SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
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o Preliminary Proxy Statement | | o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x Definitive Proxy Statement |
o Definitive Additional Materials |
o Soliciting Material under Rule 14a-12 |
Bank of South Carolina Corporation
(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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x | No fee required. |
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o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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(1) | Title of each class of securities to which transaction applies: |
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(2) | Aggregate number of securities to which transaction applies: |
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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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(4) | Proposed maximum aggregate value of transaction: |
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o | Fee paid previously with preliminary materials. |
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o | 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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(1) | Amount Previously Paid: |
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(2) | Form, Schedule or Registration Statement No.: |
Dear Shareholder:
The Annual Meeting of Shareholders of Bank of South Carolina Corporation will be held at 2:00 p.m. on Tuesday, April 8, 2003, in the Board Room of the 256 Meeting Street office of The Bank of South Carolina in the City of Charleston, South Carolina. Enclosed you will find the formal Notice, Proxy, and Proxy Statement detailing the matters which will be acted upon.
We urge you to sign and date the proxy and return it as soon as possible in the enclosed postage-paid envelope. Should you decide to attend the meeting and vote in person, you may withdraw your proxy.
We appreciate your continued interest and investment in Bank of South Carolina Corporation.
PROXY MATERIAL OF
BANK OF SOUTH CAROLINA CORPORATION NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 8, 2003 TO BE HELD APRIL 11, 2006
The Annual Meeting of Shareholders of Bank of South Carolina Corporation (the “Company”) will be held at 256 Meeting Street, Charleston, South Carolina, on Tuesday, April
8, 2003,11, 2006, at 2:00 p.m. for the following purposes:
| 1. | | To elect seventeen (17) Directors to serve until the company’s 2004Company’s 2007 Annual Meeting of Shareholders; |
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| 2. | | To ratify the appointment of KPMG LLP,Elliott Davis, LLC, as independent certified public accountants for 2003;2006; |
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| 3. | | To transact such other business as may properly come before the meeting. |
Shareholders of record at the close of business on February
21, 2003,24, 2006, will be entitled to notice of and to vote at the Annual Meeting and any adjournments thereof.
You may revoke your Proxy at any time prior to its exercise by written notice to the Company prior to the meeting or by attending the meeting personally and voting. The Board of Directors of the Company solicits the accompanying form of Proxy.
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. | By Order of the Board of Directors |
| /s/ Nathaniel I. Ball, III |
| Nathaniel I. Ball, III
Secretary |
March 3, 2003
A copy of the Company’s Annual Disclosure Statement as filed with the Securities and Exchange Commission on Form 10-KSB may be obtained at no cost by writing William L. Hiott, Jr., Treasurer, at BankBoard of South Carolina Corporation, P.O. Box 538, Charleston, South Carolina 29402 (843-724-1500). Additional copies may be obtained at a cost of $5.00 each.Directors
Richard W. Hutson
Secretary
March 6, 2006
BANK OF SOUTH CAROLINA CORPORATION
256 Meeting Street Charleston,
Charleston, South Carolina 29401
_________________________________ This Proxy Statement, which is first being mailed to
shareholdersShareholders on or about March
4, 2003,6, 2006, is provided in conjunction with the solicitation of proxies by the Board of Directors of Bank of South Carolina Corporation (the “Company”) for use at the
20032006 Annual Shareholders’ Meeting of the Company. The Notice of Meeting, Proxy Form and Annual Report are enclosed in this package.
The Board of Directors of the Company selected the persons named as proxies on the enclosed Proxy Form. No officer or employee of the Company or any subsidiary may be named as proxy.
The solicitation of proxies on behalf of the Board of Directors is conducted by Directors,
Officersofficers and regular employees of the Company and its wholly owned subsidiary, The Bank of South Carolina (the “Bank”), at no additional compensation over regular salaries. The cost of printing and mailing of all proxy materials has been paid by the Company. Brokers and others involved in handling and forwarding the proxy materials to their customers having beneficial interests in the stock of the Company registered in the names of
nomineesNominees will be reimbursed for their reasonable expenses in doing so.
The Common Stock of the Company is its only class of voting securities. On February
21, 2003,24, 2006, there were issued and outstanding
2,550,6953,092,266 shares of Common Stock (no par value). Each share is entitled to one vote; provided, however, that Shareholders have cumulative voting rights for the election of Directors. The right to cumulate votes means that the Shareholders are entitled to multiply the number of votes they are entitled to cast by the number of
directorsDirectors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates.
CUMULATIVE VOTING SHALL APPLY FOR THE ELECTION OF DIRECTORS The solicitation of proxies on behalf of the Board of Directors includes a solicitation for discretionary authority to cumulate votes.
The Board of Directors of the Company has fixed the close of business February
21, 2003,24, 2006, as the record date for the determination of Shareholders entitled to notice of and to vote at the Annual Meeting. Proxies properly executed by Shareholders of record on February
21, 2003,24, 2006, and received in time for the meeting, will be voted as specified on all business to be acted upon at the meeting and any adjournment thereof.
Any Shareholder executing a Proxy for the meeting on the Proxy Form provided may revoke the Proxy in a writing delivered to the President of the Company prior to the meeting or by attending the meeting and voting in person.
Principal Shareholders of the Company To the extent known to the Board of Directors of the Company, as of February
21, 2003,24, 2006, the only Shareholders of the Company having beneficial ownership of more than
five percent (5%)5% of the shares of Common Stock of the Company are as set forth below:
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Name and Address of | | Amount and Nature of | | Percent of |
Beneficial Owner | | Beneficial Ownership | | Class |
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Hugh C. Lane, Jr.(1) | | | 414,017 | (2) | | | 16.23 | % |
30 Church Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Charles G. Lane(1) | | | 143,794 | (3) | | | 5.64 | % |
10 Gillon Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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The Bank of South Carolina | | | 193,794 | (4) | | | 7.60 | % |
Employee Stock Ownership | | | | | | | | |
Plan and Trust (“ESOP”) | | | | | | | | |
256 Meeting Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Bank of America Corporation(5) | | | 133,840 | (6) | | | 5.25 | % |
100 North Tryon Street | | | | | | | | |
Charlotte, NC 28255 | | | | | | | | |
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N.B. Holdings Corporation(5) | | | 133,840 | (7) | | | 5.25 | % |
100 North Tryon Street | | | | | | | | |
Charlotte, NC 28255 | | | | | | | | |
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NationsBank, N.A.(5) | | | 133,840 | (8) | | | 5.25 | % |
100 South Tryon Street | | | | | | | | |
Charlotte, NC 28255 | | | | | | | | |
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Name & Address of | | Amount & Nature of | | Percent of |
Beneficial Owner | | Beneficial Ownership | | Class |
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Hugh C. Lane, Jr.(1) | | | 449,664(2) | | | | 14.54 | % |
30 Church Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Charles G. Lane(1) | | | 183,068(3) | | | | 5.92 | % |
10 Gillon Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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The Bank of South Carolina | | | 198,159(4) | | | | 6.41 | % |
Employee Stock Ownership | | | | | | | | |
Plan and Trust (“the ESOP”) | | | | | | | | |
256 Meeting Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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(1) | | To the extent known to the Board of Directors, the estate of Hugh C. Lane, Beverly G. Lane, Beverly G. Jost, Kathleen L. Schenck, Charles G. Lane and his wife and children, individually andHugh C. Lane Jr., collectively, have beneficial ownership of 646,280627,327 shares or 25.34%20.29% of the outstanding shares. As more fully described in the following footnotes, Hugh C. Lane, Jr. and Charles G. Lane are the only ones of the above who have a beneficial ownership interest in more than five (5%)5% percent of the Company’s common stock.Common Stock. Hugh C. Lane, Jr. disclaims any beneficial interest in those shares in which other members of his family have a beneficial interest other than those shares his wife owns directly and those for which he serves as trustee or she serves as custodian (as more fully described in the following footnote). Charles G. Lane disclaims any beneficial interest in those shares in which other members of his family have a beneficial interest other than those shares his wife owns directly and those for which he serves as trustee or she serves as custodian (as more fully described in the following footnote). |
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(2) | | To the extent known to the Board of Directors, Hugh C. Lane, Jr., an Executive Officer and Director of the Bank and the Company, directly owns and has sole voting and investment power with respect to 169,609201,602 shares; as a trustee for 7one trust accountsaccount holding an aggregate of 65,55039,453 shares, he has sole voting and investment power with respect to such shares; as a co-trustee for |
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| | three trust accounts holding 13,34011,567 shares, he has joint voting and investment power with respect to such shares; as a trustee for the Mills Bee Lane Memorial Foundation, he has shared voting and investment power with respect to 6,5007,865 shares; as a personal representative for an estate holding 37,263 shares, he has sole voting and investment power with respect to such shares; he is indirectly beneficial owner of 8,16810,212 shares owned by his wife and an aggregate of 120,16238,588 shares held by his wife as custodian for three minor childrentheir son, 74,022 shares held by an unemancipated daughter, and 30,68829,092 shares owned by the Employee Stock Ownership Plan and Trust (“ESOP”)ESOP in which he has a vested interest. All of the shares beneficially owned by Hugh C. Lane, Jr. are currently owned. Hugh C. Lane, Jr. has had beneficial ownership of more than five percent (5%)5% of the Bank’s Common Stock since October 23, 1986, and more than ten percent (10%)10% since November 16, 1988. |
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(3) | | To the extent known to the Board of Directors, Charles G. Lane, a Director of the Bank and the Company, directly owns and has sole voting and investment power with respect to 69,55784,163 shares; as a co-trustee for 34 trust accounts holding 16,05314,079 shares, he has joint voting and investment powerspower with respect to such shares; as a trustee for the Mills Bee Lane Memorial Foundation, he has shared voting and investment power with respect to 6,5007,865 shares; he is indirectly beneficial owner of 2,6623,219 shares owned by his wife, and an aggregate of 49,02238,018 shares held by his wife as custodian for three minor children.two children, and 35,724 shares owned by an unemancipated daughter. All of the shares beneficially owned by Charles G. Lane are currently owned. Charles G. Lane has had beneficial ownership of more than five percent (5%)5% of the Bank’s Common Stock since July 16, 1999;1999. |
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(4) | | The Trustees of the ESOP, T. Dean Harton, a Director of the Bank and the Company, Sheryl G. Sharry, an Officerofficer of the Bank and Nathaniel I. Ball, III,Hugh C. Lane, Jr., an Executive Officer and Director of the Bank and the Company, disclaim beneficial ownership of the 193,794198,159 shares owned by the ESOP which have been allocated to members of the plan each of whom under the terms of the plan has the right to direct the Trustees as to the manner in which voting rights are to be exercised. |
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(5) | | To the extent known to the Board of Directors, Bank of America Corporation is the parent holding company of N.B. Holdings Corporation. N.B. Holdings Corporation is the parent holding company of Bank of America, N.A. The shares referred to in notes (7) and (8) are a duplication of the shares referred to in note (6). |
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(6) | | To the extent known to the Board of Directors, Bank of America Corporation has shared voting power for 63,660 shares and shared investment power for 133,840 shares. |
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(7) | | To the extent known to the Board of Directors, N.B. Holdings Corporation has shared voting power for 63,660 shares and shared investment power for 133,840 shares (including 70,180 shares held as trustee under the will of Mills B. Lane for the benefit of Hugh C. Lane). |
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(8) | | To the extent known to the Board of Directors, Bank of America, N.A., has sole voting power for 58,820 shares, shared voting power for 4,840 shares and shared investment power for 133,840 shares (including 70,180 shares held as trustee under the will of Mills B. Lane for the benefit of Hugh C. Lane). |
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Beneficial Ownership of Common Stock of the Company The table below sets forth the number of shares of Common Stock (the only class of outstanding equity securities of the Company) known by the Company to be beneficially owned by each Nominee for election as Director and by the
Executive Officers and Directors of the Company as a group as of February
21, 2003.24, 2006. Except as otherwise indicated in the footnotes to the table, the persons named possess sole voting and investment power with respect to the shares shown opposite their names. As of February
21, 2003,24, 2006, no
Executive Officer, Director or Nominee beneficially owned more than
ten percent (10%)10% of the outstanding shares of the Company other than Hugh C. Lane, Jr. As of February
21, 2003,24, 2006, the
Executive Officers, Directors and
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Nominees beneficially owned 810,351877,484 shares, representing approximately 31.77%28.38% of the outstanding shares.
As of February
21, 2003,24, 2006, the beneficial ownership of Common Stock of the Company by all current Directors and each Nominee for Director was as set forth in the following table:
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Name and Address of | | Amount and Nature of | | Percent of |
Beneficial Owner | | Beneficial Ownership | | Class |
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Nathaniel I. Ball, III | | | 43,267 | (1) | | | 1.70 | % |
1302 Cove Avenue | | | | | | | | |
Sullivan’s Island, SC 29482 | | | | | | | | |
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Dr. Linda J. Bradley, CPA | | | 100 | | | | .004 | % |
3401 Waterway Blvd | | | | | | | | |
Isle of Palms, SC 29451 | | | | | | | | |
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William T. Cooper | | | 5,324 | (1) | | | .21 | % |
21 Jamestown Road | | | | | | | | |
Charleston, SC 29407 | | | | | | | | |
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C. Ronald Coward | | | 36,256 | (1) | | | 1.42 | % |
537 Planters Loop | | | | | | | | |
Mt. Pleasant, SC 29464 | | | | | | | | |
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Leonard C. Fulghum | | | 37,975 | (1) | | | 1.49 | % |
311 Middle Street | | | | | | | | |
Mt. Pleasant, SC 29464 | | | | | | | | |
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T. Dean Harton | | | 8,704 | (1) | | | .34 | % |
4620 Lazy Creek Lane | | | | | | | | |
Wadmalaw Island, SC 29487 | | | | | | | | |
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William L. Hiott, Jr. | | | 88,781 | (1) | | | 3.48 | % |
1831 Capri Drive | | | | | | | | |
Charleston, SC 29407 | | | | | | | | |
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Katherine M. Huger | | | 5,324 | (1) | | | .21 | % |
72 Murray Boulevard | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Charles G. Lane | | | 143,794 | (1) | | | 5.64 | % |
10 Gillon Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Hugh C. Lane, Jr. | | | 414,017 | (1) | | | 16.23 | % |
30 Church Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Louise J. Maybank | | | 20,661 | (1) | | | .81 | % |
8 Meeting Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Name & Address of | | Amount & Nature of | | Percent of |
Beneficial Owner | | Beneficial Ownership | | Class |
Dr. Linda J. Bradley, CPA | | | 121 | | | | .004 | % |
3401 Waterway Blvd. | | | | | | | | |
Isle of Palms, SC 29451 | | | | | | | | |
| | | | | | | | |
C. Ronald Coward | | | 43,869 | (1) | | | 1.42 | % |
537 Planters Loop | | | | | | | | |
Mt. Pleasant, SC 29464 | | | | | | | | |
| | | | | | | | |
Graham M. Eubank, Jr. | | | 440 | | | | .01 | % |
546 Blackstrap Retreat | | | | | | | | |
Mt. Pleasant, SC 29464 | | | | | | | | |
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T. Dean Harton | | | 10,529 | (1) | | | .34 | % |
4620 Lazy Creek Lane | | | | | | | | |
Wadmalaw Island, SC 29487 | | | | | | | | |
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Fleetwood S. Hassell | | | 41,223 | (1) | | | 1.33 | % |
30 New Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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William L. Hiott, Jr. | | | 108,585 | (1) | | | 3.51 | % |
1831 Capri Drive | | | | | | | | |
Charleston, SC 29407 | | | | | | | | |
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Katherine M. Huger | | | 6,441 | (1) | | | .21 | % |
72 Murray Boulevard | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Richard W. Hutson, Jr. | | | 220 | | | | .007 | % |
124 Tradd Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Charles G. Lane | | | 183,068 | (1) | | | 5.92 | % |
10 Gillon Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Hugh C. Lane, Jr. | | | 449,664 | (1) | | | 14.54 | % |
30 Church Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Name and Address of | | Amount and Nature of | | Percent of |
Beneficial Owner | | Beneficial Ownership | | Class |
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Thomas W. Myers | | | 2,000 | | | | 08 | % |
500 Central Avenue | | | | | | | | |
Summerville, SC 29483 | | | | | | | | |
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Alan I. Nussbaum, MD | | | 300 | | | | .01 | % |
37 Rebellion Road | | | | | | | | |
Charleston, SC 29407 | | | | | | | | |
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Edmund Rhett, Jr., MD | | | 1,000 | (1) | | | .04 | % |
45 South Battery | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Thomas C. Stevenson, III | | | 484 | | | | .02 | % |
Charleston, SC 29401 | | | | | | | | |
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Steve D. Swanson | | | 1,000 | | | | .04 | % |
615 Pitt Street | | | | | | | | |
Mt. Pleasant, SC 29464 | | | | | | | | |
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John M. Tupper | | | 1,364 | | | | .05 | % |
Summerville, SC 29483 | | | | | | | | |
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Name & Address of | | Amount & Nature of | | Percent of |
Beneficial Owner | | Beneficial Ownership | | Class |
Louise J. Maybank | | 26,110 | (1) | | | | .85 | % |
8 Meeting Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Alan I. Nussbaum, MD | | 363 | | | | | .01 | % |
37 Rebellion Road | | | | | | | | |
Charleston, SC 29407 | | | | | | | | |
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Edmund Rhett, Jr., MD | | 1,910 | (1) | | | | .06 | % |
45 South Battery | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Malcolm M. Rhodes, MD | | 1,430 | | | | | .05 | % |
7 Guerard Road | | | | | | | | |
Charleston, SC 29407 | | | | | | | | |
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Thomas C. Stevenson, III | | 22,595 | | | | | .73 | % |
173 Tradd Street | | | | | | | | |
Charleston, SC 29401 | | | | | | | | |
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Steve D. Swanson | | 1,210 | | | | | .04 | % |
615 Pitt Street | | | | | | | | |
Mt. Pleasant, SC 29464 | | | | | | | | |
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John M. Tupper | | 1,650 | | | | | .05 | % |
113 Linwood Lane | | | | | | | | |
Summerville, SC 29483 | | | | | | | | |
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(1) | | To the extent known to the Board of Directors, each of the following Directors and Nominees for election as Directors (each of whom directly owns and has sole voting and investment power of all shares beneficially owned by him or her except as set forth in this footnote) indirectly owns the following number of shares: Nathaniel I. Ball, III — 90 shares owned by his wife; 20,327 shares owned by the ESOP, in which he has a vested interest; William T. Cooper —C. Ronald Coward - an aggregate of 4,840 shares held by a pension plan; C. Ronald Coward — an aggregate of 1,1001,331 shares owned by a company of which he is presidentchairman and director; Leonard C. Fulghum —T. Dean Harton - an aggregate of 3,555 shares owned by his wife; T. Dean Harton — an aggregate of 2,1342,580 shares owned by his wife and held by his wife as custodian for his step-son; Fleetwood S. Hassell - an aggregate of 8,474 shares owned by his wife, held by her as custodian for their son, held by him as trustee for the revocable trust of his father, held by him as a co-trustee with Charles G. Lane for the children of Hugh C. Lane, Jr. and 17,851 shares owned by the ESOP, in which he has a vested interest; William L. Hiott, Jr. —- an aggregate of 9,85511,923 shares directly owned by his wife and by his two children and 20,45016,838 shares owned by the ESOP, in which he has a vested interest; Katherine M. Huger — 484- 585 shares owned by her husband; Charles G. Lane —- an aggregate of 74,23798,905 shares owned by his wife, held by her as custodian for eachtwo of their three children, held by an unemancipated daughter, held by him as a co-trustee with Hugh C. Lane, Jr., under two trusts for their sisters’ children, held by him as a co-trustee with Fleetwood S. Hassell for the children of Hugh C. Lane, Jr., held by him as co-trustee under the Irrevocable Trust of Hugh C. Lane and held by him as a trustee of Mills Bee Lane Memorial Foundation; Hugh C. Lane, Jr. —- an aggregate of 213,370247,612 shares owned by his wife, held by his wife as custodian for each of their three children,son, held by an unemancipated daughter, held by him as a co-trustee with Charles G. Lane under two trusts for their sisters’ children, andheld by him as a co-trustee under the Hugh C. Lane Irrevocable Trust for the benefit of three of the grandchildren of Hugh C. Lane, held by him as a co-trustee for his and his brother’s and sisters’ children (as more fully described in the footnote to the preceding table),Hugh C. Lane Irrevocable Trust, held by him as a trustee of Mills Bee Lane Memorial Foundation, and 30,68829,092 shares owned by the ESOP in which he has a vested interest; Louise J. Maybank — 8,561- 11,469 shares held by her as a co-trustee for a charitable trust; and Edmund Rhett, Jr. —, MD 400- 605 shares owned by his wife.wife; and Thomas C. Stevenson, III - 19,020 shares held by him as co-trustee under a Marital Trust, and 2,990 shares held by him as co-trustee of a QTip Trust. All such indirectly owned shares are included in the totals of the number of shares set forth in the above table and beneficially owned by the Directors and Nominees. |
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As a group, all Directors and Executive Officers (including Hugh C. Lane, Jr., President and Chief Executive Officer;
Nathaniel I. Ball, III,Fleetwood S. Hassell Executive Vice
President and Secretary;President; and William L. Hiott, Jr., Executive Vice President and Treasurer) are seventeen
(17) in number and beneficially own an aggregate of
810,351877,484 shares, representing
31.77%28.38% of the issued and outstanding Common Stock of the Company. All of these shares beneficially owned by the Directors, Nominees and Executive Officers are currently owned.
Independence of Directors
With the exception of Hugh C. Lane, Jr., Fleetwood S. Hassell, and William L. Hiott, Jr., all Executive Officers of the Company, and Charles G. Lane, brother of Hugh C. Lane, Jr., all of the Directors proposed to be elected are independent and they constitute a majority of the Board of Directors.
Election of Directors Seventeen (17)
One director, Nathaniel I. Ball, III, Executive Vice President and Secretary, retired July 31, 2005. Sixteen Directors, constituting the
entirecurrent Board of Directors, will be elected at the Annual Meeting, each to hold office for one year and until a successor shall have been duly elected or appointed and shall have qualified. In
addition the Nominating Committee of the Company Board of Directors recommended at its’ December 15, 2005 meeting to approve Fleetwood S. Hassell, Executive Vice President, for nomination to the Board of Directors. This recommendation was approved by the Board of Directors and will be voted on at the annual meeting. In the absence of instructions to the contrary, shares of Common
stockStock represented by properly executed proxies will be voted for the seventeen
(17) Nominees listed on pages 6 and 7, all of whom are recommended by
managementthe Nominating Committee and the Board of Directors of the Company and have consented to be named and to serve if elected.
The Company does not presently know of anything that would preclude any Nominee from serving; however, should any Nominee for any reason become unable or unwilling to serve as a Director, the number of Directors to be elected will be reduced accordingly.
The name of each Nominee designated by the Board of Directors of the Company for election as a Director of the Company and certain information provided by such Nominee to the Company isare set forth in the table below. Eleven (11)Eight of the current nomineesNominees served as initial directorsDirectors of the Bank from October 22, 1986, when the Bank’s charter was issued until the first annual meetingAnnual Meeting of Shareholders on April 14, 1987, and were elected to serve a one-yearone year term at such annual meeting.Annual Meeting. John M. Tupper and Thomas W. Myers werewas first elected as Directorsa Director of the Bank during 1993. All of the above nine Directors of the Bank were elected to serve one-year terms at subsequent Annual Meetings. All of the above nine Directors of the Bank were elected Directors of the Company upon its organization in 1995. Alan I. Nussbaum, MD and Edmund Rhett, Jr., MD, were first elected as Directors of the Company during 1999. Linda J. Bradley and Steve D. Swanson were first elected as Directors of the Company during 2002. They were all re-elected as Directors of the Company to serve one year terms at subsequent Annual Meetings. Graham M. Eubank, Jr., Richard W. Hutson, Jr. and Malcolm M. Rhodes, MD were elected pursuant to the By-Laws of the Company on December 16, 2004, and were elected to serve at the subsequent annual meetings.meeting. All of the above current Nominees served as Directors of the Company from April 9, 2002,12, 2005, the date of the last Annual Meeting of shareholders. Linda J. Bradley and Steve D. Swanson were elected as Directors of the Company during 2002.
5
| | | | | | | | | | | | | | | | |
| | | | | | Positions and | | | | | | |
| | | | | | Offices Held | | | | | | Business Experience |
| | | | | | With | | Family | | 1987-20031987-2005 and |
Name | | Age | | Corporation | | Relationship | | Other Directorships |
Dr. Linda J. Bradley, CPA | |
| 55 | |
| Director | | None | | Director, MS in Accountancy Program – College of Charleston (education) 1998-2006; Chairman, Dept. of Accountancy 1999-2004; Associate Professor 1999-2006; Assistant Professor 1993-1999 |
Nathaniel I. Ball, III | | | | | | | | | | |
C. Ronald Coward | | | 70 | | | Director | | None | | Chairman, Coward Hund Construction Company, Inc. (construction) 2004-2006; President, 1976-2004 |
| | | | | | | | | | |
Graham M. Eubank, Jr. | | | 38 | | | Director | | None | | President, Palmetto Ford, Inc. (retail automobile) 2000-2006; Vice President 1996-2000 |
| | | | | | | | | | |
T. Dean Harton | | | 60 | | | Director | | None | | Vice-Chairman, Piedmont Hawthorne Holdings, Inc. (aviation) 2004-2006; President, Piedmont Hawthorne Holdings, Inc. 1999-2004; President, Hawthorne Corporation (aviation) 1986-1999 |
| | | | | | | | | | |
Fleetwood S. Hassell | | | 46 | | | Executive Vice President | | Brother-in-law Charles G. Lane, Director | | The Bank of South Carolina (banking) 1986-2006 |
| | | | | | | | | | |
William L. Hiott, Jr. | | | 61 | | | Executive Vice President, Treasurer, Director | | None | | The Bank of South Carolina (banking) 1986-2006 |
| | | | | | Vice President, | | | | |
Katherine M. Huger | | 1986-2003 | 64 | | | Director | | None | | Emerita Professor of Economics, Charleston Southern University; Assistant Professor of Economics, Charleston Southern University (education) 1972-2004 |
| | | | | | | | | | |
Richard W. Hutson, Jr. | | | 48 | | | Secretary Director | | None | | Manager, William M. Means Company Insurance, LLC (insurance) 1998-2006; Sole Proprietor, William M. Means Insurance Co. (insurance) 1992-1998 |
| | | | | | | | | | |
Charles G. Lane | | | 51 | | | Director | | Brother of Hugh C. Lane, Jr.; Brother-in-law Fleetwood S. Hassell, Executive Vice President | | Managing Member – Holcombe, Fair & LLC (real estate) 1996-2006; Associate – Holcombe & Fair Realtors 1987-1996 |
| | | | | | | | | | |
Hugh C. Lane, Jr. | | | 58 | | | President, Chief Exec. Officer, Director | | Brother of Charles G. Lane | | The Bank of South Carolina (banking) 1986-2006 |
6
| | | | | | | | | | |
| | | | | | DirectorPositions and | | | | |
| | | | | | | |
Dr. Linda J. Bradley, CPAOffices Held | | | 52 | Business Experience |
| | | | | | With | | Family | | 1987-2005 and |
Name | | | Age | | | Corporation | | Relationship | | Other Directorships |
Louise J. Maybank | | | 66 | | | Director | | None | | College of Charleston, Department ofActive in community programs |
| | | | | | | | | | |
Alan I. Nussbaum, MD | | | Accounting (education) 1993-2003 |
William T. Cooper | | | 7354 | | | Director | | None | | President, Southeastern Galleries, Inc.Physician in private practice with Rheumatology Associates, PA |
| | | | | | | | | | |
Edmund Rhett, Jr., MD | | | (retail furniture and decorating)58 | | | Director | | None | | Physician in private obstetrical practice with Low Country Obstetrics & Gynecology, PA |
| | | | | | | | | | |
Malcolm M. Rhodes, MD | | | 1983-2003 |
C. Ronald Coward | | | 6747 | | | Director | | None | | President - Coward-Hund ConstructionPhysician in private practice with Parkwood Pediatric Group |
| | | | | | | | | | |
Thomas C. Stevenson, III | | | Company, Inc. (construction) 1976-2003 |
6
55 | | | Director | | None | | President, Fabtech, Inc. (metal fabrication) 1991-2006; Private Investor 1990-91; Chairman of the Board – Stevenson Hagerty, Inc. (diversified holding company) 1984-1990 |
| | | | | | | | | | |
Leonard C. FulghumSteve D. Swanson | | | 7338 | | | Director | | None | | Chairman - Ferguson Fulghum,President, Automated Trading Desk, Inc. (automated limit order stock trading) 1989-2006 |
| | | | | | | | | | |
John M. Tupper | | | (painting contractor) 1972-2003 |
T. Dean Harton | | | 5764 | | | Director | | None | | President, – Piedmont Hawthorne |
| | | | | | | | | | | | | | Holdings, Inc. (aviation) 1999-2003; |
| | | | | | | | | | | | | | President - Hawthorne Corporation |
| | | | | | | | | | | | | | (aviation) 1986-1999 |
William L. Hiott, Jr. | | | 58 | | | Executive | | None | | The Bank of South Carolina |
| | | | | | Vice President, | | | | | | (banking) 1986-2003 |
| | | | | | Treasurer, | | | | | | | | |
| | | | | | Director | | | | | | | | |
Katherine M. Huger | | | 61 | | | Director | | None | | Assistant Professor of Economics – |
| | | | | | | | | | Charleston Southern University |
| | | | | | | | | | (education) 1972-2003 |
Charles G. Lane | | | 48 | | | Director | | Brother of | | Member - Holcombe, Fair & Lane, LLC |
| | | | | | | | | | Hugh C | | (real estate) 1996-2003; |
| | | | | | | | | | Lane, Jr.; | | Associate-Holcombe & Fair Realtors |
| | | | | | | | | | brother-in-law | | 1987-1996 |
| | | | | | | | | | of Fleetwood S. | | | | |
| | | | | | | | | | Hassell, Senior | | | | |
| | | | | | | | | | Vice President | | | | |
Hugh C. Lane, Jr. | | | 55 | | | President, | | Brother of | | The Bank of South Carolina (banking) |
| | | | | | Chief Exec- | | Charles G | | 1986-2003 |
| | | | | | utive Officer, | | Lane | | | | |
| | | | | | Director | | | | | | | | |
Louise J. Maybank | | | 63 | | | Director | | None | | Active in community programs |
Thomas W. Myers | | | 68 | | | Director | | None | | President - Myers & Associates (estate and business |
| | | | | | | | | | | | | | insurance planning) 1963-2003 |
Alan I. Nussbaum, MD | | | 51 | | | Director | | None | | Physician in private practice with |
| | | | | | | | | | | | | | Rheumatology Associates, PA |
Edmund Rhett, Jr., MD | | | 55 | | | Director | | None | | Physician in private obstetrical practice |
| | | | | | | | | | | | | | with Low Country Obstetrics and |
| | | | | | | | | | | | | | Gynecology, PA |
Thomas C. Stevenson, III | | | 51 | | | Director | | None | | President - Fabtech, Inc. (metal |
| | | | | | | | | | | | | | fabrication) 1991-2003; Private Investor |
| | | | | | | | | | | | | | 1990-91; Chairman of the Board - |
| | | | | | | | | | | | | | Stevenson Hagerty, Inc. (diversified |
| | | | | | | | | | | | | | holding company) 1984-1990 |
Steve D. Swanson | | | 35 | | | Director | | | | None | | President - Automated Trading Desk, Inc. |
| | | | | | | | | | | | | | (automated limit order stock trading) |
| | | | | | | | | | | | | | 1989-2003 |
John M. Tupper | | | 61 | | | Director | | None | | President - Tupperway Tire and Service, |
| | | | | | | | | | | | | | Inc. (retail tires and service) 1980-20031980-2006 |
7
Committees of the Board of Directors Hugh C. Lane, Jr. presently serves as President of the Board of Directors. The Board has three (3)four committees: the Executive/Long-Range Planning Committee, resulting from the merger of the Executive Committee and the Long-Range Planning Committee in 2004, the Compensation Committee, the Nominating Committee, and the Audit and Compliance Committee. The Board does not have aCompensation Committee and the Nominating Committee; however,Committee were established at the regular monthly meeting of the Board as a whole performs the functions that such a committee would normally perform and will consider nominations by Shareholders. of Directors on December 18, 2003.
The
Board does not have a Compensation Committee; however, the Executive Committee performs those functions. The ExecutiveExecutive/Long-Range Planning Committee consists of the President of the Company and six (6)seven designated Directors. The President of the Company chairs the Committee. At present, the fixed membership of the Committee consists of Hugh C. Lane, Jr., Nathaniel I. Ball, III, C. Ronald Coward, T. Dean Harton, William L. Hiott, Jr., Katherine M. Huger andCharles G. Lane, Hugh C. Lane, Jr., Alan I. Nussbaum, MD.MD, and Steve D. Swanson. During 2002,2005, this Committee held two (2)five meetings. TheIn addition to long-range and strategic planning, the principal function of the Executive Committee is to exercise all authority of the Board of Directors in the management and affairs of the Company and the Bank. In addition, the Executive Committee acts on behalf of the entire Board of the Company between the regular Board Meetings.
The Long Range Planning Committee consists of Hugh C. Lane, Jr., the President of the Company, as Chairman, and Nathaniel I. Ball, III, William T. Cooper, T. Dean Harton, William L. Hiott, Jr., Charles G. Lane, Louise J. Maybank and Thomas W. Myers.
The Audit and Compliance Committee reviews and examines detailed reports of the internal auditor for the Bank; meets periodically with the internal auditor; reviews reports of regulatory bodies having jurisdiction over the Company and the Bank; evaluates internal accounting
7
controls; recommends
and approves the engagement and continuation of engagement of independent auditors, the scope of their work and the fees for their services; and meets with and considers recommendations of the independent auditors for the Company and the Bank.
The Audit and Compliance Committee consists of Linda J. Bradley, C. Ronald Coward, Graham M. Eubank, Jr., Katherine M. Huger, Alan I. Nussbaum, MD, Malcolm M. Rhodes, MD and John M. Tupper, all independent Directors of the Company. The Audit and Compliance Committee met six times during 2005.
The Compensation Committee consists of T. Dean Harton, Thomas C. Stevenson, III and Steve D. Swanson, all independent Directors of the Company. The function of the Compensation Committee is to recommend the compensation of Executive Officers to the Directors of the Company. The Compensation Committee met once during 2005.
The Nominating Committee consists of C. Ronald Coward, Edmund Rhett, Jr., MD and John M. Tupper, all independent Directors of the Company. The function of the Nominating Committee is to recommend a slate of proposed Directors to the Board of Directors of the Company. The Nominating Committee has adopted a written Charter. The Charter was attached as Exhibit A to the 2005 Proxy Statement. The Nominating Committee met two times during 2005.
Report of the Audit and Compliance Committee of the Board of Directors Membership and Role of the Audit and Compliance Committee The Audit and Compliance Committee
(Audit Committee)(the “Audit Committee”) presently consists of seven
(7) members of the Board of Directors. During
2002,2005, the Audit Committee held
five (5)six meetings. The Audit Committee operates under a written charter adopted by the Board of Directors.
The charter was attached as Exhibit A to the 2004 Proxy Statement. Members are considered to be independent of the Company under applicable rules and
regulations.regulations, including Rule 4200(a) (15) of the National Association of Securities Dealers.
Review of the Company’s Audited Financial Statements for the Fiscal Year Ended December 31, 20022005
The Audit Committee has reviewed and discussed with management the audited financial statements of the Company for the fiscal year ended December 31,
2002.2005. The Audit Committee has discussed with KPMG LLP, the Company’s independent public accountants, the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees).
The Audit Committee has also received the written disclosures and the letter from KPMG LLP required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and the Audit Committee has discussed the independence of KPMG LLP with that firm. Based on the Audit Committee’s review and discussions mentioned above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in the
8
Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 20022005 for filing with the Securities and Exchange Commission.
Submitted by:
| | | | |
Thomas W. Myers, | | Submitted by: | | |
| | | | |
| | Alan I. Nussbaum, MD, Chairman | | Edmund Rhett, Jr., MDKatherine M. Huger |
| | Dr. Linda J. Bradley, CPA | | Thomas C. Stevenson, IIIMalcolm M. Rhodes, MD |
Leonard | | C. FulghumRonald Coward | | John M. Tupper |
T. Dean Harton | | Graham M. Eubank, Jr. | | |
8
Nominations, other than those made by
or on behalf of the
existing managementNominating Committee of the Company, shall be made in writing and shall be delivered or mailed to the President of the Company not less than
seven (7)14 days nor more than
fifty (50)50 days prior to any meeting of Shareholders calling for election of Directors; provided however, that if less than
twenty-one (21) days’21 days notice of the meeting is given to Shareholders, such nomination shall be mailed or delivered to the President of the Company not later than the close of business on the
seventh (7th)7th day following the day on which the Notice of Meeting was mailed. Nominations not made according to these procedures will be disregarded.
Nominating Committee Policy for Shareholder Nominations
The Nominating Committee has a policy with regard to consideration of any Director candidates recommended by security holders and that policy is to consider any and all such recommendations. The Nominating Committee has adopted specific minimum qualifications which the Nominating Committee believes must be met by a Nominating Committee recommended Nominee for a position on the Company’s Board of Directors, and those are that such Nominee must be generally recognized as successful in such Nominee’s business or community efforts, have a generally recognized reputation for honesty and integrity, have demonstrated such Nominee’s commitment to the community in which the Company and its subsidiary Bank operates and have demonstrated in meetings with the Nominating Committee such Nominee’s commitment to the best interests of the Company, its subsidiary Bank, and its and their officers, directors, employees and shareholders. The Nominating Committee’s process for identifying and evaluating Nominees for Director of the Company and its subsidiary Bank, including Nominees recommended by security holders, is to investigate whether or not such Nominee meets the specific minimum qualifications adopted as a policy by the Nominating Committee through contacts the members of the Nominating Committee have in their community. There are no differences in the manner in which the Nominating Committee evaluates Nominees for Director based on whether the Nominee is recommended by a security holder.
The Company does not utilize or pay a fee to any third party to evaluate Nominees for Director.
The Board of Directors of the Company held six
(6) meetings (including all regularly scheduled and special meetings) during the year ended December 31,
2002.2005. No Director during such year attended fewer than
seventy-five percent (75%)75% of the aggregate of (i) the total number of meetings of the Board of Directors and (ii) the total number of meetings held by all committees of the Board of Directors on which he or she served.
Compensation of Executive Officers and Directors The following table sets forth all remuneration (including remuneration under any contract, authorization or arrangement, whether or not set forth in a formal document) paid during the year ended December 31,
2002,2005, by the Bank to the
three (3)four Executive Officers of the Company and the Bank whose cash remuneration from the Bank exceeded
one hundred thousand and no/100 ($100,000.00)$100,000.00 dollars for their services in all capacities. Such
Executive Officers receive no compensation from the Company as
Executive Officers or as Directors or in any other capacity.
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Annual Compensation | | Long Term Compensation Awards |
| | | | | |
| |
|
Name and | | Year | | Salary | | | | | | Other Annual | | | | | | | | |
Principal |
| |
| | | | | | | Compen- | | | | | | | | |
Position | | Compensation(3) | | Bonus | | sation(1) | | Options/SARS(2) | | All Other |
| |
| |
| |
| |
| |
|
Hugh C. Lane, Jr. | | | 2002 | | | $ | 153,792.78 | | | | — | | | $ | 6,069.84 | | | | 0 | | | $ | 7,515.90 | |
CEO & President | | | 2001 | | | | 161,518.10 | | | | — | | | | 5,872.24 | | | | 17,500 | | | | 15,479.09 | |
| | | 2000 | | | | 153,601.37 | | | | — | | | | 5,550.00 | | | | 0 | | | | 21,451.37 | |
|
Nathaniel I. Ball, III | | | 2002 | | | $ | 147,128.36 | | | | — | | | $ | 4,813.59 | | | | 0 | | | $ | 7,190.20 | |
Executive Vice President | | | 2001 | | | | 147,101.45 | | | | — | | | | 4,634.24 | | | | 13,750 | | | | 14,097.48 | |
& Secretary | | | 2000 | | | | 137,101.73 | | | | — | | | | 4,425.69 | | | | 0 | | | | 19,147.05 | |
|
William L. Hiott, Jr. | | | 2002 | | | $ | 147,156.03 | | | | — | | | $ | 6,037.92 | | | | 0 | | | $ | 7,191.55 | |
Executive Vice President | | | 2001 | | | | 147,101.45 | | | | — | | | | 5,827.16 | | | | 13,750 | | | | 14,097.48 | |
& Treasurer | | | 2000 | | | | 136,101.73 | | | | — | | | | 5,527.92 | | | | 0 | | | | 19,147.05 | |
9
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Annual Compensation | | Long Term Compensation Awards | |
Name and | | | | | | | | | | | | | Other | | | | | | All Other | |
Principal | | | | | | | | | | | | | Annual | | | | | | Compen- |
Position | | Year | | | Salary | | | Bonus | | Compensation(1) | | Options/SARS(2) | | sation(3) | |
Hugh C. Lane, Jr. | | | 2005 | | | $ | 166,652.67 | | | | — | | | $ | 6,001.86 | | | | 0 | | | $ | 18,687.27 | |
CEO & President | | | 2004 | | | | 159,830.69 | | | | — | | | | 6,123.74 | | | | 0 | | | | 11,351.58 | |
| | | 2003 | | | | 153,500.00 | | | | — | | | | 5,300.64 | | | | 0 | | | | 9,528.83 | |
|
Nathaniel I. Ball, III | | | 2005 | | | $ | 159,999.84 | | | | — | | | $ | 5,902.96 | | | | 0 | | | $ | 17,567.20 | |
Executive Vice President & | | | 2004 | | | | 152,851.45 | | | | — | | | | 4,302.24 | | | | 0 | | | | 10,855.90 | |
Secretary (retired) | | | 2003 | | | | 147,000.00 | | | | — | | | | 4,397.40 | | | | 0 | | | | 9,125.61 | |
|
Fleetwood S. Hassell | | | 2005 | | | $ | 104,876.35 | | | | — | | | $ | 6,279.94 | | | | 0 | | | $ | 11,857.11 | |
Executive Vice President(4) | | | | | | | | | | | | | | | | | | | | | | | | |
|
William L. Hiott, Jr. | | | 2005 | | | $ | 158,523.47 | | | | — | | | $ | 5,369.66 | | | | 0 | | | $ | 17,589.31 | |
Executive Vice President | | | 2004 | | | | 152,851.45 | | | | — | | | | 4,302.24 | | | | 0 | | | | 10,855.90 | |
| | | 2003 | | | | 147,000.00 | | | | — | | | | 4,397.40 | | | | 0 | | | | 9,125.61 | |
| | |
(1) | | Includes same life, disability, dental and health insurance benefits as all other employees of the Bank who work at least thirty (30)30 hours a week. |
|
(2) | | Amounts shown represent the number of shares underlying incentive stock options granted, each year.as adjusted for a 10% stock dividend effective on July 15, 2003 and a 10% stock distribution effective April 29, 2005. |
|
(3) | | Amounts contributed to the Bank’s ESOPESOP. |
|
(4) | | Fleetwood S. Hassell was promoted to Executive Vice President on August 16, 2005. |
Non-officer Directors of the Company received
one hundred and no/100 ($100.00) Dollars$100.00 for each meeting of the Board of Directors of the Company attended and non-officer Directors of the Bank received
two hundred fifty and no/100 ($250.00) dollars$250.00 for each meeting of the Board of Directors of the Bank attended and
one hundred and no/100 ($100.00) dollars$100.00 for each Company or Bank Board Committee meeting attended.
On November 2, 1989, the Bank adopted an Employee Stock Ownership Plan and Trust Agreement
(the “Plan”) to provide retirement benefits to eligible employees for long and faithful service.
An employee of the Bank is eligible to become a participant in the ESOP upon reaching
twenty-one (21)21 years of age and upon completion of
one thousand (1,000)1,000 hours of service in a plan year. No contributions by employees are permitted. The amount and time of contributions are at the sole discretion of the Board of Directors of the Bank. The contribution for all participants is based solely on each participant’s respective regular or base salary and wages paid by the Bank including commissions, bonuses and overtime, if any.
A participant becomes vested in the
PlanESOP upon completion of five
(5) years of
service.service, as defined in the Plan. There is no vesting prior to the completion of five
(5) years of service.
The Plan became effective as of January 1, 1989.
10
The Board of Directors of the Bank approved the contribution of
one hundred fifty thousand and no/100 ($150,000.00) dollars$300,000.00 to the ESOP for the fiscal year ended December 31,
2002.2005. The contribution was made during
2002.2005. T. Dean Harton, Sheryl G. Sharry and
Nathaniel I. Ball, III,Hugh C. Lane, Jr., currently serve as Plan Administrators and as Trustees for the Plan. The Plan currently owns
193,794198,159 shares or
7.60%6.41% of the Company’s Common Stock.
During the fiscal year ended December 31,
2002,2005, the Company had no plans or arrangements pursuant to which any
Executive Officer, Director or
principalPrincipal Shareholder received contingent remuneration or personal benefits other than the contingent remuneration and life, disability,
dental and health insurance benefits referred to in the footnotes to the preceding table.
On April 14, 1998, the
shareholdersShareholders of the Company approved an Incentive Stock Option Plan for the benefit of eligible
Officersofficers and employees of the
Bank. ABank and reserved a total
of one hundred eighty thousand (180,000) shares were reserved and on180,000 shares. On April 16, 1998, the Bank granted options to purchase Common Stock in the aggregate amount of
one hundred forty six thousand (146,000)146,000 shares to
fifty two (52)52 employees of the Bank (including
Officers,officers, such Directors as are also employees and other employees) pursuant to the Incentive Stock Option Plan. These grants included those to Hugh C. Lane, Jr., Nathaniel I. Ball, III and William L. Hiott, Jr., Executive Officers and
Directors.10
Directors and Fleetwood S. Hassell, Executive Vice President. As adjusted for a 10% stock dividend paid on May 15, 1998, 198,000 shares were being held in reserve.
As of July 10, 2000, all of the option holders, including the above Executive Officers, terminated their existing stock options. There was no obligation on the part of the Company or The Bank of South Carolina to issue additional or replacement options. No options were exercised in 1998, 1999 or 2000. On May 14, 2001, the Bank granted options to purchase Common Stock in the aggregate amount of one hundred fifty two thousand three hundred and fifty (152,350)152,350 shares to forty-five (45)45 employees of the Bank (including Officers,officers, such Directors as are also employees and other employees) pursuant to the Incentive Stock Option Plan. These grants included those to Hugh C. Lane, Jr., Nathaniel I. Ball, IIIIII., and William L. Hiott, Jr., Executive Officers and Directors.Directors and Fleetwood S. Hassell, Executive Vice President. Except for those options granted to Hugh C. Lane, Jr. as described below, all of the options were granted at an exercise price of thirteen and 50/100 dollars ($13.50). Options for three thousand one hundred (3,100) shares with an exercise price of thirteen and 50/100 dollars ($13.50) have expired.$13.50 per share. No additional options were granted during 2001. NoAdditional options were exercised during 2001 or 2002. Nine thousand five hundred (9,500) additional optionsfor 9,500 shares were granted at an exercise price of fourteen dollars and 92.5/100 ($14.925)$14.925 per share to four (4)4 employees of the Bank during 2002. Options for 13,500 shares with an exercise price of $14.20 per share were granted to 13 employees in 2003. Options for 4,000 shares with an exercise price of $14.00 were granted to one employee in 2004. No options were exercised during 2001, 2002, 2003 or 2004.
As adjusted for a 10% stock dividend effective on July 15, 2003, and a 10% stock distribution effective April 29, 2005, there are currently 239,580 shares being held in reserve. There are currently outstanding option to purchase 19,965 shares at an option price of $12.27 per share, 12,705 shares at an option price of $11.74 per share, 123,240 shares at an option price of $11.15 per share, 2,420 shares at an option price of $12.34 per share, resulting in total outstanding options to purchase 158,330 shares at the prices set forth above.
As adjusted for a 10% stock dividend effective on July 15, 2003, and a 10% stock distribution effective April 29, 2005, options for 19,964 shares with an exercise price of $11.15 per share, options for 3,025 shares with an exercise price of $11.74 per share, and options for 4,440 shares with an exercise price of $12.73 per share and options for 2,420 shares with an exercise price of $12.34 per share have expired. There were no options granted during 2005.
On October 2, 2005, Nathaniel I. Ball, III in accordance with the Incentive Stock Option Plan, exercised his options to purchase 16,637 share of common stock. The stock was purchased with the redemption of 10,300 shares of Bank of South Carolina Corporation common stock (personally held) with a price of $18.00 a share and the payment of $225 cash. The stock options were fully vested and fully exercisable.
11
Hugh C. Lane, Jr., President and Chief Executive Officer, was granted the option to purchase
seventeen thousand five hundred (17,500) shares of common stock of the Company pursuant to the Incentive Stock Option Plan at a price of fourteen dollars and 85/100 ($14.85). All of these options are exercisable on May 14, 2006 and expire if not exercised on that date. Nathaniel I. Ball, III, Executive Vice President and Secretary, and William L. Hiott, Jr., Executive Vice President and Treasurer, were each granted the option to purchase thirteen thousand seven hundred fifty (13,750)16,500 shares of Common Stock of the Company pursuant to the Incentive Stock Option Plan at a price of
thirteen dollar$14.85 per share. This option is exercisable on May 14, 2006 and
50/100 ($13.50).expires if not exercised on that date. William L. Hiott, Jr., Executive Vice President and Treasurer, was granted the option to purchase 13,750 shares of Common Stock of the Company and Fleetwood S. Hassell, Executive Vice President was granted the option to purchase 8,250 pursuant to the Incentive Stock Option Plan at a price of $13.50 per share. All of these options are exercisable in five
(5) twenty percent (20%)20% increments beginning on and for the year following May 14, 2006, with an additional
twenty percent (20%)20% to be exercisable on and for the year following each successive anniversary. The right to exercise each such
twenty percent (20%)20% of each option is cumulative and will not expire until the
tenth 10thanniversary of the date of the grant.
As adjusted for a 10% stock dividend effective on July 15, 2003 and a 10% stock distribution effective on April 29, 2005 Hugh C. Lane, Jr. now has the option to purchase 19,965 shares of Common Stock of the Company at a price of $12.27 per share, William L. Hiott, Jr. now has the option to purchase 16,637 shares at a price of $11.15 per share and Fleetwood S. Hassell now has the option to purchase 9,982 shares at a price of $11.15 per share.
Shown below is information with respect to unexercised options to purchase
Common Stock of the Company
Common Stock held by the
Namednamed Executive Officers at December 31,
2002. | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Number of Securities | | Value of Unexercised |
| | | | | | | | | | Underlying Unexercised | | In-the-Money |
| | | | | | | | | | Options/SARS | | Options/SARS |
| | # of Shares | | | | | | at Year-End(#) | | at Year-End($) |
| | Acquired | | Value | |
| |
|
| | On Exercise | | Realized($) | | Exercisable | | Unexercisable | | Exercisable | | Unexercisable |
| |
| |
| |
| |
| |
| |
|
Hugh C. Lane, Jr. | | | 0 | | | | 0 | | | | 0 | | | | 17,500 | | | | 0 | | | | 0 | |
Nathaniel I. Ball, III | | | 0 | | | | 0 | | | | 0 | | | | 13,750 | | | | 0 | | | | 0 | |
William L. Hiott, Jr. | | | 0 | | | | 0 | | | | 0 | | | | 13,750 | | | | 0 | | | | 0 | |
2005.
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Number of Securities | | Value of Unexercised |
| | | | | | | | | | Underlying Unexercised | | In-the-Money |
| | | | | | | | | | Options/SARS | | Options/SARS |
| | # of Shares | | | | | | at Year-End(#) | | at Year-End($) |
| | Acquired | | Value | | | | |
| | On Exercise | | Realized($) | | Exercisable | | Unexercisable | | Exercisable | | Unexercisable |
Hugh C. Lane, Jr. | | | 0 | | | | 0 | | | | 0 | | | | 19,965 | | | | 0 | | | $ | 380,333 | |
|
|
|
|
Nathaniel I. Ball, III | | | 16,637 | | | $ | 185,650 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
|
|
|
|
Fleetwood S Hassell | | | 0 | | | | 0 | | | | 0 | | | | 9,982 | | | | 0 | | | $ | 190,157 | |
|
|
|
|
William L. Hiott, Jr. | | | 0 | | | | 0 | | | | 0 | | | | 16,637 | | | | 0 | | | $ | 316,935 | |
In the event of a prospective reorganization, consolidation or sale of substantially all of the assets or any other form of corporate reorganization in which the Company would not be the surviving entity or in the event of the acquisition, directly or indirectly, of the beneficial ownership of
twenty-four percent (24%)24% of the Common Stock of the Company or the making, orally or in writing, of a tender offer for, or any request or invitation for tender of, or any advertisement making or inviting tenders of the Company stock by any person, all options in effect at that time would accelerate so that all options would become immediately exercisable and could be exercised within one year immediately following the date of acceleration but not thereafter.
In the case of termination of employment of an option holder other than involuntary termination without just cause, retirement, death or legal disability, the
Optionoption holder may exercise the option only with respect to those shares of
Company common stockCommon Stock as to which he or she has become vested. The option
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holder may exercise the option with respect to such shares no more than thirty (30)30 days after the date of termination of employment (but in any event prior to the expiration date).
In the event that the option holder’s employment is terminated without just cause, the option shall become fully vested and fully exercisable as of the date of his or her termination without regard to the five (5) year initial vesting and exercisability or to the twenty percent (20%)20% annual increments thereafter. The option holder may exercise the option following an involuntary termination without just cause until the expiration date of the option.
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In the event the option holder remains in the continuous employ of the Company or any subsidiary from the date of the grant until the option holder’s retirement, the option shall become fully vested and fully exercisable as of the date of his or her retirement without regard to the five
(5) year initial vesting and exercisability or to the
twenty percent (20%)20% annual increments thereafter. The option holder may exercise the option following his or her retirement until the expiration date.
In the event the option holder remains in the continuous employ of the Company or a subsidiary from the date of the grant until his or her death, the option shall become fully vested and fully exercisable as of the date of death without regard to the five
(5) year initial vesting and exercisability or the
twenty percent (20%)20% annual increments thereafter. The person or persons entitled to exercise the option following the option holder’s death may exercise the option until the expiration date.
In the event the option holder remains in the continuous employ of the Company or any subsidiary from the date of the grant until the date of his or her legal disability, the option shall become fully vested and fully exercisable as of the date of his or her termination of employment on account of his or her legal disability without regard to the five
(5) year initial vesting and exercisability or to the
twenty percent (20%)20% annual increments thereafter. The option holder may exercise the option following such termination of employment until the expiration date.
The Stock Incentive Plan provides for adjustment in the number of shares of
common stockCommon Stock authorized under the Plan or granted to an optionee to protect against dilution in the event of changes in the Company’s capitalization, including stock splits and dividends.
Transactions and Relations with Directors, Executive Officers, and their Associates and Affiliates of Directors The Company does not have any existing continuing contractual relationships with any Director, Nominee for election as Director or
principalExecutive Officer of the Company or the Bank, or any Shareholder owning, directly or indirectly, more than
five percent (5%)5% of the shares of Common Stock of the Company, or any associate of the foregoing persons. Directors,
PrincipalExecutive Officers,
nomineesNominees for election as Directors, and members of the immediate family of any of the foregoing have had in the past, have at present, and will have in the future, customer relationships with the Bank. Such transactions have been and will continue to be made in the ordinary course of business, made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, and such transactions did not and will not involve more than the normal risk of collectability or present other unfavorable features.
Nathaniel I. Ball, III and Hugh C. Lane, Jr. each
Fleetwood S. Hassell failed to file one
(1) Statement of Beneficial Interest on Form 4 in a timely
manner and C. Ronald Coward failed to file one (1) Statement of Beneficial Interest on Form 4 in a timely manner.
C. Ronald Coward filed one (1) erroneous Statement of Beneficial Interest on Form 4 and failed to file two (2) Statements of Beneficial Interest on Form 5 in a timely manner.12
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS On November 17, 2005, the appointment of KPMG, LLP has served as independent auditor was terminated effective upon the Bank’s independent certified public accountantscompletion of the audit of the Company’s financial statements as of and for the fiscal year ending December 31, 1994,2005 and as independent certified publicthe issuance of KPMG LLP’s report thereon. The decision to change accountants forto Elliott Davis, LLC was approved by the Company and its Bank subsidiary foraudit committee of the fiscal years ending December 31, 1995 through 2002.board of directors. At the 20032006 Annual Shareholders’ Meeting the following resolution will be subject to ratification by a simple majority vote of shares represented at the meeting:
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| RESOLVED, that the selection of KPMG LLP, as the independent certified public accountants of Bank of South Carolina Corporation (the “Company”) and its sole subsidiary, The Bank of South Carolina (the “Bank”), for the fiscal year ending December 31, 2003, is hereby ratified. | |
RESOLVED, that the selection of Elliott Davis, LLC as the independent certified public accountants of Bank of South Carolina Corporation (the “Company”) and its sole subsidiary, The Bank of South Carolina (the “Bank”), for the fiscal year ending December 31, 2006, is hereby ratified.
If ratification is not achieved, the selection of an independent certified public accountant will be reconsidered and made by the Board of Directors. Even if selection is ratified, the Board of Directors reserves the right to, and in its discretion may, direct the appointment of any other independent certified public accounting firm at any time if the Board decides that such a change would be in the best interests of the Company and its
shareholders.Shareholders.
The services provided by KPMG LLP include the examination and reporting of the financial status of the Company and the Bank. These services have been furnished at customary rates and terms. There are no existing direct or indirect agreements or understandings that fix a limit on current or future fees for these audit services.
KPMG LLP assisted in the preparation of the Company’s and Bank’s tax returns for the fiscal years ending December 31, 1995 through
2002.2005. These non-audit services were routine in nature and did not compose more than
twenty-five percent (25%)25% of the total fees paid to KPMG LLP in
2002.2005.
A representative of KPMG LLP is expected to attend the Annual Shareholders’ Meeting with the opportunity to make a statement, if desired, and is expected to be available to respond to
Shareholders’ inquiries.appropriate questions.
Before the independent certified public accountants of the Company and the Bank are engaged to render non-audit services for the Company or the Bank, each engagement is approved by the Audit Committee. All of the audit and tax services provided by KPMG LLP for the fiscal year ending December 31, 2005 were preapproved by the Audit Committee.
KPMG’s aggregate fees billed for professional services rendered for the audit of the Company’s annual financial statements
and for the
year ended December 31, 2002, and the preparation and reviewreviews of the financial statements included in the Company’s Form 10-KSB and
Quarterly Reports on Form 10-QSB were
forty seven thousand five hundred$39,775 for 2005 and
no/100 ($47,500)$47,000 for
that fiscal year.All Other2004.
KPMG’s fees
billed for tax
compliance services were
nine thousand five hundred$11,200 for 2005 and
no/100 ($9,500)$11,724 for
the year ended December 31, 2002.2004.
The Audit
and Compliance Committee of the Board of Directors has determined that the provision of tax services is compatible with maintaining the accountant’s independence.
Management is not aware of any matters to come before the meeting that will require the vote of Shareholders other than those matters indicated in the Notice of Meeting and this Proxy Statement.
13
However, if any other matter calling for Shareholder action should properly come before the meeting or any adjournments thereof, those persons named as Proxiesproxies in the enclosed Proxy Form will vote thereon according to their best judgment.
14
There is no pending litigation involving the Company.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors has adopted a process by which security holders may send communications to the Board of Directors of the Company. That process is for any security holder to send a written communication to Hugh C. Lane, Jr., President, Bank of South Carolina Corporation, 256 Meeting Street, Charleston, South Carolina 29401, or to fax such communication to Hugh C. Lane, Jr., President, at (843) 724-1513. A security holder is free to address any communication to any Director at the address of such Director set forth in this Proxy Statement. Any communication from a security holder received by the President shall be sent to all Members of the Executive Committee and, if any member of the Executive Committee so directs, will be sent to all members of the Board of Directors.
The
ANNUAL REPORTAnnual Report for
the fiscal year ended December 31,
2002, is mailed herewith to all Shareholders. Copies of the Annual Report as2005, filed with the Securities and Exchange Commission on Form 10-KSB,
may be obtained by requestis mailed herewith to
William L. Hiott, Jr., Treasurer of the Company.all Shareholders.
SHAREHOLDER PROPOSALS FOR THE 20042007 ANNUAL SHAREHOLDERS’ MEETING Shareholder proposals, if any, for inclusion in the Proxy Statement relating to the
20042007 Annual Shareholders’ meeting, must be addressed to and received in the office of the President no later than December
5, 2003. | | |
| | By Order of the Board of Directors |
| | |
|
| | /s/ Nathaniel I. Ball, III |
|
| | Nathaniel I. Ball, III |
| | Secretary |
March 3, 2003 | | |
8, 2006.By Order of the Board of Directors
Richard W. Hutson, Jr.
Secretary
February 23, 2006
15
PROXY CARD
BANK OF SOUTH CAROLINA CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS APRIL 8, 200311, 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS KNOW ALL PERSONS BY THESE PRESENTS THAT I, the undersigned Shareholder of Bank of South Carolina Corporation (the Company) do hereby appoint
William T. Cooper, Leonard C. FulghumEdmund Rhett, Jr., MD, Richard W. Hutson, Jr. and Louise J. Maybank, (no officer or employee of the Company or any subsidiary may be appointed), or any one of them, with full power to act alone, my true and lawful attorney(s) with full power of substitution, to vote on behalf of the undersigned all shares of common stock of the Company which the undersigned would be entitled to vote at the Annual Meeting of Shareholders of the Company to be held at The Bank of South Carolina, 256 Meeting Street, Charleston, South Carolina on Tuesday, April
8, 2003,11, 2006, at 2:00 p.m., or at any adjournments or postponements thereof, with all the powers the undersigned would possess if personally present upon the following matters:
The Board of Directors recommends a vote “FOR” proposals 1 and 2. 1. | | ELECTION OF DIRECTORS |
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| | o FORall nominees listed below (except as marked to the contrary below). |
| |
o WITHHOLD AUTHORITYto vote for all nominees listed below. |
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| | Nathaniel I. Ball, III,Dr. Linda J. Bradley, William T. Cooper,CPA, C. Ronald Coward, Leonard C. Fulghum,Graham M. Eubank, T. Dean Harton, Fleetwood S. Hassell, William L. Hiott, Jr., Katherine M. Huger, Richard W. Hutson, Jr., Charles G. Lane, Hugh C. Lane, Jr., Louise J. Maybank, Thomas W. Myers, Alan I. Nussbaum, MD, Edmund Rhett, Jr., Steve D. Swanson,MD, Malcolm M. Rhodes, MD, Thomas C. Stevenson, IIIIII., Steve D. Swanson and John M. Tupper |
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| | (INSTRUCTION:To withhold authority to vote for any individual nominee, write the nominee’s name in the space provided below.) |
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2. | | APPROVAL OF KPMG LLPELLIOTT DAVIS, LLC, as the Company’s independent auditors for the fiscal year ending December 31, 2003.2006. |
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3. | | The transaction of such other business as may properly come before the meeting. |
Each properly executed proxy will be voted in accordance with specifications made hereon. If no specification is made, the shares represented by this Proxy will be voted “FOR” the nominees, “FOR” KPMG LLPElliott Davis, LLC and in the discretion of the Proxies, on any other business as may properly come before the meeting. The undersigned hereby acknowledges receipt of the Company’s 20022005 Annual Report on Form 10-KSB as filed with the Securities and Exchange Commission and the accompanying Notice of Meeting and Proxy Statement and hereby revokes any proxy or proxies heretofore given.
| | |
| | Dated:________________________________, 2003 ___________________________________, 2006 |
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| | Signature(s) of Shareholder(s) |
| | Please date and sign exactly as name appears hereon. Executors, Administrators, Trustees, etc., must so indicate when signing. If shares are held jointly, both owners should signsign. |