SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PALMETTO BANCSHARES, INC.
(Name of Registrant as Specified in its Charter)
(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 was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
(LOGO)
PALMETTO BANCSHARES, INC.
301 HILLCREST DRIVE
POST OFFICE BOX 49
LAURENS, SOUTH CAROLINA 29360
(864) 984-4551
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of Palmetto Bancshares, Inc. to be held on April 21, 1998, at 3:00 p.m. at The
Palmetto Bank, Corporate Center, 301 Hillcrest Drive, Laurens, South Carolina.
The attached Notice of the Annual Meeting and Proxy Statement describe
the formal business to be transacted at the Annual Meeting. Directors and
officers of Palmetto Bancshares, Inc., as well as representatives of KPMG Peat
Marwick LLP, our independent auditors, will be present to respond to any
questions shareholders may have.
To ensure proper representation of your shares at the Annual Meeting,
please sign, date and return the enclosed proxy card as soon as possible, even
if you currently plan to attend the Annual Meeting. This will not prevent you
from voting in person, but will ensure that your vote will be counted if you are
unable to attend.
Sincerely,
/s/ L. Leon Patterson
L. Leon Patterson
Chairman and
Chief Executive Officer
The Palmetto Bank is a wholly owned subsidiary of Palmetto Bancshares, Inc.
PALMETTO BANCSHARES, INC.
301 HILLCREST DRIVE
P. O. BOX 49
LAURENS, SOUTH CAROLINA 29360
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1998
To the Shareholders of Palmetto Bancshares, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Palmetto Bancshares, Inc. (the "Company") will be held on April 21, 1998, at
3:00 p.m. at The Palmetto Bank, Corporate Center, 301 Hillcrest Drive, Laurens,
South Carolina, for the following purposes:
1. To elect six Directors to hold office until their respective
terms expire or until their successors are duly elected and
qualified; and
2. To approve the Palmetto Bancshares, Inc. 1997 Stock
Compensation Plan; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Shareholders of record at the close of business on March 13, 1998 will
be entitled to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ L. Leon Patterson
L. Leon Patterson
Chairman
Laurens, South Carolina
March 20, 1998
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
POSTAGE-PAID ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF
YOU WISH, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON AT THE
ANNUAL MEETING.
PALMETTO BANCSHARES, INC.
301 HILLCREST DRIVE
P. O. BOX 49
LAURENS, SOUTH CAROLINA 29360
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 21, 1998
This Notice of Annual Meeting, Proxy Statement and Proxy (these "Proxy
Materials") are being furnished to shareholders in connection with a
solicitation of proxies by the Board of Directors of Palmetto Bancshares, Inc.
(the "Company"). This solicitation is being made in connection with the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on April 21, 1998, at
3:00 p.m. at The Palmetto Bank, Corporate Center, 301 Hillcrest Drive, Laurens,
South Carolina. These Proxy Materials are being mailed to shareholders on
approximately March 20, 1998.
VOTING MATTERS
Shareholders of record as of the close of business on March 13, 1998 will
be entitled to vote at the Annual Meeting. At the close of business on that day,
there were 3,089,852 shares of the Company's $5.00 par value common stock
("Common Stock") outstanding. Holders of Common Stock are entitled to one vote
per share on each of the matters presented at the Annual Meeting or any
adjournments thereof. Shares may be voted in person or by proxy. The presence,
either in person or by proxy, of holders of shares representing fifty-one
percent of the outstanding shares of stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum at the Annual Meeting.
REVOCABILITY OF PROXY
Shares represented by a properly executed proxy in the accompanying form
and given by a shareholder, and not revoked, will be voted in accordance with
such instructions. As stated in the Proxy, if a returned Proxy does not specify
otherwise, the shares represented thereby will be voted in favor of the
proposals set forth herein. Proxies may be revoked at any time prior to their
being voted at the Annual Meeting by oral or written notice to Palmetto
Bancshares, Inc., 301 Hillcrest Drive, P. O. Box 49, Laurens, South Carolina
29360, Attn: Teresa M. Crabtree, Corporate Secretary, (864) 984-8321, or by
execution and delivery of a subsequent proxy or by attendance and voting in
person at the Annual Meeting.
SOLICITATION OF PROXIES
This solicitation of proxies is made by the Company, and the Company will
bear the cost of this proxy solicitation, including the cost of preparing,
handling, printing and mailing these Proxy Materials. Proxies will be solicited
principally through these Proxy Materials. Proxies may also be solicited by
telephone or through personal solicitation conducted by regular employees of the
Company. Banks, brokers and other custodians are requested to forward proxy
solicitation material to their customers where appropriate, and the Company will
reimburse such banks, brokers and custodians for their reasonable out-of-pocket
expenses in sending the proxy material to beneficial owners of the shares.
1
ELECTION OF DIRECTORS
ITEM 1 ON THE PROXY
NOMINATIONS FOR ELECTION OF DIRECTORS
The Company's Board of Directors is currently comprised of nine persons
and Management recommends its expansion to twelve directors at the annual
meeting. The Board of Directors is divided into three classes of Directors with
each class being elected for staggered three-year terms. Directors will be
elected by a plurality of votes cast at the Annual Meeting. Abstentions and
broker non-votes with respect to Nominees (as defined below) will not be
considered to be either affirmative or negative votes.
IDENTIFICATION OF NOMINEES
Management proposes to nominate to the Board of Directors the six persons
listed as nominees (the "Nominees") in the table below. Each of the Nominees is
currently serving as a Company Director. Each Nominee, if elected, will serve
until the expiration of his respective term and until such Nominee's successor
is duly qualified. Unless authority to vote with respect to the election of one
or more Nominees is "WITHHELD," it is the intention of the persons named in the
accompanying Proxy to vote such Proxy for the election of these Nominees.
Management believes that all such Nominees will be available and able to serve
as Directors. However, should any Nominee become unable to accept nomination or
election, it is the intention of the person named in the Proxy, unless otherwise
specifically instructed in the Proxy, to vote for the election of such other
persons as management may recommend.
The following table sets forth the names and ages of the six Nominees for
Directors and the Directors continuing in office, the positions and offices with
the Company held by each such person, and the period that each such person has
served as a Director of the Company.
POSITION OR DIRECTOR
NAME AGE OFFICE WITH THE COMPANY SINCE
NOMINEES FOR DIRECTORS
TERMS EXPIRING IN 1998
W. Fred Davis, Jr. 54 Director 1978
David P. George, Jr. 57 Director 1974
Michael D. Glenn 57 Director 1994
Edward K. Snead(1) 38 Director (term expires 1999) 1997
William S. Moore(1) 52 Director (term expires 2000) 1997
Ann B. Smith(1) 37 Director (term expires 2001) 1997
DIRECTORS CONTINUING IN OFFICE
TERMS EXPIRING IN 1999
John T. Gramling, II 56 Director 1984
James M. Shoemaker, Jr. 65 Director 1984
Paul W. Stringer 54 Director, President and Chief Operating Officer 1986
TERMS EXPIRING IN 2000
James A. Cannon 69 Director 1975
L. Leon Patterson 56 Director, Chairman of the Board and 1971
Chief Executive Officer
J. David Wasson, Jr. 52 Director 1979
2
(1) Ms. Smith and Messrs. Snead and Moore were elected by the Board in September
1997 to serve until the 1998 shareholders meeting, at which time they were to be
submitted for election to full terms as indicated herein.
BUSINESS EXPERIENCE OF NOMINEES AND DIRECTORS
Mr. Davis was owner and President of Palmetto Spinning Corporation
("PSC"), where he was employed from 1969 to 1995. Mr. Davis sold PSC to Martin
Color-fi, Inc. in 1994 and retired in 1995. Mr. Davis is currently a director of
Martin Color-fi, Inc.
Mr. George has been General Manager of George Motor Company, an
automobile dealership in Laurens, South Carolina, since 1964.
Mr. Glenn has been a partner with the law firm of Glenn, Haigler & Maddox
since 1992. From 1983 to 1992 he was a sole practitioner in Anderson, South
Carolina.
Mr. Snead was appointed as Director in September 1997. Mr. Snead is the
owner and President of Snead Builders Supply Company, Incorporated in Greenwood,
South Carolina.
Mr. Moore was appointed as a Director of the Company in September 1997.
Mr. Moore, currently an investor, is the former President of Reeves Brothers,
Inc., in Spartanburg, South Carolina.
Ms. Smith was appointed as Director in September 1997. She has been the
Director of Annual Giving for Clemson University since 1986.
Mr. Gramling has served as Vice President and Secretary of Gramling
Brothers, Inc., a diversified orchard business, since 1965, and has been the
President of Gramling Brothers, Inc. Real Estate, a real estate sales and
development company in Gramling, South Carolina, since 1970.
Mr. Shoemaker has been a member with the law firm of Wyche, Burgess,
Freeman and Parham, P.A., in Greenville, South Carolina, since 1965. Mr.
Shoemaker also serves as a director of One Price Clothing Stores, Inc., Ryan's
Family Steak Houses, Inc., and Span-America Medical Systems, Inc.
Mr. Stringer has served as President and Chief Operating Officer of the
Company since April 1994 and as President and Chief Operating Officer of The
Palmetto Bank, since March 1986. From April 1990 to April 1994, he served as
Executive Vice President of the Company, and from 1982 to April 1990 he served
as Vice President of the Company. Mr. Stringer also has served as Executive Vice
President of The Palmetto Bank from May 1981 to February 1986, as Senior Vice
President from July 1978 to April 1981, and as Vice President from January 1977
to June 1978. Mr. Stringer also serves as a director of the South Carolina
Student Loan Corporation and a trustee of the South Carolina Bankers Employee
Benefit Trust. Mr. Stringer served as Chairman of the South Carolina Bankers
Association from 1996-1997.
Mr. Cannon has been a consultant to Cannon Funeral Home in Fountain Inn,
South Carolina since 1989.
Mr. Patterson has served as Chairman of the Board and Chief Executive
Officer of the Company since April 1990 and as Chairman of the Board and Chief
Executive Officer of The Palmetto Bank, a wholly-owned subsidiary of the Company
("The Palmetto Bank"), since March 1986. From April 1990 to April 1994, he
served as Chairman of the Board and President of the Company, and from 1982 to
April 1990 he served as President of the Company. Mr. Patterson also served as
Chairman and President of The Palmetto Bank from January 1978 to February 1986,
and as President in 1977.
Mr. Wasson has been President and Chief Executive Officer of Laurens
Electric Cooperative, Inc. since 1975.
3
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held eleven meetings in 1997. The Board of
Directors has an Audit and Examining Committee which reviews the audit plan, the
results of the audit engagement of the Company's accountants, the scope and
results of the Company's procedures for internal auditing and internal control,
and the internal audit reports of the Company. The Audit Committee is currently
comprised of Messrs. Davis, Wasson, and Moore. Mr. Davis serves as Chairman. The
Audit Committee formally met once during 1997.
The Board of Directors has a Compensation Committee which reviews the
Company's compensation policies and benefit plans and makes recommendations
regarding senior management compensation. Its report is set forth herein. The
Compensation Committee is currently comprised of Messrs. Cannon, Shoemaker and
Wasson. Mr. Shoemaker serves as Chairman. The Compensation Committee met four
times during 1997. No members of the Compensation Committee are officers or
employees of the Company.
The Board of Directors has a Trust Committee, which reviews the operation
of the Company's Trust Department. The Trust Committee is currently comprised of
Messrs. Smith, Snead and George. Mr. George serves as Chairman. The Trust
Committee met eleven times during 1997.
The Board of Directors has a Credit Committee, which reviews certain loan
applications and other credit matters. The Credit Committee is currently
comprised of Messrs. Gramling, Stringer, and Glenn. Mr. Gramling serves as
Chairman. The Credit Committee met eleven times during 1997.
The Company does not have a Nominating Committee. The functions typically
performed by a Nominating Committee were performed by the entire Board of
Directors. Mr. Patterson serves ex officio on all committees.
EXECUTIVE OFFICERS
The Company's executive officers are appointed by the Board of Directors
and serve at the pleasure of the Board. The following persons serve as executive
officers of the Company.
COMPANY OFFICES COMPANY
NAME AGE CURRENTLY HELD OFFICER SINCE
- ------------------ --- ----------------------- -------------
L. Leon Patterson 56 Chief Executive Officer 1982
Paul W. Stringer 54 President and Chief Operating Officer 1982
Philip A. Betette 58 Vice President 1985
Ralph M. Burns, III 47 Vice President 1982
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
Mr. Patterson's business experience is set forth above under "Business
Experience of Nominees and Directors."
Mr. Stringer's business experience is set forth above under "Business
Experience of Nominees and Directors."
Mr. Betette has served as a Vice President of the Company since April
1990 and as Senior Vice President and Senior Trust Officer of The Palmetto Bank
since January 1995. Mr. Betette has also served as Senior Vice President, Trust
and Investments of The Palmetto Bank from January 1987 to December 1994, and as
Senior Vice President and
4
Trust Officer of The Palmetto Bank from July 1985 to December 1986. He served as
Vice President and Investment Officer of The Palmetto Bank from January 1979 to
June 1985, and as Assistant Vice President and Investment Officer of The
Palmetto Bank from January 1977 to December 1978.
Mr. Burns has served as a Vice President of the Company since April
1990. Mr. Burns also has served as Senior Vice President and Cashier of The
Palmetto Bank since January 1982. From January 1978 to December 1981, he served
as Assistant Vice President and Cashier of The Palmetto Bank, and from January
1976 to December 1977, he served as Assistant Cashier of The Palmetto Bank.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
During 1997 directors received an annual fee of $9,000, which includes
a retainer fee of $3,000. However, if a director misses more than one directors'
meeting and such absence(s) is not excused by the Company, the Company reduces
such fee by $500 for each unexcused absence. Due to the fact that Messrs. Moore
and Snead, and Ms. Smith did not attend a board meeting until October 1997, they
only received $1,500 for their service as directors in 1997. The Company feels
that these payments are an appropriate reflection of their service as directors
and the number of directors' meetings attended. Except as discussed in the
preceding sentences all directors received the full annual fee. SEE Election of
Directors -- Meetings and Committees of the Board of Directors.
5
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION TO EXECUTIVE OFFICERS
The following table shows the cash compensation paid by the Company, as
well as certain other compensation paid or accrued, to the Company's Chief
Executive Officer and to the executive officers of the Company who earned in
excess of $100,000 per year in compensation (in all capacities) (collectively,
the "Named Executive Officers") for the years ending December 31, 1997, 1996 and
1995.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
------------
Name and Other Annual Securities All Other
Principal Position Salary Bonus Compensation Underlying Compensation
during 1997 Year ($) ($) ($) Options (#) ($)
- --------------------------- --------- ------------ ---------- -------------- --------------- ---------------
L. Leon Patterson, 1997 182,000 43,698 9,000(1) -0- 67,354(3)
Chairman of the Board and
Chief Executive Officer
1996 170,000 54,740 9,000(1) -0- 65,059
1995 161,000 51,842 6,700(1) -0- 63,204
Paul W. Stringer, 1997 150,000 36,015 9,000(1) -0- 42.164(4)
Director, President and
Chief Operating Officer
1996 139,000 44,758 9,000(1) -0- 38,293
1995 132,000 42,504 6,700(1) -0- 37,645
Philip A. Betette, 1997 88,000 21,129 (2) -0- 10,672(5)
Vice President
1996 85,000 27,370 (2) -0- 6,253
1995 81,500 26,243 (2) -0- 4,807
Ralph M. Burns, III, 1997 85,000 20,409 (2) -0- 10,182(6)
Vice President
1996 80,750 26,002 (2) -0- 5,841
1995 77,000 24,794 (2) -0- 4,452
- -------------------------
(1) Included in other annual compensation for Mr. Patterson and Mr.
Stringer is the annual fee they received for their service as
directors.
(2) Certain amounts may have been expended by the Company which may have
had value as a personal benefit to the executive officer. However, the
total value of such benefits did not exceed the lesser of $50,000 or
10% of the annual salary and bonus of such executive officer.
(3) This amount is comprised of $12,373 and $2,391 allocated to Mr.
Patterson for the 1996 and 1997, respectively, fiscal year pursuant to
the Company's Employee Stock Ownership Plan (the "ESOP"), and $54,981
in premiums paid by the Company on behalf of Mr. Patterson with respect
to life insurance not generally available to all Company employees.
(4) This amount is comprised of $11,418 and $2,390, respectively, allocated
to Mr. Stringer for the 1996 and 1997 fiscal year pursuant to the ESOP,
and $30,746 in premiums paid by the Company on behalf of Mr. Stringer
with respect to life insurance not generally available to all Company
employees.
(5) This amount is comprised of $10,672 contributed to the ESOP on behalf
of Mr. Betette.
6
(6) This amount is comprised of $10,182 contributed to the ESOP on behalf
of Mr. Burns.
STOCK OPTIONS
The Company made no option grants with respect to the Common Stock of
the Company to the named Executive Officers in 1997.
OPTION EXERCISES
The following table sets forth information with respect to the
Executive Officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT 1997 FISCAL MONEY OPTIONS AT 1997 FISCAL
SHARES YEAR-END (#) YEAR-END ($) (1)
ACQUIRED VALUE ------------ ----------------
ON REALIZED EXERCISABLE\ EXERCISABLE\
NAME EXERCISE (#) ($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ -------- ------------- -------------
L. Leon Patterson 12,000 9.25 0 $ 0
Paul W. Stringer 15,000 9.25 0 $ 0
Philip A. Betette 9,000 9.25 0 $ 0
Ralph M. Burns III 9,000 9.25 0 $ 0
(1) Based on the difference between the option exercise price and the
value assigned to the Company's Common Stock by The Bank Advisory
Group, Inc., an independent appraiser, for purposes of allocating
shares of Common Stock contributed by the Company to The Palmetto
Bank Employee Stock Ownership Plan and Trust for fiscal year 1996.
The fiscal year 1997 valuation has not been completed.
7
PENSION PLAN
The following table sets forth the estimated annual benefits (in
single-life annuity amounts) payable upon normal retirement in fiscal year 1997
to participants whose highest average five-year earnings and years of service
are as listed. The table assumes integration at the current wage base of
$65,400. At the end of 1997, the individuals named in the Summary Compensation
Table above will have had the following final average compensation credited for
purposes of the Pension Plan and number of years of service: Mr. Patterson,
$199,250, 30 years; Mr. Stringer, $163,310, 28 years; Mr.
Betette, $101,460, 23 years; and Mr. Burns, $94,440, 22 years.
PENSION PLAN TABLE
Years of Service
Remuneration 5 10 20 25 30 35
- --------------------- ----------------- -------------------- -------------------- -------------- ------------ -----------------
$ 10,000 $ 575 $ 1,150 $ 2,300 $ 2,875 $ 3,450 $ 4,025
20,000 1,150 2,300 4,600 5,750 6,900 8,050
40,000 2,648 5,295 10,590 13,238 15,886 18,533
60,000 4,448 8,895 17,790 22,238 26,686 31,133
80,000 6,248 12,495 24,990 31,238 37,486 43,733
100,000 8,048 16,095 32,190 40,238 48,286 56,333
120,000 9,848 19,695 39,390 49,238 59,086 68,933
140,000 11,648 23,295 46,590 58,238 69,886 81,533
160,000 + up 13,448 26,895 53,790 67,238 80,686 94,133
The base compensation and any bonuses are covered by the Pension
Plan. There is no variation between the compensation covered by the Pension Plan
and the amounts listed in the Summary Compensation Table. The benefits of the
Pension Plan are based on straight-life annuity amounts, and are not subject to
any deduction for Social Security or other offset amounts.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions with respect to the compensation of the Company's executive
officers are made by the Compensation Committee of the Board. Each member of the
Compensation Committee is a non-employee director. All decisions of the
Compensation Committee relating to the compensation matters are reviewed by the
full Board of Directors. Set forth below is a report submitted by the
Compensation Committee which addresses the Company's compensation policies for
1997 with respect to Mr. Patterson as CEO, and Messrs. Stringer, Betette and
Burns, who represent all executive officers of the Company who earned in excess
of $100,000 during 1997.
8
COMPENSATION COMMITTEE REPORT
GENERAL COMPENSATION POLICIES AND SPECIFIC GUIDELINES. The Compensation
Committee believes that compensation arrangements should be structured so as to
provide competitive levels of compensation that integrate pay with the Company's
performance goals. The Company has in place a Senior Management Incentive Plan
(the "Bonus Plan"), which establishes a point system that determines incentive
cash awards based on the extent to which the Company met certain performance
goals adopted by the Compensation Committee. The Bonus Plan provides that the
twelve members of senior management who are designated each year by the
Compensation Committee (the "Senior Executives") will receive up to 35% of their
base salary in incentive cash compensation if 100% of the performance goals were
met and exceeded by specified amounts. For 1997, the Compensation Committee
adopted seven performance goals, including return on assets, return on equity,
net interest margin, net overhead ratio, net charge-off ratio, deposit growth
and loan growth. Five of the seven of the 1997 goals were met and exceeded.
Base salaries were set by the Board, after recommendation by the
Compensation Committee. They were intended to reflect individual performance and
responsibility and to represent compensation believed by the Compensation
Committee to be appropriate for the Senior Executives.
RELATIONSHIP OF PERFORMANCE TO EXECUTIVE COMPENSATION. As described above,
Company performance was an integral part in determining the compensation of
Senior Executives. Assuming that 100% of the performance goals are met each
year, approximately 35% of a Senior Executive's total compensation will consist
of incentive payments made pursuant to the Bonus Plan. The Company's Common
Stock is not publicly traded on any exchange. Accordingly, internal goals are
its means of judging its performance.
COMPENSATION PAID DURING 1997. Compensation paid the Company's executive
officers in 1997 consisted of the following elements: base salary, bonus and
payments made pursuant to the Company's ESOP. Payments under the Company's ESOP
are made to all employees on a non-discriminatory basis. The ESOP was terminated
February 1997.
As noted above, the Company achieved and exceeded five of its seven
performance goals for 1997. Based on Company performance, twelve executive
officers, including the Senior Executives, received bonuses equal to 24.01% of
their base salary pursuant to the Bonus Plan.
OTHER COMPENSATION PLANS AND COMPENSATION. The Company has adopted certain
broad-based employee benefit plans in which Senior Executives participate, as
well as certain executive officer life insurance plans. The value of these items
is set forth in the Summary Compensation Table above under the "All Other
Compensation" heading. Executive officers also may have received perquisites in
connection with their employment. However, such perquisites totaled less than
10% of their cash compensation in 1997. The foregoing benefits and compensation
are not directly or indirectly tied to Company performance.
MR. PATTERSON'S 1997 COMPENSATION. Mr. Patterson's 1997 compensation consisted
of a base salary, cash bonus, payments under the Company's ESOP, split-dollar
life insurance and supplemental life insurance policies, and certain perquisites
(which did not exceed 10% of his base salary and bonus) and the various forms of
other compensation set forth in the preceding paragraph that were available
generally to all employees. Mr. Patterson's base salary was $182,000 in 1997, as
recommended by the Compensation Committee to the Board of Directors. Mr.
Patterson also received $9,000 in directors' fees, which is included in the
Summary Compensation Table above under the "Other Annual Compensation" heading.
Mr. Patterson's cash bonus was determined in accordance with the Bonus Plan and
was 24.01% of his base salary, or $43,698, for 1997.
COMPENSATION COMMITTEE:
James M. Shoemaker, Jr., Chairman
James A. Cannon
J. David Wasson, Jr.
9
PERFORMANCE GRAPH
The following graph sets forth the performance of the Company's Common
Stock for the period from December 31, 1992 through December 31, 1997 as
compared to the NASDAQ Market Composite Index and an index comprised of all
NASDAQ commercial banks and bank holding companies. All stock prices reflect the
reinvestment of cash dividends and have been restated to give effect to the
Stock Split.
(The Performance Graph appears here. The plot points are listed in the tables
on the next page.)
10
PALMETTO BANCSHARES, INC.
ANNUAL INCREASE OF $100 INVESTMENT
December 31, 1992 to December 31, 1997
Palmetto Bancshares Stock Price plus
Dividend
Initial Value Value % Investment
Investment Beginning End Increase End
--------------- --------------- --------------- --------------- ---------------
12/31/92 100.00
12/31/93 100.00 9.48 10.16 7.14% 107.14
12/31/94 107.14 10.16 11.84 16.57% 107.17
12/31/95 123.71 11.84 13.55 14.41% 138.15
12/31/96 138.15 13.55 20.28 49.67% 187.82
12/31/97 187.82 20.28 28.38 39.94% 225.89
NASDAQ COMPOSITE MARKET INDEX
ANNUAL INCREASE OF $100 INVESTMENT
December 31, 1992 to December 31, 1997
NASDAQ Market Index Stock Price
Initial Price Price % Investment
Investment Beginning End Increase End
--------------- --------------- --------------- --------------- ---------------
12/31/92 100.00
12/31/93 100.00 676.95 776.80 14.75% 114.75
12/31/94 114.75 776.80 751.96 -3.20% 111.55
12/31/95 111.55 751.96 1052.13 39.92% 151.47
12/31/96 151.47 751.96 1291.03 71.69% 223.16
12/31/97 223.16 1291.03 1570.35 21.64% 244.79
NASDAQ BANK COMPOSITE INDEX
ANNUAL INCREASE OF $100 INVESTMENT
December 31, 1992 to December 31, 1997
NASDAQ Market Index Stock Price
Initial Price Price % Investment
Investment Beginning End Increase End
--------------- --------------- --------------- --------------- ---------------
12/31/92 100.00
12/31/93 100.00 532.93 689.43 29.37% 129.37
12/31/94 129.37 689.43 697.07 1.11% 130.47
12/31/95 130.47 697.07 1009.41 44.81% 175.28
12/31/96 175.28 697.07 1273.46 82.69% 257.97
12/31/97 257.97 1273.46 2083.22 63.59% 321.56
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company knows of no person who, or group that, owns beneficially
more than 5% of the outstanding shares of Common Stock of the Company as of
March 13, 1998, except as set forth below:
NAME AND ADDRESS OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF
OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------------------------------- -------------------------------- ---------------
The Palmetto Bank 275,180 8.91%
Trustee for the Employee
Stock Ownership Plan
301 Hillcrest Drive
Laurens, SC 29360
L. Leon Patterson 283,677 9.18%
301 Hillcrest Drive
Laurens, SC 29360
D. Smith Patterson 168,093 5.44%
831 West Main Street
Laurens, SC 29360
The information below is furnished as of March 13, 1998 as to the
Company's Common Stock owned beneficially or of record by each of the Directors
individually, by certain named executive officers and by all Directors and
executive officers of the Company as a group. Unless otherwise noted, each
person has sole voting power and sole investment power with respect to shares
listed.
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------ -------------------- ----------------
DIRECTORS
L. Leon Patterson 283,677(1) 9.18%
Paul W. Stringer 46,210(2) 1.50%
James M. Shoemaker, Jr. 9,100(7) (3)
John T. Gramling, II 8,500(7) (3)
W. Fred Davis, Jr. 17,150(4) (3)
David P. George, Jr. 4,900(7) (3)
James A. Cannon 9,014(7) (3)
J. David Wasson 6,400(7) (3)
Michael D. Glenn 3,415(7) (3)
Ann B. Smith 2,600(7) (3)
William K. Snead 7,468(5) (3)
William S. Moore 7,600(6) (3)
12
EXECUTIVE OFFICERS
Ralph M. Burns, III 27,892(8) (3)
Philip A. Betette 39,464(9) 1.28%
DIRECTORS AND EXECUTIVE 473,390 15.32%(10)
OFFICERS AS A GROUP
(14 persons)
(1) Mr. Patterson is Chief Executive Officer of the Company. The number of
shares shown as beneficially owned by Mr. Patterson includes
approximately 15,745 shares allocated to his account per the latest
report of the Company's ESOP for fiscal year 1997. Mr. Patterson is
fully vested in all shares allocated to his account pursuant to the
ESOP. Also included are 27,932 shares owned by Mr. Patterson's wife, as
to which shares Mr. Patterson disclaims beneficial ownership, and
18,000 unissued shares that can be acquired by the exercise of options,
subject to shareholder approval at the 1998 Annual Meeting of
Shareholders. These options vest 20% per year, are fully exercisable
after 5 years and expire in 10 years.
(2) Mr. Stringer is President of the Company. The number of shares shown as
beneficially owned by Mr. Stringer includes approximately 12,930 shares
allocated to his account per the latest report of the Company's ESOP
for fiscal year 1997. Mr. Stringer is fully vested in all shares
allocated to his account pursuant to the ESOP. Also included are 15,000
unissued shares that can be acquired by the exercise of options,
subject to shareholder approval at the 1998 Annual Meeting of
Shareholders. These options vest 20% per year, are fully exercisable
after 5 years and expire in 10 years.
(3) Each of these persons owns less than one percent of the outstanding
shares of common stock of the Company.
(4) Mr. Davis is a Director of the Company. The number of shares shown as
beneficially owned by Mr. Davis includes 700 shares held in a trust
account for the benefit of Mr. Davis's daughter, as to which he acts as
Custodian. Mr. Davis disclaims beneficial ownership of the trust
account shares. Also included are 2,500 unissued shares that can be
acquired by the exercise of options, subject to shareholder approval at
the 1998 Annual Meeting of Shareholders. These options vest 20% per
year, are fully exercisable after 5 years and expire in 10 years.
(5) Mr. Snead is a Director of the Company. The number of shares shown as
beneficially owned by Mr. Snead includes 600 shares each in trust
accounts for his two sons, as to which he acts as Custodian. The number
of shares also includes 180 shares owned by Mr. Snead's wife. Mr. Snead
disclaims beneficial ownership of the trust account shares and the
shares owned by his wife. Also included are 2,500 unissued shares that
can be acquired by the exercise of options, subject to shareholder
approval at the 1998 Annual Meeting of Shareholders. These options vest
20% per year, are fully exercisable after 5 years and expire in 10
years.
(6) Mr. Moore is a Director of the Company. The number of shares
beneficially owned by Mr. Moore includes 300 shares each in trust
accounts for the benefit of Mr. Moore's son and daughter. Mr. Moore
disclaims beneficial ownership of these shares. Also included are 2,500
unissued shares that can be acquired by the exercise of options,
subject to shareholder approval at the 1998 Annual Meeting of
Shareholders. These options vest 20% per year, are fully exercisable
after 5 years and expire in 10 years.
(7) Also included are 2,500 unissued shares that can be acquired by the
exercise of options, subject to shareholder approval at the 1998 Annual
Meeting of Shareholders. These options vest 20% per year, are fully
exercisable after 5 years and expire in 10 years.
(8) Mr. Burns is a Vice President of the Company. The number of shares
shown as beneficially owned by Mr. Burns includes approximately 8,172
shares allocated to his account per the latest report of the Company's
ESOP for fiscal year 1997. Mr. Burns is fully vested in all shares
allocated to his account pursuant to the ESOP. Also included are 9,000
unissued shares that can be acquired by the exercise of options,
subject to shareholder approval at the 1998 Annual Meeting of
Shareholders. These options vest 20% per year, are fully exercisable
after 5 years and expire in 10 years.
13
(9) Mr. Betette is a Vice President of the Company. The number of shares
shown as beneficially owned by Mr. Betette includes approximately 8,912
shares allocated to his account per the latest report of the Company's
ESOP for fiscal year 1997. Mr. Betette is fully vested in all shares
allocated to his account pursuant to the ESOP. Also included are 9,000
unissued shares that can be acquired by the exercise of options,
subject to shareholder approval at the 1998 Annual Meeting of
Shareholders. These options vest 20% per year, are fully exercisable
after 5 years and expire in 10 years.
(10) The beneficial ownership stated above represents sole voting and
investment power, except as indicated in the footnotes above.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the Company's directors and officers are also customers of
the Company and have home mortgages, personal credit lines, credit cards, and
other loans with the Company. All of these loans were made in the ordinary
course of business, were made on substantially the same terms (including
interest rates and collateral) as those prevailing at the time for comparable
transactions with other persons, and did not involve more than the normal risk
of collectibility or present other unfavorable features.
The law firm of Wyche, Burgess, Freeman & Parham, P.A. serves as
general counsel to the Company and receives legal fees from the Company. Mr.
Shoemaker, a Director of the Company and Chairman of the Compensation Committee,
is a member of such law firm. The Company believes that the terms of its
relationship with the law firm are at least as favorable as could be obtained
from a third party.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's Directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock of the Company. Executive officers,
Directors and greater than ten-percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms filed.
To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during 1997, all required Section 16(a) filings applicable to its
executive officers, Directors and greater than 10% beneficial owners were made.
PROPOSAL TO ADOPT THE PALMETTO BANCSHARES, INC.
1997 STOCK COMPENSATION PLAN
(ITEM NO. 2 ON THE PROXY)
The Board of Directors and the Compensation Committee recommend that
the shareholders of the Company approve adoption by the Company of the Palmetto
Bancshares, Inc. 1997 Stock Compensation Plan (the "Plan"). Under the Plan, the
Board (or a Committee of the Board (the "Committee")) would have the discretion
to grant options for up to an aggregate maximum of 175,000 shares of the
Company's Common Stock. This maximum number of shares may be appropriately
adjusted to reflect any change in capitalization of the Company resulting from a
stock dividend, stock split, stock consolidation, recapitalization,
reorganization, merger, split up or other change in the characteristics of the
shares of Common Stock of the Company. The Board and Compensation Committee
recommend approval of the Plan because it will provide the Company's key
employees and directors who participate in the Plan with an incentive to
maximize shareholder value.
The purpose of the Plan is to promote the Company's business and its
growth and profitability by
14
increasing the personal participation of key employees and directors in the
financial performance of the Company by enabling the Company to attract and
retain key employees and directors of outstanding competence and by providing
such key employees and directors with an equity opportunity in the Company.
The Board or a Committee of the Board shall administer the Plan.
Participation in the Plan is determined by the Board or Committee and
is limited to those key employees of the Company or any of its subsidiaries, who
have the greatest impact on the Company's long-term performance. In making any
determination as to key employees to whom options shall be granted and as to the
number of shares to be subject thereto, the Board or Committee shall take into
account, in each case, the level and responsibility of the person's position,
the level of the person's performance, the person's level of compensation, the
assessed potential of the person and such additional factors as the Board or
Committee shall deem relevant to the accomplishment of the purposes of the Plan.
The Company believes that key employees and all of the directors of the Company
are currently eligible to participate in the Plan.
The term of each option shall be established by the Board or Committee,
but shall not exceed ten years (or five years for owners of more than 10% of the
total combined voting power of all classes of stock of the Company or of a
subsidiary) from the date of grant. Each option will be exercisable according to
such schedule as the Board of Directors or Committee may determine. The
recipient of an option will not pay the Company any amount at the time of
receipt of the option. If an option shall expire or terminate for any reason
without having been fully exercised, the unpurchased shares subject to the
option shall again be available for the purposes of the Plan.
In the discretion of the Board of Directors or Committee, options
granted under the Plan to key employees may be "incentive stock options" for
federal income tax purposes. The Company is not allowed a deduction at any time
in connection with, and the participant is not taxed upon either the grant or
the exercise of, an incentive stock option. The difference between the exercise
price of such option and the market value of the shares of Common Stock at the
date of exercise, however, constitutes a tax preference item for the participant
in the year of exercise for alternative minimum tax purposes. To qualify as an
incentive stock option, the stock acquired by the participant must, among other
things, be held for at least two years after the option is granted and one year
after it is exercised. If the participant holds the stock for the period
required for incentive stock option qualification, then he or she will be taxed
only upon any gain realized upon disposition of the stock. The participant's
gain at that time will be equal to the difference between the sales price of the
stock and the exercise price. If an incentive stock option is exercised after
the death of the employee by the estate of the decedent, or by a person who
acquired the right to exercise such option by bequest or inheritance or by
reason of death of the decedent, none of the time requirements described in this
paragraph shall apply. Directors will not receive incentive stock options.
If the participant fails to satisfy these time requirements, the option
will be treated in a manner similar to options that are not incentive stock
options. The participant is generally not taxed upon the grant of an option that
is not an incentive stock option. Upon exercise of any such option, the
participant recognizes ordinary income equal to the difference between the fair
market value of the shares of Common Stock acquired on the date of exercise and
the exercise price. Generally, the Company receives a deduction for the amount
the participant reports as ordinary income arising from the exercise of the
option. Upon a subsequent sale or disposition of the stock, the holder would be
taxable on any excess of the selling price over the fair market value at the
date of exercise. If the participant fails to satisfy the time requirements
described above with respect to an option intended to be an incentive stock
option, the income to the participant and the deduction for the Company shall
arise at the time of the early disposition and shall equal the excess of (a)
15
the lower of the fair market value of the shares at the time of exercise or such
value at the time of disposition over (b) the exercise price. The Plan does not
satisfy all the requirements of Section 162(m) ("Section 162(m)") of the
Internal Revenue Code of 1986, as amended (the "Code"). Nonetheless, the Company
anticipates that none of the compensation payable pursuant to the Plan will lose
its deductibility by reason of Section 162(m), because no Covered Employee (as
defined in Section 162(m)) who can participate in the Plan is expected to
receive in any fiscal year aggregate compensation that exceeds $1 million and
does not qualify as performance-based compensation under Section 162(m).
The Plan provides that any option granted under the Plan will terminate
on the date of a participant's termination of employment with the Company or any
subsidiary, unless the participant (a) dies while in the employ of the Company
or any subsidiary, in which event the option may be exercised during the
one-year period after the date of the participant's death to the extent that the
participant could have exercised the option immediately prior to his or her
death; (b) becomes permanently or totally disabled within the meaning of Section
22(e)(3) of the Code (or any successor provision), in which event the option may
be exercised during the one-year period after the date of termination of the
participant's employment to the extent that the participant could have exercised
the option immediately prior to such termination; or (c) resigns or retires with
the consent of the Company, in which event the option may be exercised during
the three-month period after the participant's resignation or retirement to the
extent the participant could have exercised the option immediately prior to such
resignation or retirement. In no event may an option be exercised after the
expiration of its fixed term.
The Plan provides that no participant may sell any share of Common
Stock acquired upon the exercise of an option within six months of the date of
the grant of the underlying option.
Options granted pursuant to the Plan are not transferrable except by
will, by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or in Title I of the Employee
Retirement Income Security Act, or the rules thereunder. Options granted
pursuant to the Plan which are intended to qualify as incentive stock options
are not transferrable except by will or the laws of descent and distribution and
during a participant's lifetime are exercisable only by him or her.
The price per share at which each option granted under the Plan may be
exercised shall be such price as shall be determined by the Board or Committee
at the time of grant based on such criteria as may be adopted by the Board or
Committee at the time of grant in good faith; provided, however, that in no
event shall the exercise price per share of an option be less than 100% of the
fair market value of the Company's shares of Common Stock on the date such
option is granted. In the case of an option intended to qualify as an incentive
stock option, the exercise price per share shall not be less than 100% (or 110%
for owners of more than 10% of the total combined voting power of all classes of
stock of the Company or any subsidiary) of the fair market value of the Common
Stock at the time such option is granted.
A participant may exercise an option by completing each of the
following steps: (a) indicating in writing the decision to exercise the option
and delivering such notice to the Company; (b) tendering to the Company payment
in full in cash (or, if the Board or Committee so determines at the time of
grant, in shares of the Company's Common Stock at the fair market value of such
shares at the time of exercise) of the exercise price for the shares for which
the option is exercised; (c) tendering to the Company payment in full in cash of
the amount of all federal and state withholding or other employment taxes
applicable to taxable income of the participant resulting from such exercise;
and (d) complying with such other reasonable requirements as the Board or
Committee may establish.
16
The Plan provides that it may be suspended, terminated or amended by
the Board or Committee, except that shareholder approval would be required in
the event an amendment were to (a) materially increase the benefits accruing to
participants, (b) increase the number of securities issuable under the Plan
(other than an increase pursuant to the antidilution provisions of the Plan),
(c) change the class of individuals eligible to receive options or (d) otherwise
materially modify the requirements for eligibility.
The Plan provides that no person, estate or entity shall have any of
the rights of a shareholder with respect to shares subject to an option until a
certificate for such shares has been delivered.
No certificate(s) for shares shall be executed and delivered upon
exercise of an option until the Company shall have taken such action, if any, as
is then required to comply with the provisions of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the South Carolina
Uniform Securities Act, as amended, any other applicable state securities law(s)
and the requirements of any exchange on which the Common Stock may, at the time,
be listed.
The Plan provides that it shall terminate on the close of business on
December 8, 2007, and no option shall be granted under the Plan thereafter, but
such termination shall not affect any option theretofore granted under the Plan.
Subject to stockholder approval of the Plan, each of the six nominees
for directors and four of the directors continuing in office were granted 10
year options for 2,500 shares at the fair market value of the Company's common
stock as determined by an independent appraisal as of December 31, 1997. The
Chairman and President, who are also directors, were not granted these 2,500
options; instead, they were granted the options listed below. In addition,
subject to stockholder approval of the Plan, the following senior officers were
granted the options indicated at the fair market value to be determined:
L. Leon Patterson Philip A. Betette
Chairman & Chief Executive Officer Senior Vice President & Senior Trust Officer
Shares - 18,000 Shares - 9,000
Paul W. Stringer Ralph M. Burns, III
President & Chief Operating Officer Senior Vice President & Cashier
Shares - 15,000 Shares - 9,000
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG Peat Marwick LLP, the Company's independent
auditor, will be present at the Annual Meeting with the opportunity to make a
statement if they desire to do so, and they will be available to respond to
appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Proposals by shareholders for consideration at the 1999 Annual Meeting
of Shareholders must be received at the Company's offices at 301 Hillcrest
Drive, P. O. Box 49, Laurens, South Carolina 29360, no later than November 20,
1998, if any such proposal is to be eligible for inclusion in the Company's
proxy materials for its 1999 Annual Meeting. Under the regulations of the
Securities and Exchange Commission, the Company is not required to include
shareholder proposals in its proxy materials unless certain other conditions
specified in those regulations are satisfied.
FINANCIAL INFORMATION
THE COMPANY'S 1997 ANNUAL REPORT IS BEING MAILED TO SHAREHOLDERS
CONTEMPORANEOUSLY WITH THESE PROXY
17
MATERIALS. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF RECORD
AS OF MARCH 13, 1998, WHO SO REQUESTS IN WRITING, A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K (WITHOUT EXHIBITS) FOR THE YEAR ENDED DECEMBER 31, 1997
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. ANY SUCH REQUEST SHOULD BE
DIRECTED TO PALMETTO BANCSHARES, INC., POST OFFICE BOX 49, LAURENS, SOUTH
CAROLINA 29360 ATTENTION: CORPORATE SECRETARY.
OTHER MATTERS
Management is not aware of any other matter to be brought before the
Annual Meeting. If other matters are duly presented for action, it is the
intention of the persons named in the enclosed proxy to vote on such matters in
accordance with their judgment.
By order of the Board of Directors,
/s/ L. Leon Patterson
L. LEON PATTERSON
Chairman
March 20, 1998
Laurens, South Carolina
18
********************************************************************************
APPENDIX
P
R
O PALMETTO BANCSHARES, INC.
X ANNUAL MEETING, APRIL 21, 1998
Y
The undersigned shareholder of Palmetto Bancshares, Inc., hereby
revoking all previous proxies, hereby appoints L. Leon Patterson and Teresa M.
Crabtree and each of them, the attorneys of the undersigned, with power of
substitution, to vote all stock of Palmetto Bancshares, Inc. standing in the
name of the undersigned upon all matters at the Company's Annual Meeting to be
held at The Palmetto Bank, Corporate Center, 301 Hillcrest Drive, Laurens, South
Carolina on Tuesday, April 21, 1998 at 3:00 p.m. and at any adjournments
thereof, with all powers the undersigned would possess if personally present,
and without limiting the general authorization and power hereby given, directs
said attorneys or either of them to cast the undersigned's vote as specified
below.
1. ELECTION OF DIRECTORS.
[ ] FOR ALL NOMINEES set forth below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees below:
contrary below [ ]):
W. Fred Davis, Jr. David P. George, Jr. Michael D. Glenn
Edward K. Snead William S. Moore Ann B. Smith
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.
2. APPROVAL OF THE 1997 STOCK COMPENSATION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. At their discretion upon such other matters as may properly come before the
meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PALMETTO
BANCSHARES, INC. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR
APPROVAL OF EACH OF THE PROPOSALS ABOVE.
Please sign this Proxy as your name or names appear hereon. If stock is held
jointly, signature should appear for both names. When signing as attorney,
administrator, trustee, guardian or agent, please indicate the capacity in which
you are acting. If stock is held by a corporation, please sign in full corporate
name by authorized officer and give title of office.
Dated this ____ day of , 1998
------------------
_____________________________________
Print Name (and title if appropriate)
_____________________________________
Signature
_____________________________________
Print Name (and title if appropriate)
_____________________________________
Signature
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.