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Again this year, we are incorporating the enclosed Annual Report on Form 10KSB, as filed with the Securities and Exchange Commission, as our Annual Report to Shareholders.
BANK OF SOUTH CAROLINA CORPORATIONTo Be Held April 13, 2004TO BE HELD APRIL 8, 200813, 2004,8, 2008, at 2:00 p.m., for the following purposes: 1. To elect seventeen (17)sixteen (16) Directors to serve until the Company’s 20052009 Annual Meeting of Shareholders; 2. To ratify the appointment of KPMG LLPElliott Davis, LLC, as independent certified public accountants for 2004;2008; 3. To transact such other business as may properly come before the meeting. 23, 2004,22, 2008, will be entitled to notice of and to vote at the Annual Meeting and any adjournments thereof. of the Board of Directors/s/ Nathaniel I. Ball, IIISecretaryMarch 3, 2004A 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 BankBoard 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.Directors
Richard W. Hutson
Secretary
256 Meeting Street
Charleston, South Carolina 294013, 2004,4, 2008, 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 20042008 Annual Shareholders’ Meeting of the Company. The Notice of Meeting, Proxy Form and Annual Report are enclosed in this package.Officersofficers 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.23, 2004,22, 2008, there were issued and outstanding 2,805,6103,953,984 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.23, 2004,22, 2008, 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, 2004,22, 2008, 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. a writing delivered to the President of the Company prior to the meeting or by attending the meeting and voting in person.
223, 2004,22, 2008, the only Shareholders of the Company having beneficial ownership of more than 5% 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 463,387 (2) 16.52 % 30 Church Street Charleston, SC 29401 157,471 (3) 5.61 % 10 Gillon Street Charleston, SC 29401 The Bank of South Carolina 216,067 (4) 7.70 % Employee Stock Ownership Plan and Trust (“ESOP”) 256 Meeting Street Charleston, SC 29401 143,374 (6) 5.11 % 100 North Tryon Street Charlotte, NC 28255 143,374 (7) 5.11 % 100 North Tryon Street Charlotte, NC 28255 143,374 (8) 5.11 % 100 North Tryon Street Charlotte, NC 28255 Name & Address of Amount & Nature of Percent of Beneficial Owner Beneficial Ownership Class
30 Church Street
Charleston, SC 29401501,688(2) 12.69 % The Bank of South Carolina Employee Stock Ownership Plan and Trust (“the ESOP”)
256 Meeting Street
Charleston, SC 29401224,129(3) 5.67 % (1) To the extent known to the Board of Directors, the Marital Trust for the benefit of Beverly G. Lane, Beverly G. Lane Trust, Beverly G. Jost, Kathleen L. Schenck, Charles G. Lane and Hugh C. Lane and his wife and children, individually andJr., collectively, have beneficial ownership of 704,187672,638 shares or 25.10%17.01% of the outstanding shares. As more fully described in the following footnotes, Hugh C. Lane, Jr. and Charles G. Lane areis the only onesone of the above who have a beneficial ownership interest in more than 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., an Executive Officer and Director of the Bank and the Company, directly owns and has sole voting and investment power with respect to 181,969268,469 shares; as trustee for sixthree trust accounts holding an aggregate of 67,462113,125 shares, he has sole2voting and investment power with respect to such shares; as a co-trustee for three trust accounts holding 14,67413,731 shares, he has joint voting and investment power with respect to such shares; as a trustee for the Mills Bee Lane Memorial Foundation, he has shared voting and investment power with respect to 7,1509,831 shares; he is indirectly beneficial owner of 8,98412,764 shares owned by his wife and an aggregate of 83,62948,965 shares held by his wife as custodian for two children, 65,257 shares held by an unemancipated daughter,their son, and 34,26234,803 shares owned by the Employee Stock Ownership Plan and Trust (“ESOP”)ESOP in which he has a vested interest. All of the shares beneficially owned by Hugh C. Lane, Jr. are currently owned. Hugh C. Lane, Jr. has had beneficial ownership of more than 5% of the Bank’s Common Stock since October 23, 1986, and more than 10% since November 16, 1988. (3) To the extent known to the Board of Directors, Charles G. Lane, a Director of the Bank and the Company, directly owns and has sole voting and investment power with respect to 76,512 shares; as a co-trustee for 4 trust accounts holding 16,958 shares, he has joint voting and investment power with respect to such shares; as a trustee for the Mills Bee Lane Memorial Foundation, he has shared voting and investment power with respect to 7,150 shares; he is indirectly beneficial owner of 2,927 shares owned by his wife and an aggregate of 53,924 shares held by his wife as custodian for three children. All of the shares beneficially owned by Charles G. Lane are currently owned. Charles G. Lane has had beneficial ownership of more than 5% of the Bank’s Common Stock since July 16, 1999.(4)The Trustees of the ESOP, T. Dean Harton, a Director of the Bank and the Company, Sheryl G. Sharry, an Officerofficer of the Bank and Nathaniel I. Ball, III,Hugh C. Lane, Jr., an Executive Officer and Director of the Bank and the Company, disclaim beneficial ownership of the 216,067224,129 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 Trustees as to the manner in which voting rights are to be exercised.(5)To the extent known to the Board of Directors, Bank of America Corporation is the parent holding company of N.B. Holdings Corporation. N.B. Holdings Corporation is the parent holding company of Bank of America, N.A. The shares referred to in notes (7) and (8) are a duplication of the shares referred to in note (6).(6)To the extent known to the Board of Directors, Bank of America Corporation has shared voting power for 66,176 shares and shared dispositive power for 143,374 shares.(7)To the extent known to the Board of Directors, N B Holdings Corporation has shared voting power for 66,176 shares and shared dispositive power for 143,374 shares.(8)To the extent known to the Board of Directors, Bank of America, N.A., has sole voting power for 64,702 shares, shared voting power for 1,474 shares and shared dispositive power for 143,374 shares (including 77,198 shares held as trustee under the will of Mills B. Lane for the benefit of Hugh C. Lane).23, 2004.22, 2008. Except as otherwise indicated in the footnotes to the table, the persons named possess sole voting and investment power with respect to the shares shown opposite their names. As of February 23, 2004,22, 2008, no Executive Officer, Director or Nominee beneficially owned more than 10% of the outstanding shares of the Company other than Hugh C. Lane, Jr. As of February 23, 2004,22, 2008, the Executive
3
Name and Address of | Amount and Nature of | Percent of | ||||||
Beneficial Owner | Beneficial Ownership | Class | ||||||
Nathaniel I. Ball, III | 47,318 | (1) | 1.69 | % | ||||
1302 Cove Avenue | ||||||||
Sullivan’s Island, SC 29482 | ||||||||
Dr. Linda J. Bradley, CPA | 110 | .004 | % | |||||
3401 Waterway Blvd. | ||||||||
Isle of Palms, SC 29451 | ||||||||
William T. Cooper | 5,856 | (1) | .21 | % | ||||
21 Jamestown Road | ||||||||
Charleston, SC 29407 | ||||||||
C. Ronald Coward | 39,881 | (1) | 1.42 | % | ||||
537 Planters Loop | ||||||||
Mt. Pleasant, SC 29464 | ||||||||
Leonard C. Fulghum | 39,572 | (1) | 1.41 | % | ||||
311 Middle Street | ||||||||
Mt. Pleasant, SC 29464 | ||||||||
T. Dean Harton | 9,573 | (1) | .34 | % | ||||
4620 Lazy Creek Lane | ||||||||
Wadmalaw Island, SC 29487 | ||||||||
William L. Hiott, Jr. | 98,061 | (1) | 3.50 | % | ||||
1831 Capri Drive | ||||||||
Charleston, SC 29407 | ||||||||
Katherine M. Huger | 5,856 | (1) | .21 | % | ||||
72 Murray Boulevard | ||||||||
Charleston, SC 29401 | ||||||||
Charles G. Lane | 157,471 | (1) | 5.61 | % | ||||
10 Gillon Street | ||||||||
Charleston, SC 29401 | ||||||||
Hugh C. Lane, Jr. | 463,387 | (1) | 16.52 | % | ||||
30 Church Street | ||||||||
Charleston, SC 29401 | ||||||||
Louise J. Maybank | 22,837 | (1) | .81 | % | ||||
8 Meeting Street | ||||||||
Charleston, SC 29401 | ||||||||
Thomas W. Myers | 2,200 | .08 | % | |||||
500 Central Avenue | ||||||||
Summerville, SC 29483 |
Name & Address of | Amount & Nature of | Percent of | ||||||
Beneficial Owner | Beneficial Ownership | Class | ||||||
Dr. Linda J. Bradley-McKee, CPA 3401 Waterway Blvd. Isle of Palms, SC 29451 | 151 | .004 | % | |||||
C. Ronald Coward 537 Planters Loop Mt. Pleasant, SC 29464 | 47,955(1) | 1.21 | % | |||||
Graham M. Eubank, Jr. 791 Navigators Run Mt. Pleasant, SC 29464 | 550 | .01 | % | |||||
T. Dean Harton 4620 Lazy Creek Lane Wadmalaw Island, SC 29487 | 13,160(1) | .33 | % | |||||
Fleetwood S. Hassell 30 New Street Charleston, SC 29401 | 57,242(1) | 1.45 | % | |||||
Glen B. Haynes, DVM 101 Drayton Drive Summerville, SC 29464 | 2,876 | .07 | % | |||||
William L. Hiott, Jr. 1831 Capri Drive Charleston, SC 29407 | 141,878(1) | 3.59 | % | |||||
Katherine M. Huger 1 Bishop Gadsden Way, C-17 Charleston, SC 29412 | 8,051(1) | .20 | % |
3
4
Name and Address of | Amount and Nature of | Percent of | ||||||
Beneficial Owner | Beneficial Ownership | Class | ||||||
Alan I. Nussbaum, MD | 330 | .01 | % | |||||
37 Rebellion Road | ||||||||
Charleston, SC 29407 | ||||||||
Edmund Rhett, Jr., MD | 1,100 | (1) | .04 | % | ||||
45 South Battery | ||||||||
Charleston, SC 29401 | ||||||||
Thomas C. Stevenson, III | 532 | .02 | % | |||||
173 Tradd Street | ||||||||
Charleston, SC 29401 | ||||||||
Steve D. Swanson | 1,100 | .04 | % | |||||
615 Pitt Street | ||||||||
Mt. Pleasant, SC 29464 | ||||||||
John M. Tupper | 1,500 | .05 | % | |||||
113 Linwood Lane | ||||||||
Summerville, SC 29483 |
Name & Address of | Amount & Nature of | Percent of | ||||||
Beneficial Owner | Beneficial Ownership | Class | ||||||
Richard W. Hutson, Jr. 124 Tradd Street Charleston, SC 29401 | 1,525 | .04 | % | |||||
Charles G. Lane 10 Gillon Street Charleston, SC 29401 | 184,909(1) | 4.68 | % | |||||
Hugh C. Lane, Jr. 30 Church Street Charleston, SC 29401 | 501,688(1) | 12.69 | % | |||||
Louise J. Maybank 8 Meeting Street Charleston, SC 29401 | 44,907(1) | 1.14 | % | |||||
Alan I. Nussbaum, MD 37 Rebellion Road Charleston, SC 29407 | 703 | .02 | % | |||||
Edmund Rhett, Jr., MD 17 Country Club Drive Charleston, SC 29412 | 2,387(1) | .06 | % | |||||
Malcolm M. Rhodes, MD 7 Guerard Road Charleston, SC 29407 | 1,787 | .05 | % | |||||
Thomas C. Stevenson, III 173 Tradd Street Charleston, SC 29401 | 21,209 | .54 | % |
(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: |
4
EdmundRhett, |
5
Seventeen
5
Positions and | ||||||||||
Offices Held | Business Experience | |||||||||
With | Family | |||||||||
Name | Age | Corporation | Relationship | Other Directorships | ||||||
Dr. Linda J. | Director | None | ||||||||
C. Ronald Coward | 72 | Director | None | Chairman, Coward Hund Construction Company, Inc. (construction) 2004-2008; President, 1976-2004 | ||||||
Graham M. Eubank, Jr. | 40 | Director | None | President, Palmetto Ford, Inc. (retail automobile) 2000-2008; Vice President 1996-2000 | ||||||
T. Dean Harton | 62 | Director | None | President, Hawthorne Corporation (management and investment) 2007-2008 Vice-Chairman, Piedmont Hawthorne Holdings, Inc. (aviation) 2004-2006; President, Piedmont Hawthorne Holdings, Inc. 1999-2004; President, Hawthorne Corporation (aviation) 1986-1999 | ||||||
Fleetwood S. Hassell | 48 | Executive Vice President | Brother-in-law Charles G. Lane, Director | The Bank of South Carolina (banking) 1986-2008 | ||||||
Glen B. Haynes, DVM | 53 | Director | None | Westbury Veterinary Clinic (Veterinary) 1984 — 2008 | ||||||
William | Executive Vice President, Treasurer, Director | None | ||||||||
Katherine M. Huger | 66 | Director | None | Emerita Professor of Economics, Charleston Southern University; Assistant Professor of Economics, Charleston Southern University (education) 1972-2004 | ||||||
Richard W. Hutson, Jr. | 50 | Secretary Director | None | Manager, William M. Means Company Insurance, LLC (insurance) 1998-2008; Sole Proprietor, William M. Means Insurance Co. (insurance) 1992-1998 |
6
Positions and | ||||||||||
Offices Held | Business Experience | |||||||||
With | Family | |||||||||
Name | Age | Corporation | Relationship | Other Directorships | ||||||
Charles G. Lane | Director | Brother of Hugh C. Lane, Jr.; Brother-in-law Fleetwood S. Hassell, Executive Vice President | Managing Member | |||||||
1987 — 1996 | ||||||||||
Hugh C. Lane, Jr. | President, Chief Exec. Officer, Director | Brother of Charles G. Lane | The Bank of South Carolina (banking) | |||||||
1986-2008 | ||||||||||
Louise J. Maybank | Director | None | Active in community programs | |||||||
Alan I. Nussbaum, MD | Director | None | Physician in private practice with Rheumatology Associates, PA | |||||||
Edmund Rhett, Jr., MD | Director | None | Physician in private practice as Edmund Rhett, Jr., PA 2007-2008; Physician in private obstetrical practice with Low Country Obstetrics & Gynecology, PA 1977-2007 | |||||||
Malcolm M. Rhodes, MD | 49 | Director | None | Physician in private practice with Parkwood Pediatric Group | ||||||
Thomas C. Stevenson, III | Director | None | President, | |||||||
fabrication) | ||||||||||
1990-91; Chairman of the Board | ||||||||||
Hagerty, Inc. (diversified holding company) | ||||||||||
1984-1990 |
7
The Audit and Compliance Committee met five times during 2007. The Compensation Committee met once during 2007. 8fivefour committees: the Executive/Long-Range Planning Committee, resulting from the merger of the Executive Committee and the Long-Range Planning Committee in 2004, the Compensation Committee, the Nominating Committee, and the Audit and Compliance Committee. The Compensation Committee and the Nominating Committee were established at the regular monthly meeting of the Board of Directors on December 18, 2003, and neither committee met during 2003.ExecutiveExecutive/Long-Range Planning Committee consists of the President of the Company and seven designated Directors. The President of the Company chairs the Committee. At present, the fixed membership of the Committee consists of Nathaniel I. Ball, III,C. Ronald Coward, T. Dean Harton, Fleetwood S. Hassell, William L. Hiott, Jr., Charles G. Lane, Hugh C. Lane, Jr., Louise J. Maybank, Alan I. Nussbaum, MD, Edmund Rhett, Jr., MD and Steve D. Swanson.Thomas C. Stevenson, III. During 2003,2007, this Committee held two meetings. TheIn addition to long-range and strategic planning, 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. This committee did not meet during 2003.Bradley, LeonardBradley-McKee, CPA, C. Fulghum,Ronald Coward, Graham M. Eubank, Jr., Glen B. Haynes, Katherine M. Huger, Louise J. Maybank, Thomas W. Myers, Thomas C. Stevenson, IIIAlan I. Nussbaum, MD, and JohnMalcolm M. Tupper,Rhodes, MD, all independent Directors of the Company.Steve D. Swanson,Graham M. Eubank, Jr., all independent Directors of the Company. The function of the Compensation Committee is to recommend the compensation of Executive Officers to the Directors of the Company. and John M. Tupper,, MD all independent Directors of the Company. The function of the Nominating Committee is to recommend a slate of proposed Directors to the Board of Directors of the Company. The Nominating Committee has adopted a written Charter. The Charter was attached as Exhibit A to the 2005 Proxy Statement. The Nominating Committee met two times during 2007.
8
recognized reputation for honesty and integrity, have demonstrated such Nominee’s commitment to the community in which the Company and its subsidiary Bank operates and have demonstrated in meetings with the Nominating Committee such Nominee’s commitment to the best interests of the Company, its subsidiary Bank, and its and their officers, directors, employees and shareholders. The Nominating Committee’s process for identifying and evaluating Nominees for Director of the Company and its subsidiary Bank, including Nominees recommended by security holders, is to investigate whether or not such Nominee meets the specific minimum qualifications adopted as a policy by the Nominating Committee through contacts the members of the Nominating Committee have in their community. There are no differences in the manner in which the Nominating Committee evaluates Nominees for Director based on whether the Nominee is recommended by a security holder.
Report of the Audit and Compliance Committee of the Board of Directors
Membership and Role of the Audit and Compliance Committee
Review of the Company’s Audited Financial Statements for the Fiscal Year Ended December 31, 2003
The Audit Committee has reviewed and discussed with management the audited financial statements of the Company for the fiscal year ended December 31, 2003. 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 Discussions 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 the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003 for filing with the Securities and Exchange Commission.
Nominations for Director
Nominations, other than those made by the Nominating Committee of the Company, shall be made in writing and shall be delivered or mailed to the President of the Company not less than 7 days nor more than 50 days priorfee to any meeting of Shareholders callingthird party to evaluate Nominees for election of Directors; provided however, that if less than 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 7th day following the day on which the Notice of Meeting was mailed. Nominations not made according to these procedures will be disregarded.
9
Director.
9
Annual Compensation | Long Term Compensation Awards | |||||||||||||||||||||||
Other | ||||||||||||||||||||||||
Name and | Annual | All Other | ||||||||||||||||||||||
Principal | Compen- | Compen- | ||||||||||||||||||||||
Position | Year | Salary | Bonus | sation(1) | Options/SARS(2) | sation(3) | ||||||||||||||||||
Hugh C. Lane, Jr. | 2003 | $ | 153,500.00 | — | $ | 5,300.64 | 0 | $ | 9,528.83 | |||||||||||||||
CEO & President | 2002 | 153,792.78 | — | 6,069.84 | 0 | 7,515.90 | ||||||||||||||||||
2001 | 161,518.10 | — | 5,872.24 | 18,150 | 15,479.09 | |||||||||||||||||||
Nathaniel I. Ball, III | 2003 | $ | 147,000.00 | — | $ | 4,397.40 | 0 | $ | 9,125.61 | |||||||||||||||
Executive Vice President | 2002 | 147,128.36 | — | 4,813.59 | 0 | 7,190.20 | ||||||||||||||||||
& Secretary | 2001 | 147,101.45 | — | 4,634.24 | 15,125 | 14,097.48 | ||||||||||||||||||
William L. Hiott, Jr. | 2003 | $ | 147,000.00 | — | $ | 4,397.40 | 0 | $ | 9,125.61 | |||||||||||||||
Executive Vice President | 2002 | 147,156.03 | — | 6,037.92 | 0 | 7,191.55 | ||||||||||||||||||
& Treasurer | 2001 | 147,101.45 | — | 5,827.16 | 15,125 | 14,097.48 |
Nonqualified | ||||||||||||||||||||||||||||
Non-Equity | Deferred | All | ||||||||||||||||||||||||||
Name and Principal | Stock | Option | Incentive Plan | Compensation | Other | |||||||||||||||||||||||
Position | Year | Salary (1) | Bonus(2) | Awards | Awards | Compensation | Earnings | Compensation(3) | Total | |||||||||||||||||||
Hugh C. Lane, Jr. President and Chief Executive Officer | 2007 | 200,001.37 | 1,600.00 | 18,136.27 | 219,737.64 | |||||||||||||||||||||||
2006 | 190,000.00 | 1,600.00 | 21,630.52 | �� | 213,130.52 | |||||||||||||||||||||||
2005 | 166,652.67 | 100.00 | 18,687.27 | 185,439.94 | ||||||||||||||||||||||||
William L. Hiott, Jr. Executive Vice President and Treasurer | 2007 | 175,001.53 | 1,600.00 | 15,887.26 | 192,488.79 | |||||||||||||||||||||||
2006 | 167,000.00 | 1,600.00 | 19,033.98 | 187,533.98 | ||||||||||||||||||||||||
2005 | 158,523.47 | 100.00 | 17,589.31 | 176,212.78 | ||||||||||||||||||||||||
Fleetwood S. Hassell Executive Vice President | 2007 | 135,001.45 | 1,600.00 | 12,288.81 | 148,890.26 | |||||||||||||||||||||||
2006 | 120,000.00 | 1,600.00 | 13,728.00 | 135,228.00 | ||||||||||||||||||||||||
2005 | 104,876.35 | 100.00 | 11,857.11 | 116,833.46 | ||||||||||||||||||||||||
Nathaniel I. Ball, III Retired Executive Vice President and Secretary | 2007 | 140,600.00 | (4) | 140,600.00 | ||||||||||||||||||||||||
2006 | 149,649.09 | (4) | 146,649.09 | |||||||||||||||||||||||||
2005 | 159,999.84 | 17,567.20 | 177,567.04 |
1) | ||
4) | Nathaniel I. Ball, III, retired on July 31, 2005. The amount reported in 2007 and 2006 represents severance pay. |
Non-officer Directors of the Company received $100.00 for each meeting of the Board of Directors of the Company attended and non-officer Directors of the Bank received $250.00 for each meeting of the Board of Directors of the Bank attended and $100.00 for each Company or Bank 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.
10
as follows;
• | 1 year of service | 0% Vested | ||||||
• | 2 Years of Service | 25% Vested | ||||||
• | 3 Years of Service | 50% Vested | ||||||
• | 4 Years of Service | 75% Vested | ||||||
• | 5 Years of Service | 100% Vested |
1989 and amended effective January 1, 2007 and approved by the Board of Directors on January 18, 2007. This amendment was made to comply with the Pension Protection Act of 2006.
Equity Incentive | ||||||||||||||||||||
Number of | Plan Awards: | |||||||||||||||||||
Number of Securities | Securities | Number of Securities | ||||||||||||||||||
Underlying | Underlying | Underlying | ||||||||||||||||||
Unexercised Options | Unexercised Options | Unexercised | Option Exercise | Option Expiration | ||||||||||||||||
Name | Exercisable | Unexercisable | Unearned Options | Price | Date | |||||||||||||||
Hugh C. Lane, Jr. | — | — | — | — | — | |||||||||||||||
William L. Hiott, Jr. | — | — | — | — | — | |||||||||||||||
Fleetwood S. Hassell | — | — | — | — | — |
11
resulting in total outstanding options to purchase 136,763 shares at the prices set forth above.
12
11
Executive Vice President and Secretary, and William L. Hiott, Jr., Executive Vice President and Treasurer, were eachwas granted the option to purchase 13,750 shares of Common Stock of the Company and Fleetwood S. Hassell, Executive Vice President was granted the option to purchase 8,250 pursuant to the Incentive Stock Option Plan at a price of $13.50 per share. All of these options arebecame exercisable in five 20% increments beginning on and for the year following May 14, 2006, with an additional 20% to be exercisable on and for the year following each successive anniversary. The right to exercise each such 20% of each option is cumulative and will not expire until the 10th10th anniversary of the date of the grant.
Shown below is information with respectshare and Fleetwood S. Hassell, Executive Vice President, has the option to unexercisedpurchase 7,487 shares at a price of $8.92 per share and 5,000 shares at a price of $16.62. The options to purchase Common Stock5,000 shares at a price of the Company held by the named Executive Officers at December 31, 2003.
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-the-Money | |||||||||||||||||||||||
Options/SARS | Options/SARS | |||||||||||||||||||||||
# of Shares | at Year-End(#) | at Year-End($) | ||||||||||||||||||||||
Acquired | Value | |||||||||||||||||||||||
On Exercise | Realized($) | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||
Hugh C. Lane, Jr. | 0 | 0 | 0 | 18,150 | 0 | 13,794.00 | ||||||||||||||||||
Nathaniel I. Ball, III | 0 | 0 | 0 | 15,125 | 0 | 30,098.75 | ||||||||||||||||||
William L. Hiott, Jr. | 0 | 0 | 0 | 15,125 | 0 | 30,098.75 |
$16.62 per share were granted to Fleetwood S. Hassell on May 17, 2006.
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schedule. The person or persons entitled to exercise the option following the option holder’s death may exercise the option until the expiration date.
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-the-Money | |||||||||||||||||||||||
# of Shares | Options/SARS | Options/SARS | ||||||||||||||||||||||
Acquired | Value | at Year-End (#) | at Year-End (#) | |||||||||||||||||||||
On Exercise | Realized ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||
Hugh C. Lane, Jr. | 24,956 | 245,068 | 0 | 0 | 0 | $ | 0 | |||||||||||||||||
Fleetwood S. Hassell | 4,990 | 44,511 | 0 | 12,487 | 0 | $ | 177,066 | |||||||||||||||||
William L. Hiott, Jr. | 8,318 | 74,197 | 0 | 12,478 | 0 | $ | 176,938 |
FEES EARNED | ||||||||
NAME | OR PAID IN CASH | TOTAL | ||||||
Dr. Linda J. Bradley-McKee, CPA | $ | 4,650 | $ | 4,650 | ||||
C. Ronald Coward | $ | 6,250 | $ | 6,250 | ||||
Graham M. Eubank, Jr. | $ | 4,950 | $ | 4,950 | ||||
T. Dean Harton | $ | 4,050 | $ | 4,050 | ||||
Fleetwood S. Hassell | — | — | ||||||
Glen B. Haynes, DVM | $ | 5,350 | $ | 5,350 | ||||
William L. Hiott, Jr. | — | — | ||||||
Katherine M. Huger | $ | 5,250 | $ | 5,250 | ||||
Richard W. Hutson, Jr. | $ | 6,150 | $ | 6,150 | ||||
Charles G. Lane, Jr. | $ | 6,000 | $ | 6,000 | ||||
Hugh C. Lane, Jr. | — | — | ||||||
Louise J. Maybank | $ | 5,550 | $ | 5,550 | ||||
Alan I. Nussbaum, MD | $ | 6,400 | $ | 6,400 | ||||
Edmund Rhett, Jr. MD | $ | 5,800 | $ | 5,800 | ||||
Malcolm M. Rhodes, MD | $ | 5,800 | $ | 5,800 | ||||
Thomas C. Stevenson, III | $ | 6,000 | $ | 6,000 | ||||
Steve D. Swanson (1) | $ | 2,400 | $ | 2,400 |
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1) | Steve D. Swanson resigned from the Board of Directors during 2007 as the result of a conflict of interest due to the sale of his business. |
William L. Hiott, Jr. filed an amended
timely manner.
RESOLVED, that the selection of |
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2005 or Elliott Davis, LLC in 2006 or 2007.
Accounting Fees
appropriate questions.
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The following table sets forth professional fees billed by KPMG to Bank of South Carolina Corporation for professional services rendered for 2003 and 2002:
2003 | 2002 | |||||||
Audit Fees(1) | $ | 29,190 | $ | 46,250 | ||||
Tax Fees(2) | 11,810 | 11,250 | ||||||
$ | 41,000 | $ | 57,500 | |||||
(1) Aggregate
(2) Consists10-QSB were $54,800 in 2007 and $33,500 in 2006. KPMG, LLP billed $10,000 in 2006, for professional services rendered for the review of Company’s annual financial statements for the year ended December 31, 2006.
All Other Fees
were $7,000 in 2007 and $7,695 in 2006.
There is
14
financial condition of the Company and the Bank. To the knowledge of management, no proceedings have been instituted or are contemplated by or against any government authority against or by the Company or the Bank.
16
all Shareholders.
17
March 3, 2004
15
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:
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.
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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
2
INDEPENDENT AUDITORS
INTERNAL AUDIT DEPARTMENT AND LEGAL COMPLIANCE
OTHER AUDIT COMMITTEE RESPONSIBILITIES
3
3.
BANK OF SOUTH CAROLINA CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS APRIL 13, 20048, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, do hereby appoint William T. Cooper, Leonard C. FulghumEdmund Rhett, Jr., MD, Richard W. Hutson, Jr. 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 13, 2004,8, 2008, 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:2.1. ELECTION OF DIRECTORS 1. Nathaniel I. Ball, III,Dr. Linda J. Bradley, William T. Cooper,Bradley-McKee, CPA, C. Ronald Coward, Leonard C. Fulghum,Graham M. Eubank, T. Dean Harton, Fleetwood S. Hassell, Glen B. Haynes, DVM, William L. Hiott, Jr., Katherine M. Huger, Richard W. Hutson, Jr., Charles G. Lane, Hugh C. Lane, Jr., Louise J. Maybank, Thomas W. Myers, Alan I. Nussbaum, MD, Edmund Rhett, Jr., Steve D. Swanson,MD, Malcolm M. Rhodes, MD., Thomas C. Stevenson, III and John M. TupperIII. 2. KPMG LLPELLIOTT DAVIS, LLC, as the Company’s independent auditors for the fiscal year ending December 31, 2004.2008.oFORoAGAINSToABSTAIN3. The transaction of such other business as may properly come before the meeting. KPMG LLPElliott Davis, LLC and in the discretion of the Proxies, on any other business as may properly come before the meeting.20032007 Annual Report on Form 10-KSB as filed with the Securities and Exchange Commission and the accompanying Notice of Meeting and Proxy Statement and hereby revokes any proxy or proxies heretofore given. Dated: ___________________________________________ , 20042008 Signature(s) of Shareholder(s) Please date and sign exactly as name appears hereon. Executors, Administrators, Trustees, etc., must so indicate when signing. If shares are held jointly, both owners should sign.