SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934.
(Amendment No. )
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 Section 240.14a-12
REGIONAL BANKSHARES, INC.
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid
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[ ] 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:
REGIONAL BANKSHARES, INC.
206 South Fifth Street
Hartsville, South Carolina 29550
(843) 383-4333
Dear Shareholder:
You are cordially invited to attend the 2005 Annual Shareholders'
Meeting of Regional Bankshares, Inc., to be held at The Fairfield Inn, 200 South
Fourth Street, Hartsville, South Carolina 29550 on Thursday, May 12, 2005 at
11:00 a.m. Eastern Daylight Time. Notice of the meeting is enclosed.
A proposal to elect four directors to serve until the 2008 Annual
Shareholders' Meeting will be presented at the meeting. The nominees described
in this Proxy Statement have been approved unanimously by your Board of
Directors and are recommended by the Board to you for approval.
We hope that you will be able to join us and let us give you a review
of 2004. Whether you own a few or many shares of stock and whether or not you
plan to attend in person, it is important that your shares be voted on matters
that come before the Meeting. To make sure your shares are represented, we urge
you to complete and mail the enclosed proxy card promptly.
Thank you for helping us make our year a success. We look forward to
your continued support in 2005.
Sincerely,
Curtis A. Tyner, Sr.
Chief Executive Officer
Hartsville, South Carolina
April 4, 2005
REGIONAL BANKSHARES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of the Shareholders of Regional
Bankshares, Inc. will be held at The Fairfield Inn, 200 South Fourth Street,
Hartsville, South Carolina, on Thursday, May 12, 2005, at 11:00 a.m., for the
following purposes:
(1) To elect four directors to each serve a three-year term; and
(2) To act upon other such matters as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on March 21, 2005,
are entitled to notice of and to vote at the meeting. In order that the meeting
can be held, and a maximum number of shares can be voted, whether or not you
plan to be present at the meeting in person, please fill in, date, sign and
promptly return the enclosed form of proxy. The Company's Board of Directors
unanimously recommends a vote FOR approval of the proposals presented.
Returning the signed proxy will not prevent a record owner of shares from
voting in person at the meeting.
Included with this notice are the Company's 2005 Proxy Statement and the
Company's 2004 Annual Report to Shareholders.
By Order of the Board of Directors
April 4, 2005 Curtis A. Tyner, Sr.
Chief Executive Officer
REGIONAL BANKSHARES, INC.
206 South Fifth Street
Hartsville, South Carolina 29550
(843) 383-4333
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Regional Bankshares, Inc. (the "Company")
for use at the 2005 Annual Meeting of Shareholders. The Annual Meeting will be
held at 11:00 a.m. on Thursday, May 12, 2005 at The Fairfield Inn, 200 South
Fourth Street, Hartsville, South Carolina. A Notice of Annual Meeting is
attached, and a form of proxy is enclosed. This statement was first mailed to
shareholders on or about April 4, 2005, in connection with the solicitation. The
cost of this solicitation is being paid by the Company. The only method of
solicitation to be employed, other than use of the proxy statement, is personal,
telephone or other electronic contact by directors and regular employees of the
Company.
ANNUAL REPORT
The Annual Report to Shareholders covering the Company's fiscal year ended
December 31, 2004, including financial statements, is enclosed. Such Annual
Report to Shareholders does not form any part of the material for the
solicitation of proxies.
REVOCATION OF PROXY
Any record shareholder who executes and delivers a proxy has the right to
revoke it at any time before it is voted. The proxy may be revoked in any of the
following ways:
o by delivering to J. Richard Jones, Jr., Corporate Secretary, Regional
Bankshares, Inc., 206 South Fifth Street, Hartsville, South Carolina
29550, or by mailing to Mr. Jones at Post Office Box 2255, Hartsville,
South Carolina 29551, written instructions revoking the proxy;
o by mailing or delivering to Mr. Jones at the above addresses a duly
executed proxy bearing a later date; or
o by voting in person at the meeting.
Written notice of revocation of a proxy or delivery of a later dated proxy
will be effective upon receipt by the Company. Attendance at the Annual Meeting
will not in itself constitute revocation of a proxy.
QUORUM AND VOTING
At the close of business on March 21, 2005, there were outstanding 572,070
shares of the Company's common stock ($1.00 par value). Each share outstanding
will be entitled to one vote upon each matter submitted at the meeting. Only
shareholders of record at the close of business on March 21, 2005 (the "Record
Date"), will be entitled to notice of and to vote at the meeting.
A majority of the shares entitled to be voted at the annual meeting
constitutes a quorum. If a share is represented for any purpose at the annual
meeting by the presence of the registered owner or a person holding a valid
proxy for the registered owner, it is deemed to be present for purposes of
establishing a quorum. Therefore, valid proxies which are marked "Abstain" or
"Withhold" and shares that are not voted, including proxies submitted by brokers
that are the record owners of shares (so-called "broker non-votes"), will be
included in determining the number of votes present or represented at the annual
meeting. If a quorum is not present or represented at the meeting, the
shareholders entitled to vote, present in person or represented by proxy, have
the power to adjourn the meeting from time to time. If the meeting is to be
reconvened within thirty days, no notice of the reconvened meeting will be given
other than an announcement at the adjourned meeting. If the meeting is to be
adjourned for thirty days or more, notice of the reconvened meeting will be
given as provided in the Bylaws. At any reconvened meeting at which a quorum is
present or represented, any business may be transacted that might have been
transacted at the meeting as originally noticed.
If a quorum is present at the Annual Meeting, directors will be elected by
a plurality of the votes cast by shares present and entitled to vote at the
annual meeting. "Plurality" means that if there are more nominees than positions
to be filled, the individuals who receive the largest number of votes cast for
the positions to be filled will be elected as directors. Cumulative voting is
not permitted. Votes that are withheld or that are not voted in the election of
directors will have no effect on the outcome of election of directors. If a
quorum is present, all other matters that may be considered and acted upon at
the Annual Meeting will be approved if the number of shares of Common Stock
voted in favor of the matter exceed the number of shares of Common Stock voted
against the matter.
ACTIONS TO BE TAKEN BY THE PROXIES
The persons named as proxies were selected by the Board of Directors of
the Company. When the form of proxy enclosed is properly executed and returned,
the shares that it represents will be voted at the meeting. Each proxy, unless
the shareholder otherwise specifies therein, will be voted "FOR" the election of
the persons named in this Proxy Statement as the Board of Directors' nominees
for election to the Board of Directors. In each case where the shareholder has
appropriately specified how the proxy is to be voted, it will be voted in
accordance with his specifications. As to any other matter of business which may
be brought before the Annual Meeting, a vote may be cast pursuant to the
accompanying proxy in accordance with the best judgment of the persons voting
the same, but the Board of Directors does not know of any such other business.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit proposals for the consideration of
the shareholders at the 2006 Annual Meeting may do so by delivering them in
writing to J. Richard Jones, Jr., Corporate Secretary, Regional Bankshares,
Inc., 206 South Fifth Street, Hartsville, South Carolina 29550, or by mailing
them in writing to Mr. Jones at Post Office Box 2255, Hartsville, South Carolina
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29551. In addition to other applicable requirements, for business to be properly
brought before the 2006 Annual Meeting of Shareholders, a shareholder must give
timely notice of the matter to be presented at the meeting in a proper written
form to the Secretary. To be timely, notice must be given to the Secretary at
the above address not less than 30 nor more than 60 days prior to the annual
meeting; provided that, if less than 31 days' notice of the meeting is given to
shareholders, such notice must be mailed or delivered to the Secretary no later
than the close of the tenth day following the day on which the notice of meeting
was mailed to shareholders. All proposals must comply with the requirements of
the Bylaws. Such written proposals must be received prior to December 5, 2005,
for inclusion, if otherwise appropriate, in the Company's 2006 Proxy Statement
and form of Proxy relating to that meeting. With respect to any shareholder
proposal not received by the Company prior to February 18, 2006, proxies
solicited by management of the Company will be voted on the proposal in the
discretion of the designated proxy agents.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of
Directors may be divided into three classes, with approximately one-third of the
Company's Board of Directors being elected each year at the Annual Meeting of
Shareholders. At each Annual Meeting of Shareholders, successors to the class of
directors whose term expires are elected for a three-year term. Directors serve
until their successors are elected and qualify to serve.
The number of directors is currently set at 11. The four directors whose
terms expire in 2005 have been nominated by the Board of Directors for
re-election to serve for the next three years. Their terms will expire at the
2008 Annual Meeting. Set forth below is information about the nominees for
reelection and current directors whose terms will continue after the 2005 Annual
Meeting. Each nominee and director has served as a director since 1999,
including service on the Board of Directors of Hartsville Community Bank, N.A.
prior to formation of the Company.
The persons named in the enclosed form of proxy intend to vote for the
election as directors of the persons named below as nominees. Unless a contrary
specification is indicated, the enclosed form of proxy will be voted FOR such
nominees. In the event that any such nominee is not available to serve, the
persons acting under the proxy intend to vote for the election, in his stead, of
such other person as the Board of Directors of the Company may recommend. The
Board of Directors has no reason to believe that any of the nominees will be
unable or unwilling to serve if elected.
The Board of Directors recommends a vote FOR all nominees.
Nominees for Re-election to the Board of Directors for terms of office to
continue until the Annual Meeting of Shareholders in 2008
Franklin Hines (age 71). Mr. Hines is a native of Hartsville and has
been the President and Chief Executive Officer of Hines Funeral Home, Inc. and
Hines Enterprises, Inc., a provider of funeral-related products and services,
for the past 28 years. Mr. Hines has been a member of the Hartsville City
Council for the past 20 years. He has also served on the local advisory board of
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Carolina Bank & Trust and recently served as a member of the local advisory
board of BankAmerica Corp. Mr. Hines received his B.A. degree in Industrial Arts
from Cheyney State University in 1961, and received his Mortuary Science Degree
from the John Tyler School of Mortuary Science in 1974.
J. Richard Jones, Jr. (age 52). Mr. Jones is an attorney and a partner
in the law firm of Stanton & Jones in Hartsville. Mr. Jones also served as a
Hartsville City Judge from June 1992 to June 1995. Mr. Jones received both his
B.A. degree in History and his J.D. degree from the University of South Carolina
in 1973 and 1976, respectively.
Woodward H. Morgan III (age 63). Dr. Morgan is a native of Hartsville
and is a retired veterinarian and golf course developer. Prior to his
retirement, Dr. Morgan was the owner of Hartsville Animal Hospital and served on
the local advisory board of South Carolina Federal. Dr. Morgan received his B.S.
degree in Industrial Management from Clemson University in 1964, and received
his degree in Veterinary Medicine from the University of Georgia in 1974.
Gosnold G. Segars (age 60). Mr. Segars is a native of Hartsville and
serves as the Company's Chairman of the Board. He has been involved in the
business of residential and agricultural land development in Hartsville since
1967. Mr. Segars is also involved in the Hartsville real estate brokerage
business through his company, G. Graham Segars & Sons, Inc. Mr. Segars also has
substantial ownership interests in other companies involved in the leasing of
industrial and warehouse space in Hartsville and surrounding communities. Mr.
Segars served on the local advisory board of Carolina Bank & Trust from 1989 to
1998. Mr. Segars received his B.S. degree in agronomy from Clemson University in
1966.
Members of the Board of Directors whose terms of
office will continue until the Annual Meeting of Shareholders in 2007
Francine P. Bachman (age 71). Ms. Bachman is a native of Hartsville and
is currently a homemaker and has been a retired school teacher since 1964. Ms.
Bachman received her B.S. degree from Salem College in 1955.
Thomas James Bell, Jr. (age 62). Dr. Bell is a native of Hartsville and
has been a family physician in Hartsville since 1972. Dr. Bell received his B.S.
degree in pre-medicine from Clemson University in 1965, and received his M.D.
degree from the Medical University of South Carolina in 1969.
Peter C. Coggeshall, Jr. (age 61). Mr. Coggeshall is a native of
Hartsville and retired from Sonoco Products Company in 1998, where he had been
employed since 1969. His last position with Sonoco was Vice President,
Administration. Mr. Coggeshall also served on the local advisory board of
Wachovia Bank from 1988 to 1998. Mr. Coggeshall received his B.A. degree in
English from Davidson College in 1965, and his M.B.A. degree in General
Management from Harvard University in 1969.
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Members of the Board of Directors whose terms of office will
continue until the Annual Meeting of Shareholders in 2006
Randolph G. Rogers (age 57). Mr. Rogers is a native of Hartsville and
is a farmer with almost 30 years' experience in operating an agricultural
business.
Howard W. Tucker, Jr. (age 67). Dr. Tucker is an optometrist with Pee
Dee Eye Associates in Hartsville. He also served as a director of Mutual Savings
& Loan for 11years, where he was a member of the loan committee. Dr. Tucker
received an Associate Degree from Wingate College in 1960. Dr. Tucker received
both his B.S. degree and his O.D. degree from the Southern College of Optometry
in 1963.
Curtis A. Tyner, Sr. (age 56). Mr. Tyner is a native of Hartsville and
serves as the President and Chief Executive Officer of the Company and of
Hartsville Community Bank. Mr. Tyner served as Senior Lending Officer and
Executive Vice President of First National South in Marion, South Carolina from
October, 1994 until September, 1998, when First National South was acquired by
another financial institution. Prior to joining First National South, Mr. Tyner
was employed with The Palmetto Bank in Laurens, South Carolina since 1976. While
at The Palmetto Bank, Mr. Tyner served in numerous capacities, including loan
officer, senior vice president, executive vice president and chief financial
officer. Mr. Tyner received his B.S. degree in Business Administration from
Francis Marion University in 1974 and his M.B.A. degree from the University of
South Carolina in 1975.
Patricia M. West (age 61). Ms. West is a retired school teacher of the
Darlington County School System. Ms. West received her B.A. degree in Art and
Education from Columbia College in 1965.
Attendance at Meetings of the Board of Directors and Meetings of Shareholders
During the last full fiscal year, ending December 31, 2004, the Board
of Directors met six times, including regular and special meetings. Each
incumbent director and director nominee attended at least 75% of the total
number of meetings of the Board of Directors and committees of which he or she
was a member.
The Company encourages, but does not require, its directors to attend
annual meetings of shareholders. Last year, seven of the Company's directors
attended the annual meeting of shareholders.
Committees of the Board of Directors
Audit Committee
The Company has an Audit Committee established pursuant to Section
3(a)(58)(A) of the Securities Exchange Act of 1934 for the purpose of overseeing
the accounting and financial reporting processes of the Company and audits of
the financial statements of the Company. The Audit Committee reviews the
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Company's financial statements and the internal financial reporting systems and
controls with management and the independent auditors, recommends resolutions
for any dispute between management and the auditors, and reviews other matters
relating to the Company's relationship with its auditors. The Audit Committee is
comprised of Messrs. Hines, Jones and Coggeshall. The Audit Committee does not
have a written charter. With the exception of Mr. Jones, the members of the
Audit Committee meet the audit committee member independence criteria set forth
in The Nasdaq Stock Market, Inc. Marketplace Rules, as modified or supplemented.
The Audit Committee met twice in 2004.
Nominating Committee
The Board of Directors does not have a separate nominating committee.
Rather, the entire Board of Directors acts as a nominating committee. Based on
the Company's size, the small geographic area in which it does business and the
desirability of directors being a part of the communities served by the Company
and familiar with the Company's customers, the Board of Directors does not
believe the Company would derive any significant benefit from a separate
nominating committee. The members of the Board of Directors are not all
independent as defined in The Nasdaq Stock Market, Inc. Marketplace Rules, as
modified or supplemented. The Company does not have a Nominating Committee
charter.
In recommending director candidates, the Board takes into consideration
such factors as it deems appropriate based on the Company's current needs. These
factors may include diversity, age, skills such as understanding of banking and
general finance, decision-making ability, inter-personal skills, experience with
businesses and other organizations of comparable size, community activities and
relationships, and the interrelationship between the candidate's experience and
business background, and other Board members' experience and business
background, as well as the candidate's ability to devote the required time and
effort to serve on the Board.
The Board will consider for nomination by the Board director candidates
recommended by shareholders if the shareholders comply with the following
requirements. If a shareholder wishes to recommend a director candidate to the
Board for consideration as a Board of Directors' nominee, such shareholder must
submit in writing to the Board the recommended candidate's name, a brief resume
setting forth the recommended candidate's business and educational background
and qualifications for service, and a notarized consent signed by the
recommended candidate stating the recommended candidate's willingness to be
nominated and to serve. This information must be delivered to the Chairman of
the Company at the Company's address and must be received no later than January
15 in any year to be considered as a potential Board of Directors' nominee at
the Annual Meeting of Shareholders for that year. The Board may request further
information if it determines a potential candidate may be an appropriate
nominee. Director candidates recommended by shareholders that comply with these
requirements will receive the same consideration that the committee's candidates
receive.
Director candidates recommended by shareholders will not be considered
for recommendation by the Board as potential Board of Directors' nominees if the
shareholder recommendations are received later than January 15 in any year.
However, shareholders may nominate director candidates for election at the
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annual meeting, but no person who is not already a director may be elected at an
annual meeting of shareholders unless that person is nominated in writing at
least 90 days prior to the meeting. Such nominations, other than those made by
or on behalf of the existing management of the Company, must be made in writing
and must be delivered or mailed to the President of the Company, not less than
90 days prior to any meeting of Shareholders called for the election of
Directors. Such notification must contain the following information to the
extent known to the notifying shareholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed nominee; (c) the
total number of shares of capital stock of the Company that will be voted for
each proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) any other information required by Regulation 14A under the
Exchange Act. Nominations not made in accordance with these requirements may be
disregarded by the presiding officer of the meeting, and upon his instructions,
the vote tellers shall disregard all votes cast for each such nominee.
Compensation Committee
The Company does not have an executive compensation committee. The
entire Board acts as a compensation committee.
Shareholder Communications with the Board of Directors
Any shareholder who wishes to send communications to the Board of
Directors should mail them addressed to the intended recipient by name or
position in care of: Corporate Secretary, Regional Bankshares, Inc., 206 South
Fifth Street, Hartsville, South Carolina 29550. Upon receipt of any such
communications, the Corporate Secretary will determine the identity of the
intended recipient and whether the communication is an appropriate shareholder
communication. The Corporate Secretary will send all appropriate shareholder
communications to the intended recipient. An "appropriate shareholder
communication" is a communication from a person claiming to be a shareholder in
the communication the subject of which relates solely to the sender's interest
as a shareholder and not to any other personal or business interest.
In the case of communications addressed to the Board of Directors, the
Corporate Secretary will send appropriate shareholder communications to the
Chairman of the Board. In the case of communications addressed to the
independent or outside directors, the Corporate Secretary will send appropriate
shareholder communications to the Chairman of the Audit Committee. In the case
of communications addressed to committees of the board, the Corporate Secretary
will send appropriate shareholder communications to the Chairman of such
committee.
Executive Officers
Curtis A. Tyner, Sr., the President and Chief Executive Officer of the
Company, is the Company's only executive officer. Information about Mr. Tyner is
set forth above under "Election of Directors."
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the
Company's common stock as of March 21, 2005, by each current director, the Chief
Executive Officer, and all directors and executive officers as a group. Other
than as set forth below, management knows of no person who beneficially owns
more than 5% of the Company's common stock.
Number of Shares
Beneficially Percentage
Name Position Owned(1) Ownership
---- -------- -------- ---------
Curtis A. Tyner, Sr.(2) President, Chief Executive 20,000 3.22%
Officer and Director
Gosnold G. Segars (3) Chairman of the Board 38,700 6.24%
2586 Kelleytown Road
Hartsville, SC 29550
Francine P. Bachman (4) Director 25,800 4.16%
Thomas James Bell, Jr. (5) Director 25,000 4.03%
Peter C. Coggeshall, Jr. (6) Director 15,000 2.42%
Franklin Hines (7) Director 15,000 2.42%
J. Richard Jones (8) Secretary and Director 15,000 2.42%
Woodward H. Morgan III (9) Director 21,000 3.39%
Randolph G. Rogers (10) Director 34,100 5.50%
1901 E. Carolina Avenue
Hartsville, SC 29550
Howard W. Tucker, Jr. (11) Director 21,900 3.53%
Patricia M. West (12) Director 20,600 3.32%
All Directors and Executive
Officers as a Group (11 Persons)(13) 252,100 40.64%
(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to all shares shown as
beneficially owned by them. The information shown above is based upon
information furnished by the named persons and based upon "beneficial
ownership" concepts set forth in rules promulgated under the Securities
Exchange Act of 1934. Under such rules, a person is deemed to be a
"beneficial owner" of a security if that person has or shares "voting
power," which includes the power to vote or to direct the voting of such
security, or "investment power," which includes the power to dispose or to
direct the disposition of such security. A person is also deemed to be a
beneficial owner of any security of which that person has the right to
acquire beneficial ownership within 60 days.
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(2) Includes 200 shares held by Mr. Tyner's wife, 8,714 shares held in Mr.
Tyner's individual retirement account, 2,200 shares subject to currently
exercisable warrants, and 5,000 shares subject to currently exercisable
options.
(3) Includes 2,500 shares held by Mr. Segars' wife, and 4,700 shares subject to
currently exercisable warrants.
(4) Includes 10,000 shares held by Ms. Bachman's husband, 800 shares held by
Ms. Bachman as custodian for her grandchildren, and 4,700 shares subject to
currently exercisable warrants.
(5) Includes 10,000 shares held in Mr. Bell's individual retirement account,
and 4,700 shares subject to currently exercisable warrants.
(6) Includes 4,700 shares subject to currently exercisable warrants.
(7) Includes 4,700 shares subject to currently exercisable warrants.
(8) Includes 1,000 shares subject to currently exercisable warrants, and 4,000
shares held in Mr. Jones' individual retirement account.
(9) Includes 1,000 shares held by Mr. Morgan as custodian for his grandson, and
4,000 shares subject to currently exercisable warrants.
(10) Includes 5,000 shares held by Mr. Rogers' wife, 300 shares held by Mr.
Rogers' wife as custodian for his children, and 4,700 shares subject to
currently exercisable warrants.
(11) Includes 17,100 shares held in Mr. Tucker's individual retirement account,
800 shares held by Mr. Tucker's wife, and 3,100 shares subject to currently
exercisable warrants.
(12) Includes 100 shares held by Ms. West's husband, 5,000 shares held in the
individual retirement account of Ms. West's husband, 500 shares held by Ms.
West's husband as custodian for Ms. West's grandchildren, and 4,700 shares
subject to currently exercisable warrants.
(13) Includes 48,200 shares subject to currently exercisable options and
warrants.
MANAGEMENT COMPENSATION
Executive Officer Compensation
The following table sets forth information about the Chief Executive
Officer's compensation. The Company does not have any other executive officers.
Summary Compensation Table
Long Term
Compensation
------------
Annual Compensation(1) Awards
---------------------- ------
Number of
Securities
Underlying All Other
Options Compen-
Name and Principal Position Year Salary Bonus Awarded sation(2)
- --------------------------- ---- ------ ----- ----------- ---------
Curtis A. Tyner, Sr. 2004 $125,526 $27,500 - $4,429
President, Chief Executive 2003 121,300 12,500 - 4,659
Officer and Treasurer 2002 116,300 12,500 5,000 3,956
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- ---------------
(1) Perquisites and personal benefits did not exceed the lesser of $50,000 or
10% of total salary plus bonus.
(2) Includes Company contributions of $3,767 in 2004, $3,669 in 2003 and $3,459
in 2002 to a simple retirement plan on behalf of Mr. Tyner, and payments by
the Company of $662, $990 and $497 in 2004, 2003 and 2002, respectively,
for term life insurance premiums for Mr. Tyner.
Option Grants in Last Fiscal Year
No options were granted to the Chief Executive Officer in 2004.
Option Exercises and Year End Options Outstanding and Values
No options were exercised by the Chief Executive Officer during 2004.
The following table sets forth information about options held by the Chief
Executive Officer at December 31, 2004.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options 12/31/04(1) Options 12/31/04(2)
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Curtis A. Tyner 5,000 -0- $4,100 -0-
- -------------------------
(1) The table does not include information about the 2,200 currently
exercisable Organizer Warrants held by Mr. Tyner. See "Compensation of
Directors - Organizer Warrants."
(2) Based on a price of $13.82 per share, the weighted average price at which
the Company's Common Stock has traded during the past year in trades of
which the Company has knowledge, and an exercise price of $13.00 per share.
The Common Stock is not, however, widely traded and such price may not be
indicative of market value.
Employment Agreement
Curtis A. Tyner, Sr. has entered into an employment agreement with the
Company, which provides for a base salary of $100,000. Mr. Tyner's base salary
may be increased from time to time in the discretion of the Board of Directors.
In addition, Mr. Tyner is entitled to receive such additional incentive
compensation as may be awarded from time to time in the discretion of the Board
of Directors. Mr. Tyner may also be awarded a target bonus not to exceed 25% of
his then-current base salary upon the attainment, in the discretion of the Board
of Directors, of individual performance goals and certain specified corporate
objectives. Mr. Tyner will also be entitled to participate in all incentive,
stock option or warrant, savings and retirement plans, welfare benefit plans,
practices, policies and programs applicable generally to the Company's senior
executive officers. The term of Mr. Tyner's employment agreement commenced on
September 27, 1999 and will continue for a period of 36 full calendar months
thereafter. On each anniversary of opening of Hartsville Community Bank, N.A.,
Mr. Tyner's employment will be extended for an additional 12-month period,
unless either party provides notice that the term of employment shall not be
extended.
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In the event of Mr. Tyner's disability, the Company will continue to
pay him 100% of his then-current base salary during the first 12 months of a
continuous period of disability. However, if Mr. Tyner is disabled for a
continuous period exceeding 12 months, the Company may, at its election,
terminate his employment and cease payment of his base salary. The employment
agreement is terminable by the Company immediately for cause (as defined in the
employment agreement). In addition, the Company may terminate the employment
agreement for any reason provided that the Company pays Mr. Tyner a sum equal to
two times his then current base salary. The employment agreement also provides
that upon a "change in control" (as defined in the employment agreement) of the
Company, Mr. Tyner is entitled to a sum equal to two times his then current base
salary. Under the agreement, Mr. Tyner is subject to standard contractual
provisions requiring him not to use or divulge any confidential information for
a period of two years following Mr. Tyner's voluntary termination of his
employment. In addition, Mr. Tyner is prohibited from competing with the Company
by performing banking services within the city of Hartsville or within a 100
mile radius thereof for a period of two years following Mr. Tyner's voluntary
termination of employment. Similarly, Mr. Tyner is prohibited from soliciting
the business of any of the Company's clients or employing any of the Company's
employees for a period of two years following Mr. Tyner's voluntary termination
of his employment.
The foregoing is only a summary of the Employment Agreement between Mr.
Tyner and the Company and is qualified in its entirety by reference to the
Agreement.
Compensation of Directors
Standard Compensation
Directors currently receive $200 for each meeting of the Board of
Directors and $100 for each committee meeting.
Organizer Warrants
In consideration of their placing personal funds at risk and their
efforts in organizing Hartsville Community Bank, N.A. and their commitment to
serve as the Bank's initial directors, each of the Company's present directors
in their capacity as organizers of the Bank, received a warrant to purchase
5,000 shares of the Bank's common stock. The Bank warrants were converted into
warrants to purchase common stock of the Company in connection with the
Company's acquisition of the Bank. The exercise price for the warrants is $10.00
per share and they may be exercised over a ten-year period. All of the warrants
have vested and are currently exercisable.
The Company has the right, upon notice from the Federal Deposit
Insurance Corporation that the Bank is capital deficient, to require that each
director exercise or forfeit all of his or her warrant rights within 21 days of
the Company's call for the exercise of the warrants.
On November 18, 2004, each director was granted additional warrants to
purchase 10,000 shares of the Company's common stock at a price of $13.50 per
share. The warrants vest equally over a three-year period beginning November 18,
2005, and will expire on November 18, 2014.
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Assuming all of the warrants issued to the directors are exercised and
that the Company issues no further common stock, the directors would
beneficially own an aggregate of 357,100 shares, or 52% of the Company's
outstanding common stock.
2001 STOCK OPTION PLAN
At the 2001 Annual Meeting of Shareholders, the shareholders approved
the 2001 Stock Option Plan, which reserves 50,000 shares of Common Stock for
issuance pursuant to the exercise of options which may be granted pursuant to
the 2001 Stock Option Plan. The Plan is administered by the Board of Directors
or a Committee appointed by the Board of Directors. Options awarded under the
Plan may be "incentive stock options" within the meaning of the Internal Revenue
Code or non-qualified options. Options may be granted pursuant to the 2001 Stock
Option Plan to persons who are officers or key employees of the Company or any
subsidiary (including officers who are employees) at the time of grant. The
Board of Directors or the Committee selects the persons to receive grants under
the 2001 Stock Option Plan and determines the number of shares covered by
options granted under the 2001 Stock Option Plan.
All stock options will have such exercise prices as may be determined
by the Board of Directors or the Committee at the time of grant, but such prices
may not be less than the fair market value of the Common Stock (as determined in
accordance with the Plan) at the date of grant. The Board of Directors or the
Committee may set other terms for the exercise of the options but may not grant
to any one holder more than $100,000 of incentive stock options (based on the
fair market value of the optioned shares on the date of the grant of the option)
which first become exercisable in any calendar year. No options may be exercised
after ten years from the date of grant, and options may not be transferred
except by will or the laws of descent and distribution. Incentive stock options
may be exercised only while the optionee is an employee of the Company, within
three months after the date of termination of employment, or within twelve
months of death or disability, but only to the extent the option has not
expired.
The number of shares reserved for issuance under the Plan, the number
of shares covered by outstanding options and the exercise price of options will
be adjusted in the event of changes in the number of outstanding shares of
common stock effected without receipt of consideration by the Company. All
outstanding options will become immediately exercisable in the event of a change
of control, or imminent change of control, of the Company (both as defined in
the Plan). In the event of an extraordinary corporate action (as described in
the Plan), subject to any required shareholder approval, the Board of Directors
or the Committee, in its sole discretion, may also cancel and pay for
outstanding options. The Board or Committee also has the power to accelerate the
exercise date of outstanding options at any time. The Board of Directors may
alter, suspend or discontinue the Plan, but may not increase (except as
discussed above) the maximum number of shares reserved for issuance under the
Plan, materially increase benefits to participants under the Plan, or materially
modify the eligibility requirements under the Plan without shareholder approval
or ratification. The 2001 Stock Option Plan will terminate on March 28, 2011,
and no options will be granted thereunder after that date.
At March 21, 2005, options to purchase a total of 15,000 shares of
common stock were outstanding under the 2001 Stock Option Plan.
12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, in the ordinary course of its business, makes loans to and
has other transactions with directors, officers, principal shareholders, and
their associates. Loans are made on substantially the same terms, including
rates and collateral, as those prevailing at the time for comparable
transactions with other persons and do not involve more than the normal risk of
collectibility or present other unfavorable features. The Company expects to
continue to enter into transactions in the ordinary course of business on
similar terms with directors, officers, principal stockholders, and their
associates. The aggregate dollar amount of such loans outstanding at December
31, 2004 was $3,172,011. During 2004, $889,950 of new advances were made and
repayments totaled $37,050.
The law firm of Stanton and Jones, in which J. Richard Jones, Jr., a
director of the Company, is a partner, provided legal services to the Company in
2004 and expects to continue to provide legal services to the Company in 2005.
The Company leases its operations center from an entity controlled by
Gosnold G. Segars, a director of the Company. The lease is renewable on an
annual basis until 2008. The current monthly rental amount is $1,000 per month.
Rental expense associated with this lease was $12,000 for the year ended
December 31, 2004. Assuming the lease is renewed at the same monthly rate,
future minimum lease payments would be $12,000 per year over the next three
years, or a total of $36,000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As required by Section 16(a) of the Securities Exchange Act of 1934,
the Company's directors, its executive officers and certain individuals are
required to report periodically their ownership of the Company's Common Stock
and any changes in ownership to the Securities and Exchange Commission. Based on
a review of Section 16(a) reports available to the Company, it appears that all
such reports for these persons were filed in a timely fashion during 2004.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Elliott Davis, LLC, Certified Public
Accountants, to serve as the Company's independent certified public accountants
for 2005. It is expected that representatives from this firm will be present and
available to answer appropriate questions at the annual meeting, and will have
the opportunity to make a statement if they so desire.
Fees Paid to Independent Auditors
Set forth below is information about fees billed by the Company's
independent auditors for audit services rendered in connection with the
consolidated financial statements and reports for the years ended December 31,
2004 and 2003, and for other services rendered during such years, on behalf of
the Company and the Bank, as well as all out-of-pocket expenses incurred in
connection with these services, which have been billed to the Company.
13
Audit Fees
Audit fees include fees billed for professional services rendered for
the audit of the Company's consolidated financial statements and review of the
interim condensed consolidated financial statements included in quarterly
reports, and services that are normally provided by the Company's independent
auditor in connection with statutory and regulatory filings or engagements, and
attest services, except those not required by statute or regulation. For the
years ended December 31, 2003 and 2004, respectively, Elliott Davis, LLC billed
the Company an aggregate of $23,675 and $25,630 for audit fees.
Audit-Related Fees
Audit-related fees include fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's consolidated financial statements and are not reported under
"Audit Fees". For the year ended December 31, 2003 Elliott Davis, LLC did not
bill the Company for audit-related fees. For the year ended December 31, 2004
Elliott Davis billed the Company an aggregate of $2,100 for audit related fees.
Tax Fees
Tax fees include fees for tax compliance/preparation and other tax
services. Tax compliance/preparation include fees billed for professional
services related to federal, state and international tax compliance. Other tax
services include fees billed for other miscellaneous tax consulting and
planning. For both the years ended December 31, 2003 and 2004, Elliott Davis,
LLC billed the Company an aggregate of $1,785 for tax fees.
All Other Fees
All other fees include fees for all other services other than those
reported above. These services include assistance with the review of the prior
year's 10-KSB, Proxy Statement and preparation of Form 5500. For the years ended
December 31, 2003 and 2004, respectively, Elliott Davis, LLC billed the Company
an aggregate of $3,235 and $2,850 for all other fees.
In making its decision to recommend appointment of Elliott Davis, LLC
as the Company's independent auditors for the fiscal year ending December 31,
2005, the Audit Committee considered whether services other than audit and
audit-related services provided by that firm are compatible with maintaining the
independence of Elliott Davis, LLC.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors
The Audit Committee pre-approves all audit and permitted non-audit
services (including the fees and terms thereof) provided by the independent
auditors, subject to limited possible exceptions for non-audit services
described in Section 10A of the Securities Exchange Act of 1934, which are
approved by the Audit Committee prior to completion of the audit. The Committee
14
may delegate to one or more designated members of the Committee the authority to
pre-approve audit and permissible non-audit services, provided such pre-approval
decision is presented to the full Committee at its next scheduled meeting.
General pre-approval of certain audit, audit-related and tax services
is granted by the Committee at the first quarter Committee meeting. The
Committee subsequently reviews fees paid. Specific pre-approval is required for
all other services. During 2004, all audit and permitted non-audit services were
pre-approved by the Committee.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors has reviewed and
discussed with management the Company's audited financial statements for the
year ended December 31, 2004. The Audit Committee has discussed with the
Company's independent auditors, Elliott Davis, LLC, the matters required to be
discussed by Statement on Auditing Standards 61, as modified or supplemented.
The Audit Committee has also received the written disclosures and the letter
from Elliott Davis, LLC, required by Independence Standards Board Standard No.
1, as modified or supplemented, and has discussed with Elliott Davis, LLC, their
independence. Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2004 for filing with the Securities and Exchange
Commission.
Franklin Hines J. Richard Jones Peter C. Coggeshall, Jr.
OTHER MATTERS
The Board of Directors knows of no other business to be presented at
the meeting of shareholders. If matters other than those described herein should
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote at such meeting in accordance with their best
judgment on such matters.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-KSB
Shareholders may obtain copies of the Company's Annual Report on Form
10-KSB required to be filed with the Securities and Exchange Commission for the
year ended December 31, 2004, free of charge by requesting such form in writing
from Curtis A. Tyner, Sr., President, Regional Bankshares, Inc., 206 South Fifth
Street, Hartsville, South Carolina 29550. Copies may also be downloaded from the
Securities and Exchange Commission website at http://www.sec.gov.
15
PROXY
REGIONAL BANKSHARES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS - MAY 12, 2005
Curtis A. Tyner, Sr. or Gosnold G. Segars or either of them, with full
power of substitution, are hereby appointed as agent(s) of the undersigned to
vote as proxies for the undersigned at the Annual Meeting of Shareholders to be
held on May 12, 2005, and at any adjournment thereof, as follows:
1. ELECTION OF [ ]FOR all nominees listed [ ]WITHHOLD AUTHORITY
DIRECTORS TO below (except any I have to vote for all nominees
HOLD OFFICE written below) below
FOR THREE
YEAR TERMS
Franklin Hines, J. Richard Jones, Jr., Woodward H. Morgan, III, and Gosnold G.
Segars
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL(S) WRITE THE
NOMINEE'S(S') NAME(S) ON THE LINE BELOW.
- --------------------------------------------------------------------------------
2. And, in the discretion of said agents, upon such other business as may
properly come before the meeting, and matters incidental to the conduct
of the meeting. (Management at present knows of no other business to be
brought before the meeting.)
THE PROXIES WILL BE VOTED AS INSTRUCTED. IF NO CHOICE IS INDICATED WITH RESPECT
TO A MATTER WHERE A CHOICE IS PROVIDED, THIS PROXY WILL BE VOTED "FOR" SUCH
MATTER.
Please sign exactly as name appears below. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title. If more than one
trustee, all should sign. All joint owners must sign.
Dated:_______________, 2005 ________________________________________
________________________________________