<PAGE> 1
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 Section 240.14a-11(c) or Section 240.14a-12
BANK OF SOUTH CAROLINA CORPORATION
----------------------------------
(Name of Registrant as Specified in its Charter)
BANK OF SOUTH CAROLINA CORPORATION
----------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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)(4) 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 Number:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LETTERHEAD OF BANK OF SOUTH CAROLINA CORPORATION]
March 8, 1999
Dear Shareholder:
The Annual Meeting of Shareholders of Bank of South Carolina
Corporation will be held at 2:00 p.m. on Tuesday, April 13, 1999, in the Board
Room of the 256 Meeting Street office of The Bank of South Carolina 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.
We appreciate your continued interest and investment in Bank of South
Carolina Corporation.
Sincerely,
/s/ Hugh C. Lane, Jr.
-------------------------
President
P.O. BOX 538 - CHARLESTON, SC 29402 - (803) 724-1500 - FAX (803) 723-1473
<PAGE> 3
PROXY MATERIAL OF
BANK OF SOUTH CAROLINA CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 13, 1999
To Our Shareholders:
The Annual Meeting of Shareholders of Bank of South Carolina Corporation
(the "Company") will be held at 256 Meeting Street, Charleston, South Carolina,
on Tuesday, April 13, 1999, at 2:00 p.m. for the following purposes:
1. To elect sixteen (16) Directors to serve until the Company's
2000 Annual Meeting of Shareholders;
2. To ratify the appointment of KPMG Peat Marwick LLP, as
independent certified public accountants for 1999;
3. To transact such other business as may properly come before
the meeting.
Shareholders of record at the close of business on February 23, 1999,
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 Board of Directors of the Company solicits the
accompanying form of Proxy.
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
-------------------------------------
Secretary
March 8, 1999
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 18, 1999, 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 1999 Annual Shareholders' Meeting of the Company. The
Notice of Meeting, Proxy Form and Annual Report are enclosed in this package.
THE PROXY
The Board of Directors of the Company selected the persons named as
proxies on the enclosed Proxy Form. 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
February 23, 1999, there were issued and outstanding 2,605,597 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, 1999, 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 of record on February 23, 1999, 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.
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.
<PAGE> 5
PRINCIPAL SHAREHOLDERS OF THE COMPANY
To the extent known to the Board of Directors of the Company, as of
February 23, 1999, 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 386,521.774 (1)(2) 14.83%
30 Church Street
Charleston, SC 29401
BankAmerica Corporation (3) 150,040 (3) 5.76%
100 North Tryon Street
Charlotte, NC 28255
N.B. Holdings Corp. (3) 150,040 (4) 5.76%
100 North Tryon Street
Charlotte, NC 28255
NationsBank, N.A. (3) 150,040 (5) 5.76%
100 South Tryon Street
Charlotte, NC 28255
The Bank of South Carolina 196,857 (6) 7.56%
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
706,656.774 shares or 27.12% 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) 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
170,900 shares; as trustee for 10 trust accounts holding an aggregate
of 63,236 shares, he has sole voting and investment power with respect
to such shares; as co-trustee for one trust account holding 4,840
shares, he has joint voting and investment power with respect to such
shares; he is indirectly beneficial owner of 7,568 shares owned by his
wife and an aggregate of 114,118 shares held by his wife as custodian
for three minor children and 25,859.774 shares owned by the Employee
Stock Ownership Plan and Trust ("ESOP") in which he has a vested
interest. All of the 386,521.774 shares beneficially owned by
- 2 -
<PAGE> 6
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, BankAmerica 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 this note (3).
(4) To the extent known to the Board of Directors, N.B. Holdings
Corporation has shared voting power for 79,860 shares, and shared
investment power for 150,040 shares (including 70,180 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 N.A. has
sole voting power for 79,860 shares, sole investment power for 4,840
shares and shared investment power for 145,200 shares (including 70,180
shares held as trustee under the will of Mills B. Lane for the benefit
of Hugh C. Lane). NationsBank, N.A., disclaims beneficial ownership for
the shares referred to in this note (5).
(6) The Trustee of the ESOP, Nathaniel I. Ball, III, an executive Officer
and Director of the Bank and the Company, disclaims beneficial
ownership of 196,857 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, 1999. 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, 1999, 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 February 23, 1999, the Officers,
Directors and Nominees beneficially owned 894,608.42 shares, representing
approximately 34.33% of the outstanding shares.
As of February 23, 1999, 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 53,945.311 (1) 2.07%
1302 Cove Avenue
Sullivans Island, SC 29482
</TABLE>
- 3 -
<PAGE> 7
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- -------------------- ----------
<S> <C> <C>
William T. Cooper 5,324 (1) .20%
21 Jamestown Road
Charleston, SC 29407
C. Ronald Coward 33,836 (1) 1.30%
537 Planters Loop
Mt. Pleasant, SC 29464
Louis Y. Dawson, III 12,584 (1) .48%
33 Church Street
Charleston, SC 29401
Leonard C. Fulghum 35,175 (1) 1.35%
311 Middle Street
Mt. Pleasant, SC 29464
T. Dean Harton 7,704 (1) .30%
4620 Lazy Creek Lane
Wadmalaw, SC 29487
William L. Hiott, Jr. 84,621.335 (1) 3.25%
1831 Capri Drive
Charleston, SC 29407
James H. Holcombe 107,175 (1) 4.11%
16 Church Street
Charleston, SC 29401
Katherine M. Huger 5,324 (1) .20%
72 Murray Boulevard
Charleston, SC 29401
John E. Huguley 16,456 (1) .63%
22 Murray Boulevard
Charleston, SC 29401
Charles G. Lane 125,594 (1) 4.82%
10 Gillon Street
Charleston, SC 29401
Hugh C. Lane, Jr. 386,521.774 (1) 14.83%
30 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>
Louise J. Maybank 12,100 (1) .46%
8 Meeting Street
Charleston, SC 29401
Thomas W. Myers 6,400 .25%
90 Gaillard Lane
Summerville, SC 29483
Thomas C. Stevenson, III 484 .02%
173 Tradd Street
Charleston, SC 29401
John M. Tupper 1,364 .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 5,502 shares directly owned by his wife and
22,977.311 shares owned by the ESOP, in which he has a vested interest;
William T. Cooper - an aggregate of 4,480 shares held by a pension
plan; C. Ronald Coward - an aggregate of 1,100 shares owned by a
company of which he is president and director; Louis Y. Dawson, III -
an aggregate of 484 shares owned by his wife; Leonard C. Fulghum - an
aggregate of 3,555 shares owned by his wife; T. Dean Harton - an
aggregate of 2,134 shares owned by his wife and held by his wife as
custodian for his step-son; William L. Hiott, Jr. - an aggregate of
5,323 shares directly owned by his wife and held by him as custodian
for two children and 22,977.335 shares owned by the ESOP, in which he
has a vested interest; James H. Holcombe - an aggregate of 55,387
shares owned by the Marjorie G. Detyens Irrevocable Trust for which he
serves as co-trustee; Katherine M. Huger - 484 shares owned by her
husband; John E. Huguley - 8,954 shares owned by his wife; Charles G.
Lane - an aggregate of 58,237 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
189,762 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 25,859.774 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 sixteen (16) in number and beneficially own an
aggregate of 894,608.42 shares, representing 34.33% 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
- 5 -
<PAGE> 9
owned. Three executive officers, Hugh C. Lane, Jr., President and Chief
Executive Officer, has a future right to acquire sixteen thousand five hundred
(16,500) shares. The other 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 thirteen
thousand seven hundred fifty (13,750) 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 6 and 7, all of whom are recommended by management
and have consented to be named and to serve if elected.
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 14, 1998, the date of the last Annual
Meeting of shareholders.
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES HELD BUSINESS EXPERIENCE
WITH FAMILY 1987-1999 AND
NAME AGE CORPORATION RELATIONSHIP OTHER DIRECTORSHIPS
- ---- --- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
Nathaniel I. Ball, III 57 Executive None The Bank of South Carolina (banking)
Vice President, 1986-99
Secretary,
Director
William T. Cooper 69 Director None President, Southeastern Galleries, Inc.
(retail furniture and decorating)
1983-99
C. Ronald Coward 63 Director None President - Coward-Hund Construction
Company, Inc. (construction) 1976-99
Louis Y. Dawson, III 70 Director Father-in-law Retired (1993) President-Dawson Eng-
of Charles G. ineering, Inc. (general contracting)
Lane and of a 1954-93
bank officer,
F.S. Hassell
</TABLE>
- 6 -
<PAGE> 10
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES HELD BUSINESS EXPERIENCE
WITH FAMILY 1987-1999 AND
NAME AGE CORPORATION RELATIONSHIP OTHER DIRECTORSHIPS
- ---- --- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
Leonard C. Fulghum 69 Director None Chairman - Ferguson Fulghum, Inc.
(painting contractors) 1972-99
T. Dean Harton 53 Director None President, Hawthorne Corporation
(aviation) 1986-99
William L. Hiott, Jr. 54 Executive None The Bank of South Carolina
Vice President, (banking) 1986-99
Treasurer,
Director
James H. Holcombe 74 Director None Member - Holcombe, Fair & Lane, LLC
(real estate) 1996-99; General and
Limited Partner - Holcombe & Fair
Realtors 1970-95
Katherine M. Huger 57 Director None Assistant Professor of Economics -
Charleston Southern University
(education) 1972-99
John E. Huguley 71 Director None Retired (1996) Chairman - John Huguley
Company, Inc. (retail office products)
1980-96
Charles G. Lane 44 Director Son-in-law Member - Holcombe, Fair & Lane,
of Louis Y. LLC (real estate) 1996-99;
Dawson, III; Associate-Holcombe & Fair Realtors
brother of 1987-96
Hugh C.
Lane, Jr.
Hugh C. Lane, Jr. 51 President, Brother of The Bank of South Carolina (banking)
Chief Exec- Charles G. 1986-99
utive Officer, Lane
Director
Louise J. Maybank 59 Director None Active in community programs
Thomas W. Myers 64 Director None President - Myers & Associates (estate
and business insurance planning) 1963-99
</TABLE>
- 7 -
<PAGE> 11
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES HELD BUSINESS EXPERIENCE
WITH FAMILY 1987-1999 AND
NAME AGE CORPORATION RELATIONSHIP OTHER DIRECTORSHIPS
- ---- --- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
Thomas C. Stevenson, III 47 Director None President - Fabtech, Inc. (metal
fabrication) 1991-99; Private Investor
1990-91; Chairman of the Board -
Stevenson Hagerty, Inc. (diversified
holding company) 1984-90
John M. Tupper 57 Director None President - Tupperway Tire and Service,
Inc. (retail tires and service) 1980-99
</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 1998, this
Committee held three (3) 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 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 1998, the Audit and Compliance Committee held five (5)
meetings. The functions of the Audit and Compliance Committee include: reviewing
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
met once during 1998.
- 8 -
<PAGE> 12
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 seven (7) meetings
(including an organizational meeting and all regularly scheduled and special
meetings) during the year ended December 31, 1998. 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, 1998, 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
($100,000.00) Dollars for their services in all capacities. Such Officers
receive no compensation from the Company as Officers or as Directors or in any
other capacity.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER SECURITIES
ANNUAL RESTRICTED UNDER- ALL OTHER
NAME AND COMPEN- STOCK LYING LTIP COMPEN-
PRINCIPAL SATION(1)(2) AWARD(S) OPTIONS/ PAYOUTS SATION(1)(2)
POSITION YEAR SALARY($) BONUS($) ($) ($) SARS($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hugh C. Lane, 1998 $140,601.45 --- $19,961.21 $19,961.21
Jr. - CEO 1997 $130,601.45 $10,000.00 $16,978.72 $16,978.72
& President 1996 $123,101.45 --- $17,682.79 $17,682.79
Nathaniel I. 1998 $126,101.37 --- $17,775.76 $17,775.76
Ball, III - 1997 $116,101.37 $10,000.00 $14,729.98 $14,729.98
Executive Vice 1996 $108,601.37 --- $16,135.32 $16,135.32
President &
Secretary
William L. 1998 $126,101.37 --- $18,330.88 $18,330.88
Hiott, Jr. - 1997 $116,101.37 $10,000.00 $14,729.98 $14,729.98
Executive Vice 1996 $108,601.37 --- $16,135.32 $16,135.32
President &
Treasurer
</TABLE>
- ----------------------------
- 9 -
<PAGE> 13
(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.
The Board of Directors of the Bank approved the contribution of One
Hundred Eighty Six Thousand Forty Eight and No/100 ($186,000.00) Dollars to the
ESOP for the fiscal year ended December 31, 1998. The contribution was made
during 1998. 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 Ninety Six Thousand
Eight Hundred Fifty Seven (196,857) shares or 7.56% of the Company's Common
Stock.
During the fiscal year ended December 31, 1998, 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.
On April 14, 1998, the shareholders of the Company approved an
Incentive Stock Option Plan for the benefit of eligible Officers and employees
of the Bank. A total of one hundred eighty thousand (180,000) shares were
reserved and on April 16, 1998, the Bank granted options to purchase Common
Stock in the aggregate amount of one hundred forty six thousand (146,000) shares
to fifty two (52) 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 one hundred thirty five thousand three
hundred (135,300) shares with an exercise price of $23.01 and for sixteen
thousand five hundred (16,500) shares with an exercise price of $25.31 remain
outstanding. No options were exercised in 1998.
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<PAGE> 14
Hugh C. Lane, Jr., President and Chief Executive Officer, was granted
the option to purchase fifteen thousand (15,000) shares of common stock of the
Company pursuant to the Incentive Stock Option Plan at a price of $27.84.
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 twelve thousand five hundred (12,500) shares of Common Stock of the
Company pursuant to the Incentive Stock Option Plan at a price of $25.3125. The
above options are all exercisable in five (5) twenty (20%) percent increments
beginning on and for one year following April 16, 2003, 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 cumulative and will not expire until the tenth anniversary of the
date of the grant. Adjusted for a ten (10%) percent stock dividend on May 15,
1998, Hugh C. Lane, Jr., has the option to purchase 16,500 shares of common
stock of the Company at a price of $25.31 per share and Nathaniel I. Ball, III
and William L. Hiott, Jr., each have the option to purchase 13,750 shares of
common stock of the Company at a price of $23.01.
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.
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 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
- 11 -
<PAGE> 15
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.
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.
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.
C. Ronald Coward, Leonard C. Fulghum and Thomas W. Myers each 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 through 1998. At the 1999 Annual
Shareholders' Meeting the following resolution will be subject to ratification
by a simple majority vote of shares represented at the meeting:
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, 1999, 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.
- 12 -
<PAGE> 16
KPMG Peat Marwick, LLP assisted in the preparation of the Company's and
Bank's tax returns in 1995, 1996, 1997 and 1998. These non-audit services were
routine in nature and did not compose more than twenty-five (25%) percent of the
total fees paid to KPMG Peat Marwick, LLP in 1998. 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 that
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 vs. Oakbrook Auto Center vs. 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 its 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 Auto Center, Inc., 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.
ANNUAL REPORT
The ANNUAL REPORT for December 31, 1998, 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.
- 13 -
<PAGE> 17
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL SHAREHOLDER'S MEETING
Shareholder proposals, if any, for inclusion in the Proxy Statement
relating to the 2000 Annual Shareholder's meeting, must be addressed to and
received in the office of the President no later than December 3, 1999.
By Order of the Board of Directors
/s/ Nathaniel I. Ball, III
------------------------------------
Secretary
March 8, 1999
- 14 -
<PAGE> 18
PROXY CARD
BANK OF SOUTH CAROLINA CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS APRIL 13, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL PERSONS BY THESE PRESENTS THAT I, the undersigned Shareholder of Bank
of South Carolina Corporation (the Company) do hereby appoint William T. Cooper,
Leonard C. Fulghum and Louise J. Maybank, (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 which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
the Company to be held at The Bank of South Carolina, 256 Meeting Street,
Charleston, South Carolina on Tuesday, April 13, 1999, at 2:00 p.m., or at any
adjournments or postponements thereof, with all the powers the undersigned would
possess if personally present upon the following matters:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary
below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
Nathaniel I. Ball, III, William 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 and John M. Tupper
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
2. APPROVAL OF KPMG PEAT MARWICK LLP, as the Company's independent
auditors for the fiscal year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The transaction of such other business as may properly come before the
meeting.
EACH PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATIONS
MADE HEREON. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED "FOR" THE NOMINEES, "FOR" KPMG PEAT MARWICK, AND IN THE DISCRETION
OF THE PROXIES, ON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Company's 1998 Annual Report
and the accompanying Notice of Meeting and Proxy Statement and hereby revokes
any proxy or proxies heretofore given.
Dated: , 1999
------------------------------
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Signature(s) of Shareholder(s)
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS
HEREON. EXECUTORS, ADMINISTRATORS, TRUSTEES,
ETC., MUST SO INDICATE WHEN SIGNING. IF
SHARES ARE HELD JOINTLY, BOTH OWNERS SHOULD
SIGN.
