<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ABC BANCORP
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
----------------
ABC BANCORP
----------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1999
<PAGE>
ABC Bancorp
310 First Street, S.E.
Moultrie, Georgia 31768
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 11, 1999
To the Shareholders of ABC Bancorp:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of ABC Bancorp (the "Company") will be held at Sunset Country Club,
Thomasville Highway, Moultrie, Georgia, on Tuesday, May 11, 1999, commencing at
4:15 p.m., local time, for the following purposes:
(1) To elect four Class II directors for a three-year term of office;
(2) To ratify the appointment of Mauldin & Jenkins, Certified Public
Accountants and Consultants, LLC, as the Company's independent accountants
for the fiscal year ending December 31, 1998; and
(3) To transact any other business that may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The close of business on March 12, 1999 has been fixed as the record date
(the "Record Date") for the determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournment or postponement
thereof. Only shareholders of record at the close of business on the Record
Date are entitled to notice of, and to vote at, the Annual Meeting.
Shareholders may receive more than one proxy because of shares registered in
different names or addresses. Each such proxy should be marked, dated, signed
and returned. Please check to be certain of the manner in which your shares are
registered -- whether individually, as joint tenants, or in a representative
capacity -- and sign the related proxy accordingly.
A complete list of shareholders entitled to vote at the Annual Meeting will
be available for examination by any shareholder for any purpose germane to the
Annual Meeting, during normal business hours, for a period of at least ten days
prior to the Annual Meeting at the Company's corporate offices located at the
address set forth above.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to do so, please mark, date and sign the enclosed proxy and mail it
promptly in the enclosed postage-prepaid envelope. Returning your proxy does
not deprive you of your right to attend the Annual Meeting and to vote your
shares in person.
By Order of the Board of Directors
/s/ Doyle Weltzbarker
---------------------------
Doyle Weltzbarker, Chairman
Moultrie, Georgia
March 26, 1999
<PAGE>
ABC Bancorp
310 First Street, S.E.
Moultrie, Georgia 31768
----------------
PROXY STATEMENT
----------------
GENERAL INFORMATION
This Proxy Statement and the accompanying form of proxy (which were first
sent or given to shareholders on or about March 26, 1999) are furnished to
shareholders of ABC Bancorp (the "Company") in connection with the
solicitation by and on behalf of the Board of Directors of the Company (the
"Board") of proxies for use at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held at Sunset Country Club, Thomasville Highway, Moultrie,
Georgia, on Tuesday, May 11, 1999, at 4:15 p.m., local time, and any
adjournment or postponement thereof.
A proxy may be revoked at any time before the shares represented by it are
voted at the Annual Meeting by delivering to the Secretary of the Company
either a written revocation or a duly executed proxy bearing a later date or
by voting in person at the Annual Meeting. All shares represented by a
properly executed, unrevoked proxy will be voted on all matters presented at
the Annual Meeting on which the shares are entitled to vote, unless the
shareholder attends the Annual Meeting and votes in person. Proxies solicited
will be voted in accordance with the instructions given on the enclosed form
of proxy. UNLESS AUTHORITY IS WITHHELD IN THE MANNER INDICATED ON THE ENCLOSED
FORM OF PROXY, IT IS INTENDED THAT PROXIES IN THE ACCOMPANYING FORM WILL BE
VOTED FOR THE ELECTION AS A DIRECTOR OF EACH OF THE NOMINEES NAMED HEREIN.
Only shareholders of record at the close of business on March 12, 1999 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting.
On the Record Date, the Company had 7,247,965 shares of common stock (the
"Common Stock") outstanding and entitled to vote. All holders of Common Stock
are entitled to cast one vote per share held as of the Record Date.
The cost of preparing and mailing proxy materials will be borne by the
Company. In addition to solicitation by mail, solicitations may be made by
officers and other employees of the Company in person or by telephone,
telecopier or telegraph. Brokerage houses, custodians, nominees and
fiduciaries will be reimbursed for the expenses of sending proxy materials to
the beneficial owners of Common Stock held of record on behalf of such
persons.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Principal Shareholders. There are currently no persons who are known to the
Board to own beneficially five percent or more of the outstanding Common
Stock.
<PAGE>
Security Ownership of Management and Others. The following table sets forth
certain information with respect to the beneficial ownership of the Common
Stock, as of the Record Date, by directors, nominees for election as
directors, executive officers named in the Summary Compensation Table set
forth under the caption "Executive Compensation and Other Information," and by
all directors and executive officers as a group.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned
Position with the as of March 12, Percent
Name of Beneficial Owner Company 1999(1) of Class
- ------------------------ ------------------------ ------------------ --------
<S> <C> <C> <C>
Johnny W. Floyd (2)....... Director 47,441 *
J. Raymond Fulp........... Director 29,441 *
Kenneth J. Hunnicutt (3).. Chief Executive Officer, 155,224
President and Director 2.1%
Daniel B. Jeter........... Director 2,604 *
Bobby B. Lindsey (4)...... Director 66,704 *
Hal L. Lynch (5).......... Director 174,669 2.4%
Eugene M. Vereen, Jr. (6). Director 67,372 *
Doyle Weltzbarker (7)..... Director 74,353 1.0%
Henry C. Wortman (8)...... Director 33,754 *
All directors and
executive officers as a
group
(10 persons, including
those listed above)...... -- 653,448 9.0%
</TABLE>
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*Less than 1%.
(1) Except as otherwise specified, each individual has sole and direct
beneficial ownership interest and voting rights with respect to all shares
of Common Stock indicated.
(2) Includes 7,535 shares owned by Mr. Floyd's wife and 22,282 shares owned by
his two children, with whom Mr. Floyd shares investment and voting power
pursuant to an oral agreement.
(3) Includes options to acquire 64,583 shares (See "EXECUTIVE COMPENSATION AND
OTHER INFORMATION"); 8,966 shares owned by a partnership in which Mr.
Hunnicutt is a partner; and 2,652 shares owned by a partnership of which
Mr. Hunnicutt's wife is a partner.
(4) Includes 12,676 shares owned by Mr. Lindsey's three children, with whom
Mr. Lindsey shares investment and voting power; 957 shares owned jointly
by Mr. Lindsey and his son; and 832 shares owned by Mr. Lindsey's wife,
with whom he shares investment and voting power. Also includes 10,041
shares owned by Dixie Oil Co., 7,541 shares owned by Dixie Gas & Oil Co.,
7,541 shares owned by Dixie Petroleum Co.; 10,041 shares owned by L & L
Oil Co., Inc. and 9,875 shares owned by L.D. Advertising Co., with respect
to all of which Mr. Lindsey is President.
(5) Includes 162,496 shares owned by Mr. Lynch's family members, with whom Mr.
Lynch shares voting and investment power.
(6) Includes 2,026 shares owned by Mr. Vereen's wife.
(7) Includes 20,355 shares held by the West-End Milling Company ESOP Trust, of
which Mr. Weltzbarker serves as trustee and as to which Mr. Weltzbarker
disclaims beneficial ownership.
(8) Includes 3,460 shares owned by Mr. Wortman's wife, with whom Mr. Wortman
shares investment and voting power; 8,156 shares held as co-trustee with
Mr. Wortman's wife for the benefit of their two children; and 1,294 shares
owned jointly by Mr. Wortman and his wife.
2
<PAGE>
PROPOSAL I: ELECTION OF DIRECTORS
The Company has a classified Board consisting of two Class I directors
(Messrs. Floyd and Jeter), four Class II directors (Messrs. Fulp, Lindsey,
Lynch and Wortman), and three Class III directors (Messrs. Vereen, Hunnicutt
and Weltzbarker). The Class I, Class II and Class III directors currently
serve until the annual meetings of shareholders to be held in 1999, 2000 and
2001, respectively, and after the Annual Meeting, until 2000, 2001 and 2002,
respectively, and until their respective successors are elected and qualified.
At each annual meeting of shareholders, directors are elected for a full term
of three years to succeed those whose terms are expiring. Vacancies on the
Board and newly created directorships can generally be filled by vote of a
majority of the directors then in office. Executive officers are elected
annually by the Board and serve at the discretion of the Board.
At the Annual Meeting, shareholders are being asked to elect four directors
to serve as Class II directors until the 2002 annual meeting of shareholders
and until their successors are duly elected and qualified.
In order to be elected, a nominee for director must receive an affirmative
vote of a majority of the shares of Common Stock present or represented at the
Annual Meeting and entitled to vote.
Unless otherwise directed, the persons named in the enclosed form of proxy
intend to vote "FOR" the election of the nominees listed below as directors
for the ensuing term and until their successors are elected and qualified. In
the event any such nominee for any reason should not be available as a
candidate for director, votes will be cast pursuant to authority granted by
the enclosed proxy for such other candidate or candidates as may be nominated
by management. The Board knows of no reason to anticipate that the nominees
will not be candidates. Except as set forth below, each of the nominees has
been engaged in his principal occupation during the past five years. There is
no family relationship between any of the directors and executive officers of
the Company.
The following sets forth certain information as of the Record Date
concerning the nominees for election as directors of the Company and the other
directors whose terms of office will continue after the Annual Meeting.
Nominees for Election as Class II Directors with Terms Expiring in 2002.
J. Raymond Fulp (age 54) became a director of the Company in 1989 and has
been a director of Citizens Security Bank-Tifton since 1987. Since 1974, Mr.
Fulp has been co-owner of Midtown Pharmacy in Tifton.
Bobby B. Lindsey (age 69) was appointed to the Board in 1994. Mr. Lindsey is
also Chairman of the Board of Directors of Citizens Security Bank-Tifton since
1986. Mr. Lindsey serves as President of Dixie Oil Company, Gasmarts, Inc.,
Dixie Gas & Oil Company, Dixie Petroleum Company, Dixie Oil Distributing
Company, Dixie Oil, Florida, L & L Oil Company, Dixie Petroleum Company of
Alabama, Red Diamond Oil Company, Best Petroleum Company and Dixie Refineries,
Inc., each of which is engaged in the petroleum business, Lenox Enterprises,
Inc., an oil retail company, and L.D. Advertising Company, an advertising
agency, all since prior to 1978. Mr. Lindsey also serves on the Board of
Directors of the Georgia Oilman's Association.
Hal L. Lynch (age 69) has been a director since 1992. Mr. Lynch is President
of Lynch Management Company, which manages automobile dealerships in Florida
and Georgia, Daytona Lincoln-Mercury, Thomasville Sales and North Florida
Lincoln-Mercury. Mr. Lynch has been in the automobile business since 1953.
Henry C. Wortman (age 60) has been a director since 1990. Mr. Wortman has
also been Vice Chairman and a director of Heritage Community Bank (formerly
known as The Bank of Quitman)("Heritage Community Bank") since 1988. Mr.
Wortman has been a principal partner of Jackson & Wortman, a dairy, pecans,
timber and general farming operation based in Quitman, Georgia, since 1965.
Mr. Wortman is also a member of the Georgia Agricultural Commodity Commission
for Milk, a member of the Board of Directors of the Georgia-Florida Fertilizer
Company and the Treasurer of Georgia Milk Producers.
3
<PAGE>
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL
I.
BOARD OF DIRECTORS
Directors.
Eugene M. Vereen, Jr. (age 78) has been a director since 1981. Mr. Vereen
was the Chairman of the Board from 1981 to April 19, 1995 and Chief Executive
Officer of the Company from 1981 to 1994. From 1971 to present, Mr. Vereen has
also served as a director of American Banking Company. From the time of their
acquisition to 1995, Mr. Vereen also served as a director of Heritage
Community Bank, Bank of Thomas County, Citizens Security Bank-Tifton and Cairo
Banking Company, each of which is a wholly-owned subsidiary of the Company.
Mr. Vereen is President of M.I.A., Co., a real estate holding and investment
company, and has previously served as Senior President of American Banking
Company. He now serves as Chairman Emeritus of the Company and President
Emeritus of American Banking Company. From 1951 until its sale in 1983,
Mr. Vereen served as Chairman of the Board of Moultrie Insurance Agency. Mr.
Vereen's term expires in the year 2000.
Kenneth J. Hunnicutt (age 62) has been a director since 1981. Mr. Hunnicutt
has also been Chief Executive Officer of the Company since 1994 and President
since 1981. Mr. Hunnicutt served as Senior President of American Banking
Company from 1989 to 1991 and as President of American Banking Company from
1975 to 1989 and currently serves as a director of American Banking Company,
Heritage Community Bank, Bank of Thomas County, Citizens Security Bank-Tifton,
Citizens Security Bank-Douglas, Citizens Security Bank-Ocilla, Cairo Banking
Company, Southland Bank, Central Bank & Trust, First National Bank of South
Georgia and Merchants & Farmers Bank, each of which is a wholly-owned
subsidiary of the Company. Mr. Hunnicutt also serves on the advisory board of
Norfolk Southern Corporation, which owns Norfolk Southern Railroad.
Mr. Hunnicutt's term expires in the year 2000.
Doyle Weltzbarker (age 64), Chairman of the Board, has been a director since
1985, Vice Chairman of the Board from 1995 through 1998 and a director of
Heritage Community Bank since 1975. From 1982 until 1987, Mr. Weltzbarker
served as Vice Chairman, and currently serves as Chairman, of the Board of
Directors of Heritage Community Bank. Since 1985, Mr. Weltzbarker has served
as a director and President of West End Milling Company, a feed manufacturing
business, and Brooksco Dairy, Inc., a livestock and farming business. Mr.
Weltzbarker also serves as a director of Georgia-Florida Fertilizer Co. and
the Georgia Agribusiness Council and serves on the advisory board of Norfolk
Southern Corporation. Mr. Weltzbarker's term expires in the year 2000.
Johnny W. Floyd (age 60) has been a director since 1995. Mr. Floyd currently
serves as the Chairman of the Board of Directors of Central Bank and Trust, of
which he has been a director since 1986. Mr. Floyd is the President of Floyd
Timber Company, a forestry products company, and the President of Cordele
Realty. Mr. Floyd has also been a member of the Georgia House of
Representatives since 1989. Mr. Floyd's term expires in the year 2001.
Daniel B. Jeter (age 47) has been a director since 1997. Mr. Jeter is the
Vice-President and a major shareholder of Standard Discount Corporation
("Standard"), a consumer finance company. Mr. Jeter joined the family-owned
business in March 1979, and is an officer and director of each of Standard's
several affiliates, Colquitt Loan Company, Globe Loan Company of Hazelhurst,
Globe Loan Company of Tifton, Globe Loan Company of Moultrie, Peach Finance
Company, Personal Finance Service of Statesboro, Globe Financial Services of
Thomasville, Classic Insurance Company, Ltd. and Cavalier Insurance Company
(of which he serves as President). In addition, Mr. Jeter serves as a director
of the Georgia Industrial Loan Association and of the Georgia Financial
Services Association. Mr. Jeter's term expires in the year 2001.
The backgrounds of the directors with terms expiring in 2002 are summarized
above.
4
<PAGE>
Committees of the Board
The Company's Executive Committee is comprised of five directors, a majority
of whom are neither officers nor employees of the Company. The Executive
Committee is authorized to exercise all of the powers of the Board, except the
power to declare dividends, elect directors, amend the bylaws, issue stock or
recommend any action to shareholders. The Executive Committee, among other
things, considers and makes recommendations to the Board regarding the size
and composition of the Board, recommends and nominates candidates to fill
Board vacancies that occur and recommends to the Board the director nominees
for whom the Board will solicit proxies. The current members of the Executive
Committee are Messrs. Vereen, Hunnicutt, Lindsey, Lynch and Weltzbarker.
The Company's Executive Loan Committee is comprised of four members. Three
of the Executive Loan Committee members are directors of the Company, and the
remaining member is the Company's Subsidiary Bank Administrator. The Executive
Loan Committee is responsible for reviewing and approving all of the Company's
and the Subsidiary Banks' loan and credit requests with principal amounts
between $1.5 million and $3.0 million. The current members of the Executive
Loan Committee are Mr. Philip M. Doerr and Messrs. Hunnicutt, Weltzbarker and
Wortman.
The members of the Company's Compensation Committee, established in 1992,
are Messrs. Vereen, Hunnicutt, Weltzbarker and Jeter. The duties of the
Compensation Committee are generally to establish the salaries, bonuses,
management perquisites and other compensation of the officers of the Company
and each of the Company's nine subsidiary banks (the "Banks"). The
Compensation Committee also has the authority to administer and interpret the
ABC Bancorp Omnibus Stock Ownership and Long Term Incentive Plan and the 1997
Incentive Stock Option Plan for Kenneth J. Hunnicutt, including the selection
of eligible participants in such plans and the type, amount, duration,
acceleration and vesting of individual grants and awards made thereunder.
The Company also has an Audit Committee consisting of three members, all of
whom are directors of the Company. The Audit Committee meets as required to
review the audits performed by the Federal Deposit Insurance Corporation, the
Department of Banking and Finance of the State of Georgia, the Company's
independent accountants and the internal auditors of the Company and the
Banks. The current members of the Audit Committee are Messrs. Fulp,
Weltzbarker and Wortman.
In 1999, the Board held 12 meetings; the Executive Committee held 12
meetings; the Executive Loan Committee held 15 meetings; the Compensation
Committee held 15 meetings; and the Audit Committee held two meetings. Each
director attended at least 75% of all meetings of the full Board and of those
Committees on which he served in 1999.
The Company does not have a standing nominating committee.
5
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
The following table and notes present the cash and non-cash compensation
paid or accrued during each of the last three fiscal years to the Company's
Chief Executive Officer and to any other executive officer whose total cash
compensation exceeded $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
----------------------------------- --------------------------------
Awards Payouts All Other
------------------------ ------- Annual
Name and Principal Other Annual Restricted LTIP Compen-
Position Year Salary(1) Bonus Compensation Stock Award Options/SARs Payouts sation
------------------ ---- -------------- ------- ------------ ----------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth J. Hunnicutt, 1998 $267,400(1)(2) $87,236 -- -- -- -- $23,802(3)
Chief Executive Officer, 1997 $253,703(1)(2) $88,469 -- -- 56,250 -- $55,102(3)
President and Director 1996 $221,250(1)(2) $83,944 -- -- -- -- $53,602(3)
</TABLE>
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(1) Includes directors' fees.
(2) This amount includes matching contributions for the benefit of Mr.
Hunnicutt to the Company's 401(k) plan for 1998 in the aggregate amount of
$4,000. Contributions to the investment account under the Deferred
Compensation Agreement are disclosed as "All Other Annual Compensation."
See footnote (3), below.
(3) For each of 1996 and 1997, the Company made contributions for the benefit
of Mr. Hunnicutt to a Simplified Employee Pension Plan in the amount of
$22,500 and $24,000, respectively; to the investment account under the
Deferred Compensation Agreement in the amount of $15,300 each year; and to
the investment account under the Salary Continuation Agreement in the
amount of $15,802 each year. For 1998, the Company made matching
contributions for the benefit of Mr. Hunnicutt to the Company's Money
Purchase Pension Plan in the aggregate amount of $8,000.
Option Grants in Year Ended December 31, 1998
The Company did not grant any options or stock appreciation rights during
1998 to the Company's Chief Executive Officer or to any other executive
officer whose total cash compensation exceeded $100,000.
Stock Option Exercises During 1998 and Stock Option Year-End Values.
The following table sets forth information with respect to options exercised
in the last fiscal year by the Company's Chief Executive Officer and any other
executive officer whose total cash compensation exceeded $100,000, together
with the number and value of unexercised options and SARs held as of the end
of the last fiscal year for each such person.
Aggregated Option Exercises and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/ SARs at In-the-Money Options/SARs
Shares FY-End (#) at FY-End ($) (2)
Acquired On Value ------------------------- -------------------------
Name Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth J. Hunnicutt.... -- $-- 22,209 42,375 $280,389 $534,934
</TABLE>
- --------
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
(2) Value is calculated based upon the last known sales price for the Common
Stock on December 31, 1998.
6
<PAGE>
Deferred Compensation Agreement.
The Company has entered into a Deferred Compensation Agreement with Mr.
Hunnicutt, pursuant to which the Company has agreed to pay Mr. Hunnicutt
deferred compensation in the event of his retirement, disability or death or
the termination of his employment in the amounts and for the periods set forth
below.
<TABLE>
<CAPTION>
Event Amount Number of Months
----- ------ ----------------
<S> <C> <C>
Normal retirement $3,750/month 180
Early retirement Value of investment account (1) 120
$3,750/month if during normal
Disability retirement 180
Value of investment account if
prior to retirement (1) 120
Death during normal retirement $5,000/month Balance of 180 months
Death during early retirement $5,000/month Balance of 120 months
Death prior to retirement $5,000/month 180
Termination of employment Value of investment account (1)(2) 120
</TABLE>
- --------
(1) The balance of the investment account as of December 15, 1999 and December
15, 2000 is $336,000 and $360,000, respectively.
(2) Mr. Hunnicutt may elect not to receive the value of the investment account
upon termination of his employment and instead receive normal retirement
benefits of $3,750 per month for 180 months when he reaches normal
retirement age.
In the fiscal year ended December 31, 1998, $35,607 was accrued, but not
paid, to Mr. Hunnicutt pursuant to the Deferred Compensation Agreement.
Salary Continuation Agreement.
The Company has entered into a Salary Continuation Agreement with Mr.
Hunnicutt. The Salary Continuation Agreement provides that if Mr. Hunnicutt
remains in the Company's employ until he reaches age 68, he will be entitled
to receive 15 annual payments of $33,750 each in compensation for various
consulting and advisory services to be provided to the Company and/or its
senior executives over a 15-year period.
Executive Employment Agreement.
The Company entered into an Executive Employment Agreement with Mr.
Hunnicutt effective as of September 20, 1994, amended as of September 30, 1996
(as so amended, the "Employment Agreement"), pursuant to which Mr. Hunnicutt
has agreed to serve as the President and Chief Executive Officer of the
Company for an initial term of five years. The term is automatically extended
for an additional one year term on the anniversary of the effective date of
the Employment Agreement unless either party gives written notice to the other
party not to so extend the term within 90 days prior to any such anniversary,
in which case no further extension will occur and the term will end two years
after the anniversary of the date of the notice not to extend. Notwithstanding
any notice by the Company not to extend, the term of the Employment Agreement
will not expire prior to the expiration of 24 months after the occurrence of a
Change of Control (as such term is defined in the Employment Agreement) of the
Company. The Employment Agreement, which automatically terminates when Mr.
Hunnicutt attains age 68, provides that Mr. Hunnicutt will receive a minimum
base salary of $150,000, and is entitled to receive an annual bonus and to
participate in all present and future employee benefit, retirement and
compensation plans of the Company consistent with his salary and his position
as the President and Chief Executive Officer of the Company. The Employment
Agreement further provides that, in the event of termination of Mr.
Hunnicutt's employment with the Company, the Company will pay to Mr. Hunnicutt
(i) his base salary
7
<PAGE>
and annual bonus through the date of termination if he is terminated by the
Board for "cause" (as defined in the Employment Agreement) and (ii) his base
salary and annual bonus through the date of termination and, for three
additional 12-month periods, his base salary and a bonus in an amount
determined pursuant to the terms of the Employment Agreement if he terminates
his employment for "good reason" (as defined in the Employment Agreement).
If Mr. Hunnicutt elects to terminate his employment upon 90 days' notice,
then the Company is obligated to pay him his annual salary and annual bonus
through the date of termination. In the event of Mr. Hunnicutt's death, the
Company is obligated to purchase, under certain circumstances, all outstanding
stock options previously granted to Mr. Hunnicutt, whether or not such options
are then exercisable, at a cash purchase price equal to the amount by which
the aggregate fair market value of such options exceed their exercise price.
Finally, the Employment Agreement also includes certain restrictive covenants
which limit Mr. Hunnicutt's ability to compete with the Company or to divulge
certain confidential information concerning the Company.
Executive Consulting Agreement.
On September 20, 1994, the Company entered into an Executive Consulting
Agreement with Eugene M. Vereen, Jr., as amended on March 30, 1995 (as so
amended, the "Consulting Agreement"), pursuant to which Mr. Vereen has agreed
to provide certain consulting services to the Company following his retirement
or resignation as Chairman of the Board for a period of six years, provided
that the Consulting Agreement automatically terminates upon Mr. Vereen's 80th
birthday. Mr. Vereen retired as Chairman of the Board on April 19, 1995. The
Consulting Agreement provides that Mr. Vereen will provide consulting services
to the Company when requested by the Company's Chief Executive Officer and
that the Company will pay Mr. Vereen the sum of $87,500 per year for his
services thereunder. In addition, Mr. Vereen is entitled to reimbursement for
his reasonable expenses incurred in connection with his duties under the
Consulting Agreement. Finally, the Consulting Agreement includes certain
restrictive covenants which limit Mr. Vereen's ability to compete with the
Company or to divulge certain confidential information concerning the Company.
Compensation of Directors.
All directors receive a fee of $300 per month. Board meetings are held
monthly. Members of the Executive Committee (except Mr. Hunnicutt) receive a
fee of $300 per month, and members of the Audit Committee receive $200 per
meeting. Mr. Wortman receives $200 per meeting for his services on the
Executive Loan Committee and is the only member of the Executive Loan
Committee to receive compensation for service thereon.
Compensation Committee Interlocks and Insider Participation.
During 1998, Mr. Hunnicutt served as the Company's President and Chief
Executive Officer and also served on the Compensation Committee. No other
member of the Compensation Committee is or was an officer or employee of the
Company or any of its subsidiaries.
The Company and the Banks have had, and expect to have in the future,
banking transactions in the ordinary course of business with members of the
Compensation Committee, including corporations, partnerships and other
organizations in which such members have an interest. The Board believes that
the terms of such loans (including interest rates, collateral and repayment
terms) are fair and equitable and are substantially the same as terms
prevailing at the time such loans were made for comparable transactions with
unrelated parties. Such transactions do not involve more than the normal risk
of collectibility or present other unfavorable features.
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REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
The Company's executive compensation programs are administered by the
Compensation Committee. During 1998, the Compensation Committee was composed
of Messrs. Vereen, Hunnicutt, Weltzbarker and Jeter.
The Company's executive compensation is designed to attract and retain
highly qualified executives and to motivate them to maximize shareholder
returns. The base salary for executives is determined in relation to their
level of responsibility. Salary ranges are reviewed on an annual basis, taking
into consideration, among other things, the financial performance of the
Company, and are adjusted as necessary. Salaries are reviewed on an annual
basis, and salary changes are based primarily upon individual performance.
In reviewing the performance of Mr. Hunnicutt, the Company's President and
Chief Executive Officer, the Compensation Committee took into account Mr.
Hunnicutt's employment agreement, which establishes his base compensation from
year to year. The Company may consider and declare from time to time increases
in Mr. Hunnicutt's base compensation, and if operating results of the Company
are significantly less favorable in a given year, may decrease the base
compensation of executive officers generally, including Mr. Hunnicutt. In
determining Mr. Hunnicutt's compensation, the Compensation Committee
considered the effects of inflation, adjustments to the salaries of other
senior management personnel, Mr. Hunnicutt's past performance and the
contribution which he made to the business and profits of the Company during
fiscal year 1998. The Company's performance in 1998 reflected net income of
$6.9 million, or $.95 per share of Common Stock, a decrease of 6.8% over net
income for 1997 of $7.4 million, and a 5% increase in total assets from $692
million in 1997 to $724 million in 1998. The Company experienced a decrease in
total loans of 3% from $483 million in 1997 to $467 million in 1998 and an
increase in total deposits of 5% from $601 million in 1997 to $633 million in
1998. The Company also maintained a net interest margin of 5.35% for 1998,
which the Company believes is high by industry standards. Based on the
Company's overall operating performance, the Compensation Committee awarded
Mr. Hunnicutt an annual incentive bonus of $55,310 but did not increase Mr.
Hunnicutt's base salary during the fiscal year ended December 31, 1998. Mr.
Hunnicutt did not participate in the deliberations of the Compensation
Committee concerning his compensation.
Submitted by the Compensation Committee
Eugene M. Vereen, Jr.
Kenneth J. Hunnicutt
Doyle Weltzbarker
Daniel B. Jeter
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PERFORMANCE GRAPH
Set forth below is a line graph comparing the change in the cumulative total
shareholder return on the Common Stock against the cumulative return of The
NASDAQ Stock Market (US Companies) and the index of Nasdaq Bank Stocks for the
period commencing May 19, 1994 through December 31, 1998. In May 1994, the
Company sold 747,500 shares of Common Stock pursuant to a registered public
offering. Prior to the offering, quotations for the Common Stock were not
reported on any market, and there was no established public trading market for
the Common Stock. The graph shows the value at December 31, 1992, December 31,
1993, December 30, 1994, December 29, 1995, December 31, 1996, December 31,
1997 and December 31, 1998 assuming an investment of $100 on May 19, 1994 and
reinvestment of dividends and other distributions to shareholders.
[GRAPH APPEARS HERE]
Measurement Period A B C Nasdaq Stock Nasdaq Bank
(Fiscal Year Covered) BANCORP Market Stocks
- ------------------- ------- ------------ -----------
12/1993 $ 0 $106.8 $ 95.5
12/1994 $ 94.4 $103.6 $ 95.1
12/1995 $153.7 $145.4 $141.6
12/1996 $186.3 $178.1 $187.0
12/1997 $278.8 $217.8 $313.1
12/1998 $182.2 $300.7 $310.1
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PROPOSAL II: RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company has appointed Mauldin & Jenkins, Certified Public Accountants
and Consultants, LLC ("Mauldin & Jenkins"), as its independent accountants for
the fiscal year ended December 31, 1998. Mauldin & Jenkins has served as the
Company's independent accountants since 1985. Service provided to the Company
and its subsidiaries by Mauldin & Jenkins in the fiscal year ended December
31, 1997 included the examination of the Company's consolidated financial
statements, limited review of quarterly reports, services related to filings
with the Securities and Exchange Commission (the "SEC") and consultation with
respect to various tax matters.
Representatives of Mauldin & Jenkins will be present at the Annual Meeting,
will have the opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions by shareholders.
Ratification of the appointment of Mauldin & Jenkins as the Company's
independent accountants for the fiscal year ended December 31, 1998 requires
the affirmative vote of a majority of votes cast by the outstanding shares of
Common Stock present or represented at the Annual Meeting and entitled to
vote. Unless otherwise specified, the proxy holders designated in the proxy
will vote the shares covered thereby at the Annual Meeting "FOR" ratification
of the appointment of Mauldin & Jenkins. In the event that the shareholders do
not ratify the appointment of Mauldin & Jenkins, the appointment will be
reconsidered by the Audit Committee and the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF PROPOSAL II.
CERTAIN TRANSACTIONS
The Company and the Banks have engaged in, and in the future expect to
engage in, banking transactions in the ordinary course of business with
directors and officers of the Company and the Banks and their associates,
including corporations, partnerships and other organizations in which such
directors and officers have an interest. At December 31, 1998, certain
executive officers and directors, and companies in which, as of such date,
such executive officers and directors had a 10% or more beneficial interest,
were indebted to the Banks in the aggregate amount of approximately
$8,836,170. The Board believes that the terms of such loans (including
interest rates, collateral and repayment terms) are fair and equitable and are
substantially the same as terms prevailing at the time such loans were made
for comparable transactions with unrelated parties. Such transactions do not
involve more than the normal risk of collectibility or present other
unfavorable features.
Since November 1, 1991, the Company has leased a building from Mr. Hunnicutt
and an unrelated third party that is used as the Company's operations center
in Moultrie, Georgia. On November 1, 1996, the Company renewed the lease
increasing the monthly rent payments from $2,500 to $3,334 per month. After
renovations and an addition to such building, this lease was extended and
monthly rent payments were again increased beginning October 1, 1998 to
$5,666.67 per month. Rent payments under the extended lease, which expires on
November 1, 2003, totaled $47,000 for 1998.
Since February 1996, the Company has leased a building from Mr. Hunnicutt
and an unrelated third party that is used for storage and office space for the
Company's Facilities Manager in Moultrie, Georgia. The lease for this space is
on a month-to-month basis, with annual rent payments of $7,200, payable in
monthly installments of $600 each.
SECTION 16 REPORTING
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the SEC initial
reports of ownership and reports of changes in ownership of Common Stock. They
are also required to furnish the Company with copies of all Section 16(a)
forms they file with the SEC.
11
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To the Company's knowledge, based solely on its review of the copies of such
reports furnished to it and written representations that no other reports were
required, during the fiscal year ended December 31, 1998, all of the Company's
officers, directors and greater than ten percent shareholders complied with all
applicable Section 16(a) filing requirements.
OTHER MATTERS
The Board does not contemplate bringing before the Annual Meeting any matter
other than those specified in the accompanying Notice of Annual Meeting of
Shareholders, nor does it have information that other matters will be presented
at the Annual Meeting. If other matters come before the Annual Meeting, signed
proxies will be voted upon such questions in accordance with the best judgment
of the persons acting under the proxies.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 2000 Annual Meeting
of Shareholders and to be included in the Company's proxy statement and form of
proxy for that meeting must be received by the Company, directed to the
attention of the Secretary, not later than November 20, 1999. Any such proposal
must comply in all respects with the rules and regulations of the SEC.
ANNUAL REPORT ON FORM 10-K
Upon receipt of a written request, the Company will, without charge, furnish
any owner of Common Stock a copy of its Annual Report to the SEC on Form 10-K
for the fiscal year ended December 31, 1998, including financial statements and
the schedules thereto. Copies of exhibits to the Form 10-K are also available
upon specific request and payment of a reasonable charge for reproduction. Such
request should be directed to the Secretary of the Company at the address
indicated on the first page of this Proxy Statement.
By Order of the Board of Directors
/s/ Doyle Weltzbarker
---------------------------
Doyle Weltzbarker, Chairman
Moultrie, Georgia
March 26, 1999
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<PAGE>
ABC BANCORP
310 FIRST STREET, S.E. MOULTRIE, GEORGIA 31768
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints DOYLE WELTZBARKER AND KENNETH J. HUNNICUTT,
and each of them, with full power of substitution, the proxies and attorneys
of the undersigned at the Annual Meeting of Shareholders of ABC Bancorp to be
held on Tuesday, May 11, 1999 (the "Annual Meeting") at Sunset Country Club,
Thomasville Highway, Moultrie, Georgia, at 4:15 p.m., local time, and at any
adjournment or postponement thereof, and hereby authorizes them to vote as
designated below at the Annual Meeting all the shares of Common Stock of ABC
Bancorp held of record by the undersigned as of March 12, 1999. The
undersigned hereby acknowledges receipt of the Annual Report of the Company
for the fiscal year ended December 31, 1998 and the Notice of Annual Meeting
and Proxy Statement of the Company for the Annual Meeting.
I. Election of the following nominees to the Board of Directors in Class I
for three-year terms of office:
For all nominees Withhold authority
listed below (except to vote for all
as marked to the nominees listed
contrary below) [_] below [_]
Class II
J. Raymond Fulp Bobby B. Lindsey Hal L. Lynch Henry C. Wortman
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
WRITE THE NAME(S) OF SUCH NOMINEE(S) IN THE SPACE PROVIDED BELOW.
- -------------------------------------------------------------------------------
IF THIS PROXY IS EXECUTED BY THE UNDERSIGNED IN SUCH MANNER AS NOT TO WITHHOLD
AUTHORITY TO VOTE FOR THE ELECTION OF ANY NOMINEE, THIS PROXY SHALL BE DEEMED
TO GRANT SUCH AUTHORITY.
II. To ratify the appointment of Mauldin & Jenkins, Certified Public
Accountants and Consultants, LLC, as the Company's independent
accountants for the fiscal year ended December 31, 1998
[_] FOR [_] AGAINST [_] ABSTAIN
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 THE ELECTION OF EACH NOMINEE AND IN THE DISCRETION OF THE
PROXY HOLDERS AS TO ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE ANNUAL
MEETING.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the annual meeting.
Print Name(s) ___________________
Signature _______________________
Signature if Held Jointly _______
Dated: ____________________, 1999
Please date and sign in the
same manner in which your shares
are registered. When signing as
executor, administrator,
trustee, guardian, attorney or
corporate officer, please give
full title as such. Joint owners
should each sign.
i
