Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Security Federal Corporation
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Security Federal Corporation
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
N/A
- ------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
N/A
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
- ------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- ------------------------------------------------------------------------------
[ ] 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:
N/A
- ------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
N/A
- ------------------------------------------------------------------------------
(3) Filing party:
N/A
- ------------------------------------------------------------------------------
(4) Date filed:
N/A
- ------------------------------------------------------------------------------
<PAGE>
June 20, 1997
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 15, 1997 at the University of
South Carolina - Aiken, in Room 116 of the Business and Educational Building,
Aiken, South Carolina at 2:00 p.m., Eastern time. This meeting will include
management's report to you on the Company's financial and operating
performance during the fiscal year ended March 31, 1997, 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 is the stockholder vote on
corporate business items. I urge you to exercise your voting rights as a
stockholder and participate. 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 15, 1997
Notice is hereby given that the Annual Meeting of Stockholders ("Meeting")
of Security Federal Corporation ("Company") will be held at the University of
South Carolina - Aiken, in Room 116 of the Business and Educational Building,
Aiken, South Carolina, on July 15, 1997, at 2:00 p.m., Eastern time.
A Proxy Card 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 the foregoing proposal at the Meeting on the
date specified above, or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Stockholders of record at the
close of business on June 13, 1997 are the stockholders entitled to receive
notice of and 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 9:00 a.m. and 5:00 p.m., Eastern time, Monday through
Friday, at the main office of the Company located at 1705 Whiskey Road South,
Aiken, South Carolina, for a period of 20 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 the Meeting and
vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Robert E. Johnson
Robert E. Johnson
Secretary
Aiken, South Carolina
June 20, 1997
- ------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
- ------------------------------------------------------------------------------
<PAGE>
<PAGE>
PROXY STATEMENT
SECURITY FEDERAL CORPORATION
1705 Whiskey Road South
Aiken, South Carolina 29803
(803) 641-3000
ANNUAL MEETING OF STOCKHOLDERS
July 15, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Security Federal Corporation
("Company"), to be used at the Annual Meeting of Stockholders of the Company
("Meeting"), which will be held at the University of South Carolina - Aiken,
in Room 116 of the Business and Educational Building, Aiken, South Carolina,
on July 15, 1997, at 2:00 p.m., Eastern time, and all adjournments of the
Meeting. The accompanying Notice of Annual Meeting of Stockholders and this
Proxy Statement are first being mailed to stockholders on or about June 20,
1997. Certain of the information provided herein relates to Security Federal
Bank ("Bank"), a wholly owned subsidiary and the predecessor 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. Stockholders are
not entitled to cumulate their votes in the election of directors.
Vote Required and Proxy Information
- -----------------------------------
All shares of the common stock ("Common Stock") of the Company 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 set forth in this Proxy Statement. The
Company does not know of any matters, other than as described in the Notice of
Annual 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 judgement.
If a stockholder is a participant in the Security Federal Corporation
Employee Stock Ownership Plan (the "ESOP"), the proxy card represents a voting
instruction to the trustees of the ESOP as to the number of shares in the
participant's plan account. Each participant in the ESOP may direct the
trustees as to the manner in which shares of Common Stock allocated to the
participant's plan account are to be voted.
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.
1
<PAGE>
<PAGE>
Voting Securities and Security Ownership of Certain Beneficial Owners and
Management
- -------------------------------------------------------------------------
Stockholders of record as of the close of business on June 13, 1997
("Record Date"), will be entitled to one vote for each share of Company Common
Stock then held. As of the Record Date, the Company had 417,122 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 the Record Date, more than
5% of the outstanding shares of the Company's Common Stock, (ii) as to shares
beneficially owned by the Chief Executive Officer of the Company and the Bank
and (iii) as to the shares of Common Stock beneficially owned by all executive
officers and directors of the Company as a group.
Shares
Beneficially Percent
Beneficial Owners Owned(1) of Class
- ------------------------------- -------- --------
T. Clifton Weeks(2) 50,756 12.17%
P.O. Box 941
Aiken, SC 29802
Mr. and Mrs. Robert E. Scott, Sr.(3) 35,400 8.49
4 Inverness West
Aiken, SC 29803
Thomas W. Weeks(4) 32,886 7.88
P.O. Box 365
Barnwell, SC 29812
Timothy W. Simmons(5) 26,376 6.26
P.O. Box 277
Aiken, SC 29802
All directors and executive 116,901(6) 27.76
officers as a group (10 persons)
_______________
(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 14,847 shares held
directly and 29,313 held indirectly through a partnership over which Mr.
Weeks has sole voting and dispositive power and 6,596 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 9,813 shares held directly, 10,991 shares held by
his wife; 3,938 shares which Mr. Simmons has the right to acquire
pursuant to the exercise of stock options; and 1,634 shares allocated to
Mr. Simmons' account under the Company's ESOP.
(6) Includes 8,490 shares allocated to individual accounts of executive
officers pursuant to the ESOP and options to purchase 3,938 shares
granted to Timothy W. Simmons.
2
<PAGE>
<PAGE>
ELECTION OF DIRECTORS
---------------------
The Company's Board of Directors consists of seven 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 following table sets forth information as of the Record Date regarding
each director nominee and each director whose term of office 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 nominated by the Board of
Directors and standing for election at the Meeting. If any nominee is unable
to serve, the shares represented 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.
Common
Positions Director Stock
Held in of Term Owned at Percent
the Company Company to June 13, of
Name Age and the Bank Since(1) Expire 1997(2) Class
- ---- --- ------------ -------- ------ -------- -------
NOMINEES
--------
Timothy W. 51 President, 1983 2000 26,376 6.26%
Simmons(3)(4) Chief Executive
Officer and
Director of the
Company and the
Bank
T. Clifton 70 Chairman of the 1958 2000 50,756 12.17
Weeks(4)(5) Board of the
Company and the
Bank
CONTINUING DIRECTORS
--------------------
Gasper L. 71 Director and 1958 1998 17,700 4.24
Toole III(6) Vice President
of the Company
and the Bank
Thomas L. Moore 47 Director of the 1990 1998 1,014 0.24
Company and the
Bank
Harry O. 57 Director of the 1978 1999 14,824 3.55
Weeks, Jr. Company and the
Bank
Robert E. 57 Director of the 1988 1999 500 0.12
Alexander Company and the
Bank
William Clyburn 56 Director of the 1993 1999 344 0.08
Company and the
and the Bank
(footnotes on following page)
3
<PAGE>
<PAGE>
_______________
(1) Includes service on the Board of Directors of the Bank.
(2) 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.
(3) Includes 9,813 shares held directly, 10,991 shares held by his wife,
1,634 shares allocated to Mr. Simmons' account under the Company's ESOP
and an option to purchase 3,938 shares.
(4) On February 3, 1993, Messrs. T. Clifton 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.
(5) See Footnote 2 on Page 2 for additional information on Mr. Weeks' share
ownership.
(6) Includes 2,000 shares held by his wife. 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.
The principal occupation of each of the directors during the last five
years is as follows:
Timothy W. Simmons. Mr. Simmons has been President of the Company since
------------------- 1987 and Chief Executive Officer since June 1994.
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., a finance company,
from 1980 to 1995.
T. Clifton Weeks. Mr. Weeks has been Chairman of the Board of the
----------------- Company since 1987 and was Chief Executive Officer of
the Company from 1987 until June 1994. Mr. Weeks has served as Chairman of
the Board of the Bank since January 1987 and was 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 until March 1992 (when the company
closed) and L-C-W Corp. and L-C-W Development Corp. (a wholly owned subsidiary
of L-C-W Corp.), a real estate development company that owns commercial real
estate, and Chairman of the Board of Lyon-Croft-Weeks & 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 also served as Vice
President of the Company since July 1987 and of 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.
Harry O. Weeks, Jr. Mr. Weeks is an Insurance Agent and Business
------------------- Development Officer with Hutson-Etherredge
Companies, 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, a real estate and property
management company, 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.
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 1985 to June 1994.
4
<PAGE>
<PAGE>
Executive Officers Who Are Not Directors of the Company or the Bank
- -------------------------------------------------------------------
The following information as to the principal occupation(s) 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 52, 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, Aiken, South Carolina, from October 1982 to June 1990.
Thomas C. Clark. Mr. Clark, age 40, 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. Prior to joining the Bank, Mr. Clark was employed by South
Carolina National Bank from 1979 to 1993 and was the City Executive of its
Aiken, South Carolina office from 1988 to 1993.
Roy G. Lindburg. Mr. Lindburg, age 36, 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 of Keokuk Bancshares, Inc. and First Community
Bank, FSB located in Keokuk, Iowa from May 1986 to December 1994 and Vice
President and a Director at Galva Federal Savings located in Galva, Illinois
from March 1984 to April 1986.
Board of Directors Meetings and Committees
- ------------------------------------------
Meetings and Committees of the Company. During the fiscal year ended
March 31, 1997, the Board of Directors of the Company held 12 meetings. No
director attended fewer than 75% of the meetings held by the Board of
Directors or all committees on which he served, except for Director Moore, who
missed four meetings due to his State Senate responsibilities. The Company has
standing Executive, Audit, Stock Option and Incentive Plan Administrative and
Proxy committees.
The Executive Committee, comprised of Directors T. Clifton Weeks, Toole,
Alexander and Simmons, meets on an as needed basis to handle matters arising
between Board meetings. This Committee did not meet during fiscal 1997.
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 one
time during fiscal 1997.
The Stock Option and Incentive Plan Administrative Committee is composed
of Directors Harry O. Weeks, Jr., Toole and Alexander, who are non-employee
directors of the Company and are not eligible to receive awards under the
Company's Stock Option Plan. The Committee met one time during fiscal 1997.
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 one time during fiscal 1997.
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, 1997. During fiscal 1997, 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, except for Director
Moore, who missed
5
<PAGE>
<PAGE>
four meetings due to his State Senate responsibilities. The Board of
Directors has standing Executive, Audit and Compensation committees.
The Executive Committee of the Board of Directors of the Bank is
composed of T. Clifton Weeks as Chairman and Directors Toole, 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 12 times during
fiscal 1997.
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 Harry O. Weeks, Jr.,
Moore and Clyburn. The Audit Committee met 11 times during fiscal 1997.
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. Members of this Committee are Directors T. Clifton
Weeks, Simmons, Toole and Alexander. This Committee met three times during
fiscal 1997.
Compensation of 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 $498 (which fees were increased to $600, effective January
1997) per meeting during fiscal 1997. Members of the Executive Committee
received $699 (which fees were increased to $720, effective January 1997) per
month for membership on this Committee. Members of the Audit Committee
receive $100 (which fees were increased to $105 effective January 1997) per
meeting attended. No fee is paid for membership on the Compensation
Committee.
Compensation of Executive Officers
- ----------------------------------
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,
1997, the compensation paid by the Bank to or accrued for the benefit of the
Chief Executive Officer of the Company and the Bank ("named executive
officer"). No other executive officer of the Company or the Bank received
salary and bonus in excess of $100,000 during fiscal 1997.
SUMMARY COMPENSATION TABLE
--------------------------
Annual Compensation
---------------------------------------------
Other Annual All Other
Salary Bonus Compensation Compensation
Name and Position Year ($)(1) ($) ($)(2) ($)(3)
- ----------------- ---- ------ ----- ------------ ------------
Timothy W. Simmons 1997 $106,457 $ -- -- $2,501
President, Chief 1996 102,500 -- -- 4,021
Executive 1995 100,016 -- -- 4,557
Officer and
Director of the
Company and
the Bank
(footnotes on following page)
6
<PAGE>
<PAGE>
- ----------------
(1) Salary for Mr. Simmons includes (i) deferred compensation pursuant to
the Company's 401(k) Plan of $5,001, $4,825 and $2,630 for fiscal 1997,
1996 and 1995, respectively; and (ii) Board fees of $6,282, $5,850 and
$5,664 for fiscal 1997, 1996 and 1995, respectively.
(2) Does not include perquisites which did not exceed the lesser of $50,000
or 10% of salary and bonus.
(3) All other compensation for Mr. Simmons during fiscal 1997 represents an
employer contribution to the 401(k) Plan.
Option Exercise/Value Table. The following table sets forth information
concerning the number of options exercised during fiscal year 1997 and value
of unexercised stock options held by the named executive officer at March 31,
1997.
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired at Fiscal Year End(#) at Fiscal Year End($)
on Value --------------------- ---------------------
Exer- Real- Exer- Unexer- Exer- Unexer-
Name cise(#) ized($) cisable cisable cisable cisable
---- ------- ------- ------- ------- ------- --------
Timothy
W. Simmons $3,938 $74,822 $3,938 -0- $82,698 -0-
- ----------------
(1) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the options based upon the average of the
bid and asked price of $31 per share of the Common Stock on March 31,
1997.
Salary Continuation Agreement. The Company and the Bank have entered
into a salary continuation agreement with Timothy W. Simmons. The agreement
provides 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.
For purposes of the agreement, 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 occurred on March
31, 1997, the aggregate amount due and payable to Mr. Simmons would have been
approximately $367,920.
Certain Transactions
- --------------------
Applicable law and regulations require that all loans or extensions of
credit to executive officers and directors must be made on substantially the
same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons (unless the loan or
extension of credit is made under a
7
<PAGE>
<PAGE>
benefit program generally available to all employees and does not give
preference to any insider over any other employee) and does not involve more
than the normal risk of repayment or present other unfavorable features. The
Bank has adopted a policy to this effect. At March 31, 1997, loans to all
employees, officers and directors of the Bank totalled $823,238, or 5.36% of
total stockholders' equity.
Director T. Clifton Weeks and the wife of Mr. Simmons, who are father
and daughter, are co-owners of the Franclif Company, which rents office space
to the Bank for its Laurens Street branch. Franclif Company received $24,255
in rent, none of which represents property taxes from the Bank during fiscal
1997. 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
does not present any unfavorable features.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
-------------------------------------------------
Section 16(a) of the Exchange Act requires certain officers of the
Corporation and its directors, and persons who beneficially own more than 10%
of any registered class of the Corporation's Common Stock, to file reports of
beneficial ownership and changes in beneficial ownership with the Securities
and Exchange Commission and the Corporation. Based solely on a review of the
reports and written representations provided to the Corporation by the
persons, the Corporation believes that all filing requirements applicable to
its reporting officers, directors and greater than ten percent beneficial
owners were properly and timely complied with during the fiscal year ended
March 31, 1997.
STOCKHOLDER PROPOSALS
---------------------
In order to be eligible for inclusion in the Company's proxy
solicitation 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 20, 1998. Any such proposals shall be subject to the
requirements of the proxy solicitation rules adopted under the Exchange Act.
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.
The Company's Annual Report to Stockholders, including financial
statements, is also enclosed. Any stockholder who has 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, or as
having been incorporated herein by reference.
8
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FORM 10-KSB
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A copy of the Annual Report on Form 10-KSB as filed with the Securities
and Exchange Commission will be furnished without charge to stockholders as of
the close of business on the Record Date upon written request to Robert E.
Johnson, Secretary, Security Federal Corporation, 1705 Whiskey Road South,
Aiken, South Carolina 29803.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Robert E. Johnson
Robert E. Johnson
Secretary
Aiken, South Carolina
June 20, 1997
9
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REVOCABLE PROXY
SECURITY FEDERAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
July 15, 1997
The undersigned hereby appoints the official Proxy Committee of the
Board of Directors of Security Federal Corporation ("Company") with full
powers of substitution to act as attorneys and proxies for the undersigned, to
vote all shares of Common Stock of the Company which the undersigned is
entitled to vote at the Annual Meeting of Stockholders ("Meeting"), to be held
at the University of South Carolina - Aiken, in Room 116 of the Business and
Educational Building, Aiken, South Carolina, on July 15, 1997, at 2:00 p.m.,
Eastern time, and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
---- --------
1. The election as directors of the
nominee listed below except as
as marked to the contrary below). [ ] [ ]
Timothy W. Simmons
T. Clifton Weeks
INSTRUCTION: To withhold your vote
for any individual nominee, write
that nominee's name on the line below.
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The Board of Directors recommends a vote "FOR" the above proposal.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITION STATED. 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.
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THIS PROXY IS SOLICITED BY 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 said 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 Annual Meeting of Stockholders, a proxy
statement for the Annual Meeting of Stockholders, and an Annual Report to
Stockholders.
Dated:______________, 1997
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PRINT NAME OF STOCKHOLDER
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SIGNATURE OF STOCKHOLDER
-------------------------
PRINT NAME OF STOCKHOLDER
------------------------
SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the mailing label. When signing
as attorney, executor, administrator, trustee or guardian, please give your
full title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
- -----------------------------------------------------------------------------
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