UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
(Rule 14a-101)
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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. N/A)
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Filed by the Registrant
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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ATLANTIC
SOUTHERN FINANCIAL GROUP, 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)
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Payment of Filing Fee (Check the
appropriate box):
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x
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No fee required.
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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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)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary
materials.
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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ATLANTIC SOUTHERN FINANCIAL GROUP, INC.
1701 Bass Road
Macon, Georgia 31210
(478) 476-2170
April 29, 2010
Dear
Shareholder:
You
are cordially invited to attend our annual meeting of shareholders of Atlantic
Southern Financial Group, Inc., the parent company of Atlantic Southern
Bank, which will be held at the Marriott Macon City Center, 240 Coliseum Drive,
Macon, Georgia on Tuesday, June 8, 2010, at 10:00 a.m. I sincerely hope that you will be able to
attend the meeting, and I look forward to seeing you.
We
will provide access to our proxy statement and annual report over the
Internet. Accordingly, we will mail, on
or about April 29, 2010, a Notice of Internet Availability of Proxy
Materials (the Availability Notice) to our shareholders of record and
beneficial owners as of the close of business on April 15, 2010, the
record date for this years annual meeting.
This Availability Notice will contain instructions on how to access this
proxy statement and our annual report using the Internet, as well as how to
obtain a paper copy of these materials, if you should so desire. Proxy materials in both electronic and paper
formats will be made available free of charge.
The
attached notice of the annual meeting and proxy statement describe the formal
business to be transacted at the meeting.
At the meeting, we will also report on our operations during the past
year and during the first quarter of 2010, as well as our plans for the future.
Please
take this opportunity to become involved in the affairs of Atlantic Southern
Financial Group, Inc. and Atlantic Southern Bank. Whether or not you expect to be present at
our annual meeting, we ask that you please read this proxy statement and our
annual report and vote at your earliest convenience either by telephone, by
using the Internet, or by returning a proxy card by mail. The Availability Notice contains instructions
on how to vote your shares using each of these methods. Regardless of which method you chose to vote
your shares, voting prior to the meeting will NOT deprive you of your right to
attend the meeting and vote your shares in person. If you attend the meeting, you may withdraw
your proxy and vote your own shares.
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Sincerely,
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/s/
Mark A. Stevens
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Mark
A. Stevens
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President
and Chief Executive Officer
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ATLANTIC SOUTHERN FINANCIAL GROUP, INC.
1701 Bass Road
Macon, Georgia 31210
(478) 476-2170
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 8, 2010
The
annual meeting of shareholders of Atlantic Southern Financial Group, Inc.
(the Company) will be held on Tuesday, June 8, 2010, at 10:00 a.m.
at the Marriott Macon City Center, 240 Coliseum Drive, Macon, Georgia for the
following purposes:
(1)
To elect two (2) Class II directors who
will serve a three-year term expiring at the 2013 annual meeting;
(2)
To approve a proposed amendment to the Articles of
Incorporation of Atlantic Southern Financial Group, Inc., which would
increase the number of authorized shares of common stock from 10 million to 110
million;
(3)
To ratify the appointment of Porter Keadle Moore,
LLP, as the independent registered public accounting firm for Atlantic Southern
Financial Group, Inc. for the fiscal year ending December 31, 2010;
(4)
To approve granting the Companys management the
authority to adjourn, postpone or continue the annual meeting of shareholders
for up to 30 days in order to solicit additional votes or attendance; and
(5)
To transact any other business as may properly come
before the meeting or any adjournments of the meeting.
The
Board of Directors has set the close of business on April 15, 2010, as the
record date for determining the shareholders who are entitled to notice of, and
to vote at, the meeting.
We
hope that you will be able to attend the meeting. However, whether or not you expect to be
present at our annual meeting, we ask that you please read the proxy statement
and annual report and vote at your earliest convenience either by telephone, by
using the Internet, or by returning a proxy card by mail. The Notice of Internet Availability of Proxy
Materials mailed to you on or about April 29, 2010, contains instructions
on how to vote your shares using each of these methods. Whichever voting method you chose, we would
like to remind you that promptly recording your vote will help ensure the
greatest number of shareholders is present at the meeting in person or by
proxy.
If
you attend the meeting in person, you may revoke your proxy at the meeting and
vote your shares in person. You may
revoke your proxy at any time before the proxy is exercised.
* * *
We
have strong ties to our communities and have worked with our neighbors to
enable these areas to grow and prosper.
Much of that growth and prosperity was built on the development of
property for housing and business expansion.
We made many sound loans to finance such activities and never
participated in the sub-prime lending market.
During
2008 and 2009, our state and our nation faced challenging economic conditions
on a scale greater than have been experienced in decades. Like many other community banks, those
conditions impacted our Bank.
Recently,
we have seen real estate values decline for residential housing and lots. The demand for homes and commercial
properties has also declined significantly, and unemployment has
increased. As a result, residential and
commercial real estate builders and developers, as well as consumer and small
business borrowers, have experienced and continue to experience difficulty
repaying loans to us and to other banks.
At the same time, many of these same borrowers watched their retirement
savings decline significantly. Because
the Banks loan portfolio is a reflection of our individual loan customers, the
impact of the economy on them has had a corresponding impact on our Bank.
On
September 11, 2009, Atlantic Southern Bank (the Bank), the subsidiary
bank of the Company, signed an Order to Cease and Desist (the Order) issued
by the Federal Deposit Insurance Corporation (the FDIC), in consultation with
the Georgia Department of Banking and Finance (the Department).
The
Order is based on the findings of the Department during an on-site examination
conducted as of February 2, 2009.
Since the completion of the examination, the Board of Directors has
aggressively taken steps to address the findings of the exam. The Bank and its Board of Directors have
taken an active role in working with the FDIC and the Department to improve the
condition of the Bank and have already addressed many of the items included in
the Order.
To
address the findings of the examination, the Order contains certain operational
and financial restrictions related primarily to the Banks asset quality,
concentrations of credit, and capital.
The Bank agreed to do, among other things, the following:
·
Continue to
increase Board participation in the affairs of the Bank, including continuing
to hold meetings at least monthly and establishing a Directors Committee made
up of a majority of members who are not officers, to receive reports from
management and report to the Board;
·
Assess
managements qualifications and ability to comply with the Order and applicable
laws and regulations and to restore and operate the Bank in a safe and sound
manner;
·
Maintain (a) Tier
1 Capital at or above 8% of total assets and (b) total risk-based capital
at or above 10% of total risk-weighted assets;
·
Charge-off all
assets classified as Loss and 50% of assets classified as Doubtful in any
official report of examination from the FDIC or the Department;
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Reduce the
aggregate balance of assets classified as Substandard in accordance with a
schedule provided in the Order;
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Restrict
extensions of credit to any borrower whose extension of credit has been, in
whole or in part, charged-off or adversely classified;
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File a plan
with the FDIC and the Department to correct all deficiencies in the assets
listed for Special Mention;
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Review and, if
necessary, revise its written lending, underwriting and collection policy to
provide guidance and control over the Banks lending function, specifically
addressing appropriate strategies for managing acquisition, development and
construction (ADC) loans and commercial real estate lending and specific
guidelines on placing loans on non-accrual status;
·
Perform a risk
segmentation analysis on credit concentrations;
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Revise its
written liquidity, contingent funding, interest rate risk and asset liability
management plans;
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Obtain a waiver
from the FDIC prior to accepting, renewing, or rolling over any brokered
deposits;
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Revise and
implement a written profit plan and comprehensive budget for all categories of
income and expense;
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Correct all
cited violations of law and contraventions of policy cited in the Banks Report
of Examination;
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Continue to
refrain from paying dividends without prior regulatory approval; and
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File progress
reports with the FDIC and the Department.
The
Company and the Bank believe that the proactive steps the management and Board
have already undertaken, together with those they plan to take in the future,
will help the Bank address the Order and the concerns that gave rise to the
Order. Banking products and services and
hours of business are the same, and the Banks deposits are insured by the FDIC
to the maximum limits allowed by law.
This
Order does not prevent us from continuing to fully service our customers needs
and to operate the Bank as we deem best.
Instead, this Order is primarily in place due to the decline in capital
and our increased level of problem assets.
Like any business in this area, we suffered through the downturn, and
now we believe we will have the opportunity to again prosper as the economy
continues its recovery.
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By
Order of the Board of Directors,
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/s/
Mark A. Stevens
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Mark
A. Stevens
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President
and Chief Executive Officer
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April 29,
2010
ATLANTIC SOUTHERN FINANCIAL GROUP, INC.
1701 Bass Road
Macon, Georgia 31210
(478) 476-2170
PROXY STATEMENT FOR 2010 ANNUAL MEETING
INTRODUCTION
Time
and Place of the Meeting
Our
Board of Directors is furnishing this proxy statement in connection with its
solicitation of proxies for use at the annual meeting of shareholders to be
held on Tuesday, June 8, 2010, at 10:00 a.m. at the
Marriott Macon
City Center, 240 Coliseum Drive,
Macon, Georgia and at any
adjournments of the meeting. This is the
sixth annual meeting of Atlantic Southern Financial Group, Inc. (Atlantic
Southern or the Company), the parent company of Atlantic Southern Bank.
Record
Date and Mailing Date
The
close of business on April 15, 2010, is the record date for the determination
of shareholders entitled to notice of and to vote at the meeting. We first mailed the Notice of Internet
Availability of Proxy Materials (the Availability Notice) to shareholders on
or about April 29, 2010. This
Availability Notice contains instructions on how to access this proxy statement
and our annual report using the Internet and how to request paper copies of
these materials. The Availability Notice
also contains instructions for voting by telephone, by using the Internet, by
mail or at the annual meeting.
Number
of Shares Outstanding
As
of the close of business on the record date, the Company had authorized
10,000,000 shares of common stock, no par value, of which 4,211,780 shares were issued and
outstanding. Each issued and outstanding
share of common stock is entitled to one vote on all matters presented at the
meeting.
VOTING AT THE ANNUAL MEETING
Proposals
To Be Considered
Shareholders
will be asked to elect two (2) persons to serve as Class II directors
of the Company for a three-year term.
The nominees for Class II directors, as well as the continuing
directors, are described beginning on page 4.
The Board
of Directors recommends a vote FOR approval of this proposal.
Shareholders will be asked to approve a proposed
amendment to the Companys Articles of Incorporation, which would increase the
number of authorized shares of common stock from 10 million to 110
million.
The Board of Directors recommends a vote FOR approval of this proposal.
Shareholders will be asked to ratify the appointment
of Porter Keadle Moore, LLP (Porter Keadle Moore) to serve as the independent
registered public accounting firm for Atlantic Southern for
the year ending December 31, 2010.
The Board
of Directors recommends a vote FOR approval of this proposal.
Shareholders will be asked to approve granting the
Companys management the authority to adjourn, postpone or continue the annual
meeting of shareholders for up to 30 days in order to solicit additional
votes.
The
Board of Directors recommends a vote FOR approval of this proposal.
Procedures for Voting by Proxy
In accordance with rules and regulations adopted by the Securities
and Exchange Commission (SEC), instead of mailing a printed copy of our proxy
materials to each shareholder of record, we are now furnishing proxy materials
to our shareholders on the Internet. If
you received an Availability Notice by mail, you will not receive a printed
copy of this proxy statement and the annual report unless you specifically
request them.
If,
before the meeting, you properly appoint proxies to vote your shares of common
stock by following the instructions as set forth in the Availability Notice,
the persons appointed as proxies will vote your shares according to the
instructions you have specified in connection with this appointment. If you appoint proxies but do not specify how
the persons appointed as proxies are to vote your shares, your proxy will be
voted FOR the election of the director nominees, FOR the approval of the
proposed amendment to the Companys Articles of Incorporation, FOR the
ratification of the appointment of Porter Keadle Moore, and in the best
judgment of the persons appointed as proxies as to all other matters properly
brought before the meeting. If any
nominee for election to the Board of Directors named in this proxy statement
becomes unavailable for election for any reason, the proxy will be voted for a
substitute nominee selected by the Board of Directors.
Revocation of Proxies.
An Atlantic Southern
shareholder who has appointed proxies, whether by telephone, by Internet or by
physical proxy card, may revoke this appointment at any time prior to its
exercise at the annual meeting by:
·
Giving written notice of revocation to Atlantic
Southern;
·
Properly submitting to Atlantic Southern a duly
executed proxy bearing a later date; or
·
Attending the annual meeting and voting in person.
All
written notices of revocation and other communications concerning proxies
should be sent to: Atlantic Southern
Financial Group, Inc., 1701 Bass Road, Macon, Georgia 31210; Attention:
Carol Soto, Chief Financial Officer.
Requirements for Shareholder Approval
A
quorum will be present at the meeting if a majority of the outstanding shares
of common stock is represented in person or by valid proxy. We will count abstentions and broker
non-votes, which are described below, in determining whether a quorum exists. Only those votes actually cast for each proposal,
however, will be counted for purposes of determining whether a particular
proposal received sufficient votes to pass.
To
be elected, a director nominee must receive more votes than any other nominee
for the particular seat on the Board of Directors. As a result, if you withhold your vote as to
one or more nominees, it will have no effect on the outcome of the election
unless you cast that vote for a competing nominee. At the present time we do not know of any
competing nominees.
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To
be approved, the proposed amendment to the Companys Articles of Incorporation
requires the affirmative vote of a majority of all shares of common stock
issued and outstanding. Shares not voted
with respect to this matter, whether by abstention or broker non-vote, would
have the effect of a vote cast against this proposal.
To
be approved, the ratification of the appointment of Porter Keadle Moore, the
grant of authority to the Companys management to adjourn, postpone or continue
the annual meeting of shareholders, and any other matters that may properly
come before the annual meeting, require the affirmative vote of a majority of
the shareholders present in person or by proxy and entitled to vote at the
meeting. Abstentions and broker
non-votes will be counted in determining the minimum number of votes required
for approval of these proposals, or any other matters that may properly come
before the annual meeting, and will, therefore, have the effect of negative votes.
Abstentions.
A shareholder who is present in person or by proxy
at the annual meeting and who abstains from voting on any or all proposals will
be included in the number of shareholders present at the annual meeting for the
purpose of determining the presence of a quorum. Abstentions do not count as votes in favor of
or against a given matter.
Broker Non-Votes.
Brokers who hold shares for the accounts of their
clients may vote these shares either as directed by their clients or at their
own discretion if permitted by the exchange or other organization of which they
are members. As of January 1, 2010,
all NYSE and NASDAQ member brokers are prohibited from exercising discretionary
voting on all director elections unless that broker has instructions from the
beneficial shareholder on how to vote.
Proxies that contain a broker vote on one or more proposals, but no vote
on others, are referred to as broker non-votes with respect to the proposal(s) not
voted upon. Broker non-votes are
included in determining the presence of a quorum. A broker non-vote, however, does not count as
a vote in favor of or against a particular proposal for which the broker has no
discretionary voting authority.
SOLICITATION OF PROXIES
Atlantic
Southern Financial Group, Inc. will pay the cost of the proxy
solicitation. Our directors, officers
and employees may, without additional compensation, solicit proxies by personal
interview, telephone, fax, or otherwise.
We will direct brokerage firms or other custodians, nominees or
fiduciaries to forward our proxy solicitation material to the beneficial owners
of common stock held of record by these institutions and will reimburse them
for the reasonable out-of-pocket expenses they incur in connection with this
process.
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PROPOSAL I ELECTION OF DIRECTORS
The
Articles of Incorporation of Atlantic Southern Financial Group provide for a
staggered Board of Directors so that, as nearly as possible, one-third of the
directors will be elected each year to serve three-year terms. The term of each class expires at the annual
meeting in the years indicated below and upon the election and qualification of
the directors successors. Pursuant to Section 3.4
of the Bylaws for the Company, a person 72 years of age or greater at the time
of election is ineligible to stand for election as a director. Accordingly, the Board of Directors has
appointed Carolyn Crayton and Thomas H. McMichael, previously Class II
directors, as Class III directors of the Company and the Bank, and each
will serve an additional one-year term ending at the annual meeting in 2011 and
upon the qualification and election of their successors. The Board of Directors anticipates that both
Carolyn Crayton and Thomas H. McMichael will retire from the Board prior to the
annual meeting in 2011, the time at which their respective terms expire.
Each
of our directors is also a director of Atlantic Southern Bank. All of the Companys directors, except for Mr. Stevens,
are independent directors under the National Association of Securities Dealers
definition of independent director.
The
following table shows for each director as of April 15, 2010: (a) his or her name; (b) his or her
age at December 31, 2009; (c) how long he or she has been a director
of Atlantic Southern Financial Group or Atlantic Southern Bank; (d) his or
her position(s) with Atlantic Southern Financial Group or Atlantic
Southern Bank, other than as a director; (e) his or her principal
occupation and recent business experience for the past five years; (f) legal
proceedings to which the director has been a party; and (g) the background
and qualifications for each director and director-nominee that led to the
Companys selection for service on the Board.
Director Nominees
Name (Age)
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Director
Since
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Position with Atlantic Southern
Financial Group and Business Experience
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Class II Director Nominees
(Term Expiring 2013):
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Tyler J.
Rauls, Jr. (65)
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2001
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Founder and President
of Southeastern Retirement Management, Inc. (development and management
of retirement communities) since 1986. We believe Mr. Rauls long and
varied career and his experience in the local real estate market well qualify
him to serve on the Board.
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Mark A. Stevens (58)
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2001
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President and Chief
Executive Officer of Atlantic Southern Financial Group since 2001; Executive
Vice President of Atlantic Southern Bank since 2009; President and Chief
Executive Officer of Atlantic Southern Bank from 2001 to 2009; President and
Chief Executive Officer of Colonial Banks central Georgia region from 1998
to 2000; Senior Vice President and Senior Lender of First Macon Bank and
Trust Company from 1988 to 1998. Mr. Stevens has been a director at
Nexity Financial Corporation since May 2006. We believe
Mr. Stevens long banking career well qualifies him to serve on the
Board.
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4
Continuing Directors
Name (Age)
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Director
Since
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Position with Atlantic Southern
Financial Group and Business Experience
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Class III
Directors
(Term Expiring 2011):
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Carolyn
Crayton (78)
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2001
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President
of Marketing and Community Relations, WPGA Macon Television; Founder of Keep
Macon-Bibb Beautiful Commission and the Macon International Cherry Blossom Festival.
We believe Ms. Craytons long and varied career and her breadth of civic
involvement well qualify her to serve on the Board.
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J. Douglas Dunwody (52)
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2001
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Majority Owner and President of Dunwody Insurance Agency, Inc.
since 1984; Chairman of the Board of Shared Agency Services LLC. We believe
Mr. Dunwodys extensive experience in the field of insurance well
qualifies him to serve on the Board.
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William A. Fickling, III (53)
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2001
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Chairman of the Board of Directors of Atlantic Southern Financial
Group, Inc. and Atlantic Southern Bank; Consultant at
Fickling & Company, Inc. since 2002; Private investment
portfolio manager and Vice President of Mulberry Street Investment Company,
LP. since 1986. We believe Mr. Ficklings long and varied career,
including his experience as a private investment portfolio manager, well
qualifies him to serve on the Board.
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Carl E. Hofstadter (54)
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2001
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Founder and President of Hofstadter and Associates, Inc.
(engineering consulting) since 1982. We believe Mr. Hofstadters
business experience and knowledge of our market areas well qualify him to
serve on the Board.
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Thomas J. McMichael (73)
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2001
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Retired banker; Member of
Houston County Board of Commissioners since 1996. We believe
Mr. McMichaels long banking career well qualifies him to serve on the
Board.
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George Waters, Jr. (50)
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2001
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President and Vice President of Business Development for Waters and
Sons Construction and Paving, Inc. and Flowline Curbing &
Construction, Inc since 1981; Owner and General Manager of Mid-Georgia
Grading, Inc. since 1995. We believe that Mr. Waters long career
and knowledge of our market areas well qualify him to serve on the Board.
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5
Name (Age)
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Director
Since
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Position with Atlantic Southern
Financial Group and Business Experience
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Class I Directors
(Term Expiring 2012):
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Peter R. Cates (46)
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2001
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Co-Owner and Manager of
TruFlame Gas Co., Waynesboro, Georgia 2009-Present; President of Louisville
Christian Foundation 2009; Consultant with Crown Financial Ministries,
Gainesville, Georgia, from 2007-2009; Vice President of Finance
Administration of Asbury Theological Seminary from 2005-2007; Attorney at
Smith, Hawkins, Hollingsworth & Reeves, LLP from 2002-2005; Attorney
at Miller, Cowart & Howe, LLP from 1990-2002. We believe
Mr. Cates long and varied career, including his experience as an
attorney, and his educational background in accounting, well qualify him to
serve on the Board.
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Dr. Laudis (Rick) H.
Lanford (51).
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2001
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President of The
Foundation for the Methodist Home for Children and Youth since 1999; Ordained
Elder in the United Methodist Church. We believe Mr. Lanfords
experience as a development officer and as a principal officer managing
investments for an endowment well qualify him to serve on the Board.
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Dr. Hugh F.
Smisson, III (52)
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2001
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Board-certified
neurosurgeon; Vice President of the Neurosurgical Institute of Central
Georgia, P.A.; Founder, President and Chief Executive Officer of
Smisson-Cartledge Biomedical, LLC (biomedical company). We believe
Dr. Smissons long and varied career, including his experience in senior
management, well qualifies him to serve on the Board.
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Donald L. Moore, Jr.
(65)
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2006
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President of Donald L.
Moore, Jr., Inc., a development and commercial contracting firm
with headquarters in Savannah, Georgia, since 1973. We believe
Mr. Moores long and varied career, including his experience in the
local real estate market, and his knowledge of our market areas well qualify
him to serve on the Board.
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Recommendation
The
Board of Directors recommends that you vote
FOR
the election of each director nominee named above.
Information about the Board of Directors
Our
Board of Directors.
During the year ended December 31, 2009,
the Board of Directors held 13 meetings.
All incumbent directors attended
at least 75% of the total number of meetings of our Board of Directors and
committee meetings.
Board Leadership Structure.
In accordance
with the Companys Bylaws, the Board of Directors elects the Companys Chairman
and its Chief Executive Officer and President, and each of these positions may
be held by the same person or may be held by separate persons. Mr. William A. Fickling, III, who
is an independent director, is the Chairman of the Board. Mr. Mark A. Stevens currently serves as
a director and as the Companys President and Chief Executive Officer and
Executive Vice President of Atlantic Southern Bank. Mr. Edward P. Loomis does not serve as a
director, but serves as the President and Chief
6
Executive Officer of Atlantic Southern Bank. The foregoing structure is not mandated by
any provision of law or our Articles of Incorporation or Bylaws, but the Board
of Directors believes this structure provides for an appropriate balance of
authority between management and the Board and provides an efficient
decision-making process with proper independent oversight. The Board of Directors, however, reserves the
right to establish a different structure in the future.
Risk Oversight.
The Board oversees risks to
the Company through its leadership and service on the committees described
below. The Audit Committee addresses risks presented by the Companys internal
controls and financial record-keeping, and the Compensation Committee addresses
risks presented by its compensation policies and practices. Additionally, the
Board regularly reviews reports by the Investment Committee, which addresses interest
rate risk, and reviews credit risk through the Loan Committee. The Executive
Committee, which as of December 31, 2009 consisted of Messrs. Hofstadter
(chairperson), Fickling, Moore, Lipford and Stevens, focuses on strategies for
complying with the Order and increasing the Banks capital levels and ratios,
which in turn enables the Bank to absorb losses and thereby reduce risks
presented by the current economic environment. During the fiscal year ended December 31,
2009, the Executive Committee held 24 meetings.
Committees of the Board of Directors
We
are governed by a Board of Directors and various committees of the Board that
meet throughout the year. We currently
have 12 directors, each of whom serves for a three-year term unless such
director resigns or is removed or is appointed by the Board to serve in another
class. Directors discharge their
responsibilities throughout the year at Board and committee meetings and also
through telephone contact and other communications with the Chairman, Chief
Executive Officer of the Company, Chief Executive Officer of the Bank and other
officers.
Audit
Committee.
The Board of
Directors has established an Audit Committee, which recommends to the Board of
Directors the independent public accountants to be selected to audit our annual
financial statements, evaluates internal accounting controls, reviews the
adequacy of the internal audit budget, personnel and plans, and determines that
all audits and exams required by law are performed fully, properly, and in a
timely fashion. The Audit Committee
members as of December 31, 2009 were:
J. Russell Lipford, Jr. (chairperson), William A. Fickling, III,
J. Douglas Dunwody, and Donald L. Moore, Jr. Each of these members meets the requirement
for independence as defined under Rule 5605(a)(2) of the National
Association of Securities Dealers listing standards. The Board has determined that Mr. Lipford
meets the criteria specified under applicable Securities and Exchange
Commission (SEC) regulations for an audit committee financial expert and
that all of the committee members are financially sophisticated. The audit committee has a charter, and a copy
is posted on the Companys website at www.atlanticsouthernbank.com.
During the fiscal
year ended December 31, 2009, the Audit Committee held 12 meetings.
Compensation Committee.
The Board of
Directors has established a Compensation Committee, which is responsible for
establishing targets and awards for any incentive compensation plans, reviewing
salary ranges and fringe benefits, and reviewing and approving all elements of
remuneration of the executive officers.
The Compensation Committee members as of December 31, 2009
were: J. Douglas Dunwody (chairperson),
Carl E. Hofstadter, Donald L. Moore, Jr., J. Russell Lipford, Jr.,
and William A. Fickling, III.
During the fiscal year ended December 31, 2009, the Compensation
Committee held seven meetings. Also, the
Compensation Committee is responsible for administering the 2007 Stock
Incentive Plan, including granting awards of stock-based compensation pursuant
to the plan.
The
Compensation Committee has the sole authority to retain consultants and
advisors as it may deem appropriate and to approve the related fees and other
retention terms. The Compensation
Committee utilized the services of a compensation consultant during 2009 solely
to prepare a peer group
7
analysis. The committee also has the authority to
delegate appropriate matters to subcommittees as it deems appropriate.
Nominating/Governance Committee.
The Board of Directors established a Nominating/ Governance Committee
for director nominees and adopted a Nominating/Governance Committee charter in
2007, which is posted on the Companys website at www.atlanticsouthernbank.com.
The
Nominating/Governance Committee members as of December 31, 2009 were: George Waters, Jr. (chairperson),
William A. Fickling, III, J. Russell Lipford, Jr., Carolyn Crayton,
and Dr. Hugh F. Smission, III.
Each of the members of the committee is considered independent under Rule 5605(a)(2) of
the National Association of Securities Dealers listing standards. The Nominating/Governance Committee advises
and makes recommendations to the Board of Directors regarding corporate governance
principles and board practices by the Company.
The committee also recommends to the Board of Directors the Companys
slate of nominees for election to the Board.
The Nominating/Governance Committee did not meet in 2009.
For information regarding the
committees policy and procedures with regard to the consideration of director
candidates, see Director Nominations.
Code of Ethics
We have adopted a Code of Business Conduct and Ethics (the Code) that
applies to all of our principal executive, financial and accounting
officers. We believe the Code is
reasonably designed to deter wrongdoing and to promote honest and ethical
conduct, including: the ethical handling
of conflicts of interest; full, fair and accurate disclosure in filings and
other public communications made by us; compliance with applicable laws; prompt
internal reporting of violations of the Code; and accountability for adherence
to the Code. A copy may be obtained on
our website at www.atlanticsouthernbank.com.
A copy may also be obtained, without charge, upon written request
addressed to Atlantic Southern Financial Group, Inc., 1701 Bass Road,
Macon, Georgia 31210, Attention: Chief Financial Officer. The request may be delivered by letter to the
address set forth above or by fax to the attention of Atlantic Southern
Financial Groups Chief Financial Officer at (478) 330-5802.
Director Compensation
Effective
November 1, 2008, the Boards of Directors of the Company and the Bank
voted to unanimously suspend all Board and committee meeting fee payments. No date or time frame was established for
re-commencement of payments. Although
our directors are entitled to receive reimbursement for actual travel expenses
and bank director education expenses incurred in connection with the performance
of their respective duties, all of our directors voluntarily waived all
reimbursements to which they were entitled in 2009.
Each
of our founding directors will, upon retirement, become eligible to serve as a
director emeritus of the Company for a period of five years following their
respective retirements. Directors
elected to the Board subsequent to the founding of the Company will, upon
retirement, become eligible to serve as a director emeritus of the Company for
a period of three years following their respective retirements. During their respective periods of service,
directors emeritus may attend meetings of the Companys Board of Directors in a
non-voting capacity, for which they will receive a director emeritus fee.
Mark
A. Stevens is a director of the Company and is also a named executive
officer. As a result, information
regarding his compensation is reflected in the Summary Compensation Table and
other tables in the Executive Compensation section of this proxy statement.
8
Director Compensation Table
The following table shows the total compensation
earned by each of our directors for their service in 2009, including
reimbursement for travel expenses and bank director education expenses, where
applicable. There were no stock, option
or non-equity incentive plan awards given to directors during 2009.
Name(1)
|
|
Fees earned or
paid in cash
($)
|
|
Total
($)
|
|
|
|
|
|
|
|
William A. Fickling, III.
|
|
$
|
0
|
|
$
|
0
|
|
Raymond O. Ballard, Jr.(2)
|
|
0
|
|
0
|
|
Peter R. Cates
|
|
0
|
|
0
|
|
Carolyn Crayton
|
|
0
|
|
0
|
|
J. Douglas Dunwody
|
|
0
|
|
0
|
|
Michael C. Griffin(3)
|
|
0
|
|
0
|
|
Carl E. Hofstadter
|
|
0
|
|
0
|
|
Dr. Laudis H. Lanford
|
|
0
|
|
0
|
|
J. Russell Lipford(4)
|
|
0
|
|
0
|
|
Thomas J. McMichael
|
|
0
|
|
0
|
|
Donald L. Moore
|
|
0
|
|
0
|
|
Tyler Rauls, Jr.
|
|
0
|
|
0
|
|
Dr. Hugh Smisson, III
|
|
0
|
|
0
|
|
George Waters, Jr.
|
|
0
|
|
0
|
|
|
|
|
|
|
|
|
|
(1)
Mr. Stevens is also a Named Executive Officer,
and as a result, his compensation as a director is included in the Summary
Compensation Table below.
(2)
Mr. Ballard resigned from the Board of Directors
of the Company and the Bank on April 14, 2010.
(3)
Mr. Griffin resigned from the Board of Directors
of the Company and the Bank on February 17, 2010.
(4)
Mr. Lipford resigned from the Board of Directors
of the Company and the Bank on April 14, 2010.
Audit
Committee Report
The audit committee reports as follows with respect
to the audit of Atlantic Southerns 2009 audited consolidated financial
statements.
·
The audit
committee has reviewed and discussed Atlantic Southerns 2009 audited
consolidated financial statements with management;
·
The audit
committee has discussed with the independent auditors, Porter Keadle Moore, the
matters required to be discussed by SAS 61, as amended (AICPA, Professional
Standards, Vol. 1. ALI Section 380), as adopted by the Public Company
Accounting Oversight Board in Rule 3200T, which include, among other
items, matters related to the conduct of the audit of Atlantic Southerns
consolidated financial statements;
·
The audit
committee has received written disclosures and the letter from the independent
auditors requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with the audit committee
concerning independence, and has discussed with the auditors the auditors
independence from Atlantic Southern; and
9
·
Based on review and discussions of Atlantic Southerns
2009 audited consolidated financial statements with management and discussions
with the independent auditors, the audit committee recommended to the Board of
Directors that Atlantic Southerns 2009 audited consolidated financial
statements be included in Atlantic Southerns Annual Report on Form 10-K.
March 29,
2010
|
Audit
Committee:
|
J. Russell
Lipford, Jr. (Chairperson)
|
|
|
William A.
Fickling, III
|
|
|
Thomas
J. McMichael
|
|
|
Donald L. Moore, Jr.
|
10
EXECUTIVE OFFICERS
The following table shows
for each executive officer of the Company and the Bank: (a) his or her name; (b) his or her
age at December 31, 2009; (c) how long he or she has been an officer
of the Company; and (d) his or her current position with the Company and
the Bank.
Name (Age)
|
|
Officer
Since
|
|
Position with Atlantic Southern Financial Group and
Atlantic Southern Bank
|
|
|
|
|
|
Mark
A. Stevens (58)
|
|
2001
|
|
President
and Chief Executive Officer of Atlantic Southern Financial Group and Executive
Vice President of Atlantic Southern Bank
|
|
|
|
|
|
Edward
P. Loomis (56)
|
|
2008
|
|
President
and Chief Executive Officer of Atlantic Southern Bank
|
|
|
|
|
|
Carol
W. Soto (51)
|
|
2001
|
|
Executive
Vice President, Chief Financial Officer and Secretary of Atlantic Southern
Financial Group and Atlantic Southern Bank
|
|
|
|
|
|
Gary
P. Hall (1) (66)
|
|
2001
|
|
Executive
Vice President and Chief Credit Officer of Atlantic Southern Financial Group
and Atlantic Southern Bank
|
|
|
|
|
|
Brandon
L. Mercer (33)
|
|
2005
|
|
First
Senior Vice President and Chief Lending Officer, Atlantic Southern Financial
Group and Atlantic Southern Bank
|
|
|
|
|
|
Randy
Griffin (2) (57)
|
|
2009
|
|
Senior
Vice President and Chief Credit Officer of Atlantic Southern Financial Group
and Atlantic Southern Bank
|
(1)
Mr. Hall will retire from the Company and the
Bank effective April 30, 2010.
(2)
Mr. Griffin will be appointed as Chief Credit
Officer for the Company and the Bank upon Mr. Halls retirement.
11
EXECUTIVE COMPENSATION
Summary Compensation Table
The
following table sets forth various elements of compensation awarded to or paid
by us for services rendered in all capacities during the last fiscal year to
the Chief Executive Officer of the Company, Chief Executive Officer of the
Bank, Chief Financial Officer, Chief Credit Officer, and First Senior Vice
President Corporate Lending (collectively, the named executive officers). No other executive officer received total
compensation in excess of $100,000 for services rendered during the fiscal year
of 2009. The Company did not make any
bonus, stock, option or equity incentive plan awards to named executive
officers.
Name and Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
(2)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(3)
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
(4)
|
|
All Other
Compensation
($)
(6)
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Stevens
|
|
2009
|
|
$
|
267,664
|
|
|
|
|
|
|
|
|
|
$
|
183,581
|
|
$
|
12,382
|
|
$
|
463,627
|
|
President
and Chief Executive Officer of Atlantic Southern Financial Group
|
|
2008
|
|
$
|
270,000
|
|
|
|
|
|
|
|
|
|
$
|
173,003
|
|
$
|
22,614
|
|
$
|
465,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward P. Loomis Jr.(1)
|
|
2009
|
|
$
|
168,333
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,461
|
|
$
|
174,794
|
|
President
and Chief Executive Officer of Atlantic Southern Bank
|
|
2008
|
|
$
|
67,288
|
|
|
|
|
|
$
|
28,000
|
(5)
|
|
|
|
|
$
|
435
|
|
$
|
95,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carol Soto
|
|
2009
|
|
$
|
147,933
|
|
|
|
|
|
|
|
|
|
$
|
28,170
|
|
$
|
11,782
|
|
$
|
167,885
|
|
Executive
Vice President and Chief Financial Officer
|
|
2008
|
|
$
|
150,000
|
|
|
|
|
|
|
|
$
|
45,000
|
|
$
|
21,094
|
|
$
|
12,429
|
|
$
|
228,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary P. Hall
|
|
2009
|
|
$
|
181,542
|
|
|
|
|
|
|
|
|
|
$
|
73,278
|
|
$
|
11,336
|
|
$
|
266,156
|
|
Executive
Vice President and Chief Credit Officer
|
|
2008
|
|
$
|
183,750
|
|
|
|
|
|
|
|
$
|
36,750
|
|
$
|
68,338
|
|
$
|
12384
|
|
$
|
301,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brandon L. Mercer
|
|
2009
|
|
$
|
143,754
|
|
$
|
50,000
|
|
|
|
|
|
|
|
$
|
12,251
|
|
$
|
15,647
|
|
$
|
221,652
|
|
First
Senior Vice President and Chief Lending Officer
|
|
2008
|
|
$
|
146,000
|
|
$
|
50,000
|
|
|
|
|
|
$
|
29,200
|
|
$
|
10,815
|
|
$
|
15,539
|
|
$
|
251,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Mr. Loomis
was appointed as President and Chief Executive Officer of the Bank on July 31,
2009. Mr. Loomis served as
Executive Vice President and Chief Operating Officer of the Bank from September 18,
2008 to July 31, 2009.
(2)
The
Bank entered into an executive bonus agreement with Mr. Mercer where upon
his completion of five consecutive years of participation, the Bank provided Mr. Mercer
with a $250,000 bonus, in lump sum, on January 21, 2010, twenty-one (21)
days following the completion of his fifth year of participation. The disclosed represents the accrual for 2009
and 2008.
(3)
Reflects
the value of cash incentive compensation earned in 2008 pursuant to the
financial performance component of the Annual Incentive Plan. The cash incentive compensation was paid in February 6,
2009.
(4)
Reflects
the increase during 2009 and 2008 in actuarial values of each named executive
officers benefits under the SERP agreements determined using assumptions
consistent with those in the Companys financial statements.
(5)
Reflects
the aggregate grant date fair value of 5,000 incentive stock options granted on
July 17, 2008.
(6)
Amounts
included in this column are reflected in the following table:
12
Name and Principal
Position
|
|
Year
|
|
Employer
contributions to
401(k) plan
(1)
|
|
Dues and
Memberships
|
|
Auto Allowance
|
|
Director Fees
Earned or Paid
in Cash
(2)
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Stevens
|
|
2009
|
|
$
|
7,350
|
|
$
|
5,032
|
|
|
|
|
|
$
|
12,382
|
|
|
|
2008
|
|
$
|
6,900
|
|
$
|
4,914
|
|
|
|
$
|
10,800
|
|
$
|
22,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward P. Loomis, Jr.
|
|
2009
|
|
$
|
5,081
|
|
$
|
1,380
|
|
|
|
|
|
$
|
6,461
|
|
|
|
2008
|
|
|
|
$
|
435
|
|
|
|
|
|
$
|
435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carol Soto
|
|
2009
|
|
$
|
5,782
|
|
|
|
$
|
6,000
|
|
|
|
$
|
11,782
|
|
|
|
2008
|
|
$
|
6,429
|
|
|
|
$
|
6,000
|
|
|
|
$
|
12,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary P. Hall
|
|
2009
|
|
$
|
7,350
|
|
$
|
3,986
|
|
|
|
|
|
$
|
11,336
|
|
|
|
2008
|
|
$
|
6,900
|
|
$
|
5,484
|
|
|
|
|
|
$
|
12,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brandon L. Mercer
|
|
2009
|
|
$
|
4,625
|
|
$
|
5,022
|
|
$
|
6,000
|
|
|
|
$
|
15,647
|
|
|
|
2008
|
|
$
|
4,625
|
|
$
|
4,914
|
|
$
|
6,000
|
|
|
|
$
|
15,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
The Company provides a 50% match for employee contributions up to 6% of their
annual compensation, subject to IRS limits.
(2)
In 2008, Mr. Stevens was paid cash director fees by the Company for his
service as a director.
The
Company has adopted a 401(k) plan which provides for the Board of
Directors to make a discretionary contribution to the 401(k) Plan. The Company contributes 50% of the first 6%
of eligible compensation which an employee contributes to the plan. The employer match is subject to the
following vesting schedule:
Years
of Employment
(1,000+ hours per year)
|
|
Percent
Vested
|
|
1
|
|
0
|
%
|
2
|
|
20
|
%
|
3
|
|
40
|
%
|
4
|
|
60
|
%
|
5
|
|
80
|
%
|
6
|
|
100
|
%
|
All
named executive officers are eligible to participate in this plan up to the
maximum contribution limits established by the IRS.
The named executive officers participate in the Companys broad-based
employee benefit plans, such as medical, dental, disability and term life
insurance programs. In 2009, for each of
the named executive officers, the Company also, based on business needs,
provided the following perquisites: a
company-owned vehicle for Mr. Stevens and Mr. Hall, an auto allowance
for Mr. Mercer and Ms. Soto, country club memberships,
company-provided cell phones and laptop computers.
Outstanding
Equity Awards at Fiscal Year End
.
The
following table provides information concerning unexercised options outstanding
as of December 31, 2009 for each of our named executive officers. We have not granted any stock appreciation
rights, restricted stock or stock incentives other than stock options and
organizers warrants. The Company did
not grant any stock options to its directors or named executive officers in
2009. Finally, the named executive
officers did not exercise any options in 2009.
13
|
|
Option Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Stevens
|
|
24,000
|
(1)
|
|
|
|
|
$
|
6.67
|
|
12/10/2011
|
|
Mark A. Stevens
|
|
36,000
|
(3)
|
|
|
|
|
8.16
|
|
12/10/2012
|
|
Edward P. Loomis, Jr.
|
|
1,000
|
(4)
|
4,000
|
(4)
|
|
|
$
|
12.75
|
|
07/14/2018
|
|
Carol W. Soto
|
|
9,750
|
(1)
|
|
|
|
|
$
|
6.67
|
|
12/10/2011
|
|
Carol W. Soto
|
|
3,794
|
(3)
|
1,081
|
(3)
|
|
|
8.16
|
|
12/10/2012
|
|
Gary P. Hall
|
|
12,000
|
(1)
|
|
|
|
|
$
|
6.67
|
|
12/10/2011
|
|
Gary P. Hall
|
|
4,875
|
(3)
|
|
|
|
|
8.16
|
|
12/10/2012
|
|
Brandon L. Mercer
|
|
7,500
|
(2)
|
|
|
|
|
$
|
6.67
|
|
01/20/2012
|
|
Brandon L. Mercer
|
|
2,919
|
(3)
|
831
|
(3)
|
|
|
8.16
|
|
12/10/2012
|
|
(1)
Stock options awarded to Mr. Stevens,
Ms. Soto and Mr. Hall on December 10, 2001 under the 2001 Stock
Incentive Plan. Under this award, the
named executive officers received options to acquire 24,000, 9,750 and 12,000
shares of common stock, respectively.
The options vested 20% per year over a five-year period beginning on the
first anniversary of the date of the grant.
(2)
Stock options awarded to Mr. Mercer
on January 22, 2002 under the 2001 Stock Incentive Plan. Under this award, Mr. Mercer received
options to acquire 7,500 shares of common stock. The options vested in 20% increments over a
five-year period beginning on the first anniversary of the date of the grant.
(3)
Stock options awarded to Messrs. Stevens,
Hall, Mercer and Ms. Soto on December 10, 2002 under the 2001 Stock
Incentive Plan. Under this award, the
named executive officers received options to acquire 36,000, 4,875, 3,750 and
4,875 shares of common stock, respectively.
Mr. Stevens and Mr. Halls options vested in 20% increments
over a five-year period beginning on the first anniversary of the date of the
grant. Ms. Soto and Mr. Mercers
options vest over a nine-year period beginning on the first anniversary of the
date of the grant.
(4)
Stock options awarded to Mr. Loomis
on July 14, 2008 under the 2007 Stock Incentive Plan. Under this award, Mr. Loomis received
options to acquire 5,000 shares of common stock. The options vested in 20% increments over a
five-year period beginning on the first anniversary of the date of the grant.
The
2007 Stock Incentive Plan (an amendment and restatement of the 2001 Stock
Incentive Plan) authorizes the Board of Directors, or a committee thereof, to
grant awards of incentive stock options to officers and other key employees of
the Company. Each incentive stock option
granted permits the named executive officer to purchase a certain number of
shares of Company common stock from the Company at the exercise price, which is
the closing price of the Company common stock on the date of grant. Stock options have value only to the extent
the price of the Company common stock on the date of exercise exceeds the
exercise price. The Company believes
that grant awards serve as an effective long-term incentive for the named
executive officers and other key employees, which further encourages them to
remain with the Company and continue to excel in their performance.
Previously
awarded incentive stock options did vest in 2009. The awards granted in 2001 and 2002 had no
future compensation expense related to these options since the Bank selected
the Minimum Value Method to measure the fair value of these stock options. The Bank used the Fair Value Method of
recognizing expense for the stock options granted to Mr. Loomis in
2008. The Bank recognized $5,600 and
$2,800 of stock-based employee compensation expense for the years ended December 31,
2009 and 2008, respectively. The Bank is
recognizing the compensation expense for stock option grants with graded
vesting schedules on a straight-line basis over the requisite service period of
the award. The cost of Mr. Loomis
stock options is expected to be recognized over the vesting period of five
years.
14
Supplemental Executive Retirement Plan (SERP) Agreements with Named
Executive Officers
The
SERP Agreement with Mr. Stevens will provide annual benefits, paid out in
equal monthly installments, based on a percentage of Mr. Stevens final
annual base expected salary, upon his retirement after reaching age 65. The initial percentage base of the salary
payable is 40%. In the event Mr. Stevens
voluntarily or involuntarily resigns, he will be entitled to the vested
percentage of the benefits actually accrued under his SERP Agreement. These benefits vest by 20% of the expected
salary in the first plan year, and an additional 20% for each succeeding plan
year until Mr. Stevens becomes 100% vested. In the event of a change of control (as
defined in his SERP Agreement), Mr. Stevens will be entitled to 100% of
the benefits actually accrued. In the
event Mr. Stevens dies while benefits are still payable, his designated
beneficiary will be entitled to all payments at the same time and in the same
manner.
The
SERP Agreement with Ms. Soto is generally the same as the agreement with Mr. Stevens,
except Ms. Soto will be entitled to an annual projected benefit of 30% of
her final annual base salary, subject to annual increases of 4%, upon her
retirement after reaching age 60. In the
event Ms. Soto voluntarily or involuntarily resigns, she will be entitled
to the vested 10% of the benefits actually accrued under her agreement for the
first plan year, and an additional 10% of said amount for each succeeding plan
year. Finally, there is no provision
made for Ms. Soto in the event of a change of control.
Mr. Halls
SERP Agreement is generally the same as the agreement with Mr. Stevens,
except Mr. Hall will be entitled to an annual benefit of $36,000 for 12
years upon his retirement after reaching age 67. As a result of Mr. Halls anticipated
retirement on April 30, 2010, he will begin receiving benefits pursuant to
his SERP Agreement.
The
SERP Agreement with Mr. Mercer is generally the same as the agreement with
Mr. Stevens, except Mr. Mercer will be entitled to an annual
projected benefit of 30% of his final annual base salary, subject to annual
increases of 4%, upon his retirement after reaching age 50. In the event Mr. Mercer voluntarily or
involuntarily resigns, his benefits will not begin to vest until the sixth plan
year, after which he is entitled to the vested 10% of the benefits actually
accrued under his agreement. Also, he is
entitled to an additional 10% of said amount for each succeeding plan
year. Finally, there is no provision
made for Mr. Mercer in the event of a change of control.
The
SERP Agreement with Mr. Loomis will provide an annual benefit for 15 years
paid out in monthly installments of $9,167 upon his retirement after reaching
age 65. If Mr. Loomis is
involuntarily discharged other than for Cause (as defined in the employment
agreement) or is permanently disabled and leaves employment, he will be
entitled to a benefit equal to the portion of the retirement benefit then
accrued by the Bank for financial accounting purposes. The benefit will be paid over a 24-month
period commencing with the month following the month in which the termination
of employment occurs. In the event Mr. Loomis
dies while benefits are still payable, his designated beneficiary will be
entitled to all remaining payments at the same time and in the same
manner. If Mr. Loomis, however,
dies while still employed but before the payment of benefits is otherwise
scheduled to commence, his designated beneficiary will be entitled to the same
amount of payments, over the same period, as if Mr. Loomis had been
involuntarily discharged other than for cause.
The SERP does not provide for any enforcement benefit or for any accelerated
vesting or payment of benefits in the event of a change of control.
Employment Agreements
We
regularly evaluate the total compensation paid to our senior management to link
their compensation to our operating performance in the short- and long-term. To that end, we are analyzing implementing
bonus structures, supplemental retirement plans and equity based and other
long-term incentive programs that are consistent with those found in our
industry.
15
Effective
September 5. 2008, we entered into restated employment agreements with Ms. Soto
and Messrs. Stevens and Hall. The
primary purpose of the restated employment agreements was to conform the
provisions of the prior employment agreements to federal tax law requirements
governing the time and form of payments made under certain compensatory
arrangements. Effective December 5,
2009, however, we entered into a new employment agreement with Mr. Stevens
to reflect his new position at the Bank and at the Company. The federal tax law required that written
documentation reflecting such arrangements be in place by January 1,
2009. In addition, effective March 30,
2010, we entered into an employment agreement with Mr. Loomis. Our current employment agreements with our
senior management are described below.
Mark A. Stevens.
Effective December 3, 2009, we entered into an
employment agreement with Mark A. Stevens, which provides that he will continue
to serve as the President and Chief Executive Officer of the Company and
Executive Vice President of the Bank.
This employment agreement supersedes the restated employment agreement
between Mr. Stevens and the Bank dated September 5, 2008. Under the terms of the employment agreement, Mr. Stevens
receives an annual base salary of $170,000 per year. Pursuant to Mr. Stevens prior
employment agreement, under our 2001 Stock Incentive Plan, we granted Mr. Stevens
an incentive stock option in 2001 to purchase 24,000 (adjusted for stock-split)
shares of common stock at a purchase price of $6.67 (adjusted for stock-split)
per share. In 2002, we granted Mr. Stevens
an incentive stock option to purchase an additional 36,000 shares of common
stock at a purchase price of $8.16 (adjusted for stock-split) under the same incentive
plan. The options vested and became
exercisable in 20% increments over five years, commencing on the first
anniversary of the grant date and continued for the next four successive
anniversaries. Mr. Stevens
continues to be eligible to receive stock options pursuant to the 2007 Stock
Incentive Plan.
Mr. Stevens
employment agreement provides that his employment is at will and may be
terminated by him or the Bank or the Company at any time and for any
reason. Upon termination for any reason,
we have no further obligation, pursuant to the agreement, to Mr. Stevens,
except for the payment of any amounts earned and unpaid on the effective date
of termination and any amounts previously accrued pursuant to the SERP
discussed below.
Edward P. Loomis.
Effective March 30,
2010, we entered into an employment agreement with Edward P. Loomis, which
provides that he will continue to serve as Chief Executive Officer and
President of Atlantic Southern Bank.
Under the terms of the employment agreement, Mr. Loomis receives a
base salary that is currently set at $200,000 per year. On March 30, 2010, pursuant to his
employment agreement, Mr. Loomis was granted a restricted stock award
reflecting the right to earn up to 68,965 shares of common stock of the Company. The shares of restricted stock are scheduled
to become vested in 25% increments over four years commencing on the first
anniversary of the grant date and continuing for the next three successive
anniversaries. Vesting of the restricted
stock accelerates in the event of a change of control or Mr. Loomis
death, disability or involuntary termination.
On July 17, 2008, prior to the effective date of his employment
agreement and his appointment as President and Chief Executive Officer of the
Bank, Mr. Loomis was granted an option to purchase 5,000 shares of Company
common stock at an exercise price of $12.75 per share pursuant to the Atlantic
Southern Financial Group, Inc. 2007 Stock Incentive Plan. Mr. Loomis continues to be eligible to
receive stock options pursuant to the 2007 Stock Incentive Plan.
The
initial term of Mr. Loomis employment agreement is two years. At the end of two years, the term will
automatically extend for successive 12-month periods, and will continue until
one party gives written notice of intention not to extend the agreement. If Mr. Loomis terminates his employment
or is terminated for any reason, we have no further obligation with respect to
the employment agreement, excluding the payment of any amounts earned and
unpaid on the effective date of the termination. If Mr. Loomis becomes disabled, we will
be obligated to pay him pursuant to any short-term disability policy then in
effect, and we will be obligated to continue to pay him under the terms of the
employment
16
agreement
for six months or, if earlier, until he begins receiving benefits under any
long-term disability program.
Carol Soto.
Effective September 5, 2008, we entered
into a restated employment agreement with Carol Soto, which provides that she
will continue to serve as our Executive Vice President and Chief Financial
Officer. The restated employment
agreement supersedes the employment agreement between Ms. Soto and the
Bank dated July 10, 2003. Under the
terms of the employment agreement, Ms. Soto receives a base salary that is
currently set at $150,000 per year.
Pursuant to Ms. Sotos prior employment agreement, under our 2001
Stock Incentive Plan, we granted Ms. Soto an incentive stock option to
purchase 9,750 (adjusted for stock-split) shares of common stock at a purchase
price of $6.67 (adjusted for stock-split) per share. In 2002, we granted Ms. Soto an
incentive stock option to purchase an additional 4,875 shares of common stock
at a purchase price of $8.16 (adjusted for stock-split) under the same
incentive plan. The options granted in
2001 vested and became exercisable in 20% increments over five years,
commencing on the first anniversary of the option grant date and continuing for
the next four successive anniversaries.
The options granted in 2002 will vest and become exercisable over nine
years. Ms. Soto continues to be
eligible to receive stock options pursuant to the 2007 Stock Incentive Plan.
The
initial term of Ms. Sotos employment agreement is three years. At the end of three years, the term will
automatically extend for successive 12-month periods, and will continue until
one party gives notice of intention not to extend the agreement. We are obligated to pay Ms. Soto her
base salary for 12 months if we terminate her employment without cause, or if
she terminates her employment for cause.
If Ms. Soto becomes disabled, we may terminate the employment
agreement and will be obligated to pay Ms. Soto for three months, or until
she begins receiving payments under our long-term disability policy.
Upon
a change of control, Ms. Soto will be entitled to severance compensation
equal to 12 months of her base salary if, within six months following a change
of control, we or our successor terminates her employment other than for cause
or if she terminates for cause. Cause
for terminating employment is defined in Ms. Sotos employment
agreement. In addition, during the term
of the agreement and for 12 months following its termination under specified circumstances,
Ms. Soto is prohibited from competing with us and soliciting our customers
or employees. The noncompetition and the
nonsolicitation provisions of the agreement only apply if she terminates her
employment without cause or in connection with a change of control, or if we
terminate her employment for cause.
Gary P. Hall.
E
ffective September 5,
2008, we entered into a restated employment agreement with Gary Hall, which
provides that he will continue to serve as our Chief Credit Officer. The restated employment agreement supersedes
the employment agreement between Mr. Hall and the Bank dated December 10,
2001. Under the terms of the employment
agreement and prior to his retirement, Mr. Hall received a base salary set
at $181,542 per year. Pursuant to Mr. Halls
prior employment agreement, under our 2001 Stock Incentive Plan, we granted Mr. Hall
an incentive stock option in 2001 to purchase 12,000 (adjusted for stock-split)
shares of common stock at a purchase price of $6.67 (adjusted for stock-split)
per share. In 2002, we granted Mr. Hall
an incentive stock option to purchase an additional 4,875 shares of common
stock at a purchase price of $8.16 (adjusted for stock-split) under the same
incentive plan. The options vested and
became exercisable in 20% increments over five years, commencing on the first
anniversary of the option grant date and continued for the next four successive
anniversaries. Mr. Hall continues
to be eligible to receive stock options pursuant to the 2007 Stock Incentive
Plan.
The
initial term of Mr. Halls employment agreement was three years. At the end of three years, the term was
automatically extended for successive 12-month periods. Prior to his retirement, we were obligated to
pay Mr. Hall his base salary for 12 months if we terminated his employment
without cause, or if he terminated his employment for cause. If Mr. Hall became disabled, we could
terminate the
17
employment
agreement and would be obligated to pay Mr. Hall for three months, or
until he began receiving payments under our long-term disability policy.
Upon
a change of control, Mr. Hall was entitled to severance compensation equal
to 12 months of his base salary if, within six months following a change of
control, we or our successor terminated his employment other than for cause or
if he terminated for cause. Cause for
terminating employment is defined in Mr. Halls employment agreement. In addition, during the term of the agreement
and for 12 months following its termination under specified circumstances, Mr. Hall
is prohibited from competing with us and soliciting our customers or
employees. The noncompetition and the
nonsolicitation provisions of the agreement only apply if he terminated his
employment without cause or in connection with a change of control, or if we
terminated his employment for cause.
Upon
Mr. Halls retirement on April 30, 2010, he will serve as a
consultant to the Bank, providing assistance in managing and liquidating
foreclosed properties held by the Bank.
Brandon L. Mercer.
Although we have not entered into an employment
agreement with Mr. Mercer, we are currently paying him a base salary of
$156,000. Under our 2001 Stock Incentive
Plan, in January 2002 we granted Mr. Mercer an incentive stock option
to purchase 7,500 (adjusted for stock-split) shares of common stock at a
purchase price of $6.67 (adjusted for stock-split) per share. In December 2002, we granted Mr. Mercer
an incentive stock option to purchase an additional 3,750 shares of common
stock at a purchase price of $8.16 (adjusted for stock-split) under the same
incentive plan. The options granted in January 2002
vested and became exercisable in 20% increments over five years, commencing on
the first anniversary of the option grant date and continued for the next four
successive anniversaries. The options
granted in December 2002 will vest and become exercisable over nine
years. Mr. Mercer continues to be
eligible to receive stock options pursuant to the 2007 Stock Incentive Plan.
On
January 1, 2005, as a retention incentive, we entered into an executive
bonus agreement with Mr. Mercer.
This agreement was amended on December 29, 2008, to conform the
provisions of the prior agreement to federal tax law requirements governing the
time and form of payments made under certain compensatory arrangements. Pursuant to the agreement, upon his
completion of five consecutive years of participation, we are required to
provide Mr. Mercer with a $250,000 bonus, in a lump sum, payable within 30
days following the completion of the fifth year of participation. Pursuant to the agreement, the Company paid
the retention bonus to Mr. Mercer on January 21, 2010. During 2009 we accrued $50,000 for the
executive bonus.
Potential Payments upon
Termination or Change of control
As
described above, the Company has entered into separate employment agreements
with Ms. Soto and Messrs. Stevens, Loomis and Hall, an executive
bonus agreement with Mr. Mercer, and SERP Agreements with Ms. Soto and
Messrs. Stevens, Hall, Loomis and Mercer.
The employment agreements for Messrs. Stevens and Loomis do not
provide benefits in the event of termination or change of control. Accordingly, excluding any amounts earned and
unpaid as of the effective date of termination or change of control, we will
have no further obligation, with respect to the employment agreement, upon the
executives separation of service as a result of termination or change of
control. Further, we have no obligation
to Mr. Loomis under his SERP agreement in the event of his termination or
change of control. The employment
agreements for the executives provide each with benefits in the event of
certain terminations of employment.
Summaries of these agreements are provided above and the required
payments upon termination or change of control for each executive are as
follows:
18
Termination for Cause; Resignation Without Good Reason; Resignation
Absent Companys Breach of Employment Agreement.
If Ms. Soto or Mr. Hall is
terminated for Cause or resigns without good reason and absent our breach of
the employment agreement, such executive will receive only the salary and
benefits that are accrued through the date of termination.
Termination Due to Death or Disability.
If Ms. Soto or Messrs. Stevens,
Loomis, or Hall dies, the executive (or his/her estate) will receive the
accrued salary and benefits through the date of termination. If we terminate the executives employment
due to disability, the Company will continue to pay the executives salary
until the executive begins receiving payments under the Banks long-term
disability policy or a term specified in each executives respective employment
agreement.
Absent a Change of control: Termination without Cause; Resignation for
Good Reason; Companys Breach of Employment Agreement.
If, absent a change of control, Ms. Soto
or Mr. Hall is terminated without cause, resigns for good reason, or
resigns due to our breach of employment agreement, the executive will receive a
severance payment of one times the annual base salary, in addition to accrued
salary and benefits. Severance payments
generally are paid in cash in a lump sum.
Termination Following a Change of control.
If, within six months following a change of
control, Ms. Soto or Mr. Hall is terminated without cause, resigns by
reason of an involuntary termination (as defined in the agreement), or resigns
due to our (or our successors) breach of his/her employment agreement, the
executive will be entitled to:
·
accrued salary and benefits; and
·
severance
payment equal to one times the annual base salary.
Finally, the employment agreements prohibit
the executives, excluding Messrs. Stevens and Loomis, from competing with
the Company or soliciting customers or employees for a period of 12 months
following termination of employment.
19
PROPOSAL II -
APPROVAL TO INCREASE AUTHORIZED NUMBER OF SHARES
General
Our Articles of
Incorporation currently authorize the issuance of up to 10 million shares of
common stock, no par value. As of the
record date, 4,211,780 shares were issued and outstanding,
381,000
shares of common stock were subject to currently
outstanding warrants and stock options or were reserved in connection with
future options or awards under the 2007 Atlantic Southern Financial Group, Inc.
Stock Incentive Plan. After giving
effect to such reserved shares, approximately 5,407,240 shares of common stock
were available for issuance on the record date.
Our Board of Directors is
proposing an amendment to our Articles of Incorporation to increase the number
of authorized shares of common stock of the Company from 10 million to 110
million. If the shareholders approve
this proposal, Section (a) of Article 2 of the Companys
Articles of Incorporation will be amended to read as follows:
(a) The total number
of shares of capital stock which the Corporation is authorized to issue is one
hundred twelve million (112,000,000) shares, divided into one hundred ten
million (110,000,000) shares of common stock, no par value (the Common Stock),
and two million (2,000,000) shares of preferred stock, no par value (the Preferred
Stock).
At this time, approximately
42% of our authorized shares of common stock are outstanding. Assuming shareholder approval of the
amendment, approximately 4% of our authorized shares of common stock will be
outstanding.
Purpose and
Effect of the Proposed Amendment
Our Board of Directors
believes that an increase in the number of shares of authorized common stock as
contemplated by the amendment is in the best short- and long-term interests of
the Company and our shareholders. The
Board believes that the current number of authorized shares does not give the
Company flexibility to issue common stock to raise capital or for general
corporate purposes to the degree that the Company had previously. In particular, if the Board determines that
it would be appropriate to conduct a common stock offering to raise capital
pursuant to the Order, or declare a dividend or split, the current number of
unissued authorized shares might not be enough to complete such
transaction. Although we cannot
guarantee that any future common stock offerings, dividends or splits will occur,
the Board believes that the proposed increase in the number of authorized
shares will provide the Company with the flexibility necessary to issue shares
in connection with a common stock offering or other corporate purpose, without
incurring the expense of convening a special shareholders meeting or the delay
of waiting until the next annual meeting.
If this proposal is
approved, all authorized but unissued shares of common stock will be available
for issuance from time to time for any proper purpose approved by the Board,
including issuances to raise capital.
Neither the Company nor the Board currently has any arrangements,
agreements or understandings with respect to the issuance or use of the
additional shares of authorized common stock sought to be approved. If this proposal is approved, all or any of
the shares may be issued without further shareholder action, unless required by
law or the rules of the NASDAQ Global Market exchange.
The newly authorized shares
of common stock will, upon issuance, have all of the rights and privileges of
common stock presently authorized.
Existing shareholders do not have preemptive or similar rights to
subscribe for or purchase any additional shares of common stock that we may
issue in the future. Therefore, future
issuances of common stock, other than issuances on a pro rata basis to all
shareholders, would reduce each shareholders proportionate interest in the
Company.
20
An increase in the
authorized number of shares of common stock could have an anti-takeover
effect. If we issue additional shares in
the future, such an issuance could dilute the voting power of a person seeking
control of the Company, thereby making an attempt to acquire control of the
Company more difficult or expensive.
Neither the Board nor management is currently aware of any attempt, or
contemplated attempt, to acquire control of the Company; in addition, we are
not presenting this proposal with the intent that it be used as an anti-takeover
device.
Vote
Required for Approval
The approval of the
amendment to the Articles of Incorporation to increase the number of authorized
shares requires the affirmative vote of the holders of a majority of the shares
of common stock issued and outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR
THE APPROVAL OF THE AMENDMENT TO INCREASE THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.
21
PROPOSAL III - RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected, and the Board has approved, Porter
Keadle Moore, LLP, an independent registered public accounting firm, to serve
as the independent registered public accounting firm for the Company for the
year ending December 31, 2010, subject to ratification by the
shareholders. Porter Keadle Moore also
served as the independent auditors for the Company for the year ended December 31,
2009. Although shareholder ratification
of our independent auditors is not required by our Bylaws or otherwise, we are
submitting the selection of Porter Keadle Moore to shareholders for
ratification to permit shareholders to participate in this important corporate
decision. If Porter Keadle Moore
declines to act or otherwise becomes incapable of acting, or if appointment is
otherwise discontinued, the Audit Committee will appoint another independent
registered public accounting firm. A
representative of Porter Keadle Moore is expected to be present at the Annual
Meeting and will be given an opportunity to make a statement on behalf of the
firm or to respond to appropriate questions from shareholders.
Vote
Required for Approval
The appointment of Porter Keadle Moore as independent auditors of the
Company for the fiscal year ending December 31, 2010, requires the
approval by the affirmative vote of a majority of the shareholders present in
person or by proxy and entitled to vote at the meeting.
THE BOARD UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS
VOTE FOR THE APPOINTMENT OF
PORTER
KEADLE MOORE, LLP
AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2010.
22
PROPOSAL IV - TO APPROVE GRANTING MANAGEMENT THE AUTHORITY TO
ADJOURN, POSTPONE OR CONTINUE THE ANNUAL MEETING
The
Board of Directors believes that if the number of shares of common stock
present or represented at the meeting and voting in favor of one or more of the
proposals presented is insufficient to approve such proposal(s), it is in the
best interests of the shareholders to enable our proxy solicitor and Board of
Directors to continue to seek to obtain a sufficient number of additional votes
to approve the applicable proposal. As a
result, if at the annual meeting the number of shares of common stock of the
Company present or represented and voting in favor of a proposal is
insufficient to approve them, the Companys management may move to adjourn,
postpone or continue the meeting for up to 30 days in order to enable our proxy
solicitor and Board of Directors to continue to solicit additional proxies in
favor of the proposal(s). In that event,
you will be asked to vote only upon this proposal and not on the proposal(s) for
which the meeting is adjourned.
If
the Companys shareholders approve this proposal, management could adjourn,
postpone or continue the meeting and any adjourned session of the meeting and
use the additional time to solicit additional proxies in favor of other
proposals, including the solicitation of proxies from shareholders that have
previously voted against such proposal(s).
Among other things, approval of this proposal could mean that even if
proxies representing a sufficient number of votes against a proposal have been
received, management could adjourn, postpone or continue the meeting for up to
30 days without a vote on that proposal or seek to convince the holders of
those shares to change their votes to votes in favor of the approval of such
proposal(s).
Vote
Required for Approval
The
granting management the authority to adjourn, postpone or continue the annual
meeting of shareholders requires the approval by the affirmative vote of a
majority of the shareholders present in person or by proxy and entitled to vote
at the meeting.
No proxy that
is specifically marked AGAINST a proposal will be voted in favor of this
proposal unless the proxy is specifically marked FOR this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR GRANTING MANAGEMENT THE AUTHORITY TO ADJOURN,
POSTPONE OR CONTINUE THE ANNUAL MEETING OF SHAREHOLDERS.
23
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The following table lists
the number and percentage ownership of shares of common stock beneficially
owned as of December 31, 2009 by each of our directors, each executive
officer named in the summary compensation table presented elsewhere in this
proxy statement, all directors and executive officers as a group, and each
person or entity that beneficially owns 5% or more of our outstanding common
stock. Unless otherwise indicated, the
address for each person included in the table is 1701 Bass Road, Macon, Georgia
31210.
Information
relating to beneficial ownership of our common stock is based upon beneficial
ownership concepts described in the rules issued under the Securities
Exchange Act of 1934, as amended. Under
these rules a person is deemed to be a beneficial owner of a security if
that person has or shares voting power, which includes the power to vote or
to direct the voting of the security, or investment power, which includes the
power to dispose or to direct the disposition of the security. A person is also deemed to be a beneficial
owner of any security as to which that person has the right to acquire
beneficial ownership within 60 days from December 31, 2009. Unless otherwise indicated under Amount and
Nature of Beneficial Ownership, each person is the record owner of and has
sole voting and investment power with respect to his or her shares.
Name
of Beneficial Owner
|
|
Amount and
Nature of
Beneficial
Ownership
|
|
Percent of
Shares
Beneficially
Owned(1)
|
|
Warrants and
Options
Outstanding
|
|
Percent of
Shares
Beneficially
Owned
(Fully Diluted) (2)
|
|
Directors:
|
|
|
|
|
|
|
|
|
|
Raymond O. Ballard, Jr. (6)
|
|
42,195
|
|
1.00
|
%
|
22,500
|
|
1.41
|
%
|
Peter R. Cates
|
|
25,500
|
|
*
|
|
22,500
|
|
1.04
|
%
|
Carolyn Crayton
|
|
4,362
|
|
*
|
|
3,750
|
|
*
|
|
J. Douglas Dunwody
|
|
31,303
|
|
*
|
|
18,000
|
|
1.07
|
%
|
William A. Fickling, III
|
|
229,046
|
|
5.44
|
%
|
|
|
4.98
|
%
|
Michael C. Griffin (7)
|
|
23,289
|
|
*
|
|
|
|
*
|
|
Carl E. Hofstadter
|
|
69,055
|
|
1.64
|
%
|
45,000
|
|
2.48
|
%
|
Dr. Laudis (Rick) H. Lanford
|
|
25,000
|
|
*
|
|
8,250
|
|
*
|
|
J. Russell Lipford, Jr. (8)
|
|
52,008
|
(3)
|
1.23
|
%
|
22,500
|
|
1.62
|
%
|
Thomas J. McMichael
|
|
4,250
|
|
*
|
|
1,500
|
|
*
|
|
Donald L. Moore, Jr.
|
|
10,000
|
|
*
|
|
|
|
*
|
|
Tyler J. Rauls, Jr.
|
|
96,649
|
(4)
|
2.29
|
%
|
45,000
|
|
3.08
|
%
|
Dr. Hugh F. Smisson, III
|
|
140,587
|
|
3.34
|
%
|
45,000
|
|
4.04
|
%
|
Mark A. Stevens
|
|
19,000
|
|
*
|
|
75,000
|
|
2.04
|
%
|
George Waters
|
|
23,360
|
|
*
|
|
15,000
|
|
*
|
|
Executive Officers
(Non-Directors):
|
|
|
|
|
|
|
|
|
|
Gary P. Hall
|
|
2,500
|
|
*
|
|
16,875
|
|
*
|
|
Carol W. Soto
|
|
13,387
|
(5)
|
*
|
|
14,625
|
|
*
|
|
Brandon L. Mercer
|
|
1,835
|
|
*
|
|
11,250
|
|
*
|
|
Edward P. Loomis
|
|
7,000
|
|
*
|
|
5,000
|
|
*
|
|
All Directors and Executive
Officers as a Group (19 Persons)
|
|
820,326
|
|
19.48
|
%
|
371,750
|
|
25.92
|
%
|
*
|
Less
than 1%.
|
(1)
|
The
percentage of our common stock beneficially owned was calculated based on
4,211,780 shares of common stock issued and outstanding as of
December 31, 2009.
|
(2)
|
The
percentage of our common stock beneficially owned was calculated based on 4,598,780, which includes 4,211,780
shares of common stock issued and outstanding as of
December 31, 2009, 123,000
shares of common stock, post stock-split, subject to outstanding employee
stock options, and 264,000 shares of common stock, post stock-split, subject
to organizers warrants.
|
(3)
|
J.
Russell Lipford, Jr.: 22,000 shares are pledged.
|
(4)
|
Tyler
J. Rauls, Jr.: 96,649 shares are pledged.
|
(5)
|
Carol
W. Soto: 2,500 shares are pledged.
|
(6)
|
Mr. Ballard
resigned from the Board of Directors of the Company and the Bank effective
April 14, 2010.
|
(7)
|
Mr. Griffin
resigned from the Board of Directors of the Company and the Bank effective February 17,
2010.
|
(8)
|
Mr. Lipford resigned from the Board of
Directors of the Company and the Bank effective April 14, 2010.
|
24
SECTION 16(a) BENEFICIAL
OWNERSHIP
REPORTING COMPLIANCE
Section 16 of the Securities
and Exchange Act of 1934 requires Atlantic Southerns executive officers,
Directors and greater than 10% shareholders (Reporting Persons) to file
certain reports (Section 16 Reports) with respect to their beneficial
ownership of Atlantic Southerns securities.
Based on the Companys review of the Section 16 Reports furnished
to us by our Reporting Persons, all of our Directors and executive officers
complied with all Section 16(a) reporting requirements.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Some of our directors, officers, principal shareholders
and their associates were customers of or had transactions with the Company or
the Bank in the ordinary course of business during 2009. Some of our directors are directors,
officers, trustees or principal securities holders of corporations or other
organizations that were also customers of or had transactions with the Company
or its subsidiaries in the ordinary course of business during 2008.
All outstanding loans and other transactions with our
directors, officers and principal shareholders were made in the ordinary course
of business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and, when made, did not involve more than the normal risk of
collectability or present other unfavorable features. In addition to banking and financial
transactions, the Company and the Bank may have had additional transactions
with or used products or services of various organizations with which directors
of the Company and its subsidiaries were associated. The amounts involved in these non-credit
transactions have not been material in relation to the business of the Company,
the Bank or such other organizations. We
expect that the Company and the Bank will continue to have similar transactions
in the ordinary course of business with such individuals and their associates
in the future.
During
the third and fourth quarter of 2008, the Bank issued an aggregate of
$1,400,000 in fixed rate subordinated debentures, which will mature on September 30,
2018 (the Notes), to several directors and private accredited investors. Interest on the debentures is fixed at 12%
per annum. The interest will be payable
semiannually in arrears on June 30 and December 31 of each year. The Bank may redeem all or some of the Notes
at any time beginning on September 30, 2013 at a price equal to 100% of
the principal amount of such Notes redeemed plus accrued, but unpaid, interest
to the redemption date. Payment of the
principal on the Notes may be accelerated by holders of the Notes only in the
case of the Banks insolvency or liquidation.
There is no right of acceleration in the case of default in payment of
principal or interest on the Notes. The
terms of the Notes are no less favorable to directors than unrelated holders of
the Notes.
Related Party Transaction Approval Policies and Procedures
We
recognize that related party transactions can present potential or actual
conflicts of interest and create the appearance that the Companys decisions
are based on considerations other than our best interests and our
shareholders. Therefore, our Board of
Directors adopted a formal, written policy with respect to related party
transactions in March 2007.
For
the purpose of the policy, a related party transaction is a transaction in
which we participate and in which any related party has a direct or indirect
material interest, other than (1) transactions available to all employees
or customers generally, (2) transactions involving less than $120,000 when
aggregated with all similar transactions, or (3) loans made by Atlantic
Southern Bank in the ordinary course of business, on substantially the same
terms, including interest rates and collateral, as those
25
prevailing
at the time for comparable loans with persons not related to the lender, and
not involving more than the normal risk of collectibility or presenting other
unfavorable features.
Under
the policy, any related party transaction must be reported to the
Nominating/Governance Committee and may be consummated or may continue only (i) if
the Nominating/Governance Committee approves or ratifies such transaction and
if the transaction is on terms comparable to those that could be obtained in
arms-length dealings with an unrelated third party, (ii) if the
transaction involves compensation that has been approved by our Compensation
Committee, or (iii) if the transaction has been approved by the
disinterested members of the Board of Directors. The Nominating/Governance Committee may
approve or ratify the related party transaction only if the Committee
determines that, under all of the circumstances, the transaction is in the best
interests of the Company.
INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS
The Company selected the accounting firm of Porter Keadle Moore, LLP as
its independent accountants for the fiscal year ending December 31,
2009. Thigpen, Jones, Seaton &
Co., P.C. rendered consulting and other non-audit services to the Company
throughout 2008 and 2009, and management anticipates such services will
continue in the future.
A representative of Porter Keadle Moore, LLP
is expected to be present at the meeting and will be given the opportunity to
make a statement if he or she desires to do so, and will be available to
respond to appropriate questions from shareholders.
The following table sets
forth the fees billed to the Company for the years ended December 31, 2008
and 2009, by Porter Keadle Moore.
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
Audit
Fees
|
|
$
|
155,000
|
|
$
|
154,400
|
|
Audit-Related
Fees
|
|
6,000
|
|
25,000
|
|
Tax
Fees
|
|
13,000
|
|
20,400
|
|
All
Other Fees
|
|
N/A
|
|
N/A
|
|
Total
Fees
|
|
$
|
174,000
|
|
$
|
199,800
|
|
Audit Fees
Audit fees represent fees and expenses billed
by Porter Keadle Moore in connection with the audit of the Companys annual
consolidated financial statements, and the review of the Companys Quarterly
Reports on Form 10-Q and Annual Reports on Form 10-K for 2008 and
2009.
Audit Related Fees
For 2009, these services are comprised of
fees for professional services rendered in review of various SEC requested
correspondence. For 2008, the audit
related fees represent fees for professional services rendered in the review of
the Atlantic Southern Financial Group, Inc. 2007 Stock Incentive Plan
registration statement and the Private Placement Memorandum for the Offering of
Fixed Rate Subordinated Debentures
Tax Fees
Tax
fees represent the aggregate fees billed
for professional services rendered by the principal accountant for tax
compliance, tax advice and tax planning during 2009 and 2008.
26
The
fees billed by Porter Keadle Moore were pre-approved by the Audit Committee for
the Company in accordance with the policies and procedures of the Audit
Committee. The Audit Committee
pre-approves all audit and the majority of non-audit services provided by the
independent auditors and may not engage the independent auditors to perform any
prohibited non-audit services. For 2009,
100% of the fees incurred were pre-approved.
DIRECTOR NOMINATIONS
Director Nominations.
The Nominating/Governance
Committee of the Board participates in the consideration of director
nominees. The Committee has not adopted
a formal process for identifying or evaluating nominees, but informally
solicits and considers recommendations from a variety of sources, including
other directors, members of the community, customers of the Bank, shareholders
of the Company, and professionals in the financial services and other
industries. Similarly, the Committee
does not prescribe any specific qualifications or skills that a nominee must
possess, although it considers the potential nominees business experience;
knowledge of the Company, the Bank, and the financial services industry;
experience in serving as a director of the Company or the Bank or another
financial institution or public company generally; wisdom, integrity and
analytical ability; familiarity with and participation in the communities
served by the Bank; commitment to and availability for service as a director;
and any other factors the Committee deems relevant.
In
accordance with the Companys bylaws, a shareholder may nominate persons for
election as directors if written notice of the nomination is received by the
Secretary of the Company at the principal executive offices of Atlantic
Southern no less than 30 days prior to the date of the annual meeting;
provided, however, if less than 40 days notice or prior public disclosure of
the meeting date is given, the notice must be received no later than the close
of business on the tenth day following the date on which the notice was mailed
or such public disclosure was made. The
notice must set forth:
(1)
with respect to
the nominee(s), all information regarding the nominee(s) required to be
disclosed in a solicitation of proxies for election of directors pursuant to
Regulation 14A under the Securities and Exchange Act of 1934 (including each
nominees written consent to be named in a proxy statement as a nominee and to
serve as a director if elected);
(2)
the name and
address of the shareholder making the nomination, as they appear on the books
of the Company;
(3)
the class and
number of shares of Company capital stock beneficially owned by the shareholder
making the nomination; and
(4)
the total
number of shares of the Company that will be voted for the proposed nominee.
The
officer presiding at meeting may, if the facts warrant, determine and declare
to the meeting that a nomination was not made in accordance with the foregoing
requirements and therefore will be disregarded.
Although the Nominating/Governance Committee does
not have a policy with regard to the consideration of diversity in identifying
director nominees, the committee does consider geographic diversity and
diversity in business experience in identifying director nominees. Atlantic Southern Bank provides full
commercial banking services to customers throughout Bibb, Houston, Crawford,
Peach, Effingham, McIntosh, Lowndes, Glynn and Chatham Counties in Georgia and
Duval County, Florida. As a result, the
committee considers director nominees from these market areas who exemplify
prudent
27
business acumen and knowledge of their local area. The Board of Directors consists of both male
and female members. The current
directors come from a variety of backgrounds and occupations ranging from
physicians and attorneys to leaders in the real estate and insurance industries. The Board of Directors welcomes the different
and valid viewpoints each director has to offer to the operation of Atlantic
Southern Financial Group, Inc. and Atlantic Southern Bank.
SHAREHOLDER PROPOSALS
Shareholder proposals submitted for consideration at
the next annual meeting of shareholders must be received by the Company no
later than December 1, 2010, to be included in the 2011 proxy
materials. A shareholder must notify the
Company before February 1, 2011 if the shareholder has a proposal to
present at the 2011 annual meeting which the shareholder intends to present
other than by inclusion in the proxy material.
If the Company does not receive notice prior to February 1, 2011,
proxies solicited by the management of the Company will confer discretionary
authority upon the management of the Company to vote upon any such proposal.
OTHER MATTERS
The Board of Directors of the Company knows
of no other matters that may be brought before the meeting. If, however, any matters other than the election
of directors and matters to related to the election should properly come before
the meeting, votes will be cast pursuant to the proxies in accordance with the
best judgment of the proxyholders.
Whether
or not you can attend the meeting, please complete, sign, date and return the
enclosed proxy promptly. An envelope has
been provided for that purpose. No
postage is required if mailed in the United States.
ADDITIONAL INFORMATION
The
Company changed its name from NSB Holdings, Inc. to Atlantic Southern
Financial Group, Inc. in November 2005. We currently file periodic reports with the
SEC; however, prior to 2005,
the Bank filed periodic reports with the
Federal Deposit Insurance Corporation (FDIC) pursuant to the requirements of
the Securities Exchange Act of 1934, as amended. The Company will be pleased to make its
Annual Report on Form 10-K for the year ended December 31, 2009
available without charge to interested persons.
Written requests should be directed to Carol Soto, Chief Financial
Officer, Atlantic Southern Bank, 1701 Bass Road, Macon, Georgia 31210.
28
REVOCABLE PROXY
Atlantic Southern Financial Group, Inc.
ANNUAL MEETING OF SHAREHOLDERS
June 8, 2010
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
shareholder of record hereby appoints Mark A. Stevens and Carol W. Soto, and
either of them, with full power of substitution, as Proxies for the
shareholder, to attend the Annual Meeting of the Shareholders of Atlantic
Southern Financial Group, Inc. (the Company), to be held at the Marriott
Macon City Center, 240 Coliseum Drive, Macon, Georgia on Tuesday, June 8,
2010, and any adjournments thereof, and to vote all shares of the common stock
of the Company that the shareholder is entitled to vote upon each of the
matters referred to in this Proxy and, at their discretion, upon such other
matters as may properly come before this meeting.
This
Proxy, when properly executed, will be voted in the manner directed herein by
the shareholder of record. If no
direction is made, this Proxy will be voted FOR all Proposals.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA THE
INTERNET OR BY TELEPHONE.
(Continued, and to be marked, dated and signed, on the other side)
FOLD AND DETACH HERE
ATLANTIC SOUTHERN FINANCIAL
GROUP, INC. ANNUAL MEETING, JUNE 8,
2010
YOUR VOTE IS IMPORTANT!
Annual Meeting Materials are available on-line at:
http://www.cfpproxy.com/5797
You can vote in one of three ways:
1.
Call
toll free 1-888-216-1364
on a Touch-Tone Phone. There is
NO CHARGE
to
you for this call.
or
2.
Via the
Internet at https://www.proxyvotenow.com/asfn and follow the instructions.
or
3.
Mark, sign and
date your proxy card and return it promptly in the enclosed envelope.
PLEASE SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
x
PLEASE
MARK VOTES AS IN THIS EXAMPLE
|
|
REVOCABLE PROXY
Atlantic Southern Financial
Group, Inc.
|
|
Annual Meeting of Shareholders
JUNE 8, 2010
|
|
For
|
Withhold
|
For All
Except
|
Proposal
I:
To elect the following
persons to serve as directors for a three-year term until the 2013 annual
meeting:
|
o
|
o
|
o
|
(01) Tyler
J. Rauls, Jr.
|
|
|
|
(02) Mark
A. Stevens
|
|
|
|
INSTRUCTION: To withhold authority to vote for any
nominee(s), mark For All Except and write the nominee(s) name(s) or
number(s) in the space provided below.
|
|
|
For
|
Against
|
Abstain
|
Proposal II:
To amend the Articles of
Incorporation of the Company to increase the number of authorized shares of
common stock from 10 million to 110 million.
|
o
|
o
|
o
|
|
|
|
|
|
For
|
Against
|
Abstain
|
Proposal III:
To ratify the appointment
of Porter Keadle Moore, LLP as independent auditors for the Company for the
fiscal year ending December 31, 2010.
|
o
|
o
|
o
|
|
|
|
|
|
For
|
Against
|
Abstain
|
Proposal IV:
To authorize management of
the Company to adjourn the annual meeting of shareholders to another time and
date if such action is necessary to solicit additional proxies or attendance
at the annual meeting of shareholders.
|
o
|
o
|
o
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
EACH PROPOSAL.
Mark
here if you plan to attend the meeting
|
|
o
|
|
|
|
Mark
here for address change and note change
|
|
o
|
Note: Please sign exactly as
your name appears on this Proxy. If
signing for estates, trusts, corporations or partnerships, title or capacity
should be stated. If shares are held
jointly, each holder should sign.
Please
be sure to date and sign this proxy card in the box below.
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sign
above
|
|
|
|
IF YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR
INTERNET, PLEASE READ THE INSTRUCTIONS BELOW
FOLD AND DETACH HERE IF YOU ARE VOTING BY MAIL
PROXY VOTING INSTRUCTIONS
Shareholders
of record have three ways to vote:
1. By Mail; or
2. By Telephone (using a Touch-Tone
Phone); or
3. By Internet.
A
telephone or Internet vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed, dated and returned this proxy. Please note telephone and Internet votes must
be cast prior to 3:00 a.m. June 8, 2010. It is not necessary to return this proxy if
you vote by telephone or Internet.
Vote by Telephone
Call Toll-Free on a Touch-Tone Phone anytime prior
to
3:00 a.m. June 8, 2010
1-888-216-1364
|
|
Vote by Internet
anytime prior
to
3:00 a.m. June 8, 2010
https://www.proxyvotenow.com/asfn
|
Please note that the last vote received, whether by telephone, Internet
or by mail, will be the vote counted.
ON-LINE ANNUAL MEETING MATERIALS:
http://www.cfpproxy.com/5797
Your vote is important!
Atlantic Southern Financial Grp., Inc. (MM) (NASDAQ:ASFN)
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