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GREENVILLE FIRST BANCSHARES, INC.
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GREENVILLE FIRST BANCSHARES, INC.
112 HAYWOOD ROAD
GREENVILLE, SOUTH CAROLINA 29607
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Dear Fellow Shareholder:
We cordially invite you to attend the 2001 Annual Meeting of
Shareholders of Greenville First Bancshares, Inc., the holding company for
Greenville First Bank. At the meeting, we will report on our performance in 2000
and answer your questions. We are excited about our accomplishments in 2000 and
look forward to discussing both our accomplishments and our plans with you. We
hope that you can attend the meeting and look forward to seeing you there.
This letter serves as your official notice that we will hold the
meeting on May 15, 2001 at the bank's main office in Greenville, South Carolina
at 4:30 PM for the following purposes:
1. To elect four members to the Board of Directors; and
2. To transact any other business that may properly come before the
meeting or any adjournment of the meeting.
Shareholders owning our common stock at the close of business on April
2, 2001 are entitled to attend and vote at the meeting. A complete list of these
shareholders will be available at the company's offices prior to the meeting.
Please use this opportunity to take part in the affairs of your company
by voting on the business to come before this meeting. Even if you plan to
attend the meeting, we encourage you to complete and return the enclosed proxy
to us as promptly as possible.
By order of the Board of Directors,
/s/ R. Arthur Seaver, Jr.
R. Arthur Seaver, Jr.
President and Chief Executive Officer
Greenville, South Carolina
April 23, 2001
GREENVILLE FIRST BANCSHARES, INC.
112 HAYWOOD ROAD
GREENVILLE, SOUTH CAROLINA 29607
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 15, 2001
Our Board of Directors is soliciting proxies for the 2001 Annual
Meeting of Shareholders. This proxy statement contains important information for
you to consider when deciding how to vote on the matters brought before the
meeting. We encourage you to read it carefully.
VOTING INFORMATION
The Board set April 2, 2001 as the record date for the meeting.
Shareholders owning our common stock at the close of business on that date are
entitled to attend and vote at the meeting, with each share entitled to one
vote. There were 1,150,000 shares of common stock outstanding on the record
date. A majority of the outstanding shares of common stock represented at the
meeting will constitute a quorum. We will count abstentions and broker
non-votes, which are described below, in determining whether a quorum exists.
When you sign the proxy card, you appoint R. Arthur Seaver, Jr. and Mr.
Fred Gilmer, Jr. as your representatives at the meeting. Mr. Seaver and Mr.
Gilmer will vote your proxy as you have instructed them on the proxy card. If
you submit a proxy but do not specify how you would like it to be voted, Mr.
Seaver and Mr. Gilmer will vote your proxy for the election to the board of
directors of all nominees listed below under "Election Of Directors". We are not
aware of any other matters to be considered at the meeting. However, if any
other matters come before the meeting, Mr. Seaver and Mr. Gilmer will vote your
proxy on such matters in accordance with their judgment.
You may revoke your proxy and change your vote at any time before the
polls close at the meeting. You may do this by signing and delivering another
proxy with a later date or by voting in person at the meeting. Brokers who hold
shares for the accounts of their clients may vote these shares either as
directed by their clients or in their own discretion if permitted by the
exchange or other organization of which they are members. Proxies that brokers
do not vote on some proposals but that they do vote on others are referred to as
"broker non-votes" with respect to the proposals not voted upon. A broker
non-vote does not count as a vote in favor of or against a particular proposal
for which the broker has no discretionary voting authority. In addition, if a
shareholder abstains from voting on a particular proposal, the abstention does
not count as a vote in favor of or against the proposal.
We are paying for the costs of preparing and mailing the proxy
materials and of reimbursing brokers and others for their expenses of forwarding
copies of the proxy materials to our shareholders. Our officers and employees
may assist in soliciting proxies but will not receive additional compensation
for doing so. We are distributing this proxy statement on or about April 23,
2001.
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PROPOSAL NO. 1: ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with staggered
terms, so that the terms of only approximately one-third of the Board members
expire at each annual meeting. The current terms of the Class II directors will
expire at the meeting. The terms of the Class III directors expire at the 2002
Annual Shareholders Meeting. The terms of the Class I directors will expire at
the 2003 Annual Shareholders Meeting. Our directors and their classes are:
Class I Class II Class III
------- -------- ---------
Mark A. Cothran Leighton M. Cubbage Andrew B. Cajka
Rudolph G. Johnstone, III, M.D. David G. Ellison Anne S. Ellefson
Keith J. Marrero James B. Orders Fred Gilmer, Jr.
R. Arthur Seaver, Jr. William B. Sturgis Tecumseh Hooper, Jr.
Shareholders will elect four nominees as Class II directors at the
meeting to serve a three-year term, expiring at the 2004 Annual Meeting of
Shareholders. The directors will be elected by a plurality of the votes cast at
the meeting. This means that the four nominees receiving the highest number of
votes will be elected.
The board of directors recommends that you elect Leighton M. Cubbage,
David G. Ellison, James B. Orders, and William B. Sturgis as Class II directors.
If you submit a proxy but do not specify how you would like it to be
voted, Mr. Gilmer and Mr. Seaver will vote your proxy to elect Messrs. Cubbage,
Ellison, Orders and Sturgis. If any of these nominees is unable or fails to
accept nomination or election (which we do not anticipate), Mr. Gilmer and Mr.
Seaver will vote instead for a replacement to be recommended by the board of
directors, unless you specifically instruct otherwise in the proxy.
Set forth below is certain information about the nominees. Each of the
nominees is a director of our subsidiary, Greenville First Bank:
LEIGHTON M. CUBBAGE, 48, Class II director, was the co-founder,
president, and chief operating officer of Corporate Telemanagement Group in
Greenville, South Carolina from 1989 until 1995, when the company was acquired
by LCI International. Since 1995, Mr. Cubbage has been a private investor
maintaining investment interests in a telecommunications company, a car
dealership, and a trucking company. He is a 1977 graduate of Clemson University
with a bachelors degree in political science. Mr. Cubbage is on the board of
directors for the Greenville United Way, a member of the Greenville Technical
College Foundation Board, and a member of the Clemson University Entrepreneurial
Board.
DAVID G. ELLISON, 51 Class II director, is the District Director of
Northwestern Mutual Financial Network, since 1987. Mr. Ellison is a 1972
graduate of Furman University where he received a bachelors degree and a 1976
graduate of Clemson-Furman University where he received a masters in business
administration. Mr. Ellison was on the board of trustees of Furman University
and past president of both the Furman Alumni and Furman Paladin Club. He is also
was on the board of trustees for United Way of Greenville County. He was a
former commissioner of the Greenville Housing Authority and is a current member
of the Rotary Club of Greenville, South Carolina.
JAMES B. ORDERS, III, 44, Class II director, is the Chairman of the
Board for Greenville First Bancshares. He has been the president of Park Place
Corporation, a company engaged in the manufacture and sale of bedding and other
furniture to the wholesale market, since 1986. Mr. Orders is chairman of
Comfortaire Corporation and a director of Orders Realty Co., Inc., a real estate
development and management company that is a wholly owned subsidiary of Park
Place Corporation. He attended Clemson University from 1970 until 1974. Mr.
Orders is the
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past president of the Downtown Rotary Club, a past member of the advisory board
of Greenville National Bank, and a past member of the advisory board of Carolina
First Bank. In addition, he is a member of the Lay Christian Association Board
and the Downtown Soccer Association Board.
WILLIAM B. STURGIS, 66, Class II director, held various executive
positions with W.R. Grace & Co. from 1984 until his retirement in 1997,
including executive vice president of W.R. Grace's worldwide packaging
operations and president of its North American Cryovac Division. Mr. Sturgis
graduated from Clemson University in 1957 with a degree in chemical engineering
and is a graduate of the Advanced Management Program at Harvard. He is active
with Clemson University, serving on the Foundation Board, the President's
Advisory Council, and the Engineering Advisory Board. He is also an advisory
board member of the Peace Center and a member of the Downtown Rotary Club and
Presbyterian Community Foundation.
Set forth below is also information about each of the company's other
directors and each of its executive officers. Each director is also an organizer
and a director of our subsidiary bank.
MARK A. COTHRAN, 43, Class I director, is the president and principal
owner of Cothran Company, Inc., a real estate construction and development
company in Greenville, South Carolina. He has been with Cothran Company, Inc.
since 1986. Mr. Cothran received his bachelors degree in finance and banking
from the University of South Carolina in 1980 and is a licensed real estate
broker in the State of South Carolina. He is currently on the board of directors
of the Greenville Chamber of Commerce and a member of its economic development
board. He is past president of the state chapter of NAIOP and past member of the
Advisory Board of Greenville National Bank.
ANNE S. ELLEFSON, 46 Class III director, is an attorney and shareholder
with Haynsworth Sinker Boyd, P.A., where she has practiced law since 1979. Mrs.
Ellefson is a 1976 graduate of the University of South Carolina where she
received a bachelors decree and a 1979 graduate of the University of South
Carolina School of Law. Mrs., Ellefson previously served on advisory boards at
both United Carolina Bank and BB&T. She is Chairperson elect of the Greater
Greenville Chamber of Commerce and on the Boards of United Way of Greenville
County and the Greenville Urban League.
RUDOLPH "TRIP" G. JOHNSTONE, III, M.D.,40, Class I director, is a
physician who has practiced with the Cross Creek Asthma, Allergy and Immunology
medical clinic, since 1992. He graduated from Washington & Lee University in
1982 with a degree in biology and from the Medical University of South Carolina
in 1986. Dr. Johnstone is active with the Greenville Art Museum and served on
the consulting board to Greenville National Bank from 1995 until 1998, when it
was acquired by Regions Bank.
KEITH J. MARRERO, 41, Class I director, is the principal and owner of
AMI Architects, an architectural firm located in Greenville, South Carolina that
was founded in 1988. He is a registered architect with the South Carolina and
Louisiana Boards of Architectural Examiners and the National Council of
Architectural Registration Boards. Mr. Marrero is a previous advisory board
member of BB&T. He graduated from the University of Notre Dame with a bachelors
degree in Architecture in 1983. Mr. Marrero was appointed by former Governor
David Beasley to the board of directors of the South Carolina Legacy Trust Fund.
He is also an executive committee member of the Greenville Chamber of Commerce,
serving as vice chairman of Minority Business. Mr. Marrero is also an advisory
board member of the Bi-Lo Center and serves on the Historic Architecture Review
Board for the City of Greenville.
R. ARTHUR "ART" SEAVER, JR., 37, Class I director, is the president and
chief executive officer of our company and our subsidiary bank. He has over 13
years of banking experience. From 1986 until 1992, Mr. Seaver held various
positions with The Citizens & Southern National Bank of South Carolina,
including assistant vice president of corporate banking. From 1992 until
February 1999, he was with Greenville National Bank, which was acquired by
Regions Bank in 1998. He was the senior vice president in charge of Greenville
National Bank's liability portion of the balance sheet prior to leaving to form
Greenville First Bank. Mr. Seaver is a 1986 graduate of Clemson University with
a bachelors degree in Finance and a 1999 graduate of the BAI Graduate School of
Community Bank Management. He is very active in the Greenville community, where
he works with
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numerous organizations, including Leadership Greenville, the South Carolina
Network of Business and Education Partnership, Junior Achievement, the
Greenville Convention and Visitors Bureau, the United Way, and the First
Presbyterian Church.
JAMES "JIM" M. AUSTIN, III, 44, is the senior vice president and chief
financial officer of our company and subsidiary bank. He has over 20 years of
experience in the financial services industry. From 1978 to 1983, Mr. Austin was
employed by KPMG Peat Marwick specializing in bank audits. Mr. Austin was
employed for 12 years with American Federal Bank as controller and senior vice
president responsible for the financial accounting and budgeting. From 1995
until 1997, Mr. Austin was the senior vice president and chief financial officer
of Regional Management Corporation, a 58-office consumer finance company where
he was responsible for the finance and operations area of the company. From 1997
until July 1999, he was the director of corporate finance for Homegold
Financial, a national sub-prime financial services company that specializes in
mortgage loan originations. Mr. Austin is a 1978 graduate of the University of
South Carolina with degrees in accounting and finance. He is also a Certified
Public Accountant and graduate of the University of Georgia's Executive
Management's Savings Bank program. He is a graduate of Leadership Greenville. He
has served on the community boards of River Place Festival, Junior Achievement,
and Pendleton Place, and he is the past president of the Financial Manager's
Society of South Carolina and former board member of the Young Manager's
Division of the Community of Financial Institutions of South Carolina. He is
active in the First Presbyterian Church and currently serves on the board of
directors for the Center for Development Services.
ANDREW B. CAJKA, 41, Class III director, is the founder and president
of Southern Hospitality Group, LLC, a hotel management and development company
in Greenville, South Carolina. Prior to starting his own business, Mr. Cajka was
a managing member of Hyatt Hotels Corporation from 1986 until 1998. He is a
graduate of Bowling Green State University in 1982. Mr. Cajka is currently on
the board of directors for the Greenville Chamber of Commerce and past president
of the down area council. He is a member of the Greenville Hospital Foundation
Board, past chairman of the Children's Hospital, Board of Trustee member and
chairman of the Foundation at St. Joseph High School, past chairman of the
Greenville Tech Hospitality Board, board member of the Urban League, and past
chairman of the Greenville Convention and Visitors Bureau.
FRED GILMER, JR,.65, Class III director, is the senior vice president
of our company and subsidiary bank. He is a seasoned banker with over 40 years
of experience in the financial industry. He was the executive officer in charge
of client relations for Greenville National Bank from 1994 until April 1999,
when he resigned to help organize our subsidiary bank. Mr. Gilmer has held
executive positions with three other banks in the Greenville area between 1959
and 1995. He graduated from the University of Georgia in 1958 and the LSU
Graduate School of Banking of the South in Baton Rouge, Louisiana in 1970. Mr.
Gilmer is very active in the Greenville community. He is a graduate of
Leadership Greenville and presently serves numerous organizations, including the
Greenville Rotary Club, the Greenville Chamber of Commerce, the YMCA, and the
First Presbyterian Church. He is a past board member of Family Children Service,
Goodwill Industries, Downtown Area Council, Greenville Little Theater,
Greenville Cancer Society, South Carolina Arthritis Foundation, Freedom Weekend
Aloft, and the Greenville Chamber of Commerce.
TECUMSEH "TEE" HOOPER, JR., 53, Class III director, has been the
president of IKON Office Solutions in Greenville, South Carolina, since 1982. He
is also a director of Homegold, Inc., a sub-prime mortgage lender, and a
director of Peregrine Energy, Inc., an energy management company. From 1994
until 1997, he served as a director of Carolina Investors, a savings and loan
institution. Mr. Hooper graduated from The Citadel in 1969 with a degree in
business administration, and he received a Masters in Business Administration
from the University of South Carolina in 1971. Mr. Hooper has served the
community as a member of the Greenville County Development Board, the Greenville
Chamber of Commerce, and the board of directors for Camp Greenville, as well as
the vice chairman of communications for the United Way. Mr. Hooper also serves
on the board of directors for Leadership Greenville, Leadership South Carolina,
and the YMCA Metropolitan.
FAMILY RELATIONSHIPS. Dr. Randolph G. Johnstone, III, director, is Fred
Gilmer, Jr's stepson and Fred Gilmer, III, senior vice president, is Fred Gilmer
Jr's son. No other director has a family relationship with any other director or
executive officer of the company.
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows the cash compensation we paid to our chief
executive officer and president for the years ended 2000 and 1999 and for all
other executives who earned over $100,000 for the year ended 2000.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
----------------------------- ------------
Other Annual Number of Securities
Name and Principal Position Year Salary Bonus Compensation Underlying Options
- --------------------------- ---- ------ ----- ------------ ------------------
R. Arthur Seaver 2000 $ 123,100 40,000 $ 1,130 ---
President and Chief Executive 1999 $ 108,019 -- --
Officer
James A. Austin 2000 $ 97,667 22,500 $ -- ---
Senior Vice President and Chief
Financial Officer
Fred Gilmer, III 2000 $ 81,250 28,100 $ 6,000 ---
Senior Vice President
EMPLOYMENT AGREEMENTS
We have entered into an employment agreement with Art Seaver for a
three-year term, pursuant to which he serves as the president, the chief
executive officer, and a director of both our company and our subsidiary bank.
Mr. Seaver will be paid an initial salary of $123,000, plus his yearly medical
insurance premium. He also will receive an annual increase in his salary equal
to the previous year's salary times the increase in the Consumer Price Index
during the previous year. The board of directors may increase Mr. Seaver's
salary above this level, but not below it. He will be eligible to receive an
annual bonus of up to 5% of the net pre-tax income of our bank, if the bank
meets performance goals set by the board. He will also be eligible to
participate in any management incentive program of the bank or any long-term
equity incentive program and will be eligible for grants of stock options and
other awards thereunder. Mr. Seaver was granted options to purchase a number of
shares of common stock equal to 5% of the number of shares sold in offering, or
57,500 shares. These options will vest over a five-year period and will have a
term of ten years. Additionally, Mr. Seaver will participate in the bank's
retirement, welfare, and other benefit programs and is entitled to a life
insurance policy and an accident liability policy and reimbursement for
automobile expenses, club dues, and travel and business expenses.
Mr. Seaver's employment agreement also provides that following
termination of his employment and for a period of 12 months thereafter, he may
not (a) compete with the company, the bank, or any of its affiliates by,
directly or indirectly, forming, serving as an organizer, director or officer
of, or consultant to, or acquiring or maintaining more than 1% passive
investment in, a depository financial institution or holding company thereof if
such depository institution or holding company has one or more offices or
branches within radius of thirty miles from the main office of the company or
any branch office of the company, (b) solicit major customers of the bank for
the purpose of providing financial services, or (c) solicit employees of the
bank for employment. If Mr. Seaver terminates his employment for good cause as
that term is defined in the employment agreement or if he is
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terminated following a change in control of Greenville First Bancshares as
defined in the agreement, he will be entitled to severance compensation of his
then current monthly salary for a period of 12 months, plus accrued bonus, and
all outstanding options and incentives shall vest immediately.
DIRECTOR COMPENSATION
We pay each of our eight outside directors $200 for each meeting they
attend and $50 for each committee meeting they attend.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
GENERAL
The following table shows how much common stock in the company is owned
by the directors, certain executive officers, and owners of more than 5% of the
outstanding common stock, as of April 2, 2001. In addition, each organizer
received a warrant to purchase one share of common stock at a purchase price of
$10.00 per share for every two shares purchased by that organizer in the
offering, or 129,950 shares. The warrants, which will be represented by separate
warrant agreements, will vest over a three year period beginning on January 10,
2001 and will be exercisable in whole or in part during the ten year period
following that date.
NAME NUMBER OF RIGHT PERCENTAGE OF
---- SHARES TO BENEFICIAL
OWNED(1) ACQUIRE(2) OWNERSHIP(3)
--------- ---------- -------------
James M. Austin, III 7,000 2,500 0.82%
Andrew B. Cajka, Jr. 10,000 1,667 1.01%
Mark A. Cothran 30,000 5,000 3.03%
Leighton M. Cubbage 83,800 13,333 8.35%
Anne S. Ellefson 1,750 0.15%
David Ellison 3,000 0.26%
Fred Gilmer, Jr. 17,300 5,383 1.96%
Fred Gilmer, III 1,500 1,250 0.24%
Tecumseh Hooper, Jr. 15,000 2,500 1.52%
Rudolph G. Johnstone, III 10,600 1,767 1.07%
Keith J. Marrero 5,000 833 0.51%
James B. Orders, III 20,000 3,333 2.02%
R. Arthur Seaver, Jr. 12,000 13,500 2.19%
William B. Sturgis 2,500 10,000 1.08%
All directors and executive officers 219,450 61,066 23.16%
as a group (12 persons)
(1) Includes shares for which the named person:
o has sole voting and investment power,
o has shared voting and investment power with a spouse, or
o holds in an IRA or other retirement plan program, unless otherwise
indicated in these footnotes. Does not include shares that may be
acquired by exercising stock options.
(2) Includes shares that may be acquired within the next 60 days by
exercising vested stock options and warrants but does not include any
other stock options or warrants.
(3) Determined by assuming the named person exercises all options and
warrants which he or she has the right to acquire within 60 days, but
that no other persons exercise any options.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 2000, the board of directors of the
company held 12 meetings and the board of directors of the bank, held 12
meetings. All of the directors of the company and the bank attended at least 75%
of the aggregate of such board meetings and the meetings of each committee on
which they served.
The company's board of directors has appointed three committees,
including an audit, personnel, and finance committee. The audit committee is
composed of Mr. Cajka, Mr. Hooper, Mrs. Ellefson, Mr. Marrero, Mr.
8
Sturgis, and Mr. Cubbage. Each of these members are considered "independent"
under Rule 4200(a)(14) of the National Association of Securities Dealers'
listing standards. The audit committee met one time in 2000. The audit committee
functions are set forth in its charter, which is included as Appendix A. The
audit committee has the responsibility of reviewing financial statements,
evaluating internal accounting controls, reviewing reports of regulatory
authorities, and determining that all audits and examinations required by law
are performed. The committee recommends to the board the appointment of the
independent auditors for the next fiscal year, reviews and approves the
auditor's audit plans, and reviews with the independent auditors the results of
the audit and management's responses. The audit committee is responsible for
overseeing the entire audit function and appraising the effectiveness of
internal and external audit efforts. The audit committee reports it findings to
the board of directors.
The personnel committee is composed of Mr. Sturgis, Mr. Cothran, Mr.
Johnstone, Mr. Ellison, Mr. Seaver, and Mr. Marrero. The personnel committee met
two times in 2000. The personnel committee has the responsibility of approving
the compensation plan for the entire bank and specific compensation for all
executive officers. The personnel committee reviews all benefit plans and
annually reviews the performance of the chief executive officer.
The finance committee is composed of Mr. Orders, Mr. Cajka, Mr.
Cothran, Mr. Gilmer, Mr. Hooper, Mr. Ellison, Mrs. Ellefson, Mr. Seaver, and Mr.
Johnstone. The finance committee has the responsibility of reviewing the loan
policy, investment policy, and the bank's asset/liability structure.
We do not have a nominating committee or a committee serving a similar
function.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD
The report of the audit committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the company specifically
incorporates the information contained in the report by reference, and shall not
be deemed filed under such acts.
The audit committee reviewed and discussed with management the audited
financial statements. The audit committee discussed with the independent
auditors the matters required to be discussed by the Statement on Auditing
Standards No. 61. The audit committee received from the independent auditors the
written disclosures and the letter required by the Independent Standards Board
Standard No. 1 ("Independence Discussions with Audit Committees") and discussed
with the independent auditors the independent auditor's independence from the
company and its management. In reliance on the reviews and discussions referred
to above, the audit committee recommended to our board of directors that the
audited financial statements be included in our Annual Report on SEC Form 10-K
for the fiscal year ended December 31, 2000 for filing with the SEC.
The report of the audit committee is included herein at the direction
of its members Mr. Cajka, Mr. Hooper, Mrs. Ellefson, Mr. Marrero, Mr. Sturgis,
and Mr. Cubbage.
AUDIT FEES
The aggregate fees billed for professional services rendered by the
independent auditors during our 2000 fiscal year for audit of our annual
financial statements and review of those financial statements included in our
quarterly reports filed on SEC Form 10-QSB totaled $3,370. The company estimates
that an additional $7,800 will be billed during 2001 for the above services.
9
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
We did not engage the independent auditors to provide, and the
independent auditors did not bill for, professional services regarding financial
information systems design and implementation during the year ended December 21,
2000.
ALL OTHER FEES
The aggregate fees billed for non audit services rendered by the
independent auditors during the company's fiscal year totaled $2,360. Non-audit
services included internal audit services, and income tax return preparation.
The company estimates that the independent auditors will bill an additional
$1,800 during 2001 for non-audit services provided in 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
We enter into banking and other transactions in the ordinary course of
business with our directors and officers of the company and the bank and their
affiliates. It is our policy that these transactions be on substantially the
same terms (including price, or interest rates and collateral) as those
prevailing at the time for comparable transactions with unrelated parties. We do
not expect these transactions to involve more than the normal risk of
collectibility nor present other unfavorable features to us. Loans to individual
directors and officers must also comply with our bank's lending policies and
statutory lending limits, and directors with a personal interest in any loan
application are excluded from the consideration of the loan application. We
intend for all of our transactions with our affiliates to be on terms no less
favorable to the us than could be obtained from an unaffiliated third party and
to be approved by a majority of disinterested directors.
LEASE AND CONSTRUCTION OF MAIN OFFICE
We have leased our bank's main facility from Halton Properties, LLC for
a term of 20 years at an initial rental rate of $23,521 per month. Mark A.
Cothran, one of our directors, is a 50% owner of Halton Properties, LLC. One of
our other directors, Keith J. Marrero, is an architect and is designing the
facility. Mr. Marrero was paid approximately $70,000 for his architectural
services. The construction of our main facility is complete and we have begun to
pay rent in the amount of $23,521 per month. We have conducted two separate
appraisals of the lease and the property, which includes Mr. Marrero's
architectural services, to ensure that the terms of the proposed lease are on
substantially the same terms as those prevailing at the time for comparable
transactions with unrelated parties.
10
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
As required by Section 16(a) of the Securities Exchange Act of 1934,
our directors, and executive officers and certain other individuals are required
to report periodically their ownership of our common stock and any changes in
ownership to the SEC. Based on a review of Forms 3, 4, and 5 and any
representations made to us, it appears that all such reports for these persons
were filed in a timely fashion during 2000 except that a timely filing on Form 4
was not made for Leighton Cubbage. This late report represented only one
transaction for that month.
INDEPENDENT AUDITORS
We have selected the firm of Elliot, Davis & Company LLP to serve as
independent auditors to the company for the year ended December 31, 2001.
SHAREHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING OF SHAREHOLDERS
If shareholders wish a proposal to be included in our proxy statement
and form of proxy relating to the 2002 annual meeting, they must deliver a
written copy of their proposal to our principal executive offices no later than
December 24, 2001. To ensure prompt receipt by the company, the proposal should
be sent certified mail, return receipt requested. Proposals must comply with our
bylaws relating to shareholder proposals in order to be included in our proxy
materials.
April 23, 2001
11
PROXY SOLICITED FOR ANNUAL MEETING
OF SHAREHOLDERS OF
GREENVILLE FIRST BANCSHARES, INC.
TO BE HELD ON MAY 15, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints Fred Gilmer, Jr. and R. Arthur
Seaver, Jr. and each of them, his or her true and lawful agents and proxies with
full power of substitution in each, to represent and vote, as indicated below,
all of the shares of common stock of Greenville First Bancshares, Inc. that the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
the company to be held at the bank's main office in Greenville, South Carolina,
at 4:30 p.m. local time, and at any adjournment, upon the matters described in
the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement,
receipt of which is acknowledged. These proxies are directed to vote on the
matters described in the Notice of Annual Meeting of Shareholders and Proxy
Statement as follows:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED: (I) "FOR" PROPOSAL NO. 1 TO ELECT THE FOUR IDENTIFIED CLASS
II DIRECTORS TO SERVE ON THE BOARD OF DIRECTORS FOR THREE-YEAR TERMS.
1. PROPOSAL to elect the four identified Class II directors to serve
for three year terms
Leighton Cubbage
David G. Ellison
James B. Orders
William B. Sturgis
|_| FOR all nominees |_| WITHHOLD AUTHORITY
listed (except as marked to to vote for all nominees
the contrary)
(INSTRUCTION: To withhold authority to vote for any individual nominee(s), write
that nominees name(s) in the space provided below).
Dated: , 2000
-----------------------------
- -------------------------------- ----------------------------------------
Signature of Shareholder(s) Signature of Shareholder(s)
- -------------------------------- ----------------------------------------
Please print name clearly Please print name clearly
Please sign exactly as name or names appear on your stock certificate. Where
more than one owner is shown on your stock certificate, each owner should sign.
Persons signing in a fiduciary or representative capacity shall give full title.
If a corporation, please sign in full corporate name by authorized officer. If a
partnership, please sign in partnership name by authorized person.
APPENDIX A
Charter of the Audit Committee of the Board of Directors
AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit
Committee's primary duties and responsibilities are to:
o Monitor the integrity of the Company's financial reporting process
and systems of internal controls regarding finance, accounting,
and legal compliance.
o Monitor the independence and performance of the Company's
independent auditors and internal auditing department.
o Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct
access to the independent auditors as well as anyone in the
organization. The Audit Committee has the ability to retain, at the
Company's expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its duties.
AUDIT COMMITTEE COMPOSITION AND MEETINGS
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent nonexecutive
directors, free from any relationship that would interfere the exercise
of his or her independent judgement. All members of the Committee
should have a basic understanding of finance and accounting and be able
to read and understand fundamental financial statements, and at least
one member of the Committee shall have accounting or related financial
management expertise.
Audit Committee members shall be appointed by the Board. If an audit
committee Chair is not designated or present, the members of the
Committee may designate a Chair by majority vote of the Committee
membership.
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. The
Committee should meet privately in an executive session at least
annually with management, the director of the internal auditing
department, the independent auditors, and as a committee to discuss any
matters that the Committee or each of these groups believe should be
discussed. In addition, the Committee, or at least the Chair, should
communicate with management and the independent auditors quarterly to
review the Company's financial statements and significant findings
based upon the auditors limited review procedures.
AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
REVIEW PROCEDURES
1. Review and reassess the adequacy of this Charter at least
annually. Submit the charter to the Board of Directors for
approval and have the document published at least every three
years in accordance with SEC regulations.
2. Review the Company's annual audited financial statements prior
to filing or distribution. Review should included discussion
with management and independent auditors of significant issues
regarding accounting principles, practices, and judgments.
3. In consultation with the management, the independent auditors,
the internal auditors, consider the integrity of the Company's
financial reporting processes and controls. Discuss
significant financial risk exposures and the steps management
has taken to monitor, control, and report such exposures.
Review significant findings prepared by the independent
auditors and the internal auditing department together with
management responses.
4. Review with financial management and the independent auditors
the company's quarterly financial results prior to the release
of earnings and/or the company's quarterly financial
statements prior to filing or distribution. Discuss any
significant changes in the Company's accounting principles and
any items required to be communicated by the independent
auditors in accordance with SAS 61 (see item 9). The Chair of
the Committee may represent the entire Audit Committee for
purposes of this review.
INDEPENDENT AUDITORS
5. The independent auditors are ultimately accountable to the
Audit Committee and the Board of Directors. The Audit
Committee shall review the independence and performance of the
auditors and annually recommend to the Board of Directors the
appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid
to the independent auditors.
7. On an annual basis, the Committee shall review and discuss
with the independent auditors all significant relationships
they have with the Company that could impair the auditor's
independence.
8. Review the independent auditor's audit plan - discuss scope,
staffing, locations, reliance upon management, and internal
audit and general audit approach.
9. Prior to releasing the year-end earnings, discuss the results
of the audit with the independent auditors. Discuss certain
matters required to be communicated to audit committees in
accordance with AICPA SAS 61.
10. Consider the independent auditor's judgments about the
quality and appropriateness of the Company's accounting
principles as applied in its financial reporting.
11. Review the budget, plan, changes in plan, activities,
organizational structure, and qualifications of the internal
audit department, as needed.
INTERNAL AUDIT DEPARTMENT AND LEGAL COMPLIANCE
12. Review the appointment, performance, and replacement of the
individual responsible for the internal audit function.
13. Review significant reports prepared by the internal audit
function together with management's response and follow-up to
these reports.
14. On at least an annual basis, review with the Company's
counsel, any legal matters that could have a significant
impact on the organization's financial statements, the
Company's compliance with applicable laws and regulations, and
inquiries received from regulators or governmental agencies.
OTHER AUDIT COMMITTEE RESPONSIBILITIES
15. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be
included in the Company's annual proxy statement.
16. Perform any other activities consistent with this charter, the
Company's by-laws, and governing law, as the Committee or the
Board deem necessary or appropriate.
17. Maintain minutes of meetings and periodically report to the
Board of Directors on significant results of the foregoing
activities.