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
Southern BancShares (N.C.), Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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:
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:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
SOUTHERN BANCSHARES (N.C.), INC.
100 North Center Street
Mount Olive, North Carolina 28365
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 16, 1997
NOTICE is hereby given that the Annual Meeting of Shareholders of Southern
BancShares (N.C.), Inc. ("Southern BancShares") will be held as follows:
<TABLE>
<S> <C>
Place: Main Office Lobby
Southern Bank and Trust Company
100 North Center Street
Mount Olive, North Carolina
Date: Wednesday, April 16, 1997
Time: 5:30 P.M.
</TABLE>
The purposes of the meeting are:
1. To elect an 18-member Board of Directors, each member to hold office
for a term of one year or until his or her respective successor is
duly elected and qualified.
2. To consider and vote on a proposal to ratify the appointment of KPMG
Peat Marwick LLP as Southern BancShares' independent public
accountants for 1997.
3. To transact any other business that may properly come before the
Annual Meeting.
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE THE PRESENCE OF A QUORUM, ALL SHAREHOLDERS, EVEN
THOUGH THEY PLAN TO ATTEND, ARE URGED TO COMPLETE, SIGN AND DATE THE
ACCOMPANYING PROXY AND PROMPTLY RETURN IT IN THE POSTAGE PREPAID
ENVELOPE PROVIDED FOR THAT PURPOSE. THE GIVING OF SUCH PROXY WILL NOT
AFFECT YOUR RIGHT TO REVOKE IT AND VOTE IN PERSON IF YOU ATTEND THE
MEETING.
By Order of the Board of Directors
[sig. appears here]
David A. Bean, Secretary
March 21, 1997
<PAGE>
SOUTHERN BANCSHARES (N.C.), INC.
100 North Center Street
Mount Olive, North Carolina 28365
PROXY STATEMENT
Annual Meeting of Shareholders
To Be Held April 16, 1997
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Southern BancShares (N.C.), Inc. ("Southern
BancShares") of proxies in the form enclosed herewith to be used at the Annual
Meeting of Shareholders of Southern BancShares to be held in the Main Office
Lobby of Southern Bank and Trust Company (the "Bank"), 100 North Center Street,
Mount Olive, North Carolina, at 5:30 P.M. on April 16, 1997, or any
adjournments thereof. In addition to solicitation by mail, proxies may be
solicited personally or by telephone by directors, officers or employees of
Southern BancShares and the Bank. Expenses of such proxy solicitation will be
paid by Southern BancShares. Persons named in the proxy to represent
shareholders at the meeting are R. S. Williams, W. A. Potts and John N. Walker.
This Proxy Statement is first being mailed to Southern BancShares' shareholders
on March 21, 1997.
Shares represented by each proxy that is properly executed and
returned, and not revoked, will be voted in accordance with the instructions
contained therein. If no instructions are given, those shares will be voted
"FOR" the election of each of the 18 nominees for director named in Proposal 1
below, and "FOR" ratification of the appointment of KPMG Peat Marwick LLP as
Southern BancShares' independent public accountants for 1997. On such other
matters as may properly come before the meeting, the persons named in the form
of proxy to represent shareholders will be authorized to vote all proxies in
accordance with their best judgment on such matters. If, at or before the time
of the Annual Meeting, any nominee named in Proposal 1 has become unavailable
for any reason, all proxies may be voted for a substitute nominee designated by
the Board of Directors. A shareholder who executes a proxy has the right to
revoke it at any time before it is voted by filing with the Secretary either an
instrument revoking the proxy or a duly executed proxy bearing a later date, or
by attending the Annual Meeting and requesting the right to vote in person.
VOTING SECURITIES
At the close of business on March 10, 1997, Southern BancShares had
outstanding voting securities as follows: 119,918 shares of $5 par value
common stock, entitled to one vote per share; 407,752 shares of no par value
Series B non-cumulative preferred stock, entitled to one vote per 38 shares;
and 43,631 shares of no par value Series C non-cumulative preferred stock,
entitled to one vote per 38 shares.
RECORD DATE; VOTE REQUIRED FOR APPROVAL
March 10, 1997, has been set as the record date for the determination
of shareholders entitled to notice of and to vote at the Annual Meeting. At
the Annual Meeting, shareholders will be entitled to cast the appropriate
number of votes for the shares of Southern BancShares' voting securities
standing of record in their respective names at the close of business on that
date. In the election of directors, the 18 candidates receiving the highest
numbers of votes shall be elected. For Proposal 2 to be approved, a majority
of the votes represented, in person and by proxy, and entitled to be cast at
the Annual Meeting, must be cast in favor of approval. In the voting at the
Annual Meeting, abstentions will have the same effect as votes against Proposal
2. Broker non-votes will have no effect in the voting on Proposal 2.
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
At the close of business on March 10, 1997, persons known to management
to own beneficially or of record 5% or more of any class of Southern
BancShares' voting securities were as follows:
<TABLE>
<CAPTION>
Amount and
Title Nature Percentage Percentage
of Name and Address of Beneficial of of Total
Class of Beneficial Owner Ownership* Class Votes**
<S> <C> <C> <C> <C>
Common Frank B. Holding 31,131(1) 25.96% 23.62%
Smithfield, North Carolina
Lewis R. Holding 28,127(2) 23.46% 21.34%
Lyford Cay, Bahamas
Helen Corbett Woodard 6,180(3) 5.15% 4.69%
Virginia Beach, Virginia
Series B Frank B. Holding 22,171(4) 5.44% .44%
Preferred Smithfield, North Carolina
Series C James R. Hendrix 6,120 14.03% .12%
Preferred Tyner, North Carolina
Elmo J. Peele 3,229 7.40% .06%
Lewiston-Woodville, North Carolina
Charlie H. Spivey 2,550 5.84% .05%
Sunbury, North Carolina
Harry N. and Nell C. Willey 2,200(5) 5.04% .04%
Enfield, North Carolina
</TABLE>
* Except as otherwise stated in the footnotes below, the shares shown as
beneficially owned are, to the best of management's knowledge, owned of
record by the persons named and such persons exercise sole voting and
investment power with respect to those shares.
** This column reflects the votes to which these shares are entitled as a
percentage of the aggregate votes that may be cast by the holders of
all shares of Southern BancShares' outstanding voting securities. For
further information as to the number of outstanding shares and voting
rights of the common and preferred stock, see the section of this Proxy
Statement above entitled "VOTING SECURITIES".
(1) Frank B. Holding exercises sole voting and investment power as to 7,349
shares of common stock held directly. He disclaims beneficial
ownership as to shares included above and held by his wife (1,802
shares), by his adult son and daughters and their spouses (20,880
shares) and by his wife and First-Citizens Bank & Trust Company as
co-trustees of several irrevocable trusts for the benefit of his adult
son and daughters (1,100 shares).
(2) Lewis R. Holding exercises sole voting and investment power as to
22,576 shares of common stock held directly. He disclaims beneficial
ownership as to shares included above and held by his wife directly
(4,298 shares), by his wife and George H. Broadrick as co-trustees of
two irrevocable trusts for the benefit of his adult daughters (1,100
shares) and held directly by one of his adult daughters (153 shares).
(3) Helen Corbett Woodard exercises sole voting and investment power as to
2,804 shares of common stock held on her own behalf and as to an
additional 3,376 shares held by her as sole trustee of a trust for the
benefit of her brother, Robert L. Corbett, Jr.
2
<PAGE>
(4) Frank B. Holding exercises sole voting and investment power as to 946
shares of Series B preferred stock held directly. He exercises shared
voting and investment power as to 17,205 shares of Series B held by
First Citizens BancShares, Inc., a corporation of which Mr. Holding is
deemed a "control person" for beneficial ownership purposes. He
disclaims beneficial ownership as to 4,020 shares of Series B held by
his adult children and their spouses, which shares are included above.
(5) Harry N. Willey and Nell C. Willey exercise shared voting and
investment power as to 1,700 shares of Series C preferred stock held
jointly, and Mr. Willey exercises sole voting and investment power as
to an additional 500 shares of Series C held directly and included
above.
OWNERSHIP OF VOTING SECURITIES BY MANAGEMENT
As of the close of business on March 10, 1997, the beneficial ownership
of Southern BancShares' voting securities by its directors and certain named
executive officers, and by all directors and executive officers as a group, was
as follows:
<TABLE>
<CAPTION>
Amount and
Title Nature Percentage Percentage
of Name of of Beneficial of of Total
Class Beneficial Owner Ownership* Class Votes**
<S> <C> <C> <C> <C>
Common Bynum R. Brown 372 .31% .28%
William H. Bryan 108 .09% .08%
D. Hugh Carlton 288(1) .24% .22%
Robert J. Carroll 30 .03% .02%
Hope H. Connell 4,542(2) 3.79% 3.45%
J. Edwin Drew 3,553(3) 2.96% 2.70%
Moses B. Gillam, Jr. 125 .10% .09%
LeRoy C. Hand, Jr. 148(4) .12% .11%
Frank B. Holding 31,131(5) 25.96% 23.62%
M. J. McSorley 204(6) .17% .15%
W. B. Midyette, Jr. 150 .13% .11%
W. Hunter Morgan 350(7) .29% .27%
Charles I. Pierce, Sr. 70 .06% .05%
W. A. Potts 550(8) .46% .42%
Charles L. Revelle, Jr. 1,020 .85% .77%
Charles O. Sykes 100 .08% .08%
John N. Walker 190 .16% .14%
R. S. Williams 225(9) .19% .17%
All directors and executive
officers as a group (22 persons) 38,684 32.26% 29.35%
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Amount and
Title Nature Percentage Percentage
of Name of of Beneficial of of Total
Class Beneficial Owner Ownership* Class Votes**
<S> <C> <C> <C> <C>
Series B Bynum R. Brown 2,358 .58% .05%
Preferred
Robert J. Carroll 2,687(10) .66% .05%
Hope H. Connell 2,000(2) .49% .04%
LeRoy C. Hand, Jr. 17,522(4) 4.30% .35%
Frank B. Holding 22,171(11) 5.44% .44%
M. J. McSorley 5,225(12) 1.28% .10%
W. Hunter Morgan 7,368(7) 1.81% .15%
Charles I. Pierce, Sr. 336(13) .08% .01%
R. S. Williams 7,109(9) 1.74% .14%
All directors and executive
officers as a group (22 persons) 64,776 15.89% 1.29%
Series C M. J. McSorley 25(12) .06% .00%
Preferred
Charles I. Pierce, Sr. 139(13) .32% .00%
All directors and executive
officers as a group (22 persons) 164 .38% .00%
</TABLE>
* Except as otherwise stated in the footnotes below, the shares shown
above as beneficially owned are, to the best of management's knowledge,
owned of record by the persons named and such persons exercise sole
voting and investment power with respect to such shares.
** This column reflects the votes to which these shares are entitled as a
percentage of the aggregate votes that may be cast by the holders of
all shares of Southern BancShares' outstanding voting securities. For
further information as to the number of outstanding shares and voting
rights of the common and preferred stock, see the section of this Proxy
Statement above entitled "VOTING SECURITIES".
(1) D. Hugh Carlton exercises sole voting and investment power as to 114
shares of common stock held directly, and shared voting and investment
power as to 149 shares of common stock held by Carlton Insurance
Agency, Inc., of which he is deemed a control person. He shares voting
and investment power as to an additional 25 shares of common stock held
by his spouse.
(2) Hope H. Connell exercises sole voting and investment power as to 2,893
shares of common stock held directly and as to 200 shares of common
stock held by her as custodian for her son. She exercises shared
voting and investment power as to 220 shares of common stock held in a
trust for her benefit by First-Citizens Bank & Trust Company and her
mother as co-trustees. She disclaims beneficial ownership as to 537
shares of common stock and 2,000 shares of Series B held by her husband
on his own behalf and as to 692 shares of common stock held by her
husband as custodian for their sons and included above. All of such
shares also are included, and disclaimed, in the beneficial ownership
shown above for her father, Frank B. Holding.
(3) J. Edwin Drew exercises sole voting and investment power as to 2,939
shares of common stock held directly and 614 shares of common stock
held in a self-directed retirement plan.
4
<PAGE>
(4) LeRoy C. Hand, Jr. exercises sole voting and investment power as to 100
shares of common stock and 11,233 shares of Series B preferred stock
held directly. He disclaims beneficial ownership as to 48 shares of
common stock and 6,289 shares of Series B preferred stock owned by his
wife and included above.
(5) For an explanation of the nature of the beneficial ownership of the
common stock shown above as beneficially owned by Frank B. Holding, see
footnote (1) of the section of this Proxy Statement entitled "PRINCIPAL
HOLDERS OF VOTING SECURITIES." Included in the shares shown as
beneficially owned by Mr. Holding are 4,542 shares of common stock also
shown above as beneficially owned by his daughter, Hope H. Connell, as
to which shares Mr. Holding disclaims beneficial ownership.
(6) M. J. McSorley exercises sole voting and investment power as to 144
shares of common stock held directly and disclaims beneficial ownership
as to 60 shares of common stock held by his wife and included above.
(7) W. Hunter Morgan exercises sole voting and investment power as to 225
shares of common stock and 1,795 shares of Series B preferred stock
held directly. He disclaims beneficial ownership as to 125 shares of
common stock and 2,131 shares of Series B held by his wife and included
above. He exercises shared voting and investment power as to 3,442
shares of Series B held by Kellogg-Morgan Agency, Inc., a corporation
of which Mr. Morgan is deemed a "control person" for beneficial
ownership purposes, which shares are included above.
(8) W. A. Potts exercises sole voting and investment power as to 350 shares
of common stock held directly and disclaims beneficial ownership as to
200 shares of common stock held by his wife and included above.
(9) R. S. Williams exercises sole voting and investment power as to 175
shares of common stock and 6,785 shares of Series B preferred stock
held directly. He disclaims beneficial ownership as to 50 shares of
common stock and 324 shares of Series B held by his wife and included
above.
(10) Robert J. Carroll exercises sole voting and investment power as to
1,994 shares of Series B preferred stock held directly and disclaims
beneficial ownership as to 693 shares of Series B held by his wife and
included above.
(11) For an explanation of the nature of the beneficial ownership of the
Series B preferred stock shown above as beneficially owned by Frank B.
Holding, see footnote (4) of the section of this Proxy Statement
entitled "PRINCIPAL HOLDERS OF VOTING SECURITIES."
(12) M. J. McSorley exercises sole voting and investment power as to 344
shares of Series B preferred stock held directly and disclaims
beneficial ownership as to 4,881 shares of Series B and 25 shares of
Series C held by his wife and included above.
(13) Charles I. Pierce, Sr. exercises sole voting and investment power as
to 265 shares of Series B and 110 shares of Series C preferred stock
held directly. He exercises shared voting and investment power as to
71 shares of Series B and 29 shares of Series C held jointly with his
adult son.
5
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
The Bylaws of Southern BancShares provide for not less than 5 nor more
than 23 directors. The Board of Directors is authorized to establish within
those limits the number of directors to be elected each year and has set the
number of directors at 18 for election at the Annual Meeting. The nominees for
the Board of Directors set forth below consist of the 18 current directors who
have been nominated to be reelected for terms of one year or until their
successors have been duly elected and qualified:
<TABLE>
<CAPTION>
Positions
with
Southern Year Principal Occupation
Name, Address BancShares First and Business Experience
and Age and Bank Elected(1) For Past Five Years
<S> <C> <C> <C>
Bynum R. Brown Director 1986 President and Owner, Bynum R.
Murfreesboro, NC Brown Agency, Inc.
71 (real estate and insurance);
Secretary/Treasurer,
Roanoke Valley Nursing Home,
Inc.; President and
Owner, Brown Manor, Inc. (family
care home)
William H. Bryan Director 1992 President, Director and
Mount Olive, NC Treasurer, Mount Olive Pickle
39 Company, Inc. (manufacturer of
pickle and pepper products)
D. Hugh Carlton Director 1994 President, Carlton Insurance
Warsaw, NC Agency, Inc.
65 (insurance)
Robert J. Carroll Director 1986 President and Owner, Carroll's
Gates, NC Garage, Inc.
72 (truck and farm equipment
dealer)
Hope H. Connell (2) Director 1992 Senior Vice President,
Raleigh, NC First-Citizens Bank & Trust
34 Company
J. Edwin Drew Director 1973 Retired physician and former
Macclesfield, NC President, J. Edwin Drew, M.D.,
66 P.A.
Moses B. Gillam, Jr. (3) Director 1982 Partner, Gillam and Gillam
Windsor, NC (attorneys)
80
LeRoy C. Hand, Jr. Director 1986 Retired physician and former
Camden, NC President, Albemarle Emergency
76 Associates, P.A.
Frank B. Holding (2) Director; 1962 Executive Vice Chairman of the
Smithfield, NC Chairman Board, First Citizens
68 of Executive BancShares, Inc. and First-
Committee Citizens Bank & Trust
Company; Vice Chairman of the
Board, First Citizens
Bancorporation of S.C., Inc. and
First-Citizens Bank
and Trust Company of South
Carolina
M. J. McSorley Director; 1990 President and Chief Executive
Mount Olive, NC President Officer of the Bank;
63 of Bank; Vice President of Southern
Vice BancShares
President
Southern
BancShares
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Positions
with
Southern Year Principal Occupation
Name, Address BancShares First and Business Experience
and Age and Bank Elected (1) For Past Five Years
<S> <C> <C> <C>
W. B. Midyette, Jr. Director 1982 Retired farmer
Bath, NC
77
W. Hunter Morgan Director 1986 President, Kellogg-Morgan
Sunbury, NC Agency, Inc.
66 (insurance)
Charles I. Pierce, Sr. Director 1986 President, Pierce Printing Co.,
Ahoskie, NC Inc. (commercial printers)
79
W. A. Potts Vice 1968 Retired veterinarian and former
Mount Olive, NC Chairman of President, W. A. Potts, DVM, P.A.;
70 the Board Chairman of the Board,
Mount Olive Pickle Company, Inc.
Charles L. Revelle, Jr. Director 1986 Chairman of the Board, Revelle
Murfreesboro, NC Agri-Products, Inc.; Vice President,
70 Revelle Builders of NC, Inc.;
President, Revelle Equipment
Co., Inc. (agribusiness)
Charles O. Sykes Director 1984 President, Mount Olive Livestock
Mount Olive, NC Market, Inc. (livestock auction
67 market and dealer)
John N. Walker Director 1971 President Emeritus (former
Mount Olive, NC President, Chief
71 Executive Officer and Director),
Mount Olive Pickle Company, Inc.
(manufacturer of pickle and
pepper products)
R. S. Williams Chairman of the 1971 Chairman of the Board and
Mount Olive, NC Board; President Consultant, Southern
68 of Southern BancShares and Bank; President,
BancShares Southern BancShares
(retired President of Bank)
</TABLE>
(1) Refers to the year each director first became a director of Southern
BancShares or its predecessor or, if elected to the Board prior to December
31, 1982, the year first elected to the Board of the Bank.
(2) Hope H. Connell is the daughter of Frank B. Holding.
(3) The firm of Gillam and Gillam performed legal services for the Bank in
1996, and it is expected that such relationship will continue during 1997.
Mr. Gillam is a partner in the firm.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
ELECTION OF THE 18 NOMINEES LISTED ABOVE FOR THE BOARD OF DIRECTORS.
7
<PAGE>
Compensation of Directors
Compensation paid to directors includes a quarterly retainer of $400,
plus $200 for attendance at each meeting of the Board of Directors, $100 for
attendance at each meeting of a Board committee of which a director is a
member, and $40 for attendance at each monthly local advisory board meeting.
Directors R. S. Williams, Frank B. Holding and M. J. McSorley do not receive
directors' compensation for serving on the Board of Directors or its
committees.
Since his retirement as the Bank's President in December 1989, R. S.
Williams has been compensated for his services pursuant to a consulting and
noncompetition agreement with the Bank under which he currently receives
monthly payments of $2,533 for the noncompetition arrangement and $300 for his
consulting services. In addition, Mr. Williams receives payments under the
Bank's Pension Plan. For further information, see the sections of this Proxy
Statement entitled "Executive Compensation", "Pension Plan" and "Employment
Contracts, Termination of Employment and Change-in-Control Arrangements".
Meetings and Committees of the Boards of Directors
The Boards of Directors of Southern BancShares and the Bank held four
joint meetings in 1996. All directors attended at least 75% of the aggregate
number of meetings of Southern BancShares' Board of Directors and any
committees on which they served during their terms, with the exception of D.
Hugh Carlton.
There are several standing committees of the Boards, including an Audit
and Compliance Committee and a Compensation Committee. Southern BancShares'
Board of Directors does not have a standing nominating committee or any other
committee performing equivalent functions.
The Audit and Compliance Committee currently consists of John N.
Walker - Chairman, William H. Bryan, W. A. Potts, and Charles O. Sykes. The
Committee oversees the scope and detail of the continuous audit program
conducted by the audit staff of the Bank's affiliate, First-Citizens Bank &
Trust Company ("First Citizens"), pursuant to an agreement between the Bank
and First Citizens (see "Transactions with Management"). The Committee
periodically reviews reports on the work of such external auditors and related
matters. Subject to the approval of the Board of Directors and ratification
by the shareholders of Southern BancShares, the Audit and Compliance Committee
engages a qualified firm of certified public accountants to conduct an annual
audit of Southern BancShares' consolidated financial statements. The Committee
receives written reports from the accounting firm and reviews nonaudit services
proposed by management to be provided by the accounting firm. During 1996, the
Audit and Compliance Committee held four meetings.
The members of the Compensation Committee are listed below. The
Compensation Committee reviews the Bank's compensation program, including
salary, pension and incentive compensation plans and such other employee
benefit matters as it deems appropriate. In conjunction with management, the
Committee makes recommendations to the entire Board of Directors with regard to
salaries and other forms of compensation. The Compensation Committee held one
meeting during 1996.
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation Committee are: Frank B.
Holding - Chairman, William H. Bryan, W. A. Potts, Charles O. Sykes, John N.
Walker and R. S. Williams. Mr. Holding is Executive Vice Chairman of First
Citizens BancShares, Inc. and its wholly-owned subsidiary, First-Citizens Bank
& Trust Company, Raleigh, N.C. ("First Citizens"). First Citizens provides
various services to the Bank and Southern BancShares, including the management
consulting services of Mr. Holding (see "Transactions with Management"). Mr.
Williams is President and Chief Executive Officer of Southern BancShares. He
retired as president of the Bank in December 1989, but continues to serve as a
consultant to both the Bank and Southern BancShares (see footnote (2) to the
Summary Compensation Table below and "Employment Contracts, Termination of
Employment and Change-in-Control Arrangements" below).
8
<PAGE>
Committee Report on Executive Compensation
The Bank attempts to provide compensation at levels that will enable it
to attract and retain qualified and motivated individuals as officers and
employees. At the present time, annual salary is the only form of compensation
paid to or for the benefit of executive officers (other than benefits under the
Bank's 401(k) salary deferral plan and other customary employee benefit and
welfare plans, including a defined benefit pension plan). The Compensation
Committee (the "Committee") administers the Bank's compensation program and has
the responsibility for matters involving the compensation of executive
officers.
For 1996, the Committee established a recommended salary for each
executive officer, including the chief executive officer of the Bank, based on
an evaluation of that officer's individual level of responsibility and
performance. The Committee's recommendations were reported to and subject to
the approval of the Board of Directors, which made all final decisions
regarding the salaries of executive officers. The performance of individual
executive officers and the Bank's financial performance in general were
considered by the Committee and the Board of Directors in connection with the
setting of salaries for 1996. However, the setting of salaries largely is
subjective and there are no specific formulae, objective criteria or other such
mechanism by which adjustments to each executive officer's salary are tied
empirically to his individual performance or to the Bank's financial
performance.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
the deductibility of annual compensation in excess of $1,000,000 paid to
certain executive officers of public corporations. As none of BancShares'
executive officers receive annual compensation approaching that amount,
BancShares' Board of Directors has not adopted a policy with respect to Section
162(m).
Compensation Committee:
Frank B. Holding, Chairman
William H. Bryan
W. A. Potts
Charles O. Sykes
John N. Walker
R. S. Williams
9
<PAGE>
Executive Officers
Certain information regarding the executive officers of Southern
BancShares and the Bank is set forth in the following table. All executive
officers serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
Name Age Positions with Southern BancShares and
the Bank and Prior Positions for Past Five Years
<S> <C> <C>
R. S. Williams 67 Chairman of the Board of Southern
BancShares and the Bank; President
and Chief Executive Officer of
Southern BancShares; President of
the Bank prior to July 1989
M. J. McSorley 63 President and Chief Executive
Officer of the Bank since
July 1989; Vice President of
Southern BancShares since April
1990; Director of the Bank and
Director of Southern BancShares
since 1990
John C. Pegram, Jr. 52 Executive Vice President of the
Bank since January 15, 1997;
formerly Senior Vice President of
the Bank from November 1995; prior
to that, Vice President and
Regional Supervisor of the Bank
Paul A. Brewer 54 Senior Vice President of the Bank
since December 1992; former Regional
Vice President of the Bank; Assistant
Secretary of Southern BancShares
since 1986
Richard D. Ray 50 Senior Vice President of the Bank
since January 1993; former Regional
Vice President of the Bank; Assistant
Treasurer of Southern BancShares
since 1991
David A. Bean 48 Secretary of Southern BancShares
and the Bank since January 1992;
Vice President and Controller of
the Bank since 1984; Treasurer of
Southern BancShares since 1986
</TABLE>
10
<PAGE>
Executive Compensation
The following table shows, for 1996, 1995 and 1994, the cash and
certain other compensation paid to or received or deferred by certain of the
executive officers of Southern BancShares and the Bank, respectively, in all
capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
Other All
Annual Restricted Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Awards SARs Payouts sation
Position Year ($)(1) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. S. Williams, 1996 -0- -0- -0- -0- -0- -0- 80,900(2)
Chairman of the
Board, President 1995 -0- 6,000 -0- -0- -0- -0- 78,500(2)
and Chief Executive
Officer of Southern 1994 -0- -0- -0- -0- -0- -0- 78,500(2)
BancShares (2)
M. J. McSorley, 1996 128,055 -0- -0- -0- -0- -0- 5,286(3)
President and Chief
Executive Officer of 1995 119,730 -0- -0- -0- -0- -0- 5,237(3)
the Bank and Vice
President of 1994 111,900 -0- -0- -0- -0- -0- 4,989(3)
Southern BancShares
</TABLE>
(1) Includes amounts deferred at the election of Mr. McSorley pursuant to
the Bank's Section 401(k) salary deferral plan.
(2) Mr. Williams retired from active employment with the Bank in December
1989, but he continues to serve as President and Chief Executive
Officer of Southern BancShares. However, Mr. Williams does not receive
a salary for his services as an officer of Southern BancShares. The
$80,900 in other compensation for 1996 is comprised of $46,900 in
benefits from the Bank's pension plan and $34,000 received pursuant to
a noncompetition and consulting agreement with the Bank. The $78,500
shown for 1995 and 1994 is comprised of $46,900 in benefits from the
Bank's pension plan and $31,600 received from the agreement with the
Bank. (See the sections of this Proxy Statement entitled "Pension
Plan" and "Employment Contracts, Termination of Employment and
Change-in-Control Arrangements" below.)
(3) Consists entirely of the Bank's contributions on behalf of Mr. McSorley
pursuant to the terms of the Bank's Section 401(k) salary deferral
plan.
11
<PAGE>
Pension Plan
The following table shows the estimated annual benefits payable to a
covered participant at normal retirement age under the Bank's qualified defined
benefit pension plan (the "Pension Plan") based on various specified numbers of
years of service and levels of covered compensation.
<TABLE>
<CAPTION>
Years of Service
Final
Average 10 15 20 25 30 35 40
Compensation Years Years Years Years Years Years Years
<S> <C> <C> <C> <C> <C> <C> <C>
$150,000 $25,958 $38,936 $51,915 $64,894 $77,873 $90,851 $99,851
125,000 21,333 31,999 42,665 53,331 63,998 74,664 82,164
100,000 16,708 25,061 33,415 41,769 50,123 58,476 64,476
75,000 12,083 18,124 24,165 30,206 36,248 42,289 46,789
50,000 7,458 11,186 14,915 18,644 22,373 26,101 29,101
</TABLE>
Benefits shown in the table are computed as straight life annuities
beginning at age 65 and are not subject to a deduction for Social Security
benefits or any other offset amount. A participant's compensation covered by
the Pension Plan is his base salary, and the participant's benefits are based
on his "final average compensation" covered by the Pension Plan, which consists
of the average earnings of the participant during the five highest consecutive
earning years of the last ten complete calendar years as a participant. The
current estimated years of service and "final average compensation",
respectively, for Mr. M. J. McSorley are 37 years and $114,291. Mr. R. S.
Williams retired from employment with the Bank in December 1989 and receives
benefits of $46,900 per year pursuant to the terms of the Pension Plan.
Employment Contracts, Termination of Employment
and Change-in-Control Arrangements
Effective on Chairman R. S. Williams' retirement from employment with
the Bank in December 1989, he entered into a noncompetition and consulting
agreement with the Bank pursuant to which he provides advisory and consulting
services to the Bank, will not compete with the Bank in North Carolina, and
currently receives monthly payments of $2,533 for the noncompetition
arrangement and $300 for consulting services. The agreement, as amended, will
terminate on December 31, 1997, unless further extended by mutual agreement of
the parties involved.
Pursuant to the terms of a similar agreement with the Bank, M. J.
McSorley, President of the Bank, will receive monthly payments of $1,067 for a
noncompetition arrangement and $356 for consulting services during the ten-year
period following his retirement.
12
<PAGE>
Performance Graph
The following line graph compares the cumulative total shareholder
return (the "CTSR") on Southern BancShares' common stock during the previous
five fiscal years with the CTSR over the same measurement period of the
Nasdaq-U.S. index and the Nasdaq Banks index. Each line graph assumes $100
invested on January 1, 1992, and that dividends were reinvested in additional
shares.
Comparison of Five-Year Cumulative Total Shareholder Return among
Southern BancShares (N.C.), Inc., Nasdaq Banks and
Nasdaq-US Companies Indices
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
+Southern []Nasdaq
Year BancShares Banks *Nasdaq-US
<S> <C> <C> <C>
1991 $100 $100 $ 100
1992 101 146 116
1993 143 166 134
1994 145 165 131
1995 146 246 185
1996 235 326 227
</TABLE>
13
<PAGE>
Transactions with Management
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with several of the directors,
executive officers, and principal shareholders of Southern BancShares and the
Bank and their associates. Loans included in those transactions were made on
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with others, and did not involve more than
the normal risk of collectibility or present other unfavorable features. Each
such transaction has been approved by the Board of Directors of the Bank.
Frank B. Holding, a director and principal shareholder of Southern
BancShares, and Lewis R. Holding, a principal shareholder of Southern
BancShares, are directors, executive officers and principal shareholders of
First Citizens BancShares, Inc., the bank holding company for First-Citizens
Bank & Trust Company, Raleigh, N.C. ("First Citizens"). Hope H. Connell, the
daughter of Frank B. Holding and a director of Southern BancShares, also is a
principal shareholder of First Citizens BancShares, Inc. and an officer of
First Citizens. During 1996, the Bank paid fees to First Citizens in an
aggregate amount of $2,328,136 for data and item processing services, internal
audit services, securities portfolio management services, the management
consulting services of Frank B. Holding, and services as trustee for the Bank's
pension plan and Section 401(k) salary deferral plan. During 1997, the Bank
projects that its payments to First Citizens for similar services will be
approximately $2,416,000, of which total the salary reimbursement payments to
First Citizens for the management consulting services of Frank B. Holding are
projected to amount to approximately $75,842.
During 1996, the Bank paid $76,658 to Carlton Insurance Agency, Inc.,
of which D. Hugh Carlton, a director of Southern BancShares and the Bank, is
President, for servicing the general liability and comprehensive insurance
policies on property and vehicles for the Bank, as well as the Bank's workers'
compensation coverage and umbrella policies. It is expected that such
relationship will continue during 1997.
PROPOSAL 2: RATIFICATION OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the shareholders, the Board of Directors has
approved the appointment of KPMG Peat Marwick LLP, Certified Public Accountants
("Peat Marwick"), as Southern BancShares' independent accountants for fiscal
1997. During 1995, Peat Marwick replaced Price Waterhouse LLP ("Price
Waterhouse"), which had served as Southern BancShares' independent accountants
since its organization in 1986 and had previously been engaged by its
predecessors. The appointment of Peat Marwick was first approved by the Board
of Directors of Southern BancShares on January 18, 1995, based upon the
recommendation of its Audit Committee. Such appointment has been ratified by
shareholders at the 1995 and 1996 Annual Meetings.
During Southern BancShares' two fiscal years prior to the change in
accountants, and through January 18, 1995, the date of the Board's approval of
the change in accountants (which was also the date of Price Waterhouse's report
on Southern BancShares' financial statements for the year ended December 31,
1994), there were no disagreements with Price Waterhouse on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to such firm's satisfaction, would
have caused it to make reference to the subject matter of such disagreement in
connection with its reports; and, during that period, Price Waterhouse's
reports on the financial statements of Southern BancShares did not contain an
adverse opinion or a disclaimer of opinion, nor were they qualified or modified
as to uncertainty, audit scope or accounting principles.
Representatives of Peat Marwick are expected to be present at the
Annual Meeting and available to respond to appropriate questions from
shareholders, and will have the opportunity to make a statement if they so
desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS OF SOUTHERN BANCSHARES FOR 1997.
14
<PAGE>
PROPOSALS OF SHAREHOLDERS
Any proposal of a shareholder which is intended to be presented at the
1998 Annual Meeting must be received by Southern BancShares at its principal
office in Mount Olive, North Carolina, no later than December 1, 1997, in order
that any such proposal be timely received for inclusion in the proxy statement
and form of proxy to be issued in connection with that meeting. It is
anticipated that the 1998 Annual Meeting will be held on a date during April
1998.
ANNUAL REPORT ON FORM 10-K
Southern BancShares is required to file with the Securities and
Exchange Commission an Annual Report on Form 10-K within 90 days after the end
of each fiscal year. ON OR AFTER MARCH 31, 1997, UPON WRITTEN REQUEST TO DAVID
A. BEAN, TREASURER AND SECRETARY, SOUTHERN BANCSHARES (N.C.), INC., POST OFFICE
BOX 729, MOUNT OLIVE, NORTH CAROLINA 28365, BY A SHAREHOLDER OF SOUTHERN
BANCSHARES ENTITLED TO VOTE AT THE ANNUAL MEETING, A COPY OF SOUTHERN
BANCSHARES' ANNUAL REPORT ON FORM 10-K FOR 1996, INCLUDING FINANCIAL STATEMENTS
AND SCHEDULES THERETO, WILL BE PROVIDED WITHOUT CHARGE TO THE SHAREHOLDER
MAKING SUCH REQUEST.
OTHER MATTERS
The Board of Directors knows of no other business to be brought before
the meeting or any adjournment thereof. Should other matters properly come
before the meeting, the persons named in the proxy to represent the
shareholders will be authorized to vote according to their best judgment on
such matters.
By Order of the Board of Directors
[Sig. appears here]
David A. Bean, Secretary
March 21, 1997
15
<PAGE>
*******************************************************************************
APPENDIX
SOUTHERN BANCSHARES (N.C.), INC.
100 North Center Street
Mount Olive, North Carolina 28365
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints R. S. Williams, W. A. Potts and John N.
Walker, or any of them, attorneys and proxies, with power of substitution, to
vote all outstanding stock of Southern BancShares (N.C.), Inc. held of record
by the undersigned on March 10, 1997, at the Annual Meeting of Shareholders of
Southern BancShares (N.C.), Inc. to be held in the Main Office Lobby, Southern
Bank and Trust Company, 100 North Center Street, Mount Olive, North Carolina,
at 5:30 P.M. on April 16, 1997, and any adjournments thereof, on the matters
listed below:
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as indicated otherwise) all nominees listed below
</TABLE>
Nominees: Bynum R. Brown; William H. Bryan; D. Hugh Carlton; Robert J.
Carroll; Hope H. Connell; J. Edwin Drew; Moses B. Gillam, Jr.; LeRoy C. Hand,
Jr.; Frank B. Holding; M. J. McSorley; W. B. Midyette, Jr.; W. Hunter Morgan;
Charles I. Pierce, Sr.; W. A. Potts; Charles L. Revelle, Jr.; Charles O. Sykes;
John N. Walker; R. S. Williams.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the line below.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS: Proposal to
ratify the appointment of KPMG Peat Marwick LLP, as independent
accountants for 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. OTHER BUSINESS: Should other matters properly come before the Annual
Meeting, the persons named herein as attorneys and proxies are
authorized to vote the shares represented by this proxy in accordance
with their best judgment.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED ABOVE.
IN THE ABSENCE OF ANY DIRECTION TO THE CONTRARY, THE PROXYHOLDERS WILL VOTE
THIS PROXY "FOR" PROPOSAL 2, AND "FOR" THE ELECTION OF EACH OF THE NOMINEES
FOR DIRECTOR LISTED IN PROPOSAL 1. IF, AT OR BEFORE THE TIME OF THE MEETING,
ANY NOMINEE LISTED IN PROPOSAL 1 HAS BECOME UNAVAILABLE FOR ANY REASON, THE
PROXYHOLDERS ARE AUTHORIZED TO VOTE FOR A SUBSTITUTE NOMINEE. THIS PROXY MAY
BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED BY FILING WITH THE SECRETARY AN
INSTRUMENT REVOKING THE PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE OR
BY ATTENDING THE ANNUAL MEETING AND REQUESTING THE RIGHT TO VOTE IN PERSON.
Please date and sign exactly as name appears below. When shares are
held jointly by more than one person, all should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: , 1997
(SEAL)
Signature
(SEAL)
Signature if held jointly
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY USING THE ENCLOSED
ENVELOPE
