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
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
GREEN STREET FINANCIAL CORP
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241 Green Street Telephone (910) 483-3681
P.O. Box 1540 FAX (910) 483-5102
Fayetteville, North Carolina 28302
December 14, 1998
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 27, 1999, 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 appropriate 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
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on January 27, 1999
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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 27, 1999,
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, 1999;
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 9, 1998, are the stockholders entitled to vote at the
Meeting and any adjournments thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE 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 OR HER 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 14, 1998
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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.
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<PAGE>
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PROXY STATEMENT
OF
GREEN STREET FINANCIAL CORP
241 GREEN STREET
FAYETTEVILLE, NORTH CAROLINA 28301
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ANNUAL MEETING OF STOCKHOLDERS
January 27, 1999
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GENERAL
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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 27, 1999, 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 14, 1998.
At the Meeting, stockholders will consider and vote upon (i) the
election of three directors, (ii) the ratification of the appointment of
McGladrey & Pullen, LLP, as independent auditors of the Company for the fiscal
year ending September 30, 1999, 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.
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VOTING AND REVOCABILITY OF PROXIES
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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 proposals. 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.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on December 9, 1998
(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 4,083,219 shares of Common Stock issued and outstanding.
-1-
<PAGE>
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, such Proposal II shall be determined by a majority of
the total votes cast affirmatively or negatively without regard to (a) broker
non-votes or (b) proxies for which the "ABSTAIN" box is selected as to the
matter.
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 (%)
- ------------------------------------ -------------------- ---------------
<S> <C> <C>
Home Federal Savings and Loan Association
Employee Stock Ownership Plan and Trust ("ESOP")
241 Green Street
Fayetteville, North Carolina 28301 260,000(1) 6.4
All directors and executive officers of the Company
as a group (12 persons) 378,137(2) 8.9
</TABLE>
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(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 Record Date, 58,500 shares have been allocated under the ESOP
to participant accounts.
(2) 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 options to purchase 171,924
shares of Common Stock 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"). Excludes 103,154 shares of
Common Stock previously awarded under the restricted stock plan ("RSP")
which are subject to forfeiture and for which the individuals in the
group exercise no voting control and excludes 232,087 shares held by
the ESOP (260,000 shares minus 27,913 shares allocated to executive
officers) over which certain directors, as trustees to the ESOP and the
RSP, exercise shared voting and investment power. Such individuals
disclaim beneficial ownership with respect to such shares held by the
ESOP and the RSP. See Proposal I - Information with Respect to Nominees
for Director, Directors Continuing in Office, and Executive Officers.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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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 1998 fiscal year.
-3-
<PAGE>
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I - INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR, DIRECTORS
CONTINUING IN OFFICE, AND EXECUTIVE OFFICERS
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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 and
until their successors have been elected and qualified.
John M. Grantham, Robert G. Ray, and H.D. Reaves, Jr. have been
nominated by the Board of Directors to serve as directors. Messrs. Grantham, Ray
and Reaves are currently members of the Board and have each been nominated for a
three-year term to expire in 2002. 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 names, ages, the years they first
became directors of the Company or the Association, the expiration date of their
current terms as directors, 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
Age at Year First Current Common Stock
September 30, Elected or Term to Beneficially Percent
Name and Title 1998 Appointed(1) Expire Owned (2) (3) Owned
- -------------- ---- ------------ ------- -------------- ------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEES FOR TERM TO EXPIRE IN 2002
John M. Grantham 67 1984 1999 35,399(4) -- (8)
Senior Vice President and Director
Robert G. Ray 55 1993 1999 15,561(5) -- (8)
Director
H. D. Reaves, Jr. 61 1984 1999 62,956(6) 1.5
President, Chief Executive Officer
and Director
DIRECTORS CONTINUING IN OFFICE
Norwood E. Bryan, Jr. 63 1976 2000 50,316(5) 1.2
Director
Joseph H. Hollinshed 63 1993 2000 25,661(5) -- (8)
Director
Henry W. Holt 58 1979 2000 32,481(5)(7) -- (8)
Director
Henry G. Hutaff, Sr. 68 1974 2001 40,661(5)(7) 1.0
Vice Chairman of the Board and
Director
Robert O. McCoy, Jr. 70 1971 2001 18,190(5)(7) -- (8)
Chairman of the Board and
Director
John C. Pate 72 1970 2001 56,798(6) 1.4
Senior Vice President and Director
</TABLE>
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(1) 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.
(2) As of December 9, 1998, the Record Date.
(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 20,630 stock options to purchase Common Stock which are
exercisable. Excludes 12,381 shares of Common Stock awarded under the
RSP which are subject to forfeiture and for which no voting control is
exercised by the individual.
(5) Includes stock options to purchase 8,596 shares of Common Stock awarded
pursuant to the 1996 Stock Option Plan which are exercisable within 60
days of the Record Date. Excludes 5,158 shares of Common Stock awarded
under the RSP which are subject to forfeiture and for which no voting
control is exercised by the individual as of the Record Date.
(6) Includes stock options to purchase 39,542 shares of Common Stock which
are exercisable. Excludes 23,725 shares of Common Stock awarded under
the RSP which are subject to forfeiture and for which no voting control
is exercised by the individual.
(footnotes continued on next page)
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<PAGE>
(7) 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 Board or the ESOP
Committee. As of the Record Date, 58,500 shares have been allocated
under the ESOP to participant accounts.
(8) Less than 1% of outstanding Common Shares.
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 President of the law
firm Rose, Ray, O'Connor, Manning & McCauley, PA.
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.
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, 1998, 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, 1998, the Boards
of Directors held twenty-four (24) regular meetings and four (4) special
meetings. No director attended fewer than 75% of the total meetings of the
Boards of Directors and committees during the time such director served during
the fiscal year ended September 30, 1998.
The Nominating Committee consists of the Board of Directors of the
Company. Nominations to the Board of Directors made by stockholders must be made
in writing to the Secretary of the Company and received by the Company not less
than 60 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders of the Company. Notice to the Company of such
nominations must include certain information required pursuant to the Company's
Bylaws. The Nominating Committee, which is not a standing committee, met once
during the year ended September 30, 1998.
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, 1998.
The Personnel and Compensation Committee consists of non-employee
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
once during the year ended September 30, 1998.
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
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Director Compensation
During fiscal year 1998, each non-employee director of the Board of
Directors of the Association received a monthly fee of $800, regardless of
attendance. Additionally, each non-employee director of the Association received
a fee of $200 per meeting attended. Each non-employee director of the Company
received a fee of $150 for each monthly 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, 1998, were
$96,600.
-7-
<PAGE>
Executive 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.
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, 1998, 1997 and 1996 that exceeded
$100,000 for services rendered in all capacities to the Association or the
Company.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------------------------------- Awards
-------------------------------
Securities
Restricted Underlying All
Name and Fiscal Other Annual Stock Options/SARs Other
Principal Position Year Salary($) Bonus Compensation($)(1) Award($) (#) Compensation($)
- ------------------- ---- --------- ----- ------------------ ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
H. D. Reaves, Jr. 1998 97,800 8,989 -- -- -- 41,884(4)
President and 1997 97,800 10,379 -- 588,202(2) 98,857(3) 67,333(5)
Chief Executive 1996 97,800 9,800 -- -- -- 12,194(6)
Officer
</TABLE>
- ---------------
(1) For perquisites and other personal benefits, 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. For the periods presented, there
were no: (a) payments of above-market preferential earnings on deferred
compensation; (b) payments of earnings with respect to long term
incentive plans prior to settlement or maturity; (c) tax payment
reimbursements; or (d) preferential discounts on stock.
(2) Represents awards of 39,543 shares of Common Stock under the RSP based
upon the value of such stock of $14.875 per share as of the date of
such award. As of September 30, 1998, value of restricted stock (31,634
shares) was $12.75 per share or $403,334 in the aggregate. Such stock
awards become non-forfeitable at the rate of 7,909 shares per year
commencing on October 17, 1997. Dividend rights associated with such
stock are accrued and held in arrears to be paid at the time that such
stock becomes non-forfeitable.
(3) Represents award of options exercisable at the rate of 20% per year
commencing on October 17, 1997. The exercise price equals the market
value of common stock on the date of grant of $14.9375.
(4) Represents an allocation of 3,285 shares of Common Stock under the ESOP
based upon a market price of such stock of $12.75 per share as of
September 30, 1998.
(5) Represents an allocation of 3,245 shares of Common Stock under the ESOP
based upon a market price of such stock as of September 30, 1997 of
$20.750 per share.
(6) Represents an allocation of 783 shares of Common Stock under the ESOP
based upon a market price of such stock as of September 30, 1996 of
$15.5625 per share.
Employment 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
taxable annual
-8-
<PAGE>
compensation. The Association maintains similar agreements with three other
officers. In the event of a change in control at September 30, 1998, Mr. Reaves
would have been entitled to a severance payment of approximately $320,000.
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 year 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 service are also reduced
proportionately. The Pension Plan also provides for payments in the event of
disability or death. At September 30, 1998, Mr. Reaves, President, had 36 years
of credited service under the Pension Plan.
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.
<TABLE>
<CAPTION>
Average Annual Salary Years of Benefit Service
- --------------------- ---------------------------------------------------------------------------
20 25 30 or more
-------------------- ----------------------- ------------------
<S> <C> <C> <C>
$ 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
</TABLE>
1996 Stock Option Plan. The 1996 Stock Option Plan, previously adopted
by the Board of Directors, was approved by stockholders on October 17, 1996.
Pursuant to the Option Plan, 429,812 shares of the Common Stock are reserved for
issuance by the Company upon exercise of stock options granted to officers,
directors and employees of the Company and Association from time to time under
the Option Plan. No options to purchase shares of common stock were granted in
fiscal 1998.
The following table sets forth the year end value of options granted
pursuant to the 1996 Stock Option Plan to the chief executive officer.
-9-
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year, and FY-End Option Value
------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Options In-The-Money Options
at FY-End (#) at FY-End ($)
------------------------- ------------------------
Shares Acquired Value
Name on Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- ------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
H.D. Reaves, Jr. -- -- 39,542 / 59,315 -- / -- (1)
</TABLE>
- ------------------
(1) Based upon an exercise price of $14.9375 per share and the closing price
for the Common Stock of $12.75 as of September 30, 1998.
Long Term Incentive Plans. The Company does not presently sponsor any
long-term incentive plans nor did it make any payouts to H.D. Reaves, Jr. under
such plans during the fiscal year ended September 30, 1998.
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 non-employee 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 $300 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, 1998, H. D. Reaves, Jr.,
President and Chief Executive Officer received no increase in salary. 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 $300 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.
Compensation Committee for the fiscal year ended September 30, 1998.
Joseph H. Hollinshed
Henry W. Holt
Robert O. McCoy, Jr.
-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 $100 as of April 3, 1996 (the date of initial issuance of the
Common Stock). All of these cumulative total returns are computed assuming the
reinvestment of dividends.
There can be no assurance that the Company's future stock performance
will be the same or similar to the historical stock performance shown in the
graph below. The Company neither makes nor endorses any predictions as to future
stock performance.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
4/04/96($) 9/30/96($) 9/30/97($) 9/30/98($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CRSP Nasdaq U.S. Index 100.00 110.23 151.32 154.63
- --------------------------------------------------------------------------------------------------------------------
CRSP Nasdaq Bank Index 100.00 112.10 186.75 185.33
- --------------------------------------------------------------------------------------------------------------------
Green Street Financial Corp 100.00 156.83 216.51 137.65
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
-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, 1998, except as
set forth below. Furthermore, the Company had no "interlocking" relationships
existing during the year ended September 30, 1998, 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.
The Association, like many financial institutions, has followed a
policy of granting residential financing of loans to officers, directors, and
employees. Effective August 9, 1989, the Association followed a policy of
granting all loans to executive officers and directors of the Association 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 such loans
do not involve more than the normal risk of collectibility or present other
unfavorable features.
Since November 8, 1996, the Association has made loans available to all
employees and directors of the Association at interest rates up to 1.00% below
those offered to non-employees. Set forth below is information relating to loans
made by the Association to its executive officers and directors whose total
aggregate loan balances or line of credit exceeded $60,000 at any time during
the fiscal year ended September 30, 1998.
<TABLE>
<CAPTION>
Unpaid Balance
Original Highest Balance as of
Date Loan During 1998 September 30, Interest
Name of Officer or Director Loan Type Originated Amount Fiscal Year 1998 Rate Paid
- --------------------------- ----------------------- ---------- -------- ----------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
H. D. Reaves, Jr.............. Home mortgage, adjustable 08-08-88 $40,000 $25,576 $22,245 6.25%(1)
rate
H. D. Reaves, Jr.............. Home equity, adjustable 07-02-97 50,000 43,738 38,349 8.50%(2)
rate
Henry Hutaff.................. Home mortgage, fixed rate 04-15-97 $210,000 $209,075 $206,879 7.00%(1)
Henry Hutaff.................. Home equity, adjustable 04-09-97 77,000 71,763 70,222 8.50%(2)
rate
</TABLE>
(1) The prevailing market rate was 1.00% above the rate charged.
(2) Home equity loans have been made in the ordinary course of business and
on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions
with the Bank's other customers, and do not involve more than the
normal risk of collectibility, or present other unfavorable features.
-12-
<PAGE>
- --------------------------------------------------------------------------------
II -- RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP was the Company's independent public accountant
for the 1998 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, 1999. A representative of
McGladrey & Pullen, LLP is expected to be present at the meeting to respond to
appropriate 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, 1999.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above 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 person or persons voting such proxies. If
the Company did not have notice of a matter on or before November 29, 1998, it
is expected that the persons named in the accompanying proxy will exercise
discretionary authority when voting on that matter.
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 material
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 telegraph or telephone without additional compensation.
The Company's 1998 Annual Report to Stockholders has been mailed to all
stockholders of record as of the Record Date. Any stockholder who has not
received a copy of the annual report may obtain a copy by writing to the
Secretary of the Company.
- --------------------------------------------------------------------------------
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 16,
1999.
In the event the Company receives notice of a stockholder proposal to
take action at next year's annual meeting of stockholders that is not submitted
for inclusion in the Company's proxy material, or is submitted for inclusion but
is properly excluded from the proxy material, the persons named in the proxy
sent by the Company to its stockholders intend to exercise their discretion to
vote on the stockholder proposal in accordance with their best judgment if
notice of the proposal is not received at the Company's main office by November
28, 1999.
-13-
<PAGE>
- --------------------------------------------------------------------------------
FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1998, 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 28301.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Allen Lloyd
----------------------------------
Allen Lloyd
Secretary
Fayetteville, North Carolina
December 14, 1998
-14-
<PAGE>
Appendix A
- --------------------------------------------------------------------------------
GREEN STREET FINANCIAL CORP
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
January 27, 1999
- --------------------------------------------------------------------------------
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 27,
1999, at 5:15 p.m. and at any and all adjournments thereof, in the following
manner:
FOR WITHHELD
--- --------
1. The election as directors with
three-year terms of the nominees
listed below (except as marked to
the contrary below): |_| |_|
John M. Grantham
Robert G. Ray
H.D. Reaves, Jr.
(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,
1999. |_| |_| |_|
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.
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>
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 14, 1998, and the 1998 Annual Report to Stockholders.
Dated:
---------------------------
- ----------------------------------- -----------------------------------
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.
- --------------------------------------------------------------------------------
