FIRST FINANCIAL HOLDINGS, INC.
34 Broad Street
Charleston, S. C. 29401
803-529-5800
December 20, 1995
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting
of Stockholders of First Financial Holdings, Inc. to be held at
the Corporation's main office, 34 Broad Street, Charleston, South
Carolina, on Wednesday, January 24, 1996, at 5:30 p.m., South
Carolina time.
The attached Notice of Annual Meeting of Stockholders and
Proxy Statement describe the formal business to be transacted at
the meeting. During the meeting, we will also report on the
operations of the Corporation. Directors and Officers of the
Corporation, as well as a representative of KPMG Peat Marwick
LLP, the Corporation's independent auditors, will be present to
respond to any questions stockholders may have.
To ensure proper representation of your shares at the
meeting, please sign, date and return the enclosed proxy card in
the enclosed postage-prepaid envelope as soon as possible, even
if you currently plan to attend the meeting. This will not
prevent you from voting in person, but will assure that your vote
is counted if you are unable to attend the meeting.
Sincerely,
A. L. Hutchinson, Jr.
President and Chief Executive Officer
<PAGE>
FIRST FINANCIAL HOLDINGS, INC.
34 Broad Street
Charleston, South Carolina 29401
803-529-5800
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 24, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders ("Meeting") of First Financial Holdings, Inc.
("Corporation") will be held at the main office of the
Corporation at 34 Broad Street, Charleston, South Carolina, on
Wednesday, January 24, 1996, at 5:30 p.m., South Carolina time.
A Proxy Card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting
upon:
1. The election of three directors of the Corporation; and
2. Such other matters as may properly come before the
Meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on any one of the foregoing
proposals at the Meeting on the date specified above, or on any
date or dates to which, by original or later adjournment, the
Meeting may be adjourned. Pursuant to the Bylaws, the Board of
Directors has fixed the close of business on November 30, 1995,
as the record date for the determination of the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of
Proxy, which is solicited by the Board of Directors, and to mail
it promptly in the enclosed envelope. The Proxy will not be used
if you attend and vote in person at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
PHYLLIS B. AINSWORTH
SECRETARY
Charleston, South Carolina
December 20, 1995
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A
QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
<PAGE>
PROXY STATEMENT
OF
FIRST FINANCIAL HOLDINGS, INC.
34 Broad Street
Charleston, South Carolina 29401
803-529-5800
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 24, 1996
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of First
Financial Holdings, Inc. ("First Financial" or "Corporation") to
be used at the Annual Meeting of Stockholders of the Corporation
("Meeting"). The Meeting will be held at the Corporation's main
office at 34 Broad Street, Charleston, South Carolina, on
Wednesday, January 24, 1996, at 5:30 p.m., South Carolina time.
The accompanying Notice of Annual Meeting of Stockholders and
this Proxy Statement are first being mailed to stockholders on or
about December 20, 1995.
First Financial operates as a multiple savings and loan
holding company for First Federal Savings and Loan Association of
Charleston ("First Federal") and Peoples Federal Savings and Loan
Association, Conway, South Carolina ("Peoples
Federal")(collectively, the "Associations").
REVOCATION OF PROXIES
Stockholders who execute proxies retain the right to revoke
them at any time. Unless so revoked, the shares represented by
such proxies will be voted at the Meeting and all adjournments
thereof. Proxies may be revoked by written notice delivered in
person or mailed to the Secretary of the Corporation at 34 Broad
Street, Charleston, South Carolina 29401, or the filing of a
later proxy, to be received prior to a vote being taken on a
particular proposal at the Meeting. A proxy will not be voted if
a stockholder attends the Meeting and votes in person. Proxies
solicited by the Board of Directors of First Financial will be
voted in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted for the
nominees for directors set forth below.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on
November 30, 1995, are entitled to one vote for each share then
held. Stockholders are not permitted to cumulate their votes for
the election of directors. As of November 30, 1995, the
Corporation had 6,307,730 shares of common stock ("Common Stock")
issued and outstanding.
Persons and groups owning in excess of 5% of the
Corporation's Common Stock are required to file certain reports
disclosing such ownership pursuant to the Securities Exchange Act
of 1934, as amended ("1934 Act"). Based upon such reports, the
following table sets forth, as of September 30, 1995, certain
information as to those persons who were beneficial owners of
more than 5% of the outstanding shares of Common Stock.
Management knows of no persons other than those set forth below
who owned more than 5% of the Corporation's outstanding shares of
Common Stock at September 30, 1995. The table also sets forth
information as to the shares of Common Stock beneficially owned
by the Chief Executive Officer of the Corporation, by the
Corporation's or the Associations' four other most highly
compensated individuals ("named executive officers") and by all
executive officers and directors of the Corporation as a group.
<TABLE>
<CAPTION>
Name and Amount and Nature Percent of Shares
Address of of Beneficial of Capital Stock
Beneficial Owner Ownership<F1> Outstanding
<S> <C> <C>
Dimensional Fund
Advisors, Inc.<F2> 361,600 5.73%
1299 Ocean Avenue
11th Floor
Santa Monica,
California 90401
Named Executive Officers <F3>
A. L. Hutchinson, Jr. 122,595 1.94%
A. Thomas Hood 94,085 1.49%
George N. Magrath, Jr. 21,239 .34%
Charles F. Baarcke, Jr. 37,559 .60%
John L. Ott, Jr. 57,768 .92%
All officers and directors
as a group (37 persons) 730,986(3) 11.59%
_______________________
<F1> Unless otherwise indicated, all shares are owned directly by
the named persons or by the persons indirectly through a
trust, corporation or association, or as custodians or
trustees for the shares of minor children. The named
persons effectively exercise voting and investment power
over such shares.
<F2> Dimensional Fund Advisors, Inc. ("Dimensional"), a
registered investment advisor, is deemed to have beneficial
ownership of 361,600 shares of the Corporation's Common
Stock as of September 30, 1995. Such shares are held in
portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in series of the
DFA Investment Trust Company, a Delaware business trust, or
the DFA Group Trust and the DFA Participating Group Trust,
investment vehicles for qualified employee benefit plans,
all of which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such
shares.
<F3> Includes 33,100, 35,440, 11,800, 22,600, 17,300 and 252,671
shares of Common Stock that may be received upon the
exercise of stock options, which are exercisable within 60
days from September 30, 1995, for Messrs. Hutchinson, Hood,
Magrath, Baarcke, Ott and all officers and directors as a
group, respectively.
</TABLE>
PROPOSAL I - ELECTION OF DIRECTORS
The Corporation's Board of Directors ("Board") is currently
composed of 10 members. The Corporation's Certificate of
Incorporation provides that directors are to be elected for terms
of three years with approximately one-third elected annually. At
the Meeting, three directors will be elected to serve for a
three-year period, or until their respective successors have been
elected and qualified. The Nominating Committee has nominated
for election as directors James C. Murray, D. Kent Sharples and
D. Van Smith for three-year terms. All nominees currently are
members of the Board.
If any nominee is unable to serve, the shares represented by
all valid proxies will be voted for the election of such
substitute as the Board may recommend or the Board may amend the
Bylaws and reduce the size of the Board. At this time, the Board
knows of no reason why any nominee might be unavailable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE
NOMINEES
FOR DIRECTORS OF THE CORPORATION.
The following table sets forth for each nominee and for each
director continuing in office his name, age, principal
occupation(s) during the past five years, the year he first
became a director and the number of shares of the Corporation's
Common Stock he owns beneficially.
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Year First Year Owned at Percent
Elected Term September 30, of
Name Age<F1> Principal Occupation<F2> Director<F3> Expires 1995<F4> Class
BOARD NOMINEES
<S> <C> <S> <C> <C> <C> <C>
James C. Murray<F5> 56 President, Chief Executive 1991 1999<F6> 6,915 .11%
Officer, and Chairman of
Utilities onstruction Co.,
an electrical contracting
company specializing in high
voltage electrical work and
heavy industrial work in the
Southeast.
D. Kent Sharples<F7> 52 President of Horry-Georgetown 1992<F8> 1999<F6> 5,909 .09%
Technical College.
D. Van Smith<F5> 64 President and co-owner of Van 1968 1999<F6> 19,631 .31%
Smith Company, Inc., a concrete
company; President and owner of
Smith and Smith, Inc., an
investment property company.
DIRECTORS CONTINUING IN OFFICE
A. Thomas Hood<F5><F7> 49 Executive Vice President and 1987 1997 94,085 1.49%
Chief Operating Officer of the
Corporation and President and
Chief Executive Officer of First
Federal since February 1, 1995.
Previously served in various
capacities for the Corporation
and First Federal. Mr. Hood
also serves as a director of the
Business Development Corporation
of South Carolina.
A. L. Hutchinson, Jr. 61 President and Chief Executive 1985 1997 122,595 1.94%
<F5><F7> Officer of the Corporation; Vice
Chairman of the Corporation and
First Federal since February 1,
1995. Previously served in various
capacities for the Corporation and
First Federal.
Thomas E. Thornhill 66 Principal, Clement, Crawford & 1979 1997 21,101 .33%
<F5> Thornhill, Inc., a commercial
real estate firm.
Gary C. Banks, Jr.<F5> 61 Director and retired Executive 1987 1998 17,815 .28%
Vice President, Banks Construction
Company, which specializes in
highway construction.
Joseph A. Baroody<F7> 67 Retired President of N. B. 1992<F8> 1998 3,608 .06%
Baroody Co., Inc., a wholesale
foods business.
Paul G. Campbell, Jr. 49 Senior Vice President and 1991 1998 3,800 .06%
<F5> General Manager of Alumax of
South Carolina, a leading primary
aluminum reduction company in
the U. S.
Herman B. Speissegger, 70 Retired Vice President and 1978 1998 36,088 .57%
Jr.<F5><F7> Group Executive of Customer
Operations for South Carolina
Electric and Gas Company.
Self-employed engineering and
management consultant.
___________________
<F1> As of September 30, 1995.
<F2> Nominees and directors have held these vocations or positions for at least five years, unless otherwise
noted.
<F3> Includes prior service, as applicable, on the Board of Directors of First Federal.
<F4> In accordance with Rule 13d-3 under the 1934 Act, a person is deemed to be the beneficial owner, for
purposes of this table, of any share of the Corporation's Common Stock if he has shared voting and/or
investment power with respect to such security. The table includes shares owned by spouses, other
immediate family members in trust, shares held in retirement accounts or funds for the benefit of the
named individuals and other forms of ownership, over which shares the persons named in the table possess
voting and investment power. None of the directors have exercised their right to disclaim beneficial
ownership over shares in which they possess a beneficial interest. This table also includes 92,046
shares of Common Stock subject to outstanding options which are exercisable within 60 days from
September 30, 1995.
<F5> Also serves as a director of First Federal.
<F6> Assuming re-election at the Meeting.
<F7> Also serves as a director of Peoples Federal.
<F8> Does not include prior service on Board of Directors of Peoples Federal.
The following discussion presents information with respect
to the nominees at the Meeting:
JAMES C. MURRAY has served as a director of First Financial
since 1991. Mr. Murray, a Registered Professional Engineer, has
been President and Chief Executive Officer since 1980 and
Chairman of the Board of Directors since 1984 of Utilities
Construction Company, an electrical contracting company
specializing in high voltage electrical work and heavy industrial
work in the Southeast. Mr. Murray is active in numerous civic
associations, including serving as President of the Coastal
Carolina Council of the Boy Scouts of America and as a director
on the Boy Scouts of America Southern Regional Executive Board,
which governs 13 states. Having served as a director and
treasurer for the Trident United Way, Mr. Murray will serve as
the 1996 Trident United Way Campaign Chairman. He is active in
the South Carolina Chamber of Commerce and Trident Technical
College Foundation, of which he previously served as President.
D. KENT SHARPLES has served as a director of Peoples Federal
since 1985. Since 1980, Dr. Sharples has been President of
Horry-Georgetown Technical College, Conway, South Carolina. He
has been active in numerous civic associations, serving as
President of the United Way of Horry County, President of the
Myrtle Beach Rotary Club, Chairman of the Horry County Economic
Development Board, Chairman of the Subcommittee of the Area
Transportation Council, a member of the Board of Directors of
Grand Strand YMCA, a member of the Myrtle Beach Chamber of
Commerce, and a member of the Georgetown Propeller Club. Dr.
Sharples was also appointed by then Secretary of Labor Dole to
serve as a member of the Secretary's Advisory Commission.
D. VAN SMITH has served as a director of First Federal for
27 years. He is President and co-owner of Van Smith Company,
Inc., a concrete company. Mr. Smith is also President and owner
of Smith and Smith, Inc., an investment property company. He is
a member of several professional and social organizations.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
FIRST FINANCIAL
The Board of Directors of the Corporation conducts its
business through meetings of the Board and through its
committees. During the fiscal year ended September 30, 1995, the
Board of Directors of the Corporation held eight meetings. No
director of First Financial attended fewer than 75% of the total
meetings of the Board and committee meetings on which such Board
member served during this period for the Corporation except for
Mr. Campbell who missed one meeting of the Compensation/Benefits
Committee due to other business commitments.
The Executive Committee of the Corporation, composed of
Messrs. Smith, Hood, Hutchinson, Murray and Sharples, met five
times during the fiscal year ended September 30, 1995.
The Audit Committee of the Corporation, composed of Messrs.
Speissegger, Baroody, Sharples and Thornhill meets periodically
to study the findings of the Corporation's independent auditors
and internal auditor and to evaluate policies and procedures
relating to internal controls. This Committee met four times
during the fiscal year ended September 30, 1995.
The Compensation/Benefits Committee of the Corporation,
composed of Messrs. Banks, Baroody, Campbell and Speissegger,
reviews compensation policies and benefit plans of the
Corporation, grants stock options and recommends compensation for
senior management. This Committee held three meetings during the
fiscal year ended September 30, 1995.
Article II, Section 14 of the Corporation's Bylaws provides
that the Board of Directors shall act as a nominating committee
for selecting the management nominees for election as directors.
Such section of the Bylaws also provides as follows: "No
nominations for directors except those made by the nominating
committee shall be voted upon at the annual meeting unless other
nominations by stockholders are made in writing and delivered to
the Secretary of the Corporation in accordance with the
provisions of the Corporation's Certificate of Incorporation."
Article II, Section 15 further provides that any new business to
be taken up at the annual meeting shall be stated in writing and
filed with the Secretary of the Corporation in accordance with
the provisions of the Corporation's Certificate of Incorporation.
Article IX of the Certificate of Incorporation provides that
notice of a stockholder's intent to make a nomination or present
new business at the meeting ("stockholder notice") must be given
not less than 30 days nor more than 60 days prior to any such
meeting; provided, however, that if less than 31 days notice of
the meeting is given to stockholders by the Corporation, a
stockholder's notice shall be delivered or mailed, as prescribed,
to the Secretary of the Corporation not later than the close of
the tenth day following the day on which notice of the meeting
was mailed to stockholders. If properly made, such nominations
or new business shall be considered by stockholders at such
meeting. The Board of Directors of the Corporation held one
meeting in its capacity as the nominating committee during the
fiscal year ended September 30, 1995.
FIRST FEDERAL
During the fiscal year ended September 30, 1995, the Board
of Directors of First Federal held 13 meetings. No director of
First Federal attended fewer than 75% of the total meetings of
the Board and committee meetings on which such Board member
served during this period except Mr. Campbell who missed one
meeting of the Compensation/Benefits Committee due to other
business commitments.
The Executive Committee of First Federal, composed of
Messrs. Smith, Hood, Hutchinson, Speissegger and Thornhill, held
no meetings during the fiscal year ended September 30, 1995.
The Planning and Development Committee, composed of Messrs.
Campbell, Hood, Magrath and Thornhill, held one meeting during
the fiscal year ended September 30, 1995.
The Directors Loan Committee, composed of Messrs. Murray,
Hood, Speissegger and Stilley, met 12 times during the fiscal
year ended September 30, 1995.
The Public Relations Committee, composed of Messrs. Banks,
Hutchinson, Magrath and Murray held one meeting during the fiscal
year ended September 30, 1995.
The Audit Committee, composed of Messrs. Thornhill, Banks
and Stilley, met four times during the fiscal year ended
September 30, 1995.
The Compensation/Benefits Committee, composed of Messrs.
Campbell, Banks and Stilley, reviews the evaluations of senior
management, the performance of the President and Chief Executive
Officer, and recommends salaries for the upcoming year. During
the fiscal year ended September 30, 1995, the Committee held two
meetings.
Article II, Section 14 of First Federal's Bylaws provides
that the Board of Directors shall act as a nominating committee
for selecting the management nominees for election as directors.
The nominating committee met one time during fiscal 1995.
PEOPLES FEDERAL
During the fiscal year ended September 30, 1995, the Board
of Directors of Peoples Federal held 12 meetings. No director of
Peoples Federal attended fewer than 75% of the total meetings of
the Board and committee meetings on which such Board member
served during this period.
The Executive Committee of Peoples Federal, composed of
Messrs. Baroody, Griffin, Hutchinson, Magrath and Sharples, held
no meetings during the fiscal year ended September 30, 1995.
The Loan Committee of Peoples Federal schedules weekly
meetings in Conway and in Florence. Three directors and/or staff
constitute a quorum of which one of these members must be a non-
management director. Dr. Griffin serves as Chairman in Conway
and Mr. Willcox serves in this capacity in Florence. There were
52 meetings held in Conway and 43 meetings held in Florence
during fiscal 1995.
The Audit Committee of Peoples Federal, composed of Messrs.
Willcox, Sharples, Baroody, Swink and Speissegger, met four
times during the year ended September 30, 1995.
The Compensation Committee of Peoples Federal, composed of
Messrs. Baroody, Sharples and Speissegger, reviews the
performance of and recommends compensation for the President and
Chief Executive Officer. During the fiscal year ended September
30, 1995, the Committee held one meeting.
Article II, Section 14 of Peoples Federal's Bylaws provide
that the Board of Directors shall act as a nominating committee
for selecting the management nominees for election as directors.
The nominating committee met one time during fiscal 1995.
MANAGEMENT REMUNERATION
Summary Compensation Table. The following information is
furnished for the Chief Executive Officer and those named
officers for the Corporation or the Associations who received
salaries and bonuses in excess of $100,000 during the fiscal year
ended September 30, 1995.
</TABLE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE*
Annual Compensation Long-Term
Compensation
Awards
Other Annual All Other
Salary Compensation Stock Options Compensation
Name and Principal Position Year ($)<F1> ($)<F2> (#) ($)<F3>
<S> <C> <C> <S> <S> <C>
A. L. Hutchinson, Jr., 1995 $217,987 -- -- $ 6,259
Vice Chairman,
President and Chief 1994 213,178 -- 23,500 9,015
Executive Officer
1993 193,668 -- -- 12,410
A. Thomas Hood, 1995 162,829 -- -- 6,259
Executive Vice President
and Chief Operating Officer 1994 153,549 -- 15,600 7,190
of the Corporation; President
and Chief Executive Officer, 1993 145,353 -- -- 9,485
First Federal
George N. Magrath, Jr. 1995 110,319 -- -- 7,457
President
Peoples Federal 1994 97,839 -- 1,800 7,523
1993 89,666 -- 10,000 2,857
Charles F. Baarcke, Jr., 1995 121,755 -- -- 3,943
Senior Vice President
1994 115,574 -- 4,400 4,310
1993 107,571 -- -- 5,659
John L. Ott, Jr., 1995 125,271 -- -- 5,090
Senior Vice President
1994 120,268 -- 11,300 5,642
1993 112,199 -- -- 7,398
* All compensation, except for the compensation of George N. Magrath, Jr., is
paid by First Federal but allocated between the Corporation and First Federal
based on approximate time spent by the named executive on Corporation
business. Mr. Magrath is compensated by Peoples Federal.
_________________
<F1> Does not include directors' fees described below. Includes management fees
assessed First Financial by First Federal for hours spent attending to
First Financial business. Since the formation of First Financial,
effective June 30, 1988, none of its executive officers have received any
remuneration from First Financial. It is expected that unless and
until First Financial becomes actively involved in additional businesses,
no separate compensation will be paid to the officers of First Financial
in addition to that paid to them by First Federal.
<F2> Does not include perquisites which did not exceed $50,000 or 10% of salary
and bonus.
<F3> Represents total 401(k) and profit sharing plan contributions paid by
the Corporation in fiscal year.
</TABLE>
Option Exercise Table. The following table sets forth the
aggregated option exercises in fiscal 1995 and fiscal year-end
option value for the Chief Executive Officer and the named
executive officers under the First Federal 1983 Stock Option and
Incentive Plan and First Financial's 1990 Stock Option and
Incentive Plan.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Value of
Unexercised
Number of In-the-Money
Shares Unexercised Options at Fiscal
Acquired Value Options at Fiscal Year Year End<F1>
on Realized End Exercisable/ Exercisable/
Name Exercise <F1> Unexercisable Unexercisable
<S> <C> <C> <C> <C>
A. L. Hutchinson, Jr. 9,000 $87,875 33,100/10,400 $363,000/$52,000
A. Thomas Hood 4,660 51,170 35,440/2,500 397,807/12,500
George N. Magrath, Jr. -0- -0- 11,800/-- 95,250/--
Charles F. Baarcke, Jr. -0- -0- 22,600/-- 292,725/--
John L. Ott, Jr. 2,000 23,000 17,300/-- 145,750/--
______________________
<F1> Market value of underlying securities at exercise or fiscal year end, minus
the exercise or base price.
</TABLE>
During fiscal 1993, the Stock Option Committee established
First Financial stock ownership guidelines for members of
management. The desired level of stock ownership is based on the
market value of the shares owned as a percentage of annual
salary. The percentages are 400%, 300%, 200% and 100% for the
President, Executive Vice President, Senior Vice Presidents and
other members of management, respectively. Stock ownership goals
are expected to be met within five years. When goals are met,
additional stock options may be granted. All members of
management have met stock ownership goals set by the Corporation,
with the exception of ten management members, nine of which have
been members for less than five years.
Pension Plan Table. The following table indicates the
annual retirement benefit that would be payable under the former
pension plan of First Federal and the related Supplemental
Executive Retirement Plan ("SERP")(as discussed herein).
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Estimated Annual Pension for
Average Representative Years of Service
Earnings
20 25 30 35
<C> <C> <C> <C> <C>
$ 40,000 $16,000 $20,000 $ 24,000 $ 28,000
60,000 24,000 30,000 36,000 42,000
80,000 32,000 40,000 48,000 56,000
100,000 40,000 50,000 60,000 70,000
150,000 60,000 75,000 90,000 105,000
200,000 80,000 100,000 120,000 120,000
</TABLE>
First Federal previously maintained a qualified,
noncontributory defined benefit pension plan (the "Pension
Plan"), qualified under the Employee Retirement Income Security
Act of 1974 ("ERISA"). The Pension Plan covered all full-time
employees of First Federal who had attained the age of 21 years
and had been employed at least 1,000 hours during the annual
enrollment period. The Pension Plan provided for monthly
payments to or on behalf of each covered employee upon such
employee's retirement at age 65 based upon 60% of the employee's
highest average earnings during any three consecutive years of
his employment in the last ten years reduced by 60% of the
employee's projected social security benefit. Benefit accruals
under the Pension Plan ceased as of December 31, 1989 and the
Pension Plan was terminated effective August 31, 1990.
Participants having accrued benefits under the Pension Plan were
entitled to elect (i) to receive their accrued benefit as an
annuity contract; or (ii) to transfer their accrued benefit to
their account under First Federal's Sharing Thrift Plan. All
regulatory approvals were received and the Pension Plan was
liquidated on or about December 15, 1991.
First Federal also maintains the SERP for certain eligible
employees, including Mr. Hutchinson and several other officers
and employees. The SERP is an unfunded plan which provides for
benefit payments to supplement those payable under the First
Federal Thrift Plan (including amounts transferred from the
Pension Plan), under conditions specified in the SERP. In fiscal
1993, the First Federal Thrift Plan was transferred to and became
the First Financial Thrift Plan. The SERP covers certain
employees who had over 20 years of service with First Federal and
had attained age 50 prior to the termination of the Pension Plan.
Under the SERP, First Federal will pay any required additional
amounts so that the total benefits paid to SERP participants will
be the same as the Pension Plan would have paid to such persons
absent termination of the Pension Plan. SERP benefits are based
on final average pay and service with First Federal to age 65.
The benefits calculated under the SERP are offset by payments
under the Pension Plan and, after January 1, 1991, by the present
value of profit sharing contributions to First Financial's Thrift
Plan described above. For the fiscal year ended September 30,
1995, total SERP costs charged to expense for Mr. Hutchinson was
$52,194 and the amount charged to expense for all officers and
employees was $70,475.
Employment Agreements. First Federal entered into
employment agreements ("Agreements") with Messrs. Hutchinson and
Hood on July 30, 1987, which Agreements were subsequently amended
on September 29, 1988 and October 1, 1993 and now include First
Financial as a party to the Agreements. Additionally, First
Federal and First Financial entered into three year Agreements
with Messrs. Baarcke and Ott on October 1, 1993. On the same
date, Peoples Federal and First Financial entered into an
employment agreement with Mr. Magrath for a term of three years.
The Agreements of Messrs. Hutchinson, Hood, Magrath, Baarcke and
Ott provide for a salary of not less than $190,380, $143,700,
$93,600, $104,220 and $112,080 per annum, respectively,
disability and retirement income benefits and bonus and other
fringe benefits as may be approved by the Board of Directors.
The terms of the Agreements may be extended for an additional 12
full calendar months upon action of the Board of First Federal,
Peoples Federal and First Financial prior to the anniversary date
of the Agreements and on each succeeding anniversary date
thereafter. Each of the Agreements provides for termination for
cause or in certain events specified by Office of Thrift
Supervision ("OTS") regulations. Each of the Agreements is also
terminable by First Federal, Peoples Federal or the Corporation
without cause except that the affected employee would be entitled
to the full amount of salary remaining under the term of the
Agreement. In the event of a change in control of the
Corporation resulting in the involuntary termination of
employment following such change in control, each Agreement
provides for the payment to the employee of the greater of the
salary which would have been received for the remainder of the
Agreement or 2.99 of a year's salary for Messrs. Hutchinson,
Hood, Magrath, Baarcke and Ott. At September 30, 1995, Messrs.
Hutchinson, Hood, Magrath, Baarcke and Ott would have received
approximately $638,305, $491,197, $334,345, $353,777 and
$371,179, respectively, if the Agreements were terminated
subsequent to change in control.
On October 1, 1993, First Federal and First Financial
entered into one year employment agreements with eight other
officers and with one officer on May 15, 1995. In the event of a
change in control of the Corporation resulting in the involuntary
termination of employment of the officer following such change in
control, the agreements provide for the payment of one year's
salary. At October 1, 1995, such officers would have received
approximately $644,340 in the aggregate if such agreements were
terminated subsequent to a change in control.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF
THE CORPORATION'S PREVIOUS FILINGS UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE 1934 ACT THAT MIGHT INCORPORATE FUTURE
FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE
FOLLOWING REPORT AND PERFORMANCE GRAPH SHALL NOT BE INCORPORATED
BY REFERENCE INTO ANY SUCH FILINGS.
Report of the Compensation Committee. The Compensation/
Benefits Committees of the Board of Directors for the
Corporation, First Federal and Peoples Federal are composed
entirely of independent directors. The Corporation's Committee
is responsible for establishing and monitoring compensation
policies of the Corporation and for reviewing and ratifying the
actions of the Associations' Compensation Committees.
Performance is evaluated and salaries are set at the
Associations' level.
It is the policy of First Federal and Peoples Federal that
the performance of senior management be evaluated using the same
established criteria which are used for the staff and that the
salary structure for the executive officers be included in the
salary structure of the Associations. The Committees are
responsible for evaluating the performance of the Chief Executive
Officer of the Associations while the Chief Executive Officer of
the Associations evaluates the performance of other senior
officers. Salary increases are recommended to the Committee
based on these evaluations. The Committee reviews the
evaluations and sets the salaries for the coming year.
The Compensation Committees' considerations include
management skills, long-term performance, shareholder returns,
operating results, asset quality, asset-liability management,
regulatory compliance and unusual accomplishments as well as
economic conditions and other external events that affect the
operations of the Corporation. Compensation policies must
promote the attraction and retention of highly qualified
executives and the motivation of these executives for performance
related to a financial interest in the success of the Corporation
and the enhancement of long-term shareholder value.
In addition to salaries, the Corporation's compensation plan
includes Profit Sharing Plan contributions and matching
contributions to the 401(k) Plan, both of which are based on
return on equity. Stock options are also awarded periodically
based on performance, length of service and salary grades. The
awards of stock options should provide increased motivation to
work for the success of the Corporation thereby increasing
personal financial success. Options granted to executives and
employees are at a price equal to the closing price of the
Corporation's stock on the date of grant.
Periodically, independent compensation consultants are
engaged to review the salary levels of all members of management
as compared with peers with comparable responsibilities in other
companies. Results are reported to the Compensation/Benefits
Committee.
During the fiscal year ended September 30, 1995, the base
compensation for A. L. Hutchinson, Jr., Vice Chairman, President
and Chief Executive Officer of the Corporation, was $217,987
which represented a 2.26% increase from the previous fiscal year.
Based on plan provisions, the Corporation also made contributions
to the Sharing Thrift Plan and the SERP on his behalf.
PEOPLES FEDERAL SAVINGS AND FIRST FEDERAL SAVINGS AND LOAN
LOAN ASSOCIATION ASSOCIATION OF CHARLESTON
Joseph A. Baroody Paul G. Campbell, Jr.
D. Kent Sharples Gary C. Banks, Jr.
Herman B. Speissegger, Jr. Walter A. Stilley, III
FIRST FINANCIAL HOLDINGS, INC.
Gary C. Banks, Jr.
Joseph A. Baroody
Paul G. Campbell, Jr.
Herman B. Speissegger, Jr.
Compensation Committee Interlocks And Insider Participation.
The Board of Directors of the Corporation has a
Compensation/Benefits Committee currently composed of Messrs.
Banks, Baroody, Campbell and Speissegger. Mr. Banks is presently
the Committee's Chairman. The Committee reviews and ratifies the
actions of the Compensation Committees of First Federal and
Peoples Federal. No member of the Compensation Committee is a
former or current officer or employee of the Corporation or any
of its subsidiaries.
Performance Graph. The following graph shows a five year
comparison of cumulative total returns for the Corporation, the
CRSP Index for NASDAQ Stock Market (U.S. Companies) and the CRSP
Peer Group Index.*
<TABLE>
<CAPTION>
Comparison of Five Year Cumulative Total Returns
FIRST FINANCIAL HOLDINGS, INC.
Nasdaq Stock Market
CRSP Index
Measurement Period First Financial CRSP Index Savings Institutions
(Fiscal Year End) Holdings, Inc. US Companies (SIC 6030-6039 US Only)
<S> <C> <C> <C>
9/30/90 100.0 100.0 100.0
9/30/91 155.4 157.3 153.2
9/30/92 224.4 176.3 213.5
9/30/93 332.9 231.0 348.1
9/30/94 384.7 232.9 400.3
9/30/95 488.0 320.7 511.6
</TABLE>
Assumptions
- - - -- Assumes $100 invested September 30, 1990, in First Financial
Holdings, Inc. Common Stock, Nasdaq Stock Market (U. S.
Companies) and Nasdaq Stocks Savings Institutions (U. S.
only).
- - - -- Total return assumes reinvestment of dividends.
- - - -- Fiscal year ending September 30.
* Source: Center for Research in Security Prices (CRSP), the
University of Chicago Graduate School of Business.
DIRECTORS' COMPENSATION
During the fiscal year ended September 30, 1995, members of
the Board of Directors of the Corporation received a fee of
$6,720 except the Chairman, who received a fee of $8,100. Non-
management members of the Board of Directors of First Federal
received $10,800 except the Chairman who received $12,900. No
additional fees are paid to directors who serve on the committees
appointed by the Board of Directors of the Corporation. No fees
are paid to officers of First Federal who serve on the Board of
Directors of the Corporation. Effective October 1, 1994, non-
management directors of the Corporation, First Federal and
Peoples Federal were offered the opportunity to participate in
the 1994 Outside Directors Stock Options-for-Fees Plan, approved
by the Shareholders at the January 25, 1995, Annual Meeting. In
1995, 10 directors (excluding Emeritus and Advisory Directors)
participated, deferring $112,230 in fees.
Non-management members of Peoples Federal's Board of
Directors received a fee of $7,200 except for the Chairman who
received $9,000. The members of management who serve on the
Board of Directors of Peoples Federal receive no additional
compensation. However, all members of the Board of Directors
received $50 for each Loan Committee attended.
COMPLIANCE WITH SECTION 16(a) OF THE 1934 ACT
Section 16(a) of the 1934 Act requires certain officers of
the Corporation and its directors, and persons who beneficially
own more than ten percent of any registered class of the
Corporation's equity securities, to file reports of ownership and
changes in ownership with the SEC.
Based solely on a review of the reports and written
representations provided to First Financial by the above
referenced persons, the Corporation believes that during the
fiscal year ended September 30, 1995, all filing requirements
applicable to its reporting officers, directors and greater than
ten percent beneficial owners were properly and timely complied
with except one report filed by Dr. D. Kent Sharples, a director
of First Financial and Peoples Federal. Dr. Sharples filed an
amended Form 4, Statement of Change in Beneficial Ownership of
Securities, in December 1995 for the Form 4 filed in February
1995.
TRANSACTIONS WITH MANAGEMENT
In 1993, the Board of Directors of First Federal adopted a
revised employee loan policy for financing and improving employee
personal residences, consumer loans and lot loans for primary
residences only. These loans are made in the ordinary course of
business and on substantially the same terms and collateral as
those of comparable transactions prevailing at the time and do not
involve more than the normal risk of collectibility or contain
other unfavorable features. Where loans are on owner-occupied,
single-family homes, rates on the promissory note are at prevailing
rates; however, a separate contract between First Federal and the
participant provides for an adjustment in rate below the prevailing
market rate to a rate of 1/2 of 1% above the index used for
adjustable-rate single-family home loans at the time of closing.
On all loans, the floor interest rate will be First Federal's
internal monthly cost of funds as defined in the contract. The
contract further provides for First Federal to revert the rate
charged to the market rate if: 1) the participant does not occupy
the property as a primary residence, or 2) the participant is no
longer employed with First Federal or a wholly-owned subsidiary.
Total consumer loan amounts outstanding are limited to $30,000
depending on qualifications of the participant. All consumer loan
promissory notes are at prevailing rates; however, by separate
contract, rates are adjusted below prevailing market rates. The
Board of Directors of First Federal has established a maximum
aggregate loan amount of $200,000 for each employee of First
Federal. As a result of provisions contained in the Financial
Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), loans are now granted at interest rates below
prevailing market rates only to non-insider employees. For all
insiders, market rates and fees apply. First Federal also complies
with all terms of Regulation O, which governs the activities of
loans to insiders.
All other eligible loans made to employees are made at
prevailing market rates in the ordinary course of business and also
on the same terms and collateral as those of comparable
transactions in effect at the time and do not involve more than the
normal risk of collectibility or contain other unfavorable
features.
Peoples Federal has followed a policy of offering loans to its
directors, officers, and employees for the financing and
improvement of their personal residences, as well as consumer
loans. These loans are made in the ordinary course of business and
also are made on substantially the same terms, collateral and rates
of interest as those of comparable transactions prevailing at the
time and do not involve more than the normal risk of collectibility
and are in compliance with FIRREA.
Set forth below is certain information relating to loans to
officers and directors of First Federal originated on preferential
terms and with aggregate balances in excess of $60,000 outstanding
during the fiscal year ended September 30, 1995. Peoples Federal
does not make loans with preferential terms to employees.
<TABLE>
<CAPTION>
Highest
Balance
During Fiscal
Original Original Year Ending Balance at Contract Prevailing
Date of Loan September 30, September 30, Interest Interest
Name Type of Loan Loan Balance 1995 1995 Rate<F1><F2> Rate<F3>
<S> <C> <C> <C> <C> <C> <C> <C>
D. Van Smith Mortgage<F4> 10-14-86 $250,000 $220,224 $214,244 8.375% 9.580%
A. L. Hutchinson, Jr. Mortgage<F4> 2-25-77 67,000 48,071 -0- 8.250<F5> 8.750
2nd Mortgage<F6> 7-27-84 35,018 12,290 -0- 10.250 13.000
A. Thomas Hood Mortgage<F4> 2-24-86 114,000 94,819 91,496 9.375 11.000
______________
<F1> At the time of closing.
<F2> Interest rate subject to periodic adjustment unless otherwise
noted.
<F3> At time of loan origination.
<F4> Purpose of loan is to finance primary residence.
<F5> Fixed-rate loan.
<F6> Purpose of loan is for debt consolidation.
OTHER MATTERS
The Board of Directors of the Corporation is not aware of
any business to come before the Meeting other than the matters
described above in this Proxy Statement. However, if any other
matters should properly come before the Meeting, it is intended
that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgement of the person or persons
voting the proxies.
The cost of solicitation of proxies will be borne by the
Corporation. In addition to solicitations by mail, directors,
officers and regular employees of the Corporation may solicit
proxies personally or by telegraph or telephone without
additional compensation.
ANNUAL REPORT TO STOCKHOLDERS
The Corporation's Annual Report to Stockholders, including
financial statements, has been mailed to all stockholders who
were stockholders of record as of the close of business on
November 30, 1995. Any stockholder who has not received a copy
of such Annual Report may obtain a copy by writing to the
Secretary of the Corporation. Such Annual Report is not to be
treated as part of the proxy solicitation material or as having
been incorporated herein by reference.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Corporation's
proxy materials for next year's Annual Meeting of Stockholders,
any stockholder proposal to take action at such meeting must be
received at the Corporation's main office at 34 Broad Street,
Charleston, South Carolina, no later than August 29, 1996. Any
such proposals shall be subject to the requirements of the proxy
rules adopted under the 1934 Act.
BY ORDER OF THE BOARD OF DIRECTORS
PHYLLIS B. AINSWORTH
SECRETARY
Charleston, South Carolina
December 20, 1995
FORM 10-K
A COPY OF THE FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF
THE RECORD DATE UPON WRITTEN REQUEST TO PHYLLIS B. AINSWORTH,
SECRETARY, FIRST FINANCIAL HOLDINGS, INC., P.O. BOX 118068,
CHARLESTON, SOUTH CAROLINA 29423-8068.
</TABLE>
