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
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Greer Bancshares Incorporated
-----------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
--------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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:
--------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------
Greer
Bancshares
Incorporated
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 2003
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Greer
Bancshares Incorporated will be held on Thursday, April 24, 2003, at 7:00 p.m.,
local time, at the West Poinsett Street office of Greer State Bank, 1111 West
Poinsett Street, Greer, South Carolina, for the following purposes:
1. To elect three directors to hold office until the 2006 Annual Meeting
of Shareholders or until their successors have been duly elected and
qualified; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournments of the meeting.
Only those shareholders of the Company of record at the close of business on
March 27, 2003 are entitled to vote at the Annual Meeting or any adjournments
thereof. A complete list of shareholders will be available at the Company's
offices prior to the meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EACH
----
SHAREHOLDER IS REQUESTED TO DATE, SIGN, AND RETURN THE ACCOMPANYING PROXY IN THE
- --------------------------------------------------------------------------------
ENCLOSED POSTAGE PAID, RETURN ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE
- --------------------------------------------------------------------------------
ANNUAL MEETING. YOU MAY, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE YOUR SHARES
- --------------------------------------------------------------------------------
IN PERSON AT THE ANNUAL MEETING.
- -------------------------------
By Order of the Board of Directors,
/s/ Gary M. Griffin
Gary M. Griffin
Greer, South Carolina Chairman, Board of Directors
April 2, 2003 Greer Bancshares Incorporated
2
GREER BANCSHARES INCORPORATED
1111 West Poinsett Street
Greer, South Carolina 29650
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 24, 2003
Our Board of Directors is soliciting proxies for the 2003 Annual Meeting of
Shareholders to be held on Thursday, April 24, 2003, at 7:00 p.m., local time.
The meeting will be held at Greer State Bank's West Poinsett Street office, 1111
West Poinsett Street, Greer, South Carolina for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. The approximate date of
the mailing of this Proxy Statement and accompanying Proxy is April 2, 2003.
Who is Entitled to Vote; Other Voting Matters
The board has set March 27, 2003 as the record date for the meeting. Only
shareholders owning the Company's common stock on that date will be entitled to
vote at the meeting. At the close of business on that day, there were
outstanding 1,607,379 shares of the Company's common stock. Each share of common
stock is entitled to one vote on all matters presented at the Annual Meeting. In
accordance with the Company's articles of incorporation, cumulative voting will
not be permitted.
The presence, in person or by proxy, of the holders of one third of the total
number of shares of common stock entitled to vote at the meeting is necessary to
constitute a quorum at the meeting. Since many shareholders cannot attend the
meeting, it is necessary that a large number be represented by proxy.
Accordingly, the Board of Directors has designated proxies to represent those
shareholders who cannot be present in person and who desire to be so
represented. In the event there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
The election of directors will be determined by a plurality vote. We will count
abstentions and broker non-votes, which are described below, in determining
whether a quorum exists. 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.
3
Availability of Voting by Proxy; Revocability of Proxies
When you sign the proxy card, you appoint Walter M. Burch, Theron C. Smith, III
and C. Don Wall as your representatives at the meeting. Mr. Burch, Mr. Smith and
Mr. Wall 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.
Burch, Mr. Smith and Mr. Wall 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. Burch, Mr. Smith and Mr. Wall 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.
Solicitation of Proxies
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 2, 2003.
We are mailing our 2002 Annual Report along with this proxy statement. The
annual report contains financial statements reflecting our financial position
and results of operations at and for the three years ended December 31, 2002.
The annual report, however, is not part of this proxy statement.
ELECTION OF DIRECTORS
Proposal 1 on the Proxy
General Information Regarding 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 Company's bylaws provide for a Board of Directors
consisting of not less than nine and not more than 15 directors. The Board of
Directors is currently comprised of 10 directors.
Shareholders will elect three nominees at the meeting to serve a three-year
term, expiring at the 2006 annual meeting of shareholders. The directors will be
elected by a plurality of the votes cast at the meeting. This means that the
three nominees receiving the highest number of votes will be elected.
The board of directors recommends that you elect the three nominees identified
below as directors. If you submit a proxy but do not specify how you would like
it to be voted, Mr. Burch, Mr. Smith and Mr. Wall will vote your proxy to elect
these nominees. If any of these nominees is unable or fails to accept nomination
or election (which we do not anticipate), Mr. Burch, Mr. Smith and Mr. Wall will
vote instead for a
4
replacement to be recommended by the board of directors, unless you specifically
instruct otherwise in the proxy.
Identification of Nominees
The following table sets forth information concerning the three persons
nominated as directors, as well as directors continuing in office.
Position or Office Director
Name Age with the Company Since
---- --- ---------------- -----
Nominees for Three Year Terms Expiring in 2006
Mark S. Ashmore 46 Director 2002
Harold K. James 51 Director 1988
Anthony C. Cannon 38 Director 2000
Continuing Directors with Terms Expiring in 2004
Walter M. Burch 61 Director 1988
Paul D. Lister 58 Director 1988
C. Don Wall 59 Director 1988
Theron C. Smith, III 54 Director 2000
Continuing Directors with Terms Expiring in 2005
Gary M. Griffin 48 Director 1992
R. Dennis Hennett 60 Director, President & CEO 1988
David M. Rogers 48 Director 1988
Experience of the Board of Directors (All directors have been at their present
occupation at least five years)
Mr. Ashmore is President of Ashmore Bros., Inc./Century Concrete, a local paving
company.
Mr. Burch is General Manager and Co-Publisher of The Greer Citizen, a local
weekly newspaper.
Mr. Cannon is the Energy Manager for Greer Commission of Public Works.
Mr. Griffin is Vice President of Mutual Home Stores, a group of retail stores in
the Greenville-Spartanburg area.
Mr. James is Vice President and Broker-in-Charge of the James Agency, a local
insurance and real estate company.
5
Mr. Lister is a Certified Public Accountant, with a local practice.
Mr. Rogers is President of Joshua's Way, a local non-profit organization.
Mr. Smith is an optometrist with a local practice.
Mr. Wall is a pharmacist and President of Professional Pharmacy, Incorporated.
Meetings and Committees of the Board of Directors.
The Board of Directors held 13 meetings in 2002. All of the directors attended
at least 75% of the aggregate of such board meetings and the meetings of each
committee on which they served.
Our board of directors has appointed a number of committees, including a
personnel committee, a nominating committee, and an audit committee.
Our personnel committee, which met five times in 2002, establishes and monitors
our employee benefits program and personnel policies. This committee also
performs the duties of a compensation committee and reviews annually the
recommendations of executive management regarding administration of salaries and
benefits costs. In 2002, the personnel committee was comprised of Mr. Rogers,
Chairman; Mr. Cannon, Mr. Griffin, and Mr. Smith. In addition, Mr. Hennett, as
our Chief Executive Officer, presents recommendations from executive management
and participates in discussions affecting the compensation of all employees
except his own. The personnel committee also administers the Company's Incentive
Stock Option Plan whereby stock options are awarded to key employees.
Our nominating committee has the principal function of selecting management
nominees for election as directors. The members of the nominating committee are
Messrs. Rogers (Chairman), Griffin, Lister, and Wall.
The audit committee, which met five times in 2002, selects the Company's
independent auditors, determines the scope of the annual audit, determines
whether the Company has adequate administrative, operational, and internal
accounting controls, and determines whether the Company is operating according
to established policies and procedures. The members of the audit committee are
Messrs. Lister (Chairman), Ashmore, and Smith. Each of these members is
considered "independent" under Rule 4200(a)(14) of the National Association of
Securities Dealers' listing standards. The Board of Directors has not adopted a
formal audit committee charter. It is, however, a policy of the Board that the
Audit Committee is responsible for engaging a qualified CPA firm to audit the
bank's financial statements annually to be presented to the shareholders. It is
also a policy that the committee is comprised of outside directors, who will
ensure the bank's internal audit function is independent of bank management and
the audit responsibility is performed competently.
6
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee of the Board of Directors is responsible for providing
independent oversight of the Company's accounting functions and internal
controls. Management is responsible for the Company's internal controls and
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The audit committee's responsibility is to monitor and oversee
these processes.
In connection with these responsibilities, the audit committee has reviewed the
audited financial statements for the year ended December 31, 2002 and has
discussed the audited financial statements with management. The audit committee
has also discussed with Crisp Hughes Evans LLP, our independent accountants, the
matters required to be discussed by Statement on Auditing Standards No. 61 -
Codification of Statements on Auditing Standards (having to do with accounting
methods used in the financial statements). The audit committee has received
written disclosures and the letter from Crisp Hughes Evans LLP required by
Independence Standards Board Standard No. 1 (having to do with matters that
could affect the auditor's independence), and has discussed with Crisp Hughes
Evans LLP the accountants' independence. Based on this, the audit committee
recommended to the board that the audited financial statements be included in
Greer Bancshares Incorporated's SEC Form 10-K for the fiscal year ended December
31, 2002 for the filing with the SEC.
The Audit Committee:
Paul D. Lister, Chairman Mark S. Ashmore Theron C. Smith, III
AUDITING AND RELATED FEES
Audit Fees. The aggregate fees billed for professional services rendered by
Crisp Hughes Evans LLP for the audit of our annual financial statements for the
year ended December 31, 2002 and for the reviews of the financial statements
included in our periodic reports filed with the SEC during 2002 were $23,572.
Financial Information Systems Design and Implementation Fees. Crisp Hughes Evans
LLP performed no services and therefore billed no fees relating to operating or
supervising the operation of our information systems or wide area network or for
designing or implementing our financial information management systems during
2002.
Internal Audit Fees. Crisp Hughes Evans LLP performed internal audit procedures
for us and billed fees for $13,250 relating to internal audit work performed
from January through August 2002.
7
All Other Fees. The aggregate fees billed for other services rendered to us by
Crisp Hughes Evans LLP in 2002 were $2,325, including tax-related services and
other professional services. Auditor Independence. The audit committee of the
board believes that the non-audit services provided by Crisp Hughes Evans LLP
are compatible with maintaining the auditor's independence. None of the time
devoted by Crisp Hughes Evans LLP on its engagement to audit our financial
statements for the year ended December 31, 2002 is attributable to work
performed by persons other than Crisp Hughes Evans LLP employees.
The Board of Directors has appointed the firm of Crisp Hughes Evans LLP as
independent certified public accountants to audit the books of the Company for
the 2003 fiscal year and to perform such other appropriate accounting and
related services as may be required by management. The appointment was made upon
the recommendation of the audit committee. A representative of Crisp Hughes
Evans LLP will be present at the Annual Meeting and will have the opportunity to
make a statement and will be available to respond to appropriate questions that
the shareholders may have.
8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Common Stock. The following table sets forth as of March 27, 2003 information
with respect to the common stock owned beneficially or of record by each of the
directors and nominees individually, by the named executive officers, by all
directors and executive officers of the Company as a group, and by each holder
of at least 5% of the Company's common stock. Unless otherwise noted, each
person has sole voting power and sole investment power with respect to the
shares listed.
Amount and Nature of
Beneficial Ownership Percent of Class (1)
Walter M. Burch 37,102 (2) 2.3%
Paul D. Lister 67,968 (3) 4.2%
C. Don Wall 81,802 (4) 5.1%
Theron C. Smith, III 1,081 *
Gary M. Griffin 21,927 (5) 1.4%
R. Dennis Hennett 1,721 *
David M. Rogers 11,483 (6) *
Mark S. Ashmore 205 *
Harold K. James 27,087 (7) 1.7%
Anthony C. Cannon 221 *
All Directors/Executive Officers as a Group (15 persons) 280,128 17.4%
* Less than 1%.
-------------------------------
<FN>
(1) The calculation is based on 1,607,379 shares of common stock, which is the
actual number of shares outstanding as of the record date. Pursuant to Rule
13d-3 promulgated under the Securities Exchange Act of 1934, percentages of
total outstanding shares have been computed on the assumption that shares
of common stock that can be acquired within 60 days upon the exercise of
options by a given person or group are outstanding, but no other shares
similarly subject to acquisition by other persons are outstanding.
(2) Includes 7,351 shares owned by an affiliated company of Mr. Burch.
(3) Includes 12,769 shares owned by Mr. Lister's spouse.
(4) 38,427 shares owned by Mr. Wall's spouse and 42,911 shares owned by a
company of which Mr. Wall is majority owner. Mr. Wall's address is c/o
Greer Bancshares Incorporated, 1111 West Poinsett Street, Greer, South
Carolina 29650.
(5) Includes 2,014 shares owned by Mr. Griffin's spouse, 7,930 shares owned by
Mr. Griffin's children and 5,327 shares owned by a trust for which he is
custodian.
(6) Includes 2,331 shares owned by Mr. Rogers' spouse and 3,298 shares owned by
Mr. Rogers as custodian for his children.
(7) Includes 15,587 shares owned by a company in which Mr. James has an
ownership interest, 189 shares owned by Mr. James' spouse and 2,174 shares
for which Mr. James is Trustee under an estate.
</FN>
9
EXECUTIVE OFFICERS
We have defined our executive officer classification to include only officers at
the senior vice president level and above. The only executive officers of the
Company are Mr. Hennett, our Chief Executive Officer, and Mr. Medlock, our Chief
Financial Officer. Our executive officers of the Bank include:
Bank
Name Age Title Officer Since
---- --- ----- -------------
R. Dennis Hennett 60 President and CEO 1987
E. Pierce Williams, Jr. 47 EVP -- Commercial Lending 1992
Sandra I. Burdette 60 SVP & Chief Operations Officer 1988
William S. Harrill, Jr. 53 SVP & Mortgage Lending Officer 1988
J. Richard Medlock, Jr. 46 SVP & Chief Financial Officer 1988
John W. Hughes 56 SVP & Consumer Lending Officer 1989
The only family relationship among executive officers and directors is between
William S. Harrill, Jr. (Senior Vice President) and Gary M. Griffin (director),
who are brothers-in-law.
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
Ms. Burdette is a Senior Vice President and the Chief Operations Officer of
Greer State Bank and has managed the Operations area of the Bank since the
Bank's opening in 1989.
Mr. Harrill is a Senior Vice President and the Mortgage Lending Officer of Greer
State Bank and has managed the Bank's mortgage lending function since the Bank's
opening in 1989.
Mr. Hennett has been President and Chief Executive Officer of Greer State Bank
since the Bank's opening in 1989.
Mr. Hughes is a Senior Vice President and Consumer Lending Officer of Greer
State Bank and has been a senior lender for the Bank since 1989.
Mr. Medlock is a Senior Vice President and the Chief Financial Officer of Greer
State Bank. He has been with the Bank since its opening in 1989 and in his
current capacity since 1992.
Mr. Williams is the Executive Vice President and Commercial Lending Officer of
Greer State Bank. He was hired by the Bank in 1992 and has been a lender since
1993.
None of the executive officers serve as directors of other companies.
10
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation of Directors
During 2002, directors received $1,200 for each regular meeting of the Board of
Directors. The Company's policy was to pay $1,200 per special meeting, beginning
with the third special meeting of the year. No more than $2,400 could have been
paid to a director in any one month regardless of the number of regular or
special meetings attended. One special meeting of the Board was held in 2002.
Directors are not compensated for committee meetings. In addition to the monthly
fees paid, each director who was not an employee of the Company was paid a bonus
of $1,200 in 2002.
Compensation Committee Interlocks and Insider Participation
The Company's personnel committee performs the duties of a compensation
committee and reviews annually the recommendations of executive management
regarding administration of salaries and benefits costs. In 2002, the personnel
committee was comprised of David M. Rogers, Chairman; Anthony C. Cannon, Gary M.
Griffin, and Theron C. Smith, III. R. Dennis Hennett, the Bank's Chief Executive
Officer, presents recommendations from executive management and participates in
discussions affecting the compensation of all employees except his own. The
committee met five times during 2002.
Board Compensation Committee Report on Executive Compensation
The personnel committee has approved and implemented a formal salary
administration program with job grades and salary ranges for all personnel of
the Company. Each position within the company, including the chief executive
officer and all other executive officers, has been assigned a ranking based on
certain criteria including, but not limited to, education, knowledge,
experience, skill, and level of authority and responsibility. Each grade or
level has been assigned a salary range based on salary surveys for other
financial institutions of comparable markets, size, and complexity. The
personnel committee reviews job grades periodically and makes changes as
warranted by market conditions or the needs of the Company. The personnel
committee reviews salary ranges every two years and makes adjustments to reflect
changes in the employment marketplace, the Consumer Price Index, and salary
surveys from banking associations.
Annual base salaries are generally set at competitive levels with similar
financial institutions and within the Company's salary administration program.
The personnel committee reviews each employee periodically for job performance
and individual goal attainment. Salary increases are primarily based on
individual performance and achievement.
In 2002, the personnel committee approved, and the board ratified, an incentive
cash award based on the Company's performance and profitability for the year.
All officers and employees participated in the incentive cash awards based on
evaluations and recommendations by each employee's or officer's immediate
supervisor. The personnel committee and the Board of Directors evaluated and
approved the cash award to the chief executive officer. The personnel committee
plans to approve a similar plan in 2003.
11
The Company's overall compensation program for its chief executive officer and
senior management is intended to attract, motivate, and retain key employees;
maintain a base salary structure that is competitive in the Company's
marketplace; link annual incentive cash awards with specific financial
performance goals; and provide long-term incentive awards in the form of
incentive stock options that align management ownership with shareholder value.
The Personnel Committee:
David M. Rogers, Chairman Anthony C. Cannon
Gary M. Griffin Theron C. Smith, III
Performance Graph
The Company is required to provide its shareholders with a line graph comparing
the Company's cumulative total shareholder return with a performance indicator
of the overall stock market and either a published industry index or a
Company-determined peer comparison. The purpose of the graph is to help
shareholders determine the reasonableness of the compensation committee's
decisions with respect to the setting of various levels of executive officer
compensation. Shareholder return (measured through increases in stock price and
payment of dividends) is often a benchmark used in assessing corporate
performance and the reasonableness of compensation paid to executive officers.
However, shareholders should recognize that corporations often use a number of
other performance benchmarks (in addition to shareholder return) to set various
levels of executive officer compensation. The Company's 2002 Annual Report to
Shareholders contains a variety of relevant performance indicators concerning
the Company. Thus, Company shareholders may wish to consider other relevant
performance indicators which may be more closely related to officer performance
in assessing the reasonableness of Company executive officer compensation, such
as growth in earnings per share, book value per share, and cash dividends per
share, along with Return on Equity (ROE) and Return on Assets (ROA) percentages.
The performance graph included in this proxy compares the Company's cumulative
total shareholder return over the previous five fiscal years with both the
NASDAQ Composite Index and The Carson Medlin Company's Independent Bank Index
(an index published by the Carson Medlin Company, Investment Bankers). The
NASDAQ Composite Index reflects overall stock market performance. The
Independent Bank Index is the compilation of the total return to shareholders
over the past five years of a group of 23 independent community banks located in
the southeastern states of Alabama, Florida, Georgia, North Carolina, South
Carolina, Tennessee, Virginia, and West Virginia. The total five year return was
calculated for each of the banks in the peer group taking into consideration
changes in stock price, cash dividends, stock dividends, and stock splits since
December 31, 1997. The individual results were then weighted by the market
capitalization of each bank relative to the entire peer group. The total return
approach and the weighting based upon market capitalization is consistent with
the preparation of the NASDAQ total return index. The Company believes the
Independent Bank Index is a more relevant standard by which community banks
should measure their own performance because the peer group is comprised of
banks that are closer in
12
size and style of doing business. Furthermore, this
index more closely reflects the actual trading patterns of community bank
stocks.
Returns assume a beginning stock index price of $100 per share. The value of the
Company's stock as shown in the graph is based on information known to the
Company regarding transactions in the Company's stock. Because there is no
active trading market in the Company's stock, the information is based on a
limited number of transactions.
[Five Year Performance Index graph]
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
GREER BANCSHARES INCORPORATED $100 $157 $201 $209 $228 $238
INDEPENDENT BANK INDEX 100 113 105 97 113 141
NASDAQ INDEX 100 141 252 157 125 86
13
Summary of Cash and Certain Other Compensation
The following table sets forth the compensation paid by the Bank for the fiscal
years ending December 31, 2002, 2001 and 2000 to our Chief Executive Officer. No
other executive officers received aggregate cash compensation in excess of
$100,000 in 2002.
Securities
Name & Underlying All
Principal Fiscal Other Annual Options/SARS# Other
Position Year Salary 1 Bonus Compensation Granted Compensation 2
-------- ---- ------ ----- ------------ ------- ------------
R. Dennis Hennett 2002 $172,127 $25,000 3 - 0 / 0 $ 9,331
President & CEO 2001 157,370 20,000 4 - 0 / 0 8,851
2000 146,670 16,000 5 - 0 / 0 7,373
- -----------------------
<FN>
1 Represents salary, directors' fees, and deferred compensation expense (which
totaled $23,725 in 2002) for Mr. Hennett.
2 This amount represents 401(k) employer match ($5,475 in 2002), disability
insurance premium ($2,668 in 2002), and group life premium ($1,188 in 2002).
3 Represents bonus paid Mr. Hennett in 2003 for fiscal year 2002.
4 Represents bonus paid Mr. Hennett in 2002 for fiscal year 2001.
5 Represents bonus paid Mr. Hennett in 2001 for fiscal year 2000.
</FN>
Option Grants in Last Fiscal Year
There were no options granted to the named executive officer during the last
fiscal year.
Aggregated Option Exercises in Last Fiscal Year & Fiscal Year-End Option Values
The following table lists the aggregate number of stock options exercised by
executive officers whose aggregate cash compensation exceeded $100,000. Also
listed are the number of exercisable and unexercisable stock options and the
value of exercisable and unexercisable "in-the-money"stock options at December
31, 2002:
Value of Unexercised
Number of Securities In-the-Money Securities
Number of Underlying Options as of Underlying Options as of
Shares Acquired Value Year-end Exercisable/ Year-end
Name on Exercise Realized 1 Unexercisable Exercisable/Unexercisable
---- ----------- -------- ------------- -------------------------
R. Dennis Hennett 100 $1,226 700 / 2,400 $8,841 / $30,312
- ---------------------------
<FN>
1 Market value of underlying securities on the exercise date, minus the
exercise or base price. The market value of $27.00 is based on information
obtained from The Greenville News as of May 15, 2002 (the exercise date).
</FN>
14
Equity Compensation Plan Information
The following table sets forth equity compensation plan information at December
31, 2002.
Number of securities
Remaining available for
Number of securities future issuance under
to be issued Weighted-average equity compensation plans
upon exercise of exercise price of (c)
outstanding options, outstanding options, (excluding securities
Plan Category warrants and rights (a) warrants and rights (b) reflected in column (a))
- -------------- ----------------------- ----------------------- --------------------------
Equity compensation
Plans approved by 56,131 $18.88 92,350
security holders
Equity compensation
Plans not approved N/A N/A N/A
by security holders
Total 56,131 $18.88 92,350
Salary Continuation Plan
In 1997, the Bank's Board of Directors approved a Salary Continuation Plan for
its six executive officers. The purpose of the Salary Continuation Plan is to
encourage the executives to remain in the employ of the Company. The plan is
funded by life insurance written on each participant. Under the plan, the
Company promises to pay certain supplemental retirement or death benefits to the
executive.
Following is information regarding the Salary Continuation Plan for executive
officers whose aggregate cash compensation exceeded $100,000 in 2002. R. Dennis
Hennett, President and Chief Executive Officer of the Company, will receive
$3,333.33 each month for 180 consecutive calendar months, beginning the first
month following his termination of employment after his "normal retirement
date." "Normal retirement date" is defined by the Salary Continuation Plan as
being the date upon which the executive attains 65 years of age.
15
Directors' Deferred Compensation Plan
A Directors' Deferred Compensation Plan was instituted in 1996. The plan allows
directors' board fees to be deferred and earn interest at a rate equal to the
Company's return on average equity (with a minimum interest rate of 7% and a
maximum of 12%). The rate of interest paid during 2002 was 12%. The following
directors participated in the plan:
Total Total Total
Deferred Amount Interest
As of 12/31/02 Deferred -2002 Earned -2002
-------------- -------------- ------------
Anthony C. Cannon $ 2,546.72 $ 2,400.00 $ 146.72
Gary M. Griffin $ 15,640.55 $ 2,400.00 $ 1,223.32
R. Dennis Hennett $ 7,637.42 $ 7,200.00 $ 437.42
Harold K. James $ 7,640.18 $ 7,200.00 $ 440.18
Paul D. Lister $ 102,803.41 $ 14,400.00 $ 10,253.44
David M. Rogers $ 84,852.44 $ 14,400.00 $ 8,330.12
Charles D. Wall $ 102,803.41 $ 14,400.00 $ 10,253.44
Directors' Supplemental Life Insurance/Split Dollar Plan
The Company's Board of Directors believes it to be in the best interests of the
Company to enter into Split Dollar Life Insurance Agreements with the directors.
The agreements provide the directors with the opportunity to receive
supplemental life insurance benefits of $100,000 after seven years of service,
increased each year until termination of service by an inflation factor of 4%.
The life insurance acquired will help finance the interest paid on the
directors' deferred compensation. The Bank applied for and owns a life insurance
policy on certain directors (listed below). By way of a separate split dollar
agreement, the policy interests are divided between the Bank and the director.
The Bank owns the policy cash surrender value, including the accumulated policy
earnings, and the policy death benefits over and above the cash surrender value
are endorsed to the director and his named beneficiary. The Bank will report to
the participant each year the economic value of the insurance coverage as
taxable income. The following individuals are included in the plan:
Initial Split Dollar Projected Post
Death Benefit Retirement Death Benefit
------------- ------------------------
Walter M. Burch $100,000 $173,168
Gary Griffin 100,000 277,247
Harold K. James 100,000 246,472
Paul D. Lister 100,000 194,790
David M. Rogers 100,000 288,337
C. Don Wall 100,000 180,094
16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The James Agency, Inc. has sold and/or brokered insurance to the Company for
2002, for which it earned commissions from the Company of $3,018.70. In 2002,
the James Agency also was broker for the sale of a parcel of undeveloped real
estate for the Company for which the James Agency received commissions of
$74,364 from the Company. Harold K. James, a member of the Board of Directors,
is vice president and co-owner of the James Agency, Inc.
Carter, Smith, Merriam, Rogers & Traxler, P.A. has provided professional legal
services to the Company in 2002. David M. Rogers, a member of the Board of
Directors, is an attorney with the Carter, Smith, Merriam, Rogers & Traxler,
P.A. law firm.
The insurance sold to the Company and real estate brokered for the Company by
the James Agency, and the legal services provided to the Company were at prices
and on terms comparable to those provided to their other customers.
The Bank has had, and expects to have in the future, banking transactions in the
ordinary course of business with officers, directors, shareholders, and their
associates on the same terms, including interest rates and collateral on loans,
as those prevailing at the same time for comparable transactions with others.
Such loans have not involved more than normal risks of collectability, nor have
they presented any other unfavorable features.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of Forms 3, 4, and 5 and any representations made to us, it
appears that all executive officers and directors have made timely filings of
Statements of Beneficial Ownership on Form 3, Form 4 and Form 5 during 2002,
except the following, who failed to file a Form 4 within the required two days
of the transaction:
- - Mr. Smith failed to report within two days the purchase of 609 shares on
October 2, 2002, and
- - Mr. Williams failed to report within two days a grant of options to purchase
2,500 shares.
Form 4's for both the transactions noted were subsequently filed.
DEADLINE FOR SUBMITTING SHAREHOLDER PROPOSALS
If shareholders wish a proposal to be included in the Company's proxy statement
and form of proxy relating to the 2004 annual meeting, they must deliver a
written copy of their proposal to the principal executive offices of the Company
no later than December 1, 2003. To ensure prompt receipt by the Company, the
proposal should be sent certified mail, return receipt requested. Proposals must
also comply with the Company's bylaws and the SEC federal proxy rules relating
to shareholder proposals in order to be included in the Company's proxy
materials. A copy of the bylaws is available upon written request.
17
Any shareholder proposal to be made at an annual meeting, but which is not
requested to be included in the Company's proxy materials, must comply with the
Company's bylaws, including the following requirements: Proposals for director
nominations must be delivered to the Company's principal executive offices
between 30 and 60 days prior to the annual meeting of shareholders. Other
proposals must be delivered between 60 and 90 days prior to the first
anniversary of the preceding year's annual meeting. However, if the date of the
annual meeting is more than 30 days before or more than 60 days after such
anniversary date, the shareholder notice must be delivered between 60 and 90
days prior to the annual meeting or within 10 days following the day on which
public announcement of the date of the meeting is first made.
AVAILABLE FINANCIAL INFORMATION
The Company will provide free of charge to any shareholder of record as of March
27, 2003, and to each person to whom this Proxy Statement is delivered in
connection with the Annual Meeting of Shareholders, upon written request of such
shareholder or person, a copy of the Company's Registration Statement on Form
10-K, including financial statements and financial statement schedules (but
excluding exhibits), filed with the Securities and Exchange Commission. Any such
request should be directed to Greer Bancshares Incorporated, Post Office Box
1029, Greer, South Carolina 29652, Attention: J. Richard Medlock, Jr., Treasurer
and Secretary.
Other Matters
Management of the Company knows of no other matters to be brought before the
Annual Meeting of the Shareholders. However, if any other matters do properly
come before the Annual Meeting of the Shareholders, it is intended that the
shares represented by the proxies in the accompanying form will be voted in
accordance with the best judgment of the persons voting the proxies.
By Order of the Board of Directors,
/s/ Gary M. Griffin
Gary M. Griffin
Greer, South Carolina Chairman, Board of Directors
April 2, 2003 Greer Bancshares Incorporated
Greer
Bancshares
Incorporated
GREER BANCSHARES INCORPORATED
(864) 877-2000
1111 West Poinsett Street
Greer, South Carolina 29650
NOTICE OF
ANNUAL MEETING
OF
SHAREHOLDERS
---------------------
PROXY STATEMENT
---------------------
(This page left blank intentionally)
This Proxy is solicited by the Board of Directors of
GREER BANCSHARES INCORPORATED
The undersigned, hereby revoking all previous proxies, hereby appoints Walter M.
Burch, C. Don Wall and Theron C. Smith, III, each of them the attorney or
attorneys of the undersigned with the power of substitution, to vote all shares
of common stock of Greer Bancshares Incorporated, Greer, South Carolina (the
"Company"), in the name of the undersigned upon all matters at the Company's
Annual Meeting to be held April 24, 2003, and at any adjournments thereof, with
all powers that the undersigned would possess if personally present, and without
limiting the general authorization and power hereby given, directs said
attorneys to cast the undersigned's vote as specified below:
1) Election of Directors
|_| FOR all nominees listed below |_| WITHHOLD authority for all nominees
Nominees to serve a full term of three years:
Mark S. Ashmore, Harold K. James and Anthony C. Cannon
NOTE: If you wish to withhold authority for any individual nominee, write that
nominee's name in the space below.
- --------------------------------------------------------------------------------
2) Authority to transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
|_| FOR |_| AGAINST |_| ABSTAIN
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
This proxy may be revoked prior to its exercise. The shares represented by this
proxy will be voted as directed. Where no direction is given, the shares will be
voted for items 1 and 2.
Dated: , 2003
----------------------------
Signature of Shareholder:
--------------------------------------
Signature of Shareholder:
--------------------------------------
Your signature on this proxy should correspond with the name appearing on your
stock certificate. When signing as a Personal Representative, Administrator,
Trustee, Guardian, Attorney, etc., please indicate your full title. If stock is
held jointly, each joint owner must sign.