<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BANK OF SOUTH CAROLINA CORPORATION
- --------------------------------------------------------------------------------
(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> 2
[BANK OF SOUTH CAROLINA CHARLESTON LETTERHEAD]
March 6, 1998
Dear Shareholder:
The Annual Meeting of Shareholders of Bank of South Carolina
Corporation will be held at 6:00 p.m. on Tuesday, April 14, 1998, in the
Conference Room at the West Ashley office of The Bank of South Carolina at 2027
Sam Rittenberg Boulevard in the City of Charleston, South Carolina. Enclosed you
will find the formal Notice, Proxy and Proxy Statement detailing the matters
which will be acted upon.
We urge you to sign and date the proxy and return it as soon as
possible in the enclosed postage-paid envelope. Should you decide to attend the
meeting and vote in person, you may withdraw your proxy.
On behalf of the Corporation, I would like to take this opportunity to
thank James E. Brown for his advice and counsel as an organizer of The Bank of
South Carolina and as a director of the Bank and of the Corporation. In
accordance with our retirement policy, he is not offering for reelection as a
director.
We appreciate your continued interest and investment in Bank of South
Carolina Corporation.
Sincerely,
/s/ Hugh C. Lane, Jr.
---------------------
Hugh C. Lane, Jr.
President
<PAGE> 3
PROXY MATERIAL OF
BANK OF SOUTH CAROLINA CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 14, 1998
To Our Shareholders:
The Annual Meeting of Shareholders of Bank of South Carolina Corporation
(the "Company") will be held at 2027 Sam Rittenberg Boulevard, Charleston, South
Carolina, on Tuesday, April 14, 1998, at 6:00 p.m. for the following purposes:
1. To elect sixteen (16) Directors to serve until the Company's 1999
Annual Meeting of Shareholders;
2. To ratify the appointment of KPMG Peat Marwick, LLP, as independent
certified public accountants for 1998;
3. To approve Bank of South Carolina Corporation 1998 Omnibus Stock
Incentive Plan and Incentive Stock Option Agreement.
4. To amend the Articles of Incorporation to authorize the issuance of
six million (6,000,000) shares of common stock, no par value, and
reserve 180,000 shares for the 1998 Stock Incentive Plan.
5. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on February 23, 1998, will
be entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.
You may revoke your Proxy at any time prior to its exercise by written
notice to the Company prior to the meeting or by attending the meeting
personally and voting. The accompanying form of Proxy is solicited by the Board
of Directors of the Company.
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY AND PROMPTLY RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
By Order of the Board of Directors
/s/ Nathaniel I. Ball, III
--------------------------
Nathaniel I. Ball, III
Secretary
March 6, 1998
A COPY OF THE COMPANY'S ANNUAL DISCLOSURE STATEMENT AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-KSB MAY BE OBTAINED AT NO COST BY
WRITING WILLIAM L. HIOTT, JR., TREASURER, AT BANK OF SOUTH CAROLINA CORPORATION,
P.O. BOX 538, CHARLESTON, SOUTH CAROLINA 29402 (803-724-1500). ADDITIONAL COPIES
MAY BE OBTAINED AT A COST OF $5.00 EACH.
<PAGE> 4
BANK OF SOUTH CAROLINA CORPORATION
256 MEETING STREET
CHARLESTON, SOUTH CAROLINA 29401
---------------------------------
PROXY STATEMENT
This Proxy Statement, which is first being mailed to shareholders on or
about March 11, 1998, is provided in conjunction with the solicitation of
proxies by the Board of Directors of Bank of South Carolina Corporation (the
"Company") for use at the 1998 Annual Shareholders' Meeting of the Company. The
Notice of Meeting, Proxy Form and Annual Report are enclosed in this package.
THE PROXY
The persons named as proxies on the enclosed Proxy Form were selected by
the Board of Directors of the Company. No officer or employee of the Company or
any subsidiary may be named as proxy.
The solicitation of proxies on behalf of the Board of Directors is
conducted by Directors, Officers and regular employees of the Company and its
wholly owned subsidiary, The Bank of South Carolina (the "Bank"), at no
additional compensation over regular salaries. The cost of printing and mailing
of all proxy materials has been paid by the Company. Brokers and others involved
in handling and forwarding the proxy materials to their customers having
beneficial interests in the stock of the Company registered in the names of
nominees will be reimbursed for their reasonable expenses in doing so.
VOTING RIGHTS
The Common Stock of the Company is its only class of voting securities. On
March 3, 1998, there were issued and outstanding 2,341,514 shares of Common
Stock (no par value). Each share is entitled to one vote; provided, however,
that Shareholders have cumulative voting rights for the election of Directors.
The right to cumulate votes means that the Shareholders are entitled to multiply
the number of votes they are entitled to cast by the number of directors for
whom they are entitled to vote and cast the product for a single candidate or
distribute the product among two or more candidates.
CUMULATIVE VOTING SHALL APPLY FOR THE ELECTION OF DIRECTORS.
The solicitation of proxies on behalf of the Board of Directors includes a
solicitation for discretionary authority to cumulate votes.
The Board of Directors of the Company has fixed the close of business
February 23, 1998, as the record date for the determination of Shareholders
entitled to notice of and to vote at the Annual Meeting. Proxies properly
executed by Shareholders who are of record on February 23, 1998, and received in
time for the meeting will be voted as specified on all business to be acted upon
at the meeting and any adjournment thereof.
<PAGE> 5
RIGHT OF REVOCATION
Any Shareholder executing a Proxy for the meeting on the Proxy Form
provided may revoke the Proxy in a writing delivered to the President of the
Company prior to the meeting or by attending the meeting and voting in person.
PRINCIPAL SHAREHOLDERS OF THE COMPANY
To the extent known to the Board of Directors of the Company, as of March
3, 1998, the only Shareholders of the Company having beneficial ownership of
more than five (5%) percent of the shares of Common Stock of the Company are as
set forth below:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- --------------------- ---------
<S> <C> <C>
Hugh C. Lane, Jr. 375,305.986 (1) (2) 16.03%
30 Church Street
Charleston, SC 29401
NationsBank, N.A. (4) 132,000 (3) 5.64%
NationsBank Plaza
Charlotte, NC 28255
N.B. Holdings Corporation (4) 132,000 (5) 5.64%
NationsBank Plaza
Charlotte, NC 28255
NationsBank Corporation (4) 132,000 (6) 5.64%
NationsBank Plaza
Charlotte, NC 28255
John M. Rivers, Jr. 117,920 (7) 5.04%
80 Alexander Street
Charleston, SC 29403
The Bank of South Carolina 161,416 (8) 6.89%
Employee Stock Ownership
Plan and Trust ("ESOP")
256 Meeting Street
Charleston, SC 29401
</TABLE>
- ------------------------------
(1) To the extent known to the Board of Directors, Hugh C. Lane and his
children, individually and collectively, have beneficial ownership of
694,497.996 shares or 29.66% of the outstanding shares. As more fully
described in the following footnote, Hugh C. Lane, Jr. is the only one of
the above who has a beneficial ownership interest in more than five (5%)
percent of the Company's common stock. Hugh C. Lane, Jr. disclaims any
beneficial interest in those shares in which other members of his family
have a beneficial interest other than those shares his wife owns directly
and those for which he serves as trustee or she serves as custodian (as
more fully described in the following footnote).
2
<PAGE> 6
(2) To the extent known to the Board of Directors, Hugh C. Lane, Jr. directly
owns and has sole voting and investment power with respect to 158,182
shares; as trustee for 11 trust accounts holding an aggregate of 60,380
shares, he has sole voting and investment power with respect to such
shares; as co-trustee for one trust account holding 4,400 shares, he has
joint voting and investment power with respect to such shares; he is
indirectly beneficial owner of 6,880 shares owned by his wife and an
aggregate of 101,926 shares held by his wife as custodian for three minor
children and 21,964.676 shares owned by the Employee Stock Ownership Plan
and Trust ("ESOP") in which he has a vested interest. All of the
375,305.986 shares beneficially owned by Hugh C. Lane, Jr. are currently
owned. Hugh C. Lane, Jr. has had beneficial ownership of more than five
(5%) percent of the Bank's Common Stock since October 23, 1986, and more
than ten (10%) percent since November 16, 1988.
(3) To the extent known to the Board of Directors, NationsBank Corporation is
the parent holding company of N.B. Holdings Corporation. N.B. Holdings
Corporation is the parent holding company of NationsBank, N.A. The shares
referred to in notes (4) and (5) are a duplication of the shares referred
to in note (3).
(4) To the extent known to the Board of Directors, N.B. Holdings Corporation
has sole voting power for 68,000 shares and shared investment power for
132,000 shares (including 63,800 shares held as trustee under the will of
Mills B. Lane for the benefit of Hugh C. Lane). N.B. Holdings Corporation
disclaims beneficial ownership for the shares referred to in this note
(4).
(5) To the extent known to the Board of Directors, NationsBank Corporation has
sole voting power for 68,000 shares and shared investment power for
132,000 shares (including 63,800 shares held as trustee under the will of
Mills B. Lane for the benefit of Hugh C. Lane). NationsBank Corporation
disclaims beneficial ownership for the shares referred to in this note
(5).
(6) To the extent known to the Board of Directors, John M. Rivers, Jr.
directly owns and has sole voting and investment power for 117,920 shares.
The John and Kathleen Rivers Foundation owns 10,560 shares. Mr. Rivers is
the President of the Foundation but does not serve on its Investment
Committee or have authority to vote or dispose of shares owned by the
Foundation. Mr. Rivers disclaims beneficial ownership of the shares owned
by the Foundation.
(7) The Trustee of the ESOP, Nathaniel I. Ball, III, an executive Officer and
Director of the Bank and the Company, disclaims beneficial ownership of
161,416 shares owned by the ESOP which have been allocated to members of
the plan, each of whom under the terms of the plan has the right to direct
the Trustee as to the manner in which voting rights are to be exercised.
BENEFICIAL OWNERSHIP OF COMMON STOCK OF THE COMPANY
The table below sets forth the number of shares of Common Stock (the
only class of outstanding equity securities of the Company) known by the Company
to be beneficially owned by each Nominee for election as Director and by the
Officers and Directors of the Company as a group as of February 23, 1998. Except
as otherwise indicated in the footnotes to the table, the persons named possess
sole voting power and investment power with respect to the shares shown opposite
their names. As of February 23, 1998, no Officer, Director or Nominee
beneficially owned more than ten (10%) percent of the outstanding shares of the
Company other than Hugh C. Lane, Jr. As of March 3, 1998, the Officers,
Directors and Nominees beneficially owned 876,517.756 shares, representing
approximately 37.43% of the outstanding shares.
3
<PAGE> 7
As of February 23, 1998, the beneficial ownership of Common Stock of
the Company by all current Directors and each Nominee for Director was as set
forth in the following table:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- -------------------- ----------
<S> <C> <C>
Nathaniel I. Ball, III 61,001.863 (1) 2.61%
70 Legare Street
Charleston, SC 29401
James E. Brown, DDS 12,066 (1) .52%
6908 Rivers Avenue
Charleston Heights, SC 29418
William T. Cooper 4,840 (1) .21%
21 Jamestown Road
Charleston, SC 29407
C. Ronald Coward 30,760 (1) 1.31%
537 Planters Loop
Mt. Pleasant, SC 29464
Louis Y. Dawson, III 11,440 (1) .49%
33 Church Street
Charleston, SC 29401
Leonard C. Fulghum 31,432 (1) 1.34%
311 Middle Street
Mt. Pleasant, SC 29464
T. Dean Harton 7,004 (1) .30%
4620 Lazy Creek Lane
Wadmalaw, SC 29487
William L. Hiott, Jr. 90,177.907 (1) 3.85%
1831 Capri Drive
Charleston, SC 29407
James H. Holcombe 97,432 (1) 4.16%
16 Church Street
Charleston, SC 29401
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- -------------------- ----------
<S> <C> <C>
Katherine M. Huger 4,840 (1) .21%
72 Murray Boulevard
Charleston, SC 29401
John E. Huguley 14,960 (1) .64%
22 Murray Boulevard
Charleston, SC 29401
Charles G. Lane 114,178 (1) 4.88%
10 Gillon Street
Charleston, SC 29401
Hugh C. Lane, Jr. 375,305.986 (1) 16.03%
30 Church Street
Charleston, SC 29401
Louise J. Maybank 11,000 .47%
8 Meeting Street
Charleston, SC 29401
Thomas W. Myers 8,400 .36%
500 Central Avenue
Summerville, SC 29483
Thomas C. Stevenson, III 440 .02%
173 Tradd Street
Charleston, SC 29401
John M. Tupper 1,240 .05%
113 Linwood Drive
Summerville, SC 29483
</TABLE>
(1) To the extent known to the Board of Directors, each of the following
Directors and Nominees for election as Directors (each of whom directly
owns and has sole voting and investment power of all shares beneficially
owned by him or her except as set forth in this footnote) indirectly owns
the following number of shares: Nathaniel I. Ball, III - an aggregate of
5,276 shares directly owned by his wife and 19,536.209 shares owned by the
ESOP, in which he has a vested interest; James E. Brown - an aggregate of
11,846 shares owned jointly with his wife; William T. Cooper - an
aggregate of 4,400 shares held by a pension plan; C. Ronald Coward - an
aggregate of 1,000 shares owned by a company of which he is president and
director; Louis Y. Dawson, III - an aggregate of 440 shares owned by his
wife; Leonard C. Fulghum - an aggregate of 3,232 shares owned by his wife;
T. Dean Harton - an aggregate of 1,940 shares owned by his wife and held
by his wife as custodian for his step-son; William L. Hiott, Jr. - an
aggregate of 8,960 shares directly owned by his wife and held by him as
custodian for two children and 19,536.231 shares owned by the ESOP, in
which he has a vested interest; James H. Holcombe - an aggregate of 50,352
shares owned by the Marjorie G. Detyens Irrevocable Trust for which he
serves as co-trustee; Katherine M. Huger - 440 shares owned by her
husband; John E. Huguley - 8,140 shares owned by his wife; Charles G. Lane
- an aggregate
5
<PAGE> 9
of 52,944 shares owned by his wife, held by her as custodian for children,
held by him as co-trustee with Hugh C. Lane, Jr., for a sister's children
and held by him as a co-trustee for the children of Hugh C. Lane, Jr.; and
Hugh C. Lane, Jr. - an aggregate of 173,586 shares owned by his wife, held
by his wife as custodian for each of three children, held by him as
co-trustee with Charles G. Lane for a sister's children and held by him as
trustee for his and his brother's and sisters' children (as more fully
described in the footnote to the preceding table) and 21,964.676 shares
owned by the ESOP, in which he has a vested interest. All such indirectly
owned shares are included in the totals of the number of shares set forth
in the above table and beneficially owned by the Directors and Nominees.
------------------------------
As a group, all Directors and Executive Officers (including Hugh C.
Lane, Jr., President and Chief Executive Officer; Nathaniel I. Ball, III,
Executive Vice President and Secretary; and William L. Hiott, Jr., Executive
Vice President and Treasurer) are seventeen (17) in number and beneficially own
an aggregate of 876,517.756 shares, representing 37.43% of the issued and
outstanding Common Stock of the Company. All of these shares beneficially owned
by the Directors, Nominees and Executive Officers are currently owned: two
executive officers (Nathaniel I. Ball, III, Executive Vice President and
Secretary; and William L. Hiott, Jr., Executive Vice President and Treasurer)
each have a future right to acquire six thousand six hundred (6,600) shares of
Common Stock of the Company pursuant to the Bank's Incentive Stock Option Plan.
ELECTION OF DIRECTORS
Sixteen (16) Directors, constituting the entire Board of Directors will
be elected at the Annual Meeting, each to hold office for one year and until a
successor shall have been duly elected or appointed and shall have qualified. In
the absence of instructions to the contrary, shares of Common stock represented
by properly executed proxies will be voted for the sixteen (16) Nominees listed
on pages 7 and 8, all of whom are recommended by management and have consented
to be named and to serve if elected. James E. Brown has notified the Company
that he will not stand for reelection as a Director in accordance with the
retirement policy of the Board of Directors.
The Company does not presently know of anything that would preclude any
Nominee from serving; however, should any Nominee for any reason become unable
or unwilling to serve as a Director, the number of Directors to be elected will
be reduced accordingly.
The name of each Nominee designated by the Board of Directors of the
Company for election as Director of the Company and certain information provided
by such Nominee to the Company is set forth in the table below. Fourteen (14) of
the current nominees served as initial directors of the Bank from October 22,
1986, when the Bank's charter was issued until the first annual meeting of
Shareholders on April 14, 1987, and were elected to serve a one-year term at
such annual meeting. John M. Tupper and Thomas W. Myers were first elected as
Directors of the Bank during 1993. They were all re-elected to serve one year
terms at subsequent annual meetings. All of the current Nominees served as
Directors of the Company from April 8, 1997, the date of the last Annual Meeting
of shareholders.
6
<PAGE> 10
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES HELD BUSINESS EXPERIENCE
WITH FAMILY 1987-1998 AND
NAME AGE CORPORATION RELATIONSHIP OTHER DIRECTORSHIPS
- ---- --- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
Nathaniel I. Ball, III 56 Executive None The Bank of South Carolina (banking)
Vice President, 1986-98
Secretary,
Director
William T. Cooper 68 Director None President, Southeastern
Galleries, Inc.(retail
furniture and decorating)
1983-98
C. Ronald Coward 62 Director None President - Coward-Hund Construction
Company, Inc. (construction) 1976-98
Louis Y. Dawson, III 69 Director Father-in-law Retired (1993) President-Dawson Engi-
of Charles G. neering, Inc. (general contracting)
Lane and of a 1954-93
bank officer,
F.S. Hassell
Leonard C. Fulghum 68 Director None Chairman - Ferguson Fulghum, Inc.
(painting Contractors) 1972-98
T. Dean Harton 52 Director None President, Hawthorne Corporation (aviation)
1986-98
William L. Hiott, Jr. 53 Executive None The Bank of South Carolina
Vice President, (banking) 1986-98
Treasurer,
Director
James H. Holcombe 73 Director None Member - Holcombe, Fair & Lane, LLC
(real estate) 1996-98; General and Limited
Partner - Holcombe & Fair Realtors 1970-95
Katherine M. Huger 56 Director None Assistant Professor of Economics -
Charleston Southern University (education)
1972-98
John E. Huguley 70 Director None Retired (1996) Chairman - John Huguley
Company, Inc. (retail office products)
1980-96
</TABLE>
7
<PAGE> 11
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES HELD BUSINESS EXPERIENCE
WITH FAMILY 1987-1998 AND
NAME AGE CORPORATION RELATIONSHIP OTHER DIRECTORSHIPS
- ---- --- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
Charles G. Lane 43 Director Son-in-law of Member - Holcombe, Fair & Lane,
Louis Y. LLC (real estate) 1996-98;
Dawson, III; Associate - Holcombe & Fair Realtors
brother of 1987-96
Hugh C. Lane, Jr.
Hugh C. Lane, Jr. 50 President, Brother of The Bank of South Carolina (banking)
Chief Exec- Charles G. 1986-98
utive Officer, Lane
Director
Louise J. Maybank 58 Director None Active in community programs
Thomas W. Myers 63 Director None President - Myers & Associates (estate and
business insurance planning) 1963-98
Thomas C. Stevenson, 46 Director None President - Fabtech, Inc. (metal
III fabrication) 1991-98; Private Investor 1990-
91; Chairman of the Board - Stevenson
Hagerty, Inc. (diversified holding
company) 1984-90
John M. Tupper 56 Director None President - Tupperway Tire and Service,
Inc. (retail tires and service) 1980-98
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
Hugh C. Lane, Jr. presently serves as President of the Board of Directors.
The Board has three (3) committees: the Executive Committee, the Long Range
Planning Committee, and the Audit and Compliance Committee. The Board does not
have a Nominating Committee; however, the Board as a whole performs the
functions that such a committee would normally perform. The Board does not have
a Compensation Committee; however, the Executive Committee performs those
functions.
The Executive Committee consists of the President of the Company and six
(6) designated Directors. The President of the Company chairs the Committee. At
present, the fixed membership of the Committee consists of Hugh C. Lane, Jr.,
Nathaniel I. Ball, III, T. Dean Harton, William L. Hiott, Jr., James H.
Holcombe, Thomas W. Myers, and Thomas C. Stevenson, III. During 1997, this
Committee held two (2) meetings. The principal function of the Executive
Committee is to exercise all authority of the Board of Directors in the
management and affairs of the Company and the Bank. In addition, the Executive
Committee acts on behalf of the entire Board of the Company between the regular
Board Meetings.
The Audit and Compliance Committee presently consists of Katherine M.
Huger, as Chairman, and James E. Brown, Louis Y. Dawson, III, Leonard C.
Fulghum, James H. Holcombe and John E. Huguley. The Company's internal auditor,
also sits on this Committee. During 1997, the Audit and Compliance Committee
held five (5) meetings. The functions of the Audit and Compliance Committee
include: reviewing
8
<PAGE> 12
and examining detailed reports of the internal auditor for the Bank; meeting
periodically with the internal auditor; reviewing reports of regulatory bodies
having jurisdiction over the Company and the Bank; evaluating internal
accounting controls; recommending the engagement and continuation of engagement
of independent auditors; and meeting with, and receiving and considering
recommendations of, the independent auditors for the Company and the Bank.
The Long Range Planning Committee consists of Hugh C. Lane, Jr., the
President of the Company, as Chairman, and Nathaniel I. Ball, III, William T.
Cooper, T. Dean Harton, William L. Hiott, Jr., James H. Holcombe, Charles G.
Lane, Louise J. Maybank and Thomas W. Myers. The Long Range Planning Committee
did not meet during 1997.
NOMINATIONS FOR DIRECTOR
Nominations, other than those made by or on behalf of the existing
management of the Company, shall be made in writing and shall be delivered or
mailed to the President of the Company not less than seven (7) days, nor more
than fifty (50) days prior to any meeting of Shareholders calling for election
of Directors; provided, however, that if less than twenty-one (21) days' notice
of the meeting is given to Shareholders, such nomination shall be mailed or
delivered to the President of the Company not later than the close of business
on the seventh (7th) day following the day on which the Notice of Meeting was
mailed. Nominations not made according to these procedures will be disregarded.
DIRECTORS' MEETINGS
The Board of Directors of the Company held eight (8) meetings (including
an organizational meeting and all regularly scheduled and special meetings)
during the year ended December 31, 1997. No Director during such year, attended
fewer than seventy-five (75%) percent of the aggregate of (i) the total number
of meetings of the Board of Directors and (ii) the total number of meetings held
by all committees of the Board of Directors on which he or she served.
COMPENSATION OF OFFICERS AND DIRECTORS
The following table sets forth all remuneration (including remuneration
under any contract, authorization or arrangement, whether or not set forth in a
formal document) paid during the year ended December 31, 1997, by the Bank to
the three (3) Executive Officers of the Company and the Bank whose total
remuneration from the Bank exceeded One Hundred Thousand and No/100
($100,000.00) Dollars for their services in all capacities. Such Officers
receive no compensation from the Company as Officers or as Directors or in any
other capacity.
9
<PAGE> 13
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
OTHER SECURITIES
ANNUAL RESTRICTED UNDER- ALL OTHER
NAME AND COMPEN- STOCK LYING LTIP COMPEN-
PRINCIPAL SATION(1)(2) AWARD(S) OPTIONS/ PAYOUTS SATION(1)(2)
POSITION YEAR SALARY($) BONUS($) ($) ($) SARS(#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hugh C. Lane, 1997 $130,601.45 $10,000.00 $16,978.72 $16,978.72
Jr. - CEO 1996 $123,101.45 --- $17,682.79 $17,682.79
& President 1995 $113,101.37 $10,000.00 $17,596.33 $17,596.33
Nathaniel I. 1997 $116,101.37 $10,000.00 $14,729.98 $14,729.98
Ball, III - 1996 $108,601.37 --- $16,135.32 $16,135.32
Executive Vice 1995 $101,101.37 $10,000.00 $16,052.84 $16,052.84
President &
Secretary
William L. 1997 $116,101.37 $10,000.00 $14,729.98 $14,729.98
Hiott, Jr. - 1996 $108,601.37 --- $16,135.32 $16,135.32
Executive Vice 1995 $101,101.37 $10,000.00 $16,052.84 $16,052.84
President &
Treasurer
</TABLE>
- ----------------------------------
(1) Includes same life, disability and health insurance benefits as all other
employees of the Bank who work at least thirty (30) hours a week.
(2) Includes Bank contribution to the ESOP.
---------------------------------
Non-officer Directors of the Company received One Hundred and No/100
($100.00) Dollars for each meeting of the Board of Directors attended and
non-officer Directors of the Bank received Two Hundred and No/100 ($200.00)
Dollars for each meeting of the Board of Directors attended and One Hundred and
No/100 ($100.00) Dollars for each Board Committee meeting attended.
On November 2, 1989, the Bank adopted an Employee Stock Ownership Plan
and Trust Agreement, to provide retirement benefits to eligible employees for
long and faithful service.
An employee of the Bank is eligible to become a participant in the ESOP
upon reaching twenty-one (21) years of age and upon completion of one thousand
(1,000) hours of service in a plan year. No contributions by employees are
permitted. The amount and time of contributions are at the sole discretion of
the Board of Directors of the Bank. The contribution for all participants is
based solely on each participant's respective regular or base salary and wages
paid by the Bank including commissions, bonuses and overtime, if any.
A participant becomes vested in the Plan upon completion of five (5)
years of service. There is no vesting prior to the completion of five (5) years
of service.
The Plan became effective as of January 1, 1989.
10
<PAGE> 14
The Board of Directors of the Bank approved the contribution of One
Hundred Sixty Five Thousand Forty Eight and No/100 ($165,048.00) Dollars to the
ESOP for the fiscal year ended December 31, 1997. The contribution was made
during 1997. T. Dean Harton, Sheryl G. Sharry, and Nathaniel I. Ball, III,
currently serve as Plan Administrators. Nathaniel I. Ball, III, currently serves
as Trustee for the Plan. The Plan currently owns One Hundred Sixty One Thousand
Four Hundred Sixteen (161,416) shares or 6.89% of the Company's Common Stock.
During the fiscal year ended December 31, 1997, the Company had no
plans or arrangements pursuant to which any Officer, Director or principal
Shareholder received contingent remuneration or personal benefits other than the
contingent remuneration and life, disability and health insurance benefits
referred to in the footnotes to the preceding table.
The Bank has an Incentive Stock Option Plan for the benefit of eligible
Officers and employees of the Bank. A total of fifty thousand (50,000) shares
were reserved and on April 21, 1988, the Bank granted options to purchase Common
Stock in the aggregate amount of forty-five thousand (45,000) shares to eighteen
(18) employees of the Bank (including officers, such Directors as are also
employees and other employees) pursuant to the Incentive Stock Option Plan.
These grants include those to Hugh C. Lane, Jr., Nathaniel I. Ball, III, and
William L. Hiott, Jr., Executive Officers and Directors, as more specifically
set forth below. Options for twelve thousand seven hundred (12,700) shares with
an exercise price of Twenty and No/100 ($20.00) Dollars and seven thousand five
hundred (7,500) shares with an exercise price of Twenty and 7625/10,000ths
($20.7625) Dollars have expired. No options were granted during 1997. Options
for six thousand two hundred (6,200) shares with an exercise price of Twenty and
No/100 ($20.00) Dollars remain outstanding. Adjusted for the exchange of two (2)
shares of Company Common Stock for each share of Bank Common Stock on April 17,
1995, the options for eighteen thousand six hundred (18,600) shares at Twenty
and No/100 ($20.00) Dollars per share were converted to options for thirty-seven
thousand two hundred (37,200) shares at Ten and No/100 ($10.00) Dollars per
share. Adjusted for the above-mentioned exchange, options for twelve thousand
four hundred (12,400) shares at Ten and No/100 ($10.00) Dollars per share were
exercised during 1995 and the same amount during 1996. Adjusted for a ten
percent (10%) stock dividend on May 15, 1996, the remaining twelve thousand four
hundred (12,400) shares at Twenty and No/100 ($20.00) Dollars per share were
converted to options for twenty seven thousand two hundred eighty (27,280)
shares at Nine and 09/100 ($9.09) Dollars. Adjusted for the above-mentioned
exchange and ten percent (10%) stock dividend, options for thirteen thousand six
hundred forty (13,640) shares at Nine and 09/100 ($9.09) Dollars were exercised
on January 22, 1997.
Nathaniel I. Ball, III, Executive Vice President and Secretary, and
William L. Hiott, Jr., Executive Vice President and Treasurer, were each granted
the option to purchase seven thousand five hundred (7,500) shares of Common
Stock of the Bank pursuant to the Incentive Stock Option Plan at a price of
Twenty and No/100 ($20.00) Dollars. These options are exercisable in five (5)
twenty (20%) percent increments beginning on and for one year following April
21, 1993, with an additional twenty (20%) percent to be exercisable on and for
one year following each successive anniversary. The right to exercise each such
twenty (20%) percent of each option is not cumulative and expires at the end of
the one year period following the date on which such right becomes effective.
Adjusted for the above-mentioned exchange, options for six thousand (6,000)
shares of Common Stock of the Company at Ten and No/100 ($10.00) Dollars per
share were exercised by the two (2) Officers during 1995 at a time when the
average between quoted bid and ask in the markets in which the shares were
traded was Twelve and 75/100 ($12.75) Dollars per share and options for six
thousand (6,000) shares were exercised during 1996 at a time when the average
between bid and ask in the markets in which the Common Stock was traded was
$16.75. Adjusted for the above-mentioned exchange and ten percent (10%) stock
dividend, options for six thousand six hundred (6,600) shares of common stock of
the Company at Nine and 09/100 ($9.09) Dollars were exercised in January, 1997,
by the two officers at a time when the
11
<PAGE> 15
average between quoted bid and ask in the markets in which the shares were
traded was Twenty Two and 75/100 ($22.75) Dollars per share. Adjusted for the
above-mentioned exchange, the ten percent (10%) stock dividend and the two for
one stock split, options for six thousand six hundred (6,600) shares of Common
Stock of the Company with an exercise price of Four and 55/100 ($4.55) Dollars
per share remain outstanding for each of the above Officers.
In the event of a prospective reorganization, consolidation or sale of
substantially all of the assets or any other form of corporate reorganization in
which the Company would not be the surviving entity or in the event of the
acquisition, directly or indirectly, of the beneficial ownership of twenty-four
(24%) percent of the Common Stock of the Company or the making, orally or in
writing, of a tender offer for, or any request or invitation for tender of, or
any advertisement making or inviting tenders of the Company stock by any person,
all options in effect at that time would accelerate so that all options would
become immediately exercisable and could be exercised within one year
immediately following the date of acceleration but not thereafter.
STOCK INCENTIVE PLAN
The existing Incentive Stock Option Plan of The Bank of South Carolina
was approved by the shareholders of The Bank of South Carolina on April 21,
1988, and expires on April 21, 1998. A number of deserving officers and
employees have joined the Bank in the intervening years who do not participate
in the existing plan.
The Board of Directors of the Company recommends that the Bank of South
Carolina Corporation 1998 Omnibus Incentive Plan be adopted by the shareholders
at the Annual Meeting of Shareholders to be held April 14, 1998.
A COPY OF THE "BANK OF SOUTH CAROLINA CORPORATION 1998 OMNIBUS STOCK
INCENTIVE PLAN" and "INCENTIVE STOCK OPTION AGREEMENT" (COLLECTIVELY, "STOCK
INCENTIVE PLAN") MAY BE OBTAINED BY WRITING NATHANIEL I. BALL, III, SECRETARY,
BANK OF SOUTH CAROLINA CORPORATION, P.O. BOX 538, CHARLESTON, SC 29402. THIS
COPY WILL BE SENT TO YOU AT THE COMPANY'S EXPENSE. THE STOCK INCENTIVE PLAN
CONTAINS VARIOUS TERMS AND PROVISIONS, CERTAIN OF WHICH ARE SUMMARIZED BELOW.
FOR A FULL AND COMPLETE STATEMENT OF ITS PROVISIONS, REFERENCE SHOULD BE MADE TO
THE "BANK OF SOUTH CAROLINA CORPORATION 1998 OMNIBUS STOCK INCENTIVE PLAN" AND
"INCENTIVE STOCK OPTION AGREEMENT."
If approved, the proposed Stock Incentive Plan would set aside 180,000
shares of the currently authorized but unissued and unreserved 614,436 shares of
the no par value Common Stock for options to be granted to eligible employees of
the Company or of a subsidiary, including employees who are members of the Board
of Directors. Non-employee directors of the Company would not be granted options
under the Stock Incentive Plan. The Stock Incentive Plan would be administered
by a Compensation Committee consisting of members of the Executive Committee
(exclusive of members who are also executive officers of the Company) of the
Board of Directors. No member of the Compensation Committee would be a
beneficiary of the Stock Incentive Plan.
Options under the Stock Incentive Plan will be granted by the Board of
Directors to eligible employees upon recommendation of the Compensation
Committee and will be vested with respect to twenty percent (20%) of the shares
subject to the Option on the fifth anniversary of the date of the grant and with
respect to an additional twenty percent (20%) of the shares subject to the
Option on each subsequent anniversary of the date of the grant so that the
Option shall be fully vested and fully exercisable on the tenth anniversary of
the Date
12
<PAGE> 16
of the Grant. The right to exercise each such twenty percent (20%) increment of
any option will be cumulative and will not expire until the tenth anniversary of
the date of the grant.
The option price would be the Fair Market Value on the date of the
grant (determined as of the day preceding the date of exercise which is not less
than the Option price). In the case of an employee, who at the time of the
grant, directly or indirectly owns more than ten percent (10%) of the total
combined voting power of the common stock of the Company or of a subsidiary, the
option price would be one hundred and ten percent (110%) of the market price on
the date of the grant. The market value of a share of common stock as of March
6, 1998, was $20.03.
The exercise of an option is to be by payment in full of the exercise
price by cashiers check or by the surrender of shares of Company common stock
with an aggregate Fair Market Value (determined as of the day preceding the date
of exercise) which is not less than the Option price, or a combination of cash
and Company common stock. All options would expire in ten (10) years, except in
the cash of termination of employment, retirement or legal disability, all as
described below, and except for an option to an employee who, at the time of the
grant, directly or indirectly owns more than ten percent (10%) of the total
combined voting power of the common stock of the Company or of a subsidiary,
which option would expire in five (5) years.
In the case of termination of an option holder other than involuntary
termination without just cause, retirement, death or legal disability, the
Option holder may exercise the option only with respect to those shares of
Company common stock as to which he or she has become vested. The option holder
may exercise the option with respect to such shares no more than thirty (30)
days after the date of termination of employment (but in any event prior to the
expiration date).
In the event that the option holder's employment is terminated without
just cause, the option shall become fully vested and fully exercisable as of the
date of his or her termination without regard to the five (5) year initial
vesting and exercisability or to the twenty percent (20%) annual increments
thereafter. The option holder may exercise the option following an involuntary
termination without just cause until the expiration date of the option.
In the event the option holder remains in the continuous employ of the
Company or any subsidiary from the date of the grant until the option holder's
retirement, the option shall become fully vested and fully exercisable as of the
date of his or her retirement without regard to the five (5) year initial
vesting and exercisability or to the twenty percent (20%) annual increments
thereafter. The option holder may exercise the option following his or her
retirement until the expiration date.
In the event the option holder remains in the continuous employ of the
Company or a subsidiary from the date of the grant until his or her death, the
option shall become fully vested and fully exercisable as of the date of death
without regard to the five (5) year initial vesting and exercisability or the
twenty percent (20%) annual increments thereafter. The person or persons
entitled to exercise the option following the option holder's death may exercise
the option until the expiration date.
In the event the option holder remains in the continuous employ of the
Company or any subsidiary from the date of the grant until the date of his or
her legal disability, the option shall become fully vested and fully exercisable
as of the date of his or her termination of employment on account of his or her
legal disability without regard to the five (5) year initial vesting and
exercisability or to the twenty percent (20%) annual increments thereafter. The
option holder may exercise the option following such termination of employment
until the expiration date.
13
<PAGE> 17
The Stock Incentive Plan would provide for adjustment in the number of
shares of common stock authorized under the Plan or granted to an optionee to
protect against dilution in the event of changes in the Bank's capitalization,
including stock splits and dividends.
In the event of a prospective reorganization, consolidation or sale of
substantially all of the assets or any other form of corporate reorganization in
which the Bank would not be the surviving entity or in the event of the
acquisition, directly or indirectly, of the beneficial ownership of twenty four
percent (24%) of the common stock of the Company or the making, orally or in
writing, of a tender offer for, or any request or invitation for tender of, or
any advertisement making or inviting tenders of the Bank stock by any person,
all options in effect at that time would accelerate so that all options would
become immediately exercisable and could be exercised within one year
immediately following the date of acceleration but not thereafter.
Although all options granted under the Stock Incentive Plan would be
intended to be "incentive stock options" within the meaning of Section 422A of
the Internal Revenue Code of 1986, to the extent that any options granted under
the Stock Incentive Plan failed to qualify as incentive stock options, they
would be permitted as non-qualified options under the Stock Incentive Plan. In
addition, the Compensation Committee would have the authority, in its sole
discretion, to grant non-qualified options to eligible employees.
An option granted under the Stock Incentive Plan of the Company may be
either an incentive stock option ("ISO") or a non-qualified option. Although the
intent is to issue only ISOs, if the option granted fails to meet the strict
tests of Internal Revenue Code Section 422A, the plan includes a provision to
issue the option as a non-qualified option. The tax treatment varies for the
different type options.
The Company generally is not entitled to a deduction when it issues
ISOs; however, if the required holding periods described in Section 422A are not
met, the Company is entitled to a deduction as compensation in the year of
disposition of the stock acquired by the employee. This deduction is measured by
the amount that the fair market value of the option at the exercise date
exceeded the exercise price, or the excess of sales proceeds over the exercise
price, if less. The employee is required to include an equal amount in income as
compensation.
The receipt of a non-qualified option by an employee is taxable under
Section 83 of the Code as property received for services rendered. If the option
has a readily ascertainable value, it is taxed at the time of the grant. If no
value can be determined at the grant date, taxation to the employee occurs on
exercise, at which time the employee is considered to receive compensation in an
amount equal to the fair market value of the stock acquired over the price paid.
At the time the employee is required to include an amount in compensation,
whether on the grant date or the exercise date, the employer is entitled to a
compensation deduction measured by the amount the employee is required to
include in income.
It is contemplated that all current employees of the Company will be
granted options to purchase shares of common stock under the Stock Incentive
Plan. The number of shares to be subject to each such individual option and the
number of options to be received by eligible employees (including officers, such
directors as are also employees, and all other employees) either individually,
or as a group, has not yet been determined by the Company.
Amendment of the Stock Incentive Plan will be only by written
instrument approved by the Board of Directors and the shareholders of the
Company. In no event, will there be any amendment changing the option price,
decreasing the option price after the grant of an option, increasing the period
of the option or increasing the aggregate shares available for option except
upon compliance with the above requirements.
14
<PAGE> 18
INCREASE IN AUTHORIZED SHARES
The Board of Directors of the Company has concluded that it would be in
the best interests of the Company and its shareholders for the Articles of
Incorporation of the Company to authorize the issuance of a greater number of
shares than the three million (3,000,000) shares of common stock the Company is
currently authorized to issue for possible future stock dividends, stock splits
or acquisitions. Accordingly, the Board recommends the Articles of Incorporation
of the Company be amended to authorize the issuance of six million (6,000,000)
shares of common stock, no par value. Assuming all of the remaining twenty seven
thousand two hundred eighty (27,280) shares subject to option under the 1998
Incentive Stock Option Plan are exercised and one hundred eighty thousand
(180,000) shares are reserved for the 1998 Stock Incentive Plan, the Company
will have in reserve approximately three million four hundred fifty one thousand
two hundred six (3,451,206) shares of authorized but unissued common stock. The
Board believes the availability of an ample reservoir of authorized but unissued
shares will enhance the flexibility of the Company in raising additional capital
and in negotiating the acquisition of other businesses through the issuance of
Company common stock.
TRANSACTIONS AND RELATIONS WITH DIRECTORS, OFFICERS, AND THEIR ASSOCIATES AND
AFFILIATES OF DIRECTORS
The Company does not have any existing continuing contractual
relationships with any Director, Nominee for election as Director or principal
Officer of the Company or the Bank, or any Shareholder owning, directly or
indirectly, more than five (5%) percent of the shares of Common Stock of the
Company, or any associate of the foregoing persons. Directors, Principal
Officers, nominees for election as Directors, and members of the immediate
family of any of the foregoing have had in the past, have at present, and will
have in the future, customer relationships with the Bank. Such transactions have
been and will continue to be made in the ordinary course of business, made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and such
transactions did not and will not involve more than the normal risk of
collectability or present other unfavorable features. The Company entered into a
contract with Coward-Hund Construction Co., Inc., of which C. Ronald Coward,
Director of the Company, is a principal, for the construction of a branch office
and operations center in the West Ashley area of Charleston, South Carolina,
with a final contract price of $1,158,056.00. The Company also entered into a
contract with Southeastern Galleries, Inc. of which William T. Cooper, Director
of the Company, is a principal, for the furnishings for the West Ashley office
and with Ferguson Fulghum, Inc., of which Leonard C. Fulghum, Director of the
Company, is a principal for painting the West Ashley office.
Thomas W. Myers failed to file one Statement of Changes in Beneficial
Ownership on Form 4 in a timely manner. Nathaniel I. Ball, III, filed one
incorrect Statement of Beneficial Interest on Form 4.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick, LLP, has served as the Bank's independent certified
public accountants for the fiscal year ending December 31, 1994, and as
independent certified public accountants for the Company and its Bank subsidiary
for the fiscal years ending December 31, 1995, 1996 and 1997. At the 1998 Annual
Shareholders' Meeting the following resolution will be subject to ratification
by a simple majority vote of shares represented at the meeting:
15
<PAGE> 19
RESOLVED, that the selection of KPMG Peat Marwick, LLP, as the
independent certified public accountants of Bank of South Carolina
Corporation (the "Company") and its sole subsidiary, The Bank of South
Carolina (the "Bank"), for the fiscal year ending December 31, 1998, is
hereby ratified.
If ratification is not achieved, the selection of an independent
certified public accountant will be reconsidered and made by the Board of
Directors. Even if selection is ratified, the Board of Directors reserves the
right to, and in its discretion may, direct the appointment of any other
independent certified public accounting firm at any time if the Board decides
that such a change would be in the best interests of the Company and its
shareholders.
The services provided by KPMG Peat Marwick, LLP include the examination
and reporting of the financial status of the Company and the Bank. These
services have been furnished at customary rates and terms. There are no existing
direct or indirect agreements or understandings that fix a limit on current or
future fees for these audit services.
KPMG Peat Marwick, LLP assisted in the preparation of the Company's and
Bank's tax returns in 1995, 1996 and 1997. These non-audit services were routine
in nature and composed twenty-five (25%) percent of the total fees paid to KPMG
Peat Marwick, LLP in 1997. These services do not affect their independence.
A representative of KPMG Peat Marwick, LLP is expected to attend the
Annual Shareholder's Meeting with the opportunity to make a statement, if
desired, and is expected to be available to respond to Shareholder's inquires.
OTHER MATTERS
Management is not aware of any matters to come before the meeting which
will require the vote of Shareholders other than those matters indicated in the
Notice of Meeting and this Proxy Statement.
However, if any other matter calling for Shareholder action should
properly come before the meeting or any adjournments thereof, those persons
named as Proxies in the enclosed Proxy Form will vote thereon according to their
best judgment.
PENDING LITIGATION
There is pending litigation involving the Company.
Towne v. Oakbrook Auto Center v. Hunt, Auto Supply and Equipment Co., Nationwide
Leasing and Bank of South Carolina, 97-CP-18-203: The case arose out of a loan
made by the Bank to Oakbrook Auto Center, Inc., which was guaranteed by William
A. Towne, Jr. When the note was not paid according to terms, it was paid by the
guarantor, Mr. Towne, and assigned to him. Mr. Towne thereafter brought suit
against Oakbrook Auto Center, Inc., to collect the note and Oakbrook Auto
Center, Inc., filed a third party complaint against a number of parties,
including the Bank of South Carolina, alleging that, in making the original
loan, the president of Oakbrook, Gregory A. Hunt, committed an ultra vires act,
of which The Bank of South Carolina had knowledge or should have had knowledge.
Counsel for the Bank does not anticipate the Bank's incurring any liability for
this lawsuit and believe it will be resolved with minimal expense.
BVS Performance Systems, Inc., v. The Bank of South Carolina, C97-189 MJM: This
case was filed September 24, 1997, in the District Court for the Northern
District of Iowa. It involves an alleged copyright
16
<PAGE> 20
violation relating to some training materials leased by the Bank from BVS.
Counsel for the Bank does not believe the Bank has any material liability.
Anya McKnight v. The Bank of South Carolina, EEOC Charge No. 146970639: This
Equal Employment Opportunity Commission claim was filed by Anya McKnight, a
former Bank employee, who alleges a racial discrimination claim against The Bank
of South Carolina. Counsel for the Bank does not anticipate the Bank's incurring
any liability for this claim and believe it will be resolved with minimal
expense.
ANNUAL REPORT
The ANNUAL REPORT for December 31, 1997, is mailed herewith to all
Shareholders. Copies of the Annual Report as filed with the Securities and
Exchange Commission on Form 10-KSB may be obtained by request to William L.
Hiott, Jr., Treasurer of the Company.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL SHAREHOLDERS' MEETING
Shareholder proposals, if any, for inclusion in the Proxy Statement
relating to the 1999 Annual Shareholders' meeting, must be addressed to and
received in the office of the President no later than December 7, 1998.
By Order of the Board of Directors
/s/ Nathaniel I. Ball, III
--------------------------
Nathaniel I. Ball, III
Secretary
March 6, 1998
17
<PAGE> 21
BANK OF APPENDIX
SOUTH CAROLINA
CORPORATION PROXY
256 Meeting Street
Charleston, SC 29401
KNOW ALL PERSONS BY THESE PRESENTS THAT I, the undersigned Shareholder of Bank
of South Carolina Corporation (the Company) do herby appoint William T. Cooper,
T. Dean Harton or Thomas W. Myers (no officer or employee of the Company or any
subsidiary may be appointed), or any one of them with full power to act alone,
my true and lawful attorney(s) with full power of substitution, to vote on
behalf of the undersigned all shares of common stock of the Company (the
Shares) which the undersigned would be entitled to vote at the annual meeting
of Shareholders to be held on Tuesday, April 14, 1998 at The Bank of South
Carolina, 2027 Sam Rittenberg Blvd., Charleston, South Carolina, at 6:00 p.m.,
or at any adjournments thereof, with all the powers the undersigned would
possess if personally present, hereby revoking all proxies heretofore given
with respect to such Shares, upon the propositions set forth below and more
fully described in the notice of the proxy statement for such annual meeting
(receipt of which is hereby acknowledged) as follows:
ELECTIONS OF DIRECTORS
[ ] FOR ALL nominees listed below (except as otherwise indicated by lining
through or otherwise striking out the name of any nominee or nominees)
[ ] WITHHOLD AUTHORITY to vote for ALL nominees listed below
Nathaniel I. Ball, III; Williams T. Cooper; C. Ronald Coward; Louis Y. Dawson,
III; Leonard C. Fulghum; T. Dean Harton; William L. Hiott, Jr.; James H.
Holcombe; Katherine M. Huger; John E. Huguley; Charles G. Lane; Hugh C. Lane,
Jr.; Louise J. Maybank; Thomas W. Myers; Thomas C. Stevenson, III; John M.
Tupper.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE OR
NOMINEES, LINE THROUGH OR OTHERWISE STRIKE OUT THE NAME OF SUCH NOMINEE(S).
PROPOSITION TO APPROVE THE APPOINTMENT OF KPMG Peat Marwick as independent
auditors for the Company for the fiscal year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
TO APPROVE BANK OF SOUTH CAROLINA CORPORATION 1998 OMNIBUS STOCK INCENTIVE
PLAN AND INCENTIVE STOCK OPTION AGREEMENT.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
TO AMEND THE ARTICLES OF INCORPORATION TO AUTHORIZE THE ISSUANCE OF 6,500,000
SHARES OF COMMON STOCK NO PAR VALUE, AND RESERVE 180,000 SHARES FOR THE 1998
STOCK INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, directors and confers authority to vote
"FOR" each proposition listed above unless "AGAINST", "ABSTAIN"' OR "WITHHOLD
AUTHORITY" is indicated. IF NO DIRECTION WITH RESPECT TO ANY PROPOSITION IS
MADE IN THIS PROXY, THIS PROXY WILL BE VOTED "FOR" SUCH PROPOSITION. If any
other matter is properly brought before the annual meeting to be held on April
14, 1998, this proxy shall be voted by the Proxy Solicitation Committee in
accordance with the recommendation of management.
<PAGE> 22
<TABLE>
<S> <C>
PLEASE DATE AND SIGN THIS PROXY BELOW AND RETURN IT IN THE ENCLOSED THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF
POSTAGE-PAID ENVELOPE. WHEN DATING AND SIGNING, PLEASE SIGN EXACTLY THE LISTED PROPOSITIONS. THIS PROXY IS SOLICITED BY THE
AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATE(S). PROXY SOLICITATION COMMITTEE ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY FOR USE AT A REGULAR ANNUAL
MEETING TO BE HELD ON APRIL 14, 1998 AND MAY BE REVOKED
PRIOR TO ITS EXERCISE.
Date: , 1998
-------------
SIGN -
HERE ----------------------------------------
-
----------------------------------------
-
----------------------------------------
(Signature of Shareholder)
---------------------------
No. of Shares
When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If
more than one executor, administrator, trustee, or
guardian, all should sign. ALL joint owners must sign.
If signing as a corporation, please sign in full the
corporate name by, and with the signature and title of,
the President or other authorized officer. If signing as
a partnership, please sign in name of partnership by, and
with the signature of, an authorized partner, or if
required, authorized partners.
PLEASE RETURN PROMPTLY
</TABLE>
