<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ANCHOR FINANCIAL CORPORATION
Tommy E. Looper
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
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 Thursday, April 24, 1997 at 4:00 p.m.
local time, at the Myrtle Beach Martinique, 7100 North Ocean Boulevard, Myrtle
Beach, South Carolina 29577, 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 five and to elect five
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, 1997;
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 3, 1997, 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 1996 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 28, 1997
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 28, 1997.
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 Thursday, April 24, 1997 at 4:00 p.m. local time,
at the Myrtle Beach Martinique, 7100 North Ocean Boulevard, Myrtle Beach, South
Carolina 29577, 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 3, 1997, the record date, the Corporation
had 7,000,000 shares of common stock authorized, $6.00 par value per share, of
which 2,559,340 shares were issued and outstanding, and 260,841 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 3, 1997, 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 3, 1997.
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 3, 1997, The Anchor Bank Employee Stock Ownership Plan
beneficially owned 218,405 shares (8.53%) of the Corporation's outstanding
common stock, including 48,691 (1.90%) unallocated shares. To the knowledge of
the management of the Corporation, as of March 3, 1997, no other shareholder
owned beneficially more than five percent (5%) of the Corporation's outstanding
common stock. As of March 3, 1997, the Board of Directors of the Corporation
beneficially owned 480,303 shares (18.77%), directly and indirectly, of the
Corporation's issued and outstanding common stock. Six members of the Board of
Directors, as trustees, also have voting power as to 48,691 (1.90%) 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 1998 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 28, 1997. 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 sixteen 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
1997 to serve three-year terms be fixed at five and that the five 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 twelve times in 1996,
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 five times during 1996, consists of C. Jason
Ammons, Jr., C. Donald Cameron, 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 1996, and consists of C.
Donald Cameron, 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 three times during 1996, and consists
of Stephen L. Chryst, 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 1996. During 1996, Directors Bellamy and
Springs attended less than 75% of the Executive Committee meetings and Directors
Burroughs and Springs attended less than 75% of the Loan 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 1996. To the best of the Corporation's
knowledge, these filing requirements were satisfied by its directors and
officers in 1996. 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 $700 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 $700
per regular or special Board meeting attended for their services to the
Corporation. All committee members receive $200 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. 51 1987 1999 Owner -- Sea Mist Resort
Howell V. Bellamy, Jr.* 60 1989 2000 Chairman of the Board -- Bellamy, Rutenberg, Copeland, Epps,
Gravely and Bowers, P.A. (Attorney)
W. Cecil Brandon, Jr.* 67 1974 2000 President -- Brandon Advertising & Sales Co., Inc.
James E. Burroughs 50 1989 1998 Chairman of the Board -- Burroughs & Chapin Company
C. Donald Cameron* 68 1974 2000 President -- Inlet Development Corporation
Stephen L. Chryst 51 1978 1998 President and Chief Executive Officer of the Corporation
J. Bryan Floyd 61 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. 70 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 49 1993 1999 Executive Vice President, Chief Financial Officer, and
Secretary of the Corporation
W. Gairy Nichols, III 45 1987 1999 Owner -- Dunes Realty, Inc.
Ruppert L. Piver 57 1994 1998 Rural Letter Carrier for U. S. Postal Service; previously
owner of R. L. Piver Landscaping and Hauling
Thomas J. Rogers 60 1974 1999 President -- Grand Strand Broadcasting Corporation
Albert A. Springs, III 57 1974 1998 Owner -- H. B. Springs Company (Insurance)
J. Roddy Swaim* 51 1987 2000 Owner -- Dunes Realty, Inc.
Harry A. Thomas* 47 1994 2000 President -- Thomas Real Estate Company
Zeb M. Thomas, Sr. 75 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 3, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
OWNED DIRECTLY OUTSTANDING SHARES OF
SHAREHOLDER (INDIRECTLY) COMMON STOCK
<S> <C> <C>
C. Jason Ammons, Jr..................................................... 63,415 2.48%
(30,590) (1.20%)
Howell V. Bellamy, Jr.*................................................. 9,670 0.38%
W. Cecil Brandon, Jr.*.................................................. 17,158 0.67%
(2,702) (0.11%)
James E. Burroughs...................................................... 211 0.01%
C. Donald Cameron*...................................................... 8,030 0.31%
(266) (0.01%)
Stephen L. Chryst....................................................... 27,278 (1) 1.07%
J. Bryan Floyd.......................................................... 47,809 1.87%
(950) (0.04%)
Admah Lanier, Jr........................................................ 9,016 0.35%
(5,033) (0.20%)
Tommy E. Looper......................................................... 19,645 (1) 0.77%
(1,378) (0.05%)
W. Gairy Nichols, III................................................... 32,356 1.26%
(3,117) (0.12%)
Ruppert L. Piver........................................................ 10,508 0.41%
Thomas J. Rogers........................................................ 16,018 0.63%
(2,008) (0.08%)
Albert A. Springs, III.................................................. 29,272 1.14%
J. Roddy Swaim*......................................................... 15,044 0.59%
(1,800) (0.07%)
Harry A. Thomas*........................................................ 21,846 0.85%
(9,251) (0.36%)
Zeb M. Thomas, Sr....................................................... 59,860 2.34%
(36,072) (1.41%)
All directors and executive officers as a group (18 persons)............ 406,651 (1)(2) 15.89%
(102,080) (3.99%)
</TABLE>
(*) Nominee for election.
(1) Includes vested shares in The Anchor Bank Employee Stock Ownership Plan for
Messrs. Chryst and Looper of 20,627 and 12,152, respectively, and does not
include stock options exercisable on December 31, 1996. All directors and
executive officers as a group have the right to purchase an aggregate of
201,920 shares of common stock under the stock option plan, including 80,000
and 44,800 shares for Messrs. Chryst and Looper, respectively.
(2) Six members of the Board of Directors, as trustees, also have voting power
as to 48,691 (1.90%) 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, 1996, 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
ANNUAL COMPENSATION SECURITIES
(1) UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) (2) COMPENSATION (3)
<S> <C> <C> <C> <C> <C>
Stephen L. Chryst 1996 $260,004 $111,760 0 $ 30,714
President and Chief Executive Officer 1995 240,000 92,768 40,000 33,534
1994 215,000 77,400 0 26,071
Robert E. Coffee, Jr. 1996 $107,500 $ 35,608 0 $ 16,769
Executive Vice President and 1995 98,418 27,500 22,400 16,112
Chief Administrative Officer -- 1994 90,000 25,000 0 13,249
The Anchor Bank
Robert R. DuRant, III 1996 $113,125 $ 45,056 0 $ 10,376
Executive Vice President and 1995 106,250 32,500 22,400 9,020
Chief Credit Officer -- 1994 100,000 30,000 0 10,451
The Anchor Bank
Tommy E. Looper 1996 $135,624 $ 56,320 0 $ 25,655
Executive Vice President and 1995 127,082 45,000 22,400 28,139
Chief Financial Officer 1994 120,000 40,000 0 21,539
</TABLE>
(1) The aggregate amount of perquisites and other personal benefits not reported
above during 1996 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.
(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 six members of 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 up to $150,000 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 1996, the Corporation's contribution to the ESOP was $350,232,
including contributions of $7,071, $6,973, $7,071, and $7,071 for
Messrs. Chryst, Coffee, DuRant, and Looper, respectively.
6
<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 1996, 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 1996, the Corporation's matching
contribution to the 401(k) Plan was $74,768, including a matching
contribution of $2,863, $2,823, $2,863, and $2,863 for Messrs. Chryst,
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 1996, the Corporation paid in
director and committee fees $20,050, $6,600, and $15,250 to Messrs.
Chryst, Coffee, and Looper, respectively.
(d) Payment by the Corporation for the year 1996 of premiums of $730, $373,
$442, and $471 for group term life insurance on behalf of Messrs.
Chryst, Coffee, DuRant and Looper, respectively.
(e) On January 27, 1996, the Corporation and its subsidiary, The Anchor
Bank, entered into Salary Continuation Agreements with Stephen L.
Chryst, Robert E. Coffee, Jr., Robert R. DuRant, III, and Tommy E.
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 8 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 Anchor
Bank, the vesting schedule is stepped up to 100%. The normal retirement
benefit payable to the executives each year for 15 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.
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<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
1996 by the named executive officers and the value of such officers' unexercised
options at December 31, 1996.
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ON VALUE OPTIONS AT FY-END (2) (#) AT FY-END (3)
NAME EXERCISE (#) REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Stephen L. Chryst -0- $ -0- 53,333 26,667 $ 1,184,994 $ 480,006
Robert E. Coffee, Jr. 10,610 147,538 17,387 14,933 398,810 268,794
Robert R. DuRant, III -0- -0- 29,867 14,933 663,606 268,794
Tommy E. Looper -0- -0- 29,867 14,933 663,606 268,794
</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, 1996 was $32.50 per share.
8
<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 1996 to executive officers consisted of base
salary, bonus, 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 adopted
Salary Continuation Agreements for its executive officers in 1996.
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 1996. Certain performance goals included earnings per share ("EPS") of $1.55,
return on average total stockholders' equity ("ROE") of 13.34%, return on
average total assets ("ROA") of 1.00% and internal growth of assets by 16.5%.
The Corporation's EPS was $1.81 or 117% of goal. The Corporation's ROE was
15.38% or 115% of goal and ROA was 1.04% or 104% of goal. Assets grew internally
21.1% or 128% of goal.
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, 1996. No options were granted under this plan during
1996. 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. Under this
9
<PAGE>
plan, 50,000 of the shares were vested at December 31, 1996. The exercise period
for options granted under this plan is ten years from the grant date. At
December 31, 1996, Messrs. Chryst, Coffee, DuRant and Looper had options to
purchase 80,000, 32,320, 44,800 and 44,800 common shares, respectively, at an
average price of $11.46 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 totaled less than 10% of their cash
compensation in 1996. The foregoing benefits and compensation generally are not
directly or indirectly tied to the Corporation's performance.
For the year 1996, based on the factors discussed above and a review by the
Compensation Committee, Messrs. Coffee, DuRant and Looper received increases in
base pay of 9.2%, 6.5% and 6.7%, respectively. Messrs. Coffee, DuRant, and
Looper were awarded a bonus of 33.1%, 39.8% and 41.5% of their base salaries for
the year 1996, respectively.
Mr. Stephen L. Chryst has been Chief Executive Officer of the Corporation
since 1982. Mr. Chryst's 1996 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 paragraphs.
Mr. Chryst's base salary of $260,004 was set by the Compensation Committee at
the beginning of 1996 and increased 8.3% from 1995. 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 117% of the EPS goal, 115% of the ROE goal, 104%
of the ROA, and 128% of the internal growth goal. These performance achievements
resulted in a cash bonus to Mr. Chryst of $111,760 or 42.9% of his base salary.
The Compensation Committee believes that the Corporation's strong performance
during 1996 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
J. Bryan Floyd
J. Roddy Swaim
Zeb M. Thomas, Sr.
10
<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, 1996, assuming dividend
reinvestment, and the difference between the Corporation's share price at
December 31, 1996 and December 31, 1991 by the share price at December 31, 1991.
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, plot points as follows)
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Anchor Financial Corporation 100.00 106.38 158.69 171.69 252.19 422.77
Dow Jones Regional Banks-South 100.00 133.31 136.96 134.84 207.26 288.65
Dow Jones Equity Market Index 100.00 108.61 119.41 120.33 166.31 205.57
</TABLE>
11
<PAGE>
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 1996, 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 rendered legal services to
the Corporation and its subsidiaries during 1996. 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 on which its Hampstead, North Carolina office is
located. The lease expires on December 31, 2002, but the Bank 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 1996. 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 1996.
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, 1997.
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 28, 1997
12
<PAGE>
*****************************************************************************
APPENDIX
*****************************************************************************
P R O X Y
ANCHOR FINANCIAL CORPORATION
2002 OAK STREET
MYRTLE BEACH, SC 29577
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Terry S. Haight, W. Gairy Nichols, III 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 3, 1997 at the annual
meeting of shareholders to be held on April 24, 1997 or any adjournment thereof.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
( ) FOR all nominees listed below ( ) WITHHOLD AUTHORITY
(except as marked to the contrary to vote 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.
Howell V. Bellamy, Jr.
W. Cecil Brandon, Jr.
C. Donald Cameron
J. Roddy Swaim
Harry A. Thomas
2. PROPOSAL TO RATIFY SELECTION OF PRICE WATERHOUSE LLP as independent
public accountants for the Corporation for the year ending December 31,
1997.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. 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 by the undersigned
shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
PROPOSAL 1 AND 2.
(Continued on other side.)
<PAGE>
<PAGE>
(Continued from other side.)
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.
