SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
110 South Congress Street
Winnsboro, South Carolina 29180
(803) 635-5536
November 14, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of South Carolina Community Bancshares, Inc. (the
"Company"), which will be held in the Meeting Room of the
Fairfield Motel, 115 S. 321 By-Pass, Winnsboro, South Carolina at
10:30 a.m. (South Carolina Time) on Wednesday, December 17, 1997.
The enclosed Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted. During the
meeting we will also report on the operations of the Company and
Community Federal Savings Bank (the "Bank"), the wholly-owned
subsidiary of the Company. Directors and officers of the Company
and Bank will be present to respond to any questions that
stockholders may have. Also enclosed for your review is our
Annual Report on Form 10-KSB, which serves as the Annual Report
to Stockholders, and which contains detailed information
concerning the activities and operating performance of the Bank.
The business to be conducted at the Annual Meeting consists of
the election of two directors and the ratification of the
appointment of independent auditors for the Company for the
fiscal year ending June 30, 1997. The Board of Directors of the
Company has determined that the matters to be considered at the
Annual Meeting are in the best interest of the Company and its
stockholders, and the Board of Directors unanimously recommends a
vote "FOR" each matter to be considered.
On behalf of the Board of Directors, we urge you to sign, date
and return the enclosed proxy card as soon as possible even if
you currently plan to attend the Annual Meeting. This will not
prevent you from voting in person, but will assure that your vote
is counted if you are unable to attend the meeting.
Sincerely,
Alan W. Pullen
President and Chief Executive Officer
<PAGE>
SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
110 South Congress Street
Winnsboro, South Carolina 29180
(803) 635-5536
NOTICE OF
1997 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On December 17, 1997
Notice is hereby given that the 1997 Annual Meeting of the
Stockholders of South Carolina Community Bancshares, Inc. (the
"Company") will be held in the Meeting Room of the Fairfield
Motel, 115 S. 321 By-Pass, Winnsboro, South Carolina, on
Wednesday, December 17, 1997 at 10:30 a.m. South Carolina time.
A Proxy Card and a Proxy Statement for the Annual Meeting
are enclosed. The Annual Meeting is for the purpose of
considering and acting upon:
1. The election of two directors;
2. The ratification of Crisp, Hughes & Co., L.L.P. as
independent auditors of the Company for the fiscal year ending
June 30, 1997; and
such other matters as may properly come before the Annual
Meeting, or any adjournments thereof. The Board of Directors is
not aware of any other business to come before the Annual
Meeting.
Any action may be taken on the foregoing proposals at the
Annual Meeting on the date specified above, or on any date or
dates to which the Annual Meeting may be adjourned. Stockholders
of record at the close of business on November 6, 1997, are the
stockholders entitled to vote at the Annual Meeting, and any
adjournments thereof. A list of stockholders entitled to vote at
the Annual Meeting will be available at Community Federal Savings
Bank, 110 South Congress Street, Winnsboro, South Carolina for a
period of ten days prior to the Annual Meeting and will also be
available for inspection at the meeting itself.
By Order of the Board of Directors
Terri C. Robinson
Secretary
Winnsboro, South Carolina
November 14, 1997
- -----------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT
THE ANNUAL MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE
UNITED STATES.
- -----------------------------------------------------------------
<PAGE>
SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
110 South Congress Street
Winnsboro, South Carolina 29180
(803) 635-5536
------------------------------
PROXY STATEMENT
------------------------------
1997 ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 17, 1997
------------------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
South Carolina Community Bancshares, Inc. (the "Company") to be
used at the 1997 Annual Meeting of Stockholders of the Company
(the "Annual Meeting"), which will be held in the Meeting Room of
the Fairfield Motel, 115 S. 321 By-Pass, Winnsboro, South
Carolina, on Wednesday, December 17, 1997, at 10:30 a.m., South
Carolina Time, and at all adjournments of the Annual Meeting.
The accompanying Notice of Annual Meeting of Stockholders and
this Proxy Statement are first being mailed to stockholders on or
about November 17, 1997.
Regardless of the number of shares of Common Stock owned, it
is important that stockholders be represented by proxy or be
present in person at the Annual Meeting. Stockholders are
requested to vote by completing the enclosed Proxy Card and
returning it, signed and dated, in the enclosed postage-paid
envelope. Stockholders are urged to indicate the way they wish to
vote in the spaces provided on the proxy card. Proxies solicited
by the Board of Directors of the Company will be voted in
accordance with the directions given therein. Where no
instructions are indicated, signed proxies will be voted FOR the
election of the nominees for director named in this Proxy
Statement, and FOR the ratification of Crisp, Hughes & Co.,
L.L.P. as independent auditors of the Company for the fiscal year
ending June 30, 1997.
The Board of Directors knows of no additional matters that
will be presented for consideration at the Annual Meeting.
Execution of a proxy, however, confers on the designated
proxyholders discretionary authority to vote the shares in
accordance with their best judgement on such other business, if
any, that may properly come before the Annual Meeting or any
adjournments thereof.
<PAGE>
Stockholders who execute proxies in the form solicited
hereby retain the right to revoke them in the manner described
below. Unless so revoked, the shares represented by such proxies
will be voted at the Annual Meeting and all adjournments thereof.
Proxies solicited on behalf of the Board of Directors of the
Company will be voted in accordance with the directions given
thereon. Where no instructions are indicated, proxies will be
voted "FOR" the proposals set forth in this Proxy Statement for
consideration at the Annual Meeting.
Proxies may be revoked at any time prior to exercise by
sending written notice of revocation to the Secretary of the
Company, Terri C. Robinson, at the address of the Company shown
above, or by delivering to the Company a duly executed proxy
bearing a later date. The presence at the Annual Meeting of any
stockholder who had given a proxy shall not revoke such proxy
unless the stockholder delivers his or her ballot in person at
the Annual Meeting or delivers a written revocation to the
Secretary of the Company prior to the voting of such proxy.
The cost of solicitation of proxies in the form enclosed
herewith will be borne by the Company. Proxies may also be
solicited personally or by mail, telephone or telegraph by the
Company's Directors, officers and regular employees, without
additional compensation therefor. The Company will also request
persons, firms and corporations holding shares in their names, or
in the name of their nominees, which are beneficially owned by
others, to send proxy material to and obtain proxies from such
beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
VOTING SECURITIES
Holders of record of the Company's common stock, par value
$.01 per share (the "Common Stock") as of the close of business
on November 6, 1997 (the "Record Date") are entitled to one vote
for each share then held, except as described below. As of the
Record Date, the Company had 645,573 shares of Common Stock
issued and outstanding. The presence, in person or by proxy, of
at least a majority of the total number of shares of Common Stock
outstanding and entitled to vote is necessary to constitute a
quorum at this Annual Meeting. In the event there are not
sufficient votes for a quorum, or to approve or ratify any matter
being presented, at the time of this Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further
solicitation of proxies.
In accordance with the provisions of the Company's
Certificate of Incorporation, record holders of Common Stock who
beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote with
respect to the shares held in excess of the Limit. The Company's
Certificate of Incorporation authorizes the Board of Directors
(i) to make all determinations necessary to implement and apply
the Limit, including determining whether persons or entities are
acting in concert, and (ii) to demand that any person who is
reasonably believed to beneficially own stock in excess of the
Limit supply information to the Company to enable the Board to
implement and apply the Limit.
<PAGE>
VOTING PROCEDURES AND METHOD OF COUNTING VOTES
As to the election of Directors, the proxy card being
provided by the Board of Directors enables a stockholder to vote
FOR the election of the two nominees proposed by the Board, or
to WITHHOLD AUTHORITY to vote for the nominees being proposed.
Under Delaware law and the Company's Certificate of Incorporation
and Bylaws, Directors are elected by a plurality of votes cast,
without regard to either broker non-votes, or proxies as to which
authority to vote for the nominees being proposed is withheld.
As to the ratification of the appointment of independent
auditors, the proxy card being provided by the Board of Directors
enables a stockholder to check the appropriate box on the proxy
card to (i) vote "FOR", (ii) vote "AGAINST", or (iii) vote to
"ABSTAIN" from voting on, such matter. An affirmative vote of
the holders of a majority of the Common Stock present at the
Annual Meeting, in person or by proxy, and entitled to vote is
required to constitute ratification by the stockholders. Shares
as to which the "ABSTAIN" box has been selected on the proxy card
will be counted as shares present and entitled to vote and will
have the effect of a vote against the matter for which the
"ABSTAIN" box has been selected. In contrast, broker non-votes
will not be counted as shares present and entitled to vote and
will have no effect on the vote on the matter presented.
Proxies solicited hereby will be returned to the Company,
and will be tabulated by inspectors of election designated by the
Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups who beneficially own in excess of 5% of
the Common Stock are required to file certain reports with the
Company and with the Securities and Exchange Commission (the
"SEC") regarding such ownership pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"). The following table
sets forth information regarding each person known to be
beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date.
<TABLE>
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owner Ownership Outstanding
<S> <C> <C>
Community Federal Savings 62,422 (1) 9.67%
Bank Employee Stock Ownership Trust
110 South Congress Street
Winnsboro, South Carolina 29180
- -------------------
</TABLE>
(1) Under the Community Federal Savings Bank Employee Stock
Ownership Plan (the "ESOP"), shares allocated to participants'
accounts are voted in accordance with the participants'
directions. Unallocated shares held by the ESOP are voted by the
Trustees in the manner calculated to most accurately reflect the
instructions it has received from the participants regarding the
allocated shares. As of the Record Date, 13,744 shares of Common
Stock have been allocated to the accounts of employees under the
ESOP. The Trustees of the ESOP are Directors of the Company.
<PAGE>
PROPOSAL 1-ELECTION OF DIRECTORS
The Company's Board of Directors consists of six members.
Directors of the Company are generally elected to serve for a
three-year period or until their respective successors shall have
been elected and shall qualify. Each of the Directors of the
Company also serves on the board of directors of Community
Federal Savings Bank (the "Bank"). Two directors will be elected
at the Annual Meeting to serve for a three-year period or until a
successor has been elected and qualified. The Board of Directors
has nominated Quay W. McMaster and John S. McMeekin to serve as
directors. Each of the nominees is currently a member of the
Board of Directors.
The table below sets forth certain information regarding the
composition of the Company's Board of Directors, including the
terms of office of Board members. It is intended that the
proxies solicited on behalf of the Board of Directors will be
voted at the Annual Meeting for the election of the nominees
identified below (unless otherwise directed on the proxy card).
If a nominee is unable to serve, the shares represented by all
such proxies will be voted for the election of such substitute as
the Board of Directors may recommend. At this time, the Board of
Directors knows of no reason why the nominees might be unable to
serve, if elected.<PAGE>
<TABLE>
Term to Shares of
Expire Common
following Stock
Fiscal Beneficially Percent
Positions Held Director Year Ending Owned at of
Name Age in the Company Since(1) June 30 Record Date Class
- -------------------------------------------------------------------------------------------------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Quay W. McMaster 71 Chairman of the Board 1978 2000 33,766(2) 5.23%
John S. McMeekin 43 Director 1995 2000 8,758(2) 1.36
DIRECTORS CONTINUING IN OFFICE
Richard H. Burton 79 Director 1986 1998 7,340(2) 1.14
George R.
Lauderdale, Jr. 73 Director 1987 1998 17,340(2) 2.69
Alan W. Pullen 40 President 1987 1999 19,311(3) 2.99
Philip C. Wilkins 42 Director 1996 1999 3,025 0.47
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Terri C. Robinson 38 Chief Financial Officer n/a n/a 5,423(4) 0.84
All Directors and Executive Officers 94,963(5) 14.71%
as a Group (7 persons)
/TABLE
<PAGE>
- -------------------
(1) Reflects initial appointment to the Board of Directors of
Community Federal Savings Bank, the Company's subsidiary.
(2) Includes 1,560 shares that may be acquired pursuant to
presently exercisable options.
(3) Includes 7,802 shares that may be acquired pursuant to
presently exercisable options.
(4) Includes 2,400 shares that may be acquired pursuant to
presently exercisable options.
(Footnotes continued on the following page)
<PAGE>
(5) Excludes 62,422 shares of Common Stock, or 9.67% of the
shares of Common Stock outstanding, owned by the Company's ESOP
for the benefit of the employees of the Bank. The ESOP
Administrative Committee administers the ESOP. Under the terms
of the ESOP, shares of Common Stock allocated to the account of
employees are voted in accordance with the instructions of the
respective employees. Unallocated shares are voted by the ESOP
Trustee in the manner calculated to most accurately reflect the
instructions it has received from the participants regarding the
allocated shares, unless their fiduciary duties require
otherwise. As of the Record Date, 13,744 of Common Stock have
been allocated under the ESOP. The Trustees of the ESOP are
Directors of the Company.
The principal occupation during the past five years of each
director and executive officer of the Company is set forth below.
All directors have held their present positions for five years
unless otherwise stated.
Quay W. McMaster is the owner, President and Chief Executive
Officer of Winnsboro Plywood Co., Inc. and Winnsboro Veneer Co.,
Inc. He has served as Mayor of the Town of Winnsboro since 1973.
Mr. McMaster is the past President of the Bank, having served
from July 1992 to December 1993, when he was elected Chairman of
the Board. In addition, Mr. McMaster was Vice President of the
Bank from 1989 to July 1992.
Richard H. Burton retired in 1980. Prior to his retirement,
he was Plant Manager of the Winnsboro plant of Uniroyal, Inc.
Mr. Burton has served as a director of the Bank since May 1986,
and he was elected Vice-Chairman of the Board in December 1993.
In addition, Mr. Burton served as Vice President of the Bank from
July 1992 through December 1993.
Alan W. Pullen is the President and Chief Executive Officer
of the Bank, having been elected to that position in December
1993. From January 1, 1987 through December 1993, Mr. Pullen
served as Executive Vice President of the Bank.
George W. Lauderdale was the Treasurer of Fairfield County,
South Carolina prior to his retirement on July 1, 1987. Mr.
Lauderdale was elected to the Board of Directors in November
1987, and he has served as Treasurer of the Bank since 1993, and
Vice President since October, 1994.
John S. McMeekin is president of Winnsboro Furniture
Company. He was first elected to the Board of Directors of the
Bank in September, 1994, and to the Board of Directors of the
Company in April, 1995.
Philip C. Wilkins, DMD is a dentist with offices in
Winnsboro, South Carolina. He was first elected to the Board of
Directors of the Bank in June, 1996, and to the Board of
Directors of the Company in September, 1996.
Terri C. Robinson, has been employed by the Bank since 1984
in various capacities, most recently as Bookkeeper, Secretary-
Treasurer, and since December 1993, as Chief Financial Officer.
<PAGE>
Committees and Meetings of the Board of Directors
The business of the Company and the Bank is conducted
through regular and special meetings of the Board of Directors
and its committees. The Board of Directors of the Company met 13
times during fiscal 1997. During the fiscal year ended June 30,
1997, the Board of Directors of the Bank held 12 meetings. No
director attended fewer than 75% of the total meetings held by
the Board of Directors and the committees on which such director
served, with respect to each of the Company and the Bank. The
following is a discussion of certain committees of the Bank. The
Bank's Audit Committee functions as the audit committee of the
Company, and the Bank's Personnel Committee functions as the
personnel committee of the Company.
The Loan Committee is composed of any 3 members of the Board
of Directors, including Alan W. Pullen, President and Chief
Executive Officer of the Company and Bank. The Loan Committee
meets periodically in between the regular monthly meetings of the
Board of Directors in order to ratify loan approvals. The
actions of the Loan Committee are reported to the full Board at
its next regular meeting. During the 1997 fiscal year, the Loan
Committee held 13 meetings.
The Personnel Committee is composed of Directors McMaster
(Chairman) and Burton, and it meets periodically during the year
as needed to review the Bank's salary and benefit policies and to
set salary increases for the Bank's officers and employees. The
Personnel Committee met 2 times during fiscal 1997.
The Audit Committee consists of Directors Lauderdale
(Chairman) and McMeekin. The Audit Committee meets as needed to
review the audit reports prepared by the Bank's independent
auditor, and meets periodically with the Bank's management in
order to set asset classifications. In addition, the committee
annually reviews the Bank's audit policies and recommends any
necessary changes to the Board of Directors. During fiscal 1997,
the Audit Committee held 3 meetings.
The Investment Committee meets periodically to review the
Bank's investment policies, and it is authorized to make security
investments on behalf of the Bank. The Investment Committee is
composed of Directors McMaster and Pullen, and in the absence of
either member, any one of the other members of the Board of
Directors may be substituted for the absent member of the
committee. During fiscal 1997, this committee met 4 times.
Neither the Bank nor the Company has a standing Nominating
Committee, but rather the full Board of Directors, except for the
directors standing for re-election, serves as the nominating
committee. While the Board will consider nominees recommended by
the stockholders, it has not actively solicited recommendations
from stockholders. Nominations by stockholders must comply with
certain procedural and informational requirements set forth in
the Company's Bylaws. See "Advance Notice of Business to be
Conducted at an Annual Meeting." The Board of Directors met
once in its capacity as the nominating committee during fiscal
1997.
<PAGE>
Director Compensation
The Bank pays a $5,000 annual retainer to each of its
directors, in addition to a $200 per meeting fee. The Company
pays a fee of $50 per board meeting attended. Directors have
received awards of stock options and stock grants under plans
approved by the stockholders.
Executive Compensation
The following table sets forth for the fiscal years ended
June 30, 1997, 1996, and 1995, certain information as to the
total remuneration paid by the Bank and the Company to the Chief
Executive Officer of the Bank and the Company (the "Named
Executive Officer").<PAGE>
<TABLE>
Long-Term
Annual Compensation Compensation Awards
Restricted
Stock Options/ All Other
Name and Year Ended Salary Bonus Award(s) SARs Compensation
Principal Position June 30, (1) (2) (#)(3) (4)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alan W. Pullen 1997 $64,700 $5,000 $ --- --- $37,504
President and Chief 1996 65,000 5,000 --- --- 36,279
Executive Officer 1995 66,605 5,000 129,654 19,507 8,606
/TABLE
<PAGE>
- -------------------
(1) Includes directors fees.
(2) Relates to an award as to 9,604 shares of Common Stock
granted pursuant to the Company's Recognition and Retention Plan
in December 1994. The market value per share of the Common Stock
was $13.50 on the date of grant. Such award vests in five equal
installments, and will be 100% vested upon termination of
employment due to death, disability or following a change in
control. When such shares become vested and are distributed, the
recipient will also receive an amount equal to the accumulated
dividends and earnings thereon.
(3) Relates to options granted pursuant to the Company's 1994
Stock Option Plan, which become exercisable in equal installments
at a rate of 20% per year commencing one year from the date of
grant, and are fully exercisable following a change in control.
The first installment of options became exercisable on December
13, 1995.
(4) Represents $3,668, $2,850, and $3,025 respectively, of
contributions made by the Bank on Mr. Pullen's behalf pursuant to
the Bank's 401(k) Plan for the fiscal years ended June 30, 1997,
1996, and 1995. Also includes, $33,836, $33,429 and $5,581
relating to the market value of stock allocated to Mr. Pullen
under the Bank's ESOP as of June 30 of each year.
Employment Agreement. The Bank has entered into an
employment agreement with Alan Pullen, President and Chief
Executive Officer of the Company and the Bank. The employment
agreement for Mr. Pullen with the Bank and the Company provides
for a three-year term. Commencing on the first anniversary date
and continuing each anniversary date thereafter, the employment
agreement renews for an additional year, such that the remaining
term shall be three years unless written notice of nonrenewal is
given by the Board of Directors after conducting a
<PAGE>
performance evaluation of the executive. The agreement provides
that the base salary of the executive will be reviewed annually.
The base salary of Mr. Pullen is $60,000. In addition to the
base salary, the employment agreement provides that the executive
is to receive all benefits provided to permanent full-time
employees of the Bank, including among other things,
participation in stock benefit plans and other fringe benefits
applicable to executive personnel, as well as director fees. The
employment agreement provides for the termination by the Bank of
the executive's employment for cause at any time. In the event
the Bank chooses to terminate Mr. Pullen's employment for reasons
other than for cause, or upon the termination of his employment
for reasons other than upon retirement or death, or in the event
of his resignation from the Bank or the Company upon: (i) failure
to re-elect him to his current office; (ii) a material change in
his functions, duties or responsibilities which change would
cause his position to become one of lesser responsibility,
importance or scope; (iii) relocation of his principal place of
employment by more than 30 miles; (iv) the liquidation or
dissolution of the Bank or the Company; or (v) a breach of the
agreement by the Bank, the executive, or in the event of death,
his beneficiary, would be entitled to receive an amount equal to
the greater of the remaining payments, including base salary,
bonuses and other payments due under the remaining term of the
employment agreement or three times the average of the
executive's base salary, including bonuses and other cash
compensation paid, and the amount of any benefits received
pursuant to any employee benefit plans maintained by the Bank,
over the five fiscal years preceding such termination. The Bank
would also continue the executive's life, health, and disability
coverage for the remaining unexpired term of the employment
agreement to the extent allowed by the plan or policies
maintained by the Bank or the Company from time to time.
Severance Agreements. The Bank has entered into Severance
Agreements (the "Severance Agreements") with Ms. Robinson and a
senior officer of the Bank which will provide such officers with
certain benefits in the event of a change of control of the Bank
or the Company. The Severance Agreements provide for up to a 3-
year term. Commencing on the first anniversary date, and
continuing on each anniversary date thereafter, the Board of
Directors may extend either of the Severance Agreements for an
additional year. Following a change of control of the Company or
the Bank, as defined in the Severance Agreement, an officer shall
be entitled to a payment under the Severance Agreement if the
participant terminates employment during the term of such
agreement, following any demotion, loss of title, office or
significant authority, reduction in his or her annual
compensation or benefits, or relocation of his principal place of
employment by more than 30 miles. In the event that a
participant in the Severance Agreement is entitled to receive
payments pursuant to the Severance Agreement, he or she shall
receive a cash payment up to a maximum of three times such
participant's annual compensation prior to termination of
employment, plus such participant shall be entitled to receive
life and medical coverage for a period of up to 36 months from
the date of termination.
Stock Options. The Board of Directors of the Company has
adopted the 1994 Stock Option Plan (the "Stock Option Plan"),
which has been approved by the stockholders. Certain directors,
officers and employees of the Bank and the Company are eligible
to participate in the Stock Option Plan. The Stock Option Plan
is administered by a committee of outside directors (the
"Committee"). The Stock Option Plan authorizes the grant of
stock options and limited rights equal to 78,028 shares of Common
Stock. The Stock Option Plan provides for the grant of (i)
options to purchase Common
<PAGE>
Stock intended to qualify as incentive stock options under
Section 422 of the Internal Revenue Code, (ii) options that do
not so qualify ("nonstatutory options") and (iii) limited rights
that are exercisable only upon a change in control of the
Company. Non-employee directors of the Bank and the Company are
only eligible to receive nonstatutory options under the Stock
Option Plan. Options granted to employees are determined by the
Committee. Options granted to directors under the Stock Option
Plan are awarded under a formula pursuant to which each non-
employee director of both the Company and the Bank receives an
option to purchase 3,901 shares of Common Stock of the Company.
Options must be exercised within 10 years from the date of grant.
Stock options may be exercised for up to one year following
termination of service or such later period as determined by the
Committee. The exercise price of the options must be at least
100% of the fair market value of the underlying Common Stock at
the time of the grant. Upon the exercise of "limited rights" in
the event of a change in control, the optionee will be entitled
to receive a lump sum cash payment equal to the difference
between the exercise price of the option and the fair market
value of the shares of Common Stock subject to the option on the
date of exercise of the right in lieu of purchasing the stock
underlying the option.
No options were granted under the Stock Option Plan to the
Named Executive Officer during the year ended June 30, 1997.
Set forth below is certain additional information concerning
options outstanding to the Named Executive Officer at June 30,
1997. No options were exercised during fiscal 1997.<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Fiscal Year-End Fiscal Year-End(1)
Shares Acquired Value Exercisable/Unexercisable Exercisable/Unexercisable
Name Upon Exercise Realized(1) (#) ($)
<S> <C> <C> <C> <C>
Alan W. Pullen --- $--- 7,802/11,705 $39,010/58,525
/TABLE
<PAGE>
- ---------------------
(1) Equals the difference between the aggregate exercise price
of such options and the aggregate fair market value of the shares
of Common Stock that would be received upon exercise, assuming
such exercise occurred on June 30, 1997, at which date the
average of the bid and ask price of the Common Stock as quoted on
the Nasdaq Small-Cap Market was $18.50.
Recognition and Retention Plan. Under the Company's
Recognition and Retention Plan, which has been approved by the
stockholders, 23,408 shares are available to be awarded to
executive officers and employees and 7,803 shares are available
to be awarded to non-employee directors. These shares were
acquired through open market purchases. A Committee of the Board
of Directors of the Bank and the Company composed of non-employee
directors administers the Recognition Plan, and makes awards to
executive officers pursuant to the Recognition Plan. However,
awards to outside directors are fixed by the terms of the
Recognition Plan. Awards of Common Stock that
<PAGE>
are restricted by the Recognition Plan ("Restricted Stock") are
nontransferable and nonassignable. All awards under the
Recognition Plan will vest at a rate of 20% per year. The
Committee may extend the vesting rate of any awards made after
the effective date of the Recognition Plan. When a participant's
shares become vested in accordance with the Recognition Plan, the
participant will recognize income equal to the fair market value
of the Restricted Stock so vested at that time, unless the
participant has made an irrevocable election to be taxed on the
shares of Restricted Stock awarded to him in the year of the
award. The amount of income recognized by a participant will be
a deductible expense of the Company for Federal income tax
purposes. When shares become vested and are actually distributed
in accordance with the Recognition Plan, participants will also
receive amounts equal to any accrued dividends with respect
thereto.
Transactions With Certain Related Persons
Under banking regulations applicable to the Bank, all loans
or extensions of credit to executive officers and directors must
be made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more
than the normal risk of repayment or present other unfavorable
features. In addition, loans made to a director or executive
officer in excess of the greater of $25,000 or 5% of the Bank's
capital and surplus (or in any event greater than $500,000) must
be approved in advance by a majority of the disinterested members
of the Board of Directors. The Bank provides loans to employees
who are not "executive officers" for bank regulatory purposes, at
reduced rates and/or with points waived or reduced. The only
such loan to any current executive officer that exceeded $60,000
since July 1, 1994, was a first mortgage loan to Terri C.
Robinson. The largest principal amount outstanding on such loan
during the fiscal year ended June 30, 1997 was $66,744, the
amount outstanding as of October 31, 1997 was $64,310, and the
interest rate on such loan at October 31, 1997 was 5.89%. Loans
are made to directors and executive officers in the ordinary
course of business on the same terms and conditions as the Bank
would make to any other customer in the ordinary course of
business and do not involve more than a normal risk of
collectibility or present other unfavorable features. Other than
as described in this paragraph, all loans that exceeded $60,000
at any time during fiscal year ended June 30, 1997 to executive
officers, directors, immediate family members of executive
officers and directors, or organizations with which executive
officers and directors are affiliated, were made in the ordinary
course of business, on substantially the same terms including
interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons.
<PAGE>
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended
June 30, 1997 were Crisp, Hughes & Co., L.L.P. The Company's
Board of Directors has reappointed Crisp, Hughes & Co., L.L.P. to
continue as independent auditors for the Company for the fiscal
year ending June 30, 1998, subject to ratification of such
appointment by the stockholders. A representative of Crisp,
Hughes & Co., L.L.P. is expected to attend the Annual Meeting.
He will be given an opportunity to make a statement if he desires
to do so and will be available to respond to appropriate
questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF CRISP, HUGHES & CO., L.L.P. AS
THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR
ENDING JUNE 30, 1998.
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice
procedure for certain business, or nominations to the Board of
Directors, to be brought before an annual meeting. In order for a
stockholder to properly bring business before an annual meeting,
or to propose a nominee to the Board, the stockholder must give
written notice to the Secretary of the Company not less than
ninety (90) days in advance of the date of the Company's proxy
statement mailed to stockholders in connection with the previous
year's annual meeting; provided, that if the date of an annual
meeting date changes by more than thirty (30) days from the date
of the previous year's annual meeting, notice by the stockholder
to be timely must be received not later than the close of
business on the tenth day following the day on which notice of
the date of the annual meeting was mailed to stockholders or
public disclosure thereof was made. The notice must include the
stockholder's name, record address, and number of shares owned by
the stockholder, and describe briefly the proposed business, the
reasons for bringing the business before the annual meeting, and
any material interest of the stockholder in the proposed
business. In the case of nominations to the Board, certain
information regarding the nominee must be provided. Nothing in
this paragraph shall be deemed to require the Company to include
in its proxy statement and proxy relating to an annual meeting
any stockholder proposal which does not meet all of the
requirements for inclusion established by the SEC in effect at
the time such proposal is received.
<PAGE>
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy
material for next year's Annual Meeting of Stockholders, any
stockholder proposal to take action at such meeting must be
received at the Company's office, 110 South Congress Street,
Winnsboro, South Carolina 29180, no later than July 17, 1998. Any
such proposals shall be subject to the requirements of the proxy
rules adopted under the Securities Exchange Act of 1934.
BY ORDER OF THE BOARD OF DIRECTORS
Terri C. Robinson
Secretary
Winnsboro, South Carolina
November 14, 1997
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 17, 1997
The undersigned hereby appoints the official proxy committee
of the Board of Directors, with full powers of substitution, to
act as attorneys and proxies for the undersigned to vote all
shares of Common Stock of the Company which the undersigned is
entitled to vote at the 1997 Annual Meeting of Stockholders
("Annual Meeting") to be held in the Annual Meeting Room of the
Fairfield Motel, 115 S. 321 By-Pass, Winnsboro, South Carolina,
on December 17, 1997, at 10:30 a.m. The official proxy committee
is authorized to cast all votes to which the undersigned is
entitled as follows:
VOTE
FOR WITHHELD
1. The election as director of the / / / /
nominees listed below.
Quay W. McMaster
John S. McMeekin
VOTE
FOR WITHHELD ABSTAIN
2. The ratification of the appointment / / / / / /
of Crisp, Hughes & Co., L.L.P. as
the Company's independent auditors
for the fiscal year ending June 30,
1998.
The Board of Directors recommends a vote "FOR" each of the listed
proposals.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF
THE PROPOSITIONS STATED ABOVE. IF ANY OTHER BUSINESS IS PROPERLY
PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE
PROXY COMMITTEE OF THE BOARD OF DIRECTORS IN THEIR BEST
JUDGEMENT.
(Continued, and to be signed on the reverse side)
<PAGE>
(Continued from reverse side)
This proxy may be revoked by sending written notice to the
Secretary of the Company at the address set forth on the Notice
of Annual Meeting of Stockholders, and by the filing of a later
dated proxy prior to a vote being taken at the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to
the execution of this proxy of a Notice of Annual Meeting and of
a Proxy Statement, each dated November 14, 1997.
Dated: -----------------, 1997
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PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- -------------------------- ---------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When
signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held
jointly, each holder may sign, but only one signature is
required.
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Please complete and date this proxy and return it promptly
in the enclosed postage-prepaid envelope.
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