Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
Greenville First Bancshares, Inc.
-------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
GREENVILLE FIRST BANCSHARES, INC.
112 Haywood Road
Greenville, South Carolina 29607
Notice of Annual Meeting of Shareholders
Dear Fellow Shareholder:
We cordially invite you to attend the 2002 Annual Meeting of
Shareholders of Greenville First Bancshares, Inc., the holding company for
Greenville First Bank. At the meeting, we will report on our performance in 2001
and answer your questions. We are excited about our accomplishments in 2001 and
look forward to discussing both our accomplishments and our future plans with
you. We hope that you can attend the meeting and look forward to seeing you
there.
This letter serves as your official notice that we will hold the
meeting on May 15, 2002 at the bank's main office location at 112 Haywood Road,
Greenville, South Carolina at 4:30 p.m. for the following purposes:
1. To elect four members to the Board of Directors; and
2. To transact any other business that may properly come before the
meeting or any adjournment of the meeting.
Shareholders owning our common stock at the close of business on April
1, 2002 are entitled to attend and vote at the meeting. A complete list of these
shareholders will be available at the company's offices prior to the meeting.
Please use this opportunity to take part in the affairs of your company
by voting on the business to come before this meeting. Even if you plan to
attend the meeting, we encourage you to complete and return the enclosed proxy
to us as promptly as possible.
By order of the Board of Directors,
/s/ R. Arthur Seaver, Jr.
R. Arthur Seaver, Jr.
President and Chief Executive Officer
Greenville, South Carolina
April 15, 2002
GREENVILLE FIRST BANCSHARES, INC.
112 Haywood Road
Greenville, South Carolina 29607
Proxy Statement For Annual Meeting of
Shareholders to be Held on May 15, 2002
Our Board of Directors is soliciting proxies for the 2002 Annual
Meeting of Shareholders. This proxy statement contains important information for
you to consider when deciding how to vote on the matters brought before the
meeting. We encourage you to read it carefully.
Voting Information
The Board set April 1, 2002 as the record date for the meeting.
Shareholders owning our common stock at the close of business on that date are
entitled to attend and vote at the meeting, with each share entitled to one
vote. There were 1,150,000 shares of common stock outstanding on the record
date. A majority of the outstanding shares of common stock represented at the
meeting will constitute a quorum. We will count abstentions and broker
non-votes, which are described below, in determining whether a quorum exists.
When you sign the proxy card, you appoint R. Arthur Seaver, Jr. and Mr.
Fred Gilmer, Jr. as your representatives at the meeting. Mr. Seaver and Mr.
Gilmer will vote your proxy as you have instructed them on the proxy card. If
you submit a proxy but do not specify how you would like it to be voted, Mr.
Seaver and Mr. Gilmer will vote your proxy for the election to the board of
directors of all nominees listed below under "Election of Directors". We are not
aware of any other matters to be considered at the meeting. However, if any
other matters come before the meeting, Mr. Seaver and Mr. Gilmer will vote your
proxy on such matters in accordance with their judgment.
You may revoke your proxy and change your vote at any time before the
polls close at the meeting. You may do this by signing and delivering another
proxy with a later date or by voting in person at the meeting. Brokers who hold
shares for the accounts of their clients may vote these shares either as
directed by their clients or in their own discretion if permitted by the
exchange or other organization of which they are members. Proxies that brokers
do not vote on some proposals but that they do vote on others are referred to as
"broker non-votes" with respect to the proposals not voted upon. A broker
non-vote does not count as a vote in favor of or against a particular proposal
for which the broker has no discretionary voting authority. In addition, if a
shareholder abstains from voting on a particular proposal, the abstention does
not count as a vote in favor of or against the proposal.
We are paying for the costs of preparing and mailing the proxy
materials and of reimbursing brokers and others for their expenses of forwarding
copies of the proxy materials to our shareholders. Upon written or oral request,
we will promptly deliver a separate copy of our annual report, our annual report
on Form 10-KSB, or this proxy statement to our shareholders at a shared address
to which a single copy of the document was delivered. Our officers and employees
may assist in soliciting proxies but will not receive additional compensation
for doing so. We are distributing this proxy statement on or about April 15,
2002.
3
Proposal No. 1: Election of Directors
The Board of Directors is divided into three classes with staggered
terms, so that the terms of only approximately one-third of the Board members
expire at each annual meeting. The current terms of the Class III directors will
expire at the meeting. The terms of the Class I directors expire at the 2003
Annual Shareholders Meeting. The terms of the Class II directors will expire at
the 2004 Annual Shareholders Meeting. Our directors and their classes are:
Class I Class II Class III
------- -------- ---------
Mark A. Cothran Leighton M. Cubbage Andrew B. Cajka
Rudolph G. Johnstone, III, M.D. David G. Ellison Anne S. Ellefson
Keith J. Marrero James B. Orders Fred Gilmer, Jr.
R. Arthur Seaver, Jr. William B. Sturgis Tecumseh Hooper, Jr.
Shareholders will elect four nominees as Class III directors at the
meeting to serve a three-year term, expiring at the 2005 Annual Meeting of
Shareholders. The directors will be elected by a plurality of the votes cast at
the meeting. This means that the four nominees receiving the highest number of
votes will be elected.
The board of directors recommends that you elect Andrew B. Cajka, Anne
S. Ellefson, Fred Gilmer, Jr., and Tecumseh Hooper, Jr. as Class III directors.
If you submit a proxy but do not specify how you would like it to be
voted, Mr. Gilmer and Mr. Seaver will vote your proxy to elect Ms. Ellefson and
Messrs. Cajka, Gilmer, and Hooper. If any of these nominees is unable or fails
to accept nomination or election (which we do not anticipate), Mr. Gilmer and
Mr. Seaver will vote instead for a replacement to be recommended by the board of
directors, unless you specifically instruct otherwise in the proxy.
Set forth below is certain information about the nominees. Each of the
nominees is also a director and organizer of our subsidiary, Greenville First
Bank:
Andrew B. Cajka, 42, Class III director, is the founder and president
of Southern Hospitality Group, LLC, a hotel management and development company
in Greenville, South Carolina. Prior to starting his own business, Mr. Cajka was
a managing member of Hyatt Hotels Corporation from 1986 until 1998. He is a
graduate of Bowling Green State University in 1982. Mr. Cajka served on the
board of directors for the Greenville Chamber of Commerce and is past president
of the downtown area council as well as past chairman of Greenville Hospital
Foundation Board, and past chairman of the Children's Hospital. He currently
serves as Trustee of St. Joseph's High School and is a past chairman of the
Foundation Board at St. Joseph's High School. He is also a past chairman of the
Greenville Tech Hospitality Board, and of the Greenville Convention and Visitors
Bureau. Mr. Cajka serves as a board member of the Urban League, Thornblade Board
of Governors, chair elect of the Convention and Visitors Bureau, and secretary
and treasurer of Greenville County Research & Technological Development
Corporation.
Anne S. Ellefson, 47, Class III director, is an attorney and
shareholder with Haynsworth Sinker Boyd, P.A., where she has practiced law since
1979. Mrs. Ellefson is a 1976 graduate of the University of South Carolina where
she received a bachelors decree and a 1979 graduate of the University of South
Carolina School of Law. Mrs., Ellefson previously served on advisory boards at
both United Carolina Bank and BB&T. She is Chairman of the Greater Greenville
Chamber of Commerce and on the Board of United Way of Greenville County.
4
Fred Gilmer, Jr., 66, Class III director, is the senior vice president
and corporate secretary of our company and subsidiary bank. He is a seasoned
banker with over 42 years of experience in the financial industry. Mr. Gilmer
was involved with the organization of Southern Bank and Trust Company and has
held executive positions with two other banks in the Greenville area. He
graduated from the University of Georgia in 1958 and the LSU Graduate School of
Banking of the South in Baton Rouge, Louisiana in 1970. Mr. Gilmer is very
active in the Greenville community. He is a graduate of Leadership Greenville
and presently serves numerous organizations, including the Greenville Rotary
Club, the Greenville Chamber of Commerce, the YMCA, the United Way, and the
First Presbyterian Church. He is a past board member of Family Children Service,
Goodwill Industries, Downtown Area Council, Greenville Little Theater,
Greenville Cancer Society, South Carolina Arthritis Foundation, Freedom Weekend
Aloft, and the Greenville Chamber of Commerce.
Tecumseh "Tee" Hooper, Jr., 54, Class III director, is a private
investor. He is also a director of Homegold, Inc., a sub-prime mortgage lender,
and a director of Peregrine Energy, Inc., an energy management company. Mr.
Hooper has been the president of IKON Office Solutions in Greenville, South
Carolina, from 1982 through 2001. From 1994 until 1997, he served as a director
of Carolina Investors, a savings and loan institution. Mr. Hooper graduated from
The Citadel in 1969 with a degree in business administration, and he received a
Masters in Business Administration from the University of South Carolina in
1971. Mr. Hooper has served the community as a member of the Greenville County
Development Board, the Greenville Chamber of Commerce, and the board of
directors for Camp Greenville, as well as the vice chairman of communications
for the United Way. Mr. Hooper also serves on the board of directors for
Leadership Greenville, Leadership South Carolina, and the YMCA Metropolitan.
Set forth below is also information about each of the company's other
directors and each of its executive officers. Each director is also an organizer
and a director of our subsidiary bank.
Mark A. Cothran, 44, Class I director, is the president and owner of
Cothran Properties, LLC, a real estate development company in Greenville, South
Carolina. He has been with Cothran Properties, LLC since 1986. Mr. Cothran
received his bachelor degree in finance and banking from the University of South
Carolina in 1980 and is a licensed real estate broker in the State of South
Carolina. He currently serves on the National Business Park Forum of the
National Association of Industrial and Office Properties (NAIOP) and is past
president of the state chapter of NAIOP. He has served on the board of directors
of the Greenville Chamber of Commerce and on the Advisory Board of Greenville
National Bank and is currently a member of the Chamber's Economic Development
Board.
Leighton M. Cubbage, 49, Class II director, is also the chief executive
officer of Ionosphere and was the co-founder, president, and chief operating
officer of Corporate Telemanagement Group in Greenville, South Carolina from
1989 until 1995, when the company was acquired by LCI International. Since 1995,
Mr. Cubbage has been a private investor maintaining investment interests in a
telecommunications company, car dealerships, and a trucking company. He is a
1977 graduate of Clemson University with a bachelors degree in political
science. Mr. Cubbage is a member of the Greenville Technical College Foundation
Board, a member of the Clemson University Entrepreneurial Board, and a trustee
of the Greenville Hospital System.
David G. Ellison, 52 Class II director, is the District Director of
Northwestern Mutual Financial Network, since 1983. Mr. Ellison is a 1972
graduate of Furman University where he received a bachelors degree and a 1976
graduate of the Clemson-Furman University Program where he received a masters in
business administration. Mr. Ellison is on the board of trustees of Furman
University and past president of both the Furman Alumni Association and Furman
Paladin Club. He is also on the board of trustees for United Way of Greenville
County. He previously was a commissioner of the Greenville Housing Authority and
is a current member of the Rotary Club of Greenville, South Carolina.
5
Fred Gilmer, III, 37, is the Senior Vice President and Senior Lending
Officer of our company and subsidiary bank. He has over 14 years of banking
experience. From 1987 until 1999, Mr. Gilmer held various management positions
with Wachovia Bank, N.A., including Commercial Lending, City Executive, and Vice
President in Private Banking. Mr. Gilmer is a 1986 graduate of Clemson
University with a bachelors degree in management and a graduate of Leadership
Greenville. He has served on the community boards of Metro YMCA and is the past
chairman of Cleveland Street YMCA. Other activities include Greenville Chamber
of Commerce, United Way loan executive, Greenville Convention and Visitors
Bureau and Rotary Club of Greenville. He is active at Buncombe Street United
Methodist Church serving in various roles including the Board of Stewards and
currently serves on the board of directors for the Bon Secours St. Francis
Foundation.
Rudolph "Trip" G. Johnstone, III, M.D., 41, Class I director, is a
physician who has practiced with the Cross Creek Asthma, Allergy and Immunology
medical clinic, since 1992. He graduated from Washington & Lee University in
1982 with a degree in biology and from the Medical University of South Carolina
in 1986. Dr. Johnstone served on the consulting board to Greenville National
Bank from 1995 until 1998, when it was acquired by Regions Bank. He is on the
board of directors of Allergy Partners, PA and immediate past president of the
Southeastern Asthma, Allergy and Immunology Society.
Keith J. Marrero, 42, Class I director, is the president and owner of
AMI Architects, LLC, an architectural firm located in Greenville, South Carolina
that was founded in 1988. Mr. Marrero is a previous advisory board member of
BB&T. He graduated from the University of Notre Dame with a bachelor's degree in
Architecture in 1983. Mr. Marrero was appointed by former Governor David Beasley
to the board of directors of the South Carolina Legacy Trust Fund. He is a
member of the American Institute of Architects and the National Council of
Architecture Registration. He is licensed to practice architecture in the states
of South Carolina, North Carolina, Louisiana, and Georgia. Mr. Marrero currently
serves on the advisory board for the School of Architecture at the University of
Notre Dame, YMCA board, South Carolina Children's Board, Urban League Board,
Upstate Forever Board, Community Foundation Board, and a member of the Greater
Greenville Community Forum Steering Committee.
James B. Orders, III, 49, Class II director, is the Chairman of the
Board for Greenville First Bancshares. He has been the president of Park Place
Corporation, a company engaged in the manufacture and sale of bedding and
upholstered furniture to the wholesale market, since 1986. Mr. Orders is
chairman of Comfortaire Corporation and a director of Orders Realty Co., Inc., a
real estate development and management company that is a wholly owned subsidiary
of Park Place Corporation. He attended Clemson University from 1970 until 1974.
Mr. Orders is the past president of the International Sleep Products
Association, past president of the Downtown Rotary Club, a past member of the
advisory board of Greenville National Bank, and a past member of the advisory
board of Carolina First Bank. In addition, he is a member of the Lay Christian
Association Board.
R. Arthur "Art" Seaver, Jr., 38, Class I director, is the president and
chief executive officer of our company and our subsidiary bank. He has over 15
years of banking experience. From 1986 until 1992, Mr. Seaver held various
positions with The Citizens & Southern National Bank of South Carolina,
including assistant vice president of corporate banking. From 1992 until
February 1999, he was with Greenville National Bank, which was acquired by
Regions Bank in 1998. He was the senior vice president in charge of Greenville
National Bank's liability portion of the balance sheet prior to leaving to form
Greenville First Bank. Mr. Seaver is a 1986 graduate of Clemson University with
a bachelors degree in Finance and a 1999 graduate of the BAI Graduate School of
Community Bank Management. He is very active in the Greenville community, where
he currently works on the board of the Palmetto Society for the United Way and
the advisory board of the Junior League. Past organizations that he has worked
with include Leadership Greenville, Greenville Chamber of Commerce, South
Carolina Network of Business and Education Partnership, Junior Achievement, the
Greenville Convention and Visitors Bureau, the United Way, and the First
Presbyterian Church.
6
William B. Sturgis, 67, Class II director, held various executive
positions with W.R. Grace & Co. from 1984 until his retirement in 1997,
including executive vice president of W.R. Grace's worldwide packaging
operations and president of its North American Cryovac Division. Mr. Sturgis
graduated from Clemson University in 1957 with a degree in chemical engineering
and is a graduate of the Advanced Management Program at Harvard. He is active
with Clemson University, serving on the Foundation Board, the President's
Advisory Council, and the Engineering Advisory Board. He is also a board member
of the Peace Center and a member of the Downtown Rotary Club and Presbyterian
Community Foundation.
James "Jim" M. Austin, III, 45, is the senior vice president and chief
financial officer of our company and subsidiary bank. He has over 23 years of
experience in the financial services industry. From 1978 to 1983, Mr. Austin was
employed by KPMG Peat Marwick specializing in bank audits. Mr. Austin was
employed for 12 years with American Federal Bank as controller and senior vice
president responsible for the financial accounting and budgeting. From 1995
until 1997, Mr. Austin was the senior vice president and chief financial officer
of Regional Management Corporation, a 58-office consumer finance company where
he was responsible for the finance and operations area of the company. From 1997
until July 1999, he was the director of corporate finance for Homegold
Financial, a national sub-prime financial services company that specializes in
mortgage loan originations. Mr. Austin is a 1978 graduate of the University of
South Carolina with degrees in accounting and finance. He is also a Certified
Public Accountant and graduate of the University of Georgia's Executive
Management's Savings Bank program. He is a graduate of Leadership Greenville. He
has served on the community boards of River Place Festival, Junior Achievement,
and Pendleton Place, and he is the past president of the Financial Manager's
Society of South Carolina and former board member of the Young Manager's
Division of the Community of Financial Institutions of South Carolina. He is
active in the First Presbyterian Church and currently serves as chairman of the
Center for Development Services.
Family Relationships. Dr. Randolph G. Johnstone, III, director, is Fred
Gilmer, Jr.'s stepson and Fred Gilmer, III, senior vice president, is Fred
Gilmer Jr.'s son. No other director has a family relationship with any other
director or executive officer of the company.
7
Compensation of Directors and Executive Officers
Summary of Cash and Certain Other Compensation
The following table shows the cash compensation we paid to our chief
executive officer and president for the years ended December 31, 2001 through
1999 and for all other executives who earned over $100,000 for the year ended
2001.
Summary Compensation Table
Long Term
Annual Compensation Compensation Awards
Other Annual Number of Securities
Name and Principal Position Year Salary Bonus Compensation Underlying Options
--------------------------- ---- ------ ----- ------------ ------------------
R. Arthur Seaver 2001 $ 130,667 45,000 $ 6,925 --
President and Chief Executive 2000 $ 123,100 40,000 $ 7,934 --
Officer of the Company and 1999 $ 108,019 -- $ 7,000 57,500
the Bank
James M. Austin 2001 $ 104,167 32,000 $ 9,067 2,500
Senior Vice President and 2000 $ 97,667 22,500 $ 3,907 10,000
Chief Financial Officer 1999 -- -- -- --
of the Company and the Bank
Fred Gilmer, III 2001 $ 104,167 50,400 $10,609 2,500
Senior Vice President 2000 $ 81,250 28,100 $ 9,250 5,000
of the Bank 1999 -- -- -- --
Option Grants In Last Fiscal Year
The following table sets forth information concerning the grant of
stock options to our named executive officers during the year ended December 31,
2001.
Number of Percent of
Securities Total Options Exercise or
Underlying Granted to Base Price
Options Employees in (Dollars per Expiration
Granted Fiscal Year Share) Date
------------------------------------------------------------------
James M. Austin, III 2,500 16.1% $ 10.00 02/20/11
Fred Gilmer, III 2,500 16.1% $ 10.00 02/20/11
In 2001, we also granted 10,500 options to employees pursuant to the Greenville
First Bancshares, Inc. 2001 Stock Incentive Plan, approved by our board of
directors and shareholders. We may grant a total of 172,500 stock options under
the 2001 Stock Incentive Plan to our officers, directors, and employees.
8
Aggregated Option Exercise and Year-end Option Values
Number of Unexercised Securities Value of Unexercised In-the-Money
Underlying Options at Fiscal Year End Options at Fiscal Year End ($)(1)
---------------------------------------- -------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
James M. Austin, III 7,500 5,000 $ 8,625 $ 5,750
Fred Gilmer, III 4,167 3,333 $ 4,792 $ 3,833
R. Arthur Seaver, Jr. 23,000 34,500 $ 26,450 $ 39,675
(1) The last trade of which we are aware prior to April 1, 2002 was at $11.15.
All options and warrants granted as of December 31, 2001 are exercisable at
$10.00 per share making their value $1.15 per share.
Employment Agreements
We have entered into an employment agreement with Art Seaver on July
27, 1999, for an annually renewing three-year term, pursuant to which he serves
as the president, the chief executive officer, and a director of both our
company and our subsidiary bank. Mr. Seaver is paid an initial salary of
$123,000, plus his yearly medical insurance premium. He also will receive an
annual increase in his salary equal to the previous year's salary times the
increase in the Consumer Price Index during the previous year. The board of
directors may increase Mr. Seaver's salary above this level, but not below it.
He is eligible to receive an annual bonus of up to 5% of the net pre-tax income
of our bank, if the bank meets performance goals set by the board. He is also
eligible to participate in any management incentive program of the bank or any
long-term equity incentive program and is eligible for grants of stock options
and other awards thereunder. Mr. Seaver was granted options to purchase a number
of shares of common stock equal to 5% of the number of shares sold in offering,
or 57,500 shares. These options vest over a five-year period beginning on the
first anniversary of the bank's opening and have a term of ten years.
Additionally, Mr. Seaver participates in the bank's retirement, welfare, and
other benefit programs and is entitled to a life insurance policy and an
accident liability policy and reimbursement for automobile expenses, club dues,
and travel and business expenses.
Mr. Seaver's employment agreement also provides that following
termination of his employment and for a period of 12 months thereafter, he may
not (a) compete with the company, the bank, or any of its affiliates by,
directly or indirectly, forming, serving as an organizer, director or officer
of, or consultant to, or acquiring or maintaining more than 1% passive
investment in, a depository financial institution or holding company thereof if
such depository institution or holding company has one or more offices or
branches within radius of thirty miles from the main office of the company or
any branch office of the company, (b) solicit major customers of the bank for
the purpose of providing financial services, or (c) solicit employees of the
bank for employment. If Mr. Seaver terminates his employment for good cause as
that term is defined in the employment agreement or if he is terminated
following a change in control of Greenville First Bancshares as defined in the
agreement, he will be entitled to severance compensation of his then current
monthly salary for a period of 12 months, plus accrued bonus, and all
outstanding options and incentives shall vest immediately.
Director Compensation
We paid each of our ten outside directors $200 for each board meeting
they attended and $50 for each committee meeting they attended. Beginning in
2002, we plan to pay our outside directors $200 for each board meeting they
attend and $100 for each committee meeting they attend.
9
Security Ownership of Certain
Beneficial Owners and Management
General
The following table shows how much common stock in the company is owned
by the directors, certain executive officers, and owners of more than 5% of the
outstanding common stock, as of April 1, 2002. In addition, each organizer
received a warrant to purchase one share of common stock at a purchase price of
$10.00 per share for every two shares purchased by that organizer in the
offering, or 129,450 shares. The warrants, which are represented by separate
warrant agreements, vest over a three year period beginning on January 10, 2001
and are exercisable in whole or in part during the ten year period following
that date.
Right Percentage of
Number of To Beneficial
Name Shares Owned(1) Acquire(2) Ownership(3)
---- --------------- ---------- -------------
James M. Austin, III 7,000 7,500 1.25%
Andrew B. Cajka, Jr. 10,000 3,333 1.16%
Mark A. Cothran 30,000 10,000 3.45%
Leighton M. Cubbage 83,800 26,667 9.39%
Anne S. Ellefson 3,750 -- *
David Ellison 6,275 -- *
Fred Gilmer, Jr. 17,300 12,433 2.56%
Fred Gilmer, III 1,500 4,667 *
Tecumseh Hooper, Jr. 13,000 5,000 1.56%
Rudolph G. Johnstone, III 10,600 3,533 1.23%
Keith J. Marrero 4,000 1,333 *
James B. Orders, III 20,100 6,667 2.31%
R. Arthur Seaver, Jr. 12,000 27,000 3.31%
William B. Sturgis 4,500 20,000 2.09%
All directors and executive officers 223,825 128,133 27.54%
as a group (12 persons)
* Indicates less than 1%
(1) Includes shares for which the named person:
o has sole voting and investment power,
o has shared voting and investment power with a spouse, or
o holds in an IRA or other retirement plan program, unless
o therwise indicated in these footnotes. Does not include shares
that may be acquired by exercising stock options.
(2) Includes shares that may be acquired within the next 60 days by
exercising vested stock options and warrants but does not include any
other stock options or warrants.
(3) Determined by assuming the named person exercises all options
and warrants which he or she has the right to acquire within 60 days,
but that no other persons exercise any options.
10
Meetings and Committees of the Board of Directors
During the year ended December 31, 2001, the board of directors of the
company held 12 meetings and the board of directors of the bank, held 12
meetings. All of the directors of the company and the bank attended at least 75%
of the aggregate of such board meetings and the meetings of each committee on
which they served.
The company's board of directors has appointed three committees,
including an audit, personnel, and finance committee. The audit committee is
composed of Mr. Cajka, Mr. Hooper, Mrs. Ellefson, Mr. Marrero, Mr. Sturgis, and
Mr. Cubbage. Each of these members are considered "independent" under Rule
4200(a)(14) of the National Association of Securities Dealers' listing
standards. The audit committee met two times in 2001. The audit committee
functions are set forth in its charter, which is included as Appendix A. The
audit committee has the responsibility of reviewing financial statements,
evaluating internal accounting controls, reviewing reports of regulatory
authorities, and determining that all audits and examinations required by law
are performed. The committee recommends to the board the appointment of the
independent auditors for the next fiscal year, reviews and approves the
auditor's audit plans, and reviews with the independent auditors the results of
the audit and management's responses. The audit committee is responsible for
overseeing the entire audit function and appraising the effectiveness of
internal and external audit efforts. The audit committee reports it findings to
the board of directors.
The personnel committee is composed of Mr. Sturgis, Mr. Cothran, Mr.
Cubbage, Dr. Johnstone, Mr. Ellison, Mr. Seaver, and Mr. Marrero. The personnel
committee met two times in 2001. The personnel committee has the responsibility
of approving the compensation plan for the entire bank and specific compensation
for all executive officers. The personnel committee reviews all benefit plans
and annually reviews the performance of the chief executive officer.
The finance committee is composed of Mr. Orders, Mr. Cajka, Mr.
Cothran, Mrs. Ellefson, Mr. Ellison, Mr. Gilmer, Mr. Hooper, Dr. Johnstone and
Mr. Seaver. The finance committee has the responsibility of reviewing the
loan policy, investment policy, and the bank's asset/liability structure.
We do not have a nominating committee or a committee serving a similar
function.
Report of The Audit Committee of the Board
The report of the audit committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the company specifically
incorporates the information contained in the report by reference, and shall not
be deemed filed under such acts.
The audit committee reviewed and discussed with management the audited
financial statements. The audit committee discussed with the independent
auditors the matters required to be discussed by the Statement on Auditing
Standards No. 61. The audit committee received from the independent auditors the
written disclosures and the letter required by the Independent Standards Board
Standard No. 1 ("Independence Discussions with Audit Committees") and discussed
with the independent auditors the independent auditor's independence from the
company and its management. In reliance on the reviews and discussions referred
to above, the audit committee recommended to our board of directors that the
audited financial statements be included in our Annual Report on SEC Form 10-KSB
for the fiscal year ended December 31, 2001 for filing with the SEC.
The report of the audit committee is included herein at the direction
of its members Mr. Cajka, Mr. Hooper, Mrs. Ellefson, Mr. Marrero, Mr. Sturgis,
and Mr. Cubbage.
11
Audit Fees
The aggregate fees billed for professional services rendered by the
independent auditors during our 2001 fiscal year for audit of our annual
financial statements and review of those financial statements included in our
quarterly reports filed on SEC Form 10-QSB totaled $4,800. The company estimates
that an additional $9,000 will be billed during 2002 for the above services.
Financial Information Systems Design and Implementation Fees
We did not engage the independent auditors to provide, and the
independent auditors did not bill for, professional services regarding financial
information systems design and implementation during the year ended December 21,
2001.
All Other Fees
The aggregate fees billed for non audit services rendered by the
independent auditors during the company's fiscal year totaled $4,825. Non-audit
services included internal audit services, and income tax return preparation.
The company estimates that the independent auditors will bill an additional
$1,800 during 2002 for non-audit services provided in 2001.
Certain Relationships and Related Transactions
Interests of Management and Others in Certain Transactions
We enter into banking and other transactions in the ordinary course of
business with our directors and officers of the company and the bank and their
affiliates. It is our policy that these transactions be on substantially the
same terms (including price, or interest rates and collateral) as those
prevailing at the time for comparable transactions with unrelated parties. We do
not expect these transactions to involve more than the normal risk of
collectibility nor present other unfavorable features to us. Loans to individual
directors and officers must also comply with our bank's lending policies and
statutory lending limits, and directors with a personal interest in any loan
application are excluded from the consideration of the loan application. We
intend for all of our transactions with our affiliates to be on terms no less
favorable to the us than could be obtained from an unaffiliated third party and
to be approved by a majority of disinterested directors.
We leased our bank's main facility from Halton Properties, LLC for a
term of 20 years beginning in 2001. The lease requires us to make a $26,854
monthly payment for the next year. Mark A. Cothran, one of our directors, is a
50% owner of Halton Properties, LLC. We have conducted two separate appraisals
of the lease and the property and believe that the terms of the proposed lease
are on substantially the same terms as those prevailing at the time for
comparable transactions with unrelated parties.
12
Compliance with Section 16(a) of the Securities Exchange Act of 1934
As required by Section 16(a) of the Securities Exchange Act of 1934,
our directors, and executive officers and certain other individuals are required
to report periodically their ownership of our common stock and any changes in
ownership to the SEC. Based on a review of Forms 3, 4, and 5 and any
representations made to us, it appears that all such reports for these persons
were filed in a timely fashion during 2001 except that a timely filing on Form 4
was not made for the following directors: Ms. Ellefson purchased 2,250 shares
during 2001. She purchased 250 shares in February, 250 shares in March, 1,000
shares in June, 500 shares in July, 750 shares in September. We filed a late
Form 4 for all of the stated purchases made during the year 2001. We have also
amended her original Form 3 filing to correctly show her beneficial ownership
prior to becoming a director of our company. Mssr. Ellison purchased 2,275
shares during 2001. He purchased 775 shares in March and 1,500 shares in October
for which we filed a late Form 4 in December 2001 to report these transactions.
In our initial offering, Mssr. Hooper purchased 15,000 shares, of which he
placed 2,000 shares in each of his two children's names. We have amended Mr.
Hooper's Form 3 to reflect his beneficial ownership of 13,000 shares. Mssr.
Orders's has a minor child who was gifted 100 shares in December 15, 2000 for
which Mr. Orders has voting power and we filed a late Form 5. Mssr. Sturgis
purchased 2,500 shares on March 15, 2001 for which we filed a late Form 4 in
December 2001 to report this transaction. Mssr. Marrero inadvertently reported
on his Form 3 for his original purchase his ownership of 5,000 shares. Mssr.
Marrero purchased 4,000 shares and has warrants for 2,000 shares. An amended
Form 3 was filed to correctly report Mssr. Marrero's ownership.
Independent Auditors
We have selected the firm of Elliott Davis, LLP to serve as independent
auditors to the company for the year ended December 31, 2002. We do not expect a
representative of the firm to be present at our annual meeting.
Shareholder Proposals for the 2003 Annual Meeting of Shareholders
If shareholders wish a proposal to be included in our proxy statement
and form of proxy relating to the 2003 annual meeting, they must deliver a
written copy of their proposal to our principal executive offices no later than
December 15, 2002. To ensure prompt receipt by the company, the proposal should
be sent certified mail, return receipt requested. Proposals must comply with our
bylaws relating to shareholder proposals in order to be included in our proxy
materials.
April 15, 2002
13
PROXY SOLICITED FOR ANNUAL MEETING
OF SHAREHOLDERS OF
GREENVILLE FIRST BANCSHARES, INC.
to be held on May 15, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints Fred Gilmer, Jr. and R. Arthur
Seaver, Jr. and each of them, his or her true and lawful agents and proxies with
full power of substitution in each, to represent and vote, as indicated below,
all of the shares of common stock of Greenville First Bancshares, Inc. that the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
the company to be held at the bank's main office at 112 Haywood Road,
Greenville, South Carolina, at 4:30 p.m. local time, and at any adjournment,
upon the matters described in the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement, receipt of which is acknowledged. These
proxies are directed to vote on the matters described in the Notice of Annual
Meeting of Shareholders and Proxy Statement as follows:
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted: "for" Proposal No. 1 to elect the four identified Class III
directors to serve on the board of directors for three-year terms.
1. PROPOSAL to elect the four identified Class III directors to serve for
three year terms
Andrew B. Cajka
Anne S. Ellefson
Fred Gilmer, Jr.
Tecumseh Hooper, Jr.
|_| FOR all nominees |_| WITHHOLD AUTHORITY
listed (except as marked to to vote for all nominees
the contrary)
(INSTRUCTION: To withhold authority to vote for any individual nominee(s), write
that nominees name(s) in the space provided below).
Dated: , 2002 Dated: , 2002
--------------------------- -----------------------
Signature of Shareholder(s) Signature of Shareholder(s)
Please print name clearly Please print name clearly
Please sign exactly as name or names appear on your stock certificate. Where
more than one owner is shown on your stock certificate, each owner should sign.
Persons signing in a fiduciary or representative capacity shall give full title.
If a corporation, please sign in full corporate name by authorized officer. If a
partnership, please sign in partnership name by authorized person.
Appendix A
Charter of the Audit Committee of the Board of Directors
Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit
Committee's primary duties and responsibilities are to:
o Monitor the integrity of the Company's financial
reporting process and systems of internal controls regarding
finance, accounting, and legal compliance.
o Monitor the independence and performance of the Company's
independent auditors and internal auditing department.
o Provide an avenue of communication among the independent
auditors, management, the internal auditing department, and the
Board of Directors.
The Audit 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 Audit 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.
Audit Committee Composition and Meetings
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent nonexecutive
directors, free from any relationship that would interfere the exercise
of his or her independent judgement. All members of the Committee
should have a basic understanding of finance and accounting and be able
to read and understand fundamental financial statements, and at least
one member of the Committee shall have accounting or related financial
management expertise.
Audit Committee members shall be appointed by the Board. If an audit
committee Chair is not designated or present, the members of the
Committee may designate a Chair by majority vote of the Committee
membership.
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. The
Committee should meet privately in an executive session at least
annually with management, the director of the internal auditing
department, the independent auditors, and as a committee to discuss any
matters that the Committee or each of these groups believe should be
discussed. In addition, the Committee, or at least the Chair, should
communicate with management and the independent auditors quarterly to
review the Company's financial statements and significant findings
based upon the auditors limited review procedures.
A-1
Audit Committee Responsibilities and Duties
Review Procedures
1. Review and reassess the adequacy of this 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.
2. Review the Company's annual audited financial
statements prior to filing or distribution. Review should
included discussion with management and independent auditors
of significant issues regarding accounting principles,
practices, and judgments.
3. In consultation with the management, the independent
auditors, the 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 independent
auditors and the internal auditing department together with
management responses.
4. Review with financial management and the independent
auditors 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 in the Company's accounting principles
and any items required to be communicated by the independent
auditors in accordance with SAS 61 (see item 9). The Chair of
the Committee may represent the entire Audit Committee for
purposes of this review.
Independent Auditors
5. The independent auditors are ultimately accountable to
the Audit Committee and the Board of Directors. The Audit
Committee shall review the independence and performance of the
auditors and annually recommend to the Board of Directors the
appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid
to the independent auditors.
7. On an annual basis, the Committee shall review and
discuss with the independent auditors all significant
relationships they have with the Company that could impair the
auditor's independence.
8. Review the independent auditor's audit plan - discuss
scope, staffing, locations, reliance upon management, and
internal audit and general audit approach.
9. Prior to releasing the 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 AICPA SAS 61.
10. Consider the independent auditor's judgments about the
quality and appropriateness of the Company's
accounting principles as applied in its financial reporting.
11. Review the budget, plan, changes in plan, activities,
organizational structure, and qualifications of
the internal audit department, as needed.
A-2
Internal Audit Department and Legal Compliance
12. Review the appointment, performance, and replacement of the
individual responsible for the internal audit function.
13. Review significant reports prepared by the internal audit
function together with management's response
and follow-up to these reports.
14. 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
15. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be
included in the Company's annual proxy statement.
16. Perform any other activities consistent with this
charter, the Company's by-laws, and governing law, as the
Committee or the Board deem necessary or appropriate.
17. Maintain minutes of meetings and periodically report to the
Board of Directors on significant results of
the foregoing activities.
A-3