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
CAROLINA FIRST CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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>
CAROLINA FIRST CORPORATION
102 SOUTH MAIN STREET
GREENVILLE, SOUTH CAROLINA 29601
March 20, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of Carolina First Corporation (the "Annual Meeting") to be held in the Gunter
Theatre, Peace Center for the Performing Arts, 300 South Main Street,
Greenville, South Carolina, on Thursday, April 30, 1998 at 10:30 a.m.
The attached Notice of the Annual Meeting and Proxy Statement describe
the formal business to be transacted at the Annual Meeting. During the Annual
Meeting, we will report on the operations of Carolina First Corporation and its
subsidiaries. Directors and officers of Carolina First Corporation and its
subsidiaries, as well as representatives of KPMG Peat Marwick LLP, our
independent auditors, will be present to respond to any questions shareholders
may have.
To ensure proper representation of your shares at the Annual Meeting,
please sign, date and return the enclosed proxy card as soon as possible, even
if you currently plan to attend the Annual Meeting. This will not prevent you
from voting in person, but will ensure that your vote will be counted if you are
unable to attend.
Sincerely,
Mack I. Whittle, Jr.
President and Chief Executive Officer
<PAGE>
CAROLINA FIRST CORPORATION
102 South Main Street
Greenville, South Carolina 29601
(864) 255-7900
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 30, 1998
To the Shareholders of Carolina First Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Carolina First Corporation (the "Company") will be held on
April 30, 1998 at 10:30 a.m., Greenville time, in the Gunter Theatre, Peace
Center for the Performing Arts, 300 South Main Street, Greenville, South
Carolina for the following purposes:
1. To set the number of Directors at 13 and to elect five
Directors to hold office until their respective terms expire
or until their successors are duly elected and qualified;
2. To consider and vote upon amendments to the Company's
Directors' Stock Option Plan (the "Directors' Plan"); and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Shareholders of record at the close of business on March 10, 1998 will
be entitled to vote at the Annual Meeting.
By Order of the Board of Directors,
William S. Hummers III
Secretary
Greenville, South Carolina
March 20, 1998
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE POSTAGE-PAID
ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU WISH, YOU
MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON AT THE ANNUAL MEETING.
<PAGE>
CAROLINA FIRST CORPORATION
102 South Main Street
Greenville, South Carolina 29601
----------------------
PROXY STATEMENT
----------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 30, 1998
This Notice of Annual Meeting, Proxy Statement and Proxy (these "Proxy
Materials") are being furnished to shareholders in connection with a
solicitation of proxies by the Board of Directors of Carolina First Corporation
(the "Company"). This solicitation is being made in connection with the Annual
Meeting of Shareholders (the "Annual Meeting") to be held in the Gunter Theatre,
Peace Center for the Performing Arts, 300 South Main Street, Greenville, South
Carolina at 10:30 a.m. on April 30, 1998. These Proxy Materials are being mailed
on approximately March 20, 1998.
Voting Matters
Holders of record as of the close of business on March 10, 1998 of the
Company's $1.00 par value common stock ("Common Stock") will be entitled to vote
at the Annual Meeting. At the close of business on that day, 17,709,741 shares
of Common Stock were outstanding. Holders of Common Stock are entitled to one
vote per share on each matter presented at the Annual Meeting or any
adjournments thereof. Shareholders do not have cumulative voting rights. Shares
of Common Stock may be voted in person or by proxy. The presence, either in
person or by proxy, of holders of shares representing a majority of the
outstanding Common Stock of the Company on March 10, 1998 is necessary to
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes are
each included in the determination of the number of shares present and voting.
In connection with the election of directors, abstentions and broker non-votes
are not counted in determining the votes cast for directors. Abstentions and
broker non-votes have no effect on the vote on the proposal to approve the
amendments to the Directors' Plan.
Revocability of Proxy
Shares represented by a properly executed proxy in the accompanying
form and given by a shareholder, and not revoked, will be voted in accordance
with such instructions. As stated in the Proxy, if a returned Proxy does not
specify otherwise, the shares represented thereby will be voted in favor of all
proposals set forth herein. Proxies may be revoked at any time prior to their
being voted at the Annual Meeting by oral or written notice to William S.
Hummers III at Carolina First Corporation, 102 South Main Street, Greenville,
South Carolina 29601, (864) 255- 7913 or by execution and delivery of a
subsequent proxy or by attendance and voting in person at the Annual Meeting.
Solicitation of Proxies
This solicitation of proxies is made by the Company, and the Company
will bear the cost of this proxy solicitation, including the cost of preparing,
handling, printing and mailing these Proxy Materials. Proxies will be solicited
principally through these Proxy Materials. Proxies may also be solicited by
telephone or through personal solicitation conducted by regular employees of the
Company. Employees and officers will be reimbursed for the actual out-of-pocket
expenses incurred in connection with such solicitation. Banks, brokers and other
custodians are requested to forward these Proxy Materials to their customers
where appropriate, and the Company will reimburse such banks, brokers and
custodians for their reasonable out-of-pocket expenses in sending these Proxy
Materials to beneficial owners of the shares.
<PAGE>
ELECTION OF DIRECTORS
Item 1 on the Proxy
Nominations for Election of Directors
The Company's Board of Directors is currently comprised of 13 persons.
The Company's Articles of Incorporation provide that in the event that the Board
of Directors is comprised of nine or more persons the Board of Directors shall
be divided into three classes of Directors with each class being elected for
staggered three-year terms. Directors will be elected by a plurality of votes
cast at the Annual Meeting. Abstentions and broker non-votes with respect to
Nominees will not be considered to be either affirmative or negative votes.
Identification of Nominees
Management proposes to nominate to the Board of Directors the five
persons listed as Nominees in the table below. Each of the Nominees is currently
serving as a Director. Each Nominee, if elected, will serve until the expiration
of his respective term and until his successor is duly qualified. Unless
authority to vote with respect to the election of one or more Nominees is
"WITHHELD," it is the intention of the persons named in the accompanying Proxy
to vote such Proxy for the election of these Nominees. Management believes that
all such Nominees will be available and able to serve as Directors. However,
should any Nominee become unable to accept election, it is the intention of the
person named in the Proxy, unless otherwise specifically instructed in the
Proxy, to vote for the election of such other persons as management may
recommend. The following table sets forth the names and ages of the Nominees for
Directors and the Directors continuing in office, the positions and offices with
the Company held by each such person, and the period that each such person has
served as a Director.
<TABLE>
<CAPTION>
Name Age Position or Office with the Company Director Since
- ---------------------- --- ----------------------------------- --------------
<S> <C>
Nominees For Directors (For terms expiring in 2001)
Judd B. Farr 72 Director 1994
C. Claymon Grimes, Jr. 75 Director 1990
Elizabeth P. Stall 66 Director 1986
David C. Wakefield III 54 Director 1997
Mack I. Whittle, Jr. 49 President, Chief Executive Officer 1986
Directors Continuing In Office (For terms expiring in 1999)
William S. Hummers III 52 Executive Vice President, Secretary 1990
William R. Phillips 78 Director 1997
Charles B. Schooler 69 Director 1990
Eugene E. Stone IV 59 Director 1996
(For terms expiring in 2000)
M. Dexter Hagy 53 Director 1993
Vernon E. Merchant, Jr. 67 Director 1997
H. Earle Russell, Jr. 56 Director 1997
William R. Timmons, Jr. 74 Chairman of the Board of Directors 1986
</TABLE>
Meetings and Committees of the Board of Directors
The Board held eight meetings in 1997. No Director attended less than 75%
of such meetings.
The Board has an Audit Committee which reviews the audit plan, the
results of the audit engagement of the Company's accountants, the scope and
results of the Company's procedures for internal auditing and internal control,
and the internal audit reports of the Company's subsidiaries. The Audit
Committee is also reviewing the Company's plans and progress in addressing Year
2000 system issues. The Audit Committee is currently comprised of Messrs.
Grimes, Russell and Schooler. The Audit Committee met twice during 1997.
All current members were present at each of the meetings.
The Board has a Compensation Committee which reviews the Company's
compensation policies and makes recommendations regarding senior management
compensation. Its report is set forth herein. The Compensation Committee is
currently comprised of Mr. Farr, Mr. Hagy, Ms. Stall and Mr. Stone. The
Compensation Committee met twice during 1997. All current members were present
at both meetings. No members of the Compensation Committee are officers or
employees of the Company or its subsidiaries.
The Board has a Nominating Committee comprised of Mr. Hagy, Ms. Stall,
Mr. Timmons and Mr. Whittle. The Nominating Committee did not meet during 1997.
The Nominating Committee will consider nominees recommended by security holders.
Any such recommendations should be made in writing and delivered to the
Company's principal offices before December 1 of each year.
2
<PAGE>
APPROVAL OF AMENDMENTS TO THE COMPANY'S DIRECTORS' STOCK OPTION PLAN
Item 2 on the Proxy
The Company proposes to amend its existing Directors' Stock Option Plan
(the "Directors' Plan" and, as amended, the "Amended Directors' Plan") to
increase the number of shares which may be subject to options thereunder from
250,000 shares to 500,000 shares, and to amend the compensation payable
thereunder to Company directors ("Company Directors") to be consistent with the
director compensation program adopted by the Company for 1998. Under the
Directors' Plan's existing provisions, all non-employee directors of the Company
and its principal subsidiaries receive options to purchase 1,000 shares of
Common Stock on an annual basis. The Directors' Plan is being amended to
differentiate between Company Directors and directors of subsidiaries who do not
also serve as Company Directors ("Subsidiary Directors"). Subsidiary Directors
will continue to receive the annual 1,000 share grant. However, the Company has
approved a program whereby Company Directors will receive 60% of their total
director compensation (calculated assuming 100% attendance at all scheduled
Board and committee meetings) in the form of options to purchase Common Stock.
The options will be valued based on the Black-Scholes valuation method. The
Amended Directors' Plan also contains provisions for the immediate vesting of
options upon a Change of Control. For the reasons set forth below, the Board of
Directors unanimously recommends a vote FOR the approval of such amendments.
Reasons for Approval. The Company believes that it is important to align
the Company Directors' interest and the shareholders' interest. Accordingly, the
Company has decreased significantly the cash portion of Company Director
compensation and provided that a substantial portion (60%) of the Company
Directors' compensation will be paid in the form of options (valued under the
Black-Scholes method). The number of shares issuable under the Directors' Plan
is being increased to reflect this increased use of options for compensation, as
well as to reflect the increase in the number of directors.
Material Features of the Amended Directors' Plan. The Amended Directors'
Plan is summarized below. However, this summary is qualified in its entirety by
reference to the text of the Amended Directors' Plan, a copy of which may be
obtained, without charge, by written request to Carolina First Corporation, Post
Office Box 1029, Greenville, South Carolina 29602, Attention: William S. Hummers
III.
Administration and Eligibility. Non-employee directors of the Company and
its principal subsidiaries are eligible to participate in the Amended Directors'
Plan ("Eligible Directors"). The Amended Directors' Plan is administered by the
Board of Directors or a committee of individuals (the "Committee") appointed by
the Board, subject to applicable law. On March 10, 1998, there were 19 Eligible
Directors for purposes of the Amended Directors' Plan.
Granting of Options. The Amended Directors' Plan provides that on May 1
of each calendar year (or if May 1 is not a business day, the immediately
preceding business day) (the "Grant Date"), each Subsidiary Director shall
automatically receive from the Company an option to acquire 1,000 shares of
Common Stock and each Company Director shall automatically receive from the
Company an option to acquire shares of Common Stock, valued based on the
Black-Scholes valuation method, equal to 60% of the Company Director's total
compensation as a Company Director for that particular twelve-month period. All
options shall have an exercise price equal to the average of the high and low
sales prices of the Common Stock (the "Fair Market Value") on the Grant Date.
Exercisability of Options. Options are exercisable after ten months from
the Grant Date and at any time thereafter (except that Options become
immediately vested upon certain changes in control) until and including the date
which is the business day immediately preceding the tenth anniversary of the
Grant Date. Subject to certain limitations, any option granted under the Amended
Directors' Plan shall terminate in full (whether or not previously exercisable
and prior to the expiration of its term) one year following the date on which
the optionee ceases to be an Eligible Director. In no event may an option be
exercised after the expiration of its fixed term. All vesting of options shall
cease when a person ceases (for whatever reason) to serve as an Eligible
Director.
Non-transferability. Options granted under the Amended Directors' Plan
are not transferable except: (i) by will; (ii) by the laws of descent and
distribution; or (iii) pursuant to a qualified domestic relations order as
defined by the Code or in Title I of ERISA, or the rules thereunder.
3
<PAGE>
Amendment. The Board or Committee may suspend, amend or terminate the
Amended Directors' Plan. However, under Section 16 of the Securities Exchange
Act of 1934, as amended, certain material amendments may not be made without the
approval of holders of a majority of the Company's outstanding capital stock
present or represented by proxy and entitled to vote at a meeting duly held of
the stockholders of the Company.
Effective Date. The original effective date of the Amended Directors'
Plan was as of April 20, 1994. Assuming shareholder approval is received at the
Annual Meeting, the Amended Directors' Plan will be amended effective as of May
1, 1998. If such approval is not received, the Directors' Plan, unamended, will
continue in effect.
Shareholder Approval. Approval of the Amended Directors' Plan by holders
of a majority of the votes cast on the proposal is required under the Bylaws of
the NASD, to which the Company is subject because its Common Stock is traded on
the Nasdaq National Market. Abstentions and broker non-votes are not considered
to be either affirmative or negative votes.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
AMENDMENTS TO THE AMENDED DIRECTORS' PLAN.
Federal Income Tax Consequences Associated with the Plans. The following
discussion is intended only as a brief summary of the federal income tax rules
relevant to stock options and restricted stock awards. The laws governing the
tax aspects of awards are highly technical and such laws are subject to change.
The options will not be qualified as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended. Upon the grant of
a nonqualified option, the grantee will not recognize any taxable income, and
the Company will not be entitled to a deduction. Upon the exercise of such an
option, the excess of the fair market value of the shares acquired on the
exercise of the option over the option price (the "spread"), will constitute
compensation taxable to the grantee as ordinary income. In determining the
amount of the spread or the amount of consideration paid to the grantee, the
fair market value of the stock on the date of exercise is used. The Company, in
computing its federal income tax, will generally be entitled to a deduction in
an amount equal to the compensation taxable to the grantee.
Plan Benefits. The following table sets forth for the year ended December
31, 1997, options granted under the Directors' Plan to the Company Directors.
All Subsidiary Directors received an option to purchase 1,000 shares. No
executive officer or other employee of the Company received any options under
the Directors' Plan.
<TABLE>
<CAPTION>
Name Dollar Value ($)(1) Number of Options (2)
- ------------------ ------------------- ---------------------
<S> <C> <C>
Judd B. Farr 8,514 1,000
C. Claymon Grimes, Jr. 8,514 1,000
M. Dexter Hagy 8,514 1,000
Vernon E. Merchant, Jr. --- ---
William R. Phillips --- ---
H. Earle Russell, Jr. 8,514 1,000
Charles B. Schooler 8,514 1,000
Elizabeth P. Stall 8,514 1,000
Eugene E. Stone IV 8,514 1,000
William R. Timmons, Jr. 8,514 1,000
David C. Wakefield III --- ---
</TABLE>
- ------------------------------------------
(1) Calculated by using the Black-Scholes option-pricing model with the
following assumptions: dividend yield of 3.25%, expected volatility of
38%, risk-free interest rate of 6.73% and expected lives of 7.5 years.
(2) These options had an exercise price of $15.75, which was the fair market
value of the Company's Common Stock at the time of grant.
EXECUTIVE OFFICERS
The Company's executive officers are appointed by the Board of Directors
and serve at the pleasure of the Board. The following persons serve as executive
officers of the Company.
4
<PAGE>
<TABLE>
<CAPTION>
Name Age Company Offices Currently Held Company Officer Since
- ------------------ --- ----------------------------------------- ----------------------
<S> <C> <C> <C>
Mack I. Whittle, Jr. 49 President and Chief Executive Officer 1986
William S. Hummers III 52 Executive Vice President, Secretary 1988
James W. Terry, Jr. 50 President of Carolina First Bank 1991
David L. Morrow 48 Executive Vice President of Carolina First Bank 1992
Joseph C. Reynolds 52 President of Carolina First Mortgage Company 1993
</TABLE>
Business Experience of Directors and Executive Officers
Mr. Farr is the owner and President of Greenco Beverage, Inc., a
distributorship headquartered in Greenville, South Carolina. Mr. Farr has served
as President since the opening of Greenco Beverage, Inc. in 1965.
Mr. Grimes is an attorney in private practice in Georgetown, South
Carolina.
Mr. Hagy is a principal of Vaxa Capital Management, LLC, an investment
management firm formed in 1995, and President of Vaxa Corporation, an investment
holding company formed in 1987, located in Greenville, South Carolina. Since
January 1996, Mr. Hagy has been Chairman and Chief Executive Officer of BPM
Technology, Inc., a development stage producer of printing equipment used in
engineering design offices.
Mr. Hummers joined the Company in June 1988 in his present capacity. He
is also a director of World Acceptance Corporation.
Dr. Merchant retired in March 1997 after being a physician and surgeon
for over 37 years. Dr. Merchant serves as an assistant clinical professor at the
Medical University of South Carolina.
Mr. Morrow currently serves as Executive Vice President and a Director
of Carolina First Bank. From 1992 until the merger of Carolina First Savings
Bank, F.S.B. into Carolina First Bank in February 1995, Mr. Morrow served as the
President of Carolina First Savings Bank, F.S.B. From 1988 to 1992, Mr. Morrow
was Vice President/City Executive for First Union National Bank of South
Carolina in Hilton Head, South Carolina.
Mr. Phillips is a retired stockbroker from J.C. Bradford & Co.
Mr. Reynolds has served as President of Carolina First Mortgage Company
since 1993. From 1984 until 1993, Mr. Reynolds was Senior Vice President and
Chief Mortgage Banking Officer at South Carolina Federal Savings Bank, F.S.B. in
Columbia, South Carolina.
Dr. Russell is a surgeon in Greenville, South Carolina.
Dr. Schooler is an optometrist in Georgetown, South Carolina.
Ms. Stall is a private investor in Greenville, South Carolina.
Mr. Stone currently serves as Chairman of Umbro International, Inc.,
formerly known as Stone Manufacturing. Mr. Stone is a director of the Liberty
Corporation.
Mr. Terry has served as the President and a Director of Carolina First
Bank since 1991. From 1986 to 1991, Mr. Terry was Senior Vice President and
Regional Executive for First Union National Bank of South Carolina in
Greenville, South Carolina.
Mr. Timmons is Chairman of Canal Insurance Company, a nationwide
insurer of commercial motor vehicles ("Canal"). From 1947 until 1993, Mr.
Timmons served as Canal's First Vice President and Secretary.
Mr. Wakefield has served as an independent consultant to the Company
since the Company's acquisition of First Southeast Financial Corporation ("First
Southeast") in November 1997. Mr. Wakefield was President and Chief Executive
Officer of First Southeast since its formation in 1993 and President and Chief
Executive Officer of First Federal Savings and Loan Association of Anderson, a
subsidiary of First Southeast, since 1991.
Mr. Whittle has been President and CEO of the Company since its
organization in 1986. From 1986 until 1991, Mr. Whittle also served as President
of Carolina First Bank.
5
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation Of Directors
During 1997, non-officer Directors received an annual fee of $13,200,
plus $500 for each Board of Directors' meeting attended. Directors who attended
committee meetings received $250 per meeting. Pursuant to the Directors' Plan,
all non-employee Directors received options to purchase 1,200 shares (adjusted
for a six-for-five stock split) on May 1, 1997, which options had an exercise
price equal to the fair market value of the Common Stock on the date of grant.
For 1998, each Company Director's total compensation will be valued at
$30,000, assuming that the Director attends all meetings. Meeting fees will be
$500 for each Board of Directors' meeting attended and $250 for each committee
meeting attended. A total of 60% of each Company Director's total compensation
will be paid in the form of options to purchase Common Stock, which will be
valued based on the Black-Scholes valuation method. This is described in greater
detail above in Item 2.
Changes in Director compensation are being undertaken to more closely
align directors' interests with those of the shareholders.
Summary of Cash and Certain Other Compensation
The following table sets forth information concerning all compensation
paid by the Company and its subsidiaries during the fiscal years ended December
31, 1995, 1996 and 1997, to the Company's CEO and to each of the four most
highly compensated executive officers other than the CEO (collectively the
"Executive Officers") for services rendered in all capacities to the Company and
its subsidiaries. For purposes of the table, all bonus amounts listed for a
particular year (including annual bonus compensation and Long Term Compensation
payments) were actually paid in February of the following year. For example, the
bonuses for 1997 were paid in February 1998, but listed as 1997 compensation,
because the bonuses were earned as of December 31, 1997.
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
---------------------------------------- ---------- -------
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Salary Bonus Compen- Awards Options/ Payouts Compensation
Principal Position Year ($) ($) sation ($) SARs (#) ($) ($)
------------------ ---- ----- ----- -------- ----- -------- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mack I. Whittle, Jr. 1997 298,330 177,436 (1) 73,336(2) 15,506 73,343 50,872(3)
President, Chief 1996 274,520 28,342 (1) -- -- -- 408,559
Executive Officer 1995 264,340 40,320 (1) 87,413 11,867 87,404 33,877
William S. Hummers III 1997 181,900 105,147 (1) 43,473(4) 9,189 43,463 59,316(5)
Executive Vice 1996 171,145 17,006 (1) -- -- -- 127,459
President 1995 163,485 24,360 (1) 52,815 7,242 52,807 30,437
James W. Terry, Jr. 1997 186,585 92,782 (1) 35,991(6) 7,609 35,989 30,732(7)
President 1996 175,920 18,530 (1) -- -- -- 25,806
Carolina First Bank 1995 174,515 55,874 (1) 41,055 5,630 41,059 26,612
David L. Morrow 1997 156,600 49,346 (1) 29,455(8) 6,225 29,446 25,278(9)
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Executive Vice 1996 144,790 12,754 (1) -- -- -- 23,177
President 1995 133,700 36,085 (1) 30,205 4,141 30,198 14,369
Carolina First Bank
Joseph C. Reynolds 1997 165,820 134,104 (1) 31,626(10) 6,686 31,627 38,949(11)
President, Carolina 1996 148,110 22,788 (1) -- -- -- 12,115
First Mortgage 1995 136,500 111,282 (1) 31,780 4,360 31,788 14,825
Company
</TABLE>
(Footnotes to table)
(1) Certain amounts may have been expended by the Company which may have had
value as a personal benefit to the executive officer. However, the total
value of such benefits did not exceed the lesser of $50,000 or 10% of the
annual salary and bonus of such executive officer.
(2) At December 31, 1997, Mr. Whittle held a total of 9,684 shares of
restricted stock awarded pursuant to the Restricted Stock Plan having a
market value as of December 31, 1997 of $208,206. Dividends are payable
on the restricted stock to the extent paid on the Company's Common Stock
generally.
(3) This amount is comprised of (i) $8,406 contributed to the Company's
401(k) Plan by the Company on behalf of Mr. Whittle to match fiscal 1997
pre-tax deferral contributions, all of which was vested, (ii) $6,466
contributed to the Company's Employee Stock Ownership Plan (the "ESOP"),
and (iii) $36,000 in premiums paid by the Company on behalf of Mr.
Whittle with respect to insurance not generally available to all Company
employees.
(4) At December 31, 1997, Mr. Hummers held a total of 5,817 shares of
restricted stock awarded pursuant to the Restricted Stock Plan having a
market value as of December 31, 1997 of $125,065. Dividends are payable
on the restricted stock to the extent paid on the Company's Common Stock
generally.
(5) This amount is comprised of (i) $7,850 contributed to the Company's
401(k) Plan by the Company on behalf of Mr. Hummers to match fiscal 1997
pre-tax deferral contributions, all of which was vested, (ii) $6,466
contributed to the ESOP, and (iii) $45,000 in premiums paid by the
Company on behalf of Mr. Hummers with respect to insurance not generally
available to all Company employees.
(6) At December 31, 1997, Mr. Terry held a total of 4,014 shares of
restricted stock awarded pursuant to the Restricted Stock Plan having a
market value at December 31, 1997 of $86,301. Dividends are payable on
the restricted stock to the extent paid on the Company's Common Stock
generally.
(7) This amount is comprised of (i) $9,266 contributed to the Company's
401(k) Plan by the Company on behalf of Mr. Terry to match fiscal 1997
pre-tax deferral contributions, of which all was vested, (ii) $6,466
contributed to the ESOP, and (iii) $15,000 in premiums paid by the
Company on behalf of Mr. Terry with respect to insurance not generally
available to all Company employees.
(8) At December 31, 1997, Mr. Morrow held a total of 3,499 shares of
restricted stock awarded pursuant to the Restricted Stock Plan having a
market value at December 31, 1997 of $75,228. Dividends are payable on
the restricted stock to the extent paid on the Company's Common Stock
generally.
(9) This amount is comprised of (i) $3,812 contributed to the Company's
401(k) Plan by the Company on behalf of Mr. Morrow to match fiscal 1997
pre-tax deferral contributions, of which all was vested, (ii) $6,466
contributed to the ESOP, and (iii) $15,000 in premiums paid by the
Company on behalf of Mr. Morrow with respect to insurance not generally
available to all Company employees.
(10) At December 31, 1997, Mr. Reynolds held a total of 4,065 shares of
restricted stock awarded pursuant to the Restricted Stock Plan having a
market value at December 31, 1997 of $87,397. Dividends are payable on
the restricted stock to the extent paid on the Company's Common Stock
generally.
(11) This amount is comprised of (i) $7,483 contributed to the Company's
401(k) Plan by the Company on behalf of Mr. Reynolds to match fiscal 1997
pre-tax deferral contributions, of which 80% was vested, (ii) $6,466
contributed to the ESOP and (iii) $25,000 in premiums paid by the Company
on behalf of Mr. Reynolds with respect to insurance not generally
available to all Company employees.
7
<PAGE>
Board Compensation Committee Report on Executive Compensation
Decisions with respect to the compensation of the Company's Executive
Officers are made by the Compensation Committee of the Board. Each member of the
Compensation Committee is a non-employee director. All decisions of the
Compensation Committee relating to compensation are reviewed by the full Board
of Directors. Set forth below is a report submitted by the Compensation
Committee which addresses the Company's compensation policies for 1997 with
respect to Mr. Whittle as CEO, as well as the Executive Officers as a group.
Determination of Executive Compensation
The Compensation Committee believes that compensation programs and practices
should reflect and reinforce the basic mission and nature of the Company, its
management and operating philosophies, and its business strategies. Accordingly,
the Company's compensation programs and actual pay practices should be
consistent with and supportive of executives who are entrepreneurial,
innovative, visionary, and profit and growth driven.
The Compensation Committee believes that it has implemented an executive
compensation program which motivates employees to build wealth for shareholders.
The Company believes that this program has been an important factor in the
Company's superior earnings growth, asset growth, credit quality, and total
return to shareholders over the past several years.
There are three defining elements of the Company's program:
(1) Emphasis on Performance-based Pay.
Utilization of Objective Criteria. The Company's annual incentive
awards are based on objective financial and operational performance
measures, which are designed to build shareowner wealth.
Reward Long-term Management Achievements. Because of the importance of
achieving long term objectives, the Committee believes a major
component of compensation should come from the Company's Long Term
Incentive Plan. Longer term incentive awards are generated by a
combination of the Company's stock price performance and the Company's
performance in direct financial and operational terms. The Committee
wants to create an environment that promotes and rewards sustained
performance through a broad and balanced perspective and to moderate
any windfall penalty or gain due to uncontrollable fluctuations in the
stock market.
(2) Alignment of Executive and Shareholder Interests.
The Committee believes that each executive should hold an ownership
stake in the Company that is significant in comparison with his or her
salary. Accordingly, a major component of executive compensation is
option and stock grants. Another major way of aligning these interests
is the Company's policy against repricing of stock options.
(3) Rigorous Performance Requirements.
The Company's programs emphasizes "stretch goals" and risk-bearing in
the following ways:
Stretch Goals. Executive compensation is heavily dependent upon
reaching and exceeding established performance goals. The performance
goals are recommended by the Compensation Committee, following the
Committee's deliberations regarding Management's recommendations, and
are reviewed and adopted by the full Board of Directors at the
beginning of the Company's fiscal year. The goals are developed to
reflect what the Committee considers will be superior to outstanding
performance for the Company. In determining performance goals, the
Committee gives significant and careful consideration to the historical
and projected performance of the Company's peer group which is
comprised of bank holding companies in the Southeast similar to the
Company.
Emphasis on Variable Compensation. For the Company's executive
officers, the portion of pay that was at risk under performance-based
variable pay programs in fiscal 1997 ranged from 37% to more than 92%.
Significant Performance Leverage. The Committee believes that the
performance leverage in its variable pay plans should be significant,
with a sharp drop in the level of incentive earnings if performance is
below the
8
<PAGE>
"Plan Goal." For example, if actual performance is below the Plan's
Threshold performance requirements, no bonus is paid. Conversely, if
actual performance equals the Plan's goals, the incentive award is 50%
of salary.
The Company's compensation paid to executive officers consists principally of
base salary, cash and equity bonuses, matching contributions paid with respect
to the Company's 401(k) Plan, payments made pursuant to the Company's ESOP, and
certain other benefits such as health insurance. Bonus payments are calculated
principally utilizing the Company's Short-Term Management Performance Plan (the
"Short-Term Plan") and the Company's Long-Term Management Performance Plan (the
"Long-Term Plan"). Payments under the Short-Term Plan are comprised primarily of
cash; payments under the Long-Term Plan are comprised principally of equity.
Base salaries are determined primarily by reference to compensation packages for
similarly situated executives of companies of similar size or in comparable
lines of business, with whom the Company expects to compete for executive
talent. The Compensation Committee also assesses subjective qualitative factors
to discern a particular executive's relative value to the corporate enterprise
in establishing base salaries. In general, base salaries are at the midpoint of
salaries of similar companies.
It is the Company's policy not to pay compensation in excess of the amounts
referenced in Section 162(m)(4) of the Internal Revenue Code of 1986, as
amended.
Calculation of Bonus. A significant portion of the total compensation of the
Company's Executive Officers is incentive compensation as determined under the
Short-Term Plan and the Long-Term Plan.
The Short-Term Plan establishes a point system which determines cash bonus
awards based on the extent to which the Company met certain performance goals.
These performance goals, which were recommended by the Compensation Committee
and adopted by the Board, were set at the beginning of 1997 and were designed to
represent what the Compensation Committee considered to be outstanding levels of
Company performance. The Short-Term Plan provides that the Executive Officers
will receive from 35% to 50% of their base salary in incentive cash compensation
if 100% of the performance goals are met. Incentive compensation generally
becomes payable on a graduated scale when the Company (or in certain cases a
Company subsidiary) achieves 85% of the established performance goals. The
performance goals under the Short-Term Plan for 1997 related to (i) earnings per
share, (ii) return on average equity, (iii) average deposit per branch, (iv)
nonperforming assets as a percentage of total loans (asset quality goal), and
(v) noninterest expense as a percentage of net interest income plus noninterest
income (efficiency goal).
The Long-Term Plan is structured with three-year "performance cycles" with
compensation payable at the end of such cycles. The first performance cycle
ended December 1995 and compensation was paid to the Executive Officers with
respect to this cycle in January 1996. In 1994, the Board of Directors adopted
goals for the second cycle, which covers 1995 through 1997 and compensation was
paid in February 1998. The performance goals under the Long-Term Plan for the
1995-1997 cycle relate to (i) earnings growth, (ii) presence in certain markets
in the state, (iii) nonperforming assets as a percentage of total loans, and
(iv) noninterest expense as a percentage of net interest income plus noninterest
income. In 1997, the Board of Directors adopted goals for the third cycle that
cover 1997 through 1999. These goals consist of total shareholder return
relative to peers and earnings per share growth.
Compensation Paid during 1997. Compensation paid to the Executive Officers in
1997 consisted of the following elements: base salary, bonus, options,
restricted stock, matching contributions paid with respect to the Company's
401(k) Plan and payments made pursuant to the Company's ESOP. Payments under the
Company's 401(k) Plan and ESOP are made to all employees on a non-discriminatory
basis. The Company also has certain broad based employee benefit plans in which
Executive Officers participate, as well as certain executive officer retirement,
life and health insurance plans. 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.
However, such perquisites totaled less than 10% of their cash compensation in
1997. Except for bonuses, options and restricted stock, the foregoing benefits
and compensation are not directly or indirectly tied to Company performance.
During 1997, under the Short-Term Plan, the Company achieved 95% of its earnings
per share goal, 86% of its return on average equity goal, 101% of its retail
banking alternative delivery systems goal, 208% of its asset quality goal, and
98% of its efficiency goal. Based on Company performance, the Executive Officers
received bonuses ranging from 37% to 92% of their annual base salaries
(excluding automobile allowances). All bonuses were determined in accordance
with the terms of the Short-Term Plan.
Mr. Whittle's 1997 Compensation. Mr. Whittle's 1997 compensation consisted of a
base salary, cash bonus, the value of previously-granted restricted stock which
became transferrable, certain perquisites (which did not exceed 10% of his base
salary and bonus), and the various forms of other compensation set forth in the
preceding paragraph which were available generally to all employees. Mr.
Whittle's base salary of $298,330 (which includes an automobile allowance
9
<PAGE>
of $28,330) was determined by the Compensation Committee at the beginning of
1997. It was determined largely on compensation levels of other chief executive
officers and is believed to be comparable thereto and is in the midpoint of
salaries for Chief Executive Officers of similar companies. Mr. Whittle's cash
bonus was determined in accordance with the Short-Term Plan. Mr. Whittle's
bonus, if all applicable Company performance goals were fully achieved, would
have been 50% of his base salary (excluding his automobile allowance), or
$135,000. As weighted for Mr. Whittle, the performance results resulted in a
cash bonus of $177,436.
The Committee believes that the Company's strong performance during 1997 was
directly related to Mr. Whittle's and the other Executive Officers' leadership
and believes that all compensation paid to Mr. Whittle and the other Executive
Officers was warranted. Of particular importance to the Committee was the
Company's continued strong credit quality, the extensive work done in connection
with the acquisition of First Southeast, and the Company's successful
participation in the initial public offering of Net.B@nk, Inc. common stock.
Compensation Committee: Judd B. Farr, M. Dexter Hagy, Elizabeth P. Stall, Eugene
E. Stone IV
10
<PAGE>
Stock Options
The following table sets forth information regarding option grants with
respect to Common Stock made by the Company to the Named Executive Officers
during 1997.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
- ---------------------------------------------------------------------------------------------------------
Fair
Market
Number of % of Value per
Securities Total Share of
Underlying Options Common
Options Granted to Stock at Exercise
Granted Employees Time of Price Expiration Grant Date
Name (#) in 1997 Grant(1) ($/Sh) Date(2) Valuation
- ---------------------------- ----- --------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Mack I. Whittle, Jr. 18,075 4.93% $15.69 $15.69 08/20/07 $150,270.13(3)
13,627 3.72 21.56 21.56 12/17/07 153,166.12(4)
13,627 3.72 21.56 24.79 12/17/07 140,791.44(4)
13,627 3.72 21.56 28.03 12/17/07 129,797.18(4)
13,627 3.72 21.56 31.26 12/17/07 120,041.61(4)
William S. Hummers III 5,700 1.55% $15.69 $15.69 08/20/07 $ 47,388.09(3)
11,534 3.14 21.56 21.56 12/17/07 129,641.01(4)
11,534 3.14 21.56 24.79 12/17/07 119.166.98(4)
11,534 3.14 21.56 28.03 12/17/07 109,861.35(4)
11,534 3.14 21.56 31.26 12/17/07 101,604.16(4)
James W. Terry, Jr. 3,360 0.92% $15.69 $15.69 08/20/07 $ 27,934.03(3)
8,328 2.27 21.56 21.56 12/17/07 93.605.89(4)
8,328 2.27 21.56 24.79 12/17/07 86,043.23(4)
8,328 2.27 21.56 28.03 12/17/07 79,324.20(4)
8,328 2.27 21.56 31.26 12/17/07 73,362.18(4)
David L. Morrow 3,360 0.92% $15.69 $15.69 08/20/07 $ 27,934.03(3)
5,475 1.49 21.56 21.56 12/17/07 61,538.45(4)
5,475 1.49 21.56 24.79 12/17/07 56,566.61(4)
5,475 1.49 21.56 28.03 12/17/07 52,149.38(4)
5,475 1.49 21.56 31.26 12/17/07 48,229.82(4)
Joseph C. Reynolds 3,360 0.92% $15.69 $15.69 08/20/07 $ 27,934.03(3)
10,453 2.85 21.56 21.56 12/17/07 117,490.67(4)
10,453 2.85 21.56 24.79 12/17/07 107,998.31(4)
10,453 2.85 21.56 28.03 12/17/07 99,564.83(4)
10,453 2.85 21.56 31.26 12/17/07 92,081.52(4)
</TABLE>
- --------------------
(1) The number shown is the closing price of a share of Common Stock as
quoted on the Nasdaq National Market on the date of grant.
(2) The plan pursuant to which the options were granted sets forth certain
earlier expiration dates upon the option holder's termination of
employment.
11
<PAGE>
(3) Calculated by using the Black-Scholes option-pricing model with the
following assumptions: dividend yield of 3.25%, expected volatility of
38%, risk-free interest rate of 6.22% and expected lives of 7.5 years.
(4) Calculated by using the Black-Scholes option-pricing model with the
following assumptions: dividend yield of 3.25%, expected volatility of
38%, risk-free interest rate of 5.81% and expected lives of 7.5 years.
Option Exercises
The following table sets forth certain information with respect to
options to purchase shares of Common Stock held by the Named Executive Officers
and as to the number of shares covered by both exercisable and unexercisable
stock options exercised in 1997. Also reported are the values for the
"in-the-money" options which represent the positive spread between the exercise
price of any such existing stock option and the year-end fair market value of
the Common Stock. None of the Named Executive Officers exercised stock options
during 1997.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at 1997 Fiscal 1997 Fiscal
Shares Value Year-End (#) Year-End ($) (1)
Acquired on Realized ------------ ----------------
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ ----- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Mack I. Whittle, Jr. ----- ----- 11,987 / 72,583 82,950 / 105,016
William S. Hummers III ----- ----- 7,242 / 51,836 50,115 / 33,117
James W. Terry, Jr. ----- ----- 5,630 / 36,672 38,960 / 19,522
David L. Morrow ----- ----- 4,141 / 25,260 28,656 / 19,522
Joseph C. Reynolds ----- ----- 4,360 / 45,172 30,171 / 19,522
</TABLE>
- ------------------------------
(1) The indicated value is based on exercise prices ranging from $14.58 to
$15.69 per share and a per share value of $21.50, which was the closing
market price of a share of the Company's Common Stock on December 31,
1997 as reported by the Nasdaq National Market.
12
<PAGE>
Long-Term Incentive Plan
The following table sets forth information concerning awards made under
the Long-Term Plan.
Long-Term Incentive Plan Awards
<TABLE>
<CAPTION>
Estimated Future Payouts under
Non-Stock Price-Based Plans
-------------------------------
Performance Period
Number of Until Maturation Threshold Target Maximum
Name Shares (1) or Payout Shares Shares Shares
- ------------------------- ---------- ----------- -------- ------- ------
<S> <C> <C> <C> <C> <C>
Mack I. Whittle, Jr. 48,000 Two years 12,000 48,000 72,000
William S. Hummers III 14,100 Two years 3,525 14,100 21,150
James W. Terry, Jr. 10,080 Two years 2,520 10,080 15,120
David L. Morrow 10,080 Two years 2,520 10,080 15,120
Joseph C. Reynolds 10,080 Two years 2,520 10,080 15,120
</TABLE>
(1) Represents the targeted annual amount payable in the year 2000 if earned
for the years 1997 until 1999.
13
<PAGE>
Employment Contracts
Noncompetition, Severance and Employment Agreements
The Company has entered into substantially similar Noncompetition,
Severance and Employment Agreements (individually, the "Agreement") with William
S. Hummers III, David L. Morrow, Joseph C. Reynolds, James W. Terry, Jr. and
Mack I. Whittle, Jr. (each an "Executive"). The Agreement is summarized below.
However, this summary is qualified in its entirety by reference to the Agreement
itself, a copy of which may be obtained, without charge, by written request to
the Company at its principal executive offices, Attn: William S. Hummers III.
The Agreement has a rolling term of three years (the "Term") and extends
automatically unless either party causes the Term to be a fixed three year term.
Under the Agreement, the Executive is given duties and authority typical of
similar executives and the Company is obligated to pay the Executive an annual
salary determined by the Board, such incentive compensation as may become
payable to the Executive under the Company's Short-Term Plan and Long-Term Plan,
and certain other typical executive benefits.
The Executive may terminate the Agreement if (i) the Company breaches the
Agreement, (ii) there is a Voluntary Termination, or (iii) there is an
Involuntary Termination (clauses (i), (ii) and (iii) being hereinafter referred
to as "Legitimate Executive Reasons"). If an Executive terminates his employment
other than for Legitimate Executive Reasons, the Company's obligations under the
Agreement cease as of the date of such termination and the Executive becomes
subject to the noncompetition provisions described below. If an Executive
terminates his employment as a result of clauses (i) or (iii) of the Legitimate
Executive Reasons, the Executive is entitled to receive an amount generally
equal to three years' compensation. If an Executive terminates his employment
pursuant to clause (ii) of the Legitimate Executive Reasons, the Executive is
entitled to receive an amount generally equal to one year's compensation.
"Involuntary Termination" is defined as the Executive's termination of his
employment following a change in control (as defined in the Agreement) due to
(i) a change in the Executive's responsibilities, position or authority, (ii) a
change in the Term, (iii) a reduction in the Executive's compensation, (iv) a
forced relocation of the Executive outside the Executive's area, (v) a
significant increase in the Executive's travel requirements, (vi) an attempted
termination for "cause" that violates the Agreement, (vii) the Company's
insolvency, or (viii) the Company's breach of the Agreement. "Voluntary
Termination" is defined as the Executive's termination of his employment
following a change in control which is not the result of any of clauses (i)
through (viii) set forth in the definition of Involuntary Termination above. The
Company may terminate the Agreement at any time during its Term (i) for "cause"
(as defined in the Agreement), (ii) if the Executive becomes disabled (generally
unable to perform Company duties on a full-time basis for six months), or (iii)
upon the Executive's death (clauses (i), (ii) and (iii) being hereinafter
referred to as "Legitimate Company Reasons"). If the Company terminates an
Executive's employment for Legitimate Company Reasons, the Company's obligations
under the Agreement cease as of the date of termination, except that if the
Executive is terminated for cause after a change in control, then such
termination shall be treated as a Voluntary Termination. If the Company
terminates an Executive other than for Legitimate Company Reasons after a change
in control, the Executive is entitled to receive as severance upon such
termination, such amounts as would be payable in the event of an Involuntary
Termination. If the Company terminates the Executive other than for Legitimate
Company Reasons but in the absence of a change in control, the Executive shall
be entitled to receive as severance upon such termination, the aggregate
compensation and benefits that would have been payable under the Agreement for
the remaining Term of this Agreement. In the event of termination pursuant to
clauses (i) or (iii) of the Legitimate Executive Reasons, or in the event of
termination other than for Legitimate Company Reasons, (A) all rights of
Executive pursuant to awards of share grants or options granted by the Company
generally become vested and released from all conditions and restrictions, and
(B) the Executive is credited with Company service for the remaining Term of the
Agreement for the purposes of the Company's benefit plans.
In the event that an Executive's employment is terminated before a change
in control voluntarily by the Executive or by the Company for cause, then the
Executive may not, for a period of one year following such termination of
employment, become employed by any insured depository institution which conducts
certain business activities in South Carolina or interfere with or otherwise
compete against the Company or its operations in violation of the provisions set
forth in the Agreement. The Agreement also imposes certain confidentiality
obligations on the Executive.
14
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the performance of the Company's Common
Stock for the five year period from December 31, 1992 through December 31, 1997
as compared to the Nasdaq Market Composite Index and an index comprised of all
NASDAQ commercial banks and bank holding companies. All stock prices reflect the
reinvestment of cash dividends.
<TABLE>
<CAPTION>
12/92 12/93 12/94 12/95 12/96 12/97
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CFC 100.000 107.081 122.840 161.002 178.468 237.255
Nasdaq Market 100.000 114.793 112.209 158.684 195.194 239.632
Nasdaq Bank 100.000 114.042 114.100 169.232 223.701 377.438
Stocks
</TABLE>
15
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Common Stock. The following table sets forth as of March 10, 1998
information with respect to the Common Stock owned beneficially or of record by
each of the Directors and Nominees individually, by the Named Executive Officers
and by all Directors and executive officers of the Company as a group. Unless
otherwise noted, each person has sole voting power and sole investment power
with respect to shares listed. There are no persons known to the Company to own
beneficially 5% or more of the Common Stock.
<TABLE>
<CAPTION>
Amount and Nature Percent
Name of Beneficial Owner of Beneficial Ownership of Class (1)
- ------------------------ ---------------------------------------------- ------------
<S> <C> <C> <C>
Judd B. Farr 121,345 (2) *
C. Claymon Grimes, Jr. 61,403 (3) *
M. Dexter Hagy 11,789 (4) *
William S. Hummers III 70,092 (5) *
William R. Phillips 26,996 *
David L. Morrow 30,745 (6) *
Joseph C. Reynolds 32,157 (7) *
Vernon E. Merchant, Jr. 29,718 *
H. Earle Russell, Jr. 5,818 (8) *
Charles B. Schooler 36,053 (9) *
Elizabeth P. Stall 46,657 (10) *
Eugene E. Stone IV 2,920 (11) *
James W. Terry, Jr. 41,973 (12) *
William R. Timmons, Jr. 301,596 (13) 1.70%
David C. Wakefield III 84,949 (14) *
Mack I. Whittle, Jr. 115,280 (15) *
All Directors/Executive Officers as a Group (16 persons) 1,020,301 5.76%
</TABLE>
* Less than 1%.
(1) The calculation is based on 17,709,941 shares of Common Stock outstanding.
Pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended, percentages of total outstanding shares have been
computed on the assumption that shares of Common Stock that can be
acquired within 60 days upon the exercise of options by a given person are
outstanding, but no other shares similarly subject to acquisition by other
persons are outstanding.
(2) This includes 4,720 shares of Common Stock issuable pursuant to an option
granted under the Directors' Plan.
(3) This includes 4,720 shares of Common Stock issuable pursuant to an option
granted under the Directors' Plan.
(4) This includes 4,720 shares of Common Stock issuable pursuant to an option
granted under the Directors' Plan.
(5) This includes 5,958 shares of Common Stock owned by Mr. Hummers through
the Restricted Stock Plan, 16,431 shares of Common Stock issuable to Mr.
Hummers under outstanding options and 8,598 shares of Common Stock owned
by his spouse.
(6) This includes 3,722 shares of Common Stock owned by Mr. Morrow through the
Restricted Stock Plan and 10,366 shares of Common Stock issuable to Mr.
Morrow under outstanding options.
(7) This includes 4,320 shares of Common Stock owned by Mr. Reynolds through
the Restricted Stock Plan and 11,046 shares of Common Stock issuable to
Mr. Reynolds under outstanding options.
(8) This includes 4,720 shares of Common Stock issuable pursuant to an option
granted under the Directors' Plan.
(9) This includes 4,090 shares of Common Stock issuable pursuant to an option
granted under the Directors' Plan.
(10) This includes 4,720 shares of Common Stock issuable pursuant to an option
granted under the Directors' Plan.
(11) This includes 2,200 shares of Common Stock issuable pursuant to an option
granted under the Directors' Plan.
(12) This includes 4,192 shares of Common Stock owned by Mr. Terry through the
Restricted Stock Plan and 13,239 shares of Common Stock issuable to Mr.
Terry under outstanding options.
(13) This includes 190,170 shares of Common Stock owned by Canal, of which Mr.
Timmons is an officer, and 4,720 shares of Common Stock issuable to Mr.
Timmons pursuant to an option granted under the Directors' Plan.
(14) Includes 3,268 shares of Common Stock held in an estate of which Mr.
Wakefield is a trustee.
(15) This includes 9,960 shares of Common Stock owned by Mr. Whittle through
the Restricted Stock Plan and 27,493 shares of Common Stock issuable to
Mr. Whittle under outstanding options.
16
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Carolina First Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with the Company's Directors and
officers and their associates, on the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unrelated third parties. Such loans have not involved more than normal risks of
collectibility nor have they presented any other unfavorable features. Under
banking regulations applicable to state banks, any loan made by such a bank to
any of its officers or Directors must be collaterally secured. The aggregate
dollar amount of these loans was approximately $17,387,000 at December 31, 1997.
During 1997, approximately $9,440,000 in new loans were made and payments
totaled approximately $6,849,000.
Carolina First Bank and David C. Wakefield III entered into a consulting
agreement that became effective upon consummation of the merger of the Company
and First Southeast, whereby Mr. Wakefield, as an independent contractor, shall
assist the Company in the assimilation of First Southeast. Compensation under
such agreement is $8,500 per month and includes the provision of health and
other employee benefits to Mr. Wakefield and his spouse. The duration of the
consulting agreement is six months from the closing date of the merger. The
consulting agreement may be terminated by Mr. Wakefield without Cause, as
defined in the agreement, or by Carolina First Bank with or without Cause.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Executive officers, Directors and greater than ten-percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms filed. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during 1997, all required
Section 16(a) filings applicable to its executive officers, Directors and
greater than 10% beneficial owners were made.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP ("KPMG") served as the Company's independent public
accountants for the 1997 current fiscal year. KPMG has indicated that it plans
to have a representative present at the Annual Meeting. Such representative will
have the opportunity to make a statement and will be available to respond to
appropriate questions from shareholders. The Board of Directors has selected
KPMG as the independent public accountants for the Company for the 1998 fiscal
year.
SHAREHOLDER PROPOSALS
Proposals by shareholders for consideration at the 1999 Annual Meeting of
Shareholders must be received at the Company's offices at 102 South Main Street,
Greenville, South Carolina 29601 no later than November 20, 1998, if any such
proposal is to be eligible for inclusion in the Company's proxy materials for
its 1999 Annual Meeting. Under the regulations of the SEC, the Company is not
required to include shareholder proposals in its proxy materials unless certain
other conditions specified in those regulations are satisfied.
17
<PAGE>
FINANCIAL INFORMATION
The Company's 1997 Annual Report is being mailed to shareholders
contemporaneously with these Proxy Materials. The Company will provide without
charge to any shareholder of record as of March 10, 1998, who requests in
writing, a copy of the Company's Annual Report on Form 10-K (without exhibits)
for the year ended December 31, 1997 filed with the SEC. Any such request should
be directed to Carolina First Corporation, Post Office Box 1029, Greenville,
South Carolina 29602 Attention: William S. Hummers III.
OTHER MATTERS
Management is not aware of any other matter to be brought before the
Annual Meeting. If other matters are duly presented for action, it is the
intention of the persons named in the enclosed proxy to vote on such matters in
accordance with their judgment.
By order of the Board of Directors,
William S. Hummers III
Secretary
March 20, 1998
Greenville, South Carolina
18
<PAGE>
********************************************************************************
APPENDIX
PROXY CAROLINA FIRST CORPORATION
Annual Meeting, April 30, 1998
The undersigned shareholder of Carolina First Corporation, hereby revoking
all previous proxies, hereby appoints William R. Timmons, Jr. and William S.
Hummers III and each of them, the attorneys of the undersigned, with power of
substitution, to vote all stock of Carolina First Corporation standing in the
name of the undersigned upon all matters at the Company's Annual Meeting to be
held in the Gunter Theatre, Peace Center for the Performing Arts, 300 South
Main Street, Greenville, South Carolina on Thursday, April 30, 1998 at 10:30
a.m. and at any adjournments thereof, with all powers the undersigned would
possess if personally present, and without limiting the general authorization
and power hereby given, directs said attorneys or either of them to cast the
undersigned's vote as specified below.
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS.
[ ] FOR ALL NOMINEES set forth [ ] WITHHOLD AUTHORITY to vote
below and to set the number of Directors for all nominees below and to set the
at 13 persons (except as marked to the number of Directors at 13 persons
contrary below [ ] )
Judd B. Farr C. Clayton Grimes, Jr. Elizabeth P. Stall David C. Wakefield III
Mack I. Whittle, Jr.
INSTRUCTION: To withhold authority to vote for any individual Nominee, strike a
line through the Nominee's name in the list above.
</TABLE>
<TABLE>
<S> <C> <C>
2. PROPOSAL TO AMEND THE DIRECTORS' STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. At their discretion upon such other matters as may properly come before the meeting.
</TABLE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CAROLINA
FIRST CORPORATION. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR
APPROVAL OF EACH OF THE PROPOSALS ABOVE.
(Please date and sign on reverse side and return in the enclosed envelope.)
(This proxy is continued on the other side.)
<PAGE>
Please sign this Proxy as your name or names appear hereon. If stock is
held jointly, signature should appear for both names. When signing as attorney,
administrator, trustee, guardian or agent, please indicate the capacity in
which you are acting. If stock is held by a corporation, please sign in full
corporate name by authorized officer and give title of office.
Dated this ____ day of _______________, 1998
________________________________
Print Name (and title if
appropriate)
________________________________
Signature
________________________________
Print Name (and title if
appropriate)
________________________________
Signature
PLEASE COMPLETE, DATE, SIGN AND
MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
