1
SCHEDULE 14 A 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-11 )c) or
Section 240.14a-12
BANK OF SOUTH CAROLINA CORPORATION
----------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BANK OF SOUTH CAROLINA CORPORATION
----------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN 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)(4) AND
0-11.
1. TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
2. AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
3. PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION
COMPUTED PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE
AMOUNT ON WHICH THE FILING FEE IS CALCULATED AND STATE HOW IT
IS DETERMINED):
4. PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
5. TOTAL FEE PAID:
[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT
RULE 0-11(A)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE
WAS PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION
STATEMENT NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
1. AMOUNT PREVIOUSLY PAID:
2. FORM, SCHEDULE OR REGISTRATION STATEMENT NUMBER
3. FILING PARTY:
4. DATE FILED:
2
PROXY MATERIAL OF
BANK OF SOUTH CAROLINA CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 10, 2001
To Our Shareholders:
The Annual Meeting of Shareholders of Bank of South Carolina
Corporation (the "Company") will be held at 256 Meeting Street, Charleston,
South Carolina, on Tuesday, April 10, 2001, at 2:00 p.m. for the following
purposes:
1. To elect sixteen (16) Directors to serve until the company's
2002 Annual Meeting of Shareholders;
2. To ratify the appointment of KPMG LLP, as independent
certified public accountants for 2001;
3. To transact such other business as may properly come before
the meeting.
Shareholders of record at the close of business on February 23, 2001,
will be entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof.
You may revoke your Proxy at any time prior to its exercise by written
notice to the Company prior to the meeting or by attending the meeting
personally and voting. The Board of Directors of the Company solicits the
accompanying form of Proxy.
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY AND PROMPTLY RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
By Order of the Board of Directors
/s/ Nathaniel I. Ball, III
-----------------------------------
Nathaniel I. Ball, III
Secretary
March 2, 2001
A copy of the Company's Annual Disclosure Statement as filed with the
Securities and Exchange Commission on Form 10-KSB may be obtained at no cost by
writing William L. Hiott, Jr., Treasurer, at Bank of South Carolina Corporation,
P.O. Box 538, Charleston, South Carolina 29402 (843-724-1500). Additional copies
may be obtained at a cost of $5.00 each.
3
BANK OF SOUTH CAROLINA CORPORATION
256 MEETING STREET
CHARLESTON, SOUTH CAROLINA 29401
---------------------------------
PROXY STATEMENT
This Proxy Statement, which is first being mailed to shareholders on or
about March 2, 2001, is provided in conjunction with the solicitation of proxies
by the Board of Directors of Bank of South Carolina Corporation (the "Company")
for use at the 2001 Annual Shareholders' Meeting of the Company. The Notice of
Meeting, Proxy Form and Annual Report are enclosed in this package.
THE PROXY
The Board of Directors of the Company selected the persons named as
proxies on the enclosed Proxy Form. No officer or employee of the Company or any
subsidiary may be named as proxy.
The solicitation of proxies on behalf of the Board of Directors is
conducted by Directors, Officers and regular employees of the Company and its
wholly owned subsidiary, The Bank of South Carolina (the "Bank"), at no
additional compensation over regular salaries. The cost of printing and mailing
of all proxy materials has been paid by the Company. Brokers and others involved
in handling and forwarding the proxy materials to their customers having
beneficial interests in the stock of the Company registered in the names of
nominees will be reimbursed for their reasonable expenses in doing so.
VOTING RIGHTS
The Common Stock of the Company is its only class of voting securities. On
February 23, 2001, there were issued and outstanding 2,580,597 shares of Common
Stock (no par value). Each share is entitled to one vote; provided, however,
that Shareholders have cumulative voting rights for the election of Directors.
The right to cumulate votes means that the Shareholders are entitled to multiply
the number of votes they are entitled to cast by the number of directors for
whom they are entitled to vote and cast the product for a single candidate or
distribute the product among two or more candidates.
CUMULATIVE VOTING SHALL APPLY FOR THE ELECTION OF DIRECTORS
The solicitation of proxies on behalf of the Board of Directors includes a
solicitation for discretionary authority to cumulate votes.
The Board of Directors of the Company has fixed the close of business
February 23, 2001 as the record date for the determination of Shareholders
entitled to notice of and to vote at the Annual Meeting. Proxies properly
executed by Shareholders of record on February 23, 2001, and received in time
for the meeting will be voted as specified on all business to be acted upon at
the meeting and any adjournment thereof.
4
RIGHT OF REVOCATION
Any Shareholder executing a Proxy for the meeting on the Proxy Form
provided may revoke the Proxy in a writing delivered to the President of the
Company prior to the meeting or by attending the meeting and voting in person.
PRINCIPAL SHAREHOLDERS OF THE COMPANY
To the extent known to the Board of Directors of the Company, as of
February 23, 2001, the only Shareholders of the Company having beneficial
ownership of more than five (5%) percent of the shares of Common Stock of the
Company are as set forth below:
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- --------------------- ----------
Hugh C. Lane, Jr. 413,860.937(1)(2) 16.04%
30 Church Street
Charleston, SC 29401
Charles G. Lane 141,794(3) 5.49%
10 Gillon Street
Charleston, SC 29401
The Bank of South Carolina 206,693(4) 8.01%
Employee Stock Ownership
Plan and Trust ("ESOP")
256 Meeting Street
Charleston, SC 29401
- ------------------------------
(1) To the extent known to the Board of Directors, Hugh C. Lane and his
children, individually and collectively, have beneficial ownership of
694,906.937 shares or 26.93% of the outstanding shares. As more fully
described in the following footnote, Hugh C. Lane, Jr. and Charles G.
Lane are the only ones of the above who have a beneficial ownership
interest in more than five (5%) percent of the Company's common stock.
Hugh C. Lane, Jr. disclaims any beneficial interest in those shares in
which other members of his family have a beneficial interest other
than those shares his wife owns directly and those for which he serves
as trustee or she serves as custodian (as more fully described in the
following footnote). Charles G. Lane disclaims any beneficial interest
in those shares in which other members of his family have a beneficial
interest other than those shares his wife owns directly and those for
which he serves as trustee or she serves as custodian (as more fully
described in the following footnote).
(2) To the extent known to the Board of Directors, Hugh C. Lane, Jr.
directly owns and has sole voting and investment power with respect to
175,350 shares; as trustee for 7 trust accounts holding an aggregate of
61,250 shares, he has sole voting and investment power with respect to
such shares; as co-trustee for two trust accounts holding 12,340
shares, he has joint voting and investment power with respect to such
shares; as trustee for the Mills Bee Lane Memorial Foundation, he has
shared voting and investment power with respect to 6,500 shares; he is
2
5
indirectly beneficial owner of 8,168 shares owned by his wife and an
aggregate of 120,042 shares held by his wife as custodian for three
minor children and 30,210.937 shares owned by the Employee Stock
Ownership Plan and Trust ("ESOP") in which he has a vested interest.
All of the 413,860.937 shares beneficially owned by Hugh C. Lane, Jr.
are currently owned. Hugh C. Lane, Jr. has had beneficial ownership of
more than five (5%) percent of the Bank's Common Stock since October
23, 1986, and more than ten (10%) percent since November 16, 1988.
(3) To the extent known to the Board of Directors, Charles G. Lane
directly owns and has sole voting and investment power with respect to
69,557 shares; as co-trustee for 2 trust accounts holding 14,053
shares, he has joint voting and investment powers with respect to such
shares; as trustee for the Mills Bee Lane Memorial Foundation, he has
shared voting and investment power with respect to 6,500 shares; he is
indirectly beneficial owner of 2,662 shares owned by his wife and an
aggregate of 49,022 shares held by his wife as custodian for three
minor children. All of the shares beneficially owned by Charles G.
Lane are currently owned. Charles G. Lane has had beneficial ownership
of more than five (5%) percent of the Bank's Common Stock since July
16, 1999;
(4) The Trustee of the ESOP, Nathaniel I. Ball, III, an executive Officer
and Director of the Bank and the Company, disclaims beneficial
ownership of 206,693 shares owned by the ESOP which have been
allocated to members of the plan each of whom under the terms of the
plan has the right to direct the Trustee as to the manner in which
voting rights are to be exercised and claims beneficial ownership of
4,700 shares owned by the ESOP which have not yet been allocated to
members of the plan.
BENEFICIAL OWNERSHIP OF COMMON STOCK OF THE COMPANY
The table below sets forth the number of shares of Common Stock (the
only class of outstanding equity securities of the Company) known by the Company
to be beneficially owned by each Nominee for election as Director and by the
Officers and Directors of the Company as a group as of February 23, 2001. Except
as otherwise indicated in the footnotes to the table, the persons named possess
sole voting power and investment power with respect to the shares shown opposite
their names. As of February 23, 2001, no Officer, Director or Nominee
beneficially owned more than ten (10%) percent of the outstanding shares of the
Company other than Hugh C. Lane, Jr. As of February 23, 2001, the Officers,
Directors and Nominees beneficially owned 829,805.147 shares, representing
approximately 32.16% of the outstanding shares.
As of February 23, 2001, the beneficial ownership of Common Stock of
the Company by all current Directors and each Nominee for Director was as set
forth in the following table:
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- -------------------- ----------
Nathaniel I. Ball, III 61,489.584(1) 2.38%
1302 Cove Avenue
Sullivan's Island, SC 29482
William T. Cooper 5,324(1) .21%
21 Jamestown Road
Charleston, SC 29407
3
6
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
---------------- -------------------- ---------
C. Ronald Coward 34,136(1) 1.32%
537 Planters Loop
Mt. Pleasant, SC 29464
Leonard C. Fulghum 35,175(1) 1.36%
311 Middle Street
Mt. Pleasant, SC 29464
T. Dean Harton 8,704(1) .34%
4620 Lazy Creek Lane
Wadmalaw, SC 29487
William L. Hiott, Jr. 88,393.626(1) 3.43%
1831 Capri Drive
Charleston, SC 29407
Katherine M. Huger 5,324(1) .21%
72 Murray Boulevard
Charleston, SC 29401
John E. Huguley 16,456(1) .64%
22 Murray Boulevard
Charleston, SC 29401
Charles G. Lane 141,794(1) 5.49%
10 Gillon Street
Charleston, SC 29401
Hugh C. Lane, Jr. 412,756.937(1) 15.99%
30 Church Street
Charleston, SC 29401
Louise J. Maybank 12,100 .47%
8 Meeting Street
Charleston, SC 29401
Thomas W. Myers 4,000 .16%
500 Central Avenue
Summerville, SC 29483
Alan I. Nussbaum, MD 300 .01%
37 Rebellion Road
Charleston, SC 29407
4
7
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- -------------------- ----------
Edmund Rhett, Jr., MD 900(1) .03%
45 South Battery
Charleston, SC 29401
Thomas C. Stevenson, III 484 .02%
173 Tradd Street
Charleston, SC 29401
John M. Tupper 1,364 .05%
113 Linwood Drive
Summerville, SC 29483
(1) To the extent known to the Board of Directors, each of the following
Directors and Nominees for election as Directors (each of whom directly
owns and has sole voting and investment power of all shares
beneficially owned by him or her except as set forth in this footnote)
indirectly owns the following number of shares: Nathaniel I. Ball, III
- an aggregate of 5,802 shares directly owned by his wife; 20,305.584
shares owned by the ESOP, in which he has a vested interest and 4,700
shares owned by the ESOP which have not yet been allocated to members
of the plan; William T. Cooper - an aggregate of 4,840 shares held by a
pension plan; C. Ronald Coward - an aggregate of 1,100 shares owned by
a company of which he is president and director; Leonard C. Fulghum -
an aggregate of 3,555 shares owned by his wife; T. Dean Harton - an
aggregate of 2,134 shares owned by his wife and held by his wife as
custodian for his step-son; William L. Hiott, Jr. - an aggregate of
5,323 shares directly owned by his wife and 4,532 held by him as
custodian for two children and 20,437.626 shares owned by the ESOP, in
which he has a vested interest; Katherine M. Huger - 484 shares owned
by her husband; John E. Huguley - 8,954 shares owned by his wife;
Charles G. Lane - an aggregate of 72,237 shares owned by his wife, held
by her as custodian for children, held by him as co-trustee with Hugh
C. Lane, Jr., for a sister's children, held by him as a co-trustee for
the children of Hugh C. Lane, Jr. and held by him as a trustee of Mills
Bee Lane Memorial Foundation; Hugh C. Lane, Jr. - an aggregate of
208,300 shares owned by his wife, held by his wife as custodian for
each of three children, held by him as co-trustee with Charles G. Lane
for a sister's children and held by him as trustee for his and his
brother's and sisters' children (as more fully described in the
footnote to the preceding table), held by him as a trustee of Mills Bee
Lane Memorial Foundation and 30,210.937 shares owned by the ESOP, in
which he has a vested interest; and Edmund Rhett, Jr., 400 shares owned
by his wife. All such indirectly owned shares are included in the
totals of the number of shares set forth in the above table and
beneficially owned by the Directors and Nominees.
- ------------------------------
As a group, all Directors and Executive Officers (including Hugh C.
Lane, Jr., President and Chief Executive Officer; Nathaniel I. Ball, III,
Executive Vice President and Secretary; and William L. Hiott, Jr., Executive
Vice President and Treasurer) are sixteen (16) in number and beneficially own an
aggregate of 829,805.147 shares, representing 32.16% of the issued and
outstanding Common Stock of the Company.
5
8
All of these shares beneficially owned by the Directors, Nominees and Executive
Officers are currently owned.
ELECTION OF DIRECTORS
Sixteen (16) Directors, constituting the entire Board of Directors,
will be elected at the Annual Meeting, each to hold office for one year and
until a successor shall have been duly elected or appointed and shall have
qualified. In the absence of instructions to the contrary, shares of Common
stock represented by properly executed proxies will be voted for the sixteen
(16) Nominees listed on pages 6 and 7, all of whom are recommended by management
and have consented to be named and to serve if elected.
The Company does not presently know of anything that would preclude
any Nominee from serving; however, should any Nominee for any reason become
unable or unwilling to serve as a Director, the number of Directors to be
elected will be reduced accordingly.
The name of each Nominee designated by the Board of Directors of the
Company for election as Director of the Company and certain information provided
by such Nominee to the Company is set forth in the table below. Twelve (12) of
the current nominees served as initial directors of the Bank from October 22,
1986, when the Bank's charter was issued until the first annual meeting of
Shareholders on April 14, 1987, and were elected to serve a one-year term at
such annual meeting. John M. Tupper and Thomas W. Myers were first elected as
Directors of the Bank during 1993. Alan I. Nussbaum, MD and Edmund Rhett, Jr.,
MD, were first elected as Directors of the Company during 1999. They were all
re-elected to serve one-year terms at subsequent annual meetings. All of the
above current Nominees served as Directors of the Company from April 11, 2000,
the date of the last Annual Meeting of shareholders.
POSITIONS AND
OFFICES HELD BUSINESS EXPERIENCE
WITH FAMILY 1987-2001 AND
NAME AGE CORPORATION RELATIONSHIP OTHER DIRECTORSHIPS
- ---- --- ----------- ------------ -------------------
Nathaniel I. Ball, III 59 Executive None The Bank of South Carolina (banking)
Vice President, 1986-2001
Secretary,
Director
William T. Cooper 71 Director None President, Southeastern Galleries, Inc. (retail furniture
and decorating) 1983-2001
C. Ronald Coward 65 Director None President - Coward-Hund Construction
Company, Inc. (construction) 1976-2001
Leonard C. Fulghum 71 Director None Chairman - Ferguson Fulghum, Inc. (painting contractors)
1972-2001
T. Dean Harton 55 Director None President - Hawthorne Corporation (aviation) 1986-2001
6
9
POSITIONS AND
OFFICES HELD BUSINESS EXPERIENCE
WITH FAMILY 1987-2001 AND
NAME AGE CORPORATION RELATIONSHIP OTHER DIRECTORSHIPS
- ---- --- ----------- ------------ -------------------
William L. Hiott, Jr. 56 Executive None The Bank of South Carolina
Vice President, (banking) 1986-2001
Treasurer,
Director
Katherine M. Huger 59 Director None Assistant Professor of Economics - Charleston Southern
University (education) 1972-2001
John E. Huguley 73 Director None Retired (1996) Chairman - John Huguley Company, Inc.
(retail office products) 1980-2001
Charles G. Lane 46 Director Brother of Member - Holcombe, Fair & Lane, (real estate) 1996-2001;
Hugh C. LLC Associate-Holcombe & Fair Realtors 1987-96
Lane, Jr.;
brother-in-law
of Fleetwood S.
Hassell, Senior
Vice President
Hugh C. Lane, Jr. 53 President, Brother of The Bank of South Carolina (banking)
Chief Exec- Charles G. 1986-2001
utive Officer, Lane
Director
Louise J. Maybank 61 Director None Active in community programs
Thomas W. Myers 66 Director None President - Myers & Associates (estate and business
insurance planning) 1963-2001
Alan I. Nussbaum, MD 49 Director None Physician - Rheumatology Associates, PA
Edmund Rhett, Jr., MD 53 Director None Physician in private obstetrical practice
with Low Country OB/GYN
Thomas C. Stevenson, III 49 Director None President - Fabtech, Inc. (metal fabrication) 1991-2001;
Private Investor 1990-91; Chairman of the Board - Stevenson
Hagerty, Inc. (diversified holding company) 1984-90
John M. Tupper 59 Director None President - Tupperway Tire and Service, Inc. (retail
tires and service) 1980-2001
7
10
COMMITTEES OF THE BOARD OF DIRECTORS
Hugh C. Lane, Jr. presently serves as President of the Board of
Directors. The Board has three (3) committees: the Executive Committee, the
Long-Range Planning Committee, and the Audit and Compliance Committee. The Board
does not have a Nominating Committee; however, the Board as a whole performs the
functions that such a committee would normally perform. The Board does not have
a Compensation Committee; however, the Executive Committee performs those
functions.
The Executive Committee consists of the President of the Company and
six (6) designated Directors. The President of the Company chairs the Committee.
At present, the fixed membership of the Committee consists of Hugh C. Lane, Jr.,
Nathaniel I. Ball, III, Leonard Fulghum, T. Dean Harton, William L. Hiott, Jr.,
Thomas W. Myers, and Alan I. Nussbaum. During 2000, this Committee held two (2)
meetings. The principal function of the Executive Committee is to exercise all
authority of the Board of Directors in the management and affairs of the Company
and the Bank. In addition, the Executive Committee acts on behalf of the entire
Board of the Company between the regular Board Meetings.
The Long Range Planning Committee consists of Hugh C. Lane, Jr., the
President of the Company, as Chairman, and Nathaniel I. Ball, III, William T.
Cooper, T. Dean Harton, William L. Hiott, Jr., Charles G. Lane, Louise J.
Maybank and Thomas W. Myers. The Long-Range Planning Committee met once during
2000.
The Audit and Compliance Committee reviews and examines detailed
reports of the internal auditor for the Bank; meets periodically with the
internal auditor; reviews reports of regulatory bodies having jurisdiction over
the Company and the Bank; evaluates internal accounting controls; recommends the
engagement and continuation of engagement of independent auditors, the scope of
their work and the fees for their services; and meets with and considers
recommendations of the independent auditors for the Company and the Bank.
REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF DIRECTORS
Membership and Role of the Audit and Compliance Committee
The Audit and Compliance Committee (Audit Committee) presently consists
of six (6) members of the Board of Directors. The Company's internal auditor
also sits on this Committee. During 2000, the Audit Committee held four (4)
meetings. The Audit Committee operates under a written charter adopted by the
Board of Directors which is attached to this Proxy as Exhibit A.
Review of the Company's Audited Financial Statements for the Fiscal Year Ended
December 31, 2000
The Audit Committee has reviewed and discussed with management the
audited financial statements of the Company for the fiscal year ended December
31, 2000. The Audit Committee has discussed with KPMG LLP, the Company's
independent public accountants, the matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
The Audit Committee has also received the written disclosures and the
letter from KPMG LLP required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees) and the Audit Committee has
discussed the independence of KPMG LLP with that firm. Based on the Audit
Committee's review and discussions mentioned above, the Audit Committee
recommended to the Board of Directors that the Company's audited financial
statements be included in
8
11
the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2000 for filing with the Securities and Exchange Commission.
Submitted by:
Leonard C. Fulghum Thomas W. Myers
Katherine M. Huger, Chairman Edmund Rhett, Jr.
Louise J. Maybank Thomas C. Stevenson, III
NOMINATIONS FOR DIRECTOR
Nominations, other than those made by or on behalf of the existing
management of the Company, shall be made in writing and shall be delivered or
mailed to the President of the Company not less than seven (7) days, nor more
than fifty (50) days, prior to any meeting of Shareholders calling for election
of Directors; provided, however, that if less than twenty-one (21) days' notice
of the meeting is given to Shareholders, such nomination shall be mailed or
delivered to the President of the Company not later than the close of business
on the seventh (7th) day following the day on which the Notice of Meeting was
mailed. Nominations not made according to these procedures will be disregarded.
DIRECTORS' MEETINGS
The Board of Directors of the Company held six (6) meetings (including
all regularly scheduled and special meetings) during the year ended December 31,
2000. No Director during such year, attended fewer than seventy-five (75%)
percent of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings held by all committees of the
Board of Directors on which he or she served.
COMPENSATION OF OFFICERS AND DIRECTORS
The following table sets forth all remuneration (including remuneration
under any contract, authorization or arrangement, whether or not set forth in a
formal document) paid during the year ended December 31, 2000, by the Bank to
the three (3) Executive Officers of the Company and the Bank whose total
remuneration from the Bank exceeded One Hundred Thousand and No/100
($100,000.00) Dollars for their services in all capacities. Such Officers
receive no compensation from the Company as Officers or as Directors or in any
other capacity.
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER SECURITIES
ANNUAL RESTRICTED UNDER- ALL OTHER
NAME AND COMPEN- STOCK LYING LTIP COMPEN-
PRINCIPAL SATION(1)(2) AWARD(S) OPTIONS/ PAYOUTS SATION(1)(2)
POSITION YEAR SALARY($) BONUS($) ($) ($) SARS($) ($) ($)
Hugh C. Lane, 2000 $153,601.37 -- $21,451.37 $21,451.37
Jr. - CEO 1999 $142,500.00 -- $18,996.83 $18,996.83
& President 1998 $130,601.45 -- $19,961.21 $19,961.21
9
12
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER SECURITIES
ANNUAL RESTRICTED UNDER- ALL OTHER
NAME AND COMPEN- STOCK LYING LTIP COMPEN-
PRINCIPAL SATION(1)(2) AWARD(S) OPTIONS/ PAYOUTS SATION(1)(2)
POSITION YEAR SALARY($) BONUS($) ($) ($) SARS($) ($) ($)
Nathaniel I. 2000 $137,101.73 -- $19,147.05 $19,147.05
Ball, III - 1999 $126,000.00 -- $16,752.09 $16,752.09
Executive Vice 1998 $116,101.37 -- $17,775.76 $17,775.76
President &
Secretary
William L. 2000 $137,101.37 -- $19,147.05 $19,147.05
Hiott, Jr. - 1999 $126,000.00 -- $17,318.45 $17,318.45
Executive Vice 1998 $116,101.37 -- $18,330.88 $18,330.88
President &
Treasurer
- --------------
(1) Includes same life, disability and health insurance benefits as all
other employees of the Bank who work at least thirty (30) hours a week.
(2) Includes Bank contribution to the ESOP.
- --------------
Non-officer Directors of the Company received One Hundred and No/100
($100.00) Dollars for each meeting of the Board of Directors attended and
non-officer Directors of the Bank received Two Hundred and No/100 ($200.00)
Dollars for each meeting of the Board of Directors attended and One Hundred and
No/100 ($100.00) Dollars for each Board Committee meeting attended.
On November 2, 1989, the Bank adopted an Employee Stock Ownership Plan
and Trust Agreement to provide retirement benefits to eligible employees for
long and faithful service.
An employee of the Bank is eligible to become a participant in the ESOP
upon reaching twenty-one (21) years of age and upon completion of one thousand
(1,000) hours of service in a plan year. No contributions by employees are
permitted. The amount and time of contributions are at the sole discretion of
the Board of Directors of the Bank. The contribution for all participants is
based solely on each participant's respective regular or base salary and wages
paid by the Bank including commissions, bonuses and overtime, if any.
A participant becomes vested in the Plan upon completion of five (5)
years of service. There is no vesting prior to the completion of five (5) years
of service.
The Plan became effective as of January 1, 1989.
The Board of Directors of the Bank approved the contribution of Two
Hundred Seventy Five Thousand and No/100 ($275,000.00) Dollars to the ESOP for
the fiscal year ended December 31, 2000.
10
13
The contribution was made during 2000. T. Dean Harton, Sheryl G. Sharry and
Nathaniel I. Ball, III, currently serve as Plan Administrators. Nathaniel I.
Ball, III, currently serves as Trustee for the Plan. The Plan currently owns Two
Hundred Six Thousand Six Hundred Ninety-three (206,693) shares or 8.01% of the
Company's Common Stock.
During the fiscal year ended December 31, 2000, the Company had no
plans or arrangements pursuant to which any Officer, Director or principal
Shareholder received contingent remuneration or personal benefits other than the
contingent remuneration and life, disability and health insurance benefits
referred to in the footnotes to the preceding table.
On April 14, 1998, the shareholders of the Company approved an
Incentive Stock Option Plan for the benefit of eligible Officers and employees
of the Bank. A total of one hundred eighty thousand (180,000) shares were
reserved and on April 16, 1998, the Bank granted options to purchase Common
Stock in the aggregate amount of one hundred forty six thousand (146,000) shares
to fifty two (52) employees of the Bank (including officers, such Directors as
are also employees and other employees) pursuant to the Incentive Stock Option
Plan. These grants included those to Hugh C. Lane, Jr., Nathaniel I. Ball, III
and William L. Hiott, Jr., Executive Officers and Directors.
As of July 10, 2000, all of the option holders, including the above
Executive Officers, willfully terminated their existing stock options. There was
and is no obligation on the part of the Company or The Bank of South Carolina to
issue additional or replacement options.
TRANSACTIONS AND RELATIONS WITH DIRECTORS, OFFICERS, AND THEIR ASSOCIATES AND
AFFILIATES OF DIRECTORS
The Company does not have any existing continuing contractual
relationships with any Director, Nominee for election as Director or principal
Officer of the Company or the Bank, or any Shareholder owning, directly or
indirectly, more than five (5%) percent of the shares of Common Stock of the
Company, or any associate of the foregoing persons. Directors, Principal
Officers, nominees for election as Directors, and members of the immediate
family of any of the foregoing have had in the past, have at present, and will
have in the future, customer relationships with the Bank. Such transactions have
been and will continue to be made in the ordinary course of business, made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and such
transactions did not and will not involve more than the normal risk of
collectability or present other unfavorable features.
Hugh C. Lane, Jr. filed one incorrect Statement of Changes in
Beneficial Ownership on Form 4. Thomas W. Myers failed to file one Statement of
Beneficial Interest on Form 4 in a timely manner. Edmund Rhett, Jr., filed one
incorrect Statement of Changes in Beneficial Ownership on Form 4 and failed to
file one Statement of Changes in Beneficial Ownership on Form 4 in a timely
manner.
11
14
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP, has served as the Bank's independent certified public
accountants for the fiscal year ending December 31, 1994, and as independent
certified public accountants for the Company and its Bank subsidiary for the
fiscal years ending December 31, 1995 through 2000. At the 2001 Annual
Shareholders' Meeting the following resolution will be subject to ratification
by a simple majority vote of shares represented at the meeting:
RESOLVED, that the selection of KPMG LLP, as the independent certified
public accountants of Bank of South Carolina Corporation (the
"Company") and its sole subsidiary, The Bank of South Carolina (the
"Bank"), for the fiscal year ending December 31, 2001, is hereby
ratified.
If ratification is not achieved, the selection of an independent
certified public accountant will be reconsidered and made by the Board of
Directors. Even if selection is ratified, the Board of Directors reserves the
right to, and in its discretion may, direct the appointment of any other
independent certified public accounting firm at any time if the Board decides
that such a change would be in the best interests of the Company and its
shareholders.
The services provided by KPMG LLP include the examination and reporting
of the financial status of the Company and the Bank. These services have been
furnished at customary rates and terms. There are no existing direct or indirect
agreements or understandings that fix a limit on current or future fees for
these audit services.
KPMG LLP assisted in the preparation of the Company's and Bank's tax
returns in 1995, 1996, 1997, 1998, 1999 and 2000. These non-audit services were
routine in nature and did not compose more than twenty-five (25%) percent of the
total fees paid to KPMG LLP in 2000. These services do not affect their
independence.
A representative of KPMG LLP is expected to attend the Annual
Shareholder's Meeting with the opportunity to make a statement, if desired, and
is expected to be available to respond to Shareholder's inquires.
Audit Fees
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements for the year ended December
31, 2000, and the preparation and reviews of the financial statements included
in the Company's Form 10-KSB and 10-QSB were $49,000 for that fiscal year.
All Other Fees
The aggregate fees billed for tax services were $8,500 for the year
ended December 31, 2000.
The Audit and Compliance Committee of the Board of Directors has
determined that the provision of tax services is compatible with maintaining the
accountant's independence.
12
15
OTHER MATTERS
Management is not aware of any matters to come before the meeting that
will require the vote of Shareholders other than those matters indicated in the
Notice of Meeting and this Proxy Statement.
However, if any other matter calling for Shareholder action should
properly come before the meeting or any adjournments thereof, those persons
named as Proxies in the enclosed Proxy Form will vote thereon according to their
best judgment.
PENDING LITIGATION
There is no pending litigation involving the Company.
13
16
ANNUAL REPORT
The ANNUAL REPORT for December 31, 2000, is mailed herewith to all
Shareholders. Copies of the Annual Report as filed with the Securities and
Exchange Commission on Form 10-KSB may be obtained by request to William L.
Hiott, Jr., Treasurer of the Company.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL SHAREHOLDER'S MEETING
Shareholder proposals, if any, for inclusion in the Proxy Statement
relating to the 2001 Annual Shareholder's meeting, must be addressed to and
received in the office of the President no later than December 7, 2001.
By Order of the Board of Directors
Nathaniel I. Ball, III
Secretary
March 2, 2001
14
17
EXHIBIT A
AUDIT AND COMPLIANCE COMMITTEE CHARTER
The Board of Directors of Bank of South Carolina Corporation (the Company) has
created a committee of directors to be known as the Audit and Compliance
Committee (the Committee) with its goals and objectives, composition, meeting
format, term of membership and duties and responsibilities as follows:
GOALS AND OBJECTIVES
The primary goal of the Audit and Compliance Committee will be to assist the
Board of Directors in fulfilling its fiduciary responsibilities relating to
corporate accounting and reporting practices of the Company and its
subsidiaries. In addition, the Committee will:
- - Oversee and appraise the quality of the audit effort of the Company's
internal audit function and those of its independent auditors;
- - Maintain, by scheduling regular meetings, open lines of communication
among the board, its internal auditors and its independent accountants
to exchange views and information as well as confirm their respective
authority and responsibilities;
- - Serve as an independent and objective party to review the financial
information presented by management to shareholders, regulators and the
general public;
- - Determine the adequacy of the administrative, operating and internal
accounting controls of the Company and it subsidiaries and evaluate
adherence to those controls;
- - Function as the Audit and Compliance Committee of the Bank of South
Carolina, the wholly owned subsidiary of the Company.
The Audit and Compliance Committee has the authority to conduct any
investigation appropriate to fulfilling its responsibilities and it has direct
access to the independent auditors as well as anyone in the organization. The
Committee has the ability to retain, at the Company's expense, special legal,
accounting or other consultants or experts it deems necessary in the performance
of its duties.
COMPOSITION
The Board of Directors shall annually appoint and confirm the membership of the
Audit and Compliance Committee, none of whom shall be officers of the
Corporation or its subsidiaries. Audit and Compliance Committee members shall
meet the requirements of the NASD/AMEX exchange. The Committee will be comprised
of not less that four (4) members of the Board of Directors or such larger
number as approved by the Board. One of the members shall be elected chairperson
by the Committee. Each member shall be an independent non-executive director,
free from any relationship, which might, in the opinion of the Board of
Directors, interfere with the exercise of his or her independent judgment or be
construed as a conflict of interest.
All members of the committee shall have a basic understanding of finance and
accounting and be able to read and understand fundamental financial statements.
At least one member of the committee shall have accounting or related financial
management expertise, as the Board interprets such qualifications in its
business judgment.
18
TERM OF MEMBERSHIP
Each member of the Audit and Compliance Committee shall serve no more than six
consecutive annual terms. Members may be re-elected after a one-year absence
from the Committee. The chairperson shall be elected every two years and no
chairperson shall serve more than four consecutive years as chairperson of the
Audit and Compliance Committee. If a chairperson is not designated or present,
the members of the Committee may designate a chairperson by majority vote of the
Committee membership.
MEETING FORMAT
The Committee will hold at least four regular meetings per year and such
additional meetings as the chairperson shall require to meet the Committee's
duties and responsibilities.
The Committee meetings will consist of a general session which will be attended
by the Committee members, the internal auditor, members of management and the
independent accountants as appropriate. Others may attend by invitation of the
Committee.
Following the conclusion of the general session, the Committee will excuse
members of management in order to meet privately with the internal auditor,
independent accountants, or others at the Committee's discretion.
An executive session of the Committee members only will follow, as necessary.
DUTIES AND RESPONSIBILITIES
REVIEW PROCEDURES
- - Review and reassess the adequacy of the charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
- - Review the annual audited financial statements prior to filing or
distribution to include discussion with management and independent
auditors of significant issues regarding accounting principles,
practices and judgments.
- - In consultation with management, independent auditors and internal
auditors, consider the integrity of the Company's financial reporting
processes and controls. Discuss significant financial risk exposures
and the steps management has taken to monitor, control and report such
exposures. Review significant findings prepared by the internal and
independent auditors together with management's responses.
- - Review with management the Company's quarterly financial results prior
to the release of earnings and/or the Company's quarterly financial
statements prior to filing or distribution. Discuss any significant
changes to accounting principles and any items required to be
communicated by the independent auditors in accordance with SAS 61.
19
INDEPENDENT AUDITORS
- - The independent auditors are ultimately accountable to the Audit and
Compliance Committee of the Board of Directors. The Committee shall
review the independence and performance of the auditors and annually
recommend the appointment of the auditors or approve any discharge of
auditors when circumstances warrant.
- - Approve fees and other significant compensation to be paid to the
independent auditors.
- - On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
- - Review the independent auditor's engagement letter and audit plan by
discussing scope, staffing locations, reliance upon management and
internal audit and general audit approach.
- - Prior to releasing year-end earnings, discuss the results of the audit
with the independent auditors. Discuss certain matters required to be
communicated to audit committees in accordance with SAS 61.
- - Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
INTERNAL AUDIT DEPARTMENT AND LEGAL COMPLIANCE
- - Review the budget, plan and changes in plan, activities, organizational
structure and qualifications of the internal audit department, as
needed.
- - Review the appointment, performance and replacement of senior audit
department personnel.
- - Review significant reports prepared by the internal audit department
together with management's responses and follow-up to these reports.
- - On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations and inquiries received from regulators
or governmental agencies.
OTHER AUDIT COMMITTEE RESPONSIBILITIES
- - Annually prepare a report to shareholders as required by the SEC. The
report should be included in the Company's annual proxy statement.
- - Perform any other activities consistent with this charter, the
Company's by-laws and governing law as the Committee or the Board deems
necessary or appropriate.
- - Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities. |X|
20
PROXY
CARD
BANK OF
SOUTH CAROLINA CORPORATION
256 Meeting Street
Charleston, SC 29401
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS APRIL 10, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL PERSONS BY THESE PRESENTS THAT I, the undersigned Shareholder of Bank
of South Carolina Corporation (the Company) do hereby appoint William T. Cooper,
Leonard C. Fulghum and Louise J. Maybank, (no officer or employee of the Company
or any subsidiary may be appointed), or any one of them, with full power to act
alone, my true and lawful attorney(s) with full power of substitution, to vote
on behalf of the undersigned all shares of common stock of the Company which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
the Company to be held at The Bank of South Carolina, 256 Meeting Street,
Charleston, South Carolina on Tuesday, April 10, 2001, at 2:00 p.m., or at any
adjournments or postponements thereof, with all the powers the undersigned would
possess if personally present upon the following matters:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
Nathaniel I. Ball, III, William T. Cooper, C. Ronald Coward, Leonard C.
Fulghum, T. Dean Harton, William L. Hiott, Jr., Katherine M. Huger,
John E. Huguley, Charles G. Lane, Hugh C. Lane, Jr., Louise J. Maybank,
Thomas W. Myers, Alan I. Nussbaum, Edmund Rhett, Jr., Thomas C.
Stevenson, III and John M. Tupper
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name in the space provided below.)
2. APPROVAL OF KPMG LLP, as the Company's independent auditors for the
fiscal year ending December 31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The transaction of such other business as may properly come before the
meeting.
Each properly executed proxy will be voted in accordance with specifications
made hereon. If no specification is made, the shares represented by this Proxy
will be voted "FOR" the nominees, "FOR" KPMG LLP and in the discretion of the
Proxies, on any other business as may properly come before the meeting.
21
PLEASE DATE AND SIGN The undersigned hereby acknowledges receipt of the
EXACTLY AS NAME APPEARS Company's 2000 Annual Report and the accompanying
HEREON. EXECUTORS, Notice of Meeting and Proxy Statement and hereby
ADMINISTRATORS, TRUSTEES, revokes any proxy or proxies heretofore given.
ETC., MUST SO INDICATE
WHEN SIGNING. IF SHARES
ARE HELD JOINTLY, BOTH
OWNERS SHOULD SIGN.
Dated: ________________, 2001
SIGN --
HERE --------------------------------------
--
--------------------------------------
--
--------------------------------------
Signature(s) of Shareholder(s)