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-12
COMMUNITY FIRST BANCORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_______________________________________________
2) Form, Schedule or Registration Statement No.:_________________________
3) Filing Party:_________________________________________________________
4) Date Filed:___________________________________________________________
<PAGE>
COMMUNITY FIRST BANCORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of the Shareholders of Community
First Bancorporation will be held at Community First Bank, Seneca Office, 1600
Sandifer Boulevard, Seneca, South Carolina, on Tuesday, April 18, 2000, at 1:30
p.m., for the following purposes:
(1) To elect four directors to each serve a three-year term; and
(2) To act upon other such matters as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on March 1, 2000, are
entitled to notice of and to vote at the meeting. In order that the meeting can
be held, and a maximum number of shares can be voted, whether or not you plan to
be present at the meeting in person, please fill in, date, sign and promptly
return the enclosed form of proxy. The Company's Board of Directors unanimously
recommends a vote FOR approval of all of the proposals presented.
Returning the signed proxy will not prevent a record owner of shares from
voting in person at the meeting.
Included herewith is the Company's 2000 Proxy Statement. Also included is
the Company's 1999 Annual Report to Shareholders.
By Order of the Board of Directors
March 27, 2000 Frederick D. Shepherd, Jr.
President
<PAGE>
COMMUNITY FIRST BANCORPORATION
3685 Blue Ridge Boulevard
Walhalla, South Carolina 29691
(864) 638-2105
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Community First Bancorporation (the
"Company") for use at the Annual Meeting of Shareholders to be held at 1:30 p.m.
on Tuesday, April 18, 2000 in Community First Bank's Seneca Office, 1600
Sandifer Boulevard, Seneca, South Carolina. A Notice of Annual Meeting is
attached hereto, and a form of proxy is enclosed. This statement was first
mailed to shareholders on or about March 27, 2000, in connection with the
solicitation. The cost of this solicitation is being paid by the Company. The
only method of solicitation to be employed, other than use of the proxy
statement, is personal telephone contact by directors and regular employees of
the Company.
ANNUAL REPORT
The Annual Report to Shareholders covering the Company's fiscal year ended
December 31, 1999, including financial statements, is enclosed herewith. Such
Annual Report to Shareholders does not form any part of the material for the
solicitation of proxies.
REVOCATION OF PROXY
Any record shareholder who executes and delivers a proxy has the right to
revoke it at any time before it is voted. The proxy may be revoked by a record
shareholder by delivering to Frederick D. Shepherd, Jr., President, Community
First Bancorporation, 3685 Blue Ridge Boulevard, Walhalla, South Carolina 29691
or by mailing to Mr. Shepherd at Post Office Box 1097, Walhalla, South Carolina
29691, an instrument which by its terms revokes the proxy. The proxy may also be
revoked by a record shareholder by delivery to the Company of a duly executed
proxy bearing a later date. Written notice of revocation of a proxy or delivery
of a later dated proxy will be effective upon receipt thereof by the Company.
Attendance at the Annual Meeting will not in itself constitute revocation of a
proxy. However, any shareholder who desires to do so may attend the meeting and
vote in person in which case the proxy will not be used.
QUORUM AND VOTING
At the close of business on March 1, 2000, there were outstanding
2,003,496 shares of the Company's common stock (no par value). Each share
outstanding will be entitled to one vote upon each matter submitted at the
meeting. Only shareholders of record at the close of business on March 1, 2000
(the "Record Date"), shall be entitled to notice of and to vote at the meeting.
A majority of the shares entitled to be voted at the annual meeting
constitutes a quorum. If a share is represented for any purpose at the annual
meeting by the presence of the registered owner or a person holding a valid
proxy for the registered owner, it is deemed to be present for purposes of
establishing a quorum. Therefore, valid proxies which are marked "Abstain" or
"Withhold" and shares that are not voted, including proxies submitted by brokers
that are the record owners of shares (so-called "broker non-votes"), will be
included in determining the number of votes present or represented at the annual
meeting. If a quorum is not present or represented at the meeting, the
shareholders entitled to vote, present in person or represented by proxy, have
the power to adjourn the meeting from time to time. If the meeting is to be
reconvened within thirty days, no notice of the reconvened meeting will be given
other than an announcement at the adjourned meeting. If the meeting is to be
adjourned for thirty days or more, notice of the reconvened meeting will be
given as provided in the Bylaws. At any reconvened meeting at which a quorum is
present or represented, any business may be transacted that might have been
transacted at the meeting as originally noticed.
If a quorum is present at the Annual Meeting, directors will be elected by
a plurality of the votes cast by shares present and entitled to vote at the
annual meeting. Cumulative voting is not permitted. Votes that are withheld or
that are not voted in the election of directors will have no effect on the
outcome of election of directors. If a quorum is present all other matters that
may be considered and acted upon at the Annual Meeting will be approved if the
number of shares of Common Stock voted in favor of the matter exceed the number
of shares of Common Stock voted against the matter.
<PAGE>
ACTIONS TO BE TAKEN BY THE PROXIES
The persons named as proxies were selected by the Board of Directors of
the Company. When the form of proxy enclosed is properly executed and returned,
the shares that it represents will be voted at the meeting. Each proxy, unless
the shareholder otherwise specifies therein, will be voted "FOR" the election of
the persons named in this Proxy Statement as the Board of Directors' nominees
for election to the Board of Directors. In each case where the shareholder has
appropriately specified how the proxy is to be voted, it will be voted in
accordance with his specifications. As to any other matter of business which may
be brought before the Annual Meeting, a vote may be cast pursuant to the
accompanying proxy in accordance with the best judgment of the persons voting
the same, but the Board of Directors does not know of any such other business.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit proposals for the consideration of
the shareholders at the next Annual Meeting may do so by mailing them in writing
to Frederick D. Shepherd, Jr., President, Community First Bancorporation, Post
Office Box 1097, Walhalla, South Carolina 29691, or by delivering them in
writing to Mr. Shepherd at the Company's main office, 3685 Blue Ridge Boulevard,
Walhalla, South Carolina 29691. Such written proposals must be received prior to
November 29, 2000, for inclusion, if otherwise appropriate, in the Company's
Proxy Statement and form of Proxy relating to that meeting. With respect to any
shareholder proposal not received by the Company prior to February 12, 2001,
proxies solicited by management of the Company will be voted on the proposal in
the discretion of the designated proxy agents.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
Set forth below is information as of March 1, 2000 about persons who are
currently beneficial owners of 5% or more of the Company's common stock.
Name and Number of Shares % of outstanding
Address Beneficially owned common stock
------- ------------------ ------------
Frederick D. Shepherd, Jr. 144,658(1) 7.0%
P. O. Box 1097
Walhalla, S.C. 29691
Dwight A. Holder 110,000 5.5%
P.O. Box 998
Pickens, S.C. 29671
James E. Turner 128,019(2) 6.4%
P. O. Box 367
Seneca, S.C. 29679
- ----------
(1) Includes presently exercisable options to purchase 68,494 shares.
(2) Includes presently exercisable options to purchase 2,640 shares.
The number of shares owned, and the percentage of outstanding common
stock such number represents, for all directors, nominees and officers of the
Company is set forth below under "MANAGEMENT OF THE COMPANY."
ELECTION OF DIRECTORS
At the Annual Meeting, four directors are to be elected to hold office
for the next three years, their terms expiring at the 2003 Annual Meeting of
Shareholders, or until their successors are duly elected and qualified. Pursuant
to the bylaws of the Company, the Board of Directors acts as a nominating
committee. The Board has nominated Larry S. Bowman, William M. Brown, John R.
Hamrick and Frederick D. Shepherd, Jr. each to serve a three year term. Any
other nominations must be made in writing and delivered to the President of the
Company in accordance with the procedures set forth below under "--Committees of
the Board of Directors."
2
<PAGE>
It is the intention of the persons named in the enclosed form of proxy
to vote for the election as directors of Messrs. Bowman, Brown, Hamrick and
Shepherd. Unless a contrary specification is indicated, the enclosed form of
proxy will be voted FOR such nominees. In the event that any such nominee is not
available by reason of any unforeseen contingency, it is intended that the
persons acting under the proxy will vote for the election, in his stead, of such
other person as the Board of Directors of the Company may recommend. The Board
of Directors has no reason to believe that any of the nominees will be unable or
unwilling to serve if elected.
MANAGEMENT OF THE COMPANY
Security Ownership of Management
The table below shows as to each director and nominee his name and
positions held with the Company, the period during which he has served as a
director of the Company, and the number of shares of the Company's common stock
owned by him at March 1, 2000. Directors of the Company serve until the annual
meeting for the year indicated or until their successors are elected and
qualified.
<TABLE>
<CAPTION>
NUMBER OF % OF SHARES POSITIONS WITH DIRECTOR
AGE SHARES(1) OUTSTANDING THE COMPANY SINCE*
--- --------- ----------- ----------- ------
Members of the Board of Directors whose terms of office will continue
until the Annual Meeting of Shareholders in 2002 are:
<S> <C> <C> <C> <C> <C>
R. Theo Harris, Sr. 77 30,822 1.5% Director 1989
Westminster, S.C.
James E. McCoy 62 69,305(2) 3.5% Chairman and 1989
Walhalla, S.C. Director
James E. Turner 63 128,019(3) 6.4% Director 1989
Seneca, S.C.
Charles L. Winchester 59 68,444(4) 3.4% Director 1989
Sunset, S.C.
Members of the Board of Directors whose terms will continue until the
Annual Meeting of Shareholders in 2001 are:
Robert H. Edwards 69 69,544(5) 3.5% Director 1989
Walhalla, S.C.
Blake L. Griffith 64 84,840(6) 4.2% Director 1995**
Walhalla, S.C.
Gary V. Thrift 39 45,010(7) 2.2% Director 1995***
Seneca, S.C.
Nominees for re-election to the Board of Directors for terms of office
to continue until the Annual Meeting of Shareholders in 2003 are:
Larry S. Bowman, M.D. 51 56,549(8) 2.8% Vice Chairman 1989
Seneca, S.C. and Director
William M. Brown 54 57,510(9) 2.9% Director and 1989
Salem, S.C. Secretary
John R. Hamrick 52 58,726(10) 2.9% Director 1989
Seneca, S.C.
Frederick D. Shepherd, Jr. 59 144,658(11) 7.0% Director, President, 1989
Walhalla, S.C. Chief Executive Officer
and Treasurer
All Directors, nominees
and executive officers
as a group (11 persons) 813,427(12) 38.8%
</TABLE>
3
<PAGE>
Except as otherwise indicated, to the knowledge of management, all shares are
owned directly with sole voting power.
- --------------------
*Includes service as a director of Community First Bank prior to its acquisition
by the Company in 1997.
**Mr. Griffith previously served on the Board of Directors from 1989 to 1993.
***Mr. Thrift previously served on the Board of Directors from 1989 to 1992.
(1) Includes for each non-employee director 2,640 shares subject to currently
exercisable options.
(2) Includes 59,481 shares over which Mr. McCoy shares voting control with his
wife, Charlotte B. McCoy, and an additional 3,592 shares owned by Charlotte
B. McCoy.
(3) Includes 8,969 shares owned jointly with Patricia S. Turner, Mr. Turner's
wife; and 14,641 owned by Mrs. Turner.
(4) Includes 28,767 shares jointly owned with Joan O. Winchester, Mr.
Winchester's wife; 2,138 shares owned by Joan O. Winchester; 303 shares
held as custodian for Samantha Brooke Reeves, 290 shares held as custodian
for Savannah Lauren Kent, 303 shares held as custodian for Andrew Calton
Kent, and 290 shares held as custodian for Charlie Raye Reeves, Mr.
Winchester's grandchildren.
(5) Includes 15,796 shares jointly owned with Ruth D. Edwards, Mr. Edward's
wife; 4,452 shares owned by Ruth D. Edwards; 10,106 shares owned by Edwards
Auto Sales, Inc. Profit Sharing Plan; 5,691 shares owned by Robert H.
Edwards LLC; and 917 shares held as trustee for Bobbie Jean Shepard, 1,071
shares held as trustee for Catherine Elizabeth Edwards, and 917 shares held
as Trustee for Natalie M. Edwards, Mr. Edwards' grandchildren.
(6) Includes 12,014 shares owned by Susan P. Griffith, Mr. Griffith's wife; and
70,076 shares jointly owned with Susan P. Griffith.
(7) Includes 4,043 shares held as guardian for Catherine Hayley Thrift, 970
shares held as guardian for Rushton G. Thrift, and 2,831 shares held as
guardian for Ford H. Thrift, Mr. Thrift's children; 275 shares owned by
Catherine Thrift, Mr. Thrift's wife, and 550 shares owned jointly with
Catherine Thrift.
(8) Includes 24,290 shares jointly owned with Mary M. Bowman, Dr. Bowman's
wife; 15,914 shares owned by Mary M. Bowman; 3,630 shares owned by Mary W.
Bowman, Dr. Bowman's daughter; and 3,071 shares held as trustee for Mary W.
Bowman and 6,701 shares held as trustee for Robert B. Bowman, Dr. Bowman's
children.
(9) Includes 3,071 shares held as custodian for Lamar Bailes Brown and 3,071
shares held as custodian for William M. Brown, Jr., Mr. Brown's sons; and
2,340 shares owned by Annie B. Brown, Mr. Brown's wife.
(10) Includes 1,478 shares jointly owned with Frances R. Hamrick, Mr. Hamrick's
wife; 3,866 shares owned by Mr. Hamrick's Defined Benefit Plan; 2,719
shares held as trustee for Maryanne R. Hamrick and 2,719 shares held as
trustee for Sarah E. Hamrick, Mr. Hamrick's daughters; 4,220 shares owned
by Mrs. Hamrick's Defined Benefit Plan; 896 shares owned by Maryanne R.
Hamrick; and 897 shares owned by Sarah E. Hamrick.
(11) Includes presently exercisable options to purchase 68,494 shares.
(12) Includes presently exercisable options to purchase 94,894 shares.
4
<PAGE>
<TABLE>
<CAPTION>
Directors' Business Experience For The Past Five Years
<S> <C>
Larry S. Bowman, M.D. Orthopedic surgeon with Blue Ridge Orthopedic Association, P.A.
William M. Brown President and Chief Executive Officer of Lindsay Oil Company, Inc.
Robert H. Edwards President of Edwards Auto Sales.
Blake L. Griffith President of Griffith Properties, LLC since September 1998; formerly President
and Chief Executive Officer of Next Day Apparel, Inc.
John R. Hamrick President of Lake Keowee Real Estate, Inc.; Owner of John Hamrick Real Estate
R. Theo Harris, Sr. Retired educator, beef cattle farmer and trustee for Blue Ridge Electric Cooperative.
James E. McCoy Plant Manager of the Walhalla Plant of the Torrington Company.
Frederick D. Shepherd, Jr. President, Chief Executive Officer and Treasurer of Community First Bank since 1989;
President, Chief Executive Officer and Treasurer of the Company since May, 1997.
Gary V. Thrift President, Thrift Development Corporation, since February 1996; Vice President
and Secretary, Thrift Development Corporation July 1995 to February 1996;
General Manager, Tri-County Builders Supply, since July 1995.
James E. Turner Chairman of the Board of Turner's Jewelers, Inc.
Charles L. Winchester President, Winchester Lumber Company, Inc. of Salem, South Carolina; Vice President,
Boones Lumber Company.
</TABLE>
Neither the principal executive officer nor any directors are related
by blood, marriage or adoption in the degree of first cousin or closer.
Meetings of the Board of Directors
During the last full fiscal year, ending December 31, 1999, the Board
of Directors of the Company met 12 times, including regular and special
meetings. Each director attended at least 75% of the total number of meetings of
the Board of Directors and committees of which he was a member.
Committees of the Board of Directors
Nominating Committee. The Board of Directors acts as nominating committee, but
any shareholder of any outstanding class of capital stock of the Company
entitled to vote for the election of Directors may also present nominations for
directors. 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 14 days nor more than 50
days prior to any meeting of Shareholders called for the election of Directors;
provided, however, that if less than 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 day following
the date on which the notice of meeting was mailed. Such notification shall
contain the following information to the extent known to the notifying
Shareholder: (a) the name and address of each proposed nominee; (b) the
principal occupation of each proposed nominee; (c) the total number of shares of
capital stock of the Company that will be voted for each proposed nominee; (d)
the name and residence address of the notifying Shareholder. Nominations not
made in accordance with these requirements may be disregarded by the President
of the meeting, and upon his instructions, the vote tellers may disregard all
votes cast for each such nominee.
Audit Committee. The Audit Committee is responsible for seeing that audits of
the Company are conducted annually. A firm of certified public accountants is
employed for that purpose by the Board of Directors upon recommendation of the
Audit Committee. Reports on these audits are reviewed by the Committee upon
receipt and a report thereon is made to the Board at its next meeting. The Audit
Committee is comprised of Messrs. Edwards, Hamrick, Thrift, Winchester and
Harris. The Audit Committee met twice in 1999.
5
<PAGE>
Compensation Committee. The Company does not have a standing compensation
committee of the Board of Directors or a committee serving similar functions.
MANAGEMENT COMPENSATION
Executive Officer Compensation
The following table sets forth information about the Chief Executive
Officer's compensation. No other executive officers earned $100,000 or more
during the year ended December 31, 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Annual Compensation Awards
------------------- ------
Number of
Securities
Underlying All Other
Options Compen-
Name and Principal Position Year Salary(1) Bonus Awarded(2) sation(3)
- --------------------------- ---- --------- ----- -------------- ---------
<S> <C> <C> <C> <C> <C>
Frederick D. Shepherd, Jr. 1999 $193,116 -0- 7,700 $5,000
President, Chief Executive 1998 151,279 $14,500 15,400 5,000
Officer and Treasurer 1997 129,400 12,700 - 3,871
- ---------------
</TABLE>
(1) Includes $6,000, $3,600 and $3,600 of director's fees in 1999, 1998 and
1997, respectively. The Company also pays club dues for Mr. Shepherd and
provides him with the use of a Company car for business and personal use.
Mr. Shepherd reimburses the Company for mileage for personal use of the
car. The total of such benefits paid for Mr. Shepherd was less than 10% of
his annual salary and bonus payments. Mr. Shepherd participates in
broad-based life and medical insurance plans that are available generally
to all employees on the same terms generally available to all employees.
(2) Adjusted for a two-for-one stock split effected in 1998 and a 10% stock
dividend effective December 15, 1999.
(3) Consists of matching contributions paid by the Company pursuant to the
401(k) plan.
6
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth information about options granted to the
Chief Executive Officer in 1999. The amounts in the table have been adjusted to
reflect the 10% stock dividend effected in 1999.
<TABLE>
<CAPTION>
Individual Grants
-----------------
Number of % of Total
Securities Options Potential Realizable Value at
Underlying Granted to Exercise Assumed Annual Rates of Stock
Options Employees Price Expiration Price Appreciation for 10-Year
Name Granted(1) in 1999 (per share) Date Option Term(2)
---- ---------- ------- ----------- ---- --------------
5% 10%
----- -----
<S> <C> <C> <C> <C> <C> <C>
Frederick D. Shepherd, Jr. 7,700 40% $18.18 2/26/09 $88,036 $223,102
</TABLE>
- --------------------
(1) These options were granted on February 26, 1999 and became/become
exercisable in 1,540 share increments on February 26, 1999, 2000, 2001,
2002 and 2003.
(2) The amounts in these columns are the result of calculations based on the
assumption that the market price of the Common Stock will appreciate in
value from the date of grant to the end of the ten-year option term at
rates of 5% and 10% per year. The 5% and 10% annual appreciation
assumptions are required by the Securities and Exchange Commission; they
are not intended to forecast possible future appreciation, if any, of the
Company's stock price.
Option Exercises and Year End Options Outstanding and Values
The following table presents information about options exercised by Mr.
Shepherd during 1999 and about options held by Mr. Shepherd at December 31,
1999. This information has been adjusted to reflect a 10% stock dividend paid in
1999, a two-for-one stock split in 1998, a 15% stock dividend paid in 1997, and
5% stock dividends paid in each of 1996, 1995, 1994 and 1993.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Acquired Value Options 12/31/99 Options 12/31/99(2)
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frederick D. 15,380 $245,311 64,754 17,930 $970,644 $154,626
Shepherd, Jr.
</TABLE>
(1) Based on a price of $19.20 per share, the weighted average price at which
the Company's Common Stock has traded during the past year in trades of
which the Company has knowledge, and an exercise price of $3.25 per share.
The weighted average price has been adjusted to reflect the 10% stock
dividend effected in 1999. The Common Stock is not, however, widely traded
and such price may not be indicative of market value.
(2) Based on a price of $19.20 per share, the weighted average price at which
the Company's Common Stock has traded during the past year in trades of
which the Company has knowledge, and exercise prices ranging from $3.25 to
$18.18 per share. The weighted average price has been adjusted to reflect
the 10% stock dividend effected in 1999. The Common Stock is not, however,
widely traded and such price may not be indicative of market value.
7
<PAGE>
1989 Stock Option Plan and 1998 Stock Option Plan
The Company has adopted two stock option plans, both of which have been
approved by the shareholders. The 1989 Stock Option Plan reserved 307,512 shares
of the Company's Common Stock for issuance to eligible employees upon exercise
of options. The 1998 Stock Option Plan reserved 440,000 shares of the Company's
Common Stock for issuance to eligible employees and directors upon exercise of
options. Under both plans, the Board of Directors or a committee appointed by
the Board of Directors, determines the persons to whom options will be granted
and sets the terms of the options within the parameters of the plans. At
December 31, 1999, under the 1989 Plan, options to purchase 157,674 shares of
Common Stock were outstanding, and options to purchase 130,757 shares were
exercisable. The exercisable options have an average exercise price of $4.76 per
share. The 1989 Plan had a ten year term and has, therefore, terminated.
Although options may still be exercised under the 1989 Plan, no further options
may be granted under the 1989 Plan. At December 31, 1999, under the 1998 Plan,
options to purchase 88,880 shares of Common Stock were outstanding, 350,350
shares were available for grant pursuant to options, and options to purchase
27,268 shares were exercisable. The exercisable options have an average exercise
price of $11.25 per share.
The number of shares and average prices in this section have been
retroactively adjusted to reflect 5% stock dividends effective May 1, 1993, May
1, 1994, May 1, 1995 and May 1, 1996, a 15% stock dividend effective December
30, 1997, a two-for-one stock split effected in 1998, and a 10% stock dividend
effective December 15, 1999.
Compensation of Directors
Directors receive compensation of $500 for each regular meeting of the
Board of Directors. In addition, in 1999, each director was granted options
pursuant to the 1998 Plan to purchase 2,200 shares of common stock. The exercise
price of the options is $18.18 per share (adjusted to reflect the 10% stock
dividend effected in 1999), which was the fair market value of the options on
the date of grant. The options became/become exercisable annually in 440 share
increments, beginning February 26, 1999 and expire February 26, 2009.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, in the ordinary course of its business, makes loans to and
has other transactions with directors, officers, principal shareholders, and
their associates. Loans are made on substantially the same terms, including
rates and collateral, as those prevailing at the time for comparable
transactions with other persons and do not involve more than the normal risk of
collectibility or present other unfavorable features. The Company expects to
continue to enter into transactions in the ordinary course of business on
similar terms with directors, officers, principal stockholders, and their
associates. The aggregate dollar amount of such loans outstanding at December
31, 1999 was $4,268,490. During 1999, $3,453,203 of new loans were made and
repayments totaled $2,473,080.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As required by Section 16(a) of the Securities Exchange Act of 1934,
the Company's directors, its executive officers and certain individuals are
required to report periodically their ownership of the Company's Common Stock
and any changes in ownership to the Securities and Exchange Commission. Based on
a review of Section 16(a) reports available to the Company, it appears that all
such reports for these persons were filed in a timely fashion during 1999, with
the exception of the following: Mr. Shepherd failed to file timely one report on
Form 4 relating to the grant of stock options and one report on Form 4 relating
to the sale of shares.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Donald G. Jones and Company, P.A., Certified
Public Accountants with offices in Columbia, South Carolina, to serve as the
Company's independent certified public accountants for 2000. It is expected that
representatives from this firm will be present and available to answer
appropriate questions at the annual meeting, and will have the opportunity to
make a statement if they desire to do so.
8
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other business to be presented at
the meeting of shareholders. If matters other than those described herein should
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote at such meeting in accordance with their best
judgment on such matters.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-KSB
Shareholders may obtain copies of the Company's Annual Report on Form
10-KSB required to be filed with the Securities and Exchange Commission for the
year ended December 31, 1999, free of charge by requesting such form in writing
from Frederick D. Shepherd, Jr., President, Community First Bank, Post Office
Box 1097, Walhalla, South Carolina 29691. Copies may also be downloaded from the
Securities and Exchange Commission website at http://www.sec.gov.
9
<PAGE>
PROXY
COMMUNITY FIRST BANCORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS - TUESDAY, April 18, 2000
James E. Turner or Robert H. Edwards, or either of them, with full
power of substitution, are hereby appointed as agent(s) of the undersigned to
vote as proxies for the undersigned at the Annual Meeting of Shareholders to be
held on April 18, 2000, and at any adjournment thereof, as follows:
1. ELECTION OF [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
DIRECTORS TO below (except any I have to vote for all nominees
HOLD OFFICE written below) below
FOR THREE
YEAR TERMS
Larry S. Bowman, M. D., William M. Brown, John R. Hamrick and Frederick D.
Shepherd, Jr.
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL(S) WRITE THE
NOMINEE'S(S') NAME(S) ON THE LINE BELOW.
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2. And, in the discretion of said agents, upon such other business as may
properly come before the meeting, and matters incidental to the conduct of
the meeting. (Management at present knows of no other business to be
brought before the meeting.)
THE PROXIES WILL BE VOTED AS INSTRUCTED. IF NO CHOICE IS INDICATED WITH RESPECT
TO A MATTER WHERE A CHOICE IS PROVIDED, THIS PROXY WILL BE VOTED "FOR" SUCH
MATTER.
Please sign exactly as name appears below. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title. If more than one
trustee, all should sign. All joint owners must sign.
Dated:_____________, 2000 ________________________________________
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