This excerpt taken from the CBAN DEF 14A filed Mar 23, 2007.
Approval of an Amendment to the Bylaws of the Company
The Board of Directors recommends that shareholders approve an amendment to the bylaws of the Company.
At its January 16, 2007 board meeting, the Board of Directors voted to adopt, subject to the approval of a majority of our shareholders at the 2007 Annual Meeting, an amendment to the bylaws of the Company. The text of this amendment is attached to this proxy as Exhibit C. The amendment was necessitated pursuant to recently approved marketplace rule changes of NASDAQ and the Securities and Exchange Commission published in August, 2006. The amended rules require companies that trade on NASDAQ and other national securities exchanges to offer DTCCs Direct Registration Program which enables investors to register ownership of their shares electronically with either the issuing company or its transfer agents. Companies that were listed on NASDAQ before January 1, 2007 have until January 1, 2008 to comply with the new rules. The amendment for the bylaws of the Company will allow Colony Bankcorp, Inc. to be in compliance with the new rules requiring NASDAQ-listed securities to be eligible for a Direct Registration Program.
On August 8, 2006, the Securities and Exchange Commission approved amendments to NASDAQ Rule 4350(I), which requires securities listed on NASDAQ to be eligible for a Direct Registration Program operated by a clearing agency registered under Section 17A of the Exchange Act, such as the one offered by The Depositary Trust Corporation (DTC). A Direct Registration Program permits an investors ownership to be recorded and maintained on the books of the issuer or the transfer agent without the issuance of a physical stock certificate. Investors receive annual statements from the issuer indicating their holdings.
The rule change does not require issuers to actually participate in a Direct Registration Program or to eliminate physical stock certificates (dematerialization). However, the change requires that the listed securities are eligible for such a program. To be eligible, an issuer is required to use a transfer agent that meets DTCs requirements for direct registered securities. Further, the transfer agent must instruct DTC to designate the companys securities as direct registered eligible securities.
The vote required for approval of the amendment to the bylaws of the Company is governed by Georgia law and is a majority of the outstanding shares entitled to vote, provided a quorum is present. Abstentions and broker non-votes are considered in determining the number of votes required to obtain a majority of the shares represented and entitled to vote at the Annual Meeting and will have the same effect as a vote against the proposal.