SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934.
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
PEOPLES BANCORPORATION, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No Fee Required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
PEOPLES BANCORPORATION, INC.
1814 East Main Street
Easley, South Carolina 29640
Notice of Annual Meeting of Shareholders
April 10, 2000
TO OUR SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders of
Peoples Bancorporation, Inc. (the "Company") will be held on Monday, April 10,
2000 at 10:00 a.m., at Peoples Bancorporation, Inc., 1814 East Main Street,
Easley, South Carolina 29640, for the following purposes:
(1) To elect six directors to serve for terms of three years, two
directors to serve for terms of two years and two directors to
serve for terms of one year, or until their successors are
elected and qualified; and
(2) To conduct such other business as may lawfully come before the
Annual Meeting or any adjournments or postponements thereof.
Only shareholders of record at the close of business on February 28,
2000 are entitled to notice of, and to vote at, the meeting and any adjournments
or postponements thereof.
A proxy statement and proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the proxy promptly. If you are a
record owner of shares and attend the meeting, you may, if you wish, withdraw
your proxy and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. Dye
Chairman of the Board, President
and Chief Executive Officer
March 13, 2000
Easley, South Carolina
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY SO THAT YOUR VOTE MAY BE
RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE>
PEOPLES BANCORPORATION, INC.
1814 East Main Street
Easley, South Carolina 29640
--------------------
PROXY STATEMENT
--------------------
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Peoples Bancorporation, Inc. (the
"Company") for use at the Annual Meeting of Shareholders to be held at Peoples
Bancorporation, Inc., 1814 East Main Street, Easley, South Carolina 29640 on
Monday April 10, 2000 at 10:00 a.m., and any adjournments or postponements
thereof, for the purposes set forth in the Notice of Annual Meeting accompanying
this Proxy Statement. In addition to solicitations by mail, officers and regular
employees of the Company, at no additional compensation, may assist in
soliciting proxies by telephone or other electronic means. The Company will pay
the cost of this proxy solicitation. This Proxy Statement and the accompanying
form of proxy were first mailed to the shareholders on or about March 13, 2000.
As used herein, the term "Banks" means The Peoples National Bank, Bank of
Anderson, N. A. and Seneca National Bank, the wholly owned subsidiaries of the
Company.
ANNUAL REPORT
The Annual Report to Shareholders covering the Company's fiscal year
ended December 31, 1999, including financial statements, is enclosed herewith.
Such Annual Report to Shareholders does not form any part of the material for
the solicitation of proxies.
REVOCABILITY OF PROXY
Any proxy given pursuant to this solicitation may be revoked by any
record shareholder who attends the meeting and gives oral notice of his election
to vote in person, without compliance with any other formalities. In addition,
any proxy given pursuant to this solicitation may be revoked by the record
shareholder prior to the meeting by delivering to R. Riggie Ridgeway, Secretary
of the Company, 1814 East Main Street, Easley, South Carolina 29640, an
instrument revoking it or a duly executed proxy for the same shares bearing a
later date. Written notice of revocation of a proxy or delivery of a later dated
proxy will be effective upon receipt by the Company. Attendance at the Annual
Meeting will not in itself constitute revocation of a proxy.
QUORUM AND VOTING
Only shareholders of record on February 28, 2000 are entitled to notice
of and to vote at the Annual Meeting. On that date, the Company had outstanding
2,988,402 shares of common stock, par value $1.67 per share. Each share
outstanding will be entitled to one vote on each matter submitted to the annual
meeting.
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A majority of the shares entitled to be voted at the annual meeting
constitutes a quorum. If a share is represented for any purpose at the annual
meeting by the presence of the registered owner or a person holding a valid
proxy for the registered owner, it is deemed to be present for purposes of
establishing a quorum. Therefore, valid proxies which are marked "Abstain" or
"Withhold" and shares that are not voted, including proxies submitted by brokers
that are the record owners of shares (so-called "broker non-votes"), will be
included in determining the number of votes present or represented at the annual
meeting. If a quorum is not present or represented at the meeting, the
shareholders entitled to vote who are present in person or represented by proxy
have the power to adjourn the meeting from time to time. If the meeting is to be
reconvened within thirty days, no notice of the reconvened meeting will be given
other than an announcement at the adjourned meeting. If the meeting is to be
adjourned for thirty days or more, notice of the reconvened meeting will be
given as provided in the Bylaws. At any reconvened meeting at which a quorum is
present or represented, any business may be transacted that might have been
transacted at the meeting as originally noticed.
If a quorum is present at the Annual Meeting, directors will be elected
by a plurality of the votes cast by shares present and entitled to vote at the
annual meeting. Cumulative voting is permitted. See "CUMULATIVE VOTING RIGHTS."
Votes that are withheld or that are not voted in the election of directors will
have no effect on the outcome of election of directors. If a quorum is present,
all other matters that may be considered and acted upon at the Annual Meeting
will be approved if the number of shares of Common Stock voted in favor of the
matter exceeds the number of shares of Common Stock voted against the matter.
CUMULATIVE VOTING RIGHTS
Each holder of shares is entitled to cumulate his votes for election of
directors. Votes may be cumulated in the following ways: (1) giving one nominee
as many votes as the number of directors to be elected, multiplied by the number
of shares owned, or (2) distributing votes on the same principle among any
number of nominees.
Conditions precedent to the exercise of cumulative voting are either:
(1) giving written notice of intention to vote cumulatively to the Secretary of
the Company not less than forty-eight hours before the time of the meeting; or
(2) announcing the intention to vote cumulatively at the meeting before voting
for directors begins. Once a shareholder gives notice of intention to vote
cumulatively, all shareholders entitled to vote at the meeting may cumulate
their votes. If notice is given at the meeting, the presiding officer may, or if
requested by any shareholder, shall recess the meeting for a period not to
exceed two hours.
If shares are voted cumulatively, the designated proxy agents will
cumulate the votes represented by such proxies in such manner as necessary to
elect the greatest possible number of management nominees.
ACTIONS TO BE TAKEN BY THE PROXIES
The persons named as proxies were selected by the Board of Directors of
the Company. When the form of proxy enclosed is properly executed and returned,
the shares that it represents will be voted at the meeting. Unless the
shareholder otherwise specifies therein, each proxy will be voted "FOR" the
election of the persons named in this Proxy Statement as the Board of Directors'
nominees for election to the Board of Directors. In each case where the
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<PAGE>
shareholder has appropriately specified how the proxy is to be voted, it will be
voted in accordance with the shareholder's specifications. As to any other
matter of business which may be brought before the Annual Meeting, a vote may be
cast pursuant to the accompanying proxy in accordance with the best judgment of
the persons voting the same, but the Board of Directors does not know of any
such other business.
SHAREHOLDER PROPOSALS
Any shareholder desiring to submit proposals for the consideration of
the shareholders at the next Annual Meeting may do so by sending them in writing
to R. Riggie Ridgeway, Secretary, Peoples Bancorporation, Inc., 1814 East Main
Street, Easley, South Carolina 29640. Such written proposals must be received
prior to November 15, 2000, for inclusion, if otherwise appropriate, in the
Company's Proxy Statement and form of Proxy relating to that meeting. With
respect to any shareholder proposal not received by the Company prior to January
28, 2001, proxies solicited by management of the Company will be voted on the
proposal in the discretion of the designated proxy agents.
ELECTION OF DIRECTORS
The Board of Directors has nominated six new directors and four
existing directors for election to the Board of Directors at the Annual Meeting.
Election of the six new directors will increase the size of the Board from 12 to
18. The Board of Directors is increasing its membership to include
representation from Bank of Anderson, N.A. and Seneca National Bank and to
include the Company's Chief Financial Officer.
The Company's Articles of Incorporation provide for a classified board
of directors, whereby approximately one-third of the members of the Company's
Board of Directors are elected each year at the Company's Annual Meeting of
Shareholders. At each Annual Meeting of Shareholders, successors to the class of
directors whose term expires at the Annual Meeting are elected for a new
three-year term. The Board of Directors has nominated the four directors whose
terms expire at the Annual Meeting to be re-elected for additional three-year
terms. To maintain each class of directors as equal in number as possible, the
six new director nominees are being divided equally among the three classes.
The Board of Directors recommends the election of the ten nominees
listed below. In the event that any such nominee is not available to serve as a
director as a result of any unforeseen contingency, the persons acting under the
proxy intend to vote, in his stead, for such person as the Board of Directors
may recommend.
Information about the ten nominees and about the directors whose terms
will continue after the Annual Meeting is set forth below.
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<PAGE>
Director Nominees for Three Year Terms Expiring in 2003
William A. Carr, age 73, served as mayor of the City of Easley, South
Carolina from April 1983 through April 1999. Mr. Carr has been a director since
1992.
Robert E. Dye, Jr., age 32, has served as Director of Expansion and
Development for the Banks and Company since November 1997. Prior to joining the
Company, Mr. Dye was Vice President at Britt, Peters & Associates, Inc., an
engineering firm in Greenville, South Carolina. Mr. Dye also served as an
engineer for South Carolina operations of Vulcan Materials Company. Mr. Dye has
been a director since 1997. Mr. Dye is the son of Robert E. Dye, Sr.
W. Rutledge Galloway, age 56, has been President of Galloway-Tripp,
Inc., a commercial insulation contractor, since 1972. Mr. Galloway also serves
as director of the Greenville, South Carolina Home Builders Association. Mr.
Galloway has been a director since 1992.
E. Smyth McKissick, III, age 42, has been President of Alice
Manufacturing Company, a textile manufacturing company, since 1988. Mr.
McKissick is a member of the Board of Directors of the South Carolina
Manufacturers Alliance and the American Textile Manufacturers Institute. In
addition, Mr. McKissick is on the Board of Trustees of the Institute of Textile
Technology. Mr. McKissick has been a director since 1993.
James A. Black, Jr., age 68, a retired insurance executive, now lives
in the Keowee Key community near Seneca, South Carolina. In 1997 Mr. Black
retired as Vice President of the Barnes Insurance Agency, Inc. in Easley, SC
after 25 years of service. Mr. Black is past President of the Carolinas
Association of Professional Insurance Agents. Mr. Black currently serves as Vice
Chairman, Board of Trustees for North Greenville College. Mr. Black has been a
Director of Seneca National Bank since its formation in February, 1999.
William B. West, age 50, has served as Senior Vice President and Chief
Financial Officer of the Company since July, 1998, Executive Vice President and
Cashier for Bank of Anderson, N. A. since its formation in September, 1998 and
Cashier of Seneca National Bank since its formation in February, 1999. Prior to
that time, Mr. West was Senior Vice President, Chief Financial Officer,
Secretary, Treasurer and Director of First United Bancorporation, Executive Vice
President and Cashier and a director of Anderson National Bank, Cashier of
Spartanburg National Bank, Cashier and a director of Community Bank of
Greenville and Treasurer and a director of Quick Credit Corporation until the
merger of First United Bancorporation into Regions Financial Corporation in June
of 1998.
Director Nominees for Two Year Terms Expiring in 2002
F. Davis Arnette, Jr., age 46, has served as President and Chief
Executive Officer and director of Seneca National Bank since its formation in
February 1999. Mr. Arnette has been employed in the banking and finance industry
since 1977, serving as Assistant Cashier of First National Bank of South
Carolina, Securities Analyst for Liberty Life Insurance Company, Vice President
of First Union National Bank, First Vice President of Sun Trust, Executive Vice
President of Regions Bank and President of the Elberton Office of Regions Bank.
Larry D. Reeves, age 58 has served as Senior Vice President of Cromer
Foods, Inc. since 1989, after 20 years with Owens Coming Fiberglas where he
managed plants in Huntington, Pennsylvania and Anderson South Carolina. Mr.
Reeves also serves as a director and treasurer of Christian Youth Camp, Inc. and
has been a director of Bank of Anderson, N. A. since its formation in 1998.
Director Nominees for One Year Terms Expiring in 2001
David C. King, age 50, has served as President and Chief Executive
Officer and a director of Bank of Anderson, N. A. since its formation in
September 1998. Mr. King, who has been involved in the banking industry for over
25 years, served as President and Chief Executive Officer of Barrow Bank and
Trust in Winder, Georgia from December, 1994 until its acquisition by Regions
Financial Corporation in March 1996, and continued his employment with Regions
until March of 1997. Mr. King is also co-owner of Sullivan King Mortuary in
Anderson, South Carolina.
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<PAGE>
Andrew M. McFall, III, age 65, was employed by Anderson Savings and
Loan Association and its successor Security Federal, Security Mortgage and its
successor, Painewebber Mortgage, and Columbia National, Inc. until retiring in
1995. Mr. McFall serves as President and is on the Board of Governors for the
Greenville Chapter of the American Savings and Loan Institute and is past
President of the South Carolina Controllers Society. He currently serves as a
Commissioner on the Anderson County Planning Commission. Mr. McFall has been a
director of Bank of Anderson, N. A. since its formation in September 1998.
Directors Whose Terms Expire 2001
Eugene W. Merritt, Jr., age 56, has been co-owner and President of
Merritt Brothers, Inc., a commercial landscape company, since 1971. In addition,
Mr. Merritt is a co-owner of Merritt Brothers Tree Farm located in Easley, South
Carolina. Mr. Merritt is currently serving as a member of the Board of Directors
of the AgFirst Farm Credit Bank in Columbia, South Carolina. Mr. Merritt has
been a director since 1993.
George B. Nalley, Jr., age 61, has been Managing Partner of Nalley
Commercial Properties since 1964 and is also Chairman of Nalley Construction
Company and Town N' Country Realty, Inc., each of which is located in the
Easley, South Carolina area. Mr. Nalley has been a director since 1992.
Nell W. Smith, age 70, served as a South Carolina State Senator from
1981 to 1993. Ms. Smith is currently serving on the Clemson University Board of
Nursing and as a board member of the Palmetto Hospital Foundation and Friends of
the Library. Ms. Smith is a founder of Clemson University's John C. Calhoun
Lecture Series. Ms. Smith has been a director since 1992.
A. J. Thompson, Jr., M. D., age 52, has practiced ophthalmology in
Easley, South Carolina since 1981. Dr. Thompson has been a director since 1992.
Directors Whose Terms Expire 2002
Garnet A. Barnes, age 76, has been President of Barnes Real Estate,
Inc. since 1964. In addition, Mr. Barnes is President of Insurance Investment,
Inc. and Smithfields Development Corporation and Vice President and Secretary of
Pinnacle Associates. Mr. Barnes has been a director since 1992.
Charles E. Dalton, age 57, has been President and Chief Executive
Officer of Blue Ridge Electric Cooperative, located in Pickens, South Carolina,
since 1982. Mr. Dalton is past president of the Association of Electric
Cooperatives of South Carolina. Mr. Dalton has been a director since 1992.
Robert E. Dye, Sr., age 58, has served as Chairman of the Board and
Chief Executive Officer of The Peoples National Bank since August 1986. Mr. Dye
served as President of The Peoples National Bank from 1986 through 1995. Prior
to joining The Peoples National Bank, Mr. Dye served as Chairman of the Board
and Chief Executive Officer of Carolina National Bank until 1983 when C & S
National Bank of South Carolina acquired the bank. Mr. Dye served as Senior Vice
President/Regional Executive for C & S until 1985 when he resigned to organize
The Peoples National Bank. Mr. Dye has also served as Chairman of the Board of
Bank of Anderson, N. A., since its formation in September 1998, and Seneca
National Bank, since its formation in February 1999. Mr. Dye has served as
Chairman, Chief Executive Officer and President of the Company since its
formation in 1992. Mr. Dye has been a director since 1992. Mr. Dye is the father
of Robert E. Dye, Jr.
R. Riggie Ridgeway, age 53, served as Executive Vice President, Senior
Loan Officer and a director of The Peoples National Bank from 1986 through 1995.
Mr. Ridgeway was promoted to President of The Peoples National Bank in 1996, and
continues to serve as a director. Mr. Ridgeway, who has been involved in the
banking industry for over 31 years, served as Vice President of Commercial
Banking at American Federal Savings Bank, N. A. from 1983 to 1986. Mr. Ridgeway
has been a director since 1992.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of February 8,
2000 with respect to ownership of the outstanding common stock of the Company by
(i) all persons known to the Company to own beneficially more than five percent
(5%) of the outstanding common stock of the Company, (ii) each director of the
Company, (iii) each director nominee, and (iv) all directors and executive
officers of the Company as a group:
<TABLE>
<CAPTION>
Shares of
Name (and address of 5% Common Stock Exercisable Percent
Beneficial Owner) Beneficially Owned (1) Stock Options(2) of Total
- ----------------------------------------- ----------------------------- ------------------------ ---------------
<S> <C> <C> <C>
F. Davis Arnette, Jr. (3) 2,425 2,205 *
Garnet A. Barnes (4) 69,208 11,576 2.31%
James A. Black, Jr. (5) 36,595 0 1.22%
William A. Carr (6) 13,657 11,576 *
Charles E. Dalton (7) 15,899 6,863 *
Robert E. Dye, Sr. (8) 311,647 30,629 10.32%
1814 East Main Street
Easley, SC 29640
Robert E. Dye, Jr. (9) 91,543 662 3.06%
W. Rutledge Galloway (10) 63,814 11,576 2.13%
David C. King (11) 19,987 2,205 *
Andrew M. McFall, III (12) 8,243 525 *
E. Smyth McKissick 48,402 6,863 1.62%
Eugene W. Merritt, Jr. (13) 20,647 6,863 *
George B. Nalley, Jr. (14) 73,701 11,576 2.46%
Larry D. Reeves 3,281 525 *
R. Riggie Ridgeway (15) 55,062 13,018 1.83%
Nell W. Smith 20,434 11,576 *
A. J. Thompson, Jr., M.D. (16) 76,603 11,576 2.55%
William B. West (17) 11,024 2,205 *
Directors and Officers as a Group (19 956,204 142,274 30.54%
persons)
</TABLE>
* Less than 1%.
Unless otherwise indicated, the named individual or entity has sole voting and
investment power with respect to all shares.
(1) Pursuant to the rules of the Securities and Exchange Commission, certain
shares of the Company's Common Stock that a beneficial owner has the right
to acquire within 60 days pursuant to the exercise of stock options are
deemed to be outstanding for purposes of computing the percentage ownership
of the option holder, but not for the purpose of computing the percentage
ownership of any other person. Unless otherwise indicated, the named
individual or entity has sole voting and investment power with respect to
all shares.
(2) Shares represented by these options are included in the column showing the
number of shares of common stock beneficially owned.
(3) Includes 220 shares owned jointly with Mr. Arnette's wife.
(4) Includes 29,877 shares owned by Mr. Barnes' wife.
(5) Includes 29,834 shares owned by Mr. Black's wife.
(6) Includes 1,102 shares owned jointly with Mr. Carr's wife.
(7) Includes 1,653 shares owned jointly with Mr. Dalton's wife.
(8) Includes 36,514 shares owned by Mr. Dye's wife and her children as to which
Mr. Dye disclaims beneficial ownership.
(9) Includes 4,652 shares owned jointly with Mr. Dye's wife, 6,783 shares owned
by Mr. Dye's wife and 3,284 shares held by Mr. Dye's minor children.
(10) Includes 13,965 shares owned jointly with Mr. Galloway's wife and 38,273
shares held in the name of Galloway-Tripp, Inc. Profit Sharing Plan for the
benefit of Mr. Galloway. Mr. Galloway is the President of Galloway-Tripp,
Inc.
(11) Includes 551 shares owned by Mr. King's wife and 551 shares owned by Mr.
King's minor child.
(12) Includes 551 shares owned by Mr. McFall's wife.
(13) Includes 8,867 shares owned jointly with Mr. Merritt's wife.
(14) Includes 13,293 shares owned by Mr. Nalley's wife and an aggregate of
22,733 shares held in two trusts administered by Mr. Nalley.
(15) Includes 11,466 shares held jointly with Mr. Ridgeway's wife.
(16) Includes 18,642 shares held by Dr. Thompson's wife and 11,536 shares held
by Dr. Thompson's son.
(17) Includes 1,653 shares owned jointly with Mr. West's wife.
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BOARD COMMITTEES AND ATTENDANCE AT BOARD MEETINGS
The Board of Directors of the Company held 4 meetings during the year
ended December 31, 1999. Each Director attended at least 75% of the meetings
held by the Board and committees of the Board on which he or she served.
The Board of Directors has established an audit committee to assist the
Board in fulfilling its responsibilities relating to corporate accounting and
reporting practices of the Company. The Committee also oversees the Company's
internal audit staff and independent auditors; coordinates communication between
the Board of Directors and the internal audit staff and independent auditor;
serves as an independent and objective body to review financial information
presented by management to shareholders, regulators and the general public; and
determines the adequacy of, and adherence to, administrative, operating and
internal accounting controls of the Company. The members of the Audit Committee
in 1999 were Nancy Bennett, William A. Carr, Charles E. Dalton, Steve Edwards,
W. Rutledge Galloway, Myrtle Gillespie, Kirk Oglesby, Robert Rainey, William
Sandifer, and Nell W. Smith. The committee met four times in 1999.
The Board of Directors has also established a compensation committee to
assist the Board in setting compensation for employees and executive officers of
the Company. The members of the Compensation Committee in 1999 were Garnet A.
Barnes, Chairman, Nell W. Smith, William A. Carr, Eugene W. Merritt, Jr. and
Robert E. Dye, Sr. The committee met twice in 1999.
The Company does not have a separate nominating committee.
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by either the Company or the Banks to or on behalf
of the Company's Chief Executive Officer and the only other executive officer
whose cash compensation exceeded $100,000 for the years ended December 31, 1999,
1998 and 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
Name and -------------------- All Other
Principal Position Year Salary Bonus Compensation(1)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert E. Dye, Sr. 1999 $139,250 $14,742 $14,906
President and Chief 1998 $125,000 $13,616 $14,400
Executive Officer 1997 $110,000 $12,820 $12,809
R. Riggie Ridgeway 1999 $126,075 $11,814 $13,972
Executive Vice 1998 $118,575 $10,090 $13,367
President 1997 $105,625 $10,280 $12,592
------------------------
</TABLE>
(1) Includes: matching contributions under the Bank's 401(k) Plan
during 1999, 1998, and 1997 in the amounts of $3,716, $3,683 and $3,688
for Mr. Dye, and $3,399, $3,522, and $3,504 for Mr. Ridgeway; life
insurance premiums paid by the Company in 1999 and 1998 of $1,290 and
$2,117 for Mr. Dye, and $673 and $1,245 for Mr. Ridgeway; and directors
fees paid to each of Messrs. Dye and Ridgeway in 1999, 1998 and 1997 in
the amounts of $9,900, $8,600 and $8,200.
Retirement Benefits
The Company has entered into Salary Continuation Agreements with each
of Robert E. Dye, Sr., the Chief Executive Officer, and R. Riggie Ridgeway, the
Executive Vice President and Secretary. The agreements provide for payments of
benefits to each of Messrs. Dye and Ridgeway commencing at their retirements at
age 66 for Mr. Dye and 65 for Mr. Ridgeway or earlier in the event of death or
disability. The agreement with Mr. Dye provides for payment of an annual benefit
of $35,130 increased by 4% each year between 1998 and Mr. Dye's retirement date.
The benefit is payable in monthly installments beginning in the month after Mr.
Dye's retirement and continuing for the greater of the life of Mr. Dye or 227
additional months. Each year after the first benefit payment, the benefit will
increase by the same percentage as any increase in the consumer price index.
7
<PAGE>
The agreement with Mr. Ridgeway provides for payment of an annual
benefit of $30,029 increased by 4% each year between 1998 and Mr. Ridgeway's
retirement date. The benefit is payable in monthly installments beginning in the
month after Mr. Ridgeway's retirement and continuing for the greater of the life
of Mr. Ridgeway or 239 additional months. Each year after the first benefit
payment, the benefit will increase by the same percentage as any increase in the
consumer price index.
In the event either employee's employment with the Company is
terminated prior to his retirement for any reason other than death or
disability, each agreement provides that a retirement benefit will be paid
beginning at normal retirement age based on the amount stated above increased by
4% per year for the actual years such employee worked after 1998.
In the event either employee's employment with the Company is
terminated prior to the employee's retirement age due to disability, the
employee will receive an annual benefit after the employee reaches retirement
age of between $4,610 and $52,001, in the case of Mr. Dye or between $3,422 and
$50,000, in the case of Mr. Ridgeway, subject to adjustment for inflation, based
on the length of the employee's service from 1998 to the date of termination of
employment. In addition, if the employee's employment is terminated due to
disability, he will receive an annual payment from the date of such termination
until he reaches retirement age in an amount equal to the before tax equivalent
(using the Company's marginal tax rate) of the increase in value of the life
insurance policy owned by the Company to fund the benefits under his agreement
reduced by the hypothetical cost to the Company of paying interest on the
premium for the life insurance policy at a rate equal to the Company's cost of
funds.
In the event that the employee dies while in the employ of the Company,
his agreement provides that the employee's beneficiary shall receive an amount
between $20,255 and $507,128, in the case of Mr. Dye, and between $12,092 and
$498,148, in the case of Mr. Ridgeway. In addition the designated beneficiary of
Mr. Dye shall receive an annual benefit calculated in the same way as the
pre-retirement age disability payment for a period of years which is 29 in 1998
and reduces 2 years for each year after 1998 to a minimum of 9 years.
These benefits were funded in 1997 through the purchase of universal
life insurance policies on the lives of Messrs. Dye and Ridgeway which are
reflected in the Company's balance sheet as other assets. Although the Company
plans to use these policies to fund its obligations under the agreements, its
obligations are independent of the policies.
Noncompetition, Severance and Employment Agreements
The Company has entered into a Noncompetition, Severance and Employment
Agreement with each of Messrs. Dye, Sr., Ridgeway, West, King and Arnette. Mr.
Dye's Agreement provides for his employment as Chairman, President and Chief
Executive Officer of the Company. Mr. Ridgeway's Employment Agreement provides
for his employment as Executive Vice President of the Company. Mr. West's
Agreement provides for his employment as Senior Vice President and Chief
Financial Officer of the Company. Mr. King's Agreement provides for his
employment as President and Chief Executive Officer of Bank of Anderson, N.A.
Mr. Arnette's Agreement provides for his employment as President and Chief
Executive Officer of Seneca National Bank. The terms of all Agreements are
substantially the same. Mr. Dye's and Mr. Ridgeway's Agreements commenced on
August 7, 1995 and are each for terms of 2.99 years, which are deemed to extend
each day for an additional day automatically without any action by either party.
Messrs. West's, King's and Arnette's Agreements commenced on October 19, 1999
and have three year terms, which are deemed to extend each day for an additional
day automatically without any action by either party. Each Agreement provides
for a minimum annual salary, which is to be reviewed annually by the Board of
Directors and may, in the sole discretion of the Board be increased, and for the
payment of bonuses in accordance with the Company's Incentive Compensation Plan.
Each Agreement also provides that the executive will be entitled to any other
officer/employee benefits generally provided by the Company to its most
highly-ranking executives and to other employees, and to a full-sized automobile
and country club dues.
8
<PAGE>
Either the Company or the executive may, by notice to the other, cause
the Agreement to cease to extend automatically and upon such notice, the term
will be fixed at 2.99 years following the date of the notice in the case of
Messrs. Dye and Ridgeway, and three years following the date of the notice in
the case of Messrs. West, King and Arnette. The Agreements may also be
terminated by the Company (i) for cause (as defined in the Agreement), (ii) if
the executive becomes disabled, or (iii) upon the executive's death. If the
Company terminates the Agreement other than for one of the foregoing reasons and
there has been a "change in control", the executive will be entitled to receive
immediately the compensation and benefits that would otherwise be payable to him
under the Agreement over the 2.99 (or 3) years subsequent to such termination.
Compensation which is not fixed (such as bonus), shall be deemed to be equal to
the average of such compensation over the 2.99 (or 3) year period immediately
prior to the termination. For purposes of the Agreements a "change in control"
includes (i) acquisition by any person of 20% of the voting stock of the Company
within any 12 month period; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board, for any
reason ceasing to constitute at least a majority of the board, unless the
election of each new director was approved in advance by a vote of at least a
majority of the directors then still in office who were directors at the
beginning of the period; or (iii) consummation of (A) a merger, consolidation or
other business combination of the Company with any other person or affiliate,
other than a merger, consolidation or business combination which would result in
the outstanding common stock of the Company immediately prior thereto continuing
to represent at least 67% of the outstanding common stock of the Company
immediately after such merger, consolidation or business combination, or (B) a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of its assets; or (iv)
the occurrence of any other event or circumstance not covered by (i) through
(iii) above which the Board determines affects control of the Company. If the
Company terminates the executive other than for cause, disability or death, and
there has been no change of control, the executive will be entitled to receive
immediately as severance the compensation and benefits provided for under the
Agreement for the then remaining term of the Agreement. In the event of
termination other than for cause, disability or death, all rights of the
executive pursuant to awards of share grants or options granted by the Company
will be deemed to have vested and be exercisable, and the executive will be
deemed to be credited with service with the Company for the remaining term of
the Agreement for purposes of the Company's benefit plans.
Each such executive may also terminate the Agreement if (i) the Company
materially breaches the Agreement and does not cure the breach within 30 days
after written notice of the breach; (ii) the executive terminates his employment
following a change of control and not for any of the reasons in (iii) below (a
"voluntary termination"); or (iii) following a change of control if in the sole
judgment of the executive there has been a change in his responsibilities,
title, reporting relationships or working conditions, authority or duties, a
change in the terms or status of the Agreement, a reduction in his compensation
or benefits, a forced relocation out of the designated service area, or a
significant increase in his travel requirements (an "involuntary termination").
If the executive terminates his employment because of material breach by the
Company of the Agreement which is not cured or because of involuntary
termination, he shall be entitled to the same benefits he would receive upon
termination by the Company after a change in control other than for cause,
disability or death. If the executive terminates the Agreement as a result of a
voluntary termination, he will be entitled to receive as severance the
compensation and benefits that would otherwise be provided under the Agreement
for one year following the date of the voluntary termination. Compensation that
is not fixed (such as bonus), shall be deemed equal to the average of such
compensation over the five year (in the case of Messrs. Dye and Ridgeway) or
three year (in the cases of Messrs. West, King and Arnette) period immediately
prior to the termination. In addition, in the event of termination as a result
of material breach of the Agreement by the Company which is not cured or
involuntary termination, all of the executive's rights pursuant to awards of
share grants or options granted by the Company shall be deemed to have vested
and be exercisable, and the executive shall be deemed to be credited with
service with the Company for such remaining term for the purposes of the
Company's benefit plans.
9
<PAGE>
If the executive's employment is terminated before a change in control
voluntarily by the executive or by the Board of Directors for cause, then the
executive agrees for a period of one year not to engage in certain competitive
activities against the Company. In the event that the executive's employment is
terminated for any reason following a change of control, there will be no
limitation on any of executive's activities, including direct competition with
the Company or its successor.
The foregoing are merely summaries of certain provisions of the Salary
Continuation Agreements and the Noncompetition Severance and Employment
Agreements, and are qualified in their entirety by reference to such Agreements,
which have been filed with the Securities and Exchange Commission as exhibits to
the Company's Annual Reports on Form 10-KSB for the years ended December 31,
1995, 1998 and 1999.
Incentive Stock Option Plan
The 1993 Peoples Bancorporation, Inc. Incentive Stock Option Plan (the
"1993 Plan") authorizes options for up to 422,127 shares and provides for the
grant of options at the discretion of the Board of Directors or a committee
designated by the Board of Directors to administer the 1993 Plan. The option
exercise price must be at least 100% of the fair market value of the stock on
the date the option is granted (or 110% in the case of an option granted to a
person who owns more than 10% of the total combined voting power of all classes
of stock of the Company), and the options are exercisable by the holder thereof
prior to their expiration in accordance with the terms of the holder's Stock
Option Agreement and the 1993 Plan. Stock options granted pursuant to the 1993
Plan expire no later than ten years from the date on which they are granted,
except in the case of options granted to ten percent shareholders, which expire
not later than five years from the date on which they are granted.
During 1999, no options to purchase shares of the Company's common
stock were granted under the 1993 Plan.
Aggregated Option Exercises in 1999 and 1999 Year End Option Values
The following table presents information about exercise of options
during 1999 by Messrs. Dye and Ridgeway and about the value of options held by
Messrs. Dye and Ridgeway at December 31, 1999. No options were granted to Mr.
Dye or Mr. Ridgeway in 1999.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Value Options At Fiscal Year End At Fiscal Year End(2)
Name/Position on Exercise Realized(1) Exercisable/Unexercisable Exercisable/Unexercisable
------------- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Dye, Sr. 53,187 $759,825 30,629 30,629 $151,800 0
President and Chief
Executive Officer
R. Riggie Ridgeway, 26,596 $379,950 15,315 13,018 $ 69,000 $58,650
Executive Vice
President
</TABLE>
(1) The difference between the exercise prices of $4.51 per share for Mr. Dye
and $3.61 per share for Mr. Ridgeway and $14.29, the estimated fair value
per share on the date of exercise.
(2) Based on an exercise price of $4.51 per share and an estimated fair value
of $19.00 per share on December 31, 1999.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee in 1999 consisted of Mr. Carr, Mr. Barnes,
Mr. Merritt, Mrs. Smith and Mr. Dye, Sr., the Company's chief executive officer.
In reaching compensation decisions concerning executive officers other than Mr.
Dye, Sr., the chief executive officer, the committee took into account
discussions with and recommendations by Mr. Dye, Sr. There is no other
involvement by the Company's executive personnel in the committee's
deliberations. Mr. Dye, Sr. did not participate in deliberations and decisions
regarding his own compensation.
10
<PAGE>
Board Compensation Committee Report on Executive Compensation
The Compensation Committee has developed and implemented a formalized
salary administration program for all Company personnel. Each position within
the Company, including the chief executive officer's and all other executive
officers, has been assigned a grade based on certain criteria including but not
limited to knowledge, experience, skill, scope of decisions to be made and
authority. Each grade has been assigned a salary range based on peer group
comparisons from survey data for other financial institutions of comparable size
and complexity. Annual base salaries are generally set at competitive levels
with similar financial institutions and within the Company's salary
administration program's guidelines, including the positions of chief executive
officer and other executive officers. Each employee, including the chief
executive officer and all other executive officers, is reviewed at least
annually for job performance and individual goal attainment. Salary increases
are largely based on job performance and goal attainment.
For 1999, the Compensation Committee approved, and the Board of
Directors ratified, a cash incentive plan based on attainment of profitability
goals. All employees and officers, including the chief executive officer and all
executive officers of the Company and its subsidiaries, participated in the
plan. Cash incentive bonus awards were based on a formula driven method and
capped by a percentage of each employee's base salary level. The Compensation
Committee plans to approve a similar plan in 2000 for all employees based on
attainment of profitability goals.
The Compensation Committee also administers the Company's Incentive
Stock Option Plan whereby stock options are awarded to key employees.
The Compensation Committee is dedicated to ensuring that the Company's
overall compensation program for its chief executive officer, senior management
and all other employees is properly designed and administered to attract,
motivate and retain key employees; maintain a base salary structure that is
competitive in the Company's marketplace; link annual incentive cash awards with
specific profitability goals; and provide long-term incentive awards in the form
of incentive stock options that couple management ownership with stockholder
value.
The compensation committee will continue to review and evaluate its
compensation programs on an ongoing basis.
This report furnished by:
Garnet A. Barnes, Chairman
Nell W. Smith
William A. Carr
Eugene W. Merritt, Jr.
Robert E. Dye, Sr.
Performance Graph
The Company is required to provide its shareholders with a line graph
comparing the Company's cumulative total shareholder return with a performance
indicator of the overall stock market and either a published industry index or a
Company-determined peer comparison. The purpose of the graph is to help
shareholders determine the reasonableness of the Compensation Committee's
decisions with respect to the setting of various levels of executive officer
compensation. Shareholder return (measured through increases in stock price and
payment of dividends) is often a benchmark used in assessing corporate
performance and the reasonableness of compensation paid executive officers.
However, shareholders should recognize that corporations often use a
number of other performance benchmarks (in addition to shareholder return) to
set various levels of executive officer compensation. The Company's 1999 Annual
Report to Shareholders contains a variety of relevant performance indicators
concerning the Company. Thus, Company shareholders may wish to consider other
relevant performance indicators which may be more closely related to officer
performance in assessing the reasonableness of Company executive officer
compensation, such as growth in earnings per share, book value per share and
cash dividends per share, along with Return on Equity (ROE) and Return on Assets
(ROA) percentages.
11
<PAGE>
The performance graph below compares the Company's cumulative total
shareholder return over the most recent 5-year period with both the NASDAQ
Composite Index and The Carson Medlin Company's Independent Bank Index (an index
published by The Carson Medlin Company, Investment Bankers). The NASDAQ
Composite Index reflects overall stock market performance. The Independent Bank
Index is the compilation of the total return to shareholders over the past five
years of a group of 23 independent community banks located in the southeastern
states of Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee,
Virginia and West Virginia. The total five year return was calculated for each
of the banks in the peer group taking into consideration changes in stock price,
cash dividends, stock dividends, and stock splits since December 31, 1994. The
individual results were then weighted by the market capitalization of each bank
relative to the entire peer group. The total return approach and the weighting
based upon market capitalization is consistent with the preparation of the
NASDAQ total return index.
The Company believes the Independent Bank Index is a more relevant
standard by which community banks should measure their own performance because
the peer group is comprised of banks that are closer in size and style of doing
business. Furthermore, this index more closely reflects the actual trading
patterns of community bank stocks.
Returns assume a beginning stock index price of $100 per share. The
value of the Company's stock as shown in the graph is based on information known
to the Company regarding transactions in the Company's stock. Because there is
no active trading market in the Company's stock the information is based on a
limited number of transactions.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PEOPLES BANCORPORATION, INC. 100 137 178 267 327 438
INDEPENDENT BANK INDEX 100 122 155 235 246 222
NASDAQ INDEX 100 141 174 213 300 542
</TABLE>
Director Compensation
Directors' Fees
Each of the directors of the Company also serves as a director of The
Peoples National Bank. Although the Company did not pay directors' fees in 1999,
The Peoples National Bank paid directors' fees of $800 per regular board meeting
until September, 1999. Beginning in October 1999, fees paid by The Peoples
National Bank were increased to $900 per regular board meeting. Payment of fees
is not contingent upon attendance at meetings. The Peoples National Bank paid an
aggregate of $118,800 in director fees for 1999.
1997 Non-Employee Director Stock Option Plan
The 1997 Non-Employee Director Stock Option Plan (the "1997 Plan")
authorizes options for up to 185,220 shares and provides for the granting to
non-employee directors of options under a non-discretionary formula set forth in
the 1997 Plan. The option exercise price of each option must not be less than
100% of the fair market value of the shares of common stock of the Company on
the date of grant, and the options are exercisable by the holder thereof prior
to their expiration in accordance with the terms of the holder's Stock Option
Agreement and the 1997 Plan. Stock options granted pursuant to the 1997 Plan
expire no later than ten years from the effective date of the 1997 Plan.
12
<PAGE>
During 1999 options to purchase shares of the Company's common stock
were granted under the 1997 Plan at an exercise price of $14.29 per share to the
following directors:
Number of
Options Granted
Name in 1999 *
---- ---------------
Charles E. Dalton 525
E. Smyth McKissick, III 525
Eugene W. Merritt, Jr. 525
E. Stephen Darby 525
Myrtle E. Gillespie 525
Andrew M. McFall, III 525
D. Kirkland Oglesby 525
J. Calhoun Pruitt, Jr. 525
Robert M. Rainey 525
Larry D. Reeves 525
* All options are currently exercisable.
CERTAIN TRANSACTIONS
The Banks have outstanding loans to certain of their directors and
executive officers, their associates and members of their immediate families.
All of such loans were made in the ordinary course of business, were made on
substantially the same terms, including interest rates, collateral and repayment
terms, as those prevailing at the time for comparable transactions with persons
not affiliated with the Banks, and did not involve more than the normal risk of
collectibility or present other unfavorable features.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As required by Section 16(a) of the Securities Exchange Act of 1934,
the Company's directors, its executive officers and certain individuals are
required to report periodically their ownership of the Company's Common Stock
and any changes in ownership to the Securities and Exchange Commission. Based on
a review of Section 16(a) reports available to the Company and written
representations of persons subject to Section 16(a), it appears that all such
reports for these persons were filed in a timely fashion during 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Elliott, Davis & Company, L.L.P., Certified
Public Accountants with offices in Greenville, South Carolina, to serve as the
Company's independent certified public accountants for 2000. It is expected that
representatives from this firm will be present and available to answer
appropriate questions at the annual meeting, and will have the opportunity to
make a statement if they desire to do so.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
Shareholders may obtain copies of the Company's Annual Report on Form
10-K required to be filed with the Securities and Exchange Commission for the
year ended December 31, 1999, free of charge by requesting such form in writing
from R. Riggie Ridgeway, Secretary, Peoples Bancorporation, Inc., 1814 East Main
Street, Easley, South Carolina 29640. Copies may also be downloaded from the
Securities and Exchange Commission website at http://www.sec.gov.
OTHER MATTERS
The Board of Directors and management of the Company are not aware of
any other matters not referred to in the enclosed proxy that may be brought
before the Annual Meeting. However, if any other matter should properly come
before the Annual Meeting, the persons named in the enclosed proxy will vote
such proxy in accordance with their best judgment on such matters. As of the
date of the preparation of this Proxy Statement, no shareholder has submitted to
management any proposal to be acted upon at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. Dye
Chairman of the Board, President
and Chief Executive Officer
March 13, 2000
13
<PAGE>
PEOPLES BANCORPORATION, INC.
This Proxy is solicited on behalf of the Board of Directors
The undersigned shareholder(s) of Peoples Bancorporation, Inc., a South
Carolina Corporation, hereby acknowledge(s) receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, each dated March 13,2000, and
hereby appoint(s) William B. West and Patricia A. Jensen and each of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
2000 Annual Meeting of Shareholders of Peoples Bancorporation, Inc. to be held
on Monday, April 10, 2000 at 10:00 a.m., Eastern Time, at Peoples
Bancorporation, Inc., 1814 East Main Street, Easley, South Carolina 29640, and
at any adjournment or adjournments thereof, and to vote all shares of Common
Stock which the undersigned would be entitled to vote if then and there
personally present , on the matters set forth below:
1. To elect six (6) directors of the Company to serve a
three-year term, to elect two (2) directors of the Company
to serve a two-year term and to elect two (2) directors of
the Company to serve a one-year term (except as marked to
the contrary below):
Nominees:
Three year terms: William A. Carr, Robert E. Dye, Jr., W.
Rutledge Galloway, E. Smyth McKissick, III, James A. Black,
Jr., and William B. West
Two year terms: F. Davis Arnette, Jr., and Larry D. Reeves
One year term: David C. King and Andrew M. McFall
_______ For _______ Withhold _______ For All Except
Instruction: To withhold authority to vote for any
individual nominee, mark "For All Except" and write that
nominee's name in the space provided below.
------------------------------------------------------------
2. In their discretion, upon such other matter or matters which
may properly come before the meeting or any adjournment or
adjournments thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY. This Proxy, when
properly executed will be voted in accordance with the directions given by the
undersigned shareholder. If no direction is made, it will be voted FOR Proposal
1 and as the proxies deem advisable on such other matters as may come before the
meeting.
This Proxy should be marked, dated and signed by the shareholder(s)
exactly as his or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If shares
are held by joint tenants or as a community property, both should sign.
Date: ___________________ Signature: _________________________________
Signature: ________________________________
