<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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
[_] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
GOLDEN ISLES FINANCIAL HOLDINGS, INC.
-------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Persons(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:
--------
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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[_] 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:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
GOLDEN ISLES FINANCIAL HOLDINGS, INC.
,1999
-----------
Dear Shareholder:
On behalf of the Board of Directors, I am pleased to invite you to attend
our Annual Meeting of Shareholders to be held on June 16, 1999 in Brunswick,
Georgia at the time and place shown in the attached notice. As we do at the
meeting every year, in addition to considering the matters described in the
proxy statement, we will review our 1998 business results and other matters of
interest to our shareholders. The meeting should be interesting and
informative.
We hope that you will attend the meeting in person, but even if you plan to
do so, we encourage you to please vote your shares ahead of time by using the
enclosed proxy card. This will ensure that your Golden Isles stock will be
represented at the meeting. If you attend the meeting and prefer to vote in
person, you may do so. The attached proxy statement explains more about proxy
voting. Please read it carefully. Every shareholder's vote is important,
whether you own a few shares or many.
We look forward to your participation in the annual meeting process.
Sincerely,
Jimmy D. Veal
Treasurer and Secretary
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF GOLDEN ISLES FINANCIAL HOLDINGS, INC.
DATE: Wednesday, June 16, 1999
TIME: 10:00 a.m.
PLACE: The Comfort Inn
5308 New Jesup Highway
(I-95 and U.S. 341)
Brunswick, Georgia 31525
MATTERS TO BE VOTED ON:
PROPOSAL I: Election of nine directors
Any other matter that may be properly brought before the meeting.
Only shareholders of record at the close of business on May 10, 1999 are
entitled to notice of and to vote at the meeting or any adjournments thereof.
Your vote is important. Please complete, sign, date and return your proxy card
promptly in the enclosed envelope.
By Order of the Board of Directors
Jimmy D. Veal
Treasurer and Secretary
St. Simons Island, Georgia
May 18, 1999
<PAGE>
GOLDEN ISLES FINANCIAL HOLDINGS, INC.
3811 Frederica Road
St. Simons Island, Georgia 31522
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
June 16, 1999
This proxy statement is furnished to the shareholders of Golden Isles
Financial Holdings, Inc. in connection with the solicitation of proxies by its
Board of Directors to be voted at the 1999 Annual Meeting of Shareholders and at
any adjoumments thereof (the "Annual Meeting"). The Annual Meeting will be held
on Wednesday, June 16, 1999, at The Comfort Inn, 5308 New Jesup Highway (I-95
and U.S. 341), Brunswick, Georgia 31525, Georgia, at 10:00 a.m. local time.
This proxy statement and the accompanying proxy card were mailed or given
to shareholders on or about May 18, 1999.
As used in this proxy statement, the terms "GIFH", Company, we, our, and us
all refer to Golden Isles Financial Holdings, Inc. and its subsidiaries.
VOTING
General
The securities which can be voted at the Annual Meeting consist of Golden
Isles Financial Holdings' $1.00 par value common stock ("GIFH Stock"), with each
share entitling its owner to one vote on each matter submitted to the
stockholders. The record date for determining the holders of Golden Isles
Financial Holdings stock who are entitled to notice of and to vote at the Annual
Meeting is May 10, 1999. On the record date, 2,478,153 shares of Golden Isles
Financial Holdings stock were outstanding and eligible to be voted.
Quorum and Vote Required
The presence, in person or by proxy, of one-third of the outstanding shares
of Golden Isles Financial Holdings stock is necessary to constitute a quorum at
the Annual Meeting. In determining whether a quorum exists at the Annual
Meeting for purposes of all matters to be voted on, all votes "for" or "against"
as well as all abstentions (including votes to withhold authority to vote) will
be counted.
<PAGE>
In voting for the proposal to elect nine directors (Proposal No. 1), you
may vote in favor of all nominees or withhold your votes as to all or as to
specific nominees. The vote required to approve Proposal No. 1 is governed by
Georgia law and is a plurality of the votes cast by the holders of shares
entitled to vote, provided a quorum is present. Votes withheld and broker non-
votes will not be counted and will have no effect.
If all nine directors are elected, the directors and executive officers of
GIFH will hold 462,627 shares of GIFH Stock, or approximately 18.67% of all
outstanding stock, and we believe that all of those shares will be voted in
favor of management's nominees for director.
Proxies
All properly executed proxy cards delivered pursuant to this solicitation
and not revoked will be voted at the Annual Meeting in accordance with the
directions given. In voting by proxy with regard to the election of directors,
you may vote in favor of all nominees, withhold your votes as to all nominees or
withhold your votes as to specific nominees. You should specify your choices on
the proxy card. If no specific instructions are given with regard to the
matters to be voted upon, the shares represented by a signed proxy card will be
voted "for" the proposals listed on the proxy card. If any other matters
properly come before the Annual Meeting, the persons named as proxies will vote
upon such matters according to their judgment.
All proxy cards delivered pursuant to this solicitation are revocable at
any time before they are voted by giving written notice to our Secretary, Jimmy
D. Veal at 3811 Frederica Road, St. Simons Island, Georgia 31522, by delivering
a later dated proxy card, or by voting in person at the Annual Meeting.
All expenses incurred in connection with the solicitation of proxies will
be borne by the Company. Solicitation may take place by mail, telephone,
telegram, or personal contact by our directors, officers and regular employees
of the Company without additional compensation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Board of Directors presently consists of eight members, seven of whom
are non-employee directors. The Company's bylaws provide that the Board of
Directors shall consist of not less than three nor more than twenty-five
persons, with the exact number to be fixed and determined from time to time by
resolution of the Board of Directors, or by resolution of the shareholders at
any annual or special meeting of shareholders. The Board of Directors voted at
its April 21, 1999 meeting to set the number of directors at nine for the
Company's
-2-
<PAGE>
ensuing year. The term of office for directors is one year or until the next
Annual Meeting and thereafter until their successors are elected and qualified.
The Board has nominated the following persons for submission to the
shareholders for election for a one-year term expiring at the 2000 annual
meeting or until their successors are elected and qualified.
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Position with the Company
- ---- --- -------------------------
C. Ray Acosta 58 Director
James M. Fiveash 68 Director
L. McRee Harden 43 Director
Michael D. Hodges 45 Director; President of the Company;
President of First Bank of Brunswick
Russell C. Jacobs, Jr. 63 Director
Claude Kermit Keenum 63 Director
Jimmy D. Veal 50 Director
Charles K. Werk 48 Director
J. Thomas Whelchel 64 Director; Chief Executive Officer
</TABLE>
Each of the nominees, except Mr. Werk, is currently a director of the
Company, and has been nominated by the Board to serve an additional term.
The Board of Directors unanimously recommends that you vote "FOR" the
proposal to elect the nine nominees names above.
Each of the nominees has consented to serve if elected. If any nominee
should be unavailable to serve for any reason, the Board may designate a
substitute nominee (in which event the persons named as proxies will vote the
shares represented by all valid proxy cards for the election of such substitute
nominee), allow the vacancy to remain open until a suitable candidate is
located, or reduce the number of directors.
-3-
<PAGE>
Information as of December 31, 1998 about each of the nominees is set forth
below. Their ownership of Golden Isles Financial Holdings stock is set forth in
the table on pages nine and ten.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Board of Directors.
Charles R. Acosta. Mr. Acosta has been employed by Georgia Power Company
since 1964. He has been Region Manager for the Coastal Region, a 10-county
service area, since 1993. Prior to that, he was District Manager for the
Brunswick District from 1977 to 1993. Mr. Acosta is Past President and Campaign
Chairman of the United Way of Brunswick and Glynn County, and past Chairman of
the Brunswick and Glynn County Development Authority. Mr. Acosta was one of the
original directors of the Company and served as a director of the Company from
1987 to 1994. He also served as a director of the Bank from 1990 to 1994. Mr.
Acosta was reelected as a director of the Company at the 1997 Annual Meeting of
Shareholders.
James M. Fiveash. Mr. Fiveash initially served as a director of the
Company from 1989 until his resignation in 1994, and was elected as a director
of the Company at the 1997 Annual Meeting of Shareholders and also serves as a
director of FCC. Mr. Fiveash is retired, and serves as part-time president of
The Fiveash Company, which is in the business of renting trucking terminals.
L. McRee Harden. Mr. Harden has been a director of the Company since July
1988, a director of the Bank since February 1990, and a director of FCC since
July 1993. Mr. Harden is the Secretary and Treasurer of Friendly Express, Inc.,
a company which operates a chain of approximately 65 convenience stores in south
Georgia and Florida.
Michael D. Hodges. Mr. Hodges has been a director of the Company since
1991 and is a director of FCC and FBMC and a director the Bank since June 1990.
On February 20, 1997, Mr. Hodges became President and CEO of the Bank. He is
also President of the Company. Prior to that, he had been Senior Vice President
of the Bank since June 1990, with principal responsibilities for the Bank's loan
portfolio.
Russell C. Jacobs, Jr. Mr. Jacobs has been a director of the Company
since July 1988, a director of the Bank since February 1990, and a director of
FBMC since July 1993. He also has been a Vice Chairman of the Bank since July
1995. Mr. Jacobs is self-employed as an agent for the Equitable Financial
Companies, and as a registered representative with Equico Securities, Inc. Mr.
Jacobs holds both the Chartered Life Underwriter ("CLU") and Chartered Financial
Consultant ("CHFC") designations.
-4-
<PAGE>
Claude Kermit Keenum. Mr. Keenum has been a director of the Company since
July 1988, a director of the Bank since February 1990, and a director of FCC
since July 1995. He was the Superintendent of the Glynn County School System
from 1980 to 1989 and the Superintendent of the Cobb County School System in
metropolitan Atlanta from 1989 to 1992. Mr. Keenum was most recently President
of Southeastern Communication Systems, Inc. and Keenum's Educational Services,
Inc., and is now retired.
Jimmy D. Veal. Mr. Veal has been a Vice Chairman of the Company since July
1995. He has been a director of the Company since June 1987 and
Secretary/Treasurer of the Company since September 1992. He has been a Vice
Chairman of the Bank since July 1995, a director of the Bank since July 1990,
and Secretary/Treasurer and a director of both FCC and FBMC since July 1993. He
is owner of a hotel on Jekyll Island, Georgia.
Charles K. Werk. Mr. Werk is the CEO of Coastal Sleeve Label, Inc.,
located in Brunswick, Georgia. Additionally, Mr. Werk is the owner of Trans
Link Motor Express, Inc., a transportation and distribution company located in
Albany, Georgia, and has owned and operated various operating companies in the
printing, warehousing and food manufacturing industries. Prior to his
experience with operating companies, Mr. Werk spent fifteen years in the
Investment Banking and Commercial Banking Industry with various institutions
including SunTrust Bank, Manufacturers Hanover, Melon Bank, and First Chicago.
Mr. Werk received his Bachelor's Degree from The University of Georgia and an
MBA Degree in Finance from Georgia State University. Mr. Werk serves on the
Board of Trustees of Coastal Georgia Community College and is a member of Wesley
United Methodist Church. Mr. Werk resides on St. Simons Island, Georgia with
his wife, Eva, and daughter, Christina.
J. Thomas Whelchel. Mr. Whelchel has been the Chairman and CEO of the
Company since October 17, 1996. Prior to that, Mr. Whelchel was a Vice Chairman
of the Company between July 1995 and October 1996. From July 1988 through July
1995, he served as President of the Company. Mr. Whelchel has been a director
of the Company since July 1988, and Chairman and a director of the Bank since
February 1990. Mr. Whelchel has also been a director of both FCC and FBMC since
July 1993. He is a senior partner in the Brunswick law firm of Whelchel, Brown,
Readdick and Bumgartner.
Executive Officers
Michael D. Hodges, Jimmy D. Veal and J. Thomas Whelchel are the only
executive officers of Golden Isles Financial Holdings and were previously
reported on as nominees for election as directors.
-5-
<PAGE>
None of the directors hold directorships in any reporting company other
than Golden Isles Financial Holdings, Inc. There are no family relationships
among directors, executive officers, or persons nominated or chosen by the
Company to become directors or executive officers of the Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors conducts regular meetings, generally on a monthly
basis and also conducts some of its business through the five committees
described below. Our Board of Directors met twelve times during the year, and
each director attended at least 75% of the meetings of the full Board and of the
committees on which he serves.
Asset and Liability Committee.
The Asset and Liability Committee ("ALCO") assists the Board in adopting
policies regarding the pricing, maturity and makeup of the Company's deposits,
loans and investments. Mr. Jacobs (Chairman), Mr. Hodges, Mr. Veal and Mr.
Whelchel were members of this Committee and met four times during the year.
Audit Committee.
The Audit Committee reviews with our independent accountants the scope and
results of their audit engagement and management letter, consults with
management concerning our accounting methods and the adequacy of our internal
controls, and oversees and reviews our internal auditing procedures. The
objective of the Audit Committee is to present losses by the Company from fraud,
defalcation and/or operating deficiencies. Mr. Harden (Chairman), Mr. Jacobs
and Mr. Fiveash were members of this committee during the year. This committee
met four times during the year.
Committee on Directors.
The Committee on Directors is charged with the responsibility for oversight
of, nominations for, and compensation of the Company's directors and senior
officers. Mr. Acosta, Mr. Jacobs, Mr. Veal, Mr. Hodges, Mr. Whelchel, and Mr.
Keenum (Chairman) were members of this committee during the year. This
committee met two times during the year.
Electronic Data Processing Steering Committee.
The Electronic Data Processing Steering Committee is responsible for
ensuring that Company's compliance with Year 2000 requirements and approval of
major purchases of
-6-
<PAGE>
equipment. Mr. Harden, Mr. Keenum, Mr. Hodges and Mr. Fiveash (Chairman) were
members of this committee during the year. This committee met six times during
the year.
Loan Committee.
The Loan Committee is responsible for reviewing loan applications. Mr.
Fiveash, Mr. Acosta, Mr. Hodges, Mr. Whelchel and Mr. Veal (Chairman) were
members of this committee during the year. This committee met 41 times during
the year.
DIRECTOR COMPENSATION
Outside directors of the Company receive $500.00 per month. Additionally,
all directors are awarded points for attending board meetings and committee
meetings on the following schedule:
1. 625 points awarded for attending a Board of Director's meeting.
2. 250 points awarded for attending a Director's meeting as Chairman.
3. 125 points awarded for attending a Director's meeting as a member.
At the end of the year the points awarded to a director are divided by the
price of the Company's stock and the number of shares resulting from the
quotient are awarded as stock options under the Company Stock Option Plan to the
director.
STOCK OWNERSHIP
Principal Shareholders.
The following table sets forth share ownership information as of December
31, 1998 with respect to any person known to GIFH to be a beneficial owner of
more than 5% of GIFH's Common Stock. The information as to beneficial ownership
was furnished to GIFH by or on behalf of the persons named. Unless otherwise
indicated, each of the shareholders has sole voting and investment power with
respect to the shares of Common Stock beneficially owned. Percentage ownership
is calculated based on outstanding shares.
-7-
<PAGE>
Security Ownership of Certain Beneficial Owners*
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Number of Shares Percent of Class
- ------------------------------------ ---------------- -----------------
<S> <C> <C>
Leonard W. Golan (1) 125,017 5.04%
840 Walden Lane
Lake Forest, Illinois 60045
Charles K. Werk 130,780 5.28%
203 Medinah
St. Simons Island, GA 31522
</TABLE>
*Information relating to beneficial ownership of Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Act"). Under
such rule, a person is deemed to be a "beneficial owner" of a security if that
person has or shares "voting power," which includes the power to vote or direct
the voting of such security, or "investment power", which includes the power to
dispose of, or to direct the disposition of, such security. A person is also
deemed to be a beneficial owner of any security of which that person has the
right to acquire beneficial ownership within sixty (60) days. Under the rules,
more than one person may be deemed to be a beneficial owner of the same
securities, and a person may be deemed to be a beneficial owner of securities as
to which he has no beneficial interest. For instance, beneficial ownership
includes spouses, minor children and other relatives residing in the same
household, and trusts, partnerships, corporations or deferred compensation plans
which are affiliated with the principal.
(1) Mr. Golan's beneficial ownership of the shares of Common Stock attributed
to him stems from his having voting and investment power with respect to those
shares in his capacity as Trustee of each of the Leonard W. Golan Insurance
Trust dated January 23, 1968, the Carol P. Golan Insurance Trust dated November
7, 1977, and the Carol P. Golan QTIP Trust dated April 18, 1995.
The following table sets forth share ownership information as of December 31,
1998, with respect to (i) each director and named executive officer of GIFH who
beneficially owns Common Stock, and (ii) all directors and named executive
officers of GIFH as a group. The information as to beneficial ownership was
furnished to GIFH by or on behalf of the persons named. Unless otherwise
indicated, each of the shareholders has sole voting and investment power with
respect to the shares beneficially owned. Percentage ownership is calculated
based on outstanding shares.
-8-
<PAGE>
Security Ownership of Directors and Executive Officers*
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Number of Shares Percent of Class
- ------------------------------------ ---------------- ----------------
<S> <C> <C>
Charles R. Acosta (7) 34,365 1.39%
226 Medinah
St. Simons Island, GA 31522
James M. Fiveash (8) 15,269 .57%
605 King Cotton Row
Brunswick, GA 31525
L. McRee Harden (1) 21,836 .83%
P.O. Box 2369
Darien, GA 31305
Michael D. Hodges (2) 87,170 3.30%
207 Dunbarton Drive
St. Simons Island, GA 31522
Russell C. Jacobs, Jr. (3) 23,037 .87%
308 Oak Grove Island Drive
Brunswick, GA 31525
C. Kermit Keenum (4) 21,965 .83%
100 Old Mountain Road
Powder Springs, GA 30073
Jimmy D. Veal (5) 80,151 3.03%
711 Beachview Drive
Jekyll Island, GA 31527
Charles K. Werk 130,780 5.28%
203 Medinah
St. Simons Island, GA 31522
J. Thomas Whelchel (6) 48,054 1.82%
5 Glynn Avenue
Brunswick, GA 31520
</TABLE>
-9-
<PAGE>
All Directors and Executive 462,627 18.67%
Officers as a Group
(9 persons)
* Information relating to beneficial ownership of Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Act. Under such rule, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power," which includes
the power to vote or direct the voting of such security, or "investment power,"
which includes the power to dispose of, or to direct the disposition of, such
security. A person is also deemed to be a beneficial owner of any security of
which that person has the right to acquire beneficial ownership within sixty
(60) days. Under the rules, more than one person may be deemed to be a
beneficial owner of the same securities, and a person may be deemed to be a
beneficial owner of securities as to which he has no beneficial interest. For
instance, beneficial ownership includes spouses, minor children and other
relatives residing in the same household, and trusts, partnerships, corporations
or deferred compensation plans which are affiliated with the principal.
(1) Includes 1,250 shares owned by his wife for which he disclaims beneficial
ownership. Also includes the right to acquire 8,086 shares pursuant to
vested options.
(2) Includes the right to acquire 40,492 shares pursuant to vested options.
(3) Includes the right to acquire 7,537 shares pursuant to vested options.
(4) Includes the right to acquire 6,465 shares pursuant to vested options.
(5) Includes the right to acquire 9,648 shares pursuant to vested options and
9,438 shares owned by his adult son who resides in his household for which
he disclaims beneficial ownership.
(6) Includes 25 shares owned by Mr Whelchel's daughter for which he disclaims
beneficial ownership, and 15,396 shares pursuant to vested options.
(7) Includes the right to acquire 3,739 shares pursuant to vested options.
(8) Includes 8,000 shares owned individually by Mr. Fiveash and 2,500 shares
deemed beneficially owned by him in custodian accounts for minor children.
Also includes the right to acquire 4,769 shares pursuant to vested options.
Executive Compensation
The following table is a summary of compensation paid during the past three
years to the individual serving as the Company's CEO during 1998 and any other
executive officer who during 1998 earned in excess of $100,000 in annual salary
and bonus.
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other Restricted1 Securities
Name and Annual Stock Underlying LTIP All Other
Position Year Salary Bonus Compensation Awards Options/SARS(#) Payouts Compensation
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Thomas Whelchel 1998 ----- ----- ----- ----- 14,006/4/ ----- -----
CEO ------------------------------------------------------------------------------------------------------
1997 91,872/5/ ----- ----- ----- ----- ----- -----
------------------------------------------------------------------------------------------------------
1996 ----- ----- ----- ----- 1,390/4/ ----- 2,995/7/
- ------------------------------------------------------------------------------------------------------------------------------
Michael D. Hodges 1998 130,000 ----- ----- ----- 10,368/4/ ----- -----
President ------------------------------------------------------------------------------------------------------
First Bank of 1997 120,919 ----- ----- ----- ----- ----- -----
Brunswick ------------------------------------------------------------------------------------------------------
1996 100,861 ----- ----- ----- 2,042/4/ ----- -----
- ------------------------------------------------------------------------------------------------------------------------------
James T. Layman 1998 70,380/6/ ----- ----- ----- ----- ----- 290,000/6/
President ------------------------------------------------------------------------------------------------------
First Credit 1997 109,262 ----- ----- ----- ----- ----- -----
Corporation ------------------------------------------------------------------------------------------------------
1996 99,667 ----- ----- ----- 3,523/4/ ----- -----
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------------------
/1/ In the event that the Company declares a dividend on its outstanding
shares of Common Stock, then such dividend will be equally applicable to the
restricted stock reported in this column.
/2/ The aggregate number of shares of restricted stock held by J. Thomas
Whelchel as of December 31, 1998, is 10,325 shares and the value of such shares
is $42,037 based on the terms of the following vesting schedule. Under the terms
of the award of these restricted shares to Mr. Whelchel in 1995 ("1995
Restricted Stock") one-seventh of such shares (1,475) became vested on July 25,
1996; another one-seventh became vested on July 25, 1997; and an additional one-
seventh of such shares will vest on July 25 of each year thereafter until all
such shares have vested. If at any time Mr. Whelchel becomes neither a director
nor an executive officer of the Company or any subsidiary of the Company, then
he shall forfeit any shares of 1995 Restricted Stock which has not already
vested at the time of the event which triggers such forfeiture.
/3/ The aggregate number of shares of restricted stock held by Michael D.
Hodges as of December 31, 1998, is 2,390 shares and the value of such shares is
$12,445, based on the following schedule. Of the shares of restricted stock, 775
were awarded to Mr. Hodges in 1994 ("1994 Restricted Stock"), all of which vest
upon the earlier of (i) five years from August 17, 1994, the date the shares
were granted to Mr. Hodges or (ii) a change in control in the ownership of the
Company through the acquisition of more than 50% of the Company's outstanding
stock by a third party. Mr. Hodges will forfeit the 1994 Restricted Stock if he
is not employed by either the Company or one of its subsidiaries on August 16,
1999, unless Mr. Hodges' employment is terminated because of the sale of the
Company or a subsidiary through which Mr. Hodges is employed and Mr. Hodges is
not offered other employment within the Company or one of its subsidiaries.
Under the terms of the award of 1,615 shares of restricted stock awarded to Mr.
Hodges in 1995 ("1995 Restricted Stock"), one-seventh of such shares (230
shares) became vested on July 25, 1996; another one-seventh became vested on
July 25, 1997; and an additional one-seventh of such shares will vest on July 25
of each year thereafter until all such shares have vested. If at any time Mr.
Hodges becomes neither a director nor an executive officer of the Company or any
subsidiary of the Company, then he shall forfeit any shares of 1995 Restricted
Stock which has not already vested at the time of the event which triggers such
forfeiture.
/4/ These options are incentive stock options which have been granted
pursuant to that certain Golden Isles Financial Holdings, Inc. 1995 Stock Option
Plan adopted by the Company on July 25, 1995 (the "1995 Plan"). The 1995 Plan
provides for the granting of certain options that are intended to qualify as
incentive stock options within the meaning of Section 422(b) of the Internal
Revenue Code, as well as certain nonstatutory stock options that are not
intended to qualify as incentive stock options within the meaning of Section
422(b) of the Internal Revenue Code. These incentive stock options were granted
on July 25, 1995, and vested immediately upon being granted. These options may
be exercised at any time before the earlier of (i) July 25, 2005 or (ii) the
date upon which the optionee ceases to be an employee of the Company; provided,
however, that if the Optionee's employment with the Company is terminated for
any reason other than (a) optionee's death or disability, (b) optionee's
voluntary termination of his employment with the Company's consent, or (c)
termination of optionee's employment by the Company for cause, then, in such
event, optionee may exercise these incentive stock options for up to three
months after termination of his employment (but in no event later than July 25,
2005).
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<PAGE>
/5/ Mr. Whelchel served as acting CEO of the Company without a written
agreement, and the compensation committee of the Board agreed to compensate Mr.
Whelchel for his time spent as CEO of the Company. The amount stated as his
salary for 1997 is the amount settled upon by the compensation committee.
/6/ Mr. Layman was President of First Credit Corporation until August, 1998
when the assets of FCC were sold. Mr. Layman had an employment contract with the
company that only permitted his termination for cause. He was paid $290,000 as
compensation for early termination without cause.
/7/ The Company made a matching contribution to the Company 401(k) plan for
Mr. Hodges in the amount of $2,995 in 1998.
Executive Employment Agreements.
On February 20, 1997, the Bank and Michael D. Hodges entered into an
employment agreement ("Hodges Agreement") summarizing the terms of Mr. Hodges'
employment with the Bank. Pursuant to the Hodges Agreement, Mr. Hodges is to
serve as President and Chief Executive Officer of the Bank. Mr. Hodges' base
salary was set at $125,000 per year, subject to possible increases. The Hodges
Agreement provides that Mr. Hodges is entitled to bonuses and other benefits
including an automobile. The Bank may terminate Mr. Hodges' employment with the
Bank with or without cause. However, if Mr. Hodges is dismissed from his
employment for reasons other than for cause, the Bank shall for a period of one
year following his termination continue to pay him his then current base salary.
The initial term of the Hodges Agreement is through February 20, 1999, and
thereafter, shall be annually renewed for successive one-year periods unless
either party gives 90-days notice of non-renewal.
Mr. Whelchel served as CEO of the Company beginning October 17, 1996, and
throughout the period covered by this report without any written employment
agreement, but with the understanding, however, that the compensation committee
of the Board would determine the sum to be paid to him for his services. The
recommendation by the compensation committee was approved by the full Board, and
the compensation paid to Mr. Whelchel is disclosed in the preceding Summary
Compensation Table. Mr. Whelchel is continuing to serve as CEO of the Company
with no compensation.
On December 26, 1996, FCC and James T. Layman entered into a written
employment agreement ("Layman Agreement") summarizing the terms of Mr. Layman's
employment with FCC. Pursuant to the Layman Agreement, Mr. Layman is to serve as
President and Chief Executive Officer of FCC. Mr. Layman's base salary was set
at $95,000 per year, subject to possible annual increases. The Layman Agreement
provides that Mr. Layman is entitled to bonuses and other benefits including an
automobile. The Layman Agreement is effective through December 31, 2001, and may
be modified by the mutual consent of Mr. Layman and FCC. Should there be a
change in control of the Company, the Layman Agreement remains in force and
effect. Mr. Layman was terminated in August 1998
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<PAGE>
without cause when First Credit Company assets were sold to New South and Mr.
Layman was paid $290,000 as compensation for the termination.
Restricted Stock, Stock Options and Stock Warrants.
In August, 1994, the Company granted 9,260 shares of restricted stock to
four key employees. Of the above shares, 8,100 were forfeited in 1997, and the
remaining 1,160 shares will vest in August, 1999. In July, 1995, the Company
granted 62,570 shares of restricted stock to eight directors. In 1997, 22,558 of
these shares were forfeited. In December, 1998, the Company granted 4,000 shares
of restricted stock to two directors. All of the remaining 44,012 shares will be
fully vested by the end of the seventh year from the date of the grant. The cost
of the restricted stock is being amortized over the vesting periods. For each of
the years ended December 31, 1998 and 1997, $32,466 was amortized as restricted
stock and the same amount was credited to capital surplus. The cost recovery
associated with the restricted shares that were forfeited in 1997 was $45,790.
This cost recovery was debited to capital surplus.
Stock Options.
The company has options outstanding under three stock option plans. The
1991 Incentive Stock Option Plan ("Plan A") and the 1991 Nonstatutory Stock
Option Plan ("Plan B") were discontinued in 1995 and replaced by the 1995 Stock
Option Plan (the "1995 Plan"). Options granted under the two prior plans at the
date of replacement by the 1995 Plan remain outstanding and can be exercised
during the terms of the option agreements unless such options are forfeited by
the optionee. The option price for shares granted under Plan A were at least
equal to the fair value of such shares on the date granted unless the optionee
was a restricted shareholder, in which case the option price was at least equal
to 110% of the fair value of the shares on the date granted. The option price
for shares of common stock to be issued under Plan B was determined by the
Board, but under no circumstances could the option price be less than the fair
value of the shares on the date granted.
Options granted under the 1995 Plan are one of two types: (i) those which
qualify for treatment as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended ("Incentive Stock Options") or (ii)
those which do not so qualify ("Nonqualified Options"). The 1995 Plan provides
that not more than 250,000 shares in the aggregate be issued for Incentive Stock
Options and Nonqualified Options. The exercise price of an Incentive Stock
Option shall not be less than the fair value at the date of grant. The fair
value shall be determined from the trading price on a national securities
exchange, NASDAQ, or over-the-counter markets, if so traded. If not so traded,
the Board will determine the fair
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<PAGE>
value based upon recent sales reported to the Company. The exercise price of a
Nonqualified Option shall be determined by the Board on the date granted.
Warrants to Purchase Common Stock.
In 1995, the Company initiated a public secondary stock offering to sell
1,538,462 Units at a price of $6.50 per Unit. Each Unit consisted of one share
of common stock and one Class A Warrant to purchase common stock. Each of the
Class A Warrants expired in three years and entitles the holder to purchase an
additional share of common stock at a price of $7.25 in year one, $8.25 in year
two and $9.50 in year three. The public offering was closed in 1995 following
the sale of 897,230 Units. After deducting related stock offering and issue
expense, net proceeds of $5,456,457 were credited to paid-in capital. During
1998, warrants to purchase 149,970 shares of common stock were exercised at a
price of $9.50 per share. No warrants were exercised in 1997. All proceeds were
credited to paid-in capital, net of related expenses. On May 31, 1998, the
remaining warrants outstanding expired.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Name Shares Value Number of securities Value of Unexercised
acquired on Realized (#) underlying Unexercised in-the-money options
exercise (#) Options/SARS at FY-End SARs at FY-End
(Exercisable/Unexercisable) (Exercisable/Unexercisable)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J. Thomas Whelchel ----- ----- 15,396/0 /2/ $6,250.32/0 /1/
- ------------------------------------------------------------------------------------------------------------
Michael D. Hodges ----- ----- 40,492/0 /3/ $151,073.29/0 /1/
- ------------------------------------------------------------------------------------------------------------
James T. Layman ----- ----- 0 0
- ------------------------------------------------------------------------------------------------------------
</TABLE>
No stock options were exercised by the listed individuals and there were no
outstanding SARs during fiscal year 1997.
The Company does not have any Long Term Incentive Plans in effect.
/1/ Dollar values have been calculated by determining the difference
between the estimated fair market value of the Company's common stock at March
19, 1999 ($9.50) and the exercise prices of the options.
/2/ On January 18, 1996, options on 1,390 were awarded to Mr. Whelchel as
compensation with respect to his services as a director. In 1998 he was granted
options on 2,500 shares at $9.36 per share, 2,500 shares at $9.54 per share,
2,500 shares at $9.71 per share, 2,500 shares at $9.917 per share and 2,657
shares at $9.64 per share.
/3/ Michael D. Hodges has the right to acquire 40,492 shares of the
Company's common stock pursuant to stock options issued by the Company to Mr.
Hodges. All of the 40,492 stock options held by Mr. Hodges were exercisable as
of December 31, 1998. Of the 40,492 stock options, 18,750 are exercisable at the
price of $4.00 per share, 1,003 are exercisable at the price of $4.60 per share,
1,408 are exercisable at the price of $6.25 per share, 6,921 are exercisable at
the purchase price of $6.50 per share, 2,042 are exercisable at the price of
$6.00 per share, 5,000 shares are exercisable at $7.60 per share, 3,165 shares
are exercisable at $9.36 per share and 2,203 shares are exercisable at $9.64 per
share.
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<PAGE>
OTHER COMPENSATION AND BENEFIT PLANS
The Company provides a 401(k) plan for qualified employees to defer up to
10% of their salary with matching contributions from the Company made at the
discretion of the Board of Directors.
TRANSACTIONS WITH THE COMPANY
During 1998, the Bank loaned funds to certain of GIFH's executive officers
and directors or to businesses in which such persons had an interest. All such
loans were: (a) in the ordinary course of business, (b) on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and (c) did not involve
more than the normal risk of collectibility or present other unfavorable
features.
LEGAL PROCEEDINGS
There are no "material" pending legal proceedings, other than ordinary
routine litigation incidental to the business of the Company, to which the
Company or any of its subsidiaries is a party or of which any of their property
is subject. Material proceedings are defined as claims for damages where the
amount involved, exclusive of interest and cost, exceeds ten percent of the
current assets of the Company and its subsidiaries on a consolidated basis.
During the previous five years, no director or executive officer was the
subject of a legal proceeding (as defined below) that is material to an
evaluation of the ability or integrity of any director or executive officer. A
"legal proceeding" includes: (a) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive prior to that
time; (b) any conviction in a criminal proceeding or subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses); (c)
any order, judgment, or decree of any court of competent jurisdiction, or any
Federal or State authority permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of commodities
business, securities or banking activities; and (d) any finding by a court of
competent jurisdiction (in a civil action), the Securities and Exchange
Commission or the Commodity Futures Trading Commission of a violation of a
federal or state securities or commodities law (such finding having not been
reversed, suspended or vacated).
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<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE 1934 ACT
Section 16(a) of the Securities Exchange Act of 1934 and regulations of the
SEC require our executive officers and directors and persons who beneficially
own more than ten percent of any class of our equity securities, as well as
certain affiliates of such persons to file initial reports of ownership of any
equity securities of Golden Isles Financial Holdings and subsequent reports of
changes in ownership of such securities with the SEC. Such persons also are
required by SEC regulations to furnish us with copies of all Section 16(a)
reports they file. Based solely upon a review of Forms 3 and 4 and amendments
thereto furnished to the Company under Rule 16a-3(d) during 1998 and Form 5 and
amendments thereto furnished to the Company during 1998, no person who, at any
time during 1998, was a director, officer or beneficial owner of more than 10%
of any class of equity securities of the Company failed to file on a timely
basis any reports required by Section 16(a) during the 1998 fiscal year or
previously except Director Acosta was late filing a Form 5 showing a purchase of
1,000 shares and Director Whelchel was late in filing a Form 4 for the purchase
of 1,500 shares and a Form 5 for a purchase of 308 shares.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Mauldin & Jenkins, LLC, Albany, Georgia, has served as our
independent accountants each year since 1996, and we consider them to be well
qualified. Our Board of Directors has selected Mauldin & Jenkins, LLC to serve
as our independent accountants for the fiscal year ending December 31, 1999.
Representatives of that firm will be present at the Annual Meeting and will have
the opportunity to make a statement if they desire to do so. They will be
available to answer your questions at that time.
SHAREHOLDER PROPOSALS FOR 2000 MEETING
Shareholder proposals that are intended to be presented at our 2000 Meeting
of Shareholders must be received by us no later than February 1, 2000, in order
to be included in our proxy statement and related proxy materials for that
meeting. Any such proposal must comply with the rules and regulations of the
Securities and Exchange Commission.
OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
Our Board of Directors knows of no matters other than those referred to in
the accompanying Notice of Annual Meeting of Shareholders which may properly
come before the Annual Meeting. However, if any other matter should be properly
presented for consideration and voting at the Annual Meeting or any adjournments
thereof, it is the intention of the persons named as proxies on the enclosed
form of proxy card to vote the
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<PAGE>
shares represented by all valid proxy cards in accordance with their judgment of
what is in Golden Isles Financial Holdings' best interest.
ANNUAL REPORTS
Upon receipt of a written request, we will furnish, without charge, any
owner of common stock of the company a copy of its annual report to the
Securities and Exchange Commission on Form 10-K (the "10-K") for the fiscal year
ended December 31, 1998, including financial statements and the schedules
thereto. Copies of exhibits to the 10-K are also available upon specific request
and payment of a reasonable charge for reproduction. Such requests should be
directed to the Secretary of the Company at the address indicated on the front
of the proxy statement.
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<PAGE>
GOLDEN ISLES FINANCIAL HOLDINGS, INC.
3811 Frederica Road
St. Simons Island, Georgia 31522
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Shareholders and Proxy Statement and does hereby appoint J. Thomas
Whelchel and Jimmy D. Veal, and each of them, with full powers of substitution,
as proxies of the undersigned, to represent the undersigned and to vote all
shares of GOLDEN ISLES FINANCIAL HOLDINGS, INC. common stock which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders of Golden Isles Financial Holdings, Inc. to be held
Wednesday, June 16, 1999, at 10:00 a.m. local time, at The Comfort Inn, 5308 New
Jesup Highway (I-95 and U.S. 341), Brunswick, Georgia 31525 and at any
adjournment or postponement thereof, with all the powers (other than the power
to revoke the proxy or vote in a manner not authorized by the exceeded form of
proxy) which the undersigned would have if personally present at such meeting,
to act in their discretion upon any other matter or matters which may properly
be brought before the meeting, and to appear and vote all the shares of common
stock which the undersigned may be entitled to vote.
PROPOSAL I: To elect the nine nominees listed below to serve as directors for
the following year:
_____FOR all nominees listed below _____WITHHOLD AUTHORITY to
(except as marked to the contrary below), vote for all nominees listed below.
C. Ray Acosta Claude Kermit Keenum
James M. Fiveash Jimmy D. Veal
L. McRee Harden Charles K. Werk
Michael D. Hodges J. Thomas Whelchel
Russell C. Jacobs, Jr.
INSTRUCTIONS: To withhold your vote for any individual nominee, strike a line
through the nominee's name in the list above.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED AS IF MARKED FOR ALL NOMINEES
---
LISTED ABOVE.
The Board of Directors recommends a vote FOR the election of the above nominees
to the Board of Directors.
(Continued on Reverse Side)
<PAGE>
If other matters properly come before the meeting, the persons named herein as
proxy shall have the discretionary authority to vote with respect to such
matters after considering the recommendations of management.
Please sign below, date and return promptly in the enclosed, self-addressed
stamped envelope. When shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If the signatory is a corporation, please sign the
full corporate name by an authorized officer.
DATE: , 1999
---------------------
INDIVIDUALS: ENTITIES: (Please Print)
- -------------------------------- ----------------------------------
Name (Please print) By:
- -------------------------------- ----------------------------------
Signature Signature
- -------------------------------- ----------------------------------
Name of Joint Tenant or Tenant- Position
In-Common if any (Please Print)
- -------------------------------- ----------------------------------
Signature of Joint Tenant or
Tenant-In-Common, if any
