<PAGE>
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 (S)240.14a-11(c) or (S)240.14a-12
SOUTH STREET FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
SOUTH STREET FINANCIAL CORP.
POST OFFICE BOX 489
155 WEST SOUTH STREET
ALBEMARLE, NORTH CAROLINA 28001
(704) 982-9184
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 18, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of South Street Financial Corp. (the "Company") will be held
on February 18, 1997, at 7:00 p.m., Eastern Time, at the main office of the
Company at 155 West South Street, Albemarle, North Carolina.
THE PURPOSES OF THE ANNUAL MEETING ARE:
1. To elect six persons who will serve as directors of the Company for one-
year terms or until their successors are duly elected and qualified;
2. To ratify the selection of McGladrey & Pullen, LLP as the independent
auditor for the Company for the fiscal year ending September 30, 1997;
and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof. The Board of Directors is not
aware of any other business to be considered at the Annual Meeting.
The Board of Directors has established January 7, 1997, as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournments thereof. Only record holders of the Common
Stock of the Company as of the close of business on that date will be entitled
to vote at the Annual Meeting or any adjournments thereof. In the event there
are not sufficient shares present in person or by proxy to constitute a quorum
at the time of the Annual Meeting, the Annual Meeting may be adjourned in order
to permit further solicitation of proxies by the Company.
By Order of the Board of Directors
R. Ronald Swanner
Secretary
Albemarle, North Carolina
January 15, 1997
A FORM OF PROXY IS ENCLOSED TO ENABLE YOU TO VOTE YOUR SHARES AT THE ANNUAL
MEETING. YOU ARE URGED, REGARDLESS OF THE NUMBER OF SHARES YOU HOLD, TO
COMPLETE, SIGN, DATE AND RETURN THE PROXY PROMPTLY. A RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR YOUR
CONVENIENCE.
<PAGE>
SOUTH STREET FINANCIAL CORP.
Proxy Statement
1997 Annual Meeting of Stockholders
February 18, 1997
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
GENERAL
This Proxy Statement is being furnished to stockholders of South
Street Financial Corp. (the "Company") in connection with the solicitation by
the board of directors of the Company (the "Board of Directors" or "Board") of
proxies to be used at the 1997 Annual Meeting of Stockholders (the "Annual
Meeting") to be held on February 18, 1997, at 7:00 p.m., Eastern Time, at the
offices of the Company at 155 West South Street, Albemarle, North Carolina, and
at any adjournments thereof. This Proxy Statement and the accompanying form of
proxy were first mailed to stockholders on or about January 17, 1997.
Other than the matters listed on the attached Notice of 1997 Annual
Meeting of Stockholders, the Board of Directors knows of no matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
REVOCABILITY OF PROXY
A proxy may be revoked at any time prior to its exercise by the filing
of a written notice of revocation with the Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a
beneficial owner of shares of the Company's common stock (the "Common Stock")
that are not registered in your own name, you will need appropriate
documentation from the holder of record of your shares to vote personally at the
Annual Meeting.
SOLICITATION
The Company will pay the cost of preparing, assembling and mailing
this Proxy Statement and other proxy solicitation expenses, if any. In addition
to the use of the mail, proxies may be solicited personally or by telephone or
telegraph by directors, officers and regular employees of the Company and its
wholly-owned savings bank subsidiary, Home Savings Bank of Albemarle, S.S.B.
(the "Bank"), without additional compensation therefor. Brokerage houses and
nominees have been requested to forward these proxy materials to the beneficial
owners of shares held of record by such persons and, upon request, the Company
will reimburse such persons for their reasonable out-of-pocket expenses in doing
so.
<PAGE>
VOTING SECURITIES AND VOTE REQUIRED FOR APPROVAL
Regardless of the number of shares of Common Stock owned, it is
important that stockholders be present in person or represented by proxy at the
Annual Meeting. Stockholders are requested to vote by completing, signing,
dating and returning the enclosed proxy card in the enclosed postage-paid
envelope. Any shareholder may vote for, against, or abstain from voting on any
matter to come before the Annual Meeting. If the enclosed proxy is properly
marked, signed, dated and returned, and not revoked, it will be voted in
accordance with the instructions therein. If no instructions are given, the
proxy will be voted FOR the nominees for election to the Board of Directors
---
named in this Proxy Statement and for the other matters described in this Proxy
Statement calling for a vote of the stockholders. If instructions are given
with respect to some but not all proposals, such instructions as are given will
be followed, but the proxy will be voted FOR the proposals on which no
---
instructions are given.
The close of business on January 7, 1997, has been fixed by the Board
of Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Annual Meeting
and any adjournments thereof. As of the Record Date, the Company had
outstanding 4,496,500 shares of Common Stock and there were approximately 741
stockholders, excluding shares held in street name. Each share of Common Stock
entitles its owner to one vote on each matter calling for a vote of stockholders
at the Annual Meeting.
The presence, in person or by proxy, of the holders of at least a
majority of shares of the Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting. Since many of our
stockholders cannot attend the Annual Meeting, it is necessary that a large
number be represented by proxy. Accordingly, the Board of Directors has
designated proxies to represent those stockholders who cannot be present in
person and who desire to be so represented. In the event there are not
sufficient votes for a quorum or to approve or ratify any proposal at the time
of the Annual Meeting, the Annual Meeting may be adjourned in order to permit
the further solicitation of proxies.
In order to be elected, a nominee need only receive a plurality of the
votes cast in the election of directors. As a result, those persons nominated
who receive the largest number of votes will be elected as directors.
Accordingly, shares not voted for any reason respecting any one or more nominees
will not be counted as votes against such nominees.
The proposal to ratify the appointment of the Company's independent
auditor for the 1997 fiscal year will be approved if a plurality of the votes
cast vote in favor of the proposal.
Abstentions will be counted for purposes of determining whether a
quorum is present at the Annual Meeting. Abstentions will not be counted in
tabulating the votes cast on any proposal submitted to the stockholders. Broker
non-votes will not be counted either for determining the existence of a quorum
or for tabulating votes cast on any proposal.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires that any person or group who acquires the beneficial ownership of more
than 5% of the Common Stock notify the Securities and Exchange Commission (the
"SEC") and the Company. Following is certain information, as of the Record
Date, regarding all persons or groups, as defined in the Exchange Act, who held
of record or who are known to the Company to own beneficially, more than 5% of
the Company's Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF
NAME AND ADDRESS OWNERSHIP/1/ CLASS/2/
- ---------------- -------------- ----------
<S> <C> <C>
Caldwell A. Holbrook, Jr. 361,720/3/ 8.04%
1700 Bellamy Circle
Albemarle, NC 28001
Joel A. Huneycutt 374,720/4/ 8.33%
P. O. Box 167
Renee Ford Road
Locust, NC 28097
Douglas Dwight Stokes 380,777/5/ 8.47%
1009 Ridge Street
Albemarle, NC 28001
Greg E. Underwood 369,720/6/ 8.22%
32283-B Austin Road
New London, NC 28127
</TABLE>
- ------------
/1/Unless otherwise noted, all shares are owned directly or indirectly by the
named individuals, by their spouses and minor children, or by other entities
controlled by the named individuals.
/2/Based upon a total of 4,496,500 shares of Common Stock outstanding at the
Record Date.
/3/Mr. Holbrook serves as a trustee of the Home Savings Bank of Albemarle,
Inc., S.S.B. Employee Stock Ownership Plan (the "ESOP") which holds 359,720
shares of the Company's Common Stock. The trustees of such plan share certain
voting and investment power of such shares.
/4/Mr. Huneycutt serves as a trustee of the ESOP which holds 359,720 shares of
the Company's Common Stock. The trustees of such plan share certain voting and
investment power of such shares. This number also includes 1,737 shares held by
Mr. Huneycutt's wife. Mr. Huneycutt disclaims beneficial ownership of such
shares.
/5/Mr. Stokes serves as a trustee of the ESOP which holds 359,720 shares of the
Company's Common Stock. The trustees of such plan share certain voting and
investment power of such shares.
/6/Mr. Underwood serves as a trustee of the ESOP which holds 359,720 shares of
the Company's Common Stock. The trustees of such plan share certain voting and
investment power of such shares.
Set forth below is certain information as of the Record Date regarding
beneficial ownership of the Common Stock by each of the members of the Board of
Directors (including nominees for re-election at the Annual Meeting), each of
the members of the Board of Directors of the Bank, certain executive officers of
the Company and the Bank, and the directors and all executive officers of the
Company and the Bank as a group (all persons listed are directors of the Company
and the Bank).
3
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF
NAME AND ADDRESS OWNERSHIP/1,2/ CLASS/(3)/
- ---------------- -------------- -----------
<S> <C> <C>
Caldwell A. Holbrook, Jr. 361,720/4/ 8.04%
1700 Bellamy Circle
Albemarle, NC 28001
Joel A. Huneycutt 374,720/5/ 8.33%
P. O. Box 167
Renee Ford Road
Locust, NC 28097
Douglas Dwight Stokes 380,777/6/ 8.47%
1009 Ridge Street
Albemarle, NC 28001
Greg E. Underwood 369,720/7/ 8.22%
32283-B Austin Road
New London, NC 28127
Carl M. Hill, President and Chief Executive Officer 43,200/8/ 0.96%
of the Company and the Bank
1415 Melchor Road
Albemarle, NC 28001
R. Ronald Swanner, Executive Vice President of the 10,000 0.22%
Company and the Bank and Secretary of the
Company
1415 North Ridge Drive
Albemarle, NC 28001
Directors and all executive officers as a group (6 460,977/9/ 10.25%
persons)
</TABLE>
- ------------
/(1)/Voting and investment power is not shared unless otherwise indicated.
/(2)/Unless otherwise noted all shares are owned directly or indirectly by the
named individuals, by their spouses or minor children, or by other entities
controlled by the named individuals.
/(3)/Based upon a total of 4,496,500 shares of the Common Stock outstanding at
the Record Date.
/(4)/Mr. Holbrook serves as a trustee of the ESOP which holds 359,720 shares of
the Company's Common Stock. The trustees of such plan share certain voting
and investment power of such shares.
/(5)/Mr. Huneycutt serves as a trustee of the ESOP which holds 359,720 shares
of the Company's Common Stock. The trustees of such plan share certain
voting and investment power of such shares. This number also includes
1,737 shares held by Mr. Huneycutt's wife. Mr. Huneycutt disclaims
beneficial ownership of such shares.
4
<PAGE>
/(6)/Mr. Stokes serves as a trustee of the ESOP which holds 359,720 shares of
the Company's Common Stock. The trustees of such plan share certain voting
and investment power of such shares.
/(7)/Mr. Underwood serves as a trustee of the ESOP which holds 359,720 shares
of the Company's Common Stock. The trustees of such plan share certain
voting and investment power of such shares.
/(8)/This number includes 3,200 shares held by Mr. Hill's wife. Mr. Hill
disclaims beneficial ownership of such shares.
/(9)/The 359,720 shares held by the ESOP for which the trustees, Messrs.
Holbrook, Huneycutt, Stokes and Underwood, share voting and investment
power have been included only once in the total number of shares owned
beneficially by the directors and executive officers as a group.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership with the SEC. Executive
officers, directors and greater than ten percent beneficial owners are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during the fiscal year ended September 30,
1996, all of its executive officers and directors and greater than ten percent
beneficial owners complied with all applicable Section 16(a) filing
requirements; however, the Initial Statement of Beneficial Ownership on SEC Form
3 for the executive officers and directors was filed immediately following the
consummation of the Bank's conversion from mutual to stock form (the
"Conversion") and the Company's initial public offering on October 2, 1996
rather than in August, 1996 when its registration statement under the Exchange
Act was declared effective.
PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
The Certificate of Incorporation of the Company provides that the number of
directors of the Company shall not be less than five nor more than fifteen. The
exact number of directors shall be fixed or changed from time to time by the
Board of Directors. The Board of Directors has currently fixed the size of the
Board at six members.
The Board of Directors has nominated the six persons named below for
election as directors for terms of one year or until their earlier death,
resignation, retirement, removal or disqualification or until their successors
are elected and qualified.
The persons named in the accompanying form of proxy intend to vote any
shares of the Common Stock represented by valid proxies received by them to
elect the six nominees listed below as directors, unless authority to vote is
withheld or such proxies are revoked. Each of the nominees for election is
5
<PAGE>
currently a member of the Board of Directors. In the event that any of the
nominees should become unavailable to accept nomination or election, it is
intended that the proxyholders will vote to elect in his stead such other person
as the present Board of Directors may recommend or to reduce the number of
directors to be elected at the Annual Meeting by the number of such persons
unable or unwilling to serve (subject to the requirements of the Company's
Certificate of Incorporation). The present Board of Directors has no reason to
believe that any of the nominees named herein will be unable to serve if elected
to office. In order to be elected as a director, a nominee need only receive a
plurality of the votes cast. Accordingly, shares not voted for any reason
respecting any one or more nominees will not be counted as votes against such
nominees. No shareholder has the right to cumulatively vote his or her shares
in the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOLLOWING NOMINEES
---
FOR ELECTION AS DIRECTORS.
The following table sets forth as to each nominee and each director whose
term is continuing, his name, age, principal occupation during the last five
years and the year he was first elected as a director of the Bank. All the
nominees have previously served as directors of the Bank and were appointed to
serve as initial directors of the Company in connection with its incorporation
on May 16, 1996.
<TABLE>
<CAPTION>
AGE ON DIRECTOR
SEPTEMBER 30, PRINCIPAL OCCUPATION TERM OF BANK
NAME 1996 DURING LAST FIVE YEARS EXPIRES SINCE
- ---- ------------- ---------------------------------------- ------- --------
<S> <C> <C> <C> < C>
Carl M. Hill 64 President and CEO, the Company and 1998 1961
the Bank
Caldwell A. Holbrook, Jr. 49 Partner, D.A. Holbrook & Sons, General 1998 1985
Contractors
Joel A. Huneycutt 54 President, Locust Lumber Company, 1998 1984
Inc.
Douglas Dwight Stokes 50 Owner and President, Stokes 1998 1988
Construction Company
R. Ronald Swanner 48 Executive Vice President, the Company 1998 1981
and the Bank; Secretary of the Company
Greg E. Underwood 33 CPA in private practice; Owner, 1998 1995
Carolina Oil Co. of Albemarle, Inc. and
Barefoot Oil Co. of Albemarle, Inc.;
Secretary/Treasurer of Southeastern
Floral Corp.
</TABLE>
BOARD OF DIRECTORS OF THE BANK
The Bank also has a six-member board of directors which is comprised of the
same persons who are currently directors of the Company.
6
<PAGE>
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Company was organized in May 1996 by the board of directors of the Bank
to acquire the capital stock of the Bank issued in connection with the
Conversion. The Company did not actively engage in any business until after
consummation of the Conversion on October 2, 1996. Consequently, the meetings
of the Board of Directors held during the fiscal year ended September 30, 1996
were held in connection with the organization of the Company and the Conversion.
The Board of Directors is scheduled to meet quarterly and may have additional
meetings as needed. During fiscal 1996, the Board of Directors held two
meetings. All directors attended at least 75% of the aggregate number of
meetings of the Board of Directors and committees of the Board on which they
served during the year ended September 30, 1996.
The Board of Directors has one standing committee -- the Audit Committee.
The Audit Committee of the Board consists of Messrs. Stokes, Underwood and
Huneycutt. In the future, this committee will meet annually to review and
obtain the annual audit report from the Company's and the Bank's independent
auditor and also will meet on an as-needed basis.
The Bank's board of directors has appointed five standing committees to
which certain responsibilities have been delegated -- the Loan Committee, the
Audit Committee, the Nominating Committee, the Proxy Committee and the
Compensation Committee. The members of the Company's Audit Committee also serve
on the Bank's Audit Committee. The Bank's Audit Committee met one time during
the fiscal year ended September 30, 1996.
The Bank's Nominating Committee, composed of Messrs. Holbrook, Huneycutt
and Stokes, will serve in that capacity for the Company's Board of Directors.
The Bank's Nominating Committee generally meets on an annual basis and met one
time during the fiscal year ended September 30, 1996.
The Bank's Compensation Committee, composed of Messrs. Huneycutt, Holbrook
and Stokes, also will serve as the Company's compensation committee. The Bank's
Compensation Committee meets on an annual basis and met one time during the
fiscal year ended September 30, 1996. In addition, the Bank's board of
directors appoints other committees of its members to perform certain more
limited functions from time to time.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Members of the Board of Directors receive no fees or
compensation for their service. However, all members of the Board of Directors
also are directors of the Bank and are compensated for that service. For their
service on the Bank's board of directors, members of the board, including Mr.
Hill and Mr. Swanner, receive a retainer of $2,500 per year and an additional
$600 per regular monthly board meeting attended. Mr. Stokes receives an
additional $300 per month for his service on the Loan Committee.
BANK DEFERRED COMPENSATION AGREEMENTS WITH DIRECTORS. 1985 Retirement
Payment Agreements. Mr. Hill and Mr. Swanner, as well as two non-employee
directors and two retired directors of the Bank, participate in a deferred
compensation plan established in 1985 under which such directors, or their
designated beneficiaries, would be paid specified amounts over a ten-year period
beginning at age 65 (or in one case, age 70) in return for the deferral of
certain amounts of the director's fees over a five-year period. If a director
dies while serving as a director but before receiving all of his benefits under
the agreement, payments will be made to his designated beneficiary, or if none,
to his estate.
7
<PAGE>
As a condition of the agreement, each director has agreed not to engage in
activities in competition with the Bank and to provide consulting services to
the Bank during the period the retirement benefits are payable.
1995 Retirement Payment Agreements. In 1995, the Bank entered into
additional deferred compensation arrangements with all of its directors. Under
the agreements, the Bank will pay each director a specified amount per month for
a period of ten years upon the director's attainment of age 65 (or in Mr. Hill's
case, beginning in 2000), in return for the deferral of certain amounts of the
director's fees over a five-year period.
If a director dies while serving as a director but before receiving all of
his benefits under the agreement, payments will be made to his designated
beneficiary, or if none, to his estate, unless the death is by suicide within
two years of the execution of the agreement (in which case the deferred fees
will be returned, with interest). If a director becomes disabled while serving
as a director, but prior to attaining age 65 (or October 1, 2000 for Mr. Hill),
the Bank will pay the same benefits that would be payable in the event of the
director's death. If a director terminates his service to the Bank for reasons
other than death or disability, he or his beneficiary shall be entitled to
receive at age 65 (or October 1, 2000 for Mr. Hill) or his prior death only the
vested portion of the benefit due under the agreement. Vesting occurs according
to a schedule contained in the agreement. If any director's termination of
service shall occur after a change in control of the Bank, the director shall be
100% vested in the retirement benefits.
As a condition of the agreement, each director has agreed not to engage in
activities in competition with the Bank and to provide consulting services to
the Bank during the period that the retirement benefits are payable.
BANK DIRECTORS RETIREMENT PLAN. In 1995, the Bank adopted a retirement
plan for directors after determining that such a plan would help it attract and
retain qualified directors. Under the plan all directors will be paid $1,000
per month over a ten-year period beginning after the director attains 70 years
of age (the "Normal Retirement Date"). If a director dies while serving as a
director but before receiving all of his benefits under the plan, payments will
be made to his designated beneficiary in lump sum or installments at the Bank's
option, unless the death is by suicide within two years of the execution of the
agreement. If a director becomes disabled while serving as a director, but
prior to his Normal Retirement Date, the Bank will pay the benefits due under
the plan, either in installments over the ten-year period or in a lump sum
payment. If a director terminates his service to the Bank before his Normal
Retirement Date for reasons other than death or disability, he or his
beneficiary shall be entitled at the Normal Retirement Date or his prior death
to receive only the vested portion of the benefits due under the plan. Vesting
occurs according to a schedule contained in the agreement. If any director's
termination of service shall occur after a change in control of the Bank, the
director shall be 100% vested in the retirement benefits.
As a condition of the agreement, each director has agreed not to engage in
activities in competition with the Bank and to provide consulting services to
the Bank during the period the retirement benefits are payable.
The Bank has purchased life insurance on the lives of its directors to fund
its obligations under the deferred compensation and directors' retirement plan
agreements described above. Total expense related to the above-described
agreements was approximately $187,000 for the fiscal year ended September 30,
8
<PAGE>
1996. The Bank's accrued liability for obligations under the plans amounted to
$647,000 at September 30, 1996.
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
persons who are executive officers of either the Company or the Bank or both.
<TABLE>
<CAPTION>
EMPLOYED BY
AGE ON THE BANK OR
SEPTEMBER 30, POSITIONS AND OCCUPATIONS THE
NAME 1996 DURING LAST FIVE YEARS COMPANY SINCE
- ---- ------------- ------------------------- -------------
<S> <C> <C> <C>
Carl M. Hill 64 President and Chief Executive 1957
Officer of the Company and the
Bank
R. Ronald Swanner 48 Executive Vice President of 1974
the Company and the Bank and
Secretary of the Company
</TABLE>
EXECUTIVE COMPENSATION
The executive officers of the Company are not paid any cash compensation by
the Company. However, the executive officers of the Company also are executive
officers of the Bank and receive cash compensation from the Bank.
The following table sets forth for the fiscal year ended September 30, 1996
certain information as to the cash compensation received by and the amounts
accrued for the benefit of (i) the President and (ii) the Executive Vice
President of the Bank. No other executive officer of the Bank had cash
compensation during the year ended September 30, 1996 that exceeded $100,000 for
services rendered in all capacities to the Bank.
<TABLE>
<CAPTION>
OTHER ANNUAL
NAME AND COMPENSATION ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS ($)/(1)/ COMPENSATION
- ------------------ ---- -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Carl M. Hill 1996 $155,090 $10,388 - - - $11,700/(2)/
President and CEO
1995 $138,411 $ 7,591 - - - $ 9,250/(3)/
R. Ronald Swanner 1996 $ 99,720 $ 6,678 - - - $11,000/(4)/
Executive Vice President
1995 $ 91,887 $ 5,694 - - - $ 9,250/(5)/
</TABLE>
9
<PAGE>
(1) Under the "Other Annual Compensation" category, perquisites for the fiscal
years ended September 30, 1996 and 1995 did not exceed the lesser of
$50,000 or 10% of salary and bonus as reported for either Mr. Hill or Mr.
Swanner.
(2) Includes directors' fees of $9,700 received by Mr. Hill and $2,000
contributed to the Bank's 401(k) profit sharing plan for Mr. Hill for
fiscal year 1996. The Bank terminated the 401(k) profit sharing plan in
connection with the Conversion. This amount does not include $25,000 of
accrued expense under supplemental income agreements established for the
benefit of Mr. Hill. Mr. Hill has received no payments under the
supplemental income agreements. See "-- Bank Supplemental Income
Agreements".
(3) Directors' fees received by Mr. Hill. This amount does not include
$223,000 of accrued expense under supplemental income agreements
established for the benefit of Mr. Hill. Mr. Hill has received no payments
under the supplemental income agreements. See "--Bank Supplemental Income
Agreements".
(4) Includes directors' fees of $9,700 received by Mr. Swanner and $1,300
contributed to the 401(k) profit sharing plan for Mr. Swanner for fiscal
year 1996. The Bank terminated the 401(k) profit sharing plan in
connection with the Conversion. This amount does not include $10,000 of
accrued expense under supplemental income agreements established for the
benefit of Mr. Swanner. Mr. Swanner has received no payments under the
supplemental income agreements. See "--Bank Supplemental Income
Agreements".
(5) Directors fees received by Mr. Swanner. This amount does not include
$8,000 of accrued expense under supplemental income agreements established
for the benefit of Mr. Swanner. Mr. Swanner has received no payments under
the supplemental income agreements. See "--Bank Supplemental Income
Agreements".
BANK SUPPLEMENTAL INCOME AGREEMENTS. 1985 Agreements. The Bank entered
into Supplemental Income Agreements with Mr. Hill and Mr. Swanner on October 1,
1985. The agreements provide that the Bank will pay Mr. Hill $1,200 per month
for a continuous period of 216 months, and Mr. Swanner $861 per month for a
continuous period of 180 months. Mr. Hill's benefits will commence on the later
of his 62nd birthday or his actual retirement. Mr. Swanner's benefits will
commence on the first day of the month following his 65th birthday. If the
executive dies while employed by the Bank but before receiving any or all of the
payments due under the agreement, the remaining payments will be made to his
designated beneficiary, or, if none, to his estate. If the executive becomes
disabled prior to his retirement from the Bank, the Bank will pay him the
benefits due under the agreement. The plan also provides for an early
retirement benefit upon retirement with 30 years of service with the Bank.
As a condition of the agreements, Mr. Hill and Mr. Swanner must be
available to provide consulting services to the Bank during the period the
retirement payments are payable and must not engage in activities in Stanly
County, North Carolina in competition with the Bank.
1995 Agreements. In September 1995, the Bank entered into additional
Supplemental Income Agreements with Mr. Hill and Mr. Swanner. Under the
agreements, the Bank will pay Mr. Hill $25,000 annually and Mr. Swanner $15,000
annually for a period of fifteen years upon the executive's attainment of age
65 or actual retirement, if later.
If the executive dies while employed by the Bank but before receiving all
of his benefits under the agreement, payments will be made to his designated
beneficiary, or if none, to his estate, unless the death is by suicide within
two years of the execution of the agreement. If the executive becomes disabled
while
10
<PAGE>
employed by the Bank, but prior to attaining age 65, the Bank will pay the same
benefits that would be payable in the event of the executive's death, either in
installments over the fifteen-year period or in a lump sum payment. If the
executive terminates his service to the Bank for reasons other than death or
disability, he or his beneficiary shall be entitled to receive at age 65 or his
prior death only the vested portion of the benefits due under the agreement.
Vesting occurs according to a schedule contained in the agreement. If the
executive's termination of service shall occur after a change in control of the
Bank, the executive shall be 100% vested in the retirement benefits.
As a condition of the agreement, each executive has agreed not to engage in
activities in competition with the Bank in Albemarle, North Carolina, and to
provide consulting services to the Bank during the period that the retirement
benefits are payable.
The Bank has purchased life insurance on the lives of Mr. Hill and Mr.
Swanner to fund its obligations under the agreements described above. Total
expense related to those agreements was $35,000 for the fiscal year ended
September 30, 1996, and the Bank's accrued liability for plan obligations
amounted to $435,000 at September 30, 1996.
RETIREMENT PLAN. The Bank maintains a non-contributory defined benefit
pension plan (the "Pension Plan") for the benefit of all of its employees who
have completed one year of service and who are at least 21 years of age. Under
the Pension Plan, the Bank annually contributes an actuarially determined amount
to provide a benefit for each participant at retirement.
Participants are fully vested in amounts contributed to the Pension Plan on
their behalf by the Bank after completing five years of service. Benefits under
the plan are payable in the event of the participant's retirement, death,
disability or termination of employment.
Normal retirement age under the Pension Plan is the later of (a) age 65 or
(b) the fifth anniversary of the date an employee first became a participant in
the Pension Plan ("Normal Retirement Age"). Subject to certain restrictions on
maximum benefits required by federal law, upon reaching Normal Retirement Age,
each participant will receive a retirement benefit in the form of a straight
life annuity, determined pursuant to a formula which takes into consideration a
participant's "final average compensation," years of service with the Bank and
the participant's expected benefits from Social Security. In general, for
purposes of the Pension Plan, a participant's "Final Average Compensation" is
defined as his average annual compensation for those five consecutive years in
the last ten calendar years immediately preceding Normal Retirement Age that
produce the highest average. The plan also offers early retirement to
participants who have completed 15 years of service and who are at least 55
years of age.
The following table shows the retirement benefit payable for a range of
compensation and years of service for a person who retires at Normal Retirement
Age. These are hypothetical benefits based upon the plan's normal benefit
formula.
11
<PAGE>
<TABLE>
<CAPTION>
Earnings Credited for
Retirement Benefits Years of Service at Normal Retirement
15 20 25 30 35
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$ 25,000................ $ 4,688 $ 6,250 $ 7,813 $ 9,375 $10,938
$ 50,000................ $11,566 $15,421 $19,277 $23,132 $26,987
$ 75,000................ $18,691 $24,921 $31,152 $37,382 $43,612
$100,000................ $25,816 $34,421 $43,027 $51,632 $60,237
$125,000................ $32,941 $43,921 $54,902 $65,882 $76,862
$150,000................ $40,066 $53,421 $66,777 $80,132 $93,487
</TABLE>
The benefits listed above are annual amounts and are based on the assumption
that the participant is age 65. As of September 30, 1996, the Final Average
Compensation and years of service for Mr. Hill and Mr. Swanner would have been:
Mr. Hill -- $122,726 and 39 years; Mr. Swanner -- $85,680 and 22 years.
401(K) PROFIT SHARING PLAN. In January 1996, the Bank established a
contributory savings plan for its employees, which meets the requirements of
Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code").
All employees who have completed twelve months of service may elect to
contribute a percentage of their compensation to the plan each year, subject to
certain maximums imposed by federal law. The Bank will match 50% of each
participant's contribution, up to a maximum employer contribution of 3% of the
participant's compensation. For purposes of the 401(k) profit sharing plan,
compensation means a participant's compensation received from the employer as
reported on Form W-2.
Participants are fully vested in amounts they contribute to the plan.
Participants are fully vested in amounts contributed to the plan on their behalf
by the Bank as employer matching contributions after six years of service
according to the following schedule: 1 year, 0%; 2 years, 20%; 3 years, 40%; 4
years, 60%; 5 years, 80%; 6 or more years, 100%.
Benefits under the plan are payable in the event of the participant's
retirement, death, disability or termination of employment. Normal retirement
age under the plan is 65 years of age. The total amount contributed by the Bank
to the 401(k) profit sharing plan for the fiscal year ended September 30, 1996
was $13,000. The Bank terminated the 401(k) profit sharing plan in connection
with the Conversion.
EMPLOYEE STOCK OWNERSHIP PLAN. In connection with the Conversion, the
Bank established the ESOP for eligible employees of the Bank. Employees with
1,000 hours of employment in a plan year and who have attained age 21 are
eligible to participate. As part of the Conversion, the ESOP borrowed funds
from the Company and used the funds to purchase 359,720 of the shares of Common
Stock issued in the Conversion. Collateral for the loan is the Common Stock
purchased by the ESOP. The loan will be repaid principally from the Bank's
discretionary contributions to the ESOP over a period of 10 years or less.
Dividends, if any, paid on shares held by the ESOP may also be used to reduce
the loan. The loan has not been guaranteed by the Bank.
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<PAGE>
Shares purchased by the ESOP are held in a suspense account for
allocation among participants as the loan is repaid. Contributions to the ESOP
and shares released from the suspense account in an amount proportional to the
repayment of the ESOP loan are allocated among ESOP participants on the basis of
relative compensation in the year of allocation. Benefits vest in annual
increments with full vesting upon attaining five years of service (with credit
given for years of service prior to the Conversion). Prior to the completion of
five years of credited service, a participant who terminates employment for
reasons other than death, retirement (or early retirement), or disability will
receive only vested benefits under the ESOP. Forfeitures are reallocated among
remaining participating employees in the same proportion as contributions.
Benefits immediately vest and are payable upon death or disability. The Bank's
contributions to the ESOP are not fixed, so benefits payable under the ESOP
cannot be estimated.
The Bank has established a committee of the board of directors to
administer the ESOP. Trustees for the ESOP were appointed prior to the
Conversion. The ESOP committee may instruct the trustees regarding investment
of funds contributed to the ESOP. Participating employees may instruct the
trustees as to the voting of all shares allocated to their respective ESOP
accounts. The unallocated shares held in the suspense account, and all
allocated shares for which voting instructions are not received, will be voted
by the trustees in their discretion subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
EMPLOYMENT AGREEMENTS. In connection with the Conversion, the Bank
entered into employment agreements with Carl M. Hill and R. Ronald Swanner in
order to establish their duties and compensation and to provide for their
continued employment with the Bank. The agreements provided for an initial
annual base salary of $157,320, for Mr. Hill and $101,160 for Mr. Swanner and
for an initial term of employment of three years. Commencing on the first
anniversary date and continuing on each anniversary date thereafter, following a
performance evaluation of the employee, each agreement may be extended for an
additional year. Each agreement provides that base salary shall be reviewed by
the board of directors of the Bank not less often than annually. In addition,
the employment agreements provide for discretionary bonuses and participation in
all other pension, profit-sharing or retirement plans maintained by the Bank or
by the Company for employees of the Bank, as well as fringe benefits normally
associated with such employee's office, including the use of a company car. The
employment agreements provide that they may be terminated by the Bank for cause,
as defined in the agreement, and that they may otherwise be terminated by the
Bank (subject to vested rights) or by the employee. In the event of a change in
control (as defined below), the terms of each agreement shall be automatically
extended for three years from the date of the change of control, and the
employee's base salary shall be increased at least 6% annually.
The employment agreements provide that the nature of the employee's
compensation, duties or benefits may not be diminished following a change in
control of the Bank or the Company. For purposes of the employment agreements,
a change in control generally will occur if (i) after the effective date of the
employment agreement, any "person" (as such term is defined in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act) directly or indirectly, acquires beneficial
ownership of voting stock, or acquires irrevocable proxies or any combination of
voting stock and irrevocable proxies, representing 25% or more of any class of
voting securities of either the Company or the Bank, or acquires in any manner
control of the election of a majority of the directors of either the Company or
the Bank, (ii) either the Company or the Bank consolidates or merges with or
into another corporation, association or entity, or is otherwise reorganized,
where neither the Company nor the Bank is the surviving corporation in such
transaction, or (iii) all or substantially all of the assets of either the
Company or the Bank are sold or otherwise transferred to, or are acquired by,
any other entity or group.
13
<PAGE>
SEVERANCE PLAN. In connection with the Conversion, the Bank's board
of directors adopted a Severance Plan for the benefit of its employees. The
Severance Plan provides that in the event there is a "change in control" of the
Bank or the Company (as defined in the Severance Plan) and (i) the Bank or any
successor of the Bank terminates the employment of any full time employee of the
Bank in connection with, or within 24 months after the change in control, other
than for "cause" (as defined in the Severance Plan), or (ii) an employee
terminates his or her employment with the Bank or any successor following a
decrease in the level of such employee's annual base salary rate or a transfer
of such employee to a location outside of Stanly County, North Carolina, as
applicable, within 24 months after a change in control, all non-officer
employees shall be entitled to a severance benefit equal to the greater of (a)
an amount equal to two weeks' salary at the employee's existing salary rate
multiplied times the employee's number of complete years of service as a the
Bank employee, subject to a maximum payment equal to the employee's annual
salary rate at the time of termination; or (b) the amount of one month's salary
at the employee's salary rate at the time of termination. The Severance Plan
provides that under the circumstances described above, officers of the Bank
shall be entitled to receive a severance benefit equal to the greater of (a) the
amount of one year's salary at the officer's annual salary rate at the time of
termination or (b) an amount equal to two weeks' salary at the officer's
existing salary rate multiplied times the officer's number of complete years of
service to the Bank. Officers and employees of the Bank who, at the time of a
"change in control," are parties to employment agreements are not covered by the
Severance Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Bank's board of directors serves the
role of the Compensation Committee for the Company. The Compensation Committee
determines the compensation of the executive officers and the Bank's other
employees. During the fiscal year ended September 30, 1996, the Compensation
Committee consisted of Caldwell A. Holbrook, Jr., Joel A. Huneycutt and Douglas
D. Stokes. None of the members of the Compensation Committee were officers or
employees of the Bank or the Company during 1996 or in prior years.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
It is the responsibility of the Bank's Compensation Committee to
review and evaluate the performance of the Bank's executive officers. As part
of a recently completed compensation review process, the board of directors
engaged a consultant to analyze and review the Bank's compensation practices as
compared with practices at comparable institutions, compensation surveys and
comparative data available from trade associations. The Bank's board of
directors believes that it can best attract and retain the level of management
expertise and talent needed to efficiently and profitably operate the Bank and
the Company by offering competitive intitial base salaries. As a result of the
consultant's report, initial base salaries for each the executive officers,
including Mr. Hill, the President and Chief Executive Officer, and Mr. Swanner,
the Executive Vice President, were largely determined by market factors,
including salaries and benefits offered for similar positions by financial
institution competitors of similar size and characteristics. Increases in the
base salary of each executive officer is determined based upon the executive
officer's contributions to the Bank's overall profitability, maintenance of
regulatory compliance standards, professional leadership, and management
effectiveness in meeting the needs of day-to-day operations. In addition, the
executive
14
<PAGE>
officers of the Bank are eligible to receive discretionary bonuses--as are all
other employees -- declared by the Bank's board of directors.
Compensation Committee
Caldwell A. Holbrook, Jr.
Joel A. Huneycutt
Douglas Dwight Stokes
PERFORMANCE GRAPH
The Company is required to provide its stockholders with a line graph
comparing the Company's cumulative total shareholder return with a performance
indicator of the overall stock market and either a published industry index or a
Company-determined peer comparison. The purpose of the chart is to help
stockholders determine the reasonableness of the Compensation Committee's
decisions with respect to the setting of various levels of executive officer
compensation. Shareholder return (measured through increases in stock price and
payment of dividends) is often a benchmark used in assessing corporate
performance and the reasonableness of compensation paid executive officers.
However, the stockholders should recognize that corporations often use
a number of other performance benchmarks (in addition to shareholder return) to
set various levels of executive officer compensation. Stockholders should thus
consider other relevant performance indicators in assessing shareholder return,
such as growth in earnings per share, book value per share, and cash dividends
per share, along with other performance measures such as return on equity and
return on assets.
The following graph compares the Company's cumulative shareholder
return on the Common Stock with a Nasdaq (U.S. companies) index and with a
savings institution peer group whose stock is quoted on Nasdaq. The graph was
prepared using data through November 29, 1996.
15
<PAGE>
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG SOUTH STREET FINANCIAL CORP,
NASDAQ STOCK MARKET AND NASDAQ STOCKS
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
NASDAQ STOCKS
NASDAQ (SIC 6030-6039
SOUTH STREET STOCK US COMPANIES)
FINANCIAL MARKET SAVINGS
CORP. (US COMPANIES) INSTITUTIONS
--------------- -------------- --------------
<S> <C> <C> <C>
10/03/1996 $100.0 $100.0 $100.0
10/31/1996 $ 96.1 $ 98.4 $103.2
11/29/1996 $114.7 $104.6 $109.9
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 10/03/96.
16
<PAGE>
CERTAIN INDEBTEDNESS AND TRANSACTIONS OF MANAGEMENT
The Bank makes loans to its executive officers and directors in the
ordinary course of its business. These loans are currently made on substantially
the same terms, including interest rates, collateral and repayment terms, as
those then prevailing for comparable transactions with nonaffiliated persons,
and do not involve more than the normal risk of collectibility or present any
other unfavorable features. Applicable regulations prohibit the Bank from
making loans to its executive officers and directors at terms more favorable
than could be obtained by persons not affiliated with the Bank. The Bank's
policy concerning loans to executive officers and directors currently complies
with such regulations.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
McGladrey & Pullen, LLP, the Company's and the Bank's independent
auditor for the year ended September 30, 1996, has been selected as the
Company's and the Bank's independent auditor for the 1997 fiscal year. Such
selection is being submitted to the Company's stockholders for ratification. A
representative of McGladrey & Pullen, LLP is expected to attend the Annual
Meeting and will be afforded an opportunity to make a statement, if he so
desires, and to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THIS PROPOSAL.
---
PROPOSALS FOR 1998 ANNUAL STOCKHOLDERS' MEETING
It is presently anticipated that the 1998 Annual Meeting of
Stockholders will be held in February of 1998. In order for shareholder
proposals to be included in the proxy materials for that meeting, such proposals
must be received by the Secretary of the Company at the Company's executive
office not later than October 21, 1997, and meet all other applicable
requirements for inclusion therein.
The Company's bylaws provide that, in order to be eligible for
consideration at the annual meeting of stockholders, all nominations of
directors, other than those made by the Company's Board of Directors, must be
made in writing and must be delivered to the Secretary of the Company not less
than 30 days nor more than 50 days prior to the meeting at which such
nominations will be made; provided, however, if less than 21 days notice of the
meeting is given to stockholders, such nominations must be delivered to the
Secretary of the Company not later than the close of business on the seventh day
following the day on which the notice of meeting was mailed.
OTHER MATTERS
Management knows of no other matters to be presented for consideration
at the Annual Meeting or any adjournments thereof. If any other matters shall
properly come before the Annual Meeting, it is intended that the proxyholders
named in the enclosed form of proxy will vote the shares represented thereby in
accordance with their judgment, pursuant to the discretionary authority granted
therein.
17
<PAGE>
MISCELLANEOUS
The Annual Report of the Company for the year ended September 30,
1996, which includes financial statements audited and reported upon by the
Company's independent auditor, is being mailed along with this Proxy Statement;
however, it is not intended that the Annual Report be a part of this Proxy
Statement or a solicitation of proxies.
THE FORM 10-K FILED BY THE COMPANY WITH THE SEC, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, WILL BE PROVIDED FREE OF CHARGE TO
THE COMPANY'S STOCKHOLDERS UPON WRITTEN REQUEST DIRECTED TO: SOUTH STREET
FINANCIAL CORP., POST OFFICE BOX 489, 155 WEST SOUTH STREET, ALBEMARLE, NORTH
CAROLINA 28001, ATTENTION: CARL M. HILL.
By Order of the Board of Directors,
R. Ronald Swanner
Secretary
Albemarle, North Carolina
January 15, 1997
18
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
SOUTH STREET FINANCIAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 18, 1997
7:00 P.M.
The undersigned hereby appoints the official proxy committee of South Street
Financial Corp. (the "Company") comprised of Douglas D. Stokes, Joel A.
Huneycutt and Greg E. Underwood, each with full power of substitution, to act
as attorneys and proxies for the undersigned, and to vote all shares of Common
Stock of the Company which the undersigned is entitled to vote only at the
Annual Meeting of Stockholders, to be held at the office of the Company, 155
West South Street, Albemarle, North Carolina, on February 18, 1997 at 7:00 p.m.
and at any and all adjournments thereof, as follows:
WITH- FOR ALL
FOR HOLD EXCEPT
[_] [_] [_]
1. The approval of the election of the
following named directors:
Carl M. Hill, Caldwell A. Holbrook, Jr., Joel A. Huneycutt, Douglas Dwight
Stokes, R. Ronald Swanner and Greg E. Underwood who will serve as directors
of the Company until the 1998 Annual Meeting of Stockholders or until their
successors are duly elected and qualify.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. The ratification of [_] [_] [_]
McGladrey & Pullen, LLP as
the independent auditor
of the Company for the year
ending September 30, 1997.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE ANNUAL MEETING: [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
If no instructions are given, the proxy will be voted for the nominees for
election to the Board of Directors named in this Revocable Proxy and for the
ratification of the selection of McGladrey & Pullen, LLP as the independent
auditor for the Company for the 1997 fiscal year. If instructions are given with
respect to one but not both proposals, such instructions as are given will be
followed and the proxy will be voted for the proposal on which no instructions
are given.
--------------------------------------------
Please be sure to sign and Date
date this Proxy in the box below.
- --------------------------------------------------------------------------------
- ---Stockholder sign above---Co-Holder (if any) sign above---
+ +
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[UP ARROW APPEARS HERE] [UP ARROW APPEARS HERE]
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
SOUTH STREET FINANCIAL CORP.
- -------------------------------------------------------------------------------
The above signed acknowledges receipt from the Company, prior to the execution
of this Proxy, of a Notice of Annual Meeting and a Proxy Statement dated
January 15, 1997.
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder may sign, but only one signature is
required.
PLEASE ACT PROMPTLY
SIGN, DATE AND MAIL YOUR PROXY CARD TODAY
- --------------------------------------------------------------------------------
