DARLINGTON COUNTY BANCSHARES, INC.
202 CASHUA STREET
DARLINGTON, SOUTH CAROLINA 29532
March 25, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders (the
"Annual Meeting") of Darlington County Bancshares, Inc. (the "Company") to be
held at the Company's principal offices, 202 Cashua Street, Darlington, South
Carolina, on Tuesday, April 25, 2000 at 5:30 p.m.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Annual Meeting. During the Annual
Meeting, we will report on the operations of the Company. Directors and officers
of the Company, as well as representatives of Elliott, Davis & Company, LLP, our
independent auditors, will be present to respond to any questions shareholders
may have.
To ensure proper representation of your shares at the Annual Meeting,
please sign, date and return the enclosed proxy card as soon as possible, even
if you currently plan to attend the Annual Meeting. This will not prevent you
from voting in person, but will ensure that your vote will be counted if you are
unable to attend.
Sincerely,
/s/ W. B. McCown, III
---------------------
W. B. McCown, III
President and Chief Executive Officer
<PAGE>
DARLINGTON COUNTY BANCSHARES, INC.
202 CASHUA STREET
DARLINGTON, SOUTH CAROLINA 29532
(843) 395-1956
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 2000
To the Shareholders of Darlington County Bancshares, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Darlington County Bancshares, Inc. (the "Company") will be held on
April 25, 2000 at 5:30 p.m., Darlington time, at the Company's principal
offices, 202 Cashua Street, Darlington, South Carolina for the following
purposes:
1. To set the number of Directors at 9 and to elect four Directors to hold
office until their respective terms expire or until their successors are
duly elected and qualified;
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Shareholders of record at the close of business on March 11, 2000 will be
entitled to vote at the Annual Meeting.
By Order of the Board of Directors,
Albert L. James, III
Secretary
Darlington, South Carolina
March 25, 2000
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE POSTAGE-PAID
ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU WISH, YOU
MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON AT THE ANNUAL MEETING.
<PAGE>
DARLINGTON COUNTY BANCSHARES, INC.
202 CASHUA STREET
DARLINGTON, SOUTH CAROLINA 29532
______________________
PROXY STATEMENT
______________________
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 25, 2000
This Notice of Annual Meeting, Proxy Statement and Proxy (these "Proxy
Materials") are being furnished to shareholders in connection with a
solicitation of proxies by the Board of Directors of Darlington County
Bancshares, Inc. (the "Company"). This solicitation is being made in connection
with the Annual Meeting of Shareholders (the "Annual Meeting") to be held at the
Company's principal offices, 202 Cashua Street, Darlington, South Carolina at
5:30 p.m. on April 25, 2000. These Proxy Materials are being mailed on
approximately March 25, 2000.
Voting Matters
- --------------
Holders of record as of the close of business on March 11, 2000 of the
Company's $0.01 par value per share common stock ("Common Stock") will be
entitled to vote at the Annual Meeting. At the close of business on that day,
158,000 shares of Common Stock were outstanding. Holders of Common Stock are
entitled to one vote per share on each matter presented at the Annual Meeting or
any adjournments thereof. Shareholders are not entitled to cumulate their votes
for election of directors.
Shares of Common Stock may be voted in person or by proxy. The presence,
either in person or by proxy, of holders of shares representing a majority of
the outstanding Common Stock of the Company on March 11, 2000 is necessary to
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes are
each included in the determination of the number of shares present and voting.
In connection with the election of directors, abstentions and broker non-votes
are not counted in determining the votes cast for directors.
Revocability of Proxy
- ---------------------
Shares represented by a properly executed proxy in the accompanying form
and given by a shareholder, and not revoked, will be voted in accordance with
such instructions. As stated in the Proxy, if a returned Proxy does not specify
otherwise, the shares represented thereby will be voted in favor of all
proposals set forth herein. Proxies may be revoked at any time prior to their
being voted at the Annual Meeting by oral or written notice to Albert L. James,
III at Darlington County Bancshares, Inc., 202 Cashua Street, Darlington, South
Carolina 29532, (843) 395-1956 or by execution and delivery of a subsequent
proxy or by attendance and voting in person at the Annual Meeting.
Solicitation of Proxies
- -----------------------
This solicitation of proxies is made by the Company, and the Company will
bear the cost of this proxy solicitation, including the cost of preparing,
handling, printing and mailing these Proxy Materials. Proxies will be solicited
principally through these Proxy Materials. Proxies may also be solicited by
telephone or through personal solicitation conducted by regular employees of the
Company. Employees and officers will be reimbursed for the actual out-of-pocket
expenses incurred by them in connection with such solicitation. Banks, brokers
and other custodians are requested to forward these Proxy Materials to their
customers where appropriate, and the Company will reimburse such banks, brokers
and custodians for their reasonable out-of-pocket expenses in sending these
Proxy Materials to beneficial owners of the shares.
<PAGE>
ELECTION OF DIRECTORS
Item 1 on the Proxy
Nominations for Election of Directors
- -------------------------------------
The Company's Board of Directors is currently comprised of 9 persons. The
Company's Articles of Incorporation provide that the Board of Directors shall be
divided into three classes of Directors with each class being elected for
staggered three-year terms. Directors will be elected by a plurality of votes
cast at the Annual Meeting. Abstentions and broker non-votes with respect to
Nominees will not be considered to be either affirmative or negative votes.
Identification of Nominees
- --------------------------
Management proposes to nominate to the Board of Directors the four persons
listed as Nominees in the table below. Each of the Nominees is currently serving
as a Director. Each Nominee, if elected, will serve until the expiration of his
respective term and until his successor is duly qualified. Unless authority to
vote with respect to the election of one or more Nominees is "WITHHELD," it is
the intention of the persons named in the accompanying Proxy to vote such Proxy
for the election of these Nominees. Management believes that all such Nominees
will be available and able to serve as Directors. However, should any Nominee
become unable to accept election, it is the intention of the person named in the
Proxy, unless otherwise specifically instructed in the Proxy, to vote for the
election of such other persons as management may recommend. The following table
sets forth the names and ages of the Nominees for Directors and the Directors
continuing in office, the positions and offices with the Company held by each
such person, and the period that each such person has served as a Director.
<TABLE>
<CAPTION>
NAME AGE POSITION OR OFFICE WITH THE COMPANY DIRECTOR SINCE
NOMINEES FOR DIRECTORS (FOR TERMS EXPIRING IN 2003)
<S> <C> <C> <C>
Hubert C. Baker 56 Director 1998
G. Clyde Scott 61 Director 1986
Eugene A. Vaughan 51 Director 1986
NOMINEE FOR DIRECTOR (FOR TERMS EXPIRING IN 2002)
W. Edwin Dargan 54 Director
Albert L. James, III 56 Director 1999
DIRECTORS CONTINUING IN OFFICE (FOR TERMS EXPIRING IN 2002)
W. B. McCown, III 61 President, Chief Executive Officer 1986
DIRECTORS CONTINUING IN OFFICE (FOR TERMS EXPIRING IN 2001)
Raymond Galloway 79 Director 1986
R. E. Goodson, Sr. 84 Chairman of the Board of Directors 1986
Charles G. Howard 61 Director 1997
1997
</TABLE>
Mr. James is currently serving as a director with a term expiring in 2001. He is
being moved to the Class of 2002 in order to equalize the number of directors in
each class.
Meetings and Committees of the Board of Directors
- -------------------------------------------------
The Board of Directors, by motion passed by a majority of the Board, may
designate members of the Board to constitute committees which shall in each case
consist of such numbers of Directors and shall have and may exercise such powers
as the Board may determine and specify in the respective motions appointing
them.
The Company has the following committees: Audit Committee, Finance
Committee, Investment Committee, Benefits Committee, and Executive Committee.
The Company does not have a nominating committee.
The Audit Committee reviews the Company examination and audit reports and
is responsible for in-house audit policies. Messrs. James (Chairman), Goodson
and Vaughan serve on the Audit Committee. The Audit Committee met four times in
1999.
The Finance Committee is responsible for the supervision of the Company's
loan portfolio and loan policies. Messrs. Galloway (Chairman), Howard, Scott and
McCown serve on the Finance Committee. The Finance Committee met ten times in
1999.
The Investment Committee is responsible for the supervision of the
Company's investments and Asset-Liability management policy. Messrs. Baker
(Chairman), James, Dargan and McCown serve on the Investment Committee. The
Investment Committee met four times in 1999.
The Executive Committee is responsible for the total supervision of the
Company to include personnel matters, compensation of officers and employees and
long range planning. Messrs. Goodson (Chairman), Galloway, James and McCown
serve on the Executive Committee. The Executive Committee met five times in
1999.
The Benefits Committee is responsible for reviewing the Officer and
Employee benefits of the Company. Messrs. Vaughan (Chairman), Baker and Howard
serve on the Benefits Committee. The Benefits Committee met four times during
1999.
The Board of Directors of the Company met twelve times for regular and
special meetings in 1999. Each Director attended at least 75% of the aggregate
of (a) the total number of meetings of Board of Directors held during the period
for which he served as Director, and (b) the total number of meetings held by
all committees of the Board on which he served.
EXECUTIVE OFFICERS
The Company's executive officers are appointed by the Board of Directors
and serve at the pleasure of the Board. The person set forth below is the sole
executive officer of the Company. The Company also has a Chairman of the Board
and Secretary, but these individuals are not executive officers.
<TABLE>
<CAPTION>
NAME AGE COMPANY OFFICES CURRENTLY HELD COMPANY OFFICER SINCE
<S> <C> <C> <C>
W. B. McCown, III 61 President and Chief Executive Officer 1986
</TABLE>
BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE OFFICERS
Dr. Baker is a dentist in practice with Askins & Baker, P.A. located in
Darlington, South Carolina.
Mr. Dargan engages in a farming operation in Darlington County.
Mr. Galloway engages in a farming operation in Darlington County.
Mr. Goodson is the Chairman of the Board of R.E. Goodson Construction Co.,
Inc., a construction company located in Darlington, South Carolina.
Mr. Howard is the President of Chase Oil Company, Inc. a fuel distributor
in the Pee Dee region of South Carolina.
Mr. James is an attorney in private practice in Darlington, South Carolina.
Mr. McCown is President and CEO of the Company.
Mr. Scott is the President of Darlington Machinery Co., Inc., a hardware
store and machine shop located in Darlington, South Carolina.
Mr. Vaughan is President of Vaughan Insurance Agency, Inc., an insurance
agency located in Darlington, South Carolina.
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
During 1999, non-officer Directors received a fee of $200 for each Board of
Directors' meeting attended. Non-employee directors who were Finance Committee
members received $25 per Finance Committee meeting attended. No other committee
member received compensation as a result of their committee membership.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information concerning all compensation paid
by the Company during the fiscal years ended December 31, 1997, 1998 and 1999 to
the Company's CEO for services rendered in all capacities to the Company. For
purposes of the table, all bonus amounts listed for a particular year were
actually paid in the first quarter of the following year. For example, the
bonuses for 1999 were paid in the first quarter of 2000, but listed as 1999
compensation, because the bonuses were earned as of December 31, 1999.
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Salary Bonus Compen- Awards Options/ Payouts Compensation
Principal Position Year ($) ($) sation ($) SARs(#) ($) ($)
------------------ ---- --- --- ------ --- ------- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
W. B. McCown, III 1999 72,981 3,827 (1) -- -- -- 3,537(2)
President, CEO 1998 70,627 6,497 (1) -- -- -- 3,401(2)
1997 67,965 5,858 (1) -- -- -- 3,370(2)
<FN>
(Footnotes to table)
- -------------------------
(1) Certain amounts may have been expended by the Company which may have had
value as a personal benefit to the executive officer. However, the total
value of such benefits did not exceed the lesser of $50,000 or 10% of the
annual salary and bonus of such executive officer.
(2) This amount is comprised of contributions made by the Company to Mr.
McCown's SEP-IRA.
</FN>
</TABLE>
The Company provides life and health insurance plans for all full-time
officers and employees of the Company. Certain officers are reimbursed for civic
and social club dues.
In December 1989, the Board of Directors established a Simplified Employee
Pension-Individual Retirement Account ("SEP-IRA") for all officers and employees
meeting certain age and service requirements. Contributions are at the
discretion of and determined annually by the Board of Directors and are not to
exceed the maximum amount deductible under the applicable section of the
Internal Revenue Code.
All officers and employees are eligible to receive a contribution after
reaching the age of 21 and having completed one full year of service with the
Company.
Contributions are made, based on a percent of the total base salary for
qualified persons and an equal distribution in terms of percent is made to each
person's retirement account.
The officers and employees are fully vested upon being eligible to
participate in the tax deferred plan and are in control of his or her
investments.
The only SEP-IRA contribution to an executive officer or Director of the
Company for the year ended December 31, 1999 was to W.B. McCown, III in the
amount of $3,537.11.
<PAGE>
In 1996, the Board of Directors established an Incentive Plan for all
eligible officers and employees of the Company.
All full-time officers and employees may become eligible to receive an
incentive bonus under the Company's Incentive Plan after having completed one
full year of service with the Company provided the Company achieved a return on
average assets of 1.00% or better. Also, each officer and employee must have met
specific individual goals set for their job at the beginning of the year in
order to be eligible to participate in the Incentive Plan. The only incentive
bonus paid to an executive officer or Director of the Company for the period
ended December 31, 1999, was to W.B. McCown, III in the amount of $3,827.33.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
COMMON STOCK. The following table sets forth as of March 11, 2000 information
with respect to the Common Stock owned beneficially or of record by each of the
Directors and Nominees individually, by the Named Executive Officers and by all
Directors and executive officers of the Company as a group. Unless otherwise
noted, each person has sole voting power and sole investment power with respect
to the shares listed. There are no persons known to the Company to own
beneficially 5% or more of the Common Stock. The following information is based
on a total of 158,000 shares of Common Stock outstanding. There are no
outstanding options to purchase Common Stock.
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
Hubert C. Baker 1,000 (1) *
W. Edwin Dargan 400 *
Raymond Galloway 1,670 1.0%
R. E. Goodson, Sr. 100 *
Charles G. Howard 2,745 (2) 1.7%
Albert L. James, II 310 *
W. B. McCown, III 2,100 (3) 1.3%
G. Clyde Scott 3,300 (4) 2.1%
Eugene A. Vaughan 1,295 (5) *
ALL DIRECTORS/EXECUTIVE
OFFICERS AS A GROUP (9 persons) 12,920 8.18%
- ----------
* Less than 1%.
(1) Includes 300 shares held of record by Dr. Baker's spouse's individual
retirement account.
(2) Includes 2,000 shares held of record of Mr. Howard's individual retirement
account.
(3) Includes 2000 shares held of record of Mr. McCown's individual retirement
account.
(4) Includes 1,750 shares held by Mr. Scott's spouse.
(5) Includes 195 shares held of record by Mr. Vaughan's spouse's individual
retirement account.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has had, and expects to have in the future, banking
transactions in the ordinary course of business with the Company's Directors and
officers and their associates, on the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unrelated third parties. Such loans have not involved more than normal risks of
collectibility nor have they presented any other unfavorable features. Under
banking regulations applicable to state banks, any loan made by such a Company
to any of its officers or Directors must be collaterally secured. The aggregate
dollar amount of these loans was approximately $290,579 at December 31, 1999.
During 1999, approximately $210,000 in new loans were made and payments totaled
approximately $26,323.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's Directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Executive officers, Directors and greater than
ten-percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms filed. To the Company's knowledge, based
solely on review of the copies of such reports furnished to the Company and
written representations that no other reports were required, during 1999, all
required Section 16(a) filings applicable to its executive officers, Directors
and greater than 10% beneficial owners were made.
INDEPENDENT PUBLIC ACCOUNTANTS
Elliott, Davis & Company, LLP ("ED&C") served as the Company's independent
public accountants for the 1999 fiscal year. ED&C has indicated that it plans to
have a representative present at the Annual Meeting. Such representative will
have the opportunity to make a statement and will be available to respond to
appropriate questions from shareholders. The Board of Directors has selected
ED&C as the independent public accountants for the Company for the 2000 fiscal
year.
SHAREHOLDER PROPOSALS
Proposals by shareholders for consideration at the 2001 Annual Meeting of
Shareholders must be received at the Company's offices at 202 Cashua Street,
Darlington, South Carolina 29532 no later than December 2, 2000, if any such
proposal is to be eligible for inclusion in the Company's proxy materials for
its 2001 Annual Meeting. Under applicable regulations, the Company is not
required to include shareholder proposals in its proxy materials unless certain
other conditions specified in those regulations are satisfied. The Company's has
no provisions in its Bylaws for timely notice for proposals to be made at its
annual meeting. Director nominations must be delivered in writing to the
Company's secretary at least 10 days prior to the meeting.
<PAGE>
The Bylaws of the Company require timely advance written notice of
shareholder nominations of director candidates and of any other proposals to be
presented at an annual meeting of shareholders. In the case of director
nominations by shareholders, the Bylaws require that a shareholder's notice be
delivered to the principal executive offices of the Company during the period of
time from the 30th day to the 60th day prior to the annual meeting of
shareholders at which directors are to be elected, unless such requirement is
expressly waived in advance of the meeting by formal action of the board of
directors. In the case of other proposals by shareholders at an annual meeting,
the Bylaws require that advance written notice be delivered to the Company's
Secretary (at the address indicated above). To be timely, a shareholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company between the 60th and 90th days prior to the first anniversary of
the preceding year's annual meeting. However, in the event that the date of the
annual meeting is more than 30 days before or more than 60 days after such
anniversary date, such shareholder notice must be so delivered between the 60th
and 90th days prior to such annual meeting or within 10 days following the day
on which public announcement of the date of such meeting is first made by the
Company. A copy of the Bylaws is available upon request to the Secretary of the
Company at the address indicated above.
FINANCIAL INFORMATION
THE ANNUAL REPORT TO STOCKHOLDERS COVERING THE COMPANY'S FISCAL YEAR ENDED
DECEMBER 31, 1999, INCLUDING FINANCIAL STATEMENTS, IS ENCLOSED HEREWITH AND
INCORPORATED BY REFERENCE HEREIN. THE COMPANY WILL FURNISH FREE OF CHARGE A COPY
OF THE ANNUAL REPORT ON FORM 10-KSB UPON WRITTEN REQUEST TO W.B. MCCOWN, III,
PRESIDENT, DARLINGTON COUNTY BANCSHARES, INC., P.O. BOX 502, DARLINGTON, S.C.
29540-0502.
REGISTRATION UNDER THE SECURITIES EXCHANGE ACT OF 1934
The Company is presently registered with the Securities and Exchange
Commission (the "Commission") and is subject to the informational requirements
of the Exchange Act. Pursuant to the provisions of the Exchange Act, the Company
is required to file reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: 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 may also be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon the payment of fees at prescribed rates. The
Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
(which will include the Company) that file electronically with the Commission.
OTHER MATTERS
Management is not aware of any other matter to be brought before the Annual
Meeting. If other matters are duly presented for action, it is the intention of
the persons named in the enclosed proxy to vote on such matters in accordance
with their judgment.
By Order of the Board of Directors,
Albert L. James, III
Secretary
March 25, 2000
Darlington, South Carolina
P
R
O DARLINGTON COUNTY BANCSHARES, INC.
X THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Y
ANNUAL MEETING, APRIL 25, 2000
The undersigned stockholder of Darlington County Bancshares, Inc., hereby
revoking all previous proxies, hereby appoints Hazel M. Gainey and Albert L.
James, III, and either of them, the attorney or attorneys and proxy or proxies
of the undersigned, with full power of substitution, to attend the Annual
Meeting of Shareholders of Darlington County Bancshares, Inc. to be held April
25, 2000, at 5:30 p.m., local time, at 202 Cashua Street, Darlington, South
Carolina 29532 and at any adjournments thereof, and to vote all shares of stock
of Darlington County Bancshares, Inc. that the undersigned shall be entitled to
vote at such meeting. Said proxies are instructed to vote on the matters set
forth in the proxy statement/prospectus as specified below.
1. Election of directors.
[ ] FOR ALL NOMINEES set forth below (except as marked to the contrary):
[ ] W. Edwin Dargan [ ] Eugene A. Vaughan [ ] G. Clyde Scott
[ ] Hubert C. Baker [ ] Albert L. James, III
[ ] WITHHOLD AUTHORITY to vote for all Nominees.
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY SIGNED AND DATED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR APPROVAL OF EACH
OF THE PROPOSALS ABOVE.
Please sign exactly as name appears on stock certificate. When signing as
attorney, administrator, trustee, guardian or agent, please indicate the
capacity in which you are acting. If stock is held jointly, signature should
appear for both names. If more than one trustee, all should sign. If stock is
held by a corporation, please sign in full corporate name by authorized officer
and give title of office. This Proxy may be revoked any time prior to its
exercise.
---------------------------------
Dated: ____________, 2000 Print Name (and title if appropriate)
---------------------------------
Signature
---------------------------------
Print Name (and title if appropriate)
---------------------------------
Signature
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
