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 ss. 240.14a-12
REGIONAL BANKSHARES, INC.
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(Name of Registrant as Specified In Its Charter)
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(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:
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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 2006 Annual Shareholders'
Meeting of Regional Bankshares, Inc., to be held at 125 Westfield Street,
Hartsville, South Carolina 29550 on Thursday, May 11, 2006 at 11:00 a.m. Eastern
Daylight Time. Notice of the meeting is enclosed.
A proposal to elect four directors to serve until the 2009 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 2005. 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 2006.
Sincerely,
Curtis A. Tyner, Sr.
Chief Executive Officer
Hartsville, South Carolina
April 6, 2006
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 125 Westfield Street, Hartsville, South
Carolina, on Thursday, May 11, 2006, 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 24, 2006,
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 2006 Proxy Statement and the
Company's 2005 Annual Report to Shareholders.
By Order of the Board of Directors
April 6, 2006 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 2006 Annual Meeting of Shareholders. The Annual Meeting will be
held at 11:00 a.m. on Thursday, May 11, 2006 at 125 Westfield 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 6, 2006, 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, 2005, including financial statements, is enclosed. Such Annual
Report to Shareholders does not form any part of the material for the
solicitation of proxies.
VOTING PROCEDURES
Voting
Shareholders who hold their shares of record in their own names can vote
their shares by marking the enclosed proxy form, dating it, signing it, and
returning it to the Company in the enclosed postage-paid envelope. Shareholders
of record can also attend the Annual Meeting and vote in person. Shareholders
who hold their shares in street name with a broker or other nominee can direct
their vote by submitting voting instructions to the broker or nominee in
accordance with the procedure on the voting card provided by the broker or
nominee. Shareholders who hold their shares in street name may attend the Annual
Meeting, but may not vote in person without a proxy appointment from a
shareholder of record.
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 written instructions revoking the proxy to Mr.
Jones at Post Office Box 2255, Hartsville, South Carolina 29551;
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. However, any record
shareholder who desires to do so may attend the meeting and vote in person in
which case the proxy will not be used. Shareholders who hold their shares in
street name with a broker or other nominee may change or revoke their proxy
instructions by submitting new voting instructions to the broker or other
nominee.
Quorum And Method of Counting Votes
At the close of business on March 17, 2006, there were outstanding 694,159
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 24, 2006 (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.
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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 proxy agents, 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 2007 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
29551. In addition to other applicable requirements, for business to be properly
brought before the 2007 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 7, 2006,
for inclusion, if otherwise appropriate, in the Company's 2007 Proxy Statement
and form of Proxy relating to that meeting. With respect to any shareholder
proposal not received by the Company prior to February 20, 2007, proxies
solicited by management of the Company will be voted on the proposal in the
discretion of the designated proxy agents.
MANAGEMENT AND 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 2006 have been nominated by the Board of Directors for
re-election to serve for the next three years. Their terms will expire at the
2009 Annual Meeting. Set forth below is information about the nominees for
reelection and current directors whose terms will continue after the 2006 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.
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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 or her
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 2009
Randolph G. Rogers (age 58). 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 68). 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 57). 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 62). 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.
Members of the Board of Directors whose terms of office will continue
until the Annual Meeting of Shareholders in 2008
Franklin Hines (age 72). 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 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.
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J. Richard Jones, Jr. (age 53). 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 64). 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 61). 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 72). 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 63). 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 62). 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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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 "--Nominees for Re-election to the Board of Directors for
terms of office to continue until the Annual Meeting of Shareholders in 2009."
GOVERNANCE MATTERS
Attendance at Meetings of the Board of Directors and Meetings of Shareholders
During the last full fiscal year, ending December 31, 2005, the Board of
Directors met eight 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, ten 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
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 2005.
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.
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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
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.
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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.
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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 17, 2006, 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. The Company issued a 20% common stock dividend in
2005. The numbers of shares and options set forth in the table and the notes to
the table have been adjusted to reflect this stock dividend.
Number of Shares
Beneficially Percentage
Name Position Owned(1) Ownership
---- -------- -------- ---------
Curtis A. Tyner, Sr.(2) President, Chief Executive 36,239 4.09%
Officer and Director
Gosnold G. Segars (3) Chairman of the Board 58,440 6.59%
2586 Kelleytown Road
Hartsville, SC 29550
Francine P. Bachman (4) Director 43,060 4.86%
Thomas James Bell, Jr. (5) Director 39,940 4.51%
Peter C. Coggeshall, Jr. (6) Director 30,000 3.38%
Franklin Hines (7) Director 30,000 3.38%
J. Richard Jones (8) Secretary and Director 30,000 3.38%
Woodward H. Morgan III (9) Director 37,200 4.20%
Randolph G. Rogers (10) Director 52,920 5.97%
1901 E. Carolina Avenue
Hartsville, SC 29550
Howard W. Tucker, Jr. (11) Director 38,280 4.32%
Patricia M. West (12) Director 36,720 4.14%
All Directors and Executive
Officers as a Group (11 Persons)(13) 432,799 48.83%
(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 240 shares held by Mr. Tyner's wife, 12,936 shares held in Mr.
Tyner's individual retirement account, 12,160 shares subject to currently
exercisable warrants, and 6,000 shares subject to currently exercisable
options.
(3) Includes 3,000 shares held by Mr. Segars' wife, and 17,640 shares subject
to currently exercisable warrants.
(4) Includes 12,000 shares held by Ms. Bachman's husband, 1,060 shares held by
Ms. Bachman as custodian for her grandchildren, and 17,640 shares subject
to currently exercisable warrants.
(5) Includes 12,000 shares held in Mr. Bell's individual retirement account,
and 17,640 shares subject to currently exercisable warrants.
(6) Includes 17,640 shares subject to currently exercisable warrants.
(7) Includes 17,640 shares subject to currently exercisable warrants.
(8) Includes 13,200 shares subject to currently exercisable warrants, and
4,800 shares held in Mr. Jones' individual retirement account.
(9) Includes 1,200 shares held by Mr. Morgan as custodian for his grandson,
and 16,800 shares subject to currently exercisable warrants.
(10) Includes 6,000 shares held by Mr. Rogers' wife, 360 shares held by Mr.
Rogers' wife as custodian for his children, and 17,640 shares subject to
currently exercisable warrants.
(11) Includes 21,720 shares held in Mr. Tucker's individual retirement account,
960 shares held by Mr. Tucker's wife, and 14,520 shares subject to
currently exercisable warrants.
(12) Includes 120 shares held by Ms. West's husband, 6,000 shares held in the
individual retirement account of Ms. West's husband, 600 shares held by
Ms. West's husband as custodian for Ms. West's grandchildren, and 17,640
shares subject to currently exercisable warrants.
(13) Includes 186,160 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. 2005 $130,567 $27,500 - $4,606
President, Chief Executive 2004 125,526 27,500 - 4,429
Officer and Treasurer 2003 121,300 12,500 - 4,659
- ---------------
(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 $3,917 in 2005, $3,767 in 2004, and
$3,669 in 2003 to a simple retirement plan on behalf of Mr. Tyner, and
payments by the Company of $689, $662 and $990 in 2005, 2004 and 2003,
respectively, for term life insurance premiums for Mr. Tyner.
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Option Grants in Last Fiscal Year
No options were granted to the Chief Executive Officer in 2005.
Option Exercises and Year End Options Outstanding and Values
No options were exercised by the Chief Executive Officer during 2005.
The following table sets forth information about options held by the Chief
Executive Officer at December 31, 2005.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options 12/31/05(1) Options 12/31/05(2)
------------------- -------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Curtis A. Tyner 19,560 -0- 6,293 -0-
- -------------------------
(1) The table includes information about 1,560 currently exercisable
organizer warrants, 12,000 currently exercisable director warrants and
6,000 exercisable options held by Mr. Tyner. See "Compensation of
Directors -- Organizer Warrants" and "-- Director Warrants."
(2) Based on a price of $10.71 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 on exercise prices
ranging from $8.33 to $11.25 per share. Prices have been adjusted to
reflect the 20% stock dividend issued September 1, 2005. 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 minimum base salary of $100,000, which may be
increased from time to time in the discretion of the Board of Directors. For
2006, Mr. Tyner's base salary has been set at $136,443. 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 is
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. Mr. Tyner's
employment agreement is for a rolling three year term, unless either party
provides notice that the term of employment shall not continue to be extended.
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
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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.
Salary Continuation Agreement
The Company has also entered into a Salary Continuation Agreement with Mr.
Tyner that provides for payments to him upon his retirement, disability or
death, or upon his voluntary early termination or termination as a result of a
change of control. The agreement sets the formulae for determining the amount of
benefits to be paid and the term over which the benefits will be paid. Upon Mr.
Tyner's retiring at age 65 or later separation from service (as defined in the
agreement), Mr. Tyner will be paid an annual benefit equal to 35% of his final
pay in monthly installments for a period of 15 years. "Final pay" is defined by
the agreement as Mr. Tyner's highest annualized base salary (before reduction
for deferred compensation under all qualified, non-qualified and Internal
Revenue Code Section 125 plans) from the five years prior to and including the
year of his separation of service. If Mr. Tyner's employment is terminated prior
to age 65 for any reason other than a change of control of the Company (as
defined in the agreement), death or cause (as defined in the agreement), Mr.
Tyner will be paid a benefit equal to 100% of the balance accrued by the Company
under generally accepted accounting principles to fund the Company's obligation
under the agreement plus a discount rate initially set at 6%, together with
interest compounded until Mr. Tyner reaches age 65. The benefit will be
distributed in 180 monthly installments beginning the month after Mr. Tyner
reaches age 65, together with interest compounded monthly during the installment
period. If there is a separation of service after a change of control, Mr. Tyner
will be paid 35% of final pay (as defined above) increased by 4% annually until
Mr. Tyner reaches age 65. The benefit will be paid in monthly installments for a
period of 15 years beginning the month after Mr. Tyner reaches age 65. Upon Mr.
Tyner's death while employed by the Company, his estate will be paid an annual
benefit equal to 35% of his final pay. The death benefit will be paid in monthly
installments for a period of 15 years commencing the month after the Company's
receipt of his death certificate. No benefits will be paid to Mr. Tyner under
the agreement if he is terminated for cause. Mr. Tyner's benefits under the
agreement may also be forfeited upon the occurrence of certain events described
in the agreement.
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The foregoing is only a summary of the Salary Continuation Agreement
between Mr. Tyner and the Company and is qualified in its entirety by reference
to the Agreement.
Compensation of Directors
Standard Compensation
Directors of the Company currently receive $200 for each meeting of the
Board of Directors attended and $100 for each committee meeting attended. All of
the Directors of the Company are also directors of Heritage Community Bank and
receive $200 for each meeting of the Bank Board of Directors attended and $100
for each committee meeting attended. The Board of Directors of the Company met
eight times in 2005 and the Board of Directors of the Bank met eleven times in
2005.
Warrants
The numbers of shares and exercise prices in the two subsections below
have been adjusted for the 20% stock dividend issued in 2005.
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 6,000 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 $8.33 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.
Director Warrants
On November 18, 2004, each director was granted additional warrants to
purchase 12,000 shares of the Company's common stock at a price of $10.83 per
share. All of the warrants have vested and are currently exercisable.
Assuming all of the warrants issued to the directors are exercised, that
the Company issues no further common stock, and the directors do not purchase or
sell additional shares, the directors would beneficially own an aggregate of
426,799 shares, or 49% of the Company's outstanding common stock.
13
2001 STOCK OPTION PLAN
At the 2001 Annual Meeting of Shareholders, the shareholders approved the
2001 Stock Option Plan, which reserves 60,000 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 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. Such numbers of
shares and exercise prices have been adjusted to give effect to a 20% stock
dividend issued in 2005. 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 17, 2006, options to purchase a total of 12,000 shares of common
stock were outstanding under the 2001 Stock Option Plan.
14
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, 2005 was $3,736,214. During 2005, $1,908,506 of new advances were made and
repayments totaled $1,668,940.
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
2005 and expects to continue to provide legal services to the Company in 2006.
During 2005, the Company leased its operations center from an entity
controlled by Gosnold G. Segars, a director of the Company. The monthly rental
amount was $1,000 per month, and rental expense associated with this lease was
$12,000 for the year ended December 31, 2005. The lease was terminated effective
December 31, 2005.
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 2005.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Elliott Davis, LLC, Certified Public Accountants,
to serve as the Company's independent certified public accountants for 2006. 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,
2005 and 2004, 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.
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
15
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, 2004 and 2005, respectively, Elliott Davis, LLC billed
the Company an aggregate of $25,630 and $31,024 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 years ended December 31, 2004 and 2005, respectively, Elliott
Davis billed the Company an aggregate of $2,100 and $220 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 and state tax compliance. Other tax services include
fees billed for other miscellaneous tax consulting and planning. For the years
ended December 31, 2004 and 2005, respectively, Elliott Davis, LLC billed the
Company an aggregate of $1,785 and $2,425 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, 2004 and 2005, respectively, Elliott Davis, LLC billed the Company
an aggregate of $2,850 and $450 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, 2006,
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
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.
16
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 2005, 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, 2005. 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, 2005 for filing with the Securities and Exchange Commission.
Franklin Hines J. Richard Jones Peter C. Coggeshall, Jr.
The Audit Committee Report shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent the Company specifically incorporates
it by reference therein.
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, 2005, 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.
17
PROXY
REGIONAL BANKSHARES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS - MAY 11, 2006
Gosnold G. Segars or J. Richard Jones 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 11, 2006, 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
Randolph G. Rogers, Howard W. Tucker, Jr., Curtis A. Tyner, Sr. and Patricia M.
West
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: _____________, 2006 ----------------------------------------
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