<PAGE>
[SECURITY FEDERAL
CORPORATION LETTERHEAD]
June 22, 1995
Dear Fellow Stockholder:
It is with great pleasure that I invite you to attend the Company's Annual
Meeting of Stockholders, to be held on July 18, 1995 at the Aiken Conference
Center, 215 The Alley, Aiken, South Carolina, at 2:00 p.m. This meeting will
include management's report to you on the Company's financial and operating
performance during the fiscal year ending March 31, 1995, as well as an update
on the progress we've made in achieving our longer term corporate goals.
A critical aspect of the annual meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder
to vote and participate in this process. All the materials you need to vote
via the mail are enclosed in this package. Please look them over carefully.
Then MARK, DATE, SIGN AND PROMPTLY RETURN YOUR PROXY in the envelope provided
so that your shares can be voted at the meeting in accordance with your
instructions.
Your Board of Directors and management are committed to the continued
success of the Company and to the enhancement of your investment. As your
Chairman, I want to express my appreciation for your confidence and support.
Sincerely,
/s/ T. Clifton Weeks
T. Clifton Weeks
Chairman
<PAGE>
SECURITY FEDERAL CORPORATION
1705 Whiskey Road South
Aiken, South Carolina 29803
(803) 641-3000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On July 18, 1995
Notice is hereby given that the Annual Meeting (the "Meeting") of Stock-
holders of Security Federal Corporation (the "Company") will be held at the
Aiken Conference Center, 215 The Alley, Aiken, South Carolina on July 18, 1995,
at 2:00 p.m.
A Proxy and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the election
of two directors of the Company; and such other matters as may properly come
before the Meeting, or any adjournments thereof. The Board of Directors is not
aware of any other business to come before the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which the
Meeting may be adjourned. Stockholders of record at the close of business on
June 18, 1995, are the stockholders entitled to vote at the Meeting, and any
adjournments thereof.
A complete list of stockholders entitled to vote at the Meeting is
available for the examination by any stockholder, for any purpose germane to
the meeting between 9 a.m. and 5 p.m. Monday through Friday at the main office
of the Company located at 1705 Whiskey Road South, Aiken, South Carolina for a
period of 10 days prior to the Meeting.
You are requested to fill in and sign the enclosed form of Proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you attend and vote at the
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert E. Johnson
Robert E. Johnson
Secretary
Aiken, South Carolina
June 22, 1995
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
<PAGE>
PROXY STATEMENT
SECURITY FEDERAL CORPORATION
1705 Whiskey Road South
Aiken, South Carolina 29803
(803) 641-3000
ANNUAL MEETING OF STOCKHOLDERS
July 18, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Security Federal Corporation
(the "Company") to be used at the Annual Meeting of Stockholders of the Company
(the "Meeting"), which will be held at the Aiken Conference Center, 215 The
Alley, Aiken, South Carolina, on July 18, 1995, at 2:00 p.m., and all adjourn-
ments of the Meeting. The accompanying Notice of Meeting and this Proxy
Statement are first being mailed to stockholders on or about June 22, 1995.
Certain of the information provided herein relates to Security Federal Savings
Bank of South Carolina (the "Bank"), a wholly owned subsidiary and the prede-
cessor of the Company.
At the Meeting, stockholders of the Company are being asked to consider and
vote upon the election of two directors of the Company.
Vote Required and Proxy Information
- - -----------------------------------
All shares of Company common stock represented at the Meeting by properly
executed proxies received prior to or at the Meeting, and not revoked will be
voted at the Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be voted for the
nominees and the proposal set forth in this Proxy Statement. The Company does
not know of any matters, other than as described in the Notice of Meeting, that
are to come before the Meeting. If any other matters are properly presented at
the Meeting for action, the persons named in the enclosed form of proxy and
acting thereunder will have the discretion to vote on such matters in
accordance with their best judgment.
Directors shall be elected by a plurality of the votes present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. Broker non-votes have no effect on the vote. A majority of the
shares of the Company's common stock, present in person or represented by
proxy, shall constitute a quorum for purposes of the Meeting.
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary
of the Company at or before the Meeting a written notice of revocation bearing
a later date than the proxy; (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting; or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Robert E.
Johnson, Secretary, Security Federal Corporation, 1705 Whiskey Road South,
Aiken, South Carolina 29803.
Voting Securities and Security Ownership of Certain Beneficial Holders and
Management
- - --------------------------------------------------------------------------
Stockholders of record as of the close of business on June 18, 1995, will
be entitled to one vote for each share then held. As of that date, the Company
had 409,246 shares of common stock issued and outstanding.
The following table sets forth certain information as to (i) those persons
who were known by management to beneficially own as of June 18, 1995, more than
five percent of the outstanding shares of the Company's common
<PAGE>
stock, (ii) as to shares beneficially owned by the Chief Executive Officers of
the Company and the Bank and (iii) as to the shares of common stock
beneficially owned by all officers and directors of the Company as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Beneficial Owners Owned(1) of Class
----------------- ------------- --------
<S> <C> <C>
T. Clifton Weeks(2) 51,544 12.59%
P.O. Box 941
Aiken, SC 29802
Mr. and Mrs. Robert E. Scott, Sr.(3) 35,000 8.55
4 Inverness West
Aiken, SC 29803
Thomas W. Weeks(4) 32,886 8.04
P.O. Box 365
Barnwell, SC 29812
Timothy W. Simmons(5) 17,578 4.25
P.O. Box 277
Aiken, SC 29802
All directors and executive officers 128,382(6) 31.07
as a group (18 persons)
<FN>
- - ----------------------
(1) Includes shares held directly, as well as shares held by spouses and minor
children, and corporations owned by such individuals, shares held in
retirement accounts of such individuals' family members over which shares
the respective individuals may be deemed to have sole voting and
investment power.
(2) T. Clifton Weeks, the Chairman of the Board of the Company and the Bank,
is the father-in-law of Timothy W. Simmons. Includes 11,537 shares held
directly and 28,089 held indirectly through a partnership over which
Mr. Weeks has sole voting and dispositive power and 11,918 shares
allocated to Mr. Weeks' account under the Company's ESOP.
(3) Mr. and Mrs. Scott have shared voting and dispositive power with respect
to the shares they hold jointly.
(4) Thomas W. Weeks is the brother of H. O. Weeks, Jr., a Director of the
Company. The amount disclosed includes 7,600 shares held by his wife.
(5) Mr. Simmons is President and Chief Executive Officer of the Company and
the Bank. Includes 1,937 shares held directly, 10,175 shares held by his
wife; 3,398 shares which Mr. Simmons has the right to acquire pursuant to
the exercise of stock options; and 1,528 shares allocated to Mr. Simmons'
account under the Company's ESOP. Excludes an option to purchase 7,876
shares granted to Mr. Simmons, which is not currently exercisable.
(6) Includes 16,432 shares allocated to individual accounts of officers
pursuant to the Employee Stock Ownership Plan ("ESOP") and options to
purchase 3,938 shares granted to Timothy W. Simmons. Excludes an option
to purchase 7,876 granted to Mr. Simmons, which is not exercisable within
60 days.
</TABLE>
ELECTION OF DIRECTORS
---------------------
Each member of the Company's Board of Directors is also a director of the
Bank. Approximately one-third of the directors are elected annually.
Directors of the Company are elected to serve for a three-year period or until
their respective successors shall have been elected and shall qualify.
The Board of Directors wishes to acknowledge the many years of service of
Robert E. Johnson who will retire from the Boards of the Company and the Bank
effective as of the date of the Meeting. Mr. Johnson has served on the Board
of Directors of the Bank and the Company since 1958 and 1987, respectively.
Mr. Johnson presently serves as Secretary of the Company and the Bank,
positions he has held since July 1987 and December
<PAGE>
1976, respectively. Mr. Johnson, an attorney, practiced law in Aiken, South
Carolina until his retirement in 1993. Upon Mr. Johnson's retirement, the
Board
of Directors of the Company will be reduced by one to seven members.
The following table sets forth information as of June 18, 1995, regarding
each nominee director and each director whose term will continue after the
Meeting. The Board of Directors intends to vote the proxies solicited on its
behalf (other than proxies in which the vote is withheld as to one or more
nominees) for the two candidates standing for election as directors nominated
by the Board of Directors. If any nominee is unable to serve, the shares repre-
sented by all such proxies will be voted for the election of such substitute as
the Board of Directors may recommend. At this time the Board of Directors knows
of no reason why any nominee might be unavailable to serve. Except as
disclosed herein, there are no arrangements or understandings between any
nominee and any other person pursuant to which such nominee was selected.
<TABLE>
<CAPTION>
Director Common
of Stock
Company Term Owned at Percent
Positions Held in the (Bank) to June 18, of
Name Age Company And the Bank Since Expire 1995(1) Class
- - ----------- --- --------------------- ------ ------- -------- ------
NOMINEES
--------
<S> <C> <C> <C> <C> <C> <C>
Gasper L. Toole III(2) 69 Director and Vice President 1958 1998 17,700 4.33%
of the Company and the Bank
Thomas L. Moore 45 Director of the Company and 1990 1998 1,014 .25
the Bank
CONTINUING DIRECTORS
--------------------
Harry O. Weeks, Jr.(3) 55 Director of the Company and 1978 1996 16,824 4.11
the Bank
Robert E. Alexander 55 Director of the Company and 1987 1996 500 0.12
the Bank
William Clyburn 54 Director of the Company and 1993 1996 --- ---
the Bank
Timothy W. Simmons(4)(5) 49 President, Chief Executive 1983 1997 17,578(3) 4.25
Officer and Director of the
Company and the Bank
T. Clifton Weeks(5)(6) 68 Chairman of the Board of the 1958 1997 51,544(4) 12.59
Company and the Bank
<FN>
- - ------------------------
(1) Includes shares held directly, as well as shares held by spouses and minor
children, and corporations owned by such individuals, shares held in
retirement accounts of such individuals' family members over which shares
the respective directors may be deemed to have sole voting and investment
power.
(2) On December 14, 1992, Mr. Toole and certain members of his family received
approval from the OTS with respect to their ownership of a total of 59,537
shares of the Company's Common Stock.
(3) Includes 1,200 shares held by his wife.
(4) Includes 1,937 shares held directly, 10,175 shares held by his wife, 1,528
shares allocated to Mr. Simmons account under the Company's ESOP and an
option to purchase 3,938 shares. Excludes an option to purchase 7,876
shares granted to Mr. Simmons which are not exercisable within 60 days.
(5) On February 3, 1993, Messrs. Weeks and Simmons and certain members of
their families received approval from the Office of Thrift Supervision
("OTS") with respect to their ownership of a total of 117,567 shares of
the Company's Common Stock.
(6) See Footnote 2 on Page 2 for additional information on Mr. Weeks' share
ownership.
</TABLE>
<PAGE>
The business experience of each of the directors during the last five years
is as follows:
Harry O. Weeks, Jr. Mr. Weeks is an Insurance Agent and Business
Development Officer with Hutson, Etherredge, Brown and Ashhurst Insurance
Agency, a position he has held since May 1995. Mr. Weeks was President of
Lyon-Croft-Weeks & Hunter Insurance, Inc. until May 1995. He also served on
the Board of Directors of Lyon-Croft-Weeks until March 1992 (when the company
closed).
Robert E. Alexander. Dr. Alexander is the Chancellor of the University of
South Carolina at Aiken, South Carolina.
Timothy W. Simmons. Mr. Simmons has been President of the Company since
1987. Effective June 1, 1994, Mr. Simmons was elected Chief Executive Officer
of the Company. Mr. Simmons was elected as President and Chief Operating
Officer of the Bank in January 1987 and has served in these capacities since
March 1987. In May 1988, Mr. Simmons became Chief Executive Officer of the
Bank. Mr. Simmons served as Executive Vice President of Lyon-Croft-Weeks from
1980 until March 1992 (when the company closed) and has served as a director of
Lyon-Croft-Weeks, Hunter Insurance, Inc. and L-C-W Corp. from 1980 to 1995.
T. Clifton Weeks. Mr. Weeks has been Chairman of the Board of the Company
since 1987 and Chief Executive Officer of the Company from 1987 until June 1,
1994. Mr. Weeks has served as Chairman of the Board of the Bank since January
1987 and Chief Executive Officer from 1987 until May 1988. Prior thereto he
served as President and Managing Officer of the Bank beginning in 1958. In
addition, Mr. Weeks served as Chairman of the Board of Lyon-Croft-Weeks (a real
estate sales and property management company) until March 1992 (when the
company closed) and L-C-W Corp. (a finance company) and L-C-W Development Corp.
(a wholly owned subsidiary of L-C-W Corp. which is a real estate development
company which owns commercial real estate), and Chairman of the Board of Lyon-
Croft-Weeks and Hunter Insurance, Inc. until May 1995.
Gasper L. Toole III. Mr. Toole is of Counsel to the law firm of Toole &
Toole, a position he has held since March 1991. Prior to such time, he was a
partner in such firm. He has served as Vice President of the Company since
July 1987 and the Bank since August 1958.
Thomas L. Moore. Senator Moore is a member of the South Carolina Senate, a
position he has held since 1981. He is also President of Boiler Efficiency
Inc., a mechanical contracting company located in Clearwater, South Carolina, a
position he has held since 1978.
William Clyburn. Mr. Clyburn is employed as an Advisor for Community
Alliances with Westinghouse Savannah River Company, a U.S. Department of Energy
contractor located in Aiken, South Carolina, a position he has held since
September 1994. He previously served as an Administrative Law Judge with the
South Carolina Workers Compensation Commission from July 1986 to June 1994.
Executive Officers Who Are Not Directors of the Company or the Bank
- - -------------------------------------------------------------------
The following information as to the business experience during the past
five years is supplied with respect to executive officers of the Bank who do
not serve on the Company's or the Bank's Board of Directors. There are no
arrangements or undertakings between the persons named and any other person
pursuant to which such officers were selected.
Richard O. Garcia. Mr. Garcia, age 50, has been Senior Vice President -
Mortgage Lending since May 1992. Prior to joining the Bank, Mr. Garcia was
President, Broker-in-Charge and owner of AREA Appraisal and Real Estate
Associates, Inc. from June 1990 to May 1992, and Senior Vice President of
Mortgage Lending for Palmetto Federal Savings Bank of South Carolina, in Aiken,
South Carolina from October 1982 to June 1990.
Thomas C. Clark. Mr. Clark, age 38, has been Senior Vice President - Loan
Administration since January 1, 1994. He held the position of Vice President -
Consumer/Commercial Loans from July 1992 to January 1994.
<PAGE>
Prior to joining the Bank, Mr. Clark was employed by South Carolina National
Bank since 1979 and was the City Executive of its Aiken, South Carolina office
since 1988.
Frank M. Thomas. Mr. Thomas, age 48, has been Vice President - Commercial
Lending since October 1994. Prior to joining the Bank, Mr. Thomas was
President of Woodside Realty from April 1986 to March 1994 and Vice President -
Mortgage Lending for Palmetto Federal Savings Bank of South Carolina from April
1994 to October 1994.
Nancy Winslow Ledford. Ms. Ledford, age 49, has been Vice President -
Marketing and Deposit Administrator of the Bank since February 1987. Prior to
joining the Bank, Ms. Ledford was employed by Bankers First Federal Savings and
Loan in Augusta, Georgia as Assistant Vice President, Marketing since 1977.
Brian L. Nokleby. Mr. Nokleby, age 42, has been Vice President -
Operations of the Bank since October 1987. Prior to joining the Bank,
Mr. Nokleby was a computer consultant who worked with financial institutions
concerning data processing for twelve years.
Kathryn Y. Carr. Ms. Carr, age 50, has been Vice President - Mortgage Loan
Operations since March 1992, Vice President of Loan Servicing/Closing since
1989 and Manager of the Bank's Loan Servicing and Closing Departments since
1984. She has been employed by the Bank since 1979.
Roy G. Lindburg. Mr. Lindburg, age 34, has been Treasurer and Chief
Financial Officer of the Company and the Bank since January 1995. Prior to
joining the Company, Mr. Lindburg was Vice President and Chief Financial
Officer at Keokuk Bancshares, Inc. and First Community Bank, FSB located in
Keokuk, Iowa since May 1986 and Vice President and a Director at Galva Federal
Savings located in Galva, Illinois from March 1984 to April 1986.
Sandra M. Bartlett. Ms. Bartlett, age 49, is Vice President - Human
Resources and Purchasing, a position she has held since January 1991. She has
been employed by the Bank since 1983 in a variety of positions, including
Assistant Personnel Director since January 1988 and Assistant Vice President
and Director of Personnel and Purchasing since August of 1988.
Lewis W. Taylor. Mr. Taylor, age 72, has been Vice President and Branch
Coordinator of the Bank since August 1992 and Branch Coordinator since April
1993. Prior to joining the Bank, Mr. Taylor was Vice President of Operations
for the Aiken, South Carolina region of the Citizens and Southern National Bank
of South Carolina.
Harley G. Henkes. Mr. Henkes, age 48, has been Internal Auditor and
Compliance and Security Officer of the Bank since December 1992. Prior to
joining the Bank, Mr. Henkes was Assistant Vice President, Budgeting and Cost
Accounting from July 1987 to July 1990 and Regulatory Reporting Officer from
July 1990 to November 1992 for Citizens and Southern National Bank of South
Carolina.
Board of Directors Meetings and Committees
- - ------------------------------------------
Meetings and Committees of the Company. During the fiscal year ended
March 31, 1995, the Board of Directors of the Company held five meetings. No
director attended fewer than 75% of the meetings held by the Board of Directors
or all committees on which he served. The Company has standing Executive,
Stock Option, Audit and Proxy committees.
The Executive Committee comprised of Directors T. C. Weeks, Toole, Johnson,
Alexander and Simmons meets on an as needed basis to handle matters arising
between Board meetings. This committee did not meet during fiscal 1995.
The Audit Committee comprised of Directors H. O. Weeks, Moore and Clyburn
meets on an as needed basis to review the audit report of the Company and
oversee other matters related to the annual audit. This committee met twice
during fiscal 1995.
<PAGE>
The Stock Option and Incentive Plan Administrative Committee is composed of
Directors H. O. Weeks, Toole and Alexander, who are non-employee directors of
the Company and not eligible to receive awards under the Stock Option Plan.
The Committee did not meet during fiscal 1995.
The Proxy Committee, which is composed of the entire Board of Directors, is
responsible for voting the proxies of the Company's stockholders. The
Committee met once during fiscal 1995.
Meetings and Committees of the Bank. The Bank, as principal subsidiary of
the Company, has certain standing committees of its Board of Directors.
Meetings of the Bank's Board of Directors are generally held on a monthly
basis. The Board of Directors held a total of 12 meetings during the fiscal
year ended March 31, 1995. During fiscal 1995, no director attended fewer than
75% of the total number of meetings held by the Board of Directors or all
committees of the Board of Directors on which he served. The Board of Direc-
tors has standing Executive, Audit and Compensation committees.
The Executive Committee of the Board of Directors of the Bank is composed
of T. C. Weeks as Chairman and Directors Toole, Johnson, Alexander and Simmons.
To the extent authorized by the Board of Directors and by the Bank's bylaws,
this Committee exercises all of the authority of the Board of Directors between
Board meetings and formulates recommendations for presentation to the full
Board. The Executive Committee also serves as the Loan Committee for the Bank.
All actions of this Committee are reviewed and ratified by the entire Board.
The Executive Committee met 24 times during fiscal 1995.
The Audit Committee of the Bank reviews audit reports, reevaluates audit
performance and handles relations with the Bank's independent auditors to
ensure effective compliance with regulatory and internal policies and
procedures. Members of this Committee are Directors H. O. Weeks, Moore and
Clyburn. The Audit Committee held six meetings during fiscal 1995.
The Compensation Committee of the Bank makes recommendations to the Board
regarding the amount of the Bank's annual contribution to certain benefit plans
and salaries for the Bank's officers and employees. This Committee also
determines certain minor administrative matters related to certain employee
plans. This Committee met five times during fiscal 1994.
Compensation of Executive Officers and Directors
- - ------------------------------------------------
The Company does not pay any compensation to members of its Board of
Directors for service on the board or committees. The Directors of the Bank
received fees of $468 (which fees were increased to $484, effective January
1995) per meeting during fiscal 1995. Members of the Executive Committee
received $656 (which fees were increased to $679, effective January 1995) per
month for membership on this Committee. Commencing in November 1994, members
of the Audit Committee received $100 per meeting attended. No fee is paid for
membership on the Compensation Committee.
The Company has not paid any compensation to its executive officers since
its formation. Certain executive officers of the Company also currently hold
the same positions with the Bank, and have received compensation from the Bank.
The following table sets forth, for the fiscal year ended March 31, 1995, the
compensation paid by the Bank to or accrued for the benefit of the Chief
Executive Officers of the Company and the Bank (the "named officer"). No other
executive officer of the Company or the Bank made in excess of $100,000 during
fiscal 1995.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE(1)
Annual Compensation
All Other
Salary Bonus Compensation
Name and Principal Position(1) Year ($) ($) ($)
- - -------------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
T. Clifton Weeks, Chairman of the 1995 $24,991(2) $ --- $ 292(3)
Board and Chief Executive Officer 1994 53,062(4) 6,347 3,678(5)
of the Company, Chairman of the 1993 47,776(6) 3,654 4,574(7)
Board of the Bank
Timothy W. Simmons, President and 1995 100,016(2) --- 4,557(8)
Director of the Company, President 1994 100,688(4) 12,588 7,354(9)
and Chief Executive Officer of the 1993 90,453(6) 7,317 9,170(10)
Bank
<FN>
- - -----------------------
(1) Effective June 1, 1994, Mr. Simmons was appointed Chief Executive Officer
of the Company.
(2) Includes $292 and $2,630 of compensation deferred pursuant to the 401(k)
Plan during fiscal 1995 on behalf of Messrs. Weeks and Simmons,
respectively. Also includes Board fees of $5,664 paid to each of
Messrs. Weeks and Simmons.
(3) Includes contributions to the 401(k) Plan in the amount of $292 on behalf
of Mr. Weeks during fiscal 1995.
(4) Includes $2,175 and $4,351 of compensation deferred pursuant to the
401(k) Plan during fiscal 1994 on behalf of Messrs. Weeks and Simmons,
respectively. Also includes Board fees of $5,462 paid to each of Messrs.
Weeks and Simmons.
(5) Includes contributions to the ESOP and the 401(k) Plan in the amounts of
$1,503 and $2,175, respectively, on behalf of Mr. Weeks during fiscal
1994.
(6) Includes $2,265 and $4,544 of compensation deferred pursuant to the
401(k)Plan during fiscal 1993 on behalf of Messrs. Weeks and Simmons,
respectively. Also includes board fees of $5,250 paid to each of Messrs.
Weeks and Simmons.
(7) Includes contributions to the ESOP and the 401(K) Plan in the amounts of
$2,309 and $2,265, respectively, on behalf of Mr. Weeks during fiscal
1993.
(8) Includes contributions to the ESOP and the 401(K) Plan in the amounts of
$1,753 and $2,630, respectively, on behalf of Mr. Simmons during fiscal
1995. Also includes life insurance premiums of $174 paid by the Bank.
(9) Includes contributions to the ESOP and the 401(K) Plan in the amounts of
$3,003 and $4,351, respectively, on behalf of Mr. Simmons during fiscal
1994.
(10) Includes contributions to the ESOP and the 401(K) Plan in the amounts of
$4,626 and $4,544, respectively, on behalf of Mr. Simmons during fiscal
1993.
</TABLE>
No options were awarded during fiscal 1995 to the named officers. The
Company's Stock Option and Incentive Plan does not provide for the award of
stock appreciation rights.
The following table sets forth information concerning the number and value
of unexercised stock options held by the named officers at March 31, 1995.
None of the named officers exercised any stock options during fiscal 1994.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End(#)(1) FY-End ($)
Name Shares
Acquired
on
Exercise Value
(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
T. Clifton Weeks 11,537 N/A --- --- N/A N/A
Timothy W. Simmons 3,937 N/A 3,938(2) 7,876(2) $44,499(3) $88,999(3)
<FN>
- - -----------------------
(1) Represents an option to purchase common stock awarded to the named
officers.
(2) Represents an option to purchase shares of common stock awarded at an
exercise price of $10.00 per share.
(3) Represents the aggregate market value (market price of the common stock
less the exercise price) of the option granted based upon the average of
the bid and asked price of $21.30 per share of the common stock on
March 31, 1995.
</TABLE>
<PAGE>
Salary Continuation Agreements
- - ------------------------------
The Company and the Bank entered into salary continuation agreements with
Timothy W. Simmons and nine other executive officers.
The agreements provide for an initial term of one year. Upon the
expiration of each one-year term, the agreement may be extended for an
additional term upon approval by the Board of Directors following a formal
performance evaluation of the employee by the disinterested members of the
Board of Directors. The agreement with Mr. Simmons provides for payment of
120% of current compensation in monthly installments until the earlier of: (i)
the employee's reaching age 72, or (ii) 36 months after the employee's
resignation or termination, where the employee is terminated or resigns at any
time following a "Change in Duties or Salary" in connection with a "Change in
Control" of the Company. The agreements with nine other officers provide for
the payment of 120% of current compensation in monthly installments until the
earlier of (i) the employee reaching age 65 or (ii) 12 months after the
employee is terminated or resigns at any time following a "Change in Duties or
Salary" in connection with a "Change In Control" of the Company.
The term "Change in Control" means a change in control of the Company
where
an entity, corporation or group of persons acting in concert (other than the
members of the board of directors of the Company as of January 1, 1993) acquire
a majority of the voting stock of the Company entitling them to elect a
majority of the Board of Directors of the Company. A "Change in Duties or
Salary" shall include any of the following: (a) a change in duties and
responsibilities of Employee from those in effect at the time of a Change in
Control, which change results in the assignment of duties and responsibilities
inferior to those duties and responsibilities of employee at the time such
Change in Control occurs; (b) a reduction in rate of annual salary from such
rate in effect at the time of a Change in Control; or (c) a change in the place
of assignment of Employee from Aiken, South Carolina, to any location that is
located further than 25 miles from Aiken, South Carolina. Assuming a change of
control were to have taken place on March 31, 1995, the aggregate amount due
and payable to Mr. Simmons would have been approximately $347,400.
Certain Transactions
- - --------------------
The Bank's current policy of granting loans to employees provides that such
loans on personal residences shall be charged only one-half of the Bank's
initial service charge (normally 1%) after one year of employment, and an
origination fee equal to one-half of the normal fee charged after 2 1/2 years of
employment. Loans to directors, officers and principal stockholders are
required to be made on the same terms, including interest rates, as those
prevailing at the time for comparable transactions with non-affiliated persons.
Maximum loan limits on mortgages and construction loans on an employee's
principal residence are $250,000. Loans to employees on savings accounts held
at the Bank will be made at 2.5% above the savings account rate. Any loan made
for business or income producing purposes will be at a rate charged to regular
Bank customers. All other loans will be made at rates equivalent to the prime
rate of interest as quoted in the Wall Street Journal and will adjust annually
except for revolving credit loans which will be at the Bank's advertised rates
and terms. Employee interest rates are reviewed periodically and subject to
change as money market conditions may require. These loans are made in the
ordinary course of business, on substantially the same terms and collateral,
except for interest rates and waiver of loan origination fees, as those of
comparable transactions prevailing at the time, and do not involve more than
the normal risk of collectibility or present other unfavorable features. All
loans by the Bank to its directors and executive officers are subject to OTS
regulations restricting loans and other transactions with affiliated persons of
the Bank.
Set forth in the following table is certain information as of March 31,
1995, regarding the aggregate indebtedness to the Bank of each director and
executive officer of the Bank whose aggregate indebtedness to the Bank exceeded
$60,000 at any time since April 1, 1993. All loans designated in the table
below as mortgage loans are first mortgage loans secured by the borrower's
principal place of residence. Loans to all employees, officers and directors
of the Bank in the aggregate constituted approximately 3.9% of total
shareholders' equity of the Company at March 31, 1995.
<PAGE>
<TABLE>
<CAPTION>
Highest Balance
Date of Nature of Amount Owed as of Interest
Name Loan Indebtedness Since 4/1/93 3/31/95 Rate
- - ------------------------------ -------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
Timothy W. Simmons, President, 10/21/94 Mortgage $275,000 $273,948 6.25%
Chief Executive Officer and
Director
William Clyburn, Director 01/28/94 Mortgage 97,000 92,191 6.00
</TABLE>
Lyon-Croft-Weeks and Hunter Insurance, Inc. received $113,950 from the
Bank
in the 1995 fiscal year of which $98,931 represented insurance and bond
premiums for insurance coverage written for the Bank ($15,020 of which was
actually paid as commissions to Lyon-Croft-Weeks and Hunter Insurance, Inc.)
and $3,743 represented premiums paid out of escrow accounts maintained at the
Bank for coverage written for customers of the Bank. These transactions are
made in the ordinary course of business on substantially the same terms as
those of comparable transactions prevailing at the time and do not present any
unfavorable features. T. Clifton Weeks was Chairman and a Director, Timothy W.
Simmons was a Director and H. O. Weeks, Jr. was President and Manager of this
company prior to its acquisition in May 1995.
Director T. Clifton Weeks and the wife of Mr. Simmons, who are father and
daughter, are co-owners of Franclif Company which rents the Bank office space
for its Laurens Street branch. Franclif Company received $22,995 in rent, of
which $3,271 represents property taxes from the Bank during fiscal 1995. This
lease was made in the ordinary course of business on substantially the same
terms as those of comparable transactions prevailing at the time and do not
present any unfavorable features. Pursuant to the OTS regulations which
require a federally chartered institution to obtain prior approval for
transactions between such institution and its affiliated persons, this
transaction was approved by the Federal Home Loan Bank Board, the predecessor
of the OTS.
STOCKHOLDER PROPOSALS
---------------------
In order to be eligible for inclusion in the Company's proxy materials for
the next year's Annual Meeting of Stockholders, any stockholder proposal to
take action at such meeting must be received at the Company's main office at
1705 Whiskey Road South, Aiken, South Carolina, no later than February 26,
1996. Any such proposals shall be subject to the requirements of the proxy
rules adopted under the Securities Exchange Act of 1934, as amended.
OTHER MATTERS
-------------
Representatives of KPMG Peat Marwick LLP, the Company's independent
auditors, are expected to attend the Meeting to respond to appropriate
questions and to make a statement if they so desire
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of common stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and the Bank may
solicit proxies personally or by telegraph or telephone, without additional
compensation.
<PAGE>
The Company's Annual Report to Stockholders, including financial
statements, is also enclosed. Any stockholders who have not received a copy of
such Annual Report may obtain a copy by writing to the Company. Such Annual
Report is not to be treated as part of the proxy solicitation materials, nor as
having been incorporated herein by reference.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert E. Johnson
Robert E. Johnson
Secretary
Aiken, South Carolina
June 22, 1995
<PAGE>
REVOCABLE PROXY
SECURITY FEDERAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
July 18, 1995
The undersigned hereby appoints the official proxy committee
of the Board of Directors of Security Federal Corporation (the
"Company"), and the survivor of them, with full powers of substi-
tution, to act as attorneys and proxies for the undersigned to
vote all shares of common stock of the Company which the under-
signed is entitled to vote at the Annual Meeting of Stockholders
to be held at the Aiken Conference Center, 215 The Alley, Aiken,
South Carolina on July 18, 1995, at 2:00 p.m. and at any and all
adjournments thereof, as follows:
The election as directors of VOTE
all nominees listed below FOR WITHHELD
(except as marked to the contrary). [ ] [ ]
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
GASPER L. TOOLE III THOMAS L. MOORE
In their discretion, the proxies are authorized to vote on
any other business that may properly come before the Meeting or
any adjournment thereof.
The Board of Directors recommends a vote "FOR"
the directors listed above.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS
LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH
MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN
THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the
Meeting or at any adjournment thereof, and after notification to
the Secretary of the Company at the Meeting of the stockholder's
decision to terminate this proxy, then the power of such attorneys
and proxies shall be deemed terminated and of no further force and
effect.
The undersigned acknowledges receipt from the Company, prior
to the execution of this proxy, of notice of the Meeting, a proxy
statement and a copy of the 1995 Annual Report to Stockholders.
Dated: , 1995
------------------------- -----------------------------
PRINT NAME OF STOCKHOLDER
Please sign exactly as your name
appears on the mailing label
accompanying this proxy. When
signing as attorney, executor, -----------------------------
administrator, trustee or guardian, SIGNATURE OF STOCKHOLDER
please give your full title.
If shares are held jointly, each
shareholder should sign.
----------------------------
PRINT NAME OF STOCKHOLDER
----------------------------
SIGNATURE OF STOCKHOLDER
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
