<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)(I) 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 in 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 23, 1998
-------------------------------
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 23, 1998, 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 III DIRECTORS, EACH TO SERVE
FOR A TERM OF THREE YEARS.
2. THE ADOPTION OF AN AMENDMENT TO THE CORPORATION'S
ARTICLES OF INCORPORATION INCREASING THE NUMBER OF
AUTHORIZED SHARES FROM 6,000,000 TO 16,000,000,
CONSISTING OF 15,000,000 SHARES OF COMMON STOCK OF THE
CORPORATION AND 1,000,000 SHARES OF PREFERRED STOCK OF
THE CORPORATION.
3. THE ADOPTION OF THE SOUTHSIDE BANCSHARES CORP. 1998 STOCK
OPTION PLAN.
4. THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK
LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE
CORPORATION FOR 1998.
5. 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
9, 1998, 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 26, 1998
- 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 23, 1998
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 23, 1998, 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
26, 1998, along with the Corporation's Annual Report for 1997, 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.
<PAGE> 4
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 9, 1998,
2,792,670 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.
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 9, 1998.
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. The proposed amendment to the Articles of Incorporation increasing the
number of authorized shares from 6,000,000 to 16,000,000, the adoption of the
Southside Bancshares Corp. 1998 Stock Option Plan, and the ratification of the
appointment of KPMG Peat Marwick LLP as independent certified public accountants
for the Corporation, which are the other items proposed for consideration and
voting, as set forth in the attached Notice of Annual Meeting of Shareholders,
each require 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 9, 1998, 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.
2
<PAGE> 5
<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 63,370 402,261(4) 16.28
Douglas P. Helein 138,210 --- 4.83
Earle J. Kennedy, Jr. 5,390 74,590(5) 2.80
Norville K. McClain 139,439 --- 4.88
Daniel J. Queen 76,982 --- 2.69
Richard G. Schroeder, Sr. --- 24,230 *
Thomas M. Teschner 58,550(6) 422,117(4, 7) 16.81
Executive Officers and Directors (including
nominees) as a Group (10 persons) 534,207(8) 533,061(4) 37.32
less than 1%
<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) 402,261 14.07
Employee Stock Ownership Plan
(With 401(k) Provisions)
3606 Gravois Avenue
St. Louis, Missouri 63116
First Banks, Inc. (9) 518,020 18.11
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 (2,792,670 shares) plus the
total number of stock options that are exercisable or that will become
exercisable within sixty days (67,000 shares) for a total of 2,859,670
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 All 402,261 shares are 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 19,550 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 Shares for which Mr. Kennedy has shared voting and investment power.
6 Includes 19,550 shares allocated to Mr. Teschner's account under
the KSOP and 38,000 stock options which are exercisable or will become
exercisable within sixty days.
7 Also includes 39,406 shares for which Mr. Teschner has shared voting and
investment power.
3
<PAGE> 6
8 Includes 22,426 shares allocated to the accounts of the executive
officers of the Corporation under the KSOP and 48,000 stock options which
are exercisable or will become exercisable within sixty days.
9 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 III Directors, each to hold office for a term of three (3)
years until the Annual Meeting in 2001. In each instance, a Board member is
elected to serve until his successor shall have been duly elected and qualified.
The Corporation's Articles of Incorporation, as amended and restated,
and the amended and restated 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 and
restated, 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 III 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: Douglas P. Helein, Earle J. Kennedy, Jr., Daniel J. Queen.
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.
4
<PAGE> 7
DIRECTOR OF THE
CORPORATION
NAME, AGE, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ------------------------------------------------------- --------------
NOMINEES FOR DIRECTORS -- CLASS III DIRECTORS
(Terms Expiring 2001)
Douglas P. Helein (46) 1992
Insurance Broker, Welsch, Flatness & Lutz, Inc.
(insurance agency)
Director, South Side National Bank in St. Louis
Earle J. Kennedy, Jr. (68) 1978
Former President, Westway Services, Inc.
(vending company)
Director, South Side National Bank in St. Louis
Daniel J. Queen (56) 1992
President, Highland Diversified, Inc.
(operates grocery stores)
Director, South Side National Bank in St. Louis
and State Bank of Jefferson County
DIRECTORS CONTINUING IN OFFICE - CLASS I DIRECTORS
(Terms Expiring 1999)
Norville K. McClain (68) 1988
President, Essex Contracting, Inc.
(building contractor and developer)
Director, South Side National Bank in St. Louis
Richard G. Schroeder, Sr. (57) 1994
President, St. Louis Fabrication Services, Inc.
(steel fabrication company)
Director, South Side National Bank in St. Louis
Thomas M. Teschner (41) 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 Jefferson County (subsidiaries of the Corporation)
DIRECTORS CONTINUING IN OFFICE -- CLASS II DIRECTORS
(Terms Expiring 2000)
Joseph W. Beetz (68) 1978
President, Joseph H. Beetz Plumbing Company, Inc.
(plumbing contractor)
Director, South Side National Bank in St. Louis
5
<PAGE> 8
Ralph Crancer, Jr. (71) 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
Each of the Directors has held the same position or another executive position
with the same employer during the past five years.
ADOPTION OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION OF THE CORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES FROM 6,000,000
SHARES TO 16,000,000 SHARES
(PROPOSAL NO. 2)
The Board of Directors of the Corporation has adopted a resolution
seeking to amend Article Three of the Articles of Incorporation of the
Corporation to increase the number of authorized shares from 6,000,000 shares
consisting of 5,000,000 shares of Common Stock and 1,000,000 shares of Preferred
Stock, to 16,000,000 shares, consisting of 15,000,000 shares of Common Stock and
1,000,000 shares of Preferred Stock.
The increase in authorized shares will provide authorized Common Stock
for issuance from time to time as may be necessary in connection with the
declaration of stock dividends/splits, future financings, investment
opportunities, acquisitions of other banks or companies, other distributions,
or for other corporate purposes. It is expected that certain of the
additionally authorized shares of Common Stock will be issued in connection
with the Corporation's pending acquisition of Public Service Bank, a Federal
Savings Bank, as publicly disclosed on February 26, 1998 (although an increase
in the number of the Corporation's authorized shares is not required in order
to complete the acquisition). Otherwise, the Corporation has no present plans,
understandings, or agreements for issuing the additional shares to be
authorized by the proposed amendment, but it is necessary to enable the
Corporation as the need may arise, to take prompt advantage of market
conditions and the availability of favorable opportunities without the delay
and expense incident to the holding of a special meeting of shareholders of the
Corporation.
The issuance of additional shares of Common Stock by the Corporation
may have a dilutive effect on earnings per share and book value per share, as
well as a dilutive effect on the voting power of existing shareholders. The
Corporation would expect that any such dilutive effect on earnings per share
and/or book value would be relatively short-term in duration. Shareholders do
not possess preemptive rights and thus will not have a first right or right of
first refusal to purchase the additional shares. Unless required by applicable
law, no further authorization or vote of the shareholders will be solicited for
the issuance of the additional shares of the Corporation's Common Stock. The
increase in the number of authorized shares will not affect the preferences,
qualifications, limitations, restrictions and the special and relative rights
of any shares of the Corporation
The issuance of additional shares of Common Stock by the Corporation
also may potentially have an anti-takeover effect by making it more difficult
to obtain shareholder approval of various actions, such as a merger or other
acquisition of the Corporation. The proposed increase in the number of
authorized shares of Common Stock could enable the Board of Directors to render
more difficult an attempt by another person or entity to obtain control of the
Corporation, though the Board of Directors has no present intention of issuing
additional shares for such purposes and has no present knowledge of any such
takeover efforts.
6
<PAGE> 9
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF AN AMENDMENT
TO THE ARTICLES OF INCORPORATION OF THE CORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES FROM 6,000,000 SHARES TO 16,000,000 SHARES, WHICH IS ITEM 2 ON
THE PROXY CARD.
ADOPTION OF THE SOUTHSIDE BANCSHARES CORP. 1998 STOCK OPTION PLAN
(PROPOSAL NO. 3)
The third item to be acted upon at the Annual Meeting is a proposal to
adopt the Southside Bancshares Corp. 1998 Stock Option Plan (the "1998 Plan")
which would establish a reserve of 250,000 shares of Common Stock of the
Corporation to be issued from time to time to eligible employees of the
Corporation and/or its subsidiaries pursuant to incentive stock options and/or
non-qualified stock options. Shares to be issued pursuant to such options may be
authorized but unissued shares or treasury shares. The Corporation's Board of
Directors, at its meeting on February 26, 1998, approved a resolution adopting
the 1998 Plan, conditioned upon subsequent approval by the shareholders of the
Corporation as required by applicable law.
The purpose of the 1998 Plan is to enhance the profitability and value
of the Corporation for the benefit of its shareholders by providing for stock
options to attract, retain and motivate officers and other key employees who
make important contributions to the success of the Corporation.
The following is a brief description of the material features of the
1998 Plan:
ADMINISTRATION.
The 1998 Plan will be administered by a Committee which is appointed
from time to time by the Board of Directors of the Corporation and comprised of
at least three or more members of the Board of Directors who are "outside
directors" within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended, and "non-employee directors" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, as amended. The Committee will
determine those employees of the Corporation and any subsidiary thereof eligible
to receive stock options pursuant to the 1998 Plan, grant the stock options,
determine when the stock options will be granted, the number of shares of Common
Stock to be granted to any individual, the option price and term of each stock
option and all other terms and conditions of each stock option granted under the
1998 Plan.
PARTICIPANTS.
Any person who is employed by the Corporation or any subsidiary thereof
shall be eligible to receive grants of stock options pursuant to the 1998 Plan,
as determined by the plan Committee from time to time.
7
<PAGE> 10
STOCK SUBJECT TO THE 1998 PLAN.
Two Hundred Fifty Thousand (250,000) shares of Common Stock, which may
be either authorized but unissued shares or treasury shares, may be issued under
the 1998 Plan (subject to adjustment for future stock splits, stock dividends
and other changes in capitalization as described in greater detail in the 1998
Plan).
OPTION PRICE.
The option price of shares subject to any stock option pursuant to the
1998 Plan shall not be less than the fair market value of the Common Stock at
the time the option is granted. For purposes of the 1998 Plan, the fair market
value of the Common Stock shall mean the fair and reasonable value thereof as
determined by the 1998 Plan Committee according to prices in trades as reported
on the Nasdaq stock market. If there are no prices so reported or if, in the
opinion of the Committee, such reported prices do not represent the fair and
reasonable value of the Common Stock, the Committee shall determine fair market
value by any means its deems reasonable under the circumstances. In the case of
an incentive stock option, the aggregate fair market value of the Common Stock
with respect to which stock options are exercisable for the first time by any
employee during any calendar year shall not exceed $100,000. To the extent the
$100,000 limitation is exceeded, stock options will be treated as non-qualified
stock options.
OPTION PERIOD.
A stock option shall be exercisable during such periods as may be
established by the Committee, except that all options will become immediately
exercisable in the event of a change in control (as defined in the 1998 Plan)
and no incentive stock option may be exercised after the expiration of ten (10)
years from the date such option is granted. The Committee may, in its sole
discretion, accelerate the date of exercise of any stock option pursuant to the
1998 Plan.
TRANSFERABILITY.
Unless otherwise expressly provided in the 1998 Plan, no stock option
will be transferable other than by beneficiary designation, will or the laws of
descent and distribution, and any right granted under a stock option may be
exercised during the lifetime of the holder thereof only by him or her or by his
or her guardian or legal representative. Notwithstanding the foregoing, the
Committee may grant non-qualified stock options that are transferable, without
payment of consideration, to (i) revocable trusts for the benefit of immediate
family members which qualify as grantor trusts for Federal income tax purposes,
(ii) to immediate family members, and (iii) to partnerships whose only partners
are immediate family members.
RIGHTS AS A SHAREHOLDER.
No recipient of a stock option shall have any rights of a shareholder
in respect of any shares subject to option until certificates for such shares
have been issued to such optionee.
AMENDMENT AND TERMINATION.
The Board of Directors of the Corporation may, from time to time,
amend, suspend or terminate the 1998 Plan, in whole or in part, and if
terminated may reinstate any or all of the proisions of the 1998 Plan,
8
<PAGE> 11
except that no amendment, suspension or termination may apply to the
terms of any stock option, contingent or otherwise, granted prior to the
effective date of such amendment, suspension or termination without the option
recipient's consent. Any such action may be taken without shareholder approval
unless required by applicable law or regulation.
EFFECTIVE DATE AND TERM.
Subject to shareholder approval, it is expected that the 1998 Plan will
be effective as of April 23, 1998. The 1998 plan shall continue in effect until
December 31, 2007, when it shall terminate and no stock options shall be granted
under the 1998 Plan thereafter.
The affirmative vote of a majority of the shares of Common Stock
entitled to vote thereon is required to approve the adoption of the 1998 Plan.
Dissenting votes give rise to no rights on the part of dissenters.
The Board of Directors of the Corporation believes that the 1998
Plan will be in the best interests of the Corporation and its shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE
SOUTHSIDE BANCSHARES CORP. 1998 STOCK OPTION PLAN, WHICH IS ITEM 3 ON YOUR
PROXY CARD.
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL NO. 4)
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, 1998. 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 1997, KPMG Peat
Marwick LLP provided audit and tax services for the Corporation. The audit
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 4 ON THE PROXY CARD.
BOARD OF DIRECTORS AND COMMITTEES OF BOARD OF DIRECTORS
In fiscal year 1997, 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 Jefferson County 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
9
<PAGE> 12
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, with the exception of the Bank of St. Charles County which pays $50 for
attendance at each of its discount committee meetings. The Directors may defer
these fees until retirement or death pursuant to the Corporation's Deferred
Compensation Plan for Directors.
During 1997, there were twelve (12) regular meetings and two (2)
special meetings of the Corporation's Board of Directors. Each of the Directors
of the Corporation attended at least eighty-five percent (85%) 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 1997.
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 1997, 1996 and 1995 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 ($100,000) during the fiscal year ending December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
================================================================================================================================
ANNUAL LONG TERM ALL
COMPENSATION COMPENSATION OTHER
COMPENSATION
---------------------------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS
Securities
($)(1) ($)(2) Underlying Options ($)(3)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THOMAS M. TESCHNER (41) 1997 $160,000 $ 135,000 100,000 $104,575(4)
President, Chief Executive Officer and
Director of the Corporation and South Side 1996 160,000 100,000 20,000 $182,721(4)
National Bank in St. Louis
1995 160,000 100,000 -0- $34,066
- -------------------------------------------------------------------------------------------------------------------------------
</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.
10
<PAGE> 13
3 Consists of the Corporation's contributions and allocations to
the KSOP ($11,579 in 1997, $10,930 in 1996 and $18,696 in 1995);
Director's fees from the Corporation and its subsidiaries
($46,650 in 1997, of which $38,750 was deferred, $37,800 in
1996, of which $25,650 was deferred, and $11,850 in 1995); life
insurance premiums ($3,520 in 1997, 1996 and 1995,
respectively); and deferred compensation paid in 1997 as
described below.
4 Reflects $42,826 and $130,471 paid in 1997 and 1996,
respectively, as grants of performance stock awards under the
Deferred Compensation Agreement described in the Compensation
Committee Report elsewhere herein. The 1997 grant represents
1,241.32 shares of performance stock. The 1996 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 ($22.75
per share) as of December 31, 1996 for the 1996 fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
============================================================================================================================
INDIVIDUAL GRANTS Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
for Option Term(3)
----------------------------------------------------------------------------------------------
NAME Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SAR's Employees in Base Price Expiration
granted (#)(1) Fiscal Year ($/sh)(2) Date
-----------------------------
5% ($) 10% ($)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas M. Teschner 100,000 100% $24.00 3/25/07 $1,500,000 $3,800,000
============================================================================================================================
</TABLE>
1 The Options, which were granted on March 25, 1997, become
exercisable at the rate of one-fifth on March 26 of the first
five years commencing on March 26, 1998, 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 $39.00 and $62.00 if increased 5% and 10%,
respectively, compounded annually over the option term.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
=============================================================================================================================
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money
Options/SARs at Fiscal Year End(1) Options/SARs at Fiscal
Shares Year-End($)(2)
Name Acquired Value
on Exercise (#) Realized ($)
------------------------------------------------------------------
Exercisable(3) Unexercisable(4) Exercisable Unexercisable
(#) (#) (#) (#)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas M. Teschner -0- -0- 38,000 92,000 $569,000 $1,026,000
=============================================================================================================================
</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, 1997 closing bid price of $34.50.
11
<PAGE> 14
3 Includes 10,000 Options with an exercise price of $11.00 per share,
8,000 Options with an exercise price of $19.00 per share, and 20,000
Options with an exercise price of $24.00 per share.
4 Includes 12,000 Options with an exercise price of $19.00 per share
and 80,000 Options with an exercise price of $24.00 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 14. 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 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. The
Corporation's executive compensation program remained relatively unchanged
during 1997 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
12
<PAGE> 15
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 1997 was set at 150% of
the target award level. The target award level ranges from
15% to 50% of annual salary. In order to achieve the maximum
award level, the Corporation generally should have met or
exceeded 120% of established performance goals. In the event
the performance goals are exceeded, the award level could
range up to 75% 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 100,000 options granted in 1997.
- 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 total the
Corporation's 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.
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
13
<PAGE> 16
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 1997
consisted of:
- Base salary of $160,000.00.
- Bonus of $135,000.00. The bonus paid during 1997 related to
the 1996 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 1996, including record-setting core net
earnings and a substantial reduction in nonperforming loans.
Core net income increased by 15% in 1996 and was 104% of the
target amount included in the Plan. Nonperforming loans
declined by 64% which was 240% of the target reduction
outlined in the Plan.
- 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, a grant of 1,241.32 shares of
Performance Stock, having a value on the date of grant of
$42,825.54 ($34.50 per share) was credited to Mr. Teschner's
Performance Stock Account as of December 31, 1997 for 1997.
- Stock Option Awards. The Committee granted to Mr. Teschner
Stock Options to acquire 100,000 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.
- 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.
14
<PAGE> 17
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 1993 through 1997, compared to the
S&P 500 and the NASDAQ Bank Index.
[GRAPHIC OMITTED]
NASDAQ Numbers 1993 - 129
1994 - 131
1995 - 189
1996 - 239
1997 - 391
S&P 500 Numbers 1993 - 110
1994 - 111
1995 - 153
1996 - 188
1997 - 251
Southside Numbers 1993 - 295
1994 - 298
1995 - 304
1996 - 443
1997 - 687
*Assumes $100 invested on December 31, 1996 in Corporation's Common
Stock, the S&P 500 Index and the NASDAQ Banks Index. Total return assumes
reinvestment of dividends.
<PAGE> 18
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 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 voluntarily 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.
16
<PAGE> 19
PENSION PLAN AND RETIREMENT TRUST
The Corporation currently 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.
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
160,000 or greater(1)........... 26,187 39,280
- -----------------
</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 $160,000 in 1997.
Remuneration in the Pension Plan table includes annual base salary,
bonus and fringe benefits. The 1997 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, $160,000 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.
On February 26, 1997, the Board of Directors of the Corporation voted
to terminate the Pension Plan effective May 31, 1997. Benefits accumulated under
the Pension Plan were frozen as of March 31, 1997. Termination of the Pension
Plan is contingent upon the receipt of approval from the Internal Revenue
Service, which approval is expected during fiscal year 1998. Thereupon, all
accumulated benefits under the Pension Plan will be immediately paid.
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.
17
<PAGE> 20
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 1999, 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 28, 1998. 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, except that Mr. Kennedy filed a late report on Form 4 involving
one transaction.
ANNUAL REPORT
Copies of the Annual Report for the fiscal year ended December 31,
1997, including financial statements certified by the Corporation's independent
accountants, have been mailed on March 26, 1998 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 26, 1998 Joanne M. Schneider
St. Louis, Missouri Secretary to the Board
18
<PAGE> 21
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 23, 1998, 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 (AS DESCRIBED IN GREATER DETAIL IN THE PROXY
STATEMENT) IS RECOMMENDED BY THE BOARD OF DIRECTORS.
1. Election of directors: Douglas P.Helein, Earle J. Kennedy, Jr. and
Daniel J. Queen.
[ ] FOR all nominees listed.
[ ] FOR all nominees listed except
-------------------------------
----------------------------------------------------------
[ ] WITHHOLD AUTHORITY to vote for all nominees listed.
2. The adoption of an amendment to the Corporation's Articles of
Incorporation increasing the number of authorized shares from 6,000,000
to 16,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The adoption of the Southside Bancshares Corp. 1998 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. The ratification of the appointment of KPMG Peat Marwick LLP as
independent certified public accountants for 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. 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, 2, 3 and 4. 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 , 1998
-------------------
------------------------------
------------------------------
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 23, 1998
[ ] 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.
