UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the commission only (as permitted by rule 14A-
6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240-14a-12
SOUTHWEST GEORGIA FINANCIAL CORPORATON
(Exact name of Registrant as specified in its charter)
_________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing and registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No:
(3) Filing Party:
(4) Date Filed:
April 18, 2008
Dear Shareholder:
The Annual Meeting of the Shareholders of Southwest Georgia Financial
Corporation will be held on Tuesday, May 27, 2008, in the Southwest Georgia
Bank Administrative Services Building, 205 Second Street S.E., Moultrie,
Georgia, at 4:30 P.M. for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders and Proxy Statement.
In order to ensure that your shares are voted at the meeting, please
complete, date, sign, and return the Proxy in the enclosed postage-paid
envelope at your earliest convenience. Every shareholder's vote is
important, no matter how many shares you own.
We encourage you to attend this annual meeting of the shareholders and
join us in the lobby immediately following the meeting for hors d'oeuvres
and refreshments. We look forward to your continued support and another
good year in 2008.
Very truly yours,
/s/Dewitt Drew
DeWitt Drew
President and Chief Executive Officer
SOUTHWEST GEORGIA FINANCIAL CORPORATION
P.O. Box 3488
201 First Street, S.E.
Moultrie, Georgia 31768
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 27, 2008
The annual meeting of shareholders of Southwest Georgia Financial
Corporation (the "Corporation") will be held on Tuesday, May 27, 2008, at
4:30 p.m. at the Southwest Georgia Bank Administrative Services Building,
205 Second Street, S.E., Moultrie, Georgia, for the purposes of considering
and voting upon:
1. The election of nine directors to constitute the Board of Directors
to serve until the next annual meeting and until their successors
are elected and qualified; and
2. Such other matters as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on April 7, 2008,
will be entitled to notice of and to vote at the meeting or any adjournment
thereof.
A Proxy Statement and a Proxy solicited by the Board of Directors are
enclosed herewith. Even if you plan to attend the meeting, please provide
us voting instructions in one of the following ways as soon as possible:
(1) Please mark, sign, date, and return the Proxy promptly in the
enclosed business reply envelope;
(2) If your shares are held in "street-name", that is held for your
account by a broker, bank or other nominee, you will receive
instructions from your nominee which you must follow in order to have
your shares voted.
For directions to the annual meeting, call (229) 985-1120. If you
attend the meeting you may, if you wish, withdraw your Proxy and vote in
person.
Also enclosed is the Corporation's 2007 Annual Report to Shareholders,
which contains financial data and other information about the Corporation.
By Order of the Board of Directors,
/s/DeWitt Drew
DeWitt Drew
President and
Chief Executive Officer
April 18, 2008
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE
COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED SELF-
ADDRESSED ENVELOPE. IF YOU ARE PRESENT AT THE ANNUAL MEETING, YOU MAY, IF
YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND EXERCISE THE RIGHT TO VOTE YOUR
SHARES PERSONALLY.
SOUTHWEST GEORGIA FINANCIAL CORPORATION
P.O. Box 3488
201 First Street, S.E.
Moultrie, Georgia 31768
PROXY STATEMENT
April 18, 2008
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Directors of Southwest Georgia Financial
Corporation for use at the Annual Meeting of Shareholders of the Corporation
to be held on May 27, 2008, and any postponement and adjournment thereof,
for the purposes set forth in the accompanying notice of the meeting. The
expenses of this solicitation, including the cost of preparing and mailing
this Proxy Statement, will be paid by the Corporation. Copies of
solicitation materials may be furnished to banks, brokerage houses, and
other custodians, nominees, and fiduciaries for forwarding to beneficial
owners of shares of the Corporation's Common Stock, and normal handling
charges may be paid for such forwarding service. In addition to
solicitations by mail, directors and regular employees of the Corporation
may solicit Proxies in person or by telephone. It is anticipated that this
Proxy Statement and the accompanying Proxy will first be mailed to
shareholders on April 18, 2008.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
What is the purpose of the Annual Meeting?
At the Annual Meeting of Shareholders, shareholders will act upon the
matters set forth in the accompanying notice of meeting, including the
election of nine directors and any other matters that may properly come
before the meeting.
Who is entitled to vote?
All shareholders of record of the Corporation's common stock at the close
of business on April 7, 2008, which is referred to as the record date, are
entitled to receive notice of the Annual Meeting and to vote the shares of
common stock held by them on the record date. Each outstanding share of
common stock entitles its holder to cast one vote for each matter to be voted
upon.
How do I cast my vote?
You may vote your shares by marking, signing, dating and returning the
Proxy in the enclosed business reply envelope provided to you, or you may vote
in person at the Annual Meeting. If your shares of common stock are held in
"street name", that is held for your account by a broker, bank or other
nominee, you will receive instructions from your nominee which you must follow
in order to have your shares voted.
If the Proxy is returned but no choice is specified thereon, it will be
voted for all the persons named below under the caption "Information about
Nominees for Director".
What are the quorum and voting requirements?
A quorum is present when the holders of a majority of the shares
outstanding on the record date are present at the Annual Meeting of
Shareholders in person or by proxy. On the record date, the Corporation had
outstanding and entitled to vote 2,547,837 shares of Common Stock, par value
$1.00 per share.
-1-
The required vote for each item of business at the Annual Meeting is as
follows:
1. For Proposal 1, the election of directors, those nominees receiving
the greatest number of votes at the Annual Meeting of Shareholders
shall be deemed elected, even though the nominees may not receive a
majority of the votes cast.
2. For any other business at the Annual Meeting, the vote of a majority
of the shares voted on the matter, assuming a quorum is present,
shall be the act of the shareholders on that matter, unless the vote
of a greater number is required by law.
How are votes counted?
Abstentions and "broker non-votes" will be counted only for purposes of
establishing a quorum, but will not otherwise affect the vote. "Broker non-
votes" are proxies received from brokers or other nominees holding shares on
behalf of their clients (in "street name") who have not been given specific
voting instructions from their clients with respect to non-routine matters.
Typically, the election of directors is considered a routine matter by brokers
and other nominees allowing them to have discretionary voting power to vote
shares they hold on behalf of their clients for the election of directors.
Because directors are elected by a plurality of the votes cast, the
directors that get the most votes will be elected even if such votes do not
constitute a majority. Directors cannot be voted "against" and votes to
"withhold authority" to vote for a certain nominee will have no effect if the
nominee receives a plurality of the votes cast. For all other proposals that
come before the meeting, you may vote "for" or "against" the proposal.
If you hold your shares of common stock in your own name as a holder of
record, and you fail to vote your shares, either in person or by proxy, the
votes represented by your shares will be excluded entirely from the vote.
Will other matters be voted on at the Annual Meeting?
The Corporation is not aware of any other matters to be presented at the
Annual Meeting other than those described in this Proxy Statement. If any
other matters not described in the Proxy Statement are properly presented at
the meeting, proxies will be voted in accordance with the best judgment of the
proxy holders.
Can I revoke my Proxy instructions?
Any Proxy given pursuant to this solicitation may be revoked by any
shareholder who attends the meeting and gives oral notice of his or her
election to vote in person, without compliance with any other formalities. In
addition, any Proxy given pursuant to this solicitation may be revoked prior
to the meeting by delivering a signed writing revoking it or a duly executed
Proxy bearing a later date to the Secretary of the Corporation at Southwest
Georgia Financial Corporation, P.O. Box 3488, Moultrie, Georgia 31776-3488.
Any shareholder of record as of the record date attending the Annual Meeting
may vote in person by ballot whether or not a Proxy has been previously given,
but the presence without further action of a shareholder at the Annual Meeting
will not constitute revocation of a previously given Proxy.
Any shareholder holding shares in "street name" by a broker or other
nominee must contact the broker or nominee to obtain instructions for revoking
the Proxy instructions.
-2-
What other information should I review before voting?
The 2007 Annual Report to Shareholders, including financial statements
for the year ended December 31, 2007, is enclosed with this Proxy Statement.
The Annual Report on Form 10-K except for the exhibits is part of the proxy
solicitation material. The Corporation will furnish without charge a copy of
its complete Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 2007, including
financial statements and schedules, to any record or any beneficial owner of
its Common Stock as of April 7, 2008, who requests a copy of such report.
Any request for the Form 10-K report should be in writing addressed to:
Mr. George R. Kirkland
Southwest Georgia Financial Corporation
P.O. Box 3488
Moultrie, Georgia 31776-3488
You may also obtain copies of the Corporation's Form 10-K from the SEC at
prescribed rates by writing to the Public Reference Section of the SEC, Room
1580, F. Street, N.E., Washington, D.C. 20549. Please call the SEC at (800)
SEC-0330 for further information.
If the person requesting the report was not a shareholder of record on
April 7, 2008, the request must include a representation that the person was a
beneficial owner of Common Stock on that date. Copies of any exhibit to the
Form 10-K will be furnished on request and upon receipt of the payment of the
Corporation's expense in furnishing the exhibits.
-3-
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth as of March 12, 2008, beneficial ownership
of the Corporation's Common Stock by each "person" (as that term is defined by
the Securities and Exchange Commission) known by the Corporation to be the
beneficial owner of more than 5% of the Corporation's common stock, by each
director and named executive officers of the Corporation and all such persons
as a group.
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership(1) of Class
The Employee Stock Ownership Plan
and Trust of Southwest Georgia
Financial Corporation 336,248 12.66%
Cecil H. Barber 28,154 1.06% (2)
John J. Cole, Jr. 55,605 2.09% (3)
DeWitt Drew 21,824 * (4)
Michael McLean 94,327 3.55% (5)
Richard L. Moss 26,188 * (6)
Roy H. Reeves 28,180 1.06% (7)
Johnny R. Slocumb 49,198 1.85%
M. Lane Wear 4,667 *
Marcus R. Wells 6,857 * (8)
C. Broughton Williams, Jr. 12,089 *
C.Wallance Sansbury 2,550 * (9)
J. David Dyer, Jr. 2,849 *
George R. Kirkland 35,051 1.32% (10)
All Directors, Named Executive Officers, and
5% Shareholders as a Group (14 persons) 651,255 24.53%
* Indicates less than one percent (1%).
(1) Based on 2,655,002 shares outstanding as of March 12, 2008, which
includes shares underlying outstanding stock options exercisable within
60 days of the record date, which are deemed to be outstanding for
purposes of calculating the percentage owned by a holder.
(2) Includes 3,300 presently exercisable stock options.
(3) Includes (i) 40,235 shares allocated to the account of Mr. Cole in the
Employee Stock Ownership Plan and Trust, over which shares Mr. Cole
exercises voting power and (ii) 3,300 presently exercisable stock options
granted to Mr. Cole.
(4) Includes (i) 4,793 shares allocated to the account of Mr. Drew in the
Employee Stock Ownership Plan and Trust, over which shares Mr. Drew
exercises voting power and (ii) 13,200 presently exercisable stock
options granted to Mr. Drew.
(5) Includes 83,757 shares of which Mr. McLean holds the voting power of
attorney for E. J. McLean, Jr.
(6) Includes (i) 17,107 shares pledged as collateral for loans and (ii)
3,300 presently exercisable stock options granted to Mr. Moss.
(7) Includes (i) 11,880 shares pledged as collateral for loans and (ii)
3,300 presently exercisable stock options granted to Mr. Reeves.
(8) Includes 6,000 shares of which Mr. Wells holds the voting power of
attorney for Hiller M. Gammage, Jr.
(9) Includes 2,108 shares allocated to the account of Mr. Sansbury in the
Employee Stock Ownership Plan and Trust, over which shares Mr. Sansbury
exercises voting power.
(10) Includes (i) 10,189 shares allocated to the account of Mr. Kirkland in
the Employee Stock Ownership Plan and Trust, over which shares Mr.
Kirkland exercises voting power and (ii) 3,300 presently exercisable
stock options granted to Mr. Kirkland.
-4-
ELECTION OF DIRECTORS
The bylaws of the Corporation provide that the Board of Directors shall
consist of not less than five nor more than 25 directors. The exact number
of directors is currently set at 10 by Board resolution. However, the
number of directors may be increased or decreased within the foregoing range
from time to time by the Board of Directors or by resolution of the
shareholders.
C. Broughton Williams, Jr. is retiring as director after his current
term ends on the date of the Annual Meeting and the Board will set the
number of directors at nine immediately after the Annual Meeting.
The terms of office for directors continue until the next Annual
Meeting of Shareholders and until their successors are elected and qualified
or until earlier resignation, removal from office, or death.
Each Proxy executed and returned by a shareholder will be voted as
specified thereon by the shareholder. If no specification is made, the
Proxy will be voted for the election of the nominees named below to
constitute the entire Board of Directors. In the event that any nominee
withdraws or for any reason is not able to serve as a director, the Proxy
will be voted for such other person as may be designated by the Board of
Directors as substitute nominee. Management of the Corporation has no
reason to believe that any nominee will not serve if elected.
INFORMATION ABOUT NOMINEES FOR DIRECTOR
The following information as of April 7, 2008, has been furnished by
the respective nominees for director. Except as otherwise indicated, each
nominee has been or was engaged in his present principal employment for more
than five years.
Name (Age) Information about Nominee
Cecil H. Barber (43) A director of the Bank and the Corporation since 1999,
Mr. Barber is Vice President of Barber Contracting, a
general contracting company.
John J. Cole, Jr. (57) A director of the Bank and of the Corporation. Mr.
Cole became Executive Vice President and Cashier of
the Bank and Executive Vice President of the
Corporation in 2002. Previously, he had been Senior
Vice President and Cashier of the Bank and Senior Vice
President of the Corporation since 1992. Previously,
he has served in various other positions with the Bank
since 1976 and the Corporation since 1981.
DeWitt Drew (51) Mr. Drew has been President and Chief Executive
Officer of the Bank and Corporation since May 2002.
Previously, he served as President and Chief Operating
Officer during 2000 and 2001 and Executive Vice
President during 1999 for the Bank and Corporation.
-5-
Michael J. McLean (61) Chairman of the Board of the Corporation since 2006,
Mr. McLean has been a director of the Bank and
Corporation since 1999. Mr. McLean is the owner of
McLean Engineering Company, Inc., an engineering
consulting firm.
Richard L. Moss (56) Vice Chairman of the Board of the Corporation since
2006, Mr. Moss has been a director of the Bank since
1980 and of the Corporation since 1981. Mr. Moss is
President of Moss Farms.
Roy H. Reeves (48) A director of the Bank and the Corporation since 1991,
Mr. Reeves is a partner of Reeves Properties, L.P., a
property rental company.
Johnny R. Slocumb (55) A director of the Bank and the Corporation since 1991,
Mr. Slocumb is owner of The Slocumb Company, a company
which offers real estate and insurance services.
M. Lane Wear (56) A director of the Bank and of the Corporation. Mr.
Wear is a Certified Public Accountant and has been a
partner with Vines, Wear and Mangum, LLP since 1986.
Marcus R. Wells (50) A director of the Bank and of the Corporation. Mr.
Wells is a licensed physical therapist and has been
owner and Chief Executive Officer of Alliance
Rehab, Inc., d/b/a Moultrie Physical Therapy &
Rehabilitation since January 2004. Previously, he was
employed from 1999 to March 2003 and was managing
partner from April 2003 to December 2003 by Moultrie
Physical Therapy & Rehabilitation. Also, Mr. Wells is
Chief Executive Officer of POINT, Inc., (Prevention of
Occupational & Industrial Trauma) since 1998.
There are no family relationships between any director, executive
officer, or nominee for director of the Corporation or any of its
subsidiaries.
Meetings and Composition of the Board of Directors
The Board of Directors held 12 regular meetings and 3 called meetings
during 2007. All of the directors attended at least seventy-five percent
(75%) of the Board and committee meetings held during their tenure as
directors. Directors are expected to be present at all Board of Directors
meetings of the Corporation.
The Board has determined that eight of the ten members of the Board of
Directors are "independent" as defined under applicable federal securities
laws and listing standards of the American Stock Exchange. The
"independent" directors are Mr. Barber, Mr. McLean, Mr. Moss, Mr. Reeves,
Mr. Slocumb, Mr. Wear, Mr. Wells, and Mr. Williams. The independent
directors met in executive session without the non-independent directors and
management two times in 2007.
-6-
Committees of the Board of Directors
The Board of Directors has established three committees, a Personnel
Committee, an Audit Committee, and a Nominating Committee.
Personnel Committee
The Personnel Committee is composed of five members, Cecil Barber, Michael
J. McLean, Richard L. Moss, M. Lane Wear, and Marcus R. Wells. The Board of
Directors has determined that all of these directors are "independent" under
applicable federal securities laws and standards of the American Stock
Exchange. The Personnel Committee held eight meetings during 2007.
The Personnel Committee is responsible for establishing and administering
the policies that govern the compensation arrangements for executive
officers and other employees. The Personnel Committee is also responsible
for oversight and administration of certain executive and employee
compensation and benefit plans, including the Pension Retirement Plan (the
"Pension Plan"), the Supplemental Retirement Plan (the "Supplemental Plan"),
the 401(K) Plan, the Director's and Executive Officer's Stock Purchase Plan
(the "Stock Purchase Plan") and the Key Individual Stock Option Plan (the
"Option Plan"). It periodically reviews and makes recommendations to the
Board with respect to Directors Compensation.
Audit Committee
The Audit Committee presently consists of four directors, Richard L. Moss,
C. Broughton Williams, M. Lane Wear, and Johnny R. Slocumb. The Audit
Committee held 11 meetings during 2007.
The Board of Directors has determined that all of the members of the Audit
Committee are "independent" under applicable federal securities laws and
listing standards of the American Stock Exchange and have sufficient
knowledge in financial and accounting matters to serve on the Audit
Committee, including the ability to read and understand fundamental
financial statements. Mr. Wear, CPA, a member of the Audit Committee,
qualifies as "financially sophisticated" under the listing standards of the
American Stock Exchange or an "audit committee financial expert" under the
federal securities laws.
The Audit Committee is responsible for recommending the selection of
independent auditors; meeting with the independent auditors to review the
scope and results of the audit; reviewing with management and the internal
auditor the systems of internal control and the internal audit reports; and
ascertaining that any and all operational deficiencies are satisfactorily
corrected. The Board of Directors has adopted a written Audit Committee
Charter that is annually reviewed and assessed.
Nominating Committee
The Board of Directors has a standing Nominating Committee that presently
consists of eight members, C. Broughton Williams, Cecil Barber, Richard L.
Moss, Michael J. McLean, Roy H. Reeves, M. Lane Wear, Johnny R. Slocumb, and
Marcus R. Wells. The Nominating Committee nominates all directors and
presents a slate of nominees for the Board of Directors to be approved by a
majority of independent directors. The Board has determined that all of the
members of the Nominating Committee are "independent" under applicable
federal securities laws and listing standards of the American Stock
Exchange. On March 29, 2007, the Board of Directors adopted a written
Nominating Committee Charter which is annually reviewed and assessed.
-7-
Director Nominations
A candidate for the Board of Directors must meet the eligibility
requirements set forth in the Corporation's bylaws and in any applicable
Board or committee resolutions. The Nominating Committee considers
qualifications and characteristics that it deems appropriate from time to
time when selecting individuals to be nominated for election to the Board of
Directors. These qualifications and characteristics may include, without
limitation, independence, integrity, business experience, education,
accounting and financial expertise, age, diversity, reputation, civic and
community relationships, and knowledge and experience in matters impacting
financial institutions. In addition, prior to nominating an existing
director for re-election to the Board of Directors, the Nominating Committee
will consider and review an existing director's Board and committee
attendance, performance, and length of Board service.
The Nominating committee will consider in accordance with the analysis
described above all director nominees properly recommended by shareholders.
Any shareholder wishing to recommend a candidate for consideration as a
possible director nominee for election at an upcoming meeting of
shareholders must provide written notice to Mr. George R. Kirkland,
Southwest Georgia Financial Corporation, P. O. Box 3488, Moultrie, GA 31776-
3488 pursuant to the deadlines described in "Shareholders Proposals and
Director Nominations".
Code of Ethical Conduct
The Corporation has adopted a Code of Ethics Policies and Procedures
designed to promote ethical conduct by all of the Corporation's directors,
officers, and employees. The Code of Ethics Policies and Procedures
includes a Code of Ethical Conduct for the Chief Executive Officer and
Senior Financial Officers which sets forth standards applicable to all
officers, directors, and employees but has provisions specifically
applicable to the Chief Executive Officer and the principal financial
officer. The Code of Ethics Policies and Procedures complies with the
federal securities law requirement that issuers have a code of ethics
applicable to the chief executive officer and principal financial officer,
and the American Stock Exchange requirement that listed companies have a
code of ethical conduct applicable to all directors, officers, and
employees. The Corporation's Code of Ethical Conduct applicable to the
Chief Executive Officer and the principal financial officer was filed as
Exhibit 14 to its Form 8-K dated February 27, 2008.
EXECUTIVE COMPENSATION
Overview and Philosophy
The objective of the Corporation's compensation program is to offer a
compensation package that will attract, motivate, reward, and retain high-
performing and dedicated employees. The package must balance competitive
need and individual performance with affordability. The package must also
provide financial security for employees and dependents upon retirement,
disability, or death. The compensation program is designed to reward
performance, longevity, professional growth, initiative, and increased
responsibility.
-8-
Administration
The Personnel Committee of the Corporation reviews, evaluates, and
approves compensation and benefits for all officers, including the "Named
Executive Officers", who are DeWitt Drew, who is President and Chief
Executive Officer of the Corporation and the Bank, J. David Dyer, Jr., who is
Senior Vice President of the Corporation and the Bank and President and Chief
Executive Officer of Empire Financial Services, Inc., a subsidiary of the Bank
and John J. Cole, Jr., who is Executive Vice President of the Corporation and
the Bank, and also reviews general policy matters relating to compensation
and benefits. The executive officers recommend to the Personnel Committee
compensation for other employees based on comparison to compensation data
received from banking related compensation and benefits surveys.
All remuneration paid to the Corporation's officers during the year ended
December 31, 2007, was paid by subsidiaries of the Corporation.
Elements of Compensation
Annual Base Salary and Cash Bonus. Executive officer annual base
salary and bonus awards are determined by the Personnel Committee with
reference to Corporation-wide, divisional, and individual performance for
the previous fiscal year based on a wide range of measures, which include
comparisons with competitors' performance and internal goals set before the
start of each fiscal year and by comparison to the level of executive
officers' compensation of other financial institutions of comparable size in
comparable markets. No relative weights are assigned for these factors.
The Personnel Committee believes that the most meaningful performance
and pay equity comparisons are made against companies of similar size and in
comparable markets. In keeping with this belief, the Committee consistently
participates in and uses compensation and benefit surveys from the Georgia
Bankers Association and the Bank Administration Institute and measures the
Corporation's performance with peer comparison from the Federal Financial
Institution Examining Council Peer Group Report.
During 2007, the Personnel Committee set annual salary and bonus for
the Named Executive Officers in 2007 based primarily on Corporation-wide
performance. The Personnel Committee believes that returns on assets
("ROA") and equity ("ROE") are the most appropriate measures for evaluating
this performance.
In 2007, the Corporation's net income was 43% lower than the previous
year's net income, and the ROA was .60% and ROE was 6.17%, compared to ROA
of 1.00% and ROE of 8.01% in 2006. While net income, ROA and ROE were less
than the 2007 performance goals of $3.7 million in net income, ROA of 1.27%
and ROE of 13.26%, certain events occurred in 2007 that affected the
corporate net earnings causing it to not meet its 2007 performance goals.
Specifically, the Corporation's mortgage banking subsidiary, Empire
Financial Services, Inc. ("Empire"), experienced a 30% decline in revenue
and a pre-tax loss due to settling claims of participant lenders resulting
from a transaction entered into during the first quarter of 2006. Impacting
Empire's revenue were economic conditions that deteriorated considerably
during 2007. In addition, liquidity in the banking system became scarce.
As a result of these conditions, loan originations slowed considerably in
the second half of the year. If the loss had not occurred in 2007, the
Corporation's net income would have been approximately $3.3 million with a
ROA of 1.15% and a ROE of 11.85%.
-9-
In view of the Corporation's 2007 performance, the Named Executive
Officer's received an increase in their annual salary of between 4 and 21%
and received bonuses equal to 0% to 19% of base salary as compared to raises
of 4 to 6% and bonuses of 0% to 30% of base salary in 2006. The Named
Executive Officers' base salaries and annual bonuses for 2007 are listed in
"Executive Compensation - Summary Compensation Table".
Equity Incentive Awards. The Personnel Committee believes that equity
based incentive compensation enhances the ability to competitively search,
hire, and retain a strong competent executive staff, as well as to encourage
corporate ownership among employees. The Corporation established the Option
Plan on March 19, 1997 to provide for the issuance of stock options to key
employees and directors of the Corporation. A maximum of 196,680 shares of
common stock have been authorized for issuance with respect to options
granted under the Option Plan. The Option Plan is administered by the
Personnel Committee of the Board of Directors and all stock option grants
are approved by the Board of Directors.
The Corporation granted no incentive or nonqualified options under the
Option Plan in fiscal year 2007 to the Named Executive Officers and any
other officers or directors.
Non-Equity Incentive Awards. The Corporation has entered into an
employment agreement with J. David Dyer, Jr., the Chief Executive Officer of
the Corporation's commercial mortgage loan subsidiary, Empire. Under that
agreement, Mr. Dyer is eligible to earn incentive compensation equal to 15%
of Empire's total net income before taxes and staff bonuses in excess of
$500,000 for each year. Mr. Dyer's 2007 non-equity incentive compensation
is listed in "Executive Compensation - Summary Compensation Table".
Retirement and Other Benefits
The Corporation offers retirement and other benefits that the Personnel
Committee believes provides employees with a highly competitive package of
benefits. The Corporation believes these forms of compensation enhance the
ability to competitively search, hire, and retain a strong competent
executive staff, and that the 401(k) Plan, ESOP and Stock Purchase Plan
encourage corporate ownership among employees.
Pension Plan. The Corporation's Pension Plan is a qualified
noncontributory defined benefit pension plan and is described in "Executive
Compensation - Pension Benefits". During the fourth quarter of 2006, the
Corporation froze the Pension Plan.
401(k) Plan. In place of the frozen Pension Plan, the Corporation adopted
the Southwest Georgia Bank 401(k) Plan effective January 1, 2007 (the
"401(k) Plan") for the benefit of most all of the employees who attain the
age of 21 years and complete a year of service. The 401(k) Plan is a
qualified defined contribution plan as provided for under Section 401(k) of
the Internal Revenue Code. This 401(k) Plan will match contributions dollar
for dollar for the first 4% of compensation that each participant defers
into the 401(k) Plan each payroll period. The 401(k) Plan allows for a
discretionary match in excess of 4% and for participants to defer up to 80%
of their compensations, subject to the maximum deferrals permitted under the
Internal Revenue Code. In 2007, the Corporation matched up to 4% of
compensation for Mr. Drew and Mr. Cole in the amounts of $9,000 and $4,919,
respectively.
-10-
Employee Stock Ownership Plan. The Corporation has a qualified,
nondiscriminatory Employee Stock Ownership Plan ("ESOP") administered by an
ESOP Committee, and its assets are held and managed by a trustee. This ESOP
is designed to motivate and reward employees as corporate owners and to
provide to eligible employees additional retirement benefits. The ESOP
covers most all employees who have at least two years of service.
Contributions to the ESOP are at the discretion of the Board of Directors
and are allocated to participants who are actively employed on the last day
of the plan year and who have a year of service for such year (as defined in
the ESOP). The annual amount of the contribution is determined by taking
into consideration the prevailing financial conditions and fiscal
requirements of the Corporation. The total annual contribution is limited
by the amount that the Corporation can deduct for federal income tax
purposes. Each eligible participant's contribution is based on a percentage
of annual compensation. This form of compensation plan supports the
Corporation's overall mission statement to attain motivated and dedicated
employees. In 2007, the Corporation contributed to the ESOP for Mr. Drew
and Mr. Cole in the amounts of $16,875 and $10,040, respectively.
Supplemental Retirement Plan. The Corporation's Supplemental Plan is a
non-qualified retirement plan which provides benefits for any excess annual
retirement benefits which can not be paid under the Pension Plan and ESOP,
and is described in "Executive Compensation - Pension Benefits". There was
no impact to the ESOP part of this plan as a result of the frozen Pension
Plan. Mr. Drew is the only active participant in the Supplemental
Retirement Plan and the Corporation made a contribution of $2,037 for Mr.
Drew.
Stock Purchase Plan. The Corporation has adopted the Stock Purchase
Plan for executive officers and directors of the Corporation. The plan
provides that participants may elect to contribute up to $500 monthly of
salary or directors' fees and receive corporate common stock with an
aggregate value of 1.5 times the contribution. The maximum level of monthly
contribution is set by the Board of Directors. In 2007, the Corporation
contributed $3,000 to the Stock Purchase Plan accounts of Mr. Drew and Mr.
Dyer and $1,500 to the Stock Purchase Plan account of Mr. Cole.
Nonqualified Deferred Compensation. Mr. Dyer, under his employee
agreement, is provided deferred compensation as described in "Executive
Compensation - Nonqualified Deferred Compensation".
Insurance. The Corporation provides to all employees group term life
insurance benefit of 2.5 times their annual base salary not to exceed
$350,000. The Corporation paid premiums of $816, $2,343 and $1,160,
respectively, for Mr. Drew, Mr. Dyer and Mr. Cole during 2007. The excess
premium paid over $50,000 of life insurance benefit is non-cash compensation
to the employee. Mr. Drew was the only management officer with bank owned
life insurance compensation of $740 during 2007.
Employment Contracts and Change in Control Arrangements
DeWitt Drew. On October 1, 2003, the Corporation and the Bank entered
into an employment agreement with DeWitt Drew. Under the employment
agreement, Mr. Drew serves as the President and Chief Executive Officer of
the Corporation and the Bank and is entitled to receive an annual base
salary (currently $193,963) which is subject to normal annual increases as
shall be determined by the Board of Directors of the Corporation from time
to time. The employment agreement commenced on October 1, 2003, and is for
a rolling five-year term that is extended for an additional day each day of
-11-
his employment. In addition to the base salary, Mr. Drew is eligible to
earn incentive or bonus compensation in accordance with such bonus plan as
may be established by the Board of Directors of the Corporation for the
fiscal year. Mr. Drew receives benefits of the kind customarily granted to
other executives of the Bank and the Corporation, including participation in
the Corporation's benefit plans. The Bank also pays the premiums on a $1
million split dollar life insurance policy for Mr. Drew. If Mr. Drew's
employment terminates for any reason, he agrees not to provide banking
services or solicit certain bank customers within certain geographical
limits for a period of two years after such termination.
If Mr. Drew is terminated for Cause (as defined in the Agreement) or if
he voluntarily terminates his employment, the Bank and the Corporation will
have no further financial obligation to him. The stock options that are
vested as of the termination date will be exercisable for 90 days and then
terminate. If Mr. Drew is terminated without cause or by Mr. Drew for Good
Reason (as defined) after a Change in Control (as defined), he is entitled
to the salary and medical benefits provided to him under the agreement for
the remainder of the then current term, subject to the terms and conditions
of the agreement. Any options he has been granted as of the termination
date will immediately vest and expire upon their normal expiration date in
the case of a change in control or one year in case of another termination
without cause. If Mr. Drew is terminated due to a disability, he shall
continue to receive his salary for the remainder of the then current term
and receive medical benefits until the earlier of the end of the then
current term or he is entitled to disability coverage. If Mr. Drew's
employment terminates because of death or disability, his options will vest
and will expire upon their normal expiration date. In the event of any such
termination at December 31, 2007, Mr. Drew would have been entitled to
$982,795, which is the sum of his present salary and medical benefits for
the five-year term.
J. David Dyer. As of January 1, 2002, the Banks' subsidiary, Empire
entered into an employment agreement with J. David Dyer, Jr. that was
amended on November 15, 2006. Under the employment agreement, Mr. Dyer
serves as President and Chief Executive Officer of Empire and is entitled to
receive an annual base salary (currently $176,732) subject to normal annual
increases as determined by the Board of Directors from time to time. The
term of the employment agreement expires on September 30, 2007. The term
may be extended for an additional six month period ending March 31, 2008.
In addition to the base salary, Mr. Dyer is eligible to earn incentive or
bonus compensation. Unless otherwise agreed upon by the Board and Mr. Dyer,
his bonus for each year will be equal to 15% of Empire's total net income
before taxes and staff bonuses in excess of $500,000 for each year.
Additionally, for a period of two years after either the expiration of the
term or the date Mr. Dyer ceases to be employed by Empire, Mr. Dyer will not
engage in competitive activities within a certain geographical area.
Also, Empire maintains a deferred compensation account on Mr. Dyer's
behalf that was credited annually with $200,000 of deferred compensation on
December 31, 2002-2006. Monthly installment payments of $12,500 of the
deferred compensation commence six months after the date of Mr. Dyer's
termination and continue each month thereafter until the deferred
compensation account is exhausted.
-12-
John J. Cole, Jr. On February 28, 2006, the Corporation and the Bank
entered into an employment agreement with John Cole. Under the employment
agreement, Mr. Cole serves as an Executive Vice President of the Corporation
and the Bank and is entitled to receive an annual base salary (currently
$132,244) which is subject to normal annual increases as shall be determined
by the Board of Directors of the Corporation from time to time. The
employment agreement commenced on February 28, 2006, and is for a five-year
term. In addition to the base salary, Mr. Cole is eligible to earn
incentive or bonus compensation in accordance with such bonus plan as may be
established by the Board of Directors of the Corporation for the fiscal
year. Mr. Cole receives benefits of the kind customarily granted to other
executives of the Bank and the Corporation, including participation in the
pension benefit plans, disability insurance, medical insurance, and life
insurance pursuant to the agreement. If Mr. Cole's employment terminates
for any reason, he agrees not to provide banking services or solicit certain
bank customers within certain geographical limits for a period of two years
after such termination.
If Mr. Cole is terminated for Cause (as defined in the Agreement) or if
he voluntarily terminates his employment, the Bank and the Corporation will
have no further financial obligation to him. The stock options that are
vested as of the termination date will be exercisable for 90 days and then
terminate. If Mr. Cole is terminated without Cause or by Mr. Cole for Good
Reason (as defined) after a Change in Control (as defined), he is entitled
to the salary and medical benefits provided to him under the agreement for
the remainder of the then current term, subject to the terms and conditions
of the agreement. Any options he has been granted as of the termination
date will immediately vest and be exercisable for one year and then
terminate. If Mr. Cole is terminated due to a disability, he shall continue
to receive his salary for the remainder of the then current term and receive
medical benefits until the earlier of the end of the then current term or he
is entitled to disability coverage. If Mr. Cole's employment terminates
because of death or disability, his options will vest and will expire upon
their normal expiration date. In the event of any such termination at
December 31, 2007, Mr. Cole would have been entitled to $419,213, which is
the sum of his present salary for the remaining 3.2 year-term.
-13-
Summary Compensation Table
The following table sets forth the annual and other compensation paid or
accrued in 2007 for the Named Executive Officers. No other executive officers
of the Corporation are required to be included in table and/or were paid
$100,000 or more in total compensation during 2007.
Annual Compensation
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred
Name and Principal Base Plan Compensation All Other
Position During 2007 Year Salary Bonus Compensation Earnings Compensation(1) Total
DeWitt Drew 2007 $186,665 $35,000 $ 0 $ 0 $42,468 (2) $264,133
President and CEO of the 2006 $175,000 $52,500 $ 0 $ 24,330 $11,752 $263,582
Corporation and the Bank
J. David Dyer, Jr. 2007 $171,904 $ 0 $179,655 $ 0 $ 5,343 $356,902
Senior Vice President of 2006 $165,000 $ 0 $290,598 $200,000 $ 4,032 $659,630
the Corporation and
the Bank
John J. Cole, Jr. 2007 $110,221 $12,000 $ 0 $ 0 $27,019 (3) $149,240
Executive Vice President of 2006 $104,400 $12,750 $ 0 $ 24,662 $ 2,532 $144,344
the Corporation and
the Bank
(1) Amounts shown include stock purchase plan contributions, 401(k) match,
ESOP contributions, group term life insurance, and bank owned life
insurance benefits.
(2) Includes director's fees for 2007 of $10,000.
(3) Includes director's fees for 2007 of $9,400.
Equity-Based Compensation
As discussed in "Executive Compensation - Compensation Discussion and
Analysis", the Corporation has established the Option Plan to provide for
the grant of stock options to officers of the Corporation. The plan is
administered by the Personnel Committee of the Board of Directors. No stock
options or stock awards were granted to the Named Executive Officers during
2007.
The following table provides information as of December 31, 2007, about
outstanding equity awards under the Corporation's Key Individual Stock
Option Plan. The Corporation has never granted any other type of stock
awards under the Option Plan or otherwise.
-14-
Outstanding Equity Awards at Fiscal Year-End Table
Option Awards
Equity Incentive
Plan Awards: Number
Number of Securities Number of Securities of Securities
Underlying Underlying Underlying Option Option
Unexercised Options Unexercised Options Unexercised Unearned Exercise Expiration
Name (# exercisable) (# unexercisable) Options (#) Price Date
DeWitt Drew 13,200 - - $13.07 10/20/2009
J. David Dyer, Jr. - - - - -
John J. Cole, Jr. 3,300 - - 19.31 4/29/2008
(1) Each stock option is exercisable for one share of the Corporation's
common stock. Stock options vest on the date of grant. The expiration
date of each option is 10 years after the date of grant.
Pension Benefits
The Corporation maintains the Pension Plan was frozen effective
December 31, 2006, due to the increasing costs to keep it funded. The cost
of this plan which represents the current and future benefits of current and
retired employees has been funded by the Corporation. These benefits accrue
based upon actuarial determinations employing the aggregate funding method.
The compensation covered by the Pension Plan has included total annual
compensation including bonuses and overtime pay. The employee benefits
earned through December 31, 2006, are preserved and the funds will be
maintained in a trust account to pay future benefits through retirement, but
new benefits will not accrue under the Pension Plan. The portion of
compensation which is considered covered compensation under the Pension Plan
equals the annual salary and bonus amounts indicated in "Executive
Compensation - Summary Compensation Table".
All executive officers who exceed the maximum covered compensation limited
by federal law of $220,000 are covered under the Corporation's Supplemental
Retirement Plan. Any excess annual retirement benefit which could not be
paid under the Pension Plan and ESOP because of the above federal limitation
will be payable under the Supplemental Plan. During 2007, only DeWitt Drew,
the Chief Executive Officer qualified for this Plan.
Generally, when a participant retires, both the Pension Plan and the
Supplemental Plan will pay to the participant benefits in the form of equal
monthly installments for such participant's life or could elect to have his
retirement benefits payable under one of several optional forms of payment.
The benefits are based on compensation and years of service and are taxable to
the participant. The normal retirement age defined in the plan is 65.
Director Compensation
All of the members of the Board of Directors of the Corporation also serve
on the Bank's Board of Directors. Each Board member is compensated for his
board services by the Bank. The annual director fees for the Chairman, Vice
Chairman, and each director are $12,000, $8,400, and $4,800, respectively.
In addition, directors are paid $400 for each Board meeting attended and
$200 for each committee meeting attended (committee meeting attendance fees
are paid only to outside directors). A retired director emeritus at age 70
with at least seven year of directorship service is compensated $3,600 per
-15-
year. Directors may contribute their directors' fees to the Corporation's
Stock Purchase Plan and receive common stock of the Corporation with an
aggregate value of 1.5 times their contribution.
The Corporation has a voluntary deferred compensation plan for the
Board of Directors administered by an insurance company. The plan
stipulates that if a director participates in the Plan for four years, the
Corporation will pay the Director future monthly income for 10 years
beginning at normal retirement age, and the Corporation will make specified
monthly payments to the Director's beneficiaries in the event of his or her
death prior to the completion of such payments. The plan is funded by life
insurance policies with the Corporation as the named beneficiary. This plan
is closed to new director enrollment and participation. The current
participants are John H. Clark and Richard L. Moss.
The following table summarizes 2007 non-employee director compensation.
There were no option or stock awards granted to directors for 2007 and
directors do not participate in the Pension Plan or receive any non-
qualified deferred compensation. Mr. Drew and Mr. Cole were the only
employees on the Board of Directors for 2007 and their compensation for that
service is described in "Executive Compensation - Summary Compensation
Table". The Corporation believes that the total level of compensation for
directors is reasonably comparable with other small public traded community
bank holding companies.
Director Compensation Table
Director All Other
Name of Director Fees Earned Compensation Total
Cecil H. Barber $16,275 $ 3,000 $ 19,275
John H. Clark 2,400 196,377 (1) 198,777
Michael J. McLean 25,750 3,000 28,750
Richard L. Moss 19,150 3,000 22,150
Roy H. Reeves 18,550 3,000 21,550
Johnny R. Slocumb 16,375 3,000 19,375
M. Lane Wear 11,000 2,250 13,250
Marcus R. Wells 10,600 2,250 12,850
C. Broughton Williams 18,500 2,400 20,900
(1) Includes for Mr. Clark, a retired executive officer of the
Corporation, $25,133 from the director deferred compensation plan,
annual retirement payments of $109,994 from the Pension and
Supplemental Plans, annual payments of $60,000 for a consulting
agreement, and $1,250 contributions to the Stock Purchase Plan. Mr.
Clark retired from the Board of Directors in May 2007.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Corporation has a written related person transaction policy that
governs the review, approval land ratification of any transaction that would
be required to be disclosed by the Corporation pursuant to Item 404 of
Regulation S-K under the Securities Act of 1933. The Board of Directors of
the Corporation or the Audit Committee must approve all such transactions
under the policy.
-16-
The Bank from time to time has had, and expects to have in the future,
banking transactions in the ordinary course of business with officers and
directors of the Corporation and other related persons, on substantially the
same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with unaffiliated third parties. Such
transactions have not involved more than the normal risk of collectibility
or presented other unfavorable features. At December 31, 2007, loans to
officers, directors, and principal shareholders of the Corporation and the
Bank and to other related persons amounted to $2,884,988. Also, during
2007, directors and executive officers had approximately $2,029,959 in
deposits with the Bank.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee operates pursuant to an Audit Committee Charter
that was adopted by the Board on May 24, 2000 and revised July 23, 2003. The
Corporation's management is responsible for its internal accounting controls
and the financial reporting process. The Corporation's independent
accountants, Thigpen, Jones, Seaton & Co., P.C. ("Thigpen"), are responsible
for performing an audit of the Corporation's consolidated financial
statements in accordance with auditing standards of the Public Company
Accounting Oversight Board and for expressing an opinion as to their
conformity with generally accepted accounting principals. The Audit
Committee's responsibility is to monitor and oversee these processes.
The Audit Committee was involved with the selection process and the
approval of Thigpen as the Corporation's principal independent auditors.
Also, the Audit Committee has approved Thigpen to provide some non-audit
services related to improving the Corporation's internal audit program and
performing an information technology audit.
In keeping with its responsibilities, the Audit Committee has reviewed
and discussed the Corporation's audited consolidated financial statements
with management and the independent accountants. The Audit Committee has
discussed with the Corporation's independent accountants the matters
required to be discussed by Statement on Auditing Standards No. 61,
"Communications with Audit Committee," as currently in effect. In addition,
the Audit Committee has received the written disclosures from the
independent accountants required by Independence Standards Board Standard
No.1, "Independence Discussions with Audit Committees," and has discussed
with the independent accountants their independence. The Audit Committee
has considered whether the provision of non-audit services by the
independent auditors is compatible with maintaining their independence.
The Audit Committee also discussed with management and the auditors the
quality and adequacy of the Corporation's internal controls over financial
reporting and the internal audit function's organization, responsibilities,
budget, and staffing.
Members of the Audit Committee rely without independent verification on
the information provided to them and on the representations made by
management and the independent accountants. Accordingly, the Audit
Committee's oversight does not provide an independent basis to determine
that management has maintained appropriate accounting and financial
reporting principles or appropriate internal controls and procedures
designed to assure compliance with accounting standards and applicable laws
and regulations. Furthermore, the Audit Committee's considerations and
discussions referred to above do not assure that the audit of the
Corporation's financial statements has been carried out in accordance with
standards of the Public Company Accounting Oversight Board, that the
financial statements are presented in accordance with generally accepted
accounting principals or that the Corporation's auditors are in fact
"independent". -17-
Based on the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the committee
referred to above and in the Audit Committee Charter, the committee
recommended to the Board of Directors that the audited consolidated
financial statements of the Corporation be included in the Annual Report on
Form 10-K for the year ending December 31, 2007, for filing with the
Securities and Exchange Commission.
This report is respectfully submitted by the Audit Committee
of the Board of Directors.
Richard L. Moss M. Lane Wear
Johnny R. Slocumb C. Broughton Williams
INFORMATION CONCERNING THE COMPANY'S ACCOUNTANTS
Thigpen was the principal independent public accountant for the
Corporation during the years ended December 31, 2007 and 2006.
Representatives of Thigpen are expected to be present at the Annual Meeting
and will have the opportunity to make a statement if they desire to do so
and to respond to appropriate questions. The Corporation anticipates that
Thigpen will be the Corporation's accountants for the current fiscal year.
Audit Fees
The aggregate fees billed for professional services by Thigpen for the
audit of the Corporation and Empire's annual financial statements and
reviews of quarterly financial statements for 2007 and 2006 were $57,850 and
$61,000, respectfully.
Audit-Related Fees
The aggregate fees billed for professional services by Thigpen for an
agreed upon procedural review of the trust division and of the Bank's loan
portfolio for 2007 and 2006 were $8,250.
Tax Fees
The aggregate fees billed for professional services by Thigpen for tax
compliance for 2007 and 2006 were $4,850.
All Other Fees
The aggregate fees billed for professional services by Thigpen for the
Corporation's pension plan audit and information technology audit in 2007
were $4,500, and $3,500, respectively. In 2006, the services performed and
fees billed for the pension plan audit and information technology audit were
$4,750 and $3,500, respectively.
The Audit Committee approves all audit and non-audit services performed
by the Corporation's independent public accountant.
-18-
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, each executive officer, director and beneficial owner of 10% or
more of the Corporation's Common Stock is required to file certain forms
with the Securities and Exchange Commission ("SEC"). Based solely on its
review of the copies of such reports received by the Corporation, or written
representations from certain reporting persons, the Corporation believes
that during the last fiscal year all Section 16 filing requirements
applicable to its reporting persons were fulfilled with the exception of a
newly appointed officer, Vayden L. Murphy, Senior Vice President. There was
a delinquent filing of a Form 3 for Mr. Murphy related to his initial
beneficial ownership of securities.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Any proposals of shareholders or recommendations for director nominees
intended to be presented at the Corporation's 2009 Annual Meeting of
Shareholders must be received by December 10, 2008, in order to be eligible
for inclusion in the Corporation's Proxy Statement and Proxy for that meeting.
The Corporation must be notified of any other matter intended to be presented
by a shareholder at the 2009 Annual Meeting no later than February 24, 2009.
SHAREHOLDER COMMUNICATIONS
The Board of Directors maintains a process for shareholders to communicate
with the Board. Shareholders wishing to communicate with the Board of
Directors should send any communication in writing to Mr. George R. Kirkland,
Southwest Georgia Financial Corporation, P. O. Box 3488, Moultrie, GA 31776-
3488. Any such communication should state the number of shares beneficially
owned by the shareholder making the communication. The communication will be
forwarded to the full Board of Directors or to any individual director or
directors to whom the communication is directed unless the communication is
illegal or otherwise inappropriate.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Corporation knows of no matters other than those
stated above that are to be brought before the meeting. If any other
matters should be presented for consideration and voting, however, it is the
intention of the persons named as proxies in the enclosed Proxy to vote in
accordance with their judgment as to what is in the best interest of the
Corporation.
By order of the Board of Directors,
/s/DeWitt Drew
DeWitt Drew
President and
Chief Executive Officer
April 18, 2008
-19-