UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ABC BANCORP
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(Name of Registrant as Specified In Its Charter)
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ABC BANCORP
24 2/nd/ Avenue, S.E.
Moultrie, Georgia 31768
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 15, 2001
To the Shareholders of ABC Bancorp:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of ABC Bancorp (the "Company") will be held at Sunset Country Club,
Thomasville Highway, Moultrie, Georgia, on Tuesday, May 15, 2001, commencing at
4:15 p.m., local time, for the following purposes:
(1) To elect three Class I directors for a three-year term of office;
(2) To amend and restate Article V of the Company's Articles of
Incorporation to increase the number of authorized shares of common
stock thereunder;
(3) To ratify the appointment of Mauldin & Jenkins, Certified Public
Accountants and Consultants, LLC, as the Company's independent
accountants for the fiscal year ending December 31, 2000; and
(4) To transact any other business that may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The close of business on March 22, 2001 has been fixed as the record date
(the "Record Date") for the determination of shareholders entitled to notice of,
and to vote at, the Annual Meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on the Record Date are
entitled to notice of, and to vote at, the Annual Meeting.
Shareholders may receive more than one proxy because of shares registered
in different names or addresses. Each such proxy should be marked, dated,
signed and returned. Please check to be certain of the manner in which your
shares are registered -- whether individually, as joint tenants, or in a
representative capacity -- and sign the related proxy accordingly.
A complete list of shareholders entitled to vote at the Annual Meeting will
be available for examination by any shareholder for any purpose germane to the
Annual Meeting, during normal business hours, for a period of at least ten days
prior to the Annual Meeting at the Company's corporate offices located at the
address set forth above.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to do so, please mark, date and sign the enclosed proxy and mail it
promptly in the enclosed postage-prepaid envelope. Returning your proxy does
not deprive you of your right to attend the Annual Meeting and to vote your
shares in person.
By Order of the Board of Directors
Moultrie, Georgia
April __, 2001 Doyle Weltzbarker, Chairman
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ABC BANCORP
24 2/nd/ Avenue, S.E.
Moultrie, Georgia 31768
_________________________
PROXY STATEMENT
_________________________
GENERAL INFORMATION
This Proxy Statement and the accompanying form of proxy (which were first
sent or given to shareholders on or about April __, 2001) are furnished to
shareholders of ABC Bancorp (the "Company") in connection with the solicitation
by and on behalf of the Board of Directors of the Company (the "Board") of
proxies for use at the Annual Meeting of Shareholders (the "Annual Meeting") to
be held at Sunset Country Club, Thomasville Highway, Moultrie, Georgia, on
Tuesday, May 15, 2001, at 4:15 p.m., local time, and any adjournment or
postponement thereof.
A proxy may be revoked at any time before the shares represented by it are
voted at the Annual Meeting by delivering to the Secretary of the Company either
a written revocation or a duly executed proxy bearing a later date or by voting
in person at the Annual Meeting. All shares represented by a properly executed,
unrevoked proxy will be voted on all matters presented at the Annual Meeting on
which the shares are entitled to vote, unless the shareholder attends the Annual
Meeting and votes in person. Proxies solicited will be voted in accordance with
the instructions given on the enclosed form of proxy. UNLESS AUTHORITY IS
WITHHELD IN THE MANNER INDICATED ON THE ENCLOSED FORM OF PROXY, IT IS INTENDED
THAT PROXIES IN THE ACCOMPANYING FORM WILL BE VOTED FOR THE ELECTION AS A
DIRECTOR OF EACH OF THE NOMINEES NAMED HEREIN.
Only shareholders of record at the close of business on March 22, 2001 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting.
On the Record Date, the Company had 8,347,008 shares of common stock, $1.00 par
value per share (the "Common Stock"), outstanding and entitled to vote. All
holders of Common Stock are entitled to cast one vote per share held as of the
Record Date.
The cost of preparing and mailing proxy materials will be borne by the
Company. In addition to solicitation by mail, solicitations may be made by
officers and other employees of the Company in person or by telephone,
telecopier or telegraph. Brokerage houses, custodians, nominees and fiduciaries
will be reimbursed for the expenses of sending proxy materials to the beneficial
owners of Common Stock held of record on behalf of such persons.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Principal Shareholders. There are currently no persons who are known to
----------------------
the Board to own beneficially five percent or more of the outstanding Common
Stock.
Security Ownership of Management and Others. The following table sets
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forth certain information with respect to the beneficial ownership of the Common
Stock as of the Record Date by directors, nominees for election as directors,
executive officers named in the Summary Compensation Table set forth under the
caption "Executive Compensation and Other Information" and by all directors and
executive officers as a group.
Common Stock Beneficially
Name of Beneficial Owner Position with the Company Owned as of March 22, 2001 (1)/+/ Percent of Class
- ------------------------ ------------------------- --------------------------------- ----------------
John G. Briggs (2) Director 15,594 *
Johnny W. Floyd (3) Director 61,273 *
J. Raymond Fulp Director 35,863 *
Kenneth J. Hunnicutt (4) President, Chief Executive Officer 270,560 3.2%
and Director
Daniel B. Jeter Director 3,854 *
W. Edwin Lane, Jr. (5) Executive Vice President and Chief 9,863 *
Financial Officer
Robert P. Lynch (6) Director 150,036 1.8%
Mark D. Thomas (7) Executive Vice President, Chief 43,054 *
Operating Officer and Director
Eugene M. Vereen, Jr. (8) Director 79,346 1.0%
Doyle Weltzbarker (9) Director 90,248 1.1%
Henry C. Wortman (10) Director 54,987 *
All directors and executive
officers as a group -- 841,403 10.0%
(17 persons)
____________________________
*Less than 1%.
/+/All fractional shares have been rounded up to the next whole number.
(1) Except as otherwise specified, each individual has sole and direct
beneficial ownership interest and voting rights with respect to all shares
of Common Stock indicated.
(2) Includes 298 shares owned by Mr. Briggs' wife.
(3) Includes 9,199 shares owned by Mr. Floyd's wife and 26,978 shares owned by
accounts for the benefit of Mr. Floyd's two children, of which Mr. Floyd is
custodian.
(4) Includes options to acquire 53,499 shares of Common Stock exercisable
within 60 days of March 22, 2001; 102,800 shares of restricted Common
Stock, over which Mr. Hunnicutt exercises voting control; 3,182 shares
owned by a partnership in which Mr. Hunnicutt's wife is a partner; 20
shares owned jointly with Mr. Hunnicutt's wife; and 400 shares owned by Mr.
Hunnicutt's wife.
(5) Includes options to acquire 4,663 shares of Common Stock exercisable within
60 days of March 22, 2001 and 5,200 shares of restricted Common Stock, over
which Mr. Lane exercises voting control.
(6) Includes 128,711 shares held by members of Mr. Lynch's family over which
Mr. Lynch has voting and investment control.
(7) Includes 28,576 shares of restricted Common Stock and options to acquire
2,400 shares of Common Stock exercisable within 60 days of March 22, 2001.
(8) Includes 2,131 shares owned by Mr. Vereen's wife, with whom Mr. Vereen
shares voting and investment control.
(9) Includes 24,426 shares held by the West-End Milling Company ESOP Trust, of
which Mr. Weltzbarker serves as trustee and as to which Mr. Weltzbarker
disclaims beneficial ownership.
(10) Includes 14,393 shares owned by Mr. Wortman's wife, with whom Mr. Wortman
shares investment and voting power; 10,629 shares held as co-trustee with
Mr. Wortman's wife for the benefit of their two children; 1,270 shares
owned jointly with Mr. Wortman's father-in-law; and 1,706 shares owned
jointly by Mr. Wortman and his wife.
(11) Includes options to acquire 67,805 shares of Common Stock exercisable
within 60 days of March 22, 2001 and 146,636 shares of restricted Common
Stock.
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PROPOSAL I: ELECTION OF DIRECTORS
The Company has a classified Board currently consisting of four Class I
directors (Messrs. Floyd, Jeter and Thomas), four Class II directors (Messrs.
Briggs, Fulp, Lynch and Wortman), and three Class III directors (Messrs.
Hunnicutt, Vereen, and Weltzbarker). The Class I directors currently serve
until the Annual Meeting, and the Class II and Class III directors currently
serve until the annual meetings of shareholders to be held in 2002 and 2003,
respectively. After the Annual Meeting, the Class I, Class II and Class III
directors will serve until the annual meetings of shareholders to be held in
2004, 2002 and 2003, respectively, and until their respective successors are
elected and qualified. At each annual meeting of shareholders, directors are
elected for a full term of three years to succeed those whose terms are
expiring. Vacancies on the Board and newly created directorships can generally
be filled by vote of a majority of the directors then in office. Executive
officers are elected annually by the Board and serve at the discretion of the
Board.
At the Annual Meeting, shareholders are being asked to elect three
directors to serve as Class I directors until the 2004 annual meeting of
shareholders and until their successors are duly elected and qualified.
In order to be elected, a nominee for director must receive an affirmative
vote of a majority of the shares of Common Stock present or represented at the
Annual Meeting and entitled to vote.
Unless otherwise directed, the persons named as proxies and attorneys in
the enclosed form of proxy intend to vote "FOR" the election of the nominees
listed below as directors for the ensuing term and until their successors are
elected and qualified. If any such nominee for any reason should not be
available as a candidate for director, votes will be cast pursuant to authority
granted by the enclosed proxy for such other candidate or candidates as may be
nominated by management. The Board knows of no reason to anticipate that the
nominees will not be candidates.
The following sets forth certain information as of the Record Date
concerning the nominees for election as directors of the Company and the other
directors whose terms of office will continue after the Annual Meeting. Except
as set forth below, each of the nominees has been engaged in his principal
occupation during the past five years.
Nominees for Election as Class I Directors with Terms Expiring in 2004.
- ----------------------------------------------------------------------
Johnny W. Floyd (age 62) has been a director since 1995. Mr. Floyd
currently serves as the Chairman of the Board of Directors of Central Bank and
Trust, of which he has been a director since 1986. Mr. Floyd is the President
of Floyd Timber Company, a forestry products company, and the President of
Cordele Realty. Mr. Floyd has also been a member of the Georgia House of
Representatives since 1989.
Daniel B. Jeter (age 49) has been a director since 1997. Mr. Jeter is the
Vice-President and a majority shareholder of Standard Discount Corporation
("Standard"), a consumer finance company. Mr. Jeter joined Standard, a family-
owned business, in March 1979 and is an officer and director of each of
Standard's several affiliates, Colquitt Loan Company, Globe Loan Company of
Hazelhurst, Globe Loan Company of Tifton, Globe Loan Company of Moultrie, Peach
Finance Company, Personal Finance Service of Statesboro, Globe Financial
Services of Thomasville, Classic Insurance Company, Ltd. and Cavalier Insurance
Company (of which he serves as President). In addition, Mr. Jeter serves as a
director and officer of the Georgia Industrial Loan Corporation and director of
the Georgia Financial Services Association.
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Mark D. Thomas (age 47) has been a director of the Company since July 20,
1999. Mr. Thomas has also been Executive Vice President and Chief Operating
Officer of the Company since July 20, 1999. From September 1977 through July
1999, Mr. Thomas was employed by First Union National Bank, where he previously
served as Senior Vice President and State Consumer Banking Executive for First
Union's Tennessee subsidiary. Mr. Thomas currently serves as a director of
American Banking Company, Heritage Community Bank, Bank of Thomas County,
Citizens Security Bank, Cairo Banking Company, Southland Bank, Central Bank &
Trust, First National Bank of South Georgia and Merchants and Farmers Bank, each
of which is a wholly-owned subsidiary of the Company. Thomas now resides in
Moultrie, Georgia, and is on the board of directors of the United Way of
Colquitt County, the Moultrie YMCA and the Colquitt Regional Hospice, and also
serves on the Public Affairs Committee of Georgia Bankers Association.
The background of Wycliffe R. Griffin has been omitted because his term of
office will not continue after the Annual Meeting. (See "BOARD OF DIRECTORS -
Recent Changes to the Board").
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL I.
BOARD OF DIRECTORS
Directors.
- ---------
J. Raymond Fulp (age 56) became a director of the Company in 1989 and has
been a director of Citizens Security Bank since 1987 and Chairman since 2000.
Mr. Fulp is a pharmacist and was the co-owner of Midtown Pharmacy in Tifton,
Georgia from 1974 until its sale in 1999. Mr. Fulp's term expires in the year
2002.
Robert P. Lynch (age 37) was appointed by the Board on February 15, 2000 to
serve out the remainder of the term of his father, Hal L. Lynch, who retired
from the Board, effective as of the date of the 2000 Annual Meeting of
Shareholders. Mr. Lynch currently operates Motor Finance Co. in Jacksonville,
Florida. Mr. Lynch's family owns seven automobile dealerships in Florida and
Georgia. The family also owns Shadydale Farm, a beef cattle operation located in
Shadydale, Georgia. Mr. Lynch's term will expire in the year 2002.
Henry C. Wortman (age 62) has been a director since 1990. Mr. Wortman has
also been Vice Chairman and a director of Heritage Community Bank since 1988.
Mr. Wortman has been a principal partner of Jackson & Wortman LLC, a dairy,
pecan, timber and general farming operation based in Quitman, Georgia, since
1965. Mr. Wortman is also President of JWIT, LLC and is a member of the Georgia
Agricultural Commodity Commission for Milk and a member of the Board of
Directors of the Georgia-Florida Fertilizer Company. Mr. Wortman's term expires
in the year 2002.
Eugene M. Vereen, Jr. (age 80) has been a director since 1981. Mr. Vereen
was the Chairman of the Board from 1981 to April 19, 1995 and Chief Executive
Officer of the Company from 1981 to 1994. From 1971 to present, Mr. Vereen has
also served as a director of American Banking Company. From the time of their
acquisition to 1995, Mr. Vereen has also served as a director of Heritage
Community Bank, Bank of Thomas County, Citizens Security Bank and Cairo Banking
Company, each of which is a wholly-owned subsidiary of the Company. Mr. Vereen
is President and director of M.I.A., Co., a real
4
estate holding and investment company, and has previously served as Senior
President of American Banking Company. He now serves as Chairman of the Board
Emeritus of the Company and President Emeritus of American Banking Company. From
1951 until its sale in 1983, Mr. Vereen served as Chairman of the Board of
Moultrie Insurance Agency. Mr. Vereen's term expires in the year 2003.
Kenneth J. Hunnicutt (age 64) has been a director since 1981. Mr.
Hunnicutt has also been Chief Executive Officer of the Company since 1994 and
President since 1981. Mr. Hunnicutt served as Senior President of American
Banking Company from 1989 to 1991 and as President of American Banking Company
from 1975 to 1989 and currently serves as a director of American Banking
Company, Heritage Community Bank, Bank of Thomas County, Citizens Security Bank,
Cairo Banking Company, Southland Bank, Central Bank & Trust, First National Bank
of South Georgia and Merchants and Farmers Bank, each of which is a wholly-owned
subsidiary of the Company. Mr. Hunnicutt also serves on the advisory board of
Norfolk Southern Corporation, which owns Norfolk Southern Railroad. Mr.
Hunnicutt's term expires in the year 2003.
Doyle Weltzbarker (age 66), Chairman of the Board, has been a director
since 1985 and was Vice Chairman of the Board from 1995 through 1998. Since
1975, Mr. Weltzbarker has served as director of Heritage Community Bank and he
currently serves as Chairman. Since 1985, Mr. Weltzbarker has served as a
director and President of West End Milling Company, a feed manufacturing
business, and Brooksco Dairy, LLC, a livestock and farming business. Mr.
Weltzbarker also serves as a director and officer of Southeast Milk, Inc., of
Georgia-Florida Fertilizer Co. and the Georgia Agribusiness Council. Mr.
Weltzbarker serves on the advisory board of Norfolk Southern Corporation. Mr.
Weltzbarker's term expires in the year 2003.
Recent Changes to the Board.
- ---------------------------
In accordance with the Company's Bylaws, which require all directors who
attain the age of 70 to retire from the Board no later than the date of the next
regularly scheduled annual meeting of the Company's shareholders after the
director's birthday, on February 20, 2001, Wycliffe R. Griffin submitted his
resignation from the Board, effective as of the date of the Annual Meeting. The
vacancy on the Board created by Mr. Griffin's resignation will be filled by the
Board in accordance with the Bylaws of the Company.
Also in accordance with the Company's Bylaws, on July 18, 2000, the Board
unanimously appointed John Briggs to fill the vacancy created by the resignation
of Bobby B. Lindsey which became effective on May 9, 2000. John Briggs began
serving on the Board effective as of the date of his appointment and serves as a
Class II director until the next meeting of the Company's shareholders at which
Class II directors are elected. The following sets forth certain information as
of the Record Date concerning John Briggs.
John G. Briggs (age 59), was appointed by the Board and began serving on
the Board on July 18, 2000. Mr. Briggs has co-owned Briggs Auto Parts since
1967. From 1971 to present, Mr. Briggs has also served as a director of
American Banking Company.
Committees of the Board.
- -----------------------
The Company's Executive Committee is currently comprised of six directors,
a majority of whom are neither officers nor employees of the Company. The
Executive Committee is authorized to exercise all of the powers of the Board,
except the power to declare dividends, elect directors, amend the Company's
Bylaws, issue stock or recommend any action to shareholders. The Executive
Committee, among other things, considers and makes recommendations to the Board
regarding the size and
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composition of the Board, recommends and nominates candidates to fill Board
vacancies that occur and recommends to the Board the director nominees for whom
the Board will solicit proxies. The current members of the Executive Committee
are Messrs. Briggs, Fulp, Hunnicutt, Jeter, Thomas and Weltzbarker. Mr. Vereen
served on the Company's Executive Committee until he resigned from such
committee on October 17, 2000.
The Company's Executive Loan Committee is comprised of six members. Five
of the Executive Loan Committee members are directors of the Company, and the
remaining member is the Company's Senior Credit Officer. The Executive Loan
Committee is responsible for reviewing and approving all of the Company's and
the Subsidiary Banks' loan and credit requests with principal amounts between
$2.5 million and $4.0 million. The current members of the Executive Loan
Committee are Mr. Jon S. Edwards and Messrs. Hunnicutt, Jeter, Thomas,
Weltzbarker and Wortman.
The current members of the Company's Compensation Committee, established in
1992, are Messrs. Briggs, Fulp, Hunnicutt, Jeter, Thomas and Weltzbarker. Mr.
Vereen served on the Company's Compensation Committee until he resigned from
such committee on October 17, 2000. Although during fiscal year 2000, Messrs.
Hunnicutt and Thomas served as voting members of the Compensation Committee,
beginning in fiscal year 2001, they will serve as non-voting members of such
committee. The duties of the Compensation Committee are generally to establish
the salaries, bonuses, management perquisites and other compensation of the
officers of the Company and each of the Company's nine subsidiary banks (the
"Banks"). The Compensation Committee also has the authority to administer and
interpret the Company's Money Purchase Pension and 401(k) plans, the ABC Bancorp
Omnibus Stock Ownership and Long Term Incentive Plan and the 1997 Incentive
Stock Option Plan for Kenneth J. Hunnicutt, including the selection of eligible
participants in such plans and the type, amount, duration, acceleration and
vesting of individual grants and awards made thereunder.
The Company also has an Audit Committee consisting of three members, all of
whom are directors of the Company. The Audit Committee meets as required to
review the audits performed by the Federal Deposit Insurance Corporation, the
Department of Banking and Finance of the State of Georgia, the Department of
Banking of the State of Alabama, the Company's independent accountants and the
internal auditors of the Company and the Banks. The current members of the
Audit Committee are Messrs. Fulp, Jeter and Wortman.
The Company does not have a standing nominating committee.
In 2000, the Board held 12 meetings; the Executive Committee held 12
meetings; the Executive Loan Committee held 17 meetings; the Compensation
Committee held 6 meetings; and the Audit Committee held 3 meetings. Each
director attended at least 75% of all meetings of the full Board and of those
Committees on which he served in 2000.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation.
- ----------------------
The following table and notes present the cash and non-cash compensation
paid or accrued during each of the last three fiscal years to the Company's
Chief Executive Officer and to any other executive officer whose total cash
compensation exceeded $100,000.
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Summary Compensation Table
Long Term Compensation
Annual Compensation -------------------------------------
------------------------------------- Awards Payouts
Other ----------------------------- ------- All Other
Name and Annual Restricted Stock LTIP Annual
Principal Position Year Salary Bonus Compensation Award Options/SARS Payouts Compensation
- ---------------------------- ------ ------------- -------- ------------ ---------------- ----------- ------- ------------
Kenneth J. Hunnicutt, 2000 $294,300(1)(2) $116,168 --- $274,032(3) --- --- $66,144(4)
President, Chief Executive 1999 $277,400(1)(2) $ 78,310 --- $274,296(3) --- --- $51,302(4)
Officer and Director 1998 $263,400(1)(2) $ 87,236 --- --- --- --- $43,102(4)
Mark D. Thomas, 2000 $194,100(1)(5) $ 75,240 --- $ 20,760(6) 12,000(7) --- $15,550(8)
Executive Vice President, 1999 $ 84,423(1)(5) --- --- $286,802(6) --- --- $ 2,048(8)
Chief Operating Officer
and Director 1998(9) --- --- --- --- --- --- ---
W. Edwin Lane, Jr., 2000 $107,025 $ 37,459 --- $ 20,760(10) 12,000(11) --- $12,086(13)
Executive Vice President 1999 $ 98,400 $ 8,715 --- $ 12,468(10) 2,263(11)(12) --- $ 9,422(13)
and Chief Financial Officer 1998 $ 86,114 $ 9,892 --- --- 2,263(11) --- $ 6,957(13)
- -------------------------------------------
(1) Includes directors' fees.
(2) Contributions to the investment account under the Deferred Compensation
Agreement are disclosed as "All Other Annual Compensation." See footnote
(4) below.
(3) On January 18, 2000, the Company awarded Mr. Hunnicutt 26,400 shares of
restricted Common Stock with a fair market value equal to $10.38 per
share on the date of grant. On January 19, 1999, the Board awarded Mr.
Hunnicutt 26,400 shares of restricted Common Stock, adjusted to take into
account a 6 for 5 stock split for all shareholders of record as of
December 15, 1999, with a fair market value equal to $10.39 per share on
the date of grant.
(4) For 2000, the Company made contributions for the benefit of Mr. Hunnicutt
to the Company's 401(k) plan in the amount of $5,950, to the Company's
Money chase Pension Plan in the amount of $8,500, to the investment
account under Deferred Compensation Agreement in the amount of $15,300,
and to the vestment account under the Salary Continuation Agreement in
the amount of $15,802. Amount for 2000 also includes dividends paid on
shares of restricted Common Stock during 2000 in the amount of $20,592.
For 1999, the Company made contributions for the benefit of Mr. Hunnicutt
to the Company's 401(k) plan in the amount of $5,600, to the Company's
Money Purchase Pension Plan in the amount of $8,000, to the investment
account under the Deferred Compensation Agreement in the amount of
$15,300 and to the investment account under the Salary Continuation
Agreement in the amount of $15,802. Amount for 1999 also includes
dividends paid on shares of restricted Common Stock during 1999 in the
amount of $6,600. For 1998, the Company made contributions for the
benefit of Mr. Hunnicutt to the Company's 401(k) plan in the amount of
$4,000, to the Company's Money Purchase Pension Plan in the amount of
$8,000, to the investment account under the Deferred Compensation
Agreement in the amount of $15,300 and to the investment account under
the Salary Continuation Agreement in the amount of $15,802.
(5) Mr. Thomas commenced employment with the Company as its Executive Vice
President and Chief Operating Officer as of July 20, 1999, pursuant to an
Executive Employment Agreement that provides for an annual base salary of
$180,000. See "--Executive Employment Agreement with Mr. Thomas."
(6) On January 18, 2000, the Company awarded Mr. Thomas 2,000 shares of
restricted Common Stock with a fair market value of $10.38 per share on
the date of grant. On July 20, 1999, the Board awarded Mr. Thomas 24,576
shares of restricted Common Stock, adjusted to take into account a 6 for
5 stock split for all shareholders of record as of December 15, 1999,
with a fair market value equal to $11.67 per share on the date of grant.
(7) On January 18, 2000, the Company awarded Mr. Thomas options to purchase
12,000 shares of Common Stock at an exercise price of $10.38 per share
with such options vesting at a rate of 20% per year over a five-year
period.
(8) For 2000, the Company made contributions for the benefit of Mr. Thomas to
the Company's 401(k) plan in the aggregate amount of $1,670 and to the
Company's Money Purchase Pension Plan in the aggregate amount of $2,385.
Amount for 2000 also included dividends paid on shares of restricted
Common Stock during 2000 in the amount of $11,495. For 1999, the Company
paid dividends on the shares of restricted Common Stock held by Mr.
Thomas in the amount of $2,048.
(9) Information for fiscal year 1998 is not included for Mr. Thomas, as he
was not employed with the Company until July 20, 1999.
(10) On January 18, 2000, the Company awarded Mr. Lane 2,000 shares of
restricted Common Stock with a fair market value of $10.38 per share on
date of grant. On January 19, 1999, the Company awarded Mr. Lane 1,200
shares of restricted Common Stock, adjusted to take into account a 6 for
5 stock split for all shareholders of record as of December 15, 1999,
with a fair market value equal to $10.39 per share on the date of grant.
(11) On January 18, 2000, the Company awarded Mr. Lane options to purchase
12,000 shares of Common Stock at an exercise price of $10.38 per share
with such options vesting at a rate of 20% per year over a five-year
period. On February 16, 1999, the Company awarded Mr. Lane options to
purchase 2,263 shares of Common Stock at an exercise price of $9.90 with
such options vesting at a rate of 20% per year over a five-year period.
On January 20, 1998 the Company awarded Mr. Lane options to purchase
2,263 shares of Common Stock at an exercise price of $15.94 with such
options vesting at a rate of 20% over a five-year period.
(12) Reflects a 6 for 5 stock split for all shareholders of record as of
December 15, 1999.
(13) For 2000, the Company made contributions for the benefit of Mr. Lane to
the Company's 401(k) plan in the amount of $4,479 and to the Company's
Money Purchase Pension Plan in the amount of $6,399. Amount for 2000 also
includes dividends paid on shares of restricted Common Stock during 2000
in the amount of $1,208. For 1999, the Company made contributions for the
benefit of Mr. Lane to the Company's 401(k) plan in the amount of $3,756
and to the Company's Money Purchase Pension Plan in the amount of $5,366.
Amount for 1999 also includes dividends paid on shares of restricted
Common Stock held by Mr. Lane in the amount of $300. For 1998, the
Company made contributions for the benefit of Mr. Lane to the Company's
401(k) plan in the amount of $2,157 and to the Company's Money Purchase
Pension Plan in the amount of $4,800.
7
Option Grants in Year Ended December 31, 2000
- ---------------------------------------------
The following table sets forth information with respect to options granted
under the ABC Bancorp Omnibus Stock Ownership and Long Term Incentive Plan to
the Company's Chief Executive Officer and to any other executive officer whose
total cash compensation exceeded $100,000 for the year ended December 31, 2000.
OPTION GRANTS DURING 2000
Individual Grants
-----------------------------------------------------------
Percent of
Total
Number of Options Potential
Securities Granted to Realizable Value at
Underlying Employees Assumed Annual Rates of
Options in Exercise Price Expiration Stock Price Appreciation
Granted(1) 2000 (per share) Date for Option Term(2)
---------- ---- ----------- ---- ------------------
Name 5% 10%
- ---- --- ---
Kenneth J. Hunnicutt............ --- --- --- --- --- ---
Mark D. Thomas.................. 12,000 14.4% $10.38 1/18/10 $202,900 $323,040
W. Edwin Lane, Jr............... 12,000 14.4% $10.38 1/18/10 $202,900 $323,040
__________________
(1) All options were granted at an exercise price equal to the fair market
value of the Common Stock on the date of grant. Such options may not be
exercised later than 10 years after the date of grant.
(2) These amounts represent certain assumed rates of appreciation as set forth
by the rules of the Securities and Exchange Commission. Actual gains, if
any, on stock option exercises are dependent on the future performance of
the Common Stock and overall market conditions. The amounts reflected in
this table may not necessarily be achieved.
Stock Option Exercises During 2000 and Stock Option Year-End Values
-------------------------------------------------------------------
The following table sets forth information with respect to options
exercised in the last fiscal year by the Company's Chief Executive Officer and
any other executive officer whose total cash compensation exceeded $100,000
for the year ended December 31, 2000, together with the number and value of
unexercised options and SARs held as of the end of the last fiscal year for
each such person.
Aggregated Option Exercises and Fiscal Year-End Option/SAR Values
-----------------------------------------------------------------
Number of Securities Under- Value of Unexercised In-the-Money
lying Unexercised Options/ SARs Options/SARs at
at FY-End (#) FY-End ($) (1)
------------------------------- ---------------------------------
Shares
Acquired On Value
Name Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ----------- ------------ ----------- ------------- ----------- -------------
Kenneth J. Hunnicutt --- $ --- 44,051 33,450 $48,755 $ ---
Mark D. Thomas --- $ --- --- 12,000 $ --- $ ---
W. Edwin Lane, Jr. --- $ --- 679 15,847 $ --- $ ---
_______________
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
8
Deferred Compensation Agreement
- --------------------------------
The Company has entered into a Deferred Compensation Agreement with Mr.
Hunnicutt, pursuant to which the Company has agreed to pay Mr. Hunnicutt
deferred compensation in the event of his retirement, disability or death or the
termination of his employment in the amounts and for the periods set forth
below. In the fiscal year ended December 31, 2000, $44,350 was accrued, but not
paid, to Mr. Hunnicutt pursuant to the Deferred Compensation Agreement.
Event Amount Number of Months
- ------------------------------- ----------------------------------------------------- --------------------
Normal retirement $3,750/month 180
Early retirement value of investment account (1) 120
Disability $3,750/month if during normal retirement 180
value of investment account if prior to retirement (1) 120
Death during normal retirement $5,000/month Balance of 180 months
Death during early retirement $5,000/month Balance of 120 months
Death prior to retirement $5,000/month 180
Termination of employment Value of investment account (1)(2) 120
___________________
(1) The balance of the investment account as of December 15, 2001 will be
$360,000.
(2) Mr. Hunnicutt may elect not to receive the value of the investment account
upon termination of his employment and instead receive normal retirement
benefits of $3,750 per month for 180 months when he reaches age 68.
Salary Continuation Agreement
- -----------------------------
The Company has entered into a Salary Continuation Agreement with Mr.
Hunnicutt. The Salary Continuation Agreement provides, among other things, that
if Mr. Hunnicutt remains in the Company's employ until he reaches age 68, he
will be entitled to receive 15 annual payments of $33,750 each.
Executive Employment Agreement with Mr. Hunnicutt
- -------------------------------------------------
The Company entered into an Amended and Restated Executive Employment
Agreement with Mr. Hunnicutt effective as of May 24, 1999, (the "Hunnicutt
Employment Agreement"), pursuant to which Mr. Hunnicutt has agreed to serve as
the President and Chief Executive Officer of the Company for a term of five
years. The term of the Hunnicutt Employment Agreement will not expire prior to
the expiration of 24 months after the occurrence of a Change of Control (as such
term is defined in the Hunnicutt Employment Agreement) of the Company. The
Hunnicutt Employment Agreement provides that Mr. Hunnicutt will receive a
minimum base salary of $250,000, and he is entitled to receive an annual bonus
and to participate in all present and future employee benefit, retirement and
compensation plans of the Company consistent with his salary and his position as
the President and Chief Executive Officer of the Company. The Hunnicutt
Employment Agreement also provides certain additional benefits to Mr. Hunnicutt
if he is terminated by the Board for "cause" (as defined in the Hunnicutt
Employment Agreement) or if he terminates his employment for "good reason" (as
defined in the Hunnicutt Employment Agreement).
If Mr. Hunnicutt elects to terminate his employment upon 90 days' notice,
or the Hunnicutt Employment Agreement is terminated because of Mr. Hunnicutt's
"disability" (as defined in the Hunnicutt Employment Agreement), then the
Company is obligated to pay him his annual salary and annual bonus through the
date of termination. In the event of Mr. Hunnicutt's death, the Company is
9
obligated to purchase, under certain circumstances, all outstanding stock
options previously granted to Mr. Hunnicutt, whether or not such options are
then exercisable, at a cash purchase price equal to the amount by which the
aggregate fair market value of such options exceed their exercise price. The
Hunnicutt Employment Agreement also includes certain restrictive covenants which
limit Mr. Hunnicutt's ability to compete with the Company or to divulge certain
confidential information concerning the Company.
Executive Employment Agreement with Mr. Thomas
- ----------------------------------------------
The Company entered into an Executive Employment Agreement with Mr. Thomas
dated as of July 12, 1999 (the "Thomas Employment Agreement"), pursuant to which
Mr. Thomas has agreed to serve as the Executive Vice President and Chief
Operating Officer of the Company for an initial term of two years. The term is
automatically extended for an additional one year term on the anniversary of the
effective date of the Thomas Employment Agreement unless either party gives
written notice to the other party not to so extend the term within 90 days prior
to any such anniversary, in which case no further extension will occur and the
term will end two years after the anniversary of the date of the notice not to
extend. Notwithstanding any notice by the Company not to extend, the term of the
Thomas Employment Agreement will not expire prior to the expiration of 24 months
after the occurrence of a Change of Control (as such term is defined in the
Thomas Employment Agreement) of the Company. The Thomas Employment Agreement
provides that Mr. Thomas will receive a minimum base salary of $180,000, and is
entitled to receive an annual bonus and to participate in all present and future
employee benefit, retirement and compensation plans of the Company consistent
with his salary and his position as the Executive Vice President and Chief
Operating Officer of the Company. The Thomas Employment Agreement also provides
certain additional benefits to Mr. Thomas if he is terminated by the Board for
"cause" (as defined in the Thomas Employment Agreement) or if he terminates his
employment for "good reason" (as defined in the Thomas Employment Agreement).
If Mr. Thomas elects to terminate his employment upon 90 days' notice, or
the Thomas Employment Agreement is terminated because of Mr. Thomas' Disability
(as defined in the Thomas Employment Agreement), then the Company is obligated
to pay him his annual salary and annual bonus through the date of termination.
In the event of Mr. Thomas' death, the Company is obligated to pay him his
annual salary and annual bonus through the date of death. The Thomas Employment
Agreement also includes certain restrictive covenants which limit Mr. Thomas'
ability to compete with the Company or to divulge certain confidential
information concerning the Company.
Compensation of Directors
- -------------------------
All directors serving on the Board receive a fee of $500 per month. Board
meetings are held monthly. Members of the Executive Committee (except Mr.
Hunnicutt and Mr. Thomas) receive a fee of $300 per month, and members of the
Audit Committee receive a fee of $200 per meeting. Mr. Wortman receives $200 per
meeting for his services on the Executive Loan Committee and is the only member
of the Executive Loan Committee to receive compensation for service thereon.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
During 2000, Mr. Hunnicutt served as the Company's President and Chief
Executive Officer and also served on the Compensation Committee. Mr. Thomas, who
served as the Company's Executive Vice President and Chief Operating Officer
during 2000, also served on the Compensation Committee commencing on May 16,
2000 and through the end of fiscal year 2000. No other member of the
Compensation Committee is or was an officer or employee of the Company or any of
its subsidiaries.
10
The Company and the Banks have had, and expect to have in the future,
banking transactions in the ordinary course of business with members of the
Compensation Committee, including corporations, partnerships and other
organizations in which such members have an interest. The Board believes that
the terms of such loans (including interest rates, collateral and repayment
terms) are fair and equitable and are substantially the same as terms that were
prevailing at the time such loans were made with respect to comparable
transactions with unrelated parties. Such transactions do not involve more than
the normal risk of collectibility or present other unfavorable features.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
The Company's executive compensation programs are administered by the
Compensation Committee. During 2000, the Compensation Committee was composed of
Messrs. Hunnicutt, Jeter, Weltzbarker and Vereen. Mr. Thomas was appointed to
serve on the Compensation Committee on May 16, 2000. On October 17, 2000, Mr.
Vereen resigned from the Compensation Committee and Messrs. Briggs and Fulp were
appointed to serve thereon.
The Company's executive compensation is designed to attract and retain
highly qualified executives and to motivate them to maximize shareholder
returns. The base salary for executives is determined in relation to their level
of responsibility. Salary ranges are reviewed on an annual basis, taking into
consideration, among other things, the financial performance of the Company, and
are adjusted as necessary. Salaries are reviewed on an annual basis, and salary
changes are based primarily upon individual performance.
In reviewing the performance of Mr. Hunnicutt, the Compensation Committee
took into account the Hunnicutt Employment Agreement, which establishes Mr.
Hunnicutt's base compensation from year to year. The Company may consider and
declare from time to time increases in Mr. Hunnicutt's base compensation, and if
operating results of the Company are significantly less favorable in a given
year, may decrease the base compensation of executive officers generally,
including Mr. Hunnicutt. In determining Mr. Hunnicutt's compensation, the
Compensation Committee considered the effects of inflation, adjustments to the
salaries of other senior management personnel, Mr. Hunnicutt's past performance
and the contribution which he made to the business and profits of the Company
during fiscal year 2000. The Company's performance in 2000 reflected net income
of $10.1 million, or $1.19 per share of the Common Stock, an increase of 12.2%
over net income for 1999 of $9.0 million. The Company's total assets increased
from $789 million at December 31, 1999 to $826 million at December 31, 2000, an
increase of 4.7%. The Company experienced an increase in total loans of 10.9%
from $530 million in 1999 to $587 million in 2000 and an increase in total
deposits of 6.1% from $641 million in 1999 to $680 million in 2000. The Company
also maintained a net interest margin of 5.20% for 2000, which the Company
believes is high by industry standards. Based on the Company's overall operating
performance during fiscal year 1999 and projections with respect to the
Company's overall operating performance for fiscal year 2000, the Compensation
Committee increased Mr. Hunnicutt's base salary by $13,000 for the fiscal year
ended December 31, 2000. Mr. Hunnicutt did not participate in the deliberations
of the Compensation Committee concerning his compensation.
Submitted by the Compensation Committee
John Briggs
J. Raymond Fulp
Daniel B. Jeter
Kenneth J. Hunnicutt
Mark D. Thomas
Doyle Weltzbarker
11
REPORT OF THE AUDIT COMMITTEE OF THE BOARD
The Board has adopted a written charter for the Audit Committee. A copy of
the Audit Committee Charter is included as Appendix A to this Proxy Statement.
The primary functions of the Audit Committee are set forth in its charter and
include: (i) recommending an accounting firm to be appointed by the Company as
its independent accountants; (ii) consulting with the Company's independent
accountants regarding their audit plan; (iii) reviewing the Company's financial
statements with its accountants; and (iv) determining that management placed no
restrictions on the scope or implementation of the independent accountants'
report. The members of the Audit Committee are independent as defined in Rule
4200(a)(15) of the National Association of Securities Dealers' listing
standards.
The Audit Committee reports as follows:
(i) The Audit Committee reviewed and discussed the Company's audited
financial statements for the year ended December 31, 2000 with the
Company's management;
(ii) The Audit Committee has discussed with Mauldin & Jenkins, Certified
Public Accountants and Consultants, LLC ("Mauldin & Jenkins"), the
Company's independent accountants, the matters required to be
discussed by Statement of Accounting Standards 61;
(iii) The Audit Committee has received the written disclosures and the
letter from Mauldin & Jenkins required by Independent Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees) and has discussed Mauldin & Jenkins' independence with
representatives of Mauldin & Jenkins; and
(iv) Based on the review and discussions referred to above, the Audit
Committee recommended to the Board that the audited financial
statements be included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2000 for filing with the SEC.
Submitted by the Audit Committee
J. Raymond Fulp
Daniel B. Jeter
Henry C. Wortman
12
PERFORMANCE GRAPH
Set forth below is a line graph comparing the change in the cumulative
total shareholder return on the Common Stock against the cumulative return of
The NASDAQ Stock Market (U.S. Companies) and the index of Nasdaq Bank Stocks for
the period commencing May 19, 1994 through December 31, 2000. In May 1994, the
Company sold 747,500 shares of Common Stock pursuant to a registered public
offering. Prior to the offering, quotations for the Common Stock were not
reported on any market, and there was no established public trading market for
the Common Stock. The graph shows the value at December 31, 1992, December 31,
1993, December 30, 1994, December 29, 1995, December 31, 1996, December 31,
1997, December 31, 1998, December 31, 1999 and December 29, 2000 assuming an
investment of $100 on May 19, 1994 and reinvestment of dividends and other
distributions to shareholders.
[GRAPH]
-------
Comparison of Five - Year Cumulative Total Returns
Performance Graph for
ABC Bancorp
Produced on 03/13/2001 including data to 12/29/2000
- --------------------------------------------------------------------------------
Symbol CRSP Total Returns Index for: 12/1995 12/1996 12/1997 12/1998 12/1999 12/2000
- ------ ---------------------------- ------- ------- ------- ------- ------- -------
____________ [_] ABC Bancorp 100.0 121.2 181.4 119.2 124.3 114.9
- -- -- -- -- * Nasdaq Stock Market (US & Foreign) 100.0 122.4 149.4 207.0 385.9 233.0
- ----------- . Nasdaq Bank Stocks 100.0 132.0 221.1 219.6 211.1 241.1
SIC 6020 - 6029, 6710-6719 US & Foreign
_______________
[_] Solid black box
* Star
. Triangle
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/29/1995.
- --------------------------------------------------------------------------------
13
PROPOSAL II: PROPOSAL TO AMEND AND RESTATE ARTICLE V
OF THE ARTICLES OF INCORPORATION OF THE COMPANY TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON
STOCK THEREUNDER TO 30,000,000.
The Board has adopted a resolution unanimously approving and recommending
to the Company's shareholders for their approval an amendment to the Company's
Articles of Incorporation to increase the number of authorized shares of common
stock provided for thereunder to 30,000,000 shares of Common Stock. The text of
the proposed amendment is included in the Articles of Amendment of the Articles
of Incorporation which is attached hereto as Appendix B and shall be filed by
the officers of the Company with the Secretary of State of the State of Georgia
if Proposal II is approved by the Company's shareholders.
The Board believes the authorization of the increase in the number of
shares of Common Stock is in the best interests of the Company and its
shareholders, and believes it advisable to authorize such shares to have them
available for, among other things, possible issuance in connection with such
activities as public or private offerings of shares for cash, dividends payable
in stock of the Company, acquisitions of other companies, implementation of
employee benefit plans, and otherwise. Except as discussed below, the Company
has no present plans with respect to the increased shares of Common Stock.
The Board is required to make any determination to issue shares of Common
Stock based on its judgment as to the best interests of the shareholders and the
Company. Although the Board has no present intention of doing so, it could
issue shares of Common Stock (whether the limits imposed by applicable law) that
could make more difficult or discourage an attempt to obtain control of the
Company by means of a merger, tender offer, proxy contest or other means. Such
shares could be used to create voting or other impediments or to discourage
persons seeking to gain control of the Company. Such shares could also be
privately placed with purchasers favorable to the Board in opposing such action.
The existence of the additional authorized shares could have the effect of
discouraging unsolicited takeover attempts. The issuance of new shares also
could be used to dilute the stock ownership of a person or entity seeking to
obtain control of the Company should the Board consider the action of such
entity or person not to be in the best interest of the shareholders and the
Company.
While the Company may consider effecting an equity offering of Common Stock
or otherwise issuing such stock in the proximate future for purposes of raising
additional working capital, acquiring related businesses or assets or otherwise,
except for issuances of the Common Stock in connection with the Company's
proposed acquisition of Golden Isles Financial Holdings, Inc., which has
branches located in Brunswick, St. Simone and Jekel Island, Georgia, and Tri-
County Bank, which is located in Trenton, Florida, the Company, as of the date
hereof, has no agreements or understandings with any third party to effect any
such offering or acquisition, or to purchase any shares offered in connection
therewith, or to vote any such shares, and no assurances are given that any
offering will in fact be effected or that an acquisition pursuant to which such
shares may be issued will be proposed and consummated.
Approval of the amendment to the Company's Articles of Incorporation
requires the affirmative vote of a majority of the outstanding shares of Common
Stock which are entitled to vote at the Annual Meeting. Unless otherwise
specified, the proxy holders designated in the proxy will vote the shares
covered thereby at the Annual Meeting FOR the approval of the amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF PROPOSAL II.
14
PROPOSAL III: RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company has appointed Mauldin & Jenkins as its independent accountants
for the fiscal year ended December 31, 2000. Mauldin & Jenkins has served as
the Company's independent accountants since 1985. Services provided to the
Company and its subsidiaries by Mauldin & Jenkins in the fiscal year ended
December 31, 2000 included the examination of the Company's consolidated
financial statements, limited review of quarterly reports, services related to
filings with the Securities and Exchange Commission (the "SEC") and consultation
with respect to various tax matters.
Representatives of Mauldin & Jenkins will be present at the Annual Meeting,
will have the opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions by shareholders.
Audit Fees
For the 2000 audit of the Company's annual financial statements, including
the review of the quarterly financial statements included in the Company's
Quarterly Reports on Form 10-Q filed in 2000, the Company has agreed to pay
Mauldin & Jenkins $200,000. As of December 31, 2000, $180,000 of these fees had
been billed.
Financial Information Systems Design and Implementation Fees
For the fiscal year ending December 31, 2000, Mauldin & Jenkins was not
engaged to and did not provide any of the professional services described in
Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X.
All Other Fees
For the fiscal year-ended December 31, 2000, Mauldin & Jenkins billed
$78,000 to the Company for services other than those described above.
Compatibility of Audit Fees
The Company's Audit Committee has considered the provision of non-audit
services by Mauldin & Jenkins and the fees paid to them for such services, and
believes that the provision of such services and their fees are compatible with
Mauldin & Jenkins's maintaining independence (See "Report of the Audit Committee
of the Board").
Ratification of the appointment of Mauldin & Jenkins as the Company's
independent accountants for the fiscal year ended December 31, 2000 requires the
affirmative vote of a majority of the outstanding shares of Common Stock which
are entitled to vote at the Annual Meeting. Unless otherwise specified, the
proxy holders designated in the proxy will vote the shares covered thereby at
the Annual Meeting "FOR" ratification of the appointment of Mauldin & Jenkins.
In the event that the shareholders do not ratify the appointment of Mauldin &
Jenkins, the appointment will be reconsidered by the Audit Committee and the
Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF PROPOSAL III.
15
CERTAIN TRANSACTIONS
The Company and the Banks have engaged in, and in the future expect to
engage in, banking transactions in the ordinary course of business with
directors and officers of the Company and the Banks and their associates,
including corporations, partnerships and other organizations in which such
directors and officers have an interest. At December 31, 2000, certain
executive officers and directors, and companies in which, as of such date, such
executive officers and directors had a 10% or more beneficial interest, were
indebted to the Banks in the aggregate amount of approximately $7,748,979
million. The Board believes that the terms of such loans (including interest
rates, collateral and repayment terms) are fair and equitable and are
substantially the same as terms prevailing at the time such loans were made for
comparable transactions with unrelated parties. Such transactions do not
involve more than the normal risk of collectibility or present other unfavorable
features.
Since November 1, 1991, the Company has leased a building from Mr.
Hunnicutt and Lynn Jones, who serves as a director of one of the Company's
subsidiary banks that is used as the Company's operations center in Moultrie,
Georgia. On November 1, 1996, the Company renewed the lease increasing the rent
payments from $2,500 to $3,334 per month. After renovations and an addition to
such building, this lease was extended and rent payments were increased
beginning October 1, 1998 to $5,666.67 per month. Rent payments under the
extended lease, which expires on November 1, 2003, totaled $68,000 for 2000.
Commencing in February 1996, the Company leased a building from Mr.
Hunnicutt and Mr. Jones that was used for storage and office space for the
Company's Facilities Manager in Moultrie, Georgia. The lease for this space was
on a month-to-month basis, with annual rent payments of $7,200, paid in monthly
installments of $600 each. The lease terminated on March 31, 2000. During
fiscal year 2000 the Company paid $1,800 in rent before the lease terminated.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than ten
percent of the Common Stock to file with the SEC initial reports of ownership
and reports of changes in ownership of the Common Stock. They are also required
to furnish the Company with copies of all Section 16(a) forms they file with the
SEC.
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to it and written representations that no other reports
were required, during the fiscal year ended December 31, 2000, all of the
Company's officers, directors and greater than ten percent shareholders complied
with all applicable Section 16(a) filing requirements.
OTHER MATTERS
The Board does not contemplate bringing before the Annual Meeting any
matter other than those specified in the accompanying Notice of Annual Meeting
of Shareholders, nor does it have information that other matters will be
presented at the Annual Meeting. If other matters come before the Annual
16
Meeting, signed proxies will be voted upon such questions in accordance with the
best judgment of the persons acting under the proxies.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 2002 Annual
Meeting of Shareholders and to be included in the Company's proxy statement and
form of proxy for that meeting must be received by the Company, directed to the
attention of the Secretary, not later than November 16, 2001. Any such proposal
must comply in all respects with the rules and regulations of the SEC.
ANNUAL REPORT ON FORM 10-K
A copy of the Company's Annual Report is enclosed with this Proxy
Statement. The Annual Report is not a part of the proxy soliciting material
enclosed herewith. The Company's Annual Report to the SEC on Form 10-K for the
fiscal year ended December 31, 2000 will be filed with the SEC prior to the
Annual Meeting. Upon receipt of a written request, the Company will, without
charge, furnish any owner of its Common Stock a copy of its Annual Report to the
SEC on Form 10-K for the fiscal year ended December 31, 2000, including
financial statements and the footnotes thereto. Copies of exhibits to the Form
10-K are also available upon specific request and payment of a reasonable charge
for reproduction. Such request should be directed to the Secretary of the
Company at the address indicated on the first page of this Proxy Statement.
By Order of the Board of Directors
Moultrie, Georgia
April __, 2001 Doyle Weltzbarker, Chairman
17
APPENDIX A
ABC BANCORP
AUDIT COMMITTEE CHARTER
I. PURPOSE
The primary function of the audit committee (the "Audit Committee") of the
Board of Directors (the "Board") of ABC Bancorp (the "Corporation") is to assist
the Board in fulfilling its oversight responsibilities relating to the
accounting, legal and reporting practices of the Corporation. The Audit
Committee shall provide assistance to the directors in fulfilling their
responsibility to the shareholders of the Corporation, relating to corporate
accounting, reporting practices of the Corporation and the quality and integrity
of the financial reports of the Corporation. In so doing, it is the
responsibility of the Audit Committee to maintain free and open communication
between the directors, the Corporation's independent auditors, the Corporation's
internal auditors, if any, or the entity performing the internal audit function,
and the financial management of the Corporation.
Consistent with this function, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the Corporation's policies,
procedures and practices. The Audit Committee's primary duties and
responsibilities are to:
(a) serve as an independent and objective party to review periodically
the Corporation's financial reporting process and internal control
system;
(b) review and recommend to the Board, after consultation with the
financial management of the Corporation, the Corporation's
independent accountants selected to audit the Corporation's financial
statements;
(c) if applicable, review and concur with management's appointment,
termination or replacement of the director of the Corporation's
internal auditing department, if any, or the company performing such
internal audit function; and
(d) provide an open avenue of communication for the Corporation's
independent accountants, financial and senior management, the
Corporation's internal auditing department, if any, and the Board.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Audit
Committee. The definition of an "independent director" is outlined in the
attached Exhibit A. All members of the Audit Committee shall have a working
---------
familiarity with basic finance and accounting practices, and at least one member
of the Audit Committee shall have accounting, financial or related management
expertise. The Board shall elect members of the Audit Committee each year at a
regular or special meeting of the Board or until their successors shall be duly
elected and qualified. Unless the full Board elects a Chairman, the members of
the Audit Committee may designate a Chairman by majority vote of the full Audit
Committee membership.
III. MEETINGS
The Audit Committee shall meet at least three times each calendar year, or
more frequently as circumstances dictate. Regular meetings of the Audit
Committee may be held without notice at such time and at such place as shall
from time to time be determined by the Chairman of the Audit Committee, the
President or the Secretary of the Corporation. Special meetings of the Audit
Committee may be called by or at the request of any member of the Audit
Committee, any of the Corporation's executive officers, the Secretary, the
director of Corporation's internal auditing department, if any, or the
Corporation's independent auditors, in each case on at least twenty-four hours
notice to each member.
If the Board, management, the director of Corporation's internal auditing
department, if any, or the Corporation's independent auditors desire to discuss
matters in private, the Audit Committee shall meet in private with such person
or group.
A majority of the Audit Committee members shall constitute a quorum for the
transaction of the Audit Committee's business. Unless otherwise required by
applicable law, the Corporation's Articles of Incorporation or Bylaws or the
Board, the Audit Committee shall act upon the vote or consent of a majority of
its members at a duly called meeting at which a quorum is present. Any action of
the Audit Committee may be taken by a written instrument signed by all of the
members of the Audit Committee. Meetings of the Audit Committee may be held at
such place or places as the Audit Committee shall determine or as may be
specified or fixed in the respective notices or waivers of meetings. Members of
the Audit Committee may participate in Audit Committee proceedings by means of
conference telephone or similar communications equipment by means of which all
persons participating in the proceedings can hear each other, and such
participation shall constitute presence in person at such proceedings
As part of its job to foster open communication, the Audit Committee should
meet at least annually with management, the director of the Corporation's
internal auditing department, if any, and the Corporation's independent
accountants in separate executive sessions to discuss any matters that the Audit
Committee or each of these groups believe should be discussed privately.
Requirements as to quorum and voting requirements for the Audit Committee are
set forth in the Corporation's Bylaws.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Audit Committee shall:
(a) review and update this Charter annually as conditions dictate;
(b) review the Corporation's annual financial statements with management
and the Corporation's independent accountants to review any changes
in accounting principles and to determine that the Corporation's
independent accountants are satisfied with the disclosure and content
of the financial statements to be presented to shareholders;
(c) review the Corporation's audited financial statements and recommend
to the Board that the Corporation's audited financial statements be
included in the Corporation's Annual Report on Form 10-K;
(d) review with the Corporation's independent accountants, the
Corporation's internal auditor or the company performing the internal
audit function, if any, and the Corporation's financial and
accounting personnel, the adequacy and effectiveness of the
accounting and financial controls of the Corporation and elicit any
recommendations for the improvement
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of such internal controls or particular areas where new or more
detailed controls or procedures are desirable, in each case, placing
particular emphasis on the adequacy of internal controls to expose
any payment, transactions or procedures that might be deemed illegal
or otherwise improper;
(e) after consultation with the financial management of the Corporation,
recommend to the Board the selection of the independent accountants,
considering their independence and effectiveness, and (with
management's recommendations) approve the fees and other compensation
to be paid to the Corporation's independent accountants;
(f) on an annual basis, review and discuss with the Corporation's
independent accountants all significant relationships such
accountants have with the Corporation to determine such accountants'
independence;
(g) review the performance of the Corporation's independent accountants
and approve any proposed discharge of the Corporation's independent
accountants when circumstances warrant;
(h) periodically consult with the Corporation's independent accountants
out of the presence of management about internal controls and the
fullness and accuracy of the Corporation's financial statements;
(i) in consultation with the Corporation's independent accountants and
internal auditors, if any, review the Corporation's financial
reporting processes, both internal and external;
(j) consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the Corporation's independent accountants, management or
internal auditing department;
(k) review with financial management of the Corporation and its
independent accountants the results of their analysis of significant
financial reporting issues and practices, including, without
limitation, changes in, or adoptions of, accounting principles and
disclosure practices;
(l) review with financial management and the Corporation's independent
accountants their qualitative judgments about the appropriateness of
accounting principles and financial disclosure practices used or
proposed to be used;
(m) review any significant disagreements among management and the
Corporation's independent accountants or the internal auditing
department or the company engaged to perform the internal audit
function, if any, in connection with the preparation of the financial
statements;
(n) inquire whether management has a review system in place to ensure
that the Corporation's financial statements and other reports filed
with governmental organizations satisfy legal requirements;
(o) report, together with the financial management of the Corporation,
the results of the annual audit to the Board, and, if requested by
the Board, invite the Corporation's independent accountants to attend
the full Board meeting to assist in reporting the results of the
annual audit or to answer other directors' questions; and
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(p) investigate any matter brought to its attention within the scope of
its duties, with the power to retain outside counsel for this
purpose, if in its judgment, that is appropriate.
V. MISCELLANEOUS
The Audit Committee may perform any other activities consistent with
this Charter, the Corporation's Articles of Incorporation and Bylaws and
governing law, as the Audit Committee or the Board deems necessary or
appropriate.
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EXHIBIT A
DEFINITION OF INDEPENDENCE FOR PURPOSES OF
AUDIT COMMITTEE SERVICE
Members of the Audit Committee shall be considered "independent" if they
have no relationship to the Corporation that may interfere with the exercise of
their independence from management and the Corporation, including whether such
members have:
(a) been employed by the Corporation or its affiliates in the current or
past three years;
(b) accepted any compensation from the Corporation or its affiliates in
excess of $60,000 during the previous fiscal year (except for Board
service, retirement plan benefits or non-discretionary compensation);
(c) an immediate family member who is, or has been in the past three
years, employed by the Corporation or its affiliates as an executive
officer;
(d) been a partner, controlling shareholder or an executive officer of
any for- profit business to which the Corporation made, or from which
it received, payments (other than those which arise solely from
investments in the Corporation's securities) that exceed five percent
of the Corporation's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years; or
(e) been employed as an executive of another entity where any of the
Corporation's executives serve on that entity's compensation
committee.
APPENDIX B
ARTICLES OF AMENDMENT
OF THE ARTICLES OF INCORPORATION
OF ABC BANCORP
Pursuant to the provisions of Section 14-2-1006 of the Georgia Business
Corporation Code, as amended (the "Code"), the undersigned, on behalf of ABC
BANCORP, a Georgia corporation (the "Corporation"), hereby submits the following
information:
1. The name of the Corporation is ABC Bancorp.
2. The amendment to the Articles of Incorporation of the Corporation was
recommended by the Board of Directors of the Corporation to the Shareholders on
March 20, 2001.
3. The following amendment to the Articles of Incorporation of the
Corporation was duly adopted by the Shareholders of the Corporation, pursuant to
Section 14-2-1003 of the Code and in accordance with Section 14-2-1006 of the
Code, on May 15, 2001.
4. Effective as of the date hereof, the Articles of Incorporation of the
Corporation are hereby amended by deleting Article V thereof in its entirety and
adding the following Article V thereto:
"V.
The maximum amount of shares of stock that this corporation
shall be authorized to issue shall be 35,000,000 shares
which are to be divided into two classes as follows:
30,000,000 shares of Common Stock, par value $1.00 per
share; and
5,000,000 shares of Preferred Stock.
The Common Stock may be created and issued from time to time
in one or more series with voting rights for each series as
determined by the Board of Directors of the corporation and
set forth in the resolution or resolutions providing for the
creation and issuance of the stock in such series. The
Preferred Stock may be created and issued from time to time
in one or more series with such designations, preferences,
limitations, conversion rights, cumulative, relative,
participating, optional or other rights, including voting
rights, qualifications, limitations or restrictions thereof
as determined by the Board of Directors of the corporation
and set forth in the resolution or restrictions providing
for the creation and issuance of the stock in such series."
4. All other provisions of the Articles of Incorporation of the
Corporation shall remain in full force and effect.
5. The effective time and date of these Articles of Amendment shall be
upon filing.
EXECUTED this ____ day of _____________, 2001.
ABC BANCORP
By:______________________________
Kenneth J. Hunnicutt
Chief Executive Officer and President
ATTEST:
_________________________
Cindi H. Lewis
Secretary
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ABC Bancorp
24 2/nd/ Avenue, S.E.
Moultrie, Georgia 31768
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Doyle Weltzbarker and Kenneth J. Hunnicutt,
and each of them, with full power of substitution, the proxies and attorneys of
the undersigned at the Annual Meeting of Shareholders of ABC Bancorp (the
"Annual Meeting") to be held on Tuesday, May 15, 2001, at Sunset Country Club,
Thomasville Highway, Moultrie, Georgia, at 4:15 p.m., local time, and at any
adjournment or postponement thereof, and hereby authorizes them to vote as
designated below at the Annual Meeting all the shares of Common Stock of ABC
Bancorp held of record by the undersigned as of March 22, 2001. The undersigned
hereby acknowledges receipt of the Annual Report of the Company for the fiscal
year ended December 31, 2000 and the Notice of Annual Meeting and Proxy
Statement of the Company for the Annual Meeting.
I. Election of the following nominees to the Board of Directors in Class I for
three-year terms of office:
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY
below (except as marked to vote for all nominees
to the contrary below) listed below
Class I
-------
Johnny W. Floyd Daniel B. Jeter Mark D. Thomas
Instructions: To withhold authority to vote for any individual nominee(s), write
the name(s) of such nominee(s) in the space provided below. If this Proxy is
executed by the undersigned in such manner as not to withhold authority to vote
for the election of any nominee, this Proxy shall be deemed to grant such
authority.
II. To amend and restate Article V of the Company's Articles of Incorporation
to increase the number of authorized shares of Common stock thereunder to
30,000,000:
[_] FOR [_] AGAINST [_] ABSTAIN
III. To ratify the appointment of Mauldin & Jenkins, Certified Public
Accountants and Consultants, LLC, as the Company's independent accountants
for the fiscal year ended December 31, 2000:
[_] FOR [_] AGAINST [_] ABSTAIN
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 election of each nominee and in the discretion of the proxy
holders as to any other matter that may properly come before the Annual Meeting.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
Print Name(s): _________________________________________
Signature: _________________________________________
Signature If
Held Jointly: _________________________________________
Dated: _______________________________, 2001
Please date and sign in the same manner in which your shares are
registered. When signing as executor, administrator, trustee, guardian,
attorney or corporate officer, please give full title as such. Joint owners
should each sign.
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