SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
110 South Congress Street
Winnsboro, South Carolina 29180
(803) 635-5536
November 10, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
South Carolina Community Bancshares, Inc. (the "Company"), which will be held
in the Meeting Room of the Fairfield Motel, 115 S. 321 By-Pass, Winnsboro,
South Carolina at 10:30 a.m. (South Carolina Time) on Wednesday, December 16,
1998.
The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the meeting we will also report on the
operations of the Company and Community Federal Savings Bank (the "Bank"), the
wholly-owned subsidiary of the Company. Directors and officers of the Company
and Bank will be present to respond to any questions that stockholders may
have. Also enclosed for your review is our Annual Report on Form 10-KSB,
which serves as the Annual Report to Stockholders, and which contains detailed
information concerning the activities and operating performance of the Bank.
The business to be conducted at the Annual Meeting consists of the election of
two directors and the ratification of the appointment of independent auditors
for the Company for the fiscal year ending June 30, 1999. The Board of
Directors of the Company has determined that the matters to be considered at
the Annual Meeting are in the best interest of the Company and its
stockholders, and the Board of Directors unanimously recommends a vote "FOR"
each matter to be considered.
On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card as soon as possible 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 meeting.
Sincerely,
/S/Alan W. Pullen
Alan W. Pullen
President and Chief Executive Officer
SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
110 South Congress Street
Winnsboro, South Carolina 29180
(803)635-5536
NOTICE OF
1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On December 16, 1998
Notice is hereby given that the 1998 Annual Meeting of the Stockholders of
South Carolina Community Bancshares, Inc. (the "Company") will be held in the
Meeting Room of the Fairfield Motel, 115 S. 321 By-Pass, Winnsboro, South
Carolina, on Wednesday, December 16, 1998 at 10:30 a.m. South Carolina time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed. The
Annual Meeting is for the purpose of considering and acting upon:
1.The election of two directors;
2.The ratification of Crisp, Hughes & Co., L.L.P. as independent auditors of
the Company for the fiscal year ending June 30, 1999; and such other matters
as may properly come before the Annual Meeting, or any adjournments thereof.
The Board of Directors is not aware of any other business to come before the
Annual Meeting. Any action may be taken on the foregoing proposals at the
Annual Meeting on the date specified above, or on any date or dates to which
the Annual Meeting may be adjourned. Stockholders of record at the close of
business on November 5, 1998, are the stockholders entitled to vote at the
Annual Meeting, and any adjournments thereof. A list of stockholders entitled
to vote at the Annual Meeting will be available at Community Federal Savings
Bank, 110 South Congress Street, Winnsboro, South Carolina for a period of ten
days prior to the Annual Meeting and will also be available for inspection at
the meeting itself.
By Order of the Board of Directors
/S/ Terri C. Robinson
Terri C. Robinson
Secretary
Winnsboro, South Carolina
November 10, 1998
______________________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
______________________________________________________________________________
SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
110 South Congress Street
Winnsboro, South Carolina 29180
(803)635-5536
_______________________________________
PROXY STATEMENT
_____________________________________
1998 ANNUAL MEETING OF STOCKHOLDERS
December 16, 1998
_____________________________________
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of South Carolina Community
Bancshares, Inc. (the "Company") to be used at the 1998 Annual Meeting of
Stockholders of the Company (the "Annual Meeting"), which will be held in the
Meeting Room of the Fairfield Motel, 115 S. 321 By-Pass, Winnsboro, South
Carolina, on Wednesday, December 16, 1998, at 10:30a.m., South Carolina Time,
and at all adjournments of the Annual Meeting. The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are first being mailed
to stockholders on or about November 13, 1998.
Regardless of the number of shares of Common Stock owned, it is important that
stockholders be represented by proxy or be present in person at the Annual
Meeting. Stockholders are requested to vote by completing the enclosed Proxy
Card and returning it, signed and dated, in the enclosed postage-paid
envelope. Stockholders are urged to indicate the way they wish to vote in the
spaces provided on the proxy card. Proxies solicited by the Board of Directors
of the Company will be voted in accordance with the directions given therein.
Where no instructions are indicated, signed proxies will be voted FOR the
election of the nominees for director named in this Proxy Statement, and FOR
the ratification of Crisp, Hughes & Co., L.L.P. as independent auditors of the
Company for the
fiscal year ending June 30, 1999.
The Board of Directors knows of no additional matters that will be presented
for consideration at the Annual Meeting. Execution of a proxy, however,
confers on the designated proxyholders discretionary authority to vote the
shares in accordance with their best judgement on such other business, if any,
that may properly come before the Annual Meeting or any adjournments thereof.
Stockholders who execute proxies in the form solicited hereby retain the right
to revoke them in the manner described below. Unless so revoked, the shares
represented by such proxies will be voted at the Annual Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors
of the Company will be voted in accordance with the directions given thereon.
Where no instructions are indicated, an executed proxy will be voted "FOR" the
proposals set forth in this Proxy Statement for consideration at the Annual
Meeting.
Proxies may be revoked at any time prior to exercise by sending written notice
of revocation to the Secretary of the Company, Terri C. Robinson, at the
address of the Company shown above, or by delivering to the Company a duly
executed proxy bearing a later date. The presence at the Annual Meeting of
any stockholder who had given a proxy shall not revoke such proxy unless the
stockholder delivers his or her ballot in person at the Annual Meeting or
delivers a written revocation to the Secretary of the Company prior to the
voting of such proxy.
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Company. Proxies may also be solicited personally or by mail,
telephone or telegraph by the Company's Directors, officers and regular
employees, without additional compensation therefor. The Company will also
request persons, firms and corporations holding shares in their names, or in
the name of their nominees, which are beneficially owned by others, to send
proxy material to and obtain proxies from such beneficial owners, and will
reimburse such holders for their reasonable expenses in doing so.
VOTING SECURITIES
Holders of record of the Company's common stock, par value $.01 per share (the
"Common Stock"), as of the close of business on November 5, 1998 (the "Record
Date") are entitled to one vote for each share then held, except as described
below. As of the Record Date, the Company had 579,931 shares of Common Stock
issued and outstanding. The presence, in person or by proxy, of at least a
majority of the total number of shares of Common Stock outstanding and
entitled to vote is necessary to constitute a quorum at this Annual Meeting.
In the event there are not sufficient votes for a quorum, or to approve or
ratify any matter being presented, at the time of this Annual Meeting, the
Annual Meeting may be adjourned in order to permit the further solicitation
of proxies.
In accordance with the provisions of the Company's Certificate of
Incorporation, record holders of Common Stock who beneficially own in excess
of 10% of the outstanding shares of Common Stock (the "Limit") are not
entitled to any vote with respect to the shares held in excess of the Limit.
The Company's Certificate of Incorporation authorizes the Board of Directors
(i) to make all determinations necessary to implement and apply the Limit,
including determining whether persons or entities are acting in concert, and
(ii) to demand that any person who is reasonably believed to beneficially own
stock in excess of the Limit supply information to the Company to enable the
Board to implement and apply the Limit.
VOTING PROCEDURES AND METHOD OF COUNTING VOTES
As to the election of Directors, the proxy card being provided by the Board of
Directors enables a stockholder to vote FOR the election of the two nominees
proposed by the Board, or to WITHHOLD AUTHORITY to vote for the nominees being
proposed. Under Delaware law and the Company's Certificate of Incorporation
and Bylaws, Directors are elected by a plurality of votes cast,
without regard to either broker non-votes, or proxies as to which authority to
vote for the nominees being proposed is withheld.
As to the ratification of the appointment of independent auditors, the proxy
card being provided by the Board of Directors enables a stockholder to check
the appropriate box on the proxy card to (i) vote "FOR", (ii) vote "AGAINST",
or (iii) vote to "ABSTAIN" from voting on, such matter. An affirmative vote
of the holders of a majority of the Common Stock present at the Annual
Meeting, in person or by proxy, and entitled to vote is required to constitute
ratification by the stockholders. Shares as to which the "ABSTAIN" box has
been selected on the proxy card will be counted as shares present and entitled
to vote and will have the effect of a vote against the matter for which the
"ABSTAIN" box has been selected. In contrast, broker non-votes will not be
counted as shares present and entitled to vote and will have no effect on the
vote on the matter presented.
Proxies solicited hereby will be returned to the Company, and will be
tabulated by inspectors of election designated by the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups who beneficially own in excess of 5% of the Common Stock
are required to file certain reports with the Company and with the Securities
and Exchange Commission (the "SEC") regarding such ownership pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act"). The following table
sets forth information regarding each person known to be a beneficial owners
of more than 5% of the Company's outstanding shares of Common Stock on the
Record Date.
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owner Ownership Outstanding
__________________ ________________ __________________
Community Federal Savings 62,422(1) 10.76%
Bank Employee Stock Ownership Trust
110 South Congress Street
Winnsboro, South Carolina 29180
Quay W. McMaster 35,056(2) 6.04%
318 Evans Street
Winnsboro, South Carolina 29180
________________________________
(1)Under the Community Federal Savings Bank Employee Stock Ownership Plan (the
"ESOP"), shares allocated to participants' accounts are voted in accordance
with the participants' directions. Unallocated shares held by the ESOP are
voted by the Trustees in the manner calculated to most accurately reflect the
instructions it has received from the participants regarding the allocated
shares. As of the Record Date, 19,686 shares of Common Stock have been
allocated to the accounts of employees under the ESOP. The Trustees of the
ESOP are Directors of the Company. Includes 2,340 shares that may be acquired
pursuant to presently exercisable options.
PROPOSAL 1 ELECTION OF DIRECTORS
The Company's Board of Directors consists of six members. Directors of the
Company are generally elected to serve for a three-year period or until their
respective successors shall have been elected and shall qualify. Each of the
Directors of the Company also serves on the board of directors of the Bank.
Two directors will be elected at the Annual Meeting to serve for a three-year
period or until a successor has been elected and qualified. The Board of
Directors has nominated Richard H. Burton and George R. Lauderdale, Jr. to
serve as directors.
Each of the nominees is currently a member of the Board of Directors. The
table below sets forth certain information regarding the composition of the
Company's Board of Directors, including the terms of office of Board members.
It is intended that the proxies solicited on behalf of the Board of Directors
will be voted at the Annual Meeting for the election of the nominees
identified below (unless otherwise directed on the proxy card). If a nominee
is unable to serve, the shares represented by all such proxies will be voted
for the election of such substitute as the Board of Directors may recommend.
At this time, the Board of Directors knows of no reason why the nominees might
be unable to serve, if elected.
Term to Shares of
Expire follow- Common Stock
Positions ing Fiscal Beneficially
Held in the Director ear Ending Owned on Percent
Name Age Company Since(1) June 30 Record Date Of Class
_________________________ ______ ____________ ____________ ______________ ____________ ____________
NOMINEES
Richard H. Burton 78 Director 1986 2001 8,510(2) 1.47%
George R. Lauderdale, Jr. 74 Director 1987 2001 18,510(2) 3.19
DIRECTORS CONTINUING IN OFFICE
Alan W. Pullen 41 President and Chief 1987 1999 25,482(3) 4.39
Executive Officer
Philip C. Wilkins 43 Director 1996 1999 4,685(4) 0.81
Quay W. McMaster 72 Chairman of the
Board 1978 2000 35,056(2) 6.04
John S. McMeekin 44 Director 1995 2000 9,538(2) 1.64
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Terri C. Robinson 39 Chief Financial Officer n/a n/a 7,753(5) 1.34
All Directors and Executive Officers 109,534(6) 18.89%
as a Group (7 persons)
____________________________
(1)Reflects initial appointment to the Board of Directors of Community
Federal Savings Bank, the Company's subsidiary.
(2)Includes 2,340 shares that may be acquired pursuant to presently
exercisable options.
(3)Includes 11,704 shares that may be acquired pursuant to presently
exercisable options.
(Footnotes continued on the following page)
(Footnotes continued from previous page)
(4) Includes 1,560 shares that may be acquired pursuant to presently
exercisable options.
(5)Includes 3,600 shares that may be acquired pursuant to presently
exercisable options.
(6) Excludes 54,078 shares of Common Stock, or 9.3% of the shares of Common
Stock outstanding, owned by the Company's ESOP for the benefit of the
employees of the Bank. The ESOP Administrative Committee administers the
ESOP. Under the terms of the ESOP, shares of Common Stock allocated to
the account of employees are voted in accordance with the instructions of
the respective employees. Unallocated shares are voted by the ESOP
Trustee in the manner calculated to most accurately reflect the
instructions it has received from the participants regarding the allocated
shares, unless their fiduciary duties require otherwise. As of the Record
Date,19,686 shares of Common Stock have been allocated under the ESOP,
including 8,344 shares allocated to executive officers and included in the
above table. The Trustees of the ESOP are Directors of the Company.
The principal occupation during the past five years of each director and
executive officer of the Company is set forth below. All directors have held
their present positions for five years unless otherwise stated.
Quay W. McMaster is the owner, President and Chief Executive Officer of
Winnsboro Plywood Co., Inc. and Winnsboro Veneer Co., Inc. He has served as
Mayor of the Town of Winnsboro since 1973. Mr. McMaster is the past President
of the Bank, having served from July 1992 to December 1993, when he was
elected Chairman of the Board. In addition, Mr. McMaster was Vice President
of the Bank from 1989 to July 1992.
Richard H. Burton retired in 1980. Prior to his retirement, he was Plant
Manager of the Winnsboro plant of Uniroyal, Inc. Mr. Burton has served as a
director of the Bank since May 1986, and he was elected Vice-Chairman of the
Board in December 1993. In addition, Mr. Burton served as Vice President of
the Bank from July 1992 through December 1993.
Alan W. Pullen is the President and Chief Executive Officer of the Bank,
having been elected to that position in December 1993. From January 1, 1987
through December 1993, Mr. Pullen served as Executive Vice President of the
Bank.
George W. Lauderdale was the Treasurer of Fairfield County, South Carolina
prior to his retirement on July 1, 1987. Mr. Lauderdale was elected to the
Board of Directors in November 1987, and he has served as Treasurer of the
Bank since 1993, and Vice President since October, 1994.
John S. McMeekin is president of Winnsboro Furniture Company. He was first
elected to the Board of Directors of the Bank in September, 1994, and to the
Board of Directors of the Company in April, 1995.
Philip C. Wilkins, DMD is a dentist with offices in Winnsboro, South Carolina.
He was first elected to the Board of Directors of the Bank in June, 1996, and
to the Board of Directors of the Company in September, 1996.
Terri C. Robinson has been employed by the Bank since 1984 in various
capacities, most recently as Bookkeeper, Secretary-Treasurer, and since
December 1993, as Chief Financial Officer.
Committees and Meetings of the Board of Directors
The business of the Company and the Bank is conducted through regular and
special meetings of the Board of Directors and its committees. The Board of
Directors of the Company met twelve times during fiscal 1998. During the
fiscal year ended June 30, 1998, the Board of Directors of the Bank held
thirteen meetings. No director attended fewer than 75% of the total meetings
held by the Board of Directors and the committees on which such director
served, with respect to each of the Company and the Bank. The following is a
discussion of certain committees of the Bank. The Bank's Audit Committee
functions as the audit committee of the Company, and the Bank's Personnel
Committee functions as the personnel committee of the Company.
The Loan Committee is composed of any three members of the Board of Directors,
including Alan W. Pullen, President and Chief Executive Officer of the Company
and Bank. The Loan Committee meets periodically in between the regular
monthly meetings of the Board of Directors in order to ratify loan approvals.
The actions of the Loan Committee are reported to the full Board at its next
regular meeting. During fiscal 1998, the Loan Committee held ten meetings.
The Personnel Committee is composed of Directors McMaster (Chairman) and
Burton, and it meets periodically during the year as needed to review the
Bank's salary and benefit policies and to set salary increases for the Bank's
officers and employees. The Personnel Committee met five times during fiscal
1998.
The Audit Committee consists of Directors Lauderdale (Chairman) and McMeekin.
The Audit Committee meets as needed to review the audit reports prepared by
the Bank's independent auditor, and meets periodically with the Bank's
management in order to set asset classifications. In addition, the committee
annually reviews the Bank's audit policies and recommends any necessary
changes to the Board of Directors. During fiscal 1998, the Audit Committee
held two meetings.
The Investment Committee meets periodically to review the Bank's investment
policies, and it is authorized to make security investments on behalf of the
Bank. The Investment Committee is composed of Directors McMaster and Pullen,
and in the absence of either member, any one of the other members of the Board
of Directors may be substituted for the absent member of the committee.
During fiscal 1998, this committee met four times.
Neither the Bank nor the Company has a standing Nominating Committee, but
rather the full Board of Directors, except for the directors standing for
re-election, serves as the nominating committee. While the Board will consider
nominees recommended by the stockholders, it has not actively solicited
recommendations from stockholders. Nominations by stockholders must comply
with certain procedural and informational requirements set forth in the
Company's Bylaws. See "Advance Notice of Business to be Conducted at an
Annual Meeting." The Board of Directors met once in its capacity as the
nominating committee during fiscal 1998.
Director Compensation
The Bank pays a $5,000 annual retainer to each of its directors, in addition
to a $200 per meeting fee. The Company pays a fee of $50 per board meeting
attended. Directors have received awards of stock options and stock grants
under plans approved by the stockholders.
Executive Compensation
The following table sets forth for the fiscal years ended June 30, 1998, 1997,
and 1996, certain information as to the total remuneration paid by the Bank
and the Company to the Chief Executive Officer of the Bank and the Company
(the "Named Executive Officer").
Annual Compensation Long-Term Compensation
Awards
Year Restricted All Other
Name and Ended Salary Stock Options/ Compensation
Principal Position June 30, (1) Bonus Awards SARS(#) (2)
__________________ _______ ________ _______ __________ ___________ ____________
Alan W. Pullen 1998 $68,000 $5,000 $ $27,902
President and Chief 1997 64,700 5,000 37,504
Executive Officer 65,000 5,000 36,279
____________________________________
(1) Includes directors fees.
(2) Represents $3,000, $3,668 and $2,850 respectively, of contributions made
by the Bank on Mr. Pullen's behalf pursuant to the Bank's 401(k) Plan for the
fiscal years ended June 30, 1998, 1997, and 1996. Also includes,
$24,902, $33,836 and $33,429 relating to the market value of stock allocated
to Mr. Pullen under the Bank's ESOP as of June 30 of each year.
Employment Agreement. The Bank has entered into an employment agreement with
Alan Pullen, President and Chief Executive Officer of the Company and the
Bank. The employment agreement for Mr. Pullen with the Bank and the Company
provides for a three-year term. Commencing on the first anniversary date and
continuing each anniversary date thereafter, the employment agreement renews
for an additional year, such that the remaining term shall be three years
unless written notice of nonrenewal is given by the Board of Directors after
conducting a performance evaluation of the executive. The agreement provides
that the base salary of the executive will be reviewed annually. The base
salary of Mr. Pullen is $60,000. In addition to the base salary, the
employment agreement provides that the executive is to receive all benefits
provided to permanent full-time employees of the Bank, including among other
things, participation in stock benefit plans and other fringe benefits
applicable to executive personnel, as well as director fees. The employment
agreement provides for the termination by the Bank of the executive's
employment for cause at any time. In the event the Bank chooses to terminate
Mr. Pullen's employment for
reasons other than for cause, or upon the termination of his employment for
reasons other than upon retirement or death, or in the event of his
resignation from the Bank or the Company upon: (i) failure to re-elect him to
his current office; (ii) a material change in his functions, duties or
responsibilities which change would cause his position to become one of lesser
responsibility, importance or scope; (iii) relocation of his principal place
of employment by more than thirty (30) miles; (iv) the liquidation or
dissolution of the Bank or the Company; or (v) a breach of the agreement by
the Bank, the executive, or in the event of death, his beneficiary, would be
entitled to receive an amount equal to the greater of the remaining payments,
including base salary, bonuses and other payments due under the remaining term
of the employment agreement or three times the average of the executive's base
salary, including bonuses and other cash compensation paid, and the amount of
any benefits received pursuant to any employee benefit plans maintained by the
Bank, over the five fiscal years preceding such termination. The Bank would
also continue the executive's life, health, and disability coverage for the
remaining unexpired term of the employment agreement to the extent allowed by
the plan or policies maintained by the Bank or the Company from time to time.
Severance Agreements. The Bank has entered into Severance Agreements (the
"Severance Agreements") with Ms. Robinson and a senior officer of the Bank
which will provide such officers with certain benefits in the event of a
change of control of the Bank or the Company. The Severance Agreements
provide for up to a three-year term. Commencing on the first anniversary date,
and continuing on each anniversary date thereafter, the Board of Directors may
extend either of the Severance Agreements for an additional year. Following a
change of control of the Company or the Bank, as defined in the Severance
Agreement, an officer shall be entitled to a payment under the Severance
Agreement if the participant terminates employment during the term of such
agreement, following any demotion, loss of title, office or significant
authority, reduction in his or her annual compensation or benefits, or
relocation of his principal place of employment by more than 30 miles. In the
event that a participant in the Severance Agreement is entitled to receive
payments pursuant to the Severance Agreement, he or she shall receive a cash
payment up to a maximum of three times such participant's annual compensation
prior to termination of employment, plus such participant shall be entitled to
receive life and medical coverage for a period of up to 36 months from the
date of termination.
Stock Options. The Board of Directors of the Company has adopted the 1994
Stock Option Plan (the "Stock Option Plan"), which has been approved by the
stockholders. Certain directors, officers and employees of the Bank and the
Company are eligible to participate in the Stock Option Plan. The Stock
Option Plan is administered by a committee of outside directors (the
"Committee"). The Stock Option Plan authorizes the grant of stock options and
limited rights equal to 78,028 shares of Common Stock. The Stock Option Plan
provides for the grant of (i) options to purchase Common Stock intended to
qualify as incentive stock options under Section 422 of the Internal Revenue
Code, (ii) options that do not so qualify ("nonstatutory options") and (iii)
limited rights that are exercisable only upon a change in control of the
Company. Non-employee directors of the Bank and the Company are only eligible
to receive nonstatutory options under the Stock Option Plan. Options granted
to employees are determined by the Committee. Options granted to directors
under the Stock Option Plan are awarded under a formula pursuant to which each
non-employee director of both the Company and the Bank receives an option to
purchase 3,901 shares of Common Stock of the Company. Options must be
exercised within ten (10) years from the date of grant. Stock options
may be exercised for up to one year following termination of service or such
later period as determined by the Committee. The exercise price of the
options must be at least 100% of the fair market value of the underlying
Common Stock at the time of the grant. Upon the exercise of "limited rights"
in the event of a change in control, the optionee will be entitled to receive
a lump sum cash payment equal to the difference between the exercise price of
the option and the fair market value of the shares of Common Stock subject to
the option on the date of exercise of the right in lieu of purchasing the
stock underlying the option.
No options were granted under the Stock Option Plan to the Named Executive
Officer during the year ended June 30, 1998.
Set forth below is certain additional information concerning options
outstanding to the Named Executive Officer at June 30, 1998. No options were
exercised during fiscal 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Value of
Unexercised Unexercised
Options at In-The-Money Options at
Fiscal Year-End Year-end(1)
Shares Acquired Value Exercisable/Unexercisable Exercisable/Unexerciaable
Name Upon Exercise Realized (#) ($)
_________________ ___________ __________ ______________________ _____________________
Alan W. Pullen -- $- 11,704/7,803 $92,169/$61,448
____________________________________
(1) Equals the difference between the aggregate exercise price of such
options and the aggregate fair market value of the shares of Common Stock that
would be received upon exercise, assuming such exercise occurred on June
30, 1998, at which date the average of the high and low sales price of the
Common Stock as quoted on the Nasdaq Small-Cap Market was $21.375.
Recognition and Retention Plan. Under the Company's Recognition and Retention
Plan, which has been approved by the stockholders, 23,408 shares are available
to be awarded to executive officers and employees and 7,803 shares are
available to be awarded to non-employee directors. These shares were acquired
through open market purchases. A Committee of the Board of Directors of the
Bank and the Company composed of non-employee directors administers the
Recognition Plan, and makes awards to executive officers pursuant to the
Recognition Plan. However, awards to outside directors are fixed by the terms
of the Recognition Plan. Awards of Common Stock that are restricted by the
Recognition Plan ("Restricted Stock") are nontransferable and nonassignable.
All awards under the Recognition Plan will vest at a rate of 20% per year.
The Committee may extend the vesting rate of any awards made after the
effective date of the Recognition Plan. When a participant's shares become
vested in accordance with the Recognition Plan, the participant will recognize
income equal to the fair market value of the Restricted Stock so vested at
that time, unless the participant has made an irrevocable election to be taxed
on the shares of Restricted Stock awarded to him in the year of the award.
The amount of income recognized by a participant will be a deductible expense
of the Company for Federal income tax purposes. When shares become vested and
are actually distributed in accordance with the Recognition Plan, participants
will also receive amounts equal to any accrued dividends with respect thereto.
Transactions With Certain Related Persons
All loans or extensions of credit to executive officers and directors are
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with the general
public and must not involve more than the normal risk of repayment or present
other unfavorable features. In addition, loans made to a director or
executive officer in excess of the greater of $25,000 or 5% of the Bank's
capital and surplus (or in any event greater than $500,000) must be approved
in advance by a majority of the disinterested members of the Board of
Directors. The Bank provides loans to employees who are not "executive
officers" for bank regulatory purposes, at reduced rates and/or with points
waived or reduced. The only such loan to any current executive officer that
exceeded $60,000 since July 1, 1994, was a first mortgage loan to Terri C.
Robinson. The largest principal amount outstanding on such loan during the
fiscal year ended June 30, 1998 was $64,962, the amount outstanding as of
October 31, 1998 was $62,209, and the interest rate on such loan at October
31, 1998 was 5.89%. Loans are made to directors and executive officers in the
ordinary course of business on the same terms and conditions as the Bank would
make to any other customer in the ordinary course of business and do not
involve more than a normal risk of collectibility or present other unfavorable
features. Other than as described in this paragraph, all loans that exceeded
$60,000 at any time during fiscal year ended June 30, 1998 to executive
officers, directors, immediate family members of executive officers and
directors, or organizations with which executive officers and directors are
affiliated, were made in the ordinary course of business, on substantially the
same terms including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons.
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended June 30, 1998
were Crisp, Hughes & Co., L.L.P. The Company's Board of Directors has
reappointed Crisp, Hughes & Co., L.L.P. to continue as independent auditors
for the Company for the fiscal year ending June 30, 1999, subject to
ratification of such appointment by the stockholders. A representative of
Crisp, Hughes & Co., L.L.P. is expected to attend the Annual Meeting. He will
be given an opportunity to make a statement if he desires to do so and will be
available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF CRISP, HUGHES & CO., L.L.P. AS THE INDEPENDENT AUDITORS OF THE
COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 1999.
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for certain
business, or nominations to the Board of Directors, to be brought before an
annual meeting. In order for a stockholder to properly bring business before
an annual meeting, or to propose a nominee to the Board, the stockholder must
give written notice to the Secretary of the Company not less than ninety (90)
days in advance of the date of the Company's proxy statement mailed to
stockholders in connection with the previous year's annual meeting; provided,
that if the date of an annual meeting date changes by more than thirty (30)
days from the date of the previous year's annual meeting, notice by the
stockholder to be timely must be received not later than the close of business
on the tenth day following the day on which notice of the date of the annual
meeting was mailed to stockholders or public disclosure thereof was made. The
notice must include the stockholder's name, record address, and number of
shares owned by the stockholder, and describe briefly the proposed business,
the reasons for bringing the business before the annual meeting, and any
material interest of the stockholder in the proposed business. In the case of
nominations to the Board, certain information regarding the nominee must be
provided. Nothing in this paragraph shall be deemed to require the Company to
include in its proxy statement and proxy relating to an annual meeting any
stockholder proposal which does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal is received. The
date on which the 1999 Annual Meeting of Shareholders is expected to be held
is December 15, 1999. Accordingly, advance written notice for certain
business or nominations to the Board of Directors, to be brought before the
1999 Annual Meeting of Shareholders, must be given to the Company no later
than September15, 1999.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy material for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's office, 110 South
Congress Street, Winnsboro, South Carolina 29180, no later than July 13,1999.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Terri C. Robinson
Terri C. Robinson
Secretary
Winnsboro, South Carolina
November 10, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
SOUTH CAROLINA COMMUNITY BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
December 16, 1998
The undersigned hereby appoints the official proxy committee of the Board
of Directors, with full powers of substitution, to act as attorneys and
proxies for the undersigned to vote all shares of Common Stock of the Company
which the undersigned is entitled to vote at the 1998 Annual Meeting of
Stockholders("Annual Meeting") to be held in the Meeting Room of the
Fairfield Motel, 115 S. 321 By-Pass, Winnsboro, South Carolina, on December
16, 1998, at 10:30 a.m. The official proxy committee is authorized to cast
all votes to which the undersigned is entitled as follows:
VOTE
The election as director of the nominees listed below.
Richard H. Burton
George R. Lauderdale, Jr.
FOR AGAINST ABSTAIN
_____ _______ _______
The ratification of the appointment of Crisp, Hughes & Co., L.L.P. as the
Company's independent auditors for the fiscal year ending June 30, 1999. The
Board of Directors recommends a vote "FOR" each of the listed proposals.
FOR AGAINST ABSTAIN
_____ _______ _______
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED
ABOVE.
IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE ANNUAL MEETING, THIS PROXY
WILL BE VOTED BY THE PROXY COMMITTEE OF THE BOARD OF DIRECTORS IN THEIR BEST
JUDGEMENT.
This proxy may be revoked by sending written notice to the Secretary of the
Company at the address set forth on the Notice of Annual Meeting of
Stockholders, and by the filing of a later dated proxy prior to a vote being
taken at the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to the execution
of this proxy of a Notice of Annual Meeting and of a Proxy Statement, each
dated November 13, 1998.
Dated: _________________, 1998
__________________________________________________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________________________________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign, but only one
signature is required.
Please complete and date this proxy and return it promptly in the enclosed
postage-prepaid envelope.