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 Sec. 240.14a-11(c) or Sec. 240.14a-12
FIRST UNITED BANCORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the 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>
FIRST UNITED BANCORPORATION
304 North Main Street
Anderson, South Carolina 29621
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held April 22, 1997
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of the Shareholders (the
"Annual Meeting") of First United Bancorporation, a South Carolina corporation
(the "Company"), will be held at the main office of Anderson National Bank, 304
North Main Street, Anderson, South Carolina at 5:30 p.m., Anderson, South
Carolina time, on April 22, 1997, for the following purposes:
(1) To elect ten directors of the Company, with four to serve one-year
terms; two to serve two-year terms, and four to serve three-year terms;
(2) To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the Company for the fiscal year ending December 31, 1997; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only record holders of Common Stock of the Company at the close of
business on March 14, 1997, are entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.
You are cordially invited and urged to attend the Annual Meeting in person.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
ENCLOSED, SELF- ADDRESSED, STAMPED ENVELOPE. IF YOU NEED ASSISTANCE IN
COMPLETING YOUR PROXY, PLEASE CALL THE COMPANY AT TELEPHONE NUMBER (864)
224-1112. IF YOU ARE A RECORD HOLDER OF SHARES AND ATTEND THE ANNUAL MEETING AND
DESIRE TO REVOKE YOUR PROXY AND VOTE IN PERSON YOU MAY DO SO. IN ANY EVENT, A
PROXY MAY BE REVOKED BY A RECORD SHAREHOLDER AT ANY TIME BEFORE IT IS EXERCISED.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF ALL THE PROPOSALS PRESENTED.
By Order of the Board of Directors
Mason Y. Garrett
President
Anderson, South Carolina
April 4, 1997
<PAGE>
FIRST UNITED BANCORPORATION
304 North Main Street
Anderson, South Carolina 29621
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
to be Held April 22, 1997
-------------------------------------------------
This Proxy Statement is furnished to shareholders of First United
Bancorporation, a South Carolina corporation (herein, unless the context
otherwise requires, together with its subsidiaries, the "Company"), in
connection with the solicitation of proxies by the Company's Board of Directors
for use at the Annual Meeting of Shareholders to be held at the main office of
Anderson National Bank, 304 North Main Street, Anderson, South Carolina at 5:30
p.m., Anderson, South Carolina time on April 22, 1997 or any adjournment thereof
(the "Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders.
Solicitation of proxies may be made in person or by mail, telephone,
telegraph or other electronic means by directors, officers and regular employees
of the Company. The Company may also request banking institutions, brokerage
firms, custodians, nominees and fiduciaries to forward solicitation materials to
the beneficial owners of Common Stock of the Company held of record by such
persons, and the Company will reimburse the reasonable forwarding expenses. The
cost of solicitation of proxies will be paid by the Company. This Proxy
Statement and the accompanying form of Proxy were first mailed to shareholders
on or about April 4, 1997.
The Company has its principal executive offices at 304 North Main Street,
Anderson, South Carolina 29621. The Company's telephone number is (864)
224-1112.
ANNUAL REPORT
The Annual Report to Shareholders covering the Company's fiscal year ended
December 31, 1996, including financial statements, is enclosed herewith. Such
Annual Report to Shareholders does not form any part of the material for the
solicitation of proxies.
REVOCATION OF PROXY
Any record shareholder returning the accompanying proxy may revoke such
proxy at any time prior to its exercise (a) by giving written notice to the
Company of such revocation, (b) by voting in person at the meeting, or (c) by
executing and delivering to the Company a later dated proxy. Attendance at the
Annual Meeting will not in itself constitute revocation of a proxy. Any written
notice or proxy revoking a proxy should be sent to First United Bancorporation,
304 North Main Street, Anderson, South Carolina 29621, Attention: William B.
West, Secretary. Written notice of revocation or delivery of a later dated proxy
will be effective upon receipt thereof by the Company.
QUORUM AND VOTING
The Company's only voting security is its $1.67 par value Common Stock
("Common Stock"), each share of which entitles the holder thereof to one vote on
each matter to come before the Annual Meeting. At the close of business on March
14, 1997 (the "Record Date"), the Company had issued and outstanding 2,590,958
shares of Common Stock, which were held of record by approximately 619 persons.
Only shareholders of record at the close of business on the Record Date are
entitled to notice of and to vote on matters that come before the Annual
Meeting. Notwithstanding the Record Date specified above, the Company's stock
transfer books will not be closed and shares of the Common Stock may be
transferred subsequent to the Record Date. However, all votes must be cast in
the names of holders of record on the Record Date.
<PAGE>
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting. If a share is
represented for any purpose at the Annual Meeting by the presence of the
registered owner or a person holding a valid proxy for the registered owner, it
is deemed to be present for the purposes of establishing a quorum. Therefore,
valid proxies which are marked "Abstain" or "Withhold" or as to which no vote is
marked, including proxies submitted by brokers that are the record owners of
shares (so-called "broker non-votes"), will be included in determining the
number of votes present or represented at the Annual Meeting. Once a quorum is
present at the meeting, any subsequent departure of shares prior to adjournment
of the meeting will not destroy the quorum. If a quorum is not present or
represented at the meeting, the shareholders entitled to vote, present in person
or represented by proxy, have the power to adjourn the meeting from time to
time, without notice other than an announcement at the meeting, until a quorum
is present or represented. The Company will issue a press release if the meeting
is adjourned, informing shareholders of the time and place where the meeting
will be reconvened. Directors, officers and regular employees of the Company may
solicit proxies for the reconvened meeting in person or by mail, telephone,
telegraph or other electronic means. At any such reconvened meeting at which a
quorum is present or represented, any business may be transacted that might have
been transacted at the meeting as originally noticed.
If a quorum is established at the meeting, directors will be elected by a
plurality of the votes cast by shares present and entitled to vote at the
meeting. Votes that are withheld or shares that are not voted in the election of
directors will have no effect on the outcome of election of directors.
Cumulative voting will not be permitted.
All other matters which may be considered and acted upon by the holders of
Common Stock at the Annual Meeting require that the number of shares of Common
Stock voted in favor of the proposal exceed the number of shares of Common Stock
voted against the proposal, provided a quorum has been established.
ACTIONS TO BE TAKEN BY THE PROXIES
Each proxy, unless the shareholder otherwise specifies therein, will be
voted "FOR" the election of the persons named in this Proxy Statement as the
Board of Directors' nominees for election to the Board of Directors, and "FOR"
the ratification of the appointment of KPMG Peat Marwick LLP as accountants for
the fiscal year ending December 31, 1997. In each case where the shareholder has
appropriately specified how the proxy is to be voted, it will be voted in
accordance with the shareholder's specifications. As to any other matter of
business which may be brought before the Annual Meeting, a vote may be cast
pursuant to the accompanying proxy in accordance with the best judgment of the
persons voting the same, but the Board of Directors does not know of any such
other business.
STOCKHOLDER PROPOSALS
Any shareholder of the Company desiring to present a proposal for action
at the 1998 Annual Meeting of Shareholders must deliver the proposal to the
executive offices of the Company no later than December 15, 1997. Only proper
proposals that are timely received will be included in the Company's Proxy
Statement and Proxy.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 14, 1997, the number and
percentage of outstanding shares beneficially owned by (i) each person known by
the Company to own more than 5% of the outstanding Common Stock, (ii) each
director of the Company, (iii) each person named in the Summary Compensation
Table, and (iv) all executive officers and directors of the Company as a group.
2
<PAGE>
Name (and address Number of Shares Percent of
of 5% shareholders) Beneficially Owned (1) Class
- - ------------------- ---------------------- --------
Mason Y. Garrett
1601 North Boulevard 452,119 (2) 17.5
Anderson, SC 29621
James G. Bagnal, III 33,186 (3) 1.3
Dan C. Breeden, Jr. 6,159 (4) 0.2
Irvin L. Cauthen 98,605 (5) 3.8
Ronald K. Earnest 25,064 (6) 1.0
J. Berry Garrett 120,279 (7) 4.6
Randolph V. Hayes 35,847 (8) 1.4
J. Donald King, Sr. 26,372 (9) 1.0
Roy D. Little 6,078 (10) 0.2
T. Ree McCoy, Jr. 122,131 (11) 4.7
G. Weston Nalley 41,100 (12) 1.6
Robert V. Pinson 11,595 0.4
Donald C. Roberts, M.D. 37,292 (13) 1.4
Harold P. Threlkeld 8,746 (14) 0.3
William B. West 30,376 (15) 1.2
Frank W. Wingate 7,161 (16) 0.3
All Executive Officers and
Directors as a
Group (16 persons) 1,062,110 40.9
- - -----------------------
(1) Unless otherwise indicated, each individual has sole voting and
investment power with respect to all shares owned by such individual.
Each named person or group is deemed to be the beneficial owner of
securities which may be acquired within 60 days through the exercise of
options, warrants and rights, if any, and such securities are deemed to
be outstanding for the purpose of computing the percentage of class
beneficially owned by such person or group. Such securities are not
deemed to be outstanding for the purpose of computing the percentage of
class beneficially owned by any other person or group. Accordingly, the
indicated number of shares includes shares issuable upon exercise of
options (including employee stock options) held by such person or group.
(2) Includes 10,052 shares held by Edgar Norris for Mr. Garrett's IRA;
155,267 shares held as custodian for Mr. Garrett's children; 11,728
shares owned by Mr. Garrett's wife; 8,352 shares owned by the Garrett
Motel Trust; 11,099 shares held by a trust for the benefit of an
immediate family member sharing the same household of which Mr. Garrett
is the settlor, but is not a trustee, cannot revoke the trust, and has no
investment control over the trust; 36,566 shares subject to presently
exercisable stock options; and 3,804 shares held as custodian for Mr.
Garrett's grandchildren.
(3) Includes 12,115 shares held by Smith Barney as Custodian for Mr. Bagnal's
IRA and 21,071 shares subject to presently exercisable stock options.
(4) Includes 794 shares owned by Breeden Investment Co., L.P.
(5) Includes 49,448 shares held by Plez-U-Stores, which is owned by Mr.
Cauthen.
(6) Includes 19,592 shares subject to presently exercisable stock options.
(7) Includes 2,585 shares owned by Mr. Garrett's wife; 13,461 shares held as
custodian for Mr Garrett's children; 28,597 shares held by Mr. Garrett's
brother as custodian for Mr. Garrett's children; 44,039 shares held as
custodian for Mr. Garrett's brother; and 8,352 shares owned by the
Garrett Motel Trust.
(8) Includes 22,976 shares held by Ralph Hayes Motors, and 12,500 shares held
by Edgar Norris & Co., as Custodian for Mr. Hayes' IRA.
(9) Includes 5,384 shares held by Mr. King's wife.
(10) Includes 6,078 shares subject to presently exercisable stock options.
(11) Includes 30,332 shares held by T. Ree McCoy & Son, Inc. and 7,962 shares
owned by Mr. McCoy's wife.
(12) Includes 6,314 shares held by Mr. Nalley's wife and 6,314 shares held as
custodian for his daughter.
(13) Includes 25,534 shares held by Edgar Norris and Company as Trustee for
Donald C. Roberts, M.D., P.A., Profit Sharing Plan.
3
<PAGE>
(14) Includes 3,387 shares owned by Mr. Threlkeld's wife.
(15) Includes 973 shares owned by Mr. West's wife; 2,599 shares held by BB&T,
as Custodian for Mr. West's IRA; and 24,378 shares subject to presently
exercisable stock options.
(16) Includes 1,767 shares held by J. C. Bradford, as custodian for Mr.
Wingate's IRA; and 5,394 shares subject to presently exercisable stock
options.
The Company has granted options to purchase 238,091 shares of Common
Stock to certain executive officers and significant employees.
ELECTION OF DIRECTORS
The Board of Directors has, by resolution, fixed the number of directors
at 15, and ten directors will be elected at the Annual Meeting. The Company has
a classified Board of Directors and only a portion of the entire Board is
elected each year. The number of directors in each class should be as nearly
equal as possible. However, as a result of additions to and retirements from the
Board over the past several years, the number of directors in the 1997 class has
become disproportionately large. Therefore, to return the classes to more nearly
equal numbers of directors, the terms of the ten directors nominated by the
Board for election at the 1997 Annual Meeting will be apportioned as follows:
each of James G. Bagnal, III, Ronald K. Earnest, Frank W. Wingate and J. Donald
King, Sr. will be elected to serve for a one-year term expiring in 1998; each of
Donald C. Roberts, M.D. and G. Weston Nalley will be elected to serve for a
two-year term expiring in 1999; and each of Mason Y. Garrett, Dan C. Breeden,
Jr., T. Ree McCoy, Jr. and Robert V. Pinson will be elected to serve for a
three-year term expiring in 2000. Allocating the terms of the ten nominees in
this manner will result in the class of 1998 having five directors, the class of
1999 having six directors, and the class of 2000 having four directors. The
newly elected directors will serve until the end of the terms set forth above or
until their successors are elected and qualify to serve. Each of the ten
nominees is currently a director of the Company and has served continuously
since first becoming a director.
Should any of the above-named nominees become unable or unwilling to
accept nomination or election, it is intended that the persons acting under the
proxy will vote for the election, in his stead, of such other person or persons
as the Board of Directors of the Company may recommend. The Board of Directors
has no reason to believe that any of the proposed directors will be unable or
unwilling to serve if elected.
MANAGEMENT
The following table sets forth certain information with respect to the
directors and executive officers of the Company.
<TABLE>
<CAPTION>
Principal Director Term
Name (Age) Occupation Since Expires
(**)
<S> <C> <C> <C>
*James G. Bagnal, III Senior Vice President of the Company, 1987 1997
(52) President and Chief Executive Officer of
Spartanburg National Bank(1)
*Dan C. Breeden, Jr. Chief Financial Officer of Johnson 1996 1997
(41) Development Associates, Inc. (Real Estate
Development and Property Management)(2)
Irvin L. Cauthen President and Owner, Plez-U-Stores 1985 1998
(63) (Convenience Stores), Chairman of the
Board, Travelers Petroleum, Inc. (Gasoline
Sales)(3)
*Ronald K. Earnest Senior Vice President of the Company and 1993 1997
(42) President and Chief Executive Officer of
Anderson National Bank(4)
4
<PAGE>
J. Berry Garrett Partner, Garrett & Garrett 1995 1999
(45) (Construction and Real Estate)(5)
*Mason Y. Garrett Chairman of the Board, President and Chief 1984 1997
(54) Executive Officer of the Company,
Chairman of the Board of Anderson
National Bank, Spartanburg National Bank
and Community Bank of Greenville, N.A.
and Chairman of the Board and Chief
Executive Officer of Quick Credit
Corporation (6)
Randolph V. Hayes President, Ralph Hayes Motors (Toyota 1984 1999
(51) Dealer)(7)
*J. Donald King, Sr. President of Inter-Serv, Inc. (Consumer 1993 1997
(63) finance company) (8)
Roy D. Little President and Director of Quick Credit - -
(48) Corporation (9)
*T. Ree McCoy, Jr. President, T. Ree McCoy & Son 1985 1997
(66) (Construction and Real Estate)(10)
*G. Weston Nalley Director of Leasing, Nalley Commercial 1990 1997
(33) Properties(11)
*Robert V. Pinson Business Manager, Littlejohn Holding 1993 1997
(57) Company (12)
*Donald C. Roberts, M.D. Surgeon (retired)(13) 1984 1997
(63)
Harold P. Threlkeld Attorney(14) 1984 1999
(57)
William B. West Senior Vice President, Chief Financial 1985 1999
(47) Officer, Secretary and Treasurer of the
Company, Executive Vice President and
Cashier of Anderson National Bank,
Cashier of Spartanburg National Bank,
Treasurer of Quick Credit Corporation, and
Cashier of The Community Bank of
Greenville, N.A. (15)
*Frank W. Wingate Senior Vice President of the Company and 1996 1997
(36) President and Chief Executive Officer of
The Community Bank of Greenville, N.A.
(16)
</TABLE>
- - ----------------
* Nominee for election to the Board of Directors.
** Years of service on the Board of Directors include prior service on the
Board of Directors of Anderson National Bank (for those persons who are
directors of the Anderson National Bank).
5
<PAGE>
(1) James G. Bagnal, III serves as President and Chief Executive Officer
of Spartanburg National Bank (the "Spartanburg Bank"), and has served in such
capacities since the Spartanburg Bank's formation, and has been employed by the
Company since August 1987, as an organizer of the Spartanburg Bank. Mr. Bagnal
also serves as a director of Quick Credit Corporation. From 1972 to August 1987,
Mr. Bagnal was employed in various positions with Southern Bank and Trust
Company (which was acquired by First Union Corporation in 1986), most recently
as a Senior Vice President in charge of a three-county area (including
Spartanburg County).
(2) Dan C. Breeden serves as a director of the Spartanburg Bank. Mr.
Breeden has served as Chief Financial Officer of Johnson Development Associates,
Inc. for the past five years.
(3) Irvin L. Cauthen serves as a director of Anderson National Bank (the
"Anderson Bank"). Mr. Cauthen has served as President and Owner of Plez-U-Store
and Chairman of the Board of Travelers Petroleum, Inc. for the past five years.
(4) Ronald K. Earnest serves as President and Chief Executive Officer of
the Anderson Bank and as Senior Vice President of the Company. From 1990 until
1992, when he was employed by the Anderson Bank, Mr. Earnest was Chief Financial
Officer of Consolidated Glass and Mirror Corporation, Glaxco, Virginia. Prior to
that, from 1989 to 1990, Mr. Earnest was a Vice President and the Area Executive
of First Union National Bank, Mt. Airy, North Carolina.
(5) J. Berry Garrett has served as partner-in-charge of Administration and
leasing for Garrett & Garrett Fountain Inn, South Carolina since 1984. Prior to
becoming a partner in Garrett & Garrett he served as an associate in charge of
administration from 1974 to 1983. Mr. Garrett also serves as a director of The
Community Bank of Greenville, N.A. (the "Greenville Bank").
(6) Mason Y. Garrett has served as President, Chief Executive Officer and
a director of the Company since its organization in November, 1987. Mr. Garrett
served as Chairman of the Board, President, Chief Executive Officer and director
of the Anderson Bank from 1984 to August, 1993 and presently serves as Chairman
of the Board. Mr. Garrett also serves as Chairman and Chief Executive Officer of
Quick Credit Corporation and as Chairman of the Boards of Directors of the
Spartanburg Bank and the Greenville Bank. From September 1983 to March 1984, Mr.
Garrett served as President of Anderson Financial Group, the organizer of the
Anderson Bank. From 1982 to September 1983, Mr. Garrett served as a Senior Vice
President and Regional Executive of Southern Bank and Trust Company. From 1978
to 1982, Mr. Garrett was President and Chief Executive Officer of Carolina
National Bank, Easley, South Carolina.
(7) Randolph V. Hayes also serves as a director of the Anderson Bank. Mr.
Hayes has served as President of Ralph Hayes Motors for the past five years.
(8) J. Donald King, Sr. also serves as a director of the Anderson Bank.
Mr. King is President of Inter-Serv, Inc., a consumer finance company. Prior to
retirement in 1984, he was President of King Oil Co., Inc. in Anderson.
(9) Roy D. Little served as a Senior Executive of World Acceptance
Corporation, a consumer finance company, prior to being employed as President of
Quick Credit Corporation.
(10) T. Ree McCoy, Jr. also serves as a director of the Anderson Bank. Mr.
McCoy has served as President of T. Ree McCoy & Son for the past five years, and
as President of FUTURE, INC. and TRIMEN, Inc. for the past five years.
(11) G. Weston Nalley serves as a director of the Company. Mr. Nalley has
served as Director of Leasing of Nalley Commercial Properties for the past four
years. Prior to this, Mr. Nalley was in the Officer Training Program of South
Carolina National Bank. Mr. Nalley also serves as a director of the Greenville
Bank.
(12) Robert V. Pinson also serves as a director of the Spartanburg Bank.
Mr. Pinson has served as Business Manager of Littlejohn Holding Company for the
past five years.
6
<PAGE>
(13) Donald C. Roberts, M.D., Retired, also serves as a director of the
Anderson Bank. Prior to his retirement in 1995, Dr. Roberts was a surgeon.
(14) Harold P. Threlkeld also serves as a director of the Anderson Bank.
Mr. Threlkeld has been an attorney for the past five years, practicing as a sole
practitioner.
(15) William B. West also serves as a director of the Anderson Bank and
the Greenville Bank and has served as Executive Vice President and Cashier of
the Anderson Bank since May 1984. From July 1980 to May 1984, Mr. West served as
a Vice President and Cashier of Republic National Bank, Columbia, South
Carolina.
(16) Frank W. Wingate serves as President and Chief Executive Officer of
the Greenville Bank and has served in such capacity since the Greenville Bank's
formation. From March, 1995, until opening of the Greenville Bank, Mr. Wingate
was employed with the Company as an organizer of the Greenville Bank. Mr.
Wingate also serves as a Director of Quick Credit Corporation. From 1989 through
March, 1995, Mr. Wingate was employed in various positions with Bank South,
N.A., Atlanta, Georgia, most recently as Division Manager of the Financial
Institutions Division.
J. Berry Garrett and Mason Y. Garrett are brothers. No other immediate
family relationships exist among the above-named directors or executive officers
of the Company.
Meetings of the Board of Directors and Committees.
The Company
The Board of Directors of the Company held four regular meetings in 1996.
Each director attended at least 75% of the aggregate of (a) the total number of
meetings of the Board of Directors held during the period for which he served as
a director and (b) the total number of meetings held by all committees of the
Board of Directors on which he served. Directors of the Company, except salaried
officers of the Banks, presently receive $3,500 per year in directors' fees.
Members of the Executive Committee and the Compensation Committee, except
salaried officers, presently receive $350 per committee meeting.
The Company has an audit committee consisting of Irvin L. Cauthen, T. Ree
McCoy, Jr., Randolph V. Hayes, Robert V. Pinson, Harold P. Threlkeld, and Dan C.
Breeden, Jr. The Audit Committee held four meetings in 1996. The Audit Committee
recommends to the Board of Directors the appointment of the Company's
independent auditors and reviews the scope and the results of the audit by the
Company's independent auditors. This committee also reviews the scope and the
results of the audits of the Company's internal audit department and other
matters pertaining to the Company's accounting and financial reporting
functions.
The Company has a compensation committee consisting of Mason Y. Garrett,
Irvin L. Cauthen, G. Weston Nalley and Robert V. Pinson. The Compensation
Committee met once in 1996. The Compensation Committee evaluates the performance
of the executive officers of the Company and recommends to the Board of
Directors adjustments in compensation for the executive officers.
At the present time, the Company does not have a standing nominating
committee of the Board of Directors, or committees performing similar functions.
The Banks
Directors of the Anderson Bank and the Spartanburg Bank (other than
directors who also serve as salaried officers) presently receive $3,500 per year
in directors' fees. Directors of the Greenville Bank receive no compensation.
During 1996, the Boards of Directors of each of the Spartanburg Bank and the
Anderson Bank met twelve times. During 1996, the Board of Directors of the
Greenville Bank met 9 times.
7
<PAGE>
EXECUTIVE COMPENSATION
Compensation
The following table sets forth the compensation paid by the Company for
the fiscal year ended December 31, 1996, to the chief executive officer of the
Company and other officers of the Company and its subsidiaries whose aggregate
salary and bonus compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Number of
Securities
Annual Underlying All Other
Compensation(1) Options Compen-
Name and Principal Position Year Salary Bonus Awarded sation(2)
<S> <C> <C> <C> <C> <C>
Mason Y. Garrett 1996 $110,229 $15,026 -0- $23,227
Chairman of the Board, President and 1995 105,000 23,100 -0- 20,511
Chief Executive Officer of the 1994 95,000 21,519 -0- 16,609
Company; Chairman of the Board of
the Anderson Bank, the Spartanburg
Bank and the Greenville Bank;
Chairman of the Board and CEO of
Quick Credit Corporation
James G. Bagnal, III 1996 $108,500 $26,135 -0- $13,212
Director, Senior Vice President of the 1995 103,173 18,600 -0- 12,719
Company; President and Chief 1994 98,580 13,193 -0- 12,359
Executive Officer of the Spartanburg
Bank; Director of Quick Credit
Corporation
William B. West 1996 $92,147 $32,622 -0- $11,438
Director, Senior Vice President and 1995 87,862 23,475 -0- 10,724
Chief Financial Officer, 1994 84,053 13,995 -0- 10,172
Secretary/Treasurer of the Company;
Director, Executive Vice President and
Cashier of the Anderson Bank; Cashier
of the Spartanburg Bank; Director and
Cashier of the Greenville Bank;
Director and Secretary/Treasurer of
Quick Credit Corporation
Roy D. Little 1996 $124,583 $ -0- -0- $4,826
President and Director of Quick 1995 120,000 20,000 -0- 570
Credit Corporation 1994 45,833 -0- 10,000 -0-
Ronald K. Earnest 1996 $105,098 $39,109 -0- $9,392
Director and Senior Vice President of 1995 93,333 28,350 -0- 8,595
the Company; President and Chief 1994 87,083 14,696 4,950 8,183
Executive Officer of the Anderson
Bank; Director of Quick Credit
Corporation
</TABLE>
- - ---------------------
(1) None of the named officers received perquisites or personal benefits
that totaled in excess of the lesser of $50,000 or 10% of their
respective salary plus bonus payments.
(2) All other compensation for 1996 consisted of the following components:
8
<PAGE>
<TABLE>
<CAPTION>
Earnings on Company Contributions
Split-Dollar Deferred to Defined Contribution
Name Life Insurance Compensation Plans(1)
<S> <C> <C> <C>
Mason Y. Garrett $8,660 $10,463 $4,104
James G. Bagnal, III 8,325 923 3,964
Ronald K. Earnest 4,925 429 4,038
William B. West 6,550 1,353 3,535
Roy D. Little -0- 1,194 3,632
</TABLE>
(1) Comprised of contributions to the Company's 401K Plan as described under
"Employee Benefit Plans -- Employee Savings Plan."
Employee Benefit Plans
Stock Option Plans
On December 14, 1987, the Board of Directors of the Company adopted the
1987 Stock Option Plan, which reserves 166,114 shares of Common Stock for
issuance pursuant to the exercise of options which may be granted pursuant to
the 1987 Stock Option Plan. The shareholders of the Company adopted the 1987
Stock Option Plan in April, 1988. Options under the 1987 Stock Option Plan may
be either "incentive stock options" within the meaning of the Internal Revenue
Code of 1986, as amended (the "Code"), or nonqualified stock options and may be
granted to persons who are employees of the Company or any subsidiary (including
officers and directors who are employees) at the time of grant. All options must
have an exercise price not less than the fair market value of the Common Stock
at the date of grant, as determined by the Board of Directors. The Board of
Directors selects the employees to receive grants under the 1987 Stock Option
Plan and determines the number of shares covered by options granted under the
1987 Stock Option Plan. Options become exercisable in four equal annual
installments, the first installment becoming exercisable one year after the date
of grant. No options may be exercised after ten years from the date of grant,
options may not be transferred except by will or the laws of descent and
distribution, and options may be exercised only while the optionee is an
employee of the Company, within three months after the date of termination of
employment, or within twelve months of death or disability. During 1996, no
stock options were granted to the executive officers or to other employees of
the Company pursuant to the 1987 Stock Option Plan. At December 31, 1996,
options to purchase 163,725 shares were outstanding, 2,389 shares were available
for grant, and 160,215 options were exercisable pursuant to the 1987 Stock
Option Plan. These options have exercise prices ranging from $3.83 per share to
$5.45 per share, with an average exercise price of $4.87 per share and ten-year
terms expiring between December 1997 and April 2004. During 1996, options to
purchase 28,174 shares were exercised by employees pursuant to the 1987 Stock
Option Plan. The 1987 Stock Option Plan terminates December 14, 1997.
On March 28, 1994, the Board of Directors of the Company adopted the
1994 Stock Option Plan, which reserves 188,783 shares of Common Stock for
issuance pursuant to the exercise of options which may be granted pursuant to
the 1994 Stock Option Plan. On April 26, 1994, the shareholders of the Company
approved the 1994 Stock Option Plan. Options under the 1994 Stock Option Plan
may be either "incentive stock options" within the meaning of the Code, or
nonqualified stock options and may be granted to persons who are employees of
the Company or any subsidiary (including officers and directors who are
employees) at the time of grant. At December 31, 1996, the Company had 186 full
time employees. All options must have an exercise price not less than the fair
market value of the Common Stock at the date of grant, as determined by the
Board of Directors. The Board of Directors may set other terms for the exercise
of the options but may not grant more than $100,000 of options (based on the
fair market value of the optioned shares on the date of the grant of the option)
which first become exercisable in any calendar year. The Board of Directors also
selects the employees to receive grants under the 1994 Stock Option Plan and
determines the number of shares covered by options granted under the 1994 Stock
Option Plan. No options may be exercised after ten years from the date of grant,
options may not be transferred except by will or the laws of descent and
distribution, and options may be exercised only while the optionee is an
employee of the Company, within three months after the date of termination of
employment, or within twelve months of death or disability. The 1994 Stock
Option Plan will terminate on March 28, 2004, and no options will be granted
9
<PAGE>
thereunder after that date. Neither the Company nor the recipient of incentive
stock options will have federal income tax consequences from the issuance or
exercise of the options. Recipients of nonqualified options will recognize, as
ordinary income, the difference between the fair market value of the optioned
shares on the date of exercise and the exercise price for federal income tax
purposes and the Company will be able to expense a like amount. Because of the
discretion given to the Board of Directors in selecting the employees to whom
grants of options will be made and the number of options granted, the benefits
or amounts any individual might receive under the 1994 Stock Option Plan are not
presently determinable. During 1996, options to purchase 26,912 shares were
granted pursuant to the 1994 Stock Option Plan. Of such options to purchase
shares, none were granted to executive officers. These options have exercise
prices ranging from $4.99 per share to $14.97 per share, with an average
exercise price of $9.63 per share and have ten year terms expiring between
April, 2004 and April 2006. During 1996, options to purchase 5,462 shares were
exercised by employees pursuant to the 1994 Stock Option Plan.
The following tables present information about options granted to and
exercised by persons named in the Summary Compensation Table during the year
ended December 31, 1996, and about options held by such persons at December 31,
1996.
OPTION EXERCISES AND YEAR END OPTIONS OUTSTANDING AND VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Acquired Value Options 12/31/96 Options 12/31/96(1)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- - ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mason Y. Garrett - - 36,566 -0- $225,978 $ -0-
James G. Bagnal, III - - 21,071 -0- 140,754 -0-
Ronald K. Earnest - - 19,592 3,009 149,328 19,980
Roy D. Little - - 6,078 6,077 28,201 28,197
William B. West - - 24,378 -0- 162,845 -0-
</TABLE>
(1) The fair value of the stock has been estimated at $11.63 per share based
on the last trade price of the Company's common stock on the NASDAQ on
December 31, 1996.
Employee Savings Plan
Effective April 1, 1989, the Company adopted a tax deferred savings
plan (the "401K Plan") in accordance with Section 401(k) of the Code, which
covers substantially all of the Company's employees. The 401K Plan provides for
voluntary contributions up to a maximum of 15% per year of any employee's gross
earnings or the maximum permitted by the Code, whichever is less. In 1996, when
a participant contributed at least 4% of his or her base salary to the 401K
Plan, the Company matched the contribution up to a maximum of 3% of such
participant's base salary. For 1997, the Company has raised its matching
contribution to 4%. Participants are fully vested in both their contributions
and the Company's contributions at all times. The Company's contributions to the
plan were $103,360 in 1996. Amounts contributed by the Company pursuant to this
plan are included in the cash compensation table above.
Deferred Compensation Plan
Effective January 1, 1989, the Company established a deferred
compensation plan for its directors and certain executive officers whereby the
director/officer may elect to defer fees/salaries until he/she retires. Amounts
deferred under this plan accrue interest at the Anderson Bank's prime rate plus
1% (prime rate minus 1% if the executive officer terminates employment after
less than five years). The deferred compensation plan is funded with life
insurance policies which are payable to the Company in the event of the
employee's death and which will accumulate a cash value equal to the amount of
deferred compensation over time until the employee's retirement.
10
<PAGE>
Insurance premium expense, net of accumulated cash surrender value, was a $1,311
benefit for the year ended December 31, 1996. Amounts deferred pursuant to this
plan are included in the compensation table above.
Life Insurance Plans
In December 1988, the Anderson Bank commenced payments on split dollar
life insurance policies on behalf of Mason Y. Garrett and William B. West, and
the Spartanburg Bank commenced payments on a split dollar life insurance policy
on behalf of James G. Bagnal, III. In December, 1992, the Anderson Bank
commenced payments on a split dollar life insurance policy on behalf of Ronald
K. Earnest. In March, 1995, the Greenville Bank commenced payments on a split
dollar life insurance policy on behalf of Frank W. Wingate. The split dollar
life insurance policies provide that, in the event of the insured's death, his
named beneficiary will receive the face amount of the policy, less the amount of
premiums paid by the bank (which is paid to the bank). For Messrs. Garrett,
West, Bagnal, Earnest, and Wingate, the face amount of such policies are
$250,000, $240,000, $240,000, $240,000 and $240,000, respectively. The annual
premiums for the policies on Messrs. Garrett, West, Bagnal, Earnest and Wingate
are $8,660, $6,550, $8,325, $4,925, and $4,381, respectively.
Employment Agreements
The Company has entered into employment agreements with James G.
Bagnal, III, a director and Senior Vice President of the Company and President
and Chief Executive Officer of the Spartanburg Bank, Ronald K. Earnest, a
director and Senior Vice President of the Company and President and Chief
Executive Officer of the Anderson Bank, William B. West, a director and Senior
Vice President and Chief Financial Officer of the Company, and Frank W. Wingate,
Senior Vice President of the Company and President and Chief Executive Officer
of the Greenville Bank. Each agreement provides that, upon (i) termination by
the Company of such person's employment, other than for cause (as defined in the
agreement) or physical or mental disability, or (ii) termination of employment
by such person because of reduction in salary or benefits, transfer to different
location or different duties, or significant change in status or
responsibilities, then the Company will pay such person an amount ranging from
one to two years salary. The amount is deemed to be severance pay and such
person is not under any duty to mitigate damages in the event of any such
termination. For purposes of determining the amount due such person upon the
occurrence of such an event, the term "salary" will include all direct
compensation plus an amount sufficient for him to obtain medical, disability and
life insurance coverage equivalent to that provided by the Company plus any
amounts contributed to the Company pension plan on his behalf by the Company.
The principal purpose of the agreement is to protect such person against changes
in pay or status resulting from changes in control of the Company as the
consequence of a merger, consolidation or change in voting control of the
Company.
CERTAIN TRANSACTIONS
Certain of the officers, directors and principal shareholders (and
their affiliates) of the Company were customers of, or had transactions with,
the Company or its subsidiaries, including loans in the ordinary course of
business during 1996. All loans or other extensions of credit made by the
Company to officers, directors and principal shareholders of the Company and to
affiliates of such persons were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with independent third
parties and did not involve more than the normal risk of collectibility or
present other unfavorable features. As of December 31, 1996, outstanding loans
to officers, directors and principal shareholders of the Company and to
affiliates of such persons totaled approximately $4,085,000. This amount
represented approximately 22.4% of the Company's total shareholders' equity on
that date.
The Company expects to continue to enter into transactions in the
ordinary course of business on similar terms with officers, directors and
principal shareholders (and their affiliates) of the Company.
Harold A. Threlkeld, a director of the Company, is a lawyer and has
provided legal services to the Company, Quick Credit Corporation and to the
Anderson Bank in the past year. The Company, Quick Credit Corporation and the
Anderson Bank expect to continue to use the services of Mr. Threlkeld in the
future.
11
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
As required by Section 16(a) of the Securities Exchange Act of 1934,
the Company's directors, its executive officers and certain individuals are
required to report periodically their ownership of the Company's Common Stock
and any changes in ownership to the Securities and Exchange Commission. Based on
a review of Forms 3, 4 and 5 and written representations made to the Company, it
appears that all such reports for these persons were filed in a timely fashion
during 1996.
INDEPENDENT ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee,
has appointed KPMG Peat Marwick LLP, independent certified public accountants,
as independent auditors for the Company and its subsidiaries for the current
fiscal year ending December 31, 1997, subject to ratification by the
shareholders. KPMG Peat Marwick LLP has served as independent auditors for the
Company and its subsidiaries since April 10, 1991. KPMG Peat Marwick LLP has
advised the Company that neither the firm nor any of its partners has any direct
or material interest in the Company and its subsidiaries except as auditors and
independent certified public accountants of the Company and its subsidiaries.
A representative of KPMG Peat Marwick LLP will be present at the 1997
Annual Meeting and will be given the opportunity to make a statement on behalf
of the firm if he so desires. A representative of KPMG Peat Marwick LLP is also
expected to respond to appropriate questions from shareholders.
All shares represented by valid Proxies received pursuant to this
solicitation and not revoked before they are exercised will be voted in the
manner specified therein. If no specification is made, the Proxies will be voted
for the ratification of the appointment of KPMG Peat Marwick LLP for the fiscal
year ending December 31, 1997.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company, upon request and without charge, will provide shareholders
with copies of its Annual Report on Form 10-K for the year ended December 31,
1996 filed with the Securities and Exchange Commission. Shareholders should
direct their requests to: First United Bancorporation, 304 North Main Street,
Anderson, South Carolina 29621, attention: Cynthia Reaber.
OTHER BUSINESS
The Board of Directors of the Company does not know of any other
business to be presented at the Annual Meeting. If any other matters are
properly brought before the Annual Meeting, however, it is the intention of the
persons named in the accompanying proxy to vote such proxy in accordance with
their best judgment.
By Order of the Board of Directors
Mason Y. Garrett
President
Anderson, South Carolina
April 4, 1997
12
<PAGE>
APPENDIX - FORM OF PROXY
FIRST UNITED BANCORPORATION
PROXY Anderson, South Carolina
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS - TUESDAY, APRIL 22, 1997
J. Berry Garrett and William B. West, or either of them, with full power of
substitution, are hereby appointed as agent(s) of the undersigned to vote as
proxies all of the shares of Common Stock of First United Bancorporation held of
record by the undersigned on the Record Date at the Annual Meeting of
Shareholders to be held on April 22, 1997, and at any adjournment thereof, as
follows:
1. ELECTION OF [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
DIRECTORS. below to vote for all nominees
listed below
[ ] WITHHOLD AUTHORITY only on the following nominees:_______
__________________________________________________________
NOMINEES:
For terms to expire in 1998: James G. Bagnal, III, Ronald K. Earnest,
Frank W. Wingate and J. Donald King, Sr.
For terms to expire in 1999: Donald C. Roberts, M.D., G. Weston Nalley
For terms to expire in 2000: Mason Y. Garrett, Dan C. Breeden, Jr.,
T. Ree McCoy, Jr. and Robert V. Pinson
2. PROPOSAL TO RATIFY APPOINTMENT OF KPMG PEAT MARWICK LLP, CERTIFIED PUBLIC
ACCOUNTANTS, AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. And, in the discretion of said agents, upon such other business as may
properly come before the meeting, and matters incidental to the conduct of
the meeting. (Management at present knows of no other business to be
brought before the meeting.)
THE PROXIES WILL BE VOTED AS INSTRUCTED. IF NO CHOICE IS INDICATED WITH RESPECT
TO A MATTER WHERE A CHOICE IS PROVIDED, THIS PROXY WILL BE VOTED "FOR" SUCH
MATTER.
Please sign exactly as name appears below. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title. If more than one
trustee, all should sign. All joint owners must sign.
Dated:____________, 1997 ---------------------------------------------------
Month Day Signature of Shareholder
---------------------------------------------------
Signature of Other Shareholder(s) (if held jointly)
----------------------------------------------------
Print or type name(s) of Shareholder(s)
THIS PROXY IS SOLICITED ON BEHALF OF FIRST UNITED BANCORPORATION'S BOARD OF
DIRECTORS AND MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS EXERCISE.
