UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
Beach First National Bancshares, 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):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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Fee
paid previously with preliminary materials.
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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.
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(2) Form, Schedule or Registration Statement No.:
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Beach
First National Bancshares, Inc.
3751 Grissom Parkway,
Suite 100
Myrtle Beach, South Carolina 29577
Notice
of Annual Meeting of Shareholders
Dear Fellow Shareholders:
We cordially invite you to attend the 2009 Annual Meeting of
Shareholders of Beach First National Bancshares, Inc., the
holding company of Beach First National Bank. At the meeting, we
will report on our performance in 2008 and answer your
questions. We look forward to discussing both our
accomplishments and our 2009 plans with you. We hope that you
can attend the meeting and look forward to seeing you there.
This letter serves as your official notice that we will hold the
meeting on Monday, May 4, 2009, at 2:00 p.m. at the
Myrtle Beach Convention Center, 2101 Oak Street, Myrtle Beach,
South Carolina 29577, for the following purposes:
1. To elect five members to our Board of Directors; and
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2.
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To transact any other business that may properly come before the
meeting or any adjournment of the meeting.
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Shareholders owning our common stock at the close of business on
March 6, 2009, are entitled to attend and vote at the
meeting. A complete list of these shareholders will be available
at our offices prior to the meeting. In addition to the specific
matters to be acted upon, there also will be a report on our
operations, and our directors and officers will be present to
respond to your questions.
Please use this opportunity to take part in the affairs of your
Company by voting on the business to come before this meeting.
Even if you plan to attend the meeting, we encourage you to
complete and return the enclosed proxy to us as promptly as
possible.
By Order of the Board of Directors,
Walter E. Standish, III
President & Chief Executive Officer
Myrtle Beach, South Carolina
April 3, 2009
TABLE OF
CONTENTS
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Beach
First National Bancshares, Inc.
3751 Grissom Parkway, Suite 100
Myrtle Beach, South Carolina 29577
FOR ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD ON MAY 4,
2009
Our Board of Directors is soliciting proxies for the 2009 Annual
Meeting of Shareholders. This proxy statement contains important
information for you to consider when deciding how to vote on the
matters brought before the meeting. We encourage you to read it
carefully.
VOTING
INFORMATION
The Board set March 6, 2009, as the record date for the
meeting. Shareholders owning our common stock at the close of
business on that date are entitled to attend and vote at the
meeting, with each share entitled to one vote. There were
4,845,018 shares of common stock outstanding on the record
date. A majority of the outstanding shares of common stock
entitled to vote at the meeting will constitute a quorum. We
will count abstentions and broker non-votes, which are described
below, in determining whether a quorum exists.
Many of our shareholders hold their shares through a
stockbroker, bank, or other nominee rather than directly in
their own name. If you hold our shares in a stock brokerage
account or by a bank or other nominee, you are considered the
beneficial owner
of shares held in street name, and these
materials are being forwarded to you by your broker or nominee,
which is considered the
shareholder of record
with
respect to those shares. As the
beneficial owner,
you
have the right to direct your broker or nominee how to vote and
are also invited to attend the annual meeting. However, since
you are not the
shareholder of record,
you may not vote
these shares in person at the meeting unless you obtain a signed
proxy from the
shareholder of record
giving you the right
to vote the shares. Your broker or nominee is required to
provide you with a voting instruction card for you to use to
direct your broker or nominee how to vote these shares.
When you sign the proxy card, you appoint Raymond E.
Cleary, III and Gary S. Austin as your representatives at
the meeting. Messrs. Cleary and Austin will vote your proxy
as you have instructed them on the proxy card. If you submit a
proxy but do not specify how you would like it to be voted, the
shares will be voted in favor of all proposals set forth herein.
However, if any other matters come before the meeting,
Messrs. Cleary and Austin will vote your proxy on such
matters in accordance with their judgment.
You may revoke your proxy and change your vote at any time
before the polls close at the meeting. You may do this by
signing and delivering another proxy with a later date or by
voting in person at the meeting. (Again, though, if you are not
the
shareholder of record
, you must first obtain a signed
proxy from the
shareholder of record
giving you the right
to vote the shares.)
Brokers who hold shares for the accounts of their clients may
vote these shares either as directed by their clients or in
their own discretion if permitted by the exchange or other
organization of which they are members. Proxies that brokers do
not vote on some proposals but that they do vote on others are
referred to as broker non-votes with respect to the
proposals not voted upon. A broker non-vote does not count as a
vote in favor of or against a particular proposal for which the
broker has no discretionary voting authority. In addition, if a
shareholder abstains from voting on a particular proposal, the
abstention does not count as a vote in favor of or against the
proposal.
We are paying for the costs of preparing and mailing the proxy
materials and of reimbursing brokers and others for their
expenses of forwarding copies of the proxy materials to our
shareholders. Our officers and employees may assist in
soliciting proxies but will not receive additional compensation
for doing so. We are distributing this proxy statement on or
about April 3, 2009. We are including with this proxy
statement our
2008 Annual Report on
Form 10-K
for the year ended December 31, 2008, along with a copy of
our 2008 Annual Report Overview.
Important Notice of Internet
Availability.
The proxy statement, Annual
Report on
Form 10-K,
the 2008 Annual Report Overview, and directions to the
shareholder meeting are available to the public for viewing on
the Internet. Type
http://proxy.beachfirst.com
in your
browser.
In addition, the above items and other SEC filings are also
available to the public on the SECs website on the
Internet at
www.sec.gov
. Upon written or oral request by
any shareholder, we will deliver a copy of our
Form 10-K.
In addition, upon written or oral request, we will also promptly
deliver a copy of this proxy statement or the enclosed overview
to our shareholders at a shared address to which a single copy
of the document was delivered.
PROPOSAL NO. 1
ELECTION
OF DIRECTORS
The Board of Directors is divided into three classes with
staggered terms, so that the terms of only approximately
one-third of the Board members expire at each annual meeting.
The current terms of the Class II directors will expire at
this Annual Shareholders Meeting. The terms of the
Class III directors expire at the 2010 Annual Shareholders
Meeting. The terms of the Class I directors will expire at
the 2011 Annual Shareholders Meeting. Our directors and their
classes are:
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Class I
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Class II
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Class III
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Raymond E. Cleary, III, DDS
Joe N. Jarrett, Jr., MD
Richard E. Lester
Don J. Smith
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Michael Bert Anderson
Bartlett Buie
Michael D. Harrington
Rick H. Seagroves
Walter E. Standish, III
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James C. Yahnis
Samuel Robert Spann, Jr.
B. Larkin Spivey, Jr.
Leigh Ammons Meese
E. Thomas Fulmer
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Shareholders will elect five nominees as Class II directors
at the meeting to serve a three-year term, expiring at the 2012
Annual Meeting of Shareholders. The directors will be elected by
a plurality of the votes cast at the meeting. This means that
the five nominees receiving the highest number of votes will be
elected.
The Board of Directors recommends that you elect Michael Bert
Anderson, Bartlett Buie, Michael D. Harrington, Rick H.
Seagroves, and Walter E. Standish, III as Class II
directors.
If you submit a proxy but do not specify how you would like it
to be voted, Messrs. Cleary and Austin will vote your proxy
to elect Messrs. Anderson, Buie, Harrington, Seagroves, and
Standish. If any of these nominees is unable or fails to accept
nomination or election (which we do not anticipate),
Messrs. Cleary and Austin will vote instead for a
replacement to be recommended by the Board of Directors, unless
you specifically instruct otherwise in the proxy.
Set forth below is certain information about the nominees. Each
of the nominees has been a director of our Company and of our
subsidiary, Beach First National Bank, since the Companys
inception in 1995.
The Board
unanimously recommends a vote
FOR
these
nominees.
Michael Bert Anderson,
49, is a managing partner in the
Oceana Resorts group, which manages approximately
2,000 rental units in the Grand Strand area.
Mr. Anderson is a partner in Strand Capital, which has
acquired or developed $1.5 billion in coastal real estate
extending north from Myrtle Beach, South Carolina to Carolina
Beach, North Carolina. Mr. Anderson also serves as chairman
of the board of the Downtown Redevelopment Corporation of Myrtle
Beach. He has been a director of our Company and our bank since
our formation in 1995.
Bartlett Buie
, 60, is a certified public accountant who
owns and operates the accounting firm Bartlett Buie, CPA, PA, in
Myrtle Beach, South Carolina. A certified public accountant
since 1974, Mr. Buie has more
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than 30 years experience in the business of accounting. He
has been a director of our Company and our bank since our
formation in 1995.
Michael D. Harrington
, 61, is president and general
manager of Harrington Construction Company, Inc., a Myrtle Beach
general contracting firm organized in 1979. He has been a
director of our Company and our bank since our formation in 1995.
Rick H. Seagroves
, 52, is the owner and chief executive
officer of Southeast Restaurants Corporation, which operates 40
Pizza Hut restaurants in eastern South Carolina.
Mr. Seagroves has served in the franchise restaurant
business for more than 30 years. He has been a director of
our Company and our bank since our formation in 1995.
Walter E. Standish, III
, 58, is the president and
chief executive officer of Beach First National Bancshares,
Inc., Beach First National Bank, and subsidiaries. Prior to
joining the Company in March 2000, Mr. Standish served Bank
of America and its predecessors for more than 25 years.
Set forth below is also information about each of our other
directors. Each of the following directors has been a director
of our Company and of our subsidiary, Beach First National Bank,
since the Companys inception in 1995, with the exception
of Mr. Standish, who joined us in March 2000, and
Ms. Meese and Mr. Fulmer, who were appointed as
directors of our Company and bank in 2001 and 2003, respectively.
Dr. Raymond E. Cleary, III
,
DDS,
60, is
chairman of the Board of Beach First National Bancshares, Inc.
and Beach First National Bank. He has been a practicing general
dentist in Surfside Beach, South Carolina, for nearly
30 years. In 2008, Dr. Cleary was elected to a second
term as the South Carolina state senator for District
No. 34 covering Charleston, Georgetown, and Horry Counties.
He has been a director of our Company and our bank since our
formation in 1995.
Dr. Joe N. Jarrett, Jr.
, 60, is a board
certified orthopaedic surgeon with Strand Orthopaedic
Consultants, LLC, in Myrtle Beach, South Carolina, and has been
practicing orthopaedic surgery in Myrtle Beach since 1980. He
has been a director of our Company and our bank since our
formation in 1995.
Richard E. Lester,
65, practices real estate law with the
firm of Lester & Lester, P.A., and was admitted to the
South Carolina Bar in 1969. A retired municipal judge for the
City of Myrtle Beach, Mr. Lester has been a director of our
Company and our bank since our formation in 1995.
Don J. Smith
, 58, is president of Chicora Development and
Coldwell Banker Chicora Real Estate, a real estate firm serving
the Myrtle Beach and Grand Strand areas. Mr. Smith has been
in the real estate business for more than 30 years. He has
been a director of our Company and our bank since our formation
in 1995.
James C. Yahnis,
53, is an owner of The Yahnis Company, a
beverage wholesale company in Myrtle Beach and Florence, South
Carolina. Mr. Yahnis was previously in the real estate
appraisal business for more than 15 years, and has been
active in beverage wholesaling for 15 years. He also serves
as chairman of the executive board of the Myrtle Beach Regional
Economic Development Corporation. Mr. Yahnis has been a
director of our Company and our bank since our formation in 1995.
Samuel Robert Spann, Jr.,
60, has served as
president and chief executive officer of Spann Roofing and Sheet
Metal, Inc., since 1975. He has been a director of our Company
and our bank since our formation in 1995.
B. Larkin Spivey, Jr.,
68, is president of
Birch Canoe Campground, Inc., which owns a Kampgrounds of
America (KOA) franchised camping resort. He is the
general manager of Spivey Company, LLC, managing commercial real
estate in Myrtle Beach and Conway, South Carolina. He is also a
Christian writer and speaker, and author of
God in the
Trenches
(Allegiance Press, 2001) and
Miracles of
the American Revolution
(Allegiance Press, 2004). He has
been a director of our Company and our bank since our formation
in 1995.
Leigh Ammons Meese,
38, is the president of Sea Mist
Resort and Family Kingdom Amusement Park. Admitted to the South
Carolina Bar in 1995, Ms. Meese was an associate with
Bellamy, Rutenberg, Copeland, Epps, Gravely & Bowers,
PA, until joining the family business in spring 1997. She has
been a director of our Company and our bank since 2001.
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E. Thomas Fulmer,
60, is the owner of Beachcomber
Realty, a North Myrtle Beach real estate firm that specializes
in sales, rentals, and time-shares. Prior to founding
Beachcomber Realty in 1985, Mr. Fulmer worked in the
banking industry, serving the former First Palmetto Bank as a
senior vice president and member of the board of directors. He
has been a director of our Company and our bank since 2003.
Set forth below is also information about each of our named
executive officers (NEOs).
Gary S. Austin,
54, is an executive vice president, chief
financial officer, and corporate secretary for Beach First
National Bancshares, Inc., Beach First National Bank, and
subsidiaries. He has more than 32 years of experience in
the financial services industry, and joined Beach First in
August 2007.
M. Katharine (Katie) Huntley
, 58, is an executive
vice president, chief credit officer, and assistant secretary of
Beach First National Bancshares, Inc. and Beach First National
Bank. Ms. Huntley has more than 36 years of experience
in administrative and commercial banking and finance, including
22 years of senior banking experience on the Grand Strand.
She also serves on various community banking committees and
community service organizations. Ms. Huntley has been with
the bank since its inception.
Julien E. Springs
, 52, is an executive vice president and
business development officer for Beach First National Bank. He
has 29 years of experience in banking and loan production
in the Myrtle Beach area, and has been with Beach First National
Bank for seven years. Mr. Springs previously served The
Anchor Bank as a senior vice president and was its city
executive for the Myrtle Beach market for four years.
CORPORATE
GOVERNANCE
Corporate
Governance Guidelines
The Company has adopted corporate governance guidelines titled
Principles of Corporate Governance which are
available at
www.beachfirst.com
by first clicking
Investor Relations and then Principles of
Corporate Governance. These principles were adopted by the
Board to help ensure that the Board is independent from
management, that the Board adequately performs its function as
the overseer of management, and that the interests of the Board
and management are aligned with the interests of the
shareholders.
Director
Independence
Our Board of Directors is comprised of a majority of independent
directors in compliance with the listing requirements of The
NASDAQ Global Market. The Board affirmatively determines the
independence of each director and nominee for election as a
director in accordance with guidelines it has adopted, which
include all elements of independence set forth in the NASDAQ
Global Market listing standards.
The Board determined that each of the following non-employee
directors is independent and has no material relationship with
the Company, except as a director and shareholder of the Company:
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(1) Raymond E. Cleary, III, DDS
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(7) Leigh Ammons Meese
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(2) Bartlett Buie
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(8) Rick H. Seagroves
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(3) E. Thomas Fulmer
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(9) Don J. Smith
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(4) Michael D. Harrington
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(10) Samuel R. Spann, Jr.
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(5) Joe N. Jarrett, Jr., MD
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(11) B. Larkin Spivey, Jr.
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(6) Richard E. Lester
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(12) James C. Yahnis
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In addition, based on such standards, the Board affirmatively
determined that Walter E. Standish, III is not independent
because he serves as our chief executive officer and Michael
Bert Anderson is not independent due to the status of several
outstanding loans. For more information, please see the
discussion below under Certain Relationships and Related
Transactions: Interests of Management and Others in Certain
Transactions.
4
Meetings
and Committees of the Board of Directors
During the year ended December 31, 2008, the Board of
Directors held fourteen joint meetings of the Company and Beach
First National Bank. All of the directors of the Company
attended at least 75% of the aggregate of the Board meetings and
committee meetings on which such Board members served during
this period. We have adopted a policy which requires our
directors to attend the annual shareholders meeting absent
unusual or extenuating circumstances. Thirteen of our directors
attended the annual meeting last year.
The Board has standing committees to facilitate and assist the
Board in the execution of its responsibilities. The committees
are currently the Audit Committee and the Executive, Nominating
and Corporate Governance Committee. In accordance with the
NASDAQ Exchange listing standards, all the committees are
comprised solely of non-employee, independent directors. The
standing committees consist of the following members,
respectively:
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Executive, Nominating &
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Corporate Governance
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Audit Committee
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Committee
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Bartlett Buie
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Bartlett Buie
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Leigh Ammons Meese
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Raymond E. Cleary, III, DDS*
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Rick H. Seagroves
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Joe N. Jarrett, Jr., MD
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B. Larkin Spivey, Jr.*
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Richard E. Lester
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Don J. Smith
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B. Larkin Spivey, Jr.
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Audit
Committee
For 2008, the audit committee was composed of Messrs. Buie,
Anderson, Seagroves, and Spivey, and Ms. Meese.
Mr. Anderson resigned from the committee on
February 26, 2009, and the Board elected Mr. Spivey as
chairperson, effective February 26, 2009. Each member is
considered independent under applicable NASDAQ
listing standards. Our Board has determined that Mr. Buie
qualifies as an audit committee financial expert under the SEC
rules. The audit committee met nine times in 2008.
The audit committee has the responsibility of reviewing the
Companys financial statements, evaluating internal
accounting controls, and determining that all audits and
examinations required by law are performed. The audit committee
recommends to the Board the appointment of the independent
accountants for the next fiscal year, reviews and approves the
auditors audit plans, and reviews with the independent
accountants the results of the audit and managements
responses. The audit committee charter, which is available at
our website,
www.beachfirst.com
by first clicking
Investor Relations and then Audit Committee
Charter, was adopted by our Board of Directors on
December 20, 2000, and amended on February 23, 2004,
January 31, 2006, and December 19, 2007. The charter
outlines the committees responsibilities for overseeing
the entire audit function and appraising the effectiveness of
internal and external audit efforts and may be amended by the
Board at any time. The audit committee reports its findings to
the Board of Directors.
Report of
the Audit Committee of the Board
The report of the audit committee shall not be deemed
incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that the Company specifically incorporates
the information contained in the report by reference, and shall
not be deemed filed under such acts.
The audit committee has reviewed and discussed with management
the audited financial statements. The audit committee has
discussed with the independent auditors the matters required to
be discussed by the Statement on Auditing Standards No. 61.
The audit committee has received from the independent auditors
the written disclosures and the letter including the applicable
requirements of the Public Company Accounting
5
Oversight Board regarding the independent accountants
communications with the audit committee concerning independence,
and has discussed with the independent auditors the independent
auditors independence from the Company and its management.
In reliance on the reviews and discussions referred to above,
the audit committee recommended to the Companys Board of
Directors that the audited financial statements be included in
the Companys
Form 10-K
for the fiscal year ended December 31, 2008, for filing
with the SEC.
The report of the audit committee is included herein at the
direction of its members, Messrs. Buie, Seagroves, and
Spivey, and Ms. Meese.
Executive,
Nominating and Corporate Governance Committee
The executive, nominating and corporate governance committee
(the executive committee) consists of
Messrs. Buie, Cleary, Jarrett, Smith, Lester, and Spivey.
Each member is considered independent under
applicable NASDAQ listing standards. The executive committee met
four times during 2008. The executive committee recommends
nominees for election to the Board of Directors and acts under a
written charter adopted by the Board of Directors on
June 15, 2005, and revised on February 23, 2009. The
Executive, Nominating and Corporate Governance Charter is
available at
www.beachfirst.com
by first clicking
Investor Relations and then Executive,
Nominating and Corporate Governance Charter.
For directors previously elected by shareholders to serve on the
Board and whose terms of service are expiring, the executive
committee considers whether to recommend to the Board the
nomination of those directors for re-election for another term
of service. The executive committee also considers whether to
recommend to the Board the nomination of persons to serve as
directors whose nominations have been recommended by
shareholders.
Our executive committee will consider director candidates
recommended by shareholders who appear to be qualified to serve
on our Board of Directors. The executive committee may choose
not to consider an unsolicited recommendation if no vacancy
exists on the Board of Directors and the executive committee
does not perceive a need to increase the size of the Board of
Directors. In order to avoid the unnecessary use of the
executive committees resources, the executive committee
will consider only those director candidates recommended in
accordance with the procedures set forth below.
Our executive committee will consider director candidates
recommended by shareholders who submit nominations in accordance
with our bylaws. Shareholders must deliver nominations in
writing to the secretary of the Company on or before the later
to occur of (i) 60 days prior to the annual or special
meeting or (ii) 10 days after notice of the meeting is
provided to shareholders. Each notice must set forth:
(i) the name and address of the shareholder who intends to
make the nomination and of the person or persons to be
nominated; (ii) a representation that the shareholder is a
holder of record of stock of the Company entitled to vote at
such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (iii) a description of all arrangements or
understandings between the shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the
shareholder; (iv) such other information regarding each
nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission, had the nominee been
nominated, or intended to be nominated, by the Board of
Directors; and (v) the consent of each nominee to serve as
a director of the Company if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person
not made in compliance with the foregoing procedure.
In evaluating such recommendations, the executive committee uses
a variety of criteria to evaluate the qualifications and skills
necessary for members of our Board of Directors. Under these
criteria, members of the Board of Directors should have the
highest professional and personal ethics and values, consistent
with our longstanding values and standards. They should have
broad experience at the policy-making level in banking,
business, government, education, technology, or public interest.
They should be committed to enhancing shareholder value and
should have sufficient time to carry out their duties and to
provide insight and practical wisdom based on experience. Their
service on other boards of public companies should be limited to
a number
6
that permits them, given their individual circumstances, to
perform responsibly all director duties. Each director must
represent the interests of our shareholders.
The executive committee regularly assesses the appropriate size
of the Board of Directors, and whether any vacancies are
expected due to retirement or otherwise. If vacancies are
anticipated, or otherwise arise, our committee considers various
potential candidates for director. Candidates may come to their
attention through current members of the Board, shareholders, or
other persons. These candidates are evaluated at regular or
special meetings of the Board, and may be considered at any
point during the year. Our Board of Directors considers properly
submitted shareholder recommendations for candidates. In
evaluating such recommendations, the executive committee uses
the qualifications and standards discussed above and seek to
achieve a balance of knowledge, experience and capability on the
Board of Directors.
Communications
with the Board
Shareholders and other interested parties may communicate with
one or more members of the Board or the non-management directors
as a group in writing by regular mail or via
e-mail.
The
following address may be used by those who wish to send such
communications by regular mail:
[Board of Directors] or [Name of Individual Director(s)]
Beach First National Bancshares, Inc.
c/o Gary
S. Austin, Secretary
3751 Robert M. Grissom Parkway, Suite 100
Myrtle Beach, SC 29577
Shareholders who wish to send such communications via
e-mail
can
do so at
www.beachfirst.com
. By clicking on the
Investor Relations tab and then
investor@beachfirst.com
, you may send an
e-mail
to
any one or a combination of directors.
The Board has instructed the Secretary to review all
communications so received (via regular mail or
e-mail),
and
to exercise his discretion not to forward to the Board
correspondence that is inappropriate such as business
solicitations, frivolous communications and advertising, routine
business matters (i.e. business inquiries, complaints, or
suggestions) and personal grievances. However, any director may
at any time request the Secretary to forward any and all
communications received by the Secretary but not forwarded to
the directors.
Code of
Conduct and Ethics
The Companys Code of Conduct and Ethics, which is the
Companys code of ethics applicable to all directors,
managers and employees, embodies the Companys principles
and practices relating to the ethical conduct of the
Companys business and its long-standing commitment to
honesty, fair dealing and full compliance with all laws
affecting the Companys business. The Code of Conduct and
Ethics is available at
www.beachfirst.com
by first
clicking on Investor Relations and then Code
of Conduct and Ethics. The Code of Conduct and Ethics is
also available in print to any shareholder who requests it. All
directors and employees sign the code on an annual basis.
The Board has established a means for employees, customers,
suppliers, shareholders, and other interested parties to submit
confidential and anonymous reports of suspected or actual
violations of the Companys Code of Conduct and Ethics
relating, among other things, to:
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accounting practices, internal accounting controls, or auditing
matters and procedures;
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theft or fraud of any amount;
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insider trading;
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performance and execution of contracts;
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7
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conflicts of interest;
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violations of securities and antitrust laws; and
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violations of the Foreign Corrupt Practices Act.
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Any employee, shareholder, or other interested party may submit
a report to the following address:
Larkin Spivey, Audit Committee Chairperson
Beach First National Bancshares, Inc.
P.O. Box 3744
Myrtle Beach, SC 29578
COMPENSATION
DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis
(CD&A) describes the Companys
compensation philosophy and policies for 2008 as applicable to
the Companys executives, including the Named Executive
Officers (NEOs). The NEOs are Mr. Walter E.
Standish, III, President & CEO; Mr. Gary S.
Austin, EVP, Chief Financial Officer & Secretary;
Ms. Mary Katharine (Katie) Huntley, EVP & Chief
Credit Officer; and Mr. Julien E. Springs, EVP. The
CD&A explains the structure and rationale associated with
each material element of the NEOs total compensation, and
it provides context for the more detailed disclosure tables and
specific compensation amounts provided following the CD&A.
The executive committee is responsible for approving the
Companys overall compensation and benefit programs, and
for administrating the compensation of the Companys CEO
and NEOs.
Compensation
Objectives
The executive committee has not formally reduced the
compensation plan to writing; however, the objective of the
compensation plan is to attract and retain employees that will
provide long term value for our shareholders. The compensation
program is designed to reward performance that enhances
shareholder value. The executive committee makes salary
determinations for the CEO and, along with the CEO, makes salary
recommendations for other members of the Companys NEOs.
The executive committee does not tie its base compensation
decisions to any particular formulas, measurements or criteria,
but members take into account a review of peer salaries to the
extent they are available.
Committee
Charter and Members
The executive committees duties and responsibilities
related to compensation are outlined in the Executive,
Nominating and Corporate Governance Charter, which is available
on the Companys website (www.beachfirst.com), by first
clicking on Investor Relations and then the
Executive, Nominating and Corporate Governance
Charter. The charter is also available in print to any
shareholder who requests it. The primary compensation-related
duties are to (1) discharge the Boards
responsibilities relating to the compensation of the
Companys executives, and (2) oversee the
Companys compensation and personnel policies, benefit
programs, and plans, including management development and
succession plans, and approve executive management and certain
other benefit programs. It also oversees preparation of
executive compensation disclosures for inclusion in the
Companys proxy statement. As of December 31, 2008,
the members of the Companys executive committee were
Messrs. Cleary, Chairman; Buie, Anderson, Lester, Jarrett,
and Smith. On February 26, 2009, Mr. Anderson resigned
from the committee and the Board elected Mr. Spivey to
serve on the committee. Each committee members is
independent within the meaning of the listing
standards of the NASDAQ, is a nonemployee director
within the meaning of
Rule 16b-3
of the Securities Exchange Act of 1934, and is an outside
director within the meaning of Section 162(m) of the
Internal Revenue Code of 1986.
8
Interaction
with Consultants
The Executive Committee Charter authorizes the committee to
retain, at the Companys expense, such special consultants
and experts as it deems necessary to execute its duties. The
executive committee has engaged a compensation consultant to
review various matters as needed for the committee. In 2008, the
consultant reviewed the Companys compliance with
Section 409A of the Internal Revenue Code.
Role of
Executives in Executive Committee Deliberations
The executive committee has the ability to request the CEO to be
present at committee meetings to discuss executive compensation
and evaluate Company and individual performance. Occasionally,
other executives may attend a committee meeting to provide
pertinent financial or legal information. Only independent
committee members may vote on decisions regarding executive
compensation.
The executive committee discusses the CEOs compensation
with him, but final deliberations and all votes regarding his
compensation are made in executive session, without the CEO
present. The executive committee also determines the
compensation for other NEOs to recommend to the full Board,
based on the CEOs recommendations.
Executive
Committee Activity
In 2008, the executive committee met four times and took the
actions listed below.
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Approved the bonuses for 2008 and approved salary increases for
the CEO and NEOs.
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Approved a new Employment Agreement with Walter E.
Standish, III, as Chief Executive Officer of the Company,
and its wholly owned subsidiary, Beach First National Bank, as
of February 27, 2007, which was consummated in 2008. The
initial base salary for Mr. Standish will be $175,000,
which amount is subject to annual review by the Board of
Directors and may be increased. Mr. Standish will be
eligible to receive bonuses if he meets the goals set forth
annually for him by the executive committee or the Board of
Directors. The base bonus will be equal to 5% of the
Companys net income, but may be increased or decreased in
the discretion of the executive committee if the Bank has
extraordinary gains or losses.
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Approved recommendation to the Board of Directors for salary
continuation plans for other officers of the Bank.
|
Pay
Components Overview
The Companys executive compensation program includes the
components listed below.
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Salary fixed base pay that reflects each
executives position, individual performance, experience,
and expertise.
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Annual Cash Bonus Bonus payments for NEOs, except
for CEO, are determined by CEO annually and reported to the
executive committee before being awarded. The executive
committee has the ability to increase or decrease any awards.
Bonus payments to the CEO are contractual based on an employment
agreement. See section entitled Employment
Agreements later in this section.
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Long-Term Incentives equity-based awards (Stock
Options and Restricted Stock).
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401(k) Retirement Savings Plan.
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Executive Retirement Benefits the CEO and other NEOs
have Supplemental Executive Retirement Plan agreements defined
as a Salary Continuation Agreement.
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Other Compensation perquisites consistent with
industry practices in comparable banks, as well as broad-based
employee benefits such as medical, dental, disability, and life
insurance coverage. The NEOs Standish, Huntley, and Springs
participate in the Companys Split Dollar Life Insurance
Plan.
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9
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The NEOs also participate in additional variable life insurance
policies. The NEOs receive an automobile allowance or personal
use of a Company owned vehicle and club membership/dues.
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The forms and amounts of compensation being paid to its named
executive officers are designed to enable the Company to attract
and retain qualified executives, and the executive committee
believes that they are reasonable in view of the Companys
industry, geography, and peers.
Salary.
The Company currently pays its named
executive officers cash salaries based on a number of factors,
including a review of peer salaries, to the extent they are
comparable and available, experience, and prior performance. The
base salaries of the named executive officers are intended to
provide a competitive base level of pay for the services they
provide. Base salaries are monitored based on performance in the
particular job as well as the competitive environment. The
Company periodically benchmarks executive officer total
compensation against a peer group. The benchmark data allows the
executive committee to evaluate the Companys financial
performance versus its peers and to review other compensation
programs to ensure the Companys program is competitive
based on its size, performance, and location.
The executive committee periodically assesses the relevancy of
the companies within the peer group and makes changes when
appropriate. For 2008, the peer group consisted of the following
13 financial institutions located in South Carolina, North
Carolina, Georgia, and Virginia markets with banking assets
ranging from $300 million to $600 million:
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Access National Corporation
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Middleburg Financial Corporation
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Appalachian Bancshares, Inc.
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Mountain
1
st
Bank
and Trust Company
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Atlantic Southern Financial Group, Inc.
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New Century Bancorp, Inc.
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Commonwealth Bancshares, Inc.
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Peoples Bancorp of North Carolina, Inc.
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Community First Bancorporation
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Peoples Bancorporation, Inc.
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Crescent Financial Corporation
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WGNB Corp.
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Gateway Financial Holdings, Inc.
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The executive committee also uses publicly available data to
evaluate executive compensation and compare the Companys
overall performance to peers. Through benchmarking, the
Compensation Committee ensures that total executive compensation
and its elements are appropriately targeted for both actual
performance results and competitive positioning.
The Companys Board of Directors approved salaries for all
executive officers in 2008. Based on recommendations from the
executive committee, the Board approved the following increases:
Mr. Standish, $10,000; Mr. Austin, $12,000;
Mr. Springs, $12,000; Ms. Huntley, $12,000.
Bonus.
Bonus payments for the CEO are
contractually based on Mr. Standishs employment
agreement. It provides for a cash payment based on 5% of the net
income for the Company. The executive committee may increase or
decrease the bonus amount based on extraordinary gains or losses
at their sole discretion. Mr. Standishs bonus
opportunity reflects the Companys view that he directly
and substantially contributes to achievement of the
Companys net income and overall success, and his bonus
opportunity is intended to provide and incentive and reward for
his efforts.
Bonus payments for the other three named executive officers are
proposed by the CEO annually and recommended to the executive
committee for approval before being awarded. The executive
committee has the ability to increase or decrease any awards.
The Company believes that bonus payments play an integral role
in motivating and retaining qualified executives.
Long-Term Incentives.
The Company uses
long-term incentives to encourage retention, encourage a long
term view of earnings, and reward performance. The Company has a
Stock Option Plan which includes the use of restricted stock
awards and stock options for long-term executive officer
compensation. When determining long-term compensation awards for
executive officers other than the CEO, the executive committee
considers the CEOs input. The Corporation has not granted
any restricted stock awards since inception of the Plan.
Individual stock option grants are considered on an annual basis
with no grants in 2008 to the NEOs. The Board awards stock
options using a discretionary methodology.
10
401(k) Retirement Savings Plan.
The Company
sponsors a 401(k) Savings Plan (the 401(k) Plan)
pursuant to which the Company makes contributions through an
employer match on employee contributions. In 2008, the bank
matched 85% of the first 6% of plan eligible compensation each
employee contributed. All employees are eligible to participate
in the 401(k) Plan. All employer matched funds are fully vested
upon payment.
Executive Retirement Benefits.
The Company has
non-qualified, unfunded supplemental executive retirement plan
arrangements or Salary Continuation Agreements for
the NEOs as a part of their overall compensation package. The
Salary Continuation Agreements provide supplemental retirement
benefits to our executives, and the Company believes that that
they are an important element in the retention of the named
executive officers. The Company currently has Salary
Continuation Agreements with Messrs. Standish and Springs,
and Ms. Huntley that have been in place since 2004.
Mr. Austin received a similar arrangement in March 2008
after six months of service as agreed to in writing at the time
of his employment.
The Salary Continuation Agreements provide for an annual
supplemental retirement benefit of 35% of final pay starting at
normal retirement age of 65 payable for the executives
lifetime with a 17 year certain period. The agreements
incorporate a 10 year vesting schedule and includes
provisions for voluntary termination, involuntary termination,
termination for cause, disability, death and change of control.
The Salary Continuation Agreements were amended on
December 28, 2008, to comply with the final regulations of
Section 409A of the Internal Revenue Code. Refer to the
pension benefits table and the post-termination narrative for
more detail.
Other Compensation.
The NEOs participate in
the Companys broad-based employee benefit plans, such as
medical, dental, disability and term life insurance programs.
Messrs. Austin and Springs, and Ms. Huntley receive an
automobile allowance. Mr. Standish has personal use of a
Company owned vehicle. Messrs. Standish and Springs receive
paid country club memberships. Mr. Austins employment
letter allows him to select a country club membership, which has
not yet been determined. Messrs. Standish and Springs, and
Ms. Huntley participate in a split dollar life insurance
plan. The split dollar life insurance policies have the
following death benefits: Mr. Standish, $984,844;
Mr. Springs, $623,062; and Ms. Huntley, $755,011. In
addition, NEOs have additional whole life insurance policies
equal to two times the NEOs annual salary.
The structure of the change in control provisions were made to
be consistent the overall philosophy of the Company, peer
agreement review, and to give the management team a degree of
financial value or comfort in the event a change in control
occurs. The changes were in keeping with the overall philosophy
of the Company, including the vesting provision in the change in
control section of the agreement. The Company believes that the
interest of shareholders is served by aligning the interests of
the executive officers with them and that change in control
benefits may reduce the potential for reluctance toward pursuing
a transaction that may be in the best interest of shareholders.
The executive committee has reviewed and discussed the
Compensation Discussion and Analysis with management and has
recommended to the Board of Directors the inclusion of the
Compensation Discussion and Analysis in the Companys
year-end disclosure documents. The executive committee report is
included herein at the direction of its members,
Messrs. Cleary, Chairman; Buie, Jarrett, Lester, Smith, and
Spivey.
11
The table below summarizes the total compensation paid or earned
by each of the named executive officers for the fiscal year
ended December 31, 2008, December 31, 2007, and
December 31, 2006, respectively.
Summary
Compensation Table
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Change in
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Pension
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Value and
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Non-Equity
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Nonqualified
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Incentive
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Deferred
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Stock
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Option
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Plan
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Compensation
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All Other
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Earnings
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Compensation
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Total
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Name and Principal Position
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Year
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($)(1)
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($)(2)
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($)
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($)
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($)(7)
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($)(8)
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($)
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($)
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Walter E. Standish, III, PEO
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2008
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178,135
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0
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51,522
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48,340
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277,997
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President
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2007
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177,500
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293,832
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41,793
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42,148
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555,273
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Chief Executive Officer
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2006
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150,000
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280,701
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35,509
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42,388
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(3)
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550,455
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Gary S. Austin
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2008
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146,466
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31,000
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56,345
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19,960
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253,771
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Executive Vice President
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2007
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43,080
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23,000
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6,402
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(4)
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72,482
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Chief Financial Officer
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Mary Katharine (Katie)
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2008
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164,904
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34,000
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61,818
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25,696
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286,418
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Huntley
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2007
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149,212
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135,000
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39,356
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28,286
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351,854
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Executive Vice President
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2006
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125,308
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110,000
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27,877
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23,883
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(5)
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317,992
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Chief Credit Officer
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Julien E. Springs
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2008
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149,625
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31,000
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25,984
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25,919
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232,528
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Executive Vice President
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2007
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131,231
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125,000
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19,022
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27,857
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303,110
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2006
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112,327
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100,000
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14,002
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27,467
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(6)
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269,233
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(1)
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All compensation, including fringe benefits, is paid by our
bank. The amount of perquisites and other personal benefits
received did not exceed $10,000, except where noted.
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(2)
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Reflects bonuses earned for the fiscal years 2008, 2007, and
2006, respectively.
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(3)
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For 2008, includes 401K contribution of $11,220, imputed income
from term life insurance premiums of $5,574, automobile value of
$17,429, employer contribution to welfare benefit program of
$6,060, imputed income from group term life insurance of $1,796,
and club dues of $6,261. For 2007, includes 401K contributions
of $11,475, imputed income from term life insurance premiums of
$5,210, automobile value of $13,652, employer contribution to
welfare benefit program of $5,590, imputed income from group
term life insurance of $1,483 and club dues of $4,738. For 2006,
includes 401K contributions of $11,220, imputed income from term
life insurance premiums of $4,807, automobile value of $15,279,
employer contribution to welfare benefit program of $5,419,
imputed income from group term life insurance of $1,290 and club
dues of $4,373.
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(4)
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For 2008, includes 401K contributions of $7,115, imputed income
from term life insurance premiums of $673, automobile allowance
of $6,000, and employer contribution to welfare benefit program
$6,172. For 2007, includes 401K contributions of $2,821, imputed
income from term life insurance premiums of $171, automobile
allowance of $1,846, and employer contribution to welfare
benefit program of $1,564.
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(5)
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For 2008, includes 401K contributions of $7,919, imputed income
from term life insurance premiums of $4,273, automobile
allowance of $6,000, employer contribution to welfare benefit
program of $6,035, and imputed income from group term life
insurance of $1,469. For 2007, includes 401K contributions of
$11,475, imputed income from term life insurance premiums of
$3,954, automobile allowance of $6,000, employer contribution to
welfare plans of $5,611, and imputed income from group term life
insurance of club dues of $1,246. For 2006, includes 401K
contributions of $7,984, imputed income from term life insurance
premiums of $3,581, automobile allowance of $6,000, employer
contribution to welfare benefit program of $5,283, imputed
income from group term life insurance of $1,035.
|
|
(6)
|
|
For 2008, includes 401K contributions of $7,587, imputed income
from term life insurance premiums of $1,751, automobile
allowance of $6,000, employer contribution to welfare benefit
program of $5,721, imputed income from group term life insurance
of $700, and club dues of $4,160. For 2007, includes 401K
contributions of $11,475, imputed income from term life
insurance premiums of $1,590, automobile allowance of $6,000,
employer contribution to welfare benefit program of $4,683, and
imputed income
|
12
|
|
|
|
|
from group term life insurance of $584, and club dues of $3,525.
For 2006, includes 401K contributions of $10,828, imputed income
from term life insurance premiums of $1,469, automobile
allowance of $6,000, employer contribution to welfare benefit
program of $5,282, and imputed income from group term life
insurance of $479.
|
|
(7)
|
|
For 2008, Mr. Standishs bonus is paid according to an
employment agreement. The terms are described in the
Compensation Discussion and Analysis. For 2007 and 2006,
Mr. Standishs bonus was paid according to an
employment agreement.
|
|
(8)
|
|
For 2008, the Company has Salary Continuation Agreements with
Messrs. Standish, Austin, and Springs, and
Ms. Huntley. Salary Continuation accruals for 2008 were:
Mr. Standish, $51,522; Mr. Austin, $56,345;
Mr. Springs, $25,984; and Ms. Huntley, $61,818. Salary
Continuation accruals for 2007 were: Mr. Standish, $41,793;
Mr. Springs, $19,022; and Ms. Huntley, $39,356. Salary
Continuation accruals for 2006 were: Mr. Standish, $39,509;
Mr. Springs; $14,002, and Ms. Huntley, $27,877.
|
Grants of
Plan-Based Awards for 2008
|
|
|
|
|
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|
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|
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All
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|
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|
|
|
|
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|
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|
|
|
|
|
|
|
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|
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All
|
|
|
Other
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|
Other
|
|
|
Option
|
|
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Fair
|
|
|
|
|
|
|
Estimated Future
|
|
|
Estimated Future
|
|
|
Awards:
|
|
|
Number of
|
|
|
or Base
|
|
|
Value
|
|
|
|
|
|
|
Payouts Under non-Equity
|
|
|
Payouts Under Equity
|
|
|
Number of
|
|
|
Securities
|
|
|
Price of
|
|
|
of Stock
|
|
|
|
|
|
|
Incentive Plan Awards
|
|
|
Incentive Plan Awards
|
|
|
Shares of
|
|
|
Underlying
|
|
|
Option
|
|
|
And
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Stock or
|
|
|
Options
|
|
|
Awards
|
|
|
Options
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Units (#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
Awards
|
|
|
Gary S. Austin
|
|
|
03/03/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
$
|
13.67/sh
|
|
|
$
|
13.67
|
|
Employment
Agreements
We entered into an employment agreement with Mr. Standish
to serve as our Companys and Banks president and
chief executive officer on February 24, 2004, as amended on
December 21, 2005, February 27, 2007, and
December 15, 2008. The employment agreement provides for a
salary of $175,000 per annum. The agreement also provides that
Mr. Standish is entitled to receive a cash bonus equal to
5% of the net income of our Company at year end as determined in
each case in accordance with generally accepted accounting
principles. The executive committee may increase or decrease the
bonus amount based on extraordinary gains or losses at their
sole discretion. Mr. Standish is eligible to participate in
our retirement, welfare, and other benefit programs and is
entitled to a life insurance policy, use of an automobile, and
reimbursement for club dues and travel and business expenses.
The agreement provides for an initial term ending on
March 1, 2010, and will automatically renew for an
additional two year period unless either party terminates the
arrangement or requests renegotiation at least one month before
the end of the term. In the event of a change in control, the
term will automatically extend for an additional three years.
Furthermore, in the event of a change in control, any
restrictions on outstanding incentive awards (including
restricted stock and stock options) will lapse and all awards
will vest immediately. During his employment and for a period of
two years following the termination of his employment,
Mr. Standish may not (a) become engaged or employed in
a similar business or venture as our business within Horry
County, South Carolina, or (b) solicit our customers or
potential customers for the purpose of providing financial
services. Under the agreement, a change in control of the Bank
means that there is a change in the composition of the
Board of Directors of the Bank such that a majority of the
directors are new to the Board; the Shareholders of the Bank
approve a merger, consolidation or reorganization (unless such
merger, consolidation or reorganization is as a result of a
complete liquidation or dissolution of the Bank); or there is an
agreement for the sale or other disposition of all or
substantially all of the assets of the Bank to another entity
(other than a transfer to a subsidiary of the Bank).
13
Outstanding
Equity Awards at Fiscal Year-End
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
|
|
Equity
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
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|
|
Incentive
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Shares,
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Units or
|
|
|
Units or
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
Other
|
|
|
Other
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Stock
|
|
|
Rights
|
|
|
Rights
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
That
|
|
|
That
|
|
|
That
|
|
|
That
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have
|
|
|
Have
|
|
|
Have
|
|
|
Have
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Not
|
|
|
Not
|
|
|
Not
|
|
|
Not
|
|
|
Vesting
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Date
|
|
|
Walter E. Standish, III, CEO
|
|
|
11,250
|
|
|
|
|
|
|
|
|
|
|
$
|
5.56
|
|
|
|
03/20/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
$
|
4.53
|
|
|
|
03/20/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
|
|
|
11,250
|
|
|
|
|
|
|
|
|
|
|
$
|
9.38
|
|
|
|
03/01/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
Gary S. Austin, CFO
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
$
|
13.67
|
|
|
|
03/13/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/03/2013
|
|
Mary Katharine (Katie) Huntley, CCO
|
|
|
5,550
|
|
|
|
|
|
|
|
|
|
|
$
|
4.89
|
|
|
|
07/31/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
|
|
|
11,250
|
|
|
|
|
|
|
|
|
|
|
$
|
8.56
|
|
|
|
12/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
|
|
|
11,250
|
|
|
|
|
|
|
|
|
|
|
$
|
13.83
|
|
|
|
11/22/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
Julien E. Springs, EVP
|
|
|
6,750
|
|
|
|
|
|
|
|
|
|
|
$
|
5.11
|
|
|
|
04/17/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
|
|
|
11,250
|
|
|
|
|
|
|
|
|
|
|
$
|
8.56
|
|
|
|
12/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
|
|
|
11,250
|
|
|
|
|
|
|
|
|
|
|
$
|
13.83
|
|
|
|
11/22/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/14/2005
|
|
Option
Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Value
|
|
|
Number of
|
|
|
Value
|
|
|
|
Shares
|
|
|
Realized
|
|
|
Shares
|
|
|
Realized
|
|
|
|
Acquired
|
|
|
on
|
|
|
Acquired on
|
|
|
on
|
|
|
|
on Exercise
|
|
|
Exercise
|
|
|
Vesting
|
|
|
Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Present
|
|
|
Payments
|
|
|
|
|
|
Years
|
|
|
Value of
|
|
|
During
|
|
|
|
|
|
Credited
|
|
|
Accumulated
|
|
|
Last Fiscal
|
|
|
|
|
|
Service
|
|
|
Benefit
|
|
|
Year
|
|
Name
|
|
Plan Name
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Walter E. Standish, III, PEO
|
|
Salary Continuation Plan
|
|
|
9
|
|
|
|
188,363
|
|
|
|
|
|
Gary S. Austin
|
|
Salary Continuation Plan
|
|
|
1
|
|
|
|
30,836
|
|
|
|
|
|
Mary Katharine (Katie) Huntley
|
|
Salary Continuation Plan
|
|
|
12
|
|
|
|
171,810
|
|
|
|
|
|
Julien E. Springs
|
|
Salary Continuation Plan
|
|
|
8
|
|
|
|
74,572
|
|
|
|
|
|
Pension
Benefits Narrative
The Company currently has salary continuation agreements with
Messrs. Standish, Austin, and Springs, and Ms. Huntley.
Narrative Description of the Salary Continuation
Plans:
The 2008 benefit formula for
Messrs. Standish, Austin, and Springs, and Ms. Huntley
is 35% of final salary, paid annually for 17 years, or
expected life, starting at age 65. Refer to the
post-termination narrative for salary continuation benefits
payable upon other termination events. The normal retirement age
is defined as age 65 for all four officers. All benefits
are adjusted based on actual salary each year and projected
based on a 7% annual increase factor. Mr. Standishs
benefit is projected to be $98,354 per year for 17 years
starting at age 65. Mr. Austins benefit is
projected to
14
be $111,978 per year for 17 years starting at age 65.
Mr. Springs benefit is projected to be $128,204 per
year for 17 years starting at age 65.
Ms. Huntleys benefit is projected to be $93,858 per
year for 21 years starting at age 65. The present
value of the accumulated benefit for each officer is the accrual
balance as of December 31, 2008. The accrual balance is
determined using an assumed compensation inflator of 7%. The
plans utilize a ten-year vesting schedule.
Nonqualified
Deferred Compensation
The Company does not provide employees with non-qualified
deferred compensation opportunities, nor does it offer
non-qualified defined contribution plans.
Potential
Benefits Upon Termination or Change in Control
The following discussion below reflects the amount of
compensation to each of the named executive officers of the
Company in the event of termination of such executives
employment. The amount of compensation payable to each named
executive officer upon voluntary termination, early termination,
involuntary
not-for-cause
termination, termination following a change in control and in
the event of disability or death of the executive is shown
below. The amounts shown assume that such termination was
effective as of December 31, 2008, and thus includes
amounts earned at such time and are estimates of the amounts
which would be paid out to the executives upon their
termination. The actual amounts to be paid out can only be
determined at the time of such executives separation from
the Company. Amounts do not include compensation and benefits
available to all of the Companys general employees.
The Company has entered into an employment agreement with Walter
E. Standish, III. Summaries of the agreements are provided
in the Compensation Discussion and Analysis, and payments upon
termination or change in control are specified in this section.
Walter E. Standish, III, President &
CEO:
Employment contract does not require any
additional payments except upon a change in control. This change
in control provision renews the contract automatically for an
additional three year term with all benefits and payments
defined by agreement.
Stock based compensation shall immediately vest at change of
control. Voluntary, involuntary or cause termination, early or
normal retirement, will require option based compensation to be
exercised within 90 days of termination date or forfeiture
will result for any unexercised options.
Salary Continuation based compensation will be paid based upon
vested percentage for voluntary, involuntary or cause
termination and early retirement. Benefits for disability will
be calculated based on 100% of the account value determined as
of the end of the Plan Year preceding Separation from Service,
then increasing the vested balance at an annual rate of six
percent (6%), compounded monthly until commencement of benefit
payments at normal retirement age of 65 for a period of
17 years, payable monthly.
15
Potential
Benefits Upon Termination or Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
Reason
|
|
|
|
|
|
|
|
Compensation and/or
|
|
|
|
|
|
|
|
|
|
|
Not for
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
Benefits Payable Upon
|
|
Voluntary
|
|
|
Early
|
|
|
Normal
|
|
|
Cause
|
|
|
For Cause
|
|
|
(Change in
|
|
|
|
|
|
|
|
Termination
|
|
Termination
|
|
|
Retirement
|
|
|
Retirement
|
|
|
Termination
|
|
|
Termination
|
|
|
Control)
|
|
|
Disability
|
|
|
Death(4)
|
|
|
Walter E. Standish, III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
175,000
|
|
|
|
0
|
|
|
|
525,000
|
|
|
|
0
|
|
|
|
0
|
|
Annual Cash Bonus(2)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
287,000
|
|
|
|
|
|
|
|
634,000
|
|
|
|
0
|
|
|
|
0
|
|
Salary Continuation(3)
|
|
|
21,854
|
|
|
|
21,854
|
|
|
|
98,354
|
|
|
|
21,854
|
|
|
|
0
|
|
|
|
717,831
|
|
|
|
29,437
|
|
|
|
0
|
|
Split Dollar Life Benefit
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
984,844
|
|
Auto
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
17,000
|
|
|
|
0
|
|
|
|
51,000
|
|
|
|
0
|
|
|
|
0
|
|
Club Membership Dues
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7,000
|
|
|
|
0
|
|
|
|
15,000
|
|
|
|
0
|
|
|
|
0
|
|
Gary S. Austin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Annual Cash Bonus
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Salary Continuation(3)
|
|
|
557
|
|
|
|
557
|
|
|
|
111,978
|
|
|
|
557
|
|
|
|
0
|
|
|
|
321,006
|
|
|
|
5,570
|
|
|
|
51,359
|
|
Auto
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Club Membership Dues
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
M. Katherine (Katie) Huntley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Annual Cash Bonus
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Salary Continuation(3)
|
|
|
22,016
|
|
|
|
22,016
|
|
|
|
93,858
|
|
|
|
22,016
|
|
|
|
0
|
|
|
|
676,892
|
|
|
|
26,584
|
|
|
|
0
|
|
Split Dollar Life Benefit
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
755,011
|
|
Auto
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Club Membership Dues
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Julien E. Springs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Annual Cash Bonus
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Salary Continuation(3)
|
|
|
10,627
|
|
|
|
10,627
|
|
|
|
128,204
|
|
|
|
10,627
|
|
|
|
0
|
|
|
|
652,116
|
|
|
|
16,359
|
|
|
|
0
|
|
Split Dollar Life Benefit
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
623,062
|
|
Auto
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Club Membership Dues
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1)
|
|
Based on remaining term of employment contract.
|
|
(2)
|
|
Annual cash bonus is based on 5% of net income for the Company
based on approved projections for years ended 2009 through 2011,
respectively.
|
|
(3)
|
|
Reflects the annual amount that shall be paid in equal monthly
installments for 204 months, beginning with the month
following the normal retirement age.
|
|
(4)
|
|
The compensation received under the employment contract is the
greater of the death benefit under the split dollar arrangement
after the bank is repaid or the net present value of the salary
continuation plan, which ever is greater. At December 31,
2008, Messrs. Standish and Springs, and
Ms. Huntleys death benefit exceeded the benefit under
the salary continuation plan. Mr. Austins death
benefit is reflective of the benefit under his Salary
Continuation Plan.
|
Voluntary
Termination
Under the Salary Continuation Plans, Messrs. Standish,
Austin and Springs, and Ms. Huntley will receive benefits
based on the individual vesting at time of voluntary
termination. Stock Options shall terminate 30 days after
the date on which the grantee ceases to be an employee of the
Company.
16
Normal
Retirement
Retirement prior to age 65 is treated the same as voluntary
termination for the officers. Projected retirement benefits at
age 65 are disclosed in the Pension Benefits Table
narrative.
Termination
by the Company without Cause
The employment agreement for Mr. Standish provides for
severance payments and eligibility for benefits if the Company
terminates his employment without cause. Mr. Standish will
receive payments equal to the remaining term of the contract.
See Compensation Discussion and Analysis for details on
Mr. Standishs employment agreement.
Termination
for Cause
If the Company terminates any of the NEOs for cause, the Company
shall have no obligations to the executive as of the date of
termination.
Disability
Upon the executives separation from service because of
disability (as defined in the salary continuation agreement)
before normal retirement age, the executives disability
benefit is calculated by multiplying the vesting percentage by
the executives account value (as defined in the salary
continuation agreement) for the plan year ending immediately
prior to disability and then increasing the vested balance at an
annual rate of six percent, compounded monthly, until
commencement of benefit payments. Beginning the month
immediately after the month in which the executive attains the
normal retirement age, the Bank will pay the disability benefit
to the executive in 12 equal monthly installments on the first
day of each month and for the executives lifetime with a
17-year
term
certain period.
If Messrs. Standish, Austin or Springs, or Ms. Huntley
become disabled, the salary continuation agreements will become
100% vested in the benefit which provides payments starting at
age 65 for 17 years. Annual projected benefits under
this plan include the following: Mr. Standish, $100,532;
Mr. Austin, $111,978; Ms. Huntley, $95,674; and
Mr. Springs, $128,204.
Death
If the executive dies in active service to the Bank before
normal retirement age, the executives beneficiary will be
entitled to an amount equal to the executives account
value less any amount the Beneficiary is entitled to receive
under any split dollar arrangement between the Bank and the
executive, payable in a single lump sum on the first day of the
fourth month following the executives death.
If the executive dies before any separation from service and the
executive is receiving the executives normal retirement
benefit, but the executive has not received the executives
normal retirement benefit for the full
17-year
term
certain period, the executives beneficiary will be
entitled to the present value of the remaining portion of the
minimum 17 years of benefits due under the agreement,
payable in a single lump sum on the first day of the fourth
month following the executives death.
If the executive dies after separation from service and is
entitled to any benefit, but has not started receiving such
benefits, the executives beneficiary will be entitled to
the present value of the minimum 17 years of benefits due
under the agreement, payable in a single lump sum on the first
day of the fourth month following the executives death.
In the event of death for Messrs. Standish or Springs, or
Ms. Huntley, the beneficiary named shall receive the
benefit designated under the Split Dollar Plan.
Involuntary
Termination Following a Change in Control
Upon a change in control (as defined in the salary continuation
agreement), the Bank will pay the executive a change in control
benefit equal to the executives present value of the
projected benefit (as defined
17
in the salary continuation agreement) using a six percent
interest rate and a
17-year
payment stream, subject to the change in control vesting
percentage (50% of the benefit from the one year anniversary of
the executives date of hire with the Bank until the six
year anniversary, 80% of the benefit from the six year
anniversary until the eight year anniversary, and 100% of the
benefit from the nine year anniversary of the executives
date of hire thereafter). The Bank will distribute the benefit
to the executive in a lump sum within 90 days following a
change in control. In addition, if the executive seeks any legal
action to compel the Bank to pay the change in control benefit,
the Bank will reimburse the executive any legal fees incurred.
As specified in the employment agreement for Mr. Standish,
under involuntary termination following a change in control, the
agreement provides for the employment agreement to automatically
renew for three years and his unvested stock options shall fully
vest and become exercisable.
Under the Stock Option Plan, the NEOs unvested stock
options shall fully vest and become exercisable. Under the
Salary Continuation Agreements for Messrs. Standish,
Austin, and Springs, and Ms. Huntley, the benefit will
equal 100% of the projected benefit at normal retirement age.
Benefits will be paid in equal monthly installments for
17 years beginning at age 65. Annual projected
benefits under this plan include the following:
Mr. Standish, $98,354; Mr. Austin, $111,978;
Mr. Springs, $128,204; and Ms. Huntley, $93,858. The
NEOs will receive a
gross-up
payment to cover any excise and other income taxes triggered
under IRC Section 280G as provided in the Salary
Continuation Agreements.
Voluntary
Termination Following a Change in Control
All payments and benefits are the same as specified under
Voluntary Termination.
Director
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
or Paid in
|
|
|
Stock
|
|
|
Option
|
|
|
Plan
|
|
|
Deferred
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
|
Projected
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Earnings(1)
|
|
|
($)
|
|
|
($)
|
|
|
Benefit
|
|
|
Raymond E. Cleary, III, DDS, Chairman
|
|
|
18,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,075
|
|
|
|
|
|
|
|
32,925
|
|
|
|
17,704
|
|
Michael Bert Anderson
|
|
|
21,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,994
|
|
|
|
|
|
|
|
25,319
|
|
|
|
37,265
|
|
Thomas P. Anderson(2)
|
|
|
9,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,625
|
|
|
|
|
|
Bartlett Buie
|
|
|
18,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,770
|
|
|
|
|
|
|
|
31,245
|
|
|
|
17,704
|
|
E. Thomas Fulmer
|
|
|
23,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,952
|
|
|
|
|
|
|
|
40,202
|
|
|
|
16,546
|
|
Michael D. Harrington
|
|
|
19,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,393
|
|
|
|
|
|
|
|
37,193
|
|
|
|
15,464
|
|
Joe N. Jarrett, Jr., MD
|
|
|
16,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,770
|
|
|
|
|
|
|
|
28,770
|
|
|
|
17,704
|
|
Richard E. Lester
|
|
|
21,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,076
|
|
|
|
|
|
|
|
40,451
|
|
|
|
15,464
|
|
Leigh Ammons Meese
|
|
|
19,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,885
|
|
|
|
|
|
|
|
20,885
|
|
|
|
73,306
|
|
Rick H. Seagroves
|
|
|
19,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,190
|
|
|
|
|
|
|
|
24,240
|
|
|
|
30,419
|
|
Don J. Smith
|
|
|
18,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,471
|
|
|
|
|
|
|
|
27,971
|
|
|
|
20,270
|
|
Samuel R. Spann, Jr.
|
|
|
21,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,137
|
|
|
|
|
|
|
|
36,087
|
|
|
|
16,546
|
|
B. Larkin Spivey, Jr.
|
|
|
18,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,142
|
|
|
|
|
|
|
|
38,592
|
|
|
|
11,797
|
|
James C. Yahnis
|
|
|
22,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,876
|
|
|
|
|
|
|
|
27,926
|
|
|
|
26,569
|
|
|
|
|
(1)
|
|
The Company has Supplemental Director Retirement Plans (SDRP)
for all directors except Mr. Standish. SDRP accruals for
2008 are represented in this column.
|
|
(2)
|
|
Thomas P. Anderson resigned from our Board in 2008. Notification
of his resignation was filed with the SEC on
Form 8-K
on September 26, 2008.
|
18
Director
Compensation
The Company uses a deferred compensation, stock based
compensation, and cash payments to attract and retain qualified
candidates to serve on the Board. In setting director
compensation, the Company considers the significant amount of
time that directors expend in fulfilling their duties to the
Company as well as the skill level required by the Company of
members of the Board. The above table reflects the amount of
compensation to each of the directors of our Company.
Our bylaws permit our directors to receive reasonable
compensation as determined by a resolution of the Board of
Directors. In 2008, the directors were paid an annual retainer
on a quarterly basis of $4,000 for the Bank and $3,000 for the
Company. Beginning January 1, 2009, the directors voted to
reduce the retainer to $3,000 for the Bank and to have no
retainer for the Company. Directors are paid $750 for each Board
meeting they attend, $250 for attendance at the Executive, Loan,
and Audit Committee meetings and $150 for attendance at the
ALCO, Marketing, and Building Committee meetings.
We instituted a Supplemental Director Retirement Plan
(SDRP), which is a non-qualified director benefit
plan in which we agree to pay the director additional benefits
in the future, usually at retirement, in return for continued
satisfactory performance by the director. The SDRP is an
unfunded plan, which means there are no specific assets set
aside by the Company in connection with the establishment of the
plan. The director has no rights under the agreement beyond
those of a general creditor of the Company. We have entered into
SDRP contracts with the 13 directors of the Company.
Narrative Description of the SDRP:
The 2006
benefit formula for all directors is based on a $9,000 cash
contribution to the plan and utilizing a 6% annual increase
factor. Benefits are paid annually for 17 years starting at
age 68. The plan was amended in 2007 to reduce the starting
age to 65 for directors with the exception of Directors Spivey
and Lester who elected to begin benefit payments starting at
age 68. The accrual balance is determined using an assumed
compensation inflator of 7%. The plans utilize a ten-year
vesting schedule.
Other Compensation:
The following directors
participate in a split dollar life insurance plan. The plan was
amended to eliminate the life insurance benefit post retirement.
The split dollar life insurance policies have the following
death benefits and imputed income.
|
|
|
|
|
|
|
|
|
|
|
Split Dollar Death
|
|
|
|
|
Director
|
|
Benefit
|
|
|
Imputed Income(1)
|
|
|
Michael Bert Anderson
|
|
$
|
217,453
|
|
|
$
|
463
|
|
Bartlett Buie
|
|
$
|
137,611
|
|
|
$
|
834
|
|
Raymond E. Cleary, III, DDS
|
|
$
|
130,095
|
|
|
$
|
847
|
|
Michael D. Harrington
|
|
$
|
130,060
|
|
|
$
|
925
|
|
Joe N. Jarrett. Jr., MD
|
|
$
|
137,611
|
|
|
$
|
834
|
|
Richard E. Lester
|
|
$
|
92,396
|
|
|
$
|
916
|
|
Leigh Ammons Meese
|
|
$
|
238,135
|
|
|
$
|
252
|
|
Rick H. Seagroves
|
|
$
|
190,134
|
|
|
$
|
534
|
|
Don J. Smith
|
|
$
|
161,005
|
|
|
$
|
837
|
|
Samuel Robert Spann, Jr.
|
|
$
|
130,095
|
|
|
$
|
847
|
|
B. Larkin Spivey, Jr.
|
|
$
|
83,980
|
|
|
$
|
710
|
|
James C. Yahnis
|
|
$
|
169,452
|
|
|
$
|
542
|
|
|
|
|
(1)
|
|
Imputed income is reported annually on
form 1099 MISC.
|
19
BENEFICIAL
OWNERS AND MANAGEMENT
General
The following table shows how much common stock is owned by our
directors and executive officers and by owners of more than 5%
of the outstanding common stock, as of March 6, 2009.
Unless otherwise indicated, the mailing address for each
beneficial owner is in care of Beach First National Bancshares,
Inc., 3751 Grissom Parkway, Suite 100, Myrtle Beach, South
Carolina 29577.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
Number of Shares
|
|
|
|
|
|
Beneficial
|
|
Name
|
|
Owned(1)
|
|
|
Right to Acquire(2)
|
|
|
Ownership(3)
|
|
|
Michael Bert Anderson
|
|
|
23,927
|
|
|
|
18,000
|
|
|
|
*
|
%
|
Gary S. Austin
|
|
|
1,921
|
|
|
|
3,000
|
|
|
|
*
|
%
|
Bartlett Buie
|
|
|
29,888
|
|
|
|
21,375
|
|
|
|
1.06
|
%
|
Raymond E. Cleary, III, DDS
|
|
|
126,754
|
|
|
|
21,375
|
|
|
|
3.06
|
%
|
E. Thomas Fulmer
|
|
|
20,129
|
|
|
|
18,000
|
|
|
|
*
|
%
|
Michael D. Harrington
|
|
|
196,939
|
|
|
|
21,375
|
|
|
|
4.51
|
%
|
Mary Katharine (Katie) Huntley
|
|
|
50,497
|
|
|
|
28,050
|
|
|
|
1.62
|
%
|
Joe N. Jarrett, Jr., MD
|
|
|
57,510
|
|
|
|
21,375
|
|
|
|
1.63
|
%
|
Richard E. Lester
|
|
|
54,783
|
|
|
|
21,375
|
|
|
|
1.57
|
%
|
Leigh Ammons Meese
|
|
|
27,036
|
|
|
|
21,375
|
|
|
|
1.00
|
%
|
Rick H. Seagroves
|
|
|
111,787
|
|
|
|
21,375
|
|
|
|
2.75
|
%
|
Don J. Smith
|
|
|
34,088
|
|
|
|
21,375
|
|
|
|
1.14
|
%
|
Samuel Robert Spann, Jr.
|
|
|
91,672
|
|
|
|
21,375
|
|
|
|
2.33
|
%
|
B. Larkin Spivey, Jr.
|
|
|
45,397
|
|
|
|
21,375
|
|
|
|
1.38
|
%
|
Julien E. Springs
|
|
|
21,286
|
|
|
|
29,250
|
|
|
|
1.04
|
%
|
Walter E. Standish, III
|
|
|
45,608
|
|
|
|
67,500
|
|
|
|
2.33
|
%
|
James C. Yahnis
|
|
|
52,986
|
|
|
|
21,375
|
|
|
|
1.55
|
%
|
Executive officers and directors as a group (17 persons)
|
|
|
992,208
|
|
|
|
398,925
|
|
|
|
28.71
|
%
|
|
|
|
*
|
|
Less than 1%
|
|
(1)
|
|
Includes shares for which the named person has sole voting and
investment power, has shared voting and investment power with a
spouse, or holds in an IRA or other retirement plan program,
unless otherwise indicated in these footnotes.
|
|
(2)
|
|
Includes shares that may be acquired upon the exercise of stock
options that are or become exercisable within 60 days of
the date of this proxy statement.
|
|
(3)
|
|
For each individual, this percentage is determined by assuming
the named person exercises all options which he or she has the
right to acquire within 60 days, but that no other persons
exercise any options. For the directors and executive officers
as a group, this percentage is determined by assuming that each
director and executive officer exercises all options which he or
she has the right to acquire within 60 days, but that no
other persons exercise any options. The calculations are based
on 4,845,018 shares of common stock outstanding on
March 6, 2009.
|
20
FEES
Audit
Fees
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit Fees
|
|
$
|
117,052
|
|
|
$
|
112,205
|
|
Audit-Related Fees
|
|
|
11,810
|
|
|
|
|
|
Tax Fees
|
|
|
10,345
|
|
|
|
8,355
|
|
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
139,207
|
|
|
$
|
120,560
|
|
|
|
|
|
|
|
|
|
|
Audit Fees.
This category includes the
aggregate fees billed for each of the last two fiscal years for
professional services rendered by Elliott Davis, PLLC for the
audit of our annual financial statements in both years, the
audit of internal control over financial reporting under
Sarbanes-Oxley 404 in 2007, and for the condensed financial
statements included in our quarterly reports on
Form 10-Q.
Fees for 2007 include $4,205 for consultations related to
mortgages held for sale and derivatives.
Audit-Related Fees.
This category includes the
aggregate fees billed for non-audit services, exclusive of the
fees disclosed relating to audit fees, rendered by Elliott
Davis, PLLC during the fiscal years ended December 31, 2008
and 2007. The fees for 2008 were related to the audit of the
401K plan.
Tax Fees.
This category includes the aggregate
fees billed for tax services rendered by Elliott Davis, PLLC
during the fiscal years ended December 31, 2008 and 2007.
These services include preparation of state and federal tax
returns for the Company and its subsidiary. Tax fees for 2007
include $4,605 related to consultations on state tax issues.
All Other Fees.
This category includes the
aggregate fees billed for all other services, exclusive of the
fees disclosed above, rendered by Elliott Davis, PLLC during the
fiscal years ended December 31, 2008 and December 31,
2007. No other services were rendered in 2008 or 2007.
Oversight
of Accountants; Approval of Accounting Fees
Under the provisions of its charter, the audit committee is
responsible for the appointment, compensation, retention and
oversight of the work of the independent accountants. These
services may include audit services, audit-related services, tax
services and other services. The audit committee approves the
fees for each specific category of service. The policy
specifically prohibits certain non-audit services that are
prohibited by securities laws from being provided by an
independent accountant.
All of the principal accounting services and fees reflected in
the table above were reviewed and approved by the audit
committee, and none of the services were performed by
individuals who were not employees of the independent accountant.
We selected the firm of Elliott Davis, PLLC to serve as our
independent accountants for the year ending December 31,
2008. We expect that a representative from this firm will be
present and available to answer appropriate questions at the
annual meeting and will have an opportunity to make a statement
if he or she desires to do so.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Interests
of Management and Others in Certain Transactions
We enter into banking and other transactions in the ordinary
course of business with our directors and officers and their
affiliates. It is our policy that these transactions be on
substantially the same terms (including price, or interest rates
and collateral) as those prevailing at the time for comparable
transactions with unrelated
21
parties. We do not expect these transactions to involve more
than the normal risk of collectability nor present other
unfavorable features to us. Loans to individual directors and
officers must also comply with our banks lending policies
and statutory lending limits, and directors with a personal
interest in any loan application are excluded from the
consideration of the loan application. We intend for all of our
transactions with our affiliates to be on terms no less
favorable to us than could be obtained from an unaffiliated
third party and to be approved by a majority of disinterested
directors.
Director Michael Bert Andersons loans were granted on the
same terms as other comparable loans and complied with our
banks lending policies and statutory lending limits. As of
December 31, 2008, Mr. Anderson or his related
interests had seven loans with total principal and interest
outstanding of $2,415,616 that were on the banks list of
potential problem loans. Total principal payments of $374,746.13
and total interest payments of $113,057.98 were made during
2008. Mr. Anderson has resigned as audit committee chairman
and from the executive committee. The table below summarizes the
key items related to these loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Largest
|
|
Principal
|
|
|
Interest
|
|
|
Total at
|
|
|
|
|
|
Total Principal
|
|
|
Total Interest
|
|
|
Balance
|
|
Outstanding
|
|
|
Outstanding
|
|
|
12/31/08
|
|
|
Rate
|
|
|
Payments
|
|
|
Payments
|
|
|
During 2008
|
|
|
$
|
1,241,949.22
|
|
|
$
|
1,966.39
|
|
|
$
|
1,243,915.61
|
|
|
|
3.25
|
%
|
|
$
|
146,048.66
|
|
|
$
|
70,622.46
|
|
|
$
|
1,387,997.88
|
|
$
|
14,931.79
|
|
|
$
|
29.47
|
|
|
$
|
14,961.26
|
|
|
|
3.25
|
%
|
|
$
|
1,600.00
|
|
|
$
|
731.35
|
|
|
$
|
14,979.24
|
|
$
|
393,525.43
|
|
|
$
|
5,589.83
|
|
|
$
|
399,115.26
|
|
|
|
7.00
|
%
|
|
$
|
4,018.51
|
|
|
$
|
24,459.37
|
|
|
$
|
397,543.97
|
|
$
|
164,641.88
|
|
|
$
|
852.53
|
|
|
$
|
165,494.41
|
|
|
|
7.00
|
%
|
|
$
|
3,747.76
|
|
|
$
|
12,545.38
|
|
|
$
|
168,389.64
|
|
$
|
22,268.31
|
|
|
$
|
15.11
|
|
|
$
|
22,283.42
|
|
|
|
8.25
|
%
|
|
$
|
4,546.27
|
|
|
$
|
2,109.83
|
|
|
$
|
26,814.58
|
|
$
|
349,164.59
|
|
|
$
|
5,626.32
|
|
|
$
|
354,790.91
|
|
|
|
6.75
|
%
|
|
$
|
910.41
|
|
|
$
|
2,589.59
|
|
|
$
|
350,075.00
|
|
$
|
213,874.52
|
|
|
$
|
1,180.70
|
|
|
$
|
215,055.22
|
|
|
|
6.50
|
%
|
|
$
|
213,874.52
|
|
|
|
|
|
|
$
|
213,874.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,400,355.74
|
|
|
$
|
15,260.35
|
|
|
$
|
2,415,616.09
|
|
|
|
|
|
|
$
|
374,746.13
|
|
|
$
|
113,057.98
|
|
|
$
|
2,559,674.80
|
|
The bank has one additional credit with Mr. Anderson and
his related interests that is a participation loan. The
banks portion of this loan as of December 31, 2008,
reflects a principal balance of $2,475,080.28 and the interest
rate is 6.00%. None of the loans, including the participation
loan, were past due greater than 90 days as of
December 31, 2008, and all of the loans continued to accrue
interest.
The Company has adopted a Code of Conduct and Ethics which
contains disclosure procedures for reviewing transactions
between the Company and its directors and executive officers,
their immediate family members, and entities with which they
have a position or relationship. These procedures are intended
to determine whether any such related person transaction impairs
the independence of a director or presents a conflict of
interest on the part of a director or executive officer.
Pursuant to our principles of corporate governance, the Board
expects directors, officers, and employees of the Company to
behave ethically and to adhere to the Companys Code of
Conduct and Ethics. This policy also requires the Companys
bank subsidiaries to comply with Regulation O, which
contains restrictions on extensions of credit to executive
officers, directors, certain principal shareholders, and their
related interests. Such extensions of credit (i) must be
made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with third parties and (ii) must not involve
more than the normal risk of repayment or present other
unfavorable features.
The Company annually requires each of its directors and
executive officers to complete a directors and
officers questionnaire that elicits information about
related person transactions. Directors must disclose to other
directors, the Chairman, and the Secretary any potential
conflicts of interest they may have with respect to any matter
under discussion and refrain from voting on any matter in which
they have a conflict. Directors are required to recuse
themselves from any discussion or decision affecting their
personal, business, or professional interests. The
Companys Corporate Governance Committee annually reviews
all transactions and relationships disclosed in the director and
officer questionnaires, and the Board of Directors makes a
formal determination regarding each directors independence
under NASDAQ Global Market listing standards and applicable SEC
rules.
22
In addition, the Bank is subject to the provisions of
Section 23A of the Federal Reserve Act, which places limits
on the amount of loans or extensions of credit to, or
investments in, or certain other transactions with, affiliates
and on the amount of advances to third parties collateralized by
the securities or obligations of affiliates. The Bank is also
subject to the provisions of Section 23B of the Federal
Reserve Act which, among other things, prohibits an institution
from engaging in certain transactions with certain affiliates
unless the transactions are on terms substantially the same, or
at least as favorable to such institution or its subsidiaries,
as those prevailing at the time for comparable transactions with
nonaffiliated companies.
COMPLIANCE
WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF
1934
As required by Section 16(a) of the Securities Exchange Act
of 1934, our directors and executive officers and certain other
individuals are required to report periodically their ownership
of our common stock and any changes in ownership to the SEC.
Based on a review of Forms 3, 4, and 5 and any
representations made to us, it appears that all such reports for
these persons were filed in a timely fashion during 2008, with
the exception of Mr. Buie who filed a Form 4 late.
SHAREHOLDER
PROPOSALS FOR THE 2010 ANNUAL MEETING OF
SHAREHOLDERS
If shareholders wish a proposal to be included in our proxy
statement and form of proxy relating to the 2010 Annual Meeting,
they must deliver a written copy of their proposal to our
principal executive offices no later than November 20,
2009. To ensure prompt receipt by the Company, the proposal
should be sent certified mail, return receipt requested.
Proposals must comply with our bylaws relating to shareholder
proposals in order to be included in our proxy materials. A copy
of the bylaws is available upon written request.
Any shareholder proposal to be made at an annual meeting, but
which is not requested to be included in our proxy materials,
must comply with our bylaws. Proposals must be delivered to our
principal executive offices on or before the later to occur of
(i) 60 days prior to the annual meeting; or
(ii) 10 days after notice of the annual meeting is
provided to shareholders.
OTHER
MATTERS
The Board is not aware of any business to come before the annual
meeting other than the matters described above in this proxy
statement. However, if any other matters should properly come
before the meeting, it is intended that proxies in the
accompanying form will be voted in respect thereof in accordance
with the judgment of the person or persons voting the proxies.
The cost of solicitation of proxies will be borne by the
Company. In addition to solicitations by mail, directors,
officers and regular employees of the Company may solicit
proxies personally or by telegraph or telephone without
additional compensation.
The Board has implemented a process for shareholders of the
Company to send communications to the Board. Please see
page 7 of this proxy statement for further information and
the mailing address. The secretary of the Company has been
instructed by the board to promptly forward all communications
received to the addressee indicated thereon.
By Order of the Board of Directors,
Gary S. Austin, Secretary
April 3, 2009
Myrtle Beach, South Carolina
23
PROXY
PROXY SOLICITED FOR ANNUAL MEETING
OF SHAREHOLDERS OF
BEACH FIRST NATIONAL BANCSHARES, INC.
to be held on May 4, 2009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
|
|
|
|
The undersigned hereby constitutes and appoints Raymond E. Cleary, III and Gary S. Austin,
together or either of them acting individually in the absence of the other, his or her true and
lawful agents and proxies with full power of substitution in each, to represent and vote, as
indicated below, all of the shares of common stock of Beach First National Bancshares, Inc. that
the undersigned would be entitled to vote at the Annual Meeting of Shareholders of the Company to
be held at the Myrtle Beach Convention Center, 2101 Oak Street, Myrtle Beach, South Carolina 29577
on Monday, May 4, 2009 at 2:00 p.m. local time, and at any adjournment, upon the matters described
in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement. These proxies are
directed to vote on the matters described in the Notice of Annual Meeting of Shareholders and Proxy
Statement as follows:
|
|
|
This proxy, when properly executed, will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this proxy will be voted FOR the proposal to
elect the five identified Class I directors to serve on the Board of Directors each for three-year
terms. If any other business is presented at the meeting, including a motion to adjourn the
meeting, this proxy will be voted by the proxies in their best judgment.
(Continued and to be signed on reverse side)
5
FOLD AND DETACH HERE
5
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|
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|
|
|
|
|
|
|
|
To vote your proxy via the Internet, please type the following address in your browser:
https://www.shareholderlink.com/beach/pxsignon.asp
or
http://proxy.beachfirst.com.
You will need to enter your proxy control number, which is the
12
digit number (xxxx-xxxx-xxxx) found at the top of this proxy card.
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|
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|
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|
|
Important Notice of Internet Availability.
The proxy statement and our 2008 Annual Report
on Form
10-K, along with the 2008 Annual Report Overview, are available to the public
for viewing on the
Internet. Type
http://proxy.beachfirst.com
in your browser.
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Please mark
your votes as
indicated in
this example.
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x
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FOR
all nominees listed
(except as marked to
the contrary)
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WITHHOLD
AUTHORITY
to vote for all nominees
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AGAINST
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1.
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PROPOSAL to elect the five identified
Class II directors to serve for three
year terms.
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o
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o
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o
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Michael Bert Anderson
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Bartlett Buie
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Michael D. Harrington
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Rick H. Seagroves
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Walter E. Standish, III
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INSTRUCTION: To withhold authority to vote for any individual nominee(s), write that nominees name(s) in the space
provided below.
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Signature of Shareholder(s)
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Please print name
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Dated:
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, 2009
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Signature of Shareholder(s)
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Please print name
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Dated:
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, 2009
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Please sign exactly as name or names appear on your stock certificate. Where more than one owner is
shown on your stock certificate, each owner should sign. Persons signing in a fiduciary or
representative capacity shall give full title. If a corporation, please sign in full corporate name
by authorized officer. If a partnership, please sign in partnership name by authorized person.
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5
FOLD AND DETACH HERE
5
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DETACH CARD
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Please detach proxy at perforation before mailing.
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To vote your proxy via the Internet, please type the following address in your browser:
https://www.shareholderlink.com/beach/pxsignon.asp
or
http://proxy.beachfirst.com.
You will need to enter your proxy control number, which is the
12
digit number (xxxx-xxxx-xxxx) found at the top of this proxy card.
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Important Notice of Internet Availability.
The proxy statement and our 2008 Annual Report
on Form
10-K, along with the 2008 Annual Report Overview, are available to the public
for viewing on the
Internet. Type
http://proxy.beachfirst.com
in your browser.
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