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 2003 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 2002 and answer your
questions. We are excited about our accomplishments in 2002 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 14, 2003 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,
2003 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 note, if your shares are held in "street name," you will need to obtain a
proxy form from the institution that holds your shares in order to vote at our
annual 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 14, 2003
GREENVILLE FIRST BANCSHARES, INC.
112 Haywood Road
Greenville, South Carolina 29607
Proxy Statement for Annual Meeting of
Shareholders to be Held on May 14, 2003
Our Board of Directors is soliciting proxies for the 2003 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, 2003 as the record date for the meeting.
Shareholders owning our common stock at the close of business on that date are
entitled to vote and to attend the meeting, with each share entitled to one
vote. If you are a registered shareholder who wishes to vote at our annual
meeting, you may do so by delivering your proxy card in person at the meeting.
"Street name" shareholders who wish to vote at our annual meeting will need to
obtain a proxy form from the institution that holds their shares. 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 James B. Orders, III and Mr. Fred
Gilmer, Jr. as your representatives at the meeting. Mr. Orders 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. Orders
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. Orders 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 14, 2003.
2
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 I directors will expire at
the meeting. The terms of the Class II directors expire at the 2004 Annual
Shareholders Meeting. The terms of the Class III directors will expire at the
2005 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, III Fred Gilmer, Jr.
R. Arthur Seaver, Jr. William B. Sturgis Tecumseh Hooper, Jr.
Shareholders will elect four nominees as Class I directors at the meeting
to serve a three-year term, expiring at the 2006 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 Mark A. Cothran, Rudolph
G. Johnstone, III, M.D., Keith J. Marrero, and R. Arthur Seaver, Jr. as Class I
directors.
If you submit a proxy but do not specify how you would like it to be voted,
Mr. Orders and Mr. Gilmer will vote your proxy to elect Messrs. Cothran,
Marrero, and Seaver and Dr. Johnstone. If any of these nominees is unable or
fails to accept nomination or election (which we do not anticipate), Mr. Orders
and Mr. Gilmer 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:
Mark A. Cothran, 45, 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.
Rudolph "Trip" G. Johnstone, III, M.D., 42, 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.
3
Keith J. Marrero, 43, 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, University Center Board of Visitors, Urban League Board,
Upstate Forever Board, Community Foundation Board, and a member of the Greater
Greenville Community Forum Steering Committee.
R. Arthur "Art" Seaver, Jr., 39, Class I director, is the president and
chief executive officer of our company and our subsidiary bank. He has over 16
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.
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.
James "Jim" M. Austin, III, 46, is the senior vice president and chief
financial officer of our company and subsidiary bank. He has over 24 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
Board for the Center for Development Services.
Andrew B. Cajka, 43, 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 of the Convention and Visitors Bureau, and secretary and
past treasurer of Greenville County Research & Technological Development
Corporation.
4
Leighton M. Cubbage, 51, Class II director, is 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 is Chairmen
of the board of trustees of the Greenville Hospital System.
Anne S. Ellefson, 48, Class III director, is an attorney and shareholder
with Haynsworth Sinkler 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 a Past Chairman of the Greater
Greenville Chamber of Commerce and on the Board of United Way of Greenville
County.
David G. Ellison, 53, Class II director, is the managing 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 where he is a former board chair. He is 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 is prior commissioner of the
Greenville Housing Authority.
Fred Gilmer, Jr., 67, Class III director, is the senior vice president and
corporate secretary of our company and subsidiary bank. He is a seasoned banker
with over 43 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.
Fred Gilmer, III, 38, is the senior vice president and senior lending
officer of our bank. He has over 15 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.
5
Tecumseh "Tee" Hooper, Jr., 55, Class III director, is a private investor.
Since 2002, Mr. Hooper has been the president and chief executive officer of
ProfitLab, Inc., a web-based telecom expense management company headquartered in
Greenville, South Carolina, and he was recently appointed to serve as the
chairman of the South Carolina Department of Transportation. He is also a
director of Peregrine Energy, Inc., an energy management company. Mr. Hooper was
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 board member of the Greenville County
Development Board authority, 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 has also served on the board of directors for
Leadership Greenville, Leadership South Carolina, the YMCA Metropolitan, and
chairman of Patriots Point Development Authority.
James B. Orders, III, 50, Class II director, is the chairman of our board
of directors. 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.
William B. Sturgis, 68, 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.
Family Relationships. Dr. Randolph G. Johnston, 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.
6
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, 2002 through
2000 and for all other executives who earned over $100,000 for the year ended
2002.
Summary Compensation Table
Long Term
---------
Compensation
------------
Annual Compensation (1) Awards
----------------------- ------
Number of Securities All Other
Name and Principal Position Year Salary Bonus Underlying Options Compensation
--------------------------- ---- ------ ----- ------------------ ------------
R. Arthur Seaver 2002 $137,004 60,000 - $ 8,510(2)
President and Chief Executive 2001 $130,667 45,000 - $ 5,517
Officer of the Company and 2000 $123,100 40,000 - $ 4,357
the Bank
James M. Austin,III 2002 $110,000 37,000 2,500 $11,704(3)
Senior Vice President and 2001 $104,167 32,000 2,500 $ 9,879
Chief Financial Officer 2000 $ 97,667 22,500 10,000 $ 8,719
of the Company and the Bank
Fred Gilmer, III 2002 $ 93,500 57,600 4,000 $ 9,460(4)
Senior Vice President 2001 $ 87,125 50,400 2,500 $ 8,761
of the Bank 2000 $ 81,250 28,100 5,000 $ 7,402
---------------
(1) Executive officers of the company also received indirect compensation in
the form of certain perquisites and other personal benefits. The amount of
such benefits received in the fiscal year by each named executive officer
did not exceed the lesser of either $50,000 or 10% of the executive's
annual salary and bonus.
(2) Includes 401K contributions of $4,550 and medical insurance premiums of
$3,960.
(3) Includes 401K contributions of $5,500 and medical insurance premiums of
$6,204.
(4) Includes 401K contributions of $5,500 and medical insurance premiums of
$3,960.
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, 2002.
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 21.7% $11.35 01/15/12
Fred Gilmer, III 4,000 34.8% $11.35 01/15/12
---------------
In 2002, we also granted 5,000 options to employees pursuant to the Greenville
First Bancshares, Inc. 2001 Stock Incentive Plan, approved by our board of
directors and shareholders. We may grant a total of 172,500 stock options under
the 2001 Stock Incentive Plan to our officers, directors, and employees.
7
Aggregated Option Exercise and Year-end Option Values
Number of Unexercised Securities Value of Unexercised In-the-Money
Underlying Options at Fiscal Year End Options at Fiscal Year End ($)(1)
---------------------------------------- -------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
James M. Austin, III 9,375 5,625 $ 39,000 $21,375
Fred Gilmer, III 6,000 5,500 $ 24,150 $19,325
R. Arthur Seaver, Jr. 34,500 23,000 $146,625 $97,750
(1) The last trade of which we are aware prior to April 2, 2003 was at $14.25.
All options and warrants granted prior to December 31, 2002 are exercisable
at $10.00 per share; options granted in 2002 are exercisable at $11.35 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 was paid an initial salary of $123,000, plus
his yearly medical insurance premium. He also receives 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
In 2002, 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 2003, we plan to pay our outside directors $300 for each board
meeting they attend and $150 for each committee meeting they attend.
8
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, 2003. 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. Unless otherwise indicated, the mailing address for each beneficial
owner is care of Greenville First Bancshares, Inc., 112 Haywood Road,
Greenville, South Carolina 29607.
Number of Right Percentage of
Shares To Beneficial
Name Owned(1) Acquire(2) Ownership(3)
---- -------- ---------- ------------
James M. Austin, III 7,000 9,375 1.41%
Andrew B. Cajka, Jr. 10,000 5,000 1.30%
Mark A. Cothran 30,000 15,000 3.86%
Leighton M. Cubbage 83,800 40,000 10.40%
Anne S. Ellefson 5,800 - .50%
David Ellison 7,519 - .65%
Fred Gilmer, Jr. 17,300 16,150 2.87%
Fred Gilmer, III 1,500 6,750 .71%
Tecumseh Hooper, Jr. 13,000 7,500 1.77%
Rudolph G. Johnstone, III 10,600 5,300 1.38%
Keith J. Marrero 1,500 2,000 .30%
James B. Orders, III 20,100 10,000 2.59%
R. Arthur Seaver, Jr. 12,000 40,500 4.41%
William B. Sturgis 5,975 30,000 3.05%
All directors and executive officers
as a group (14 persons) 226,094 187,575 30.93%
---------------
(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 otherwise
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.
9
Meetings and Committees of the Board of Directors
During the year ended December 31, 2002, 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 four committees, including
an audit, personnel, nominating, 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 is considered "independent" under Rule
4200(a)(14) of the National Association of Securities Dealers' listing
standards. The audit committee met two times in 2002. The audit committee
functions are set forth in its charter, which was adopted in September 19, 2000.
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 2002. 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 met eleven times in 2002. The finance committee
has the responsibility of reviewing the loan policy, investment policy, and the
bank's asset/liability structure.
The nominating committee is composed of Mr. Cajka, Ms. Ellefson, and Mr.
Hooper. The nominating committee met once in 2003. The nominating committee
recommends nominees for election to the Board. The committee is comprised
entirely of independent directors. The committee will consider nominees
recommended by shareholders if proposals are submitted in accordance with the
procedures set forth in the section of this proxy statement entitled
"Shareholder Proposals for the 2004 Annual Meeting of Shareholders."
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 Independence 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, 2002 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.
10
Audit Fees
The aggregate fees billed for professional services rendered by the
independent auditors during our 2002 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 approximately $20,100.
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 31, 2002.
All Other Fees
The aggregate fees billed for non-audit services rendered by the
independent auditors during the company's fiscal year totaled $3,000. Non-audit
services included income tax return preparation. The audit committee believes
that the provision of those services is compatible with maintaining the
auditors' independence.
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 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 $27,659 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.
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 2002, except that a timely filing on Form
4 was not made for Mr. Ellison. He purchased 544 shares in February of 2002 for
which we filed a late Form 4 in April of 2002.
11
Independent Auditors
We have selected the firm of Elliott Davis, LLC to serve as independent
auditors to the company for the year ending December 31, 2003. We do not expect
a representative of the firm to be present at our annual meeting.
Shareholder Proposals for the 2004 Annual Meeting of Shareholders
If shareholders wish a proposal to be included in our proxy statement and
form of proxy relating to the 2004 annual meeting, they must deliver a written
copy of their proposal to our principal executive offices no later than December
18, 2003. 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.
Any shareholder proposal to be made at an annual meeting, but which is not
requested to be included in the company's proxy materials, must comply with the
company's bylaws, including the following requirements: Proposals for director
nominations must be delivered to the company's principal executive offices no
later than 90 days prior to the annual meeting of shareholders. Other proposals
must be delivered between 30 and 60 days prior to the annual meeting. However,
if less than 31 days' notice of the meeting is given to shareholders, the notice
must be delivered no later than 10 days following the day on which notice of the
meeting was mailed to shareholders.
April 14, 2003
12
PROXY SOLICITED FOR ANNUAL MEETING
OF SHAREHOLDERS OF
GREENVILLE FIRST BANCSHARES, INC.
to be held on May 14, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints Fred Gilmer, Jr. and James B.
Order, III 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 I 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
Mark A. Cothran
Rudolph G. Johnstone, III, M.D.
Keith J. Marrero
R. Arthur Seaver, 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 nominee's name(s) in the space provided below).
Dated: , 2003 Dated: , 2003
------------------------ ------------------------
------------------------------ ------------------------------
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.