FORM 11-K
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
First Financial Holdings, Inc. 1994 Employee Stock Purchase Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
First Financial Holdings, Inc.
34 Broad Street
Charleston, SC 29401
FIRST FINANCIAL HOLDINGS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
Financial Statements
December 31, 1998, 1997 and 1996
(With Independent Auditors' Report Thereon)
Index
Independent Auditors' Report . . . . . . . . . . . . . . 1
Financial Statements for 1998, 1997 and 1996:
Statements of Financial Condition . . . . . . . . . . 2
Statements of Operations and Changes in Plan Equity . 3
Notes to Financial Statements . . . . . . . . . . . . . . 4
Independent Auditors' Consent . . . . . . . . . . . . . . 7
Signature . . . . . . . . . . . . . . . . . . . . . . . . 8
Independent Auditors' Report
The Trustees
First Financial Holdings, Inc.
1994 Employee Stock Purchase Plan:
We have audited the accompanying statements of financial
condition of First Financial Holdings, Inc. 1994 Employee Stock
Purchase Plan as of December 31, 1998 and 1997, and the related
statements of operations and changes in plan equity for each of
the years in the three-year period ended December 31, 1998.
These financial statements are the responsibility of management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial condition
of First Financial Holdings, Inc. 1994 Employee Stock Purchase
Plan at December 31, 1998 and 1997, and the results of operations
for each of the years in the three-year period ended December 31,
1998, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
March 5, 1999
FIRST FINANCIAL HOLDINGS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
Statements of Financial Condition
December 31, 1998 and 1997
1998 1997
Assets:
Cash and cash equivalents $ 33,422 $ 840
Liabilities and Plan Equity:
Liabilities:
Due to First Financial Holdings, Inc. 33,048 --
Plan Equity: 374 840
$ 33,422 $ 840
The accompanying notes are an integral part of these financial
statements.
FIRST FINANCIAL HOLDINGS, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
Statements of Operations and Changes in Plan Equity
Years ended December 31, 1998, 1997 and 1996
1998 1997 1996
Contributions:
Contributions from employees $ 109,459 $ 84,140 $ 83,583
Withdrawals:
Common stock distributions to
participants 106,168 81,208 79,827
Withdrawals by participants from plan 3,757 2,370 3,797
Net income (loss) (466) 562 (41)
Plan equity at beginning of year 840 278 319
Plan equity at end of year $ 374 $ 840 $ 278
The accompanying notes are an integral part of these financial
statements.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
1. Description of Plan
The following brief description of First Financial Holdings,
Inc. 1994 Employee Stock Purchase Plan ("the Plan") is
provided for general informational purposes only.
Participants should refer to the Plan Agreement for a more
complete description of the Plan's provisions.
General
On July 28, 1994, the Board of Directors of First Financial
Holdings, Inc. ("the Corporation"), approved the
establishment of the Plan to provide the eligible employees
of the Corporation and its designated Subsidiaries an
opportunity to purchase common stock of the Corporation
through accumulated payroll deductions at a discounted price
of 90% of the fair market value. At the annual meeting in
January 1995, the stockholders of the Corporation approved
the Plan.
Participation in Plan
The Plan is a defined contribution employee stock purchase
plan sponsored by the Corporation. An employee who has been
continuously employed by the Corporation for at least six
consecutive months, who is employed by the Corporation on a
given enrollment date and who is scheduled to work at least
1,000 hours as an employee during each calendar year shall be
eligible to participate in the Plan for the offering period
commencing with such enrollment date (the first day of each
offering period). An offering period is a period of
approximately three months, beginning on the first trading
day on or after January 1, April 1, July 1, and October 1 of
each year and terminating on the last trading day on or
before the end of the period. There were 47 and 34
participants in the Plan as of December 31, 1998 and 1997,
respectively.
Contributions
Employees may contribute to the Plan through payroll
deductions. Eligible employees may elect to have payroll
deductions made on each payday during an offering period in
an amount not exceeding ten percent of their gross
compensation.
Plan Administration
During the years ended December 31, 1998 and 1997, the
Corporation absorbed all costs of the Plan's administration.
Income Tax Status
It is the intention of the Corporation to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section
423 of the Internal Revenue Code of 1986, as amended.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on
the accrual basis and present the assets and liabilities
using fair values, based on quoted market prices.
3. Grant and Exercise of an Option
On the enrollment date of each offering period, each eligible
employee participating in the Plan will be granted an option
to purchase, on each exercise date of such offering period, a
certain number of shares of the Corporation's common stock.
The number of shares is determined by dividing the employee's
applicable payroll deductions accumulated prior to the
exercise date and retained in the participant's account as of
the exercise date by the applicable purchase price. The
purchase price is an amount equal to 90% of the fair market
value of a share of common stock on the enrollment date or on
the exercise date, whichever is lower.
Unless a participant withdraws from the Plan, his or her
option will be automatically exercised on the exercise date,
and the maximum number of full shares subject to option shall
be purchased for the participant at the applicable purchase
price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll
deductions accumulated in a participant's account which are
not sufficient to purchase a full share shall be retained in
the participant's account and applied toward the purchase of
shares in a subsequent offering period.
4. Withdrawal or Termination of Employment
A participant may withdraw all, but no less than all, of the
applicable payroll deductions credited to his or her account
and not yet used to exercise his or her option under the Plan
at any time by giving written notice to the Corporation.
When a participant ceases to be an employee for any reason,
the participant's option will be automatically terminated.
Upon termination of a participant's employment relationship,
the payroll deductions credited to the participant's account
during the offering period but not yet used to exercise the
option will be returned to such participant or, in the case
of his or her death, to the designated beneficiary.
5. Plan Termination
Although it has not expressed any intent to do so, the
Corporation has the right to terminate the Plan at any time.
The termination cannot affect options previously granted,
provided that the Board of Directors may terminate an
offering period on any exercise date if the Board determines
that the termination of the Plan is in the best interest of
the Corporation and its stockholders.
6. Related Party Transactions
In 1998 and 1997, the Plan purchased 5,989 and 6,338 shares
of First Financial Holdings, Inc. common stock, respectively,
on behalf of the participants in the Plan. First Financial
Holdings, Inc. declared a two-for-one stock split on February
26, 1998, for stockholders of record on March 13, 1998, to be
paid on March 27, 1998. All share and per share amounts have
been restated retroactively.
INDEPENDENT AUDITORS' CONSENT
The Plan Trustees
First Financial Holdings, Inc.
1994 Employee Stock Purchase Plan:
We consent to the incorporation by reference in the registration
statement (No. 33-57855) on Form S-8 of First Financial Holdings,
Inc. of our report dated March 5, 1999 relating to the statements
of financial condition of the First Financial Holdings, Inc. 1994
Employee Stock Purchase Plan as of December 31, 1998 and 1997,
and the related statements of operations and changes in plan
equity for each of the years in the three-year period ended
December 31, 1998, which report appears in the December 31, 1998
annual report on Form 11-K of First Financial Holdings, Inc. 1994
Employee Stock Purchase Plan.
KPMG Peat Marwick LLP
Greenville, South Carolina
March 19, 1999
SIGNATURE
The Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, the trustees (or other persons who
administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
First Financial Holdings, Inc.
1994 Employee Stock Purchase Plan
Date: March 24, 1999 By: /s/ Susan Baham
Susan Baham
Senior Vice President
Chief Financial Officer
Duly Authorized Representative