SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
( ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
(x ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Community Capital Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 20, 1996
Notice is hereby given that the Annual Meeting of Shareholders of
Community Capital Corporation will be held in the Board Room of Greenwood Bank &
Trust at 109 Montague Avenue, Greenwood, South Carolina on Monday, May 20, 1996,
at 4:00 p.m., for the following purposes:
(1) To elect eight members to the Board of Directors;
(2) To ratify the adoption of an amendment to the Company's
Incentive Stock Option and Nonstatutory Stock Option Plan
(1993);
(3) To ratify the appointment of Tourville, Simpson & Henderson,
Certified Public Accountants, as the Company's independent
auditors for the fiscal year ending December 31, 1996; and
(4) To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Only shareholders whose names appeared of record on the books of the
Company on April 15, 1996 will be entitled to notice of and to vote at the
Annual Meeting or any adjournment thereof.
You are cordially invited and urged to attend the Annual Meeting in
person, but if you are unable to do so, please date, sign and promptly return
the enclosed proxy in the enclosed, self-addressed, stamped envelope. If you
attend the Annual Meeting and desire to revoke your proxy and vote in person,
you may do so. In any event, a proxy may be revoked at any time before it is
exercised.
By Order of the Board of Directors
William G. Stevens
President and Chief Executive Officer
Charles J. Rogers
Chairman of the Board
Greenwood, South Carolina
April 23, 1996
<PAGE>
COMMUNITY CAPITAL CORPORATION
109 Montague Avenue
Greenwood, South Carolina 29646
PROXY STATEMENT
General
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Community Capital Corporation (the
"Company") to be used in voting at the Annual Meeting of Shareholders of the
Company to be held in the Board Room of Greenwood Bank & Trust (the "Greenwood
Bank") at 109 Montague Avenue, Greenwood, South Carolina, on Monday, May 20,
1996, at 4:00 p.m., and at any adjournment thereof. The purposes of the Annual
Meeting are (a) to elect eight directors for terms varying from one to three
years, (b) to ratify the adoption of an amendment to the Company's Incentive
Stock Option and Nonstatutory Stock Option Plan (1993), (c) to ratify the
appointment of Tourville, Simpson & Henderson, Certified Public Accountants, as
the Company's independent auditors for the fiscal year ending December 31, 1996,
and (d) to transact such other business as may properly come before the Annual
Meeting or any adjournment thereof. This Proxy Statement and the accompanying
form of proxy are being mailed to shareholders commencing on or about April 23,
1996.
Any shareholder who executes the form of proxy referred to in this
Proxy Statement may revoke it at any time before it is exercised. The proxy may
be revoked by either giving written notice to the Secretary of the Company of
such revocation, or by executing and delivering to the Secretary of the Company
a proxy bearing a later date. The voting of such proxy will be suspended if the
person executing the proxy attends the Annual Meeting and elects to vote in
person. Whether or not you plan to attend, you are urged to sign and return the
enclosed proxy.
The cost of preparing, assembling and mailing this Proxy Statement and
the form of proxy will be borne by the Company. Directors, officers and
employees of the Company may also solicit proxies personally or by mail,
telephone or telegram. No compensation will be paid for such solicitations. In
addition, the Company may request banking institutions, brokerage firms,
custodians, nominees and fiduciaries to forward the Company's proxy solicitation
materials to the beneficial owners of the Company's common stock, $1.00 par
value (the "Common Stock"), held of record by such entities, and the Company
will reimburse their reasonable forwarding expenses.
Voting Securities Outstanding
The Board of Directors has fixed April 15, 1996 as the record date (the
"Record Date") for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting or at any adjournments thereof. As of the Record
Date, there were 1,160,227 issued and outstanding shares of the Common Stock
held of record by approximately 1,338 shareholders. All of such shares are
eligible to be voted on each matter currently scheduled to come before the
Annual Meeting and there are no other outstanding shares of capital stock of the
Company eligible to be voted at the Annual Meeting. Cumulative voting for the
election of directors is not available under the Company's Articles of
Incorporation. Consequently, each share of Common Stock is entitled to one vote
on each matter to be voted upon at the Annual Meeting.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting or any adjournment
thereof. If a quorum is not present or represented at the meeting, the
shareholders entitled to vote, present in person or represented by proxy, have
the power to adjourn the meeting from time to time, without notice other than an
announcement at the meeting, until a quorum is present or represented.
Directors, officers and regular employees of the Company may solicit proxies for
the reconvened meeting in person or by mail, telephone or telegraph. At any such
reconvened meeting at which a quorum is present or represented, any business may
be transacted that might have been transacted at the meeting as originally
scheduled.
1
<PAGE>
Security Ownership Of Management
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Common Stock of the Company as of the
Record Date. Information is presented for (i) each director and executive
officer of the Company, individually, and (ii) all directors and executive
officers of the Company, as a group. As of the Record Date, other than as
reflected in the following table, the Company did not know of any shareholder
who was the beneficial owner of five percent or more of the Common Stock. Except
as otherwise specified in the notes to the following table, each of the
shareholders named in the table has indicated to the Company that such
shareholder has sole voting and investment power with respect to all shares of
Common Stock beneficially owned by that shareholder.
<TABLE>
<CAPTION>
Number of Shares
Beneficially
Name Owned (1) Percentage (1)
- ---------------------------- ---------------- -------------
<S> <C> <C>
George B. Park............................................................ 64,196 (2) 5.43%
William G. Stevens........................................................ 51,646 (3) 4.30
David P. Allred........................................................... 50,714 (4) 4.29
Charles J. Rogers......................................................... 48,894 (5) 4.15
John W. Drummond.......................................................... 36,826 (6) 3.13
Lex D. Walters............................................................ 36,217 (7) 3.08
Wayne Q. Justesen, Jr.................................................. 30,434 (8) 2.59
Joseph H. Patrick, Jr..................................................... 30,289 (9) 2.58
H. Edward Munnerlyn....................................................... 29,156(10) 2.48
Thomas C. Lynch, Jr....................................................... 22,399(11) 1.93
Donna W. Robinson......................................................... 20,181(12) 1.72
James H. Stark............................................................ 15,418(13) 1.31
Patricia C. Edmonds....................................................... 14,955(14) 1.28
Thomas E. Skelton......................................................... 12,600(15) 1.09
Robert C. Coleman......................................................... 11,354(16) *
George D. Rodgers......................................................... 4,216(17) *
All directors and executive officers
as a group (16 persons)................................................ 479,495 34.61
</TABLE>
* Amount represents less than 1.0%.
(1) Beneficial ownership is determined in accordance with the rules and
regulations of the Securities and Exchange Commission and generally
includes voting or investment power with respect to securities. Shares
of Common Stock issuable upon the exercise of options currently
exercisable or convertible, or exercisable or convertible within 60
days, are deemed outstanding for computing the percentage ownership of
the person holding such options, but are not deemed outstanding for
computing the percentage ownership of any other person. Percentage
ownership is based on 1,160,227 shares outstanding on the Record Date.
2
<PAGE>
(2) Includes 23,152 shares issuable pursuant to currently exercisable stock
options. The address of Mr. Park is 2860 Cokesbury Road, Greenwood,
South Carolina.
(3) Includes 40,075 shares issuable pursuant to current exercisable stock
options, 8,443 shares held by Mr. Steven's wife, and 346 shares held by
Mr. Steven's wife as custodian for Mr. Steven's daughter.
(4) Includes 4,410 shares held by Dr. Allred's wife and 23,152 shares
issuable pursuant to currently exercisable stock options.
(5) Includes an aggregate of 3,854 shares held by Mr. Rogers for his
grandchildren and 17,363 shares issuable pursuant to currently
exercisable stock options.
(6) Includes 17,363 shares issuable pursuant to currently exercisable stock
options.
(7) Includes 441 shares held by Mr. Walter's wife and 17,363 shares
issuable pursuant to currently exercisable stock options.
(8) Includes an aggregate of 662 shares held by Mr. Justesen's wife as
custodian for each of Mr. Justesen's three sons, 288 shares held by Mr.
Justesen's wife, 231 shares held as an IRA for Mr. Justesen's wife and
14,470 shares issuable pursuant to currently exercisable stock options.
(9) Includes 11,865 shares held jointly with Mr. Patrick's wife, an
aggregate of 230 shares held by Mr. Patrick's wife as custodian for two
of Mr. Patrick's sons, 1,122 shares held as an IRA for Mr. Patrick's
wife and 14,470 shares issuable pursuant to currently exercisable stock
options.
(10) Includes 31 shares held by Mr. Munnerlyn's wife, 31 shares held by Mr.
Munnerlyn's son and 14,470 shares issuable pursuant to currently
exercisable stock options.
(11) All shares owned jointly with Mr. Lynch's wife.
(12) Includes 21 shares held by Ms. Robinson for her granddaughter and
15,750 shares issuable pursuant to currently exercisable stock options.
(13) Includes 14,605 shares issuable pursuant to currently exercisable stock
options.
(14) Includes 5,787 shares held jointly with Ms. Edmonds' husband and 5,787
shares issuable pursuant to currently exercisable stock options.
(15) Includes 2,100 shares held jointly with Mr. Skelton's wife.
(16) Includes 2,314 shares held jointly with Mr. Coleman's two children and
7,234 shares issuable pursuant to currently exercisable stock options.
(17) Includes 175 shares in an IRA for Mr. Rodgers' wife and 26 shares held
by Mr. Rodgers' daughter.
Section 16(a) of the Securities Exchange Act of 1934 (the "Act")
requires the Company's directors and officers to file reports of holdings and
transactions in the Company's securities with the Securities and Exchange
Commission (the "SEC"). On the basis of Company records and other information,
the Company believes that all SEC filing requirements under Section 16(a) of the
Act applicable to its officers and directors with respect to the Company's
fiscal year ended December 31, 1995 were complied with, except that Forms 4 were
inadvertently filed late by each of Mr. Coleman, Mr. Drummond, Ms. Edmonds, Mr.
Justesen, Mr. Munnerlyn, Mr. Park, Mr. Rogers, Mr. Stevens and Mr. Walters with
respect to a purchase of Common Stock by each of such persons in the Company's
1995 public offering of Common Stock.
3
<PAGE>
Executive Officers
The following individuals constitute the executive officers of the
Company.
<TABLE>
<CAPTION>
Name Position(s) Currently Held With the Company and the Greenwood Bank
<S> <C>
William G. Stevens President and Chief Executive Officer of the Company and the Greenwood Bank
James H. Stark Chief Financial Officer of the Company and Senior Vice President and Cashier of
the Greenwood Bank. Mr. Stark has held such position with the Company for
over five years.
</TABLE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting. The Company's
Articles of Incorporation provide for a classified Board of Directors which at
the date of the Annual Meeting will consist of fifteen directorships divided
into three classes of five directorships, with one class of directorships
expiring at the Annual Meetings in each of 1996, 1997 and 1998.
In connection with the organization on June 12, 1995 of Clemson Bank &
Trust, a South Carolina state bank and wholly-owned subsidiary of the Company
(the "Clemson Bank"), the Board of Directors of the Company was expanded from
thirteen to sixteen members, and the then existing Board of Directors of the
Company appointed the following four individuals to fill the three newly-created
vacancies and the vacancy that existed as a result of a director's resignation
in 1994: Donna W. Robinson, Thomas C. Lynch, Jr., George D. Rodgers and Thomas
E. Skelton. In April 1996, the Board of Directors reduced the size of the Board
from sixteen to fifteen directorships by eliminating the vacancy that existed as
a result of the resignation of Thomas D. Wingard in 1995. A total of eight
directorships will expire on the date of the forthcoming Annual Meeting,
including the four appointed directorships referenced above.
The Nominating Committee of the Board of Directors has nominated the
eight nominees listed below for election to the Board of Directors. In order to
comply with the statutory requirement that, as near as possible, an equal number
of directors exist in each class of directors, five individuals are being
nominated to serve from the date of their election at the Annual Meeting until
the 1999 Annual Meeting of Shareholders, one individual is being nominated to
serve from the date of her election at the Annual Meeting until the 1998 Annual
Meeting of Shareholders, and two individuals are being nominated to serve from
the date of their election at the Annual Meeting until the 1997 Annual Meeting
of Shareholders, and all until their respective successors shall have been
elected and qualified. In accordance with the Bylaws of the Company, those
nominees receiving the greatest number of votes cast (although not necessarily a
majority of the votes cast) at the Annual Meeting will be elected to the Board
of Directors. Cumulative voting in the election of directors is not permitted by
the Company's Articles of Incorporation.
The persons named in the accompanying proxy have been designated by the
Board of Directors and, unless authority is specifically withheld, they intend
to vote for the election of the eight nominees listed below. A shareholder
executing the enclosed proxy may vote for all or any of the nominees or may
withhold such vote from any or all nominees. In each case where the shareholder
has appropriately specified how the proxy is to be voted, it will be voted in
accordance with such shareholder's specifications. Although it is not
contemplated that any of the nominees will become unable to serve prior to the
Annual Meeting, the persons named on the enclosed proxy will have the authority
to vote for the election of other persons in accordance with their best
judgment.
4
<PAGE>
THE PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE
ELECTION OF THE NOMINEES LISTED BELOW.
Set forth below is the age and certain other biographical information
with respect to each of the eight nominees for election as directors at the
forthcoming Annual Meeting and with respect to each of the directors whose terms
will continue beyond the Annual Meeting. All of the nominees are currently
members of the Board of Directors, and all of the current directors except Donna
W. Robinson, Thomas C. Lynch, Jr., George D. Rodgers and Thomas E. Skelton have
served as directors of the Company since its inception.
Nominees for Directors Whose Terms Expire in 1999:
Patricia C. Edmonds, 41, has served as Secretary of the Company since
1988. She has served as the Executive Director of the Upper Savannah Council of
Governments since March 1989 and served as its Assistant Director from August
1984 to March 1989.
Thomas C. Lynch, Jr., 60, has served as a pharmacist and as President
of Lynch Drug Company, a retail pharmacy in Clemson, South Carolina, since 1963.
Mr. Lynch has served as a director of the Company since June 1995.
H. Edward Munnerlyn, 52, has served as President and owner of Munnerlyn
& Company, a corporate apparel and uniforms company, since January 1989. Prior
to 1989 he was employed by Greenwood Mills, Inc. ("GMI"), a textile
manufacturer, for nineteen years and was Executive Vice President of GMI when he
left GMI in 1988.
Joseph H. Patrick, Jr., 52, has served as President and principal
shareholder of Southern Resources, Inc. since January 1996. Prior to 1996, he
served as President and co-owner of Southern Brick Company for eleven years.
Lex D. Walters, 58, has served as President of Piedmont Technical
College since 1968.
Nominee for Director Whose Term Expires in 1998:
Donna W. Robinson, 48, has served as President and Chief Executive
Officer of the Clemson Bank and as a director of the Company since June 1995.
From September 1994 to June 1995 she was employed by the Company primarily to
assist in matters relating to the organization of the Clemson Bank. Prior to
that time, she served as a Vice President of Wachovia Bank of South Carolina and
had been employed by such bank or its predecessor banks since 1973.
Nominees for Directors Whose Terms Expire in 1997:
George D. Rodgers, 52, has served as President and owner of Palmetto
Insurance Agency, Inc. in Clemson, South Carolina since 1985. Mr. Rodgers has
served as a director of the Company since June 1995.
Thomas E. Skelton, 65, has served as Interim Dean of the College of
Forestry and Life Sciences at Clemson University since 1969. He has served as
General Partner of SVT Properties for fifteen years. Mr. Skelton has served as a
director of the Company since June 1995.
Continuing Directors Whose Terms Expire in 1998:
David P. Allred, 56, is a medical doctor who has been in private
practice in Saluda, North Carolina since April 1994 and was in private practice
in Beaufort, South Carolina from August 1990 to March 1994. From September 1988
to July 1990, he was employed by the Medical University of South Carolina. From
August 1971 through August 1988, he was in private medical practice in
Greenwood, South Carolina.
5
<PAGE>
Robert C. Coleman, 50, has owned and has served as President of Coleman
Realty Company since 1976.
Wayne Q. Justesen, Jr., 50, has been employed by GMI since 1978 and has
served as Secretary and General Counsel of GMI since 1983.
William G. Stevens, 51, has served as President and Chief Executive
Officer of the Company since April 1988 and of the Greenwood Bank since January
1989. He was employed by NCNB National Bank of South Carolina (formerly Bankers
Trust) for eighteen years prior to 1987.
Continuing Directors Whose Terms Expire in 1997:
John S. Drummond, 76, has owned and operated Drummond Oil Company since
1960 and has served as a member of the South Carolina Senate since 1965.
George B. Park, 45, has served as President and Chief Executive Officer
of Otis S. Twilley Seed Company, Inc., a mail order seed company, since August
1993 and as President and owner of GeoSeed, a seed distribution company, since
April 1993. He served as a Managing Director of K. Sahin Zaden, B.V., a flower
seed breeding and production company from July 1989 to August 1992 and was
co-owner, Vice President and Corporate Secretary of George W. Park Seed Company
for ten years prior to 1989.
Charles J. Rogers, 63, has served as Chairman of the Board of Directors
of the Company since 1989 and as President of The Organizational Paths Company,
a consulting firm for organizational strategies, since July 1993. Mr. Rogers
served as plant manager of the Greenwood Plant of the Monsanto Chemical Company
from 1982 until June 1993.
Board Meetings and Committees
The Board of Directors of the Company had a total of twelve regular
meetings and four special meetings during 1995. No director attended fewer than
75% of the total of such Board meetings and the meetings of the committees upon
which the director served. Among the standing committees established by the
Board of Directors are an Audit Committee, a Personnel Committee and a
Nominating Committee.
The Audit Committee consists of Messrs. Justesen, Munnerlyn, Park and
Walters. This Committee recommends to the Board of Directors the engagement of
the independent auditors for the Company, determines the scope of the auditing
of the books and accounts of the Company, reviews the reports submitted by the
auditors, examines procedures employed in connection with the Company's internal
control structure, undertakes certain other activities related to the fiscal
affairs of the Company and makes recommendations to the Board of Directors as
may be appropriate. This Committee met ten times during 1995.
The Personnel Committee consists of Messrs. Allred, Coleman, Drummond
and Park. This Committee monitors the Company's executive compensation plan,
practice and policies, including all salaries, bonus awards and fringe benefits,
and makes recommendations to the Board of Directors with respect to changes in
existing executive compensation plans and the formation and adoption of new
executive compensation plans. This Committee met twelve times during 1995.
The Nominating Committee consists of all of the current directors other
than the eight directors whose terms expire at the Annual Meeting. This
Committee designates on behalf of the Board of Directors candidates for the
directors of the class be elected at the next annual meeting of shareholders.
The Nominating Committee will consider any nominee considered by the
shareholders, provided the nomination is made in writing and is received by the
Secretary of the Company no later than thirty days prior to the Annual Meeting,
unless the Company notifies the shareholders otherwise. This Committee met one
time during 1995.
6
<PAGE>
MANAGEMENT COMPENSATION
Compensation of Officers
The following table summarizes the compensation earned by the Company's
President and Chief Executive Officer for all services provided to the Company
and the Greenwood Bank during 1995 and during each of the two prior fiscal
years. No other executive officer of the Company, the Greenwood Bank or the
Clemson Bank earned compensation in excess of $100,000 for services provided to
the Company, the Greenwood Bank or the Clemson Bank in any of the three fiscal
years reflected below.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation Awards
--------------------------------- ----------------------
Shares of Common Stock All Other
Name and Principal Positions Year Salary Bonus Underlying Options Compensation
- ----------------------------------
------ -------- ----------- ---------------------- -------------
<S> <C> <C> <C> <C> <C>
William G. Stevens 1995 $115,162 $12,622 -0- $4,239
President and Chief Executive Officer 1994 109,047 19,256 -0- 3,573
the Company and the Greenwood Bank 1993 102,887 6,827 11,135 2,509
</TABLE>
Amounts included under the heading "Salary" for 1995, 1994 and 1993
include aggregate director compensation of $6,420, $6,343 and $4,874,
respectively. Amounts included under the heading "All Other Compensation" for
1995 include (i) $955 of premiums for life insurance provided by the Company for
the benefit of Mr. Stevens, and (ii) $3,284 in Company contributions to the
Company's 401(k) plan for the account of Mr. Stevens. The share amount under the
heading "Long-Term Compensation Awards" has been adjusted to reflect the impact
of stock dividends in 1994 and 1995.
Fiscal Year-End Option Values
The following table sets forth certain information with respect to the
unexercised Common Stock purchase options held at December 31, 1995 by the
Company's Chief Executive Officer. No options were exercised by the Chief
Executive Officer in 1995.
<TABLE>
<CAPTION>
December 31, 1995 Option Value
Value of Unexercised
In-the-Money
Number of Securities Underlying Options
Unexercised Options at 12/31/95 at 12/31/95
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C>
William G. Stevens 40,075(1) -0- $157,495 (2) $ -0-
</TABLE>
- ---------------------
(1) Amount represents shares of Common Stock, as adjusted for the payment
in July 1995 of a 5% Common Stock dividend to all shareholders.
(2) There is currently no established or other active trading market for
the Common Stock. The value amount in the table has been calculated on
the basis of an assumed fair market value of $13.00 per share of Common
Stock at December 31, 1995 which was determined by the Company's Board
of Directors and represents its good faith best estimate of the market
price based on its knowledge of recent trading in the Common Stock. The
average exercise price of the options at December 31, 1995 was $9.07
per share of Common Stock, which exercise price represents an
adjustment from the original $10.00 per share exercise price as a
consequence of Common Stock dividends paid since the grant of the
applicable options.
7
<PAGE>
Compensation of Directors
Directors of the Company each receive $100 per month for their services
as directors. Directors of the Greenwood Bank are each paid a fee of $200 per
month for their services as directors of the Greenwood Bank, plus a fee of $50
for attending each regular and each special meeting of the Board of Directors of
the Greenwood Bank and each meeting of any committee of the Board of Directors
of the Greenwood Bank. The President of the Greenwood Bank is the only director
of the Greenwood Bank who is not paid a fee of $50 for attending special
meetings of the Board of Directors of the Greenwood Bank or meetings of any of
its committees. In addition, directors of the Greenwood Bank are eligible to
receive certain additional incentive compensation. See "Management Incentive
Compensation Plans." All directors of the Greenwood Bank and the Clemson Bank
are reimbursed by their respective Bank for all out-of-pocket expenses
reasonably incurred by them in the discharge of their duties as directors,
including out-of-pocket expenses incurred in attending meetings of the Board of
Directors and committees of their respective Boards of Directors.
Executive Supplemental Compensation Plan
During 1993, the Boards of Directors of the Greenwood Bank and the
Company adopted the Executive Supplemental Compensation Plan (the "Executive
Plan") pursuant to which the Chief Executive Officer and certain other executive
officers of the Greenwood Bank 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 Greenwood 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 by the Greenwood Bank 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 Greenwood Bank and requires the employee to be available for
consulting work for the Greenwood Bank. The Executive Plan is an unfunded plan,
although the Company and the Greenwood 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 Greenwood
Bank to offset a portion of the liabilities associated with the obligation to
pay death and retirement benefits under the Executive Plan. As of April 1, 1996,
William G. Stevens, the Company's and the Greenwood Bank's Chief Executive
Officer, and James H. Stark, T. Terry Adkins, and S. Hazel Hughes, Senior Vice
Presidents of the Greenwood Bank, were covered under the Executive Plan.
Management Incentive Compensation Plans
During 1993, the Board of Directors of the Greenwood Bank designed and
implemented two incentive compensation plans designed to provide incentive
compensation to selected members of the Greenwood Bank management and to all
members of the Board of Directors of the Greenwood Bank. A separate plan covers
the executives as a group and the directors as a group. Each of the two plans
establishes certain annual target goals of returns on assets for the Greenwood
Bank and allocates compensation to participants in such plan based on the level
of return on assets reached by the Greenwood Bank during the year. Target levels
of return on assets are determined by the Board of Directors of the Greenwood
Bank on an annual basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management
Each of the Greenwood Bank and the Clemson Bank, in the ordinary course
of its business, makes loans to and has other transactions with directors,
officers, principal shareholders of the Company and their associates
("Affiliated Persons"). All loans, other extensions of credit and other
transactions between Affiliated Persons and
8
<PAGE>
any of the Greenwood Bank, the Clemson Bank or the Company are made on
substantially the same terms, including rates and collateral, as those
prevailing at the time for comparable transactions with unaffiliated third
parties and do not involve more than the normal risk of collectibility or
present other unfavorable features. The Greenwood Bank and the Clemson Bank
expect to continue to enter into transactions in the ordinary course of business
on similar terms with such Affiliated Persons. The aggregate dollar amounts of
such loans outstanding to Affiliated Persons of the Greenwood Bank and the
Clemson Bank were approximately $2,341,253 and $534,297, respectively, at
December 31, 1995.
Lease of Bank Branch
In connection with the establishment by the Greenwood Bank of a new
branch in Ninety Six, South Carolina, the Company has executed a five-year lease
(the "Lease") from John W. Drummond for approximately two-thirds of an acre of
land at Church and West Main Streets in Ninety Six. Mr. Drummond is a principal
shareholder of the Company and is a director of the Company and of the Greenwood
Bank. The Lease expires on July 31, 1999 and provides for escalating annual
rental payments of $4,800, $6,000, $7,200, $9,600 and $10,000 in years one, two,
three, four and five, respectively, of the Lease. The Company is responsible for
all taxes, fees, utilities, maintenance and insurance costs relating to the
leased premises. During the term of the Lease, the Company is also obligated to
erect and maintain a portable building on the leased premises which the Company
is obligated to remove upon the expiration or earlier termination of the Lease.
The Lease grants the Company during the term of the Lease the option to purchase
the leased premises for $90,000, such purchase price being based upon an
independent appraisal of such property conducted as of July 20, 1994. The
Company believes that the terms of the Lease are no more or less favorable to
the Company than those that would be obtainable through arms' length
negotiations with unrelated third parties for similar property. The leased
premises are being subleased from the Company to the Greenwood Bank for its
branch operations in Ninety Six.
Bank Development Agreement
In December 1994, the Company and the organizers (the "Organizers") of
the Clemson Bank entered into a Bank Development Agreement (the "Development
Agreement") that allocated to the Organizers substantially all of the
responsibilities relating to the development of the Clemson Bank as a
wholly-owned subsidiary of the Company, other than certain oversight
responsibilities of the Company of various legal and accounting aspects,
including state and federal regulatory matters, relating to the organization of
the Clemson Bank. The Clemson Bank was organized on June 12, 1995. The Company
and the Organizers believe that the leading role being taken by the Organizers
in the development of the Clemson Bank was necessary to demonstrate to both the
Company and the Clemson community the level of local interest in having the
Clemson Bank organized. The Organizers received no compensation for any
liabilities or responsibilities they assumed under the Development Agreement.
Cost Allocations. Under the Development Agreement, all costs (other
than legal and accounting costs) incurred by any party in connection with the
formation of the Clemson Bank, including real estate, construction, upfitting,
equipment and furnishings costs, third-party bank consulting fees and regulatory
filing fees, were the responsibility of the Organizers. Donna W. Robinson, an
officer of the Company, became the President of the Clemson Bank concurrently
with the commencement of its operations. Prior to Ms. Robinson assuming such
duties, the Organizers also agreed to reimburse to the Company sixty percent of
the cost to the Company of Ms. Robinson's salary under her employment agreement
with the Company (representing an annual reimbursement obligation of up to
approximately $45,000). To fund their share of the costs under the Development
Agreement, the Organizers obtained a line of credit from the Greenwood Bank (the
"Line of Credit"). See "Organizers' Line of Credit." Under the Development
Agreement, the obligations under the Line of Credit were satisfied from the
proceeds used by the Company in the capitalization of the Clemson Bank.
Management. The Development Agreement designated the composition of the
executive officers of the Clemson Bank and provided that the initial Board of
Directors of the Clemson Bank be composed of the Organizers and William G.
Stevens (or another director of officer of the Company designated by Mr.
Stevens). In addition, the following persons were appointed to the Board of
Directors of the Company: Donna W. Robinson, Thomas C. Lynch, Jr., George D.
Rodgers and Thomas E. Skelton.
9
<PAGE>
Other Provisions. In accordance with the Bank Development Agreement,
upon the incorporation and capitalization of the Clemson Bank, the Organizers
conveyed to the Clemson Bank all real estate and leasehold interests held or
acquired by the Organizers in connection with the development and organization
of the Clemson Bank.
Organizers' Line of Credit
In order to fund various costs and expenses associated with the
development and organization of the Clemson Bank, the Organizers obtained from
the Greenwood Bank a $350,000 Line of Credit bearing an annual interest rate of
prime plus one percent. In accordance with the Bank Development Agreement, upon
the incorporation and capitalization of the Clemson Bank, the Line of Credit was
satisfied. See "Bank Development Agreement." The Company believes that the terms
of the Line of Credit were no more or less favorable to the Greenwood Bank than
those that would be obtainable through arms' length negotiations with unrelated
third parties for similar services.
PROPOSAL TWO
RATIFICATION OF ADOPTION OF AN AMENDMENT TO THE COMPANY'S
INCENTIVE STOCK OPTION AND NONSTATUTORY STOCK OPTION PLAN (1993)
General. On April 15, 1996, the Board of Directors approved an
amendment (the "Amendment") to the Company's Incentive Stock Option and
Nonstatutory Stock Option Plan (1993) (the "Stock Plan"), subject to approval of
the Amendment by the shareholders at the Annual Meeting. The Amendment increases
the number of shares of Common Stock that may be issued under the Stock Plan
from 262,500 shares to 500,000. The increase in such number of issuable shares
is expected to be sufficient for the remainder of the term of the Stock Plan,
thereby removing the need for any future shareholder approval of the number of
shares issuable under the Stock Plan. The Board of Directors approved the
Amendment to be effective April 15, 1996. The approval of the Amendment requires
the affirmative vote of the holders of a majority of the shares of Common Stock
present or represented by properly executed and delivered proxies at the Annual
Meeting. Abstentions and shares held in street name voted as to any matter at
the Annual Meeting will be included in determining the number of votes present
or represented at the Annual Meeting. If the Amendment is not approved by the
shareholders, the Stock Plan will remain in effect without the Amendment.
The following discussion of the Stock Plan, as amended by the proposed
Amendment, is qualified in its entirety by reference to the Stock Plan. The
Company will provide promptly, upon request and without charge, a copy of the
full text of the Stock Plan to each shareholder to whom a copy of this Proxy
Statement is delivered. Requests should be directed to Mr. James H. Stark, Chief
Financial Officer, Community Capital Corporation, 109 Montague Avenue,
Greenwood, South Carolina 29648, (803) 941-8200.
Purpose. The Stock Plan was approved by the shareholders of the Company
at the Company's 1994 Annual Meeting of Shareholders. The Stock Plan provides
for the grant of statutory or incentive stock options ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986 (the "Code"), as
well as nonstatutory stock options and stock appreciation rights ("SARs"). The
Stock Plan is intended to provide the Company maximum flexibility to meet the
evolving needs of the Company and its subsidiaries in providing stock- based
compensation to executive officers and directors in order to align more closely
the interests of corporate management with those of shareholders. The Stock Plan
is also expected to promote the interests of the Company and its shareholders by
strengthening the Company's ability to attract and retain key officers and
directors by furnishing additional incentives whereby such present and future
executive officers, key employees and directors may be encouraged to acquire, or
to increase their acquisition of, Common Stock, thus maintaining their personal
and proprietary interests in the Company's continued success and progress.
Administration and Operation. The Board of Directors has established
the Stock Option Plan Committee (the "Committee") to oversee and carry out the
provisions of the Stock Plan, and to assume such other duties as are
contemplated for such Committee under the terms of the Stock Plan. The Board of
Directors has appointed each of the members of the Personnel Committee of the
Board of Directors to serve as members of the Committee. The Committee is
responsible to the Board of Directors for the operation of the Stock Plan, and
makes recommendations
10
<PAGE>
to the Board of Directors with respect to participation in the Stock Plan by
employees and directors of the Company, and with respect to the extent of that
participation. The interpretation and construction of any provision of the Stock
Plan by the Committee is final, unless otherwise determined by the Board.
All awards made under the Stock Plan are evidenced by written
agreements between the Company and the participant. The Board of Directors, in
its discretion, may prescribe that a participant's rights in an award under the
Stock Plan shall be conditioned upon the requirement that the participant
continue employment with the Company or the Company's subsidiaries for a
specified period and agree not to compete with the Company or the Company's
subsidiaries for a specified period and/or within a specific geographical area.
As amended by the proposed Amendment, a maximum of 500,000 shares of
Common Stock may be issued pursuant to awards granted under the Stock Plan, and
the Board of Directors has reserved 500,000 shares for this purpose. The number
of shares reserved for issuance under the Stock Plan shall be adjusted in the
event of an adjustment in the capital stock structure of the Company affecting
the Common Stock (due to a merger, share exchange, stock split, stock dividend,
combination, recapitalization or similar event), and the Committee is authorized
to adjust awards in the terms of the Stock Plan in the event of a change in the
capital stock in order to prevent dilution or enlargement of awards under the
Stock Plan.
Eligibility. Each employee and each director of the Company and its
subsidiaries is eligible to participate in the Stock Plan. The Committee will
select the individuals who will participate in the Stock Plan and members of the
Committee are not restricted under the terms of the Stock Plan from
participating in the Stock Plan while serving as members of the Committee. On
the date of this Proxy Statement, there were fifteen directors of the Company,
eight additional directors of the Company's subsidiaries, and approximately
fifty-six employees eligible to participate in the Stock Plan. The Board of
Directors, upon recommendation of the Committee, may grant nonstatutory stock
options to any director and ISOs and nonstatutory stock options to any officer,
key executive, administrative or other employee (including an employee who is a
director of the Company). Options that are granted at different times need not
contain similar provisions. In addition, the Board of Directors may, upon
recommendation of the Committee, grant SARs to participants in the Stock Plan at
the same time as such participants are awarded nonstatutory stock options under
the Stock Plan.
Stock Options. A stock option entitles the participant to purchase
shares of Common Stock from the Company at the option price. The option exercise
price will be fixed by the Committee at the time the option is granted, but the
exercise price per share cannot be less than 100% of the fair market value of a
share of Common Stock on the date of grant in the case of ISOs, and unless the
Committee determines otherwise, the exercise price will be not less than 100% of
the fair market value of a share of Common Stock on the date of grant in the
case on nonstatutory stock options. The Committee may include in an option
granted under the Stock Plan the right to surrender all or a portion of the
option and receive in exchange therefor an amount of cash or Common Stock equal
to the difference between the then fair market value of the shares of Common
Stock issuable upon the exercise of the option or a portion thereof surrendered
and the exercise price of the option or portion thereof surrendered. Except as
may be provided in an option agreement, an option may be exercised in whole or
in part at any time during its term, but no option may be exercised after the
expiration of ten years from the date it is granted. No ISO may be exercised
prior to the date one year, or after the date ten years, from the date the ISO
is granted. The option price may be paid in cash, with shares of Common Stock,
or with a combination of cash and Common Stock.
Stock Appreciation Rights. The Board of Directors may, upon
recommendation of the Committee, grant SARs to participants at the same time as
such participants are awarded nonstatutory stock options under the Stock Plan.
Each SAR shall relate to a specific nonstatutory stock option awarded under the
Stock Plan. The Company shall have the sole discretion to grant up to one SAR
for every 2.5 nonstatutory stock options awarded under the Stock Plan. SARs
entitle the participant to receive the lesser of (i) the excess of the fair
market value of a share of Common Stock on the date of exercise over the initial
value of the SAR or (ii) the initial value of the SAR. The initial value of the
SAR is the exercise price per share of Common Stock under the related
nonstatutory stock option. The amount payable upon the exercise of a SAR shall
be paid in cash. A participant may exercise a SAR only in conjunction with the
exercise of the related nonstatutory stock option.
No option or SAR may be granted under the Stock Plan after December 20,
2003. The Board of Directors may terminate the Stock Plan sooner without further
action by the shareholders. The Board of Directors also may
11
<PAGE>
amend the Stock Plan except that no amendment that increases the number of
shares of Common Stock that may be issued under the Stock Plan or changes the
class of individuals who may be selected to participate in the Stock Plan will
become effective until it is approved by the shareholders.
Federal Income Tax Consequences. The Company has been advised by
counsel regarding the federal income tax consequences of the Stock Plan. No
income is recognized by a participant at the time an option is granted. If the
option is an ISO, no income will be recognized upon the participant's exercise
of the option. Income is recognized by a participant when the participant
disposes of shares acquired under an ISO. The exercise of a nonstatutory stock
option generally is a taxable event that requires the participant to recognize,
as ordinary income, the difference between the underlying shares' fair market
value and the option price.
No income is recognized upon the grant of a SAR. The exercise of a SAR
generally is a taxable event. The participant generally must recognize income
equal to any cash that is paid and the fair market value of Common Stock that is
received in settlement of a SAR.
The Company will be entitled to claim a federal income tax deduction on
account of the exercise of a nonstatutory stock option or SAR. The amount of the
deduction is equal to the ordinary income recognized by the participant. The
Company will not be entitled to a federal income tax deduction on account of the
grant or the exercise of an ISO. The Company may claim a federal income tax
deduction on account of certain dispositions of Common Stock acquired upon the
exercise of an ISO.
Future awards that may be granted under the Stock Plan are not yet
determinable, as such awards are subject to the discretion and approval of the
Committee, as described above. The following table sets forth the awards of
stock options granted under the Stock Plan. The amounts have been adjusted to
give effect to the payment of stock dividends following the respective grants of
stock options. As of December 31, 1995, there were 270,042 shares of Common
Stock underlying options granted under the Stock Plan, with expiration dates
ranging from December 20, 2003 to February 27, 2005. Such shares of Common Stock
had a market value of approximately $3,510,546 based upon an assumed fair market
value of $13.00 per share on that date. (There is currently no established or
other active trading market for the Common Stock. The assumed fair market value
on December 31, 1995 was determined by the Company's Board of Directors and
represents its good faith best estimate of the market price of the Common Stock
based on its knowledge at that time of recent trading in the Common Stock.)
Outstanding Awards
Incentive Stock Option and Nonstatutory Stock Option Plan (1993)
<TABLE>
<CAPTION>
Shares of Common Stock
Underlying Options Granted
----------------------------------------
Average Exercise
Name and Position Statutory Nonstatutory Price Per Share
- --------------------------------------------- --------------- ------------------ ------------------------
<S> <C> <C> <C>
William G. Stevens
President and Chief
Executive Officer........................ 11,135 28,940 $ 9.07
All Current Executive
Officers, as a group(*).................. 22,270 28,940 9.07
Nominees for Director:
Patricia C. Edmonds...................... -0- 5,787 9.07
Thomas C. Lynch, Jr...................... -0- -0-
H. Edward Munnerlyn...................... -0- 14,470 9.07
Joseph H. Patrick, Jr.................... -0- 14,470 9.07
Donna W. Robinson........................ 15,750 -0- 11.43
George D. Rodgers........................ -0- -0-
Thomas E. Skelton........................ -0- -0-
Lex D. Walters........................... -0- 17,363 9.07
12
<PAGE>
Shares of Common Stock
Underlying Options Granted
----------------------------------------
Average Exercise
Name and Position Statutory Nonstatutory Price Per Share
- --------------------------------------------- --------------- ------------------ ------------------------
Other Holders of 5% or More of Options:
David P. Allred.......................... -0- 23,152 9.07
John S. Drummond......................... -0- 17,363 9.07
Wayne Q. Justesen, Jr.................... -0- 14,470 9.07
George B. Park........................... -0- 23,152 9.07
Charles J. Rogers........................ -0- 17,363 9.07
All Non-Executive
Officer Directors, as a
group.................................... -0- 170,574 9.29
All Non-Executive
Officer Employees, as
a group.................................. 21,970 -0- 9.07
</TABLE>
- -------------------
(*) Includes only the Company's Chief Executive Officer and the Company's
Chief Financial Officer.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF RATIFICATION
OF ADOPTION OF THE AMENDMENT TO THE COMPANY'S INCENTIVE STOCK OPTION AND
NONSTATUTORY STOCK OPTION PLAN (1993). THE PERSONS NAMED IN THE FORM OF PROXY
WILL VOTE THE PROXY AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE
VOTED "FOR" THE APPROVAL OF RATIFICATION OF ADOPTION OF THE AMENDMENT TO THE
COMPANY'S INCENTIVE STOCK OPTION AND NONSTATUTORY STOCK OPTION PLAN (1993).
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, upon recommendation of the Audit Committee, has
reappointed the firm of Tourville, Simpson & Henderson, Certified Public
Accountants, as independent auditors to make an examination of the accounts of
the Company for the fiscal year 1996, subject to shareholder ratification. If
the shareholders do not ratify this appointment, other certified public
accountants will be considered by the Board of Directors upon recommendation of
the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. THE
PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE RATIFICATION OF THE
COMPANY'S INDEPENDENT AUDITORS.
A representative of Tourville, Simpson & Henderson is expected to be in
attendance at the Annual Meeting and will have the opportunity to make a
statement and be available to respond to appropriate questions.
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<PAGE>
OTHER BUSINESS
The Board of Directors of the Company knows of no other matter to come
before the Annual Meeting. However, if any matter requiring a vote of the
shareholders should arise, it is the intention of the persons named in the
enclosed form of proxy to vote such proxy in accordance with their best
judgment.
PROPOSALS FOR 1997 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company by December 31, 1996 for
possible inclusion in the proxy material relating to such meeting.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, which is required to be filed with the Securities and
Exchange Commission, will be made available to shareholders to whom this proxy
statement is mailed, without charge, upon written request to Mr. James H. Stark,
Chief Financial Officer, 109 Montague Avenue, Greenwood, South Carolina 29648.
By order of the Board of Directors,
William G. Stevens
President and Chief Executive Officer
Charles J. Rogers
Chairman of the Board
Greenwood, South Carolina
April 23, 1996
14
<PAGE>
COMMUNITY CAPITAL CORPORATION
GREENWOOD, SOUTH CAROLINA
-------------------------------------------------------------------------------
INCENTIVE STOCK OPTION AND
NONSTATUTORY STOCK OPTION PLAN
(as Amended and Restated through April 15, 1996)
-------------------------------------------------------------------------------
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 Community Capital Corporation, a South
Carolina corporation, and any subsidiary corporation.
2.04. "Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>
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.
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 Community Capital Corporation Stock Option
Plan.
2.11. "Stock" shall mean the common stock of Community Capital
Corporation.
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 500,000
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.
2
<PAGE>
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
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.
3
<PAGE>
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 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
4
<PAGE>
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.
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.
5
<PAGE>
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.
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:
6
<PAGE>
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 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
7
<PAGE>
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.
10. Exercise of Options
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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.
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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 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
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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.
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 Originally Approved By Board of Directors: December 20, 1993
Date Originally Approved by Company Shareholders: May 16, 1994
Date Amended by Board of Directors to increase authorized shares: April 15, 1996
Date Amendment Approved by Company Shareholders: May 20, 1996
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