SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1995
Commission file number: 0-18460
COMMUNITY CAPITAL CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C>
South Carolina 57-0866395
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
109 Montague Avenue
Greenwood, South Carolina 29646
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(Address of principal (Zip Code)
executive offices)
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Registrant's telephone number, including area code: (803) 941-8200
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, par value $1.00 per share
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
There is presently no established public trading market for shares of
the Registrant's common stock, $1.00 par value, and trading in such shares has
been limited. Accordingly, trading activity in the voting stock of the
Registrant does not currently represent a reliable indicator of the aggregate
market value of the voting stock of the Registrant held by non-affiliates of the
Registrant and the Registrant is unable to estimate such value.
The number of shares outstanding of the Registrant's common stock as of
March 1, 1996 was 1,160,227.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Proxy Statement in connection with its 1996 Annual
Meeting of Stockholders (Part III).
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PART I
Item 1. Business.
General
Community Capital Corporation (the "Company") is a bank holding company
incorporated under the laws of the State of South Carolina on April 8, 1988.
Until May 26, 1994, the Company operated under the name Greenwood National
Bancorporation. The Company is based in Greenwood, South Carolina and
substantially all of its operations are conducted through two wholly-owned
subsidiaries, Greenwood Bank & Trust, a state chartered Federal Reserve member
bank (the "Greenwood Bank"), and Clemson Bank & Trust, a state-chartered
nonmember bank (the "Clemson Bank"). (The Greenwood Bank and the Clemson Bank
are referred to collectively herein as the "Banks.")
The Greenwood Bank engages in a general commercial banking business,
emphasizing the banking needs of individuals and small to medium-sized
businesses in the Greenwood Bank's primary service area of Greenwood County,
South Carolina. On September 26, 1994, the Greenwood Bank converted from a
national banking association to a South Carolina state bank. The conversion did
not result in any material change in the nature of the operations of the
Greenwood Bank or the scope of the commercial banking services it offers. The
Greenwood Bank continues to be a member of the Federal Reserve System and the
Federal Deposit Insurance Corporation (the "FDIC").
The Clemson Bank engages in a general commercial banking business in
its primary service area of Pickens County, South Carolina. The Clemson Bank is
newly organized, having received final state and federal regulatory approvals
for the commencement of operations in June 1995. At that time, the Company
acquired all of the common stock of the Clemson Bank using $4,500,000 in
proceeds from the Company's 1995 public offering of common stock. The public
offering commenced February 27, 1995 and raised approximately $6,250,000 gross
proceeds prior to its expiration in September 1995.
Bank Services
The Greenwood Bank
The Greenwood Bank engages in a general commercial banking business,
emphasizing the banking needs of individuals and small to medium-sized
businesses in the Greenwood Bank's primary service area of Greenwood County,
South Carolina. The Greenwood Bank has three banking locations, one of which is
its principal office, located at 109 Montague Street, Greenwood, South Carolina.
The Greenwood Bank has two branch locations, one of which is located on
Greenwood's Highway 72 By-Pass and the other in Ninety Six, South Carolina. The
Ninety Six branch commenced banking activities in February 1995.
The Greenwood Bank offers a full range of commercial banking functions.
Some of the major services provided include checking and savings accounts, NOW
accounts, IRA accounts, other savings and time deposits of various types ranging
from daily money market and super money market accounts, to long-term
certificates of deposit. All deposit accounts are insured by the FDIC up to the
maximum amount permitted by law. The Greenwood Bank's transaction accounts and
time certificates are tailored to its principal market area at competitive
rates.
The Greenwood Bank also offers a full range of consumer credit and
short-term and intermediate term commercial and personal loans. Among the
Greenwood Bank's personal credit services are loans to individuals for the
purchase of automobiles, mobile homes, boats and other recreational vehicles, as
well as for home improvements, agricultural purposes, business needs and
education. The Greenwood Bank conducts residential mortgage loan origination
activities pursuant to which first mortgage loans are sold to investors in the
secondary markets, subject to pre-existing commitments from such investors.
Servicing of such loans is not retained by the Greenwood Bank. Commercial credit
services offered by the Greenwood Bank consist of secured and unsecured loans
primarily to
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individuals and small to medium-sized businesses in the Greenwood
County, South Carolina area. These loans are available for general
operating purposes, acquisitions of fixed assets, including real
estate, purchases of equipment and machinery, financing of equipment
and accounts receivable, and for other business purposes. The
Greenwood Bank offers VISA(R) credit card accounts together with related
lines of credit. The lines of credit may be used for overdraft
protection as well as a pre-authorized credit for personal
purchases and expenses.
The Greenwood Bank also provides safe deposit boxes, wire transfer
services, travelers checks, and direct deposit of payroll and social security
checks. Discount securities brokerage services are available through a
third-party brokerage service. In addition, the Greenwood Bank participates in a
regional network of automated teller machines that may be used by Greenwood Bank
customers in major cities throughout the Southeast. In January 1995, the
Greenwood Bank obtained regulatory approvals for the commencement of trust and
related fiduciary services by a newly-formed trust department. The Greenwood
Bank does not provide international banking services.
The Clemson Bank
The Clemson Bank engages in a general commercial banking business in
the Clemson, South Carolina community, providing personalized banking services
with emphasis on the individual financial needs and objectives of individuals
and small to medium-sized businesses. Substantially all credit and related
decisions are made locally, facilitating prompt response. The Clemson Bank
emphasizes a commitment to the industrial and business growth of the Clemson
community and Pickens County area. The principal operating facility for the
Clemson Bank is at 528 Old Greenville Highway within the city limits of Clemson,
South Carolina on property the Clemson Bank leases from the Company.
The principal business of the Clemson Bank is the acceptance of
deposits from the public and the making of loans and other investments. The
Clemson Bank offers the same full range of deposit and other services that are
offered by the Greenwood Bank. See "The Greenwood Bank." The principal sources
of funds for the Clemson Bank's loans and investments are demand, time, savings
and other deposits, amortization loans or participations in loans, fees received
from other lenders or institutions for servicing loans sold to such lenders or
institutions, and borrowings. In addition, a portion of the funds used to
capitalize the Clemson Bank have been used by the Clemson Bank to fund loans.
The principal sources of income for the Clemson Bank are the servicing of loans
sold to other lenders or institutions and, to a lesser extent, interest and
dividends collected on other investments. The principal expenses of the Clemson
Bank are interest paid on savings and other deposits (including NOW accounts),
interest paid on other borrowings by the Clemson Bank, employee compensation,
office expenses and other overhead expenses.
Through December 1995, the Clemson Bank used facilities of the
Greenwood Bank for data processing, resulting in significant monetary savings
for the Clemson Bank. In January 1996, the Greenwood Bank's data processing
facilities, including certain of its computer and item-sorting equipment, were
transferred to the Company. As a result, the Company now performs data
processing functions for the Banks upon terms that the managements of both Banks
believe is competitive with those offered by unaffiliated third-party service
bureaus. The Company also administers certain operating functions for the Banks
where cost savings can be achieved. Included in such operations are regulatory
compliance, personnel and internal audit functions. The Company's costs
associated with the performance of such services are allocated between the Banks
based on each Bank's total assets.
Competition
Banks generally compete with other financial institutions through the
selection of banking products and services offered, the pricing of services, the
level of service provided, the convenience and availability of services and the
degree of expertise and the personal manner in which services are offered. South
Carolina law permits statewide branching by banks and savings institutions, and
many financial institutions in the state have branch networks. Consequently,
commercial banking in South Carolina is highly competitive. South Carolina law
also permits regional interstate banking whereby bank holding companies in
certain southeastern states are allowed to acquire depository institutions
within South Carolina. Many large banking organizations currently operate in the
market areas of both the Greenwood Bank and the Clemson Bank, several of which
are controlled by out-of-state ownership. In addition, competition between
commercial banks and thrift institutions (savings institutions and credit
unions) has been intensified significantly by the elimination of many previous
distinctions between the various types of financial institutions and the
expanded powers and increased activity of thrift institutions in areas of
banking which
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previously had been the sole domain of commercial banks. Recent legislation,
together with other regulatory changes by the primary regulators of the various
financial institutions, has resulted in the almost total elimination of
practical distinctions between a commercial bank and a thrift institution.
Consequently, competition among financial institutions of all types is largely
unlimited with respect to legal ability and authority to provide most financial
services. Furthermore, as a consequence of legislation recently enacted by the
United States Congress, national banks not previously allowed to operate in
South Carolina will be allowed to commence operations and compete in the Banks'
primary service areas if the South Carolina legislature does not elect to limit
the reach of such federal legislation within South Carolina. See "Government
Supervision and Regulation -- Interstate Banking."
Each of the Banks faces increased competition from both
federally-chartered and state-chartered financial and thrift institutions, as
well as credit unions, consumer finance companies, insurance companies and other
institutions in the Banks' respective market areas. Some of these competitors
are not subject to the same degree of regulation and restriction imposed upon
the Banks. Many of these competitors also have broader geographic markets and
substantially greater resources and lending limits than the Banks and offer
certain services such as trust banking that the Banks do not currently provide.
In addition, many of these competitors have numerous branch offices located
throughout the extended market areas of the Banks that the Company believes may
provide these competitors with an advantage in geographic convenience that the
Banks do not have at present. Such competitors may also be in a position to make
more effective use of media advertising, support services and electronic
technology than can either of the Banks.
The management of each of the Banks believes that each Bank's ability
to compete with other financial institutions in its respective market area is
enhanced by its posture as a locally-managed bank with a broad base of local
ownership and by its relatively small size which permits it to offer what it
believes to be more personalized service than many of its competitors. The
competitive strategy of the Banks consists of competing against savings
institutions by offering more competitive mortgage products, supplying
commercial lending services that savings institutions generally have not
offered, and offering professionals and high income customers the opportunity to
conduct personal and commercial banking business in one institution. The
competitive strategy against the other major commercial banks and savings
institutions in the Banks' respective market areas consists of approving loan
requests more quickly with a local loan committee, operating with more flexible,
but equally prudent, lending policies, personalizing service by establishing a
long-term banking relationship with the customer, having a higher ratio of
employees to customers to ensure a higher level of service, and offering special
services for area businesses and professions such as arranging borrowings from
institutional investors and providing conduits to equity markets, venture
capital and possibly institutional investors. Although some of these services
are offered by the other major banks and savings institutions doing business in
the Banks' respective market areas, management believes that all of these
services are generally not combined in an effective, personalized package for
the benefit of the Banks' target customers, primarily consisting of individual
consumers, professionals and small businesses.
Currently there are six other commercial banks, one savings institution
and approximately six credit unions operating in the Greenwood Bank's primary
service area, and four other commercial banks, one savings institution and one
credit union operating in the Clemson Bank's primary service area.
Employees
The Company currently has eighteen full-time employees and three
part-time employees. The Greenwood Bank currently employs twenty-nine full-time
employees and no part-time employees. The Clemson Bank currently employs nine
full-time employees and no part-time employees.
Government Supervision and Regulation
General
The Company and the Banks are subject to an extensive collection of
state and federal banking laws and regulations which impose specific
requirements and restrictions on, and provide for general regulatory oversight
with respect to, virtually all aspects of the Company's and the Banks'
operations. The Company and the Banks are also
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affected by government monetary policy and by regulatory measures affecting the
banking industry in general. The actions of the Federal Reserve System affect
the money supply and, in general, the Banks' lending abilities in increasing or
decreasing the cost and availability of funds to the Banks. Additionally, the
Federal Reserve System regulates the availability of bank credit in order to
combat recession and curb inflationary pressures in the economy by open market
operations in United States government securities, changes in the discount rate
on member bank borrowings, changes in the reserve requirements against bank
deposits and limitations on interest rates which banks may pay on time and
savings deposits.
During 1989 and 1991, the United States Congress enacted two major
pieces of banking legislation: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") and the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"). The FIRREA and FDICIA have significantly
changed the commercial banking industry through, among other things, revising
and limiting the types and amounts of investment authority, significantly
increasing minimum regulatory capital requirements, and broadening the scope and
power of federal bank and thrift regulators over financial institutions and
affiliated persons in order to protect the deposit insurance funds and
depositors. These laws, and the resulting implementing regulations, have
subjected the Banks and the Company to extensive regulation, supervision and
examination by the FDIC. This has resulted in increased deposit insurance
premiums and increased administrative, professional and compensation expenses in
complying with a substantially increased number of new regulations and policies.
The regulatory structure created by these laws gives the regulatory authorities
extensive authority in connection with their supervisory and enforcement
activities and examination policies.
The following is a brief summary of certain statutes, rules and
regulations affecting the Company and the Banks. This summary is qualified in
its entirety by reference to the particular statutory and regulatory provisions
referred to below and is not intended to be an exhaustive description of the
statutes or regulations applicable to the business of the Company and the Banks.
Any change in applicable laws or regulations may have a material adverse effect
on the business and prospects of the Company and the Banks.
The Company
The Company is a bank holding company within the meaning of the Federal
Bank Holding Company Act of 1956, as amended (the "BHCA"), and the South
Carolina Bank Holding Company Act, as amended (the "South Carolina Act"). The
Company is registered with both the Federal Reserve System and the State Board.
The Company is required to file with both of these agencies annual reports and
other information regarding its business operations and those of its
subsidiaries. It is also subject to the supervision of, and to regular
examinations by, these agencies.
The BHCA requires every bank holding company to obtain the prior
approval of the Federal Reserve Board before (i) it or any of its subsidiaries
(other than a bank) acquires substantially all of the assets of any bank, (ii)
it acquires ownership or control of any voting shares of any bank if after such
acquisition it would own or control, directly or indirectly, more than 5% of the
voting shares of such bank, or (iii) it merges or consolidates with any other
bank holding company. Under the South Carolina Act, it is unlawful without the
prior approval of the South Carolina Board for any South Carolina bank holding
company (i) to acquire direct or indirect ownership or control of more than 5%
of the voting shares of any bank or any other bank holding company, (ii) to
acquire all or substantially all of the assets of a bank or any other bank
holding company, or (iii) to merge or consolidate with any other bank holding
company.
The BHCA and the Federal Change in Bank Control Act, together with
regulations promulgated by the Federal Reserve Board, require that, depending on
the particular circumstances, either the Federal Reserve Board's approval must
be obtained or notice must be furnished to the Federal Reserve Board and not
disapproved prior to any person or company acquiring control of a bank holding
company, such as the Company, subject to certain exemptions for certain
transactions.
Under the BHCA, a bank holding company is generally prohibited from
engaging in, or acquiring direct or indirect control of more than 5% of the
voting shares of any company engaged in, nonbanking activities, unless the
Federal Reserve Board, by order or regulation, has found those activities to be
so closely related to banking or managing or controlling banks as to be a proper
incident thereto. Some of the activities that the Federal Reserve
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Board has determined by regulation to be proper incidents to the business of a
bank holding company include making or servicing loans and certain types of
leases, engaging in certain insurance and discount brokerage activities,
performing certain data processing services, acting in certain circumstances as
a fiduciary or investment or financial adviser, owning savings associations and
making investments in certain corporations or projects designed primarily to
promote community welfare. The Company is also restricted in its activities by
the provisions of the Glass-Steagall Act of 1933, which prohibits the Company
from owning subsidiaries that are engaged principally in the issue, flotation,
underwriting, public sale or distribution of securities. The regulatory
requirements to which the Company is subject also set forth various conditions
regarding the eligibility and qualifications of its directors and officers.
The Greenwood Bank
Prior to September 26, 1994, the Greenwood Bank operated as a national
banking association incorporated under the laws of the United States. Pursuant
to the Certificate of Conversion filed with the South Carolina Secretary of
State and a notice forwarded to the Office of the Comptroller of the Currency
(the "OCC"), the Greenwood Bank was converted as of September 26, 1994 from a
national banking association to a South Carolina chartered banking corporation.
The Greenwood Bank remains a member of the Federal Reserve System and the FDIC.
The operations of the Greenwood Bank are subject to various statutory
requirements and rules and regulations promulgated and enforced primarily by the
State Board, the Federal Reserve System and the FDIC. The State Board and the
FDIC regulate or monitor all areas of the Greenwood Bank's operations, including
security devices and procedures, adequacy of capitalization and loss reserves,
loans, investments, borrowings, deposits, mergers, issuances of securities,
payment of dividends, interest rates payable on deposits, interest rates or fees
chargeable on loans, establishment of branches, corporate reorganizations,
maintenance of books and records, and adequacy of staff training to carry on
safe lending and deposit gathering practices.
The Federal Reserve System also requires the Greenwood Bank to maintain
certain capital ratios (see "Federal Capital Regulations"), and the provisions
of the Federal Reserve Act require the Greenwood Bank to observe certain
restrictions on any extensions of credit to the Company, or with certain
exceptions, other affiliates, on investments in the stock or other securities of
other banks, and on the taking of such stock or securities as collateral on
loans to any borrower. In addition, the Greenwood Bank is prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit, or the providing of any property or service. The regulatory requirements
to which the Greenwood Bank are subject also set forth various conditions
regarding the eligibility and qualification of its of directors and officers.
The Clemson Bank
As a South Carolina-chartered banking corporation and a member of the
FDIC, the Clemson Bank is subject to various statutory requirements and rules
and regulations promulgated and enforced primarily by the State Board and the
FDIC. The State Board and the FDIC regulate and monitor all areas of the Clemson
Bank's operations, including security devices and procedures, adequacy of
capitalization and loss reserves, loans, investments, borrowings, deposits,
mergers, issuances of securities, payment of dividends, interest rates payable
on deposits, interest rates or fees chargeable on loans, establishment of
branches, corporate mergers, sales and similar reorganizations, maintenance of
books and records, and adequacy of staff training to carry on safe lending and
deposit gathering practices. In addition, the Clemson Bank is prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit, or the providing of any property or service. The regulatory requirements
to which the Clemson Bank is subject also set forth various conditions regarding
the eligibility and qualification of its directors and officers.
Dividends
Although the Company is not presently subject to any direct legal or
regulatory restrictions on dividends (other than the South Carolina state
business corporation law requirements that dividends may be paid only if such
payment would not render the Company insolvent or unable to meet its obligations
as they come due), the Company's ability to pay cash dividends will depend
entirely upon the amount of dividends paid by each of the Banks and any other
subsequently acquired entities. The Banks are subject to regulatory restrictions
on the payment of dividends, including the prohibition of payment of dividends
from each Bank's capital. All dividends of the Banks must be paid out of the
respective undivided profits then on hand, after deducting expenses, including
losses and bad debts. In
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addition, as a member of the Federal Reserve System, the Greenwood Bank is
prohibited from declaring a dividend on its shares of common stock until its
surplus equals its stated capital, unless there has been transferred to surplus
no less than one-tenth of such bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend) and the
approval of the Federal Reserve Board is required if the total of all dividends
declared by the Greenwood Bank in any calendar year exceeds the total of its net
profits for that year combined with the Greenwood Bank's retained net profits
for the preceding two years, less any required transfers to surplus. The Banks
are subject to various other federal and state regulatory restrictions on the
payment of dividends, including receipt of the approval of the South Carolina
Commissioner of Banking prior to paying dividends to the Company.
FIRREA
The FIRREA was enacted on August 9, 1989 and has had a significant
impact on the operations of all financial institutions, including the Banks.
FIRREA, among other things, abolished the Federal Savings and Loan Insurance
Corporation and established two new insurance funds under the jurisdiction of
the FDIC: the Savings Association Fund and the Bank Insurance Fund (see "FDIC
Regulations"). FIRREA also imposed, with certain exceptions, a "cross guaranty"
on the part of commonly controlled depository institutions such as the Banks.
Under this provision, if one depository institution subsidiary of a multi-bank
holding company fails or requires FDIC assistance, the FDIC may assess a
commonly controlled depository institution for the estimated losses suffered by
the FDIC. Consequently, each of the Banks is subject to assessment by the FDIC
related to any loss suffered by the FDIC arising out of the operations of the
other Bank. The FDIC's claim is junior to the claims of nonaffiliated
depositors, holders of secured liabilities, general creditors and subordinated
creditors but is superior to the claims of shareholders.
FDIC Regulations
The FDIC establishes rates for the payment of premiums by federally
insured banks and thrifts for deposit insurance. Deposits in the Banks are
insured by the FDIC up to a maximum amount (generally $100,000 per depositor,
subject to aggregation rules). A separate Bank Insurance Fund (the "BIF") is
maintained for commercial banks with insurance premiums from the industry used
to offset losses from insurance payouts when banks fail. The Banks pay premiums
to the BIF on their deposits. Due to the high rate of bank failures in recent
years, the fees that commercial banks pay to the BIF have increased. Beginning
in 1993, the FDIC adopted a rule which establishes a risk-based deposit
insurance premium system for all insured depository institutions, including the
Banks.
Federal Capital Regulations
In an effort to achieve a measure of capital adequacy that is more
sensitive to the individual risk profiles of financial institutions, pursuant to
the provisions of the FDICIA, the Federal Reserve Board, the FDIC and other
federal banking agencies have adopted risk-based capital adequacy guidelines for
banking organizations insured by the FDIC, including each of the Banks. These
guidelines redefine traditional capital ratios to take into account assessments
of risks related to each balance sheet category, as well as off-balance sheet
financing activities. The guidelines define a two-tier capital framework. Tier 1
capital consists of common and qualifying preferred stockholders' equity, less
goodwill and other adjustments. Tier 2 capital consists of mandatory
convertible, subordinated and other qualifying term debt, preferred stock not
qualifying for Tier 1, and the allowance for credit losses up to 1.25% or
risk-weighted assets. Under the guidelines, institutions must maintain a
specified minimum ratio of "qualifying" capital to risk-weighted assets. At
least 50% of an institution's qualifying capital must be "core" or "Tier 1"
capital, and the balance may be "supplementary" or "Tier 2" capital. The
guidelines imposed on the Company and the Banks include a minimum leverage ratio
standard of capital adequacy. The leverage standard requires top-rated
institutions to maintain a minimum Tier 1 capital to assets ratio of 3%, with
institutions receiving less than the highest rating required to maintain a
minimum ratio of 4% or greater, based upon their particular circumstances and
risk profiles. As of December 31, 1995, the guidelines require achievement of a
minimum ratio of total capital to risk-weighted assets of 8% and a minimum ratio
of Tier 1 capital risk-weighted assets of 4%.
Both the Company's and the Banks' leverage and risk-based capital
ratios at December 31, 1995 exceeded their respective fully phased-in minimum
requirements.
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Other Regulations
Interest and certain other charges collected or contracted for by the
Banks are subject to state usury laws and certain federal laws concerning
interest rates. The Banks' loan operations are also subject to certain federal
laws applicable to credit transactions, such as the federal Truth-In-Lending Act
governing disclosures of credit terms to consumer borrowers, the Community
Reinvestment Act of 1977 requiring financial institutions to meet their
obligations to provide for the total credit needs of the communities they serve,
including investing their assets in loans to low- and moderate-income borrowers,
the Home Mortgage Disclosure Act of 1975 requiring financial institutions to
provide information to enable the pubic and public officials to determine
whether a financial institution is fulfilling its obligations to help meet the
housing needs of the community it serves, the Equal Credit Opportunity Act
prohibiting discrimination on the basis of race, creed or other prohibited
factors in extending credit, the Fair Credit Reporting Act governing the manner
in which consumer debts may be collected by collection agencies, and the rules
and regulations of the various federal agencies charged with the responsibility
of implementing such federal laws. The deposit operations of the Banks also are
subject to the Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality of consumer financial records and prescribes procedures for
complying with administrative subpoenas of financial records, and the Electronic
Funds Transfer Act and Regulation E issued by the Federal Reserve Board to
implement that Act, which govern automatic deposits to and withdrawals from
deposit accounts and customers' rights and liabilities arising from the use of
automated teller machines and other electronic banking services.
Interstate Banking
In 1986, South Carolina adopted legislation which permits banks and
bank holding companies in certain southern states to acquire banks in South
Carolina to the extent that such other states have reciprocal legislation which
is applicable to South Carolina banks and bank holding companies, and to the
extent the South Carolina banking organization to be acquired has continually
operated as a bank for a period of five years. This legislation resulted in a
number of South Carolina banks being acquired by large out-of-state bank holding
companies. Size gives the larger banks certain advantages in competing for
business from large corporations. These advantages include higher lending limits
and the ability to offer services in other areas of South Carolina and the
region. As a result, the Company does not generally attempt to compete for the
banking relationships of large corporations, but concentrates its efforts on
small to medium-sized businesses and on individuals. The Company believes it has
competed effectively in this market segment by offering quality, personal
service.
On September 29, 1994, the federal government enacted the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the "1994 Act"). The
provisions of the 1994 Act became effective on September 29, 1995, at which time
eligible bank holding companies in any state were permitted, with Federal
Reserve Board approval, to acquire banking organizations in any other state. As
such, all existing regional compacts (such as the Southeastern Regional banking
compact recognized by the South Carolina Act) and substantially all existing
regional limitations on interstate acquisitions of banking organizations have
been eliminated, although the provisions of the South Carolina Act limiting
acquisition targets to those organizations with five years of continuous
operations in South Carolina will continue to be given effect.
The 1994 Act also removed substantially all of the existing
prohibitions on interstate branching by national banks. On and after June 1,
1997, a national bank operating in any state may establish one or more branches
within any other state without, as currently required, the establishment of a
separate banking structure within the other state. Interstate branching is
allowed earlier than the automatic phase-in date of June 1, 1997 as long as the
legislatures of both states involved have adopted statutes expressly permitting
such branching to take place at an earlier date. The 1994 Act allows state
legislatures to opt-out of these interstate branching provisions prior to the
June 1, 1997 phase-in date. If a state opts-out of interstate branching,
national banks operating outside of such state will be prohibited from
establishing a separate bank structure in such state, and national banks
operating inside such state likewise will be prohibited from establishing
branches outside of such state. States that do not opt-out will retain the right
to require out-of state bank holding companies and national banks to comply with
certain permitted state rules governing entry. Although the 1994 Act has the
potential to increase the number of competitors in the marketplace of each of
the Banks, the Company cannot predict the actual impact of such legislation on
the competitive position of either of the Banks.
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As of the date of this report, legislation responding to the opt-out
provision of the 1994 Act or addressing the ability of state banks to engage in
interstate branching has not been adopted by the South Carolina legislature.
Item 2. Properties.
The Company and the Greenwood Bank own approximately two acres of land
comprised of several parcels in Greenwood, South Carolina. The Company's
executive offices are located in the Greenwood Bank's 8,200 square foot
headquarters building at 109 Montague Street on land owned by the Greenwood
Bank. The Greenwood Bank also operates a branch location of approximately 2,000
square feet on Greenwood's Highway 72 by-pass. The land and building housing
this branch are owned by the Company and are leased to the Greenwood Bank. The
Company leases approximately two-thirds of an acre of land in Ninety Six, South
Carolina from John S. Drummond, a director of the Company and the Greenwood
Bank, and owns a 715 square foot building located on such leased land. The
Company has subleased the building and land in Ninety Six to the Greenwood Bank
for its branch location in that community. The Clemson Bank operates out of a
1,000 square foot building located on approximately one and a half acres of land
at 528 Old Greenville Highway in Clemson, South Carolina. The building is leased
by the Clemson Bank from an unaffiliated third-party. The land on which the
building is located is owned by the Company and is leased by it to the Clemson
Bank.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder
Matters.
There is presently no established public trading market for shares of
the Common Stock and trading activity in such shares has been limited. Price
information for the Common Stock is available from Edgar M. Norris Co., Inc.,
Interstate/Johnson Lane Corporation and J.C. Bradford & Co. with respect to
stock trades executed by such companies. There is no available composite index
of trading and pricing of the Common Stock. Occasionally, trading transactions
have been effected through the efforts of officers of the Company in matching
interested purchasers with shareholders who have expressed an interest in
selling their shares. Substantially all private trading has occurred without any
participation of officers of the Company other than to record the transfer in
the Company's shareholder records. Accordingly, management is not aware of the
prices at which all shares of Common Stock have traded. The range of share
prices in the limited number of arm's length Common Stock transactions known to
management are $8.50 to $9.00 in 1991, $7.50 to $10.00 in 1992, $8.00 to $10.00
in 1993, $10.25 to $10.50 in 1994 and $10.50 to $13.00 in 1995. These
transactions may not, however, be representative of all transactions in the
Common Stock and are not necessarily indicative of the price at which shares of
Common Stock could be bought or sold. Five percent Common Stock dividends were
paid by the Company to shareholders of record in September 1993, April 1994 and
April 1995. If an active trading market had existed for the Common Stock, such
stock dividends could have been expected to generate a proportionate decrease in
the market price of the Common Stock. In the absence of an active or otherwise
established trading market for the Common Stock, the actual effect, if any, of
these stock dividends on share prices is not determinable. As of December 31,
1995 there were approximately 1,153,060 shares of Common Stock outstanding held
by approximately 1,339 shareholders of record.
The Company has not declared or distributed any cash dividends to its
shareholders since its organization in 1988, and it is not likely that any cash
dividends will be declared in the foreseeable future. If declared, it is not
known what the amount of such dividends would be or whether such dividends would
continue for future periods. The Board of Directors of the Company intends to
follow a policy of retaining any earnings to provide funds to operate and expand
the businesses of the Company and the Banks for the foreseeable future. The
future dividend policy of the Company is subject to the discretion of the Board
of Directors and will depend upon a number of factors, including future
earnings, financial condition, cash need, and general business conditions. The
Company's ability to distribute
9
<PAGE>
cash dividends will depend entirely upon the Banks' abilities to distribute
dividends to the Company. As state-chartered banks, the Banks are subject to
legal limitations on the amount of dividends each is permitted to pay. In
particular, the Banks must receive the approval of the South Carolina
Commissioner of Banking prior to paying dividends to the Company. Furthermore,
neither of the Banks nor the Company may declare or pay a cash dividend on any
of their capital stock if they are insolvent or if the payment of the dividend
would render them insolvent or unable to pay their obligations as they become
due in the ordinary course of business. See "Item 1. Business. --
Government Supervision and Regulation -- Dividends."
Item 6. Selected Financial Data.
The following table sets forth certain selected financial data concerning
the Company. The selected financial data has been derived from the audited
consolidated financial statements of the Company which, have been audited by
Tourville, Simpson & Henderson, independent accountants. This information should
be read in conjunction with "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ------- -------- -------- ------
Income Statement Data: (Dollars in thousands, except for share amounts)
<S> <C> <C> <C> <C> <C>
Interest income........................................ $ 6,147 $ 4,340 $ 3,794 $ 3,315 $ 3,159
Interest expense....................................... 2,948 1,693 1,600 1,642 1,930
Net interest income.................................... 3,199 2,647 2,194 1,673 1,229
Provision for loan losses.............................. 122 14 80 227 173
Net interest income after provision for loan losses.... 3,087 2,633 2,114 1,446 1,056
Other income........................................... 777 514 776 631 447
Other expense.......................................... 3,069 2,261 2,121 1,787 1,462
Income tax expense..................................... 261 301 255 102 7
Income (loss) before extraordinary credit and
accounting change................................... 534 585 513 187 34
Extraordinary credit................................... -0- -0- -0- 102 7
Accounting change...................................... -0- -0- 47 -0- -0-
Net income (loss)...................................... 534 585 560 289 41
Weighted average common shares outstanding (2)......... 1,019,176 729,997 676,322 675,984 675,984
Net income (loss) per share (2)........................ $ .58 $ .88 $ .83 $ .43 $ .06
Balance Sheet Data:
Assets................................................. $ 96,100 $ 65,071 $ 58,970 $ 49,281 $ 39,302
Net loans.............................................. 62,532 49,985 44,067 33,993 28,080
Securities held for sale............................... 22,446 5,932 7,949 7,466 5,174
Investment securities.................................. -0- 1,684 -0- -0- -0-
Deposits:
Interest bearing.................................... 63,691 42,178 41,017 36,350 31,223
Non-interest bearing................................ 9,447 6,968 4,974 4,620 3,022
Stockholders equity (1)................................ 12,932 6,079 5,419 4,844 4,554
</TABLE>
- ---------------------
(1) Cash dividends have not been paid or declared since inception of the
Company in 1988.
(2) Restated for the effects of 5% Stock dividends in 1995, 1994 and 1993.
10
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis is intended to assist the reader in
understanding the financial condition and results of operations of the Company
and the Banks. This commentary should be read in conjunction with the
consolidated financial statements of the Company and the related notes and the
other statistical information set forth elsewhere in this Report on Form 10-K.
RESULTS OF OPERATIONS
1995 COMPARED TO 1994
For the year ended December 31,1995, net income was $533,868 or $.58 per share,
a decrease of $50,988 or $.26 per share when compared to 1994 net income. The
organization of the Clemson Bank was the main contributing factor for the
decrease in net income as the Company incurred one-time charges and increased
overhead which negatively impacted 1995 earnings. Non-interest expenses were
$3,069,283 in 1995 compared to $2,260,748 in 1994, an increase of $808,535 or
35.8%. The negative effects of the increase in other expenses were partially
offset by the $552,142, or 20.9%, increase in net interest income over the 1994
amount of $2,646,587. Volume increases in all major categories of
interest-earning assets and interest-bearing liabilities were the main factors
contributing to the improvement in net interest income.
1994 COMPARED TO 1993
Net income for the year ended December 31, 1994 was $584,856, or $.84 per share,
compared to $560,322, or $.79 per share, for the year ended December 31, 1993.
Among the more significant factors contributing to the improvement was an
increase in net interest income of $452,617, or 20.6%, mitigated in part by a
decrease in other operating income of $262,491, or 33.9%. Also, in 1993 the
Company recorded a benefit of $46,730 from a change in the method of accounting
for income taxes which did not recur in 1994.
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
The following table presents the percentage relationships of significant
components of the Company's average balance sheets for the last two fiscal
years.
11
<PAGE>
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY -continued
Balance Sheet Categories as a Percent of Average Total Assets
December 31,
1995 1994
-------- -------
Assets:
Interest earning assets
Federal funds sold 2.27% 1.78%
Deposits with other banks .27
Investment securities, net 18.42 12.88
Loans 70.26 76.42
------ ------
Total interest earning assets 90.95 91.35
------ ------
Cash and due from banks 3.52 3.31
Allowance for loan losses (.77) (.94)
Premises and equipment 2.92 2.90
Other assets 3.38 3.38
------ ------
Total assets 100.00% 100.00%
====== ======
Liabilities and stockholders' equity:
Interest bearing transaction accounts 7.84% 9.24%
Savings accounts 18.76 19.48
Certificates of deposit 38.38 38.80
Federal funds purchased and repurchase agreements 3.06 1.13
Notes payable .11
Federal Home Loan Bank advances 8.50 10.74
------ ------
Total interest bearing liabilities 76.65 79.39
------ ------
Non-interest bearing deposits 10.54 10.28
Accrued interest and other liabilities .82 .87
------ ------
Total liabilities 88.01 90.54
------ ------
Stockholders' equity 11.99 9.46
------ ------
Total liabilities and stockholders' equity 100.00% 100.00%
====== ======
NET INTEREST INCOME
Earnings are dependent, to a large degree, on net interest income. It represents
the difference between gross interest earned on earning assets, primarily loans
and investment securities, and interest incurred on deposits and borrowed funds.
Net interest income is affected by the interest rates earned or paid and by
volume changes in loans, investment securities, deposits and borrowed funds.
Net interest income for the year ended December 31, 1995 was $3,198,729 compared
to $2,646,587 in 1994, an increase of $552,142 or 20.9%. The interest rate
spread decreased to 3.72% in 1995 from 4.32% in 1994, and the net yield on
earning assets, commonly referred to as net interest margin, fell to 4.49% in
1995 compared to 4.78% in 1994. These key ratios were significantly affected by
strategies to improve liquidity and reduce the loans-to-funds and
loans-to-assets ratios recommended by the Board of Directors and to attract
customers dissatisfied with recent mergers and acquisitions of larger state and
regional banks which moved corporate headquarters and operations out of South
Carolina. This was accomplished by management's implementation of a competitive
pricing program on certificates of deposit and other interest bearing deposit
accounts.
The higher volume of earning assets, particularly real estate loans and
investment securities, contributed significantly to the improvements in net
interest income. Average interest earning assets in 1995 were approximately
$71,214,000, an increase of 28.7% over 1994. The increase in earning assets,
coupled with a 79 basis point increase in the yield
12
<PAGE>
on earning assets due to a higher overall interest rate environment, resulted in
a $1,807,345 improvement in gross interest income. The cost of interest bearing
liabilities increased from 3.52% in 1994 to 4.91% in 1995, a 139 basis point
increase. The increase in interest expense from $1,693,049 in 1994 to $2,948,252
in 1995, represented a 74% increase. Other factors contributing to growth in
interest earning assets, interest bearing liabilities, and net interest income
were the opening of a new branch in February 1995, the opening of the Clemson
Bank in June 1995, and trust activities which began in January 1995.
For the year ended December 31, 1994, net interest income was $2,646,587, an
increase of $452,617, or 20.6%, over the amount recorded in 1993. Interest
earned on real estate loans increased $567,865, or 29.3%, during 1994 and was a
result of both higher interest rates earned and a higher volume of real estate
loans in the portfolio. Although interest rates increased during 1994, increases
in the prime lending rate had not, at December 31, 1994, translated into
proportionate market pressure to increase interest rates paid on deposit
accounts. As a result, for the year ended December 31, 1994, the Company
benefitted from an 8 basis point overall reduction in the cost of funds from
that paid in 1993. When compared to the year ended December 31, 1993, net
interest spread increased 33 basis points to 4.32% and net yield on earning
assets increased 61 basis points to 4.78% during the year ended December 31,
1994.
COMPARATIVE AVERAGE BALANCES, YIELDS AND RATES
The following tables, "Comparative Average Balances, Yields and Rate" and
"Rate/Volume Analysis", provide information on specific factors affecting the
Company's net interest income.
<TABLE>
<CAPTION>
1995 1994
----------------------------------- -----------------------------------
Average Yield/ Average Yield/
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
------- -------- ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Federal funds sold $ 1,777 $ 107 6.02% $ 1,077 $ 42 3.90%
Deposits with other banks 161 6 3.73%
Investment securities, net 14,419 895 6.21% 7,801 382 4.90%
Loans(1) 55,018 5,146 9.35% 46,305 3,910 8.44%
------ ----- ------ -----
Total interest earning assets 71,214 6,148 8.63% 55,344 4,340 7.84%
------ ----- ------ -----
Cash and due from banks 2,758 2,006
Allowance for loan losses (601) (569)
Premises and equipment 2,288 1,760
Other assets 2,646 2,053
----- -----
Total assets $ 78,305 $ 60,594
====== ======
Liabilities and Stockholders' Equity:
Transaction accounts $ 6,136 113 1.84% $ 5,597 103 1.84%
Savings accounts 14,693 590 4.02% 11,805 324 2.74%
Certificates of deposit 30,053 1,719 5.72% 23,518 937 3.98%
Federal funds purchased and repos 2,393 137 5.73% 683 31 4.54%
Notes payable 86 8 9.30%
FHLB advances 6,655 381 5.73% 6,501 298 4.58%
----- --- ----- ---
Total interest bearing liabilities 60,016 2,948 4.91% 48,104 1,693 3.52%
------ ----- ----- -----
Non-interest bearing accounts 8,258 6,228
Accrued interest and other liabilities 643 530
Stockholders' equity 9,388 5,732
----- -----
Total liabilities and
stockholders' equity $ 78,305 $ 60,594
====== ======
Net interest income $3,200 $ 2,647
===== =====
Interest rate spread 3.72% 4.32%
==== ====
Net interest margin 4.49% 4.78%
==== ====
</TABLE>
(1) The effects of loans in non-accrual status and fees collected are not
significant to the computations.
13
<PAGE>
RATE/VOLUME ANALYSIS
The following table describes the extent to which changes in interest rates and
changes in the volume of earning assets and interest bearing liabilities have
affected the Company's interest income and interest expense during the periods
indicated. Information is provided on changes in each category attributable to
(a) change due to volume (change in volume multiplied by prior period rate), (b)
change due to rates (change in rates multiplied by prior period volume) and (c)
change in rate and volume (change in rate multiplied by the change in volume).
1995 compared to 1994
Due to increase (decrease) in
<TABLE>
<CAPTION>
(Dollars in thousands) Volume Rate Volume/Rate Total
<S> <C> <C> <C> <C>
Interest income:
Loans $ 736 $ 421 $ 79 $ 1,236
Deposits in other banks - - (6) (6)
Investment securities, net 324 102 87 513
Federal funds sold 27 23 15 65
-- -- -- --
Total interest income $ 1,087 $ 546 $ 175 $ 1,808
===== === === =====
Interest expense:
Interest bearing deposits $ 332 $ 585 $ 141 $ 1,058
Federal funds purchased and
repurchase agreements 78 8 20 106
Notes payable 8 8
FHLB advances 7 74 2 83
- -- - --
Total interest expense $ 417 $ 667 $ 171 $ 1,255
=== === ==== =====
Net interest income $ 670 $ (121) $ 4 $ 553
=== ==== = ===
</TABLE>
1994 compared to 1993
Due to increase (decrease) in
<TABLE>
<CAPTION>
(Dollars in thousands) Volume Rate Volume/Rate Total
<S> <C> <C> <C> <C>
Interest income:
Loans $ 560 $ 12 $ 6 $ 578
Deposits in other banks (13) (2) 1 (14)
Investment securities, net (19) 10 (9)
Federal funds sold (19) 15 (5) (9)
--- -- --- --
Total interest income $ 509 $ 35 $ 2 $ 546
=== == = ===
Interest expense:
Interest bearing deposits $ 57 $ (78) $ (4) $ (25)
Federal funds purchased and
repurchase agreements 6 8 3 17
FHLB advances 76 19 6 101
-- -- - ---
Total interest expense $ 139 $ (51) $ 5 $ 93
=== === = ==
Net interest income $ 370 $ 86 $ (3) $ 453
=== == == ===
</TABLE>
RATE SENSITIVITY
Interest rates paid on deposits and borrowed funds and interest rates earned on
loans and investments have generally followed the fluctuations in market rates
in 1995 and 1994. However, fluctuations in market interest rates do not
necessarily have a significant impact on net interest income, depending on the
Company's sensitivity position. A rate sensitive asset or liability is one that
can be repriced either up or down in interest rate within a certain time
interval. When a proper balance exists between rate sensitive assets and rate
sensitive liabilities, market interest rate fluctuations should not have a
significant impact on liquidity and earnings. The larger the imbalance, the
greater the
14
<PAGE>
interest rate risk assumed and the greater the positive or negative impact of
interest rate fluctuations on liquidity and earnings.
Interest rate sensitivity management is concerned with the management of both
the timing and the magnitude of repricing characteristics of interest earning
assets and interest bearing liabilities and is an important part of
asset/liability management. The objectives of interest rate sensitivity
management are to ensure the adequacy of net interest income and to control the
risks to net interest income associated with movements in interest rates. The
following table, "Interest Rate Sensitivity Analysis," indicates that, on a
cumulative basis through twelve months, rate sensitive liabilities exceeded rate
sensitive assets, resulting in a liability sensitive position at the end of 1995
of $19,226,000. For comparison purposes, at the end of 1994, the cumulative
negative gap was $21,584,000. For a bank with a liability sensitive position, or
negative gap, falling interest rates would generally be expected to have a
positive effect on net interest income and rising interest rates would generally
be expected to have the opposite effect.
The Company's management is responsible for asset/liability management. This
responsibility includes establishing various interest rate risk measures,
setting strategies to control interest rate risk, implementing tactics to
achieve objectives and assuring adequate and stable earnings. During 1995, the
Company directed its attention to improving liquidity and reducing the
loan-to-funds and loans-to-assets ratios without sacrificing earnings. This was
accomplished by competitively pricing deposit accounts while continuing its
lending emphasis toward variable and callable fixed rate terms, limiting the
amount of long-term fixed rate loans, and investing in quality debt securities,
particularly securities of U.S. government agencies and corporations. While this
strategy had the effect of decreasing the interest rate spread and net interest
margin, it also increased net interest income and improved the interest
sensitivity gap and gap ratio by shortening the repricing frequency of the
Company's assets. Other factors contributing to improvements in the ratios used
to measure rate sensitivity were the $2,479,095, or 35.6%, increase in
non-interest bearing demand deposits which were available to invest in interest
earning assets, and the overall increase in the interest rate environment, which
encouraged customers to open certificates of deposit maturing in more than one
year.
In 1996, management expects interest rates to remain moderately stable, with
only minor adjustments in the prime rate throughout the year. In a stable
interest rate environment, management expects to continue to emphasize variable
rate lending and renew borrowings from the FHLB as a method of managing the
negative gap position. Management also expects to actively attempt to decrease
the sensitivity position of its liabilities by lengthening their repricing
and/or maturity schedules. Management believes the likelihood of substantial
interest rate increases or decreases in the immediate future is not great.
The following table presents the Company's rate sensitivity at each of the time
intervals indicated as of December 31, 1995. The table may not be indicative of
the Company's rate sensitivity position at other points in time.
Interest Rate Sensitivity Analysis
<TABLE>
<CAPTION>
Less than 4-6 7-12 1-5 Over 5
3 months months months years years Total
<S> <C> <C> <C> <C> <C> <C>
Interest earning assets:
Federal funds sold $ 2,330 $ $ $ $ $2,330
Securities held-to-maturity
Securities available-for-sale 306 1,091 3,273 8,279 9,497 22,446
Loans 31,312 4,896 5,992 20,327 677 63,204
------ ----- ----- ------ --- ------
Total 33,948 5,987 9,265 28,606 10,174 87,980
====== ===== ===== ====== ====== ======
Interest bearing liabilities:
Demand deposit accounts 8,028 8,028
Savings accounts 17,419 17,419
Certificates of deposit 14,390 11,912 8,589 3,336 16 38,243
Federal funds purchased 3,034 3,034
FHLB advances 4,351 234 469 1,190 6,244
----- --- --- ----- == -----
Total 47,222 12,146 9,058 4,526 16 72,968
====== ====== ===== ===== == ======
Interest sensitivity gap (13,274) (6,159) 207
Cumulative interest sensitivity gap (13,274) (19,433) (19,226)
Gap ratio .72 .49 1.02
Cumulative gap ratio .72 .67 .72
</TABLE>
The above table reflects the balances of interest earning assets and interest
bearing liabilities at the earlier of their repricing or maturity dates.
Scheduled payment amounts of amortizing fixed rate loans are reflected at each
scheduled payment date. Variable rate amortizing loans reflect scheduled
repayments at each scheduled payment date until the
15
<PAGE>
loan may be repriced contractually; the unamortized balance is reflected at that
point. Debt securities are reflected at each instrument's ultimate maturity date
except for the mortgage-backed security which will be repriced in October 1996.
Overnight federal funds are reflected at the earliest pricing interval due to
the immediately available nature of the instruments. Interest bearing
liabilities with no contractual maturity, such as savings deposits and interest
bearing transaction accounts, are reflected in the earliest repricing period due
to contractual arrangements which give the Company the opportunity to vary the
rates paid on those deposits within a thirty-day or shorter period. Fixed rate
time deposits, principally certificates of deposit, are reflected at their
contractual maturity date. Variable rate time deposits are reflected at the
earlier of their next repricing or maturity date.
PROVISION FOR LOAN LOSSES
The provision for loan losses represents charges to earnings based upon
management's evaluation of specific loans and general economic conditions and
trends in the marketplace. The 1995 and 1994 provisions for loan losses and
their related effect of increasing the allowance for loan losses is related to
the improved quality of the loan portfolio, favorable net chargeoff experience
and a favorable trend in customer delinquency and default. Please refer to the
section "Loan Portfolio" for a discussion of management's evaluation of the
adequacy of the allowances for loan losses. In 1995 and 1994, the provisions for
loan losses were $112,000 and $14,000, respectively.
Management is of the opinion that the banking industry and its regulators may
have, in some cases, overreacted to the crisis in the thrift industry through
establishing industry-wide norms for the allowance for loan losses at
unnecessarily high levels. Management has concluded that the quality of its loan
underwriting process, its loan monitoring and administration mechanisms, and the
Bank's historical chargeoff experience warrant reducing the level of its
allowance for loan losses as a percentage of loans outstanding. Management will
maintain the target percentage between 1.05% and 1.15%, adjusted for changes in
the economy, loan mix, and other relevant factors. The allowance for loan losses
as a percentage of outstanding loans was 1.06% as of December 31, 1995 compared
to 1.16% as of December 31, 1994.
OTHER INCOME
For the year ended December 31, 1995, other income was $777,242 compared to
$513,592 for the year ended December 31, 1994. The $263,650, or 51.3%, increase
was significantly affected by the $87,550 increase in service charges on deposit
accounts resulting from deposit growth from the new branch, the opening of the
Clemson Bank, and pricing strategies discussed earlier. The amount of loss
recognized from the sale of securities available-for-sale was $21,527 in 1995
compared to $78,723 in 1994, resulting in a $57,196 increase in income before
taxes. The Company has an investment holding strategy whereby securities are
sold when approximately one year remains until maturity. During periods of
rising interest rates, this investment strategy results in losses on the sales
of securities. However, this negative impact is mitigated, to some extent, by
the reinvestment of sales proceeds in investments with higher interest rates.
The Greenwood Bank also established a discount brokerage department in 1995
which generated $49,286 in investment fees income. Other categories of
noninterest income were positively affected by Company growth.
For the year ended December 31, 1994, other income was $513,592, a decrease of
$262,491, or 33.9%, from $776,083 recognized during the previous year. This
decrease is primarily attributable to a decrease of $222,605 in the amount of
fees earned on the sale of residential mortgage loans. During 1993, the
Company's marketplace experienced an extraordinary amount of mortgage
refinancings, based primarily on record low residential lending rates. In early
1994, rates began to rise and continued to do so through the third quarter of
1994. By the end of 1994, refinancing activity had substantially ceased. Also
contributing significantly to the decrease in other operating income were losses
on the sales of investment securities available-for-sale. In 1994, the Company
realized losses aggregating $78,723, whereas in 1993 the Company realized net
gains of $22,327. Service charges on deposit accounts increased during 1994 by
$34,329 over 1993. This increase is due primarily due to volume increases in the
deposit accounts.
OTHER EXPENSES
In 1995, non-interest expense increased 35.8% to $3,069,283 from $2,260,748 in
1994. The main component of noninterest expense is salaries and employee
benefits which increased $303,667, or 27.4%, when compared to the 1994 amount of
$1,107,692. The $170,987 cost of salaries for the Clemson Bank, the addition of
employees to manage the trust department and discount brokerage department, and
cost of living salary increases contributed to the increase in salaries and
employee benefits. Net occupancy expense was $422,032 and $237,251 for the years
ended December 31, 1995 and 1994, respectively. The $184,781, or 77.9%, increase
was primarily due to an increase in
16
<PAGE>
depreciation expense resulting from additions to premises and equipment totaling
$996,716 in preparation for opening the new branch in Ninety Six, South Carolina
and the Clemson Bank. Categories of other operating expenses which significantly
contributed to the increase in non-interest expense were as follows: banking and
ATM supplies, $90,389 increase; computer supplies, $73,346 increase; and postage
and freight, $39,449 increase. The increase in professional fees and other
nonrecurring fees from the organization of the Clemson Bank and increases due to
Company growth also contributed to the increase in other operating expenses.
The industry wide reduction in the rate charged for federal deposit insurance
had a $49,590 positive impact on other operating expenses. Management does not
expect the assessment for 1996 to exceed $5,000.
For the year ended December 31, 1994, other expense increased $139,445, or 6.6%,
to $2,260,748, when compared to $2,121,303 for the year ended December 31, 1993.
Salaries and benefits increased $206,604, or 22.9%, when compared to the 1993
amount of $901,088. During 1994, the Bank hired an entry level management
employee in a loan administration capacity. Also, four persons who operate the
new branch in Ninety Six, South Carolina were added. In 1994, bonuses to
employees and the management group were earned based on the achievement of
certain performance criteria of the banking subsidiary. This plan was in effect
in 1993 only during the fourth quarter. Net occupancy expense decreased modestly
in 1994 to $237,251 and was a result of fully depreciating certain premises and
equipment purchased during 1989, the Bank's first year of operations. In
recognition of the decrease in mortgage loan origination fees, discussed in the
previous section "Other Income", certain employees assigned to the mortgage loan
department were either assigned additional duties in other areas or left the
employ of the Company. As a result, the expenses of the mortgage loan department
decreased $55,837, or 58.1%, from the prior year amount.
INCOME TAXES
The Company's income tax expense attributable to operations for 1995 was
$260,820, a decrease of $39,755 from 1994 expense of $300,575.
The Company files a consolidated federal income tax return. Accordingly, the
Company was able to benefit from the $222,336 pretax loss recorded by the
Clemson Bank in 1995. Income tax expense (benefit) is allocated to the
subsidiaries based on their pro-rata share of the total income tax expense
(benefit). In 1994, the Company's income tax expense was $300,575, an increase
of $45,262, or 17.7%, over the 1993 provision. Changes in the income tax expense
results primarily from changes in the income before taxes. The Company's
effective tax rates for the years ended December 31, 1995, 1994 and 1993 were
32.8% , 33.9% and 33.2%, respectively.
Effective January 1, 1993, the Company adopted the provisions of Financial
Accounting Standards Board Statement No. 109 "Accounting for Income Taxes"(FASB
109). In adopting the new standard, the Company recorded a benefit of $46,730.
At the date of adoption and at December 31, 1995, 1994 and 1993, management
considered whether a valuation allowance was necessary. Since the total tax
payments made during the carryback period and management's budgeted expectations
of continued profitable operations in the future years substantially exceeded
the net deferred tax asset, management concluded that it was more likely than
not the entire deferred tax asset would be realized and a valuation allowance
was not required. Accordingly, at the date of adoption and December 31, 1995,
1994 and 1993, the valuation allowance account is reported as $0.
LIQUIDITY
Liquidity is the ability of the Company to meet its cash obligations through
asset maturities or acquisition of liabilities. The Company manages liquidity at
the banking subsidiary level. Adequate liquidity is necessary to meet the
requirements of customers for loans and deposit withdrawals in the most timely
and economical manner. Some liquidity is ensured by maintaining assets which may
be converted into cash at minimal cost, such as amounts due from banks and
federal funds sold. Some liquidity is provided from securities available for
sale, particularly those maturing within two years. In addition, liquidity is
provided from maturing loans. However, the most manageable source of liquidity
is liabilities, with the primary focus of liquidity management being on the
ability to obtain deposits within the Company's market areas. Core deposits,
which include all deposits except certificates of deposit in excess of $100,000,
are a relatively stable source of liquidity. Certificates of deposit in excess
of $100,000 are a less stable source of liquidity because they are more
sensitive to interest rate changes than other deposit accounts. Management has
available to it additional sources of liquidity which include federal funds
purchased from correspondent banks and further advances from the Federal Home
Loan Bank. In order to maximize earnings, the Company has historically managed
liquidity at the lower range of its peers, and maintains credit agreements with
other financial institutions to meet short-term liquidity requirements. However
during 1995, the Company implemented strategies to strengthen
17
<PAGE>
liquidity by decreasing the loan-to-funds and loan-to-assets ratios and by
expanding the Company's portfolio of securities available-for-sale, which is a
more liquid investment option than loans. Unused line of credit agreements
totaled $9,250,000 at December 31, 1995. Significant liquidity is also available
from the Federal Home Loan Bank under agreements in place with the agency. At
December 31, 1995, management believes the Company's liquidity sources
adequately meet its operational needs.
The banking subsidiaries are required by regulation to maintain an average cash
reserve balance computed as a percentage of deposits. The requirement is met by
vault and teller cash, and amounts due from the Federal Reserve Bank which are
reported as cash equivalents on the Company's balance sheet.
As a bank holding company, the Company's ability to pay cash dividends and meet
its cash obligations is primarily dependent upon the earnings of the banking
subsidiaries. Banking subsidiary dividends are subject to the prior approval of
the South Carolina Commissioner of Banking and are paid from undivided profits.
At December 31, 1995, the Company does not plan to pay cash dividends for the
foreseeable future. The Company has paid stock dividends in the past and may do
so in the future.
CAPITAL RESOURCES
The Company uses several ratios as indicators of capital strength. The most
commonly used measure is average common equity to average assets which was
11.99% for 1995 compared to 9.49% for 1994. The change from 1994 resulted from
equity growth from the $6,009,860 net proceeds from the stock offering, stock
sales to the employee stock ownership plan and 1995 net income outpacing the
growth in assets.
The Federal Reserve Board and bank regulatory agencies require bank holding
companies and financial institutions to maintain capital at adequate levels
based on a percentage of assets and off-balance sheet exposures, adjusted for
risk weights ranging from 0% to 100%. Under the risk-based standard, capital is
classified into two tiers. Tier I capital of the Company consists of common
stockholders' equity, excluding the unrealized gain (loss) on securities
available-for-sale, minus certain intangible assets. Tier II capital consists of
general reserve for loan losses subject to certain limitations. A bank holding
company's qualifying capital base for purposes of its risk-based capital ratio
consists of the sum of its Tier I and Tier II capital. The regulatory minimum
requirements are 4% for Tier I and 8% for total risk-based capital.
The holding company and banking subsidiaries are also required to maintain
capital at a minimum level based on total assets, which is known as the leverage
ratio. Only the strongest bank holding companies and banks are allowed to
maintain capital at the minimum requirement. All others are subject to
maintaining ratios 100 to 200 basis points above the minimum.
At December 31, 1995, the Company's and banking subsidiaries risk-based capital
and regulatory minimums are as follows:
<TABLE>
<CAPTION>
Tier I Total Capital Leverage
<S> <C> <C> <C>
Community Capital Corporation 14.79% 15.57% 14.09%
Greenwood Bank & Trust 10.56% 11.60% 8.13%
Clemson Bank & Trust 51.69% 52.54% 33.88%
Minimum Requirement 4.00% 8.00% 3.00%
</TABLE>
Management anticipates relocating the Company's operations and bookkeeping
departments from its banking centers during 1996. In anticipation of this, the
Company purchased a commercial lot and building on January 29, 1996 from an
unrelated party for approximately $450,000. Management expects an additional
$70,000 to $90,000 of costs to be incurred for renovations.
Management also plans to begin construction on a permanent facility for the
Clemson Bank during 1996. The costs of all premises and equipment are expected
to approximate $1,300,000, not to exceed $1,500,000. As of December 31, 1995,
the Company was not committed to any party for expenditures relating to the
construction of the new Bank.
18
<PAGE>
IMPACT OF INFLATION AND CHANGING PRICES
The consolidated financial statements and related financial data presented
herein have been prepared in accordance with generally accepted accounting
principles which require the measurement of financial position and operating
results in terms of historical dollars, without considering changes in relative
purchasing power over time due to inflation. Unlike most industrial companies,
virtually all of the assets and the liabilities of a financial institution are
monetary in nature. As a result, interest rates generally have a more
significant impact on a financial institution's performance than does the effect
of inflation.
While the effect of inflation on a bank is normally not as significant as its
influence on those businesses that have large investments in plant and
inventories, it does have an effect. Interest rates generally increase as the
rate of inflation increases, but the magnitude of the change in rates may not be
the same. While interest rates have traditionally moved with inflation, the
effect on income is diminished because both interest earned on assets and
interest paid on liabilities vary directly with each other. Also, general
increases in the price of goods and services will result in increased operating
expenses.
PORTFOLIO OF INVESTMENT SECURITIES
The following tables summarize the carrying values of securities classified as
available-for-sale and held-to-maturity by the Company as of the indicated
dates, and the maturities and weighted average yields at December 31, 1995.
Yields on tax-exempt securities are shown at their nominal rates and have not
been tax-effected.
Investment Securities Portfolio Composition
<TABLE>
<CAPTION>
Available-for-Sale Held-to-Maturity
------------------------------------- ----------------
1995 1994 1994
--------------- --------------- ------------
<S> <C> <C> <C>
U.S. Treasury Securities $ 5,951,516 $ 4,888,384 $
Securities of other U.S. Government
agencies and corporations 11,546,355 1,044,029
Obligations of state and political subdivisions 4,550,252 1,628,334
Mortgage-backed securities 397,802 _________ _________
-------
$ 22,445,925 $ 5,932,413 $ 1,628,334
========== ========= =========
</TABLE>
Maturities of Securities and Average Yields
<TABLE>
<CAPTION>
Carrying
U.S. Treasury and U.S. Government Agencies Amount Yield
------------- -------------
<S> <C> <C>
Due in one year or less $ 3,875,641 6.37%
Due after one year but within five years 6,643,779 6.50%
Due after five years but within ten years 6,978,451 7.19%
---------
Total 17,497,871 6.75%
----------
Obligations of States and Local Governments
Due in one year or less 396,268 5.48%
Due after one year but within five years 1,635,533 6.21%
Due after five years but within ten years 321,645 4.92%
Due after ten years 2,196,806 5.84%
---------
Total 4,550,252 5.87%
---------
Total Securities
Due in one year or less 4,271,909 6.29%
Due after one year but within five years 8,279,312 6.44%
Due after five years but within ten years 7,300,096 7.09%
Due after ten years 2,196,806 5.84%
Mortgage-backed securities 397,802 6.88%
-------
Total securities $ 22,445,925 6.70%
==========
</TABLE>
19
<PAGE>
LOAN PORTFOLIO
Credit Risk Management
Credit risk entails both general risk, which is inherent in the process of
lending, and risk that is specific to individual borrowers. The management of
credit risk involves both the process of loan underwriting and loan
administration. The Company manages credit risk through a strategy of making
loans within the Company's primary marketplace and within the Company's limits
of expertise. Although management seeks to avoid concentrations of credit by
loan type or industry through diversification, a substantial portion of the
borrowers' ability to honor the terms of their loans is dependent on the
business and economic conditions in Greenwood and Pickens Counties and the
surrounding areas comprising the Company's marketplace. Additionally, since real
estate is considered by the Company as the most desirable nonmonetary
collateral, a significant portion of the banking subsidiaries loans are
collateralized by real estate. Even though a substantial portion of the
Company's loans are collateralized by real estate, the cash flow of the borrower
or the business enterprise is generally considered as the primary source of
repayment. Generally, the value of real estate is not considered by the Company
as the primary source of repayment for performing loans. The Company also seeks
to limit total exposure to individual and affiliated borrowers. The Company
manages risk specific to individual borrowers through the loan underwriting
process and through an ongoing analysis of the borrower's ability to service the
debt as well as the value of the pledged collateral.
The Company's loan officers and loan administration staff are charged with
monitoring the Company's loan portfolio and identifying changes in the economy
or in a borrower's circumstances which may affect the ability to repay the debt
or the value of the pledged collateral. In order to assess and monitor the
degree of risk in the Company's loan portfolio, several credit risk
identification and monitoring processes are utilized. The Company assesses
credit risk initially through the assignment of a risk grade to each loan based
upon an assessment of the borrower's financial capacity to service the debt and
the presence and value of any collateral. Credit grading is subject to
adjustment during the life of the loan. The Company's Compliance Officer and an
external reviewer both perform periodic independent reviews of the loan
portfolio. Finally, the senior loan administration official administers an
internal review mechanism in which adversely graded loans are monitored more
closely and become the basis for analysis of the adequacy of the loan loss
reserve.
Lending Activities
The Banks extend credit primarily to consumers and small businesses in Greenwood
and Clemson and, to a limited extent, customers in contiguous counties.
The Company's service area is mixed in nature. The home office and branch
offices of the Greenwood Bank are located in Greenwood County, South Carolina.
The economy of Greenwood is a regional business center whose economy contains
elements of medium and light manufacturing, higher education, regional
healthcare, and distribution facilities. The Clemson Bank office is a temporary
facility located in Clemson, South Carolina. Due to its proximity to a major
interstate and Clemson University, a state-supported university, management
expects the area to remain stable with continued growth. Outside the
incorporated city limits of Greenwood and Clemson, the economy includes
manufacturing, agriculture, timber, and recreational activities. No particular
category or segment of the economies previously described are expected to grow
or contract disproportionately in 1996.
Loan Portfolio Description
The Company believes the loan portfolio is adequately diversified. There are no
foreign loans and agricultural lending is limited. Real estate loans are
primarily construction loans and loans secured by real estate. Commercial loans
are spread across a variety of industries with no significant concentrations
existing by industry or customer type. As of December 31, 1995, the ten largest
loans, including lines of credit, totaled $5,263,687, or 8.3% of outstanding
loans.
In January 1995, the Company changed its target ratio of loans to funds from 85%
to 80% and of loans to assets from 75% to 70%. Although loan growth remains
strong as evidenced by an increase in the loan portfolio for 1995 and 1994 of
$12,638,706 and $5,930,943, respectively, the deposit base has outpaced the
growth in loans. At December 31, 1995 and 1994, the loan-to-borrowed funds ratio
was 76.7% and 86.5%, respectively, and the loan-to-assets ratio was 65.8% and
77.7%, respectively. The loan to total borrowed money ratio is used to monitor
the financial institution's potential profitability and efficiency of asset
distribution and utilization. Generally, a higher loan to borrowings ratio is
indicative of higher interest income since loans yield a higher return than
alternative investment vehicles.
20
<PAGE>
In 1995 and 1994, the Banks earned fees from the origination of residential
mortgages sold on the secondary market totaling $114,596 and $113,065,
respectively. The Banks accept residential mortgage loan applications, qualifies
potential borrowers to standards established by investors and funds loans of
qualified borrowers. Funded loans are held temporarily and sold to investors
under the terms of pre-existing commitments. The Banks do not fund or sell
residential mortgages having market or interest rate risk. The Banks do not
service residential mortgages for the benefit of others.
Loan Portfolio Composition
December 31,
1995 1994
------------- --------------
Commercial and agricultural $ 13,349,226 $ 12,231,392
Real estate 38,295,636 29,386,734
Home equity 6,593,037 4,795,981
Consumer and other 4,666,890 4,014,176
Residential mortgages held for sale 299,000 136,800
------- -------
$ 63,203,789 $ 50,565,083
========== ==========
Commercial and agricultural loans increased $1,117,834, or 9.1%, in 1995 to
$13,349,226. The increase was generally attributable to the addition of a new
lending officer in 1993 who successfully obtained new business relationships
from competitors. Management also successfully expanded existing customer loan
volume in 1995. Commercial and agricultural loans are made on either a secured
or unsecured basis. Collateral for commercial loans may consist of receivables,
inventories or equipment. Unsecured loans are generally for short-term periods
to borrowers evaluated as having satisfactory net worth and repayment history.
Real estate loans include construction loans and any loan collateralized by real
estate. Real estate loans increased $8,908,902, or 30.3% in 1995 to $38,295,636.
The increase in real estate lending was attributable to the addition of the
Clemson Bank, which had $4,277,399 of real estate loans as of December 31, 1995,
increases in commercial real estate volume and increases in residential
construction lending. In 1993, several first home residential subdivisions were
started in the Greenwood marketplace and influenced the Greenwood Bank's 1994
construction lending activity. This growth continued in 1995 and is expected to
continue throughout the next year. The Banks were also able to compete favorably
for residential mortgage loans with other financial institutions by offering
fixed rate products having three and five year call provisions. Generally, the
Banks limit loan-to-value ratios to 80%. Currently, loans for the construction
of homes having no contract for sale are available to only the most credit
worthy contractors. Residential real estate loans consist of first and second
mortgages on single or multifamily residential dwellings.
The origination of residential mortgages held for sale continued in 1995;
however, the volume has not approached the levels attained during the
refinancing boom in 1992 and 1993. The origination of residential mortgages held
for sale is considered to be a component of the Company's overall marketing
strategy and not a primary segment of business activity in future periods.
Maturities and Sensitivity of Loans to Changes in Interest Rates:
The following table summarizes the loan maturity distribution, by type, at
December 31, 1995 and related interest rate characteristics:
<TABLE>
<CAPTION>
Less One After
than one year to five years five years Total
<S> <C> <C> <C> <C>
Commercial loans $ 9,869,045 $ 3,480,181 $ $ 13,349,226
Real estate loans 18,787,898 18,550,005 957,732 38,295,636
Home equity loans 6,593,037 6,593,037
Consumer and other loans 3,342,534 1,311,532 12,825 4,666,890
Residential mortgages held for sale 299,000 299,000
------- ------- ------- -------
$ 38,891,514 $ 23,341,718 $ 970,557 $ 63,203,789
========== ========== ======= ==========
Predetermined rate
maturing greater than one year $ 20,583,193 $ 970,557 $ 21,553,750
========== ======= ==========
Variable rate or maturing
within one year $ 38,891,514 $ 2,758,525 $ $ 41,650,039
========== ========= ==========
</TABLE>
21
<PAGE>
Potential Problem Loans
The Company adopted Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for the Impairment of a Loan", and Statement of
Financial Accounting Standards No. 118, "Accounting by Creditors for Impairment
of a Loan - Income Recognition and Disclosures" as of January 1, 1995. These
statements identify how creditors should measure and account for impaired loans.
Under SFAS 114 and 118, impairment of loans should be measured at the present
value of the expected future cash flows discounted at the loan's effective
interest rate or at fair value of the collateral if the loan is collateral
dependent.
Loans are defined as impaired when "based on current information and events, it
is probable that a creditor will be unable to collect all amounts due according
to the contractual terms of the loan agreement." All loans are subject to this
criteria except for: "smaller-balance homogeneous loans that are collectively
evaluated for impairment" and loans "measured at fair value or at the lower of
cost or fair value." The Company considers its consumer installment portfolio,
credit cards and home equity lines as meeting this criteria. Therefore, the real
estate and commercial loan portfolios are primarily affected by these
Statements.
The Company identifies impaired loans through its normal internal loan review
process. Loans on the Company's problems loan watch list are considered
potentially impaired loans. These loans are evaluated in determining whether all
outstanding principal and interest are expected to be collected. Loans are not
considered impaired if a minimal delay occurs and all amounts due including
accrued interest at the contractual interest rate for the period of delay are
expected to be collected.
The Company relies on its internal loan review process to identify loans on
which full collection of principal or interest under the original terms may be
questionable. Criticized and classified loans have not historically resulted in
loss of principal or interest.
At December 31, 1995, the Company did not consider the affects of loan
impairment, if any, to be material to the consolidated financial statements and
has not established a valuation account. The Company had discontinued the
accrual of interest on loans totaling $13,213 and $3,076 as of December 31, 1995
and 1994, respectively.
At December 31, 1995 and 1994, the Company's internal review mechanism had
identified $2,947,072 and $4,019,549, respectively, of criticized loans which
included $1,894,397 and $2,144,233, respectively, of classified loans. The above
listed loans in nonaccrual status were included. The results of this internal
review process is the primary determining factor in management's assessment of
the adequacy of the allowance for loan losses. There were no loans in the
portfolio excluded from the internal review process. Please refer to the section
"Summary of Loan Loss Experience." Except for the information used by management
in its internal review process, management is not aware of any further
information about any material credits which causes management to have serious
doubts as to the ability of borrowers' ability to comply with the loan repayment
terms.
Other Real Estate Owned
At December 31, 1995, the Company had no Other Real Estate Owned recorded, and
there were no loans which management considered in-substance foreclosures of
property.
At December 31, 1994, Other Real Estate Owned consisted of a single piece of
residential rental property having a fair value of $19,457. Management does not
anticipate significant expenses to be associated with holding or disposing of
the property. There are no loans at December 31, 1994 which management considers
in-substance foreclosures of property.
22
<PAGE>
Summary of Loan Loss Experience
<TABLE>
<CAPTION>
1995 1994
--------------- -------------
<S> <C> <C>
Net loans outstanding at the end of year $ 62,532,451 $ 49,984,555
========== ==========
Average amount of loans outstanding $ 54,417,254 $ 45,736,180
========== ==========
Allowance for loan losses
Balance, beginning of year 580,528 566,810
Loans charged off:
Commercial 17,127
Real estate
Consumer 4,348 4,714
----- -----
Total loans charged off 21,475 4,714
------ -----
Recoveries of loans previously charged off 285 4,432
--- -----
Net charge offs 21,190 282
Provision charged to operations 112,000 14,000
------- ------
Balance, end of year $ 671,338 $ 580,528
======= =======
Ratios:
Net charge-offs to average loans outstanding .03% (1)
Net charge-offs to loans at end of year .03% (1)
Allowance for loan losses to average loans 1.22% 1.27%
Allowance for loan losses to loans, end of year 1.07% 1.16%
Net charge-offs to allowance for loan losses 3.16% (1)
Net charge-offs to provisions to loan losses 18.92% .02%
</TABLE>
(1) - actual percentage is less than 1 hundredth of one percent
The following table presents management's allocation of the allowance for loan
losses. The allocation is based upon estimates and selective judgment and is not
necessarily indicative of the specific amounts or loan categories in which
losses may ultimately occur.
<TABLE>
<CAPTION>
1995 1994
----------------------------- ---------------------------
Reserve % of Reserve % of
Amount Loans Amount Loans
<S> <C> <C> <C> <C>
Commercial and agricultural loans $ 315,000 21.1% $272,000 24.2%
Real estate loans 242,000 60.6% 209,000 58.2%
Consumer and other loans 114,338 7.4% 99,528 7.9%
Home equity loans 10.4% 9.5%
Residential mortgages held for sale .5% .2%
Unallocated N/A N/A
------- ----- ------- ----
$ 671,338 100.0% $ 580,528 100.0%
======= ===== ======= =====
</TABLE>
The reserve for loan losses is maintained at a level determined by management to
be adequate to provide for probable losses inherent in the loan portfolio
including commitments to extend credit. The reserve is maintained through
provision for loan losses which is a charge to operations. The potential for
loss in the portfolio reflects the risks and uncertainties inherent in the
extension of credit.
The Company's provision and allowance for loan losses is subjective in nature
and relies on judgments and assumptions of risk elements in the portfolio,
future economic conditions and other factors affecting borrowers. The process
includes identification and analysis of loss potential in various portfolio
segments utilizing a credit risk grading process and specific reviews and
evaluations of significant problem credits. In addition, management monitors the
overall portfolio quality through observable trends in delinquency, chargeoffs,
and general and economic conditions in the service area. Management is not aware
of any trends, material risks or uncertainties affecting the loan portfolio nor
is management aware of any information about any significant borrowers which
causes serious doubts as to the ability of the borrower to comply with the loan
repayment terms. It should be noted however that no assurances can
23
<PAGE>
be made that future charges to the allowance for loan losses or provisions for
loan losses may not be significant to a particular accounting period. At
December 31, 1995 and 1994, management considers the allowances for loan losses
adequate based on their judgments, evaluations and analysis of the loan
portfolio.
AVERAGE DAILY DEPOSITS
The following table summarizes the Bank's average daily deposits for the years
ended December 31, 1995 and 1994. The 1995 totals include certificates of
deposit over $100,000 which at December 31, 1995 totaled $12,082,348. Of this
total, $5,415,039 had scheduled maturities within three months, $4,509,270
within three to six months, $1,363,039 within six to twelve months and $795,000
maturing thereafter.
<TABLE>
<CAPTION>
1995 1994
------------------------- -----------------------------
Average Average
Amount Rate Paid Amount Rate Paid
<S> <C> <C> <C> <C>
Non-interest bearing demand $ 8,258,045 $6,227,199
Interest bearing transaction accounts 6,135,859 1.84% 5,597,266 1.84%
Savings accounts 14,692,883 4.02% 11,805,003 4.02%
Certificates of deposit 30,053,453 5.72% 23,518,216 5.72%
---------- ----------
$ 59,140,240 $ 47,147,684
========== ==========
</TABLE>
RETURN ON EQUITY AND ASSETS
The following table shows the return on average assets (net income divided by
average total assets), return on average equity (net income divided by average
equity), and equity to assets ratio (average equity divided by average total
assets) for the period indicated. Since its inception, the Company has not paid
cash dividends.
1995 1994
----------- --------
Return on average assets .68% .97%
Return on average equity 5.69% 10.17%
Equity assets ratio 11.99% 9.49%
SHORT-TERM BORROWINGS
At December 31, 1995 and 1994, the Banks had purchased federal funds and
securities sold under agreements to repurchase totaling $3,034,000 and
$3,386,000, respectively. During 1995 and 1994, the maximum amounts outstanding
at any month-end was $5,900,000 and $3,386,000, respectively. The average
interest rates paid on these short-term borrowings were 5.73% and 4.54% in 1995
and 1994, respectively. The weighted average interest rate being paid on federal
funds at December 31, 1995 and 1994 was 5.55% and 5.98%, respectively.
ACCOUNTING AND FINANCIAL REPORTING ISSUES
Newly-Issued Accounting Standards - In October 1995, the Financial Accounting
Standards Board issued FASB statement No. 123, "Accounting for Stock-Based
Compensation," effective for transactions entered into in fiscal years that
begin after December 15, 1995. FASB 123 recommends that companies account for
stock compensation on a fair value based method which requires compensation cost
to be measured at the grant date based on the value of the award and to be
recognized over the service period. As an alternative, companies may continue to
record compensation cost based on the excess, if any, of the quoted market price
of the stock at the grant date (or other measurement date) over the amount an
employee must pay to acquire the stock. However, if a company elects this
method, it must include in the financial statements certain disclosures which
reflect pro forma amounts as if the fair value method had been used.
24
<PAGE>
Management has not yet determined the method that will be used to account for
future grants under the Company's stock option plans. The impact for 1996 is
expected to be immaterial to the financial statements, and the effects on future
years has not yet been determined.
FORWARD LOOKING AND TREND INFORMATION
As expected, the opening of the Clemson Bank had a negative impact on 1995 net
income. Typically, new banks incur substantial initial expenses and may not be
profitable for several years after the commencement of business activities.
Management expects the operating activities of the Clemson Bank to continue
having a negative impact on earnings in future periods until asset and deposit
growth has matured to a level that net interest income and other income will
support the overhead expenses.
Management has positioned the Company for growth through the issuance of 520,422
shares of stock in 1995 resulting in net proceeds of $6,009,860. The Company's
strong capital base will allow management to pursue opportunities to acquire
other branches and banks and expand the Company's market area. Management also
expects continued growth in deposits from customer dissatisfaction with the "big
bank" philosophy as the operations of former South Carolina banks are moved out
of state. Management anticipates competing for these deposits by offering
competitive rates and funding quality loans, particularly real estate and
commercial loans.
Item 8. Financial Statements and Supplementary Data.
The financial statements identified in Item 14 of this Report on Form
10-K are included herein under the caption for such Items.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Information called for by PART III (Items 10, 11, 12 and 13) of this
Report on Form 10-K has been omitted as the Company intends to file with the
Securities and Exchange Commission not later than 120 days after the close of
its fiscal year ended December 31, 1995 a definitive Proxy Statement pursuant to
Regulation 14A promulgated under the Securities Exchange Act of 1934. Such
information will be set forth in such Proxy Statement.
Item 10. Directors and Executive Officers of the Company.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial
Owners and Management.
Item 13. Certain Relationships and Related Transactions.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1)-(2) Financial Statements and Schedules:
The consolidated financial statements and schedules of the Company
identified in the accompanying Index to Financial Statements at page
F-1 herein are filed as part of this Report on Form 10-K.
25
<PAGE>
(3) Exhibits:
The accompanying Exhibit Index sets forth the exhibits that are filed
as part of this Report on Form 10-K.
(b) Reports on Form 8-K:
None.
26
<PAGE>
COMMUNITY CAPITAL CORPORATION
AND SUBSIDIARY
Financial Statements
Years ended December 31, 1995, 1994, and 1993
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Tourville, Simpson & Henderson,
Independent Auditors.................................................................................F-2
Consolidated Balance Sheets as of
December 31, 1995 and 1994...........................................................................F-3
Consolidated Statements of Operations for the years ended
December 31, 1995, 1994 and 1993.....................................................................F-4
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1995, 1994, and 1993....................................................................F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994, and 1993....................................................................F-6
Notes to Consolidated Financial Statements......................................................................F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Community Capital Corporation
Greenwood, South Carolina
We have audited the accompanying consolidated balance sheets of Community
Capital Corporation and Subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Community Capital
Corporation and Subsidiaries as of December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, the Company
changed its method of accounting for investment securities on January 1, 1994.
In 1993, the Company changed its method of accounting for income taxes.
/s/ TOURVILLE, SIMPSON & HENDERSON
Tourville, Simpson & Henderson
Columbia, South Carolina
January 19, 1996
[ORIGINAL SIGNED OPINION ON TOURVILLE, SIMPSON & HENDERSON LETTERHEAD IS ON FILE
WITH COMMUNITY CAPITAL CORPORATION]
F-2
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
--------------- ---------
Cash and cash equivalents:
<S> <C> <C>
Cash and due from banks $ 2,949,289 $ 3,038,958
Federal funds sold 2,330,000 -
-------------- -------------
5,279,289 3,038,958
Securities available-for-sale 22,445,925 5,932,413
Securities held-to-maturity (estimated market value of
$1,628,054 at December 31, 1994) - 1,684,334
Loans receivable 63,203,789 50,565,083
Less allowance for loan losses (671,338) (580,528)
-------------- -------------
Loans, net 62,532,451 49,984,555
Premises and equipment, net 2,530,820 1,738,233
Other real estate owned - 19,457
Other assets 3,311,492 2,673,399
-------------- -------------
Total assets $ 96,099,977 $ 65,071,349
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $ 9,447,005 $ 6,967,910
Interest bearing 63,690,569 42,177,891
-------------- -------------
73,137,574 49,145,801
Federal funds purchased and securities sold
under agreements to repurchase 3,034,000 3,386,000
Accrued interest and other liabilities 753,272 535,401
Advances from Federal Home Loan Bank 6,243,561 5,925,200
-------------- -------------
Total liabilities 83,168,407 58,992,402
-------------- -------------
Stockholders' equity:
Common stock, $1 par value; 10,000,000 shares authorized; 1,153,060 and 573,002
shares issued and outstanding at December 31, 1995
and 1994, respectively 1,153,060 573,002
Capital surplus 11,254,039 5,110,618
Unrealized gain (loss) on securities
available-for-sale, net 177,297 (77,313)
Retained earnings 347,174 472,640
-------------- -------------
Total stockholders' equity 12,931,570 6,078,947
-------------- -------------
Total liabilities and stockholders' equity $ 96,099,977 $ 65,071,349
============== =============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
F-3
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ --------
<S> <C> <C> <C>
Interest income:
Loans, including fees $ 5,145,614 $ 3,909,427 $ 3,331,841
Securities, taxable 722,872 300,714 354,179
Securities, nontaxable 171,521 81,642 37,508
Federal funds sold 106,974 41,901 50,704
Time deposits with other banks - 5,952 19,687
-------------- -------------- -------------
6,146,981 4,339,636 3,793,919
-------------- -------------- -------------
Interest expense:
Deposits 2,421,905 1,364,151 1,389,393
Advances from Federal Home Loan Bank 381,136 298,362 196,687
Federal funds purchased and other 145,211 30,536 13,869
-------------- -------------- -------------
2,948,252 1,693,049 1,599,949
-------------- -------------- -------------
Net interest income 3,198,729 2,646,587 2,193,970
Loan loss provision 112,000 14,000 79,845
-------------- -------------- -------------
Net interest income after loan loss provision 3,086,729 2,632,587 2,114,125
------------- ------------- ---------------
Other income:
Service charges on deposit accounts 393,156 305,606 271,277
Gain (loss) on sale of securities available for sale (21,527) (78,723) 22,327
Residential mortgage origination fees 114,596 113,065 335,670
Other income 291,017 173,644 146,809
-------------- -------------- -------------
777,242 513,592 776,083
-------------- -------------- -------------
Other expense:
Salaries and employee benefits 1,411,359 1,107,692 901,088
Net occupancy expense of premises 422,032 237,251 254,176
Other operating expense 1,235,892 915,805 966,039
-------------- -------------- -------------
3,069,283 2,260,748 2,121,303
-------------- -------------- -------------
Income before income taxes and cumulative effect
of change in accounting principle 794,688 885,431 768,905
Income tax provision 260,820 300,575 255,313
-------------- -------------- -------------
Income before cumulative effect
of change in accounting principle 533,868 584,856 513,592
Cumulative effect on prior years (to December
31, 1992) of accounting change - - 46,730
-------------- -------------- -------------
Net income $ 533,868 $ 584,856 $ 560,322
============== ============== =============
Primary and fully diluted net income per share (Note 1): $ .58 $ .84 $ .79
Average common shares and equivalents outstanding 1,019,176 766,497 710,138
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
F-4
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Unrealized
Gain (loss) on
Securities
Common Stock Capital Available Retained
Shares Amount Surplus for Sale, net Earnings Total
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1992 505,000 $ 505,000 $ 4,490,535 $ - $ (151,794) $ 4,843,741
Stock options exercised 1,890 1,890 13,935 - - 15,825
5% stock dividend 25,219 25,219 220,666 - (246,187) * (302)
Net income - - - - 560,322 560,322
------------ ------------ ------------ ------------- ------------ -------------
Balance,
December 31, 1993 532,109 532,109 4,725,136 - 162,341 5,419,586
Sales of stock to K-SOP 14,294 14,294 139,444 - - 153,738
Adoption of accounting
principle (Note 2) - - - (4,276) - (4,276)
5% stock dividend 26,599 26,599 246,038 - (274,557) *(1,920)
Change in fair value
for the period - - - (73,037) - (73,037)
Net income - - - - 584,856 584,856
------------ ------------ ------------ ------------- ------------ -------------
Balance,
December 31, 1994 573,002 573,002 5,110,618 (77,313) 472,640 6,078,947
Net proceeds of stock
offering 520,422 520,422 5,489,438 6,009,860
Sales of stock to K-SOP 4,741 4,741 51,017 55,758
Stock options exercised 300 300 2,421 2,721
5% stock dividend 54,595 54,595 600,545 (659,334) *(4,194)
Change in fair value
for the period 254,610 254,610
Net income 533,868 533,868
------------ ------------ ------------ ------------- ------------ -------------
Balance,
December 31, 1995 1,153,060 $1,153,060 $11,254,039 $177,297 $347,174 $12,931,570
========= ========== =========== ======== ======== ===========
</TABLE>
*Represents fractional shares paid in cash
The accompanying notes are an integral part of the consolidated
financial statements.
F-5
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
-------------- --------------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 533,868 $ 584,856 $ 560,322
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of accounting change -- -- (46,730)
Depreciation and amortization 324,181 210,378 259,939
Provision for loan losses 112,000 14,000 79,845
Deferred income tax benefit (43,290) (321) (45,844)
Amortization less accretion on securities 45,908 45,067 84,485
Amortization of deferred loan fees and costs, net 84,313 102,939 49,787
(Gain) loss on sale of securities available-for-sale 21,527 78,723 (22,327)
Proceeds from sales of residential mortgages 4,651,567 5,813,807 17,145,863
Disbursements for residential mortgages held for sale (4,813,766) (5,572,360) (16,250,850)
Increase in interest receivable (426,126) (118,585) (30,942)
Increase (decrease) in interest payable 179,978 16,689 (64,698)
Increase in other assets (267,315) (550,954) (279,635)
Increase (decrease) in other liabilities 37,893 (75,413) 308,956
------ ------- ---------
Net cash provided by operating activities 440,738 548,826 1,748,171
----------- ----------- ---------
Cash flows from investing activities:
Net increase in loans made to customers (12,582,010) (6,295,068) (11,024,273)
Net decrease in deposits in other banks 200,000 406,067
Proceeds from sales of securities available-for-sale 1,975,294 4,928,398 3,068,654
Proceeds from maturities of securities available-for-sale 1,527,254 37,725 2,976,667
Purchases of securities available-for-sale (15,209,486) (4,484,249) (6,590,936)
Proceeds from maturities of securities held-to-maturity 100,000 461,125 --
Purchases of securities held-to-maturity (2,890,630) (853,170) --
Proceeds from sale of other real estate owned 19,457 -- 22,110
Purchases of premises and equipment (996,716) (183,847) (140,947)
Purchases of non-marketable equity securities (165,849) -- (574,509)
-------- ---- ---------
Net cash used by investing activities (28,222,686) (6,189,086) (11,857,167)
-------------- --------------- --------------
Cash flows from financing activities:
Net increase in demand and savings deposits 9,135,600 3,696,057 1,093,012
Net increase (decrease) in certificates of deposit 14,856,173 (541,801) 3,928,046
Proceeds of advances from Federal Home Loan Bank 1,900,000 117,000 4,440,000
Repayments of advances from Federal Home Loan Bank (1,581,639) (948,212) (310,588)
Proceeds from issuance of common stock 6,009,860 -- --
Proceeds from exercise of common stock options 2,721 -- 15,825
Proceeds from stock sales to employee benefit plan 55,758 153,738 --
Borrowings for organization of the Clemson Bank 457,189 -- --
Repayment of organizational notes (457,189) -- --
Net increase (decrease) in federal funds purchased
and repos (352,000) 3,178,000 (282,000)
Cash paid in lieu of fractional shares (4,194) (1,920) (302)
-------------- --------------- --------------
Net cash provided by financing activities 30,022,279 5,652,862 8,883,993
---------- --------- ---------
Net increase (decrease) in cash and cash equivalents 2,240,331 12,602 (1,225,003)
Cash and cash equivalents, beginning of year 3,038,958 3,026,356 4,251,359
--------- --------- ---------
Cash and cash equivalents, end of year $ 5,279,289 $ 3,038,958 $ 3,026,356
=============================== ===============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
F-6
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation - The accompanying consolidated financial statements
include the accounts of Community Capital Corporation (the Company), and its
wholly-owned subsidiaries, Greenwood Bank & Trust (the "Greenwood Bank") and
Clemson Bank & Trust (the "Clemson Bank"), which began operations on June 22,
1995. (See Note 9). Another subsidiary, GNB Mortgage Company, commenced
operations on January 2, 1990 and ceased operation as an active entity on March
4, 1991. The principal business activity of the Company and its subsidiaries is
to provide banking services to domestic markets, principally Greenwood County
and Pickens County, South Carolina. In consolidation, all significant
intercompany items and transactions have been eliminated.
In preparing the financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of
the balance sheet date and revenues and expenses for the period. Actual results
could differ significantly from those estimates.
Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for loan losses, including
valuation allowances for impaired loans, and the carrying amount of real estate
acquired in connection with foreclosures or in satisfaction of loans. Management
must also make estimates in determining the estimated useful lives and methods
for depreciating premises and equipment.
Investment Securities Held-to-Maturity - Investment securities held-to-maturity
generally include obligations of states and political subdivisions and are
carried at cost adjusted for amortization of premiums and accretion of
discounts, both computed by the straight-line method. Management has the intent
and the Company has the ability to hold designated investment securities to
maturity. Reductions in market value considered by management to be other than
temporary are reported as a realized loss and a reduction in the cost basis of
the security. (See Note 2)
Investment Securities Available-for-Sale - Investment securities
available-for-sale by the Company include government and corporate debt
securities and are carried at amortized cost and adjusted to estimated market
value by recording the aggregate unrealized gain or loss in a valuation account.
Management does not actively trade securities classified as available-for-sale.
Reductions in market value considered by management to be other than temporary
are reported as a realized loss and a reduction in the cost basis in the
security. The adjusted cost basis of securities available-for-sale is determined
by specific identification and is used in computing the gain or loss from a
sales transaction.
Loans - Loans are stated at their unpaid principal balance. Interest income is
computed using the simple interest method and is recorded in the period earned.
When serious doubt exists as to the collectibility of a loan or a loan is 90
days past due, the accrual of interest income is generally discontinued unless
the estimated net realizable value of the collateral is sufficient to assure
collection of the principal balance and accrued interest. When interest accruals
are discontinued, income in the current year is reversed and interest accrued in
prior years is charged to the allowance for loan losses.
Impairment of a loan is measured based on the present value of expected future
cash flows discounted at the loan's effective interest rate or fair value of the
collateral if the loan is collateral dependent. When management determines that
a loan is impaired, the difference between the Company's investment in the
related loan and the present value of the expected future cash flows, or the
fair value of the collateral, is charged to bad debt expense with a
corresponding entry to a valuation account. The accrual of interest is
discontinued on an impaired loan when management determines that the borrower
may be unable to meet payments as they become due.
F-7
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
Allowance for Loan Losses - Management provides for losses on loans through
specific and general charges to operations and credits such charges to the
allowance for loan losses. Specific provision for losses is determined for
identified loans based upon estimates of the excess of the loan's carrying value
over the net realizable value of the underlying collateral. General provision
for loan losses is estimated by management based upon factors including industry
loss experience for similar lending categories, actual loss experience,
delinquency trends as well as prevailing and anticipated economic conditions.
While management uses the best information available to make evaluations, future
adjustment to the allowance may be necessary if economic conditions differ
substantially from the assumptions used in making the evaluation. Delinquent
loans are charged against the allowance at the time they are determined to be
uncollectible. Recoveries are added to the allowance.
Residential Mortgages Held For Sale - The banking subsidiaries' mortgage
activities are comprised of accepting residential mortgage loan applications,
qualifying borrowers to standards established by investors, funding residential
mortgages and selling mortgages to investors under pre-existing commitments.
Funded residential mortgages held temporarily for sale to investors are recorded
at cost which approximates market (Note 5). Application and origination fees
collected by the Bank are recognized as income upon sale to the investor.
Premises and Equipment - Premises and equipment are stated at cost, less
accumulated depreciation. Gain or loss on retirement of premises and equipment
is recognized in the statements of operations when incurred. Expenditures for
maintenance and repairs are charged to expense; betterments and improvements are
capitalized. Depreciation charges are computed principally on the straight-line
method over the estimated useful lives as follows:
Building and improvements 7-30 years
Furniture, fixtures and equipment 5-7 years
Other Real Estate Owned - Other real estate owned includes real estate acquired
through foreclosure and loans accounted for as in-substance foreclosures.
Collateral is considered foreclosed in-substance when the borrower has little or
no equity in the fair value of the collateral, proceeds for repayment of the
debt can be expected to come only from the sale of the collateral and it is
doubtful that the borrower can rebuild equity or otherwise repay the loan in the
foreseeable future. Other real estate owned is carried at the lower of cost
(fair value at the date of foreclosure) or fair value minus estimated costs to
sell. Any write-downs at the date of acquisition are charged to the allowance
for possible loan losses. Expenses to maintain such assets, subsequent changes
in the valuation allowance, and gains and losses on disposal are included in
other expenses.
Federal Reserve Bank and Federal Home Loan Bank Stock - Other assets includes
the cost of the Company's investments in the stock of the Federal Reserve Bank
and the Federal Home Loan Bank. The stocks have no quoted market value and no
ready market exists. Investment in Federal Reserve Bank stock is required for
state-chartered member banks. Investment in Federal Home Loan Bank stock is a
condition of borrowing from the Federal Home Loan Bank and the stock is pledged
to secure the borrowings. At December 31, 1995 and 1994, the Company's
investment in Federal Reserve Bank stock was $127,150. At December 31, 1995 and
1994, the Bank's investment in Federal Home Loan Bank stock was $772,200.
Loans Fees and Costs - Loan origination and commitment fees and certain direct
loan origination costs are deferred and are being amortized to income over the
contractual lives of commercial and installment loans, adjusted for prepayments,
using the level yield method. Net deferred fees and costs associated with the
origination of home equity lines of credit are being amortized to income over
the contractual life of the lending agreement using the straight-line method.
Income taxes - The income tax provision is the sum of amounts currently payable
to taxing authorities and the net changes in income taxes payable or refundable
in future years. Income taxes deferred to future years are determined utilizing
a liability approach. This method gives consideration to the future tax
consequences associated with differences between the financial accounting and
tax bases of certain assets and liabilities, principally the allowance for loan
losses and depreciable premises and equipment.
F-8
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
Cash Flow Information - For purposes of reporting cash flows in consolidated
financial statements, the Company considers certain highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents. Cash equivalents include amounts due from depository institutions
and federal funds sold. Generally, federal funds sold are purchased for one day
periods.
During 1995, 1994 and 1993, the Company paid $2,768,274, $1,676,360 and
$1,664,647, respectively, for interest. In 1995, 1994 and 1993, the Company made
tax payments of $330,841, $512,470 and $148,594, respectively.
Supplemental noncash investing and financing activities are as follows:
In 1995, 1994 and 1993, the Company declared 5% stock dividends and transferred
$655,140, $272,637 and $245,885 from retained earnings (net of cash paid for
fractional shares) to common stock and capital surplus in the amounts of
$54,595, $26,599 and $25,219, respectively, and $600,545, $246,038 and $220,666,
respectively. In 1993 the Bank loaned customers approximately $75,000 to
purchase foreclosed real estate.
Transfers between the categories of securities available-for-sale and securities
held-to-maturity and changes in the valuation account of securities
available-for-sale, including the deferred tax effects, are considered noncash
transactions for purposes of the statement of cash flows and are presented in
detail in the notes to the financial statements.
Off-Balance-Sheet Financial Instruments - In the ordinary course of business,
the Bank has entered into off-balance- sheet financial instruments consisting of
commitments to extend credit, commitments under credit card arrangements and
letters of credit. These financial instruments are recorded in the financial
statements when they become payable by the customer.
Concentrations of Credit Risk - Financial instruments which potentially subject
the Company to concentrations of credit risk consist principally of loans
receivable, securities, federal funds sold and amounts due from banks.
Management is not aware of any concentrations of loans to classes of borrowers
or industries that would be similarly affected by economic conditions. Although
the Company's loan portfolio is diversified, a substantial portion of its
borrowers' ability to honor the terms of their loans is dependent on business
and economic conditions in Greenwood and Pickens Counties and surrounding areas.
Management does not believe credit risk is associated with obligations of the
United States, its agencies or its corporations. The Company places its deposits
and correspondent accounts with and sells its federal funds to high credit
quality institutions. By policy, time deposits are limited to amounts insured by
the FDIC. Management believes credit risk associated with correspondent accounts
is not significant.
Per Share Amounts - Net income per share is computed by dividing net income by
the weighted average number of shares of common stock and common stock
equivalents outstanding during the period using the treasury stock method
modified for the 20% limitation. For purposes of this calculation, the options
issued to the organizing Board of Directors and the stock options granted to the
Chief Executive Officer and other employees are considered to be common stock
equivalents (Notes 9 and 10). The weighted average common shares outstanding
were 1,019,176, 766,497, and 710,138, at December 31, 1995, 1994 and 1993,
respectively. Retroactive recognition has been given for the effect of the stock
dividends in 1995, 1994 and 1993 (Note 9).
Common Stock Owned by the Employee Stock Ownership Plan (ESOP) - ESOP purchases
and redemptions of the Company's common stock are at estimated fair value as
determined by independent valuations. Dividends on ESOP shares are charged to
retained earnings. All shares held by the ESOP are treated as outstanding for
purposes of computing earnings per share.
Reclassifications - Certain captions and amounts in the 1994 and 1993
consolidated financial statements were reclassified to conform with the 1995
presentation.
F-9
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE:
Effective January 1, 1994, the Company adopted the provisions of Financial
Accounting Standards Board Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (FASB 115). Management reviewed the
investment securities portfolio and classified securities as either
held-to-maturity or available-for-sale. In determining such classifications,
securities that the Company has the positive intent and ability to hold to
maturity were classified as held-to-maturity and are carried at amortized cost.
All other securities were classified as available- for-sale and are carried at
amortized cost and adjusted to estimated fair value with unrealized gains and
losses included in stockholders' equity on an after-tax basis.
In accordance with the provisions of FASB 115, effective January 1, 1994, the
Company recorded a $4,276 decrease to stockholders' equity representing the net
unrealized after-tax loss at that date. Net income and earnings per share were
not affected by the adoption of the new accounting principle.
Effective November 15, 1995, the Financial Accounting Standards Board
permitted a one-time opportunity for financial institutions to
reassess their investment portfolios and change the classification
of their debt securities from held-to-maturity to available-for-sale
without bringing into question the intent to hold other securities to
maturity. In response, management determined that the Company's
entire investment portfolio was available-for-sale and transferred
securities having an amortized cost of $4,444,290 from the
held-to-maturity to available-for-sale category. The redesignation of
securities had no effect on net income or earnings per share.
NOTE 3 - RESTRICTIONS ON CASH AND DUE FROM BANKS:
The Bank is required to maintain average reserve balances with the Federal
Reserve Bank computed as a percentage of deposits. At December 31, 1995 and
1994, the required cash reserves were $339,000 and $281,000 respectively, and
were satisfied by vault cash on hand and amounts due from the Federal Reserve
Bank.
NOTE 4 - INVESTMENT SECURITIES:
Securities available-for-sale at December 31, 1995 and 1994 consist of the
following:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
December 31, 1995 Cost Gains Losses Value
------------ ------------- ------------ ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 5,896,767 $ 54,767 $ 18 $ 5,951,516
Securities of other U.S. Government
agencies and corporations 11,435,284 117,387 6,316 11,546,355
Obligations of states and local
government 4,439,076 111,280 104 4,550,252
Mortgage-backed securities 394,384 3,418 397,802
------------ ------------- ------------ ------------
$ 22,165,511 $ 286,852 $ 6,438 $ 22,445,925
============ ============= ============ ============
December 31, 1994
U.S. Treasury securities $ 4,995,239 $ $ 106,855 $ 4,888,384
Securities of other U.S. Government
agencies and corporations 1,055,805 340 12,116 1,044,029
------------ ------------- ------------ ------------
$ 6,051,044 $ 340 $ 118,971 $ 5,932,413
============ ============= ============ ============
</TABLE>
F-10
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - INVESTMENT SECURITIES: (continued)
Securities held-to-maturity as of December 31, 1994 consist of the following:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
December 31, 1994 Cost Gains Losses Value
<S> <C> <C> <C>
Obligations of states and local
government $ 1,684,334 $ $ 56,280 $ 1,628,054
=========== =========== =========== ===========
</TABLE>
The following is a summary of maturities of securities available-for-sale as of
December 31, 1995 based on the contractual maturities. Actual maturities may
differ from the contractual maturities because borrowers may have the right to
call or prepay obligations with or without penalty. There were no securities
designated held-to-maturity as of December 31, 1995.
Amortized Estimated
Cost Fair Value
Due in one year or less $ 4,247,648 $ 4,271,909
Due after one year but within five years 8,197,634 8,279,312
Due after five years but within ten years 7,215,892 7,300,096
Due after ten years 2,109,953 2,196,806
Mortgage-backed securities 394,384 397,802
------------- -------------
$22,165,511 $22,445,925
============= =============
Proceeds from sales of securities available-for-sale during 1995, 1994 and 1993
were $1,975,294, $4,928,398 and $3,068,654, respectively, resulting in gross
realized gains of $156, $266 and $22,327 along with gross realized losses
$21,683, $78,989 and $0, respectively. There were no sales of securities
held-to-maturity in 1995, 1994 or 1993.
At December 31, 1995 and 1994, securities having an amortized cost of
approximately $13,821,812 and $4,607,645, respectively, and an estimated market
value of $14,017,849 and $4,518,167, respectively, were pledged to secure public
and trust deposits, collateralize Federal Home Loan Bank borrowings, and for
other purposes as required and permitted by law.
NOTE 5 - LOANS RECEIVABLE:
Loans receivable at December 31, 1995 and 1994, are summarized as follows:
1995 1994
------------- --------------
Commercial and agricultural $13,349,226 $12,231,392
Real estate 38,295,636 29,386,734
Home equity 6,593,037 4,795,981
Consumer - installment 3,721,774 2,974,407
Consumer - credit card and checking 868,736 978,689
Residential mortgages held for sale 299,000 136,800
Other, net 76,380 61,080
------------- -------------
$63,203,789 $50,565,083
============= =============
At December 31, 1995 and 1994, the Company had sold participations in real
estate loans aggregating $5,595,122 and $4,882,478, respectively, to other
financial institutions on a nonrecourse basis. Collections on loan
participations and remittances to participating institutions conform to
customary banking practices.
F-11
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - LOANS RECEIVABLE: (continued)
The Company accepts residential mortgage loan applications and funds loans of
qualified borrowers (Note 1). Funded loans are sold without recourse to
investors at face value under the terms of pre-existing commitments. The Company
does not sell residential mortgages having market or interest rate risk. The
Company and its banking subsidiaries do not service residential mortgage loans
for the benefit of others.
At December 31, 1995 and 1994, the banking subsidiaries had pledged
approximately $6,863,611 and $7,652,106, respectively, of loans on residential
real estate as collateral for borrowings from the Federal Home Loan Bank (Note
7).
The Company adopted Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for the Impairment of a Loan", and Statement of
Financial Accounting Standards No. 118, "Accounting By Creditors for Impairment
of a Loan - Income Recognition and Disclosures" as of January 1, 1995. These
statements identify how creditors should measure and account for impaired loans.
Under SFAS 114 and 118, impairment of loans should be measured at the present
value of the expected future cash flows discounted at the loan's effective
interest rate or at fair value of the collateral if the loan is collateral
dependent.
Loans are defined as impaired when "based on current information and events, it
is probable that a creditor will be unable to collect all amounts due according
to the contractual terms of the loan agreement." All loans are subject to this
criteria except for: "smaller-balance homogeneous loans that are collectively
evaluated for impairment" and loans "measured at fair value or at the lower of
cost or fair value." The Company considers its consumer installment portfolio,
credit cards and home equity lines as meeting this criteria. Therefore, the real
estate and commercial loan portfolios are primarily affected by these
Statements.
The Company identifies impaired loans through its normal internal loan review
process. Loans on the Company's problem loan watch list are considered
potentially impaired loans. These loans are evaluated in determining whether all
outstanding principal and interest are expected to be collected. Loans are not
considered impaired if a minimal delay occurs and all amounts due including
accrued interest at the contractual interest rate for the period of delay are
expected to be collected.
At December 31, 1995, management reviewed its problem loan watch list and
determined that no impairment on loans existed that would have a material effect
on the Company's consolidated financial statements. In accordance with SFAS 114,
financial information for prior periods has not been restated to reflect this
Statement.
The accrual of interest is discontinued on impaired loans when management
anticipates that a borrower may be unable to meet the obligations of the note.
Accrued interest through the date the interest is discontinued is reversed.
Subsequent interest earned is recognized only to the point that cash payments
are received. All payments will be applied to principal if the ultimate amount
of principal is not expected to be collected.
An analysis of the allowance for loan losses for the years ended December 31,
1995, 1994 and 1993, is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
------------- ------------- -------------
<S> <C> <C> <C>
Balance, beginning of year $ 580,528 $ 566,810 $ 499,806
Provision for loan losses 112,000 14,000 79,845
Loans charged off, net (21,190) (282) (12,841)
------------- ------------- -------------
Balance, end of year $ 671,338 $ 580,528 $ 566,810
============= ============= =============
</TABLE>
F-12
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - LOANS RECEIVABLE: (continued)
In the normal course of business, the Company is a party to financial
instruments with off-balance-sheet risk. These financial instruments are
commitments to extend credit and letters of credit and have elements of risk in
excess of the amount recognized in the balance sheet. Commitments to extend
credit are agreements to lend to a customer as long as there is no violation of
any condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee.
A commitment involves, to varying degrees, elements of credit and interest rate
risk in excess of the amount recognized in the consolidated balance sheets. The
Company's exposure to credit loss in the event of non-performance by the other
party to the instrument is represented by the contractual notional amount of the
instrument. Since certain commitments are expected to expire without being drawn
upon, the total commitment amounts do not necessarily represent future cash
requirements. Letters of credit are conditional commitments issued to guarantee
a customer's performance to a third party and have essentially the same credit
risk as other lending facilities. The Company uses the same credit policies in
making commitments to extend credit as it does for on-balance-sheet instruments.
At December 31, 1995 and 1994, the Company had unfunded commitments of
$11,785,530 and $8,832,576, of which $2,392,675 and $2,743,146, respectively,
were unsecured. At December 31, 1995, the Company was not committed to lend
additional funds to borrowers owing nonaccrual loans.
NOTE 6 - PREMISES AND EQUIPMENT:
Premises and equipment at December 31, 1995 and 1994, consists of the following:
1995 1994
------------- -------------
Land $ 465,159 $ 286,254
Buildings 1,577,149 1,377,387
Furniture and equipment 1,600,050 1,002,163
------------- -------------
3,642,358 2,665,804
Less, accumulated depreciation 1,111,538 927,571
------------ ----------------
$2,530,820 $1,738,233
============= =============
NOTE 7 - ADVANCES FROM FEDERAL HOME LOAN BANK:
Advances from the Federal Home Loan Bank consisted of the following at December
31, 1995:
Interest
Description Rate Balance
Adjustable rate advances maturing:
January 24, 1996 6.02% $1,000,000
March 9, 1996 5.78% 117,000
March 23, 1997 5.76% 1,100,000
April 24, 1997 6.02% 1,500,000
Fixed rate advances maturing:
January 29, 1996 6.05% 400,000
March 5, 1997 5.31% 340,000
May 26, 1997 6.34% 21,176
August 27, 1997 4.49% 1,615,385
March 24, 1998 7.37% 150,000
-------------
$6,243,561
F-13
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - ADVANCES FROM FEDERAL HOME LOAN BANK: (continued)
Scheduled principal reductions of Federal Home Loan Bank advances are as
follows:
1996 $1,517,000
1997 4,576,561
1998 150,000
-------------
$6,243,561
As collateral, the Bank has pledged first mortgage loans on one to four family
residential structures aggregating $6,863,611 (Note 5) and debt securities
aggregating $1,750,000 (Note 4) at December 31, 1995. In addition, the Bank's
Federal Home Loan Bank stock, which is included in other assets (Note 1), is
pledged to secure the borrowings. Certain advances are subject to prepayment
penalties.
NOTE 8 - DEPOSITS
The following is a summary of deposit accounts as of December 31, 1995 and 1994:
1995 1994
------------- ---------
Non-interest bearing demand deposits $ 9,447,005 $ 6,967,910
NOW accounts 8,028,202 7,157,903
Money market accounts 9,497,679 4,815,111
Savings accounts 7,921,557 6,817,919
Certificates of deposit 38,243,131 23,386,958
------------- -------------
$ 73,137,574 $49,145,801
============ =============
At December 31, 1995 and 1994, certificates of deposit of $100,000 or more
totaled approximately $12,082,348 and $7,494,002, respectively. Interest expense
on these deposits was approximately $471,000, $259,000 and $253,000 in 1995,
1994 and 1993, respectively.
NOTE 9 - STOCKHOLDERS' EQUITY:
Pursuant to a prospectus dated February 27, 1995, the Company completed a public
offering of 520,422 shares of its common stock, resulting in net proceeds (after
deducting issuance cost) of $6,009,860. On June 22, 1995, the Company acquired
all of the common stock of Clemson Bank & Trust (the "Clemson Bank") for
$4,500,000. Immediately upon being chartered as a state bank on June 22, 1995,
the Clemson Bank assumed ownership of its organizational partnership's assets
and liabilities.
Organizational costs incurred for attorney's fees, consultants and filing fees
in the amount of $68,303 were capitalized and are being amortized over a
five-year period. The unamortized costs are included in the accompanying
consolidated balance sheet.
The Company declared 5% stock dividends for stockholders of record on August 1,
1995, April 1, 1994 and September 1, 1993. Accordingly, amounts equal to the
estimated fair market value of the additional shares issued have been charged to
retained earnings and credited to common stock and capital surplus. Dividends
representing fractional shares were paid in cash.
The Company has authorized 2,000,000 shares of an undesignated class of stock of
$1 par value which are to be designated as the Board of Directors may determine.
Further, the Board of Directors is required to specify relative rights,
preferences and limitations of the undesignated stock prior to issuance. At
December 31, 1995, the undesignated stock class has not been designated.
F-14
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - STOCK OPTIONS:
The Company has two stock option plans: an Employee Incentive Stock Option Plan
(1988 Plan), and an Incentive and Nonstatutory Stock Option Plan (Stock Plan).
Employee Incentive Stock Option Plan - Adopted in 1988, this plan provides for
the granting of options to purchase shares of the Company's common stock to
officers and other eligible employees of the Company and Greenwood Bank & Trust.
The per-share exercise price of the options may not be less than the fair market
value of a share of common stock on the date the option is granted. Options
become exercisable one year after the date of grant and can be exercised within
five years from the date of grant. Any options that expire unexercised or are
cancelled become available for issuance.
Incentive and Nonstatutory Stock Option Plan - During 1993 the Company approved
the terms of the Company's Incentive Stock Option and Nonstatutory Stock Option
Plan which received shareholders approval on May 16, 1994. The Stock Plan
provides for the granting of statutory incentive stock options within the
meaning of Section 422 of the Internal Revenue Code as well as nonstatutory
stock options and stock appreciation rights. Stock options and stock
appreciation rights are issuable only to employees and directors of the Company
and its subsidiaries. The per-share exercise price of incentive stock options
granted under the Stock Plan may not be less than the fair market value of a
share on the date of grant, nor can the exercise date of any option granted be
less than ten years from the date of grant. Any options that expire unexercised
or are cancelled become available for issuance. Options granted generally become
exercisable after one year and expire ten years from the date of grant.
Information regarding the Company's stock option plans is summarized below (all
amounts have been restated to reflect stock dividends paid in 1995, 1994 and
1993):
<TABLE>
<CAPTION>
1988 Stock
Plan Plan Price
<S> <C> <C> <C>
Outstanding, December 31, 1992 25,000 $7.45 to $10.66
Granted 14,181 $8.31
Exercised 1,890 $8.21 to $8.57
Cancelled 2,836 $7.45 to $8.31
--------- ----------
Outstanding, December 31, 1993 34,455 $7.45 to $10.66
Granted 9,812 254,592 $9.07
Exercised
Cancelled 8,032 $7.45 to $9.52
--------- ----------
Outstanding, December 31, 1994 36,235 254,592 $7.45 to $10.66
Granted 14,438 15,750 $11.19 to $11.43
Exercised 300 $9.07
Cancelled 5,781 $9.07 to $11.19
--------- ----------
Outstanding, December 31, 1995 44,892 270,042 $7.45 to $11.43
--------- ----------
As of December 31, 1995:
Shares reserved for issuance 45,379 275,325
Options exercisable 31,717 254,292
Shares available for grant 487 5,283
</TABLE>
F-15
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - RELATED PARTY TRANSACTIONS:
Certain parties (primarily directors, executive officers, principal stockholders
and their associates) were loan customers and had other transactions in the
normal course of business with the Company. Related party loans are made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated persons and
generally do not involve more than normal risk of collectibility. Total loans
and commitments outstanding to related parties at December 31, 1995 and 1994,
were $2,875,550 and $2,451,285, respectively. During 1995, $1,324,732 of new
loans were made to related parties and repayments totaled $900,467.
The Company has leased land used as the site for a branch banking location from
a director of the Company. The term of the lease is for five years ending July
31, 1999. The Company can purchase the land at any time during the term of the
lease for $90,000. The average monthly rent during the term of the lease is
$600. Scheduled rental payments for the remaining term of the lease are $6,500
in 1996, $8,200 in 1997, $9,766 in 1998 and $5,833 in 1999. In 1995, payments
under the land lease totaled $5,300. There were no unpaid amounts outstanding at
December 31, 1995
NOTE 12 - COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS:
In the ordinary course of business, the Company or its subsidiaries may, from
time to time, become a party to legal claims and disputes. At December 31, 1995,
management is not aware of any pending or threatened litigation, or unasserted
claims that could result in losses, if any, that would be material to the
consolidated financial statements.
Management anticipates relocating the Company's operations and bookkeeping
departments from its banking centers during 1996. In anticipation of this, the
Company purchased a commercial lot and building on January 29, 1996 from an
unrelated party for approximately $450,000. Management expects an additional
$70,000 to $90,000 of costs to be incurred for renovations.
Management also plans to begin construction on a permanent facility for the
Clemson Bank during 1996. The costs of all premises and equipment are expected
to approximate $1,300,000, not to exceed $1,500,000. As of December 31, 1995,
the Company was not committed to any party for expenditures relating to the
construction of the new Bank.
NOTE 13 - RESTRICTION ON SUBSIDIARY DIVIDENDS:
The ability of the Company to pay cash dividends to stockholders is dependent
upon receiving cash in the form of dividends from its banking subsidiaries.
However, certain restrictions exist regarding the ability of the subsidiary to
transfer funds in the form of cash dividends, loans or advances to the Company.
The prior approval of the Commissioner of Banking is required and dividends are
payable only from the undivided profits of the banking subsidiaries. At December
31, 1995, the Greenwood Bank's undivided profits were $1,834,082, and the
deficit balance in the Clemson Bank's undivided profits was $280,765.
F-16
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - INCOME TAXES:
Income tax expense included in the statement of operations for the years ended
December 31, 1995, 1994 and 1993 is summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
--------- -------- -----------
<S> <C> <C> <C>
Currently payable:
Federal $ 269,150 $ 271,737 $ 275,570
State 34,960 29,159 25,587
---------- --------- ----------
304,110 300,896 301,157
---------- --------- ----------
Change in deferred income taxes:
Federal 100,779 (39,267) (41,775)
State 366 (2,372) (4,069)
---------- --------- ----------
101,145 (41,639) (45,844)
---------- ---------- ----------
Income tax expense $ 405,255 $ 259,257 $ 255,313
========== ========= ==========
Income tax expense is allocated as follows:
To continuing operations $ 260,820 $ 300,575 $ 255,313
To stockholders' equity 144,435 (41,318) -
---------- --------- ----------
$ 405,255 $ 259,257 $ 255,313
========== ========= ==========
</TABLE>
A summary of the Company's deferred tax accounts as of December 31, 1995 and
1994 follows:
<TABLE>
<CAPTION>
1995 1994
-------- -------
<S> <C> <C>
Deferred tax assets $298,001 $256,000
Deferred tax liabilities $189,936 $ 46,790
Valuation allowance $ 0 $ 0
</TABLE>
The principal sources of temporary differences in 1995 and 1994, and timing
differences in 1993, and the related deferred tax effects are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- --------
<S> <C> <C> <C>
Provision for bad debts $ (38,751) $ (5,390) $ (27,675)
Tax depreciation in excess of book depreciation 7,873 3,193 (4,197)
Net operating losses (9,022)
Other, net (3,390) 1,876 (13,972)
---------- --------- ----------
Temporary differences attributable to continuing operations (43,290) (321) (45,844)
Change in valuation allowance - - -
--------- -------- ---------
Deferred tax expense attributable to continuing operations (43,290) (321) (45,844)
Deferred tax expense (benefit) attributable to stockholders' equity 144,435 (41,318) -
---------- -------- ----------
Change in deferred income taxes $ 101,145 $ (41,639) $ (45,844)
========== ========= ==========
</TABLE>
F-17
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - INCOME TAXES: (continued)
A reconciliation of the income tax provision and the amount computed by applying
the Federal statutory rate of 34% to income before income taxes and
extraordinary items follows:
<TABLE>
<CAPTION>
1995 1994 1993
--------- -------- ----------
<S> <C> <C> <C>
Income tax at the statutory rate $ 270,194 $ 301,046 $ 261,427
State income tax, net of federal benefit 9,959 15,838 10,838
Tax exempt interest income (46,573) (19,367) (8,992)
Disallowed interest expense 6,089 3,809 1,498
Officers' life insurance (974) 6,077 -
Other, net 22,125 (6,828) (9,458)
------------ ---------- -----------
$ 260,820 $ 300,575 $ 255,313
============ ========== ===========
</TABLE>
NOTE 15 - OTHER OPERATING EXPENSES:
Other operating expenses for the years ended December 31, 1995, 1994 and 1993
are summarized below:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Federal deposit insurance assessment $ 59,411 $ 109,001 $ 99,095
Banking and ATM supplies 186,286 95,897 88,444
Directors' fees 71,632 90,266 71,762
Mortgage loan department expenses 43,575 40,238 96,075
Amortization of organizational costs and other assets 32,849 30,978 46,225
Computer supplies 110,492 37,146 57,007
Postage and freight 90,134 50,685 47,688
Professional fees 115,823 92,022 96,524
Other 525,690 369,572 363,219
------------ ---------- -----------
$ 1,235,892 $ 915,805 $ 966,039
============ ========== ===========
</TABLE>
NOTE 16 - RETIREMENT AND BENEFIT PLANS:
The Company sponsors a voluntary nonleveraged employee stock ownership plan
(ESOP) as part of a 401(K) savings plan covering substantially all full-time
employees. The Company match is 50 cents per dollar, up to a maximum of 3% of
employee compensation. Company contributions to the savings plan were $22,928,
$19,275 and $27,000 in 1995, 1994 and 1993 respectively. The Company's policy is
to fund amounts accrued. At December 31, 1995, the savings plan owned 20,113
shares of the Company's common stock purchased at an average cost of $10.42 per
share adjusted for the effects of stock dividends. The estimated value of shares
held at December 31, 1995 was $229,892.
The Company has a Directors' Incentive Compensation Plan and an Officers'
Incentive Compensation Plan which provide that portions of directors' fees and
certain officers' cash awards, respectively, will be determined based upon
various performance measures of the Bank. For the years ended December 31, 1995,
1994 and 1993, awards under these plans were $26,856, $41,966 and $25,000,
respectively, and $57,826, $83,777 and $25,300, respectively.
F-18
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 - RETIREMENT AND BENEFIT PLANS: (continued)
The Company has an Executive Supplemental Compensation Plan which provides
certain officers with salary continuation benefits upon retirement. The plan
also provides for benefits in the event of early retirement, death or
substantial change of control of the Company. For the years ended December 31,
1995, 1994 and 1993, salary continuation expense included in salaries and
employee benefits was $19,762, $11,881 and $2,154, respectively. In connection
with the Executive Supplemental Compensation Plan, life insurance contracts were
purchased on the officers. In 1995, 1994 and 1993, insurance premiums of
$192,210, $192,210 and $110,000, respectively, were paid, of which $180,908,
$167,689 and $95,518, respectively, have been capitalized to reflect the cash
surrender value of investment life insurance contracts.
NOTE 17 - UNUSED LINES OF CREDIT:
At December 31, 1995, the Bank had unused lines of credit to purchase federal
funds from unrelated banks totaling $9,250,000. These lines of credit are
available on a one to 14 day basis for general corporate purposes. The lenders
have reserved the right not to renew their respective lines.
NOTE 18 - NEWLY-ISSUED ACCOUNTING STANDARDS
In October 1995, the Financial Accounting Standards Board issued FASB statement
No. 123, "Accounting for Stock-Based Compensation," effective for transactions
entered into in fiscal years that begin after December 15, 1995. FASB 123
recommends that companies account for stock compensation on a fair value based
method which requires compensation cost to be measured at the grant date based
on the value of the award and to be recognized over the service period. As an
alternative, companies may continue to record compensation cost based on the
excess, if any, of the quoted market price of the stock at the grant date (or
other measurement date) over the amount an employee must pay to acquire the
stock. However, if a company elects this method, it must include in the
financial statements certain disclosures which reflect pro forma amounts as if
the fair value method had been used.
Management has not yet determined the method that will be used to account for
future grants under the Company's stock option plans. The impact for 1996 is
expected to be immaterial to the financial statements, and the effects on future
years has not yet been determined.
F-19
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 - FAIR VALUE OF FINANCIAL INSTRUMENTS:
In December 1991, the Financial Accounting Standards Board issued Statement on
Financial Accounting Standards No. 107 (SFAS 107), "Disclosures About Fair Value
of Financial Instruments." SFAS 107 extends the existing fair value disclosure
practices for some instruments by requiring all entities to disclose the fair
value of financial instruments, both assets and liabilities recognized and not
recognized in the balance sheet, for which it is practicable to estimate fair
value. The Company has adopted the provisions of SFAS 107 for its year ended
December 31, 1995.
The fair value of a financial instrument is the amount at which the asset or
obligation could be exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale. Fair value estimates are made at a
specific point in time based on relevant market information and information
about the financial statements. Because no market value exists for a significant
portion of the financial instruments, fair value estimates are based on
judgments regarding future expected loss experience, current economic
conditions, risk characteristics of various financial instruments, and other
factors.
The following methods and assumptions were used to estimate the fair value of
significant financial instruments:
Cash and Due from Banks - The carrying amount is a reasonable estimate of fair
value.
Federal Funds Sold - Federal funds sold are for a term of one day and the
carrying amount approximates the fair value.
Investment Securities - The fair values of marketable securities
held-to-maturity are based on quoted market prices or dealer quotes. For
securities available-for-sale, fair value equals the carrying amount which is
the quoted market price. If quoted market prices are not available, fair values
are based on quoted market prices of comparable securities.
Loans - For certain categories of loans, such as variable rate loans which are
repriced frequently and have no significant change in credit risk and credit
card receivables, fair values are based on the carrying amounts. The fair value
of other types of loans is estimated by discounting the future cash flows using
the current rates at which similar loans would be made to the borrowers with
similar credit ratings and for the same remaining maturities.
Deposits - The fair value of demand deposits, savings, and money market accounts
is the amount payable on demand at the reporting date. The fair values of
certificates of deposit are estimated using a discounted cash flow calculation
that applies current interest rates to a schedule of aggregated expected
maturities.
Off-Balance Sheet Financial Instruments - The fair value of commitments to
extend credit and standby letters of credit is estimated using the fees
currently charged to enter into similar agreements taking into account the
remaining terms of the agreements and the present creditworthiness of the
counterparties. The contractual amount is a reasonable estimate of fair value
for the instruments because commitments to extend credit and standby letters of
credit are issued on a short-term or floating rate basis.
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase - The
carrying amount is a reasonable estimated of fair value because these
instruments typically have terms of one day.
Advances from Federal Home Loan Bank - The carrying amounts of variable rate
borrowings are reasonable estimates of fair value because they can be repriced
frequently. The fair values of fixed rate borrowings are estimated using a
discounted cash flow calculation that applies the Company's current borrowing
rate from the FHLB.
F-20
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 - FAIR VALUE OF FINANCIAL INSTRUMENTS: continued
The carrying values and estimated fair values of the Company's financial
instruments as of December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Carrying Estimated
Amount Fair Value
<S> <C> <C>
Financial Assets:
Cash and due from banks $ 2,949,289 $ 2,949,289
Federal funds sold 2,330,000 2,330,000
Securities available-for-sale 22,445,925 22,445,925
Loans 63,203,789 63,017,141
Allowance for loan losses (671,338) (671,338)
Financial Liabilities:
Demand deposit, interest-bearing transaction,
and savings accounts $ 34,894,443 $ 34,894,443
Certificates of deposit 38,243,131 38,371,455
Federal funds purchased and securities
sold under agreements to repurchase 3,034,000 3,034,000
Advances from Federal Home Loan Bank 6,243,561 6,227,290
Off-Balance Sheet Financial Instruments:
Commitments to extend credit 11,785,530 11,785,530
</TABLE>
F-21
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 - COMMUNITY CAPITAL CORPORATION (PARENT COMPANY ONLY):
Condensed financial statements for Community Capital Corporation (Parent Company
Only) for the years ended December 31, 1995 and 1994 follow:
BALANCE SHEETS
<TABLE>
<CAPTION>
1995 1994
--------------- --------------
<S> <C> <C>
Assets
Cash and cash equivalents $ 200,379 $ 11,952
Investment in subsidiaries 10,467,316 5,257,641
Securities available-for-sale 1,001,888
Premises and equipment, net 897,230 512,352
Other assets 364,760 297,002
-------------- --------------
$ 12,931,573 $ 6,078,947
============== ==============
Liabilities and Stockholders' Equity
Other liabilities $ 3 $ -
-------------- --------------
Total liabilities 3 -
-------------- --------------
Common stock 1,153,060 573,002
Capital surplus 11,254,039 5,110,618
Unrealized gain (loss) on securities
available-for-sale, net 177,297 (77,313)
Retained earnings 347,174 472,640
-------------- --------------
Total stockholders' equity 12,931,570 6,078,947
-------------- --------------
Total liabilities and stockholders' equity $ 12,931,573 $ 6,078,947
============== ==============
</TABLE>
F-22
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 - COMMUNITY CAPITAL CORPORATION (PARENT COMPANY ONLY): (continued)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
1995 1994 1993
-------------- -------------- ---------
<S> <C> <C> <C>
Income:
Interest income on securities available-for-sale $ 27,348 $ $ 13,336
Fee and rental income 92,745 19,050 8,538
Gain on sale of securities available-for-sale - - 5,123
----- ------- -------------
120,093 19,050 26,997
------------ -------------- -------------
Expenses:
Salaries 19,562 12,001 -
Net occupancy expense 67,452 188 (8,595)
Interest expense 7,764 - -
Other operating expenses 89,631 90,206 72,589
------------- -------------- ------------
184,409 102,395 63,994
-------------- -------------- ------------
Income (loss) before income taxes, cumulative
effect of accounting change, and equity in
undistributed earnings of subsidiaries (64,316) (83,345) (36,997)
-------------- --------------- --------------
Income tax benefit - allocated from
consolidated return 26,625 35,013 16,352
Cumulative effect to December 31, 1992 of a change
in accounting principle - - 12,065
-------------- -------------- -------------
Income (loss) before equity in undistributed
earnings of subsidiaries (37,691) (48,332) (8,580)
-------------- -------------- --------------
Equity in undistributed earnings of subsidiaries 571,559 633,188 568,902
------------ ------------ ---------------
Net income $ 533,868 $ 584,856 $ 560,322
============== ============== =============
</TABLE>
F-23
<PAGE>
COMMUNITY CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 - COMMUNITY CAPITAL CORPORATION (PARENT COMPANY ONLY): (continued)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
1995 1994 1993
-------------- -------------- ---------
<S> <C> <C> <C>
Operating activities:
Net income $ 533,868 $ 584,856 $ 560,322
Adjustments to reconcile net income to
net cash provided (used) by operating activities:
Cumulative effect of accounting change - - (12,065)
Equity in undistributed earnings of
subsidiaries (571,559) (633,188) (568,902)
Depreciation and amortization 52,052 26,606 26,860
Amortization of securities 490
Deferred tax benefit (10,177) (35,013) (5,248)
Increase (decrease) in other liabilities 3 (3,110) 2,443
Increase in other assets (58,216) (57,377) (4,024)
-------------- -------------- -------------
Net cash used by operating activities (53,539) (117,226) (614)
------- -------- ---------
Investing activities:
Purchases of premises and equipment, net (436,930) (77,517) (23,624)
Purchases of securities available-for-sale (1,000,660) - -
Proceeds from sales of securities available-for-sale - - 207,069
Net investment in Clemson Bank (4,384,589)
Purchase of equity securities - - (187,609)
-------------- -------------- -------------
Net cash used by investing activities (5,822,179) (77,517) (4,164)
---------- ------------- -------------
Financing activities:
Proceeds from the exercise of stock options 2,721 - 15,825
Proceeds from sales of stock to retirement plan 55,758 153,737 -
Cash paid in lieu of fractional shares (4,194) (1,920) (302)
Proceeds from issuance of common stock 6,009,860
Borrowings for organization of the Clemson Bank 457,189
Repayment of organizational notes (457,189)
-------------- ------------- ---------------
Net cash provided by financing activities 6,064,145 151,817 15,523
-------------- ------------- ---------------
Net increase (decrease) in cash and cash
equivalents 188,427 (42,926) 10,745
Cash and cash equivalents, beginning of year 11,952 54,878 44,133
---------- ----------- --------------
Cash and cash equivalents, end of year $ 200,379 $ 11,952 $ 54,878
============== ============== =============
</TABLE>
Supplemental schedule of non-cash investing and financing activities:
In 1995, 1994 and 1993, the Company declared 5% stock dividends and transferred
$655,140, $272,637 and $245,885, respectively, from retained earnings to common
stock and capital surplus in the amounts of $54,595, $26,599 and $25,219,
respectively, and $600,545, $246,038 and $220,666, respectively.
F-24
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant, Community Capital Corporation, has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
COMMUNITY CAPITAL CORPORATION
Dated: March 27, 1996 By: /s/ WILLIAM G. STEVENS
-----------------------
William G. Stevens
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant, Greenwood National Bancorporation, and in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ WILLIAM G. STEVENS
- -------------------------------------- President (Principal March 27, 1996
William G. Stevens Executive Officer) and
Director
/s/ JAMES H. STARK
- ---------------------------------------- Chief Financial March 27, 1996
James H. Stark Officer (Principal
Financial and
Accounting Officer)
/s/ PATRICIA C. EDMONDS
- ---------------------------------- Secretary and March 27, 1996
Patricia C. Edmonds Director
*
- --------------------------------- Director March 27, 1996
David P. Allred, M.D.
*
- --------------------------------- Director March 27, 1996
Robert C. Coleman
*
- -------------------------------- Director March 27, 1996
John W. Drummond
*
- -------------------------------- Director March 27, 1996
Wayne Q. Justesen, Jr.
<PAGE>
*
- -------------------------------- Director March 27, 1996
Thomas C. Lynch
*
- -------------------------------- Director March 27, 1996
H. Edward Munnerlyn
*
- -------------------------------- Director March 27, 1996
George B. Park
- ------------------------------- Director March 27, 1996
Joe H. Patrick, Jr.
*
- ------------------------------ Director March 27, 1996
Donna W. Robinson
*
- ------------------------------ Director March 27, 1996
George D. Rodgers
*
- ------------------------------ Director March 27, 1996
Charles J. Rogers
*
- ------------------------------ Director March 27, 1996
Thomas E. Skelton
*
- ------------------------------ Director March 27, 1996
Lex D. Walters
*By: /s/ WILLIAM G. STEVENS March 27, 1996
------------------------------
(William G. Stevens) (As
Attorney-in-Fact for each
of the persons indicated)
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL CORPORATION.]
</TABLE>
<PAGE>
EXHIBIT INDEX
COMMUNITY CAPITAL CORPORATION
FORM 10-K
Pursuant to Item 601 of Regulation S-K
<TABLE>
<CAPTION>
Exhibit
Number Description Page No.
<S> <C> <C>
3.1 Articles of Incorporation of Registrant.....................................................
3.2 Articles of Amendment to Articles of Incorporation of
Registrant (re: Change of Name).............................................................
3.3 Bylaws of Registrant........................................................................
10.1 Registrant's Stock Option Plan for Employees (1988).........................................
10.2 Registrant's Incentive Stock Option and Nonstatutory Stock
Option Plan (1993)..........................................................................
10.3 Registrant's Executive Supplemental Income Plan (Summary)
and form of Executive Supplemental Income Agreement.........................................
10.4 Registrant's Management Incentive Compensation Plans (Summary)..............................
10.5 Lease Agreement dated July 8, 1994 between John W. Drummond and
the Registrant..............................................................................
10.6 Lease Agreement dated September 1, 1994 between Greenwood
Bank & Trust and the Registrant.............................................................
10.7 Employment Contract dated November 19, 1987 between Greenwood National
Bank and William G. Stevens.................................................................
10.8 Employment and Option Agreement dated November 21, 1994 between
Donna W. Robinson and the Registrant........................................................
11.1 Per Share Computations......................................................................
22.1 Subsidiaries of the Registrant..............................................................
24.1 Directors' Powers of Attorney...............................................................
</TABLE>
<PAGE>
EXHIBIT 3.1
STATE OF SOUTH CAROLINA SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
GREENWOOD NATIONAL BANCORPORATION
ONE
The name of the corporation is GREENWOOD NATIONAL
BANCORPORATION.
TWO
The corporation is organized pursuant to the provisions of the Code of
Laws of South Carolina (1976), as amended.
THREE
The existence of the corporation shall begin as of the filing date of
these Articles of Incorporation with the Secretary of State.
FOUR
The corporation shall have perpetual duration.
FIVE
The corporation is organized for profit and for the purpose of becoming
and operating as a bank holding company and engaging in any business and
activity not specifically prohibited to bank holding companies under applicable
state and federal laws. The corporation shall have all powers necessary to
conduct such business and engage in any such activities, including but not
limited to, the powers enumerated in the Code of Laws of South Carolina.
SIX
The corporation shall have authority to be exercised by the Board of
Directors to issue a total of 12,000,000 shares of all classes of stock, which
shall consist of not more than 10,000,000 shares of common voting stock of $1.00
par value (the "Common Stock"), and 2,000,000 shares of a special class of stock
of $1.00 par value (the "Special Stock"), which shall be designated as the Board
of
1
<PAGE>
Directors may determine, and which may be issued in series by the Board of
Directors. Preferences, limitations and relative rights with respect to the
shares of each class of stock of the corporation shall be as hereinafter set
forth.
(a) A holder of record of one or more shares of the Common Stock shall
have one (1) vote on any matter submitted to a stockholder vote for each share
of the Common Stock held. Holders of common stock have no cumulative voting
rights on any matter submitted to a stockholder vote. Holders of the Common
Stock are entitled to the entire voting power, all dividends declared, and all
assets of the corporation upon liquidation, subject to the rights of holders of
the Special Stock to such voting power, dividends, and assets upon liquidation
pursuant to paragraph (b) of this Article Six.
(b) The Special Stock may be divided into and issued from time to time
in one or more series as the Board of Directors may determine. Before any shares
of the Special Stock of any particular series shall be issued, the Board of
Directors shall specify the relative rights, preferences, and limitations as
among the shares of such series.
SEVEN
No holder of shares of any class of capital stock of the corporation
shall have the preemptive right to acquire unissued shares of any class of
capital stock of the corporation, unless otherwise provided by the Board of
Directors in connection with the establishment of any series of the Special
Stock.
EIGHT
Notwithstanding any affirmative vote required by law, these Articles of
Incorporation, or the Bylaws of this corporation, and except as otherwise
provided herein, the following transactions shall require the affirmative vote
("Special Voting Requirement") of the holders of not less than eighty percent
(80%) of the outstanding Common Stock of the corporation entitled to vote with
respect to each such transaction:
2
<PAGE>
(a) The merger, consolidation or exchange of shares of
this corporation with any other corporation, partnership, trust, estate
or association;
(b) The sale or exchange by this corporation of all or a
substantial part of its assets to or with such entity;
(c) The issuance or delivery by this corporation of any
stock or other securities issued by it in exchange or payment for any
properties or assets of such entity or securities issued by such
entity, or any merger of any affiliate of this corporation with or into
such entity or any of its affiliates; or
(d) The nonjudicial dissolution of the Corporation.
Notwithstanding the foregoing, the Special Voting Requirement shall not
apply to any such merger, consolidation, sale or exchange, issuance or delivery
of stock or other securities, or dissolution which was approved by the
affirmative vote of not less than eighty percent (80%) of the directors, nor
shall it apply to any such transactions solely between this corporation and
another entity fifty percent (50%) or more of the voting stock or voting equity
interests of which is owned by this corporation. For purposes of this Article
Eight, an "affiliate" is any person (including a corporation, partnership,
trust, estate, association or individual) who directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the person specified. "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, by
contract, or otherwise; and, in computing the percentage of outstanding voting
stock beneficially owned by any person, the shares outstanding and the shares
owned shall be determined as of the record date fixed to determine the
stockholders entitled to vote or express consent with respect to such proposal.
A substantial part of the corporation's assets for purposes of these Articles of
Incorporation shall mean assets the book value of which constitute more than
twenty percent (20%) of the book value, or the fair market value of which
constitutes more than twenty percent (20%) of the fair market value, of the
total assets of this corporation and its subsidiaries taken as a whole. The
shareholder vote, if any, required for mergers, consolidations,
3
<PAGE>
exchange of shares, sales or exchanges of assets, issuances of stock or other
securities, or dissolution not expressly provided for in these Articles of
Incorporation, shall be such as may be required by applicable law.
NINE
When evaluating any offer of another party to (a) make a tender or
exchange offer for any equity security in this corporation, (b) merge or
consolidate this corporation with another corporation, (c) purchase or otherwise
acquire all or a substantial part of the assets of this corporation, the board
of directors shall, in connection with the exercise of its judgment in
determining what is in the best interests of this corporation and its
shareholders, give due consideration to (i) all relevant factors, including
without limitation, the social, legal, environmental, and economic effects on
the employees, customers, suppliers and other constituencies of this corporation
and its subsidiaries, on the communities and geographical areas in which this
corporation and its subsidiaries operate or are located, and on any of the
businesses and properties of this corporation and its subsidiaries, as well as
such other factors as the directors deem relevant, and (ii) not only the
consideration being offered in relation to the then current market price for the
corporation's outstanding shares of capital stock, but also in relation to the
then current value of the corporation in a freely negotiated transaction and in
relation to the board of directors' estimate of the future value of this
corporation (including the unrealized value of its properties and assets) as an
independent going concern.
TEN
Any shareholder entitled to vote for the election of directors may make
nominations for the election of directors only by giving written notice to the
secretary of the corporation at least 30 days but not more than 60 days prior to
the annual meeting of shareholders at which directors are to be elected, unless
such requirement is waived in advance of the meeting by the affirmative vote of
eighty percent (80%) of the directors.
4
<PAGE>
ELEVEN
Notwithstanding any other provision of these Articles of Incorporation
or the Bylaws of the corporation, the affirmative vote of the holders of not
less than eighty percent (80%) of the outstanding Common Stock of the
Corporation shall be required to remove any director or the entire board of
directors of the corporation without cause.
TWELVE
Notwithstanding any other provision of these Articles of Incorporation
or the Bylaws of this corporation, the terms of the members of the board of
directors shall be staggered in the manner set forth in this Article Twelve, in
lieu of electing the whole number of directors annually. Commencing on the first
annual meeting of the shareholders of this corporation, the directors shall be
divided by the board into three classes, each class to be as nearly equal in
number as possible. The term of office of directors of the first class shall
expire at the first annual meeting of shareholders after their election, that of
the second class shall expire at the second annual meeting after the election,
and that of the third class shall expire at the end of the third annual meeting
after their election. After each annual meeting after such classification the
number of directors equal to the number of the class whose terms expires at the
time of such meeting shall be elected to hold office until the third such
succeeding annual meeting. The provisions of this Article Fourteen shall apply
only when the board of directors consists of nine or more members; if the board
consists of less than nine members, the term of each such member shall expire at
the next annual meeting of the shareholders of the corporation.
THIRTEEN
Notwithstanding any other provision of these Articles of Incorporation
or the Bylaws of the corporation, the affirmative vote of the holders of not
less than eighty percent (80%) of the outstanding Common Stock of the
corporation shall be required to amend or repeal Articles Eight, Nine, Ten,
Eleven, Twelve and Thirteen of the Articles of Incorporation or to adopt
provisions
5
<PAGE>
inconsistent with such provisions, unless not less than eighty percent (80%) of
the directors approve such amendment, in which case the voting requirements
otherwise provided for by law shall apply.
FOURTEEN
If any provision or any part of any provision of these Articles of
Incorporation is found to be not valid for any reason, said provisions shall be
entirely severable from, and shall have no effect upon, the remaining provisions
of these Articles of Incorporation.
FIFTEEN
The initial registered office of the corporation shall be at:
332 Main Street
Suite 201,
Greenwood, South Carolina 29646
The initial registered agent of the corporation at such address shall be William
G. Stevens.
SIXTEEN
The initial Board of Directors shall consist of thirteen members whose names and
addresses are as follows:
NAME ADDRESS
David P. Allred, M.D. 310 Hunting Road
Greenwood, SC
Robert C. Coleman #5 Harper Lane
Greenwood, SC
John W. Drummond Box 127
Ninety Six, SC
Patricia C. Edmonds Post Office Box
135 Greenwood, SC
H. Edward Munnerlyn 1220 Calhoun Road
Greenwood, SC
George B. Park 2860 Cokesbury Road
Greenwood, SC
Joe H. Patrick, Jr. 660 Chinquapin Road
Greenwood, SC
Henry H. Robinson III 111 Ashford Place
Greenwood, SC
Wayne Q. Justesen, Jr 133 Gatewood Drive
Greenwood, SC
6
<PAGE>
Charles J. Rogers, Jr. 121 Rutledge Road
Greenwood, SC
William G. Stevens 134 Gatewood Drive
Greenwood, SC
Lex D. Walters, Ph.D. 193 Partridge Road
Greenwood, SC
Thomas D. Wingard 104 Lodge Drive
Greenwood, SC
SEVENTEEN
Every person who was or is a party to, or is threatened to be made a
party to, or is otherwise involved in, any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of the fact that he
or a person of whom he is the legal representative is or was a Director or
Officer of the Corporation or is or was serving at the request of the
Corporation or for its benefit as a director or officer of another Corporation,
or as its representative in a partnership, joint venture, trust, or other
enterprise, shall be indemnified and held harmless to the fullest extent legally
permissible under and pursuant to the South Carolina Business Corporation Act,
as may be amended from time to time, against all expenses, liabilities, and
losses (including without limitation attorneys' fees, judgments, fines, and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. Such right of indemnification shall be a contract right
that may be enforced in any manner desired by such person. Such right of
indemnification shall not be exclusive of any other right which such Directors,
Officers, or representatives may have or hereafter acquire and, without limiting
the generality of such statement, they shall be entitled to their respective
rights of indemnification under any bylaw, agreement, Board of Director plan of
indemnification, vote of Shareholders, provision of law, or otherwise, as well
as their rights under this Article.
The Board of Directors may cause the Corporation to purchase and
maintain insurance on behalf of any person who is or was a Director or Officer
of the Corporation, or is or was serving at the request of the Corporation as a
Director or Officer of another corporation, or as its representative in a
partnership, joint venture, trust, or other enterprise, against any liability
asserted against such
7
<PAGE>
person and incurred in any such capacity or arising out of such status, whether
or not the Corporation would have the power to indemnify such person.
EIGHTEEN
The name and address of the incorporator is as
follows:
William G. Stevens
134 Gatewood Drive
Greenwood, South Carolina
/s/ WILLIAM G. STEVENS WILLIAM G. STEVENS
Signature of Incorporator Type or Print Name
8
<PAGE>
EXHIBIT 3.2
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF AMENDMENT
(Re: Change of Name)
GREENWOOD NATIONAL BANCORPORATION
Pursuant to Section 33-10-106 of the 1976 South Carolina Code, as
amended, the undersigned corporation adopts the following Articles of Amendment
to its Articles of Incorporation:
1. The name of the corporation is Greenwood National Bancorporation.
2. On May 16, 1994, the corporation adopted the following Amendment of its
Articles of Incorporation.
The name of the corporation is changed to:
Community Capital Corporation.
3. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA"): Not Applicable
4. The Amendment was adopted by shareholder action.
At the date of adoption of the amendment, the number of
outstanding shares of each voting group entitled to vote
separately on the Amendment, and the vote of such shares
was:
<TABLE>
<CAPTION>
Number of Number of
Votes Undisputed
Number of Number of Represented Shares
Voting Outstanding Votes Entitled at the Voted
Group Share To Be Cast Meeting For Against
<S> <C> <C> <C> <C> <C>
Common 562,328 562,328 395,291 378,779 16,512
</TABLE>
5. Unless a delayed date is specified, the effective date of these
Articles of Amendments shall be the date of acceptance for filing by
the Secretary of State (See ss.33-1-230(b): upon filing.
DATE: May 19, 1994 GREENWOOD NATIONAL
BANCORPORATION
By: /s/ William G. Stevens
William G. Stevens
Its: President and Chief Executive Officer
<PAGE>
EXHIBIT 3.3
BYLAWS
OF
GREENWOOD NATIONAL BANCORPORATION
NAME CHANGED TO COMMUNITY CAPITAL CORPORATION
ON MAY 16, 1994
ARTICLE I
OFFICES AND REGISTERED AGENT
Section 1.01. Principal Office. The Corporation shall maintain its
Principal Office in the City of Greenwood, South Carolina.
Section 1.02. Registered Office. The Corporation shall maintain a
Registered Office as required by the South Carolina Business Corporation Act, as
amended (the "Act"), at a location in the State of South Carolina designated by
the Board of Directors from time to time. In the absence of a contrary
designation by the Board of Directors, the Registered Office of the Corporation
shall be located at its Principal Office.
Section 1.03. Other Offices. The Corporation may have such other
offices within and without the State of South Carolina as the business of the
Corporation may require from time to time. The authority to establish or close
such other offices may be delegated by the Board of Directors to one or more of
the Corporation's Officers.
Section 1.04. Registered Agent. The Corporation shall maintain a
Registered Agent as required by the Act who shall have a business office at the
Corporation's Registered Office. Such Registered Agent shall be designated by
the Board of Directors from time to time to serve at its pleasure. In the
absence of such designation the Registered Agent shall be the Corporation's
Secretary.
Section 1.05. Filings. Unless the Board of Directors otherwise
provides, the Secretary of the Corporation shall cause the Corporation to
maintain currently all filings in respect of the Registered Office and
Registered Agent with all governmental officials as required by the Act or
otherwise by law.
ARTICLE II
SHAREHOLDERS
Section 2.01. Annual Meetings. An annual meeting of the Corporation's
Shareholders shall be held once each calendar year for the purpose of electing
Directors and for the transaction of such other business as may properly come
before the meeting. The annual meeting shall be held at such time and place as
the Board of Directors shall designate from time to time. In the absence of any
such designation to the contrary, the annual meeting shall be held at the hour
of ten o'clock in the morning on the second Tuesday of the third month following
the
1
<PAGE>
Corporation's fiscal year-end; but if such day shall be a holiday under federal
or South Carolina law, then such annual meeting shall be held on the next
succeeding business day.
Section 2.02. Special Meetings. Special meetings of the Corporation's
Shareholders may be called for any one or more lawful purposes by the
Corporation's President, a majority of the Board of Directors, or the holders of
record of ten percent of the Corporation's outstanding shares of voting capital
stock. Special meetings of the Shareholders shall be held at the Corporation's
Registered Office at such time as may be designated in the notice of such
meeting provided for hereinbelow; provided, however, that such meetings called
by a majority of the Board of Directors may be held at such place as the Board
of Directors may determine.
Section 2.03. Notice of Meetings. Written or printed notice of all
meetings of Shareholders shall be delivered not less than ten nor more than
fifty days before the meeting date, either personally or by United States mail,
to all Shareholders of record entitled to vote at such meeting. Such notice
shall state the date, time and place of the meeting and, in the case of a
special meeting, the purpose or purposes for which such meeting was called. At
the written request, delivered personally or by registered or certified mail, of
the person or persons calling a special meeting of Shareholders, the President
or Secretary of the Corporation shall fix the date and time of such meeting and
provide notice thereof to the Shareholders as required above; provided, however,
such date shall in no event be fixed less than ten or more than fifty days from
the date such request was received. If such notice of the meeting is not given
within fifteen days after such request is made to the President or Secretary the
person or persons calling the meeting may fix the date and time of the meeting
and give or cause to be given the notice thereof required above. Notice of a
meeting of Shareholders need not be given to any Shareholder who attends such
meeting or who, in person or by proxy, signs a waiver of notice either before or
after such meeting. To be effective, such waiver shall contain recitals
sufficient to identify beyond reasonable doubt the meeting to which it applies.
Such recitals may, but need not necessarily, include reference to the date and
purpose of the meeting and the business transacted thereat. Recital of the
proper date of a meeting shall be conclusive identification of the meeting to
which a waiver of notice applies unless such waiver contains additional recitals
creating a patent ambiguity as to its proper application.
Section 2.04. Quorum. At any meeting of Shareholders the presence, in
person or by proxy, of the holders of a majority of the outstanding shares
entitled to vote thereat shall constitute a quorum for the transaction of any
business properly before the meeting. In the absence of a quorum a meeting may
be adjourned from time to time in accordance with the provisions concerning
adjournments contained elsewhere in these Bylaws by the holders of a majority of
such shares as are represented at the meeting in person or in proxy. At such
adjourned meeting a quorum of Shareholders may transact such business as might
have been properly transacted at the original meeting.
Section 2.05. Transaction of Business. Business transacted at an annual
meeting of Shareholders may include all such business as may properly come
before the meeting. Business transacted at a special meeting of Shareholders
shall be limited to the purposes stated in the notice of such meeting.
Section 2.06. Voting. Except as may otherwise be required by the Act or
the Corporation's Articles of Incorporation, and subject to the provisions
concerning Shareholders of record contained elsewhere in these Bylaws, a person
(or his proxy) present at a meeting of Shareholders shall be entitled to one
vote for each share of voting stock as to which such person is the Shareholder
of record. In elections of Directors those candidates receiving the greater
2
<PAGE>
number of votes cast (though not necessarily majority of the votes cast) at the
meeting shall be elected. Any other corporate action shall be authorized by a
majority of the votes cast at the meeting unless otherwise provided by the Act,
the Corporation's Articles of Incorporation or these Bylaws. For each meeting of
Shareholders an odd number of persons shall be appointed to serve as voting
inspectors either by the Board of Directors prior to such meeting or by the
presiding officer at such meeting. The voting inspectors shall by majority
decision resolve all disputes which may arise concerning the qualification of
voters, the validity of proxies, the existence of a quorum, and the acceptance,
rejection and tabulation of votes. Each voting inspector shall take an oath to
execute his duties impartially and to the best of his ability. Such oath shall
be administered by the presiding officer to each voting inspector at the meeting
following the call to order and before such voting inspector enters upon the
discharge of his duties.
Section 2.07. Adjournments. A majority of the voting shares held by
Shareholders of record present in person or by proxy at a meeting of
Shareholders may adjourn such meeting from time to time to a date and time fixed
by notice as provided for above or, if such date is less than thirty days from
the date of adjournment, to a date fixed by such majority and announced at the
original meeting prior to adjournment.
Section 2.08. Action Without Meeting. The Shareholders may act without
meeting as to such matters and in accordance with such procedures as may be
permitted by the Act.
Section 2.09. Shareholders of Record. For the purpose of determining
Shareholders entitled to vote at any meeting of Shareholders, or entitled to
receive dividends or other distributions, or in connection with any other proper
purpose requiring a determination of Shareholders, the Board of Directors shall
by resolution fix a record date for such determination. Such date shall be not
more than fifty and not less then ten days prior to the date on which the
activity requiring such determination is to occur. The Shareholders of record
appearing in the stock transfer books of the Corporation at the close of
business on the record date as fixed shall constitute the Shareholders of right
in respect of the activity in question. The Secretary or his designate shall
prepare a complete list of such Shareholders in alphabetical order showing the
address of and number of shares owned by each such Shareholder. Such list shall
be produced at the meeting by the Secretary or his designate and kept open and
available for the inspection of any Shareholder at all times during the meeting.
ARTICLE III
DIRECTORS
Section 3.01. Authority. The Board of Directors shall have ultimate
authority over the conduct and management of the business and affairs of the
Corporation.
Section 3.02. Number. The number of Directors shall be fixed by the
Board of Directors from time to time; provided, however, no reduction in the
number of Directors shall have the effect of shortening the term of any
incumbent Director.
Section 3.03. Tenure. Each Director shall hold office from the date of
his election and qualification until his successor shall have been duly elected
and qualified, or until his earlier removal, resignation, death or incapacity.
An election of all Directors by the Shareholders shall occur at each annual
meeting of the Corporation's Shareholders.
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Section 3.04. Removal. Any Director may be removed from office, with or
without cause, by a vote of the holders of a majority of the shares of the
Corporation's voting stock. Any Director may be removed from office with cause
by a majority vote of the Board of Directors at a meeting at which only the
removal and replacement of the Director in question shall be considered.
Section 3.05. Vacancies. The Board of Directors may by majority vote of
the Directors then in office, regardless of whether such Directors constitute a
quorum, elect a new Director to fill a vacancy on the Board of Directors;
provided, however, no person may be elected to fill a vacancy created by his
removal from office pursuant to these Bylaws.
Section 3.06. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice other than this Bylaw immediately after,
and at the same place as, the annual meeting of Shareholders. The Board of
Directors may by resolution provide for the holding of additional regular
meetings without notice other than such resolution; provided, however, such
resolution shall fix the date, time and place (which may be anywhere within or
without the State of South Carolina) for such regular meetings.
Section 3.07. Special Meetings. Special meetings of the Board of
Directors may be called for any lawful purpose or purposes by any Director or
the President of the Corporation. The person calling a special meeting shall
give, or cause to be given, to each Director notice of the date, time and place
of the meeting by any normal means of communication no less than seventy-two
hours nor more than sixty days prior thereto. Any time or place fixed for a
special meeting must permit participation in such meeting by means of
telecommunications as authorized below. Notice of a special meeting need not be
given to any Director who signs a waiver of notice either before or after such
meeting. To be effective such waiver shall contain recitals sufficient to
identify beyond reasonable doubt the meeting to which it applies. Such recitals
may, but need not necessarily, include reference to the date and purpose of the
meeting and the business transacted thereat. Recital of the proper date of a
meeting shall be conclusive identification of the meeting to which a waiver of
notice applies unless such waiver contains additional recitals creating a patent
ambiguity as to its proper application.
Section 3.08. Participation by Telecommunications. Any Director may
participate in, and be regarded as present at, any meeting of the Board of
Directors by means of conference telephone or any other means of communication
by which all persons participating in the meeting can hear each other at the
same time.
Section 3.09. Quorum. A majority of Directors in office shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors.
Section 3.10. Action. The Board of Directors shall take action pursuant
to resolutions adopted by the affirmative vote of a majority of the Directors
participating in a meeting at which a quorum is present, or the affirmative vote
of a greater number of Directors where required by the Corporation's Articles of
Incorporation, these Bylaws, or otherwise by law. The Board of Directors may
also take action without meeting as to such matters and according to such
procedures as may be authorized by the Act.
Section 3.11. Committees. The Board of Directors may by resolution
designate and delegate authority to an Executive Committee and such other
committees as may be permitted by the Act.
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Section 3.12. Compensation. The Board of Directors may by resolution
authorize payment to all Directors of a uniform fixed sum for attendance at each
meeting or a uniform stated salary as a Director. No such payment shall preclude
any Director from serving the Corporation in any other capacity and receiving
compensation therefor. The Board of Directors may also by resolution authorize
the payment of reimbursement of all expenses of each Director related to such
Director's attendance at meetings.
ARTICLE IV
OFFICERS
Section 4.01. In General. The Offices of the Corporation shall consist
of a President, a Vice President, a Secretary and a Treasurer and such
additional vice presidents, assistant secretaries, assistant treasurers and
other officers and agents as the Board of Directors deems advisable from time to
time. All Officers shall be appointed by the Board of Directors to serve at its
pleasure. Any Officer may be removed by the Board of Directors at any time, with
or without cause. One person may hold two or more offices except that the
President shall not simultaneously serve as a Vice President or the Secretary.
Each Officer shall exercise such authority and perform such duties as may be set
forth in these Bylaws and such additional authority and duties as the Board of
Directors shall determine from time to time.
Section 4.02. President. The President shall be the chief executive
officer of the Corporation and, subject to the authority of the Board of
Directors, shall manage the business and affairs of the Corporation. The
President shall preside at all meetings of the Shareholders and all meetings of
the Board of Directors and shall see that the resolutions of the Board of
Directors are put into effect. The President shall have full authority to
execute on the Corporation's behalf any and all contracts, agreements, notes,
bonds, deeds, mortgages, certificates, instruments and other documents except as
may be specifically limited by resolution of the Board of Directors.
Section 4.03. Vice President. The Vice President shall serve under the
direction of the President. In the absence, incapacity, or inability or refusal
of the President to act, the Vice President shall assume the authority and
perform the duties of the President. If the Board of Directors appoints more
than one Vice President, the seniority of the Vice Presidents shall be
determined from their date of appointment unless the Board of Directors shall
otherwise specify.
Section 4.04. Secretary. Except as otherwise provided by these Bylaws
or determined by the Board of Directors, the Secretary shall serve under the
direction of the President. The Secretary shall attend all meetings of the
Shareholders and the Board of Directors and record the proceedings thereof. The
Secretary shall give, or cause to be given, all notices in connection with such
meetings. The Secretary shall be custodian of the Corporate seal and affix the
seal to document requiring it.
Section 4.05. Treasurer. Except as otherwise provided by these Bylaw or
determined by the Board of Directors, the Treasurer shall serve under the
direction of the President. The Treasurer shall under the Direction of the
President keep safe custody of the Corporation's funds and maintain complete and
accurate books and records of account. The Treasurer shall upon request report
to the Board of Directors on the financial condition of the Corporation.
Section 4.06. Assistant Officers. Except as otherwise provided by these
Bylaws or determined by the Board of Directors, the Assistant Secretaries and
Assistant Treasurers, if
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any, shall serve under the immediate direction of the Secretary and the
Treasurer, respectively, and under the ultimate direction of the President. The
Assistant Officers shall assume the authority and perform the duties of their
respective immediate superior Officer as may be necessary in the absence,
incapacity, or inability or refusal of such immediate superior Officer to act.
The seniority of Assistant Officers shall be determined from their date of
appointment unless the Board of Directors shall otherwise specify.
ARTICLE V
INDEMNIFICATION
Section 5.01. Scope. Every person who was or is a party to, or is
threatened to be made a party to, or is otherwise involved in, any action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, by
reason of the fact that he or a person of whom he is the legal representative is
or was a Director or Officer of the Corporation or is or was serving at the
request of the Corporation or for its benefit as a director or officer of
another Corporation, or as its representative in a partnership, joint venture,
trust, or other enterprise, shall be indemnified and held harmless to the
fullest extent legally permissible under and pursuant to the Act, against all
expenses, liabilities, and losses (including without limitation attorneys' fees,
judgments, fines, and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith. Such right of
indemnification shall be a contract right that may be enforced in any manner
desired by such person. Such right of indemnification shall not be exclusive of
any other right which such Directors, Officers, or representatives may have or
hereafter acquire and, without limiting the generality of such statement, they
shall be entitled to their respective rights of indemnification under any bylaw,
agreement, vote of Shareholders, provision of law, or otherwise, as well as
their rights under this Article.
Section 5.02. Insurance. The Board of Directors may cause the
Corporation to purchase and maintain insurance on behalf of any person who is or
was a Director or Officer of the Corporation, or is or was serving at the
request of the Corporation as a Director or Officer of another corporation, or
as its representative in a partnership, joint venture, trust, or other
enterprise, against any liability asserted against such person and incurred in
any such capacity or arising out of such status, whether or not the Corporation
would have the power to indemnify such person.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Certificates for Shares. Certificates representing shares
of capital stock of the Corporation shall state upon the face thereof the name
of the person to whom issued, the number of shares, the par value per share and
the fact that the Corporation ia organized under the laws of the State of South
Carolina. Such certificates shall be signed by the President or a Vice President
and by the Secretary or an Assistant Secretary. All certificates for shares
shall be consecutively numbered. The name and address of the person to whom the
shares represented thereby are issued, with the number of shares and date of
issuance, shall be entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be cancelled and
no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered and cancelled, except that in case
of a lost, destroyed or mutilated certificate a new one may be issued therefor
upon the making of an affidavit by the holder of record of the shares
represented by such certificate setting forth the facts
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concerning the loss, theft or mutilation thereof and upon such bond or indemnity
to the Corporation as the Board of Directors may prescribe.
Section 6.02. Transfer of Shares. Subject to the provisions of the Act,
transfer of shares of the Corporation shall be made only on the stock transfer
books of the Corporation by the holder of record thereof or by his agent,
attorney-in-fact or other legal representative, who shall furnish proper
evidence of authority to transfer, upon surrender for cancellation of the
certificate for such shares. The person in whose name shares stand on the stock
transfer books of the Corporation shall be deemed by the Corporation to be the
owner thereof for all purposes.
Section 6.03. Fiscal Year. The fiscal year of the Corporation shall be
established, and may be altered, by resolution of the Board of Directors from
time to time as it deems advisable.
Section 6.04. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions as the Board of Directors deems
advisable and as permitted by law.
Section 6.05. Seal. The seal of the Corporation shall be circular in
form and shall have inscribed thereon the name of the Corporation, the year of
its organization, and the words "Corporate Seal, State of South Carolina."
Section 6.06. Amendments. These Bylaws may be altered, amended or
repealed, and new Bylaws may be adopted, by a majority vote of the Board of
Directors or as otherwise permitted by law.
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EXHIBIT 10.1
EMPLOYEE STOCK OPTION PLAN
GREENWOOD NATIONAL BANCORPORATION
1. PURPOSE
This Employee Stock Option Plan (hereinafter, the "Plan") is intended
as an incentive and to encourage stock ownership by employees of GREENWOOD
NATIONAL BANCORPORATION (hereinafter, the "Company") and its subsidiary,
GREENWOOD NATIONAL BANK thereinafter, the "Bank"), as such employees are
selected as described herein, 50 that they may acquire or increase their
proprietary interest in the success of the Company, and to encourage them to
remain in the employ of the Company and/or the Bank. It is further intended
that, unless specifically designated as otherwise, options issued pursuant to
this Plan shall constitute incentive stock options thereinafter, "Incentive
Stock Options") within the meaning of Section 422A of the Internal Revenue Code
of 1986, as such may be amended from time to time (hereinafter, "Code"). Unless
otherwise specifically noted herein, the term "option" or "options" shall refer
to Incentive Stock Options; however, the Board may specifically designate
non-incentive stock options as long as the grant of such complies with all
applicable laws. This Plan does not include certain options granted to the Chief
Executive Officer under an employment agreement dated November 19, 1981.
2. ADMINISTRATION
Except for matters specifically reserved herein for the Board of
Directors, the Plan shall be administered by a Compensation Committee of the
Board of Directors of the Company (the "Committee"). The Committee shall select
one of its members as Chairman, and shall hold meetings at such times and places
as it may determine. A majority of the Committee at which a quorum is present,
or acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee. No director while a member
of the Committee shall be eligible to receive an option under the Plan The
Committee shall from time to time at its discretion make recommendations to the
Board of Directors of the Company with respect to the employees who shall be
granted options and the amount of stock to be optioned to each. Hereinafter,
reference to Board, Director(s) or Board of Directors shall refer to the Board,
Director's) or Board of Directors of the Company.
The interpretation, construction and acts by the Committee of any
provisions of the Plan or of any option granted under it shall be final unless
otherwise determined by the Board of Directors at its next regularly scheduled
meeting or any subsequent meeting(s) that, in the discretion of the Board of
Directors, is necessary to further consider such interpretation, construction or
acts of the Committee. No member of the Board of Directors or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under it.
3. ELIGIBILITY
Except as may be specifically restricted in the Plan, the persons who
shall be eligible to receive options shall be employees (including officers,
whether or not they are directors) of the Company and/or the Bank existing from
time to time as the Board of Directors shall select from time to time from among
those nominated by the Committee. An optionee may hold more than one option, but
only on the terms and subject to the restrictions hereafter set forth. No person
shall be eligible to receive an option for a larger number of shares than is
recommended for him by the Committee. Notwithstanding anything contained herein,
no otherwise eligible employee may be issued an Incentive Stock Option if such
employee owns (as defined in any applicable portions of Sections 422, 422A and
425 of the Code) more than ten (10%) percent of the total combined voting power
or value of all classes of stock of the Company or any parent or subsidiary
unless the option exercise price is at least one hundred ten (110%) percent of
the fair market value of the applicable stock of the Company at the time the
option is granted, and such option must be exercised within five (5) years from
the date of the grant of such option.
4. STOCK
The stock subject to the options shall be shares of the Company (and
all successor corporations) authorized but unissued or reacquired, $1.00 par
value common stock, hereafter sometimes called "Capital Stock." The aggregate
number of shares which may be issued under Incentive Stock options shall not
exceed 41,000 shares of Capital Stock. The number of shares with respect to
which Incentive Stock Option rights may be granted to any individual under any
and all options which are issued to him by the Company shall not exceed
applicable restrictions
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under the Internal Revenue Code and any other applicable law. The limitations
established by each of the preceding sentences shall be subject to adjustment as
provided in Article 5(h) of the Plan.
In the event that any outstanding option under the Plan for any reason
expires or is terminated, the shares of Capital Stock allocable to the
unexercised portion of such option may again be subjected to an option under the
Plan.
5. TERMS AND CONDITIONS OF OPTIONS
Stock options granted pursuant to the Plan shall be authorized by the
Board of Directors and shall be evidenced by certificates in such form as the
Committee shall from time to time recommend and the Board of Directors shall
from time to time approve, which certificates shall comply with and be subject
to the following terms and conditions which may be incorporated by reference to
this Plan in such certificate:
(a) Optionee's Agreement
Each optionee shall agree to remain in the employ of and to render to
the Bank and/or the Company (as applicable) his/her services for a period of one
(1) year from the date of the option, but such agreement shall not impose upon
the Company and/or the Bank any obligation to retain the optionee in the employ
of either or both for any period.
(b) Number of Shares
Each option shall state the number of shares to which it pertains.
(c) Option Price
Except in the case of an Incentive Stock Option issued to a ten (10%)
percent or greater shareholder as described in Paragraph 3 herein, the option
price shall be not less than one hundred (100%) percent of the fair market value
of the underlying shares of the Capital Stock of the Company at the time the
option is granted. The Committee shall recommend, and the Board of Directors
shall fix, the option price and shall make such a determination by a method
consistent with the applicable provisions of the Code and any Treasury
Regulations promulgated thereunder and, in doing such, shall have full authority
and discretion and be fully protected in doing so.
(d) Medium and Time of Payment
The option price shall be payable in United States dollars upon the
exercise of the option and may be paid in cash or by check.
(e) Term and Exercise of Options
No option shall be exercisable either in whole or in part prior to one
(1) year from the date it is granted. The Committee may provide, however, for
the exercise of options before the initial one (1) year period, but not after
the expiration of three (3) months from the date such employee ceases to be
employed with the Company and/or the Bank, if the employee shall, with the
approval of the Company and/or the Bank (as applicable), retire. No option shall
be exercisable after the expiration of five (5) years from the date it is
granted. No less than one hundred [100) shares may be purchased at any one time
unless the number purchased is the total number at the time purchasable under
the option. During the lifetime of the optionee, the option shall be exercisable
only by him/her. The Incentive Stock Option shall not be assignable or
transferable by the optionee and no other person shall acquire any rights
therein except by will or the laws of descent and distribution.
(f) Termination of Employment
Except Death/Retirement
In the event that an optionee shall cease to be employed by the Bank
for any reason other than his/her death or retirement and shall be no longer in
the employ of any of them, subject to the condition that no option shall be
exercisable after the expiration of five (5) years from the date it is granted,
such optionee shall have the right to exercise the option at any time within
three (3) months after such termination of employment to the extent his/her
right to exercise such option had accrued pursuant to Article 5(e) of the Plan
and had not previously been exercised at the date of such termination. Whether
authorized leave of absence or absence for military or governmental service
shall constitute termination of employment, for the purposes of the Plan, shall
be determined by the Committee, which
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determination, unless overruled by the Board of Directors under the procedures
described in Paragraph 2 herein, shall be final and conclusive.
(g) Death of Optionee and Transfer of Option
If the optionee shall die while in the employ of the Bank or within a
period of three (3) months after the termination of his employment with the Bank
and shall not have fully exercised the option, an option may be exercised,
subject to the condition that no option shall be exercisable after the
expiration of five (5) years from the date it is granted, to the extent that the
optionee's right to exercise such option had accrued pursuant to Article 5(e) of
the Plan at the time of his death and had not previously been exercised, at any
time within one (1) year after the optionee's death, by the executors or
administrators of the optionee or by any person or persons who shall have
acquired the option directly from the optionee by bequest or inheritance.
No option shall be transferable by the optionee otherwise than by will
or the laws of descent and distribution.
(h) Recapitalization
Subject to any required action by the stockholders, the number of
share" of Capital Stock covered by each outstanding option, and the price per
share thereof in each such option, and the number of shares reserved for
purposes of this option plan, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Capital Stock of the Company
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Capital Stock) or any other increase or decrease
in the number of such shares effected without receipt of consideration by the
Company.
Subject to any required action by the stockholders, if the Company
shall be the surviving corporation or entity in any merger or consolidation,
each outstanding option shall pertain to and apply to the securities to which a
holder of the number of shares of Capital Stock subject to the option would have
been entitled. A dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation or entity
shall cause each outstanding option to terminate, provided that each optionee
shall, in such event, if employed with the Company or the Bank for a period of
six (6) months from the date the option shall have expired, have the right,
immediately prior to such dissolution or liquidation or merger or consolidation
in which the Company is not the surviving corporation or entity, to exercise
his/her option in whole or in part without regard to the provisions of Article
5(a) and (e) of the Plan.
In the event of a change in the Capital Stock of the Company as
presently constituted, which is limited to a change of all of its authorized
shares with par value, into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Capital Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive,
provided that each option granted pursuant to the Plan shall not be adjusted in
a manner that causes the option to fail to continue to qualify as an incentive
stock option within the meaning of Section 422A of the Code.
Except as hereinbefore expressly provided in this Article 5(h), the
optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of and class or by reason
of any dissolution, liquidation, merger, or consolidation or spin-off of assets
or stock of another corporation, and any issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Capital Stock subject to the option.
The grant of an option pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
(i) Rights as a Stockholder
An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any shares covered by his/her option until the date
of the issuance of a stock certificate to him/her for such shares. No adjustment
shall be made for dividends "ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
provided in Article 5(h) hereof.
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(j) Amendment
The Plan may from time to time be terminated, modified or amended by
the Board of Directors of the Company in such respects as it shall deem
advisable in order that the options granted hereunder shall be "Incentive Stock
Options" as such term is defined in Section 422A of the Code, or to conform to
any change in any law or regulation governing the same or in any other respect;
provided, however, that no such modification or amendment shall change: (i) the
maximum number of shares for which options may be granted under the Plan, either
in the aggregate or to any individual employee, with the exception of changes in
such maximum by reason of the operation of the provisions of Section 5(h)
hereof; (ii) the option price, with the exception of changes in such price by
reason of the operation of the provisions of Section 5(h) hereof and with the
exception of changes in determining the fair market value of common shares for
the purposes of Section 5(c) hereof to conform with any then applicable
provision of the Code or regulations promulgated thereunder; (iii) the maximum
period during which the options granted under the Plan may be exercised (iv) the
provisions relating to the determination of employees to whom options granted
hereunder shall be granted and the number of shares covered thereunder or (v)
the provisions relating to adjustments to be made upon those changes described
in Section 5(h) hereof.
(k) Investment Purpose
Each option under the Plan shall be granted on the condition that the
purchases of stock thereunder shall be for investment purposes and not with a
view to resale or distribution except that in the event the stock subject to
such option is registered under the Securities Act of 1933, as amended, or in
the event a resale of such stock without such registration would otherwise be
permissible, such condition shall be inoperative if in the opinion of counsel
for the Company such condition is not required under the Securities Act of 1933
or any other applicable law, regulation, or rule of any governmental agency.
(l) Other Provisions
The option agreements authorized under the Plan shall contain such
other provisions, including, without limitation, restrictions upon the exercise
of the option, as the Committee and the Board of Directors of the Company shall
deem advisable. Any such option agreement shall contain such limitations and
restrictions upon the exercise of the option as shall be necessary in order that
such option will be an "Incentive Stock Option" as defined in Section 422A of
the Code or to conform to any change in the law.
(m) $100,000 Exercise Limitation
The fair market value (determined at the time the Incentive Stock
Option is granted) of the shares of Capital Stock covered by options exercisable
for the first time by an employee during any calendar year after 1986 (i.e.,
incentive stock options under all plans of the Company, or of any parent or
subsidiary of the Company) shall not exceed $100,000, but the foregoing shall be
subject to the interpretation of the Internal Revenue Service and applicable law
of the provisions of Code ss. 422A(b)(7) as such Code section may be amended
from time to time.
The foregoing matters shall be considered a part of the Plan herein.
6. TERM OF PLAN
Options may be granted pursuant to the plan from time to time within a
period of five (5) years from the date the Plan is adopted, or the date the Plan
is approved by the stockholders, whichever is earlier.
7. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee and the
Directors participating in decisions and other matters pursuant to the Plan
shall be indemnified by the Company against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any option granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Committee member or such Director(s)
is liable for negligence or misconduct in the performance of his duties;
provided that within sixty (60) days after institution of any such action,
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suit or proceeding a Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same. Notwithstanding
the foregoing, the provisions of this Paragraph 7 shall not be applicable to the
extent such is violative to applicable law, and if only a portion, but not all,
of Paragraph 7 shall so violate applicable law, then the balance of the
Paragraph 7 and the Plan shall remain and be enforceable, and the portion or
portions of Paragraph 7 which so violate applicable law shall be, if possible,
interpreted so as to allow enforceability to the maximum extent allowable under
law.
8. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Capital Stock
pursuant to options will be used for general corporate purposes.
9. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the optionee
to exercise such option.
10. RATIFICATION BY STOCKHOLDERS AND EFFECTIVE DATE
As this Plan is adopted by the Board of Directors, this Plan must be
approved by the holders of a majority of the outstanding shares of Capital
Stock, and such approval must occur within the period beginning twelve (12)
months after the date the Plan is adopted by the Board of Directors. If and when
such approval is made by the shareholders, the date of such approval shall be
the effective date of this Plan and such date shall be entered below.
Effective Date of Plan October 10, 1988
EXECUTED this 10th day of October, 1988.
/s/ David P. Allred
/s/ Robert C. Coleman
/s/ John Drummond
/s/ Patricia C. Edmond
/s/ Wayne Q. Justesen, Jr.
/s/ H. Edward Munnerlyn
/s/ George B. Park
/s/ Joe H. Patrick
/s/ H. H. Robinson, III
/s/ Charles J. Rogers
/s/ W.G. Stevens
/s/ Lex D. Walters
/s/ Thomas D. Wingard
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EXHIBIT 10.2
GREENWOOD NATIONAL BANCORPORATION
GREENWOOD, SOUTH CAROLINA
INCENTIVE STOCK OPTION AND
NONSTATUTORY STOCK OPTION PLAN
1. Purpose and Scope
The purpose of this Plan is to promote the interests of the Company and
its shareholders by strengthening its ability to attract and retain key officers
and directors by furnishing additional incentives whereby such present and
future officers, key employees, and directors may be encouraged to acquire, or
to increase their acquisition of, the Company's common stock, thus maintaining
their personal and proprietary interest in the Company's continued success and
progress. The Plan provides for the grant of Incentive Stock Options and the
grant of Nonstatutory Stock Options and Stock Appreciation Rights in accordance
with the terms and conditions set forth below.
2. Definitions
Unless otherwise required by the context:
2.01. "Board" shall mean the Board of Directors of the Company.
2.02. "Committee" shall mean the Stock Option Plan Committee, which
consists of members appointed by the Board.
2.03. "Company" shall mean Greenwood National Bancorporation, a South
Carolina corporation, and any subsidiary corporation
2.04. "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.05. "Incentive Stock Option" shall mean a right to purchase stock,
granted pursuant to the Plan, which qualifies under Section 422 of the Code and
the regulations thereunder.
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2.06. "Nonstatutory Stock Option" shall mean a right to purchase Stock
granted pursuant to the Plan, which does not qualify under Section 422 of the
Code and the regulations thereunder.
2.07. "Options" shall mean either an Incentive Stock Option or
Nonstatutory Stock Option.
2.08. "Option Price" shall mean the purchase price for Stock under an
Incentive Stock Option or Nonstatutory Stock Option, as determined in Section 6
below.
2.09. "Participant" shall mean anyone to whom an Incentive Stock Option
or Nonstatutory Stock Option is granted under the Plan.
2.10. "Plan" shall mean the Greenwood National Bancorporation Stock
Option Plan.
2.11. "Stock" shall mean the common stock of Greenwood National
Bancorporation.
2.12. "Stock Appreciation Right" shall mean a right to receive cash,
granted pursuant to Section 9 of the Plan.
3. Stock to be Optioned
Subject to the provisions of Section 15 of the Plan, the maximum number
of shares of Stock that may be optioned or sold under the Plan is 250,000
shares. Such shares may be treasury, or authorized, but unissued, shares of
Stock of the Company. If any Incentive Stock Option or Nonstatutory Stock Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full, the shares not purchased shall again be available for
purposes of the Plan.
4. Administration
The Plan shall be administered by the Committee. Two members of the
Committee shall constitute a quorum for the transaction of business. The
Committee shall be responsible to the Board for the operation of the Plan, and
shall make recommendations to the Board with respect to participation in the
Plan by employees and directors of the Company, and with respect to the extent
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of that participation. The interpretation and construction of any provision of
the Plan by the Committee shall be final, unless otherwise determined by the
Board. No member of the Board or the Committee shall be liable for any action or
determination made by him in good faith.
5. Eligibility
The Board, upon recommendation of the Committee, may grant Nonstatutory
Stock Options to any security holder of the Company and Incentive Stock Options
or Nonstatutory Stock Options to any officer, key executive, administrative or
other employee (including an employee who is a director of the Company). Options
may be awarded by the Board at any time and from time to time to new
Participants, or to then Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the Board,
upon recommendation by the Committee shall determine. Options granted at
different times need not contain similar provisions.
6. Option Price
The purchase price for Stock under each Nonstatutory Stock Option shall
be 100 percent of the fair market value of the Stock at the time the Option is
granted, unless the Committee determines otherwise. The purchase price for stock
under each Incentive Stock Option shall not be less than 100 percent of the fair
market value of the Stock at the time the Incentive Stock Option is granted.
7. Terms and Conditions of Options
Options granted pursuant to the Plan shall be authorized by the Board
and shall be evidenced by a Stock Option Agreement in such form as the Board,
upon recommendation of the Committee, shall from time to time approve. Such
agreements shall comply with and be subject to the following terms and
conditions:
7.01. Employment Agreement. The Board may, in its discretion, include
in any Option granted under the Plan a condition that the Participant shall
agree to remain in the employ of, and to render services to, the Company for a
period of time (specified in the agreement) following the
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date the Option is granted. No such agreement shall impose upon the Company,
however, any obligation to employ the Participant for any period of time.
7.02. Noncompetition. The Board may, in its discretion, include in any
Option granted under the Plan a condition that the Participant agree not to
compete with the Company for a specific period of time and/or within a specific
geographic area.
7.03 Time and Method of Payment. The Option Price shall be paid in cash
at the time an Option is exercised under the Plan and/or may be paid for by
tendering of one or more shares of Stock. Upon a tender of Stock, the fair
market value of the Stock at the time of tender shall be used to determine the
value of the Stock as payment. The Committee shall have sole discretion to
determine the fair market value of the shares of Stock taking into consideration
such factors as the most recent appraisal of the Stock for purposes of the
Company's Employee Stock Ownership Plan, the Company's year-to-date earnings,
and recent trading prices of the Stock. Promptly after the exercise of an Option
and the payment of the full Option Price either in Stock or cash, the
Participant shall be entitled to the issuance of a stock certificate evidencing
his ownership of such share of Stock. A Participant shall have none of the
rights of a shareholder until shares are issued to him, and no adjustment will
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
7.04. Surrender Rights. The Committee may include in an Option granted
under the Plan the right to surrender all or a portion of the Option and receive
in exchange therefor an amount of cash or Stock equal to the difference between
the then fair market value of the shares of stock issuable upon the exercise of
the Option or portion thereof surrendered and the exercise price of the Option
or portion thereof surrendered. The fair market value of the Stock shall be
determined in accordance with the provisions under Section 7.03 of the Plan.
7.05. Number of Shares. Each Option shall state the total number of
shares of Stock to which it pertains.
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7.06. Option Period and Limitations on Exercise of Options. The Board
may, in its discretion, provide that an Option may not be exercised in whole or
in part for any period or periods of time specified in the Option Agreement.
Except as provided in the Option Agreement, an Option may be exercised in whole
or in part at any time during its term. No Option may be exercised after the
expiration of ten years from the date it is granted. No Option may be exercised
for a fractional share of Stock.
8. Provisions Applicable to Incentive Stock Options
It is intended that Incentive Stock Options granted under the Plan
shall constitute Incentive Stock Options within the meaning of Section 422 of
the Code. The following provisions are applicable to any Incentive Stock Option
granted under the Plan
8.01. Term of Incentive Stock Option. No Incentive Stock Option shall
be exercisable prior to the date one year, or after the date ten years, from the
date such Incentive Stock Option is granted.
8.02. Ten Percent Shareholder. Notwithstanding any other provision
herein contained, no Plan Participant may receive an Incentive Stock Option
under the Plan if such Participant, at the time the award is granted, owns (as
defined in Section 424(d) of the Code) stock possessing more than ten percent of
the total combined voting power of all classes of stock of the Company, unless
the option price for such Incentive Stock Option is at least 110 percent of the
fair market value of the Stock subject to such Incentive Stock Option on the
date of the grant and such Incentive Stock Option is not exercisable after the
date five years from the date such Incentive Stock Option is granted.
8.03. Limitation on Amounts. The aggregate fair market value
(determined with respect to each Incentive Stock Option as of the time such
Incentive Stock Option is granted) of the Stock with respect to which Incentive
Stock Options are exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000.
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8.04. Grant of Incentive Stock Option. An Incentive Stock Option
granted pursuant to the Plan must be granted within ten years from the date the
Plan is adopted or the date the Plan is approved by Company shareholders,
whichever is earlier.
9. Stock Appreciation Rights
The Board may, upon recommendation of the Committee, grant Stock
Appreciation Rights to Participants at the same time as such Participants are
awarded Nonstatutory Stock Options under the Plan. Such Stock Appreciation
Rights shall be evidenced by a Nonstatutory Stock Option and Stock Appreciation
Right Agreement in such form as the Board shall from time to time approve. Such
Agreement shall comply with, and be subject to, the following terms and
conditions:
9.01. Employment Agreement. The Board may, in its discretion, include
in any Stock Appreciation Right granted under the Plan a condition that the
Participant shall agree to remain in the employ of, and to render services to,
the Company or any of its subsidiaries for a period of time (specified in the
agreement) from the date the Stock Appreciation Rights are granted. No such
agreement shall impose upon the Company, however, any obligations to employ the
Participant for any period of time.
9.02. Grant. Each Stock Appreciation Right shall relate to a specific
Nonstatutory Stock Option under the Plan, and shall be awarded to a Participant
concurrently with the grant of such Nonstatutory Stock Option. The Company shall
have sole discretion to grant up to one (1) Stock Appreciation Right for every
2.5 Nonstatutory Stock Options granted under this Agreement.
9.03. Manner of Exercise. A Participant shall exercise a Stock
Appreciation Right by giving written notice of such exercise to the Company. The
date upon which such written notice is received by the Company shall be the
exercise date for the Stock Appreciation Right.
9.04. Appreciation Available. Each Stock Appreciation Right shall
entitle a Participant to the following amount of appreciation--the excess of the
fair market value of a share of Stock on the exercise date over the Nonstatutory
Stock Option Price per share of the related Nonstatutory
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Stock Option. The Committee shall have sole discretion to determine the fair
market value of the shares of Stock taking into consideration such factors as
the most recent appraisal of the Stock for purposes of the Company's Employee
Stock Ownership Plan, the Company's year-to-date earnings, and recent trading
prices of the Stock. The total appreciation available to a Participant from any
exercise of Stock Appreciation Rights shall be equal to the number of Stock
Appreciation Rights being exercised, multiplied by the amount of appreciation
per Right determined under the preceding sentences.
9.05. Payment of Appreciation. The total appreciation available to a
Participant from an exercise of Stock Appreciation Rights shall be paid to the
Participant in cash. The amount thereof shall be the amount of appreciation
determined under Paragraph 4 above.
9.06. Limitations Upon Exercise of Stock Appreciation Rights. A
Participant may exercise a Stock Appreciation Right for cash only in conjunction
with the exercise of the Nonstatutory Stock Option to which the Stock
Appreciation Right relates. Stock Appreciation Rights may be exercised only at
such times and by such persons as may exercise Nonstatutory Stock Options under
the Plan. Adjustment to the number of shares in the Plan and the price per share
pursuant to Section 15 below shall also be made to any Stock Appreciation Rights
held by each Participant. Any termination, amendment, or revision of the Plan
pursuant to Section 15 below shall be deemed a termination, amendment, or
revision of Stock Appreciation Rights to the same extent.
9.07. Tax Deductibility of Stock Appreciation Rights. The Board may, in
its discretion, include in any Stock Appreciation Right granted under the Plan a
condition that if the Internal Revenue Code is amended such that, at the time
the Participant elects to exercise his Stock Appreciation Right, the dollar
value of the Stock Appreciation Right is not tax-deductible, then such Stock
Appreciation Right will become null and void. The Board may further provide that
such condition may be waived by the Committee at the time the Participant
exercises the Stock Appreciation Right.
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10. Exercise of Options
The Committee, in granting Options and Stock Appreciation Rights
hereunder, shall have discretion to determine the terms upon which such Options
and Stock Appreciation Rights shall be exercisable, subject to the applicable
provisions of the Plan. If a Participant holding Incentive Stock Options is
discharged for just cause at any time, the entire number of shares of Stock and
Stock Appreciation Rights granted to a Participant shall be forfeited. For this
purpose, "just cause" shall mean theft, fraud, embezzlement or willful
misconduct causing significant property damage to the Company or personal injury
to any employee of the Company. The Committee shall have sole discretion in
determining "just cause" within the terms of this Section.
11. Rights in Event of Death
If a Participant dies while employed by
the Company or any of its subsidiaries, or within three months after having
retired with the consent of the Company or any of its subsidiaries, without
having fully exercised his Options and Stock Appreciation Rights, the executors
or administrators, or legatees or heirs, of his estate shall have the right to
exercise such Options and Stock Appreciation Rights to the extent that such
deceased Participant was entitled to exercise the Options and Stock Appreciation
Rights on the date of his death; provided, however, that in no event shall the
Options or Stock Appreciation Rights be exercisable more than ten years from the
date they were granted.
12. No Obligations to Exercise Option or Stock Appreciation Rights
The granting of an Option or Stock Appreciation Right shall impose no
obligation upon the Participant to exercise such Option or Stock Appreciation
Right.
13. Nonassignability
Options and Stock Appreciation Rights shall not be transferable other
than by will or by the laws of descent and distribution, and during a
Participant's lifetime shall be exercisable only by such Participant.
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14. Effect of Change in Stock Subject to the Plan
The aggregate number of shares of Stock available for Options under the
Plan, the shares subject to any Option, the price per share, and the number of
related Stock Appreciation Rights shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock subsequent to the
effective date of the Plan resulting from (1) a subdivision or consolidation of
shares or any other capital adjustment, (2) the payment of a stock dividend, or
(3) other increase or decrease in such shares effected without receipt of
consideration by the Company. If the Company shall be the surviving corporation
in any merger or consolidation, any Option or Stock Appreciation Right shall
pertain, apply, and relate to the securities to which a holder of the number of
shares of Stock subject to the Option would have been entitled after the merger
or consolidation. Upon dissolution or liquidation of the Company, or upon a
merger or consolidation in which the Company is not the surviving corporation,
all Options and Stock Appreciation Rights outstanding under the Plan shall
terminate; provided, however, that each Participant (and each other person
entitled under Section 11 to exercise an Option or Stock Appreciation Right)
shall have the right, immediately prior to such dissolution or liquidation, or
such merger or consolidation, to exercise such Participant's Options and Stock
Appreciation Rights in whole or in part, but only to the extent that such
Options and Stock Appreciation Rights are otherwise exercisable under the terms
of the Plan.
15. Amendment and Termination
Neither the Board nor the Committee may, without the consent of the
holder of an Option, alter or impair any Option or Stock Appreciation Right
previously granted under the Plan, except as authorized herein. Unless sooner
terminated, the Plan shall remain in effect for a period of ten (10) years from
the earlier of the date of the Plan's adoption by the Board or approval by the
Company shareholders. Termination of the Plan shall not affect any Option
previously granted
With respect to any shares of Stock to which Options have not been
granted under the Plan, the Board, without further action on the part of the
shareholders of the Company, may from time to
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time alter, amend, or suspend certain provisions of the Plan except that it may
not, without the approval of the shareholders of the Company: (i) change the
number of shares of Stock available for grant under the Plan, (ii) extend the
duration of the Plan, (iii) increase the maximum term of Incentive Stock Options
under the Plan, (iv) decrease the minimum option price of Incentive Stock
Options, (v) change the class of employees eligible to be granted Incentive
Stock Options under the Plan, or (vi) effect a change relating to Incentive
Stock Options granted under the Plan which is inconsistent with Code Section 422
or the regulations thereunder.
16. Agreement and Representation of Employees
As a condition to the exercise of any portion of an Option, or of any
Stock Appreciation Right, the Company may require the person exercising such
Option or Stock Appreciation Right to represent and warrant at the time of such
exercise that any shares of Stock acquired at exercise are being acquired only
for investment and without any present intention to sell or distribute such
shares, if, in the opinion of counsel for the Company, such a representation is
required under the Securities Act of 1933 or any other applicable law,
regulation, or rule of any governmental agency.
17. Reservation of Shares of Stock
The Company, during the term of this Plan, will at all times reserve
and keep available, and will seek or obtain from any regulatory body having
jurisdiction any requisite authority necessary to issue and to sell, the number
of shares of Stock that shall be sufficient to satisfy the requirements of this
Plan. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority deemed necessary by counsel for the Company for the
lawful issuance and sale of its Stock hereunder shall relieve the Company of any
liability in respect of the failure to issue or sell Stock as to which the
requisite authority has not been obtained.
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18. Withholding Taxes
Whenever under the Plan shares are to be issued upon the exercise of
Options or Rights thereunder, the Company shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy federal, state
and local withholding tax requirements, if any, prior to the delivery of any
Stock certificate or certificates for such shares. Whenever under the Plan
payments are made in cash such payment shall be net of an amount sufficient to
satisfy federal, state and local withholding tax requirements.
19. Effective Date of Plan
The Plan shall be effective from the date that the Plan is approved by
the Board. Pursuant to Code Section 422(b)(1), the adoption of the Plan shall be
submitted for the approval of the shareholders of the Company within twelve (
12) months thereafter.
Date Approved By Board of Directors: December 20, 1993
Date Approved by Company Shareholders: May 16, 1994
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EXHIBIT 10.3
REGISTRANT'S EXECUTIVE SUPPLEMENTAL INCOME PLAN
AND FORM OF EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
(SUMMARY)
The Registrant has adopted an Executive Supplemental Income Plan (the
"Executive Plan") pursuant to which certain executive officers are provided with
certain salary continuation benefits upon their respective retirements. The
Executive Plan also provides for benefits in the event of early retirement or
death. In the event of a substantial change in control of the Company (generally
defined as the acquisition of a 20% or greater ownership interest in the Bank or
the Company), the participants in the Executive Plan become fully vested in
their respective death benefits and all amounts credited toward their respective
retirement benefit accounts. The Executive Plan is designed to provide
participating employees (or the participant's beneficiary, as applicable) with
both a pre-retirement death benefit based on a percentage of the employee's
current compensation and a post-retirement annuity benefit designed to provide
the employee with a certain percentage of the employee's final average income at
retirement age. The Executive Plan requires that the participating employees be
employed at the earlier of death or retirement in order for the participant or
the participant's beneficiary to be eligible to receive benefits under the
Executive Plan. While the employee is receiving benefits under the Executive
Plan, the Executive Plan prohibits the employee from competing with the Bank and
requires the employee to be available for consulting work for the Bank. The
Executive Plan is an unfunded plan, although the Company and the Bank have the
right to acquire investments to indirectly provide funding of the benefits
payable under the Executive Plan. Life insurance policies have been purchased by
the Bank to offset a portion of the liabilities associated with the obligation
to pay death and retirement benefits under the Executive Plan.
<PAGE>
GREENWOOD NATIONAL BANK
EXECUTIVE SUPPLEMENTAL INCOME PLAN
SUMMARY OF THE AGREEMENT
1. What is the ESI Plan?
The ESI Plan is an Agreement between you and the Bank. The Bank agrees
to provide you with a benefit payable when you retire and a benefit
payable to your Beneficiary should you die prior to retirement. In
return, you agree to continue to work for the Bank. These benefits are
in addition to Social Security and any other retirement plans in which
you may be entitled to participate such as the Employee Stock Ownership
Plan (ESOP).
2. How do I qualify for the ESI Benefits?
With certain exceptions, upon execution of the Agreement, you will
immediately obtain a one hundred percent nonforfeitable interest in the
amount in your account. (See Paragraph 4.01 of the Agreement).
3. Must I contribute funds to participate in tile ESI Plan?
No, you have been selected to be a participant in the Executive
Supplemental Income Plan. There will be no reduction in your take-home
pay or in contributions on your behalf to any other benefit plans. Your
only contribution is to provide your best efforts on behalf of the
Bank.
4. What is the amount of the benefits provided by the ESI Plan?
The amount of your retirement benefit is determined solely by the
amount in your Deferred Compensation Account, a bookkeeping reserve to
which the Bank will make annual credits on the basis of a targeted
benefit. The target benefit amount and payment period of your
pre-retirement death benefit are set forth in the Addendum to the
Agreement. These amounts may be adjusted from time to time (usually on
a biannual basis) as your position with the Bank and your salary
changes. Should you die before the end of your benefit payment period,
the payments being made to you will continue to be made to your
Beneficiary until all payments under your Agreement have been made.
(See Paragraph 2.01 and 3.01 of the Agreement and the Addendum.)
5. When am I taxed for receiving the ESI benefits?
You will pay no taxes during the years prior to your death or
retirement even though the current economic benefits of being an ESI
participant are substantial. When you or your family receive the
benefits at your retirement, or upon your death, the benefit will be
taxed as ordinary income.
6. Is Early Retirement provided for under the ESI Agreement?
Yes, if you have at least 10 years of service with the Bank, you may
retire after age 55 with the approval of the Board of Directors.
However, should the Bank undergo a Change
<PAGE>
in Control, you may retire at any time after attaining age 55 without
having been employed by the Bank for any minimum years of service and
without obtaining Board approval.
(See Paragraph 3.03 of the Agreement.)
7. If I retire early, what are my ESI benefits?
You will receive an early retirement pension equal to the amount in
your Deferred Compensation Account at the time of your early retirement
(i.e. age 55). (See Paragraph 3.03 of the agreement.)
8. If I die before Age 65, what ESI benefits will my Beneficiary receive?
Your Beneficiary will begin to receive payments on the first day of the
month following the date of your death. The amount and term of the
benefit is stated in the Addendum to the Agreement. (See Paragraph 2.01
of the Agreement and the Addendum.)
9. How do I name a Beneficiary under the ESI plan?
Your Agreement contains a Beneficiary Designation Form for you to name
your primary and contingent Beneficiary. You can, of course, change
your Beneficiary at any time by written notice to the Bank.
10. If I leave the Bank before the normal Retirement Date, am I entitled to
any ESI benefits?
Your Agreement provides, with certain exceptions, that you are 100%
vested in the post-retirement benefits and partially vested in the
pre-retirement benefits provided by your Agreement. Thus, unless you
are discharged for Just Cause, you will take your benefits with you
upon leaving the Bank. (See Paragraph 4.01 of the Agreement.)
11. What is the disability benefit?
Your retirement benefit continues to accrue and your pre-retirement
death benefit is in effect during periods of disability. This is in
addition to the Bank's regular disability program. (See Paragraph 4.01
of the Agreement.)
12. What happens to my ESI benefit if the Bank is sold?
If the bank leaves you (i.e the Bank undergoes a Change in Control),
you are fully vested in a portion of the pre-retirement death benefit
and the amount in your Deferred Compensation Account and your continued
employment with any successor bank is not required to receive this
benefit. (See Paragraph 4.02 of the Agreement.)
13. Once I retire and begin receiving ESI retirement benefits, are there
any requirements to continue to receive benefits?
You must make yourself available (if called upon) to provide the Bank
with reasonable business consulting and advisory services after the
date you retire. In addition, you may not become employed in such a way
that you are competing with the Bank. However,
<PAGE>
should the Bank undergo a Change in Control, these requirements will
not apply. (See Paragraphs 4.03, 4.04, and 4.05 of the Agreement.)
14. May the Bank accelerate the payment of ESI benefits under the Agreement?
Yes, if you or your Beneficiary agree to accelerate the payments. The
amount paid to you or your Beneficiary would be the remaining credit
balance under the Deferred Compensation Account. (See Paragraph 7.01 of
the Agreement.)
15. Do I have any rights in the assets, if any, set aside refund my ESI
benefits?
Although the Bank has elected to indirectly fund your ESI benefits, to
avoid current taxation of ESI benefits you cannot have any interest in
or right to such assets. You must remain a general, unsecured creditor
of the Bank. (See Paragraphs 5.01 and 6.01 of the Agreement.)
16. May the Bank amend or revoke the ESI Agreement?
No. The Bank may not amend, modify, or revoke the Agreement without
your mutual consent.
THE VALUE OF THIS BENEFIT IS SUBSTANTIAL. YOU HAVE BEEN SELECTED TO
PARTICIPATE IN RECOGNITION OF YOUR CURRENT CONTRIBUTIONS AND TO
MOTIVATE YOUR FUTURE EFFORTS ON BEHALF OF THE BANK.
<PAGE>
GREENWOOD NATIONAL BANK
GREENWOOD, SOUTH CAROLINA
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
THIS AGREEMENT is effective on the day of , 1993, by and between
GREENWOOD NATIONAL BANK, Greenwood, South Carolina (the "Bank") and (the
"Officer").
W I T N E S S E T H:
WHEREAS, the Officer is currently employed by the Bank in an executive
capacity;
WHEREAS, the Bank desires to retain the valuable services and business
counsel of the Officer and to induce the Officer to remain in an executive
capacity with the Bank;
WHEREAS, the Bank wishes to retain the Officer in order to prevent the
substantial financial loss which the Bank could incur if the Officer were to
leave and were to enter the employment of a competitor;
WHEREAS, the Officer is considered a highly compensated Officer or
member of a select management group of the Bank; and
WHEREAS, the Bank desires to pay the Officer the benefits provided
herein, subject to the terms and conditions set forth hereinbelow.
NOW, THEREFORE, for and in consideration of the above premises, and of
the following terms, conditions and mutual covenants of the parties hereto, IT
IS HEREBY AGREED.
ARTICLE I
DEFINITIONS
1.01. "Actuarially Determined Amount" shall mean the amount determined
by applying a fraction to the amount of the Benefit payable where: (1) the
numerator shall consist of the Officer's total Years of Service from date of
hire until the date the Officer's termination of employment became effective,
and (2) the denominator shall consist of Officer's total Years of Service from
date of hire until the date the Officer attains Retirement Age.
1.02. "Annual Funding Amount" shall mean the amount required to be
contributed by the Bank to the Deferred Compensation Account annually pursuant
to paragraph 3.01(a) of this Agreement.
1.03. "Beneficiary" shall mean the person or persons the Officer has
designated in writing to the Bank; if the Officer has not designated a
Beneficiary, then any payments due under the Agreement shall be paid to the
Officer's Estate.
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1.04. "Benefit" shall mean the Death Benefit or the Retirement Benefit,
as the case may be.
1.05. "Buyout" shall mean a transaction or series of related
transactions by which the Bank is sold, either through the sale of a Controlling
Interest in the Bank's voting stock or through the sale of substantially all of
the Bank's assets, to a party not having a Controlling Interest in the Bank's
voting stock on the date of execution of this Agreement.
1.06. "Change in Control" shall mean a Buyout, Merger, or Substantial
Change in Ownership.
1.07. "Compensation" shall mean the total base salary paid to Officer
by Bank for any calendar year, as reflected on the payroll records of the Bank.
1.08. "Controlling Interest" shall mean ownership, either directly or
indirectly, of more than twenty percent (20%) of the voting stock of the Bank or
a parent company of the Bank which is a member of the same "affiliated group" as
defined in 26 U.S.C. Section 1504(a).
1.09. "Death Benefit" shall mean the Annual Pre-Retirement Death
Benefit amount set forth in the Addendum to this Agreement.
1.10. "Deferred Compensation Account" shall mean the liability account
to which the Bank contributes the Annual Funding Amount pursuant to paragraph
3.01(a) of this Agreement.
1.11. "Disability" shall mean a condition whereby the Officer, because
of a physical or mental Disability, is or will be unable to perform the duties
of the Officer's customary position of employment. The Board of Directors shall
determine whether the Officer is considered Disabled within this definition and
may require the Officer to submit to a physical examination in order to confirm
Disability.
1.12. "Early Retirement Age" shall mean age fifty-five (55).
1.13. "Just Cause" shall be determined by the Board of Directors and
will include theft, fraud, embezzlement or willful misconduct causing
significant property damage to the Bank or personal injury to another employee.
Just Cause shall also include any single action and/or inaction or series of
actions and/or inactions which result in the Officer not performing the
Officer's duties in the manner expected of the Officer by the Bank. The
existence of Just Cause shall be determined upon recommendation by the Chief
Executive Officer and by vote of seventy percent (70%) of the Board of
Directors.
1.14. "Merger" shall mean a transaction or series of transactions
wherein the Bank is combined with another business entity, and after which the
persons or entities who had owned, either directly or indirectly, a Controlling
Interest in the Bank's voting stock on the date of execution of this Agreement
own less than a Controlling Interest in the voting stock of the combined entity.
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1.15. "Retirement Age" shall mean age sixty-five (65), or later at the
election of the Board and Officer.
1.16. "Retirement Benefit" shall mean fifteen (15) equal annual
installments of an amount necessary to amortize the amount credited to the
Deferred Compensation Account at Early Retirement Age or Retirement Age,
whichever the case may be.
1.17. "Substantial Charge in Ownership" shall mean a transaction or
series of transactions in which a Controlling Interest in the Bank is acquired
by or for a person or business entity, either of which did not own, either
directly or indirectly, a Controlling Interest in the Bank on the date that this
Agreement was executed. The above shall not apply to stock purchased by the
Greenwood National Bancorporation Employee Stock Ownership Plan with 401(k)
Provisions
("KSOP").
1.18. "Target Benefit" shall mean the present value at Retirement Age
of the Annual Post- Retirement Benefit set forth in the Addendum to this
Agreement.
1.19. "Year of Service" shall mean a twelve (12) consecutive month
period during which the Officer is considered a full-time employee of the Bank.
A fractional Year of Service shall accrue at a rate of one-twelfth (1/12) of a
Year of Service for each full month of continuous employment.
ARTICLE II
PAYMENT OF DEATH BENEFIT
2.01. If covered by the provisions of this Agreement, the Bank agrees
that if the Officer dies prior to attaining Retirement Age or commencement of
payments under Early Retirement, the Bank will pay the Officer's Beneficiary the
Death Benefit. The Death Benefit shall be payable monthly in equal installments
to commence on the first business day of the month following the month in which
the Officer dies. The payment of such Death Benefit will be subject to the
conditions and limitations set forth elsewhere in this Agreement.
2.02. Notwithstanding the provisions of this Article II, the Bank shall
have no obligation under this Agreement if the Officer's death results from
suicide, whether sane or insane, within two years of the effective date of this
Agreement.
ARTICLE III
PAYMENT OF RETIREMENT BENEFIT
3.01. Retirement Benefit.
(a) The Bank shall credit to the Deferred Compensation Account for each
year that the Officer is covered by this Agreement, the Annual Funding Amount
which is projected to be necessary to fund his Target Benefit. The Deferred
Compensation Account shall be segregated from other accounts on the books and
records of the Bank as a contingent liability of the Bank to the Officer.
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(b) The Annual Funding Amount for the Officer shall be the Target
Benefit multiplied by a fraction. The denominator of the fraction is the sum of
all the years digits corresponding to the number of years from the effective
date of this Agreement until the Officer's Retirement Age. The numerator of the
fraction is one (1) for the first year of term of the Agreement, and increases
by one (1) for each year thereafter. Upon commencement of payment of the
Retirement Benefit at Early Retirement Age or Retirement Age, whichever the case
may be, the Annual Funding Amount shall be one-tenth (1/10th) of the amount
credited to the Deferred Compensation Account at the end of the year of payment.
(c) The Annual Funding Amount shall remain constant unless there has
been a change in the Officer's Compensation. If there has been such a change,
then the Annual Funding Amount shall be increased or decreased as appropriate,
in an amount equal to the change in Target Benefit multiplied by the fraction
from subparagraph (b) representing the number of full years remaining to
Retirement Age from the date as of which the change in Compensation is
recognized.
3.02. Retirement.
On or after Retirement Age, the Officer may elect to terminate service
and commence the receipt of the Retirement Benefit in equal monthly installments
commencing on the first business day of the month after the Officer's
termination of employment.
3.03. Early Retirement.
If the Officer has at least ten (10) years of service with the Bank,
the Officer may retire and begin to receive benefits under this Article III at
any time after attaining age fifty-five (55). However, if there has been a
Change in Control, the Officer can retire and begin receiving payments at any
time after attaining age fifty-five (55) without satisfying any minimum years of
service requirement and without obtaining Board approval.
3.04. Post-Retirement Death Benefit.
If covered by this Agreement, in the event the Officer dies on or after
commencement of Retirement Benefit payments under this Article III, the
Officer's remaining Retirement Benefit payments shall continue to be paid to the
Officer's Beneficiary.
ARTICLE IV
CONDITIONS
4.01. Continuous Employment.
Eligibility for Benefits under this Agreement is conditioned upon the
Officer's continuous employment in an eligible capacity (periods of Disability
and authorized leave of absence shall be considered as periods of employment)
with the Bank from the date of execution of this Agreement until the earlier of
the date the Officer attains Retirement Age, qualifies for and elects Early
Retirement or dies. Benefit payments are conditioned upon the Officer's
compliance with the terms of this Agreement so long as the Officer lives and
payments are due under the terms of this Agreement.
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4.02. Vesting.
Should the Officer voluntarily terminate employment with the Bank,
become permanently Disabled, or be discharged without Just Cause prior to the
date the Officer obtains Retirement Age, the Officer will be entitled to a
vested and non-forfeitable interest in the Actuarially Determined Amount of the
Death Benefit and in all amounts credited to the Deferred Compensation Account.
4.03. Services.
Payment of the Retirement Benefit is further conditioned upon the
Officer rendering such reasonable business consulting and advisory services as
the Bank's Board of Directors may call upon the Officer to provide while
receiving payments under this Agreement.
(1) It is understood that such services shall not require the
Officer to be active in the Bank's day-to-day activities,
and that the Officer shall perform services as requested
by management.
(2) It is further understood that the Officer shall be
compensated for such services in an amount to be then
agreed upon, and shall be reimbursed for all expenses
incurred in performing such services.
4.04. Noncompetition.
Payment of the Retirement Benefit is further conditioned upon the
Officer not acting in any similar employment capacity for any business
enterprise which competes to a substantial degree with the Bank, nor engaging in
any activity involving substantial competition with the Bank during employment
with the Bank, after retirement from the Bank, or during periods of Disability
while covered by the provisions of this Agreement. In the event of violation of
this provision, all future payments shall be canceled and discontinued. The
Board of Directors shall determine whether violations have occurred and may also
waive these conditions.
4.05. Change in Control.
The conditions set forth in paragraphs 4.03 and 4.04 shall not be
applicable if the Officer voluntarily terminates employment, becomes permanently
Disabled or is discharged without Just Cause on the date of or on any date
subsequent to a Change in Control. The Officer will become 100 percent vested in
the Death Benefit in all amounts credited to the Deferred Compensation Account
upon a Change in Control.
ARTICLE V
FUNDING
5.01. The Bank's obligations under this Agreement shall be an unfunded
and unsecured promise to pay. The Bank shall not be required under any
circumstances to fund its obligations under this Agreement. The Bank may,
however, in its sole and absolute discretion, elect to fund this Agreement in
whole or in part.
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ARTICLE VI
OFFICER RIGHT TO ASSETS
6.01. The rights of the Officer or the Beneficiary shall be solely
those of an unsecured general creditor of the Bank. The Officer or the
Beneficiary shall only have the right to receive from the Bank those payments as
specified under this Agreement. The Officer or the Beneficiary shall have no
rights or interests whatsoever in any assets of the Bank. Any asset used or
acquired by the Bank in connection with the liabilities the Bank has assumed
under this Agreement, except as expressly provided, shall not be deemed to be
held under any trust for the benefit of the Officer or the Beneficiary, nor
shall it be considered security for the performance of the obligations of the
Bank. It shall be, and remain, a general, unpledged, and unrestricted asset of
the Bank.
ARTICLE VII
ACCELERATION OF PAYMENT
7.01. The Bank may accelerate to a single payment Benefits payable
under this Agreement with the written consent of the Officer or the Beneficiary.
In the event it is agreed to accelerate payment, the single payment shall be the
remaining credit balance under the Deferred Compensation Account.
ARTICLE VIII
LEAVES OF ABSENCE
8.01. The Bank may, in its sole discretion, permit the Officer to take
a leave of absence; each such period shall not exceed one year in length. During
such leave, the Officer shall be considered to be in the continuous employment
of the Bank for purposes of this Agreement.
ARTICLE IX
ASSIGNABILITY
9.01. Except insofar as this provision may be contrary to applicable
law, no sale, transfer, alienation, assignment, pledge, collateralization, or
attachment of any Benefits under this Agreement shall be valid or recognized by
the Bank.
ARTICLE X
AMENDMENT/REVOCATION
10.01. This agreement shall not be amended, modified, or revoked at
anytime, in whole or in part, without the mutual written consent of the Officer
and Bank; provided, however, that in the event the Officer is discharged for
Just Cause, this Agreement shall be terminated and shall become null and void
with neither the Officer nor the Officer's Beneficiary having any claim or right
against Bank.
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ARTICLE XI
LAW GOVERNING/ENFORCEMENT/PARTIES
11.01. This Agreement shall be governed by the laws of the State of
South Carolina. This Agreement is solely between the Bank and the Officer.
Furthermore, the Officer or the Beneficiary shall only have recourse against the
Bank for enforcement of the Agreement. However, it shall be binding upon the
Beneficiary, heirs, executors and administrators of the Officer, and upon any
and all successors and assigns of the Bank.
11.02. The Bank is hereby designated as a fiduciary under this
Agreement. The Bank as a fiduciary shall have authority to control, interpret
and manage the operation and administration of this Agreement. Any decision by
the Bank denying a claim by the Officer or a Beneficiary for Benefits under this
Agreement shall be stated in writing and delivered or mailed to the Officer or
such Beneficiary. Such statement shall set forth the specific reasons for the
denial, written to the best of the Bank's ability in a manner that may be
understood without legal or actuarial counsel. In addition, the Bank shall
afford a reasonable opportunity to the Officer or such Beneficiary for a full
and fair review of the decision denying such claim.
ARTICLE XII
SEVERABILITY
12.01. In the event that any of provisions of this Agreement or portion
thereof, are held to be inoperative or invalid by any court of competent
jurisdiction, then: (a) insofar as is reasonable, effect will be given to the
intent manifested in the provision held invalid or inoperative; and (b) the
validity and enforceability of the remaining provisions will not be affected
thereby.
ARTICLE XIII
INCOMPETENCY
13.01. If the Bank shall find that any person to whom any payment is
payable under this Agreement is unable to care for their affairs because of
illness or accident, or is a minor, any payment due (unless a prior claim shall
have been made by a duly appointed guardian, committee, or other legal
representative) may be paid to the Spouse, a child, a parent, a brother or
sister, or a custodian determined pursuant to the Uniform Gift to Minors Act (or
similar law), or to any person deemed by the Bank to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Bank may determine. Any such payment shall be a complete discharge of the
liabilities of the Bank under this Agreement.
ARTICLE XIV
NO EMPLOYMENT CONTRACT
14.01. This Agreement shall in no way be construed to create an
employment contract between the Bank and the Officer.
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ARTICLE XV
PRIOR AGREEMENTS
15.01. This Agreement sets forth the entire understanding of the
parties hereto with respect to the transactions contemplated hereby, and any
previous Agreements or understandings between the parties hereto regarding the
subject matter hereof are merged into and superseded by this Agreement.
IN WITNESS WHEREOF, the parties acknowledge receipt of an executed
original of this Agreement signed this day of , 19 .
(Officer's Name)
GREENWOOD NATIONAL BANK
GREENWOOD, SOUTH CAROLINA
By:
Title
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GREENWOOD NATIONAL BANK
GREENWOOD, SOUTH CAROLINA
ADDENDUM TO
EXECUTIVE SUPPLEMENTAL INCOME AGREEMENT
This Addendum to the Executive Supplemental Income Agreement
covering enumerates the dollar amount of death
benefits payable under the Executive Supplemental Income Agreement.
All rights and payment provisions are controlled by the Executive
Supplemental Income Agreement effective on the day of , 19 . This
Addendum revokes any previously dated Addendum.
ANNUAL PRE-RETIREMENT DEATH BENEFIT:
Year 1: $
Years 2 - 5: $
Years 6 - 15: $
ANNUAL POST-RETIREMENT BENEFIT:
$ payable for years
IN WITNESS WHEREOF, the parties hereto have executed this Addendum this
day of , 19 , each acknowledging receipt of a fully signed original hereof.
(Officer's Name)
GREENWOOD NATIONAL BANK
GREENWOOD, SOUTH CAROLINA
By:
Title
<PAGE>
GREENWOOD NATIONAL BANK
GREENWOOD, SOUTH CAROLINA
BENEFICIARY DESIGNATION
PURSUANT to the terms of the EXECUTIVE SUPPLEMENTAL INCOME PLAN
AGREEMENT dated , I hereby designate the following beneficiary(ies) to receive
any payments which may be due under such Agreement after my death:
Primary Individual Beneficiary(ies):
NAME ADDRESS RELATIONSHIP %SHARE
Contingent Individual Beneficiary(ies):
NAME ADDRESS RELATIONSHIP %SHARE
This designation hereby revokes any prior designation which may have
been in effect.
Date Signed Officer's Signature
Date Signed Witness
GREENWOOD NATIONAL BANK
GREENWOOD, SOUTH CAROLINA
Date Signed Acknowledged By Title
<PAGE>
EXHIBIT 10.4
MANAGEMENT INCENTIVE COMPENSATION PLANS
(SUMMARY)
The Registrant has established a Directors' Incentive Compensation Plan
and an Officers' Incentive Compensation Plan pursuant to which portions of
directors' fees and certain officers' cash awards, respectively, are determined
based upon various performance measures of the Registrant's operating
subsidiaries. Target levels of performance goals are determined by the
Registrant's Board of Directors on an annual basis.
<PAGE>
EXHIBIT 10.5
STATE OF SOUTH CAROLINA )
) LEASE AGREEMENT WITH OPTION
COUNTY OF GREENWOOD )
THIS AGREEMENT under the terms and conditions hereinafter set forth is
made by and between John W. Drummond, as Lessor (hereinafter referred to as
LANDLORD), and Community Capital Corporation, a South Carolina corporation,
(hereinafter referred to as TENANT), as Lessee.
WITNESSETH:
That the Landlord has leased and by these presents does grant and
demise unto Tenant the following described real property located in the Town of
Ninety Six, County of Greenwood, State of South Carolina, together with any
improvements now located thereon, said property being more fully described as
follows:
PARCEL I: All that certain lot or parcel of land situate, lying, and
being in the Town of Ninety Six, County of Greenwood, state aforesaid,
containing the following metes and bounds: 108 feet frontage on Church Street
facing east, thence running back 202 feet west; thence 108 feet south; thence
back 202 feet in an easterly direction to Church Street. Bounded on the north by
lot of P. H. Culbreath; west by lot formerly of Wasson; south by lot of Mary
Emma Holland; and east by Church Street.
PARCEL II: All that certain lot or parcel of land, together with improvements
thereon, situate, lying, and being in the Town of Ninety Six, county and state
aforesaid, containing the following metes and bounds: 34 feet frontage on Church
Street facing east; thence running back 202 feet west, thence 50.5 feet south;
thence 202.6 feet in an easterly direction to the street, said lot being bounded
on the east by Church Street; north by lot of Emma Holland; west by lot formerly
of Wasson; and on the south by S. C. Highway No. 22, upon which there is a brick
filling station.
TERM AND RECITAL:
TO HAVE AND TO HOLD, the same, with rights, privileges, easements, and
appurtenances thereunto attaching and belonging to Tenant for the term of five
(5) years beginning August 1, 1994, and ending on July 31, 1999.
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Tenant shall, during the term of this lease, pay to Landlord a base
rental in 12 monthly installments of Four hundred and no/100 Dollars ($400.00),
payable on the first day of each month by Tenant in advance to the Landlord with
the first monthly payment being due on August 1, 1994; for the second year
rental shall be Five hundred and no/100 Dollars ($500.00) per month; for the
third year Six hundred and no/100 Dollars ($600.00); for the fourth year Eight
hundred and no/100 Dollars ($800.00); and for the fifth year Eight hundred
thirty-three and 33/100 Dollars ($833.33) per month.
It is further mutually agreed between the parties as follows:
TITLE AND ENJOYMENT:
Landlord covenants that it has good title to the leased premises; that
the premises are free and clear of all liens, encumbrances, and leases, except a
DHEC environmental loan which Landlord acknowledged and fully assumes all risks,
costs, and liabilities incident thereto and which Landlord agrees to pay.
Landlord further covenants that Tenant, on paying the rental herein provided,
and in keeping, observing, and performing all the other terms, covenants, and
agreements herein contained on the part of Tenant to be kept, observed, and
performed, shall, during the term hereby granted, peaceable and quietly have,
hold, and enjoy the said premises for the full term of five years in this lease,
subject to the terms, covenants and agreements hereof. In the event, during the
term of this lease, Landlord's title shall fail or become clouded in such
fashion that Landlord is unable to grant the term herein demised, then Tenant
shall have to option to correct such condition or cloud, at Landlord's expense,
or to cancel and void this Lease.
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USE OF PREMISES:
Tenant covenants not to use its premises for any illegal purpose nor
in such manner as to violate any applicable and valid law, rule or regulation of
any governmental body, and to occupy and use its premises in a careful, safe,
and proper manner, and not permit waste thereon.
REPAIRS BY TENANT:
Tenant covenants that during the lifetime of this lease it will erect a
portable bank building and related appurtenances and it will maintain the
building and premises, at its sole expense, in good order and repair. At the
expiration, or any prior terminations, of this lease, Tenant will surrender the
premises to Landlord in as good condition as received, except for ordinary wear
and tear, except that Tenant shall remove the portable bank building and
drive-thru canopy and related equipment.
Tenant shall have the right and privilege to make, from time to time,
any alterations, changes and improvements, at its own expense, which Tenant
considers necessary to adapt the leased premises to the changing needs of
Tenant's uses, provided, however, Tenant obtains prior approval from Landlord
which shall not be unreasonably withheld. Title to any changes, alterations, and
improvements so made by Tenant shall, at the option of Landlord, pass to
Landlord at the termination of this lease Landlord may require Tenant to remove
the same and restore premises to the original condition and structure, normal
wear and the tear excepted with the exception of the portable bank facility and
drive-thru canopy and related equipment which shall remain Tenant's property
ASSIGNMENT AND SUBLETTING:
Tenant may transfer and assign this Lease or sublet the premises only
upon prior consent of the Landlord.
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TAXES AND OTHER LIENS:
Tenant covenants and agrees to pay all the taxes and special
assessments of the state, city, and county governments which may be made against
the leased premises. In the event Tenant fails to pay any taxes or assessments
by it hereunder, or to keep the leased premises free and clear from any and all
liens and claims of Tenant's creditors, except as hereinabove noted, which
interfere with Landlord's ownership. Landlord may, but shall not be required to
pay said taxes or other assessments or discharge said liens and add the cost to
the rental provided hereunder.
INSURANCE:
Tenant, at its option, shall, at its own expense, carry fire and
extended coverage insurance in an amount sufficient to repair, restore or
rebuild the premises in the event of destruction or damage by fire, lightning,
earthquake, windstorm, or other such casualty, as the respective interests of
Landlord and Tenant may appear. Landlord is not responsible for maintaining
insurance policies covering the contents and personal effects of Tenant.
Tenant also agrees to maintain liability coverage on said premises and
shall hold Landlord harmless and indemnify Landlord for any accidents or damages
occurring to persons or property arising on said premises with the exception of
the aforesaid DHEC environmental lien for which Landlord is solely responsible.
UTILITY BILLS:
Tenant shall pay all public utility charges made against its leased
premises for water, sewer, gas, oil, and electricity during the continuance of
this lease, as the same shall become due.
INDEMNITY:
Tenant agrees to hold Landlord harmless from and against any and all
claims which may arise from, on, in, or about leased premises when such claims
arise out of or are caused in whole or in part by a defective, dangerous, or
unsafe condition of leased premises, equipment, fixtures, or appurtenances
required to be maintained in good repair by Tenant. Tenant further agrees to
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hold Landlord harmless from any and all claims which may arise from, on, in, or
about leased premises when such claims arise out of, or are caused by, Tenants
negligence, or failure to perform its obligations hereunder. The provisions of
this paragraph do not apply to the DHEC environmental lien for which Landlord is
solely responsible and indemnifies Tenant against damages arising therefrom.
REMEDIES OF LANDLORD IN EVENT OF DEFAULT BY TENANT:
In the event Tenant shall default in the payment of any semi-annual
rental herein provided for and such default shall continue for 30 days after
Landlord shall have notified Tenant in writing of the existence of such default,
or, if Tenant shall default in the performance of any of the other covenants,
promises, or agreements herein set forth and contained for Tenant to keep and
perform, and such default shall continue for 30 days after Landlord shall have
notified Tenant in writing of the existence of such default, then Landlord may
forthwith reenter the premises and repossess itself thereof, it being fully
understood and agreed that any amounts paid in by Tenant to Landlord shall be
forfeited to the Landlord as liquidated damages. No termination of this lease
prior to the normal expiation shall attest Landlord's right to collect rent for
the entire five year lease term as discounted by normal actuarial discounting
methods. If not mutually agreed upon then each party may select an arbitrator
who shall select a third arbitrator which decision shall be binding.
OPTION TO PURCHASE:
For and in consideration of the premises and the covenants herein
contained, Tenant shall have the right at any time during the term of this lease
to purchase the entire property of Landlord herein described for the original
purchase price of Ninety thousand and no/100 ($90,000.00) Dollars. The
transaction shall take place as follows: Within thirty (30) days following
notice by Tenant, that it elects to exercise its option to purchase, Landlord
shall deliver to Tenant a good and sufficient general warranty deed, free and
clear of all encumbrances, conveying title to the
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entire property unto Tenant, and Tenant agrees to simultaneously pay unto
Landlord the sum of Ninety thousand and no/100 Dollars ($90,000.00). NOTICES AND
RENTALS:
Notices required to be given hereunder shall be given in writing by
registered or certified mail unless otherwise agreed.
POSSESSION:
It is understood and agreed that upon the execution of this document
and compliance with the terms herein stated, Tenant shall be given possession of
the premises on or about August 1, 1994
GENERAL PROVISIONS:
Time is of the essence of this lease agreement, but no delay or failure
of either party to exercise any right hereunder or to insist upon strict
compliance with the terms and provisions hereof shall constitute a waiver of any
right hereunder or a waiver of the right thereafter to insist upon strict
compliance with the terms and provisions hereof.
The within agreement, together with attached amortization schedule
expresses the entire understanding of the parties.
The within Lease Agreement and Option is binding on the heirs, personal
representatives, and assigns of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have hereunder set their hands
and seals this 8th day of July, 1994.
WITNESS: (AS TO LANDLORD)
/s/ JANETTE VAISILU /s/ JOHN W. DRUMMOND
JOHN D. DRUMMOND
WITNESS: (AS TO TENANT) COMMUNITY CAPITAL CORPORATION
STATE OF SOUTH CAROLINA
/s/ BONNIE R.CROWE By: /s/ W.G. STEVENS
/s/ WILLIAM H. HARTER W.G. STEVENS, PRESIDENT
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STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF GREENWOOD )
PERSONALLY appeared before me the undersigned witness who, being first
duly sworn, says that (S)he saw the within-named John W. Drummond sign, seal,
and as his act and deed deliver the within written document and that (s)he with
the other witness above, witnessed the execution thereof.
/s/ JANNETTE VAISILU
Witness
SWORN to before me this 8th day July 1994.
/s/ CAROL W. CHEEK
NOTARY PUBLIC FOR SOUTH CAROLINA
My Commission Expires: 3/28/98
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF GREENWOOD )
PERSONALLY appeared before me the undersigned witness who, being first
duly sworn, says that (s)he saw the within-named Community Capital Corporation,
by W. G. Stevens, President, sign, seal, and as its act and deed deliver the
within written document and that (s)he with the other witness above, witnessed
the execution thereof.
/s/ BONNIE R. CROWE
Witness
SWORN to before me this 8th day July, 1994.
/s/ WILLIAN H. HARTER
NOTARY PUBLIC FOR SOUTH CAROLINA
My Commission Expires: 5/28/02
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EXHIBIT 10.6
LEASE AGREEMENT
This Lease Agreement (the "Lease") is made and entered into as of the
1st day of September, 1994, by and between Community Capital Corporation
("Lessor") and Greenwood Bank & Trust ("Lessee").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements contained
herein, the parties hereto covenant and agree as follows:
1. Leased Premises. Subject to and upon the terms, provision and
conditions hereinafter set forth, Lessor does hereby lease, demise and let to
Lessee and Lessee does hereby accept the lease of the certain property and
premises (the "Leased Premises") described in Exhibit A attached hereto and made
a part hereof.
2. Lease Term.
(a) Initial Term. Unless sooner terminated pursuant to the
provision hereof, the term of the Lease shall commence on the opening date as an
operating branch of the Greenwood Bank & Trust in the town of Ninety Six, South
Carolina (the "occupancy Date.) and ending at midnight, Greenwood, South
Carolina time, on the date which is five (5) full years from the first day of
the calendar month next succeeding the Occupancy Date (the "Initial Term").
(b) Option Periods. In addition to the Initial Term,
Lessee shall have two (2) successive options to renew the term of this Lease for
a per cd of five year each (respectively the "First Option Period. and the
"Second Option Period") at a rental amount for said option periods specified in
paragraph 3 below, such options being exercisable by written notice to Lessor
not less than 90 days prior to the end of the then existing term.
3. Rental. During the full term of this Lease, Lessee shall pay to
Lessor, without notice, demand, reduction, set-off or any defense, a total
rental (the "Annual Rental") consisting of the applicable amounts set forth
below for each of the respective terms of this Lease. The Annual Rental shall be
payable in equal monthly installments in advance on or before the first day of
each month in the amounts set forth below for each of the respective teems of
this Lease.
Term Annual Rental Monthly Installment
Initial Term $35,400.00 $2,950.00
First Option Period $35,400.00 $2,950.00
Second Option Period $35,400.00 $2,950.00
If the Occupancy Date is a date other than the first day of a calendar
month, the initial rental installment during the Initial Term shall be prorated
daily from such date to the first day of the next calendar month and paid on the
Occupancy Date.
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4. Taxes and Assessments. Lessor shall pay and discharge during the
term of this Lease, commencing with the Initial Term, all real estate taxes and
assessments imposed upon the Leased Premises. The Lessor is responsible for the
real estate taxes resulting from the Land Lease with the third party All
insurance premiums are to be paid by Lessee for "all risk" buyer an extended
coverage insurance and general liability insurance pertaining to the Leased
Premises. Insurance provided by the Lessee may be approved by Lessor.
5. Utilities. Lessee shall be solely responsible for and promptly pay
all charges for heat, water, gas, electricity, and any other utilities use or
consumed on the leased premises and any and all tap-in or connection charges in
connection therewith. Lessor shall not be liable to Lessee for interference with
or interruption of any utility service, nor shall any curtailment or
interruption constitute a constructive eviction or grounds for a rental
abatement in whole or in part hereunder.
6. Maintenance and Repair. Lessor shall, at Lessor's sole cost and
expense, during the Initial Term and any Option Period of this Lease, keep and
maintain in good order, condition and repair all improvements now comprising the
Leased Premises or at any time hereafter situated upon the Leased Premises and
every part thereof, including without limitation, all plumbing, sewage,
fixtures, interior walls, floors, ceilings, sides, windows, doors, glass,
electrical facilities and equipment, lighting fixtures, appliances and any other
mechanical systems. Lessor shall also furnish termite protection for all
existing structures or any replacements thereof. Lessor shall be obligated to
repair or replace any part of any improvements now or at any time situated upon
the Leased Premises.
7. Liability Insurance. Lessee shall, at its expense, maintain during
the term hereof, comprehensive public liability insurance, including contractual
liability, and property damage insurance under policies issued by insurers of
recognized responsibility, for personal injury, bodily injury, death or for
damage or injury to or destruction of property (including the loss of use
thereof) for any one occurrence, all in amounts and with sues. coverage as shall
reasonably be requested by Lessor. Lessee's policy shall name Lessor, its agents
and employees as additional insured. Lessee shall furnish, at Lessor's request,
a certificate evidencing such coverage.
8. Mutual Indemnification. Lessee shall indemnify and hold Lessor
Harmless against claims and liability for injuries to all persons and for damage
to or loss of property occurring in or about the Leased Premises, due to any
negligent act or failure to act or intentionally wrongful act by Lessee, its
agents, employees or invitees. Lessor shall indemnify and hold Lessee harmless
against claims and liability for injuries to all person and for damage to or
loss of property occurring in or about the Leased Premises, due to any negligent
act or failure to act or intentionally wrongful act by Lessor, its agents,
employees or invitees. Nothing in this paragraph shall require a party to
indemnify the other party against such other party's own willful or negligent
actions.
9. Subleasing and Assignment. Lessee shall have no right to assign this
Lease or sublet any part of the Lease Premises without the prior written consent
of the Lessor.
10. Execution of Other Instruments. Lessor agrees to execute
acknowledge, and deliver to Lessee other instruments respecting the Lease
Premises, such as a Memorandum of
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Lease in recordable form, and such other instruments as Lessee may reasonably
request from time to time.
11. Termination Due to Casualty. If the Leased Premises are destroyed
or substantially damaged by casualty or by the negligence of Lessor or of
Lessor's employees, agents, contractors, or licensees, Lessee may upon fifteen
(15) days' written notice to Lessor elect to terminate this Lease an all rights
and obligations hereunder.
12. Land Leased for Use by These Premises. The Lessor has entered int:
a Land Lease with a third party and the Premises covered by this lease agreement
will be placed upon the land leased from the third party. The Lessee will be
responsible for the Land Lease payments and will make the payments directly to
the third party on a monthly basis as described in the Land Lease. In the event
this agreement is terminated for any reason, the Land Lease payments will be
reverted to the responsibility of the Lessor.
13. Entire Agreement. This Lease constitutes the entire agreement
between the parties. It may not be modified or terminated except as provided
herein or by other written agreement between the parties.
IN WITNESS WHEREOF, the parties hereto bind themselves to the
provisions of this Lease as of the day and year first above written.
LESSOR:
COMMUNITY CAPITAL CORPORATION
By: /s/ W.G. STEVENS
Its: President & CEO
LESSEE:
GREENWOOD BANK & TRUST
By: /s/ JAMES H. STARK
Its: Senior Vice President & Cashier
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EXHIBIT A
The Premises consist of a modular bank building with two drive through
lanes and a drive through window. Included in this Lease Agreement is t
equipment required to operate this facility as a branch bank of Greenwood Bank &
Trust in Ninety Six, South Carolina.
Included are:
1. Modular steel building containing approximately 715 square
feet renovated to plans prepared by Jim Steverson Davis &
Floyd architectural firm.
2. Two Diebold remote drive through lanes with overhead
vacuum tubes and one drive through window with deal
drawer.
3. Built in Diebold combination night depository and teller
storage vault.
4. Required desks, chairs, credenzas, teller stools,
typewriters adding machines, teller counters and other
normal office equipment.
5. NCR Automated Teller Machine.
6. Unisys teller machines (3) for online operation with
mainframe computer.
7. Unisys CSR stations (2) for online operation with
mainframe computer.
8. Built in Alarm system.
9. Surveillance Equipment.
10. Teller Under Counter Equipment.
11. All exterior parking lots, lighting and landscaping.
12. All signs for exterior of building and road.
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EXHIBIT 10.7
EMPLOYMENT CONTRACT
THIS AGREEMENT made and entered into this November 19, 1987 between the
Greenwood National Bank, a banking institution to he chartered by the Office of
the Comptroller of the Currency, ("employer"), and William G, Stevens
("employee");
WHEREAS, employer is to be formed as a new National bank in Greenwood,
Greenwood County, South Carolina: and
WHEREAS, employee has agreed to become President and Chief Executive
Officer of said bank; and
WHEREAS, employer wishes to provide for the terms and conditions of
employee's employment;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
1.
RELATIONSHIP ESTABLISHED AND DUTIES
(a) Employer hereby employs employee as President and Chief Executive
Officer, to hold the title of President and Chief Executive Officer, and to
perform such services and duties as its Board of Directors may, from time to
time, designate during the term hereof. Subject to the terms and conditions
hereof, employee will perform such duties and exercise such authority as are
customarily performed and exercised by persons holding such office, subject to
the general direction of the Board of Directors of employer, exercised in good
faith in accordance with standards of reasonable business judgment.
(b) Employee shall serve on the Board of Directors of employer and as a
member of its Executive Committee, subject to the terms hereof.
(c) Employee accepts such employment and shall devote his full time,
attention, and efforts to the diligent performance of his duties herein
specified and as an officer and director or employer and will not accept
employment with any other individual, corporation, partnership, governmental
authority or other entity, or engage in any other venture for profit which
employer may consider to be in conflict with his or its best interest or to be
in competition with employer's business, or which may interfere in any way with
the employee's performance of his duties hereunder.
2.
TERMS OF EMPLOYMENT
Employment shall commence upon the effective date of this agreement.
The term of this agreement shall continue for three (3) consecutive years unless
such is terminated pursuant to Section 6 of this agreement or by the first to
occur of the follow conditions.
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(a) the death of employee;
(b) the complete disability of employee. "Complete disability" as used
herein shall mean the inability of employee, due to illness, accident, or any
other physical or mental in- capacity to perform the services provided for
hereunder for an aggregate of sixty (60) days within any period of 120
consecutive days during the term hereof;
(c) the discharge of employee by employer for cause. "Cause" a" used
herein shall mean (i) such negligence or misconduct as shall constitute, as a
matter of law, a breach of the covenants and obligations of employee hereunder,
(ii) failure or refusal of employee to comply with the provisions of this
agreement, or (iii) employee being convicted by any duly constituted law
enforcement agency or authority with a crime involving moral turpitude.
Provided, however, disability because of illness or accident or any other
physical or mental disability shall not constitute a basis for discharge for
cause.
Termination of employee's employment shall constitute a tender by
employee of 06 resignation as an officer and director of employer.
3.
COMPENSATION
For all services which employee may render to employer during the term
hereof, employer shall pay to employee, subject to such deductions as may be
required by law:
(a) Base Salary. An annual salary of $80.000 payable in equal monthly
installments and subject to such deductions as may be required by law.
(b) Performance Bonuses. Each year, a performance bonus, ranging from
0% to 50% of annual salary will be awarded, the specific percentage to be
determined by the board of directors.
(c) In consideration of time and effort invested in the process of
applying for the National Bank Charter and in the planning of the proposed
bank's operations, the employee will receive a signing bonus of $10,000 which
will be payable upon the banks opening.
4.
OTHER BENEFITS
During the term of his employment hereunder, employer shall furnish to employee
(i) an automobile (value not to exceed $18,000) plus related expenses (ii) a
life insurance policy providing for death benefits of $250,000 having a
beneficiary designated by employee; (iii) group health and hospital insurance
covering employee and his family; (iv) long term disability insurance with
benefits of at least $50,000 per year; (v) initiation fee and monthly dues for
membership in clubs suitable for business entertainment: and (vi) normal
director's fees.
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5.
STOCK BONUS AND OPTIONS
If the employee is still employed under the provisions of this
agreement then the employee will earn stock options and bonuses based on the
following schedule: (1) At the end of the first fiscal year following the bank's
opening, the employee will earn a stock bonus of 1% of the original stock issue.
(2) During fiscal years two through five following the banks opening, the
employee will earn a stock option of 1% in each year. Options are exercisable at
the price per share equal to original issue price of the stock anytime for seven
years after award.
In the event a change of control of employer, prior to the expiration
of five years from the effective date hereof, and employee is still employed by
employer, then all stock bonuses and options contemplated by this paragraph 5
not already granted to employee shall immediately be granted in the same manner
as if such had been earned by employee and notwithstanding the fact that the
requirements for earning said bonuses had not been met by employee.
6.
FAILURE TO OBTAIN CHARTER OR FINANCING
This contract shall be null, void, and of no further force and effect
upon the happening of either of the following events;
(a) The refusal or failure of the Office of the Comptroller of the
Currency to issue a charter to employer to operate a national bank in Greenwood
County, South Carolina within 180 days of an application for such having been
submitted to "aid agency by employer; or
(b) The failure for any reason of employer to raise adequate capital
within 180 days of the date of charter approval.
If this contract is terminated by reason of the foregoing and employee
has actually commenced employment hereunder, then employer agrees to provide
employee with the base salary provided in Paragraph 3(a) above for a period not
to exceed three (3) months until employee has found comparable employment.
7.
EXPENSES
Upon presentment to employer of expense reports in sufficiently
detailed form to comply with standards for deductibility of business expenses
established from time to time by the Internal Revenue Service, employer will
reimburse employee for such reasonable business expenses incurred by employee in
connection with performance of his duties hereunder. Reasonable moving and
related travel expenses are acceptable.
8.
POST TERMINATION COVENANTS
It during the term hereof employee shall cease employment hereunder for
any reason, then employee agrees that for one (1) year following such
termination he will not be employed in the banking business or any related field
thereto in Greenwood, South Carolina or any county that
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borders Greenwood County. Furthermore, following such termination employee
agrees he will not, without the prior written consent of employer: (i) furnish
anyone with the name of, or any list or lists of customers of the employer or
utilize such list or information himself; or (ii) furnish, use, or divulge to
anyone any information acquired by him from employer relating to employer's
methods of doing business; or (iii) contact directly or indirectly any customer
of employer; or (iv) hire for any other employer (including himself) any
employee of employer or directly or indirectly cause such employee to leave his
employment to work for another; or (v) undertake a business opportunity that
came to the attention of employee through his employment with employer which
employee had not previously offered in writing to employer and which employer
had not rejected in writing.
It is understood and agreed by the parties hereto that the provisions
of this paragraph are independent of each other, and the invalidity of any such
provision or portion thereof shall not affect the validity or enforceability of
any other provisions of this agreement.
9.
WAIVER OF PROVISIONS
Failure of any of the parties to insist, in one or more instances, on
performance by the others in strict accordance with the terms and conditions of
this agreement shall not be deemed a waiver or relinquishment of any right
granted hereunder or of the future performance of any such term or condition or
of any other term or condition of this agreement, unless such waiver is
contained in a writing signed by or on behalf of all the parties.
10.
GOVERNING LAW
This agreement shall be governed by and construed and enforced in
accordance with the laws of the State of South Carolina. If for any reason any
provision of this agreement shall be held by a court of competent jurisdiction
to be void or unenforceable, the same shall not affect the remaining provisions
thereof.
11.
MODIFICATION AND AMENDMENT
This agreement contains the sole and entire agreement among the parties
hereto and supersedes all prior discussions and agreements among the parties,
and any such prior agreements shall, from and after the date hereof, be null and
void. This agreement shall not be modified or amended except by an instrument in
writing signed by or on behalf of the parties hereto.
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COUNTERPARTS AND HEADINGS
This agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this agreement.
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13.
CONTRACT NONASSIGNABLE
This agreement may not be assigned or transferred by any party hereto,
in whole or in part, without prior written consent of the other.
IN WITNESS WHEREOF, the parties hereto have executed this agreement
under seal as of the date first above.
/s/ W. G. Stevens
Accepted--Employee
By the Compensation Commission of the Board of Directors:
/s/ George B. Park
/s/ David P. Allred
/s/ Wayne Q. Justesen, Jr.
Witness:
/s/ Byron Richardson
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EXHIBIT 10.8
EMPLOYMENT AND OPTION AGREEMENT
This Employment And Option Agreement (the "Agreement") is made as of
November 21, 1994, by and between Community Capital Corporation, a South
Carolina corporation ("Employer"), and Donna W. Robinson ("Employee").
WHEREAS, Employer is a bank holding company; and
WHEREAS, Employer desires to employ Employee, and Employee desires to
be employed by Employer, in accordance with the terms and conditions hereinafter
set forth:
NOW, THEREFORE, in consideration of the mutual promises herein set
forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, agree
as follows:
1. Employment. Employer hereby agrees to employ Employee to perform the
duties described in Section 3 below subject to and in accordance with the terms
and conditions hereof, and Employee hereby accepts such employment.
2. Term. The employment shall commence on the date hereof, and shall
continue for an initial term of two (2) years, unless earlier terminated in
accordance with Section 8 hereof.
3. Duties of Employee.
A. In accepting employment by Employer, Employee shall
undertake and assume the responsibility of performing for and on behalf of
Employer the duties of a Vice- President of the Employer and/or such other
duties as may be assigned to Employee by Employer at any time and from time to
time, including but not limited to duties of assisting Employer with the
formation of a bank to be wholly owned by Employer and located in Clemson, South
Carolina. Notwithstanding the forgoing, except with her written consent,
Employee shall not be permanently assigned to any position of lower professional
status.
B. During the term of this Agreement, Employee shall be a
full-time employee of Employer or a wholly owned subsidiary of Employer, and
shall devote her full working time and efforts to her duties hereunder. Employee
shall perform all of her duties hereunder to the best of her ability and shall
not, directly or indirectly, engage or participate in any activities in conflict
with the best interests of Employer, and will conduct all Employee's activities
in strict loyalty to Employer. Without limiting the generality of the foregoing,
Employee shall not engage in any activity for compensation or pecuniary gain
other than her employment hereunder and passive investing for the account of
herself or members of her household.
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4. Compensation. As compensation for the services to be
rendered by Employee
for Employer under this Agreement, Employee shall be compensated as follows:
A. Base Salary.
(1) Until a licensed bank that is wholly
owned by Employer lawfully commences business in Clemson, South Carolina,
Employee shall receive from Employer an annual salary of Seventy Thousand and
No/100 ($70,000) Dollars. Such salary shall be payable in pay periods as
determined by the Employer, but in no event less frequently than monthly.
(2) Upon the lawful commencement of business
in Clemson, South Carolina of a licensed bank that is wholly owned by Employer,
Employer's obligations under Section 4(A)(1) above ceases, and Employee shall
receive from Employer an annual salary of Seventy-Five Thousand and No/100
($75,000) Dollars; provided however, the payment of such salary to Employee by
Employer shall be reduced dollar for dollar by the amount of salary and/or
wages, if any, paid by such bank to Employee during the initial term of this
Agreement; and provided further that the amount of such Base Salary payable by
such Bank pursuant to this Section 4(A)(2) is hereby guaranteed by Employer for
the balance of the initial two year term of this Agreement. Such salary shall be
payable in pay periods as determined by Employer or such bank, but in no event
less frequently than monthly.
B. Dues. Employer shall pay all dues of Employee as a
member of one social club and one service club, both of which shall be approved
by the parties hereto. In addition, to assist with marketing of the Employer and
the bank to be formed in Clemson, South Carolina, Employer or such bank shall
join IPTAY, the athletic booster club of Clemson University.
C. Vacation. Employer shall provide Fifteen (15) business
days of paid vacation time each calendar year. Such vacation days are to be
taken at such time or times as Employee may reasonably request, subject to the
Employer's convenience and prior approval, which approval shall not be
unreasonably withheld. Vacation time shall not cumulate year to year.
D. Automobile Provision. Employer shall provide Employee
with the use of an automobile with a purchase price of not less than Twenty
Thousand and No/100 ($20,000) Dollars.
E. Reimbursement For Expenses. Employer shall provide
reimbursement of all pre-approved reasonable expenses incurred by Employee for
the benefit of Employer in the performance of her duties hereunder.
F. Other Benefits. The Employer shall provide other
benefits (e.g., health insurance coverage, dental insurance coverage, life
insurance, disability insurance, participation in pension plans, and paid leave,
etc.) reasonably comparable to, and no less favorable to Employee than, those
benefits, if any, generally provided to other senior executives of Employer or
any bank owned by Employer.
Other than as set forth in Section 10 hereof, the compensation stated
above is intended to be the total compensation paid to Employee.
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5. Confidentiality and Secrecy. Employee acknowledges that in and as a
result of her employment hereunder, she will be making use of, acquiring, and/or
adding to confidential information of a special and unique nature and value
relating to Employer's business, including without limitation technological
knowhow, copyrights, proprietary information, trade secrets, systems,
procedures, manuals, confidential reports, records, operational expertise, lists
of customers and projects, the nature and type of services rendered by Employer,
the equipment and methods used and preferred by Employer's customers, and the
fees paid by them (all of which are deemed for all purposes confidential and
proprietary). As a material inducement to Employer to enter into this Agreement
and to pay to Employee the compensation stated in Section 4, Employee covenants
and agrees that during the term of her employment hereunder, and for two (2)
years after the expiration or earlier termination of her employment by Employer
or an affiliate of Employer, she shall not, directly or indirectly, make use of,
or disclose to any person, any confidential information of Employer or its
affiliates.
6. Covenants Against Competition. In view of the unique value to
Employer of the services of Employee for which Employer has contracted
hereunder, because of the confidential information to be obtained by or
disclosed to Employee, as hereinabove set forth, and because Employee's
employment hereunder will result in Employee's development of a unique
relationship with customers, suppliers and employees, as a material inducement
to Employer to enter into this Agreement and to pay to Employee the compensation
stated in Section 4, Employee covenants and agrees as follows:
A. During Employee's employment by Employer or an
affiliate of Employer, and for a period of two (2) years after the expiration or
earlier termination for any reason of her employment by Employer or an affiliate
of Employer, Employee shall not directly or indirectly solicit or divert
employment of any employee of Employer's business or employ any person
previously employed by Employer.
B. During Employee's employment by Employer or an
affiliate of Employer, and for a period of two (2) years after the expiration or
earlier termination for any reason of her employment by Employer or an affiliate
of Employer, Employee shall not directly or indirectly solicit, divert or
convert, or assist another person or entity to solicit, divert or convert,
Employer's customers to any other company or entity providing substantially the
same or competitive services or products as Employer or Employer's subsidiaries.
C. During Employee's employment by Employer or an
affiliate of Employer, and for a period of two (2) years after the expiration or
earlier termination of Employee's employment by Employer or an affiliate of
Employer for any reason other than Employer's termination of Employee "without
cause" pursuant to Section 8(B) hereof, Employee shall not within the geographic
area specified below engage in any business or perform any services, directly or
indirectly, in competition with the business of Employer or any subsidiary of
Employer, or have any interest, whether as a proprietor, partner, employee,
stockholder (directly or beneficially), principal, agent, consultant, director,
officer, or in any other capacity or manner whatsoever, in any enterprise that
shall so engage; except that Employee shall be permitted to own for investment
purposes only, directly or beneficially, up to (but not more than) 2% in the
aggregate of the stock of a competing corporation which is publicly-traded on a
national stock exchange or the NASDAQ National Market System, so long as
Employee is not a controlling person of, or a member of a group that controls,
such corporation and Employee is not otherwise affiliated in any capacity with
such corporation. The restrictions of this Section
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6(C) shall apply everywhere within a 25 mile radius of each location where
Employer (or any subsidiary of Employer) maintains an office or branch at any
time during the term of this Agreement.
7. Reasonableness, Enforceability and Remedies.
A. Employee has carefully read and considered the
provisions of Sections 5, 6, and 7, and, having done so, agrees that the
restrictions set forth in these Sections, including, but not limited to, the
time period of restriction and geographic limitations set forth in Section 6,
are fair and reasonable and are reasonably required for the protection of the
interests of Employer and its officers, directors, shareholders, employees, and
affiliates.
B. In the event that, notwithstanding the foregoing, any
of the provisions of Sections 5, 6, or 7 or any parts thereof shall be held to
be invalid or unenforceable, the remaining provisions or parts thereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable portions or parts had not been included therein. In the event that
any provision of Sections 5 or 6 relating to the time period and/or geographic
restrictions and/or related aspects shall be declared by a court of competent
jurisdiction to exceed the maximum restrictiveness such court deems reasonable
and enforceable, the time period and/or geographic restrictions and/or related
aspects deemed reasonable and enforceable by the court shall become and
thereafter be the maximum restriction in such regard, and the restriction shall
remain enforceable to the fullest extent deemed reasonable by such court.
C. Employee acknowledges that the services she is to
render are of a special and unusual character with a unique value to Employer,
the loss of which cannot adequately be compensated by damages in an action at
law. In the event of a breach or threatened breach by Employee of any of the
provisions of Sections 5 or 6, Employer, in addition to and not in limitation
of, any other rights, remedies, or damages available to Employer under this
Agreement, shall be entitled to a permanent injunction in order to prevent or
restrain any such breach by Employee or by Employee's partners, agents,
representatives, servants, employers, employees, consulting clients, and/or any
and all persons directly or indirectly acting for or with her.
D. Employee covenants and agrees that if she shall
violate any of her covenants or agreements under Sections 5 or 6, Employer shall
be entitled to: (i) an accounting and repayment of all profits, compensation,
commissions, remuneration, or other benefits that Employee directly or
indirectly has realized and/or may realize as a result of, growing out of, or in
connection with, any such violation; (ii) recover actual damages incurred by
Employer or its affiliates as a result of any such violation; (iii) any
injunctive relief to which Employer is or may be entitled at law, in equity, or
under this Agreement; and (iv) exercise its other rights respecting a breach of
this Agreement as set forth herein. The remedies set forth herein shall not be
the sole and exclusive remedies to which Employer is entitled for violation of
Sections 5 or 6.
E. Employee's obligations under Sections 5 and 6 shall
survive any termination of Employee's employment hereunder.
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8. Termination
A. For Cause By Employer. Notwithstanding any other
provision hereof, Employer may terminate Employee's employment under this
Agreement immediately at any time for "cause." For purposes hereof the term
"cause" shall include, but not be limited to, the commission of any of the
following by Employee: dishonesty; theft; unethical business conduct; indictment
for a felony; indictment for a misdemeanor involving moral turpitude; drug or
alcohol addiction or abuse; incompetence in the performance of material duties
on behalf of Employer; violation of the terms and provisions of this Agreement;
willful or recurring insubordination; failure to attempt, in good faith, to
comply with reasonable instructions of Employer; material violation by Employee
of any federal or state banking law, rule or regulation; causing or permitting,
whether intentionally or negligently, Employer to materially violate any federal
or state banking law, rule or regulation; or if Employee is suspended and/or
temporarily prohibited from participating in the conduct of the affairs of
Employer or any subsidiary of Employer by notice served under Section 8(e) of
the Federal Deposit Insurance Act (12 U.S.C., Section 1818 (e)). All
compensation (including without limitation the Base Salary, and all perquisites
and fringe benefits) to which Employee would otherwise be entitled (for periods
after the effective date of such termination) shall be discontinued and
forfeited as of the effective date of such termination.
B. Without Cause By Employer. Employer may terminate this
Agreement "without cause" upon thirty (30) days prior written notice to
Employee. In the event of such termination, all compensation (including without
limitation the Base Salary and any perquisites and fringe benefits, if any) to
which Employee would otherwise be entitled (for periods after the effective date
of the termination) shall be discontinued and forfeited as of the effective date
of such termination. Notwithstanding the foregoing, in the event of such
termination by Employer without cause, the following shall occur:
(i) Employee shall be paid a cash lump sum
severance payment equal to the amount of the Base Salary as defined in Section
4(A) which would be payable to Employee during the remaining initial term of
this Agreement if Employee's employment hereunder was not terminated pursuant to
this Section 8(B);
(ii) Employee shall receive from Employer, at
Employer's expense, all benefits set forth in Section 4(F) until the expiration
of the initial term of this Agreement; provided however, during such period
should a third party provide any such benefit to Employee, Employer's obligation
pursuant to this paragraph to provide the fringe benefit provide by the third
party shall be reduced by the amount and to the extent such fringe benefit is
provided to Employee by such third party; and
(iii) Employee shall receive the title to the
automobile described in Section 4(D) hereof.
C. Termination By Employee. Employee may with or without
cause terminate this Agreement upon thirty (30) days prior written notice to
Employer. In the event of such termination, all compensation (including without
limitation the Base Salary, and all perquisites and fringe benefits) to which
Employee would otherwise be entitled (for periods after the effective date of
such termination) shall be discontinued and forfeited as of the effective date
of such termination. Employee's death shall be deemed termination of this
Agreement pursuant to this Section 8(C).
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D. Disability. In the event of the Employee's disability
during employment under this Agreement, then employment under this Agreement
shall terminate. For purposes of this Agreement, except as provided hereinbelow,
"disability" shall mean the inability of Employee, due to sickness or other
incapacity, to perform her duties under this Agreement for a period in excess of
ninety (90) substantially consecutive days. Such termination shall become
effective at Employer's election upon the expiration of such ninety (90) day
period of disability. Upon termination of employment under this Agreement due to
Employee's disability, all compensation (including without limitation the Base
Salary, and all perquisites and fringe benefits) to which Employee would
otherwise be entitled (for periods after the effective date of such termination)
shall be discontinued and forfeited as of the effective date of such
termination.
9. Annual Review. On or about each anniversary date of the date of this
Agreement, during the term of this Agreement, this Agreement, including the
compensation provisions of Section 4, shall be reviewed by the Employer and
Employee; provided, however, neither party shall have any obligation to modify
this Agreement, and no amendment or other modification hereof shall be effective
unless mutually agreed to by the parties in writing.
10. Grant of Stock Option. As a material inducement to Employee to
enter into this Agreement, Employer shall grant to Employee on the Granting Date
(as defined hereinbelow), pursuant to that certain Incentive Stock Option Plan
adopted by the Employer on May 16, 1994 (the "Plan"), a stock option to purchase
pursuant to the terms of the Plan a total of Fifteen Thousand (15,000) shares of
Employer's capital stock (the "Option Shares"); provided however, if on the
Granting Date (as defined hereinbelow) the Employee's employment with Employer
hereunder has terminated for any reason, Employer's obligation to grant such
option to Employee shall be null, void and without effect. Subject to the terms
and limitations set forth in this Section 10, on the Granting Date (as defined
hereinbelow) the Employer and Employee shall execute and deliver an Incentive
Stock Option Agreement in the form contemplated by the Plan. The purchase price
per Option Share shall be equal to the price per share of the Employer's common
stock sold by the Employer pursuant to that certain proposed public stock
offering of approximately $4,500,000 to $7,020,000 anticipated to take place
during 1995 (the "Public Offering"). For purposes hereof, the "Granting Date"
shall be the date upon which the first share of Employer's common stock is sold
by Employer pursuant to the Public Offering. Employee may not transfer or assign
any right or interest in this proposed option in whole or in part.
11. Burden and Benefit. This Agreement shall be binding upon, and shall
inure to the benefit of, Employer and Employee, and their respective heirs,
personal and legal representatives, successors, and permitted assigns.
12. Assignment. This Agreement and any rights hereunder are personal to
Employee and shall not be assigned or otherwise transferred by Employee.
Employer shall be entitled to assign this Agreement to any corporation
controlled by Employer.
13. Governing Law/Jurisdiction. The construction and interpretation of
this Agreement shall at all times and in all respects be governed by the laws of
the State of South Carolina. The parties hereby (i) agree that any litigation,
action or proceeding arising out of or relating to this Agreement may be
instituted in a state or federal court in the State of South Carolina, (ii)
waives any objection which it might have now or hereafter to any such
litigation, action or proceeding based upon improper venue or inconvenient
forum, and (iii) irrevocably submits to the jurisdiction of such courts in any
such litigation, action or proceeding. For all
6
<PAGE>
purposes of this Agreement, the parties hereby further agree that service of
process upon any party may be effected pursuant to United States mail.
14. Usage. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Term such as "hereof", "hereunder",
"hereto", "herein", and words of similar import shall refer to this Agreement in
its entirety and all references shall refer to specified portions of this
Agreement, unless the context clearly requires otherwise.
15. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of this Agreement shall not affect the validity and enforceability of
the other provisions. Without limiting the generality of the foregoing or of
Section 7, each provision, sub-provision, part, and sub-part of Sections 6 or 7
shall be deemed severable.
16. Survival. Employee's obligations pursuant to Section 5 and 6 hereof
shall survive the termination of this Agreement.
17. Modifications. This Agreement can only be modified by a written
agreement duly signed by authorized representatives of the parties hereto.
Moreover, in order to avoid uncertainty, ambiguity and misunderstandings in
their relationships, the parties hereto covenant and agree not to enter into any
oral agreement or understanding inconsistent or in conflict with this Agreement;
and the parties hereto further covenant and agree that any oral communication
allegedly or purportedly constituting such an agreement or understanding shall
be absolutely null, void and without effect.
18. Waiver. Any waiver by either party of any breach or any term or
condition hereof shall be effective only if in writing and such writing shall
not be deemed to be a waiver of any subsequent or other breach, term or
condition of this Agreement.
19. No Inference Against Author. No provision of this Agreement shall
be interpreted against any party because such party or its legal representative
drafted such provision.
20. Notice. Any notice, request, approval, consent, demand or other
communication hereunder shall be effective if in writing and upon the first to
occur of the following: (i) upon receipt by the party to whom such notice,
request, approval, consent, demand or other communication is being given; or
(ii) three (3) business days after being duly deposited in the U.S. Mail,
certified, return receipt requested, and addressed as follows:
Employee:
Donna W. Robinson
902 Berkeley Drive
Clemson, South Carolina 29631
Employer: Community Capital Corporation
P.O. Box 218
Greenwood, South Carolina 29648
Attn: Chairman of the Board
7
<PAGE>
The parties hereto may change their respective addresses by notice in writing
given to the other party this Agreement.
21. Entire Agreement. This Agreement contains the entire agreement and
understanding by and between Employer and Employee with respect to the subject
matter hereof and supersedes all prior and contemporaneous written or oral
agreements and representations between the parties with respect thereto.
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement under seal to be effective as of the day and year first above written.
IN THE PRESENCE OF: EMPLOYEE:
(SEAL)
/s/ Bonnie R. Crowe /s/ Donna W. Robinson
Witness Donna W. Robinson
/s/ David P. Allred
Witness
EMPLOYER:
COMMUNITY CAPITAL CORPORATION
/s/ Bonnie R. Crowe
Witness (SEAL)
By: /s/ W. G. Stevens
Its: President
/s/ David P. Allred
Witness
8
<PAGE>
Exhibit
11.1
COMMUNITY CAPITAL CORPORATION
PER SHARE COMPUTATIONS
Primary and Fully Diluted Earnings Per Share
<TABLE>
<CAPTION>
1995 1994 1993
------ ----- ----
<S> <C> <C> <C>
Net income applicable to primary and fully diluted shares $ 533,868 $ 584,856 $ 560,322
Add: Interest income from assumed
purchase of securities, net of tax 52,666 55,866 -
------ ------ ------
Adjusted net income for fully diluted shares $ 586,534 $640,722 $ 560,322
= ======= ======== = =======
Shares Outstanding
Weighted average number of common shares outstanding (2) 885,296 594,369 584,566
Aggregate stock equivalents (1) (2) 133,880 172,128 125,572
------- ------- -------
Total common stock and equivalents 1,019,176 766,497 710,138
========= ======= =======
Primary and fully diluted income per share
Income before extraordinary credit $ .58 $ .84 $ .72
Cumulative effect of accounting change .07
Net income .58 .84 .79
</TABLE>
(1) Computed using the treasury stock method modified for the aggregate 20%
limitation.
(2) Restated for the effects of 5% stock dividends in 1995, 1994 and 1993.
<PAGE>
EXHIBIT 22.1
SUBSIDIARIES OF COMMUNITY CAPITAL CORPORATION
Greenwood Bank & Trust
Clemson Bank & Trust
GNB Mortgage Company (inactive)
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ DAVID P. ALLRED
Print Name: David P. Allred
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ ROBERT C. COLEMAN
Print Name: Robert C. Coleman
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ JOHN W. DRUMMOND
Print Name: John W. Drummond
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ WAYNE Q. JUSTESEN, JR.
Print Name: Wayne Q. Justesen, Jr.
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ THOMAS C. LYNCH
Print Name: Thomas C. Lynch
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ H. EDWARD MUNNERLYN
Print Name: H. Edward Munnerlyn
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ GEORGE B. PARK
Print Name: George B. Park
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ DONNA W. ROBINSON
Print Name: Donna W. Robinson
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ GEORGE D. RODGERS
Print Name: George D. Rodgers
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ CHARLES J. ROGERS
Print Name: Charles J. Rogers
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ THOMAS E. SKELTON
Print Name: Thomas E. Skelton
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of GREENWOOD NATIONAL BANCORPORATION, a South Carolina
corporation (hereinafter referred to as the "Company"), does hereby constitute
and appoint William G. Stevens, with full power of substitution, his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable to enable the Company to comply with the Securities Exchange Act of
1934, as amended (the "Act"), and any rules, regulations and requirements of the
Securities and Exchange Commission (the "Commission") in respect thereof, in
connection with the filing under the Act of the Company's Annual Report on Form
10-K for the Company's fiscal year ended December 31, 1995, including all
amendments thereto (the "Form 10-K"), and including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the Company to the Form 10-K filed with the Commission and to any
instrument or document filed as a part of, as an exhibit to, or in connection
with said Form 10-K; and the undersigned does hereby ratify and confirm as his
own act and deed all that said attorney and agent shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents,
this 27th day of March, 1996.
Signature: /S/ LEX D. WALTERS
Print Name: Lex D. Walters
[ORIGINAL EXECUTED SIGNATURE PAGE IS ON FILE WITH COMMUNITY CAPITAL
CORPORATION.]
<PAGE>
