Tucker retired after 31 years of service as a county agent for
the University of Georgia Cooperative Extension Service. Mr. Tucker is a member
of the Henry County Chamber of Commerce, the Veterans of Foreign Wars, and the
American Legion.
John C. Bowdoin has been a Senior Vice President and Fayette County
President of the Bank since July 1999. Prior to joining the Bank, Mr. Bowdoin
was an executive vice president with United Bank of Griffin, Griffin, Georgia
from March 1998 to July 1999. Prior to that time, from September 1995 to March
1998, Mr. Bowdoin was the president and chief executive officer of Precise
Packaging, a package manufacturer in Griffin, Georgia. Mr. Bowdoin serves as a
member of the advisory board for the Fayetteville Main Street Commission. He
also serves on the Board of the Fayette County Chamber of Commerce and on the
board of the Fayette County Education Foundation.
Richard P. Florin has been a Senior Vice President and Senior Credit
Officer of the Bank and the Company since September 1996. Prior to that time,
from March 1990 to September 1996, Mr. Florin was a senior vice president of
lending of Southern Crescent Bank, Morrow Georgia. Mr. Florin serves on the Tech
Prep Back to Work Committee for Clayton College and State University.
Mary Jo Rogers has been employed as Senior Vice President and the Chief
Financial Officer of the Bank since February 1997. Prior to joining the Bank,
Ms. Rogers was a vice president and auditor for the First National Bank in
Griffin, Georgia from May 1988 until February 1997. Ms. Rogers has served as
President of the Griffin Area Georgia Tech Alumni Club, a non-profit
organization, since 1997.
Charles T. Segers has been a Senior Vice President and Henry County
President of the Bank since April 1999. Prior to joining the Bank, Mr. Segers
performed similar functions with First Citizens Bank in Riverdale, Georgia,
between July 1997 and April 1999. From 1990 until 1997, Mr. Segers served as
President and Chief Operating Officer of First Bank of Georgia in East Point,
Georgia. Mr. Segers currently serves as Secretary for the Henry County Rotary
Club.
Edith W. Stevens has been employed by the Bank since 1978 and has
served as Senior Vice President and the Chief Operating Officer of the Bank
since 1984. Ms. Stevens serves as a member of the Program Advisory Committee of
Applied Business Technology/Banking Option Program for Griffin Technological
College.
John Westervelt has been a Senior Vice President and Clayton County
President of the Bank since November 2000. Prior to joining the Bank, Mr.
Westervelt worked for Gulf Coast Bank as Vice President and manager of the SBA
lending program from October 1995 until joining the Bank in November 2000. Mr.
Westervelt has served as a contracted instructor with the Office of Continuing
Education at Clayton College and State University in Morrow Georgia for the last
six years, teaching courses in Business Credit and Small Business Loan
Packaging. Mr. Westervelt is a member of the Southlake Kiwanis Club.
Nominations for Directors
Only persons who are nominated in accordance with the procedures set
forth in the Articles are eligible for election as directors. In addition to the
right of the Board of Directors to make nominations for the election of
directors, nominations may be made by any stockholder entitled to vote for the
election of directors at a meeting called for the purpose of electing directors
if the stockholder is present at the meeting in person or by proxy.
6
Advance notice of a proposed nomination by a stockholder must be received by the
Chairman of the nominating committee of the Board of Directors of the Company
(which notice may be sent to the Chairman in care of the Secretary of the
Company) or, in the absence of a nominating committee, by the Secretary of the
Company, not less than 14 days nor more than 60 days prior to any meeting of the
stockholders called for the election of directors. Each notice must set forth
(1) the name, age, business address, and, if known, residence address of each
nominee proposed in the notice, (2) the principal occupation or employment of
each nominee, and (3) the number of shares of common stock that are beneficially
owned by each nominee. The stockholder making a nomination must also provide any
other information reasonably requested by the Company.
If the chairman of the Annual Meeting, in his or her discretion,
determines that a nomination was not made in accordance with the foregoing
procedures, then that determination will be announced at the Annual Meeting, and
the defective nomination will be discarded.
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the Board and through activities of its committees. During the
fiscal year ended December 31, 2001, the Board of Directors held 12 regular
meetings. No director attended fewer than 75% of the total meetings of the Board
of Directors and the committees on which he served during 2001.
The Board of Directors of the Bank (the "Bank Board") conducts its
business through meetings of the Bank Board and through activities of its
committees. During the fiscal year ended December 31, 2001, the Bank Board held
12 regular meetings. No director attended fewer than 75% of the total meetings
of the Bank Board and the committees on which he served during 2001.
During 2001, the full Board of Directors acted as a nominating
committee for selecting the nominees for election of directors in accordance
with the Company's Bylaws. Effective January 16, 2002, the Board of Directors
established a nominating committee (the "Nominating Committee") consisting of
Roy V. Hall, John B. Lee, Jr., and Edwin S. Kemp, Jr. In its deliberations, this
committee will consider the candidate's knowledge of the banking business and
involvement in community, business, and civic affairs. While the Nominating
Committee will consider nominees recommended by stockholders, it will not
actively solicit recommendations from the Company's stockholders for nominees
nor, subject to the procedural requirements set forth in the Articles and the
Bylaws, has it established any procedures for this purpose. During 2001, the
Board of Directors met once as the nominating committee.
The Executive Compensation Committee consists of Messrs. Lee (Chairman),
Kemp, Hall, Mitchell, and Tucker and determines executive compensation. The
Executive Compensation Committee did not meet during 2001.
The Board of Directors has established an Audit Committee by adopting a
written charter setting out the audit related functions the committee is to
perform. We have reviewed and reassessed the adequacy of the formal written
charter and found that it meets all necessary requirements.
Report of the Audit Committee
The following report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933 or the Exchange
Act, except to the extent the Company specifically incorporates this report by
reference therein.
As set forth in more detail in the Audit Committee charter, the Audit
Committee's primary responsibilities include:
. ensuring the adequacy of the Company's internal controls and
financial reporting process and the reliability of the Company's
financial statements;
. the independence and performance of the Company's internal
auditors and independent auditors; and
. the Company's compliance with legal and regulatory requirements.
7
The Audit Committee recommends the selection of the Company's and the
Bank's independent auditors to the Board of Directors and the Bank Board and
meets with the Company's independent auditors to discuss the scope and to review
the results of the annual audit.
The Audit Committee has implemented procedures to ensure that during
the course of each fiscal year it devotes the attention that it deems necessary
or appropriate to each of the matters assigned to it under the Committee's
charter. To carry out its responsibilities, the Audit Committee met five times
during 2001.
A majority of the directors who serve on this committee are
"Independent" for purposes of the National Association of Securities Dealers
("NASD") listing standards for small business issuers. That is, the Board of
Directors has determined that a majority of the members of the Audit Committee
do not have any relationship to the Company that may interfere with our
independence from the Company and its management.
The Audit Committee has reviewed the Company's financial statements and
met with both management and Porter Keadle Moore, LLP, the Company's independent
auditors, to discuss those financial statements. Management has represented to
us that the financial statements were prepared in accordance with generally
accepted accounting principles.
The Audit Committee has received from and discussed with Porter Keadle
Moore, LLP, the written disclosure and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees).
These items relate to that firm's independence from the Company. The Audit
Committee has also discussed with Porter Keadle Moore, LLP, any matters required
to be discussed by Statement on Auditing Standards No. 61 (Communication with
Audit Committees).
On the basis of these reviews and discussions, the Committee
recommended to the Board of Directors that the Board approve inclusion of the
Company's audited financial statements in the Company's Annual Report on Form
10-KSB for the fiscal year end December 31, 2001, for filing with the Securities
and Exchange Commission.
Members of the Audit Committee
Charles S. Tucker, Chairman
Roy V. Hall
Edwin S. Kemp, Jr.
John T. Mitchell
8
-------------------------------------------------------
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
-------------------------------------------------------
Director Compensation
The directors of the Bank receive $350 per month. The directors of the
Company receive $500 per month. Directors of the Bank and of the Company receive
$50 for attendance at any committee meetings. However, directors who are
officers of either the Bank or the Company are not compensated for their
services on any committee. Director fees paid by the Bank totaled $91,500 in
compensation. This was paid to directors for their service on the Board of
Directors and the Bank Board and its committees during the fiscal year ended
December 31, 2001. In 1996, Directors Tucker, Lee, Kemp, and former director
Mundy were each awarded the equivalent of 2,879 shares of common stock pursuant
to the Management Stock Bonus Plan. These awards vest over five years at a rate
of 20% per year. Pursuant to the 2000 Stock Option Plan, each Director has been
annually awarded options for 300 shares of common stock that can be exercised
after a six-month vesting period.
Executive Officer Compensation
Summary Compensation Table. The following table sets forth the cash and
--------------------------
non-cash compensation awarded to or earned by the Chief Executive Officer and
the four most highly compensated executive officers (the "Named Executive
Officers"). No other executive officer of the Company had a salary and bonus
during the year ended December 31, 2001 that exceeded $100,000 for services
rendered in all capacities to the Company.
Long Term Compensation
Annual Compensation (1) Awards
- -------------------------------------------------------------------------------- ----------------------------------------
Securities
Restricted Underlying
Name and Fiscal Other Annual Stock Options/ All Other
Principal Position Year Salary Bonus Compensation(2) Awards SARs (#) Compensation
- ------------------ ---- ------ ----- --------------- ------ -------- ------------
David B. Turner 2001 $131,250 $32,233 $23,324 $ -- 900 $64,002 (3)
President and Chief 2000 125,000 14,683 24,343 -- 900 17,412 (3)
Executive Officer 1999 110,000 11,000 21,212 -- -- 16,845 (3)
Leonard A. Moreland 2001 $122,500 $32,911 $20,074 $ -- 500 $65,809 (4)
Executive Vice 2000 115,000 13,388 22,869 -- 450 14,072 (4)
President and Chief 1999 100,000 10,000 20,774 -- -- 14,670 (4)
Administrative
Officer
Richard P. Florin 2001 $ 98,000 $26,788 $ 3,848 $ -- 500 $56,800 (5)
Sr. Vice President and 2000 95,000 11,800 -- -- 450 10,795 (5)
Chief Lending Officer 1999 90,000 9,414 -- -- -- 13,749 (5)
John C. Bowdoin 2001 $ 99,000 $24,301 $ 3,735 $ -- 400 $39,673 (6)
Sr. Vice President and 2000 93,600 10,588 -- 14,438(7) 400 --
Fayette County President 1999(8) 43,962 4,396 -- 17,530(7) 5,000 --
Charles T. Segers 2001 $ 86,945 $13,153 $ 3,791 $ -- 400 $35,912 (9)
Sr. Vice President and 2000 83,600 6,657 -- 14,438(7) 400 --
Henry County President 1999(8) 67,722 5,698 -- 15,500(7) 5,000 --
________________
(1) Includes compensation paid by the Bank or the Company.
(2) For Mr. Turner, includes director's fees of $10,200 in each of the last
three fiscal years. For Mr. Turner, 2001 includes $7,825 of dependent
insurance, 2000 includes $8,183 of dependant insurance, and 1999 includes
$6,774 of dependant insurance. The amount shown also includes a car
allowance and life insurance, the values of which do not individually
exceed 25% of the total perquisites and other personal benefits. For Mr.
Moreland, includes $10,200 of director's fees in each of the last three
fiscal years. For Mr. Moreland, 2001 includes $6,789 of dependent
insurance, 2000 includes $8,183 of dependent insurance, and 1999 includes
$7,229 of dependant insurance. For Mr. Moreland, the amount shown includes
a car allowance, a gas allowance, and life
9
insurance, the values of which do not individually exceed 25% of the total
perquisites and other personal benefits. For Messrs. Florin, Bowdoin, and
Segers, the amount shown includes a car allowance, the value of which does
not individually exceed 25% of the total perquisites and other personal
benefits.
(3) For Mr. Turner, consists of $4,796, $6,847, and $6,215 of Company matching
contributions under the Company's 401(k) Profit Sharing Plan for the fiscal
years ended December 31, 2001, 2000, 1999, respectively. Also, includes an
allocation of 2,562, 1,008, and 704 shares of common stock under the ESOP
during the Company's fiscal years ended December 31, 2001, 2000, and 1999,
respectively. These shares had a value of $55,698, $10,085, and $10,208 at
December 31, 2001, 2000, and 1999, respectively (calculated by multiplying
the aggregate number of shares allocated under the ESOP (as defined below)
by the common stock's closing price as of the last day of the respective
fiscal year). This amount also includes term life insurance premiums for
2001, 2000, and 1999 of $573, $480, and $422, respectively, and Heritage
Bank Executive Supplemental Retirement Plan (the "Executive Plan")
contributions for 2001 of $2,935.
(4) For Mr. Moreland, consists of $993, $6,410, and $5,607 of Company matching
contributions under the Company's 401(k) Profit Sharing Plan in 2001, 2000,
and 1999, respectively. Also, includes an allocation of 2,522, 722, and 625
shares of common stock under the ESOP in 2001, 2000, and 1999,
respectively. These shares had a value of $54,828, $7,220, and $9,063 at
December 31, 2001, 2000, and 1999, respectively (calculated by multiplying
the aggregate number of shares allocated under the ESOP (as defined below)
by the common stock's closing price as of the last day of the respective
fiscal year). This amount also includes term life insurance premiums for
2001, 2000, and 1999 of $536, $442, and $384, respectively, and Executive
Plan contributions for 2001 of $9,452.
(5) For Mr. Florin, consists of $3,451, $4,935, and $4,473 of Company matching
contributions under the Company's 401(k) Profit Sharing Plan in 2001, 2000,
and 1999, respectively. Also, includes an allocation of 2,046, 550, and 616
shares of common stock under the ESOP (as defined below) during the
Company's fiscal years ended December 31, 2001, 2000, and 1999,
respectively. These shares had a value of $44,480, $5,500, and $8,932 at
December 31, 2001, 2000, and 1999, respectively (calculated by multiplying
the aggregate number of shares allocated under the ESOP (as defined below)
by the common stock's closing price as of the last day of the respective
fiscal year). This amount also includes term life insurance premiums for
2001, 2000, and 1999 of $430, $360, and $344, respectively, and Executive
Plan contributions for 2001 of $8,439.
(6) For Mr. Bowdoin, consists of an allocation of 1,793 shares of common stock
under the ESOP (as defined below) during the Company's fiscal year ended
December 31, 2001. These shares had a value of $38,980 at December 31, 2001
(calculated by multiplying the aggregate number of shares allocated under
the ESOP (as defined below) by the common stock's closing price as of the
last day of the 2001 fiscal year). This amount also includes term life
insurance premiums for 2001 of $435, and Executive Plan contributions for
2001 of $257.81.
(7) Mr. Bowdoin and Mr. Segers were each awarded 1,500 shares in 2000, and
1,000 shares in 1999 through the Management Stock Bonus Plan, a restricted
stock plan. Awards are earned by participants at a rate of 20% per year for
five years, as the participant remains an employee of the Bank. This amount
represents the value of the shares of restricted stock as of the date of
the grant.
(8) Mr. Bowdoin's and Mr. Segers' salaries and bonuses for 1999 are for partial
year employment.
(9) For Mr. Segers, consists of $3,699 of Company matching contributions under
the Company's 401(k) Profit Sharing Plan in 2001. Also, includes an
allocation of 1,464 shares of common stock under the ESOP (as defined
below) during the Company's fiscal year ended December 31, 2001. These
shares had a value of $31,827 at December 31, 2001 (calculated by
multiplying the aggregate number of shares allocated under the ESOP (as
defined below) by the common stock's closing price as of the last day of
the 2001 fiscal year). This amount also includes term life insurance
premiums for 2001 of $386.
10
Option Grants in Last Fiscal Year. The following table sets forth all
---------------------------------
individual grants of stock options during the year ended December 31, 2001, to
each of the Named Executive Officers.
Percent of Total
Number of Securities Options
Underlying Options Granted to Employees Exercise or Base
Name Granted (#) in Fiscal Year Price ($/Sh) Expiration Date
---- ----------- -------------- ------------ ---------------
David B. Turner 900 9.14% $21.74 12/31/11
Leonard A. Moreland 500 5.08 21.74 12/31/11
Richard P. Florin 500 5.08 21.74 12/31/11
John C. Bowdoin 400 4.06 21.74 12/31/11
Charles T. Segers 400 4.06 21.74 12/31/11
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End
-------------------------------------------------------------------
Option Values. The following table summarizes the number of shares and value
- -------------
realized by each of the Named Executive Officers upon the exercise of options
during 2001 and the value of the outstanding options held by the Named Executive
Officers at December 31, 2001.
Number of Securities
Underlying Unexercised Value of Unexercised
Value Options/SARs at Fiscal In-the-Money Options/SARs at
Shares Acquired Realized Year-End (#) (1) Fiscal Year-End ($) (2)
----------------- -----------------------
Name on Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- --- ----------- ------------- ----------- -------------
David B. Turner -- -- 36,900 900 $425,286 $ --
Leonard A. Moreland -- -- 14,130 6,820 159,050 47,337
Richard P. Florin -- -- 6,500 500 71,228 --
John C. Bowdoin -- -- 2,400 3,400 13,116 12,630
Charles T. Segers -- -- 2,400 3,400 17,176 18,720
___________________
(1) Adjusted for two 10% stock dividends previously issued.
(2) Based on the difference between the exercise price and $21.74, the average
of the bid and ask price of common stock on December 31, 2001.
Employment and Other Agreements
Employment Agreements. The Bank has entered into employment agreements
---------------------
with each of David B. Turner, its Vice Chairman and Chief Executive Officer, and
Leonard A. Moreland, its President and Chief Administrative Officer. The
employment agreements are for terms of thirty-six months with a base salary of
$131,250 for Mr. Turner and $122,500 for Mr. Moreland. Each agreement expires on
January 1, 2005. Each agreement may be terminated by the Bank for "just cause"
as defined in each agreement. If the Bank terminates the officer without just
cause, he will be entitled to a continuation of salary from the date of
termination through the remaining term of the agreement including any renewal
term. Each employment agreement contains a provision stating that in the event
of termination of employment in connection with, or within twelve months after,
any change in control (as defined in each agreement) of the Bank or the Company,
the officer shall be paid an amount equal to 2.99 times his average annual
taxable compensation paid during the five years prior to the change in control.
Such sum shall be paid, at the option of the officer, either in one lump sum
which shall be discounted to the "prime rate" as published in the Wall Street
Journal Eastern Edition, or in equal periodic payments over the next thirty-six
months or remaining term of the agreement, whichever is less. If that event had
occurred at December 31, 2001, the payments would have equaled approximately
$475,900 for Mr. Turner and $392,300 for Mr. Moreland. The aggregate payments
that would be made would be an expense to the Bank and reduce net income and
capital by those amounts. The agreements may be renewed annually by the Board of
Directors upon a determination of satisfactory performance within the Board of
Director's sole discretion.
Executive Supplemental Retirement Plan. The Bank has established the
--------------------------------------
Heritage Bank Executive Supplemental Retirement Plan (the "Executive Plan")
pursuant to the Named Executive Officers have entered into an Executive
Supplemental Retirement Plan Executive Agreement and a Life Insurance
Endorsement Method Split Dollar Plan Agreement. In order to help fund and/or
offset the amounts payable by the Bank under the Executive
11
Plan, the Bank purchased split dollar life insurance policies on the life of
certain of the participants. Although the Executive Plan does not require the
Company or the Bank to set aside any assets in order to fund the obligations
arising thereunder, the Company has utilized these split dollar life insurance
policies as the primary funding source. The Executive Plan provides participants
with an indexed retirement benefit and a deferral benefit. Generally, the
indexed retirement benefit of a participant for each calendar year is equal to
the excess (if any) of (A) the aggregate after-tax income under the applicable
life insurance contracts on such participant under the Executive Plan for that
year over (B) the Opportunity Cost (as hereinafter defined). The term
"Opportunity Cost" is defined to mean (Y) sum of (1) the premiums for the
applicable life insurance contract for that year, plus (2) any benefits paid to
the participant under the plan for that year, plus (3) the sum of all prior
years' Opportunity Costs, with the resulting sum multiplied by the average
annualized after-tax yield of a one-year Treasury bill for the year, divided by
(Z) 1.13 minus the Bank's marginal tax rate. The indexed retirement benefits for
each calendar year are aggregated to produce an indexed retirement benefit of
the participant, which is paid to the participant upon attainment of age 65,
upon disability or upon a termination of employment; provided, however, no
indexed retirement benefit is paid to a participant if his employment is
terminated by the Bank prior to his completion of five years of service with the
Bank, or if his employment is terminated for "cause." Indexed retirement
benefits are generally paid in equal annual installments over ten years.
However, payments may be made after such ten year period to the extent of any
balance then remaining in the participant's account. For a participant who
remains an employee of the Bank until age 65, indexed retirement benefits will
continue to accrue and be paid each year following the attainment of age 65 or
until his death. In the event of the death of a participant, indexed retirement
benefits are paid in a single lump sum to the beneficiary selected by the
participant.
Generally, the deferral benefit of a participant for each calendar year
is equal to amounts deferred under the Executive Plan. Under the Executive Plan,
a participant may elect to defer up to 100% of his or her salary for a period of
up to five (5) years (although the Board may further extend the participant's
deferral period). Amounts deferred by a participant are credited with interest
at a rate of 150% of the one-year Treasury bill each year, but in no event less
than 6% per year. Generally, a participant's deferral benefit is paid at the
same time and in the same manner of the participant's indexed retirement
benefit. No participant has elected to defer amounts under the Executive Plan.
In addition to indexed retirement benefits and deferral benefits, an
additional death benefit may be payable to a participant's designated
beneficiary equal to all or a part of the death benefit provided under life
insurance contracts with respect to that participant if the participant has been
employed with the Bank for five (5) years prior to his or her death.
Upon a change of control of the Bank, under the Executive Plan
participants are deemed to continue to work with the Bank until age 65 if they
voluntarily quit or are terminated without "cause."
Estimated annual benefits payable upon retirement at age 65 when
expressed as an annual payment for ten (10) years for each of the participants
in the Executive Plan is shown below:
Estimated Amount Allocated to Estimated Annual Payments Payable After
Executive Participant Participant's Account in 2001 (1) Normal Retirement Age (2)
- --------------------- --------------------------------- -------------------------
David B. Turner $4,644 $73,416
Leonard A. Moreland 3,938 96,846
Richard P. Florin 3,609 23,248
John C. Bowdoin 3,022 28,411
Charles T. Segers 2,968 16,747
______________________
(1) Based on the estimated performance of the applicable life insurance policy
in 2001.
(2) Assumes the participant's continuous employment with the Bank until the
participant reaches age 65, the normal retirement age. The information is
estimated based on (a) the number of years until the participant attains
the age of 65, (b) the historical and assumed future performance of the
applicable life insurance policy, (c) an assumed one-year Treasury bill
rate of 5%, and (d) a marginal tax rate for the Bank of 38%. The actual
retirement benefit will be dependent on the actual performance of the
applicable life insurance policy as well as the actual Treasury bill rates
and marginal tax rates during the period prior to the participant attaining
age 65.
12
Change in Control Severance Agreements. The Bank also has change in control
--------------------------------------
severance agreements with three of the Named Executive Officers: John C.
Bowdoin, Richard P. Florin, and Charles T. Segers. The agreements provide
severance benefits equal to 100% of the taxable compensation plus certain
medical and dental benefits paid to the officer by the Bank for the twelve-month
period prior to termination in the event of an involuntary or constructive
termination, absent "just cause" as defined in each agreement, in connection
with, or within twelve months after, a change in control of the Bank or the
Company. Such sum shall be paid, at the option of the officer, either in one
lump sum which shall be discounted to the "prime rate" as published in the Wall
Street Journal Eastern Edition minus 100 basis points, or in equal periodic
payments over the next twelve months. An officer is considered to be
constructively terminated in the event that after a change in control: (i) the
officer would be required to move more than thirty-five miles from the primary
office location of the officer; (ii) the Bank or Company fails to maintain the
officer's base compensation and employee benefit plans, except where reduction
in benefits does not disproportionately adversely impact the officer; (iii) the
officer is assigned duties and responsibilities other than those normally
associated with the officer's position, as indicated in each agreement; or (iv)
the officer's responsibilities or authority has been materially diminished or
reduced. Mr. Florin's agreement further includes a provision calling for
constructive termination where the organizational structure of the Bank or the
Company after a change in control would require Mr. Florin to report to a person
or persons other than the Executive Vice President and Chief Administrative
Officer. In addition, the agreements entered into with Mr. Bowdoin and Mr.
Segers each contain loyalty and noncompete provisions. If a change in control of
the Bank had occurred at December 31, 2001 and Mr. Bowdoin, Mr. Florin, and Mr.
Segers had each been terminated, the total amount payable under these three
agreements would have been approximately $283,945.
Benefits
Employee Stock Ownership Plan. The Bank has established an employee stock
-----------------------------
ownership plan (the "ESOP"). The ESOP borrowed funds through a loan from the
Company to acquire shares of the common stock in July 1995. Shares purchased
with the loan proceeds are held in a suspense account for allocation among
participants as the loan is repaid.
A committee consisting of non-employee directors (the "ESOP Committee")
administers the ESOP and serves as the ESOP's trustees (the "ESOP Trustees").
The Board of Directors or the ESOP Committee may instruct the ESOP Trustees
regarding investments of funds contributed to the ESOP. The ESOP Trustees must
vote all allocated shares held in the ESOP in accordance with the instructions
of the participating employees. Unallocated shares and allocated shares for
which no timely direction is received will be voted by the ESOP Trustees as
directed by the Board of Directors or the ESOP Committee, subject to the ESOP
Trustees' fiduciary duties. The ESOP held 78,773 allocated shares and 0
unallocated shares after the vesting on December 31, 2001.
1995 Stock Option Plan. The Company's Board of Directors adopted the CCF
----------------------
Holding Company 1995 Stock Option Plan, which was approved by stockholders of
the Company at the annual meeting of stockholders held on January 23, 1996.
Pursuant to the Option Plan, 136,819 shares common stock (as adjusted for two
stock dividends and a previous exercise and retirement of 5,951 shares) are
reserved for issuance upon exercise of stock options granted or to be granted to
officers, directors, and key employees of the Company and its subsidiaries from
time to time.
2000 Stock Option Plan. The Company's Board of Directors adopted the CCF
----------------------
Holding Company 2000 Stock Option Plan, which was approved by stockholders of
the Company at the annual meeting of stockholders held on April 17, 2000.
Pursuant to the Option Plan, 80,000 shares of common stock are reserved for
issuance upon exercise of stock options granted or to be granted to officers,
directors, and key employees of the Company and its subsidiaries from time to
time.
Management Stock Bonus Plan. The Company's Board of Directors adopted the
---------------------------
CCF Holding Company Management Stock Bonus Plan ("MSBP"), which was approved by
stockholders of the Company at the annual meeting of stockholders held on
January 23, 1996. Pursuant to the plan, certain directors, officers, and key
employees were granted shares of restricted stock from time to time. Restricted
stock awarded under this plan vest at a rate of 20% per year beginning on the
anniversary date of the grant. Pursuant to this plan, 4,950 shares of restricted
stock (as adjusted for two stock dividends) are reserved for issuance upon
vesting and 3,615 shares of restricted stock were retired. The Company is not
authorized to grant any further stock pursuant to this plan.
13
-----------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-----------------------------------------------------------
The Bank's directors and executive officers, their immediate family members
and certain companies and other entities associated with them have been
customers of and have had banking transactions with the Bank and are expected to
continue those relationships. Except as listed in the chart following the next
paragraph, all extensions of credit made by the Bank to these individuals,
companies, and entities (a) were made in the ordinary course of business, (b)
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and (c) did not involve more than a normal risk of collectibility
or present other unfavorable features. There is approximately $356,000 in
outstanding loans to John T. Mitchell, a director, that meet the above-listed
criteria. There is approximately $161,000 in outstanding loans to David B.
Turner, an executive officer and director, that meet the above-listed criteria.
There is approximately $95,600 in outstanding loans to John B. Lee, Jr., a
director, that meet the above-listed criteria. There is approximately $150,000
in outstanding loans to Roy V. Hall, a director, that meet the above-listed
criteria. There is approximately $61,800 in outstanding loans to Edith W.
Stevens, an officer, that meet the above-listed criteria.
Prior to 1990, the Bank provided loans to officers and directors and other
affiliates at reduced interest rates and fees. The following table sets forth
the indebtedness of executive officers, directors, and members of the immediate
family of an executive officer or director who are or were indebted to the Bank
at any time during the fiscal year ended December 31, 2001, in an amount in
excess of $60,000 for loans that were originated at a preferential rate prior to
1990.
Highest
Balance
During
Year
Type Loan Prevailing Ended Balance
of Origination Original Interest Rate at at at
Name Affiliation Loan Date Balance Rate Origination 12/31/01 12/31/01
---- ----------- ---- ---- ------- ---- ----------- -------- --------
John B. Lee, Jr. Director First 12/18/87 $153,000 4.80% 7.875% $72,702 $64,126
Election of each of the nominated directors requires the approval of a
majority of the votes cast by the stockholders of the Company at the Annual
Meeting. The Board of Directors recommends that stockholders vote "FOR" the
election of each of the individuals nominated as a director of the Company.
14
---------------------------------------------------------------------
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
---------------------------------------------------------------------
The Board of Directors has approved the selection of Porter Keadle Moore,
LLP, as the Company's independent auditors for the fiscal year ending December
31, 2002, subject to ratification by the Company's stockholders. A
representative of Porter Keadle Moore, LLP, is expected to be present at the
Annual Meeting to respond to stockholders' questions and will have the
opportunity to make a statement if he or she so desires.
Audit Fees
The aggregate fees billed by the Company's independent auditors for
professional services rendered for the audit of the Company's annual financial
statements included in the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2001, as well as for the review of the Company's
financial statements included in the Company's Quarterly Reports on Form 10-QSB
during the fiscal year ended December 31, 2001 totaled $58,050 (excluding
expenses reimbursed by the Company).
Financial Information Systems Design and Implementation of Fees
No fees other than those described above under the caption "Audit Fees" and
those described below under the caption "All Other Fees" were billed to the
Company by Porter Keadle Moore, LLP, for professional services in the fiscal
year ended December 31, 2001.
15
All Other Fees
The aggregate fees billed by Porter Keadle Moore, LLP, for professional
services rendered other than as stated above under the captions "Audit Fees" and
"Financial Information Systems Design and Implementation of Fees" above totaled
$11,900 in fiscal 2001. The Audit Committee considers the provision of these
services to be compatible with maintaining the independence of Porter Keadle
Moore, LLP.
Ratification of the appointment of the auditors requires the approval of a
majority of the votes cast by the stockholders of the Company at the Annual
Meeting. The Board of Directors recommends that stockholders vote "FOR" the
ratification of the appointment of Porter Keadle Moore, LLP, as the Company's
auditors for the fiscal year ending December 31, 2002.
--------------------------------------------------
MISCELLANEOUS
---------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of common stock.
The Company's Annual Report to Stockholders for the year ended December 31,
2001, including financial statements, will be mailed to all stockholders of
record as of the close of business on the Record Date. Any stockholder who has
not received a copy of the Annual Report may obtain a copy by writing to the
Secretary of the Company. The Annual Report is not to be treated as a part of
the proxy solicitation material or as having been incorporated herein by
reference.
--------------------------------------------------
STOCKHOLDER PROPOSALS
--------------------------------------------------
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Annual Meeting, it
is intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the persons named in the accompanying
proxy. If the Company did not have notice of a matter by December 18, 2001, it
is expected that the persons named in the accompanying proxy will exercise
discretionary authority when voting on that matter.
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at that meeting must be received at the Company's executive offices at
101 North Main Street, Jonesboro, Georgia 30236, no later than December 6, 2002.
In the event the Company receives notice of a stockholder proposal to take
action at next year's annual meeting of stockholders that is not submitted for
inclusion in the Company's proxy material, or is submitted for inclusion but is
properly excluded from the proxy material, the persons named in the proxy sent
by the Company to its stockholders may exercise their discretion to vote on the
stockholder proposal in accordance with their best judgment if notice of the
proposal is not received at the Company's executive offices by March 17, 2003.
16
----------------------------------------
FORM 10-KSB
-----------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2001, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, CCF HOLDING COMPANY, 101
NORTH MAIN STREET, JONESBORO, GEORGIA 30236.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Charles S. Tucker
Charles S. Tucker
Secretary
Jonesboro, Georgia
April 5, 2002
17
--------------------------------------------------------
CCF HOLDING COMPANY
--------------------------------------------------------
--------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
May 16, 2002
--------------------------------------------------------
The undersigned hereby appoints Edwin S. Kemp, Jr. and Leonard A. Moreland,
and each of them or their designees, with full powers of substitution, to act as
attorneys and proxies for the undersigned, to vote all shares of common stock of
the Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders ("Annual Meeting"), to be held at the Heritage Bank office located
at 440 N. Jeff Davis Drive, Fayetteville, Georgia 30214, on Thursday, May 16,
2002, at 9:00 a.m. or at any and all adjournments thereof, in the following
manner:
FOR ALL
NOMINEES
(EXCEPT AS WITHHELD FOR
MARKED BELOW) ALL NOMINEES
------------- ------------
1. The election as director of the nominees listed below
with terms expiring in the year shown (except as
marked to the contrary below):
John T. Mitchell (2003)
Charles S. Tucker (2005)
David B. Turner (2005)
Instructions: To withhold your vote for a nominee, write the nominee's name
on the line provided below.
--------------------------------------------------
FOR AGAINST ABSTAIN
2. The ratification of the appointment of Porter
Keadle Moore, LLP, as independent auditors
of CCF Holding Company, for the fiscal year
ending December 31, 2002.
In their discretion, these attorneys and proxies are authorized to vote in their
discretion upon any other business as may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors recommends a vote "FOR" each of the above listed
propositions.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
SIGNED PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN
THIS PROXY IN THEIR BEST JUDGMENT.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual Meeting,
or at any adjournment thereof, and after notification to the Secretary of the
Company at the Annual Meeting of the stockholder's decision to terminate this
proxy, the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. The undersigned may also revoke this proxy by
filing a subsequently dated proxy or by written notification to the Secretary of
the Company of his or her decision to terminate this proxy. Such subsequently
dated proxy must be received by the Secretary of the Company prior to the date
of the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of Notice of Annual Meeting of Stockholders and a proxy
statement dated April 5, 2002 and the Company's 2001 Annual Report to
Stockholders.
Dated: ____________________, 2002
________________________ ________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
_________________________ _________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------