SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB-A
AMENDMENT NO. 1
|X| Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the fiscal year ended June 30, 1999
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Commission file number 0-24476
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South Carolina Community Bancshares, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 57-0999615
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
110 S. Congress Street
Winnsboro, South Carolina 29180
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(Address of principal executive (Zip Code)
offices)
Telephone Number: (803) 635-5536
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Indicate by checkmark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Securities Registered Pursuant to Section 12(g)of the Exchange Act: Common Stock
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be contained to
the Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |X|
The aggregate market value of the voting stock held by nonaffiliates of
the Registrant, computed by reference to the closing price of such stock on the
NASDAQ SmallCap Market on September 17, 1999 was approximately $6,668,000. For
the purpose of this calculation, officers and directors of the Registrant are
considered nonaffiliates.
The Registrant's revenues for the fiscal year ended June 30, 1999 were
$3,532,000.
The number of shares outstanding of the Registrant's Common Stock, the
registrant's only class of outstanding capital stock, as of June 30, 1999 was
538,716.
Documents Incorporated by Reference
None
<PAGE>
PART III
Item 9. Directors and Officers of the Registrant
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The Board of Directors of South Carolina Community Bancshares, Inc.
(the "Company") consists of six members. Directors of the Company are generally
elected to serve for a three-year period and until their respective successors
shall have been elected and shall qualify. Only one class of Directors expires
in each year. The table below sets forth certain information regarding the
composition of the Company's Board of Directors as of June 30, 1999, including
the terms of office of Board members.
<TABLE>
<CAPTION>
Term to Shares of
Expire follow- Common Stock
Positions ing Fiscal Beneficially
Held in the Director Year Ending Owned on Percent
Name Age Company Since(1) June 30 June 30, 1999 Of Class
----- --- ------- ----- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Richard H. Burton 79 Director 1986 2001 9,680(2) 1.77%
George R.
Lauderdale, Jr. 75 Director 1987 2001 19,680(2) 3.63
Alan W. Pullen 42 President and Chief 1987 1999 32,034(3)(6) 5.78
Executive Officer
Philip C. Wilkins 44 Director 1996 1999 4,752(4) 0.88
Quay W. McMaster 73 Chairman of the Board 1978 2000 36,226(2) 6.69
John S. McMeekin 45 Director 1995 2000 6,318(2) 1.17
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Terri C. Robinson 40 Chief Financial Officer n/a n/a 9,968(5)(6) 1.83
All Directors and Executive Officers 118,658(7) 21.05
as a Group (7 persons)
</TABLE>
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(1) Reflects initial appointment to the Board of Directors of Community Federal
Savings Bank (the "Bank"), the Company's
subsidiary.
(2) Includes 3,120 shares that may be acquired pursuant to presently
exercisable options.
(3) Includes 15,604 shares that may be acquired pursuant to presently
exercisable options.
(4) Includes 1,560 shares that may be acquired pursuant to presently
exercisable options.
(5) Includes 4,800 shares that may be acquired pursuant to presently
exercisable options.
(6) Includes 7,009 shares and 3,688 shares allocated to Mr. Pullen and Ms.
Robinson, respectively, under the Bank's Employee Stock Ownership Plan (the
"ESOP").
(7) Excludes 36,929 shares of common stock, or 6.86% of the shares of common
stock outstanding, owned by the ESOP for the benefit of the employees of
the Bank.
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.
<PAGE>
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.
Item 10. Executive Compensation
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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.
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<PAGE>
Executive Compensation
The following table sets forth for the fiscal years ended June 30,
1999, 1998, and 1997, 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").
<TABLE>
<CAPTION>
====================================================================================================================================
Annual Compensation Long-Term Compensation
Year Restricted All Other
Name and Ended Salary Stock Options\ Compensation
Principal Position June 30, (1) Bonus Awards SARS (#) (2)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Alan W. Pullen 1999 $ 68,000 $ 5,000 $ -- -- $27,324
President and Chief 1998 68,000 5,000 -- --
Executive Officer 1997 64,700 5,000 -- -- 27,902
37,504
====================================================================================================================================
</TABLE>
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(1) Includes directors fees.
(2) Represents $5,620, $3,000 and $3,668 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, 1999, 1998, and 1997. Also includes $21,704,
$24,902 and $33,836 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 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 thirty (30) miles;
(iv) the
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<PAGE>
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 three-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 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 ten (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
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<PAGE>
"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, 1999.
Set forth below is certain additional information concerning options
outstanding to the Named Executive Officer at June 30, 1999. No options were
exercised during fiscal 1999.
<TABLE>
<CAPTION>
=========================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
=========================================================================================================================
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Shares Acquired Value Fiscal Year-End Year-End (1)
Name Upon Exercise Realized
Exercisable/Unexercisable Exercisable/Unexercisable
(#) ($)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alan W. Pullen -- $-- 15,606/3,901 $222,386/$55,589
=========================== ================= ================= ========================== ==========================
</TABLE>
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(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, 1999, at which date the average of the high and low sales price of the
Common Stock as quoted on the Nasdaq Small Cap Market was $14.25.
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 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.
5
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
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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 a beneficial owners of
more than 5% of the Company's outstanding shares of Common Stock on June 30,
1999.
<TABLE>
<CAPTION>
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) 11.59%
Bank Employee Stock Ownership Trust
110 South Congress Street
Winnsboro, South Carolina 29180
Quay W. McMaster 36,226 (2) 6.69
318 Evans Street
Winnsboro, South Carolina 29180
Alan W. Pullen 32,034 (3)(4) 5.78
1735 Center Creek Road
Ridgeway, South Carolina 29130
</TABLE>
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(1) Under the ESOP, shares allocated to participants' accounts are voted in
accordance with the participants' directions. As of October 30, 1999,
25,493 shares of stock had been allocated to the accounts of employees
under the ESOP. Unallocated shares held by the ESOP are voted by the ESOP
Trustees in the same proportion as shares for which the trustees have
received voting instructions from participants. The trustees of the ESOP
are the directors of the Company.
(2) Includes 3,120 shares that may be acquired pursuant to presently
exercisable options.
(3) Includes 15,604 shares that may be acquired pursuant to presently
exercisable options.
(4) Includes 7,009 shares allocated to Mr. Pullen under the ESOP.
Item 12. Certain Relationships and Related Transactions
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All loans or extensions of credit to executive officers and directors
are 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, 1999 was
$62,918, the amount outstanding as of September 30, 1999 was $60,187, and the
interest rate on such loan at September 30, 1999 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
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<PAGE>
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, 1998 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.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
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Registrant
Date: October 25, 1999 By: \s\ Alan W. Pullen
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Alan W. Pullen
President, Chief Executive
Officer and Director
