Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
HCSB Financial Corp.
------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
<PAGE>
HCSB FINANCIAL CORP.
5009 Broad Street
Loris, South Carolina 29569
Notice of Annual Meeting of Shareholders
Dear Fellow Shareholder:
We cordially invite you to attend the 2000 Annual Meeting of
Shareholders of HCSB Financial Corp., the holding company for Horry County State
Bank. At the meeting, we will report on our performance in 1999 and answer your
questions. We are excited about our accomplishments in 1999 and look forward to
discussing both our accomplishments and our plans with you. We hope that you can
attend the meeting and look forward to seeing you there.
This letter serves as your official notice that we will hold the
meeting on April 20, 2000 at 7:00 p.m. at the Center for Health Center and
Fitness at 3207 Casey Street, Loris, South Carolina for the following purposes:
1. To elect four members to the Board of Directors;
2. To transact any other business that may properly come before the
meeting or any adjournment of the meeting.
Shareholders owning our common stock at the close of business on March
15, 2000 are entitled to attend and vote at the meeting. A complete list of
these shareholders will be available at the company's offices prior to the
meeting.
Please use this opportunity to take part in the affairs of your company
by voting on the business to come before this meeting. Even if you plan to
attend the meeting, we encourage you to complete and return the enclosed proxy
to us as promptly as possible.
By order of the Board of Directors,
/s/ James R. Clarkson
James R. Clarkson
President and Chief Executive Officer
Loris, South Carolina
March 22, 2000
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HCSB FINANCIAL CORP.
5009 Broad Street
Loris, South Carolina 29569
Proxy Statement For The Annual Meeting of
Shareholders to be Held on April 20, 2000
Our Board of Directors is soliciting proxies for the 2000 Annual
Meeting of Shareholders. This proxy statement contains important information for
you to consider when deciding how to vote on the matters brought before the
meeting. We encourage you to read it carefully.
Voting Information
The Board set March 15, 2000 as the record date for the meeting.
Shareholders owning our common stock at the close of business on that date are
entitled to attend and vote at the meeting, with each share entitled to one
vote. There were 1,002,770 shares of common stock outstanding on the record
date. A majority of the outstanding shares of common stock represented at the
meeting will constitute a quorum. We will count abstentions and broker
non-votes, which are described below, in determining whether a quorum exists.
When you sign the proxy card, you appoint Hoyt J. Hardee and B. Kemp
Floyd, Jr. as your representatives at the meeting. Mr. Hardee and Mr. Floyd will
vote your proxy as you have instructed them on the proxy card. If you submit a
proxy but do not specify how you would like it to be voted, Mr. Hardee and Mr.
Floyd will vote your proxy for the election to the Board of Directors of all
nominees listed below under "Election of Directors." We are not aware of any
other matters to be considered at the meeting. However, if any other matters
come before the meeting, Mr. Hardee and Mr. Floyd will vote your proxy on such
matters in accordance with their judgment.
You may revoke your proxy and change your vote at any time before the
polls close at the meeting. You may do this by signing and delivering another
proxy with a later date or by voting in person at the meeting. Brokers who hold
shares for the accounts of their clients may vote these shares either as
directed by their clients or in their own discretion if permitted by the
exchange or other organization of which they are members. Proxies that brokers
do not vote on some proposals but that they do vote on others are referred to as
"broker non-votes" with respect to the proposals not voted upon. A broker
non-vote does not count as a vote in favor of or against a particular proposal
for which the broker has no discretionary voting authority. In addition, if a
shareholder abstains from voting on a particular proposal, the abstention does
not count as a vote in favor of or against the proposal.
We are paying for the costs of preparing and mailing the proxy
materials and of reimbursing brokers and others for their expenses of forwarding
copies of the proxy materials to our shareholders. Our officers and employees
may assist in soliciting proxies but will not receive additional compensation
for doing so. We are distributing this proxy statement on or about March 22,
2000.
Proposal No. 1: Election of Directors
The Board of Directors is divided into three classes with staggered
terms, so that the terms of only approximately one-third of the Board members
expire at each annual meeting. The current terms of the Class I directors will
expire at the meeting. The terms of the Class II directors expire at the 2001
Annual Shareholders Meeting. The terms of the Class III directors will expire at
the 2002 Annual Shareholders Meeting. Our directors and their classes are:
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Class I Class II Class III
------- -------- ---------
D. Singleton Bailey William H. Caines Russell R. Burgess, Jr.
Franklin C. Blanton James R. Clarkson Tommie W. Grainger
Charles F. Freeman J. Lavelle Coleman Gwyn G. McCutchen
T. Freddie Moore Boyd R. Ford, Jr. Bill G. Page
Carroll D. Padgett, Jr. Randy B. Hardee
Because he has reached the mandatory retirement age in our bylaws, Mr.
Charles F. Freeman will not stand for reelection to the Board of Directors at
the meeting. The Board of Directors is reducing the size of the board to
fourteen members, including four Class I directors, to reflect Mr. Freeman's
retirement. We ask you to join us in recognizing Mr. Freeman for his service to
our bank.
Shareholders will elect four nominees as Class I directors at the
meeting to serve a three-year term, expiring at the 2003 Annual Meeting of
Shareholders. The directors will be elected by a plurality of the votes cast at
the meeting. This means that the four nominees receiving the highest number of
votes will be elected.
The Board of Directors recommends that you elect D. Singleton Bailey,
Franklin C. Blanton, T. Freddie Moore, and Carroll D. Padgett, Jr. as Class I
directors.
If you submit a proxy but do not specify how you would like it to be
voted, Mr. Hardee and Mr. Floyd will vote your proxy to elect Mr. Bailey, Mr.
Blanton, Mr. Moore, and Ms. Padgett. If any of these nominees is unable or fails
to accept nomination or election (which we do not anticipate), Mr. Hardee and
Mr. Floyd will vote instead for a replacement to be recommended by the Board of
Directors, unless you specifically instruct otherwise in the proxy.
Set forth below is certain information about the nominees:
D. Singleton Bailey, 49, Class I director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Mr. Bailey
is the president of Loris Drug Store, Inc., located in Loris, South Carolina.
Mr. Bailey received a B.A. from Wofford College in 1972.
Franklin C. Blanton, 55, Class I director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Mr. Blanton
is the president of Blanton Supplies, Inc., and has served as president of
Independent Builders Supply, Inc. and also the vice president of the Coastal
Education Foundation. Mr. Blanton attended Campbell University and received a
B.S. degree in Business Administration in 1968.
T. Freddie Moore, 58, Class I director, has served as a director of the
company since its formation in 1999 and of the bank since 1987. Mr. Moore is the
president of Gateway Drug Store, Inc. Mr. Moore received his B.S. from The
Citadel, in 1963.
Carroll D. Padgett, Jr., 52, Class I director, has served as a director
of the company since its formation in 1999 and of the bank since 1987. Mr.
Padgett is a practicing attorney at Carroll D. Padgett, Jr., P.A. Mr. Padgett
received his law degree from the University of South Carolina School of Law in
1972.
Set forth below is also information about each of the company's other
directors and each of its executive officers. Each of the following directors is
also a director of the subsidiary bank.
Russell R. Burgess, Jr., 57, Class III director, has served as a
director of the company since its formation in 1999 and of the bank since 1998.
Mr. Burgess is the owner of Aladdin Realty Company and also the owner and
broker-in-charge of Burgess Realty & Appraisal Service. Mr. Burgess is serving
his fourth term as a member of the North Myrtle Beach City Council. Mr. Burgess
has been a member of the North Myrtle Beach Planning
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Commission for the past six years. Mr. Burgess received a B.S. degree in biology
from Campbell University in 1966. Mr. Burgess is a licensed real estate broker.
Glen R. Bullard, 51, is the executive vice president of the bank. Mr.
Bullard served as a vice president and manager of the bank's north Myrtle beach
office from February, 1997 through December, 1999. Mr. Bullard received his B.S.
in Business from the University of South Carolina in 1977.
William H. Caines, 63, Class II director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Mr. Caines
is currently the president of Caines Realty and Appraisals Inc. and of Blackburn
Insurance, Inc.
James R. Clarkson, 48, Class II director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Mr. Clarkson
is the president and Chief Executive officer of the company and the bank. Mr.
Clarkson serves as a director of the Horry Telephone Coop., Inc. Mr. Clarkson
received his B.A. degree in economics from Clemson University in 1973.
J. Lavelle Coleman, 60, Class II director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Mr. Coleman
is the president of Tabor City Oil, Inc and is involved in the operation of R.C.
Coleman Tobacco Warehouse. Mr. Coleman serves on the board of directors of Tabor
City Recreation Community. Mr. Coleman attended East Carolina University.
Boyd R. Ford, Jr., 60, Class II director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Mr. Ford is
retired from Ford's Fuel Service, Inc. and Ford's Propane Gas, Inc. Mr. Ford
received a business degree from the University of South Carolina in 1962.
Charles F. Freeman, 70, Class I director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Mr. Freeman
serves as chairman and director of the Felburn Foundation, Isle Base Ltd., and
Aetna Freight Lines, Inc. Mr. Freeman received his B.S. in Political Science
from Furmam University in 1960. Because he as reached the mandatory retirement
age in our bylaws, Mr. Freeman will not stand for reelection to the Board of
Directors at the meeting.
Tommie W. Grainger, 60, Class III director, has served as a director of
the company since its formation in 1999 and of the bank since 1998. Mr. Grainger
is the president of Coastal Timber Co., Inc. Mr. Grainger previously owned WJXY,
an AM/FM radio station. Mr. Grainger attended the Forest Ranger School of the
University of Florida in 1959.
Randy B. Hardee, 42, Class II director, has served as a director of the
company since its formation in 1999 and of the bank since 1987. Mr. Hardee is
the president of Hardee Business Services. Mr. Hardee received his B.S. degree
in accounting from Clemson University in 1979.
Gwyn G. McCutchen, 56, Class III director, has served as a director of
the company since its formation in 1999 and of the bank since 1987. Dr.
McCutchen is a dentist. Dr. McCutchen received his B.S. in 1966 from
Presbyterian College and his D.D.S. from the Medical College of Virginia
Dentistry in 1970.
Bill G. Page, 65, Class III director, has served as a director of the
company since its formation in 1999 and of the bank since 1987. Mr. Page is the
president of Page Chemical Co., Inc. Mr. Page is also the Manager of Twin City
Farmers Cooperative, Inc. Mr. Page received his B.S. from Clemson College in
1956, with a major in agricultural education.
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<PAGE>
Compensation of Directors and Executive Officers
Summary of Cash and Certain Other Compensation
The following table shows the cash compensation paid by our company or
its subsidiary bank to our chief executive officer and president for the years
ended December 31, 1999. No other executive officers of the company or the bank
earned total annual compensation, including salary and bonus, in excess of
$100,000 in 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------- --------------------------
Name and Securities All Other
Principal Position Year Salary (1) Bonus Underlying Options (#) Compensation (1)
- ------------------- ---- ---------- ----- ------------------------ ----------------
<S> <C> <C> <C> <C> <C>
James R. Clarkson, President 1999 $107,719 $2,019 ---- $11,217
and CEO 1998 95,000 1,827 ---- 9,678
1997 84,998 2,366 ---- 8,108
</TABLE>
- ----------
(1) Includes employees life, disability and health insurance benefits,
retirement fund contributions, and directors fees.
Director Compensation
During the year ended December 31, 1999, directors received fees of
$150 per month in director fees and $50 for attendance at each committee
meeting. These fees have been increased to $250 and $100 respectively effective
January 1, 2000.
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<PAGE>
Security Ownership of Certain
Beneficial Owners and Management
General
The following table shows how much common stock in the company is owned
by the directors, executive officers, and owners of more than 5% of the
outstanding common stock, as of March 1, 2000.
Number of Shares Percent of Class
Beneficial Owner Beneficially Owned (1) Beneficially Owned
- ---------------- ------------------- ------------------
D. Singleton Bailey 8,073 1.61%
Franklin C. Blanton 15,512 (2) 3.09%
Russell R. Burgess, Jr. 305 0.06%
William H. Caines 1,860 0.37%
James R. Clarkson 4,093 0.82%
J. Lavelle Coleman 3,007 0.60%
Boyd R. Ford, Jr. 17,247 3.44%
Charles F. Freeman 8,057 1.61%
Tommie W. Grainger 3,343 0.67%
Randy B. Hardee 6,101 1.22%
Gwyn G. McCutchen 4,983 0.99%
T. Freddie Moore 3,378 0.67%
Carroll D. Padgett, Jr. 3,378 0.67%
Bill G. Page 1,942 0.39%
- ---------------------------------
Executive officers and directors
as a group (17 persons) 83,020 16.56%
(1) Includes shares for which the named person:
o has sole voting and investment power,
o has shared voting and investment power with a spouse or other person, or
o holds in an IRA or other retirement plan program, unless otherwise
indicated in these footnotes.
(2) The 15, 512 shares listed for Mr. Blanton include 6,641 shares held by
Blanton Supplies of Little River, Inc. and 844 shares held by Blanton
Supplies of Loris, Inc, each of which Mr. Blanton controls in excess of 10%
ownership.
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<PAGE>
Meetings and Committees of the Board of Directors
During the year ended December 31, 1999, the Board of Directors of the
company held 2 meetings and the Board of Directors of the bank held 14 meetings.
All of the directors of the company and of the bank attended at least 75% of the
aggregate of such board meetings and the meetings of each committee on which
they served except for Charles. F. Freeman.
Audit Committee. The audit committee recommends engaging and
discharging the independent account firms, reviews the examination reports of
the bank's regulatory supervisory agencies, establishes and monitors internal
audit procedures, reviews reports of the bank's internal auditor, and conducts
surprise audits of the bank's tellers' and vault cash. During 1999, the audit
committee held 24 meetings. In 1999, the members of the audit committee were
Randy B. Hardee, D. Singleton Bailey, William H. Caines, and J. Lavelle Coleman.
Executive Committee. The executive committee supervises and reviews the
bank's investment portfolio, the bank's Asset/Liability Management Policy and
Reports, and, in general, reviews the overall operations of the bank. During
1999, the Executive Committee held 12 meetings. In 1999, the members of the
executive committee were Carroll D. Padgett, Jr., James R. Clarkson, Randy B.
Hardee, Gwyn G. McCutchen, and T. Freddie Moore
Personnel Committee. The personnel committee supervises the bank's
adherence to the personnel policy, makes recommendations to the Board of
Directors as to compensation of the bank's president, the overall annual salary
increases, the employee benefits package, contributions to the employee
retirement fund, and staffing requirements. During 1999, the Personnel Committee
held 6 meetings. In 1999, the members of the Personnel Committee were Gwyn G.
McCutchen, Russell R. Burgess, Randy B. Hardee, D. Singleton Bailey, and Bill G.
Page.
Certain Relationships and Related Transactions
Interests of Management and Others in Certain Transactions
The company and the bank have banking and other transactions in the
ordinary course of business with directors and officers of the company and the
bank and their affiliates. It is the company's policy that these transactions be
on substantially the same terms (including price, or interest rates and
collateral) as those prevailing at the time for comparable transactions with
unrelated parties. The company does not expect these transactions to involve
more than the normal risk of collectibility nor present other unfavorable
features to the company or the bank. Loans to individual directors and officers
must also comply with the bank's lending policies and statutory lending limits,
and directors with a personal interest in any loan application are excluded from
the consideration of the loan application. The company intends for all of its
transactions with its affiliates to be on terms no less favorable to the company
than could be obtained from an unaffiliated third party and to be approved by a
majority of disinterested directors.
Compliance with the Securities Exchange Act of 1934
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 SEC. Based on a review of Forms 3, 4, and 5
and any representations made to the company, the company believes that all such
reports for these persons were filed in a timely fashion during 1999.
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Independent Auditor
The company has selected Tourville, Simpson & Henderson, L.LP. to serve
as the independent auditor to the company for the year ending December 31, 2000.
We do not expect a representative from this firm to attend the meeting.
Shareholder Proposals for the 2001 Annual Meeting of Shareholders
If shareholders wish a proposal to be included in the company's proxy
statement and form of proxy relating to the 2001 annual meeting, they must
deliver a written copy of their proposal to the principal executive offices of
the company no later than November 20, 2000. To ensure prompt receipt by the
company, the proposal should be sent certified mail, return receipt requested.
Proposals must comply with the company's bylaws relating to shareholder
proposals in order to be included in the company's proxy materials.
March 22, 2000
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PROXY SOLICITED FOR ANNUAL MEETING
OF SHAREHOLDERS OF
HCSB FINANCIAL CORP.
To be held on April 20, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints Hoyt J. Hardee and B.
Kemp Floyd, Jr., and each of them, his or her true and lawful agents and proxies
with full power of substitution in each, to represent and vote, as indicated
below, all of the shares of common stock of HCSB Financial Corp. that the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
the company to be held at the Center for Health Center and Fitness at 3207 Casey
Street, Loris, South Carolina, at 7:00 p.m. local time, and at any adjournment,
upon the matters described in the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement, receipt of which is acknowledged. These
proxies are directed to vote on the matters described in the Notice of Annual
Meeting of Shareholders and Proxy Statement as follows:
1. PROPOSAL to elect the four identified Class I directors to serve for
three year terms.
D. Singleton Bailey
Franklin C. Blanton
T. Freddie Moore
Carroll D. Padgett, Jr.
|_| FOR all nominees |_| WITHHOLD AUTHORITY
listed (except as marked to to vote for all nominees
the contrary)
(INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominees name(s) in the space provided below).
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted: "for" Proposal No. 1 to elect the four identified Class I
directors to serve on the Board of Directors each for three-year terms.
Dated: , 2000
------------------------------
---------------------------------------
Signature of Shareholder(s)
---------------------------------------
Print name clearly
---------------------------------------
Signature of Shareholder(s)
---------------------------------------
Print name clearly
Please sign exactly as name or names
appear on your stock certificate. Where
more than one owner is shown on your
stock certificate, each owner should
sign. Persons signing in a fiduciary or
representative capacity shall give full
title. If a corporation, please sign in
full corporate name by authorized
officer. If a partnership, please sign
in partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
