Proposal
1-Election of Directors
The Board
of Directors consists of 17 members elected annually. During 2009, C.
Ronald Coward resigned from the Board of Directors due to personal reasons.
Therefore, the Board of Directors proposes that the 16 nominees described below,
each of whom is currently serving as Director, be re-elected for a new term
expiring at the 2011 Annual Meeting of Shareholders and until their successors
are duly elected and qualified. In addition the Nominating Committee of the
Company Board of Directors recommended at its December 17, 2009 meeting to
approve Sheryl G. Sharry Executive Vice President of the Bank and Corporation,
for nomination to the Board of Directors. This recommendation was
approved by the Board of Directors and will be voted on at the 2010 Annual
Meeting.
Each of
the nominees has consented to be named as a nominee. If any of them
should become unavailable to serve as a Director (which is not now expected),
the Board may designate a substitute nominee.
The Board
of Directors believes that it is necessary for each of the Company’s Directors
to possess many qualities and skills. When searching for new
candidates, the Nominating Committee (Corporate Governance Committee) considers
the evolving needs of the Board of Directors and searches for candidates that
fill any current or anticipated future gap. The Board of
Directors also believes that all Directors must possess a considerable amount of
business management (such as experience as Chief Executive or Chief Financial
Officer) and educational experience. The Nominating Committee first
considers management experience and then considers issues of judgment,
background, stature, conflicts of interest, integrity, ethics and commitment to
the goal of maximizing shareholder value when considering Director
candidates. The Nominating Committee focuses on issues of diversity,
such as diversity in gender, race and national origin, education, professional
experience and differences in viewpoints and skills. The Nominating
Committee does not have a formal policy with respect to diversity; however the
Board of Directors and the Nominating Committee believe that it is essential
that the Board members represent diverse viewpoints. In considering
candidates for the Board of Directors, the Nominating Committee considers the
entirety of each candidate’s credentials in the context of these
standards. With respect to the nomination of continuing Directors for
re-election, the individual’s contributions to the Board of Directors are also
considered.
All Board
members bring to the Board of Directors a wealth of leadership experience
derived form their extensive business and Board experiences. The
process undertaken by the Nominating Committee in recommending qualified
Director candidates is described below under “Corporate Governance-Director
Nomination Process” (see pages 14 -16 of this Proxy
Statement). Certain individual qualifications and skills of our
Directors that contribute to the Board of Directors effectiveness as a whole are
described in the following paragraphs.
The name
of each Nominee designated by the Board of Directors of the Company for election
as a Director of the Company and certain information provided by such Nominee to
the Company are set forth in the table below. Six of the current
Nominees served as initial Directors of the Bank from October 22, 1986, when the
Bank's charter was issued until the first Annual Meeting of Shareholders on
April 14, 1987, and were elected to serve a one year term at such Annual
Meeting. All of the above six Directors of the Bank were elected to
serve one-year terms at subsequent Annual Meetings. All of the above six
Directors of the Bank were elected Directors of the Company upon its
organization in 1995. Alan I. Nussbaum, MD and Edmund Rhett, Jr., MD, were first
elected as Directors of the Company during 1999. Dr. Linda J. Bradley
McKee, CPA was first elected as a Director of the Company during 2002. They were
all re-elected as Directors of the Company to serve one year terms at subsequent
Annual Meetings. Graham M. Eubank, Jr., Richard W. Hutson, Jr. and Malcolm M.
Rhodes, MD were elected pursuant to the By-Laws of the Company on December 16,
2004, and were elected to serve one year terms at subsequent Annual
Meetings. Fleetwood S. Hassell was first elected by the shareholders
on April 11, 2006 at the Annual Meeting, and was elected to serve one year terms
at subsequent Annual Meetings. Glen B. Haynes, DVM was first elected
by the shareholders on April 10, 2007 at the Annual Meeting and was elected to
serve a one year term at subsequent Annual Meetings. David W. Bunch
and David W. Schools were elected to serve a one year term at the April 14, 2009
Annual Meeting. All of current Nominees, except Sheryl G. Sharry,
served as Directors of the Company from April 14, 2009, the date of the last
Annual Meeting of Shareholders.
William
L. Hiott, Jr., Executive Vice President and Treasurer, has reached the age of
retirement and will be retiring from the Company on April 13,
2010. He will remain a nominee for Director and will continue to
serve on the Board if re-elected by shareholders at the Annual Meeting April 13,
2010.
The names
of the nominees along with their present positions, principal occupations and
Directorships held during the past five years, their ages and the year first
elected as a Director, are set forth below.
Executive Officer Directors
and Nominees
Fleetwood,
S. Hassell
Age 50
First elected to the
Board 2006
Mr.
Hassell has been with The Bank of South Carolina since its organization in 1986.
He began as an Assistant Vice President for commercial lending and business
development. Mr. Hassell held the position of Vice President and Senior Vice
President and currently is an Executive Vice President and Senior
Lender. Born and raised in Charleston, SC, Mr. Hassell graduated from
Porter Gaud High School and earned a BS and MBA from the University of South
Carolina School of Business. Mr. Hassell began his banking career in
1983 as a management trainee at the Citizens and Southern National Bank of South
Carolina. He was elected to the Board of Directors of the Bank of
South Carolina and its parent Company in 2006. In addition to serving
on the Board of the Bank and the Company, Mr. Hassell has served on the Boards
of the Kidney Foundation, Crime Stoppers, Atlantic Coast Conservation
Association, Trident Tech Foundation, Charleston Breakfast Rotary Club
(President), Charleston Day School (Treasurer), Porter Gaud School Alumni, and
the Preservation Society.
Given Mr.
Hassell’s experience in banking, his strong background in commercial lending and
business development and his current participation and contributions made to the
Board of Directors and its committees, the Nominating Committee recommended his
re-election to the Board.
William
L. Hiott, Jr.
Age 65
First elected to the
Board 1995
Mr. Hiott
has been with The Bank of South Carolina since its organization in
1986. He has served as Executive Vice President and Cashier of the
Bank since 1986 and Executive Vice President and Treasurer of the Company since
its organization in 1995. He has served on the Board of Directors of The Bank of
South Carolina since its organization in 1986 and Bank of South Carolina
Corporation since its organization in 1995. Mr. Hiott was born and
raised in Colleton County, South Carolina where he graduated from Walterboro
High School. He received a BS in Accounting from Charleston Southern
University. He is a graduate of South Carolina Bankers School and a
graduate of the University of Wisconsin’s Bank Administration Graduate School.
Mr. Hiott began his banking career at Citizens and Southern National Bank of
South Carolina where he held the position of Vice President of Operations. In
addition to serving on the Board of the Bank and the Company, Mr. Hiott has
served on the Boards of the Harry Hampton Memorial Wildlife Fund (Chairman), SC
Nature Conservancy, and the Low Country Open Land Trust
(Treasurer). He has also served on the SC Department of Natural
Resources Marine Advisory Board (Vice-Chairman), DNR SC Governor’s Cup Advisory
Board, DNR Waterfowl Advisory Board (Chairman), and the DNR Migratory Waterfowl
Stamp Advisory Board (Chairman).
The
Nominating Committee recommended Mr. Hiott for re-election to the Board of
Directors based on his experience in banking, in-depth knowledge of the
financials of the Company, his strong commitment to the local community, and his
current contributions to the Board.
Hugh
C. Lane, Jr.
Age 62
First
elected to the Board 1995
Mr. Lane,
brother of Charles G. Lane,
has been with The Bank
of South Carolina since its organization in 1986. He has served as President and
Chief Executive Officer of the Bank since 1986 and of the Company since
1995. He has served as Chairman of the Board of Directors of The Bank
of South Carolina since its organization in 1986, and Chairman of Bank of South
Carolina Corporation since its organization in 1995. Mr. Lane was
born in Charleston, SC. He graduated from Choate School in
Wallingford, Connecticut and earned a BA in economics from the University of
Pennsylvania. Mr. Lane began his banking career at Citizens and
Southern National Bank of Georgia in Atlanta. His banking career also
included working in the Bond, Leasing and International Departments at the
Chemical Bank in New York, City Executive of Citizens and Southern National
Bank, Sumter South Carolina, and Executive Vice President, heading the Citizens
and Southern National Bank’s Southern Region. Mr. Lane also served on
the Board of Directors of Citizens and Southern National Bank of South Carolina
for 14 years. Mr. Lane serves as an Administrator and Trustee of the Bank of
South Carolina Employee Stock Option Plan and Trust. In addition to his
responsibilities at The Bank of South Carolina, Mr. Lane has served as a member
of the Advisory Committee for the ACE Basin National Estuarine Research Reserve
System and is currently Chairman of the Charleston County Conservation Bank
Board. He is past chairman of the Board of Trustees of the Belle W.
Baruch Foundation, Trustee and Chairman of the Board at Wofford College, Trustee
and past Chairman of South Carolina Independent Colleges &
Universities, Trustee and past President of Charleston Museum, past
Co-Chairman of the Community Relations Committee, past member of Advisory
Committee for the Storm Eye Institute of the Medical University of South
Carolina, member of the Trident Chamber of Commerce, and past member of the
Board of Trident Urban League. He has been the recipient of Honorary
Doctorates from Southern University and The Citadel. He has also received the
“Distinguished Citizen Award” from Wofford College National Alumni Council, the
Avery Citizenship Award for outstanding community service, the Joseph P. Riley
Leadership Award, and the Order of the Palmetto presented by the Governor of
South Carolina.
The
Nominating Committee has recommended the re-election of Hugh C. Lane, Jr. to the
Board of Directors based on his background in economics, banking experience,
knowledge of the financials of the Company, and his strong commitment to the
local community. In addition the Committee considered his current
contribution to the Board and his continued devotion to serving the shareholders
of the Company.
Sheryl
G. Sharry
Age
55
First elected to the Board (Nominee 2010)
Mrs.
Sharry
has been
with The Bank of South Carolina since its organization in 1986. She
has served as Assistant Vice President – Operations Department, Vice President –
Operations & Technology, Senior Vice President – Operations &
Technology, and is currently Executive Vice President. Mrs. Sharry
serves as an Administrator and Trustee of the Bank of South Carolina Employee
Stock Option Plan and Trust. Mrs. Sharry is a nominee for the Board
of Directors of The Bank of South Carolina and Bank of South Carolina
Corporation. Mrs. Sharry has lived in South Carolina for 46
years. She is a graduate of the College of Charleston, South Carolina
Bankers School, and the School of Bank Investments and Financial
Management. Mrs. Sharry started her banking career at Citizens and
Southern National Bank of South Carolina where she served as Utility Staff, CSR,
teller and CSR trainer, and Operations Officer-Internal Operations
Department. Mrs. Sharry has attended classes covering Network
Security and Administration, Administration of the Bank’s core software, ITI;
Information Technology Risk Assessment, Internet Banking Compliance, Cyber
Crime, Liquidity Contingency Planning, and Asset Liability Management and
Interest Rate Risk. She is a member of Fiserv Regional
Users
Group, South Carolina Bankers Association Disaster Recovery Committee, Financial
Managers Society, and South Carolina InfrGard.
Sherry
Sharry was recommended for election to the Board of Directors by the Nominating
Committee based on her strong background in operations and technology of the
Company, experience in banking, in-depth knowledge of the financials of the
Company, and continued devotion to the success of the Company.
Non-Employee Directors and
Nominees
David
W. Bunch
Age 59
First
elected to the Board 2009
Mr.
Bunch
has been a
member of the Board of Directors of The Bank of South Carolina and Bank of South
Carolina Corporation since 2009. He was born in Charleston, South
Carolina and graduated from North Charleston High School and Clemson
University. He has been employed by XO Bunch Organizations since
1973, serving as President, Hughes Motors, Inc.; Vice-President, Bunch Leasing
Co.; Vice-President, Florence Truck Center, Inc.; Partner, Bunch Truck &
Equipment, LLC; Partner, Bunch & Sons-Real Estate; Managing member, Wando
Properties, LLC; and President, Double D Leasing Co., Inc. In
addition to serving on Board of Directors of the Bank of South Carolina
Corporation and The Bank of South Carolina, Mr. Bunch served as Board member of
South Carolina Federal Savings Bank. He is a past President of the
Rotary Club of North Charleston, a Paul Harris Fellow of the Rotary Club of
North Charleston, a member of South Carolina Trucking Association, a member of
the Executive Association of Greater Charleston, a member of the Hibernian
Society, and a member of North Charleston United Methodist Church.
The
Nominating Committee has recommended the re-election of David Bunch to the Board
of Directors based on his strong knowledge of business including successfully
starting and running several companies, his participation on the Loan Committee,
and his service on various Boards with the Company and community.
Graham
M. Eubank, Jr.
Age 42
First elected to the
Board 2005
Mr.
Eubank has been a member of the Board of Directors of The Bank of South Carolina
and Bank of South Carolina Corporation since 2005. He was born in
Fayetteville, North Carolina and raised in Charleston South
Carolina. He attended private schools and received a BS in Management
from Clemson University. He is also a graduate of the National
Automobile Dealers Association Dealer Candidate Academy. In 1992 Mr.
Eubank began working with his family’s business, Palmetto Ford, Inc., where he
has held many positions including New Car Sales Manager, Used Car Sales Manager
and Parts and Service Director. Currently Mr. Eubank is President and
CEO of the Palmetto Car and Truck Group which is comprised of Ford, Lincoln,
Mercury, Hyundai, Mama’s Used Cars and Quick Lane Auto and Tire
Center. In addition to serving on the Board of Directors of The Bank
of South Carolina and Bank of South Carolina Corporation, Mr. Eubank has served
on the Board of Carolina Ford Dealer Advertising Association, the Board of the
East Cooper Rotary Club and the Board of The Boy Scouts of America. In addition
he has served as President of the Trident New Car Dealers Association and Vice
President of the South Carolina Automobile Dealers Association.
Graham
Eubank has been on the Board of Directors since 2005. He has served
on various committees including the Audit Committee, Compensation Committee and
the Nominating Committee. His background in business has been an
asset to the current Board. For these reasons Mr. Eubank has been recommended
for re-election to the Board of Directors by the Nominating
Committee.
Glen
B. Haynes, DVM
Age 55
First
elected to the Board 2007
Dr.
Haynes
has been a
member of the Board of Directors of The Bank of South Carolina and Bank of South
Carolina Corporation since 2007. He was born in Charlottesville,
Virginia and has lived in Summerville, South Carolina for 26
years. He is a graduate of Virginia Tech where he received a BS in
Biology. He received a DVM from the University of Georgia and attended a South
Carolina Bankers School program specific for bank Directors. In addition to
serving on the Board of Directors of The Bank of South Carolina and Bank of
South Carolina Corporation, Dr. Haynes has served as President of the
Summerville Rotary Club, President of Frances Willis SPCA, Chairman of the South
Carolina Board of Veterinary Medical Examiners, and President of Trident
Veterinary Medical Association. Dr. Haynes is a member of the American
Veterinary Medical Association and a member of St. Paul’s Episcopal Church where
he served on the vestry.
Dr.
Haynes has been committed to the success of the Company, serving on the Audit
and Loan Committees for several years. In recommending Dr. Haynes for
re-election to the Board of Directors the Nominating Committee considered this
experience as well as his strong ties to the Summerville community and his work
ethic demonstrated in running his own practice.
Katherine M. Huger
|
Age 68
|
First elected to the Board 1995
|
Mrs.
Huger has been a member of the Board of Directors of The Bank of South Carolina
since its organization in 1986, and a member of the Board of Directors of the
Bank of South Carolina Corporation since its organization in
1995. Born in Buffalo, New York, Mrs. Huger has lived in Charleston,
South Carolina for 39 years. Mrs. Huger studied economics, international
economic relations and international finance, receiving an AB degree from Bryn
Mawr College, and MA and MALD degrees from The Fletcher School of Law and
Diplomacy, Tufts University. Mrs. Huger served as an Assistant Professor of
Economics at Charleston Southern University from 1972-2004. In
addition to serving on the Board of the Bank and the Company, Mrs. Huger has
served on the Boards of the Charleston Museum, the Charleston Horticulture
Society, the Charleston Foreign Affairs Forum, and the Junior League of
Charleston. Currently, she is involved with the Gibbes Art Museum and Water
Mission International.
The
Nominating Committee has recommended the re-election of Katherine Huger to the
Board of Directors. The Committee recognized Mrs. Huger’s commitment
to the success of the Company as shown by her 24 years of service as well as her
willingness to serve on the Audit Committee, Loan Committee, and the
Executive/Long range Planning Committee. In addition, her extensive background
in economics and finance and her community involvement were factors in the
Committee’s recommendation.
Richard W. Hutson
|
Age 52
|
First elected to the Board 2005
|
Mr.
Hutson
has been a
member of the Board of Directors of The Bank of South Carolina and Bank of South
Carolina Corporation since 2005. Mr. Hutson was born and raised in
Charleston, South Carolina. He majored in economics and received a BA
from The University of the South. In addition to serving on the Board
of the Bank and the Company, Mr. Hutson has served on the Boards of the SC
Historical Society and the Historic Charleston Foundation. In
addition, Mr. Hutson has served as President of the SC Historical Society,
Commodore of the Carolina Yacht Club, and President of the Charleston
Club. Mr. Hutson is the Manager of William M. Means Company Insurance
LLC.
Richard
Hutson has served on the Audit Committee and the Loan
Committee. His experience on these committees, in addition to
his business background in running a large insurance company, led the Nominating
Committee to recommend Mr. Hutson for re-election to the Board. The
Committee also considered his strong ties to the Charleston community and his
experience of serving on other Boards.
Charles G. Lane
|
Age 55
|
First elected to the Board 1995
|
Mr.
Lane
has been a
member of the Board of Directors of The Bank of South Carolina since its
organization in 1986, and a member of the Board of Directors of Bank of South
Carolina Corporation since its organization in 1995. Mr. Lane was
born and raised in Charleston, South Carolina. He is a graduate of
Clemson University. Mr. Lane served on the Advisory Board of Citizens
and Southern National Bank of Greenville, South Carolina. In
addition, Mr. Lane served on the Boards of Ducks Unlimited, Delta Waterfowl, The
Nature Conservancy, The South Carolina Conservation Bank, The Donnelley
Foundation, and the ACE Basin Task Force. Mr. Lane has served as
Chairman of the Coastal Conservation League Board. Mr. Lane is a
Managing Member of Holcombe, Fair and Lane, LLC, a real estate
company.
Charles
G. Lane, brother of Hugh C. Lane, Jr., has been with the Company since its
organization. He has served on the Executive Committee, the Long
Range Planning Committee (currently Executive/Long Range Planning), and the Loan
Committee. His has devoted 24 years to ensuring the success of the
Company. His experiences in the real estate market and the local
community have been valuable to the Board in its decision
making. Based on these aspects the Nominating Committee has
recommended the re-election of Charles Lane to the Board.
Louise J. Maybank
|
Age 70
|
First elected to the Board 1995
|
Mrs.
Maybank has been a member of the Board of Directors of The Bank of South
Carolina since its organization in 1986, and a member of the Board of Directors
of Bank of South Carolina Corporation since its organization in
1995. Born in Edgecombe, North Carolina, Mrs. Maybank has lived in
Charleston, South Carolina for 51 years. Mrs. Maybank is currently
Chairman of the Charleston County Greenbelt Advisory Board. In
addition she has served on the Boards of the Lowcountry Open Land Trust, The
Historic Charleston Foundation, the City of Charleston’s Planning and Zoning
Board and the Board of Adjustments. She has been a member of the
Coastal Community Foundation, the Junior League of Charleston, and a Trustee of
Charleston Day School and Episcopal High School.
Louise J.
Maybank has served on the Board of the Bank and the Company since their
organization. She has served on the Planning Committee, Loan
Committee and the Nominating Committee and has dedicated her time to ensuring
the success of the Company. The Nominating Committee considered all
of Mrs. Maybank’s service to the Company as well as her strong community
involvement in recommending her for re-election to the Board.
Linda J. Bradley McKee, PhD, CPA,
|
Age 59
|
First elected to the Board 2002
|
Dr.
McKee
has been a
member of the Board of Directors of The Bank of South Carolina and Bank of South
Carolina Corporation since 2002. Born in Hereford, Texas, Dr. McKee
has lived in Charleston for 17 years. Dr. McKee earned a BS in
Mathematics from the University of Texas at Arlington, a MS in Accounting from
Texas Tech, and a PhD in Accounting from the University of North
Texas. She is an Associate Professor of Accounting at the College of
Charleston. In addition to serving on the Board of the Bank and the
Company, she also served on the Board of Directors of Hospice of Colorado
Springs. She served as President of the Charleston Estate Planning
Council and Program Director of Charleston Tax Roundtable. Dr. McKee
is a member of First Methodist Church. She is also a member of the
following professional organizations: AICPA, American Accounting Association,
Taxation Division of American Accounting Association, Charleston Estate Planning
Council, and Charleston Tax Roundtable.
Dr. McKee
is considered by the Board of Directors to be a financial expert under
applicable guidelines of the Securities and Exchange Commission. She
has an extensive background in accounting and taxation and has been an asset to
the Board and the Audit Committee. For the above reasons the Nominating
Committee has recommended Dr. McKee for re-election to the Board of
Directors.
Alan I. Nussbaum, MD
|
Age 58
|
First elected to the Board 1999
|
Dr.
Nussbaum
has been a
member of the Board of Directors of The Bank of South Carolina and Bank of South
Carolina Corporation since 1999. Born and raised in Charleston, South Carolina,
Dr. Nussbaum graduated from Porter Gaud High School. He
received a BA from Johns Hopkins University and a MD from Harvard Medical
School. Dr. Nussbaum completed his internship in Internal Medicine at
Duke University Medical Center and completed his residency in Internal Medicine
from Duke University Medical Center. In addition, Dr. Nussbaum
completed a Fellowship in Rheumatology and Immunology from the Medical
University of South Carolina. Dr. Nussbaum is a Clinical Associate Professor in
the Department of Medicine at the Medical University of South Carolina and has a
private practice, Rheumatology Associates, PA. Dr. Nussbaum has
served both as Assistant Chairman and Chairman of the Department of Medicine at
Roper Hospital. He has served as Chairman of the Quality Management
Committee at Roper Hospital and is currently Chairman of the Board of Directors
of Roper Hospital. He has served on the Board of the Charleston
Community Concert Association, as Vice-President and President of Synagogue
Emanu-El, and has been a Board member of the Hebrew Orphan Society.
The
Nominating Committee has recommended the re-election of Dr. Alan Nussbaum to the
Board of Directors based on the commitment that he has made to the Board, the
Executive Committee and the Audit Committee. In addition to having
his own medical practice and serving on several Boards in the medical community,
Dr. Nussbaum served as Chairman of the Audit Committee and is dedicated to the
success of the Company.
Edmund Rhett, Jr., MD
|
Age 62
|
First elected to the Board 1999
|
Dr. Rhett
has been a member of the Board of Directors of The Bank of South Carolina and
Bank of South Carolina Corporation since 1999. Dr. Rhett was born in
Charleston, SC and raised in Atlanta, Georgia. He has lived in the
Charleston area for 32 years. Dr. Rhett received a BA from The
University of the South and a MD from the Medical College of
Georgia. He has a private gynecological practice, Edmund Rhett, Jr.,
PA. Dr. Rhett has been on the Board of Directors of the Canterbury
house for 27 years and has served as President of its Board for 15 years. In
addition he has served on the Boards of both the East Cooper Regional Medical
Center and Charleston Day School. Dr. Rhett is a member of the
Carolina Yacht Club and the Country Club of Charleston.
The
Nominating Committee has recommended Dr. Rhett for election to the Board of
Directors. Dr. Rhett has served on the Board since
1999. He has served on the Mount Pleasant local Advisory Board in
addition to serving on the Nominating Committee, Audit Committee and the Loan
Committee. He has a successful private gynecological practice and has
committed 27 years to serving on the Board of the Canterbury
House. His success in running his practice and dedication to service
of the local community were very important considerations in the Nominating
Committee’s recommendation.
Malcolm M. Rhodes, MD
|
Age 51
|
First elected to the Board 2005
|
Dr.
Rhodes
has been a
member of the Board of Directors of The Bank of South Carolina and Bank of South
Carolina Corporation since 2005. Born and raised in Charleston, South Carolina,
Dr. Rhodes graduated from Porter Gaud High School. He received a BA
from Duke University and a MD from the Medical University of South Carolina. He
is a Fellow of the American Board of Pediatrics and has been a partner at
Parkwood Pediatric Group since 1988. He is on the clinical faculty at
MUSC and active staff at Roper and Bon-Secours St. Francis Hospitals, serving on
the Credentials Committee. He and his wife own The Charleston Angler. In
addition to serving on the Board of Directors of the Bank and the Company, Dr.
Rhodes currently represents South Carolina on the Atlantic States Marine
Fisheries Commission where he is Chairman of the Governor's Appointees, serves
on the Executive Committee and Administrative Oversight Committee and chairs the
Shad and River Herring Board. He is a Trustee of Ashley Hall School
and treasurer of the Carolina Gold Rice Foundation. He is on the Executive
Committee of The Agricultural Society of South Carolina and the SC State Board
of Coastal Conservation Association. He has served as a Trustee of Charleston
Stage Company and on the vestry of St. Philip's Church where he is still
actively involved.
The
Nominating Committee has recommended the re-election of Dr. Rhodes to the Board
of Directors based on the commitment that Dr. Rhodes has made to the Board and
the Audit Committee. In addition the Nominating Committee also
considered Dr. Rhodes’ knowledge of business including running a medical
practice and serving on staff of several local hospitals. Dr. Rhodes
currently serves as Chairman of the Audit Committee and is dedicated to the
success of the Company.
David R. Schools
|
Age 51
|
First elected to the Board 2009
|
Mr.
Schools has been a member of the Board of Directors of The Bank of South
Carolina and Bank of South Carolina Corporation since 2009. Born and
raised in Charleston, South Carolina, Mr. Schools graduated from Porter Gaud
High school. He received his BA from the College of
Charleston. Currently, Mr. Schools is President and CEO of Piggly
Wiggly Carolina Company. In addition to serving on the Board of the Bank and the
Company, Mr. Schools is a member of the Boards of Greenbax Enterprises,
Charleston Metro Chamber of Commerce, Trident United Way, and an Advisory Board
member of the Dee Norton Lowcountry Children’s Center. He is a past
member of the Board of Directors of the South Carolina Chamber of
Commerce. Mr. Schools is a member of Carolina Food Industry
Council.
Given Mr.
Schools significant background and extensive experience in the food and grocery
industry and outstanding community involvement, Mr. Schools has been recommended
by the Nominating Committee for re-election to the Board. The Nominating
Committee also considered his contributions made to the Board and the Audit
Committee.
Thomas C. Stevenson, III
|
Age 59
|
First elected to Board 1995
|
Mr.
Stevenson
has been
a member of the Board of Directors of The Bank of South Carolina since its
organization in 1986, and a member of the Board of Directors of Bank of South
Carolina Corporation since its organization in 1995. Born and raised
in Charleston, South Carolina, Mr. Stevenson received his BA from The University
of the South. Currently, Mr. Stevenson is President of Fabtech,
Inc. In addition to serving on the Board of the Bank and the Company,
Mr. Stevenson has served on the Boards of Ashley Hall School, Christ School, and
Trident Technical College. He has served on the Board and as
Vice-President of Finance for the Chamber of Commerce. He is a member
of the Low Country Manufacturers Council and the South Carolina Manufacturers
Council.
The
Nominating Committee has recommended Thomas C. Stevenson, III for re-election to
the Board of Directors. Mr. Stevenson has been a Board member since
its organization. He has served on the Audit Committee, Compensation
Committee, Executive Committee, and is the current Chairman of the Loan
Committee. Mr. Stevenson also serves as an Administrator and Trustee of the Bank
of South Carolina Employee Stock Option Plan and Trust. His experience in
running a successful company as well as his service to local community Boards
were important qualifications the Nominating Committee felt were beneficial to
the Board.
No
Director or Executive Officer was involved in any legal proceedings, nor have
any members been convicted in criminal proceedings in the past 10
years. In addition there are no pending legal proceedings against any
Executive Officer or Director.
MEETINGS
AND COMMITTEES OF THE BOARD OF DIRECTORS
AND
CORPORATE GOVERNANCE MATTERS
Board
of Directors
Bank of
South Carolina Corporation’s Board of Directors conducts its business through
Board meetings and through its committees. Hugh C. Lane, Jr. presently serves as
Chairman of the Board of Directors. The Board of Directors of the Company held 6
meetings (including all regularly scheduled and special meetings) during the
year ended December 31, 2009. No Directors attended fewer than 75% of the
aggregate of (i) the total number of meetings of the Board of Directors and (ii)
the total number of meetings held by all committees of the Board of Directors on
which they served.
Board
Leadership Structure
The Board
believes that the Company’s President and Chief Executive Officer is best
situated to serve as Chairman because he is the Director most familiar with the
Company’s business and industry, and most capable of effectively identifying
strategic priorities and leading the discussion and execution of
strategy. Independent Directors and management have different
perspectives and roles in strategy development. The Company’s
independent Directors bring experience, oversight and expertise from outside the
Company and industry, while the Chief Executive Officer brings Company-specific
experience and expertise. The Board believes that the combined role
of Chairman and Chief Executive Officer promotes strategy development and
executions, and facilities information flow between management and the Board,
which are essential to effective governance.
One of
the key responsibilities of the Board is to develop strategic direction and hold
management accountable for the execution of strategy once it is
developed. The Board believes the combined role of Chairman and Chief
Executive Officer together with an independent Lead Director having the duties
described below is the best interest of stockholders as it provides the
appropriate balance between strategy development and independent oversight of
management.
Lead
Director
Thomas C. Stevenson, III
, an
independent Director who serves as Chairman of the Loan Committee, was selected
by the Board of Directors to serve as the Lead Director for all meetings of the
non-management Directors held in Executive Session. Non-management
Directors of the Board are required to meet on a regular scheduled basis without
the presence of management (IM-5605-2 NASDAQ Corporate Governance
Rules). The Lead Director chairs these sessions.
Risk
Management
The Board
has an active role, as a whole and also at the committee level, in overseeing
the management of the Company’s risks. The Board regularly reviews
information regarding the Company’s credit, liquidity and operations, as well as
the risks associated with each. The Audit Committee oversees the management of
financial risks. The Nominating Committee manages risks associated
with the independence of the Board of Directors and potential conflicts of
interest. While each committee is responsible for evaluating certain
risks and overseeing the management of such risks, the entire Board of Directors
is regularly informed through committee reports about such risks.
Committees
and Committee Charters
The Board
has four committees: the Executive/Long-Range Planning Committee, the
Compensation Committee, the Nominating Committee, and the Audit and Compliance
Committee. Each Committee serves in a dual capacity as a Committee of
the Company and the Bank.
The
following table lists the membership of the standing committees of the Board of
Directors.
Director
|
|
Audit/Compliance
|
|
Executive/Long-
Range Planning
|
|
Compensation
Committee
|
|
Nominating
Committee
|
David
W. Bunch
|
|
|
|
|
|
|
|
|
Graham
M. Eubank, Jr.
|
|
X
|
|
|
|
X
|
|
X
|
Fleetwood
S. Hassell
|
|
|
|
X
|
|
|
|
|
Glen
B. Haynes, DVM
|
|
X
|
|
|
|
|
|
|
William
L. Hiott, Jr.
|
|
|
|
X
|
|
|
|
|
Katherine
M. Huger
|
|
|
|
|
|
|
|
|
Richard
W. Hutson, Jr.
|
|
X
|
|
|
|
|
|
|
Charles
G. Lane
|
|
|
|
X
|
|
|
|
|
Hugh
C. Lane, Jr.
|
|
|
|
X
|
|
|
|
|
Louise
J. Maybank
|
|
|
|
X
|
|
|
|
X
|
Dr.
Linda J. Bradley McKee
|
|
X
|
|
|
|
|
|
|
Alan
I. Nussbaum, MD
|
|
X
|
|
X
|
|
|
|
|
Edmund
Rhett, Jr., MD
|
|
|
|
|
|
|
|
X
|
Malcolm
M. Rhodes, MD
|
|
X
|
|
|
|
|
|
|
David
R. Schools
|
|
X
|
|
|
|
|
|
X
|
Sheryl
G. Sharry
|
|
|
|
|
|
|
|
|
Thomas
C. Stevenson, III
|
|
|
|
X
|
|
X
|
|
|
The Audit
and Compliance Committee (the “Audit Committee”) presently consists of seven
members of the Board of Directors. During 2009, the Audit Committee
held 5 meetings. The Audit Committee operates under a written Charter adopted by
the Board of Directors. The Charter was attached as Exhibit A to the
2004 Proxy Statement. Members are considered to be independent of the
Company under applicable rules and regulations, including Rule 4200(a) (15) of
the National Association of Securities Dealers. The Board of
Directors has determined that Linda J. Bradley McKee, PhD CPA, a member of the
Audit Compliance Committee, qualifies as an Audit Committee financial expert
under the applicable guidelines of the Securities and Exchange Act.
The Audit
Committee has the responsibility of reviewing the Company’s financial
statements, evaluating internal accounting controls, reviewing reports of
regulatory authorities, and determining that all examinations required by law
are performed. The Committee recommends to the Board of Directors the
appointment of the independent auditors for the next fiscal year, reviews and
approves the auditors’ audit plan, and reviews with the independent auditors the
results of the audit and management’s response. The Board of
Directors has adopted an Audit Committee Charter, which outlines the Committee’s
responsibilities for overseeing the entire audit function and appraising the
effectiveness of internal and external audit efforts. The Charter amended by the
Board of Directors at any time.
The
Executive/Long-Range Planning Committee consists of the President of the Company
and six designated Directors. The President of the Company chairs the
Committee. During 2009, the Executive/long-Range Planning Committee
held 4 meetings. In addition to long-range and strategic planning,
the principal function of the 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 Committee acts on behalf of the entire Board of the Company
between the regular Board Meetings.
The
Compensation Committee consists of 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. The Compensation Committee does not use the services of a
compensation consultant. The Committee reviews the salaries of
individuals with similar positions at similar sized banks within South
Carolina. The Compensation Committee met 1 time in 2009.
The
Nominating Committee consists of 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. A copy of this
charter may be obtained at the Company’s internet website www.banksc.com. The
Nominating Committee met 3 times during 2009.
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 14 days nor more than 50 days prior to any meeting of Shareholders
calling 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 7
th
day
following the day on which the Notice of Meeting was
mailed. Nominations not made according to these procedures will be
disregarded.
The
Nominating Committee has a policy with regard to consideration of any Director
candidates recommended by security holders and that policy is to consider any
and all such recommendations. The Nominating Committee has adopted
specific minimum qualifications which the Nominating Committee believes must be
met by a Nominating Committee recommended Nominee for a position on the
Company's Board of Directors, and those are that such Nominee must be generally
recognized as successful in such Nominee's business or community efforts, have a
generally 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 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.
The
Company does not utilize or pay a fee to any third party (compensation
consultant) to evaluate Nominees for Director.
Director Independence
The
Board is comprised of a majority (75%) of independent Directors in compliance
with SEC and NASDAQ rules. All members of the Audit and Compliance
Committee, the Compensation Committee, and the Nominating Committee are
independent pursuant to SEC and NASDAQ rules. The members of these
committees do not have any relationship to The Bank of South Carolina or Bank of
South Carolina Corporation that may interfere with the exercise of their
independence from management. None of the members of these committees
are current or former officers or employees of The Bank of South Carolina or
Bank of South Carolina Corporation. All members of the Board are
independent except Hugh C. Lane, Jr., President and Chief Executive Officer,
William L. Hiott, Jr., Executive Vice President and Treasurer, Fleetwood S.
Hassell, Executive Vice President and Charles G. Lane, brother of Hugh C.
Lane.
Code of Business Conduct and Ethics
A Code of Ethics for officers, Directors and employees was attached to
the 2004 10KSB. The Code of Ethics requires the officers, Directors
and employees to maintain the highest standards of professional ethical
conduct. The Code includes guidelines relating to the ethical
handling of actual or potential conflicts of interest, compliance with laws,
accurate financial reporting and procedures for promoting compliance with, and
reporting violations of the Code.
Shareholder Communication with the
Board of Directors
The Board of Directors has adopted a process by which
security holders may send communications to the Board of Directors of the
Company. That process is for any security holder to send a written
communication to Hugh C. Lane, Jr., President, Bank of South Carolina
Corporation, 256 Meeting Street, Charleston, South Carolina 29401, or to fax
such communication to Hugh C. Lane, Jr., President, at (843)
724-1513. A security holder is free to address any communication to
any Director at the address of such Director set forth in this Proxy
Statement. Any communication from a security holder received by the
President shall be sent to all Members of the Executive Committee and, if any
member of the Executive Committee so directs, will be sent to all members of the
Board of Directors.
In
addition, any shareholder or interested party who has any concerns or complaints
relating to accounting, internal accounting controls or auditing matters, may
contact the Audit Committee by writing the following address:
Bank of South Carolina Corporation
Audit Committee
c/o Malcolm M. Rhodes, MD.,
Chairman
Bank of South Carolina
Corporation
256 Meeting Street
Charleston, SC 29401
Annual Meeting Attendance by
Directors
Directors are expected to attend the Annual Meeting of
shareholders, but the Company does not have a formal policy regarding
attendance.
Related Party Transactions
The
Company does not have any existing continuing contractual relationships with any
Director, Nominee for election as Director or Executive Officer of the Company
or the Bank, or any Shareholder owning, directly or indirectly, more than 5% of
the shares of Common Stock of the Company, or any associate of the foregoing
persons. Directors, Executive Officers, Nominees for election as
Directors, and members of the immediate family of any of the foregoing have had
in the past, have at present, and will have in the future, customer
relationships with the Bank. Such transactions have been and will
continue to be made in the ordinary course of business, made on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons, and such transactions
did not and will not involve more than the normal risk of collectability or
present other unfavorable features.
DIRECTORS’
COMPENSATION
The
following table sets forth the information regarding the compensation earned by
each Director who served on the Board of Directors during the year ended
December 31, 2009. The officers of the Corporation other than the
Secretary, do not receive payment for their participation on the
Board or its Committees.
Transactions
and Relations with Directors, Executive Officers, and their Associates and
Affiliates of Directors
DIRECTOR COMPENSATION
|
|
NAME
|
|
FEES EARNED OR PAID IN CASH
|
|
|
TOTAL
|
|
David
W. Bunch
|
|
$
|
4,350
|
|
|
$
|
4,350
|
|
C.
Ronald Coward (Resigned)
|
|
$
|
3,400
|
|
|
$
|
3,400
|
|
Graham
M. Eubank, Jr.
|
|
$
|
5,100
|
|
|
$
|
5,100
|
|
Fleetwood
S. Hassell
|
|
|
-
|
|
|
|
-
|
|
Glen
B. Haynes, DVM
|
|
$
|
7,450
|
|
|
$
|
7,450
|
|
William
L. Hiott, Jr.
|
|
|
-
|
|
|
|
-
|
|
Katherine
M. Huger
|
|
$
|
6,300
|
|
|
$
|
6,300
|
|
Richard
W. Hutson, Jr.
|
|
$
|
4,650
|
|
|
$
|
4,650
|
|
Charles
G. Lane, Jr.
|
|
$
|
6,350
|
|
|
$
|
6,350
|
|
Hugh
C. Lane, Jr.
|
|
|
-
|
|
|
|
-
|
|
Louise
J. Maybank
|
|
$
|
6,450
|
|
|
$
|
6,450
|
|
Dr.
Linda J. Bradley McKee, CPA
|
|
$
|
4,800
|
|
|
$
|
4,800
|
|
Alan
I. Nussbaum, MD
|
|
$
|
6,550
|
|
|
$
|
6,550
|
|
Edmund
Rhett, Jr. MD
|
|
$
|
6,100
|
|
|
$
|
6,100
|
|
Malcolm
M. Rhodes, MD
|
|
$
|
5,350
|
|
|
$
|
5,350
|
|
David
R. Schools
|
|
$
|
3,000
|
|
|
$
|
3,000
|
|
Thomas
C. Stevenson, III
|
|
$
|
6,900
|
|
|
$
|
6,900
|
|
Non-Executive-Officer
Directors of the Company received $150.00 for each meeting of the Board of
Directors of the Company attended and non-officer Directors of the Bank received
$300.00 for each meeting of the Board of Directors of the Bank attended and
$150.00 for each Company or Bank Board Committee meeting
attended.
Executive
Compensation-Compensation Discussion and Analysis
The
following table sets forth all remuneration (including remuneration under any
contract, authorization or arrangement, whether or not set forth in a formal
document) paid during the years ended December 31, 2009, 2008 and 2007 by the
Bank to the three Executive Officers of the Company and the Bank, and one
retired Executive Officer of the Company and Bank, whose cash remuneration from
the Bank exceeded $100,000.00 dollars for their services in all capacities. Such
Executive Officers receive no compensation from the Company as Executive
Officers or as Directors or in any other capacity.
SUMMARY
COMPENSATION TABLE
|
|
Name
and
Principal
Position
|
|
Year
|
|
Salary (1)
|
|
|
|
|
Stock
|
|
Option
|
|
Non-Equity
Incentive Plan
Compensation
|
|
Nonqualified
Deferred
Compensation
Earnings
|
|
All
Other
|
|
|
Total
|
|
Hugh
C. Lane, Jr.
President
and Chief Executive
Officer
|
|
2009
|
|
|
210,101.45
|
|
|
|
100.00
|
|
|
|
|
|
|
|
|
|
|
6,676.21
|
|
|
|
216,877.66
|
|
|
|
2008
|
|
|
210,101.45
|
|
|
|
100.00
|
|
|
|
|
|
|
|
|
|
|
19,572.15
|
|
|
|
229,773.60
|
|
|
|
2007
|
|
|
200,001.37
|
|
|
|
1,600.00
|
|
|
|
|
|
|
|
|
|
|
18,136.27
|
|
|
|
219,737.64
|
|
William
L. Hiott, Jr.
Executive
Vice President and Treasurer
|
|
2009
|
|
|
180,101.45
|
|
|
|
100.00
|
|
|
|
|
|
|
|
|
|
|
5,722.92
|
|
|
|
185,924.37
|
|
|
|
2008
|
|
|
180,101.45
|
|
|
|
100.00
|
|
|
|
|
|
|
|
|
|
|
16,777.48
|
|
|
|
196,978.93
|
|
|
|
2007
|
|
|
175,001.53
|
|
|
|
1,600.00
|
|
|
|
|
|
|
|
|
|
|
15,887.26
|
|
|
|
192,488.79
|
|
Fleetwood
S. Hassell
Executive
Vice President
|
|
2009
|
|
|
145,101.29
|
|
|
|
100.00
|
|
|
|
|
|
|
|
|
|
|
4,610.75
|
|
|
|
149,812.04
|
|
|
|
2008
|
|
|
145,101.29
|
|
|
|
100.00
|
|
|
|
|
|
|
|
|
|
|
13,517.02
|
|
|
|
158,718.31
|
|
|
|
2007
|
|
|
135,001.45
|
|
|
|
1,600.00
|
|
|
|
|
|
|
|
|
|
|
12,288.81
|
|
|
|
148,890.26
|
|
Nathaniel
I. Ball, III
Retired
Executive Vice President and Secretary (6)
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,600.00
|
|
|
|
140,600.00
|
|
Sheryl
G. Sharry (7)
|
|
2009
|
|
|
127,301.45
|
|
|
|
100.00
|
|
|
|
|
|
|
|
|
|
|
4,036.56
|
|
|
|
131,438.01
|
|
|
1)
|
The
Compensation Committee consisting of Graham M. Eubank, Jr., and Thomas C.
Stevenson, compared salaries for similar positions at similar sized banks
within South Carolina as well as the overall bank and individual
performance. Once the salary levels were established by the Compensation
Committee, the salaries were recommended to the Board of Directors for
approval.
|
|
2)
|
The
bonus consists of a $100 bonus presented to all employees at Christmas in
2009, 2008 and 2007 and a $1,500 bonus presented in January 2007 to all
employees employed before July 1,
2006.
|
|
3)
|
The
Company did not issue any stock to its Executive Officers during the years
ended December 31, 2009, 2008 or
2007.
|
|
4)
|
There
were no options granted in 2009 to any employees. There were no options
granted to any Executive Officer in 2008 or
2007.
|
|
5)
|
On
November 2, 1989, the Bank adopted an Employee Stock Ownership Plan and
Trust Agreement (the “Plan”) to provide retirement benefits to eligible
employees for long and faithful service. The other compensation represents
the amount contributed to the Bank’s ESOP. (See table and discussion below
for other compensation.)
|
|
6)
|
Nathaniel
I. Ball, III, retired on July 31, 2005. The amount reported in
2007 represents severance pay.
|
|
7)
|
Sheryl
G. Sharry was promoted to Executive Vice President on January 21,
2010.
|
All
Other Compensation
The
Following table sets forth details of “All Other Compensation” as presented
above in the Summary Compensation Table.
Name
|
|
Employee Stock Ownership Plan
|
|
|
Total
|
|
Hugh
C. Lane, Jr.
|
|
|
6,676.21
|
|
|
|
6,676.21
|
|
William
L. Hiott, Jr.
|
|
|
5,722.92
|
|
|
|
5,722.92
|
|
Fleetwood
S. Hassell
|
|
|
4,610.75
|
|
|
|
4,610.75
|
|
Sheryl
G. Sharry
|
|
|
4,036.56
|
|
|
|
4,036.56
|
|
An
employee of the Bank is eligible to become a participant in the ESOP upon
reaching 21 years of age and credited with one year of service (1,000 hours of
service). The employee may enter the plan on the January 1
st
that
occurs nearest the date on which the employee first satisfies the age and
service requirements described above. No contributions by employees are
permitted. The amount and time of contributions are at the sole
discretion of the Board of Directors of the Bank. The contribution
for all participants is based solely on each participant's respective regular or
base salary and wages paid by the Bank including commissions, bonuses and
overtime, if any.
A
participant becomes vested in the ESOP based upon the employee’s credited years
of service. The vesting schedule is 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
|
The Plan
became effective as of January 1, 1989 was 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.
The Board
of Directors of the Bank approved the contribution of $120,000 to the ESOP for
the fiscal year ended December 31, 2009. The contribution was made during
2009. Thomas C. Stevenson, III, Sheryl G. Sharry and Hugh C. Lane,
Jr., currently serve as Plan Administrators and as Trustees for the
Plan. The Plan currently owns 219,185 shares or 5.48% of the
Company's Common Stock.
During
the fiscal year ended December 31, 2009, the Company had no plans or
arrangements pursuant to which any Executive Officer, Director or principal
shareholder received contingent remuneration or personal benefits other than the
contingent remuneration and life, disability, dental and health insurance
benefits. Life, disability, dental and health insurance benefits are
available for all employees of the Bank who work at least 30 hours a
week. Benefit programs provided to Executive Officers, officers and
employees are listed in the table below.
Benefit Plan
|
|
Executive
Officers
|
|
Officers
|
|
Full Time
Employees
|
Employee
Stock Ownership Plan
|
|
x
|
|
x
|
|
x
|
Medical
and Dental Plans
|
|
x
|
|
x
|
|
x
|
Life
and Disability Plans
|
|
x
|
|
x
|
|
x
|
Stock
Option Plans
|
|
x
|
|
x
|
|
x
|
There
were no options granted in 2009. The following information with
respect to the outstanding equity awards as of December 31, 2009 is presented
for the named Executive Officers with additional discussion below.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2009
|
|
OPTION AWARDS
|
|
STOCK AWARDS
|
|
Name
(a)
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b)
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(c)
|
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
(d)
|
|
Option
Exercise
Price (#)
(e)
|
|
Option
Expiration
Date
(f)
|
|
Number
of Shares
of Units
of Stock
That
Have
Not
Vested
(#)
(g)
|
|
Market
Value
of
Shares
or Units
of
Stock
That
Have
Not
Vested
($)
(h)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)
(i)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value or
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)
(j)
|
|
Hugh
C. Lane, Jr.
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
William
L. Hiott, Jr.
|
|
|
-
|
|
|
4,160
|
|
|
-
|
|
|
8.92
|
|
May
14, 2011
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Fleetwood
|
|
|
-
|
|
|
2,497
|
|
|
-
|
|
|
8.92
|
|
May
14, 2011
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
S.
Hassell
|
|
|
|
|
|
5,000
|
|
|
|
|
|
16.62
|
|
May
17, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheryl
G. Sharry
|
|
|
-
|
|
|
2,497
|
|
|
-
|
|
|
8.92
|
|
May
14, 2011
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
On April
14, 1998, the Shareholders of the Company approved an Incentive Stock Option
Plan for the benefit of eligible officers and employees of the Bank and reserved
a total 180,000 shares. On April 16, 1998, the Bank granted options
to purchase Common Stock in the aggregate amount of 146,000 shares to 52
employees of the Bank (including officers, such Directors as are also employees
and other employees) pursuant to the Incentive Stock Option
Plan. These grants included those to Hugh C. Lane, Jr., William L.
Hiott, Jr., and Fleetwood S. Hassell, Executive Officers and Directors and
Nathaniel I. Ball, III, (retired) Executive Officer and Director.
As of
July 10, 2000, all of the option holders, including the above Executive
Officers, terminated their existing stock options. There was no
obligation on the part of the Company or The Bank of South Carolina to issue
additional or replacement options. No options were exercised in 1998,
1999 or 2000. On May 14, 2001, the Bank granted options to purchase
Common Stock in the aggregate amount of 152,350 shares to 45 employees of the
Bank (including officers, such Directors as are also employees and other
employees) pursuant to the Incentive Stock Option Plan. These grants
included those to Hugh C. Lane, Jr., William L. Hiott, Jr., and Fleetwood S.
Hassell, Executive Officers and Directors and Nathaniel I. Ball, III, (retired)
Executive Officer and Director. Except for those options granted to
Hugh C. Lane, Jr. as described below, all of the options were granted at an
exercise price of $13.50 per share. No additional options were granted during
2001. Options to purchase 9,500 shares were granted at an exercise price of
$14.925 per share to 4 employees of the Bank during 2002. Options to purchase
13,500 shares with an exercise price of $14.20 per share were granted to 13
employees in 2003. Options to purchase 4,000 shares with an exercise price of
$14.00 were granted to one employee in 2004. No options were exercised during
2001, 2002, 2003 or 2004. Options to purchase 32,500 shares with an exercise
price of $16.62 were granted to twenty-one employees in 2006. Options to
purchase 5,000 shares with an exercise price of $15.99 and options to purchase
5,000 shares with an exercise price of 15.51 were granted to two employees in
2007. During 2008, options to purchase 4,500 shares with an exercise price of
$14.19 were granted to two employees. There were no options granted during
2009.
Under the
1998 stock option plan no options are available for grant due to expiration.
There are currently outstanding options to purchase 12,212 shares at an option
price of $9.39 per share, options to purchase 37,625 shares at an option price
of $8.92 per share, options to purchase 17,250 shares at an option price of
$16.62 per share, options to purchase 5,000 shares at an option price of $15.99
per share, options to purchase 5,000 shares at an option price of $15.51 per
share and options to purchase 2,000 shares at an option price of $14.19
resulting in total outstanding options to purchase 79,087 shares at the prices
set forth above.
As
adjusted for a 10% stock dividend effective on July 15, 2003, a 10% stock
distribution effective April 29, 2005 and a 25% stock dividend effective April
28, 2006, options to purchase 44,853 shares with an exercise price of $8.92 per
share, options to purchase 11,343 shares with an exercise price of $9.87,
options to purchase 4,537 shares with an exercise price of $9.39 per share,
options to purchase 5,500 shares with an exercise price of $9.26 per share,
options to purchase 15,250 shares with an exercise price of $16.62 per share and
options to purchase 2,500 shares with an exercise price of $14.19 have expired.
There were 32,500 options granted during 2006 with an exercise price of $16.62.
During 2007, there were 5,000 options granted with an exercise price of $15.99
and 5,000 options granted with an exercise price of $15.51. There were 4,500
options granted during 2008 with an exercise price of $14.19. There were no
options granted in 2009.
On
October 2, 2005, Nathaniel I. Ball, III (retired) Executive Officer and
Director, in accordance with the Incentive Stock Option Plan, exercised his
options to purchase 16,637 shares of Common Stock. The stock was
purchased with the redemption of 10,300 shares of Bank of South Carolina
Corporation Common Stock (personally held) with a price of $18.00 a share and
the payment of $225 cash. On May 14, 2006 in accordance with the
Incentive Stock Option Plan, options to purchase 67,220 shares of Common Stock
became exercisable. Hugh C. Lane, Jr. exercised his option to
purchase 24,956 shares at $9.82 per share. Twenty-four employees, including
William L. Hiott, Jr. Executive Vice President and Treasurer and Fleetwood S.
Hassell, Executive Vice President, exercised their option to purchase 39,846
shares of Common Stock at $8.92 per share. William L. Hiott purchased
4,159 shares and Fleetwood S. Hassell purchased 2,495 shares. On December 4,
2006 Janice Flynn, former Senior Vice President exercised her options to
purchase 6,655 shares at $8.92 per share and 3,025 shares at $9.87 per
share. Her shares became fully vested due to permanent
disability. On May 14, 2007 in accordance with the Incentive Stock
Option Plan, options to purchase 27,488 shares at $8.92 per share became
exercisable. Twenty employees, including William L. Hiott, Jr.,
Executive Vice President and Treasurer and Fleetwood S. Hassell, Executive Vice
President, exercised their options to purchase 24,257 shares of Common Stock at
$8.92 per share. William L. Hiott, Jr. purchased 4,159 shares and
Fleetwood S. Hassell purchased 2,495 shares. On May 14, 2008 in
accordance with the Incentive Stock Option Plan, options to purchase 27,488
shares at $8.92 per share became exercisable. Fourteen employees,
including William L. Hiott, Jr. Executive Vice President and Treasurer and
Fleetwood S. Hassell, Executive Vice President, exercised their options to
purchase 20,268 shares of Common Stock at $8.92 per share. On May 15, 2008 in
accordance with the Incentive Stock Option Plan, options to purchase 3,174 at
9.39 per share became exercisable. Eight employees exercised their
options to purchase 2,347 shares of Common Stock at 9.39 per share. All stock
options were fully vested and fully exercisable. On May 14, 2009 in accordance
with the Incentive Stock Option Plan, options to purchase 27,488 shares at $8.92
per share became exercisable. Fifteen employees, including William L.
Hiott, Jr. Executive Vice President and Treasurer and Fleetwood S. Hassell,
Executive Vice President, exercised their options to purchase 24,991 shares of
Common Stock at $8.92 per share. On May 15, 2009 in accordance with the
Incentive Stock Option Plan, options to purchase 3,174 at $9.39 per share became
exercisable. Five employees exercised their options to purchase 1,320
shares of Common Stock at $9.39 per share. All stock options were fully vested
and fully exercisable.
Hugh C.
Lane, Jr., President and Chief Executive Officer, was granted the option to
purchase 16,500 shares of Common Stock of the Company pursuant to the Incentive
Stock Option Plan at a price of $14.85 per share. The option was exercisable on
May 14, 2006 and would have expired if not exercised on that date. William L.
Hiott, Jr., Executive Vice President and Treasurer, was 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 became exercisable in five 20% increments beginning 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 10
th
anniversary of the date of the grant.
As
adjusted for a 10% stock dividend effective on July 15, 2003, a 10% stock
distribution effective on April 29, 2005 and a 25% stock dividend effective
April 28, 2006, William L. Hiott, Jr., Executive Vice President and Treasurer,
has the option to purchase 4,160 shares at a price of $8.92 per share and
Fleetwood S. Hassell, Executive Vice President, has the option to purchase 2,497
shares at a price of $8.92 per share and 5,000 shares at a price of
$16.62. The options to purchase 5,000 shares at a price of $16.62 per
share were granted to Fleetwood S. Hassell on May 17, 2006 and will be
exercisable on May 17, 2011.
In the
event of a prospective reorganization, consolidation or sale of substantially
all of the assets or any other form of corporate reorganization in which the
Company would not be the surviving entity or in the event of the acquisition,
directly or indirectly, of the beneficial ownership of 24% of the Common Stock
of the Company or the making, orally or in writing, of a tender offer for, or
any request or invitation for tender of, or any advertisement making or inviting
tenders of the Company stock by any person, all options in effect at that time
would accelerate so that all options would become immediately exercisable and
could be exercised within one year immediately following the date of
acceleration but not thereafter.
In the
case of termination of employment of an option holder other than involuntary
termination without just cause, retirement, death or legal disability, the
option holder may exercise the option only with respect to those shares of
Common Stock as to which he or she has become vested. The option
holder may exercise the option with respect to such shares no more than 30 days
after the date of termination of employment (but in any event prior to the
expiration date).
In the
event that the option holder's employment is terminated without just cause, the
option shall become fully vested and fully exercisable as of the date of his or
her termination without regard to the five year vesting schedule. The
option holder may exercise the option following an involuntary termination
without just cause until the expiration date of the option.
In the
event the option holder remains in the continuous employ of the Company or any
subsidiary from the date of the grant until the option holder's retirement, the
option shall become fully vested and fully exercisable as of the date of his or
her retirement without regard to the five year schedule. The option holder may
exercise the option following his or her retirement until the expiration
date.
In the
event the option holder remains in the continuous employ of the Company or a
subsidiary from the date of the grant until his or her death, the option shall
become fully vested and fully exercisable as of the date of death without regard
to the five year vesting schedule. The person or persons entitled to exercise
the option following the option holder's death may exercise the option until the
expiration date.
In the
event the option holder remains in the continuous employ of the Company or any
subsidiary from the date of the grant until the date of his or her legal
disability, the option shall become fully vested and fully exercisable as of the
date of his or her termination of employment on account of his or her legal
disability without regard to the five year vesting schedule. The option holder
may exercise the option following such termination of employment until the
expiration date.
The
Incentive Stock Option Plan provides for adjustment in the number of shares of
Common Stock authorized under the Plan or granted to an employee to protect
against dilution in the event of changes in the Company's capitalization,
including stock splits and dividends.
Shown
below is information with respect to unexercised options to purchase Common
Stock of the Company held by the named Executive Officers at December 31,
2009.
2009 OPTION EXERCISES AND STOCK VESTED
|
|
|
|
OPTION AWARDS
|
|
|
STOCK AWARDS
|
Name
(a)
|
|
|
Number of Shares
Acquired on
Exercise
(#)
(1)
|
|
|
Value Realized on
Exercise
($)
(2)
|
|
|
Number of Shares
Acquired on Vesting
(#)
(d)
|
|
Value Realized on
Vesting
($)
(e)
|
Hugh
C. Lane, Jr.
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
William
L. Hiott, Jr.
|
|
|
|
4,159
|
|
|
|
6,779
|
|
|
|
|
|
Fleetwood
S. Hassell
|
|
|
|
2,495
|
|
|
|
5,938
|
|
|
|
|
|
Sheryl
G. Sharry
|
|
|
|
2,495
|
|
|
|
8,932
|
|
|
|
|
|
|
(1)
|
Options
exercised in 2009.
|
|
(2)
|
This
column reflects the difference between the market value of the shares on
the date of exercise and the exercise price of the stock
options.
|
AUDIT
COMMITTEE MATTERS
AUDIT
COMMITTEE
The Audit
Committee of the Company is composed of seven independent Directors and operates
under a written charter attached as Exhibit A to the 2004 Proxy
Statement. The Audit Committee is responsible for the appointment,
compensation and oversight of our independent registered public accounting
firm.
The Board
of Directors has determined that Linda J. Bradley McKee, PhD, CPA meets the
qualifications of an “audit committee financial expert” in accordance with SEC
rules, including meeting the relevant definition of “Independent
Director’.
Review of the Company’s
Audited Financial Statements for the Fiscal Year Ended
December 31,
2009
Management
is responsible for the Company’s internal controls and the financial reporting
process. The independent auditors are responsible for performing an
independent audit of the Company’s consolidated financial statements in
accordance with accounting principles generally accepted in the United States of
America and issuing a report theron. The Audit and Compliance
Committee’s responsibility is to monitor and oversee the process.
In this
context, the Audit Committee has met and held discussions with management and
Elliott Davis, LLC, the Company’s independent auditors in 2009. In
discharging its oversight responsibility as to the audit process, the Audit
Committee has received the written disclosures and the letter from the
independent auditors required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent auditor’s communications
with the Audit Committee concerning independence and has discussed with the
independent auditors their independence from the Company and its
management. The Audit Committee also discussed with management, the
internal auditors and the independent auditors the quality and adequacy of the
Company’s internal controls. The Audit Committee reviewed with the
independent auditor their audit plans, audit scope and identification of audit
risks.
The Audit
Committee reviewed and discussed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
“Communication with Audit and Finance Committees,” and, with and without
management present, discussed and reviewed the results of the independent
auditors’ examination of the financial statements. The Audit
Committee also discussed the results of the internal audit
examinations.
The Audit
Committee reviewed and discussed the audited consolidated financial statements
of Bank of South Carolina Corporation as of and for the year ended December 31,
2009, with management and the independent auditors.
Based on
the above-mentioned review and discussion with management and the independent
auditors, the Audit Committee recommended to the Board of Directors that Bank of
South Carolina Corporation’s audited consolidate financial statements be
included in its Annual Report on Form 10-K for the year ended December 31, 2009,
for the filing with the Securities and Exchange Commission. During
2009 the Committee appointed Elliott Davis, LLC as the Company’s independent
auditors for 2010.
Submitted by:
Malcolm M. Rhodes, MD,
Chairman
Graham M. Eubank, Jr.
Glen B. Haynes
Richard W. Hutson, Jr.
Dr. Linda J. Bradley McKee,
CPA
Alan I. Nussbaum, MD
David R. Schools
PROPOSAL
2 - APPROVE THE 2010 OMNIBUS STOCK OPTION PLAN
INCLUDING
300,000 SHARES TO BE RESERVED UNDER THIS PLAN
The Board
of Directors recommends that shareholders vote in favor of the 2010 Omnibus
Stock Incentive Plan. If approved, the proposed Stock Incentive Plan
would set aside 300,000 shares of the currently authorized but unissued and
unreserved 4,202,411 shares of no par value Common Stock for options to be
granted to eligible employees of the Company or of a subsidiary, including
employees who are members of the Board of Directors. At February 26,
2010, eligible employees included 69 full time employees. The full time
employees include 4 Executive Officers all of whom are nominees for the Board of
Directors. Non-employee Directors of the Company would not be granted
options under the Stock Incentive Plan.
Approval
of the 2010 Omnibus Stock Incentive Plan Will Facilitate the Attraction,
Retention and Motivation of Talented Employees Critical to the Company’s
Success
The 2010
Omnibus Stock Incentive Plan is the sole plan for providing equity incentive
compensation to eligible employees and employee Directors. The Board of
Directors believe that the 2010 Omnibus Stock Incentive Plan is in the best
interest of shareholders and the Company, as equity awards granted under the
plan help to attract, motivate, and retain talented employees and employee
Directors, align employee and shareholder interests, link employee compensation
with Company performance, and maintain a culture based on employee stock
ownership. The following summary of major features of the 2010
Omnibus Stock Incentive Plan is qualified in its entirety by reference to the
actual text of the Plan, set forth in Exhibit A.
Approval
of the 2010 Omnibus Stock Incentive Plan Will Allow the Company to Follow Equity
Compensation “Best Practices”
The 2010
Omnibus Stock Incentive Plan contains a number of provisions that the Board
believes are consistent with the interest of shareholders and sound corporate
governance practices:
|
·
|
Limitation on Shares
Issued
Assuming the passage of the 2010 Omnibus
Stock Incentive Plan, no more than 300,000 total shares of Bank of South
Carolina Corporation Common Stock will be authorized for
issuance.
|
|
·
|
No Discounted Stock
Options
All stock options must have an exercise
price equal to or greater than 100% of the fair market value on Bank of
South Carolina Corporation Common Stock on the date of
grant.
|
|
·
|
Shareholder
Approval
The Board of Directors may amend or
terminate this Plan from time to time; provided, however, that no
amendment may become effective until shareholder approval is
obtained. In no event will there be any amendment changing the
option price, decreasing the option price after the grant of an option,
increasing the period of the option or increasing the aggregate shares
available for option except upon compliance with the above
requirements.
|
|
·
|
Vesting
Options
will vest with respect to twenty percent (20%) of the shares subject to
the option on the fifth anniversary of the date of the grant and with
respect to an additional twenty percent (20%) of the shares subject to the
option on each subsequent anniversary of the date of grant so that the
option shall be fully vested and fully exercisable on the tenth
anniversary of the date of grant.
The right to
exercise each such twenty percent (20%) increment of any option will be
cumulative and will not expire until the tenth anniversary of the date of
grant. Options to an employee, who at the time of the grant,
directly or indirectly owns more than 10% of the total combined voting
power of the Common Stock of the Company or of a subsidiary, shall be
fully vested and fully exercisable on the fifth anniversary of the date of
grant.
|
|
·
|
Forfeitures
If
an option is terminated, in whole or in part, for any reason other than
its exercise, the number of shares of Bank of South Carolina Corporation
Common Stock allocated to the option or portion thereof may be reallocated
to other options to be granted under the
Plan.
|
|
·
|
Nontransferability
Any
option granted under this Plan shall be nontransferable except by will or
by the laws of descent and distribution. In the event of any
such transfer, the option must be transferred to the same person or
persons, entity or entities. During the lifetime of a
participant to whom an option is granted, the option may be exercised only
by the participant. No right or interest of a participant in
any option shall be liable for, or subject to, any lien, obligation or
liability of such participant.
|
|
·
|
Committee
The
2010 Omnibus Stock Incentive Plan shall be administered by the Executive
Committee of the Board of Directors for non- executive
employees. The Board of Directors shall administer the 2010
Omnibus Stock Incentive Plan to Executive
Officers.
|
Background
on Equity Compensation at The Bank of South Carolina
The
Company has been granting stock options to officers and other key employees
since 1998. One Hundred Eighty Thousand shares were reserved under the 1998
Omnibus Stock Incentive Plan. As adjusted for a 10% stock dividend, a
10% stock distribution and a 25% stock divided, 272,250 total shares were
reserved under the 1998 Omnibus Stock Incentive Plan. A total of
317,692 options were granted with 83,983 options forfeited leaving 38,541 shares
that were not granted under this Plan.
On April
14, 2008, the 1998 Omnibus Stock Incentive Plan expired. According to
the Plan, no options may be granted under this Plan after the expiration
date. The options granted before this date remain valid in accordance
with their terms. There are outstanding granted options of 79,087 under the 1998
Omnibus Stock Incentive Plan that are exercisable in 20% increments beginning on
the fifth anniversary of the date of grant. The right to exercise
each such 20% of each option is cumulative and will not expire until the 10
th
anniversary of the date of the grant. There were 154,622 options
exercised under this Plan.
Summary
of the 2010 Omnibus Stock Incentive Plan
If
approved, the proposed Stock Incentive Plan would set aside 300,000 shares of
the currently authorized but unissued and unreserved 4,202,411 shares of the no
par value Common Stock for options to be granted to eligible employees of the
Company or of a subsidiary, including employees who are members of the Board of
Directors. Non-employee Directors of the Company would not be granted
options under the Stock Incentive Plan. The Stock Incentive Plan
would be administered by the Executive Committee (exclusive of members who are
also Executive Officers of the Company) of the Board of Directors. No
member of the Executive Committee would be a beneficiary of the Stock Incentive
Plan.
Options
under the Stock Incentive Plan will be granted by the Board of Directors to
eligible employees upon recommendation of the Executive Committee and will be
vested with respect to twenty percent (20%) of the shares subject to the option
on the fifth anniversary of the date of the grant and with respect to an
additional twenty percent (20%) of the shares subject to the option on each
subsequent anniversary of the date of the grant so that the option shall be
fully vested and fully exercisable on the tenth anniversary of the date of
grant. The right to exercise each such twenty percent (20%) increment
of any option will be cumulative and will not expire until the tenth anniversary
of the date of the grant.
The
option price would be the Fair Market Value on the date of the grant (determined
as of the day preceding the date of exercise which is not less than the option
price). In the case of an employee, who at the time of the grant,
directly or indirectly owns more than ten percent (10%) of the total combined
voting power of the Common Stock of the Company or of a subsidiary, the option
price would be one hundred ten percent (110%) of the market price on the date of
grant.
The
exercise of an option is to be by payment in full of the exercise price by
cashiers check or by the surrender of shares of Company Common Stock with an
aggregate fair market value (determined as of the day preceding the date of
exercise) which is not less than the option price, or a combination of cash and
Company Common Stock. All options would expire in ten (10) years,
except in the case of termination of employment, retirement or legal disability,
all as described below, and except for an option to an employee who, at the time
of the grant, directly or indirectly owns more than ten percent (10%) of the
total combined voting power of the Common Stock of the Company or of a
subsidiary, which option would expire in five (5) years.
In the
case of termination of an option holder other than involuntary termination
without just cause, retirement, death or legal disability, the option holder may
exercise the option only with respect to those shares of Company Common Stock as
to which he or she has become vested. The option holder may exercise
the option with respect to such shares no more than thirty (30) days after the
date of termination of employment (but in any event prior to the expiration
date).
In the
event that the option holder’s employment is terminated without just cause, the
option shall become fully vested and fully exercisable as of the date of his or
her termination without regard to the five (5) year initial vesting and
exercisability or to the twenty percent (20%) annual increments
thereafter. The option holder may exercise the option following an
involuntary termination without just cause until the expiration date of the
option.
In the
event that the option holder remains in the continuous employ of the Company or
a subsidiary from the date of the grant until the option holder’s retirement,
the option shall become fully vested and fully exercisable as of the date of his
or her retirement without regard to the five (5) year initial vesting and
exercisability or to the twenty percent (20%) annual increments
thereafter. The option holder may exercise the option following his
or her retirement until the expiration date.
In the
event the option holder remains in the continuous employ of the Company or a
subsidiary from the date of the grant until his or her death, the option shall
become fully vested and fully exercisable as of the date of death without regard
to the five (5) year initial vesting and exercisability or to the twenty percent
(20%) annual increments thereafter. The person or persons entitled to
exercise the option following the option holder’s death may exercise the option
until the expiration date.
In the
event that the option holder remains in the continuous employ of the Company or
a subsidiary from the date of the grant until the date of his or her legal
disability, the option shall become fully vested and fully exercisable as of the
date of his or her legal disability without regard to the five (5) year initial
vesting and exercisability or to the twenty percent (20%) annual increments
thereafter. The option holder may exercise the option following such
termination until the expiration date.
The Stock
Incentive Plan would provide for adjustment in the number of shares of Common
Stock authorized under the Plan or granted to an optionee to protect against
dilution in the event of changes in the Bank’s capitalization, including stock
splits and dividends.
In the
event of a prospective reorganization, consolidation or sale of substantially
all of the assets or any other form of corporate reorganization in which the
Bank would not be the surviving entity; or in the event of the acquisition,
directly or indirectly, of the beneficial ownership of twenty four (24%) of the
Common Stock of the Company; or the making, orally or in writing, of a tender
offer for or any request or invitation for tender of, or any advertisement
making or inviting tenders of the Bank stock by any person, all options in
effect a the time would accelerate so that all options would become immediately
exercisable and could be exercised within one year immediately following the
date of acceleration but not thereafter.
Although
all options granted under the Stock Incentive Plan would be intended to be
“incentive stock options” within the meaning of Section 422A of the Internal
Revenue Code of 1986, to the extent that any options granted under the Stock
Incentive Plan failed to qualify as incentive stock options they would be
permitted as non-qualified options under the Stock Incentive Plan. In
addition, the Compensation Committee would have the authority, in its sole
discretion, to grant non-qualified options to eligible
employees.
An option
granted under the Stock Incentive Plan of the Company may be either an incentive
stock option (ISO) or a non-qualified option. Although the intent is
to issue only ISOs, if the option granted fails to meet the strict test of
Internal Revenue Code Section 422A, the Plan includes a provision to issue the
option as a non-qualified option. The tax treatment varies for the
different type of options.
The
Company generally is not entitled to a deduction when it issues ISOs; however,
if the required holding periods described in Section 422A are not met, the
Company is entitled to a deduction as compensation in the year of disposition of
the stock acquired by the employee. This deduction is measured by the
amount that the fair market value of the option at the exercise date exceeded
the exercise price, or the excess of sales proceeds over the exercise price, if
less. The employee is required to include an equal amount in income
as compensation.
The
receipt of a non-qualified option by an employee is taxable under Section 83 of
the Code as property received for services rendered. If the option
has a readily ascertainable value, it is taxed at the time of the
grant. If no value can be determined at the grant date, taxation to
the employee occurs on exercise, at which time the employee is considered to
receive compensation in an amount equal to the fair market value of the stock
acquired over the price paid. At the time the employee is required to
include an amount in compensation, whether on the grant date or the exercise
date, the employer is entitled to a compensation deduction measured by the
amount the employee is required to include in income.
It is
contemplated that all current employees of the Company will be granted options
to purchase shares of Common Stock under the Stock Incentive
Plan. The number of shares to be subject to each such individual
option and the number of options to be received by eligible employees (including
officers, such Directors as are also employees, and all other employees) either
individually, or as a group, has not yet been determined by the
Company.
Amendment
of the Stock Incentive Plan will be only by written instrument approved by the
Board of Directors and Shareholders of the Company. In no event, will
there be any amendment changing the option price, decreasing the option after
the grant of an option, increasing the period of the option or increasing the
aggregate shares available for option except upon compliance with the above
requirements.
PROPOSAL
3 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit
and Compliance Committee of the Board has appointed Elliott Davis, LLC as Bank
of South Carolina Corporation’s independent accounting firm for the year ended
December 31, 2010 and that appointment is being submitted to shareholders for
ratification. The appointment of Elliott Davis, LLC as independent public
accountants was approved by the Audit and Compliance Committee of the Board of
Directors and ratified by the Shareholders at the 2009 and 2008 Annual
Shareholders Meetings. At the 2010 Annual Shareholders’ Meeting the following
resolution will be subject to ratification by a simple majority vote of shares
represented at the meeting:
RESOLVED,
that the selection of Elliott Davis, LLC as the independent certified public
accountants of Bank of South Carolina Corporation (the "Company") and its sole
subsidiary, The Bank of South Carolina (the "Bank"), for the fiscal year ending
December 31, 2010, is hereby ratified.
If
ratification is not achieved, the selection of an independent certified public
accountant will be reconsidered and made by the Board of
Directors. Even if selection is ratified, the Board of Directors
reserves the right to, and in its discretion may, direct the appointment of any
other independent certified public accounting firm at any time if the Board
decides that such a change would be in the best interests of the Company and its
Shareholders.
Independent
Registered Public Accounting Firm
Auditing
and Related Fees
The
services provided by Elliott Davis, LLC include the examination and reporting of
the financial status of the Company and the Bank. These services have
been furnished at customary rates and terms. There are no existing
direct or indirect agreements or understandings that fix a limit on current or
future fees for these audit services.
Elliott
Davis, LLC assisted in the preparation of the Company’s and Bank’s tax returns
for the fiscal year ending December 31, 2009 and 2008. These
non-audit services were routine in nature and did not compose more than 25% of
the total fees paid to Elliott Davis, LLC in 2009 or 2008.
A
representative of Elliott Davis, LLC is expected to attend the Annual
Shareholders’ Meeting with the opportunity to make a statement, if desired, and
is expected to be available to respond to appropriate questions.
Before
the independent certified public accountants of the Company and the Bank are
engaged to render non-audit services for the Company or the Bank, each
engagement is approved by the Audit Committee. All of the audit and
tax services provided by Elliott Davis, LLC for the fiscal year ending December
31, 2009 were preapproved by the Audit Committee.
|
|
2009
|
|
|
2008
|
|
Audit
Fees
|
|
$
|
68,650
|
|
|
$
|
60,750
|
|
Audit
related fees
|
|
|
|
|
|
|
|
|
Audit
and related fees
|
|
|
|
|
|
|
-
|
|
Tax
Fees
|
|
|
8,300
|
|
|
|
9,300
|
|
Total
Fees
|
|
$
|
79,950
|
|
|
$
|
65,062
|
|
OTHER
MATTERS
Management
is not aware of any matters to come before the meeting that will require the
vote of Shareholders other than those matters indicated in the Notice of Meeting
and this Proxy Statement.
However,
if any other matter calling for Shareholder action should properly come before
the meeting or any adjournments thereof, those persons named as Proxies in the
enclosed Proxy Form will vote thereon according to their best
judgment.
PENDING
LITIGATION
In the
opinion of management, there are no legal proceedings pending other than routine
litigation incidental to its business or involving amounts which are not
material to the 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.
ANNUAL
REPORT
The
Annual Report for the fiscal year ended December 31, 2009, filed with the
Securities and Exchange Commission on Form 10-K, is mailed herewith to all
Shareholders.
SHAREHOLDER
PROPOSALS FOR THE 2011 ANNUAL SHAREHOLDERS’ MEETING
Shareholder
proposals, if any, for inclusion in the Proxy Statement relating to the 2011
Annual Shareholders’ meeting, must be addressed to and received in the office of
the President no later than December 3, 2010. To ensure prompt
receipt by the Company, the proposal should be sent certified mail, return
receipt requested.
|
By
Order of the Board of Directors
|
|
|
|
/S/Richard
W. Hutson, Jr.
|
|
Richard
W. Hutson, Jr.
|
|
Secretary
|
February
25, 2010
PROXY
CARD
BANK
OF SOUTH CAROLINA CORPORATION
PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS APRIL 13, 2010
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL
PERSONS BY THESE PRESENTS THAT I, the undersigned Shareholder of Bank of South
Carolina Corporation (the Company) do hereby appoint Edmund Rhett, Jr., MD,
David R. Schools 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, 2010, at 5:30 p.m., or at any
adjournments or postponements thereof, with all the powers the undersigned would
possess if personally present upon the following matters:
The
Board of Directors recommends a vote “FOR” proposals 1, 2 and 3.
¨
FOR
all nominees listed below
(except as marked to the contrary below).
¨
WITHHOLD AUTHORITY
to vote for
all nominees listed below.
David W.
Bunch, Graham M. Eubank, Jr., 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, Dr. Linda J. Bradley McKee, CPA, Alan I.
Nussbaum, MD, Edmund Rhett, Jr., MD, Malcolm M. Rhodes, MD., David R. Schools,
Sheryl G. Sharry, Thomas C. Stevenson, III.
(
INSTRUCTION:
To
withhold authority to vote for any individual nominee, write the nominee’s name
in the space provided below.)
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|
|
|
2.
|
APPROVAL OF THE 2010 INCENTIVE
STOCK OPTION PLAN including 300,000 shares to be reserved under this
Plan.
|
¨
FOR
¨
AGAINST
¨
ABSTAIN
3.
|
APPROVAL OF ELLIOTT DAVIS,
LLC
as the Company’s independent auditors for the fiscal year
ending December 31, 2010.
|
¨
FOR
¨
AGAINST
¨
ABSTAIN
4.
|
The
transaction of such other business as may properly come before the
meeting.
|
Each
properly executed Proxy will be voted in accordance with specifications made
hereon. If no specification is made, the shares represented by this
Proxy will be voted “FOR” the nominees, “FOR” the 2010 Incentive Stock Option
Plan, “FOR” Elliott Davis, LLC and in the discretion of the Proxies, on any
other business as may properly come before the meeting.
The
undersigned hereby acknowledges receipt of the Company’s 2009 Annual Report on
Form 10-K 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:
_____________________________, 2010
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
PROXY
MATERIAL OF
BANK
OF SOUTH CAROLINA CORPORATION
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD APRIL 13, 2010
To Our
Shareholders:
The
Annual Meeting of Shareholders of Bank of South Carolina Corporation (the
“Company”) will be held at 256 Meeting Street, Charleston, South Carolina, on
Tuesday, April 13, 2010, at 5:30 p.m., for the following purposes:
|
1.
|
To
elect seventeen (17) Directors to serve until the Company’s 2011 Annual
Meeting of Shareholders;
|
|
2.
|
To
approve the 2010 Incentive Stock Option Plan including 300,000 shares to
be reserved under the Plan.
|
|
3.
|
To
ratify the appointment of Elliott Davis, LLC, as independent certified
public accountants for 2010;
|
|
4.
|
To
transact such other business as may properly come before the
meeting.
|
Shareholders
of record at the close of business on February 26, 2010, will be entitled to
notice of and to vote at the Annual Meeting and any adjournments
thereof.
You may
revoke your Proxy at any time prior to its exercise by written notice to the
Company prior to the meeting or by attending the meeting personally and
voting. The Board of Directors of the Company solicits the
accompanying form of Proxy.
PLEASE
SIGN AND DATE THE ACCOMPANYING PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
|
By
Order of the Board of Directors
|
|
|
|
|
|
|
|
Richard
W. Hutson
|
|
|
Secretary
|
|
|
|
|
|
February
25, 2010
|
|
Exhibit
A
BANK OF
SOUTH CAROLINA CORPORATION
2010
OMNIBUS STOCK INCENTIVE PLAN
BANK
OF SOUTH CAROLINA CORPORATION
2010 OMNIBUS STOCK INCENTIVE
PLAN
ARTICLE
I
DEFINITIONS
1.01
|
Agreement
means
a written agreement (including any amendment or supplement thereto)
between BKSC and a Participant specifying the terms and conditions of an
award of an Option granted to such
Participant.
|
1.02
|
Code
means the
Internal Revenue Code of 1986, as
amended.
|
1.03
|
Board
means the
Board of Directors of BKSC.
|
1.04
|
Committee
means
the Executive Committee.
|
1.05
|
Date of
Exercise
means the date that the Option price is received by
BKSC.
|
1.06
|
Fair Market
Value
means, on any given date, the closing price of BKSC Common
Stock as reported on the Nasdaq Capital Market. If BKSC Common
Stock was not traded on the Nasdaq Capital Market on such date, then
Fair Market
Value
is determined with reference to the next preceding day that
BKSC Common Stock was so traded.
|
1.07
|
Legal
Disability
means that a Participant is permanently and totally
disabled within the meaning of Code section
22(e)(3).
|
1.08
|
Plan
means the
Bank of South Carolina Corporation 2010 Omnibus Stock Incentive
Plan.
|
1.09
|
Retirement
means that a Participant has separated from service on or after his
earliest early retirement date under The Bank of South Carolina Employee
Stock Ownership Plan and Trust or such tax-qualified pension or profit
sharing plan maintained by BKSC or a Subsidiary in which he
participates.
|
1.10
|
BKSC
means Bank
of South Carolina Corporation.
|
1.11
|
BKSC Common
Stock
means the Common Stock, no par value, of
BKSC.
|
1.12
|
Option
means a
stock option that entitles the holder to purchase from BKSC a stated
number of shares of BKSC Common Stock at the price set forth in an
Agreement.
|
1.13
|
Participant
means an employee of BKSC or of a Subsidiary, including an employee who is
a member of the Board, or a non-employee who satisfies the requirements of
Article IV and is selected by the Committee to receive an
Option.
|
ARTICLE
II
PURPOSES
The Plan
is intended to assist BKSC in recruiting and retaining employees with ability
and initiative by enabling employees to participate in its future success and to
associate their interests with those of BKSC and its
shareholders. The Plan is intended to permit the grant of both
Options qualifying under Code section 422 (“incentive stock options”) and
Options not so qualifying. No Option that is intended to be an
incentive stock option shall be invalid for failure to qualify as an incentive
stock option. The proceeds received by BKSC from the sale of BKSC
Common Stock pursuant to this Plan shall be used for general corporate
purposes.
ARTICLE
III
ADMINISTRATION
Except as
provided in this Article III, the Plan shall be administered by the Executive
Committee. The Committee shall have authority to grant Options upon
such terms (not inconsistent with the provisions of this Plan) as the Committee
may consider appropriate. Such terms may include conditions (in
addition to those contained in this Plan) on the exercisability of all of any
part of an Option. Notwithstanding any such condition, the Committee
may, in its discretion, accelerate the time at which any Option may be
exercised. In addition, the Committee shall have complete authority
to interpret all provisions of this Plan; to prescribe the form of Agreements;
to adopt, amend and rescind rules and regulations pertaining to the
administration of the Plan; and to make all other determinations necessary or
advisable for the administration of this Plan. The express grant in
the Plan of any specific power to the Committee shall not be construed as
limiting any power or authority of the Committee. Any decision made,
or action taken, by the Committee or in connection with the administration of
this Plan shall be final and conclusive. No member of the Committee
shall be liable for any act done in good faith with respect to this Plan or any
Agreement or Option. All expenses of administering this Plan shall be
borne by BKSC.
The
Committee, in its discretion, may delegate to one or more officers of BKSC all
or part of the Committee’s authority and duties with respect to Participants who
are not subject to the reporting and other provisions of Section 16 of the
Securities and Exchange Act of 1934, as in effect from time to
time. In the event of such delegation, and as to matters encompassed
by the delegation, references in the Plan to the Committee shall be interpreted
as a reference to the Committee’s delegate or delegates. The
Committee may revoke or amend the terms of a delegation at any time but such
action shall not invalidate any prior actions of the Committee’s delegate or
delegates that were consistent with the terms of the Plan.
ARTICLE
IV
ELIGIBILITY
4.01
|
General
. Any
employee of BKSC or of any Subsidiary (including any corporation that
becomes a Subsidiary after the adoption of this Plan) is eligible to
participate in this Plan if the Committee, in its sole discretion,
determines that such person has contributed or can be expected to
contribute to the profits or growth of BKSC or a
Subsidiary. Any such employee may be granted
Options. A Director of BKSC who is an employee of BKSC or a
Subsidiary may be granted Options under this Plan. A member of
the Committee may not participate in this Plan during the time that his
participation would prevent the Committee from being “disinterested” for
purposes of Securities and Exchange Commission Rule 16b-3 as in effect
from time to time.
|
4.02
|
Grants
. The
Committee will designate individuals to whom Options are to be granted and
will specify the number of shares of BKSC Common Stock subject to each
award or grant. All Options granted under this Plan shall be
evidenced by Agreements which shall be subject to the applicable
provisions of this Plan and to such other provisions as the Committee may
adopt. No Participant may be granted incentive stock options
(under all incentive stock option plans of BKSC and its Subsidiaries)
which are first exercisable in any calendar year for stock having an
aggregate Fair Market Value (determined as of the date an option is
granted) exceeding $100,000.
|
ARTICLE
V
STOCK SUBJECT TO
PLAN
5.01
|
Source of
Shares
. Upon the exercise of an Option, BKSC may deliver
to the Participant authorized but unissued BKSC Common
Stock.
|
5.02
|
Maximum Number of
Shares
. The maximum aggregate number of shares of BKSC
Common Stock that may be issued pursuant to the exercise of Options is One
Hundred Thousand subject to increases and adjustments as provided in this
Article V and Article XI.
|
5.03
|
Incentive Stock
Options
. Section 5.02 to the contrary notwithstanding,
the maximum aggregate number of shares of BKSC Common Stock that may be
issued pursuant to the exercise of Options that are incentive stock
options granted under this Plan is Three Hundred
Thousand.
|
5.04
|
Forfeitures,
etc
. If an Option is terminated, in whole or in part,
for any reason other than its exercise, the number of shares of BKSC
Common Stock allocated to the Option or portion thereof may be reallocated
to other Options to be granted under this
Plan.
|
ARTICLE
VI
OPTION
PRICE
The price
per share for BKSC Common Stock purchased on the exercise of an Option shall be
determined by the Committee on the date of grant. The price per share
for BKSC Common Stock purchased on the exercise of any incentive stock option
shall not be less than one hundred percent (100%) of the Fair Market Value on
the date the Option is granted.
ARTICLE
VII
EXERCISE OF
OPTIONS
7.01
|
Maximum Option
Period
. The maximum period in which an Option may be
exercised shall be determined by the Committee on the date of grant except
that no Option that is an incentive stock option shall be exercisable
after the expiration of ten years from the date the Option was
granted. The terms of any Option may provide that it is
exercisable for a period less than such maximum
period.
|
7.02
|
Nontransferability
. Any
Option granted under this Plan shall be nontransferable except by will or
by the laws of descent and distribution. In the event of any
such transfer, the Option must be transferred to the same person or
persons or entity or entities. During the lifetime of a
Participant to whom an Option is granted, the Option may be exercised only
by the Participant. No right or interest of a Participant in
any Option shall be liable for, or subject to, any lien, obligation or
liability of such Participant.
|
ARTICLE
VIII
METHOD OF
EXERCISE
8.01
|
Exercise
. An
Option granted under this Plan shall be deemed to have been exercised on
the Date of Exercise. Subject to the provisions of Articles VII
and X, an Option may be exercised in whole at any time or in part from
time to time at such times and in compliance with such requirements as the
Committee shall determine. An Option granted under this Plan
may be exercised with respect to any number of whole shares less than the
full number of whole shares for which the Option could be
exercised. A partial exercise of an Option shall not affect the
right to exercise the Option from time to time in accordance with this
Plan and the applicable Agreement with respect to remaining shares subject
to the Option.
|
8.02
|
Payment
. Unless
otherwise provided by the Agreement, payment of the Option price shall be
made by Cashiers Check. If the Agreement provides, payment of
all or part of the Option price may be made by surrendering shares of BKSC
Common Stock to BKSC. If BKSC Common Stock is used to pay all
of part of the Option price, the shares surrendered must have a Fair
Market Value (determined as of the day preceding the Date of Exercise)
that is not less than such price or part
thereof.
|
8.03
|
Shareholder
Rights
. No Participant shall have any rights as a
stockholder with respect to shares subject to an Option until the Date of
Exercise of such Option.
|
ARTICLE
IX
ADJUSTMENT UPON CHANGE IN
BKSC COMMON STOCK
If all or
any portion of the Option is exercised subsequent to any stock dividend, split
up, recapitalization, combination or exchange of shares, merger, consolidation,
acquisition of property or stock, separation, reorganization, or a transaction
to which Section 424 of the Internal Revenue Code applies, or other similar
change or transaction of or by BKSC, as a result of which shares of any class
shall be issued in respect of outstanding shares of the class covered by the
Option or shares of the class covered by the Option shall be changed into the
same or a different number of shares of the same or another class or classes,
the person or persons so exercising such an Option shall receive, for the
aggregate option price payable upon such exercise of the Option, the aggregate
number and class of shares equal to the number and class of shares the Optionee
would have had on the date of exercise had the shares been purchased for the
same aggregate price at the date the Option was granted and had not been
disposed of, taking into consideration any such stock dividend, split up,
recapitalization, combination or exchange of shares, merger, consolidation,
acquisition of property or stock, separation, reorganization or other similar
change or transaction;
provided, however
,
that no fractional share shall be issued upon any such exercise and the
aggregate price paid shall be appropriately reduced on account of any fractional
share not issued.
ARTICLE
X
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
No option
shall be exercisable and no BKSC Common Stock shall be issued under this Plan
except in compliance with all applicable federal and state laws and regulations
(including, without limitation, withholding tax requirements) and the rules of
any domestic stock exchanges on which BKSC’s shares may be
listed. BKSC shall have the right to rely on an opinion of its
counsel as to such compliance. Any share certificate issued to
evidence BKSC Common Stock for which an Option is exercised may bear such
legends and statements as the Committee may deem advisable to assure compliance
with federal and state laws and regulations. No Option shall be
exercisable and no BKSC Common Stock shall be issued under this Plan until BKSC
has obtained such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters.
ARTICLE
XI
GENERAL
PROVISIONS
13.01
|
Effect on
Employment
. Neither the adoption of this Plan, its
operation nor any documents describing or referring to this Plan (or any
part thereof) shall confer upon any employee any right to continue in the
employ of BKSC or a Subsidiary, nor shall it interfere in any way with the
right of Bank of South Carolina Corporation or any Subsidiary to terminate
his/her employment at any time. So long as the Participant
shall continue to be an employee of Bank of South Carolina Corporation or
any Subsidiary, the Option shall not be affected by any changes in the
duties or positions of the
Participant.
|
13.02
|
Rules of
Construction
. Headings are given to the articles and
sections of this Plan solely as a convenience to facilitate
reference. The reference to any statute, regulation or other
provision of law shall be construed to refer to any amendment to or
successor of such provision of
law.
|
13.03
|
Employee
Status
. For purposes of determining the applicability of
Code section 422 (relating to incentive stock options) or in the event
that the terms of any Option provide that it may be exercised only during
employment or within a specified period of time after termination of
employment, the Committee may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability or other
reasons shall not be deemed interruptions of continuous
employment.
|
ARTICLE
XII
AMENDMENT
The Board
may amend or terminate this Plan from time to time; provided, however, that no
amendment may become effective until shareholder approval is obtained if (i) the
amendment increases the aggregate number of shares of BKSC Common Stock that may
be issued under the Plan or (ii) the amendment changes the class of individuals
eligible to become Participants. No amendment shall, without a
Participant’s consent, adversely affect any rights of such Participant under any
Option outstanding at the time such amendment is made.
ARTICLE
XIII
DURATION OF
PLAN
No Option
may be granted under this Plan after April 14, 2020. Options granted
before that date shall remain valid in accordance with their terms.
ARTICLE
XIV
EFFECTIVE DATE OF
PLAN
Options
may be granted under this Plan upon its adoption by the Board, provided that no
Option will be effective unless this Plan is approved by shareholders holding a
majority of BKSC’s outstanding voting stock, voting either in person or by proxy
at a duly held shareholder’s meeting within twelve months of such adoption. The
amount of shares to be reserved under this plan will not exceed
300,000.