Colony Bankcorp (CBAN) DEF 14ADefinitive proxy

This proxy statement is being furnished to the shareholders of Colony Bankcorp, Inc. in connection with the solicitation of proxies by its Board of Directors (the “Board”) to be voted at the 2024 Annual Meeting of Shareholders and at any adjournments thereof (the “Annual Meeting”) for the purposes set forth in this proxy statement and the accompanying notice of the meeting. The Annual Meeting will be held on Thursday, May 16, 2024, at Colony Bankcorp, Inc.’s Corporate Office at 115 South Grant Street, Fitzgerald, Georgia 31750, at 11:00 a.m. local time.

As used in this proxy statement, the terms “Colony Bankcorp,” “Company,” “Colony,” “we,” “our” and “us” all refer to Colony Bankcorp, Inc. and its wholly-owned banking subsidiary, Colony Bank, except where the context requires otherwise.

The securities which can be voted at the Annual Meeting consist of the Company’s common stock, $1.00 par value per share (“Company common stock”), with each share entitling its owner to one vote on each matter submitted to the shareholders. The record date for determining the holders of Company common stock who are entitled to notice of and to vote at the Annual Meeting is March 22, 2024. Holders of shares of our common stock at the close of business on the record date are entitled to attend the Annual Meeting and vote on the proposals brought forth during the Annual Meeting or any postponements or adjournments thereof. On the record date, 17,558,611 shares of Company common stock were outstanding and eligible to be voted.

The presence, in person or by proxy, of a majority of the outstanding shares of Company common stock is necessary to constitute a quorum at the Annual Meeting. In determining whether a quorum exists at the Annual Meeting for purposes of all matters to be voted on, all votes “for” or “against” as well as all broker non-votes and abstentions (including votes to withhold authority to vote) will be counted.

In voting on the proposal to approve the ratification of the Company’s independent registered public accounting firm ( Proposal No. 3), you may vote for or against the proposal or abstain. The proposal will be deemed approved if a majority of the votes cast at the Annual Meeting are voted for Proposal No. 3, excluding abstentions and votes withheld, which will not be counted and will have no effect.

As of March 22, 2024, our directors and executive officers held 1,156,646 shares of Company common stock, or approximately 6.59% of all outstanding common stock, and we believe that all of those shares will be voted in favor of all proposals.

In the event there are not sufficient votes for a quorum or to approve or ratify any proposal at the time of the Annual Meeting, the Annual Meeting may be adjourned or postponed to permit the further solicitation of proxies.

If you hold your shares in your own name, you may vote by proxy or in person at the Annual Meeting. To vote your shares, you may select one of the following options:

All expenses incurred in connection with the solicitation of proxies will be paid by the Company. Solicitation may take place by mail, telephone, telegram, or personal contact by our directors, officers, and employees of the Company without additional compensation. The Annual Report of the Company for the year 2023, which includes the Audited Consolidated Financial Statements and accompanying Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, accompanies this proxy statement.

Many of our shareholders hold their shares through a bank, broker, or other nominee rather than directly in their own name. If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, commonly referred to as “street name,” you should have received our proxy materials from that organization rather than from us. As a beneficial owner, you have the right to direct your broker, bank or other agent on how to vote the shares in your account. You should follow the instructions provided by your broker, bank or other agent regarding how to vote your shares. As the beneficial owner of shares held in street name, you are also invited to attend the Annual Meeting. However, since your bank, broker, or other nominee, and not you, is the shareholder of record, you may not vote shares held in street name in person at the Annual Meeting unless you obtain a signed “legal proxy” from your bank, broker, or other nominee giving you the right to vote the shares. Your bank, broker, or other nominee has enclosed or provided with this proxy statement a voting instruction card for you to use to direct your bank, broker, or other nominee how to vote your shares.

If your shares are held by your broker, bank or other agent as your nominee, you must follow the instructions provided by your broker, bank or other agent as your nominee if you wish to change or revoke your vote.

The Board has appointed T. Heath Fountain and Mark H. Massee as your proxies, each with power of substitution, at the Annual Meeting. We are not aware of any other matters to be considered at the Annual Meeting. However, if any other matters come before the Annual Meeting, Mr. Fountain and Mr. Massee will vote your proxy on such matters in accordance with their judgment .

All proxy cards delivered pursuant to this solicitation are revocable at any time before the Annual Meeting by giving written notice to our Secretary, Edward L. Bagwell, at 115 South Grant Street, Fitzgerald, Georgia 31750, by delivering a later dated proxy card, by voting in person at the Annual Meeting, or by voting again by telephone or on the Internet prior to 11:59 P.M., Eastern Time, on May 15, 2024. Please note that attending the Annual Meeting in person will not automatically change or revoke your proxy unless you vote again in person at the Annual Meeting.

The Company will publish the voting results in a Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission (“SEC”) within four business days following the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results .

If you attend the Annual Meeting and desire to vote your shares at the meeting, you must bring photo identification. If you hold your shares through a bank, broker or other agent, you must also bring proof of your ownership of your shares, such as the voting instruction form or an account statement from your broker, bank or other agent. Without proof of ownership, you may not be allowed to vote at the meeting. The use of cameras, sound recording equipment, communications devices or any similar equipment during the Annual Meeting is prohibited without express written consent of the Company.

The Board of Directors is asking for your proxy, and we will pay all of the costs of soliciting shareholder proxies. In addition to the solicitation of proxies via mail, our officers, directors and employees may solicit proxies personally or by other means of communication, without being paid additional compensation for such services. The Company will reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding the proxy materials to beneficial owners of common stock.

The Company is a Georgia business corporation that began operating as Colony Bank in 1975. The Company was organized for the purpose of operating as a bank-holding company in 1982 under the Federal Bank Holding Company Act of 1956, as amended, and the bank holding company laws of Georgia. From 1984 through 2008, the Company engaged in a series of mergers and acquisitions that resulted in the Company’s ownership of seven banking subsidiaries and one non-bank subsidiary. In 2008, the Company affected a merger (the “Merger”) of its subsidiary banks into one surviving bank, Colony Bank of Fitzgerald, which it renamed Colony Bank (the “Bank”).

Responsibility for management of the Bank remains with the Bank’s Board of Directors and officers. Services rendered by the Company are intended to assist bank management and to expand the scope of available banking services.

Colony Bankcorp, Inc.’s common stock is quoted on the NASDAQ Global Market under the symbol “CBAN.”

Our Board of Directors consists of ten members, eight of whom are non-employee directors. The Company’s Amended and Restated Bylaws provide that the Board of Directors shall consist of not less than three nor more than 25 persons, with the exact number to be fixed and determined from time to time by resolution of the Board of Directors, or by resolution of the shareholders at any annual or special meeting of shareholders. Our Board of Directors also serves as the Board of Directors of the Bank.

The Board of Directors has voted that the Board consist of eight members for the Company’s 2024 fiscal year.

The Nominating Committee, consisting of independent directors Edward P. Loomis, Jr., Meagan M. Mowry, Matthew D. Reed and Harold Wyatt, III, recommended to the full Board a slate of directors for consideration in the shareholders proxy for the Annual Meeting. The Board of Directors, based on the Nominating Committee recommendations, has nominated the following persons for submission to the shareholders for election for a one-year term expiring at the 2025 annual meeting:

Each of the nominees has consented to serve if elected. If any nominee should be unavailable to serve for any reason, the Board may designate a substitute nominee (in which event the persons named as proxies will vote the shares represented by all valid proxy cards for the election of such substitute nominee), allow the vacancy to remain open until a suitable candidate is located, or reduce the number of directors.

As currently comprised, the Board of Directors is a diverse group of individuals who are drawn from various market sectors and industry groups with a presence in the Bank's markets. Board members are individuals with knowledge and experience who serve and represent the Company's geographic footprint throughout the counties and communities served. Current board representation by outside directors demonstrates a background in banking, local government, construction and small business ownership, with the expertise of these individuals covering a broad array of skills including corporate management, human resource management, strategic planning, business acquisitions, and small business operations. In addition, generational attributes further broaden the diversity of the full board.

The Board of Directors believes that Mr. Downing’s broad business background dealing with regulatory issues and bank board experience will provide invaluable expertise in oversight and setting policy for the Company and will make him an excellent candidate for Director of the Company.

    

The Board of Directors believes that Mr. Fountain’s background in executive leadership roles and his experience in the banking industry will make him an excellent candidate for Director of the Company.

The Board of Directors believes that Ms. Hollingsworth’s experience in Human Resource roles and her experience in the banking industry will make her an excellent candidate for Director of the Company.

    

The Board of Directors believes that Mr. Massee’s experience in commercial real estate and management will make him an excellent candidate for Director of the Company.

The Board of Directors believes that Ms. Mowry’s knowledge of real estate lending and finance and her understanding of the real estate industry will make her an excellent candidate for Director of the Company.

The Board of Directors believes that Mr. Reed’s record of business and civic achievement will be invaluable to our mission as a community bank. Also, the expertise and insight he provides to the Greater Georgia business community will add a unique perspective to our Board’s governance and will make him an excellent candidate for Director of the Company.

    

The Board of Directors believes that Mr. Schmitt's experience in bank executive management will make him an excellent candidate for Director of the Company.

No director named herein has a family relationship, as defined in Item 401 of Regulation S-K, with any of the other directors or executive officers. No director named herein is being proposed for election pursuant to any agreement or understanding between such director and the Company. Each director serves until the Annual Meeting following his election or until such later time as his successor is elected and qualifies or there is a decrease in the number of directors.

T. Heath Fountain, Edward Lee Bagwell, III, Leonard Bateman, Jr., Roy Dallis Copeland, Jr., Kimberly C. Dockery, and Derek Shelnutt are executive officers of the Company. The following are certain biographical information for our executive officers. For Mr. Fountain, who also serves as a director of the Company, please see “Directors and Nominees” for their biographical information.

Executive officers do not hold office for a fixed term but may be removed by the Board of Directors with or without cause. There are no arrangements or understandings between any of the executive officers and any other person pursuant to which he or she was selected as an executive officer. No executive officer named herein has a family relationship, as defined in Item 401 of Regulation S-K, with any of the directors or other executive officers.

Our Board of Directors believes that the purpose of corporate governance is to ensure that shareholder value is maximized in a manner consistent with legal requirements and the highest standards of integrity. The Company, through its Board of Directors and management, has long sought to meet the highest standards of corporate governance. The Board has adopted and adheres to corporate governance guidelines which the Board and senior management believe promotes this purpose, are sound and represent best practices. We continually review these governance practices, Georgia law (the law of the state in which we are incorporated), the rules and listing standards of the NASDAQ Stock Market, and SEC regulations, as well as best practices suggested by recognized governance authorities.

The Board has evaluated the independence of its directors in accordance with the NASDAQ rules and applicable rules and regulations of the SEC. Our corporate governance guidelines and principles and the NASDAQ rules require that a majority of the Board be composed of directors who meet the requirements for independence established by these standards. Currently, our Board of Directors has ten members, all of whom meet the NASDAQ standard for independence with the exception of Messrs. Fountain, and Schmitt. The rules of the NASDAQ Stock Market, as well as those of the SEC, also impose several other requirements with respect to the independence of our directors. Following the Annual Meeting, the Board of Directors will consist of eight members, of which six members will meet the NASDAQ standard for independence. The Board of Directors has determined that Messrs. Fountain and Schmitt each do not qualify as an independent director because they are current or past executive officers of the Company and/or the Bank. The Board has further determined that each director who serves on the Audit Committee, Governance Committee, Compensation Committee and Nominating Committee satisfies the independence requirements for such committees in accordance with the NASDAQ rules and applicable rules and regulations of the SEC.

Our Company places a strong emphasis on the ethical conduct and values of our directors. It is crucial for them to uphold the highest standards of professionalism and personal integrity, aligning with our longstanding values and principles. To ensure that our directors possess the necessary qualifications, we seek individuals who have extensive experience in policy-making roles within various sectors such as business, government, or civic organizations.

In addition to their professional background, our directors must be dedicated to enhancing shareholder value. This means that they should prioritize the long-term growth and success of the Company, always considering the best interests of our shareholders. To fulfill their responsibilities effectively, our directors must also have sufficient time available to carry out their duties and contribute valuable insights and practical wisdom based on their own unique experiences.

One of the key expectations from our directors is that they represent the interests of all shareholders. This means that they should act impartially and make decisions that benefit the entire shareholder base rather than favoring specific individuals or groups. When evaluating potential candidates for director positions, our Board of Directors takes into account various factors. These include the candidate's independence, character, judgment, diversity, age, skills, financial literacy, and relevant experience. By considering these aspects, we aim to ensure that our board is well-rounded and capable of addressing the diverse needs and challenges faced by our Company.

Above all, our Board of Directors prioritizes the selection of individuals who will actively contribute to the interests of our shareholders. We seek individuals who have a proven track record of professional and personal achievements, as well as expertise that aligns with our growth strategy. By bringing together a diverse group of directors with a wide range of experiences and perspectives, we believe that we can enhance our ability to make informed decisions and drive our Company's success in the long run.

The Company is committed to strong Board leadership. Our governance framework provides the Board with flexibility to select the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’ shareholders. In accordance with the Company’s Amended and Restated Bylaws, the Board of Directors elects our Chief Executive Officer and our Chairman; each of these positions may be held by the same person or may be held by two persons. Currently, Mark H. Massee serves as Chairman of both the Company and the Bank and T. Heath Fountain serves as Chief Executive Officer of both the Company and the Bank. In this capacity as Chairman, Mr. Massee has frequent contact with Mr. Fountain and other members of management on a broad range of matters and has additional corporate governance responsibilities for the Board. The Board of Directors believes that separating the Chairman and Chief Executive Officer roles fosters clear accountability, effective decision-making, and alignment with corporate strategy and provides an effective leadership model for the Company. In light of the active involvement by all independent directors, the Board of Directors has not specified a lead independent director at this time. After careful consideration, the Board of Directors believes that its current structure is appropriate to effectively manage the affairs of the Company and the best interests of the Company’s shareholders. From time to time, the board leadership structure will be re-evaluated to ensure that it continues to be the most effective approach in serving the Company’s goals. In addition, to further strengthen the oversight of the full board of directors, our independent directors hold executive sessions at which only independent directors are present. The executive sessions are scheduled in connection with regularly scheduled board meetings, which occurs at least four times a year.

In order to give a significant voice to our non-management directors, we provide for executive sessions of our non-management and independent directors. Our Board believes this is an important governance practice that enables the Board to discuss matters without management present. Our non-management directors are given the opportunity to meet in executive session following each regularly scheduled Board meeting. Our independent directors meet separately from the other directors in regularly scheduled executive sessions at least twice annually, and at such other times as may be deemed appropriate by the Company’s independent directors. Any independent director may call an executive session of independent directors at any time. The independent directors met 9 times in executive session in 2023 .

The Board of Directors is actively involved in oversight of risks that could affect the Company and the Bank. The Board of Directors has ultimate authority and responsibility for overseeing our risk management. The Board of Directors monitors, reviews and reacts to material enterprise risks identified by management. The Board receives specific reports from management on financial, credit, liquidity, interest rate, capital, operational, legal compliance and reputation risks and the degree of exposure to those risks. The Board helps ensure that management is properly focused on risk by, among other things, reviewing and discussing the performance of senior management and business line leaders. This oversight is conducted primarily through committees of the Board, as disclosed in the descriptions of each of the committees below. However, the full Board has retained responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within the Company and the Bank.

Our Board recognizes the importance of maintaining the trust and confidence of our customers, clients, and employees, and devotes significant time and attention to oversight of cybersecurity and information security risk. In particular, our Board and Risk Management Committee receive regular reporting on cybersecurity and information security risk, as well as presentations throughout the year on cybersecurity and information security topics. Our Risk Management Committee also annually reviews and approves our Information Security Policy. Our Risk Management Committee reviews cybersecurity and information security as well as steps taken by management to understand and mitigate such risks. Our Board received quarterly updates on cybersecurity and information security risk in 2023 and discussed cyber security and information security risks with both the Information Security Officer and Chief Risk Officer. For more information on our cybersecurity risk management, strategy, and governance, see “Part I - Item 1C. Cybersecurity” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 .

The Board and Board committees undertake a joint evaluation process on an annual basis. Each director evaluates the performance of the Board and Management. The evaluations are reviewed by the Governance Committee and the Chairman of the Board, and the aggregated results are shared and discussed by the Board as a whole. The evaluation process improves the overall effectiveness of the Board and Board committees by identifying strengths, as well as areas for which additional training may be needed .

The Company highly values diversity on its Board of Directors. We aim to ensure that the composition of the Board reflects diversity of race, gender, age, geography, education, and work experience. We believe that a diverse board translates to more effective strategic planning, critical decision making, and creative problem solving, all resulting in a better return for our shareholders. We are actively working to increase the diversity of our Board, including the number of women and ethnic minorities on the Board. The following matrix depicts the diversity of the Board as of March 22, 2024.

The Company provides training and presentations throughout the year to all Directors in many different areas including; BSA, ESG, Insider Trading, Fair Lending, fiduciary responsibility, and others. All new directors are given an orientation on duties and expectations of a director.

Our Board of Directors is committed to overseeing our ESG initiatives. We consider ESG-related matters throughout the organization with a focus on transparency and continuous improvement. Our ESG initiatives are currently focused on supporting the communities we serve in the areas of affordable housing, community development and financial education; promoting diversity, equity and inclusion within the Company; and corporate governance best practices.

Throughout the year, we contacted, virtually and telephonically, a number of the Company’s largest shareholders. This allowed us to better understand and address shareholder questions and concerns related to such issues as our financial performance, the interest rate environment, our strategic objectives, and our long-term growth strategy. Feedback and perspectives shared during these engagement meetings were discussed by executive management and the Board and influenced several changes and disclosure enhancements.

We look forward to continued enhancement of our shareholder engagement program in 2024. We are committed to an open dialogue where investor views and priorities may be gathered and discussed, thereby informing and guiding a deliberative decision-making process with a diverse shareholder base in mind .

The Nominating Committee will consider candidates for nomination as a director submitted by shareholders. Although the Committee does not have a separate policy that addresses the consideration of director candidates recommended by shareholders, the Board does not believe that such a separate policy is necessary as the Company’s bylaws permit shareholders to nominate candidates. The Committee evaluates individuals recommended by shareholders for nomination as directors according to the criteria discussed above under “Director Qualifications” and in accordance with the Company’s bylaws and the procedures described under “Shareholder Proposals” of this proxy statement.

The Risk Management Committee was formed in October 2018 and is appointed by the Chairman of the Board of Directors of the Company, subject to election by the full Board. The purpose of the Risk Management Committee is to look at risk and rewards in maximizing shareholder value. Risks noted in banking include interest rate risk, credit risk, compliance risk, liquidity risk, pricing risk, reputational risk, strategic risk, cyber risk, transaction risk, legal risk and regulatory risk. Mr. Loomis is the Chairman of the Risk Management Committee. All directors are members of the Risk Management Committee. The Risk Management Committee met 4 times during 2023.

The Company’s Audit Committee is comprised of Mark H. Massee, Jonathan W.R. Ross, Harold W. Wyatt, III and Edward P. Loomis. Each of these members meets the requirements for independence as defined by the applicable listing standards of NASDAQ and SEC regulations applicable to listed companies. In addition, the Board of Directors has determined that Mr. Massee meets the NASDAQ and SEC “audit committee financial expert” standards and thus elected him to serve as the Audit Committee’s “audit committee financial expert.” In addition, the Board of Directors has determined the financial acumen of each member of the Audit Committee to be very strong and capable of satisfactorily discharging their duties and responsibilities to the Board of Directors and the shareholders.

The Audit Committee has the responsibilities and powers set forth in its charter, which include the responsibility to assist the Board of Directors in its oversight of our accounting and financial reporting principles and policies and internal audit controls and procedures, the integrity of our financial statements, our compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence, and the performance of the independent auditor and our internal audit function. The Audit Committee is also required to prepare this report to be included in our annual proxy statement pursuant to the proxy rules of the SEC.

Management is responsible for the preparation, presentation and integrity of our financial statements and for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures to provide for compliance with accounting standards and applicable laws and regulations. The internal auditor is responsible for testing such internal controls and procedures. Our independent registered public accounting firm is responsible for planning and carrying out a proper audit of our annual financial statements, reviews of our quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other procedures.

The Audit Committee reports as follows with respect to the audit of the Company’s 2023 audited consolidated financial statements.

As of March 22, 2024, the Company’s records and other information from outside sources indicated the following were beneficial owners of more than 5 percent of the outstanding shares of the Company’s common stock (excluding directors and officers of the Company, and assuming that their holdings have not changed from such other date as may be shown below):

The following table sets forth information as of March 22, 2024 regarding the beneficial ownership of the Company’s common stock by each Company director (including nominees for director) and by the executive officers of the Company and its subsidiaries, and by all directors and executive officers as a group.

Each of the executive officer employment agreements requires the executive to execute and not revoke a general release of claims against the Company. The employment agreements also contain certain non-competition and employee and customer non-solicitation covenants that apply during the executive's employment with the Company and for 12 months following termination of employment (or, if longer, the period of time during which the executive is receiving severance payments), and standard confidentiality covenants.

applicable valuation dates. The assumptions used in calculating the fair value of the RSUs did not

differ in any material respect from the assumptions used to calculate the grant date fair value of

the awards as reported in the Summary Compensation Table for the applicable year. The fair

value calculation used herein is consistent with the fair value methodology used to account for

share-based payments in our financial statements.

The Company uses cash incentive compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, the Company considers the significant amount of time that Directors expend in fulfilling their duties to the Company as well as the skill-level required by the Company of members of the Board.

For fiscal year ended December 31, 2023, independent members of the Board (except the Chairman) received a retainer of $48,000 for Board Service for the year. Members that are also employees of the Company receive a retainer of $18,000 for board service for the year. The Chairman received a retainer of $63,000 for the year for Board service. Committee Chairs receive an additional $2,000 annually per committee chaired. Directors who are employees of the Company do not receive any committee fees. Most non-employee Directors were awarded 600 shares of Company stock that will vest in three equal installments on each anniversary of the grant date. As a new Director, Ms. Hollingsworth received 3,000 shares of Company stock that will vest in three equal installments on each anniversary of the grant date.

Colony Bank, a wholly-owned subsidiary of the Company, has deferred compensation plans covering certain former directors and certain officers choosing to participate through individual deferred compensation contracts. In accordance with terms of the contracts, the Bank is committed to pay the directors deferred compensation over a specified number of years, beginning at age 65. In the event of a director’s death before age 65, payments are made to the director’s named beneficiary over a specified number of years, beginning on the first day of the month following the death of the director.

The Company prohibits all directors, officers and employees from engaging in speculative trading and hedging shares of Company securities. This includes prohibitions against short-selling Company securities and transactions in any derivative of Company securities, including buying and writing options. Directors, officers and employees are restricted from buying Company securities on margin. Additionally, the Company’s Insider Trading Policy prohibits trading for directors, officers and certain employees during designated blackout periods and requires approval by the Company’s General Counsel prior to any trade.

The Company maintains a clawback policy that complies with the applicable listing standards of NASDAQ and Rule 10D-1 under the Securities Exchange Act of 1934. In the event of a restatement of the Company’s reported financial results due to material non-compliance with financial reporting requirements, the Compensation Committee will recover reasonably promptly the amount of all erroneously awarded compensation received by an executive officer during the covered period (within the meaning of such terms as provided in the NASDAQ listing standards).

As of December 31, 2023, certain officers, executive officers, directors, and companies in which they are an executive officer or partner or in which they have a 10% or more beneficial interest, were indebted to the Bank in the aggregate amount of $6,590,606.02 outstanding or available.

The Company adopted a related person transaction policy and procedure on October 17, 2017, and to the best of our knowledge all related parties are in compliance.

There are no “material” pending legal proceedings, other than ordinary routine litigation incidental to the business of the Company, to which the Company or its subsidiary is a party or of which any of their property is subject. Material proceedings are defined as claims for damages where the amount involved, exclusive of interest and cost, exceeds 10 percent of the current assets of the Company and its subsidiary on a consolidated basis.

    

During the previous 10 years, no director, person nominated to become a director, or executive officer of the Company was the subject of a legal proceeding that is material to an evaluation of the ability or integrity of any such person.

Our Board of Directors does not have an established written policy or process for security holders to send communications to the Board of Directors. However, it has been the practice of the Company to direct any such communications to the Chairman of the Board, who would, in his or her discretion, discuss the communications with the Board at a regular Board meeting. The Board has determined this practice and process to be satisfactory in allowing security holders to communicate directly with the Board of Directors. Communications that are not related to the duties and responsibilities of the Board of Directors or a committee will not be distributed, including spam, junk mail and mass mailings, surveys and business solicitations or advertisements. In addition, we will not distribute unsuitable material to our directors, including material that is unduly hostile, threatening or illegal.

During 2023, Mr. Dwozan, until his retirement, Ms. Hollingsworth, Mr. Massee, Mr. Reed and Mr. Ross served as members of the Compensation Committee. During 2023, no member of the Compensation Committee served as an officer or employee of the Company or its subsidiaries, was formerly an officer of the Company or its subsidiaries, or entered into any transactions with the Company or its subsidiaries that would require disclosure under applicable SEC regulations. During 2023, none of our executive officers served as a member of the compensation committee or on the board of directors of another entity, any of whose executive officers served on our Compensation Committee or on our Board of Directors.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and directors, and persons who own more than ten percent of the Company stock, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file .

Section 14A(a)(1) of the Securities Exchange Act of 1934, as amended, requires the Company to permit a non-binding advisory vote (at least once every three years) on the compensation of its Named Executive Officers, as described and presented in the “Executive Compensation” section of this 2024 Proxy Statement, and the accompanying tables and narrative disclosure.

This proposal, commonly known as a “say-on-pay” proposal, gives the Company’s shareholders the opportunity to endorse or not endorse our executive compensation program and policies through the following resolution:

Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. It is our current policy to provide you this advisory voting opportunity annually. Accordingly, you will have the opportunity to vote on whether to approve, on an advisory basis, the compensation of our Named Executive Officers again at our 2025 annual meeting of shareholders.

Our Audit Committee has selected Mauldin & Jenkins, LLC, to serve as our independent accountants for the fiscal year ending December 31, 2024, subject to ratification by the shareholders. Representatives of Mauldin & Jenkins, LLC will be available at the Annual Meeting on May 16, 2024, and will have the opportunity to make a statement if they desire to do so. They will be available to answer your questions at that time.

Shareholder ratification of the selection of Mauldin & Jenkins, LLC as our independent registered public accounting firm for the 2024 fiscal year is not required by our bylaws, state law or otherwise. The Board of Directors is submitting the selection of Mauldin & Jenkins, LLC as the Company’s independent registered public accounting firm to the shareholders for ratification as a matter of good corporate practice. If the ratification of the appointment of Mauldin & Jenkins, LLC is not approved by a majority of the votes cast at the Annual Meeting, other independent registered public accounting firms may be considered by the Audit Committee of the Board of Directors. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change is in the best interests of the Company and its shareholders.

The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In accordance with its charter, the Audit Committee approves, in advance, the independent registered public accounting firm, and on a case-by-case basis, all audit and permissible non-audit services to be performed by the independent registered public accounting firm. The Audit Committee delegates authority over the review of such preapprovals to an internal audit firm, which prepares an internal program that is subject to the Audit Committee’s approval. Such approval process ensures that the external auditor does not provide any non-audit services to the Company that are prohibited by law or regulation. The Audit Committee has considered the provision of non-audit services by our principal accountants and has determined that the provision of such services were consistent with maintaining the independence of the Company’s principal accountants. All services set forth above under the captions “Audit Fees”, “Audit-Related Fees”, “Tax Fees”, and “All Other Fees” were approved by the Audit Committee pursuant to SEC Regulation S-X Rule 2-.01(c)(7)(i).

The Company did not retain its principal accountant to perform Financial Information Systems Design or Implementation services in fiscal year 2023.

To have a nominee included in the Company’s proxy statement and form of proxy for the annual meeting to be held in 2025, notice of such nomination must be submitted by the nominating shareholder on a Schedule 14N to the Company no earlier than 5:00 p.m., Eastern Time, on January 16, 2025 nor later than 5:00 p.m., Eastern Time on February 15, 2025, with such notice to also be filed with the SEC no later than February 15, 2025.

Our Board of Directors knows of no matters other than those referred to in the accompanying Notice of Annual Meeting of Shareholders which may properly come before the Annual Meeting. However, if any other matter should be properly presented for consideration and voting at the Annual Meeting or any adjournments thereof, it is the intention of the persons named as proxies on the enclosed form of proxy card to vote the shares represented by all valid proxy cards in accordance with their judgment of what is in the Company’s best interest.

Upon receipt of a written request, we will furnish, without charge, any owner of common stock of the Company a copy of its annual report as filed with the SEC on form 10-K (the “10-K”) for the fiscal year ended December 31, 2023, including financial statements and the schedules thereto. Copies of exhibits to the 10-K are also available upon specific request and payment of a reasonable charge for reproduction. Such requests should be directed to the Secretary of the Company at the address indicated on the front of this proxy statement.