Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST SOUTHEAST FINANCIAL CORPORATION
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
FIRST SOUTHEAST FINANCIAL CORPORATION
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transactions applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
[ ] 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.
(1) Amount previously paid:
N/A
(2) Form, schedule or registration statement no.:
N/A
(3) Filing party:
N/A
(4) Date filed:
N/A
September 20, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of First Southeast Financial Corporation to be held at its main office
located at 201 North Main Street, Anderson, South Carolina, on Tuesday,
October 29, 1996, at 2:00 p.m., Eastern Time.
The enclosed Notice of Annual Meeting of Stockholders and Proxy
Statement describe the formal business to be transacted at the Annual
Meeting. During the Annual Meeting, we will also report on the operations of
the Corporation. Directors and Officers of the Corporation, as well as a
representative of Crisp, Hughes & Co., LLP, the Corporation's independent
auditors, will be present to respond to any appropriate questions
stockholders may have.
To ensure proper representation of your shares at the Annual Meeting,
the Board of Directors requests that you sign, date and return the enclosed
proxy card in the enclosed postage-prepaid envelope by October 29, 1996, even
if you currently plan to attend the Annual Meeting. This will not prevent
you from voting in person, but will assure that your vote is counted if you
are unable to attend the Annual Meeting.
Sincerely,
David C. Wakefield, III
President and Chief Executive Officer
PAGE
FIRST SOUTHEAST FINANCIAL CORPORATION
201 NORTH MAIN STREET
ANDERSON, SOUTH CAROLINA 29621
(864) 224-3401
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 29, 1996
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Stockholders
("Meeting") of First Southeast Financial Corporation ("Corporation") will be
held at its main office located at 201 North Main Street, Anderson, South
Carolina on Tuesday, October 29, 1996, at 2:00 p.m., Eastern Time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Corporation;
2. Such other matters as may properly come before the
Meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on the foregoing proposal at the Meeting on the
date specified above, or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Pursuant to the Corporation's
Bylaws, the Board of Directors has fixed the close of business on September
13, 1996 as the record date for the determination of the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete, sign and return by October 29, 1996 the
enclosed Proxy Card, which is solicited by the Board of Directors, and to
mail it promptly in the enclosed envelope. The Proxy Card will not be used
if you attend the Meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
CAROLE K. BAIN
SECRETARY
Anderson, South Carolina
September 20, 1996
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
PROXY STATEMENT
OF
FIRST SOUTHEAST FINANCIAL CORPORATION
201 NORTH MAIN STREET
ANDERSON, SOUTH CAROLINA 29621
(864) 224-3401
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 29, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of First Southeast Financial Corporation
("First Southeast" or "Corporation"), the holding company for First Federal
Savings and Loan Association of Anderson ("First Federal" or "Association"),
to be used at the Annual Meeting of Stockholders of the Corporation
("Meeting"). The Meeting will be held at the Corporation's main office
located at 201 North Main Street, Anderson, South Carolina on Tuesday,
October 29, 1996, at 2:00 p.m., Eastern Time. The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are being first
mailed to stockholders on or about September 20, 1996.
VOTING AND PROXY PROCEDURE
Stockholders of record as of the close of business on September 13, 1996
are entitled to one vote for each share of common stock ("Common Stock") of
the Corporation then held. As of September 13, 1996, the Corporation had
4,388,231 shares of Common Stock issued and outstanding. The presence, in
person or by proxy, of at least a majority of the total number of outstanding
shares of Common Stock entitled to vote is necessary to constitute a quorum
at the Meeting. Abstentions will be counted as shares present and entitled
to vote at the Annual Meeting for purposes of determining the existence of a
quorum. Broker non-votes will not be considered shares present for purposes
of determining a quorum.
The Board of Directors solicits proxies so that each stockholder has the
opportunity to vote on the proposals to be considered at the Meeting. When a
proxy card is returned properly signed and dated, the shares represented
thereby will be voted in accordance with the instructions on the proxy card.
Where no instructions are indicated, proxies will be voted FOR the nominees
for directors set forth below. If a stockholder attends the Annual Meeting,
he or she may vote by ballot.
If a stockholder does not return a signed proxy card or does not attend
the Annual Meeting and vote in person, his or her shares will not be voted.
Stockholders who execute proxies retain the right to revoke them at any
time. Proxies may be revoked by written notice delivered in person or mailed
to the Secretary of the Corporation or by filing a later proxy prior to a
vote being taken on a particular proposal at the Annual Meeting. Attendance
at the Annual Meeting will not automatically revoke a proxy, but a
stockholder in attendance may request a ballot and vote in person, thereby
revoking a prior granted proxy. Where no instructions are indicated, proxies
will be voted FOR the nominees for directors set forth below.
If a stockholder is a participant in the First Federal Employee Stock
Ownership Plan (the "ESOP"), the proxy card represents a voting instruction
to the trustees of the ESOP as to the number of shares in the participant's
plan account. Each participant in the ESOP may direct the trustees as to the
manner in which shares of Common Stock allocated to the participant's plan
account are to be voted.
-1-
PAGE
The two directors to be elected at the Annual Meeting will be elected by
a plurality of the votes cast by stockholders present in person or
by proxy and entitled to vote. Stockholders are not permitted to cumulate
their votes for the election of directors. With respect to the election of
directors, votes may be cast for or withheld from each nominee. Votes that
are withheld and broker non-votes will have no effect on the outcome of the
election because directors will be elected by a plurality of votes cast.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Persons and groups who beneficially own in excess of 5% of the
Corporation's Common Stock are required to file certain reports disclosing
such ownership pursuant to the Securities Exchange Act of 1934, as amended
("Exchange Act"). Based upon such reports, the following table sets forth,
as of August 23, 1996, certain information as to those persons who were
beneficial owners of more than 5% of the outstanding shares of Common Stock.
Management knows of no persons other than those set forth below who
beneficially owned more than 5% of the outstanding shares of Common Stock at
August 23, 1996. The following table also sets forth, as of August 23, 1996,
information as to the shares of Common Stock beneficially owned by each
director, by the Chief Executive Officer of the Corporation, and by all
executive officers and directors of the Corporation as a group.
Amount and Nature Percent of
of Beneficial Common Stock
Ownership (1) Outstanding
First Federal Savings and
Loan Association of Anderson
Employee Stock Ownership Plan 329,761 7.5%
Directors and Named Executive Officers
David C. Wakefield, III (2) 89,338 2.0
Charles L. Stuart 69,773 1.6
James H. Barton 61,677 1.4
Josiah Crudup, Jr. 45,773 1.0
Vernon E. Merchant, Jr. 37,173 0.8
William R. Phillips 33,023 0.8
Aubrey T. Scales 38,773 0.9
A.C. Terry 57,933 1.3
All executive officers and
directors as a
group (11 persons) 574,138 13.1%
_______________
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner for purposes of this table, of
any shares of Common Stock if he has shared voting and/or
investment power with respect to such security. The table
includes shares owned by spouses, other immediate family members
in trust, shares held in retirement accounts or funds for the
benefit of the named individuals, and other forms of indirect
ownership, over which shares the persons named in the table
possess voting and investment power. Shares considered indirectly
owned included in the table are Mr. Wakefield, 5,959; Mr. Barton,
21,504; Mr. Crudup, 5,000; Mr. Scales, 1,500; Mr. Terry, 21,086;
and all executive officers and directors as a group, 73,110.
(2) President and Chief Executive Officer of the Corporation and the
Association.
-2-
PAGE
PROPOSAL I - ELECTION OF DIRECTORS
The Corporation's Board of Directors is currently composed of eight
members. The Corporation's Certificate of Incorporation provides that
directors are to be elected for terms of three years, approximately one-third
of whom are elected annually. Two directors will be elected at the Meeting
to serve for a three-year period or until their respective successors have
been elected and qualified. The Nominating Committee which is comprised of
the full Board of Directors has nominated for election as directors David C.
Wakefield, III and Aubrey T. Scales, each of whom is currently a member of
the Board.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the Board of Directors may amend the Bylaws and
reduce the size of the Board. At this time, the Board knows of no reason why
any nominee might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
OF MESSRS. WAKEFIELD AND SCALES.
The following table sets forth as to each nominee and director
continuing in office, his name, age, principal occupation during the past
five years and the year he first was elected a director.
Principal
Occupation
During Past
Five Years Year First Year
and Other Elected Term
Name Age(1) Information Director(2) Expires
BOARD NOMINEES
David C.
Wakefield, III 52 President and Chief Executive 1991 1993(3)
Officer of First Federal since
1991. Prior thereto, Mr.
Wakefield served as Chief
Operating Officer of First
Federal from 1990 to 1991
and in various capacities
since 1976. He also is a
past director of the Community
Financial Institutions of
South Carolina and serves as
Chairman of the Board of
Visitors of Anderson College.
Aubrey T. Scales 73 Retired Senior Vice President of 1992 1993(3)
First Federal. Mr. Scales has
been affiliated with the Association
for 44 years in various capacities.
He is a current member and a past
president of the Anderson Lions Club.
He is a life member and Executive
Committee member of the American
Legion. Mr. Scales is also a
past Director of the Anderson YMCA.
(table continued on following page)
-3-
PAGE
Principal
Occupation
During Past
Five Years Year First Year
and Other Elected Term
Name Age(1) Information Director(2) Expires
DIRECTORS CONTINUING IN OFFICE
James H. 74 Mr. Barton, a retired colonel in 1977 1997
Barton the U.S. Marine Corps Reserve,
is a past member of the National
Executive Committee, Reserve
Officers Association of the United
States, is a member of the Tri-
County Technical College Foundation
Board, Chairman of the Support
(Finance) Committee of the Holy
Trinity Lutheran Church, and is
the retired president of Barton
Grocery Co., Inc. and Acme
Distributing Company of Greenville.
Josiah
Crudup, Jr. 71 Retired President and Chief 1979 1997
Executive Officer of Crudup Oil
Co., Inc. Mr. Crudup is a past
member of the Kiwanis Club, the
South Carolina Petroleum Marketers
Association and the Board of
Directors of the Salvation Army
Boys Club.
Vernon E.
Merchant, Jr. 65 Self-employed physician and 1983 1997
surgeon for over 36 years.
Dr. Merchant is a Director of
the State Free Cancer Clinic
and is a State Cancer Liaison-
Fellow to the American College
of Surgeons. He also serves as
an assistant clinical professor
at the Medical University of
South Carolina.
Charles L.
Stuart 70 Chairman of the Board of the 1965 1998
Association. Mr. Stuart has been
affiliated with the Association
for over 41 years and has served
in various capacities, including
holding the offices of President
and Chief Executive Officer. He
is a past Director of the Community
Financial Institutions of South
Carolina, the Anderson Board of
Realtors, is a past Director of
the Anderson County Historical
Society, is a past Director of
the South Carolina Chamber of
Commerce, and is a past member
of the Anderson Civitan Club.
William R.
Phillips 77 Retired stockbroker from J.C. 1977 1998
Bradford & Co. Mr. Phillips is
a retired colonel of the South
Carolina National Guard, is a
past President of the Anderson
County Foundation, is a past
President and Chairman of the
Board of United Way, is a Past
Treasurer of the Chamber of
Commerce and was a charter member
of Appalachian Regional Council
of Governors.
(table continued on following page)
-4-
PAGE
Principal
Occupation
During Past
Five Years Year First Year
and Other Elected Term
Name Age(1) Information Director(2) Expires
DIRECTORS CONTINUING IN OFFICE (continued)
A.C. Terry 70 Retired president and owner of 1983 1998
Terry Furniture Co., a retail
furniture company. Mr. Terry
is a past director of the
Southern Home Furnishings
Association, is a past president
of the Anderson Lions Club and is
an elder in the Young Memorial A.
R. Presbyterian Church.
- ----------------------
(1) At September 13, 1996.
(2) Includes prior service on the Board of Directors of First Federal.
(3) Assuming re-election at the Meeting.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Corporation and the Association conduct
their business through meetings of the Boards and through their committees.
During the fiscal year ended June 30, 1996, the Board of Directors of the
Corporation held 10 meetings. During the fiscal year ended June 30, 1996,
the Board of Directors of First Federal held 12 meetings. No director of
First Federal or the Corporation attended fewer than 75% of the total
meetings of the Board and committees on which such Board member served during
this period.
The Board of Directors of the Association has established an Executive,
Audit and Compliance, Planning, Loan, Compensation, and Pension Committees.
The Association also has an Asset and Liability Management Committee, Loan
Committee and a Management Compliance Committee.
The Executive Committee consists of Messrs. Crudup (Chairman), Terry and
Wakefield. This Committee meets on an as called basis and acts as an interim
decision-making body. The Executive Committee also acts as the Proxy
Committee. The Executive Committee met 33 times during fiscal 1996.
The Compensation Committee consists of Messrs. Crudup (Chairman),
Scales, and Barton. This Committee meets on an as called basis to make
recommendations for compensation of executive officers including the Chief
Executive Officer. This Committee met four times during fiscal 1996.
The Audit and Compliance Committee consists of Messrs. Phillips
(Chairman), Merchant and Scales. This Committee meets on an as called basis
to investigate and monitor internal affairs and regulatory compliance. This
Committee met four times during fiscal 1996.
The Planning Committee consists of Messrs. Phillips (Chairman), Barton,
Scales, Stuart and Wakefield. This Committee meets on an as called basis for
the purpose of developing and/or investigating strategic Board objectives.
This Committee met two times during fiscal 1996.
-5-
PAGE
The Loan Committee consists of Messrs. Merchant, Barton, Phillips,
Stuart, Scales and Wakefield. This Committee meets on an as called basis for
loan approvals of above $150,000 to $300,000. Any member of the committee,
along with an authorized officer, may approve loans in the designated range.
This Committee met 76 times during fiscal 1996.
The Pension Committee consists of Messrs. Wakefield, Stuart, Biediger,
Locke, Barton and Scales. This Committee meets on an as called basis to
transact any business relating the Association's Retirement Plan. This
Committee met two times during fiscal 1996.
In connection with the Annual Meeting and selection of the management
nominees for election as directors, Article II, Section 14 of the
Corporation's Bylaws provides that the Board of Directors of the Corporation
shall act as a nominating committee for selecting the management nominees for
election as directors. Such section of the Bylaws also provides as follows:
"... no nominations for directors except those made by the nominating
committee shall be voted upon at the annual meeting unless other nominations
by stockholders are made in writing and delivered to the secretary of the
Corporation in accordance with the provisions of the Corporation's
Certificate of Incorporation." Article II, Section 15 further provides that
any new business to be taken up at the annual meeting shall be stated in
writing and filed with the secretary of the Corporation in accordance with
the provisions of the Corporation's Certificate of Incorporation. Article XI
of the Certificate of Incorporation provides that written notice of a
stockholder's intent to make a nomination or present new business at the
meeting ("stockholder notice") must be given not less than 30 days nor more
than 60 days prior to any such meeting; provided, however, that if less than
31 days' notice of the meeting is given to stockholders by the Corporation, a
stockholder notice shall be delivered or mailed, as prescribed, to the
Secretary of the Corporation not later than the close of the tenth day
following the day on which notice of the meeting was mailed to stockholders.
If properly made, such nominations shall be considered by stockholders at
such meeting. The Board of Directors of the Corporation held one meeting in
its capacity as the nominating committee during fiscal 1996, in order to
nominate the individuals for election at the Meeting.
DIRECTORS' COMPENSATION
Currently, each director of the Corporation is also a director of the
Association. Non-officer members of the Corporation's and the Association's
Board of Directors received fees of $500 and $1,000, respectively, per
meeting during fiscal 1996. Non-officer directors receive an additional $300
for certain committee meetings. Total fees paid to directors during the
fiscal year ended June 30, 1996 were $157,700. Directors also participate in
the Association's Director Emeritus Plan under which directors are eligible
to serve as emeritus directors following their retirement from the Board of
Directors of the Association. Emeritus Directors continue to receive Board
fees while serving in that capacity if they meet certain minimum
requirements, including providing consulting services to management of the
Association.
-6-
PAGE
EXECUTIVE COMPENSATION
Summary Compensation Table
Long-term
Compensation
Annual Compensation Awards
______________________ ________________
Other All
Annual Restricted Other
Name and Compen- Stock Compen-
Principle Salary Bonus sation Awards Options sation
Position Year ($)(1) ($) ($)(1) ($) (#) ($)(2)
__________ ____ ______ _____ _______ ______ _______ _______
David C. 1996 $113,735 $ -- $-- $-- $ -- $23,443
Wakefield 1995 107,370 -- -- -- -- 48,453
President 1994 98,995 5,000 -- -- 54,080 34,160
and Chief
Executive
Officer of
the Corpora-
tion and the
Association
* Except as otherwise noted, all compensation is paid by the Association.
- ---------------------
(1) Does not include prerequisites which did not exceed the lesser of
$50,000 or 10% of salary and bonus.
(2) All other Compensation for Mr. Wakefield in fiscal year 1996 includes
the following: 401(k) Profit Sharing Plan: $3,934; Executive Deferred
Compensation Plan: $16,366; Pension Plan: $3,143. Does not include
amounts payable pursuant to employment agreements with Mr. Wakefield
in the event of a "change of control" of the Corporation. For a
discussion of the employment agreements including the amounts payable
in the event of a "change of control" of the Corporation, see "--
Employment Agreements."
(3) Represents the total value of the awards at the date of grant,
October 7, 1993. All awards under the Association's restricted stock
plan are fully vested.
-7-
PAGE
Option Exercise/Value Table
The following information with respect to options exercisable
during the fiscal year ended June 30, 1996 and remaining unexercised or
unexercisable at the end of the fiscal year, is presented for the Chief
Executive Officer.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired FY-End (#) FY-End ($)
on Value
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ----------- ---------- ---------- -------------- ---------------
David C.
Wakefield,
III 54,080 $419,120 -0-/-0- $0/$0
Employment Agreements
Effective October 1, 1993, the Corporation and the Association
(collectively the "Employers") entered into a three-year employment agreement
with David C. Wakefield, III. The salary level for Mr. Wakefield under the
agreement is $90,500, which amount is paid by the Association and which may
be increased at the discretion of the Board of Directors of the Association
or an authorized committee of the Board. On each anniversary of the
commencement date of the agreement, the term of the agreement may be extended
by action of the Board of Directors of the Association or the Corporation, as
the case may be, for an additional year. The current term of the agreement
runs through September 30, 1999. The agreement is terminable by the
Employers for cause at any time or upon the occurrence of certain events
specified by Office of Thrift Supervision ("OTS") regulations. The agreement
also provides for severance payments if Mr. Wakefield's employment is
terminated following a "change of control" of the Corporation or the
Association (as defined in the Agreement). These payments, which will be
made promptly after any such "change in control," equal 2.99 times the
average annual compensation paid to Mr. Wakefield during the five years
immediately preceding the change in control. Based upon Mr. Wakefield's
recent compensation history, the aggregate payments that would be payable
under the terms of the agreements if a change of control occurred in 1996
would be approximately $402,000.
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1933, as amended,
or the Exchange Act that might incorporate future filings, including this
Proxy Statement, in whole or in part, the following report and Performance
Graph shall not be incorporated by reference into any such filings.
Report of the Compensation Committee
Under rules established by the SEC, the Corporation is required to
provide certain data and information in regard to the compensation and
benefits provided to the Corporation's Chief Executive Officer and other
executive officers of the Corporation and the Association. The disclosure
requirements for the Chief Executive Officer and other executive officers
include the use of tables and a report explaining the rationale and
considerations that led to the fundamental executive compensation decisions
affecting those individuals. Insofar as no separate compensation is
currently payable by the Corporation, the Compensation Committee of the
Association (the "Committee"), at the direction of the Board of Directors of
the Corporation, has prepared the following report for inclusion in this
proxy statement.
-8-
PAGE
General. The Committee's duties are to recommend and administer
policies that govern executive compensation for the Association. The
Committee evaluates individual executive performance, compensation policies
and salaries. The Chief Executive Officer of the Association evaluates the
performance of the other senior officers of the Association and makes
recommendations to the Committee regarding individual compensation levels.
The Committee reviews the Chief Executive Officer's recommendations on such
officers' salaries and recommends salaries to be paid to each executive
officer. The entire Board of Directors reviews the Compensation Committee's
recommendations as to executive compensation, including the Chief Executive
Officer, and sets these salaries.
Compensation Policies. The executive compensation policies of the
Association are designed to establish an appropriate relationship between
executive pay and the Corporation's and the Association's annual
performance,to reflect the attainment of short and long-term financial
performance goals and to enhance the ability of the Corporation and the
Association to attract and retain qualified executive officers. The
principles underlying the executive compensation policies include the
following:
* To attract and retain key executives who are vital to the
long-term success of the Corporation and the Association
and are of the highest caliber;
* To provide levels of compensation competitive with those
offered throughout the financial industry and consistent
with the Corporation's and the Association's level of
performance; and
* To motivate executives to enhance long-term stockholder
value by building their equity interest in the
Corporation.
The Committee considers a variety of subjective and objective factors in
determining the compensation package for individual executives including: (1)
the performance of the Corporation and the Association as a whole with
emphasis on annual performance factors and long-term objectives; (2) the
responsibilities assigned to each executive; and (3) the performance of each
executive of assigned responsibilities as measured by the progress of the
Corporation and the Association during the year.
In reviewing and recommending executive salary levels, the Compensation
Committee surveys similar institutions in South Carolina, the Southeast, and
the United States. Peer group analysis focuses on asset size, nature of
ownership, type of operation, and other common factors. In setting salaries
for calendar year 1996, the Compensation Committee also reviewed executive
compensation data compiled by Americas Community Bankers, Ben S. Cole
Financial, Inc., and SNL Securities Thrift Executive Compensation Review. In
fiscal 1996, executive compensation structure includes salaries, long-term
incentive opportunities in the form of stock options, restricted stock and
deferred compensation.
Although the Compensation Committee did not establish executive
compensation levels on the basis of whether specific financial goals had been
achieved by the Corporation and the Association, the Compensation Committee
(and the Board of Directors) considered the overall profitability of the
Corporation and the Association when making their decisions. The
Compensation Committee believes that management compensation levels, as a
whole, appropriately reflect the application of the Corporation's and
Association's executive compensation policy and the progress of a the
Corporation and the Association.
Long Term Incentive Compensation. Under the Association's 1993
Management Development and Recognition Plans ("MDRPs") and the Corporation's
1993 Stock Option and Incentive Plan, executive officers of the Association
and the Corporation received grants and awards in connection with the
Association's mutual to stock conversion. The Committee believes that stock
ownership by the Corporation's and the Association's executives is a
significant factor in aligning the interests of the executives with those of
stockholders. Stock options and stock awards under such plans were allocated
based upon regulatory practices and policies, the practices of other recently
converted financial institutions as verified by external surveys and based
upon the executive officers' level of
-9-
PAGE
responsibility and contributions to the Corporation and the Association. All
shares have been awarded under the MDRPs. However, options covering 124,384
shares remain available for grant under the 1993 Stock Option and Incentive
Plan. The Board may authorize the
award of additional stock options in the future although no specific awards
are under consideration at this time.
Compensation of the Chief Executive Officer. During calendar year 1996,
the base salary of David C. Wakefield, III, President and Chief Executive
Officer of the Corporation and the Association, is $117,000. Mr. Wakefield's
base salary includes compensation paid in lieu of directors fees. The 1996
base salary is 6.8% above the 1995 base salary. The Committee believes that
Mr. Wakefield's compensation is appropriate based on the Association's
overall compensation policy and on the basis of the Committee's consideration
of peer group data. Mr. Wakefield did not participate in the Committee's
consideration of his compensation level for the fiscal year.
Compensation Committee
Joseph Crudup, Jr. (Chairman)
James H. Barton
Aubrey T. Scales
Compensation Committee Interlocks and Insider Participation
The Compensation Committee was composed of Messrs. Crudup, Barton and
Scales during the year ended June 30, 1996. No executive officer of the
Association has served as a member of the compensation committee of another
entity, one of whose executive officers served on the Compensation Committee
of the Association. No executive officer of the Association has served as a
director of another entity, one of whose executive officers served on the
Compensation Committee. No executive officer of the Association has served
as a member of the compensation committee of another entity, one of whose
executive officers served as a director of the Association.
Performance Graph
The following graph compares the Corporation's cumulative stockholder
return on its Common Stock with the return on the National Association of
Securities Dealers Automated Quotation ("Nasdaq") (U.S. companies) Index and
a peer group of the Nasdaq's Financial Index. Total return assumes the
reinvestment of all dividends.
-10-
PAGE
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
CORPORATION, NASDAQ (U.S. COMPANIES) AND NASDAQ
FINANCIAL STOCKS
Period Ending
10/07/93 09/30/94 09/30/95 07/31/96
_______________________________________
Corporation $100.00 $156.47 $185.62 $207.80
Nasdaq (Fin.) Index 100.00 105.39 133.37 148.52
Nasdaq (U.S.) Index 100.00 100.82 139.25 145.48
The graph assumes $100 was invested on October 7, 1993 when the
Corporation first issued stock to the public. Trading of the stock began
October 8, 1993.
TRANSACTIONS WITH MANAGEMENT
The Association, like many financial institutions, has followed the
policy of granting loans to its officers, directors and employees on the
security of their primary residences and also makes consumer loans to such
persons. In accordance with the requirements of applicable law, loans to
executive officers and directors of the Association are made on substantially
the same terms, including interest rates, fees and collateral, as those
prevailing at the time for comparable transactions with other persons, and
the opinion of management do not involve more than the normal risk of
collectability or present other unfavorable features. At June 30, 1996,
outstanding balances on loans to directors and executive officers totalled
$483,866.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the officers of the
Corporation and its directors, and persons who beneficially own more than 10%
of any registered class of the Corporation's Common Stock, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission and the Corporation.
-11-
PAGE
Based solely on a review of the reports and written representations
provided to the Corporation by the above referenced persons, the Corporation
believes that during fiscal 1996 all filing requirements applicable to its
reporting officers, directors and greater than 10% beneficial owners were
complied with properly and in a timely manner.
OTHER MATTERS
The Board of Directors of the Corporation is not aware of any business
to come before the Meeting other than those matters described above in this
Proxy Statement. However, if any other matters should properly come before
the Meeting, it is intended that proxies in the accompanying form will be
voted in respect thereof in accordance with the judgment of the person or
persons voting the proxies.
FINANCIAL STATEMENTS
The cost of solicitation of proxies will be borne by the Corporation.
In addition to solicitations by mail, directors, officers and regular
employees of the Corporation may solicit proxies personally or by telegraph
or telephone without additional compensation. The Corporation will solicit
proxies from stockholders, including brokers' accounts.
The Corporation's Annual Report to Stockholders, including financial
statements, has been mailed to all stockholders of record as of the close of
business on September 13, 1996. Any stockholder who has not received a copy
of such Annual Report may obtain a copy by writing to the Secretary of the
Corporation. Such Annual Report is not to be treated as part of the proxy
solicitation material or as having been incorporated herein by reference.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Corporation's proxy
materials for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Corporation's
administrative office at 201 North Main Street, Anderson, South Carolina
29621, no later than May 23, 1997. Any such proposals shall be subject to
the requirements of the proxy rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
CAROLE K. BAIN
SECRETARY
Anderson, South Carolina
September 20, 1996
FORM 10-K
A COPY OF THE FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON
WRITTEN REQUEST TO CAROLE K. BAIN, SECRETARY, FIRST SOUTHEAST FINANCIAL, 201
NORTH MAIN STREET, ANDERSON, SOUTH CAROLINA 29621.
-12-
REVOCABLE PROXY
FIRST SOUTHEAST FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 29, 1996
The undersigned hereby appoints A.C. Terry, Josiah Crudup, Jr. and David
C. Wakefield, III as the official proxy committee of the Board of Directors,
with full powers of substitution, as attorneys and proxies for the
undersigned, to vote all shares of common stock of First Southeast Financial
Corporation which the undersigned is entitled to vote at the Annual Meeting
of Stockholders, to be held at its main office located at 201 North Main
Street, Anderson, South Carolina, on Tuesday, October 29, 1996, at 2:00 p.m.,
Eastern Time, and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
1. The election as directors of [ ] [ ]
all nominees listed below
(except as marked to the
contrary below).
David C. Wakefield, III
Aubrey T. Scales
INSTRUCTION: To withhold your vote
for any individual nominee, write
that nominee's name on the line below.
-----------------------------
-----------------------------
The Board of Directors recommends a vote "FOR" the above proposal.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITION STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual
Meeting or at any adjournment thereof and after notification to the Secretary
of the Corporation at the Meeting of the stockholder's decision to terminate
this proxy, then the power of said attorneys and proxies shall be deemed
terminated and of no further force and effect.
The undersigned acknowledges receipt from the Corporation prior to the
execution of this proxy of notice of the Meeting, a proxy statement dated
September 20, 1996 and the 1996 Annual Report to Stockholders.
Dated: , 1996
- ---------------------------- ----------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- --------------------------- ----------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.