<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [ ]
Mark the appropriate item:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Anchor Financial Corporation
Tommy E. Looper
Payment of filing fee (Mark the appropriate item):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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 transactions 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:
[ ] Mark 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 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 24, 1996 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 consider and vote upon an amendment to the Corporation's Articles of
Incorporation to increase the authorized shares of common stock to
7,000,000 shares;
3. To consider and vote on adoption of the proposed Anchor Financial
Corporation, The Anchor Bank and The Anchor Bank of North Carolina
Incentive Stock Option Plan of 1996, to be effective as of April 25,
1996;
4. To ratify the selection of Price Waterhouse LLP as independent public
accountants for the Corporation for the year ending December 31, 1996;
and
5. 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, 1996, 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 1995 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 27, 1996
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 27, 1996.
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 24, 1996 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, 1996, the record date, the Corporation
had 4,000,000 shares of common stock authorized, $6.00 par value per share, of
which 2,551,595 shares were issued and outstanding, and 262,962 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, 1996, 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, 1996.
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, 1996, The Anchor Bank Employee Stock Ownership Plan
beneficially owned 216,180 shares (8.47%) of the Corporation's outstanding
common stock. To the knowledge of the management of the Corporation, as of March
1, 1996, no other shareholder owned beneficially more than five percent (5%) of
the Corporation's outstanding common stock. As of March 1, 1996, the Board of
Directors of the Corporation beneficially owned 486,184 shares (19.05%),
directly and indirectly, of the Corporation's issued and outstanding common
stock. Seven members of the Board of Directors, as trustees, also have voting
power as to 63,744 (2.50%) 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 1997 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 27, 1996. 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
1996 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.
INFORMATION RESPECTING THE BOARD AND NOMINEES
The Board of Directors of the Corporation, which met thirteen times in
1995, has standing Executive, Audit, Loan, Long Range Planning and Compensation
Committees. The Long Range Planning Committee also serves as the nominating
committee.
2
<PAGE>
The Audit Committee, which met four times during 1995, 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 two times during 1995, 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 1995, 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 1995 except Director Bellamy. During 1995,
Director Bellamy attended less than 75% of the Executive Committee meetings and
Director Cameron attended less than 75% of the Compensation Committee meetings.
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 1995. To the best of the Corporation's
knowledge, these filing requirements were satisfied by its directors and
officers in 1995. 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 that are also members of the Board of
Directors of The Anchor Bank (the "Bank") receive $250 per quarter and $600 per
special Board meeting (not held on a regularly scheduled meeting date) attended
for their services to the Corporation; in addition, these directors earn fees
for their services on the Bank Board. Directors of the Corporation that are not
members of the Board of Directors of the Bank receive $250 per quarter and $600
per regular or special Board meeting attended for their services to the
Corporation. All committee members receive $150 for each committee meeting
attended and payment for one excused absence, if applicable.
3
<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>
SERVED YEAR
AS TERM
DIRECTOR WILL PRINCIPAL OCCUPATION
NAME AGE SINCE EXPIRE FOR PAST FIVE YEARS
<S> <C> <C> <C> <C>
C. Jason Ammons, Jr.* 50 1987 1999 Owner -- Sea Mist Resort
Howell V. Bellamy, Jr. 59 1989 1997 Chairman of the Board -- Bellamy, Rutenberg, Copeland, Epps,
Gravely and Bowers, P.A. (Attorney)
W. Cecil Brandon, Jr. 66 1974 1997 President -- Brandon Advertising & Sales Co., Inc.
James E. Burroughs 49 1989 1998 Chairman of the Board -- Burroughs & Chapin Company
C. Donald Cameron 67 1974 1997 President -- Inlet Development Corporation
Stephen L. Chryst 50 1978 1998 President and Chief Executive Officer of the Corporation
John D. Flowers 65 1974 1998 Owner -- Flowers, McGee & Associates (Investments)
J. Bryan Floyd 60 1994 1998 Businessman and civic leader; Owner and Operator, Hoskins
Restaurant; Vice President and Secretary, Caro-Strand
Corporation d/b/a Bay Tree Golf Plantation
Admah Lanier, Jr.* 69 1994 1999 Co-owner and President, Lanwillo Development Co.; Owner,
Arvida Development Co., Inc.; Owner, Pender Development
Co., Inc.; Partner, Coastal Farms
Tommy E. Looper* 48 1993 1999 Executive Vice President, Chief Financial Officer, and
Secretary of the Corporation
W. Gairy Nichols, III* 44 1987 1999 Owner -- Dunes Realty, Inc.
Ruppert L. Piver 56 1994 1998 Rural Letter Carrier for U. S. Postal Service; previously
owner of R. L. Piver Landscaping and Hauling
Thomas J. Rogers* 59 1974 1999 President -- Grand Strand Broadcasting Corporation
Albert A. Springs, III 56 1974 1998 Owner -- H. B. Springs Company (Insurance)
J. Roddy Swaim 50 1987 1997 Owner -- Dunes Realty, Inc.
Harry A. Thomas 46 1994 1997 President -- Thomas Real Estate Company
Zeb M. Thomas, Sr.* 74 1979 1999 Owner -- The Dayton House, Inc. (Hotel)
</TABLE>
(*) Nominee for election.
4
<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 as of March 1, 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
OWNED DIRECTLY OUTSTANDING SHARES OF
SHAREHOLDER (INDIRECTLY) COMMON STOCK
<S> <C> <C>
C. Jason Ammons, Jr.*................................................... 62,305 2.44%
(30,055) (1.18%)
Howell V. Bellamy, Jr................................................... 9,670 0.38%
W. Cecil Brandon, Jr.................................................... 16,857 0.66%
(481) (0.02%)
James E. Burroughs...................................................... 209 0.01%
C. Donald Cameron....................................................... 186 0.01%
(8,110) (0.32%)
Stephen L. Chryst....................................................... 25,782(1) 1.01%
John D. Flowers......................................................... 21,081 0.83%
J. Bryan Floyd.......................................................... 45,976 1.80%
(931) (0.04%)
Admah Lanier, Jr.*...................................................... 8,857 0.35%
Tommy E. Looper*........................................................ 18,604(1) 0.73%
(1,255) (0.05%)
W. Gairy Nichols, III*.................................................. 31,824 1.25%
(3,102) (0.12%)
Ruppert L. Piver........................................................ 10,302 0.40%
Thomas J. Rogers*....................................................... 16,018 0.63%
(2,008) (0.08%)
Albert A. Springs, III.................................................. 29,098 1.14%
J. Roddy Swaim.......................................................... 15,044 0.59%
(1,800) (0.07%)
Harry A. Thomas......................................................... 21,464 0.84%
(9,233) (0.36%)
Zeb M. Thomas, Sr.*..................................................... 59,860 2.35%
(36,072) (1.41%)
All directors and executive officers as a group (20 persons)............ 421,047(1)(2) 16.50%
(116,629) (4.57%)
</TABLE>
(*) Nominee for election.
(1) Includes vested shares in The Anchor Bank Employee Stock Ownership Plan for
Messrs. Chryst and Looper of 19,248 and 11,144, respectively, and does not
include stock options exercisable on December 31, 1995. All directors and
executive officers as a group have the right to purchase an aggregate of
204,920 shares of common stock under the stock option plan, including 80,000
and 44,800 shares for Messrs. Chryst and Looper, respectively.
(2) Seven members of the Board of Directors, as trustees, also have voting power
as to 63,744 (2.50%) 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, 1995, which were paid by the Corporation
to all executive officers whose total annual salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
SECURITIES
ANNUAL COMPENSATION UNDERLYING
(1) OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (#)(2) COMPENSATION (3)
<S> <C> <C> <C> <C> <C>
Stephen L. Chryst 1995 $240,000 $92,768 40,000 $ 33,534
President and Chief Executive Officer 1994 215,000 77,400 0 26,071
1993 181,000 57,010 0 27,352
David E. Buffaloe 1995 $ 90,000 $ 7,500 3,000 $ 13,371
President -- The Anchor Bank 1994 90,000 17,537 0 13,199
of North Carolina 1993 83,640 0 0 8,698
Robert E. Coffee, Jr. 1995 $ 98,418 $27,500 22,400 $ 16,112
Executive Vice President and 1994 90,000 25,000 0 13,249
Chief Administrative Officer -- 1993 76,500 0 0 404
The Anchor Bank
Robert R. DuRant, III 1995 $106,250 $32,500 22,400 $ 9,020
Executive Vice President and 1994 100,000 30,000 0 10,451
Chief Credit Officer -- 1993 90,000 42,757 0 10,485
The Anchor Bank
Tommy E. Looper 1995 $127,082 $45,000 22,400 $ 28,139
Executive Vice President and 1994 120,000 40,000 0 21,539
Chief Financial Officer 1993 92,500 42,757 0 14,833
</TABLE>
(1) The aggregate amount of perquisites and other personal benefits not reported
above during 1995 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) All options have been adjusted to reflect the two-for-one stock split in
1995 which was effected in the form of a stock dividend.
(3) 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 seven members of the
Board of Directors of the 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 up to $150,000 relative to the aggregate compensation of
all participants. Participants employed less than seven years will be
6
<PAGE>
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 1995, the Corporation's contribution to the ESOP was $296,463,
including contributions of $6,022, $4,063, $5,223, $5,731 and $6,022 for
Messrs. Chryst, Buffaloe, Coffee, DuRant and Looper, respectively.
(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 1995, 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 1995, the Corporation's matching contribution to the 401(k)
Plan was $68,537, including a matching contribution of $3,000,
$2,024, $2,388, $2,855 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 1995, the Corporation paid in director and committee
fees $23,900, $7,100, $8,100 and $18,600 to Messrs. Chryst,
Buffaloe, Coffee and Looper, respectively.
(d) Payment by the Corporation for the year 1995 of premiums of
$612, $367, $401, $434 and $517 for group term life
insurance on behalf of Messrs. Chryst, Buffaloe, Coffee,
DuRant and Looper, respectively.
(e) On January 27, 1996, the Corporation and the Bank, entered
into Salary Continuation Agreements with Messrs. Chryst,
Coffee, DuRant and Looper. These Agreements provide for a
continuation of salary payments to these executives upon
retirement, termination, death or disability. The Agreements
have a vesting schedule that requires eight years of service
after the date of the Agreements before an executive is 100%
vested. In the event of a change in control of the
Corporation or the Bank, the vesting schedule is stepped up
to 100%. The normal retirement benefit payable to the
executives each year for fifteen years when each executive
retires after reaching age 65 would be $150,600, $36,900,
$46,308 and $53,300 for Messrs. Chryst, Coffee, DuRant and
Looper, respectively. The vested termination benefits for
each of the executives upon termination prior to a normal
retirement date for reasons other than death or disability
and prior to a change in control would be the vested portion
of the accrued liability for the normal retirement benefit.
7
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table shows the stock options granted to the named executive
officers during 1995 and the potential realizable value of those grants (on a
pre-tax basis). All options granted will expire on the tenth anniversary of
their respective grant dates and become exercisable over a three-year period.
Option exercise prices were in all cases equal to the fair market value of a
share of common stock on the date the option was granted.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
NUMBER OF ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OF FOR
OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION OPTION TERM (1)
NAME GRANTED (#)(2) IN 1995 PER SHARE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Stephen L. Chryst.......... 40,000 26.67% $ 14.50 6/15/05 $ 364,759 $ 924,371
David E. Buffaloe.......... 3,000 2.00 14.50 6/15/05 27,357 69,328
Robert E. Coffee, Jr....... 22,400 14.93 14.50 6/15/05 204,265 517,648
Robert R. DuRant, III...... 22,400 14.93 14.50 6/15/05 204,265 517,648
Tommy E. Looper............ 22,400 14.93 14.50 6/15/05 204,265 517,648
Increase in value to all shareholders (3) $23,241,260 $58,897,915
</TABLE>
(1) The potential gain is calculated from the closing price of common stock on
June 15, 1995, the date of grants to executive officers. These amounts
represent assumed rate of appreciation only. Actual gains, if any, on stock
option exercises and common stock holdings are dependent on the future
performance of the common stock and overall market conditions. There can be
no assurance that the amounts reflected in this table will be achieved.
(2) All options have been adjusted to reflect the two-for-one stock split in
1995 which was effected in the form of a stock dividend.
(3) Calculated using a common stock price of $14.50, the closing market price on
June 15, 1995, which is the exercise price of all of the options granted in
1995, and the total weighted average number of common shares outstanding for
1995 of 2,548,671 shares.
8
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth the aggregated option exercises in fiscal
1995 by the named executive officers and the value of such officers' unexercised
options at December 31, 1995.
<TABLE>
<CAPTION>
SHARES
ACQUIRED NUMBER OF SECURITIES VALUE OF UNEXERCISED
ON VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
EXERCISE REALIZED OPTIONS AT FY-END (2) AT FY-END (3)
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Stephen L. Chryst.................... -0- -0- 40,000 40,000 $ 435,000 $ 210,000
David E. Buffaloe.................... -0- -0- -0- 3,000 0 $ 15,750
Robert E. Coffee, Jr................. -0- -0- 20,530 22,400 285,462 $ 117,600
Robert R. DuRant, III................ -0- -0- 22,400 22,400 243,600 $ 117,600
Tommy E. Looper...................... -0- -0- 22,400 22,400 243,600 $ 117,600
</TABLE>
(1) The value is calculated by subtracting the exercise price from the market
value on the date of exercise.
(2) All options have been adjusted to reflect the two-for-one stock split in
1995 which was effected in the form of a stock dividend.
(3) 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, 1995 was $19.75 per share.
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 1995 to executive officers consisted of base
salary, bonus, stock option awards, and 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
9
<PAGE>
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 1995. Certain performance goals included earnings per share ("EPS") of $1.38,
adjusted for the two-for-one stock split, return on average total stockholders'
equity ("ROE") of 12.50%, return on average total assets ("ROA") of 0.90% and
growth of average assets internally by 12%. The Corporation's EPS was $1.39 or
101% of goal. The Corporation's ROE was 12.75% or 102% of goal and ROA was 0.93%
or 103% of goal. Average assets grew internally 14.6% or 122% of goal.
For the year 1995, 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 none, 9.4%, 6.3% and 5.9%, respectively. Messrs.
Buffaloe, Coffee, DuRant, and Looper were awarded a bonus of 8.3%, 27.9%, 30.6%
and 35.4% of their base salaries for the year 1995, 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 vested 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 110,392 common shares at an average option price of $8.875 per share,
adjusted for the two-for-one stock split. Under this plan, all shares were
vested at December 31, 1995. No options were granted under this plan during
1995. The Corporation adopted the Anchor Financial Corporation, The Anchor Bank
and The Anchor Bank of North Carolina Incentive Stock Option Plan of 1994 during
1994 covering certain of its officers. Options granted under this plan vest on a
cumulative basis for one-third of the shares on each of the first three
anniversaries of the grant. During the year ended December 31, 1995,
participating officers, including certain executive officers, received options
to purchase an aggregate of 150,000 common shares at an average option price of
$14.50 per share, adjusted for the two-for-one stock split. Under this plan,
none of the shares were vested at December 31, 1995. The exercise period for
options granted under this plan is ten years from the grant date. Under the
terms of a merger agreement, stock options granted under the 1st Atlantic Bank
Incentive Stock Option Plan were converted into options to purchase an aggregate
of 24,772 shares of the Corporation's common stock at an average option price of
$5.85 per share, adjusted for the two-for-one stock split. Messrs. Buffaloe,
Chryst, Coffee, DuRant and Looper have received options to purchase 3,000,
80,000, 42,930, 44,800 and 44,800 common shares, respectively, at an average
price of $11.46 per share, adjusted for the two-for-one stock split.
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 totaled less than 10% of their cash
compensation in 1995. The foregoing benefits and compensation generally are not
directly or indirectly tied to the Corporation's performance.
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Mr. Stephen L. Chryst has been Chief Executive Officer of the Corporation
since 1982. Mr. Chryst's 1995 compensation consisted of base salary, cash bonus,
stock options, 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 were generally available to all employees. Mr.
Chryst's base salary of $240,000 was set by the Compensation Committee at the
beginning of 1995 and increased 11.6% from 1994. The level of base salary was
based in part on compensation levels of chief executive officers of comparable
companies and the total assets of the Corporation. Mr. Chryst's cash bonus was
determined principally by achievement of the set performance goals discussed
above. The Corporation achieved 101% of the EPS goal, 102% of the ROE goal, 103%
of the ROA, and 122% of the internal growth goal. These performance achievements
resulted in a cash bonus to Mr. Chryst of $92,768 or 38.7% of his base salary.
The Compensation Committee believes that the Corporation's strong performance
during 1995 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.
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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, 1995, assuming dividend
reinvestment, and the difference between the Corporation's share price at
December 31, 1995 and December 31, 1990 by the share price at December 31, 1990.
The Dow Jones Market Equity Index and the Dow Jones Regional Banks-South Index
are constructed using this methodology for large samples of companies.
(The Performance Graph appears here. The plot points are listed in the
table below.)
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Anchor Financial Corporation 100.00 99.94 106.31 158.60 171.59 252.05
Dow Jones Regional Banks-South Index 100.00 181.01 241.31 247.92 244.07 375.16
Dow Jones Equity Market Index 100.00 132.44 143.83 158.14 159.36 220.51
</TABLE>
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 1995, 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
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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 rendered legal services to the
Corporation and its subsidiaries during 1995. 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 1995. 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 1995.
PROPOSED AMENDMENT FOR ARTICLES OF INCORPORATION
INCREASE OF AUTHORIZED SHARES OF COMMON STOCK. The Board of Directors of
the Corporation recommends an amendment to Article FOURTH of the Articles of
Incorporation ("Articles") of the Corporation as set forth below. The proposed
amendment must be approved by the holders of a majority of the common stock of
the Corporation.
The proposed amendment to Article FOURTH of the Articles would increase
from 4,000,000 to 7,000,000 the number of shares of common stock the Corporation
is authorized to issue.
The holders of the Corporation's common stock will vote on amending Article
FOURTH of the Articles to read as follows:
The aggregate number of shares which the corporation is
authorized to issue is seven million (7,000,000) of one class of
common stock with a par value of six dollars ($6.00) per share. All
stock shall be common stock of the same class.
The holders of common stock are entitled to one vote per share. The holders
of common stock do not have preemptive rights to purchase any securities
subsequently issued by the Corporation pursuant to a provision in the Articles.
The holders of common stock are entitled to receive dividends as may be declared
by the Board of Directors of the Corporation with respect to the common stock
out of funds legally available therefor. In the event of liquidation,
dissolution or winding-up of the affairs of the Corporation, the holders of
outstanding shares of common stock will be entitled to share pro rata according
to their respective interests in the Corporation's assets and funds remaining
after payment or provision for payment of all debts and other liabilities of the
Corporation.
The proposed increase of the number of shares of common stock that the
Corporation is authorized to issue from 4,000,000 to 7,000,000 is intended to
allow the Corporation greater flexibility with respect to its capitalization and
the number of shares that shall be outstanding. The Board of Directors will have
discretion in regard to the issuance of the additional authorized shares,
subject to applicable laws and regulations that may require shareholder vote.
The Corporation does not currently have any plans to issue the authorized
unissued shares, but the Corporation will have the flexibility to issue such
shares for sale or in an exchange transaction in connection
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with a merger or acquisition or for other appropriate corporate purposes. If
additional shares are issued, the general effect upon the rights of existing
security holders will be to reduce their percentage of ownership and, depending
upon the consideration received for any additional shares issued, may increase
or decrease the value of the outstanding shares.
The Corporation's Articles and By-Laws contain certain anti-takeover
features. The Articles and By-Laws provide for a Board of Directors which serves
staggered three-year terms. Shareholders vote only for candidates in the class
of directors whose terms expire at the time of the annual stockholders' meeting.
The staggered classification of the Board could make it more difficult for
shareholders to effect a significant change in the overall composition of the
Board, thus perpetuating the tenure of management.
South Carolina corporate law provides that a corporation's articles of
incorporation may be amended or repealed by a majority of the shareholders
entitled to vote thereon, unless applicable law or a company's articles require
a different vote to amend or repeal the articles. The Corporation's Articles
require that certain Articles may only be amended or repealed by the affirmative
vote of holders of at least 80% of all outstanding voting shares. These
provisions render more difficult the accomplishment of a merger or acquisition
or the assumption of control by a principal stockholder and make the removal of
management more difficult. The specific Articles of the Corporation requiring
80% approval to amend or appeal such Articles are:
1. The stock of the Corporation may be issued for valid corporate
purposes upon authorization by the Board without stockholder
approval. Such authorization by the Board may be made by a majority
or other vote of the Board as may be provided in the By-Laws of the
Corporation. The affirmative vote of the holders of not less than
80% of the outstanding voting stock of the Corporation is required
to amend or repeal the provisions of the Article EIGHTH.
2. The affirmative vote of the holders of not less than 80% of the
outstanding voting stock of the Corporation is required in the
event that the Board does not recommend to the stockholders of the
Corporation a vote in favor of (1) a merger or consolidation of the
Corporation with, or (2) a sale, exchange or lease of all or
substantially all the assets of the Corporation to any person or
entity. For purposes of this provision, substantially all the
assets shall mean assets having a fair market value or book value,
whichever is greater, of 25% or more of the total assets as
reflected on a balance sheet of the Corporation as of a date no
earlier than 45 days prior to any acquisition of such assets. The
affirmative vote of the holders of not less than 80% of the
outstanding voting stock of the Corporation is required to amend or
repeal the provisions of this Article NINTH.
3. The Board of Directors of the Corporation shall consist of a
maximum of 20 persons. The affirmative vote of the holders of not
less than 80% of the outstanding voting stock of the Corporation is
required to amend or repeal the maximum number provided for in
Article THIRTEENTH.
In addition to the above Articles which require 80% shareholder approval,
the Corporation's By-Laws explicitly require the Board to consider all factors
it deems relevant in evaluating any proposed tender offer, exchange offer or
other change in control for the Corporation or any subsidiary. This provision
requires the Board to evaluate whether a proposal is in the best interests of
the Corporation by considering the best interests of the stockholders, and other
relevant factors, including the social, legal and economic effects on
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employees, customers and the communities served by the Corporation and its
subsidiaries. These specific standards could make it more difficult to challenge
the business judgment of the Board in deciding not to recommend a particular
transaction to the shareholders, even if the transaction is favorable to the
interests of the stockholders.
These provisions in the Articles and By-Laws could have the effect of
reducing the attractiveness of the Corporation to persons who might wish to make
a tender offer, an exchange offer or other takeover bid for the Corporation's
common stock, thereby reducing the possibility that existing stockholders might
be offered premiums over the market value of their stock, a situation often
associated with takeover bids. The provisions also may have the overall effect
of rendering more difficult the accomplishment of mergers or the assumption of
control of the Corporation, and thus make the removal of management more
difficult. These provisions could make the accomplishment of a future
transaction more difficult even if it is favorable to the interests of the
shareholders. At the present time, management of the Corporation has no
knowledge of and no reason to believe that any person or entity is considering
an offer of the type which would be affected by any of these provisions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PROPOSED
AMENDMENT TO THE ARTICLES OF INCORPORATION.
PROPOSAL FOR INCENTIVE STOCK OPTION PLAN
The Board of Directors of the Corporation recommends approval of the
proposed "Anchor Financial Corporation, The Anchor Bank and The Anchor Bank of
North Carolina Incentive Stock Option Plan of 1996" ("ISOP") as described below.
The proposed ISOP must be approved by the holders of a majority of the common
stock of the Corporation.
The stated purpose of the ISOP is to aid the Corporation and its subsidiary
Banks in securing and retaining key employees of outstanding ability by making
it possible to offer them an increased incentive, in the form of a proprietary
interest in the common stock of the Corporation, to join or continue in service
of the Corporation or one of its subsidiary Banks and to increase the welfare
and success of the Corporation and its subsidiaries. The total number of shares
of the Corporation that may be optioned under the ISOP is 75,000 shares of the
Corporation's $6.00 par value common stock. The option price per share shall not
be less than 100% of the fair market value of the optioned stock at the time an
option is granted pursuant to the ISOP.
The ISOP shall be administered by the Board of Directors of the Corporation
which shall have the power and authority to administer, construe and interpret
the ISOP and to make rules for carrying it out and to make changes in such
rules. The proposed ISOP is set forth as an exhibit to the Annual Report filed
on Form 10-K with the Securities and Exchange Commission for the period ended
December 31, 1995. The terms of each option granted under the proposed ISOP
shall be as determined from time to time by the Board of Directors and shall be
set forth in an Incentive Stock Option Agreement in the form attached as an
exhibit to the ISOP and approved by the Board of Directors, subject to the
limitations set forth in the ISOP.
The key employees who will be eligible to participate in the ISOP are
defined to include persons in the regular full-time common law employment of the
Corporation or any subsidiary as an executive or non-executive officer thereof,
who in the opinion of the Board of Directors of the Corporation, is or is
expected
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<PAGE>
to be primarily responsible for the management, growth or protection of some
part or all of the business of the Corporation or any subsidiary. As of the date
hereof, it is anticipated that the approximate number of persons who will be
"key employees" as defined in the ISOP is forty (40). Neither the dollar value
nor the number of options that may be available to any executive officer or
other key employee are determinable as of the date hereof. Such determinations
must be made by the Board of Directors of the Corporation after the ISOP becomes
effective.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED INCENTIVE STOCK
OPTION PLAN.
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, 1996.
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 27, 1996
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APPENDIX
ANCHOR FINANCIAL CORPORATION,
THE ANCHOR BANK AND THE ANCHOR BANK OF NORTH CAROLINA
INCENTIVE STOCK OPTION PLAN OF 1996
1. Purpose of Plan
The purpose of this Stock Option Plan ("Plan") is to aid Anchor
Financial Corporation (the "Corporation") and The Anchor Bank and The Anchor
Bank of North Carolina (collectively "Banks") in securing and retaining Top
Management Key Employees of outstanding ability by making it possible to offer
them an increased incentive, in the form of a proprietary interest in the
Corporation, to join or continue in the service of the Corporation and/or one
or both of the Banks and to increase their efforts for its welfare and success.
2. Definitions
As used in this Plan, the following words shall have the following
meanings:
(a) "Board" means the Board of Directors of the Corporation;
(b) "Code" means the Internal Revenue Code of 1986, as amended;
(c) Intentionally Omitted;
(d) "Common Stock" means the $6.00 par value common stock of Anchor
Financial Corporation;
(e) "Banks" means The Anchor Bank, a South Carolina banking
corporation, and The Anchor Bank of North Carolina, a North Carolina banking
corporation, both of which are wholly-owned subsidiaries of Anchor Financial
Corporation;
(f) "Corporation" means Anchor Financial Corporation, a South
Carolina corporation with its principal office located at Myrtle Beach, South
Carolina;
(g) "Disability" means the Participant's inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months;
(h) "Incentive Stock Options" means a stock option to purchase
shares of Common Stock, which is intended to qualify as an incentive stock
option defined in Code Section 422A;
<PAGE>
(i) "Key Employee" means any person in the regular full-time
common law employment of the Corporation or any Subsidiary, as an executive
or non-executive officer thereof, who in the opinion of the Board, is or is
expected to be primarily responsible for the management, growth or protection
of some part or all of the business of the Corporation;
(j) "Option" means an Incentive Stock Option;
(k) "Parent" means any corporation in an unbroken chain of
corporations if each of the corporations owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain;
(l) "Participant" means a person to whom an Option is granted that
has not expired and ceased to be exercisable under the Plan; and
(m) "Subsidiary" means any corporation other than the Corporation
in an unbroken chain of corporations beginning with the Corporation if each
of the corporations other than the last corporation in the unbroken chain
owns fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
3. Administration of Plan
The Plan shall be administered by the Board. In the event that a
director of the Board is eligible to be selected for the grant of an Option,
during such membership as a director, such director shall recuse himself and
not participate in the discussion nor vote on the award of the Option to him.
The Board shall have the power and authority to administer, construe and
interpret the Plan, to make rules for carrying it out and to make
changes in such rules.
4. Granting of Options and $100,000 Limitation
The Board may from time to time grant Options under the Plan to such
Key Employees and subject to the limitations of paragraph (a) of Section 7, for
such number of shares as the Board may determine after receiving
recommendations from the compensation committee or the executive officers of
the Bank that employs the Participant. Subject to the provisions of the Plan,
the Board may impose such terms and conditions as it deems advisable on the
grant of an Option. Any of the foregoing to the contrary notwithstanding,
the following limitations shall apply to the grant of any Incentive Stock
Option:
(a) The aggregate fair market value, determined at the time the
Incentive Stock Option is granted, of the stock exercised by a Participant
for the first time during any calendar year shall not exceed $100,000.
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(b) Any Option granted to a Participant, who immediately before such
grant owns stock processing more than ten percent (10%) of the total combined
voting power of all classes of stock either of the Corporation or any
Subsidiary shall not be an Incentive Stock Option, unless (i) at the time such
Option is granted the Option price per share is not less than one hundred ten
percent (110%) of the optioned stock's then fair market value; and (ii) the
Option shall not be exercisable after the expiration of five (5) years from the
date of the grant of the Option.
5. Terms of Options
The terms of each Option granted under the Plan shall be as determined
from time to time by the Board and shall be set forth in an Incentive Stock
Option Agreement in a form attached hereto as Exhibit "A" and approved by
the Board; provided, however, the terms of such agreement shall not
exceed the following limitations:
(a) Subject to paragraph (b) of Section 4 with regard to 10% owners,
the Option price per share shall not be less than one hundred percent (100%) of
the fair market value of the optioned stock at the time the Option is granted.
(b) Subject to paragraph (e) of this Section, the Option shall be
exercisable in whole or in part from time to time during the period beginning
on date of grant of the Option, and ending no later than the expiration of ten
(10) years from the date of grant of the Option, unless an earlier expiration
date shall be stated in the Option or the Option shall cease to be exercisable
pursuant to paragraph (d) of this Section 5.
(c) Payment in full of the Option price for shares purchased
pursuant to an Option shall be made upon exercise of the Option (in whole
or in part) and shall be made in cash.
(d) If a Participant's employment with the Corporation or the Banks
terminates, the following rules shall apply:
(i) If a Participant's employment with the Corporation or the
Banks terminates other than by reason of the Participant's death, disability
or retirement after reaching age 65, the Participant's Option shall thereupon
expire and cease to be exercisable upon the expiration date of the earlier of
ten (10) years from the date of grant of the Option, or three (3) months from
the date of such termination.
(ii) If the Participant's employment with the Corporation
or the Banks terminates by reason of his death, the Participant's Option shall
terminate and cease to be exercisable upon the expiration of the earlier of ten
(10) years from the date of grant of the Option, or one (1) year from the date
of death. Such Option may be exercised by the duly appointed personal
representative of the deceased Participant's estate.
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(iii) If a Participant's employment with the Corporation or
the Banks terminates by reason of Disability, the Participant's Option shall
terminate and cease to be exercisable upon the expiration of the earlier of
ten (10) years from the date of grant of the Option, or one (1) year from the
date of such termination in the case of disability.
(iv) If a Participant's employment with the Corporation
or the Banks terminates by reason of retirement after reaching age 65 (other
than for Disability), the Participant's Option shall expire and cease to be
exercisable upon the expiration of the earlier of ten (10) years from the date
of grant of the Option, or three (3) months from the date of such termination.
(v) Notwithstanding anything contained herein to the contrary,
if a Participant's employment with the Corporation or the Banks is terminated
for cause (fraud, embezzlement, failure to perform job responsibilities, etc.)
as determined by the Board, in the Board's sole discretion, or if a Participant
competes with the Corporation or the Banks, any Option granted to that
Participant shall be immediately revoked and terminated and the Participant
shall have no further rights under this Plan. For purposes of this Plan,
competition with the Corporation or the Banks shall include direct or indirect
ownership of or employment with a financial services business within a 100
mile radius of any office operated by the Corporation or any of it's
subsidiaries.
(e) Notwithstanding any other provision herein, the options
granted hereunder shall vest and be exercisable on a cumulative basis for
one-third of the shares covered thereby on each of the first three
anniversaries of the grant thereof.
In the event that the Corporation has a change of control in
which 51% or more of the stock of the Corporation is acquired or the
Corporation is merged or consolidated with another corporation in an
acquisition transaction or the Corporation sells substantially all of the
assets of the Corporation, or the Bank which employes the Participant is
merged or consolidated with another Bank not owned at least 50% by the
Corporation or its Subsidiary or such Bank has a change of control in which
51% or more of the stock of the Bank is acquired or such Bank sells
substantially all of its assets, then immediately prior to any such
transaction, the vesting schedule set forth above shall not be applicable
and the holder of any options granted hereunder shall be 100% vested in such
options, subject to the other terms and conditions herein.
6. Exercise of Options
The holder of an Option who decides to exercise the Option in whole or
in part shall give notice to the Secretary of the Corporation of such exercise
in writing on a form approved by the Board. Any exercise shall be effective as
of the date specified in the notice of exercise, but not earlier than the date
the notice of exercise and payment in full of the Option price is actually
received and in the hands of the Secretary of the Corporation.
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7. Limitations and Conditions
(a) The total number of shares of Common Stock that may be optioned as
Incentive Stock Options under the Plan is seventy five thousand (75,000)
shares of Anchor Financial Corporation's $6.00 par value common stock. Such
total number of shares may consist, in whole or in part, of unissued shares or
reacquired shares. The foregoing numbers of shares may be increased or
decreased by the events set forth in Section 9.
(b) There shall be no limitations on the amount of shares of Common
Stock that may be optioned as Incentive Stock Options under the Plan as
set forth in Section 7(a) above, on an annual basis. The amount of shares
to be optioned, within the total limitation set forth in Section 7(a) above,
shall be determined solely at the discretion of the Board as set forth herein.
If there is a proposed acquisition, merger, change of control or other
takeover of the Corporation or the Bank that employs the Participant as defined
in Section (5)(e) of this Plan, the Board, at its sole discretion, may issue
any options authorized under this Plan but unissued prior to such time.
(c) Any shares that have been optioned that cease to be subject to an
Option (other than by reason of exercise of the Option) shall again be available
for option and shall not be considered as having been theretofore optioned.
(d) No Option shall be granted under the Plan after April 25, 2006, (10
years after the effective date), and the Plan shall terminate on such date, but
Options theretofore granted may extend beyond that date in accordance with the
Plan. At the time an Option is granted or amended or the terms or conditions of
an Option are changed, the Board may provide for limitations or conditions on
the exercisability of the Option.
(e) An Option shall not be transferable by the Participant otherwise
than by Will or by the laws of descent and distribution. During the lifetime of
the Participant, an Option shall only be exercisable by the Participant.
(f) No person shall any rights of a stockholder as to shares under
option until, after proper exercise of the Option, such shares shall have been
recorded on the Corporation's official stockholder records as having been
issued or transferred.
(g) The Corporation shall not be obligated to deliver any shares
until there has been compliance with such laws or regulations as the
Corporation may deem applicable. The Corporation shall use its best efforts
to effect such compliance.In addition to the foregoing and not by way of
limitation, the Corporation may require that the person exercising the Option
represent and warrant at the time of such exercise that any shares acquired
by exercise are being acquired only for investment and without any present
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intention to sell or distribute such shares, if, in the opinion of counsel for
the Corporation, such a representation is required under the Securities Act of
1933 or any other applicable law, regulation or rule of any governmental agency.
8. Transfers and Leaves of Absence
For the purposes of the Plan: (a) a transfer of a Participant's
employment without an intervening period from the Corporation to a subsidiary or
vice versa, or from one subsidiary to another or from parent to subsidiary or
vice versa, shall not be deemed a termination of employment, and (b) a Key
Employee who is granted in writing a leave of absence of no more than ninety
(90) days, or if more than ninety (90) days, which guarantees his employment
with the Corporation or the Banks at the end of such leave, shall be deemed
to have remained in the employ of the Corporation or the Banks during such
leave of absence.
9. Stock Adjustments
In the event of any merger, consolidation, stock dividend, split-up,
combination or exchange of shares or recapitalization or change in
capitalization, the total number of shares set forth in paragraph (a) of
Section 7 shall be proportionately and appropriately adjusted. In any such
case, the number and kind of shares that are subject to any Option (including
any Option outstanding after termination of employment) and the Option price
per share shall be proportionately and appropriately adjusted without any
change in the aggregate Option price to be paid therefor upon the exercise
of the Option. The determination by the Board as to the terms of any of the
foregoing adjustments shall be conclusive and binding.
10. Amendment and Termination
(a) The Board shall have the power to amend the Plan, including the
power to change the amount of the aggregate fair market value of the shares
for which any Key Employee may be granted Incentive Stock Options under
Section 4 to the extent provided in Code Section 422A. It shall not, however,
except as otherwise provided in the Plan, increase the maximum number of
shares authorized for the Plan, nor change the class of eligible employees
to other than Key Employees, nor reduce the basis upon which the minimum
Option price is determined, nor extend the period within which Options under
the Plan may be granted, nor provide for an Option that is exercisable during
a period of more than ten (10) years from the date it is granted. It shall
have no power (without the consent of the person or persons at the time
entitled to exercise the Option) to change the terms and conditions of any
Option after the Option is granted in a manner that would adversely affect the
rights of such persons except to the extent, if any, provided in the Option.
(b) The Board may suspend or terminate the Plan at any time. No such
suspension or termination shall affect Options then in effect.
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<PAGE>
11. No Employment Right
The grant of an Option hereunder shall not constitute an agreement
or understanding, expressed or implied, on the part of the Corporation, any
Parent or any Subsidiary, to employ the Participant for any specified period
and shall not confer upon any employee the right to continue in the
employment of the Corporation, any Parent or any Subsidiary, nor affect any
right which the Corporation, a Parent or Subsidiary may have to terminate
the employment of such employee.
12. Effective Date
The Plan is adopted on and shall be effective as of April 25, 1996.
Secretary
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<PAGE>
Exhibit A
ANCHOR FINANCIAL CORPORATION, THE ANCHOR BANK AND
THE ANCHOR BANK OF NORTH CAROLINA
INCENTIVE STOCK OPTION AGREEMENT UNDER
INCENTIVE STOCK OPTION PLAN OF 1996
THIS AGREEMENT, made this day of , 199 , by and between
Anchor Financial Corporation ("Corporation") with its principal office
located at 2002 Oak Street, Myrtle Beach, South Carolina; ("Bank");
and [ ] ("Participant"), of .
WITNESSETH:
WHEREAS, the Corporation on , 1996, adopted, by action of its
Shareholders, the "Anchor Financial Corporation, The Anchor Bank and The Anchor
Bank of North Carolina Incentive Stock Option Plan of 1996" ("Plan"), effective
, 1996; and
WHEREAS, under such Plan, certain shares of the Corporation are made
available for purchase by key employees of the Corporation or the Banks which
are subsidiaries of the Corporation through the grant of options; and
WHEREAS, the Participant is an employee of the Bank and is a Key
Employee under the Plan, and therefore, eligible for the grant of stock options
thereunder; and
WHEREAS, the Board of Directors of the Corporation under the Plan has
determined the the Participant shall be granted certain options under the Plan
as an incentive to his continued superior performance as an employee of the
Corporation.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
do hereby agree as follows:
1. Grant of Option. The Corporation hereby grants to the Participant
an option ("Option") to purchase ( ) shares of the $6.00 par
value common stock of the Corporation, upon the terms and conditions set forth
below and in the Plan document. The date of such grant is the date of this
Agreement. The number of Options specified above in this paragraph shall be
adjusted as provided in Section 9 of the Plan.
2. Option Price. The Option shall be exercisable at the price of
($ ) per share, which price has been determined by the Board
to be at least one hundred percent (100%) (or one hundred ten percent (110%)
<PAGE>
for a 10% shareholder) of the fair market value of such shares as of the
date of this Agreement.
3. Terms of Purchase. The purchase of any shares pursuant to the
Participant's exercise of the Option shall be for cash, payable in full upon
such exercise.
4. Period of Option. The Option shall be exercisable over the period
described below.
(a) Earliest Date of Exercise. The Option granted hereby shall become
first exercisable as the Option is vested as provided in Section 5 hereof;
provided, however, in no event shall any shares be available for purchase
hereunder prior to the date on which the Plan is approved by the stockholders
of the Corporation; provided, futher, however; in no event shall the number
of shares available for purchase hereunder increase beyond that available on
the date of the Participant's termination of employment with the Corporation
(as defined under the Plan), irrespective of the date on which the Option
shall expire under paragraph (b) of this Section 4.
(b) Latest Date of Exercise. In no event shall any shares be
available for purchase hereunder and the Option shall expire upon the earlier
of (i) ten years from the date of grant of the Option of five years from the
date of grant of the Option in case the Participant is already a 10% shareholder
of the Corporation, and (ii)(A) in the event of the Participant's termination of
employment with the Corporation or Bank for any reason other than death or
disability (as defined under the Plan), upon the expiration of three (3) months
from the date of such termination; (B) in the event of the Participant's
termination of employment as aforesaid by reason of his disability, upon the
expiration of one (1) year from the date of such termination; or (C) in the
event of the Participant's termination of employment as aforesaid by reason of
his death, upon the expiration of one (1) year from his date of death.
Notwithstanding anything to the contrary herein, if the employment of
Participant is terminated for cause or if the Participant completes with the
Corporation or the Bank as provided in the Plan, this Option is immediately
revoked and terminated.
(c) Prior Outstanding Options. This Option is exercisable despite
the existence of any other incentive option (defined under Section 422A) which
was granted to the Participant, before the granting of this Option, and which
earlier incentive stock option is for the purchase of shares in the Corporation
or in a corporation which at the date of grant hereunder is a Parent (as
defined under the Plan) or a Subsidiary (as defined under the Plan) or a
predecessor of any such corporations.
5. Vesting. The options granted hereunder may be exercised by the
participant on a cumulative basis for one-third of the shares covered thereby
on each of the first three anniversaries of the grant thereof.
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<PAGE>
In the event that the Corporation has a change of control in which 51%
or more of the stock of the Corporation is acquired or the Corporation is
merged or consolidated with another corporation in an acquisition transaction
or the Corporation sells substantially all of the assets of the Corporation,
or the Bank which employs the Participant is merged or consolidated with
another Bank not owned at least 50% by the Corporation or its Subsidiary or
such Bank has a change of control in which 51% or more of the stock of the
Bank is acquired or such Bank sells substantially all of its assets, then
immediately prior to such transaction, the vesting schedule set forth
above shall not be applicable and the holder of any options granted hereunder
shall be 100% vested in such options, subject to the other terms and conditions
herein.
6. Nontransferability. The Option is not transferable by the Participant,
in whole or in part, to any person, except by Will or by any applicable law
or descent and distributions. The Option shall not be exercisable, in whole
or in part, during the lifetime of the Participant by any person other than
the Participant.
7. Construction. The Option is intended to qualify for treatment as
an "incentive stock option" under Section 422A of the Internal Revenue Code of
1986, as amended, and any questions arising hereunder shall be resolved,
where possible, consistent with such intention. This Agreement shall be
construed in accordance with the laws of the State of South Carolina.
8. No Contract of Employment. Neither this Agreement, nor the Plan,
shall be construed to constitute an agreement or understanding, expressed or
implied, on the part of the Corporation or the Bank, or Parent or any
Subsidiary, to employ the Participant for any specified period and shall not
confer upon any employee the right to continue in the employment of the
Corporation, the Bank, any Parent or any Subsidiary nor affect any right which
the Corporation, the Bank, a Parent or Subsidiary may have to terminate the
employment of such employee.
9. Withholding. As a condition to the issuance of shares pursuant to any
exercise of this Option, the Participant authorizes the Corporation or the
Bank to withhold in accordance with applicable law from any cash compensation
payable to him any taxes required to be withheld by the Corporation or the
Bank under federal, state or local law as a result of such exercise; provided,
however, if at the time of such exercise no such compensation remains payable,
the Participant agrees to remit the amount of any such required withholding, if
any, to the Corporation or the Bank.
10. Legal Restrictions. This Option may not be exercised if the issuance
of shares pursuant to such exercise would constitute a violation of any
applicable federal or state securities or other law or regulation. The person
exercising the Option, as a condition to such exercise, shall represent to
the Corporation that the shares acquired thereby are being acquired for
investment and not with a present view to distribution or resale, unless
counsel
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<PAGE>
for the Corporation is then of the opinion that such representation is not
required under the Securities Act of 1933 or any other applicable law,
regulation or rule of any governmental agency.
11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Participant and his heirs, and shall be binding upon
the Corporation and the Bank and their successors and assigns.
12. Incorporation of Plan. This Agreement is made pursuant to and is
subject to the terms and conditions of the Plan, which terms and conditions
are hereby incorporated by reference herein.
13. Amendment. This Agreement may be amended by the Corporation at
any time (i) if the Corporation determines, in its sole discretion, that
amendment is necessary or advisable light of any addition to or change in the
Internal Revenue Code of 1986 or in the regulations issued thereunder, or any
federal or state securities law or other law or regulation, which change
occurs after the date of this Agreement and by its terms applies to the
Agreement; or (ii) other than in the circumstances described in clause (i),
with the consent of the Grantee.
14. Governing Law. This Agreement shall be governed by South Carolina
law, except to the extent preempted by federal law, which shall to that
extent govern.
IN WITNESS WHEREOF, the by its authorized representative, and the
Participant do hereby affix their signatures on the date first written
above.
ATTEST: ANCHOR FINANCIAL CORPORATION
By:
Printed Name:
Title:
BANK:
By:
Printed Name:
Title:
EXECUTIVE:
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<PAGE>
*******************************************************************************
APPENDIX
ANCHOR FINANCIAL CORPORATION
P R O X Y
2002 OAK STREET
MYRTLE BEACH, SC 29577
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John J. Moran, Ruppert L. Piver and Albert
A. Springs, III, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all shares
of common stock of Anchor Financial Corporation (the "Corporation") held of
record by the undersigned on March 1, 1996 at the annual meeting of shareholders
to be held on April 24, 1996 or any adjournment thereof.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary for all nominees listed below
below)
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME BELOW.
C. Jason Ammons, Jr.
Tommy E. Looper
Thomas J. Rogers
Admah Lanier, Jr.
W. Gairy Nichols, III
Zeb M. Thomas, Sr.
2. PROPOSAL TO CONSIDER AND VOTE UPON AN AMENDMENT TO THE CORPORATION'S
ATRICLES OF INCORPORATION to increase the authorized shares of common
stock to 7,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO CONSIDER AND VOTE ON ADOPTION OF THE PROPOSED ANCHOR
FINANCIAL CORPORATION, THE ANCHOR BANK AND THE ANCHOR BANK OF NORTH
CAROLINA INCENTIVE STOCK OPTION PLAN OF 1996, to be effective as of April
25, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on other side.)
<PAGE>
(Continued from other side.)
4. PROPOSAL TO RATIFY SELECTION OF PRICE WATERHOUSE LLP as independent
public accountants for the Corporation for the year ending December 31,
1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. 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" PROPOSALS 1 THROUGH 4.
DATED
SIGNATURE
SIGNATURE IF HELD JOINTLY
Please sign exactly as name
appears at left. When shares
are held by joint tenants, both
should sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give full
title as such. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership name
by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
