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. )
(x ) Filed by the Registrant
( ) 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-b(e)(2))
(x ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
ANCHOR FINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
ANCHOR FINANCIAL CORPORATION
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
( x) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) 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: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid 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>
ANCHOR FINANCIAL CORPORATION
2002 OAK STREET
MYRTLE BEACH, SOUTH CAROLINA 29577
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders of Anchor
Financial Corporation will be held on Wednesday, April 26, 1995 at 4:00 p.m.
local time, at The Dunes Golf and Beach Club, 9000 North Ocean Boulevard, Myrtle
Beach, South Carolina 29572, for the following purposes, all of which are more
completely set forth in the accompanying proxy statement:
1. To fix the number of Directors to be elected at six and to elect six
persons as Directors;
2. To ratify the selection of Price Waterhouse LLP as independent public
accountants for the Corporation for the year ending December 31, 1995;
and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only those shareholders of common stock of record at the close of business
on March 1, 1995, shall be entitled to notice of and to vote at the meeting. The
Stock Transfer Book of the Corporation will not be closed.
A copy of the Corporation's 1994 Annual Report to Shareholders is enclosed
with this proxy statement.
By Order of the Board of Directors
STEPHEN L. CHRYST
President and Chief Executive Officer
Myrtle Beach, South Carolina
March 24, 1995
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY-EVEN IF YOU
PLAN TO ATTEND THE ANNUAL MEETING. YOUR PROXY CAN BE REVOKED AT ANY TIME PRIOR
TO ITS EXERCISE.
<PAGE>
ANCHOR FINANCIAL CORPORATION
2002 OAK STREET
MYRTLE BEACH, SOUTH CAROLINA 29577
PROXY STATEMENT
This Proxy Statement and the accompanying form of proxy are first sent to
shareholders on or about March 24, 1995.
INFORMATION CONCERNING PROXY
This solicitation of proxies for the Annual Meeting is being made by the
Board of Directors of Anchor Financial Corporation (the "Corporation") for use
at the meeting to be held on Wednesday, April 26, 1995 at 4:00 p.m. local time,
at The Dunes Golf and Beach Club, 9000 North Ocean Boulevard, Myrtle Beach,
South Carolina 29572, and at any adjournment(s) thereof. The entire cost of such
solicitation will be borne by the Corporation. The Corporation, through its
directors, officers, and regular employees, may solicit proxies personally or by
telephone, in addition to solicitation by mail, but without additional
compensation for such solicitation. The Corporation may request brokers and
others to send the Proxy Statement and the proxy material to the beneficial
owners of the shares and may reimburse them for their reasonable expense in
doing so.
The shares represented by the accompanying proxy will be voted if the proxy
is properly executed and received by the Corporation prior to the time of the
meeting. All proxies delivered pursuant to this solicitation are revocable at
any time prior to the exercise thereof at the option of the persons executing
them. Unless revoked, properly executed proxies will be voted in accordance with
the instructions contained therein. Proxies which contain no instructions will
be voted "FOR" the proposals.
The Corporation does not intend to present any matters for action other
than those listed in the Notice of Annual Meeting and has not been informed that
any persons intend to present any other matters for action at the meeting.
However, if any other matters are properly brought before the meeting, the
persons designated as proxies will vote in accordance with their best discretion
on such matters.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
At the close of business on March 1, 1995, the record date, the Corporation
had 4,000,000 shares of common stock authorized, $6.00 par value per share, of
which 1,270,210 shares were issued and outstanding, and 61,786 shares were
subject to options. The Corporation's common stock is the only class of stock
outstanding. Only the holders of record of common stock of the Corporation at
the close of business on March 1, 1995, are entitled to notice of and vote on
the matters to come before the Annual Meeting of Shareholders or any adjournment
thereof.
Presence, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock of the Corporation entitled to vote at the
Annual Meeting is necessary to constitute a quorum at the Meeting or any
adjournment thereof.
1
<PAGE>
A shareholder is entitled to one (1) vote, in person or by proxy, at the
Annual Meeting for each share of common stock of the Corporation held of record
in his or her name at the close of business on the record date, March 1, 1995.
In the election of each director and in all other matters which come before
the meeting of shareholders, each shareholder shall be entitled to one vote for
each share of stock owned by him.
As of March 1, 1995, The Anchor Bank Employee Stock Ownership Plan
beneficially owned 108,090 shares (8.51%) of the Corporation's outstanding
common stock. To the knowledge of the management of the Corporation, as of March
1, 1995, no other shareholder owned beneficially more than five percent (5%) of
the Corporation's outstanding common stock. As of March 1, 1995, the Board of
Directors of the Corporation beneficially owned 235,767 shares (18.56%) directly
and indirectly, of the Corporation's issued and outstanding common stock. The
Board of Directors, as trustees, also has voting power as to 40,458 (3.19%)
unallocated shares owned by The Anchor Bank Employee Stock Ownership Plan.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any proposal that a shareholder intends to present at the 1996 Annual
Meeting must be received at the Corporation's Principal Offices (2002 Oak
Street, Myrtle Beach, South Carolina 29577, Attention: Corporate Secretary) not
later than November 25, 1995. Any such proposal must comply with Rule 14a-8 of
Regulation 14A of the proxy rules of the Securities and Exchange Commission.
ELECTION OF DIRECTORS
The Charter and By-Laws of the Corporation provide that the Board of
Directors shall consist of a maximum of twenty (20) persons. The Board currently
consists of seventeen directors. The Charter and By-Laws also provide that the
terms of the Board of Directors be staggered so that approximately one-third of
the directors are elected each year to three-year terms. The Board of Directors
of the Corporation have proposed that the number of directors to be elected in
1995 to serve three-year terms be fixed at six and that the six nominees set out
in the following section be elected for the terms indicated. All the nominees
are presently serving as directors of the Corporation.
It is not contemplated that any of the nominees will be unable or unwilling
for good cause to serve; but, if that should occur, it is the intention of the
persons named in the proxy either to vote for such other person or persons for
director as may be nominated by the Board of Directors, or to reduce the number
of directors to be elected at the meeting by the number of such persons unable
or unwilling to serve.
The Corporation recommends that you vote in favor of all the nominees named
below for election to the Board of Directors.
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<PAGE>
INFORMATION RESPECTING THE BOARD AND NOMINEES
The Board of Directors of the Corporation, which met ten times in 1994, has
standing Executive, Audit, Loan, Long Range Planning and Compensation
Committees. The Long Range Planning Committee also serves as the nominating
committee.
The Audit Committee, which met five times during 1994, consists of C. Jason
Ammons, Jr., C. Donald Cameron, Stephen L. Chryst, John D. Flowers, J. Roddy
Swaim, Harry A. Thomas, and Zeb M. Thomas, Sr. The Audit Committee has the
responsibility of recommending to the Board of Directors the engagement or
discharge of the independent public accountants, reviewing with the independent
public accountants the plan for and results of the audit engagement, maintaining
direct reporting responsibility and regular communication with the Corporation's
internal audit staff, reviewing the scope and results of the internal audit
procedures of the Corporation and its subsidiaries, approving the services to be
performed by the independent public accountants, reviewing the degree of
independence of the public accountants, considering the range of audit and
nonaudit fees, and reviewing the adequacy of the Corporation's system of
internal accounting controls.
The Compensation Committee met three times during 1994, and consists of C.
Donald Cameron, John D. Flowers, J. Bryan Floyd, J. Roddy Swaim and Zeb M.
Thomas, Sr. The Compensation Committee makes recommendations to the Board of
Directors with respect to the Corporation's compensation policies and
compensation of the executive officers.
The Long Range Planning Committee met one time during 1994, and consists of
Stephen L. Chryst, John D. Flowers, J. Bryan Floyd, Admah Lanier, Jr., Thomas J.
Rogers, Albert A. Springs, III, J. Roddy Swaim and Zeb M. Thomas, Sr. The Long
Range Planning Committee is responsible for long range planning issues and
identifying and screening candidates to fill vacancies on the Board of Directors
and also makes recommendations regarding the size and composition of the Board
of Directors. This committee will consider recommendations for director nominees
made by shareholders of the Corporation. Such nominations shall be made by
writing to the Chief Executive Officer of the Corporation and providing the
candidate's name, biographical data and qualifications.
All directors attended at least 75% of the meetings of the Board of
Directors of the Corporation during 1994 except Directors Ammons and Burroughs.
Directors Ammons, Bellamy, Brandon and Burroughs attended less than 75% of the
total meetings of the Committees on which they served during 1994.
Under the securities laws of the United States, the Corporation's
directors, its executive officers, and any persons holding more than ten percent
of the Corporation's common stock are required to report their ownership of the
Corporation's common stock and any changes in that ownership to the Securities
and Exchange Commission. Specific due dates for these reports have been
established and the Corporation is required to report in this proxy statement
any failure to file by these dates during 1994. To the best of the Corporation's
knowledge, these filing requirements were satisfied by its directors and
officers in 1994. In making these statements, the Corporation has relied on the
written representations of its directors and officers and copies of the reports
that they have filed with the Commission.
Directors of the Corporation receive $250 per quarter and $600 per special
meeting (not held on a regularly scheduled meeting date) attended for their
services. All committee members receive $150 for each committee meeting
attended, and payment for one excused absence, if applicable.
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<PAGE>
The persons indicated with an asterisk (*) below are nominated for election
to serve until the annual meeting of shareholders in the year their terms
expire. It is the intention of the persons named in the proxy to vote for the
election of all nominees. The other persons listed are current directors of the
Corporation elected to serve until the year their term will expire.
<TABLE>
<CAPTION>
YEAR
TERM
NAME AND YEAR WILL
MADE DIRECTOR (1) AGE EXPIRE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS
<S> <C> <C> <C>
C. Jason Ammons, Jr. 49 1996 Owner -- Sea Mist Resort
(1987)
Howell V. Bellamy, Jr. 58 1997 Chairman of the Board -- Bellamy, Rutenberg, Copeland, Epps,
(1989) Gravely and Bowers, P.A. (Attorney)
W. Cecil Brandon, Jr. 65 1997 President -- Brandon Advertising & Sales Co., Inc.
(1974)
James E. Burroughs* 48 1998 Chairman of the Board -- Burroughs & Chapin Company
(1989)
C. Donald Cameron 66 1997 President -- Inlet Development Corporation
(1974)
Stephen L. Chryst* 49 1998 President and Chief Executive Officer of the Corporation
(1978)
John D. Flowers* 64 1998 Executive and principal shareholder of the following corporations:
(1974) Myrtle Beach Seafood Market, Inc.; Ocean Mgmt., Inc.
J. Bryan Floyd* 59 1998 Businessman and civic leader. Owner and Operator, Hoskins
(1994) Restaurant; Vice President and Secretary, Caro-Strand Corporation
d/b/a Bay Tree Golf Plantation
Admah Lanier, Jr. 68 1996 Co-owner and President, Lanwillo Development Co.; Owner, Arvida
(1994) Development Co., Inc.; Owner, Pender Development Co., Inc.;
partner, Coastal Farms
Tommy E. Looper 47 1996 Executive Vice President, Chief Financial Officer, and
(1993) Secretary of the Corporation
W. Gairy Nichols, III 43 1996 Owner -- Dunes Realty, Inc.
(1987)
Ruppert L. Piver* 55 1998 Rural Letter Carrier for U.S. Postal Service; previously owner of
(1994) R. L. Piver Landscaping and Hauling
Thomas J. Rogers 58 1996 President -- Grand Strand Broadcasting Corporation
(1974)
Albert A. Springs, III* 55 1998 Owner -- H. B. Springs Company (Insurance)
(1974)
J. Roddy Swaim 49 1997 Owner -- Dunes Realty, Inc.
(1987)
Harry A. Thomas 45 1997 President -- Thomas Real Estate Company
(1994)
Zeb M. Thomas, Sr. 73 1996 Owner -- The Dayton House, Inc. (Hotel)
(1979)
</TABLE>
(1) Year first a Director of the Corporation.
(*) Nominee for election.
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<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the shares of the Corporation's common stock
owned beneficially by each director and by executive officers and directors of
the Corporation as a group on March 1, 1995.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
OWNED DIRECTLY OUTSTANDING SHARES OF
SHAREHOLDER (INDIRECTLY) COMMON STOCK
<S> <C> <C>
C. Jason Ammons, Jr..................................................... 30,507 2.40%
(14,716) (1.16%)
Howell V. Bellamy, Jr................................................... 2,162 0.17%
W. Cecil Brandon, Jr.................................................... 8,254 0.65%
(236) (0.02%)
James E. Burroughs*..................................................... 103 0.01%
C. Donald Cameron....................................................... 93 0.01%
(4,055) (0.32%)
Stephen L. Chryst*...................................................... 11,974(1) 0.94%
John D. Flowers*........................................................ 11,311 0.89%
J. Bryan Floyd*......................................................... 22,512 1.77%
(159) (0.01%)
Admah Lanier, Jr........................................................ 4,337 0.34%
Tommy E. Looper......................................................... 8,612(1) 0.68%
(615) (0.05%)
W. Gairy Nichols, III................................................... 15,603 1.23%
(951) (0.07%)
Ruppert L. Piver*....................................................... 5,045 0.40%
Thomas J. Rogers........................................................ 7,491 0.59%
(1,004) (0.08%)
Albert A. Springs, III*................................................. 14,269 1.12%
J. Roddy Swaim.......................................................... 6,722 0.53%
(900) (0.07%)
Harry A. Thomas......................................................... 14,711 1.16%
(434) (0.03%)
Zeb M. Thomas, Sr....................................................... 26,230 2.07%
(22,761) (1.79%)
All directors and executive officers as a group (20 persons)............ 196,893 (1)(2 15.50%
(57,748) (4.55%)
</TABLE>
(*) Nominee for election.
(1) Includes vested shares in The Anchor Bank Employee Stock Ownership Plan for
Messrs. Chryst and Looper of 8,774 and 4,960, respectively, and does not
include stock options exercisable on December 31, 1994. All directors and
executive officers as a group have the right to purchase an aggregate of
52,665 shares of common stock under the stock option plan, including 20,000
and 11,200 shares for Messrs. Chryst and Looper, respectively.
(2) The Board of Directors, as trustees, also has voting power as to 40,458
unallocated shares owned by The Anchor Bank Employee Stock Ownership Plan.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table discloses compensation for services in all capacities
for the three years ended December 31, 1994, which were paid by the Corporation
to all executive officers whose total annual salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
(1) ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (2)
<S> <C> <C> <C> <C>
Stephen L. Chryst 1994 $215,000 $77,400 $ 26,071
President and Chief Executive Officer 1993 181,000 57,010 27,352
1992 181,000 13,703 24,334
David E. Buffaloe 1994 $ 90,000 $17,537 $ 13,199
President -- The Anchor Bank of North Carolina 1993 83,640 0 8,698
1992 82,000 5,000 8,841
Robert E. Coffee, Jr. 1994 $ 90,000 $25,000 $ 13,249
Executive Vice President and Chief Administrative 1993 76,500 0 404
Officer -- The Anchor Bank 1992 74,500 1,000 393
Robert R. DuRant, III 1994 $100,000 $30,000 $ 10,451
Executive Vice President and Chief Credit Officer -- 1993 90,000 42,757 10,485
The Anchor Bank 1992 87,917 9,133 7,736
Tommy E. Looper 1994 $120,000 $40,000 $ 21,539
Executive Vice President and Chief Financial Officer 1993 92,500 42,757 14,833
1992 92,500 9,196 9,071
</TABLE>
(1) The aggregate amount of perquisites and other personal benefits not reported
above during 1994 for any individual named above did not exceed the lesser
of either $50,000 or 10% of the total annual salary and bonus reported above
for such named executive officer.
Mr. Buffaloe received a 1993 performance bonus of $10,037 in 1994.
(2) The amounts disclosed in this column include:
(a) The Corporation adopted an Employee Stock Ownership Plan ("ESOP")
effective January 1, 1982 covering all employees with at least one-year
of continuous service. The ESOP is administered by the Board of
Directors of The Anchor Bank. Contributions to the ESOP, which are
discretionary with the Board of Directors are used to purchase shares of
the Corporation's stock. The shares are held in trust for each employee
until retirement, death, or break in service. Each participant is
allocated a portion of the contribution in proportion to his
compensation relative to the aggregate compensation of all participants.
Participants employed less than seven years will be less than 100%
vested in their account in the ESOP. Benefits are distributed in the
form of shares of the Corporation's stock. For the year 1994, the
Corporation's contribution to the ESOP was $281,455, including
contributions of $8,189, $6,173, $6,507, $7,313 and $8,189 for Messrs.
Chryst, Buffaloe, Coffee, DuRant and Looper, respectively.
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<PAGE>
(b) The Corporation adopted a pre-tax savings plan ("401(k) Plan")
effective June 1, 1991 covering all employees with at least
three-months of continuous service. Under the 401(k) Plan, employees
are eligible to contribute up to 15% of compensation up to the
statutory limit. The 401(k) Plan allows for discretionary employer
matching contributions. For the year 1994, the Board of Directors
approved a discretionary employer matching contribution of 50% of
compensation contributed by the employee up to 2% of the employee's
total compensation. The discretionary employer matching
contributions will cover all employees with at least one-year of
continuous service. Participants employed less than seven years will
be less than 100% vested in the discretionary employer matching
contributions portion of their account in the 401(k) Plan. For the
year 1994, the Corporation's matching contribution to the 401(k)
Plan was $58,545, including a matching contribution of $3,000,
$2,261, $1,530, $2,679 and $3,000 for Messrs. Chryst, Buffaloe,
Coffee, DuRant and Looper, respectively.
(c) Officers that are directors and members of the committees of the
Board of Directors receive fees for attendance at such meetings
in the same manner as outside directors. For the year 1994, the
Corporation paid in director and committee fees $14,250, $4,200,
$4,800 and $9,800 to Messrs. Chryst, Buffaloe, Coffee and
Looper, respectively.
(d) Payment by the Corporation for the year 1994 of premiums of
$632, $565, $412, $458 and $550 for group term life
insurance on behalf of Messrs. Chryst, Buffaloe, Coffee,
DuRant and Looper, respectively.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth the aggregated option exercises in fiscal
1994 by the named executive officers and the value of such officers' unexercised
options at December 31, 1994.
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
ON VALUE OPTIONS/SARS AT FY-END (#) AT FY-END ($)(2)
NAME EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Stephen L. Chryst............ -0- $ -0- 20,000 -0- $195,000.00 $ -0-
David E. Buffaloe............ 9,496 89,296.00 -0- -0- -0- -0-
Robert E. Coffee, Jr......... -0- -0- 10,265 -0- 162,289.65 -0-
Robert R. DuRant, III........ -0- -0- 11,200 -0- 109,200.00 -0-
Tommy E. Looper.............. -0- -0- 11,200 -0- 109,200.00 -0-
</TABLE>
(1) The value is calculated by subtracting the exercise price from the market
value on the date of exercise.
(2) The value is determined by subtracting the exercise or base price from the
market value of the underlying securities at the fiscal year-end. The market
value of the Corporation's common stock at its fiscal year-end of December
31, 1994 was $27.50 per share.
7
<PAGE>
COMPENSATION COMMITTEE REPORT OF EXECUTIVE COMPENSATION
The Compensation Committee's executive compensation philosophy (which
includes the Chief Executive Officer) is to provide competitive levels of
compensation, integrate management's pay with the achievement of the
Corporation's annual and long-term performance goals, recognize individual
initiative and achievement, and assist the Corporation in attracting and
retaining qualified management. Management compensation is intended to be set at
levels that the Compensation Committee believes is consistent with others in the
Corporation's industry and also considers general economic conditions and other
external factors.
Base salaries for executive management are determined initially by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for management
talent, including a comparison of base salaries for comparable positions at
comparable companies within the financial services industry. Annual salary
adjustments are determined by evaluating the competitive marketplace, the
performance of the Corporation, the performance of the executive, and any
increased responsibilities assumed by the executive.
Compensation paid during 1994 to executive officers consisted of base
salary, bonus, matching contributions paid with respect to the Corporation's
401(k) Plan and ESOP. Payments to the Corporation's 401(k) Plan and ESOP are
made to all employees on a non-discriminatory basis.
The Corporation has an existing executive management incentive bonus
program, which is administered by the Compensation Committee. The amounts, which
are awarded annually, are determined based upon a combination of the level of
achievement by the Corporation of its strategic and operating goals and the
level of achievement of individual objectives by participants.
Performance goals were adopted by the Board of Directors at the beginning
of 1994. Certain performance goals included earnings per share ("EPS") of $2.10,
net noninterest expense to average asset ratio of 2.75%, and growth of average
assets internally by 10%. The Corporation's EPS was $2.76 or 131% of goal. The
net noninterest expense to average asset ratio was 2.40% or 115% of goal.
Average assets grew internally 15.9% or 159% of goal.
For the year 1994, based on the factors discussed above and a review by the
Compensation Committee, Messrs. Buffaloe, Coffee, DuRant and Looper received
increases in base pay of 7.6%, 17.6%, 11.1% and 29.7%, respectively. Messrs.
Buffaloe, Coffee, DuRant, and Looper were awarded a bonus of 8.3%, 27.8%, 30.0%
and 33.3% of their base salaries for the year 1994, respectively.
It is the philosophy of the Compensation Committee that stock options
should be awarded only to key employees of the Corporation on an intermittent
basis to promote long-term interests between such employees and the
Corporation's stockholders and assist in the retention of such employees. The
Corporation adopted a Non-Qualified Stock Option Plan during 1988 covering
certain of its officers. Options granted under this plan vest at 25% per year.
The exercise period for options granted under this plan is ten years from each
vesting date. During the year ended December 31, 1988, participating officers,
including certain executive officers, received options to purchase an aggregate
of 55,196 common shares at an average option price of $17.75 per share. Under
this plan, all shares were vested at December 31, 1994. No options were granted
under the plan during 1994. Messrs. Chryst, DuRant and Looper previously
received options to purchase 20,000, 11,200 and 11,200 common shares,
respectively, at an average price of $17.75 per share. Under the terms of a
merger
8
<PAGE>
agreement, stock options granted under the 1st Atlantic Bank Incentive Stock
Option Plan were converted into options to purchase an aggregate of 12,386
shares of the Corporation's common stock at an average option price of $11.69
per share. Under this plan, Mr. Coffee received options to purchase 10,265
common shares at an average price of $11.69 per share.
The Corporation has adopted certain broad based employee benefit plans
including retirement and life insurance plans in which executive officers
participate. The value of these items is set forth in the Summary Compensation
Table above under "All Other Compensation." Executive officers also may have
received perquisites in connection with their employment not set forth in any of
the tables herein. Such perquisites totalled less than 10% of their cash
compensation in 1994. The foregoing benefits and compensation generally are not
directly or indirectly tied to the Corporation's performance.
Mr. Stephen L. Chryst has been Chief Executive Officer of the Corporation
since 1982. Mr. Chryst's 1994 compensation consisted of base salary, cash bonus,
certain perquisites (which did not exceed 10% of his base salary and bonus) and
the various forms of other compensation set forth in the preceding paragraph
which was generally available to all employees. Mr. Chryst's base salary of
$215,000 was set by the Compensation Committee at the beginning of 1994 and
increased 18.8% from 1993. The level of base salary was based in part on
compensation levels of chief executive officers of comparable companies. Mr.
Chryst's cash bonus was determined principally by achievement of the set
performance goals discussed above. The Corporation achieved 131% of the EPS
goal, 115% of the net noninterest expense to average asset ratio goal, and 159%
of the internal growth goal. These performance achievements resulted in a cash
bonus to Mr. Chryst of $77,400 or 36.0% of his base salary. The Compensation
Committee believes that the Corporation's strong performance during 1994 was
directly related to Mr. Chryst's leadership and that all compensation paid to
him was warranted.
Periodically, independent compensation consultants are engaged to review
the total compensation of all members of executive management as compared with
peers with comparable responsibilities in other companies. Results of the study
are reported to the Compensation Committee.
COMPENSATION COMMITTEE
C. Donald Cameron
John D. Flowers
J. Bryan Floyd
J. Roddy Swaim
Zeb M. Thomas, Sr.
9
<PAGE>
PERFORMANCE GRAPH
The following chart shows a five-year comparison of the cumulative total
return on the Corporation's stock, assuming reinvestment of dividends, with that
of a broad equity market index, the Dow Jones Market Equity Index, and with that
of a published industry index, the Dow Jones Regional Banks-South Index.
The yearly percentage change in the cumulative total return on the
Corporation's stock is computed by dividing the sum of the cumulative amount of
dividends for the five year period ended December 31, 1994, assuming dividend
reinvestment, and the difference between the Corporation's share price at
December 31, 1994 and December 31, 1989 by the share price at December 31, 1989.
The Dow Jones Market Equity Index and the Dow Jones Regional Banks-South Index
are constructed using this methodology for large samples of companies.
(Performance Graph appears here see plot points below)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994
Anchor Financial Corporation 100.00 100.47 100.41 106.81 159.34 172.40
Dow Jones Regional Banks-South Index 100.00 67.75 122.63 163.48 167.96 165.36
Dow Jones Equity Market Index 100.00 96.07 127.24 138.19 151.93 153.10
</TABLE>
10
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CERTAIN TRANSACTIONS WITH MANAGEMENT
The Corporation has had in the past, and expects to have in the future,
banking transactions in the ordinary course of its business with directors,
officers, principal shareholders, and their associates, on the same terms,
including interest rates and collateral on loans, as those prevailing at the
same time for comparable transactions with others, and do not involve more than
normal risks of collectibility or present other unfavorable features.
Albert A. Springs, III, director of the Corporation, is the owner of H.B.
Springs Company (Insurance Agency). During 1994, the Corporation and its
subsidiaries purchased insurance through this company. The premiums paid for
such insurance are considered reasonable in relation to those premiums that
would have been paid to a third party. Howell V. Bellamy, Jr., director of the
Corporation, is the Chairman of the Board of the law firm of Bellamy, Rutenberg,
Copeland, Epps, Gravely and Bowers, P.A. The law firm has rendered legal
services to the Corporation and its subsidiaries during 1994. The fees paid for
such legal services are considered reasonable in relation to those fees that
would have been paid to a third party. Ruppert L. Piver, director of the
Corporation, leases land to The Anchor Bank of North Carolina ("ABNC") on which
its main office is located. The lease expires on December 31, 2002, but ABNC has
the option to extend the lease for two additional ten-year periods. The current
rental rate is approximately $3,600 annually. The Corporation made payments of
approximately $3,600 in 1994. Management believes that the terms of the lease
are as favorable as would have been obtainable from a third party.
Other than these transactions, there were no material transactions with any
such persons during 1994.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Price Waterhouse LLP has been independent public accountants for the
Corporation since 1975. The Corporation recommends that the shareholders ratify
the selection by the Board of Directors of the Corporation of Price Waterhouse
LLP as independent public accountants for the Corporation during the year ending
December 31, 1995.
It is expected that representatives of Price Waterhouse LLP will be present
at the meeting and will be available to respond to appropriate questions. The
representatives of Price Waterhouse LLP will be given an opportunity to make a
statement if they desire.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
A copy of the Corporation's Annual Report on Form 10-K, including the
financial statements and schedules thereto, which is filed with the Securities
and Exchange Commission, is available free of charge to each shareholder of
record upon written request to the Corporate Secretary, Anchor Financial
Corporation, 2002 Oak Street, Myrtle Beach, South Carolina 29577.
By Order of the Board of Directors
STEPHEN L. CHRYST
President and Chief Executive Officer
Myrtle Beach, South Carolina
March 24, 1995
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