FIRST FINANCIAL HOLDINGS, INC.
34 Broad Street
Charleston, S. C. 29401
843-529-5933
December 23, 1998
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of
Shareholders of First Financial Holdings, Inc. to be held at the
Corporation's main office, 34 Broad Street, Charleston, South
Carolina, on Wednesday, January 27, 1999, at 5:30 p.m., South Carolina
time.
The Notice of Annual Meeting of Shareholders and Proxy Statement on
the following pages 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 shareholders may have.
To ensure proper representation of your shares at the meeting,
please sign, date and return the enclosed proxy ballot 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,
/s/ A. Thomas Hood
A. Thomas Hood
President and Chief Executive Officer
<PAGE>
FIRST FINANCIAL HOLDINGS, INC.
34 Broad Street
Charleston, South Carolina 29401
843-529-5933
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JANUARY 27, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
("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 27, 1999, at 5:30
p.m., South Carolina time for the following purposes:
1. To elect four directors of the Corporation; and
2. To consider and act upon 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 the foregoing proposal 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.
Shareholders of record at the close of business on November 30, 1998,
are entitled notice of and to vote at the Meeting and any adjournments
or postponements thereof.
You are requested to complete and sign the enclosed 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
/s/ Phyllis B. Ainsworth
PHYLLIS B. AINSWORTH
SECRETARY
Charleston, South Carolina
December 23, 1998
IMPORTANT: THE PROMPT RETURN OF THE SIGNED PROXY WILL SAVE THE
CORPORATION THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN
ORDER TO ENSURE 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
843-529-5933
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 27, 1999
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 Shareholders 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 27, 1999, at
5:30 p.m., South Carolina time. The accompanying Notice of Annual
Meeting of Shareholders and this Proxy Statement are first being
mailed to shareholders on or about December 23, 1998.
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
Shareholders who execute proxies retain the right to revoke them at
any time before they are voted. 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
shareholder 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 in the following pages.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Shareholders of record as of the close of business on November 30,
1998, are entitled to one vote for each share then held. Shareholders
are not permitted to cumulate their votes for the election of
directors. As of November 30, 1998, the Corporation had 13,599,525
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, 1998, 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, 1998. The table
also sets forth information as to the shares of Common Stock
beneficially owned by each director of the Corporation, by the Chief
Executive Officer of the Corporation, by the Corporation's or the
Associations' four other most highly compensated executive officers
("Named Executive Officers") and by all executive officers and
directors of the Corporation as a group.
Name and Amount and Percent of
Address of Nature Shares
Beneficial Owner of Beneficial of Capital
Ownership Stock
(1),(3) Outstanding
Dimensional Fund Advisors, Inc. (2) 806,900 5.91%
1299 Ocean Avenue
11th Floor
Santa Monica, California 90401
Non-Employee Directors
Gary C. Banks, Jr. 55,942 (4)
Paula Harper Bethea 7,832 (4)
Paul G. Campbell, Jr. 14,033 (4)
A. L. Hutchinson, Jr. 239,120 1.75%
Thomas J. Johnson 1,905 (4)
James C. Murray 38,337 (4)
D. Kent Sharples 31,596 (4)
D. Van Smith 73,004 (4)
Thomas E. Thornhill 33,696 (4)
Named Executive Officers
A. Thomas Hood 205,114 1.49%
George N. Magrath, Jr. 60,294 (4)
Charles F. Baarcke, Jr. 65,064 (4)
John L. Ott, Jr. 124,531 (4)
Susan E. Baham 90,791 (4)
All Executive Officers and Directors 1,041,259 7.46%
as a group (14 persons)
(1)Unless otherwise indicated, all shares are owned directly by the
named persons or by the persons indirectly through spousal
ownership, or 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.
(2)Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of
806,900 shares of the Corporation's Common Stock as of
September 30, 1998, all of which 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.
(3)Includes options awarded under the Corporation's Directors Stock
Options-for-Fees Plan that are exercisable within 60 days of
November 30, 1998, for the following directors: Mr. Banks -
28,318 shares; Mr. Johnson - 1,905 shares; Mrs. Bethea - 5,979
shares; Mr. Campbell - 3,809 shares; Mr. Murray - 32,508 shares;
Dr. Sharples - 27,507 shares; Mr. Smith - 3,798 shares; and Mr.
Thornhill - 3,310 shares. In addition, Mr. Hutchinson has 27,000
options available for exercise which were granted under the
Corporation's 1990 Stock Option and Incentive Plan when Mr.
Hutchinson was President of the Corporation. Also includes
73,600, 20,100, 8,300, 30,300, 35,400 and 301,834 shares of
Common Stock that may be received upon the exercise of stock
options, which are exercisable within 60 days of November 30,
1998, for Messrs. Hood, Magrath, Baarcke, Ott and Mrs. Baham and
all executive officers and directors as a group, respectively.
(4)Less than one percent.
PROPOSAL I - ELECTION OF DIRECTORS
The Corporation's Board of Directors ("Board") is currently
composed of 10 members. At the Meeting, four 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 Thomas J. Johnson, James C.
Murray, D. Kent Sharples and D. Van Smith each for three-year terms.
Upon the retirement of Director Thomas E. Thornhill on January 27,
1999, the number of directors will be changed from 10 to 9. All
nominees are currently 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 NOMINEES FOR
ELECTION AS DIRECTORS OF THE CORPORATION.
The following table sets forth certain information regarding the
nominees for election at the Annual Meeting as well as information
regarding those directors continuing in office after the Annual
Meeting.
Year First Elected Year Term
Name Age (1) Director (2) Expires
Board Nominees
Thomas J. Johnson 48 1998 2002 (4)
James C. Murray (3) 59 1991 2002 (4)
D. Kent Sharples (5) 55 1992 (6) 2002 (4)
D. Van Smith (3) 67 1968 2002 (4)
Directors Continuing in Office
A. Thomas Hood (3),(5) 52 1987 2000
A. L. Hutchinson, Jr. (3),(5) 64 1985 2000
Gary C. Banks, Jr. (3) 64 1987 2001
Paula Harper Bethea (3) 43 1996 2001
Paul G. Campbell, Jr. (3) 52 1991 2001
(1)As of September 30, 1998.
(2)Includes prior service, as applicable, on the Board of Directors
of First Federal.
(3)Also serves as a Director of First Federal.
(4)Assuming re-election at the Meeting.
(5)Also serves as a Director of Peoples Federal.
(6)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:
THOMAS J. JOHNSON is President, Chief Executive Officer and Owner
of F & J Associates, a company that owns and operates automobile
dealerships in South and North Carolina. He serves on the Board of
Trustees for Horry Georgetown Technical College Foundation, The Board
of Visitors of the Coastal Carolina University School of Business and
the South Carolina Business Resources Board. He is a member of the
National Automobile Dealers Association, the South Carolina Automobile
Dealers Association and the Ford Lincoln Mercury Dealers Association.
He is active in community service as a member of the South Carolina
Minority Business Network, as a member of the Board of Trustees of
Shaw University and as a member of the Conway, South Carolina and
Myrtle Beach, South Carolina Chambers of Commerce.
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 served as the 1996
Trident United Way Campaign Chairman and will be President of Trident
United Way for the 1999 year. 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 30 years
and as Chairman of the Board since January 1988. He is Chairman 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.
The present principal occupation and other business experience
during the last five years of each director continuing in office is
set forth below:
A. Thomas Hood has been President and Chief Executive Officer of
the Corporation since July 1, 1996, and of First Federal since
February 1, 1995. Previously he served in various capacities for the
Corporation and First Federal.
A. L. Hutchinson, Jr. has been Vice Chairman of the Corporation and
First Federal since February 1, 1995. Previously he served as
President and Chief Executive Officer and in other various capacities
for the Corporation and First Federal.
Gary C. Banks, Jr. is a Director and retired Executive Vice
President of Banks Construction Company, which specializes in highway
construction.
Paula Harper Bethea is the Director of Client Relations and
Development for Bethea, Jordan & Griffin, P.A. of Hilton Head Island,
South Carolina, a law firm.
Paul G. Campbell, Jr. is Executive Vice President for Alcoa-Mt.
Holly, South Carolina, a leading primary aluminum reduction company in
the United States.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board conducts its business through meetings of the Board of
Directors and through its committees. During the fiscal year ended
September 30, 1998, the Board held 13 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. Smith who was absent from
three Board meetings and the Nominating Committee meeting.
The Executive Committee of the Corporation, composed of Messrs.
Smith, Hood, Hutchinson, Murray and Sharples did not meet during the
fiscal year ended September 30, 1998.
The Audit Committee of the Corporation, composed of Messrs.
Sharples, Banks, Thornhill and Campbell, meets quarterly 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, 1998.
The Compensation/Benefits Committee of the Corporation, composed of
Messrs. Murray, Hutchinson, Johnson and Mrs. Bethea, reviews
compensation policies and benefit plans of the Corporation, grants
stock options and recommends compensation for senior management. This
Committee held six meetings during the fiscal year ended September 30,
1998.
Article II, Section 14 of the Corporation's Bylaws provides that
the Board shall act as a nominating committee for selecting the
management nominees for election as directors. Such section of the
Bylaws 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 shareholders are made in
writing and delivered to the Secretary of the Corporation in
accordance with the provisions of the Corporation's Certificate of
Incorporation." The Board held one meeting in its capacity as the
nominating committee during the fiscal year ended September 30, 1998.
DIRECTORS' COMPENSATION
During the fiscal year ended September 30, 1998, non-management
members of the Board of Directors of the Corporation received a fee of
$8,040 except the Chairman, who received a fee of $9,600. Non-
management members of the First Federal Board 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. No fees
are paid to officers of First Financial who serve on the Board of
Directors of the Corporation. Non-management members of the Peoples
Federal Board received a fee of $10,380 during the fiscal year ended
September 30, 1998, except for the Chairman, who received $12,600.
The members of management who serve on the Peoples Federal Board
receive no additional compensation.
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 fiscal 1998, nine Directors (excluding
Emeritus and Advisory Directors) participated in the Plan, deferring
$88,790 in fees.
The Performance Equity Plan for Non-Employee Directors was approved
by shareholders at the January 22, 1997, Annual Meeting of
Shareholders. Performance targets for the second plan year resulted
in the award of 442 shares to the eight directors of First Federal.
MANAGEMENT REMUNERATION
Summary Compensation Table.
The following information is furnished for the Corporation's Chief
Executive Officer and the four other most highly compensated executive
officers during the fiscal year ended September 30, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE*
Long-Term
Annual Compensation Compensation
Awards
Other Annual All Other
Salary Bonus Compensation Stock Options Compensation
Name and Principal Position Year ($) (1) ($) (2) (#) (3) ($) (4)
<S> <C> <C> <C> <S> <C> <C>
A. Thomas Hood 1998 196,386 24,219 -- 2,400 16,950
President and Chief Executive 1997 186,114 28,646 -- 10,000 12,898
Officer of the Corporation and 1996 176,006 -- -- 6,000 10,240
First Federal
George N. Magrath, Jr. 1998 128,281 15,616 -- 2,000 10,618
President and Chief Executive 1997 123,379 -- -- 6,500 10,397
Officer of Peoples Federal 1996 111,028 -- -- 4,000 9,351
Charles F. Baarcke, Jr. 1998 137,546 19,972 -- 2,000 11,530
Senior Vice President of the 1997 131,066 19,167 -- -- 8,987
Corporation and First Federal 1996 127,866 -- -- 4,000 6,761
John L. Ott, Jr. 1998 143,879 18,557 -- 2,000 14,639
Senior Vice President of the 1997 136,260 23,836 -- -- 11,411
Corporation and First Federal 1996 131,441 -- -- 4,000 8,649
Susan E. Baham 1998 113,414 11,463 -- 2,000 11,547
Senior Vice President and 1997 105,589 15,477 -- 6,000 8,301
Chief Financial Officer of the 1996 89,680 -- -- 3,000 6,581
Corporation and First Federal
* 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 Officer on Corporation business. Mr. Magrath is compensated by Peoples Federal.
(1) Reflects bonuses awarded for the fiscal year which were paid in subsequent
fiscal year.
(2) Excludes perquisites which did not exceed $50,000 or 10% of salary and bonus.
(3) Adjusted for two-for-one Stock Split on March 27, 1998.
(4) Represents total 401(k) and profit sharing plan contributions paid by the
Corporation in fiscal year.
</TABLE>
Option Grants Table.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Realizable Value
Individual Grants at Assumed Annual
Rates of Stock
% of Total Price Appreciation
Options for Option Term
Options Granted to
Granted Employees in Exercise Expiration 5% 10%
Name (#)(1) Fiscal Year Price ($/Sh)(1) Date ($)(2) ($)(2)
<S> <C> <C> <C> <C> <C> <C>
A. Thomas Hood 2,400 2.97 18.625 10/23/07 28,116 71,244
George N. Magrath, Jr. 2,000 2.47 18.625 10/23/07 23,430 59,370
Charles F. Baarcke, Jr. 2,000 2.47 18.625 10/23/07 23,430 59,370
John L. Ott, Jr. 2,000 2.47 18.625 10/23/07 23,430 59,370
Susan E. Baham 2,000 2.47 18.625 10/23/07 23,430 59,370
(1) Adjusted for two-for-one Stock Split on March 27, 1998.
(2) The dollar amounts indicated in these columns are the result of calculations assuming 5% and
10% growth rates as required by the rules of the Securities and Exchange Commission ("SEC").
These growth rates are not intended by First Financial to forecast future appreciation, if any,
of the price of First Financial Common Stock. The actual value, if any, realized by an
executive officer will depend on the excess of the market price of the shares over the exercise
price on the date the option is exercised.
</TABLE>
Option Exercise Table.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Value of
Number of Unexercised
Shares Unexercised In-the-Money
Acquired Options at Fiscal Options at Fiscal
on Value Year End Year End (2)
Exercise Realized Exercisable/ Exercisable/
Name (1) ($) Unexercisable (1) Unexercisable ($)
<S> <C> <C> <C> <C>
A. Thomas Hood 11,104 208,190 73,600/-- 749,738/--
George N. Magrath, Jr. -0- -0- 20,100/-- 145,936/--
Charles F. Baarcke, Jr. 6,500 104,813 8,300/-- 49,062/--
John L. Ott, Jr. 3,050 67,579 30,300/-- 263,705/--
Susan E. Baham 7,200 129,150 35,400/-- 352,119/--
(1)Shares have been adjusted for two-for-one Stock Split on March 27, 1998, when
applicable.
(2)The values shown equal the difference between the exercise price of unexercised in-
the-money options and the closing market price ($17.00) of the underlying Common
Stock at September 30, 1998. Options are in-the-money if the fair market value of
the Common Stock exceeds the exercise price of the option.
</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%, 200% and 100% for the 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
seven management members, all of which have been management members
for less than five years.
Employment Agreements.
First Federal entered into an employment agreement ("Agreement")
with Mr. Hood on July 30, 1987, which Agreement was subsequently
amended on September 29, 1988, October 1, 1993, and September 26,
1996, and includes First Financial as a party to the Agreement since
1993. 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. On
September 26, 1996, First Federal and First Financial entered into a
three-year Agreement with Mrs. Baham. The Agreements of Messrs. Hood,
Magrath, Baarcke, Ott and Mrs. Baham provide for a salary of not less
than $175,620, $93,600, $104,220, $112,080 and $88,448 per annum,
respectively, disability and retirement income benefits and bonus and
other fringe benefits as may be approved by the Board. The terms of
the Agreements may be extended for an additional 12 full calendar
months upon action of the Boards of First Federal, Peoples Federal and
First Financial, as appropriate, prior to the anniversary date of the
Agreements. Each of the Agreements provides for termination for cause
or in certain events specified by Office of Thrift Supervision
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 (as defined in each Agreement) of the Corporation followed
by the involuntary termination of employment (or voluntary termination
of employment in certain circumstance) of the executive 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 times the average of the
prior five years' salaries for Messrs. Hood, Magrath, Baarcke, Ott and
Mrs. Baham. At September 30, 1998, Messrs. Hood, Magrath, Baarcke,
Ott and Mrs. Baham would have received approximately $481,760;
$340,653; $305,792; $359,322; and $260,465, respectively, if their
employment were terminated subsequent to change in control.
Report of the Compensation Committee.
The Compensation/Benefits Committees of the Boards of Directors of
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 of the Corporation
and the individual is evaluated and compensation is set accordingly.
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 Officers of the
Associations while the Chief Executive Officers of the Associations
evaluate the performance of other senior officers of the respective
Associations. 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 and the
Associations. Compensation policies must promote the attraction and
retention of highly-qualified executives and the motivation of these
executives to achieve financial and other goals that result in the
success of the Corporation and the Associations 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 shareholders'
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. All
options granted to executives and employees are exercisable at the
closing price of the Corporation's stock on the date of grant.
In September 1996, the Board approved a management Performance
Incentive Compensation Plan to become effective October 1, 1996. The
purpose of the plan is to share the rewards of excellent performance
with those managers who provide the knowledge, direction and work to
accomplish results that are above expectations. Standards of
measurement have been developed and the Associations must meet the
goals as identified in their strategic business plans.
Any incentive awards are supplements to annual compensation. No
incentive bonus will be awarded for a fiscal year regardless of
performance on individual factors if the Associations' return on
shareholders' equity is less than the approved minimum for that fiscal
year. Participants in the plan are limited to executives who are
responsible for directing functions which have significant impact on
the growth and profitability of the Associations and the Corporation.
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, 1998, the base
compensation for A. Thomas Hood, President and Chief Executive
Officer of the Corporation, was $196,414, which represented a 5.5%
increase from the previous fiscal year.
PEOPLES FEDERAL SAVINGS FIRST FEDERAL SAVINGS AND LOAN
AND LOAN ASSOCIATION ASSOCIATION OF CHARLESTON
Joseph A. Baroody, Chairman Gary C. Banks, Jr., Chairman
A. L. Hutchinson, Jr. Paul G. Campbell
Thomas E. Rogers, Jr. James C. Murray
Herman B. Speissegger, Jr. Walter A. Stilley, III
Thomas E. Thornhill
FIRST FINANCIAL HOLDINGS, INC.
James C. Murray, Chairman
Paula Harper Bethea
A. L. Hutchinson, Jr.
Thomas J. Johnson
Compensation Committee Interlocks And Insider Participation. The
Board has a Compensation/Benefits Committee currently composed of
Messrs. Murray, Hutchinson, Johnson and Mrs. Bethea.
Mr. Murray 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, except Mr. Hutchinson, who
retired as President of First Financial in 1995.
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.
<PAGE>
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 for Nasdaq Stocks.*
<TABLE>
<CAPTION>
Comparison of Five Year Cumulative Total Returns
Performance Graph for
FIRST FINANCIAL HOLDINGS, INC.
<S> <C> <C> <C> <C> <C> <C>
9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98
FIRST FINANCIAL HOLDINGS, INC. $ 100.0 $ 115.5 $ 146.6 $ 149.5 $ 291.3 $ 266.5
CRSP Index for Nasdaq Stock Market (US Companies) 100.0 100.8 139.3 165.2 226.8 231.8
CRSP Peer Group Index for Nasdaq Stocks 100.0 115.0 147.1 173.2 299.4 301.8
(SIC 6030-6039 US Only) Savings Institutions
</TABLE>
Assumptions
Assumes $100 invested September 30, 1993 in First Financial
Holdings, Inc. Common Stock, Nasdaq Stock Market (U.S. Companies)
and CRSP Peer Group Index for Nasdaq Stocks.
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.
<PAGE>
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 10 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 and,
except as noted below, the Corporation believes that during the fiscal
year ended September 30, 1998, all filing requirements applicable to
its reporting officers, directors and greater than 10 percent
beneficial owners were properly and timely in compliance. In July
1998 amended Forms 4 were filed to correct an incorrectly reported
stock price on a dividend reinvestment plan purchase for A. Thomas
Hood and John L. Ott, Jr. Form 4 for Hugh L. Willcox, Jr. (Peoples
Federal Director) was filed in June 1998 to correct entries made in
October 1997 and April 1998 totaling an increase of 51 shares owned.
TRANSACTIONS WITH MANAGEMENT
Applicable laws and regulations require that all loans or
extensions of credit by the Associations to executive officers and
directors must be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons (unless the loan or
extension of credit is made under a benefit program generally
available to all employees and does not give preference to any insider
over any employee) and does not involve more than the normal risk of
repayment or present other unfavorable features. The Associations
have adopted policies which comply with these provisions.
SHAREHOLDER PROPOSALS
Article II, Section 15 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 shareholder's
intent to make a nomination or present new business at the meeting
("shareholder 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 shareholders by
the Corporation, a shareholder'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 shareholders. If properly made, such
nominations or new business shall be considered by shareholders at
such meeting.
In order to be eligible for inclusion in the Corporation's proxy
materials for next year's Annual Meeting of Shareholders, any
shareholder 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 25, 1999. Any such proposals shall be
subject to the requirements of the proxy rules adopted under the 1934
Act.
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 SHAREHOLDERS
A copy of the Annual Report to Shareholders and the Annual Report
on Form 10-K for the fiscal year ended September 30, 1998 are being
mailed to each shareholder of record together with these proxy
materials. THE ANNUAL REPORT ON FORM 10-K AND THE ANNUAL REPORT TO
SHAREHOLDERS ARE NOT A PART OF THE CORPORATION'S SOLICITING MATERIAL.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Phyllis B. Ainsworth
PHYLLIS B. AINSWORTH
SECRETARY
Charleston, South Carolina
December 23, 1998
