UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

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Filed by a Party other than the Registrant [    ]

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission

Only (as permitted by Rule14a-6(e)(2))

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Definitive Proxy Statement

[    ]

Definitive Additional Materials

[    ]

Soliciting Material Pursuant to Rule14a-12

AUBURN NATIONAL BANCORPORATION, INC.

(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):

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Fee computed on table below per Exchange Act Rules14a-6(i)(1) and0-11.

 

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.                                                                                                                                                                

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LOGOLOGO

April 17, 2020March 30, 2022

TO OUR SHAREHOLDERS:

You are cordially invited to attend the Annual Meeting of Shareholders of Auburn National Bancorporation, Inc., to be held at The Hotel at Auburn University & Dixon Conference Center, 241 South College Street, Auburn, Alabama, on May 12, 2020,10, 2022, at 3:00 P.M., local time (collectively, with any adjournments or postponements thereof, the “Meeting”). During the coronavirus pandemic, we are supporting our communities’, customers’ and shareholders’ health and well-being. This year, to reduce the spread of coronavirus and in light of the State of Alabama’s stay at home order, we will be conducting a virtual meeting of shareholders, which will give you the opportunity to attend the Meeting online, using your smartphone, tablet or computer. Because the Meeting will be virtual, shareholders will not be able to attend the Meeting in person. You will be able to listen to a live audio webcast of the Meeting, ask questions and submit your votes electronically in real time as you would, if you attended the Meetingin-person.

The Notice of Meeting, Proxy Statement Proxy, and our 2019 Annual Report to ShareholdersProxy are enclosed. Details regarding how to participate in the virtual meeting are more fully described in the accompanying proxy statement. We hope you are able to logincan attend and vote your shares.shares in person. In any case, please complete the enclosed Proxy and return it to us. This action will ensure that your preferences will be expressed on the matters that are being considered. If you login toattend the Meeting, you may vote your shares electronically in real timeperson even if you have previously returned your Proxy.

Prior to the meeting, a reception will be held from 2:30 p.m. to 3:00 p.m. at The Hotel at Auburn University & Dixon Conference Center. We are here to serve our customers, communities and shareholders safely and as conveniently as possible. hope you can join us!

We thank you for your support this past year, and we encourage you to review our Annual Report. If you have any questions about the Proxy Statement or the Annual Report, please call or write us.

Sincerely,

Sincerely,

/s/ Robert W. Dumas

Robert W. Dumas

/s/ Robert W. Dumas

Robert W. Dumas

Chairman of the Board,

President and CEO

AUBURN NATIONAL BANCORPORATION, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 12, 2020

10, 2022

Notice is hereby given that the 20202022 Annual Meeting of Shareholders of Auburn National Bancorporation, Inc. (the “Company”) will be held via audio webcastat The Hotel at Auburn University & Dixon Conference Center, 241 South College Street, Auburn, Alabama on Tuesday, May 12, 2020,10, 2022, at 3:00 P.M., local time (collectively, with any adjournments or postponements thereof, the “Meeting”). In light of the coronavirus pandemic, and to limit the spread of the virus by complying with the State of Alabama’s stay at home order, we will not have a physical meeting, but will conduct a virtual meeting of shareholders. This will give you the opportunity to attend the Meeting online, using your smartphone, tablet or computer. Because the Meeting will be virtual and conducted via a live audio webcast, shareholders will not be able to attend the Meeting in person. You will be able to listen to a live audio webcast of the Meeting, ask questions and submit your votes electronically in real time, just as you would if attending the Meetingin-person. Details regarding how to participate in the virtual meeting are more fully described in the accompanying proxy statement.

The Meeting will be held, for the following purposes:

 

1.

Election of Directors.To elect 9 directorsdirector nominees to the Board of Directors forone-year terms;

 

2.

Advisory Vote on Executive Compensation. To approve, on anon-binding, advisory basis, the compensation of the Company’s “named executive officers” as disclosed in the proxy statement that accompanies this notice;

 

3.

Ratification of Auditors.To ratify the appointment of Elliott Davis LLC as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020;2022; and

 

4.

Other Business.To transact such other business as may properly come before the Meeting.

Only shareholders of record at the close of business on March 13, 2020,21, 2022, are entitled to notice of and to vote at the Meeting. All shareholders, whether or not they expect to login toattend the Meeting in person, are requested to complete, date, sign and return the enclosed Proxy in the accompanying envelope.

Also enclosed is a copyBy Order of the Company’s 2019 Annual Report.Board of Directors,

/s/ C. Wayne Alderman

By Order of the Board of Directors,

/s/ C. Wayne Alderman

C. Wayne Alderman

Secretary

April 17, 2020C. Wayne Alderman

Secretary

March 30, 2022

PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO THE TRANSFER AGENT IN THE ENVELOPE PROVIDED.    IF YOU LOGIN TOATTEND THE MEETING, YOU MAY VOTE ELECTRONICALLY IN REAL TIMEPERSON BY WRITTEN BALLOT IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

SHAREHOLDER MEETING TO BE HELD ON TUESDAY, MAY 12, 202010, 2022

THE PROXY STATEMENT AND ANNUAL REPORT TO SHAREHOLDERS

ARE AVAILABLE AT WWW.AUBNPROXY.COM

AND OUR COMPANY’S WEBSITE WWW.AUBURNBANK.COM

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

OF

AUBURN NATIONAL BANCORPORATION, INC.

TO BE HELD MAY 12, 202010, 2022

General

This Proxy Statement is being furnished to the shareholders of Auburn National Bancorporation, Inc. (the “Company”), a Delaware corporation registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), in connection with the solicitation of proxies by the Company’s Board of Directors from holders of the outstanding shares of the Company’s $.01 par value Common Stock (“Common Stock”) for the 20202022 Annual Meeting of Shareholders of the Company (collectively, with any adjournments or postponements, the “Meeting”). Unless the context otherwise requires, the term “Company” includes the Company’s subsidiary, AuburnBank (the “Bank”). The Company’s Common Stock is listed on the Nasdaq Global Market under the symbol “AUBN.”

The Meeting will beis being held virtually, online on Tuesday, May 12, 2020, at 3:00 P.M., Central Daylight Time (“CDT”), to consider and vote upon: (i) the election of 9 directorsdirector nominees to the Board of Directors; (ii) on anon-binding, advisory basis, the compensation of the Company’s “named executive officers” (defined below) as disclosed in this Proxy Statement (a“say-on-pay proposal”); (iii) the ratification of the appointment of Elliott Davis LLC (“Elliott Davis”) as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020;2022; and (iv) such other matters as may properly come before the Meeting.

The Company’s Board of Directors knows of no business that will be presented for consideration at the Meeting other than the matters described in this Proxy Statement.

This Proxy Statement and the Proxy are first being provided on or about April 17, 2020,March 30, 2022, to Company shareholders of record as of the close of business on March 13, 202021, 2022 (the “Record Date”). The Company’s 20192021 Annual Report (the “Annual Report”), including financial statements for the fiscal year ended December 31, 2019, accompanies this Proxy Statement.2021, can be found by clicking the heading “About Us” on the Company’s website, www.auburnbank.com, and then clicking on “Investor Relations.”

Each shareholder is entitled to one vote on each proposal for each share of Common Stock held as of the Record Date. In determining whether a quorum exists at the Meeting for purposes of all matters to be voted on, all votes “for” or “against,” as well as all abstentions (including votes to withhold authority to vote in certain cases), will be counted as shares present, and a quorum will exist if a majority of the shares issued and outstanding and entitled to vote at the meeting are present.present or represented by proxy. Under Delaware law, the vote required for the election of directors is a plurality of the votes cast by the shares present virtually or represented by proxy, at the Meeting and entitled to vote on the election of directors, provided a quorum is present. Consequently, with respect to the election of directors, “withhold” votes and brokernon-votes will not be counted in determining whether the proposaldirector has received the requisite number of votes for approval as they are not considered votes cast.

A “brokernon-vote” occurs when a broker, dealer, bank, or voting trustee or their nominee who can be identified as a record holder of Common Stock holding shares in “street name” for a beneficial owner of Common Stock does not vote on a particular proposal because the record holder does not have discretionary voting power for that particular item and has not received voting instructions from the beneficial owner. Brokers (and other similar record holders) that have not received voting instructions from their clients cannot vote on their clients’ behalf on the election of directors, or thesay-on-pay proposal, but may, although they are not required to, vote their clients’ shares on the ratification of the appointment of the independent registered public accounting firm.

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Thesay-on-pay proposal included on the ballot is only anon-binding, advisory vote. This means that the boardBoard of directorsDirectors will not be required to take any action on this matter regardless of the number of shares voted in favor of or against the proposal. However, the Board of Directors wants to understand the view of the Company’s shareholders on the Company’s executive compensation program, so your consideration and vote on this matter will be taken seriously by the Board of Directors. Approval of thesay-on-pay proposal requires the affirmative vote of the majority

2

of shares present virtually or represented by proxy, and entitled to vote at the Meeting (meaning that of the shares represented at the meeting and entitled to vote, a majority of them must be voted “for” the proposal for it to be approved). Abstentions will have the same effect as a vote “against” the proposal, and brokernon-votes will not be counted in determining whether the proposal received the requisite number of votes for approval.

The vote required for the ratification of the appointment of Elliott Davis as the Company’s independent registered public accounting firm is the affirmative vote of a majority of shares present virtually or represented by proxy, and entitled to vote at the Meeting (meaning that of the shares represented at the meeting and entitled to vote, a majority of them must be voted “for” the proposal for it to be approved). With respect to any such proposal, you may vote in favor of or against the item or you may abstain from voting. Any proxy marked “abstain” with respect to such proposal will have the effect of a vote “against” the proposal. As discussed above, please note that banks and brokers (and other similar record holders) that have not received voting instructions from their clients may vote their clients’ shares on the ratification of the appointment of Elliott Davis.

Unless otherwise required by the Company’s Certificate of Incorporation or Amended and Restated Bylaws (“Bylaws”), or by the Delaware General Corporation Law or other applicable law, any other proposal that is properly brought before the Meeting will require the affirmative vote of the majority of shares present virtually or represented by proxy, and entitled to vote at the Meeting (meaning that of the shares represented at the meeting and entitled to vote, a majority of them must be voted “for” the proposal for it to be approved). With respect to any such proposal, abstentions will have the same effect as a vote “against” the proposal, and brokernon-votes will not be counted in determining whether such proposal has received the requisite number of votes for approval.

The Company’s principal executive offices are located at 100132 N. Gay Street, Auburn, Alabama 36830, and its telephone number is (334)821-9200. The Company maintains an internet website atwww.auburnbank.com.

Record Date, Solicitation and Revocability of Proxies

The Record Date for the Meeting has been set as the close of business on March 13, 2020.21, 2022. Accordingly, only holders of record of shares of Common Stock on the Record Date will be entitled to vote at the Meeting. At the close of business on such date, there were approximately 3,566,1463,516,971 shares of Common Stock issued and outstanding, which were held by approximately 376366 shareholders of record.

Shares of Common Stock represented by a properly executed Proxy, if such Proxy is received in time and is not revoked, will be voted at the Meeting in accordance with the instructions indicated in such Proxy.If you properly execute and return your Proxy but do not indicate any voting instructions with respect to one or more matters to be voted upon at the Meeting, or if your voting instructions are unclear, your shares will be voted in accordance with the recommendation of the Board of Directors as to all such matters. Specifically, your shares will be voted FOR the election of all director nominees, FOR the advisory approval of thesay-on-pay proposal, FOR the ratification of the appointment of Elliott Davis as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020;2022;as well as in the discretion of the persons named as proxies on all other matters that may properly come before the Meeting.

A shareholder who has given a Proxy may revoke it at any time prior to its exercise at the Meeting by either (i) giving written notice of revocation to the Company’s Secretary, (ii) properly submitting to the Company a duly executed Proxy bearing a later date, or (iii) logging intoappearing in person at the Meeting and voting electronically in real time.person by written ballot. All written notices of revocation or other communications with respect to revocation of Proxies should be addressed as follows: Auburn National Bancorporation, Inc., P.O. Box 3110, Auburn, Alabama 36831-3110, Attention: C. Wayne Alderman, Secretary.

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Proxy Solicitation Costs

The cost of soliciting Proxies for the Meeting will be paid by the Company. The Company’s officers may also solicit proxies by telephone or otherwise, but will not receive additional compensation for these activities. In addition to the solicitation of shareholders of record by mail, telephone, facsimile, or personal contact, the Company may also make arrangements with brokers, dealers, banks, or voting trustees or their nominees who can be identified as record holders

3

of Common Stock to forward this proxy statement and the 20192021 Annual Report to beneficial owners of Common Stock. The Company will reimburse them for the reasonable expenses in connection with these services.

Important Information about the Company’s Virtual Meeting

The Meeting will be a conducted online only, via a live webcast. If you were a holder of record on the Record Date, or hold a legal proxy for the Meeting provided by your bank or broker, you are entitled to participate in the Meeting. Below are answers to some frequently asked questions about the virtual annual meeting format.

Why is the Meeting being held as a virtual meeting?

The Meeting is being held as a virtual meeting due to the coronavirus and related Alabama stay at home order and to promote the health and well-being of our shareholders, employees and community members. Holding the Annual Meeting as a virtual only meeting allows us to reach the broadest number of shareholders while maintaining our commitment to health and safety.

How can I view and participate in the Meeting?

To participate, visit www.meetingcenter.io/238043288 and login with the control number included in your proxy materials and the password AUBN2020. If you hold your shares through an intermediary, such as a bank or broker, you must register in advance using the instructions below.

How do I register to attend the 2020 Annual Meeting?

If you are a registered shareholder (i.e., you hold your shares through the direct registration system at our transfer agent, Computershare), you do not need to register to attend the Meeting. Please follow the instructions on the Notice of Annual Meeting of Shareholders or proxy card that you received.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Meeting.

To register in advance to attend the Meeting you must obtain a legal proxy from the intermediary, such as a bank or broker that holds your shares giving you the right to vote the shares. You must then submit proof of your proxy power (legal proxy) reflecting your Company holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 4:00 P.M., CDT, on May 7, 2020. You will receive a confirmation of your registration by email after Computershare receives your registration materials.

Requests for registration should be directed to Computershare at the following:

By email:

Forward the email from your broker, or attach an image of your legal proxy, to

legalproxy@computershare.com

By mail:

Computershare

Auburn National Bancorporation, Inc. Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

When can I join the virtual Annual Meeting?

You may log into the meeting platform beginning at 2:45 P.M., CDT, on May 12, 2020. The meeting will begin promptly at 3:00 P.M., CDT.

 

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How can I ask questions and vote?

We encourage you to submit your questions and vote in advance of the meeting by visiting www.meetingcenter.io/238043288. If you wish to submit a question before the meeting, then beginning at 3:00 P.M., CDT on May 5, 2020 you may log in to www.meetingcenter.io/238043288 with your control number and the password AUBN2020. Once past the login screen, click on the “messages” icon at the top of the screen to submit your question. Shareholders may also vote and submit questions during the meeting by visiting www.meetingcenter.io/238043288 and typing questions using the “messages” icon at the top of the screen. Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints.

May I attend the meeting as a guest?

Yes, if you would like to enter the meeting as a guest in listen-only mode, click on the “I am a Guest” button after entering the meeting center at www.meetingcenter.io/238043288 and enter the information requested on the following screen. Please note you will not have the ability to ask questions or vote during the meeting if you participate as a guest.

If I am unable to attend the virtual meeting, how can I ask a question?

Questions generally may be asked only via the internet at the virtual meeting. You may address a question to us in advance of the meeting by mail to us at our main office Attention: Shareholder Relations or via e-mail at motwell@auburnbank.com. We will address appropriate questions which we receive during the meeting.

What if I have technical or logistical difficulties?

We will have technicians to assist you with any technical difficulties you may have accessing the meeting. If you have technical difficulties or trouble accessing the virtual meeting at any time after online access commences at 2:45 P.M., CDT, on May 12, 2020, please access the support link at https://support.vevent.com/, or as otherwise provided on the website referenced above.

How do I inspect the list of shareholders of record?

A list of the shareholders of record as of the Record Date will be available for inspection for any legally proper purpose during ordinary business hours at our headquarters at 100 N. Gay Street, Auburn, Alabama 36830, beginning on May 2, 2020. To access the list during the Meeting, please visit www.meetingcenter.io/238043288 and enter the control number provided on your proxy card, voting instruction form or Notice and the password AUBN2020.

Where can I find additional information?

Additional information regarding the meeting agenda, procedures governing appropriate shareholder questions during the Meeting, and any rules of conduct will be available at www.meetingcenter.io/238043288 two weeks prior to the Meeting. Similarly, additional information will be available on our investor relations page one week prior to the 2020 Annual Meeting at http://platform.mi.spglobal.com/IRW/CorporateProfile/100877.

What if I have additional questions?

You may contact Marcia Otwell, Shareholder Relations, by mail at Auburn National Bancorporation, Inc., 100 N. Gay Street, P.O. Box 3110, Auburn, Alabama 36831-3110.

5

PROPOSAL ONE –ONE: ELECTION OF DIRECTORS

General

Nine personscurrent directors have been nominated to serve on the Company’s Board of Directors forone-year terms expiring at the Company’s next scheduled annual meeting of shareholders and until their successors have been elected and qualified. All of the nominees for director are current directors of the Company.

Proxies cannot be voted for a greater number of persons than the number of nominees specified herein. Cumulative voting for directors is not permitted. All shares represented by valid Proxies received and not revoked before they are exercised will be voted in the manner specified therein. If no specification is made, the Proxies will be voted for the election of the nine nominees listed below. In the unanticipated event that any nominee is unable to serve, the persons designated as proxy holders will cast votes for the remaining nominees and for such other replacements as may be nominated by the Company’s Board of Directors.

The nominees have been nominated by the Company’s Board of Directors based on the recommendation of the Nominating and Corporate Governance Committee, and the Board unanimously recommends a vote “FOR” the election of all nine nominees listed below.

Information about Nominees for DirectorDirectors and Executive Officers

The following table sets forth the name and age of each nominee for director, a brief description of his or her principal occupation and business experience, certain other directorships and how long he or she has been a director for the Company or the Bank. In addition, we have also provided a brief discussion of the specific experience, qualifications, attributes or skills that led to the Nominating and Corporate Governance Committee’s conclusion that the nominee should serve as one of our directors. Patricia Wade, M.D. is retiring as a director of the Company and the Bank and is not standing forre-election.Except for Robert W. Dumas, President and CEO of the Company and the Bank, none of the nominees is employed by the Company or the Bank or any entity that is an affiliate of the Company or the Bank.

 

Name, Principal Occupation, Business Experience, Age, Directorships and Qualifications

  Director  
Since

  Director
Since

C. Wayne Alderman

  

2004

Dean and Professor Emeritus, former Dean of Enrollment Services and former Dean, College of Business, Auburn University; former Director of Financial Operations of the Bank from 2000 to 2007; employed by Auburn University since 1979. Dr. Alderman is 69.71.

  

Dr. Alderman, a certified public accountant and former Torchmark Professor of Accounting at Auburn University, bringshas strategic planning expertise, public accounting and risk and general management knowledge to the Board. He also bringshas valuable insight and banking knowledge as a result of his service as the Bank’s Director of Financial Operations from 2000 to 2007, in addition to serving as a director of the Bank since 1993.

  

Terry W. Andrus

  

1998

Retired President and Chief Executive Officer of the East Alabama Medical Center from 1984 to 2018; Director of 340B Health, Former Director of Blue Cross/Blue Shield of Alabama. Mr. Andrus is 68.70.

  

Mr. Andrus bringshas executive decision-making, financial expertise, and business-building skills from his past service as the Chief Executive Officer of a regional hospital. Mr. Andrus also has served as Chairman of the Alabama Hospital Association. He possesses banking knowledge through his service as a director of the Bank since 1991.

  

 

65

Name, Principal Occupation, Business Experience, Age, Directorships and Qualifications

  Director  

Since

  Director
Since

J. Tutt Barrett

  

2010

Mr. Barrett is a senior partner in the law firm of Dean & Barrett, located in Opelika, Alabama, where he has worked since 1992. Mr. Barrett is 68.70.

Mr. Barrett brings a wealth of legal and risk management skills to the Board. He also provides governance skills and experience gained through his service on the boards of various charitable organizations. In addition, Mr. Barrett has served on one of the Bank’s local advisory boards since 1991.

  

Laura J. Cooper

  

2020

Executive Director of Lee County Youth Development Center in Opelika, Alabama since 2000. She has held various positions with the Lee County Youth Development Center since 1987. Ms. Cooper is 61.63.

  

Ms. Cooper bringshas extensive executive experience as head of a largenon-profit in Lee County Alabama. She also currently serves on the Auburn Industrial Development Board of Directors, the Opelika Chamber of Commerce Board of Directors, and the Auburn University Human Development and Family Studies Advisory Council. Ms. Cooper has held numerous other leadership positions, including her past service as President of the Auburn City School Board, Chairperson of the Auburn Chamber of Commerce Board, Chairperson of the United Way of Lee County Board, and as a member of the Auburn University College of Education Advisory Council. Ms. Cooper bringsprovides a unique perspective to the Board of Directors regarding the financial needs of the local community. Ms. Cooper was appointed as a director of the Company and the Bank in February 2020.

  

Robert W. Dumas

  

2001

Chairman of the Board of the Company and the Bank since January 2019;2020; President and CEO of the Company since 2017 and the Bank since 2001; Vice Chairman of the Company and the Bank from 2013 until his election as the Chairman; President and Chief Lending Officer of the Bank from 1998 to 2001. He has been employed by the Bank since 1984; and Director of East Alabama Medical Center. Mr. Dumas is 66.68.

  

Mr. Dumas brings valuable insight and knowledge to the Board as a result of his service as President and CEO of the Company and the Bank. Mr. Dumas currently serves as a trustee or director of the Auburn University Board of Trustees, the Auburn Research and Technology Board of Directors, Federal Reserve Bank of Atlanta Board of Directors, and Alabama Bankers Association Board of Directors. He has held numerous other positions in professional leadership, including his service as President and Chairman of the Alabama Bankers Association and a member of the Auburn University Business Advisory Council. Mr. Dumas bringshas valuable knowledge from his 4143 years of service in the banking industry, including serving as a director of the Bank since 1997.

  

William F. Ham, Jr.

  

2004

Former Mayor of City of Auburn from 1998 to 2018; owner of Varsity Enterprises, a company providing coin laundry services, since 1977. Mr. Ham is 66.68.

  

Mr. Ham brings a wealth of business-building skills and community knowledge to the Board as a result of his experience as an entrepreneur and as the Mayor of City of Auburn. He also bringshas valuable knowledge through his service as a director of the Bank since 1993.

  

 

76

Name, Principal Occupation, Business Experience, Age, Directorships and Qualifications

  

Director

Since

David E. Housel

  

2004

Director of Athletics Emeritus at Auburn University since January 2006; Director of Athletics at Auburn University from 1994 to January 2006. He was employed by Auburn University since 1970. Mr. Housel is 73.75.

  

Mr. Housel brings valuable business, public relations, and strategic planning skills to the Board through his previous experience managing a major collegiate athletic program with numerous employees and supervising multi-million dollar budgets. He also possesses banking knowledge through his service as a director of the Bank since 1997.

  

Anne M. May

  

1990

Retired Partner, Machen & McChesney, LLP, from 1983 to 2018. Ms. May is 69.71.

  

Ms. May has valuable risk management skills, public accounting knowledge and expertise in compensation and tax compliance as a partner and former managing partner for a local accounting firm. She also possesses extensive banking knowledge through her service as a director of the Bank since 1982.

  

Edward Lee Spencer, III

  

2004

Director of the Company; former Vice President, Spencer Lumber Company; employed by Spencer Lumber Company from 1973 to 2006. Son of E. L. Spencer, Jr. Edward Lee Spencer, III is 64.66.

  

Mr. Edward Lee Spencer, III bringshas valuable business insights and knowledge as a result of his previous management experience with Spencer Lumber Company, a supplier of building and construction materials. He also bringshas valuable banking knowledge through his service as a director of the Bank since 1991.

  

 

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CORPORATE GOVERNANCE

Board Leadership Structure

Robert W. Dumas serves as President and Chief Executive Officer of the Company and the Bank, and was elected as Chairman of the Company and the Bank in 2019.2021. The Board of Directors does not have a policy with respect to the separation of the offices of Chairman and the Chief Executive Officer. The Board believes this issue is part of the succession planning process and that it is in the best interests of the Company and our shareholders to retain the flexibility to combine or separate these functions. At this time, the Board believes there are a number of important advantages of combining the positions of Chairman and Chief Executive Officer, including the following:

 

Mr. Dumas has 36 years of experience at the Bank, including 18 years as President and Chief Executive Officer and 7 years as Vice Chairman. He has the knowledge, expertise, and experience to understand the opportunities and challenges facing the Company, as well as the leadership and management skills to promote and execute our values and strategy, particularly during the current economic environment;

●

Mr. Dumas has 38 years of experience at the Bank, including 20 years as President and Chief Executive Officer and 9 years as Vice Chairman. He has the knowledge, expertise, and experience to understand the opportunities and challenges facing the Company, as well as the leadership and management skills to promote and execute our values and strategy, particularly during the current economic environment;

 

Combining the positions allows Mr. Dumas to lead Board discussions regarding our business and strategy, and provides unified leadership for the Company;

●

Combining the positions allows Mr. Dumas to lead Board discussions regarding our business and strategy, and provides unified leadership for the Company;

 

Combining the positions creates a firm link between management and the Board and promotes the development and implementation of corporate strategy; and

●

Combining the positions creates a firm link between management and the Board and promotes the development and implementation of corporate strategy; and

 

Combining the positions allows timely communication with the Board on critical business matters given the complexity of our business.

●

Combining the positions allows timely communication with the Board on critical business matters given the complexity of our business.

The Board also believes that combining the positions of Chairman and Chief Executive Officer does not undermine the independence of the Board. The Company’s Board is comprised of Mr. Dumas and eight other directors. Seven directors are independent under Nasdaq’s listing standards. Our corporate governance guidelines provide that the independent directors will meet at least semi-annually in executive session without management present.

The Company also has established an Independent Director Committee. Anne M. May is currently the chairperson of such committee and therefore is formally identified as the Lead Independent Director. Our corporate governance guidelines provide that the independent directors will meet at least semi-annually in executive session without management present.The Lead Independent Director has broad responsibility and authority, including to:

●

Preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent Directors;

●

Call meetings of Independent Directors Committee; and

●

Serve as the principal liaison between the Chairman and the independent Directors

The Company believes the foregoing structure, policies and practices, when combined with the Company’s other governance policies and procedures, provide appropriate oversight, discussion and evaluation of decisions and direction from the Board of Directors.

Board’s Role in Risk Oversight

The Board of Directors maintains oversight responsibility of the management of the Company’s risks. A fundamental part of risk management is not only understanding the risks to the Company, and the actions needed to manage those risks, but also determining acceptable levels of risk for the Company. The full Board of Directors reviews enterprise risk management through or with the committees and with management.

 

98

While the Board of Directors maintains the ultimate oversight responsibility for risk management, the Board’s committees have these responsibilities for risk management oversight:

 

the Compensation Committee evaluate,evaluates, with our senior officers, risks posed by our compensation programs and seeks to limit any unnecessary or excessive risks these programs may pose to us, in order to avoid encouraging unnecessary or excessive risks. The Compensation Committee’s role and its relationship with the Board are more fully described under “Committees of the Board – Compensation Committee”;

 

the Audit and Compliance Committee (the “Audit Committee”) oversees risks related to our financial statements, our compliance with legal and regulatory requirements, our financial reporting process and system of internal controls. The Audit Committee also evaluates the performance of our independent auditors and our internal auditing department. The Audit Committee periodically meets privately in separate executive sessions with management, our internal audit department, and the independent auditors. The Audit Committee’s role and its relationship with the Board are more fully described under “Committees of the Board – Audit Committee”; and

 

the Strategic Planning Committee reviews management and adjusts our risk assessment during the Company’s annual strategic planning process. The Strategic Planning Committee’s role and its relationship with the Board are more fully described under “Committees of the Board – Strategic Planning Committee”.

While each of these committees is responsible for evaluating and overseeing the management of these risks, the entire Board of Directors is informed through committee reports about such risks. In addition, each of the Company’s directors serves on the Bank’s Board of Directors. We believe that Board committees that report at the Bank level are critical to the Company’s risk management processes. These committees include the Director’s Loan Committee, Asset/Liability Committee, Information Technology/Information Security (“IT/IS”) Steering Committee, and Operations and Bank Secrecy Act (“BSA”) Committee. These committees each play a role in monitoring the following risks to the Bank and Company: credit, liquidity, interest rate, operational, reputational, compliance, and information technology and securitycybersecurity risks.

10

Director Nominating Process

The Nominating and Corporate Governance Committee, in consultation with the Chairman of the Board, monitors existing director qualifications and periodically examines the composition of the Company’s Board of Directors and determines whether the Board of Directors would better serve its purposes with the addition of one or more directors. This assessment includes, among other relevant factors, in the context of the perceived needs of the Board at that time, issues of experience, reputation, judgment, diversity and skills.

If the Nominating and Corporate Governance Committee determines that adding a new director is advisable or if a vacancy on the Board arises, the Nominating and Corporate Governance Committee initiates the search, working with other directors, management and, if it deems appropriate or necessary, a search firm retained to assist in the search. The Nominating and Corporate Governance Committee will consider all appropriate candidates proposed by management, directors and shareholders.

Information regarding potential candidates is presented to the Nominating and Corporate Governance Committee, which then evaluates the candidates based on the needs of the Board of Directors at that time and the criteria listed above. Nominees for directors are considered on the basis of various factors, including their character, experience, skills, and knowledge of our communities. We seek a boardBoard of directorsDirectors with a majority of independent directors with a range of complementary experiences and diversity, including persons with the expertise and qualifications required by our Audit and Compensation Committees. Potential candidates are evaluated according to the same criteria, regardless of whether the candidate was recommended by the Nominating and Corporate Governance Committee, a shareholder, another director, management or another third party. The Nominating and Corporate Governance Committee then meets to consider the selected candidate(s) and submits the approved candidate(s) to the full Board of Directors for approval and recommendation to the shareholders.

9

The director nomination process is designed so that the Board considers members with diverse backgrounds, including race, ethnicity, gender, education, skills and experience, with a focus on appropriate financial and other expertise relevant to the company’sCompany’s business, and also considers issues of judgment, conflicts of interest, integrity, ethics and commitment to the goal of maximizing shareholder value. Although neither theThe Board norand the Nominating and Corporate Governance Committee has a formal policyCommittee’s goal with regard to the consideration of diversity in identifying director nominees the goal of this process is to assemble a group of directors with deep, varied experiences, sound judgment and commitment to the company’sCompany’s success.

In 2021, Nasdaq amended its listing rules to require diverse board composition and disclosure of specified diversity metrics, subject to certain exceptions and transition periods. In accordance with Nasdaq rules, the table below provides the composition of the Company’s Board of Directors based on voluntary self-identification of gender identity and other demographics. Each of the categories listed in the table has the meaning as it is used in the Nasdaq rules and related guidance and instructions.

  Board Diversity Matrix (As of March 30, 2022)

            
     Female         Male           Total     

Part I: Gender Identity

      

Directors

   2        7        9     

Part II: Demographic Background

      

African American or Black

   1        —        1     

White

   1        7        8     

Shareholder Nominations

Subject to the requirements of the Company’s Certificate of Incorporation and Amended and Restated Bylaws, as well as any requirements of law or regulation, any shareholder entitled to vote for the election of directors may recommend a director nominee. Advance notice of such proposed nomination must be received by the Secretary of the Company not less than 21 days nor more than 60 days prior to any meeting of the shareholders called for the election of directors. Nominations should be submitted in writing to the Secretary of the Company specifying the nominee’s name and other required information set forth in the Company’s Bylaws. In 2019,2021, there were no shareholder recommendations received, and no third party search firms were used to identify director candidates.

Shareholder Communications

Shareholders who wish to communicate with the Board, or any individual director or group of directors, may do so by sending written communications addressed to: Board of Directors of Auburn National Bancorporation, Inc., c/o C. Wayne Alderman, Secretary, Auburn National Bancorporation, Inc., 100132 N. Gay Street, P.O. Box 3110, Auburn, Alabama, 36831-3110. All information will be compiled by the Secretary of the Company and submitted to the Board of Directors or each applicable director at the next regular meeting of the Board of Directors.

11

Meetings of the Board of Directors

The Boards of Directors of the Company and the Bank, as well as the committees of the Company’s and Bank’s Boards of Directors, generally hold meetings in tandem. The Company’s Board of Directors held 12 meetings during 2019.2021. All directors attended at least 75% of the aggregate of all meetings of the Company’s Board of Directors and each committee on which they served. All of the Company’s directors are encouraged to attend the Company’s annual meetings of shareholders. All but one of the Company’s directors attended the 20192021 Annual Meeting of Shareholders.

10

Committees of the Board of Directors

In accordance with the Company’s Corporate Governance Guidelines or Bylaws, the Company’s Board has established the committees described below. As of April 17, 2020,March 30, 2022, the members of each committee are identified below:

 

Director Name  

Audit    &

  Compliance  

      Compensation      

Nominating

    & Corporate      

Governance

  

    Independent    

Directors

      Executive      

    Strategic    

Planning

  Property

Alderman

  ✓        ✓  ✓  ✓   

Andrus

  ✓(C)  ✓  ✓(C)  ✓     ✓   

Barrett

  ✓  ✓  ✓  ✓        ✓

Cooper

           ✓         

Dumas

              ✓(C)  ✓(C)  ✓(C)

Ham, Jr.

  ✓        ✓        ✓

Housel

  ✓  ✓     ✓     ✓   

May

     ✓(C)  ✓  ✓(C)  ✓  ✓  ✓

Spencer, III

                    ✓

Wade (1)

✓✓

(C) Chairman

(1) Dr. Wade is retiring as a director of the Company and the Bank and is not standing forre-election.

Audit Committee.

The Audit Committee has the responsibilities set forth in the Audit Committee Charter, including reviewing the Company’s financial statements, evaluating internal accounting controls, reviewing reports of regulatory authorities and determining that all audits and examinations required by law are performed. It appoints independent auditors, reviews and approves their audit plan and reviews with the independent auditors the results of the audit and management’s response thereto. The Audit Committee also reviews the adequacy of the internal audit budget and personnel, the internal audit plan and schedule, and results of audits performed by the internal audit staff. The Audit Committee is responsible for overseeing the entire audit function and appraising the effectiveness of internal and external audit efforts. All members of the Audit Committee are “independent directors,” as defined in the Nasdaq listing standards, and meet the independence criteria set forth in SEC Rule10A-3(b)(1) and the financial literacy requirements of the Nasdaq listing standards and SEC regulations. This committee held thirteen15 meetings in 2019.2021. The Board of Directors has determined that C. Wayne Alderman and Terry W. Andrus, members of the Audit Committee, are “audit committee financial experts,” as defined by SEC rules.

12

Compensation Committee.

The Compensation Committee Charter authorizes the Compensation Committee to review, recommend and approve the compensation of the Chief Executive Officer, other executive officers and other key employees of the Company and the Bank; evaluate the Company’s incentive compensation plans, including any equity compensation plans; and select, interview and make hiring recommendations to the Board for the Chief Executive Officer position. In addition, the Committee approves changes to any Company personnel policy manuals or handbooks, and annually evaluates director compensation. Although it has not done so, the Compensation Committee may delegate authority to subcommittees consisting of one or more members, as it deems appropriate. Although it has not done so during 2019,2021, the Compensation Committee may engage its own legal counsel and compensation consultants, funded by the Company. All members of the Compensation Committee are “independent directors” as defined in the Nasdaq listing standards. This committee held two meetings in 2019.2021.

11

Nominating and Corporate Governance Committee.

The Nominating and Corporate Governance Committee’s purpose is to identify individuals qualified to become members of the Company’s Board of Directors and recommend to the Board any director nominees. The Nominating and Corporate Governance Committee considers all appropriate candidates proposed by management, directors and shareholders. The Committee will consider all shareholder nominees that are submitted in accordance with the procedures described in the Shareholder Nominations section in this Proxy Statement. This committee also takes a leadership role in shaping corporate governance policies and practices of the Company. The responsibilities and duties of the Nominating and Corporate Governance Committee are more fully set out in the Nominating and Corporate Governance Committee Charter. All members of the Nominating and Corporate Governance Committee are “independent directors” as defined in the Nasdaq listing standards. The Nominating and Corporate Governance Committee held two meetingsone meeting in 2019.2021.

Independent Directors Committee.

The Independent Directors Committee was formed to meet Nasdaq listing standards, which require that the Company’s independent directors meet separately from the other directors in regularly scheduled executive sessions at least twice annually, and at such other times as may be deemed appropriate by the Company’s independent directors. Nasdaq listing standards also require that a majority of the Company’s directors be “independent directors.” The Board has affirmatively determined that all members of the Independent Directors Committee are independent directors. The Company’s Board of Directors has appointed Anne M. May to serve as the Board’s Lead Independent Director. This committee held two meetings in 2019.2021.

Executive Committee.

The Company’s Executive Committee is authorized to act in the absence of the Board of Directors on certain matters that require Board approval. This committee held one meeting during 2019.2021.

Strategic Planning Committee.

The Strategic Planning Committee evaluates potential acquisitions and the Company’s long-range goals and oversees the process and risk assessment used for the officers’ and directors’ strategic planning sessions. This committee held fourtwo meetings in 2019.2021.

Property Committee.

The Property Committee evaluates potential properties for expansion or branching activities. This committee held one meetingno meetings during 2019.2021.

The Board of Directors has adopted a Code of Conduct and Ethics applicable to the Company’s directors, officers and employees, including the Company’s principal executive officer, principal financial officer, principal accounting officer and other senior financial officers. The Code of Conduct and Ethics, as well as the charters for the Audit Committee, Compensation Committee, and the Nominating and Corporate Governance Committee, can be found by hovering over the heading “About Us” on the Company’s website,www.auburnbank.com, and then clicking on “Investor Relations”, and then clicking on “Governance Documents”. In addition,The Company posts any amendments to or waivers of, its Code of Conduct and Ethics at this information is available in print to anylocation on the Company’s website. Any shareholder who requests it. Written requestsmay make a written request for a copy of the Company’s Code of Conduct or the Audit

13

Committee, Compensation Committee, or Nominating and Corporate Governance Committee charters may be sent to Auburn National Bancorporation, Inc., 100132 N. Gay Street, Auburn, Alabama 36830, Attention: Marla Kickliter, Senior Vice President of Compliance and Internal Audit. Requests may also be made via telephone by contacting Ms. Kickliter or Laura Carrington, Vice President of Human Resources, at (334)821-9200. As As additional corporate governance standards are adopted, they will be disclosed on an ongoing basis on the Company’s website.

12

Board Compensation

In 2019,2021, the Chairman received $2,000 and each director received $1,000, respectively, for each Board meeting attended, which will be the same for 2020.2022. Generally, the Board of Directors of the Company and the Bank meet on the same day, and in such cases, a fee is paid for one board meeting only. In addition, members of the Audit Committee and the Compensation Committee of the Company, which also serve as the members of the Audit Committee and the Compensation Committee of the Bank, respectively, receive an additional fee of $250 for each committee meeting, while each Chairman of these committees receives $500 per meeting. Members of the Bank’s Loan Committee, Asset/Liability Committee and IT/IS Steering Committee receive $250 for each committee meeting, while each Chairman of these committees receives $500 per meeting. Committee chairs and members of the Bank’s Strategic Planning Committee and Property Committee receive $250 for each committee meeting. Fees are not paid for other committee meetings. The Company’s and the Bank’s directors may receiveyear-end cash bonuses based upon the Company’s financial performance. In 2019,2021, aggregate fees paid to Company and Bank directors, including cash bonuses, totaled approximately $267,650, which includes the 2018 $3,650 cash bonus paid to E. L. Spencer, Jr., the Company’s Chairman Emeritus, in 2019.$244,250. The compensation of directors may be changed from time to time by the Board of Directors upon recommendation of the Compensation Committee, without shareholder approval.

The following table provides information concerning the compensation of the Company’snon-employee directors for 2019.2021. Compensation paid to Robert W. Dumas for his service as director is reported in the Summary Compensation Table on page 14.15.

 

          

 Name                                                                                                                        Fees Earned
or Paid in
Cash		   Non-equity
Incentive Plan
Compensation(1)		   Total 
 

C. Wayne Alderman

    $    34,500     $    3,650     $    38,150 
 

Terry W. Andrus

   18,500    3,650    22,150 
 

J. Tutt Barrett

   26,000    3,650    29,650 
 

William F. Ham, Jr.

   21,000    3,650    24,650 
 

David E. Housel

   19,750    3,650    23,400 
 

Anne M. May

   18,000    3,650    21,650 
 

Amy B. Murphy (2)

   18,500    3,650    22,150 
 

Edward Lee Spencer, III

   21,500    3,650    25,150 
 

Patricia Wade, M.D (3)

   13,500    3,650    17,150 
Name      Fees Earned    
or Paid in
Cash		 Non-equity
Incentive Plan
 Compensation(1) 		         Total         

    

C. Wayne Alderman   $    33,750       $    3,650       $    37,400     
Terry W. Andrus   19,750   3,650   23,400 
J. Tutt Barrett   26,250   3,650   29,900 
Laura J. Cooper   15,000   3,650   18,650 
William F. Ham, Jr.   21,500   3,650   25,150 
David E. Housel   20,000   3,650   23,650 
Anne M. May   18,000   3,650   21,650 
Edward Lee Spencer, III   21,000   3,650   24,650 

 

 

(1)

Amounts represent cash bonuses paid to the Company’s directors.

(2)

Ms. Murphy resigned from the Company’s and the Bank’s Board of Directors on November 18, 2019.

(3)

Dr. Wade is retiring as a director of the Company and the Bank and is not standing forre-election.

The Company did not grant any equity ornon-equity incentive plan awards in 2019.2021. There were no stock options exercised or stock awards vested in 2019.2021.

 

1413

PROPOSAL TWO –TWO: ADVISORY VOTE ON EXECUTIVE COMPENSATION

The purpose of the Company’s compensation policies and procedures is to attract and retain experienced, highly qualified executives to promote our long-term success and shareholder value. The Board believes our compensation policies and procedures achieve this objective, and therefore recommend shareholders vote “FOR” thesay-on-pay proposal through approval of the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 20202022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables and any related material disclosed in the Proxy Statement, is hereby APPROVED.”

Thissay-on-pay proposal gives you as a shareholder the opportunity to endorse or not endorse the compensation we pay to our named executive officers (identified below) by voting to approve or not approve such compensation as described in this Proxy Statement. This vote is advisory, which means that it is not binding on the Company, the Board or the Compensation Committee. However, the Board and the Compensation Committee will consider the outcome of the vote when considering future executive compensation arrangements.

We have included this proposal in our Proxy Statement pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the “Dodd-Frank Act”, and Section 14A of the Securities Exchange Act of 1934.

In last year’s Proxy Statement for the 20192021 Annual Meeting, a similar advisory vote was requested by the Company. The results of last year’s vote were as follows:

 

     

2019

Vote Count

   Percent   
 

For

   1,973,186    98.8%   
 

Against

   10,157    0.5%   
 

Abstain

   13,736    0.7%   
   

 

 

 

  

                1,997,079                100.0%   
   

 

 

 
   

2021

        Vote Count        

          Percent         

    

For

   1,752,456    99.4% 

Against

   3,568    0.2% 

Abstain

   6,498    0.4% 
   1,762,522    100.0% 
          

The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. We encourage you to closely review the information we have provided under the caption “Executive Compensation” below.

The Board recommends you vote “FOR” the approval of this Resolution related to the compensation of the Company’s named executive officers.

 

1514

EXECUTIVE OFFICERS

Executive officers of the Company and the Bank generally are appointed annually at a meeting of the respective Boards of Directors of the Company and the Bank in January to serve forone-year terms and until successors are chosen and qualified. In addition to Mr. Dumas, whose information is included under “Proposal One – Election of Directors,” our other executive officers as of April 15, 2019 are:

 

Name

  Information About Executive Officers

David A. Hedges

  

Executive Vice President and Chief Financial Officer of the Company and the Bank since December 2015; formerly Senior Vice President, Controller and Chief Financial Officer of the Company and the Bank since 2014; various other positions with the Company and Bank since 2006. Mr. Hedges is 41.43.

Shannon S. O’Donnell

  

Chief Risk Officer since April 2014 and Senior Vice President of Credit Administration since 2007; formerly Vice President of Credit Administration since 2001. Ms. O’Donnell is 50.52.

Robert L. Smith Jr.

  

Senior Vice President of the Bank and Chief Lending Officer of the Bank since April 2014; Vice President (Commercial and Consumer Lending) of the Bank since 2001; Mr. Smith is 51.53.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table provides information concerning the compensation of our named executive officers for the years ended 20192021 and 2018.2020.

 

Name and Principal Position

      Year           Salary           Bonus (1)       All Other
  Compensation (2)  		     Total       Year         Salary       Bonus (1)   All Other
Compensation (2)		     Total    

Robert W. Dumas

   2019    $328,515    $ 82,000    $ 58,359    $468,874    2021     $345,138     $50,000     $58,025     $453,163   

President and Chief Executive

Officer of the Company and

Chairman and Director of the Bank

and the Company

   2018    309,920    71,887    41,696    423,503    2020   335,085   25,000   60,309   420,394 

David A. Hedges (3)

   2019    213,169    26,000    16,813    255,982    2021   223,955   30,000   16,873   270,828 

Executive Vice President and

Chief Financial Officer of the

Bank and the Company

   2018    204,970    21,000    13,612    239,582    2020   217,432   25,000   15,965   258,397 

Robert L. Smith, Jr. (3)

   2019    192,390    24,000    8,143    224,533 

Robert L. Smith (3)

   2021   208,070   25,000   7,902   240,972 

Senior Vice President and Chief Lending Officer of the Bank

   2018    174,900    21,600    5,690    202,190    2020   202,010   25,000   8,528   235,538 

 

 

(1)

Represents cash incentive awards paid to the Company’s executive officers. Bonuses that were earned in 2020 and 2021 were paid in 2021 and 2022, respectively.

 

(2)

For 2019,2021, includes compensation as described under “All Other Compensation” below.

 

(3)

Considered the two most highly compensated executive officers other than the principal executive officer at December 31, 2019.2021.

 

1615

All Other Compensation

The following table provides information regarding each component of compensation included in the All Other Compensation column for 20192021 of the Summary Compensation Table above.

 

Name

  Insurance
Premiums		   Company
Contributions
to Retirement and
401(k) Plans		   Total
Compensation
as Director (1)		   Total   Insurance
    Premiums    		 Company
Contributions
  to Retirement and  
401(k) Plans		 Total
  Compensation  
as Director (1)		         Total        

Robert W. Dumas

   $8,604    $9,855    $39,900    $58,359    $8,211       $10,014       $39,800       $58,025     

David A. Hedges

   8,286    8,527    —    16,813    7,915   8,958   —   16,873 

Robert L. Smith, Jr.

   448    7,695    —    8,143 
Robert L. Smith   539   7,363   —   7,902 

 

 

(1)

Represents fees earned as an employee director of the Bank and Company, including cash bonuses paid for service as a director and Chairman.

20192021 Grants of Plan-Based Awards

The Company did not grant any equity ornon-equity incentive plan awards in 2019.2021.

20192021 Option Exercises and Stock Vested

There were no stock options exercised or stock awards vested in 2019.2021.

Outstanding Equity Awards at December 31, 20192021

There were no unexercised options, unvested stock, and equity incentive plan awards for named executive officers outstanding as of December 31, 2019.2021.

Pension Benefits and Nonqualified Deferred Compensation

The Company does not offer any pension or nonqualified deferred compensation benefits to its named executive officers.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The Company does not have any severance or change in control agreements with any of its named executive officers.

 

1716

STOCK OWNERSHIP BY CERTAIN PERSONS

The following table sets forth the number and the percentage of shares of the Company’s Common Stock that were beneficially owned, as of the Record Date, by (1) each of our directors and each of our named executive officers, (2) all of our directors and executive officers as a group, and (3) each person known to us to beneficially own more than 5% of any class of our voting common stock. Other than as set forth below, no “persons” (as that term is defined by the SEC) are known by the Company to be the beneficial owners of more than 5% of the Common Stock, the Company’s only class of voting securities, as of the Record Date.

 

Name of Beneficial Owner (1)

  Number of Shares (2)  Percent of Class   Number of Shares (2)          Percent of Class        

All Directors and Named Executive Officers:

         

C. Wayne Alderman

   5,116    *   5,116  *

Terry W. Andrus (3)

   3,529    *   3,825      *

J. Tutt Barrett (4)

   7,092    *   7,709  *

Laura J. Cooper

   127  *

Robert W. Dumas

   39,591   1.11%   40,643  1.16%    

William F. Ham, Jr. (5) (6)

   4,104    *   4,346  *

David E. Housel

   5,203    *   5,770  *

Anne M. May

   33,311    *   33,311  *

Edward Lee Spencer, III (7)

   9,576    *   9,576  *

David A. Hedges

   200    *   200  *

Shannon S. O’Donnell

   983    *   1,119  *

Robert L. Smith, Jr.

   302    *

All Directors and Executive Officers as a Group (11 persons)

   109,007   3.06%

Robert L. Smith

   339  *

All Directors and Executive Officers as a Group (12 persons)

   112,081  3.19%

Persons known to Company who own more than 5% of outstanding shares of Company Common Stock:

         

E. L. Spencer, Jr. (8) (9) (10)

P. O. Box 3288

Auburn, AL 36831

   744,316   20.87%   748,069  21.27%

Emil F. Wright, Jr. (11) (12) (13)

500 Brookwood Drive

Auburn, AL 36830

   394,084   11.05%   393,084  11.18%

 

 

*

Less than 1%

 

(1)

Unless specified below, each director’s and named executive officer’s business address is c/o AuburnBank, 100132 N. Gay Street, Auburn, Alabama 36830.

 

(2)

Information relating to beneficial ownership of Common Stock by the individuals named in the above table is based upon information furnished by the respective individuals using “beneficial ownership” concepts set forth in rules of the SEC under the Securities Exchange Act of 1934, as amended. Under such rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under such rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may disclaim any beneficial ownership. Accordingly, directors and named executive officers may be named as beneficial owners of shares as to which they may disclaim any beneficial interest. Except as indicated in other notes to this table describing special relationships with other persons and specifying shared voting or investment power, directors and named executive officers possess sole voting and investment power with respect to all shares of Common Stock set forth opposite their names.

 

(3)

Includes 3,292 shares held by Mr. Andrus that were pledged as collateral for a loan from the Bank.

 

1817

(4)

Includes 2,2335,861 shares held by Mr. Barrett that were pledged as collateral for a loan from the Bank.

 

(5)

Includes 300 shares held by Mr. Ham’s wife, as to which Mr. Ham may be deemed to have shared voting and investment power.

 

(6)

Includes 2,532 shares held by Mr. Ham that were pledged as collateral for a loan from the Bank.

 

(7)

Includes 3,960 shares held by Spencer LLC, a company in which Mr. Edward Lee Spencer, III is a partner, as to which Mr. Edward Lee Spencer, III may be deemed to have shared voting and investment power, and as to which Mr. Edward Lee Spencer, III disclaims beneficial ownership of 2,640 shares.

 

(8)

Includes 18,95017,000 shares held by Mr. E.L. Spencer, Jr.’s wife, as to which Mr. E.L. Spencer, Jr. may be deemed to have shared voting and investment power.

 

(9)

Includes 5,7037,878 shares held by the Edward L. Spencer, Jr. Foundation.

 

(10)

Includes 47,882 shares held by the E.L. Spencer, Jr. 2008 Revocable Trust.

 

(11)

Includes 58,978 shares held by Dr. Wright’s wife, as to which Dr. Wright may be deemed to have shared voting and investment power.

 

(12)

Includes 59,50059,000 shares held by Ferrocene, LP whose general partners are Dr. Wright and his wife, and limited partners include Dr. and Mrs. Wright’s two children and their two grandchildren.

 

(13)

Includes 1,000 shares held by Comitas Foundation, Inc., a 501(c)(3) private foundation, whose executive officers are Dr. Wright and his wife.

CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS

Various Company and Bank directors, officers, and their affiliates, including corporations and firms where they are directors or officers or where they and/or their families have an ownership interest, are customers of the Company and the Bank. These persons, corporations, and firms have had transactions in the ordinary course of business with the Company and the Bank, including borrowings, all of which, in the opinion of management, were on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unaffiliated persons and did not involve more than the normal risk of collectability or present other unfavorable features. Such transactions are subject to review and approval as and to the extent provided in our Audit Committee Charter. The Company and the Bank expect to have such transactions, under similar conditions, with their directors, officers, and affiliates in the future.

Regulation O requires loans made to executive officers and directors to be made on substantially the same terms, including interest rates and collateral, and following credit-underwriting procedures, that are no less stringent than those prevailing at the time for comparable transactions by the Bank with other persons. Such loans also may not involve more than the normal risk of repayment or present other unfavorable features. Additionally, no event of default may have occurred (that is, such loans are not disclosed asnon-accrual, past due, restructured, or potential problems). Regulation O requires the Board of Directors to review any loan to a director or his or her related interests that has become criticized and whether such classification affects such director’s independence. In addition, the Audit Committee Charter provides that the Audit Committee will review and approve all related-party transactions. This includes a review of the Company’s compliance with applicable banking laws, including, without limitation, those banking laws and regulations concerning loans to insiders.

None of the directors or executive officers of the Company, owners of 5% or more of the Company’s outstanding stock, or their immediate family members, had direct or indirect interest in any transaction involving the Company during 20192021 or 2018,2020, served as an executive officer of, or owns, or during 20192021 or 20182020 owned, of record or beneficially, greater than 10% equity interest in any business or professional entity that has made or received during 20192021 or 2018,2020, or proposes to make or receive during 2020,2022, payments to or from the Company or the Bank for property or services in excess of the lesser of $120,000 or 1% of the Company’s average total assets at year endyear-end for the last two completed fiscal years.

 

1918

COMPLIANCE WITH SECTION 16(A) BENEFICIAL OWNERSHIP

REPORTING COMPLIANCEOF THE SECURITIES EXCHANGE ACT OF 1934

The Company is subject to Section 16(a) of the Securities Exchange Act of 1934, as amended, which requires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, Directorsdirectors andgreater-than-10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Delinquent Section 16(a) Reports

Based solely on its review of the copies of Forms 3, 4 and 5 furnished to the Company during and with respect to 2019,2021, or written representations that no Forms 5 were required, the Company believes that all Section 16(a) filing requirements applicable to the Company’s and the Bank’s officers, directors andgreater-than-10% beneficial owners were complied with during 2019, other than one inadvertent late filing of a Form 4 by Mr. Terrell Bishop to report a sale of shares.2021.

AUDIT COMMITTEE REPORT

Management is responsible for the Company’s internal controls and the financial reporting process. The Company’s independent registered accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. In this context, we have met and held discussions with management and the independent registered accountants. We have reviewed and discussed the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2019,2021, with management and the independent registered accountants. This review included discussions with the Company’s independent registered accountants of matters required to be discussed by PCAOB’s AS 1301,Communications with Audit Committees.and the SEC.

The Company’s independent registered accountants have provided us the written disclosures and the letter required by PCAOB Professional Standards Rule 3526,Communication with Audit CommitteesConcerning Independence, and we discussed with the independent registered accountants that firm’s independence.

Based upon our discussions with management and the independent registered accountants and our review of the representations of management and the report of the independent registered accountants to the Audit Committee, we recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2019.2021.

Terry W. Andrus

C. Wayne Alderman

J. Tutt Barrett

William F. Ham, Jr.

David E. Housel

 

Terry W. Andrus

C. Wayne Alderman

J. Tutt Barrett

William F. Ham, Jr.

David E. Housel

2019

PROPOSAL THREE –THREE: RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS

Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board of the Company has approved the appointment of Elliott Davis to serve as the Company’s independent registered public accounting firm for the Company for the year ending December 31, 2020.2022. The Audit Committee considered the background, expertise and experience of the audit team assigned to the Company and various other relevant matters, including the proposed fees for audit services. A representative of Elliott Davis will participate inbe present at the virtual Meeting and will be given the opportunity to make a statement on behalf of the firm, and will also be available to respond to appropriate questions from shareholders. If the shareholders should fail to ratify the appointment of the independent registered public accounting firm, the Audit Committee would reconsider the appointment.

Independent Public Accountants’ FeesAccountants

The fees billed by the Company’s independent registered public accounting firm relating to the 20192021 and 20182020 fiscal years were as follows:

 

  2019   2018           2021                   2020         

Audit Fees (1)

          $180,000           $176,500    $147,000    $   143,000 

Audit-Related Fees (2)

   10,000    15,250    8,000    10,000 

Tax Fees

   —    —    —    — 

All Other Fees

   —    —    —    — 
  

 

   

 

   

 

   

 

 

Total

   190,000    191,750    155,000    153,000 

 

 

(1)

Includes the aggregate fees billed by Elliott Davis for professional services rendered for the audit of the Company’s annual financial statements, audit of the Company’s internal control over financial reporting, and review of unaudited financial statements included in the Company’s Forms10-Q filed during fiscal years 20192021 and 2018.2020 and services normally provided for statutory and regulatory filings or engagements for the fiscal years 2021 and 2020.

 

(2)

Includes the aggregate fees billed by Elliott Davis for professional services rendered for certain agreed upon procedures and other audit and attestation reports related to compliance matters during fiscal years 20192021 and 2018.2020.

Audit Committee Review

The Company’s Audit Committee has reviewed the services rendered and the fees billed by Elliott Davis for the fiscal year ended December 31, 2019.2021. The Audit Committee has determined that the services rendered and the fees billed last year that were not related to the audit of the Company’s financial statements are compatible with the independence of Elliott Davis as the Company’s independent registered accountants.

Audit CommitteePre-Approval Policy

Under the Audit Committee’s Charter and itspre-approval policy, the Audit Committee is required to approve in advance the terms of all audit services provided to the Company as well as all permissible audit related andnon-audit services to be provided by the independent public accountants. Unless a service to be provided by the independent public accountants has received approval under thepre-approval policy, it will require specific approval by the Audit Committee. Thepre-approval policy is detailed as to the particular services to be provided, and the Audit Committee is to be informed about each service provided. The approval ofnon-audit services may be performed by the Chairman of the Committee and reported to the full Audit Committee at its next meeting, but may not be performed by the Company’s management. The term of anypre-approval is twelve months, unless the Audit Committee specifically provides for a different period.

 

2120

The Audit Committee will approve the annual audit engagement terms and fees prior to the commencement of any audit work other than that necessary for the independent public accountant to prepare the proposed audit approach, scope and fee estimates. In addition to the annual audit work, the independent public accountants may perform certain other audit related ornon-audit services that arepre-approved by the Audit Committee and are not prohibited by regulatory or other professional requirements. Engagements for the annual audit and recurring tax return preparation engagements shall be reviewed and approved annually by the Audit Committee based on the agreed upon engagement terms, conditions and fees. The nature and dollar value of services provided under these engagements shall be reviewed by the Audit Committee to approve changes in terms, conditions and fees resulting from changes in audit scope, Company structure, exchange rates or other items, if any.

In the event audit-related ornon-audit services that arepre-approved under thepre-approval policy have an estimated cost in excess of certain dollar thresholds, these services will require specific approval by the Audit Committee or by the Chairman of the Audit Committee. Any proposed engagement must be approved in advance by the Audit Committee or by the Chairman of the Audit Committee applying the principles set forth in thepre-approval policy, prior to the commencement of the engagement.Inengagement.In determining the approval of services by the independent public accountants, the Audit Committee evaluates each service to determine whether the performance of such service would: (a) impair the public accountant’s independence; (b) create a mutual or conflicting interest between the public accountant and the Company; (c) place the public accountant in the position of auditing his or her own work; (d) result in the public accountant acting as management or an employee of the Company; or (e) place the public accountant in a position of being an advocate for the Company. In no event are monetary limits the only basis for thepre-approval of services.

All of the services provided by Elliott Davis during 20192021 and described above under the caption “Audit Fees” and “Audit-Related Fees” werepre-approved by the Company’s Audit Committee pursuant to SEC RegulationS-X, Rule2-01(c)(7)(i).

The Board recommends you vote “FOR” the approval of this Resolution related to the ratification of the appointment of Elliott Davis as the independent registered public accounting firm for the fiscal year ending December 31, 2020.2022.

AVAILABILITY OF ANNUAL REPORT

Copies of the Company’s 20192021 Annual Report to Shareholders have been provided to each shareholder. The Annual Report can also be found by clicking the heading “About Us” on the Company’s website,www.auburnbank.com, and then clicking on “Investor Relations.” Upon the written request of any person whose Proxy is solicited by this Proxy Statement, the Company will furnish to such person without charge (other than for exhibits) a copy of the Annual Report, including financial statements and schedules thereto, as filed with the SEC. Such requests should be directed to Marcia Otwell, Shareholder Relations, Auburn National Bancorporation, Inc., P.O. Box 3110, Auburn, Alabama, 36831-3110.

 

2221

SHAREHOLDER PROPOSALS FOR THE 20212023 ANNUAL MEETING

Proposals of shareholders intended to be presented at the Company’s 20212023 Annual Meeting of Shareholders must be received by the Company on or before December 18, 2020November 30, 2022 and must comply with the requirements of SEC Rule14a-8, in order to be eligible for inclusion in the Company’s proxy statement and form of proxy for that meeting. If notice of a proposal is not received by the Company in accordance with the dates specified pursuant to SEC Rule 14a-8, then the proposal will be deemed untimely and we will have the right to exclude the proposal from consideration at the 2023 Annual Meeting and/or to exercise discretionary voting authority and vote proxies returned to us with respect to such proposal or director nomination.

If a shareholder does not submit a proposal for inclusion in next year’s proxy statement, but instead wishes to present it directly at the Company’s 20212023 Annual Meeting of Shareholders, the Company’s Bylaws require that the shareholder notify the Company of such proposal in writing no later than December 18, 2020,November 30, 2022, or 120 calendar days in advance of the date (with respect to the Company’s 20212023 Annual Meeting of Shareholders) that the Company’s proxy statement was released to its shareholders in connection with the Meeting. The shareholder must also comply with the requirements of Article III, Section 16 of the Company’s Bylaws with respect to shareholder proposals.

OTHER MATTERS

The Company knows of no other matters to be brought before the Meeting. However, if any other proper matter is presented, the persons named in the enclosed form of Proxy intend to vote the Proxy in accordance with their judgment of what is in the best interest of the Company.

By Order of the Board of Directors

/s/ Robert W. Dumas

Robert W. Dumas

Chairman of the Board,

President and Chief Executive Officer

March 30, 2022

22

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Your vote matters – here’s how to vote!

You may vote online or by phone instead of mailing this card.

/s/ Robert W. Dumas

Robert W. Dumas

Chairman of the Board,

President and Chief Executive Officer

April 17, 2020

23

   

             
 

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Votes submitted electronically must be received by 1:00 A.M., Central Time, on May 10, 2022.

Online

Go to www.investorvote.com/AUBN or scan the QR code – login details are located in the shaded bar below.

 
 
 

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Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada

Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. 

Your vote matters – here’s how to vote!

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During the Meeting - Go to www.meetingcenter.io/238043288 You may attend the meeting via the internet and vote during the meeting. Have your proxy card in hand when you access the website and follow the instructions to join the meeting and vote.
 Phone
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Annual Meeting Proxy Card

 

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q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.  q

 

 A Proposals – The Board of Directors recommends a voteFOR all the nominees listed,FOR Proposal 2, andFOR Proposal 3.

1.Election of Directors:+

 01 - C. Wayne Alderman02 - Terry W. Andrus03 - J. Tutt Barrett
04 - Laura Cooper05 - Robert W. Dumas06 - William F. Ham, Jr.
07 - David E. Housel08 - Anne M. May09 - Edward Lee Spencer, III

 

1. Election of Directors:

                       LOGO
    01 - C. Wayne Alderman 02 - Terry W. Andrus 03 - J. Tutt Barrett      
    04 - Laura J. Cooper 05 - Robert W. Dumas 06 - William F. Ham, Jr.      
    07 - David E. Housel 08 - Anne M. May 09 - Edward Lee Spencer, III      
  

 

☐

 

 

Mark here to vote FOR all nominees

 

 

            ☐

 

 

Mark here to WITHHOLD vote from all nominees

          
       01 02 03 04 05 06 07 08 09       
  ☐ 

 

For All EXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right.

 ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐       

  For   Against Abstain    For Against Abstain

 

2.

 

 

To approve the compensation of the Company’s named executive officers.

 ☐ ☐ ☐  3. To ratify the appointment of Elliott Davis, LLC as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2022. ☐ ☐ ☐
          
4. The Proxies are authorized to vote upon such other business as may properly come before the Meeting, or any adjournments of the majority of the Company’s Board of Directors.         

 

☐Mark here to voteFOR all nominees
☐ B Mark here toWITHHOLD vote from all nominees

    010203040506070809 
 ☐For AllEXCEPT - To withhold a vote for one or more nominees, mark the box to the left and the corresponding numbered box(es) to the right. ☐ ☐☐☐☐☐☐☐☐ 

   ForAgainstAbstain   ForAgainstAbstain
2.To approve the compensation of the Company’s named executive officers.  ☐☐☐ 3.To ratify the appointment of Elliott Davis LLC as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020.☐☐☐

4.The Proxies are authorized to vote upon such other business as may properly come before the Meeting, or any adjournments of the majority of the Company’s Board of Directors. 

BAuthorized Signatures – This section must be completed for your vote to be counted. – Date and Sign Below

When shares are held by joint tenants, both should sign. Executors, administrators, trustees, etc. should give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer.

Date (mm/dd/yyyy) – Please print date below.

 

Signature 1 – Please keep signature within the box.

 

Signature 2 – Please keep signature within the box.

       /       /      

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1 U P X

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038C1D
                 03M5YC

 

 

The 2020 Annual Meeting of Shareholders of Auburn National Bancorporation, Inc. will be held on
May 12, 2020 at 3:00pm Central Daylight Time, virtually via the internet at www.meetingcenter.io/238043288.

To access the virtual meeting, you must have the information that is printed in the shaded bar
located on the reverse side of this form.

The password for this meeting is – AUBN2020.

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REVOCABLE PROXY – AUBURN NATIONAL BANCORPORATION, INC.

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2022 ANNUAL MEETING OF SHAREHOLDERS MAY 10, 2022

2020 ANNUAL MEETING OF SHAREHOLDERS MAY 12, 2020

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.

KNOW BY ALL MEN BY THESE PRESENTS, that the undersigned shareholder of Auburn National Bancorporation, Inc., Auburn, Alabama (the “Company”), hereby revoking any proxy heretofore given, does hereby nominate, constitute, and appoint Robert W. Dumas, and Terry W. Andrus or either one of them, the true and lawful attorneys and proxies of the undersigned, with full power of substitution, for the undersigned and in the undersigned’s name, place, and stead, to vote all of the shares of common stock of the Company standing in the undersigned’s name, on its books on March 13, 2020,21, 2022, and that the undersigned may be entitled to vote at the Annual Meeting of Shareholders to be held virtually via the internet at www.meetingcenter.io/238043288The Hotel at Auburn University & Dixon Conference Center, 241 South College Street, Auburn, Alabama at 3:00 p.m., local time, on Tuesday, May 12, 2020,10, 2022, and at any adjournments thereof (the “Meeting”), with all the powers the undersigned would possess if personally present as follows:

The proxy will be voted as directed by the undersigned shareholder.Unless contrary direction is given, this proxy will be voted FOR the election of the nominees listed in Proposal 1, FOR approval of the compensation of the Company’s named executive officers and FOR the ratification of the appointment of Elliott Davis, LLC as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020.2022. The Proxies are authorized to vote upon such other business as may properly come before the Meeting, or any adjournments of the majority of the Company’s Board of Directors and in accordance with the determination of a majority of the Board of Directors as to any other matters. The undersigned shareholder may revoke this proxy at any time prior to its exercise at the Meeting by either (i) giving written notice of revocation to the Company’s Secretary, (ii) properly submitting to the Company a duly executed Proxy bearing a later date, or (iii) logging intoby appearing at the Meeting and voting electronically in real time.person. The undersigned shareholder hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 12, 202010, 2022 FOR AUBURN NATIONAL BANCORPORATION, INC. THE FOLLOWING MATERIAL IS AVAILABLE AT WWW.AUBNPROXY.COM. *PROXY STATEMENT *ANNUAL REPORT

PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE

 

  C  Non-Voting Items

CNon-Voting Items

Change of Address – Please print new address below.

      
Change of Address – Please print new address below.  

Meeting Attendance

Mark box to the right if you plan to attend the Annual Meeting.

 

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