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 Rule 14a-12
FIDELITY NATIONAL CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FIDELITY NATIONAL CORPORATION
3490 PIEDMONT ROAD
SUITE 1550
ATLANTA, GEORGIA 30305
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 2002
The Annual Meeting of Stockholders of Fidelity National Corporation
("Fidelity") will be held on Wednesday, April 24, 2002, at 3:00 p.m. at its
office at ONE SECURITIES CENTRE, 3490 PIEDMONT ROAD, SUITE 1550, ATLANTA,
GEORGIA 30305, 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.
2. Such other matters as may properly come before the meeting or
any adjournment thereof.
Only holders of Common Stock of record at the close of business on
March 7, 2002, 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. It is important that your shares be represented and voted at
the meeting. Please sign, date, and return the Proxy promptly in the enclosed
business reply envelope. If you attend the meeting you may, if you wish,
withdraw your Proxy and vote in person.
Also enclosed is a copy of Fidelity's 2001 Annual Report to
Stockholders.
By Order of the Board of Directors,
/s/ Martha C. Fleming
---------------------------------------
Martha C. Fleming
Secretary
March 22, 2002
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR
VOTE MAY BE RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
FIDELITY NATIONAL CORPORATION
3490 PIEDMONT ROAD
SUITE 1550
ATLANTA, GEORGIA 30305
PROXY STATEMENT
This Proxy Statement is furnished to you in connection with the
solicitation of Proxies by the Board of Directors of Fidelity National
Corporation ("Fidelity") for use at the Annual Meeting of Stockholders
("Meeting") to be held at its office at ONE SECURITIES CENTRE, 3490 PIEDMONT
ROAD, SUITE 1550, ATLANTA, GEORGIA 30305, on April 24, 2002, at 3:00 p.m. and
any adjournment thereof. The purposes of the Meeting are set forth in the
accompanying Notice of the Annual Meeting. It is anticipated that this Proxy
Statement and the accompanying Proxy will first be mailed to Stockholders on
March 22, 2002.
The record date of holders of Common Stock entitled to vote at the
Meeting was taken as of the close of business on March 7, 2002. On that date,
Fidelity had outstanding and entitled to vote 8,781,628 shares of Common Stock,
no par value, with each share entitled to one vote.
A Proxy given pursuant to this solicitation may be revoked by the
holder of the Common Stock who attends the Meeting and gives oral or written
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 an instrument revoking it or a
duly executed Proxy bearing a later date to the Secretary of Fidelity. If the
Proxy is properly completed and returned by the holder of the Common Stock and
is not revoked, it will be voted at the Meeting in the manner specified thereon.
If the Proxy is returned but no choice is specified thereon, it will be voted
"FOR" all of the nominees for director named herein and upon such other matters
as may properly come before the Meeting or any adjournment thereof in accordance
with the best judgment of the holders of the Proxy.
The presence of a majority of the votes entitled to be cast at the
Meeting represented in person or by proxy at the Meeting will constitute a
quorum. The nine nominees receiving the highest vote totals will be elected as
directors of Fidelity. All other matters will be decided by the affirmative vote
of the majority of the votes entitled to be cast present or represented at the
Meeting.
Abstentions, withheld votes and broker non-votes will be included in
the calculation of the number of votes represented in person or by proxy at the
Meeting in determining whether the quorum requirement is satisfied, but will not
be counted as votes cast for any matter to be voted upon. Broker "non-votes"
occur when a broker holding shares of capital stock for a beneficial owner votes
on one matter pursuant to the broker's discretionary authority or pursuant to
instructions from the beneficial owner, but does not vote on another matter for
the reason that the broker does not have discretionary authority to vote such
shares on such other matter and has not received voting instructions from the
beneficial owner. Broker non-votes will not affect the votes required to elect
the directors, which is the only matter known to management that will be
presented at the Meeting.
The expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be paid by Fidelity. 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
Common Stock and normal handling charges may be paid for such forwarding
service. In addition, directors, officers and other employees of Fidelity, who
will not be additionally compensated therefor, may solicit proxies in person or
by telephone.
1
VOTING SECURITIES AND PRINCIPAL HOLDERS
The following table sets forth as of March 7, 2002, beneficial
ownership of Fidelity's Common Stock by (i) each person known to be the
beneficial owner of more than 5% of the voting securities of Fidelity, (ii) each
director, (iii) the five most highly compensated executive officers, and (iv)
all directors and executive officers as a group.
Name Number of Shares Percent of Class
Of Beneficial Owner Owned Beneficially Outstanding
---------------------------------------- ------------------ ----------------
Tontine Management L.L.C 628,900 7.2%
200 Park Avenue - Suite 3900
New York, NY 10166-3799
Dimensional Fund Advisors 487,400 5.6%
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401-1038
James B. Miller, Jr 2,907,588(1) 32.6%
David R. Bockel 700 *
Edward G. Bowen, M.D 11,000(2) *
Carl I. Gable 5,000 *
Kevin S. King 4,069(3) *
Larry D. Peterson 85,082(4) *
Robert J. Rutland 148,764(5) 1.7%
W. Clyde Shepherd, Jr 155,322 1.8%
Rankin M. Smith, Jr 17,514(6) *
David Buchanan 26,805(7) *
M. Howard Griffith, Jr 36,355(8) *
H. Palmer Proctor, Jr 26,370(9) *
All directors and executive officers *
as a group (12 persons) 3,424,569(10) 37.9%
---------------
(1) Includes 309,803 shares held by Fidelity National Bank ("Bank") as
trustee under five trusts for Mr. Miller's children and 180,433 shares
held by Berlin American, LLC, a company of which Mr. Miller and his
wife own 40%. Also includes 87,349 shares of Common Stock owned by his
spouse, 82,583 shares held in his 401(k) Plan, and 128,080 shares of
Common Stock that Mr. Miller has the right to acquire pursuant to
outstanding stock options. Mr. Miller's business address is Suite 1550,
3490 Piedmont Road, Atlanta, Georgia 30305.
(2) Includes 10,560 shares of Common Stock held by Dr. Bowen as trustee for
Target Benefit Plan.
(3) Owned by Mr. King's wife.
(4) Includes 80,000 shares of Common Stock that Mr. Peterson has the right
to acquire pursuant to outstanding stock options.
(5) Includes 6,000 shares of Common Stock held by Mr. Rutland as trustee
for his children and 7,920 shares held by a family foundation.
(6) Includes 1,688 shares of Common Stock owned by Mr. Smith's wife and
6,607 shares held by Mr. Smith's children.
(7) Includes 18,000 shares of Common Stock that Mr. Buchanan has the right
to acquire pursuant to outstanding stock options.
(8) Includes 20,000 shares of Common Stock that Mr. Griffith has the right
to acquire pursuant to outstanding stock options.
(9) Includes 20,000 shares of Common Stock that Mr. Proctor has the right
to acquire pursuant to outstanding stock options.
(10) Includes 266,080 shares of Common Stock that the beneficial owner has
the right to acquire pursuant to outstanding stock options.
*Less than one percent.
2
ITEM 1 - NOMINATION AND ELECTION OF DIRECTORS
The number of directors is currently set at nine by resolution of the
Board of Directors. The number of directors may be increased or decreased from
time to time by resolution of the Board of Directors or of the Stockholders, but
no decrease shall have the effect of shortening the term of an incumbent
director. The terms of office for directors continue until the next annual
meeting of Stockholders and until their successors are elected and qualified.
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 unless the Board of
Directors or Stockholders by resolution provide for a lesser number of
directors, but in no event will the Proxy be voted for more than nine nominees.
Management has no reason to believe that any nominee will not serve if elected.
All the nominees are currently directors of Fidelity.
INFORMATION ABOUT NOMINEES FOR DIRECTOR
The following information as of March 7, 2002, has been furnished by
the respective nominees for director. Except as otherwise indicated, each
nominee has been engaged in his present principal employment, in the same
position, for more than five years.
Year Business Experience During Past
Name Age Elected Five Years And Other Information
---- --- ------- --------------------------------
James B. Miller, Jr.(3) 61 1979 Chairman of the Board, President and Chief Executive Officer of
Fidelity since 1979. A director of the Bank since 1976; President and
Chief Executive Officer of the Bank from 1977 to 1997; and Chairman of
the Bank since 1998. Chairman of the Board of Fidelity National Capital
Investors, Inc. ("Fidelity Capital"). A director of Interface, Inc., a
textile manufacturing company.
David R. Bockel(1) 57 1997 President of Bockel & Company, an advertising agency in Atlanta,
Georgia, since 1977. He is also Commanding General, 90th Regional
Support Command, U. S. Army Reserve. A director of the Bank since 1997.
Edward G. Bowen, M.D. 66 1989 Gynecologist and obstetrician in Atlanta, Georgia. A director of the
Bank since 1989.
Carl I. Gable(1) 62 2000 Private Investor. Of counsel, Troutman Sanders LLP from 1996 to 1998.
A director of Interface, Inc., a textile manufacturing company.
Kevin S. King(1) 54 1998 Of Counsel, Dietrick, Evans, Scholz & Williams, LLC, Atlanta, Georgia,
since 2000. A partner with King & Carragher, Attorneys from 1996 to
2000. A director of the Bank since 1998.
Larry D. Peterson 53 1997 Director, President and Chief Executive Officer of the Bank, and Vice
President of Fidelity since 1997. Senior Vice President and Senior
Segment Manager of KeyCorp from 1995 to 1997.
3
Robert J. Rutland(2)(3) 60 1979 Chairman of Allied Holdings, Inc., a transportation company located in
Decatur, Georgia, since 1995. A director of the Bank since 1974.
W. Clyde Shepherd, Jr.(2)(3) 87 1979 Secretary/Treasurer of Shepherd Construction Company, a general
contracting company located in Atlanta, Georgia, since 1948. A director
of the Bank from 1974 to 1998 and Chairman of the Board of Directors of
the Bank from 1989 to 1998.
Rankin M. Smith, Jr.(1)(2) 54 1987 Owner & Manager, Seminole Plantation in Georgia since 1991. Director,
Advisor and Shareholder of the Atlanta Falcons Football Club from 1990
to 2002. A director of the Bank since 1987.
---------------
(1) Member of the Audit Committee of the Board of Directors.
(2) Member of the Compensation Committee of the Board of Directors
(3) Member of the Executive Committee of the Board of Directors
There are no family relationships between any director, executive
officer or nominee for director of Fidelity or any of its subsidiaries except
that W. Clyde Shepherd, III, a director of the Bank and Fidelity National
Capital Investors, Inc., is the son of W. Clyde Shepherd, Jr., a director of
Fidelity.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE
NOMINEES FOR DIRECTOR.
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
All reports of beneficial ownership of securities were filed in a
timely maner in 2001 with the Securities and Exchange Commission.
4
EXECUTIVE COMPENSATION
The following table sets forth the annual and other compensation paid
by Fidelity and its subsidiaries for 2001 to James B. Miller, Jr., Larry D.
Peterson, David Buchanan, M. Howard Griffith, Jr., and H. Palmer Proctor, Jr.,
executive officers during 2001 (collectively "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Name and All Other
Principal Position Year Salary Bonus Compensation
------------------ ---- -------- ------ ------------
James B. Miller, Jr 2001 $500,000 $ -- $24,463(1)
Chairman of the Board, 2000 400,000 100,000 22,648(1)
President and Chief 1999 300,000 -- 11,685(1)
Executive Officer
Larry D. Peterson 2001 300,000 -- 13,551(2)
President and Chief 2000 300,000 -- 15,636(2)
Executive Officer, FNB 1999 300,000 -- 68,263(2)
David Buchanan 2001 150,000 9,000 7,856(3)
Vice President 2000 150,000 21,938 7,262(3)
1999 135,625 13,487 5,771(3)
M. Howard Griffith, Jr 2001 175,000 -- 6,562(4)
Chief Financial Officer 2000 175,000 -- 3,929(4)
1999 122,292 -- 2,226(4)
H. Palmer Proctor, Jr 2001 150,000 1,137 10,707(5)
Vice President 2000 150,000 8,609 6,097(5)
1999 102,083 5,057 5,766(5)
---------------
(1) Includes Fidelity's contributions of $5,000, $5,000, and $1,950 to Mr.
Miller's account in the tax-qualified savings plan ("401(k) Plan") for
2001, 2000, and 1999, respectively, and $14,734, $12,988, and $2,814
for life insurance for Mr. Miller for 2001, 2000, and 1999,
respectively, under split dollar and corporate owned life insurance
policies. Under the split dollar insurance policy, Fidelity will
receive upon termination of the policy proceeds equal to the insurance
premiums paid plus a market yield.
(2) Includes Fidelity's contributions of $4,500, $7,676, and $1,119 to Mr.
Peterson's account in the 401(k) Plan for 2001, 2000, and 1999,
respectively, and $1,236, $1,130 and $572 under a split dollar
insurance policy for Mr. Peterson for 2001, 2000, and 1999,
respectively, from which Fidelity will receive upon termination of the
policy proceeds equal to the insurance premiums paid plus a market
yield, and $4,238 and $2,087 for annual fees in 2001 and 2000 and
$60,552 paid for initiation and annual fees for a club in 1999.
(3) Includes Fidelity's contributions of $3,975, $3,237, and $2,117 to Mr.
Buchanan's account in the 401(k) Plan for 2001, 2000, 1999,
respectively, and $282, $265, and $108 under a split dollar insurance
policy for Mr. Buchanan for 2001, 2000, and 1999, respectively, from
which Fidelity will receive upon termination of the policy proceeds
equal to the insurance premium paid plus a market yield.
(4) Includes Fidelity's contributions of $5,250, $3,198, and $1,797 to Mr.
Griffith's account in the 401(k) Plan for 2001, 2000, and 1999,
respectively, and $791, $731, and $429 under a split dollar insurance
policy for Mr. Griffith for 2001, 2000, and 1999, respectively, from
which Fidelity will receive upon termination of the policy proceeds
equal to the insurance premium paid plus a market yield, and $521 for
initiation and annual fees for a club in 2001.
(5) Includes Fidelity's contributions of $4,526, $3,013, and $594 to Mr.
Proctor's account in the 401(k) Plan for 2001, 2000, and 1999,
respectively, and $201, $200, and $88 under a split dollar insurance
policy for Mr. Proctor for 2001, 2000, and 1999, respectively, from
which Fidelity will receive upon termination of the policy proceeds
equal to the insurance premiums paid plus a market yield, and $3,478,
$892, and $582 for annual fees for a club in 2001, 2000, and 1999,
respectively.
5
EMPLOYMENT AGREEMENTS
Fidelity initially entered into an employment agreement with Larry D.
Peterson in 1997. The initial employment agreement with Mr. Peterson was for a
three-year period ending September 14, 2000. A new three-year employment
agreement was entered into commencing September 15, 2000. The employment
agreements provided for an annual base salary of $300,000. Also, Fidelity
provided Mr. Peterson a disability policy, which provides disability benefits at
the annual rate of $210,000.
The employment agreement with Mr. Peterson provides that if the
executive terminates his employment or if his employment is terminated by
Fidelity for cause, such executive is subject to a non-compete provision for a
period of one year.
STOCK OPTIONS
No stock options or stock appreciation rights were granted to executive
officers during 2001.
The following table sets forth, with respect to the Named Executive
Officers, information concerning any exercise of stock options in 2001 and all
unexercised stock options held as of December 31, 2001.
AGGREGATE STOCK OPTION EXERCISES FOR THE YEAR ENDED
DECEMBER 31, 2001, AND YEAR-END STOCK OPTION VALUES
----------------------------------------------------------------------------------------------------------------------------
Value Realized
($)(Market
Number of Price at Time
Shares of Exercise Value of Unexercised
Acquired on less Exercise Number of Unexercised In-the-Money Stock Options
Name Exercise Price) Stock Options at Year-End at Year-End(1)
----------------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
James B. Miller, Jr. -- -- 128,080 21,920 $ -- $ --
Larry D. Peterson -- -- 80,000 20,000 -- --
David Buchanan -- -- 18,000 12,000 4,275 2,850
M. Howard Griffith, Jr. -- -- 20,000 30,000 4,750 7,125
H. Palmer Proctor, Jr. -- -- 20,000 30,000 4,750 7,125
(1) The average of the high and low value of a share of Common Stock of
Fidelity on December 31, 2001, was $7.49.
401(K) PLAN
Fidelity has adopted a tax-qualified savings plan, which is intended to
qualify under Section 401(k) of the Internal Revenue Code of 1986 ("Code").
Employees may elect to contribute to the 401(k) Plan through payroll deductions
up to the statutory limitation and may direct the investment of their accounts
into various investment funds. Under Section 401(k) of the Code, the employee's
contributions to the 401(k) Plan are not taxable to the employee until such
amounts are distributed to the employee. Fidelity pays the administrative
expenses of the 401(k) Plan and makes voluntary contributions from time to time,
which are allocated to each eligible employee's account as required by the Code.
Fidelity's voluntary contributions become fully vested at the earlier of six
years of service or at normal retirement age. Fidelity's voluntary contributions
in 2001 were $252,503.
6
COMPENSATION OF DIRECTORS
Prior to October 2001, each non-employee director of Fidelity was paid
$1,000 for each Board of Directors' meeting attended and $250 for committee
meetings attended on a day that was not a regularly scheduled Board meeting
date.
Effective October 1, 2001, each non-employee director of Fidelity was
paid $2,000 for each Board of Directors' meeting attended and $500 for each
committee meeting attended on a day that was not a regularly scheduled Board
meeting date. Effective January 1, 2002, each non-employee director of Fidelity
is paid a $10,000 annual retainer, paid in four quarterly installments. In
addition, a director will receive $500 for each committee meeting attended on a
day that is not a regularly scheduled Board meeting date.
Directors who are employees do not receive a fee for attending Board or
committee meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee ("Committee") are W. Clyde
Shepherd, Jr., Chairman, Robert J. Rutland, and Rankin M. Smith, Jr. No member
of the Committee is an employee of Fidelity or any subsidiary.
The Bank leases space from a corporation of which Mr. Shepherd, Jr., a
director and member of the Compensation and Executive Committees, is the
majority shareholder. The Bank leases approximately 2,200 square feet at an
average annual rate of approximately $12 per square foot subject to a pro rata
increase for increases in taxes and insurance. The lease agreement was made
substantially on the same terms as those prevailing at the time for comparable
leases for similar facilities.
Kevin S. King, a director, is of counsel to the law firm, Dietrick,
Evans, Scholz & Williams, LLC, which provided legal services to the Bank during
2001.
The Bank and Fidelity National Capital Investors, Inc. have had,
and expect to have in the future, banking and other business transactions
in the ordinary course of business with directors (including members of the
Committee) and officers of Fidelity and its subsidiaries, including members of
their families or corporations, partnerships or other organizations in which
such officers or directors have a controlling interest, on substantially the
same terms (including price, or interest rates and collateral) as those
prevailing at the time of comparable transactions with unrelated parties. Such
transactions have not and will not involve more than the normal risks of
collectibility, nor present other unfavorable features. As of December 31, 2001,
the Bank had direct and indirect loans outstanding to officers and directors and
their affiliates aggregating approximately $1.95 million.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for evaluating the
remuneration of executives of Fidelity to provide competitive levels of
compensation which take into account the annual and long-term performance goals,
whether there has been above average corporate performance, the levels of an
individual's initiative, responsibility and achievements, and the need of
Fidelity to attract and retain well trained and highly motivated executives. The
Committee fixes the compensation of the Chief Executive Officer of Fidelity and
the Chief Executive Officer of the Bank, and generally reviews the compensation
of the other executive officers. All decisions by the Committee relating to the
compensation of the Chief Executive Officers of Fidelity and the Bank are
reviewed by the full Board of Directors.
7
Executive officers' overall compensation is intended to be consistent
with the compensation paid to executives of financial institutions and of other
companies similar in size, complexity, and character to Fidelity, provided that
the performance of Fidelity and the executive officer warrants the compensation
being paid.
Compensation paid to the Named Executive Officers of Fidelity in 2001,
as reflected in the foregoing compensation tables, consisted of the following
elements: base salary, bonus, matching contributions paid with respect to the
401(k) Plan and certain perquisites. No stock options were granted to executive
officers in 2001. In addition, Fidelity has adopted certain broad-based employee
benefit plans in which executives, and other officers together with employees,
have the option to participate. Benefits under these plans are not directly or
indirectly tied to Fidelity's performance, except that contributions by Fidelity
to the 401(k) Plan are voluntary, at the election of the Board of Directors.
Bonuses were granted to Messrs. Buchanan and Proctor based upon the 2001
performance of the units for which they had responsibility and their individual
performance.
During 1999, Fidelity purchased a no load single premium company owned
life insurance policy on Mr. Miller which provides a tax exempt yield to
Fidelity if held to maturity. Mr. Miller will receive taxable income for the
economic benefit he receives under the policy as noted in the Summary
Compensation Table.
The Chief Executive Officer recommends the compensation of all other
executive officers.
Compensation Committee
W. Clyde Shepherd, Jr., Chairman
Robert J. Rutland
Rankin M. Smith, Jr.
AUDIT COMMITTEE REPORT
Each of the Audit Committee members satisfies the definition of
independent director as established by the National Association of Securities
Dealers. The Board of Directors of Fidelity has adopted a written charter for
the Audit Committee.
The Audit Committee has reviewed Fidelity's audited consolidated
financial statements for the year ended December 31, 2001, and discussed the
statements with management. The Audit Committee has discussed with Ernst &
Young, Fidelity's independent accountants, those matters required to be
discussed by Statement of Auditing Standards No. 61, Communication with Audit
and Finance Committees, as amended.
The Audit Committee reviewed the written disclosures and independence
letter required by the Independent Standards Board Standard No. 1 received from
Ernst & Young, and discussed the independence of Ernst & Young. The Audit
Committee has determined that the providing of professional services, in
addition to audit related services, is compatible with the maintenance of the
accountant's independence. Based upon the review and discussions noted above,
the Audit Committee recommended to the Board of Directors of Fidelity that the
audited consolidated financial statements of Fidelity be included in its Annual
Report on Form 10-K for the fiscal year ended December 31, 2001, and be filed
with the U. S. Securities and Exchange Commission.
This report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that Fidelity
specifically incorporates this information by reference and should not otherwise
be deemed filed under such Acts.
Audit Committee
Kevin S. King, Chairman
David R. Bockel
Carl I. Gable
Rankin M. Smith, Jr.
8
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in the
cumulative shareholder return on Fidelity's Common Stock with the cumulative
Total Return on The NASDAQ Stock Market (U.S. Companies) index and the NASDAQ
Bank Stock Market under the symbol LION.
The graph assumes $100 invested on December 31, 1996, in the Common
Stock of Fidelity and in each of the two indexes. The comparison assumes that
all dividends are reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG FIDELITY,
THE NASDAQ STOCK MARKET (U.S.) AND NASDAQ BANK STOCKS
[PERFORMANCE GRAPH]
PERIOD ENDING
----------------------------------------------------------------------------------------------
INDEX 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
----------------------------------------------------------------------------------------------------------------------------------
Fidelity National Corporation 100.00 75.51 88.08 63.17 43.08 64.88
NASDAQ - Total US* 100.00 122.48 172.68 320.89 193.01 153.15
NASDAQ Bank Index* 100.00 167.41 166.33 159.89 182.38 197.44
9
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 2001, the Board of Directors held seven (7) meetings. Each of
the directors attended at least seventy-five percent (75%) of the aggregate
meetings of the Board of Directors and the committees on which the director
served. Fidelity does not have a nominating committee. All nominees for the
Board of Directors are nominated by the entire Board of Directors.
Audit Committee. The primary functions of Fidelity's Audit Committee are to see
that an audit program is in place to protect the assets of Fidelity, assure that
adequate internal controls exist, oversee the internal audit function, and
recommend the independent auditors for appointment by the Board of Directors.
During 2001, the Audit Committee held six (6) meetings. The Audit Committee is
governed by a written charter approved by the Audit Committee and the Board of
Directors.
Compensation Committee. The primary functions of the Compensation Committee are
to evaluate and administer the compensation of the Chief Executive Officer and
to review the general compensation programs of Fidelity, including the
compensation of the other executive officers. During 2001, the Compensation
Committee held two (2) meetings.
Executive Committee. The Executive Committee is authorized to exercise any and
all of the powers of the Board of Directors in the management of the business
and affairs of Fidelity except where specific power is limited to the Board of
Directors by the Bylaws or by applicable law. During 2001, the Executive
Committee held five (5) meetings.
AUDITORS
Ernst & Young audited the consolidated financial statements of Fidelity
for the year ended December 31, 2001, and have been selected to audit the
consolidated financial statements for 2002. Representatives of Ernst & Young 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 will respond to appropriate
questions.
AUDIT FEES
Fees billed to Fidelity by Ernst & Young during 2001 for professional
services rendered for the audit of Fidelity's consolidated annual financial
statements for the fiscal year ended December 31, 2001, and the reviews of the
financial statements included in Fidelity's quarterly reports on Form 10-Q for
that fiscal year were $127,000. The Audit Committee of the Board of Directors of
Fidelity has determined that the providing of the services covered under the
captions "Financial Information Systems Design and Implementation Fees," and
"All Other Fees" is compatible with maintaining the independence of Ernst &
Young.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
No fees were billed by Ernst & Young for professional services relating
to financial information systems design and implementation rendered during the
fiscal year ended December 31, 2001.
ALL OTHER FEES
The aggregate fees billed by Ernst & Young for all other professional
services, including audit related fees of $121,500, rendered during the fiscal
year ended December 31, 2001, other than as stated above under the captions
"Audit Fees," and "Financial Information Systems Design and Implementation
Fees," were $964,468. This amount includes $748,087 for business advisory
services rendered in connection with the OCC Consent Order and its review of the
Trust Department of the Bank.
10
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be present at the 2003 Annual
Meeting must be received by Fidelity addressed to the President at 3490 Piedmont
Road, Suite 1550, Atlanta, Georgia 30305, by November 22, 2002, in order to be
eligible for inclusion in the Proxy Statement and Proxy meeting for that
meeting.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management knows of no matters, other than those stated above, that are
to be brought before the Meeting. If any other matter 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 Fidelity.
By Order of the Board of Directors,
/s/ Martha C. Fleming
---------------------------------------
Martha C. Fleming
Secretary
March 22, 2002
11
FIDELITY NATIONAL CORPORATION
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 2002
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes Edward G. Bowen, M.D. and Kevin S. King,
and each of them individually, with the power of substitution, to vote and
otherwise represent all of the shares of common stock ("Common Stock") of
Fidelity National Corporation, ("Company"), held of record by the undersigned,
at the Annual Meeting of Stockholders of the Company ("Annual Meeting") to be
held at the offices of the Corporation located at One Securities Centre, 3490
Piedmont Road, Suite 1550, Atlanta, GA 30305 on April 24, 2002, at 3:00 p.m.,
and any adjournment or adjournments thereof, as herein specified and, in their
discretion, upon such other matters as may come before the Annual Meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement for the Annual Meeting. All other proxies
heretofore given by the undersigned to vote shares of Common Stock of the
Company are expressly revoked.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR"
THE ELECTION OF DIRECTORS REFERRED TO IN ITEM 1. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS REFERRED TO IN ITEM 1.
(Continued and to be signed on the other side.)
PLEASE COMPLETE, SIGN, DATE AND [X]
[ ] RETURN THIS PROXY PROMPTLY IN Votes must be indicated
THE ENCLOSED ENVELOPE. (x) in Black or Blue ink.
Item 1. Election of Directors
FOR ALL [ ] WITHHOLD FOR ALL [ ] *EXCEPTIONS [ ] To change your address,
please mark this box. [ ]
Nominees: James B. Miller, Jr.; David R. Bockel; Edward G. Bowen, M.D.;
Carl I. Gable; Kevin S. King; Larry D. Peterson; Robert J. Rutland;
W. Clyde Shepherd, Jr.; Rankin M. Smith, Jr.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions ____________________________________________________________________
Date: __________________________________
________________________________________
Share Owner sign here
________________________________________
Co-Owner sign here
Please sign exactly as your name appears
on this card. When signing as attorney,
executor, administrator, trustee,
guardian, partner or corporate officer
please give full title as such. Whether
or not you plan to attend the Annual
Meeting, you are urged to execute and
return your proxy, which may be revoked
at any time prior to its use.