Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CLOVER COMMUNITY BANKSHARES, INC.
(Exact name of Registrant as specified in its charter)
South Carolina 6711 58-2381062
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code No.) Identification No.)
124 North Main Street
Clover, South Carolina 29710-1024
(803) 222-7660
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JAMES C. HARRIS, JR.
President and Chief Executive Officer
Clover Community Bankshares, Inc.
124 North Main Street
Clover, South Carolina 29710-1024
(803) 222-7660
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
GEORGE S. KING, JR., ESQ.
SUZANNE HULST CLAWSON, ESQ.
1426 Main Street
Columbia, South Carolina 29201
(803) 779-3080
Approximate date of commencement of proposed sale to the public: From time to
time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [x]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum
Title of securities Amount to offering price aggregate Amount of
to be registered be registered per unit (1) offering price(1) registration fee
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (no par value) 50,000 $27.56 $1,378,000.00 $383.08
============================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration
fee based on the purchase price of the shares at January 31, 1998
(four times the book value of the shares at such date).
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PROSPECTUS
CLOVER COMMUNITY BANKSHARES, INC.
124 North Main Street
Clover, South Carolina 29710-1024
(803) 222-7660
DIVIDEND REINVESTMENT PLAN
This Prospectus relates to the 50,000 shares of Common Stock of Clover
Community Bankshares, Inc. (the "Company") registered for sale by the Company
under the Clover Community Bankshares, Inc. Dividend Reinvestment Plan. The
Company recommends that you keep this Prospectus for future reference.
The Plan gives the Company's shareholders a simple and convenient way to
invest cash dividends in additional shares of Common Stock without paying any
brokerage commission or service charge.
The Company administers the Plan and bears all costs of administering
the Plan. The Company will buy Common Stock for the Plan from itself.
The Common Stock is not listed on the NASDAQ or on any securities
exchange.
The Plan will not change the Company's dividend policy. The dividend
policy will continue to depend upon future earnings, financial requirements and
other factors. Shareholders who do not participate in the Plan will receive any
declared dividends by check as usual.
Investment in the Common Stock involves risks. See "RISK FACTORS" --Page
2.
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved
of these securities or passed upon the adequacy or
accuracy of this Prospectus.
Any representation to the contrary is a criminal offense.
The date of this Prospectus is February 4, 1999.
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TABLE OF CONTENTS
Page
RISK FACTORS................................................................. 2
Price of the Shares.................................................. 2
Market for the Shares................................................ 2
Certain Provisions of the Articles of Incorporation.................. 2
Regulatory Restrictions On Dividends................................. 2
Competition.......................................................... 2
Loan Losses; Capital Deficiency...................................... 3
Governmental Regulation of the Financial Services Industry........... 3
Monetary Policy and Other Economic Factors........................... 3
Year 2000 Compliance................................................. 3
THE COMPANY.................................................................. 3
DESCRIPTION OF THE PLAN...................................................... 4
PURPOSE.............................................................. 4
ADVANTAGES........................................................... 4
ADMINISTRATION....................................................... 4
PARTICIPATION........................................................ 4
PURCHASES............................................................ 6
COSTS ............................................................... 7
REPORTS TO PARTICIPANTS.............................................. 7
DIVIDENDS............................................................ 7
CERTIFICATES FOR SHARES.............................................. 7
TERMINATION OF PARTICIPATION OR WITHDRAWAL
OF SHARES FROM THE PLAN............................................. 8
OTHER INFORMATION.................................................... 9
USE OF PROCEEDS.............................................................. 12
LEGAL MATTERS................................................................ 12
EXPERTS ..................................................................... 12
AVAILABLE INFORMATION........................................................ 12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................. 13
INDEMNIFICATION.............................................................. 13
CLOVER COMMUNITY BANKSHARES, INC. DIVIDEND REINVESTMENT PLAN................. 15
AUTHORIZATION FORM........................................................... 21
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RISK FACTORS
Prospective purchasers should consider carefully the following Risk
Factors as well as the other information contained in this Prospectus.
Some of the statements in this section are forward-looking. They include
statements concerning (a) business strategies, (b) competition, and (c)
regulatory matters. Actual results may differ materially from those suggested in
the forward-looking statements for various reasons.
Price of the Shares
The Company has arbitrarily set the price at which the Plan will
purchase shares from the Company. The purchase price will be four times the book
value per share of the Common Stock at the end of the month preceding the
purchase. Such price may be above or below the fair market value of the Common
Stock. Participants in the Plan may not be able to sell shares purchased through
Plan for as much as, or more than, the Plan paid to purchase such shares.
Market for the Shares
The Common Stock is not listed on the NASDAQ or any securities exchange.
There is no market for the Common Stock and no market is expected to develop in
the near future. Shareholders should, therefore, be prepared to hold their
shares of the Common Stock indefinitely.
Certain Provisions of the Articles of Incorporation
The Company's Articles of Incorporation include a provision that permits
the Board of Directors to consider the interests of constituencies in addition
to shareholders, such as employees, customers, suppliers, creditors and others
and interests of the community in making decisions about the best interests of
the Company. To the extent that this provision is effective in discouraging or
preventing take-over attempts, it may tend to reduce the market price for the
Company's Common Stock.
Regulatory Restrictions On Dividends
Because the Company's principal operations are conducted through its
subsidiary, Clover Community Bank (the "Bank"), it generates cash to pay
dividends primarily through dividends paid to it by the Bank. State and federal
law and regulations limit the Bank's ability to pay dividends. Therefore, the
Company's ability to pay dividends on its Common Stock is also subject to and
limited by legal and regulatory restrictions.
Competition
The Bank encounters strong competition from established financial
institutions operating in the Clover, South Carolina area. In addition,
established financial institutions not currently operating in the Bank's market
areas may open branches in the Bank's market areas at future dates. The Bank
also competes for some of its business with savings and loan associations,
credit unions, mortgage banking firms, consumer finance companies, insurance
companies, money market mutual funds and other financial institutions. Some of
these competitors are not subject to the same degree of regulation as the Bank.
Many of these competitors have substantially greater resources and lending
limits than the Bank and offer services, such as extensive and established
branch networks, trust services and international banking services, that the
Bank does not provide.
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The Company believes that the Bank will be able to compete effectively with
these institutions through the use of personalized service, loan participations
and other techniques.
Loan Losses; Capital Deficiency
The Bank lends a substantial portion of its capital and deposits to
individual and commercial borrowers. The Bank's management endeavors to be
prudent in making loans, but some loan losses are unavoidable. Changes in the
national and local economies and other factors are unpredictable and outside the
control of the Bank, and could affect the ability of borrowers to repay their
loans. It is possible that defaults by the Bank's borrowers could be large
enough to impair the ability of the Bank to continue its operations. Loan losses
and other losses might reduce the Bank's capital below the level required by the
Federal Deposit Insurance Corporation, which could result in the Bank being
placed in receivership by the Federal Deposit Insurance Corporation and in a
partial or complete loss of the Company's equity in the Bank.
Governmental Regulation of the Financial Services Industry
In the recent past, legislation has been enacted that could dramatically
affect both the costs of doing business and the competitive factors that face
the financial institutions industry. Additional legislation is constantly being
considered by Congress. The Company cannot presently predict the impact that
future legislation might have on its financial condition or operations.
Monetary Policy and Other Economic Factors
Changes in governmental economic and monetary policy may affect the
ability of the Bank to attract deposits and make loans. The rates of interest
payable on deposits and chargeable on loans are affected by governmental
regulation and fiscal policy as well as by national, state, and local economic
conditions. Furthermore, because the Bank will operate in a limited geographic
area for the foreseeable future, the Company's ability to operate profitably
will depend significantly upon the economy of the Clover market area.
Year 2000 Compliance
The business of the Company and the Bank is heavily dependent upon
computers. Failure of their computer systems, or the computer systems of other
entities to which their computers are linked or on which they are dependent, to
operate properly after December 31, 1999, could have a material adverse effect
on the Company and the Bank. The Company has prepared a plan for addressing year
2000 issues. The Company believes that its computer systems will not experience
any significant problems with the changeover to the year 2000, but it has not
yet completed testing of its systems for year 2000 compliance.
The Company has not received confirmation from all of the other entities
with which its systems are linked or upon which its systems are dependent that
such entities do not expect to encounter problems. Computer problems experienced
by customers of the Bank and others could cause economic disruptions that would
affect the business of the Company and the Bank. Therefore, it is possible that
the Company may experience year 2000 problems, and that such problems, if
experienced, will have a material adverse effect on the Company.
THE COMPANY
The Company is a bank holding company incorporated in South Carolina in
March, 1998, and registered under the federal Bank Holding Company Act. The
Company was organized for the purpose of becoming the holding company for Clover
Community Bank. Clover Community Bank was organized in 1987, and currently
operates from one office in Clover, South Carolina. The Bank presently accounts
for substantially all of the consolidated assets, revenues and operations of the
Company. The Bank is a full service commercial bank that offers individual and
commercial banking services.
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DESCRIPTION OF THE PLAN
The following is a summary, in question and answer format, of the
provisions of the Clover Community Bankshares, Inc. Dividend Reinvestment Plan
(the "Plan"). This summary is qualified by reference to the Plan, which is
attached to this Prospectus as Appendix I. You should read this entire
Prospectus and the Plan carefully before you decide whether to participate in
the Plan.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of the Company's Common
Stock a convenient means of increasing their investment in the Company through
automatic reinvestment of any cash dividends in additional shares of Common
Stock. Because shares are purchased for the Plan directly from the Company, the
Plan also provides the Company with an additional source of equity funds.
ADVANTAGES
2. What are the advantages of the Plan?
o Participants in the Plan do not pay any commissions or service
charges for purchases under the Plan.
o The Plan permits fractions of shares, as well as full shares, to
be credited to participants' accounts.
o Dividends with respect to such fractions, as well as full shares,
are credited to participants' accounts.
o Regular statements of account provide each participant with a
record of each transaction.
ADMINISTRATION
3. Who administers the Plan for participants?
The Company administers the Plan for participants, sells Common Stock to
the Plan using cash dividends paid on enrolled shares, maintains records, sends
statements of account to participants and performs other duties relating to the
Plan. The Company also holds the Common Stock purchased under the Plan for the
benefit of the participants.
PARTICIPATION
4. Who is eligible to participate?
All record holders of Common Stock who are residents of South Carolina
are eligible to participate in the Plan. Shareholders may enroll a portion of or
all of the shares of Common Stock they own of record in the Plan. If a
shareholder who resides in a state other than South Carolina wishes to
participate in the Plan, then he or she should contact Gwen M. Thompson, Vice
President, Clover Community Bankshares, Inc., 124 North Main Street, Clover,
South Carolina 29710-1024, telephone (803) 222-7660. The Company may decide to
qualify the Plan under the laws of the state where such shareholder resides if
qualification would not result in undue burden or expense. Management of the
Company has the sole right to decide whether to qualify the Plan in other
states. There can be no assurance that the Plan can or will be qualified in any
given state.
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Shareholders whose shares are held of record in names other than their
own, such as in the names of brokers, bank nominees or trustees, should either
arrange for the holder of record to join the Plan or have the shares transferred
into their own names in order to participate in the Plan. The Company reserves
the right to deny participation in the Plan to any person if, in the sole
judgment of the Company, the cost of complying with laws and rules to permit the
person to participate would be unduly burdensome.
5. How does an eligible shareholder participate?
To participate in the Plan, a shareholder of record must complete an
Authorization Form and return it to the Company. The Company will provide
Authorization Forms to shareholders from time to time, but forms may be obtained
at any time by written request to Gwen M. Thompson, Vice President, Clover
Community Bankshares, Inc., 124 North Main Street, Clover, South Carolina
29710-1024, or by telephone request to Ms.
Thompson at (803) 222-7660.
Shareholders who do not wish to participate in the Plan will receive cash
dividends, if and as declared, by check.
6. When may an eligible shareholder join the Plan?
A shareholder of record may join the Plan at any time. In all years after
1999, if the Authorization Form is received by the Company before the record
date for a dividend payment, then reinvestment of cash dividends will begin with
that dividend payment. If the Authorization Form is received after that date,
then the reinvestment of cash dividends through the Plan will begin with the
next cash dividend.
In 1999, the first year during which the Plan will be in effect, if the
Authorization Form is received by the Company no later than March 1, 1999, then
reinvestment of cash dividends will begin with the 1999 dividend payment. If the
Authorization Form is received after that date, then reinvestment of dividends
will begin with the next cash dividend.
7. What does the Authorization Form provide?
The Authorization Form:
o Allows the shareholder to indicate the number of shares the
shareholder desires to enroll in the Plan;
o Directs the Company to pay to the Plan for the account of the
participating shareholder all cash dividends on all shares enrolled in
the Plan as well as on the shares credited to the shareholder's
account under the Plan;
o Appoints the Company as agent for the shareholder; and
o Directs the agent to apply such cash dividends to the purchase of
additional shares of Common Stock in accordance with the terms and
conditions of the Plan.
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The Authorization Form is attached to this Prospectus as Appendix II.
8. Do shares purchased or otherwise acquired outside the Plan by a
participant automatically participate in the Plan?
No. Shares acquired by a participant after the participant's initial
enrollment in the Plan may only be enrolled in the Plan by completing an
Authorization Form for those shares.
9. May a participant change the amount of participation after enrollment?
Yes. A participant may reduce the number of shares enrolled in the Plan
by giving the Company written notice of the reduction. The Company must receive
the notification no later than five days before a particular dividend record
date in order to stop the full reinvestment of that dividend. (See number 18
below). A participant may increase the number of shares enrolled in the Plan by
completing an Authorization Form with respect to the additional shares. The
Company must receive the Authorization Form before a record date for enrollment
of the additional shares to be effective as of such record date. (See 6 above.)
PURCHASES
10. When are purchases of Common Stock made for the Plan?
Purchases under the Plan are made within 30 days after a cash dividend
payment date. No interest will be paid pending reinvestment. Participants will
become owners of shares purchased under the Plan as of the date the shares are
purchased.
11. What is the purchase price per share of Common Stock purchased under the
Plan?
Because there is no established market for the Company's Common Stock,
there is presently no readily ascertainable market value for the Common Stock.
Therefore, the price per share at which the shares of the Company's Common Stock
will be purchased has been arbitrarily set by the Board of Directors at an
amount equal to four times the book value of the Company's stock as of the end
of the last month preceding the anticipated sale. (Book Value of the Company's
Common Stock for purposes of determining the Plan purchase price will be
calculated by dividing the total of all equity accounts by the total shares of
Common Stock outstanding ("Book Value").) This price may be higher or lower than
the price for which the Common Stock could be sold.
The Company is not, in any event, obligated to sell shares of its Common
Stock to the Plan if the Board of Directors of the Company determines that it
would not be in the best interest of the Company to do so.
12. How many shares of Common Stock will be purchased for participants?
The number of shares to be purchased depends on the amount of dividends
paid with respect to a participant's enrolled shares, and the Book Value of the
Common Stock. A participant's account will be credited with that number of
shares, including fractions, determined by dividing the purchase price per share
into the total amount of dividends received on the participant's enrolled shares
and shares already credited to the participant's account.
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COSTS
13. Do participants pay any expenses in connection with purchases of Common
Stock from the Company under the Plan?
No. All costs of administration of the Plan are paid by the Company.
REPORTS TO PARTICIPANTS
14. What kind of accounts are maintained for participants and what reports on
those accounts do they receive?
The Company maintains a separate account for each participant. All shares
purchased for a participant under the Plan will be credited to the participant's
account.
After each purchase of shares for the Plan, the Company will mail to the
participant a statement of account. These statements are a participant's
continuing record of the cost of purchases and should be retained for tax
purposes. In addition, participants will continue to receive copies of
communications sent to stockholders, including the Company's annual and
quarterly reports to stockholders, proxy statements and reports of taxable
income required by the Internal Revenue Service. (See Number 26 below).
DIVIDENDS
15. Are participants credited with dividends on shares held in their accounts
under the Plan?
Yes. A participant's account is credited with dividends on full and
fractional shares held in his Plan account. The Company reinvests the dividends
in additional shares of Common Stock.
CERTIFICATES FOR SHARES
16. Are stock certificates issued for shares of Common Stock purchased?
Until requested by a participant, certificates for shares of Common Stock
purchased under the Plan will not be issued. The Company or its nominee will
hold all shares purchased for the benefit of Plan participants. The number of
shares purchased for each participant's account under the Plan will be shown on
a statement of account. This feature protects against loss, theft or destruction
of stock certificates.
Certificates for any number of full shares credited to a participant's
account under the Plan will be issued without charge upon the participant's
written request. No certificates will be delivered for fractional shares. A
participant may also make a blanket request that certificates for all full
shares be issued to him at regular intervals. The Company reserves the right to
suspend the policy of delivering certificates upon blanket instructions if such
policy leads to a proliferation of certificates and becomes unduly burdensome.
Unless withdrawn from participation in the Plan in accordance with number
19 below, shares in a participant's account with the Company for which
certificates are issued to the Participant will continue to be enrolled in the
Plan.
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The shares held by the Company for the account of a participant under the
Plan may not be pledged as collateral security for a loan or other obligation of
a participant. A participant who wishes to pledge such shares must request that
certificates for such shares be issued in the participant's name.
Certificates representing fractional interests will not be issued under
any circumstances.
17. In whose name are accounts maintained and certificates registered when
issued?
Accounts under the Plan are maintained in the names in which the
certificates of participants were registered at the time they entered the Plan.
Certificates for whole shares are similarly registered when issued.
Upon written request, certificates also can be registered and issued in
names other than the account name subject to compliance with any applicable laws
and the payment by the participant of any applicable taxes. Any such request
must meet the usual requirements of the Company for the recognition of a
transfer of Common Stock of the Company.
TERMINATION OF PARTICIPATION OR WITHDRAWAL OF SHARES FROM THE PLAN
18. When may a participant discontinue participation with respect to some or
all of his or her enrolled shares in the Plan?
The Plan is entirely voluntary and a participant may discontinue his
participation with respect to some or all of his or her enrolled shares at any
time by giving written notification to the Company.
If the Company receives a participant's request to discontinue his
participation at least five days prior to the record date for a dividend,
reinvestment of such participant's dividends will be terminated beginning with
such dividend and such dividend and all subsequent dividends will be paid to him
in cash. If the Company receives the discontinuance request less than five days
prior to the record date for a dividend, such dividend will be invested for the
participant's account under the Plan and the discontinuance will be effected
thereafter.
19. How may a participant withdraw shares purchased through the Plan?
A participant may withdraw all or a portion of the shares held in his
Plan account by notifying the Company in writing. The notice must specify the
number of shares to be withdrawn. The notice should be mailed to:
Ms. Gwen M. Thompson
Vice President
Clover Community Bankshares, Inc.
124 North Main Street
Clover, South Carolina 29710-1024
Certificates for whole shares of Common Stock withdrawn will be
registered in the name of and issued to the Participant. In no case will
certificates representing fractional interests be issued. If the Company
receives any notice of withdrawal less than five days prior to a dividend record
date, then the withdrawal will not be effective until dividends paid for such
record date have been reinvested in Common Stock.
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20. What happens to any fractional interest when a participant withdraws all
shares from the Plan?
A participant will receive cash in an amount equal to the last per share
purchase price of Common Stock purchased for the Plan prior to the effective
date of the withdrawal multiplied by the fractional interest. The Company will
mail cash for any fractional interest together with certificates for whole
shares directly to the withdrawing participant.
21. How may a participant transfer shares held in his account under the Plan?
A participant who wishes to transfer shares held in his account under the
Plan must first withdraw those shares from the Plan (following the procedure set
out in number 19 above). When the participant receives the certificates for such
shares, he or she may transfer them as any other securities.
Shares credited to the account of a participant may not be assigned or
pledged. If a participant desires to assign or pledge the full shares credited
to the participant's account, the participant must deliver to the Company a
request for the shares to be issued in the participant's name as discussed
above.
22. May a participant terminate the reinvestment of dividends on shares
registered in his name and still remain in the Plan?
Yes. A participant who terminates the reinvestment of dividends paid on
shares registered in his name may leave shares purchased by the Company for his
account in his Plan account. Dividends paid on the shares left in the Plan
continue to be automatically reinvested for such participant's account.
23. What happens to a Participant's Shares in the Plan in the Event of Death
or Legal Incompetency?
When the Company receives notice of death or adjudication of incompetency
of a participant, the Company will not make any further purchases of shares of
Common Stock for the account of such participant. The shares and any cash held
by the Plan for the participant will be delivered to the appropriate designated
person upon receipt of evidence satisfactory to the Company of the appointment
of a legal representative and instructions from such representative regarding
delivery.
OTHER INFORMATION
24. What happens when a participant sells or transfers the shares enrolled in
the Plan?
When the Company receives written notice that shares of Common Stock
enrolled in the Plan have been transferred of record, the Company will treat
such transfer as discontinuation of participation in the Plan with respect to
the shares transferred. However, the Company will continue to reinvest the
dividends on the shares credited to the prior record holder's account under the
Plan until such holder withdraws those shares from the Plan.
25. What happens if the Company issues a stock dividend or declares a stock
split?
Any shares of Common Stock distributed to shareholders by way of stock
dividends, stock splits, combinations, recapitalizations and similar events with
respect to enrolled shares will be distributed to the participants. Such
distributed shares will only participate in the Plan if they are enrolled on a
new Authorization Form. (See numbers 5, 6 and 8 above). Any Common Stock
distributed with respect to shares held by the Company in Plan accounts will be
retained in the Plan accounts unless withdrawn by the participant. Other
non-cash property distributions and non-cash dividends with respect to both
enrolled shares and shares held by the Company in Plan accounts will be
distributed to participants.
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26. How are a participant's shares held under the Plan voted at meetings of
stockholders?
All shares of Common Stock credited to a participant's account under the
Plan will be voted as the participant directs. If on the record date for a
meeting of shareholders there are shares credited to the participant's account
under the Plan, the Company will send the participant the proxy material for
such meeting. The Company may elect not to forward proxy solicitation materials
to any participant whom the Company reasonably believes has received such
materials from another source, provided that the Company informs such
participant that such materials will be promptly furnished upon request.
When the participant returns an executed proxy in a timely fashion, it
will be voted in accordance with the instructions therein with respect to all
shares credited to the participant. The Company will tally all instructions
regarding fractional shares. If the aggregate fractional votes are greater than
one or more whole shares, then the Company will vote that number of whole shares
in accordance with the instructions. Any remaining fractional shares will not be
voted.
27. What are the federal income tax consequences of participation in the
Plan?
(a) Dividend reinvestment aspect of Plan.
Even though a participant in the Plan will not receive cash dividends on
shares enrolled in the Plan, such participant will nonetheless be deemed to
receive a taxable distribution as a result of the Company's purchase of shares
for that participant's account with reinvested dividends. The amount of that
distribution will equal the fair market value (on the dividend payment date) of
the shares purchased for that participant's account. The Company believes that
the fair market value of the stock is approximately equal to the amount of the
cash dividend that the participant would otherwise receive. As with most cash
distributions to a shareholder, assuming that the Company has sufficient
accumulated or current earnings and profits, the entire amount of this
distribution will be treated as a taxable dividend to the participant.
The basis of shares purchased with reinvested dividends equals the fair
market value (on the dividend payment date) of the shares credited to the
participant's account.
The holding period (for purposes of determining whether gain on sale of
stock is long-term or short-term) for shares that are acquired with reinvested
dividends begins on the day following the dividend payment date.
(b) Receipt of certificate and cash payment for fractional shares.
A participant will not recognize any gain or loss upon the receipt of a
certificate for shares credited to the participant's account, either upon the
participant's request for a certificate for some of those shares or upon the
participant's withdrawal from the Plan or upon the Company's termination of the
Plan.
The receipt by a shareholder of cash from the Company in lieu of the
issuance of fractional share interests will be a taxable event for the
shareholder. Depending upon factors particular to the individual shareholder,
such payment could be treated as (a) a payment in exchange for the fractional
share interest or (b) a taxable cash dividend. If the payment is treated as a
payment in exchange for the fractional share interest, then the shareholder may
deduct his basis in that fractional share interest from the amount of the
payment and treat the net gain (or loss) as capital gain (or loss). Because the
Company will make such cash distributions solely for the purpose of saving the
Company the expense and inconvenience of issuing and transferring fractional
shares and because such payment is not separately bargained-for consideration,
the Company believes that a cash payment for a fractional share interest will be
treated as a payments in exchange for the fractional share interests, but no
assurance of such position can be obtained without a ruling from the Internal
Revenue Service. The Company has not attempted to obtain such a ruling.
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(c) Payment of Plan expenses.
The payment of the expenses associated with the Plan by the Company will
not be treated as an income item or a deduction item for the Plan participants.
(d) Other matters.
For a Plan participant who has not provided the Company with a proper tax
identification number or who falls within certain other categories, federal
income taxes equal to 20% of the dividends paid with respect to shares enrolled
in the Plan for such participant's account will be withheld by the Company.
Accordingly, the amount applied to the purchase of shares of common stock for
such a participant's account will be reduced by the amount of taxes withheld.
Therefore, any participant who has not provided a tax identification number to
the Company should do so immediately.
A participant should consult his tax advisor to determine the particular
tax consequences that may result from participation in the Plan and the
subsequent disposal of shares purchased pursuant to the Plan.
28. What are the liabilities of the Company under the Plan?
The Company in administering the Plan will not be liable for any act done
in good faith or for the good faith omission to act, including, without
limitation, any claim of liability arising out of failure to terminate a
participant's account upon such participant's death prior to receipt of notice
of such death in writing from an authorized representative, or with respect to
the prices at which shares are purchased for the participant's account and the
times when such purchases are made, or with respect to any loss or fluctuation
in the market value after purchase of shares.
29. Who bears the risk of market price fluctuations in the Common Stock?
A participant's investment in shares acquired under the Plan is no
different from an investment in directly held shares in this regard. The
participant bears the risk of loss and realizes the benefits of any gain from
market price changes with respect to all such shares held by him in the Plan or
otherwise.
30. May the Plan be changed or discontinued?
Yes. The Plan may be amended, suspended, modified or terminated at any
time without the approval of the participants. Notice of any such suspension or
termination or material amendment or modification will be sent to all
participants, who have the right to withdraw from the Plan at any time. Any
question of interpretation arising under the Plan will be determined by the
Company. Any such interpretation will be final.
The Company intends to use its best efforts to maintain the
effectiveness of a registration statement filed with the Securities and Exchange
Commission covering the offer and sale of shares of Common Stock under the Plan.
However, the Company has no obligation to offer, issue or sell shares of its
Common Stock to participants under the Plan if, at the time of the offer,
issuance or sale, such a registration statement is for any reason not effective.
Also, the Company may elect not to offer or sell its Common Stock under the Plan
to participants residing in any jurisdiction or foreign country where, in the
judgment of the Company, the burden or expense of compliance with applicable
blue sky or securities laws makes such offer or sale there impracticable or
inadvisable. In any of these circumstances, dividends will be paid by check in
the usual manner directly to the stockholder.
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USE OF PROCEEDS
The Company has no basis for estimating either the number of shares of
Common Stock that will ultimately be purchased from it pursuant to the Plan or
the prices at which such shares will be purchased. The proceeds from any such
purchases will be used for general corporate purposes. The principal reason for
the Plan is to permit shareholders to increase their ownership interest in the
Company while permitting the Company to increase its capital.
LEGAL MATTERS
The legality of the shares of Common Stock to be offered pursuant to the
Plan has been passed upon for the Company by Sinkler & Boyd, P.A., Columbia,
South Carolina.
EXPERTS
The financial statements of the Company as of December 31, 1997 and 1996,
and for the years ended December 31, 1997 and 1996, that are included in the
Company's Annual Report on Form F-2 for the year ended December 31, 1997 and
that are incorporated by reference in this Prospectus, have been audited by
Donald G. Jones and Company, P.A., independent certified public accountants,
whose report on the financial statements is also incorporated by reference in
this Prospectus. Such financial statements are incorporated by reference in
reliance upon the report of such independent accountants, given upon the
authority of such firm as experts in accounting and auditing.
AVAILABLE INFORMATION
The Company files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's New York Regional Office, 7
World Trade Center, Suite 1300, New York, New York 10048, and Chicago Regional
Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can be obtained from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission also maintains an Internet site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission at http://www.sec.gov.
The Company has filed a Registration Statement with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
shares of Common Stock offered by this Prospectus. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto, certain portions of which have been omitted pursuant to the
rules and regulations of the Commission. The Registration Statement may be
inspected and copied, at prescribed rates, at the public reference facilities
maintained by the Commission at the principal or regional offices of the
Commission at the addresses listed above.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents were previously filed by the Company's
predecessor, Clover Community Bank, with the Federal Deposit Insurance
Corporation. These documents appear as Exhibits to, and are incorporated by
reference into, a Current Report on Form 8-K filed by the Company with the
Commission on February 4, 1999, and are also incorporated in this Prospectus
by reference:
(a) Annual Report on Form F-2 for the year ended December 31, 1997; and
(b) Quarterly Report on Form 10-QSB for the quarter ended March 31, 1998.
The following documents previously filed by the Company with the
Commission are incorporated in this Prospectus by reference:
(a) Quarterly Reports on Form 10-QSB for the quarters ended June 30, 1998
and September 30, 1998; and
(b) Description of the Company's Common Stock in Registration Statement
on Form 8-A, and any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior to the
termination of this Offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference will be deemed to be modified or
superseded for the purpose of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is, or
is deemed to be, incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference that are not
contained in or delivered with this Prospectus. The Company will provide without
charge to each person, including any beneficial owner, to whom this Prospectus
has been delivered, upon the written or oral request of such person, a copy of
any or all of the documents referred to above which have been or may be
incorporated into this Prospectus and deemed to be part hereof (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference). Written requests should be directed to Ms. Gwen M. Thompson, Vice
President, Clover Community Bankshares, Inc., 124 North Main Street, Clover,
South Carolina 29710-1024. Telephone requests may be directed to Ms. Thompson at
(803) 222-7660.
INDEMNIFICATION
Under South Carolina law, a corporation has the power to indemnify
directors and officers who meet the standards of good faith and reasonable
belief that their conduct was lawful and in the corporate interest (or not
opposed thereto) set forth by statute. A corporation may also provide insurance
for directors and officers against liability arising out of their positions even
though the insurance coverage is broader than the power of the corporation to
indemnify. Unless limited by its articles of incorporation, a corporation must
indemnify a director or officer who is wholly successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party because he
is or was a director against reasonable expenses incurred by him in connection
with the proceeding. The Company's articles of incorporation do not limit such
indemnification.
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Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
Prospective investors may rely only on the information contained in this
Prospectus. Neither Clover Community Bankshares, Inc. nor any other person has
authorized anyone to provide prospective investors with information different
from that contained in this Prospectus. This Prospectus is not an offer to sell
nor is it seeking an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted. The information contained in this Prospectus is
correct only as of the date of this Prospectus, regardless of the time of the
delivery of this Prospectus or any sale of these securities.
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APPENDIX I
CLOVER COMMUNITY BANKSHARES, INC.
DIVIDEND REINVESTMENT PLAN
Clover Community Bankshares, Inc., a South Carolina corporation (the
"Company"), hereby establishes the following Dividend Reinvestment Plan (the
"Plan"):
RECITAL
The purpose of the Plan is to provide holders of the Common Stock, $.01
par value ("Common Stock"), of the Company a convenient means of increasing
their investment in the Company through regular reinvestment of cash dividends
in additional shares of Common Stock.
ARTICLE 1
Definitions
The terms defined in this Article 1 shall, for all purposes of this Plan,
have the following respective meanings:
Account. The term "Account" shall mean, with respect to any Participant,
the account maintained by the Administrator of the Plan reflecting the shares of
Common Stock and cash held from time to time for such Participant by the
Administrator.
Administrator. The term "Administrator" shall mean the Company, or such
other successor as may be designated from time to time by the Company.
Covered Shares. The term "Covered Shares" shall mean such shares of
Common Stock as are held of record by a Participant and are enrolled in the
Plan.
Dividend. The term "Dividend" shall mean a dividend, to the extent paid
in cash, on shares of Common Stock.
Dividend Payment Date. The term "Dividend Payment Date" shall mean a date
on which a Dividend is paid.
Dividend Record Date. The term "Dividend Record Date" shall mean a date
fixed by the Board of Directors of the Company or by law for determining
shareholders entitled to receive a Dividend.
Fractional Share Account. The term "Fractional Share Account" shall mean
such shares of Common Stock, fractions thereof and cash as may from time to time
be held by the Administrator as agent for the Company and administered pursuant
to Section 5.3 hereof.
Investment Date. The term "Investment Date" shall mean the date on which
the Administrator purchases any Plan Shares, which date shall in no event be
later than thirty days after a Dividend Payment Date.
Participant. The term "Participant" shall have the meaning set forth in
Section 2.1 hereof.
Plan Purchase Price. The term "Plan Purchase Price" shall mean the price
at which shares are purchased for the Plan by the Administrator as calculated
pursuant to Section 3.2 below.
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Plan Shares. The term "Plan Shares" shall mean shares of Common Stock
purchased by the Administrator pursuant to the terms of the Plan and held for
the benefit of Participants by the Administrator.
ARTICLE 2
Participation
SECTION 2.1. Election to Participate. Any holder of record of Common
Stock may elect to participate in the Plan; provided, however, that the Company
may exclude a holder from participation if, in the sole judgment of the Company,
the cost of complying with laws or regulations necessary to permit such
participation would be unduly burdensome to the Company. A stockholder who
wishes to participate in the Plan may enroll all or only a portion of the shares
of Common Stock owned of record by such stockholder. Beneficial owners of Common
Stock whose shares are held for them in registered names other than their own,
such as in the names of brokers, bank nominees or trustees, must, if they wish
to participate in the Plan, either arrange for the holder of record to join the
Plan or have the shares they wish to enroll for participation in the Plan
transferred to their own names.
An election to participate shall be made by completing and returning to
the Administrator such documentation as the Company or the Administrator may
from time to time require, prior to or at such time as the Company or the
Administrator may from time to time require. A stockholder who has made and not
revoked such election is herein referred to as a "Participant."
SECTION 2.2. Automatic Dividend Reinvestment. Dividends paid on all
Covered Shares owned by a Participant and on all Plan Shares held by the
Administrator shall be reinvested, as and when paid, in additional shares
(and/or fractional shares) of Common Stock to be credited to the Accounts of
Participants.
ARTICLE 3
Purchase of Shares
SECTION 3.1. Investment. On each Investment Date, the Administrator
shall, for the Account of each Participant, purchase shares (and/or fractions of
shares) of Common Stock equal in number to the quotient of: (a) the sum of all
Dividends paid on such Dividend Payment Date on all Covered Shares held by such
Participant plus all Dividends paid on such Dividend Payment Date on all Plan
Shares held for such Participant (and/or fractions thereof), divided by (b) the
Plan Purchase Price. The shares shall be issued to and registered in the name of
the Administrator or its nominee, as agent for the Participant.
SECTION 3.2. Purchase of Shares. Dividends credited to a Participant's
Account will be commingled with the Dividends credited to all Accounts under the
Plan and will be applied to the purchase of shares of Common Stock of the
Company. The Purchase Price at which the Plan Administrator shall acquire the
shares shall be equal to four times the book value per share of the Company's
Common Stock as of the end of the month preceding the proposed purchase ("Book
Value"). (Book Value per share shall be calculated by dividing the total equity
accounts of the Company by the total outstanding shares of the Company's Common
Stock). Notwithstanding the foregoing, the Company shall have no obligation to
sell shares of Common Stock to the Administrator if the Board of Directors of
the Company determines that it would not be in the best interest of the Company
to do so.
If an insufficient number of shares is available to meet the entire
reinvestment demand at an Investment Date, shares shall be purchased first on a
pro rata basis from reinvestment of cash dividends. If no shares or an
insufficient number of shares to meet demand are available for purchase under
the terms of this Plan, the uninvested Dividends will be distributed to
Participants no later than 30 days after the Dividend Payment Date.
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SECTION 3.3. Exhaustion of Fractional Share Account. Prior to making a
purchase of shares on an Investment Date pursuant to Section 3.1 and 3.2 hereof,
the Administrator shall first purchase, on such date and at the Plan Purchase
Price determined as of such date, from the Fractional Share Account such number
of whole shares, if any, as may be held in such account. To the extent made,
such purchases from the Fractional Share Account shall substitute for purchases
required by Section 3.1 and 3.2 hereof.
ARTICLE 4
Treatment of Accounts
SECTION 4.1. Revocation of Election. A Participant may at any time revoke
an election to participate in the Plan made pursuant to Article 2 hereof, by
notifying the Administrator in writing. Such revocation may be made with respect
to all or only a portion of the Covered Shares. Any such notice to the
Administrator received less than five days prior to a Dividend Record Date will
not become effective until dividends paid on the Dividend Payment Date have been
invested. Upon revocation of an election to participate in the Plan with respect
to all or a portion of a Participant's Covered Shares, the Administrator will
continue to reinvest the Dividends paid on Plan Shares held for the former
Participant's Account unless such Plan Shares are withdrawn from the Plan
pursuant to Section 4.2 hereof.
SECTION 4.2. Right of Withdrawal. Any Participant may at any time or from
time to time withdraw from the Plan all or a portion (other than fractions) of
the shares of Common Stock credited to his Account, by written instruction to
that effect to the Administrator. Any such notice of withdrawal received by the
Plan Administrator less than five days prior to a Dividend Record Date will not
become effective until dividends paid on the Dividend Payment Date have been
invested. Upon such a withdrawal of shares from the Plan by a Participant, the
Administrator shall promptly request the Company to deliver to the Administrator
certificates representing whole shares of Common Stock requested by such
Participant. The Administrator shall, upon receipt of such certificates,
promptly cause to be delivered to such Participant (a) such certificates and (b)
a cash payment for any fraction of a share credited to the Account of such
Participant. Such fraction of a share, if any, shall be valued at an amount
equal to the last Plan Purchase Price of the Common Stock purchased for the Plan
by the Administrator prior to receipt by the Administrator of written notice of
the Participant's withdrawal from the Plan.
SECTION 4.3. Non-Cash Distributions With Respect to Common Stock. Shares
of Common Stock distributed to shareholders by way of stock dividends, stock
splits, combinations, recapitalizations and similar events affecting the Common
Stock ("Distribution Shares") distributed with respect to Covered Shares shall
be distributed to the holders thereof. Such Distribution Shares will not become
Covered Shares unless specifically enrolled in the Plan. Distribution Shares
which are whole shares distributed with respect to Plan Shares shall be retained
in Participants' accounts and treated as Plan Shares unless withdrawn pursuant
to Section 4.2 hereof. Distribution Shares which are fractional shares
distributed with respect to Plan Shares shall be credited to Participants'
Accounts on a pro rata basis. Other non-cash property and non-cash dividends
(other than Common Stock) distributed with respect to either Covered Shares or
Plan Shares shall be distributed to Participants.
SECTION 4.4. Voting Rights and Proxy Materials. Participants shall have
the right to direct all voting rights respecting Plan Shares credited to their
respective Accounts. The Administrator shall promptly forward any proxy
soliciting materials to the Participants together with appropriate forms and
instructions to permit each Participant to direct the voting of the shares of
Common Stock credited to his Account or to obtain a proxy for the whole shares
of Common Stock credited to his Account. The Administrator may elect not to
forward proxy solicitation materials to any Participant whom the Administrator
reasonably believes has received such materials from another source, provided
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that the Administrator informs such Participant that such materials will be
promptly furnished upon request. The Administrator shall vote the Plan Shares in
accordance with the instructions received from Participants. The Administrator
shall tally all instructions regarding fractional shares and where the aggregate
fractional votes are greater than one or more whole shares, the Administrator
shall vote that number of whole shares in accordance with the instructions but
any remaining fractional shares shall not be voted. Notwithstanding the
foregoing, the Administrator, in the absence of instructions from Participants,
may vote or give a proxy respecting Plan Shares to the extent, but only to the
extent, permitted by applicable law and the rules and regulations of any stock
exchanges on which the Common Stock is then listed.
SECTION 4.5. Notices. The Participant shall notify the Administrator
promptly in writing of any change in address. Notices or statements from the
Administrator to the Participant may be given or made by letter addressed to the
Participant at his or her last address of record with the Administrator, and any
such notice or statement shall be deemed given or made when received by the
Participant or five days after mailing whichever occurs first.
SECTION 4.6. Sale, Pledge, Hypothecation, Assignment or Transfer of Plan
Shares. The Participant shall not sell, pledge, hypothecate, assign or transfer
any Plan Shares held for his account in the Plan unless such Plan Shares are
first withdrawn from the Participant's Account in the Plan, nor shall the
Participant have any right to draw checks or drafts against his Plan account.
The Administrator has no obligation to follow any instructions of the
Participant with respect to the Plan Shares or any cash held in his Account
except as expressly provided under the terms and provisions of this Plan.
SECTION 4.7. Transfer of Covered Shares. Upon receipt of written notice
to the Administrator that Covered Shares have been transferred of record by the
holder thereof, the Administrator will treat such record transfer as revocation
pursuant to Section 4.1 hereof of the election to participate in the Plan with
respect to the Covered Shares transferred. Plan Shares held by the Administrator
for the benefit of the former recordholder will continue to be credited to such
former record holder's Plan Account unless withdrawn from the Plan pursuant to
Section 4.2 hereof.
ARTICLE 5
Certificates and Fractions of Shares
SECTION 5.1. Certificates. The Administrator may hold the Plan Shares of
all Participants together in its name or in the name of its nominee. No
certificates will be delivered to a Participant for Plan Shares except (i) upon
written request, (ii) upon withdrawal of Plan Shares from the Account, or (iii)
upon termination of the Account. A Participant may request issuance of
certificates for any full shares credited to his Account at any time. A
Participant may also make a blanket request that all certificates for full
shares be delivered to him at regular intervals, although the Administrator
reserves the right to suspend the policy of delivering certificates upon blanket
instructions if such policy leads to a proliferation of certificates and becomes
unduly burdensome. No certificates will be delivered for fractional shares.
Unless withdrawn from participation in the Plan in accordance with the
requirements for withdrawal set forth elsewhere herein, Plan Shares as to which
certificates are issued to a Participant will become Covered Shares, but will no
longer be Plan Shares.
Accounts under the Plan will be maintained in the name in which the
Participant's certificates are registered when the Participant enrolls in the
Plan, and certificates for full shares will be similarly registered when issued
to the Participants. Certificates will be issued and registered in names other
than the account name, subject to compliance with applicable laws and payment by
the Participant of any applicable fees and taxes, provided that the Participant
makes a written request therefor in accordance with the usual requirements of
the Company for the registration of a transfer of the Common Stock of the
Company.
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SECTION 5.2. Fractions of Shares. Fractions of shares of Common Stock
shall be credited to Accounts as provided in Article 3 hereof; provided,
however, that no fraction of a share shall be distributed to any Participant
upon withdrawal of Plan Shares from the Plan; and provided, further, that the
Administrator shall purchase only whole shares of Common Stock hereunder.
SECTION 5.3. Fractional Share Account. Concurrently, with the initial
purchase to be made by the Administrator pursuant to this Plan, and as needed
thereafter, the Company shall contribute to the Administrator, as agent for the
Company, an amount of money equal to the Plan Purchase Price of one share of
Common Stock. The Administrator shall immediately upon receipt thereof use such
money to purchase from the Company one share of Common Stock to be held in the
Fractional Share Account. In the event that the aggregate number of shares of
Common Stock to be purchased by the Administrator on an Investment Date is a
whole number plus a fraction, such fraction shall be purchased by the
Administrator from the Fractional Share Account at the Plan Purchase Price on
such date. In the event that, upon withdrawal of all Plan Shares from the Plan,
the Account of a Participant is credited with a fraction of a share of Common
Stock, such fraction shall be sold to the Fractional Share Account as provided
in Section 3.3. The Company shall from time to time lend to the Administrator
such amounts of money as may be necessary to fund such sales to the Fractional
Share Account; provided, however, that the Company may at any time or from time
to time direct the Administrator to distribute, and thereupon the Administrator
shall distribute, to the Company such portion of the cash held in the Fractional
Share Account as the Company may, in its discretion, deem to be in excess of the
amount needed to fund the operations of the Fractional Share Account.
ARTICLE 6
Concerning the Plan
SECTION 6.1. Suspension, Modification and Termination. The Company may at
any time, at its sole option, suspend, modify or terminate the Plan. Written
notice of any such suspension, modification or termination shall be given to all
Participants. Upon complete termination of the Plan, the Accounts of all
Participants shall be treated as if each Participant had elected to withdraw
entirely from the Plan.
SECTION 6.2. Rules and Regulations. The Company may from time to time
adopt such administrative rules and regulations concerning the Plan as it deems
necessary or desirable for the administration of the Plan.
SECTION 6.3. Costs. All costs of administration of the Plan shall be paid
by the Company.
SECTION 6.4. Governing Law. This Plan, all authorizations and other
documents executed pursuant hereto, and the Accounts of Participants maintained
under this Plan shall be governed by and construed in accordance with the laws
of the State of South Carolina.
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ARTICLE 7
Concerning the Administrator
SECTION 7.1. Records and Reports. The Company, as Administrator shall
keep appropriate records concerning Accounts of Participants and shall send a
statement of account to each Participant following each purchase of shares for
the Account of such Participant.
SECTION 7.2. Liability and Indemnification. Neither the Company, as
Administrator nor its nominee(s) shall be liable hereunder for any action taken
in good faith or for any good faith omission to act, including, without
limitation, any claims of liability (a) arising out of failure to terminate the
Participant's Account upon the Participant's death prior to receipt of written
notice of such death accompanied by documentation satisfactory to the Company,
as Administrator; or (b) with respect to the prices at which Plan Shares are
either purchased or sold for the Participant's Account or the timing of, or
terms on which, such purchases or sales are made; or (c) for the market value or
fluctuations in market value after purchase of Plan Shares credited to the
Participant's Account.
ARTICLE 8
Tax Matters
It is understood that the automatic reinvestment of dividends does not
relieve the Participant of any income tax which may be payable on such
dividends. The Administrator will comply with all applicable Internal Revenue
Service requirements concerning the filing of information returns for Dividends
credited to each Account under the Plan and such information will be provided to
the Participants by a duplicate of that form or in a final statement of account
for each calendar year. With respect to foreign Participants whose dividends are
subject to United States income tax withholding, the Administrator will comply
with all applicable Internal Revenue Service requirements concerning the amount
of tax to be withheld, which will be deducted from the Dividends prior to
investment.
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AUTHORIZATION FORM
APPENDIX II
--------------------------
(Taxpayer ID No.)
TO: Clover Community Bankshares, Inc.
as Plan Administrator, or
its Duly Appointed Successor:
In order to reinvest all or some portion of my cash dividends on shares of
Clover Community Bankshares, Inc. Common Stock ("Common Stock") in additional
shares of Common Stock, I hereby authorize and direct Clover Community
Bankshares, Inc. (the "Company") to pay to the Clover Community Bankshares, Inc.
Dividend Reinvestment Plan (the "Plan") for my account cash dividends payable to
me on Common Stock of the Company registered in my name and enrolled in the
Plan, as follows:
[ ] Full Dividend Reinvestment. I want to reinvest dividends on all shares
registered in my name on this date or held for me in the Plan by the
Company as Plan Administrator. (This Authorization Form will not enroll
shares acquired by you after this date. You must complete another
Authorization Form to enroll other shares.)
[ ] Partial Dividend Reinvestment. I want to reinvest dividends on only
________ shares registered in my name.
I understand that dividends on all shares held for me in the Plan by the Company
as Plan Administrator will be reinvested.
I hereby appoint the Company, or its duly appointed successor, as my agent
subject to the terms and conditions set forth in the Plan (a copy of which I
have received and read). I hereby authorize it, (i) to retain for credit to my
account any cash dividends and any shares of Common Stock of the Company
distributed as a non-cash dividend or otherwise on the shares of Common Stock
purchased pursuant to the Plan ("Plan Shares") and credited to my account, and
to distribute to me any other non-cash property paid on such Plan Shares; and
(ii) to take all acts necessary to apply cash dividends payable on shares of
Common Stock of the Company registered in my name and enrolled in the Plan, and
cash dividends payable on Plan Shares to the purchase of full and fractional
shares of Common Stock of the Company in accordance with the terms and
conditions of the Plan.
If the Company or its nominee, as Plan Administrator, holds the certificates
representing shares purchased for my account, I hereby authorize the Company or
its nominee to merge such certificates into one or more certificates of larger
denominations.
I am giving this authorization and appointment with the understanding that I may
terminate it with respect to some or all of the shares of Common Stock of the
Company registered in my name at any time by notifying the Company in writing at
least five days before the record date of any dividend payment.
-------------------------------------
(Please sign and print your name)
-------------------------------------
(Please sign and print your name)
Please sign exactly as your name(s)
appear(s) on your stock certificate.
This authorization is invalid unless
signed by all persons whose names
appear on your stock certificate.
Date: --------------
Please mail or deliver this form to: Gwen M. Thompson, Clover Community
Bankshares, Inc., 124 North Main Street, Clover, South Carolina 29710-1024.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses of this offering are estimated to be as follows:
SEC Registration Fee.....................................$ 383.08
*Printing and Distribution................................ 2,200.00
*Accounting Fees and Expenses............................. 2,500.00
*Legal Fees and Expenses.................................. 12,000.00
*Blue Sky Fees............................................ 1,000.00
*Miscellaneous............................................ 500.00
----------
*Total........................................... $18,583.08
*Estimated
Item 15. Indemnification of Directors and Officers
Sections 33-8-500 through -580 of the South Carolina Business
Corporation Act, as amended, provides broad authority for indemnification of
directors and officers, which may include liability under the Securities Act of
1933, as amended (the "Securities Act").
Item 16. Exhibits and Financial Statement Schedules
4.1 - Dividend Reinvestment Plan (included as Appendix I to the Prospectus)
4.2 - Articles of Incorporation and Bylaws of Registrant (Incorporated by
reference to exhibits filed with Registrant's Registration Statement
on Form S-4 (Registration No. 333-47597)
5 - Opinion of Sinkler & Boyd, P.A.
23.1 - Consent of Sinkler & Boyd, P.A. (included in Exhibit 5).
23.2 - Consent of Donald G. Jones and Company, P.A.
24 - Power of Attorney
Item 17. Undertakings
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Act"), each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement; (i) To include any
prospectus required by Section 10(a)(3) of the Act; (ii) To reflect in the
prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; (iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Clover, State of South Carolina on February 1, 1999.
Clover Community Bankshares, Inc.
s/James C. Harris, Jr.
By:------------------------------
James C. Harris, Jr.
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
s/James C. Harris, Jr. President, Chief Executive 2-1-99
- - ------------------------------
(James C. Harris, Jr.) Officer and Director
c/Ruby M. Bennett Director 2-1-99
- - ------------------------------
(Ruby M. Bennett)
Director
- - ------------------------------
(C. R. Burrell)
c/Herbert Kirsh Director 2-1-99
- - ------------------------------
(Herbert Kirsh)
Director
- - ------------------------------
(Marvin McCarter)
c/J. H. Owen Director 2-1-99
- - ------------------------------
(J. H. Owen)
c/Gwen M. Thompson Principal Accounting Officer, 2-1-99
- - ------------------------------
(Gwen M. Thompson) Chief Financial Officer, Vice
President and Director
c/William Turner Director 2-1-99
- - ------------------------------
(William Turner)
24
<PAGE>
Exhibit Index
Exhibit No. Exhibits and Financial Statement Schedules
4.1 - Dividend Reinvestment Plan (Incorporated by reference to
Appendix I to Prospectus).
4.2 - Articles of Incorporation and Bylaws of Registrant (Incorporated
by reference to exhibits filed with Registrant's Registration
Statement on Form S-4 (Registration No. 333-47597)
5 - Opinion of Sinkler & Boyd, P.A.
23.1 - Consent of Sinkler & Boyd, P.A. (included in Exhibit 5).
23.2 - Consent of Donald G. Jones and Company, P.A.
24 - Power of Attorney
25
Sinkler & Boyd, P.A.
Attorneys at Law
The Palmetto Center
1426 Main Street, Suite 1200
Columbia, South Carolina 29201
(803) 779-3080
FILED VIA EDGAR
- - ---------------
February 4, 1999
Board of Directors
Clover Community Bankshares, Inc.
124 North Main Street
Clover, South Carolina 29710-1024
Gentlemen:
In connection with the registration under the Securities Act of 1933
(the "Act") of 50,000 shares of the common stock, no par value (the "Common
Stock"), of Clover Community Bankshares, Inc., a South Carolina corporation (the
"Company") for issuance pursuant to the Clover Community Bankshares, Inc.
Dividend Reinvestment Plan, we have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, it is our opinion that the Common
Stock, when issued upon the terms and conditions set forth in the Registration
Statement filed by the Company in connection with the registration of the Common
Stock, and upon receipt of the consideration therefor, will be legally issued,
fully paid and nonassessable.
We consent to be named in the Registration Statement as attorneys who
will pass upon certain legal matters in connection with the offering described
in the Registration Statement, and to the filing of a copy of this opinion as an
exhibit to the Registration Statement. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
Sinkler & Boyd, P.A.
INDEPENDENT AUDITORS' CONSENT
Board of Directors
Clover Community Bankshares, Inc.
We consent to the incorporation by reference in Clover Community
Bankshares, Inc.'s Registration Statement on Form S-3, relating to the
registration of up to 50,000 shares of its common stock for issuance pursuant to
the Clover Community Bankshares, Inc. Dividend Reinvestment Plan, of our report
dated January 16, 1998, which is included in Clover Community Bankshares, Inc.'s
Annual Report on Form F-2 for the year ended December 31, 1997.
Donald G. Jones and Company, P.A.
Columbia, South Carolina
February 3, 1999
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of Clover Community
Bankshares, Inc. and the several undersigned Officers and Directors thereof
whose signatures appear below hereby makes, constitutes and appoints James C.
Harris, Jr. and Gwen M. Thompson, and each of them acting individually, its and
his true and lawful attorneys, with power to act without the other and with full
power of substitution, to execute, deliver and file in its or his name and on
its or his behalf, and in each of the undersigned Officer's and Director's
capacity or capacities as shown below, (a) a Registration Statement on Form S-3
(or other appropriate form) with respect to the registration under the
Securities Act of 1933, as amended, of 50,000 shares of common stock of Clover
Community Bankshares, Inc. to be offered pursuant to the Clover Community
Bankshares, Inc. Dividend Reinvestment Plan, and all documents in support
thereof or supplemental thereto and any and all amendments, including any and
all post-effective amendments, to the foregoing (hereinafter called the
"Registration Statement"), and (b) such registration statements, petitions,
applications, consents to service of process or other instruments, any and all
documents in support thereof or supplemental thereto, and any and all amendments
or supplements to the foregoing, as may be necessary or advisable to qualify or
register the securities covered by said Registration Statement; and each of
Clover Community Bankshares, Inc. and said Officers and Directors hereby grants
to said attorneys, and to each of them, full power and authority to do and
perform each and every act and thing whatsoever as said attorneys or attorney
may deem necessary or advisable to carry out fully the intent of this power of
attorney to the same extent and with the same effect as Clover Community
Bankshares, Inc. might or could do, and as each of said Officers and Directors
might or could do personally in his capacity or capacities as aforesaid, and
each of Clover Community Bankshares, Inc. and said Officers and Directors hereby
ratifies and confirms all acts and things which said attorneys or attorney might
do or cause to be done by virtue of this power of attorney and its or his
signatures as the same may be signed by said attorneys or attorney, or any of
them, to any or all of the following (and/or any and all amendments and
supplements to any or all thereof): such Registration Statement under the
Securities Act of 1933, as amended, and all such registration statements,
petitions, applications, consents to service of process and other instruments,
and any and all documents in support thereof or supplemental thereto, under such
securities laws, regulations and requirements as may be applicable.
<PAGE>
IN WITNESS WHEREOF, Clover Community Bankshares, Inc. has caused this
power of attorney to be signed on its behalf, and each of the undersigned
Officers and Directors in the capacity or capacities noted has hereunto set his
hand, on the dates indicated below.
Clover Community Bankshares, Inc.
s/James C. Harris, Jr.
Date: February 1, 1999 By:-------------------------------------
James C. Harris, Jr.
Its Chief Executive Officer
Signature Title Date
s/James C. Harris, Jr. President, Chief Executive 2-1-99
- - ---------------------------
(James C. Harris, Jr.) Officer and Director
s/Ruby M. Bennett Director 2-1-99
- - ---------------------------
(Ruby M. Bennett)
Director
- - ---------------------------
(C. R. Burrell)
s/Herbert Kirsh Director 2-1-99
- - ---------------------------
(Herbert Kirsh)
Director
- - ---------------------------
(Marvin McCarter)
s/J. H. Owen Director 2-1-99
- - ---------------------------
(J. H. Owen)
s/Gwen M. Thompson Principal Accounting Officer, 2-1-99
- - --------------------------- Chief Financial Officer, Vice
(Gwen M. Thompson) President and Director
s/William Turner Director 2-1-99
- - ---------------------------
(William Turner)
