FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
GRANDSOUTH BANCORPORATION
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(Exact name of registrant as specified in its charter)
South Carolina 57-1104394
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
327 Fairview Road, Simpsonville, South Carolina 29681
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be registered Each class is to be registered
None
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If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(c), check the following box. [ ]
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), check the following box. [X]
Securities Act registration statement file number to which this form
relates: N/A (if applicable)
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
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(Title of class)
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Item 1. Description of Registrant's Securities to be Registered
Authorized Capital. GrandSouth Bancorporation is authorized to issue
20,000,000 shares of common stock, no par value per share.
Voting and Other Rights. The holders of GrandSouth Bancorporation's
Common Stock are entitled to one vote per share on each matter voted on at a
shareholders' meeting. A majority of the shares entitled to vote, represented at
a meeting in person or by proxy, constitutes a quorum, and, in general, most
routine matters will be approved if the votes cast in favor of the matter exceed
the votes against the matter. Directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election at a meeting at which a
quorum is present. Each shareholder entitled to vote in such an election shall
be entitled to vote each share of GrandSouth Bancorporation's Common Stock owned
by such shareholder for as many persons as there are directors to be elected.
Pursuant to the Articles of Incorporation of GrandSouth Bancorporation,
shareholders do not have cumulative voting rights.
In general, the affirmative vote of two-thirds of GrandSouth
Bancorporation's Common Stock outstanding and entitled to vote is required to
approve: (i) amendments to GrandSouth Bancorporation's Articles of
Incorporation, (ii) the dissolution of GrandSouth Bancorporation, or (iii) a
merger, exchange or consolidation of GrandSouth Bancorporation with, or the
sale, exchange or lease of all or substantially all of the assets of GrandSouth
Bancorporation to, any person or entity. However, if the proposed transaction
has not been approved by the affirmative vote of at least two-thirds of the
Board of Directors, then the vote required to approve the transaction is 80% of
the outstanding shares.
The shareholders of GrandSouth Bancorporation shall have dissenters'
rights to an appraisal with respect to their shares of GrandSouth
Bancorporation's Common Stock as provided by the South Carolina Business
Corporation Act (the "Business Corporation Act") in connection with certain
types of merger or share exchange transactions. Dissenters' rights generally are
also available with respect to certain sales of all or substantially all of the
property of GrandSouth Bancorporation and certain amendments to GrandSouth
Bancorporation's Articles of Incorporation that materially and adversely affect
certain enumerated rights of a dissenter's shares.
Directors. Under GrandSouth Bancorporation's Articles of Incorporation
and Bylaws and pursuant to the Business Corporation Act, the number of directors
shall be determined from time to time by the Board of Directors at five or more.
Accordingly, the directors of GrandSouth Bancorporation have the authority to
increase or decrease the number of directors, which is currently fixed at seven,
but may not increase or decrease the number by more than 30% from the number of
directors last elected by the shareholders. Directors are elected to serve until
the next annual meeting of shareholders or until their successors are elected
and qualify.
The Articles of Incorporation provide that a director may be removed
only for cause by the affirmative vote of at least 80% of the outstanding voting
stock.
Liquidation Rights. In the event of liquidation, the holders of
GrandSouth Bancorporation's Common Stock would be entitled to receive pro rata
any assets legally available for distribution to shareholders with respect to
shares held by them.
Preemptive and Other Rights. GrandSouth Bancorporation's Common Stock
does not have any preemptive rights, redemption privileges, sinking fund
privileges or conversion rights. All the shares of GrandSouth Bancorporation's
Common Stock will, upon issuance, be validly issued, fully paid and
nonassessable.
Distributions. GrandSouth Bancorporation may issue share dividends in
GrandSouth Bancorporation's Common Stock to the holders of shares of GrandSouth
Bancorporation's Common Stock. In addition, the holders of shares of GrandSouth
Bancorporation's Common Stock will be entitled to receive such other
distributions as the Board of Directors of GrandSouth Bancorporation may
declare, subject to any restrictions contained in GrandSouth Bancorporation's
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Articles of Incorporation (of which there currently are none), unless after
giving effect to such distribution, (i) GrandSouth Bancorporation would not be
able to pay its debts as they become due in the usual course of business or (ii)
GrandSouth Bancorporation's total assets would be less than the sum of
GrandSouth Bancorporation's total liabilities plus the amount that would be
needed, if GrandSouth Bancorporation were to be dissolved at the time of the
distribution, to satisfy claims of shareholders who have preferential rights
superior to the rights of holders of GrandSouth Bancorporation's Common Stock.
Indemnification of Officers and Directors. Sections 33-8-500 through
33-8-580 of the Business Corporation Act contain provisions prescribing the
extent to which directors and officers shall or may be indemnified. Section
33-8-510 permits a corporation, with certain exceptions, to indemnify a current
or former director against liability if (i) he conducted himself in good faith,
(ii) he reasonably believed (x) that his conduct in his official capacity with
the corporation was in its best interest and (y) his conduct in other capacities
was at least not opposed to the corporation's best interest, and (iii) in the
case of any criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. A corporation may not indemnify a current or former
director in connection with a proceeding by or in the right of the corporation
in which he was adjudged liable to the corporation or in connection with a
proceeding charging improper personal benefit to him. The above standard of
conduct is determined by the Board of Directors or a committee thereof or
special legal counsel or the shareholders as prescribed in Section 33-8-550.
Sections 33-8-520 and 33-8-560 require a corporation to indemnify a
director or officer in the defense of any proceeding to which such person was a
party because of his or her capacity as officer or director against reasonable
expenses when such person is wholly successful in his or her defense, unless the
Articles of Incorporation provide otherwise. Upon application, the court may
order indemnification of the director or officer if such person is adjudged
fairly and reasonably so entitled under Section 33-8-540. Section 33-8-560
allows a corporation to indemnify and advance expenses to an officer, employee
or agent who is not a director to the same extent as a director or as otherwise
set forth in the corporation's Articles of Incorporation or Bylaws or by
resolution of the Board of Directors or by contract.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of GrandSouth Bancorporation pursuant to the foregoing provisions, or
otherwise, GrandSouth Bancorporation has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
Limitation of Director Liability. As permitted by the Business
Corporation Act, GrandSouth Bancorporation's Articles of Incorporation provide
that no director shall be personally liable to GrandSouth Bancorporation or its
shareholders for monetary damages for breach of fiduciary duty as a director
except for (a) breach of the duty of loyalty to GrandSouth Bancorporation or its
shareholders, (b) acts or omissions not in good faith or which involve gross
negligence, intentional misconduct or a knowing violation of law, (c) making
unlawful distributions or (d) a transaction from which the director derived an
improper personal benefit.
Duty of Directors in Connection with Business Combinations. GrandSouth
Bancorporation's Articles of Incorporation require the Board of Directors to
consider the interests of the employees of GrandSouth Bancorporation and the
communities in which it does business in addition to the interests of GrandSouth
Bancorporation and its shareholders when evaluating a proposed plan of merger,
consolidation, exchange or sale of all, or substantially all, of the assets of
GrandSouth Bancorporation.
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Statutory Matters
Business Combination Statute. The South Carolina business combinations
statute provides that a 10% or greater shareholder of a resident domestic
corporation cannot engage in a "business combination" (as defined in the
statute) with such corporation for a period of two years following the date on
which the 10% shareholder became such, unless the business combination or the
acquisition of shares is approved by a majority of the disinterested members of
such corporation's board of directors before the 10% shareholder's share
acquisition date. This statute further provides that at no time (even after the
two-year period subsequent to such share acquisition date) may the 10%
shareholder engage in a business combination with the relevant corporation
unless certain approvals of the board of directors or disinterested shareholders
are obtained or unless the consideration given in the combination meets certain
minimum standards set forth in the statute. The law is very broad in its scope
and is designed to inhibit unfriendly acquisitions but it does not apply to
corporations whose articles of incorporation contain a provision electing not to
be covered by the law. GrandSouth Bancorporation's articles of incorporation do
not contain such a provision. An amendment of the articles of incorporation to
that effect would, however, permit a business combination with an interested
shareholder even though that status was obtained prior to the amendment.
Control Share Acquisitions. South Carolina law also contains provisions
that, under certain circumstances, would preclude an acquiror of the shares of a
South Carolina corporation who crosses one of three voting thresholds (20%,
331/3 % or 50%) from obtaining voting rights with respect to such shares unless
a majority in interest of the disinterested shareholders of the corporation
votes to accord voting power to such shares.
The legislation provides that, if authorized by the articles of
incorporation or bylaws prior to the occurrence of a control share acquisition,
the corporation may redeem the control shares for their fair value if the
acquiring person has not complied with certain procedural requirements
(including the filing of an "acquiring person statement" with the corporation
within 60 days after the control share acquisition) or if the control shares are
not accorded full voting rights by the shareholders. GrandSouth Bancorporation
is not authorized by its articles or bylaws to redeem control shares pursuant to
such legislation.
General. Taken together, the foregoing provisions of the Articles of
Incorporation and South Carolina law favor maintenance of the status quo and may
make it more difficult to change current management, and may impede a change of
control of GrandSouth Bancorporation even if desired by a majority of its
shareholders.
Item 2. Exhibits.
Exhibit No. From
Item 601 of
Regulation S-B Description
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3.1 Articles of Incorporation
3.2 Bylaws
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
(Registrant) GRANDSOUTH BANCORPORATION
Date November 13, 2000
By /s/Ronald K. Earnest
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Ronald K. Earnest
President and Chief Executive Officer
