<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SOUTHSIDE BANCSHARES CORP.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
SOUTHSIDE BANCSHARES CORP.
3606 GRAVOIS AVENUE
ST. LOUIS, MISSOURI 63116
--------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997
----------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Southside Bancshares Corp., a Missouri Corporation (the "Corporation"), will
be held at South Side National Bank's Lansdowne facility, which is located
at 4666 Lansdowne, in the City of St. Louis, Missouri, beginning at 2:00
p.m., local time, on Thursday, April 24, 1997, or at any adjournment or
adjournments thereof, for the purpose of considering and voting upon the
following matters (as more fully described in the attached Proxy Statement):
1. The election of three Class II Directors, each to serve for a
term of three years.
2. The ratification of the appointment of KPMG Peat Marwick LLP as
independent certified public accountants for the Corporation for 1997.
3. Any other business as may properly come before the meeting, or
any adjournment thereof.
Only holders of Common Stock of the Corporation whose names appear of
record on the books of the Corporation at the close of business on March 17,
1997, are entitled to vote at this Annual Meeting or any adjournment thereof.
By Order of the Board of Directors
---------------------------------------------
Joanne M. Schneider
Secretary to the Board
St. Louis, Missouri
March 27, 1997
- IMPORTANT -
YOU ARE REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY AS SOON
AS POSSIBLE, WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT. A RETURN ENVELOPE,
WHICH DOES NOT REQUIRE POSTAGE, IS ENCLOSED FOR YOUR CONVENIENCE. YOU MAY
WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE MEETING; OR IF YOU DO ATTEND THE
MEETING YOU MAY WITHDRAW YOUR PROXY AT THAT TIME IF YOU WISH. HOWEVER, IF YOUR
SHARES ARE NOT REGISTERED IN YOUR OWN NAME, PLEASE ADVISE THE SHAREHOLDER OF
RECORD (YOUR BANK, BROKER, ETC.) THAT YOU WISH TO ATTEND. THAT FIRM MUST
PROVIDE YOU WITH EVIDENCE OF YOUR OWNERSHIP WHICH WILL ENABLE YOU TO BE
ADMITTED TO THE MEETING.
Shareholders representing a majority of Common Stock issued and
outstanding must be present or represented by proxy in order to constitute a
quorum. TO ENSURE THE PRESENCE OF A QUORUM AT THIS MEETING, AN EARLY RETURN OF
YOUR PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
<PAGE> 3
SOUTHSIDE BANCSHARES CORP.
3606 GRAVOIS AVENUE
ST. LOUIS, MISSOURI 63116
(314) 776-7000
____________________
PROXY STATEMENT
____________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997
PURPOSE OF THE MEETING
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Southside Bancshares Corp. (the
"Corporation") for use at its Annual Meeting of Shareholders to be held at
South Side National Bank's Lansdowne facility, which is located at 4666
Lansdowne, in the City of St. Louis, Missouri, beginning at 2:00 p.m., local
time, on Thursday, April 24, 1997, and at any adjournment or adjournments
thereof (the "Annual Meeting"), for the purposes set forth in the attached
Notice of Annual Meeting of Shareholders and as further described herein.
PROXY SOLICITATION
PROXIES IN THE FORM ENCLOSED ARE SOLICITED BY THE BOARD OF DIRECTORS OF
THE CORPORATION. An executed proxy may be revoked by a shareholder at any time
before it is exercised by filing a written revocation or a duly executed proxy
bearing a later date with the Secretary of the Corporation, either prior to or
at the Annual Meeting. If a proxy is properly executed and returned in time,
the shares represented thereby will be voted in accordance with the
instructions specified thereon, or if no contrary instructions are specified,
the shares will be voted in favor of the election of the nominees for Directors
and in favor of the proposals described herein. This Proxy Statement and the
related form of proxy are first being sent to shareholders of the Corporation
on or about March 27, 1997, along with the Corporation's Annual Report for
1996, including financial statements therein.
It is anticipated that the solicitation of proxies will be made
primarily by mail, personal interview and telephone by Directors and regular
employees of the Corporation, who will not receive any additional remuneration
therefor. The total expense of proxy solicitation will be borne by the
Corporation. Brokers, nominees, fiduciaries and other custodians will be
requested to forward soliciting material to the beneficial owners of shares and
will be reimbursed for their expenses.
As of the date of this Proxy Statement, the Board of Directors of the
Corporation is not aware of any matters which may come before the Annual
Meeting other than those matters which are referred to in this Proxy
Statement. If any other matters properly come before such Annual Meeting or any
adjournment thereof, the proxy holders will vote the shares represented thereby
in accordance with their best judgment on such matters.
VOTING SECURITIES
The Corporation is authorized to issue 5,000,000 shares of Common
Stock, $1.00 par value (the "Common Stock") and 1,000,000 shares of cumulative
Preferred Stock, no par value (the "Preferred Stock"). As of March 17, 1997,
2,835,670 shares of Common Stock were issued and outstanding, representing all
of the shares entitled to vote at the Annual Meeting. No shares of Preferred
Stock have been issued.
<PAGE> 4
RECORD DATE
In accordance with the Corporation's Bylaws, as amended, and the action
of the Directors, the record date for the determination of the shareholders
entitled to notice of and to vote at the Annual Meeting is March 17, 1997.
VOTE REQUIRED FOR APPROVAL
With respect to those matters to be acted upon at the Annual Meeting,
each shareholder of record is entitled to one vote for each share of Common
Stock of the Corporation held by him or her on the record date. Cumulative
voting for the election of Directors is not available.
A majority of the outstanding shares entitled to vote must be
represented in person or by proxy at the Annual Meeting in order to constitute
a quorum to conduct the election of Directors and other matters described in
this Proxy Statement. If such a majority is represented at the Annual Meeting,
the three nominees for Director who receive the highest number of votes cast
will be elected. Ratification of the appointment of KPMG Peat Marwick LLP as
independent certified public accountants for the Corporation which is the other
item proposed for consideration and voting, as set forth in the attached Notice
of Annual Meeting of Shareholders, requires the affirmative vote of at
least a majority of the shares entitled to vote at the Annual Meeting.
With respect to each matter to be acted upon at the Annual Meeting,
abstentions on properly executed proxy cards will be counted for purposes of
determining whether a quorum is present at the Annual Meeting; however, such
abstentions and shares not voted by brokers and other entities holding shares
on behalf of beneficial owners will not be counted in calculating voting
results on those matters for which the shareholder has abstained or the broker
has not voted.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following tables set forth, as of March 17, 1997, the number of
shares of Common Stock, the only class of equity securities outstanding,
owned beneficially by each of the Directors of the Corporation (including
nominees for Director) including Thomas M. Teschner, a Director and the only
Executive Officer named in the Summary Compensation Table, as well as by all
Directors and Executive Officers of the Corporation as a group, without naming
them, and the number of shares held by any person who is known to the
Corporation to be the beneficial owner of more than five percent (5%) of the
outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
----------------------------------
SOLE VOTING OTHER PERCENT
AND INVESTMENT BENEFICIAL OF
OFFICERS & DIRECTORS POWER OWNERSHIP CLASS(2)
- -------------------------- ------------------ ----------- -------
<S> <C> <C> <C>
Joseph W. Beetz 19,130 -- *
Ralph Crancer, Jr. 20,240 15,000(3) 1.23%
Howard F. Etling 33,330 521,960(4),(5) 19.39
Douglas P. Helein 138,110 -- 4.82
Earle J. Kennedy, Jr. 6,340 104,150(6) 3.86
Norville K. McClain 138,439 -- 4.83
Daniel J. Queen 76,982 -- 2.69
Richard G. Schroeder, Sr. -- 24,230 *
Thomas M. Teschner 30,755(7) 513,571(4),(8) 19.00
Executive Officers and
Directors (including
nominees) as a Group
(11 persons) 472,166(9) 686,991(4) 40.47
</TABLE>
* less than 1%
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
-----------------------------
SOLE VOTING OTHER PERCENT
NAME AND ADDRESS OF AND INVESTMENT BENEFICIAL OF
OTHER PRINCIPAL SECURITY HOLDERS POWER OWNERSHIP CLASS(2)
- ------------------------------------ --------------- ---------- -------
<S> <C> <C> <C>
Southside Bancshares Corp.(4)
Employee Stock Ownership Plan -- 491,920 17.17%
(With 401(k) Provisions)
3606 Gravois Avenue
St. Louis, Missouri 63116
First Banks, Inc.(10) 518,020 -- 18.09
135 North Meramec
Clayton, Missouri 63105
</TABLE>
- ---------------
(1) The information set forth in these tables is based upon information
furnished to the Corporation by the named persons or entities. Beneficial
ownership of shares, as determined in accordance with applicable Securities
and Exchange Commission rules, includes shares as to which a person
directly or indirectly has or shares voting power or investment power or
both.
(2) The percentages of the class is based on the total number of outstanding
shares of the Corporation's Common Stock (2,835,670 shares) plus the
total number of stock options that are exercisable or that will become
exercisable within sixty days (28,600 shares) for a total of 2,864,270
shares.
(3) Represents shares held in a trust created by Mr. Crancer's wife. Mr.
Crancer claims a beneficial interest in his wife's trust account.
(4) Includes 491,920 shares held by Southside Bancshares Corp. Employee Stock
Ownership Plan With 401(k) Provisions (the "KSOP") of which
Mr. Etling and Mr. Teschner are Trustees pursuant to appointment by the
Board of Directors. Participants in the KSOP have voting power over
shares of Common Stock allocated to their accounts and such shares will
be voted by the Trustees as directed by the participants. Shares for
which no direction has been given will be voted directly by the Trustees.
Except for 17,755 shares allocated to Mr. Teschner's account in the KSOP
for which Mr. Teschner has a beneficial interest, Mr. Teschner and Mr.
Etling disclaim any personal interest in all of the shares held by the
KSOP.
(5) Also includes 30,040 shares for which Mr. Etling has shared voting and
investment power.
(6) Shares for which Mr. Kennedy has shared voting and investment power.
(7) Includes 17,755 shares allocated to Mr. Teschner's account under the
KSOP and 12,000 stock options which are exercisable or will become
exercisable within sixty days.
(8) Also includes 39,406 shares for which Mr. Teschner has shared voting and
investment power.
(9) Includes 19,795 shares allocated to the accounts of the executive
officers of the Corporation under the KSOP and 18,800 stock options which
are exercisable or will become exercisable within sixty days.
(10) Not included in First Banks, Inc.'s beneficial ownership information are
5,640 shares owned by James F. Dierberg and 123,920 shares owned by
Investors of America, L.P. The directors and executive officers of First
Securities America, Inc., the general partners of Investors of America,
L.P., and other members of their family control directly or indirectly
First Banks, Inc.
To the knowledge of the Board of Directors, no change of control has
occurred since the beginning of the last fiscal year, and there are no
contractual arrangements, the operation of the terms of which may, at a
subsequent date, result in a change of control of the Corporation.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
Three persons, each of whom are presently members of the Board of
Directors, have been nominated for election to membership on the Board of
Directors as Class II Directors, each to hold office for a term of three (3)
years until the Annual Meeting in 2000. In each instance, a Board member is
elected to serve until his successor shall have been duly elected and
qualified.
3
<PAGE> 6
The Corporation's Articles of Incorporation, as amended, and the
amended Bylaws presently provide that the number of Directors to constitute the
Board of Directors shall consist of not less than nine (9) nor more than
fifteen (15) members and that the total number of Directors may be fixed,
within the minimum and maximum numbers, by a vote of a majority of the
Directors then in office. Pursuant to these provisions, the Board of Directors,
has fixed the number of Directors at nine (9). The Corporation's Articles of
Incorporation and Bylaws, each as amended, also provide that the Board of
Directors shall be divided into three (3) classes, as nearly equal as possible,
with one class to be elected annually for a three (3) year term.
Unless otherwise instructed, the proxy holders will vote for the three
nominees for Class II Directors shown herein. There is no cumulative voting for
the election of Directors. Although it is not contemplated that any nominee
will decline or be unable to serve as Director if elected, in either such
event, the proxies will be voted for such other person as may be designated by
the Board of Directors of the Corporation.
The nominees for election to the Board of Directors at the Annual
Meeting are: Joseph W. Beetz, Ralph Crancer, Jr., and Howard F. Etling.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES LISTED
UNDER ITEM 1 ON THE PROXY CARD.
The following table indicates the principal occupation or employment
for the past five years, age, other directorships, and the year first elected
as a Director of the Corporation with respect to each nominee to become a
Director and each other Director whose term of office will continue after the
Annual Meeting. Information with respect to the business experience of each
Director of the Corporation has been furnished by such Director or has been
obtained from the records of the Corporation.
DIRECTOR OF THE
CORPORATION
NAME, AGE, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ------------------------------------------------------- ---------------
NOMINEES FOR DIRECTORS -- CLASS II DIRECTORS
(Terms Expiring 2000)
Joseph W. Beetz (67) 1978
President, Joseph H. Beetz Plumbing Company, Inc.
(plumbing contractor)
Director, South Side National Bank in St. Louis
Ralph Crancer, Jr. (70) 1966
Deputy Sheriff, St. Louis County, Missouri
Director, South Side National Bank in St. Louis
Howard F. Etling (82) 1962
Publisher Emeritus, Journal Newspapers
(publishing company)
Director, South Side National Bank in St. Louis
DIRECTORS CONTINUING IN OFFICE -- CLASS III DIRECTORS
(Terms Expiring 1998)
Douglas P. Helein (45) 1992
Insurance Broker, Welsch, Flatness & Lutz, Inc.
(insurance agency)
Director, South Side National Bank in St. Louis
4
<PAGE> 7
DIRECTOR OF
CORPORATION
NAME, AGE, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ------------------------------------------------------- -----------
Earle J. Kennedy, Jr. (67) 1978
Former President, Westway Services, Inc.
(vending company)
Director, Continental Boiler Works, Inc.
(steel fabricator)
Director, South Side National Bank in St. Louis
Daniel J. Queen (55) 1992
President, Highland Diversified, Inc.
(operates grocery stores)
Director, South Side National Bank in St. Louis
and State Bank of DeSoto
DIRECTORS CONTINUING IN OFFICE - CLASS I DIRECTORS
(Terms Expiring 1999)
Norville K. McClain (67) 1988
President, Essex Contracting, Inc.
(building contractor and developer)
Director, South Side National Bank in St. Louis
Richard G. Schroeder, Sr. (56) 1994
President, St. Louis Fabrication Services, Inc.
(steel fabrication company)
Director, South Side National Bank in St. Louis
Thomas M. Teschner (40) 1992
President, Chief Executive Officer and Director, Southside
Bancshares Corp. and South Side National Bank in St. Louis
Director, Bank of St. Genevieve, The Bank of St. Charles County
and State Bank of DeSoto (subsidiaries of the Corporation)
Prior to June 1992, Senior Vice President and Senior Loan Officer
for the Corporation and South Side National Bank in St. Louis.
Each of the Directors has held the same position or another executive position
with the same employer during the past five years.
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL NO. 2)
The Board of Directors of the Corporation voted to appoint, subject to
ratification by the shareholders, KPMG Peat Marwick LLP as independent
certified public accountants to audit the accounts of the Corporation for the
fiscal year ending December 31, 1997. It is expected that representatives of
KPMG Peat Marwick LLP will be present at the Annual Meeting to respond to
appropriate questions and to make a statement if they so desire. During 1996,
KPMG Peat Marwick LLP provided audit and tax services for the Corporation. The
audit
5
<PAGE> 8
services included examination of the consolidated financial statements of the
Corporation and its subsidiaries, including annual reports to shareholders and
the Securities and Exchange Commission, and consultation and assistance in
accounting and related matters. The Board of Directors has a standing audit
committee and does not consider the tax services performed by the independent
auditors to affect its independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP, WHICH IS ITEM 2 ON THE PROXY CARD.
BOARD OF DIRECTORS AND COMMITTEES OF BOARD OF DIRECTORS
In fiscal year 1996, Directors of the Corporation received fees of $1,000
for each regular board meeting of the Corporation. In addition, all Directors
of the Corporation who also served on the Board of South Side National Bank in
St. Louis, a subsidiary of the Corporation, received fees of $750 for each
regular meeting thereof, and $1,200 for committee meetings each month. Mr.
Queen, also serves on the Board of Directors of State Bank of DeSoto, a
subsidiary of the Corporation and received fees of $300 for each regular
meeting thereof, and $100 for loan committee meetings thereof. No other
remuneration was paid by the Corporation to any non-employee Director or for
special assignments. Mr. Teschner also received fees of $300 for each regular
meeting of each of the other subsidiaries of the Corporation for which he
serves as a Director and $100 for attendance at each discount committee meeting
of each such subsidiary's board. The Directors may defer these fees until
retirement or death pursuant to the Corporation's Deferred Compensation Plan
for Directors.
During 1996, there were twelve (12) regular meetings and no special
meetings of the Corporation's Board of Directors. Each of the Directors of the
Corporation attended at least ninety percent (90%) of the aggregate of the
total number of Board of Directors meetings of the Corporation and the total
number of meetings held by all committees of the Board on which such Director
served during 1996.
The Corporation has a standing Audit Committee (established in 1983).
This Committee consists of all of the non-employee Directors. It is the
responsibility of the Audit Committee to monitor the internal accounting
controls and practices of the Corporation and report its findings to the full
Board of Directors. The Committee meets quarterly and met four (4) times
during the last fiscal year.
The Corporation has no standing nominating committee and no committee
performs a similar function. Director nominations on behalf of the Corporation
are recommended by the Board of Directors. Nomination recommendations to the
Board of Directors by shareholders are not accepted. Compensation of officers
of the Corporation is approved by the Corporation's standing Compensation
Committee which consists of all non-employee directors. The Compensation
Committee met once during the last fiscal year. The specific functions of the
Compensation Committee are discussed in greater detail in this Proxy Statement.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the remuneration
paid or accrued in 1996, 1995 and 1994 for Thomas M. Teschner, the Chief
Executive Officer of the Corporation. None of the other executive officers of
the Corporation received total annual salary and bonuses exceeding One Hundred
Thousand Dollars ($100,000) during the fiscal year ending December 31, 1996.
6
<PAGE> 9
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL LONG TERM ALL
COMPENSATION COMPENSATION OTHER
-------------------- ------------ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS
- --------------------------- ------------
Securities
($)(1) ($)(2) Underlying Options ($)(3)
------ -------- --------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
THOMAS M. TESCHNER (40) 1996 $160,000 $100,000 20,000 $182,721(4)
President, Chief Executive Officer and
Director of the Corporation and South Side 1995 160,000 100,000 -0- $ 34,066
National Bank in St. Louis
1994 140,000 -0- -0- $ 25,368
</TABLE>
(1) Includes deferred compensation contributed by Mr. Teschner to the KSOP.
(2) Includes amounts paid in accordance with the executive
compensation program as discussed in greater detail in the
Compensation Committee Report in this Proxy Statement.
(3) Consists of the Corporation's contributions and allocations to
the KSOP ($10,930 in 1996, $18,696 in 1995 and $10,798 in 1994);
Director's fees from the Corporation and its subsidiaries
($37,800, of which $25,650 was deferred in 1996, $11,850 in 1995
and $11,050 in 1994); life insurance premiums ($3,520 in 1996,
1995 and 1994, respectively); and deferred compensation paid in
1996 as described below.
(4) Reflects $130,471 paid as a grant of performance stock awards
under the Deferred Compensation Agreement described in the
Compensation Committee Report elsewhere herein. This amount
includes an initial grant of 6,518 shares of performance stock
having a value of $104,288 ($16.00 per share) on the date of the
initial grant, which was made in order to offset limitations
imposed upon Mr. Teschner's participation in the Corporation's
qualified deferred compensation plans from 1988 through 1995, and
1,150.88 shares of performance stock having a value of $26,183
($22.75 per share) as of December 31, 1996 for the 1996 fiscal
year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS Potential Realizable
Value at Assumed Annual
- ----------------------------------------------------------------------------------------------------- Rates of Stock Price
NAME Number of % of Total Appreciation for
Securities Options/SARs Option Term(3)
Underlying Granted to Exercise or ---------------------
Options/SAR's Employees in Base Price Expiration
granted (#)(1) Fiscal Year ($/sh)(2) Date 5% ($) 10% ($)
- ------------------ -------------- ------------ ---------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Thomas M. Teschner 20,000 27% $19.00 3/31/06 $240,000 $600,000
</TABLE>
(1) The Options, which were granted on March 28, 1996, became
exercisable at the rate of one-fifth on April 1 of the first five
years commencing on April 1, 1997, subject to acceleration in the
event of a "change in control."
(2) Exercise or base price is equal to the closing bid price on the date of
grant.
(3) Pre-tax gain. The dollar amounts under these columns are the
result of calculations at the 5% and 10% rates set by the
Securities and Exchange Commission and, therefore, are not
intended to forecast possible future appreciation, if any, of the
Corporation's stock price. The Corporation's per share stock
price would be $31.00 and $49.00 if increased 5% and 10%,
respectively, compounded annually over the option term.
7
<PAGE> 10
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT FISCAL
OPTIONS/SARS AT FISCAL YEAR END(1) YEAR-END($)(2)
SHARES ---------------------------------- ---------------------------
ACQUIRED VALUE EXERCISABLE(3) UNEXERCISABLE(4) EXERCISABLE UNEXERCISABLE
NAME ON EXERCISE(#) REALIZED ($) (#) (#) (#) (#)
- ------------------- -------------- ------------ ---------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas M. Teschner -0- -0- 12,000 18,000 $109,000 $83,500
</TABLE>
(1) All amounts in the table represent Options.
(2) Pre-tax gain. The value of the Unexercised in-the-Money Options is
based upon a December 31, 1996 closing bid price of $22.75.
(3) Includes 8,000 Options with an exercise price of $11.00 per share
and 4,000 Options with an exercise price of $19.00 per share.
(4) Includes 2,000 Options with an exercise price of $11.00 per share
and 16,000 Options with an exercise price of $19.00 per share.
COMPENSATION COMMITTEE
A Compensation Committee of the Board of Directors comprised of all
non-employee Directors (the "Committee") was established in 1993. The role of
the Committee is to review the general compensation structure for executive
officers of the Corporation, including those named in the Summary Compensation
Table which appears elsewhere in this Proxy Statement, and to approve the
specific compensation levels of such executive officers.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for establishing and
administering the executive compensation program for the Corporation. The basis
for establishing the program was to link individual compensation and the
Corporation's performance levels, and to provide for both short and
long-term incentive programs that align the economic interests of management and
the Corporation's shareholders. When the program was designed in 1994, the
Compensation Committee engaged an independent third party to assist in the
development of an executive compensation program. Based upon recommendations of
the independent third party, as well as a competitive compensation analysis, the
committee adopted the Corporation's Annual Incentive Plan (the "Plan").
Information for determining the competitive compensation levels was obtained
from a bank cash compensation survey prepared by the Bank Administrative
Institute, as well as, an independent survey of financial institutions in
Missouri and Illinois with total assets of $300,000,000 to $1,000,000,000. The
group surveyed for the purpose of determining competitive compensation levels is
different than those used for comparative purposes in the performance graph on
page 13. The Committee believes that the survey group used for determining
executive compensation more closely represents the Corporation's actual
competition for executive talent. The basic philosophy underlying the Plan is as
follows:
- Maintain base salary levels relatively close to the market median
for financial institutions in the Corporation's peer group.
- Provide for annual incentive opportunities based on the
achievement of established business plan goals. The amount of
the target opportunities would also be in line with the market
median for financial institutions in the Corporation's peer
group, with additional upside potential for performance
significantly above the predetermined goals.
The Committee reviews the program on an annual basis to determine
changes, if any, which need to be made, in light of present facts and
circumstances. In 1996, the Committee updated the executive compensation
8
<PAGE> 11
program to include a deferred compensation arrangement to compensate executive
officers for certain limitations imposed upon their participation in the
Corporation's qualified benefit plans. This arrangement is more fully
described below. Other than the addition of this arrangement, the
Corporation's executive compensation program remained relatively unchanged from
the prior year and was comprised of the following components:
- Salary. For executive officers, the Committee used competitive
compensation data, and then considered the experience levels of
the incumbents in determining actual compensation levels.
- Bonus Plan. The Committee will approve annual bonuses for
certain executive officers of the Corporation based upon the
formula provided for in the Plan. Pursuant to the Plan, officers
who substantially impact the Corporation's performance will be
eligible to receive annual incentive awards if the Corporation
achieves certain performance goals based on profitability and
asset quality compared to prior years. Measures of profitability
include return on average assets for the Corporation and its bank
subsidiaries. Measures of asset quality include total
nonperforming loans and total nonperforming assets. Actual award
opportunity levels will depend on the extent to which the
Corporation realizes established performance goals. The maximum
incentive award level pursuant to the Plan for 1996 was set at
150% of the target award level. The target award level ranges
from 15% to 45% of annual salary. In order to achieve the
maximum award level, the Corporation must have met or exceeded
120% of established performance goals. In the event the
performance goals are exceeded, the award level could range up to
67.5% of the annual salary. However, the Committee retains the
right to further increase annual incentive awards if individual
contributions warrant.
- The Plan itself does not provide for issuance of stock based
awards; however, the overall executive compensation program does
address stock options. The Southside Bancshares Corp. 1993
Non-Qualified Stock Option Plan allows the Compensation
Committee to periodically grant options to key executives of the
Corporation. There were 75,000 options granted in 1996.
- As indicated previously, in 1996, the Committee established a
deferred compensation arrangement to compensate executive
officers for certain limitations imposed upon their participation
in the Corporation's qualified benefit plans. Under this
arrangement, the executives and the Corporation enter into a
deferred compensation agreement ("Agreement"). Under the
Agreement, the executives are granted an award of performance
stock each year based on the sum of the following:
a. An amount determined by multiplying the executive's
"Excess 401(k) Amount" as defined in the Agreement,
by the sum of the highest federal and applicable
state income tax rates in effect for the year in
question; plus
b. An amount equal to (i) the employer matching
contribution percentage under the Corporation's
Employee Stock Ownership Plan with 401(k) provisions
("KSOP") for such year multiplied by the executive's
gross annual compensation (determined without regard
to the Agreement), less (ii) the employer matching
contributions actually made to the KSOP for the
benefit of the executive; plus
c. An amount determined by (i) multiplying the
Corporation's total discretionary basic and optional
contributions to the KSOP, plus forfeitures, by a
fraction, the numerator of which is the executive's
gross annual compensation for such year (determined
without regard to the Agreement), and the denominator
of which is total compensation of all KSOP
participants, less (ii) the amount actually
contributed to the KSOP by the corporation's plus
forfeitures allocated, for the benefit of the
executive.
9
<PAGE> 12
The award is converted to performance shares based on the closing
bid price of the Corporation's common stock on the last business
day of each such year in the case of items a. and b. above, and
$16.00 per share in the case of item c. above. The performance
shares issued under this Agreement are deemed to be the
equivalent of one share of the Corporation's common stock. The
shares constitute a potential right to receive payment and do not
confer any dividend rights, voting rights or any other rights of
a shareholder with respect to Corporation's common stock. The
executives are entitled to receive payment under the Agreement
upon the occurrence of one of several events including: a change
in control, termination of employment, retirement, death or total
disability. The amount to be paid upon the occurrence of one of
these events is the number of performance shares credited to the
executive's account multiplied by the midpoint of the bid and ask
price of the Corporation's common stock as of the close of
business on the date of payment.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The President and Chief Executive Officer's compensation for 1996
consisted of:
o Base salary of $160,000.
o Bonus of $100,000. The bonus paid during 1996 related to the
1995 Bonus Plan. Because the Plan requires performance bonuses
to be based on actual results, it is not feasible to pay bonuses
during the fiscal year to which the bonus applies. The bonus
amount was computed in accordance with the Plan, although the
Committee exercised their discretion to further increase the
award based on the merits of the accomplishments achieved during
1995, including record-setting earnings and a substantial
reduction in nonperforming assets. Net income increased by 34%
in 1995 and was 133% of the target amount included in the Plan.
Nonperforming assets declined by 46% which was 129% of the target
reduction outlined in the Plan.
o Deferred Compensation Amounts. As described above, the Committee
established a deferred compensation arrangement to compensate
executive officers for certain limitations imposed upon their
participation in the Corporation's qualified benefit plans and
pursuant thereto entered into a Deferred Compensation Agreement
with Mr. Teschner dated April 25, 1996. Pursuant to that
Agreement, an initial grant of 6,518 shares of performance stock,
having a value on the date of grant of $104,288 ($16.00 per
share) was credited to Mr. Teschner's performance stock account
in order to offset limitations imposed upon Mr. Teschner's
participation in the Corporation's qualified deferred
compensation plans from 1988 through 1995. A grant of 1,150.88
shares of Performance Stock, having a value on the date of grant
of $26,183 ($22.75 per share) was credited to Mr. Teschner's
Performance Stock Account as of December 31, 1996 for 1996.
o Stock Option Awards. The Committee granted to Mr. Teschner Stock
Options to acquire 20,000 shares of common stock under the
Corporation's 1996 Non-Qualified Stock Option Plan. Stock
Options granted were based upon the same factors as the
Corporation's Annual Incentive Plan.
o Other Compensation. All other compensation paid to Mr. Teschner
is described in the Summary Compensation Table to the extent
required.
The Compensation Committee
--------------------------
Joseph W. Beetz Ralph Crancer, Jr.
Howard F. Etling Norville K. McClain
Douglas P. Helein Earle J. Kennedy, Jr.
Daniel J. Queen Richard G. Schroeder, Sr.
10
<PAGE> 13
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
SOUTHSIDE BANCSHARES CORP., S&P 500 INDEX AND NASDAQ BANKS INDEX
The following graph summarizes cumulative returns experienced by the
Corporation's shareholders over the years 1992 through 1996, compared to the
S&P 500 Index and the NASDAQ Banks Index.
[LINE GRAPH]
- -------------------
*Assumes $100 invested on December 31, 1991 in Corporation's Common
Stock, the S&P 500 Index, and the NASDAQ Banks Index. Total return assumes
reinvestment of dividends.
EMPLOYMENT CONTRACTS
MR. TESCHNER'S EMPLOYMENT CONTRACT
The Corporation and South Side National Bank in St. Louis (the "Bank")
have an employment agreement, dated April 27, 1995, with Thomas M. Teschner
President and Chief Executive Officer of the Corporation and the Bank (the
"President's Employment Agreement"). The President's Employment Agreement has
an initial term of three years and automatically renews for a new three year
term unless notice not to renew is delivered on or before
11
<PAGE> 14
either the first anniversary date of the President's Employment Agreement or
any successive yearly anniversary thereafter.
The President's Employment Agreement provides, among other things,
that the Corporation or the Bank may terminate the employment of Mr. Teschner
at any time for "cause" or disability. Cause is defined as willful misconduct
resulting in indictment for an alleged felony, violation of any material
provision of the President's Employment Agreement or any willful failure
substantially to perform any reasonable directions of the Corporation's or the
Bank's Board of Directors within 60 days after written demand. In addition,
termination for "cause" requires the affirmative votes of at least two-thirds
of each of the Corporation's and the Bank's Board of Directors. A disability,
to constitute an event of termination of the President's Employment Agreement,
must continue for a period of six months. Upon such termination for cause or
disability, Mr. Teschner is entitled to receive a severance payment equal to
the greater of (a) one-third of his current annual base salary or (b) a
severance payment computed in accordance with the Corporation's or the Bank's
then existing severance policy. Upon Mr. Teschner's death during the term of
the President's Employment Agreement, his beneficiary or estate is entitled to
the benefits payable under the accidental death, life insurance and similar
plans for employees of the Corporation and the Bank. In the event that such
death benefit plans are amended to reduce or terminate benefits, Mr. Teschner's
beneficiary or estate is entitled to a lump sum payment equal to the difference
between the sum which would have been payable under the death benefit plans as
of the date of the President's Employment Agreement, and the sum payable under
the amended plans.
The President's Employment Agreement provides that, after termination
of employment for cause or improper termination by the employee, Mr. Teschner
will not, for a period of six months after termination, solicit customers or
clients of the Corporation, the Bank or any of their subsidiaries without the
prior approval of the Board of Directors.
The President's Employment Agreement further provides that, upon a
change of control of the Corporation or Bank, if Mr. Teschner's employment is
terminated by the Corporation and the Bank other than for cause, death or
disability within six months prior to or within three years following a change
in control, or if Mr. Teschner voluntary terminates his employment within six
months following a change of control, Mr. Teschner is entitled in lieu of all
other benefits to the following severance benefits: (i) an amount equal to
three times his highest annual salary in effect at any time during the term of
the President's Employment Agreement, (ii) an amount equal to three times his
highest annual bonus prior to the termination, (iii) an amount equal to his
unpaid annual salary and accrued vacation, and (iv) a continuation of his
welfare benefits of health and medical insurance for three full years,
provided, however, that such welfare benefits will be discontinued prior to the
end of three years in the event that Mr. Teschner has available substantially
similar welfare benefits from a subsequent employer. Such severance benefits
are limited in the aggregate, however, to an amount that does not constitute an
"excess parachute payment" under the Internal Revenue Code.
PENSION PLAN AND RETIREMENT TRUST
The Corporation maintains a Pension Plan and Retirement Trust (the "Pension
Plan") for officers and employees. The Pension Plan is non-contributory and is
uniformly applied to officers and employees. Normal retirement is at 65 years
of age. Normal annual retirement benefits are determined at fifteen percent
(15%) of average annual salary for the highest five (5) consecutive years prior
to date of termination of employment plus ten percent (10%) of the average
annual compensation in excess of $7,200. The entire benefit shall be reduced
by 1/15th for each year of service less than fifteen (15) years.
12
<PAGE> 15
PENSION PLAN TABLE
<TABLE>
<CAPTION>
CREDITABLE
REMUNERATION YEARS OF SERVICE
(AVERAGE ANNUAL SALARY FIVE -----------------------
YEARS PRIOR TO RETIREMENT) 10 15 OR MORE
--------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 75,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,020 $18,030
100,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,187 24,280
125,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,353 30,530
150,000 or greater(1). . . . . . . . . . . . . . . . . . . . . . . . 24,520 36,780
- -----------------
</TABLE>
(1) Federal income tax laws limit the computation of benefits and
contributions by the employer to the Pension Plan to a maximum amount
based on annual compensation which amount was $150,000 in 1996.
Remuneration in the Pension Plan table includes annual base salary,
bonus and fringe benefits. The 1996 earnings for computing retirement benefits
and the number of creditable years of service under the above-described Pension
Plan for the individuals named in the Summary Compensation Table were as
follows: Mr. Teschner, $150,000 and 10 years.
Estimated annual benefits payable upon retirement at age 65 are based
on a straight life annuity basis, and the value of Social Security Benefits are
not deducted from these amounts.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
The Corporation and its subsidiary banks have had and expect to have
in the future, loans and other banking transactions in the ordinary course of
business with a number of its officers and Directors and their associates.
Such transactions were made and will be made in the ordinary course of business
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons and
did not and will not involve more than normal risk of collectibility or present
other unfavorable features.
During the previous calendar year, the subsidiaries of the Corporation
have had commercial transactions in the ordinary course of business with
companies with which certain of the Corporation's Directors are affiliated. No
significant business or personal relationships with the subsidiaries of the
Corporation existed by virtue of a person's position in the Corporation or in
subsidiaries of the Corporation, or ownership interest in the Corporation.
SHAREHOLDER PROPOSALS
If any shareholder of the Corporation intends to submit a proposal for
inclusion in the proxy statement to be delivered in connection with the Annual
Meeting of Shareholders to be held in April 1998, the shareholder's proposal
and supporting statement, if any, must meet the requirements established by the
Securities and Exchange Commission for shareholder proposals and must be
received by the Corporation at its principal executive offices no later than
November 29, 1997. It is suggested that any such proposals, together with any
supporting statement, be submitted by Certified Mail, Return Receipt Requested
and be directed to the attention of the Secretary of the Corporation.
SECTION 16(A) BENEFICIAL REPORTING COMPLIANCE
The Corporation's executive officers, Directors and persons who own
beneficially more than ten percent (10%) of the Corporation's stock are required
under Section 16(a) of the Securities Exchange Act of 1934 to file certain
reports of ownership, and changes in ownership, of the Corporation's stock with
the Securities and Exchange Commission. Copies of such reports must be furnished
to the Corporation. Based solely on a review of the copies of such forms
furnished to the Corporation, and on written representations from the
Corporation's executive officers and Directors, the Corporation believes that
all Section 16(a) filing requirements applicable to its executive officers,
Directors and greater than ten percent (10%) beneficial owners have been
complied with,
13
<PAGE> 16
except that Directors Kennedy, Queen and Schroeder, each of whom filed one late
report which related to a single transaction.
ANNUAL REPORT
Copies of the Annual Report for the fiscal year ended December 31,
1996, including financial statements certified by the Corporation's independent
accountants, have been mailed on March 27, 1997 to all stockholders entitled to
vote at the Annual Meeting. Additional copies of this Annual Report are
available on request.
SHAREHOLDERS ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY.
- ----------------------------------------------------------------------------
BY ORDER OF THE
BOARD OF DIRECTORS
----------------------------------------
March 27, 1997 Joanne M. Schneider
St. Louis, Missouri Secretary to the Board
14
<PAGE> 17
SOUTHSIDE BANCSHARES CORP.
3606 Gravois Avenue
St. Louis, Missouri 63116
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph W. Pope and Laurie A. Pennycook, and
each of them, with or without the other, attorneys and proxies, with full power
of substitution, to vote all of the shares of common stock of Southside
Bancshares Corp. which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of said Corporation to be held at South Side National
Bank's Lansdowne facility, which is located at 4666 Lansdowne, St. Louis,
Missouri, on Thursday, April 24, 1997, at 2:00 p.m., local time, and at any
adjournments thereof: (1) as hereinafter specified upon the proposals listed
below and as more particularly described in the Corporation's proxy statement,
receipt of which is hereby acknowledged; and (2) in their discretion upon such
other matters as may properly come before the Annual Meeting of Shareholders.
A VOTE FOR THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS.
1. Election of directors: Joseph W. Beetz, Ralph Crancer, Jr. and Howard
F. Etling.
[ ] FOR all nominees listed.
[ ] FOR all nominees listed except
------------------------------
---------------------------------------------------------------.
[ ] WITHHOLD AUTHORITY to vote for all nominees listed.
- --------------------------------------------------------------------------------
2. Ratification of the appointment by the Board of Directors of KPMG Peat
Marwick as the firm of independent certified public accountants to
audit the accounts of the Corporation for the fiscal year ending
December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
- --------------------------------------------------------------------------------
3. On any other matter that may be submitted to a vote of shareholders.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2. IF ANY OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF
MANAGEMENT.
(YOU ARE REQUESTED TO COMPLETE, SIGN, AND RETURN THIS PROXY PROMPTLY)
Dated , 1995
---------------------
---------------------------------
---------------------------------
IMPORTANT: Please date this
proxy and sign exactly as your
name(s) appears thereon.
If stock is held
jointly, signature
should include both names.
Executors, administrators,
trustees, guardians,
corporate officers and others
signing in a representative
capacity should so indicate.
PROXY MUST BE RETURNED BY APRIL 24
1997
[ ] Please check box if you plan
to attend the Annual Meeting
SOUTHSIDE SHAREHOLDERS
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE SOUTHSIDE ANNUAL MEETING,
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS SOUTHSIDE PROXY CARD IN THE ENVELOPE
PROVIDED. IF YOU PLAN TO ATTEND THE MEETING AND ARE A SHAREHOLDER OF RECORD,
PLEASE MARK THE PROXY CARD APPROPRIATELY AND RETURN IT. HOWEVER, IF YOUR
SHARES ARE NOT REGISTERED IN YOUR OWN NAME, PLEASE ADVISE THE SHAREHOLDER OF
RECORD (YOUR BANK, BROKER, ETC.) THAT YOU WISH TO ATTEND. THAT FIRM MUST
PROVIDE YOU WITH EVIDENCE OF YOUR OWNERSHIP WHICH WILL ENABLE YOU TO GAIN
ADMITTANCE TO THE MEETING.
