[Green Street Financial Corp Letterhead]
December 16, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Green Street
Financial Corp, (the "Company"), I cordially invite you to attend the Annual
Meeting of Stockholders to be held at the offices of the Company, 241 Green
Street, Fayetteville, North Carolina, on January 29, 1997, at 5:15 p.m. The
attached Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Annual Meeting. During the Annual Meeting, I
will also report on the operations of the Company. Directors and officers of the
Company, as well as a representative of McGladrey & Pullen, LLP, certified
public accountants, will be present to respond to any questions stockholders may
have.
The matters to be considered by stockholders at the Annual Meeting are
described in the accompanying Notice of Annual Meeting and Proxy Statement. The
Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
its stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND DATE
THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID RETURN
ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from voting in
person at the Annual Meeting, but will assure that your vote is counted if you
are unable to attend the Annual Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/H.D. Reaves, Jr.
H.D. Reaves, Jr.
President
<PAGE>
GREEN STREET FINANCIAL CORP
241 GREEN STREET
FAYETTEVILLE, NORTH CAROLINA 28301
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on January 29, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of Green Street Financial Corp ("the Company"), will be held at the offices of
the Company, 241 Green Street, Fayetteville, North Carolina on January 29, 1997,
at 5:15 p.m.
The Meeting is for the purpose of considering and acting upon the following
matters:
1. The election of three directors of the Company;
2. The ratification of the appointment of McGladrey & Pullen, LLP, as
independent auditors of the Company for the fiscal year ending September
30, 1997; and
3. Such other matters as may properly come before the meeting or any
adjournments thereof.
The Board of Directors is not aware of any other business to come before the
Meeting. Any action may be taken on the foregoing proposals at the Meeting on
the date specified above or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Stockholders of record at the close
of business on December 11, 1996 are the stockholders entitled to vote at the
Meeting and any adjournments thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE PLANS TO ATTEND THE MEETING, IS REQUESTED TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED BY
FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED
PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE
HIS PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING.
HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE
PERSONALLY AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Allen Lloyd
Allen Lloyd
Secretary
Fayetteville, North Carolina
December 16, 1996
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
<PAGE>
PROXY STATEMENT
OF
GREEN STREET FINANCIAL CORP
241 GREEN STREET
FAYETTEVILLE, NORTH CAROLINA 28301
ANNUAL MEETING OF STOCKHOLDERS
January 29, 1997
General
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Green Street Financial Corp (the "Company")
to be used at the Annual Meeting of Stockholders of the Company which will be
held at the offices of the Company, 241 Green Street, Fayetteville, North
Carolina, on January 29, 1997, 5:15 p.m. local time (the "Meeting"). The
accompanying Notice of Annual Meeting of Stockholders and this Proxy Statement
are being first mailed to stockholders on or about December 16, 1996. The
Company acquired all of the outstanding stock of Home Federal Savings and Loan
Association ("Association") issued in connection with the completion of the
Association's mutual-to-stock conversion on April 3, 1996 (the "Conversion").
At the Meeting, stockholders will consider and vote upon (i) the election
of three directors, and (ii) the ratification of the appointment of McGladrey &
Pullen, LLP, as independent auditors of the Company for the fiscal year ending
September 30, 1997 and (iii) such other matters as may properly come before the
meeting or any adjournments thereof. The Board of Directors of the Company (the
"Board" or the "Board of Directors") knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxy holder discretionary authority to vote the
shares represented by such proxy in accordance with their best judgment on such
other business, if any, that may properly come before the Meeting or any
adjournment thereof.
Voting and Revocability of Proxies
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors will be voted in
accordance with the directions given therein. Where no instructions are
indicated, signed proxies will be voted "FOR" the nominees for directors set
forth below and "FOR" the other listed proposal. The proxy confers discretionary
authority on the persons named therein to vote with respect to the election of
any person as a director where the nominee is unable to serve, or for good cause
will not serve, and matters incident to the conduct of the Meeting.
<PAGE>
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on December 11, 1996
(the "Record Date"), are entitled to one vote for each share of common stock of
the Company (the "Common Stock") then held. As of the Record Date, the Company
had 4,298,125 shares of Common Stock issued and outstanding.
The articles of incorporation of the Company ("Articles of Incorporation")
provide that in no event shall any record owner of any outstanding Common Stock
which is beneficially owned, directly or indirectly, by a person who
beneficially owns in excess of 10% of the then outstanding shares of Common
Stock (the "Limit") be entitled or permitted to any vote with respect to the
shares held in excess of the Limit. Beneficial ownership is determined pursuant
to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates (as such terms
are defined in the Articles of Incorporation), or which such person or any of
his or her affiliates has the right to acquire upon the exercise of conversion
rights or options and shares as to which such person or any of his or her
affiliates or associates have or share investment or voting power, but neither
any employee stock ownership or similar plan of the Company or any subsidiary,
nor any trustee with respect thereto or any affiliate of such trustee (solely by
reason of such capacity of such trustee), shall be deemed, for purposes of the
Articles of Incorporation, to beneficially own any Common Stock held under any
such plan.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have discretionary authority as to such shares to
vote on such matter (the "Broker Non-Votes") will be considered present for
purposes of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors (Proposal I), the proxy being provided by
the Board enables a stockholder to vote for the election of the nominees
proposed by the Board, or to withhold authority to vote for the nominees being
proposed. Directors are elected by a plurality of votes of the shares present in
person or represented by proxy at a meeting and entitled to vote in the election
of directors.
As to the ratification of independent auditors as set forth in Proposal
II, by checking the appropriate box, a stockholder may: (i) vote "FOR" the item,
(ii) vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on such item. Unless
otherwise required by law, all other matters shall be determined by a majority
of votes cast affirmatively or negatively without regard to (a) Broker Non-Votes
or (b) proxies marked "ABSTAIN" as to that matter.
Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"). The following table sets
forth, as of the Record Date, persons or groups who own more than 5% of the
Common Stock and the ownership of all executive officers and directors of the
Company as a group. Other than as noted below, management knows of no person or
group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
-2-
<PAGE>
<TABLE>
<CAPTION>
Percent of Shares of
Amount and Nature of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------- -------------------- --------------------
Home Federal Savings and Loan Association
Employee Stock Ownership Plan and Trust ("ESOP")
241 Green Street
<S> <C> <C>
Fayetteville, North Carolina 28301 260,000(1) 6.0%
The Shelton Companies
3600 One First Union Center
301 S. College Street
Charlotte, NC 28202 292,600(2) 6.8%
All directors and executive officers of the Company
as a group (11 persons) 157,181(3) 3.7%
</TABLE>
- ---------------------------------
(1) The ESOP purchased such shares for the exclusive benefit of plan
participants with funds borrowed from the Company. These shares are held
in a suspense account and will be allocated among ESOP participants
annually on the basis of compensation as the ESOP debt is repaid. The
Board of Directors has appointed a committee consisting of Robert O.
McCoy, Jr., Henry G. Hutaff, Sr. and Henry W. Holt to serve as the ESOP
administrative committee ("ESOP Committee") and the ESOP trustees ("ESOP
Trustee"). The ESOP Committee or the Board instructs the ESOP Trustee
regarding investment of ESOP plan assets. The ESOP Trustee must vote all
shares allocated to participant accounts under the ESOP as directed by
participants. Unallocated shares and shares for which no timely voting
direction is received, will be voted by the ESOP Trustee as directed by
the Board of the Company or the ESOP Committee. As of the Voting Record
Date, 6,500 shares have been allocated under the ESOP to participant
accounts.
(2) Based upon a joint Schedule 13D filing made with the Securities and
Exchange Commission on behalf of the Shelton Companies, the Shelton
Foundation, Third Set, Inc., Charles M. Shelton, Jr., Jennifer K. Shelton,
and Jane P. Norward, dated August 1996, showing sole voting and
dispositive power with respect to 292,600 shares.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which shares
the individuals effectively exercise sole voting and investment power,
unless otherwise indicated. Includes no options that may be exercised
within 60 days of the Record Date to purchase shares of Common Stock under
the 1996 Stock Option Plan (the "1996 Stock Option Plan"). Includes no
shares of Common Stock held by the restricted stock plan ("RSP") over
which shares individuals in the named group exercise shared voting and
investment power. See Director And Executive Officer Compensation.
Excludes 257,290 shares held by the ESOP (260,000 shares minus 2,710
shares allocated to executive officers) over which certain directors, as
trustees to the ESOP, exercise shared voting and investment power. Such
individuals disclaim beneficial ownership with respect to such shares held
by the ESOP.
-3-
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership of the Common Stock, on Forms
3, 4 and 5, with the Securities and Exchange Commission ("SEC") and to provide
copies of those Forms 3, 4 and 5 to the Company. The Company is not aware of any
beneficial owner of more than ten percent of its Common Stock. Based upon a
review of the copies of the forms furnished to the Company, or written
representations from certain reporting persons that no Forms 5 were required,
the Company believes that all Section 16(a) filing requirements applicable to
its officers and directors were complied with during the 1996 fiscal year.
I - INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR, DIRECTORS
CONTINUING IN OFFICE, AND EXECUTIVE OFFICERS
Election of Directors
The Articles of Incorporation require that the Board of Directors be
divided into three classes, each of which contains approximately one-third of
the members of the Board. The directors are elected by the stockholders of the
Company for staggered three-year terms, or until their successors are elected
and qualified. The Board of Directors currently consists of nine members. Three
directors will be elected at the Meeting to serve for a three-year term or until
their successors have been elected and qualified.
Norwood E. Bryan, Jr., Joseph H. Hollinshed and Henry W. Holt, have been
nominated by the Board of Directors to serve as directors. Messrs. Bryan,
Hollinshed and Holt are currently members of the Board and have been nominated
for a three-year term to expire in 2000. It is intended that the persons named
in the proxies solicited by the Board will vote for the election of the named
nominees. If any of the nominees are unable to serve, the shares represented by
all valid proxies will be voted for the election of such substitute as the Board
of Directors may recommend or the size of the Board may be reduced to eliminate
the vacancy. At this time, the Board knows of no reason why the nominees might
be unavailable to serve.
The following table sets forth information with respect to the nominees
and the directors continuing in office, their name, age, the year they first
became a director of the Company or the Association, the expiration date of
their current term as a director, and the number and percentage of shares of the
Common Stock beneficially owned. Each director of the Company is also a member
of the Board of Directors of the Association. Beneficial ownership of executive
officers and directors of the Company, as a group, is shown in the table under
"Voting Securities and Principal Holders Thereof."
-4-
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially
Year First Current Owned as of
Elected or Term to December 11, Percent
Age(1) Appointed(2) Expire 1996 (3)(4)(5) Owned
----- ------------ ------- -------------- -------
Name and Title
- --------------
BOARD NOMINEES FOR TERM TO EXPIRE IN 2000
<S> <C> <C> <C> <C> <C>
Norwood E. Bryan, Jr. 61 1976 1997 40,000 --(7)
Director
Joseph H. Hollinshed 61 1993 1997 15,000 --(7)
Director
Henry W. Holt 56 1979 1997 26,820(6) --(7)
Director
DIRECTORS CONTINUING IN OFFICE
Henry G. Hutaff, Sr. 66 1974 1998 30,000(6) --(7)
Vice Chairman of the Board and
Director
Robert O. McCoy, Jr. 68 1971 1998 8,200(6) --(7)
Chairman of the Board and
Director
John C. Pate 70 1970 1998 6,292 --(7)
Senior Vice President and Director
John M. Grantham 65 1984 1999 15,965 --(7)
Senior Vice President and Director
Robert G. Ray 53 1993 1999 4,900 --(7)
Director
H. D. Reaves, Jr. 59 1984 1999 7,784 --(7)
President, Chief Executive Officer
and Director
</TABLE>
- ---------------------------------------------------
(1) At September 30, 1996.
(2) Refers to the year the individual first became a director of the Company
or the Association. During December 1995, all directors of the Association
became directors of the Company at the time the Company was incorporated.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust, and other indirect ownership, over which shares
the individuals effectively exercise sole or shared voting and investment
power, unless otherwise indicated.
(4) Includes no stock options issued pursuant to the 1996 Stock Option Plan.
(5) Includes no shares of Common Stock issued under the RSP.
(footnotes continued on next page).
-5-
<PAGE>
(6) Excludes 260,000 shares of Common Stock held under the ESOP for which such
individual serves as either a member of the ESOP Committee or as an ESOP
Trustee. Such individual disclaims beneficial ownership with respect to
shares held in a fiduciary capacity. The ESOP purchased such shares for
the exclusive benefit of ESOP participants with funds borrowed from the
Company. These shares are held in a suspense account and will be allocated
among ESOP participants annually on the basis of compensation as the ESOP
debt is repaid. The Board of Directors has appointed Messrs. Holt, Hutaff,
and McCoy to serve on the ESOP Committee and to serve as ESOP Trustees.
The ESOP Committee or the Board instructs the ESOP Trustee regarding
investment of ESOP plan assets. The ESOP Trustees must vote all shares
allocated to participant accounts under the ESOP as directed by ESOP
participants. Unallocated shares and shares for which no timely voting
direction is received will be voted by the ESOP Trustees as directed by
the ESOP Committee. As of the Voting Record Date, 6,500 shares have been
allocated under the ESOP to participant accounts.
(7) Less than 1.0%.
Biographical Information
Set forth below is certain information with respect to the directors,
including director nominees and executive officers, of the Company. All
directors and executive officers have held their present positions for five
years unless otherwise stated.
Norwood E. Bryan, Jr. has been director of the Association since 1976. Mr.
Bryan is a 50% shareholder and the President of Bryan Pontiac-Cadillac Company,
an automobile dealership, and is also involved in automotive rental and
insurance businesses.
John M. Grantham has been director of the Association since 1984 and has
served as Senior Vice President since 1983. Mr. Grantham has been employed by
the Association since 1961.
Joseph H. Hollinshed has been director of the Association since 1993. He is
a co-owner of Cape Fear Supply Co., Inc., a building supply store, and Comtech,
Inc., a truss fabricating company.
Henry W. Holt has been director of the Association since 1979 and has
served as the Secretary of the Board since 1984. Mr. Holt is President of Holt
Oil Co., Inc., an oil distributorship, a position he has held since 1993. Prior
to that time, he served as Secretary and Treasurer at Holt Oil Co., Inc. Mr.
Holt is also part owner of Holt Properties.
Henry G. Hutaff, Sr. has been director of the Association since 1974 and
has served as Vice Chairman of the Board of Directors since 1993. Mr. Hutaff is
an executive with Coca Cola Bottling Company. Mr. Hutaff is also part owner of
H.T.M. Investment Co. and The Mann Co.
Robert O. McCoy, Jr. has been director of the Association since 1971 and
has served as Chairman of the Board of Directors since 1993. Mr. McCoy is a
realtor with McLean Real Estate Company.
John C. Pate has been director of the Association since 1970. Mr. Pate
served as President of the Association from 1976 until 1992. Mr. Pate provided
consulting services for the Association after that date until 1995 when he
became Senior Vice President. Mr. Pate has been employed with the Association
since 1963.
-6-
<PAGE>
Robert G. Ray has been director of the Association since 1993. Mr. Ray is a
member of the law firm Rose, Ray & O'Connor.
H. D. Reaves, Jr. has been director of the Association since 1984 and has
served as its President and Chief Executive Officer since 1992. Prior to that
time he served as Executive Vice President. Mr. Reaves began his employment with
the Association in 1962.
Nominations for Director
Pursuant to Article II, Section 15 of the Company's Bylaws, nominations,
other than those made by or at the direction of the Board of Directors, shall be
made pursuant to a notice in writing to the Secretary of the Company that is
delivered to, or mailed and received at, the principal executive offices of the
Company not less than 60 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders of the Company; provided, however, that
with respect to the first scheduled annual meeting, notice by the stockholder
must be so delivered or received no later than the close of business on the
tenth day following the day on which notice of the date of the scheduled meeting
must be delivered or received no later than the close of business on the fifth
day preceding the date of the meeting.
Such stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a director and
as to the stockholder giving the notice (i) the name, age, business address, and
residence address of such person, (ii) the principal occupation or employment of
such person, (iii) the class and number of shares of Common Stock which are
beneficially owned by such person on the date of such stockholder notice, and
(iv) any other information relating to such person that is required to be
disclosed in solicitations of proxies with respect to nominees for election as
directors; and (b) as to the stockholder giving the notice (i) the name and
address, as they appear on the Company's books, of such stockholder and any
other stockholders known by such stockholder to be supporting such nominees and
(ii) the class and number of shares of Common Stock which are beneficially owned
by such stockholder on the date of such stockholder notice and, to the extent
known, by any other stockholders known by such stockholder to be supporting such
nominees on the date of such stockholder notice. At the request of the Board of
Directors, any person nominated by, or at the direction of, the Board for
election as a director at an annual meeting shall furnish to the Secretary of
the Company that information required to be set forth in a stockholder's notice
of nomination which pertains to the nominee.
The Board of Directors may reject any nomination by a stockholder not made
in accordance with the requirements of the Bylaws. If the presiding officer at
the meeting determines that a nomination was not made in accordance with the
terms of the Bylaws, he shall so declare at the annual meeting and the defective
nomination shall be disregarded.
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the Board. The Board of Directors of the Company did not have
committees during the fiscal year ended September 30, 1996, but the committees
of the Association's Board of Directors acted as committees for both the Company
and the Association. During the fiscal year ended September 30, 1996, the Boards
of Directors held 21 regular meetings and three special meetings. No director
attended fewer than 75%
-7-
<PAGE>
of the total meetings of the Boards of Directors and committees during the time
such director served during the fiscal year ended September 30, 1996.
The Nominating Committee consists of the board of directors of the
Company. The Nominating Committee, not a standing committee, met one time during
the year ended September 30, 1996.
The Audit Committee consists of non-employee Directors Bryan, Hutaff and
Ray. The Audit Committee, a standing committee, meets at least once a year to
supervise and meet with the auditors of the Association and to ensure the
maintenance of proper internal controls. The Audit Committee met once during the
year ended September 30, 1996.
The Personnel and Compensation Committee consists of Directors Hollinshed,
Holt and McCoy. The committee, a standing committee, reviews personnel policies,
salaries and performance of officers and employees and recommends employee
salaries to the Board of Directors. The committee met twice during the year
ended September 30, 1996.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
Director Compensation
During calendar year 1995, each non-employee director of the Board of
Directors received a monthly fee of $700, regardless of attendance. During
calendar year 1996, this fee was $800. Additionally, each non-employee director
received a fee of $200 per meeting attended. Each non-employee director who is a
member of the Executive Committee, Personnel and Compensation Committee, Loan
Committee or Audit Committee received $100 per meeting attended. Total fees paid
to directors for the fiscal year ended September 30, 1996 were $82,100.
Subsequent to the end of the 1996 fiscal year, directors received awards
of stock options and restricted stock under the 1996 Stock Option Plan and the
RSP.
Executive Officer Compensation
The Company has no full time employees, but relies on the employees of the
Association for the services required by the Company. All compensation paid to
officers and employees is paid by the Association.
-8-
<PAGE>
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the chief executive officer. No
other executive officer of either the Association or the Company had a salary
and bonus during the years ended September 30, 1996, and 1995 that exceeded
$100,000 for services rendered in all capacities to the Association or the
Company.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
----------------------------------------------- ---------------------------
Securities
Restricted Underlying All
Name and Fiscal Other Annual Stock Options/SARs Other
Principal Position Year Salary Bonus Compensation(1) Award($) (#) Compensation(2)
- ------------------ ------ ------ ----- --------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
H. D. Reaves, Jr. 1996 $97,800 $9,800 $ -- -- -- $12,194
President and -- -- --
Chief Executive 1995 $96,000 $9,650 $ -- -- -- --
Officer
</TABLE>
- -----------------------------------
(1) Aggregate value does not exceed the lesser of $50,000 or 10% of the named
executive officer's total salary and bonuses for the year; (b) payments of
above-market preferential earnings on deferred compensation; (c) payments
of earnings with respect to long term incentive plans prior to settlement
or maturity; (d) tax payment reimbursements; or (e) preferential discounts
on stock.
(2) For fiscal year 1996, represents an allocation of 783.524 shares of Common
Stock under the ESOP (based upon the closing price of the Common Stock of
$15.5625 on September 30, 1996).
Employment and Severance Agreements. The Association entered into an
employment agreement with H.D.Reaves, Jr., President of the Association
("Agreement"). The Agreement has a three year term. Mr. Reaves' base
compensation under the Agreement is $97,800. Under the Agreement, Mr. Reaves'
employment may be terminated by the Association for "just cause" as defined in
the Agreement. If the Association terminates Mr. Reaves without just cause, Mr.
Reaves will be entitled to a continuation of his salary for a period of one year
thereafter. In the event of the termination of employment in connection with any
change in control of the Association during the term of the Agreement, Mr.
Reaves will be paid in a lump sum amount equal to 2.99 times the five year
average of his annual compensation. In the event of a change in control at
September 30, 1996, Mr. Reaves would have been entitled to a severance payment
of approximately $288,800.
Pension Plan. The Association maintains a pension plan for the benefit of
its employees (the "Pension Plan"). Any employee who became an employee before
July 1, 1995 is eligible to participate in the Pension Plan on the first day of
the month coinciding with or next following his or her first day of employment
with the Association. Any employee who became an employee after July 1, 1995 is
eligible to participate on the July 1 or January 1 coinciding with or next
following his or her completion of one year of eligible service. A qualifying
employee becomes fully vested in the Pension Plan upon completion of five years
of qualifying service. The Pension Plan is intended to comply with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
The Pension Plan provides for monthly payments or a lump sum payment to
each participating employee at normal retirement age. Upon termination at or
after age 65 and completion of 30 or more years of service, the annual
retirement benefit would be determined based upon 45% of a participant's Final
Average Compensation. Retirement benefits may be paid after age 55, in which
case such benefits shall be reduced by an early retirement factor. Retirement
benefits at age 65 with less than 30 years of
-9-
<PAGE>
service are also reduced proportionately. The Pension Plan also provides for
payments in the event of disability or death. At September 30, 1996, Mr. Reaves,
President, had 34 years of credited service under the Pension Plan. Pension
expenses for the fiscal years ended 1996 and 1995 were $84,015, and $112,542,
respectively.
The following table shows the estimated annual benefits payable under the
Pension Plan based on the respective employee's years of benefit service and
applicable average annual salary, as calculated on the basis of single life
annuity amounts under the Pension Plan. Benefits under the Pension Plan are not
subject to offset for Social Security benefits.
Average Annual Salary Years of Benefit Service
- --------------------- ---------------------------------------
20 25 30 or more
------- -------- ----------
$ 20,000............... $ 6,000 7,500 $ 9,000
40,000............... 12,000 15,000 18,000
60,000............... 18,000 22,500 27,000
80,000............... 24,000 30,000 36,000
100,000............... 30,000 37,500 45,000
120,000............... 36,000 45,000 54,000
150,000............... 45,000 56,250 67,500
Compensation Committee Interlocks and Insider Participation
The Personnel and Compensation Committee of the Association serves as the
salary review committee for executive officers of the Company and the
Association. The Personnel and Compensation Committee is a standing committee
comprised of Directors Hollinshed, Holt and McCoy.
Report of the Personnel and Compensation Committee on Executive Compensation
The Compensation Committee meets annually to review compensation paid to
executive officers and to determine the compensation levels for all employees.
The Compensation Committee reviews various published surveys of compensation
paid to employees performing similar duties for depository institutions and
their holding companies, with a particular focus on the level of compensation
paid by comparable institutions in and around the Company's market area,
including institutions with total assets of between $100 million and $200
million. Although the Compensation Committee does not specifically set
compensation levels for executive officers based on whether particular financial
goals have been achieved by the Company the Compensation Committee does consider
the overall profitability of the Company when making these decisions. With
respect to each particular employee, his or her particular contributions to the
Company over the past year are also evaluated.
During the fiscal year ended September 30, 1996, H. D. Reaves, Jr.,
President and Chief Executive Officer received an increase in salary from
$96,000 to $97,800. The Compensation Committee will consider the annual
compensation paid to chief executive officers of financial institutions in the
State of North Carolina and surrounding states with assets of between $100
million and $200 million and the individual job performance of such individual
in consideration of its specific salary increase decision with respect to
compensation to be paid to the President in the future.
-10-
<PAGE>
Stock Performance Graph
Set forth below is a stock performance graph comparing the cumulative
total shareholder return on the Common Stock with (a) the cumulative total
stockholder return on stocks included in the Nasdaq Stock Market index and (b)
the cumulative total stockholder return on stocks included in the Nasdaq Bank
index, as prepared for Nasdaq by the Center for Research in Securities Prices
("CRSP") at the University of Chicago. All three investment comparisons assume
the investment of $100 as of April 3, 1996 (the date of initial issuance of the
Common Stock). All of these cumulative total returns are computed assuming the
reinvestment of dividends. In the graph below, the periods compared were April
3, 1996 and the Company's fiscal year end of September 30, 1996.
There can be no assurance that the Company's future stock performance will
be the same or similar to the historical stock performance shown in the graph
below. The Company neither makes nor endorses any predictions as to stock
performance.
[GRAPHIC OMITTED-PLOTTING POINTS BELOW]
=======================================================
4/03/96 9/30/96
- -------------------------------------------------------
CRSP Nasdaq U.S. Index $100.00 $110.46
- -------------------------------------------------------
CRSP Nasdaq Bank Index $100.00 $112.25
- -------------------------------------------------------
Green Street Financial Corp $100.00 $156.83
=======================================================
-11-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Related Transactions
No directors, executive officers, or immediate family members of such
individuals were engaged in transactions with the Company or any subsidiary
involving more than $60,000 during the year ended September 30, 1996.
Furthermore, the Company had no "interlocking" relationships existing during the
year ended September 30, 1996 in which (i) any executive officer is a member of
the Board of Directors/Trustees of another entity, one of whose executive
officers is a member of the Company's Board of Directors, or where (ii) any
executive officer is a member of the compensation committee of another entity,
one of whose executive officers is a member of the Company's Board of Directors.
Robert G. Ray, Esq., is a director of the Company and the Association. He is
also a member of the law firm of Rose, Ray, & O'Connor, which firm provides
legal services to the Association.
The Association, like many financial institutions, has followed a policy
of granting various types of loans to officers, directors, and employees. All
loans to executive officers and directors of the Association have been made in
the ordinary course of business and on substantially the same terms and
conditions, including interest rates and collateral, as those prevailing at the
time for comparable transactions with the Association's other customers, and do
not involve more than the normal risk of collectibility nor present other
unfavorable features.
II -- RATIFICATION OF APPOINTMENT OF AUDITORS
McGladrey & Pullen, LLP, was the Company's independent public accountant
for the 1996 fiscal year. The Board of Directors of the Company presently
intends to renew the Company's arrangement with McGladrey & Pullen, LLP to be
its auditors for the fiscal year ended September 30, 1997. A representative of
McGladrey & Pullen, LLP is expected to be present at the meeting to respond to
stockholders' questions and will have the opportunity to make a statement if the
representative so desires.
Ratification of the appointment of the auditors requires the approval of a
majority of the votes cast by the stockholders of the Company at the Meeting.
The Board of Directors recommends that stockholders vote "FOR" the ratification
of the appointment of McGladrey & Pullen, LLP, as the Company's auditors for the
fiscal year ending September 30, 1997.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described in this Proxy Statement. However, if
any other matters should properly come before the Meeting, it is intended that
proxies in the accompanying form will be voted in respect thereof in accordance
with the judgment of the persons named in the accompanying proxy.
-12-
<PAGE>
MISCELLANEOUS
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telephone without additional compensation.
The Company's Annual Report to Stockholders for the year ended September
30, 1996, including financial statements, will be mailed to all stockholders of
record as of the close of business on December 11, 1996. Any stockholder who has
not received a copy of such Annual Report may obtain a copy by writing to the
Secretary of the Company. Such Annual Report is not to be treated as a part of
the proxy solicitation material or as having been incorporated herein by
reference.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive offices at
241 Green Street, Fayetteville, North Carolina 28301, no later than August 18,
1997. Any such proposals shall be subject to the requirements of the proxy rules
adopted under the 1934 Act.
FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, GREEN STREET FINANCIAL CORP,
241 GREEN STREET, FAYETTEVILLE, NORTH CAROLINA 28031.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Allen Lloyd
Allen Lloyd
Secretary
Fayetteville, North Carolina
December 16, 1996
-13-
<PAGE>
Annex A
GREEN STREET FINANCIAL CORP
241 GREEN STREET
FAYETTEVILLE, NORTH CAROLINA 28301
ANNUAL MEETING OF STOCKHOLDERS
January 29, 1997
The undersigned hereby appoints the Board of Directors of Green Street
Financial Corp (the "Company"), or its designee, with full powers of
substitution, to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held at the offices
of the Company, 241 Green Street, Fayetteville, North Carolina, on January 29,
1997, at 5:15 p.m. and at any and all adjournments thereof, in the following
manner:
FOR WITHHELD
1. The election as directors of the nominees
listed below (except as marked to the |_| |_|
contrary below):
Norwood E. Bryan, Jr.
Joseph H. Hollinshed
Henry W. Holt
(Instruction: To withhold authority to vote
for any individual nominee, write that nominee's name
on the space provided below)
- ------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. The ratification of the appointment of
McGladrey & Pullen, LLP as independent
auditors of Green Street Financial Corp,
for the fiscal year ending September 30,
1997. |_| |_| |_|
In their discretion, such attorneys and proxies are authorized to vote on any
other business that may properly come before the meeting or any adjournments
thereof.
Note: Executing this proxy permits such attorneys and proxies to vote, in their
discretion, upon such other business as may properly come before the Meeting or
any adjournments thereof.
The Board of Directors recommends a vote "FOR" the above listed
propositions.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
<PAGE>
Annex B
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Green Street Financial Corp
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or at
any adjournments thereof, and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, the power
of said attorneys and proxies shall be deemed terminated and of no further force
and effect. The undersigned may also revoke this proxy by filing a subsequently
dated proxy or by written notification to the Secretary of the Company of his or
her decision to terminate this proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated December 16, 1996, and the 1996 Annual Report.
Dated: , 1996
-------------------
_______________________________ ______________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_______________________________ ______________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
