<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 27, 2000
-------------------------------
NOTICE IS HEREBY GIVEN THAT THE ANNUAL MEETING OF SHAREHOLDERS OF SOUTHSIDE
BANCSHARES CORP. WILL BE HELD AT SOUTH SIDE NATIONAL BANK'S TELEGRAPH ROAD
FACILITY, LOCATED AT 4111 TELEGRAPH ROAD IN SOUTH ST. LOUIS COUNTY, MISSOURI, AT
2:00 P.M. ON THURSDAY, APRIL 27, 2000. THE PURPOSE OF THE MEETING IS:
1. TO ELECT THREE DIRECTORS, EACH TO SERVE FOR A THREE-YEAR TERM,
2. TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE 2000 FISCAL YEAR, AND
3. TO ACT UPON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING OR ANY ADJOURNMENT THEREOF.
YOU MAY VOTE IF YOU ARE A SHAREHOLDER OF RECORD ON MARCH 8, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ JOANNE M. SCHNEIDER
---------------------------------------
JOANNE M. SCHNEIDER
SECRETARY TO THE BOARD
ST. LOUIS, MISSOURI
MARCH 24, 2000
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. A POSTAGE-PAID RETURN ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO
OR AT THE MEETING.
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 SO THAT YOU MAY BE
ADMITTED TO THE MEETING.
Shareholders representing a majority of the company's outstanding common
stock must be present or represented by proxy at the annual meeting for a quorum
to be present. TO ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING, PLEASE
RETURN YOUR PROXY EARLY.
<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 27, 2000
---------------
PROXY SOLICITATION AND VOTING PROCEDURES
YOUR VOTE IS VERY IMPORTANT
THE BOARD OF DIRECTORS OF SOUTHSIDE BANCSHARES CORP. IS SOLICITING PROXIES
FOR THE COMPANY'S 2000 ANNUAL MEETING. The company is first mailing this proxy
statement and the form of proxy to shareholders on or about March 24, 2000.
WHO CAN VOTE
Shareholders of record on March 8, 2000 may vote at the annual meeting. On
March 8, 2000, 8,593,628 shares of common stock were outstanding and thereby
entitled to vote at the annual meeting.
THE NUMBER OF VOTES YOU HAVE
You have one vote for each share of common stock that you held on March 8,
2000.
HOW YOU CAN VOTE
There are two ways you can vote:
- by proxy - simply indicate your vote by completing the enclosed proxy
card, sign and date the proxy card and return it in the envelope
provided, or
- in person - attend the annual meeting and vote in person.
If your shares are held in the name of your broker, bank or other nominee
and you wish to vote at the annual meeting, you must bring an account statement
or letter from such person or entity indicating that you were the beneficial
owner of the shares on March 8, 2000, the record date for voting, in order to be
admitted to the annual meeting.
QUORUM REQUIREMENT
A majority of the outstanding shares of common stock entitled to vote at
the annual meeting must be present in person or by proxy at the annual meeting
in order for there to be a quorum to elect directors and to ratify the
appointment of KPMG LLP.
1
<PAGE> 4
HOW PROXIES WILL BE VOTED
If you properly execute and return your proxy in time, your shares of
common stock will be voted in accordance with your instructions. If you do not
give instructions on your proxy, your shares of common stock will be voted (1)
in favor of the election of Joseph W. Beetz, Howard F. Etling and Joseph W. Pope
to the Board of Directors and (2) in favor of KPMG LLP serving as the company's
independent certified public accountants for the year 2000.
Shares represented by proxies that are marked "withhold authority" with
respect to the election of a director or which are marked "abstain" with respect
to the ratification of the appointment of KPMG LLP or any other matter will be
counted for determining whether a quorum is present but will have the effect of
a vote against a director, against the ratification and appointment of KPMG LLP
or against any other matters presented at the meeting, as the case may be.
As of the date of this proxy statement, the company is not aware of any
matters which may come before the annual meeting other than the matters
discussed in this proxy statement. If any other matters properly come before the
annual meeting, the proxy holders will vote the shares of common stock
represented by your proxy in their discretion.
HOW YOU CAN REVOKE YOUR PROXY OR CHANGE YOUR VOTE
You may revoke a properly executed proxy at any time before it is exercised
by:
- filing a written revocation with the company secretary prior to the
annual meeting,
- filing a duly executed proxy bearing a later date with the company
secretary prior to the annual meeting, or
- voting in person at the annual meeting.
COSTS AND METHOD OF SOLICITATION
Directors and employees of the company will solicit proxies primarily by
mail, personal interview and telephone. They will not receive any additional
compensation for such solicitation. The company will pay all expenses of the
proxy solicitation. The company will request brokers, nominees, fiduciaries and
other custodians to forward soliciting material to the beneficial owners of
common stock and will reimburse such persons for their expenses.
ITEM 1 - - ELECTION OF DIRECTORS
NOMINEES
Joseph W. Beetz, Howard F. Etling and Joseph W. Pope are the nominees for
election to the Board of Directors. Mr. Beetz and Mr. Etling are presently
members of the Board of Directors. The Board of Directors has nominated Mr. Pope
to fill the seat previously held by Ralph Crancer, Jr., who passed away in
January 1999. If elected, each has consented to serve for a three-year term
until the company's annual meeting in 2003 and until their respective successors
are duly elected and qualified. Information about each of the three nominees and
the company's other directors appears beginning on page 4.
2
<PAGE> 5
VOTE REQUIRED TO ELECT DIRECTORS
The three nominees who receive the highest number of votes will be elected.
Cumulative voting for the election of directors is not available.
Unless instructed otherwise, the proxy holders will vote for Joseph W.
Beetz, Howard F. Etling and Joseph W. Pope as directors. Although the company
does not believe that Joseph W. Beetz, Howard F. Etling or Joseph W. Pope will
decline or be unable to serve as a director if elected, in such event, the proxy
holders will vote for such other person designated by the Board of Directors.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR JOSEPH W. BEETZ, HOWARD
F. ETLING AND JOSEPH W. POPE, THE NOMINEES LISTED UNDER ITEM 1 ON THE PROXY.
ITEM 2 - - RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
APPOINTMENT
Subject to ratification by the shareholders, the Board of Directors
appointed KPMG LLP as independent certified public accountants to audit the
company's accounts for the fiscal year ending December 31, 2000. The Board of
Directors expects that representatives of KPMG LLP will be present at the annual
meeting to respond to appropriate questions and to make a statement if they so
desire.
SERVICES PERFORMED
During 1999, KPMG LLP audited the consolidated financial statements of the
company and its subsidiaries and provided tax services for the company.
VOTE REQUIRED TO RATIFY ACCOUNTANTS
The ratification of KPMG LLP as independent certified public accountants
requires the affirmative vote of at least a majority of the shares of common
stock entitled to vote at the annual meeting.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG LLP, WHICH IS ITEM 2 ON THE PROXY.
ITEM 3 - - OTHER BUSINESS
As of the date of this proxy statement, the Board of Directors is not aware
of any matters which may come before the annual meeting.
3
<PAGE> 6
INFORMATION ABOUT NOMINEES AND OTHER DIRECTORS
The company's articles of incorporation and bylaws presently provide for
the company to have not less than 9 nor more than 15 directors divided into
three classes as nearly equal as possible with one class to be elected annually
for a three-year term. The Board of Directors has fixed the number of directors
at nine.
For each nominee to become a director and each other director whose term of
office will continue after the annual meeting, the following table indicates:
(1) his age, (2) his principal occupation or employment for the past five years,
(3) his other directorships, and (4) the year he was first elected as a director
of the company. Information with respect to the business experience of each
director has been furnished by such director or has been obtained from company
records.
CLASS II DIRECTORS:
NOMINEES FOR DIRECTORS
(terms expiring 2003)
<TABLE>
<CAPTION>
OTHER DIRECTOR
NAME AGE PRINCIPAL OCCUPATION DIRECTORSHIPS SINCE
---- --- -------------------- ------------- -----
<S> <C> <C> <C> <C>
Joseph W. Beetz 71 President, Joseph H. Beetz Plumbing -- 1978
Company, Inc. (plumbing contractor)
Howard F. Etling 85 Publisher Emeritus, Journal Newspapers -- 1962
Joseph W. Pope 34 Senior Vice President and Chief Financial -- nominee
Officer, Southside Bancshares Corp.
Senior Vice President,
South Side National Bank in St. Louis
</TABLE>
CLASS III DIRECTORS:
CONTINUING IN OFFICE
(terms expiring 2001)
<TABLE>
<CAPTION>
OTHER DIRECTOR
NAME AGE PRINCIPAL OCCUPATION DIRECTORSHIPS SINCE
---- --- -------------------- ------------- -----
<S> <C> <C> <C> <C>
Douglas P. Helein 48 Insurance Broker, Welsch, Flatness & Lutz, -- 1992
Inc. (insurance agency)
Earle J. Kennedy, Jr. 71 Former President, Westway Services, Inc. -- 1978
(vending company)
Daniel J. Queen 59 President, Highland Diversified, Inc. State Bank of 1992
(operates grocery stores) Jefferson County
(subsidiary of the
company)
</TABLE>
4
<PAGE> 7
CLASS I DIRECTORS:
CONTINUING IN OFFICE
(terms expiring 2002)
<TABLE>
<CAPTION>
OTHER DIRECTOR
NAME AGE PRINCIPAL OCCUPATION DIRECTORSHIPS SINCE
---- --- -------------------- ------------- -----
<S> <C> <C> <C> <C>
Norville K. McClain 70 President, Essex Contracting, Inc. South Side National 1988
(building contractor and developer) Bank in St. Louis
Richard G. Schroeder, Sr. 59 President, St. Louis Fabrication Services, South Side National 1994
Inc. (steel fabrication company) Bank in St. Louis
Thomas M. Teschner 43 President and Chief Executive Officer, Chairman, South Side 1992
Southside Bancshares Corp. National Bank in St.
Louis; Bank of St.
President and Chief Executive Officer, Genevieve; The Bank of
South Side National Bank in St. Louis St. Charles County;
and State Bank of
Jefferson County
(subsidiaries of the
company)
</TABLE>
COMMITTEES
The company has the following committees:
- audit: - monitors the internal accounting controls and
practices of the company and reports its findings
to the Board of Directors
- committee members are Mr. Beetz, Mr. Etling, Mr.
Helein, Mr. Kennedy, Mr. Queen, Mr. McClain and Mr.
Schroeder
- met four times in 1999
- compensation: - approves compensation levels for executive officers
- committee members are Mr. Beetz, Mr. Etling, Mr.
Helein, Mr. Kennedy, Mr. Queen, Mr. McClain and Mr.
Schroeder
- met two times in 1999
The company does not have a standing nominating committee, and no other
committee performs a similar function. The Board of Directors makes all
recommendations for nominees to the Board of Directors. Shareholders may not
nominate individuals to serve as directors.
MEETINGS
In 1999, the Board of Directors held twelve regular meetings and no special
meetings. Each of the directors attended at least 75% of the total number of
meetings of the Board of Directors and committees on which such director served.
5
<PAGE> 8
DIRECTOR COMPENSATION
Prior to April 1, 1999, each director received $1,000 for each regular
Board of Directors' meeting he attended. After April 1, 1999, each director
became eligible for an annual retainer of $35,400 payable in equal monthly
installments. Directors of the company who also serve as a director for one of
the company's subsidiary banks receive additional director fees from those
banks.
The directors may elect to defer their director fees pursuant to the
company's deferred compensation plan for directors. Under the deferred
compensation plan, a director may defer all or a portion of his director's fees
in exchange for post-retirement income or pre-retirement death benefits. The
amount deferred by a director is placed into a deferral account which will
accrue interest at a rate between 6% and 15% annually, with the exact return to
be based upon the increase in the company's stock price from year to year. As of
December 31, 1999, the company has entered into deferred compensation agreements
with Earle J. Kennedy, Jr., Norville K. McClain, Daniel J. Queen and Thomas M.
Teschner. No other remuneration was paid by the company to any non-employee
director or for special assignments.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following tables set forth as of March 8, 2000 the number of shares of
common stock owned beneficially by (1) each director (including nominees for
director), (2) each executive officer named in the summary compensation table on
page 8, (3) directors and executive officers as a group, and (4) any person the
company knows to be the beneficial owner of more than 5% of the outstanding
shares of common stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
------------------------------------------------
SOLE VOTING OTHER PERCENT
AND INVESTMENT BENEFICIAL OF
EXECUTIVE OFFICERS & DIRECTORS POWER OWNERSHIP CLASS(2)
- ------------------------------ ------------------------ -------------------- ------------
<S> <C> <C> <C>
Joseph W. Beetz 57,390 -- *
Howard F. Etling 166,142 -- 1.85%
Douglas P. Helein 398,320 -- 4.44%
Earle J. Kennedy, Jr. 10,020 208,525(3) 2.44%
Norville K. McClain 437,257 1,080,728(4) 16.91%
Joseph W. Pope 56,488(5) -- *
Daniel J. Queen 235,946 -- 2.63%
Richard G. Schroeder, Sr. -- 99,000(6) 1.10%
Thomas M. Teschner 330,166(7) 1,154,020(4)(8) 16.54%
Executive Officers and Directors (including
nominees) as a group (9 persons) 1,691,729(9) 1,448,867(4) 34.99%
</TABLE>
* less than 1%
6
<PAGE> 9
<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) -- 1,080,728 12.04%
Employee Stock Ownership Plan
(With 401(k) Provisions)
3606 Gravois Avenue
St. Louis, Missouri 63116
First Banks, Inc.(10) 1,579,060 -- 17.59%
135 North Meramec
Clayton, Missouri 63105
</TABLE>
- ---------------
(1) The information set forth is based upon information furnished to the
company by the named persons or entities. Beneficial ownership is
determined in accordance with Securities and Exchange Commission rules and
includes shares of common stock for which a person directly or indirectly
has or shares voting power or investment power or both and shares of common
stock which may be acquired upon the exercise of stock options that are
exercisable or will become exercisable within 60 days.
(2) The percentages are based on the total number of outstanding shares of
common stock, 8,593,628, plus the total number of shares of common stock
for which beneficial ownership may be acquired pursuant to stock options
that are exercisable or that will become exercisable within 60 days,
382,200, for a total of 8,975,828 shares.
(3) Shares for which Mr. Kennedy has shared voting and investment power.
(4) Includes 1,080,728 shares held by the Southside Bancshares Corp. Employee
Stock Ownership Plan With 401(k) Provisions. Mr. McClain and Mr. Teschner
are trustees of the plan. Participants in the plan have voting power over
shares of common stock allocated to their plan accounts. The trustees will
vote these shares of common stock as directed by the participants. If a
participant fails to provide direction, the trustees will vote those shares
in their discretion. Except for 69,166 shares of common stock allocated to
Mr. Teschner's account under the plan, Mr. Teschner and Mr. McClain
disclaim any personal interest in all of the shares of common stock held by
the plan.
(5) Includes 12,678 shares of common stock allocated to Mr. Pope's account
under the employee stock ownership plan and 42,000 shares of common stock
that Mr. Pope may acquire beneficial ownership of pursuant to stock options
that are exercisable or will become exercisable within 60 days.
(6) Shares for which Mr. Schroeder has shared voting and investment power.
(7) Includes 69,166 shares of common stock allocated to Mr. Teschner's account
under the employee stock ownership plan and 258,000 shares of common stock
that Mr. Teschner may acquire beneficial ownership of pursuant to stock
options that are exercisable or will become exercisable within 60 days.
(8) Includes 142,458 shares of common stock for which Mr. Teschner has shared
voting and investment power.
(9) Includes 81,844 shares of common stock allocated to the accounts of the
executive officers of the company under the employee stock ownership plan
and 300,000 shares of common stock that the executive officers and
directors may acquire beneficial ownership of pursuant to stock options
that are exercisable or will become exercisable within 60 days.
(10) Not included are 16,920 shares of common stock owned by James F. Dierberg
and 371,760 shares of common stock 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, including James F. Dierberg, control First Banks, Inc. directly or
indirectly.
7
<PAGE> 10
To the knowledge of the Board of Directors, no change of control of the
company has occurred since the beginning of the last fiscal year, and there are
no contractual arrangements that could give rise to a change of control of the
company in the future.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
paid or accrued in 1999, 1998 and 1997 for the company's Chief Executive Officer
and for the other executive officer of the company who received total
compensation exceeding $100,000 during the fiscal year ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
---------------------------- ------------------- All
Name and Principal Position Year Salary Bonus Securities Other
($)(1) ($)(2) Underlying Compensation
Options ($)(3)
- ------------------------------------------- --------- ------------- -------------- ------------------- ----------------------
<S> <C> <C> <C> <C> <C>
THOMAS M. TESCHNER 1999 $215,000 $115,000 -- $109,997
President, Chief Executive Officer
and Director 1998 $215,000 $100,000 -- $103,124
1997 $160,000 $135,000 300,000 $104,575
- ------------------------------------------- --------- ------------- -------------- ------------------- ----------------------
JOSEPH W. POPE 1999 $ 90,000 $ 25,000 -- $ 10,418
Senior Vice President and
Chief Financial Officer 1998 $ 85,000 $ 25,000 -- $ 9,771
1997 $ 78,000 $ 19,000 -- $ 11,258
- ------------------------------------------- --------- ------------- -------------- ------------------- ----------------------
</TABLE>
(1) Includes deferred compensation contributed by Mr. Teschner and Mr. Pope to
the employee stock ownership plan.
(2) Includes amounts paid in accordance with the executive compensation program
discussed in the Compensation Committee Report section of this proxy
statement.
(3) Consists of the company's contributions and allocations to the employee
stock ownership plan ($12,433 in 1999, $13,009 in 1998 and $11,579 in 1997
for Mr. Teschner, and $9,504 in 1999, $8,861 in 1998 and $10,444 in 1997
for Mr. Pope), director's fees from the company and its subsidiaries
($53,600 in 1999, of which $44,000 was deferred, $47,550 in 1998, of which
$39,550 was deferred, and $46,650 in 1997, of which $38,750 was deferred,
for Mr. Teschner), life insurance premiums ($4,249 in 1999, $4,438 in 1998
and $3,520 in 1997 for Mr. Teschner, and $914 in 1999, $910 in 1998 and
$814 in 1997 for Mr. Pope). Such amounts also reflect $39,715, $38,127 and
$42,826 paid to Mr. Teschner in 1999, 1998 and 1997, respectively, as
grants of performance stock awards under the deferred compensation
agreement described in the Compensation Committee Report section of this
proxy statement. The 1999 grant represents 4,538.86 shares of performance
stock. The 1998 and 1997 grants represent 3,112.39 and 3,723.96 shares of
performance stock, respectively.
8
<PAGE> 11
The following table sets forth information concerning (1) the number of
shares of the company's common stock acquired last year upon the exercise of
stock options and (2) the number of shares of the company's common stock that
may be acquired upon the exercise of stock options outstanding and the value of
such options.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION/SAR VALUES
- --------------------------- -------------- ---------------- ------------------------------------ -----------------------------
Shares Value of Unexercised
Acquired Number of Securities in-the-Money
on Exercise Value Underlying Unexercised Options/SARs at Fiscal
Name (#) Realized ($) Options/SARs at Fiscal Year End(1) Year-End($)(2)
- --------------------------- -------------- ---------------- ------------------------------------ -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
(#) (#) ($) ($)
- --------------------------- -------------- ---------------- ------------------ ----------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Thomas M. Teschner -0- -0- 258,000(3) 132,000(4) $403,560 $119,040
- --------------------------- -------------- ---------------- ------------------ ----------------- ------------- ---------------
Joseph W. Pope -0- -0- 42,000(5) 6,000(6) $149,520 $14,520
- --------------------------- -------------- ---------------- ------------------ ----------------- ------------- ---------------
</TABLE>
(1) All amounts represent shares of common stock underlying stock options at
December 31, 1999.
(2) Pre-tax gain. The value of the unexercised in-the-money stock options is
based upon a December 31, 1999 closing bid price of $8.75 for shares of
common stock.
(3) Includes 30,000 shares of common stock underlying stock options having an
exercise price of $3.67 per share, 48,000 shares of common stock underlying
stock options having an exercise price of $6.33 per share, and 180,000
shares of common stock underlying stock options having an exercise price of
$8.00 per share.
(4) Includes 12,000 shares of common stock underlying stock options having an
exercise price of $6.33 per share and 120,000 shares of common stock
underlying stock options having an exercise price of $8.00 per share.
(5) Includes 18,000 shares of common stock underlying stock options having an
exercise price of $3.67 per share and 24,000 shares of common stock
underlying stock options having an exercise price of $6.33 per share.
(6) The shares of common stock underlying such stock options have an exercise
price of $6.33 per share.
EXECUTIVE CONTRACTS
MR. TESCHNER'S EMPLOYMENT CONTRACT
The company and South Side National Bank in St. Louis have entered into an
employment agreement with Thomas M. Teschner, President and Chief Executive
Officer of the company and the bank. Mr. Teschner's employment agreement is
effective through April 27, 2002 and automatically renews each year on the
employment agreement's anniversary date for a new three-year term unless notice
not to renew is delivered on or before the anniversary date.
Under the employment agreement, the company or the bank may terminate Mr.
Teschner's employment at any time for cause or disability. The agreement defines
cause as willful misconduct resulting in indictment for an alleged felony,
violation of any material provision of the agreement or any willful failure to
substantially perform any reasonable directions of the company's or the bank's
Board of Directors within 60 days after written demand. Removal for cause
requires the affirmative vote of at least two-thirds of each of the company's
and the bank's Board of Directors. A disability is defined as the inability of
Mr. Teschner to perform his duties under the employment agreement due to illness
or injury as determined by a physician acceptable to the company, the bank and
Mr. Teschner.
9
<PAGE> 12
Upon termination for cause or disability, Mr. Teschner is entitled to
receive a severance payment equal to the greater of (1) one-third of his current
annual base salary or (2) a severance payment computed in accordance with the
company's or the bank's then existing severance policy. After termination of
employment for cause or if Mr. Teschner improperly terminates his own employment
Mr. Teschner will not, for a period of six months after termination, solicit
customers or clients of the company, the bank or any of their subsidiaries
without the prior approval of the Board of Directors.
Upon Mr. Teschner's death during the term of the agreement, his beneficiary
or estate is entitled to the benefits payable under the accidental death, life
insurance and similar plans for employees of the company 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 agreement and the sum payable under the
amended plans.
Upon a change of control of the company or the bank, if Mr. Teschner's
employment is terminated by the company and the bank other than for cause, death
or disability within six months prior to or within three years following the
change in control, or if Mr. Teschner voluntary terminates his employment within
two years following a change of control, Mr. Teschner is entitled to the
following severance benefits in lieu of all other benefits: (1) three times his
highest annual salary in effect at any time during the term of the agreement,
(2) three times his highest annual bonus prior to the termination, (3) his
unpaid annual salary and accrued vacation, and (4) a continuation of his welfare
benefits of health and medical insurance for three full years, except 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. If the company's legal counsel determines that any
of the severance benefits received by Mr. Teschner constitute a parachute
payment subject to an excise tax under the Internal Revenue Code, Mr. Teschner
will be entitled to receive from the company and the bank a lump sum cash
payment sufficient to place Mr. Teschner in the same net after tax position that
he would have been in had such payment not been subject to such excise tax.
MR. TESCHNER'S SALARY CONTINUATION AGREEMENT
The company and Thomas M. Teschner also entered into a salary continuation
agreement in 1999 which provides for payments to Mr. Teschner in the event he
retires, is terminated or the company experiences a change in control. If Mr.
Teschner retires at age 65 or later, the company will pay him an annual benefit
equal to 90% of his annual salary on the date the plan was established,
increased each plan year by 3.5% compounded annually. The plan also provides for
early retirement between the ages of 55 and 64. If Mr. Teschner retires at age
55, he will receive 50% of the normal retirement benefit. If Mr. Teschner
retires after reaching age 55, he will receive an additional 5% of the normal
retirement benefit for each year of employment until the percentage equals 100%
at age 65.
If Mr. Teschner's employment is terminated, voluntarily or involuntarily,
before he reaches age 55 for reasons other than his death or disability, the
company will pay him a lump sum between $0 and approximately $730,000, depending
on the number of completed plan years and the applicable vesting percentage when
such termination occurs. If Mr. Teschner's employment with the company is
terminated before he reaches age 55 and while he suffers a disability, Mr.
Teschner may elect to receive reduced benefit payments at age 65 or a lump sum
payment similar to a voluntary termination of employment.
If the company experiences a change in control and (1) thereafter
terminates Mr. Teschner or (2) Mr. Teschner terminates his employment after
either a change in job responsibilities or a reduction in his annual
compensation before he reaches age 55, the company will pay him a lump sum of
approximately $2,200 to approximately $730,000, depending on the number of
completed plan years when such events occur. If any amount to be received by Mr.
Teschner constitutes a parachute payment
10
<PAGE> 13
subject to an excise tax under the Internal Revenue Code, Mr. Teschner will
receive a lump sum cash payment sufficient to put him in the same net after tax
position he would have been in had such excise tax not applied.
The company is not required to make any payments under the agreement if Mr.
Teschner's employment is terminated by the company for gross negligence or gross
neglect of duties, commission of a felony involving moral turpitude or fraud,
dishonesty or willful violation of any law committed in connection with his
employment and resulting in his personal financial benefit to the company's
detriment.
MR. TESCHNER'S LIFE INSURANCE AGREEMENT
The company and Thomas M. Teschner through his irrevocable insurance trust
have entered into a split dollar agreement pursuant to which the company has
agreed to share with the trust the proceeds of a life insurance policy on Mr.
Teschner's life in lieu of the benefits payable under the salary continuation
plan. Specifically, the trust will receive $3,474,940 from the insurance policy
if Mr. Teschner dies before reaching age 65. The proceeds payable to the trust
decrease on an annual basis by the amount of any retirement payments received by
Mr. Teschner pursuant to the salary continuation agreement. The company pays the
premiums on the policy, and the cost of the insurance is included in Mr.
Teschner's gross income for federal income tax purposes.
MR. POPE'S SALARY CONTINUATION AGREEMENT
The company and Joseph W. Pope entered into a salary continuation agreement
in 1999 which provides for payments to Mr. Pope in the event he retires, is
terminated or the company experiences a change in control. If Mr. Pope retires
at age 65 or later, the company will pay him an annual benefit equal to 90% of
his annual salary on the date the plan was established, increased each plan year
by 3.5% compounded annually. The plan also provides for early retirement between
the ages of 55 and 64. If Mr. Pope retires at age 55, he will receive 50% of the
normal retirement benefit. If Mr. Pope retires after reaching age 55, he will
receive an additional 5% of the normal retirement benefit for each year of
employment until the percentage equals 100% at age 65.
If Mr. Pope's employment is terminated, voluntarily or involuntarily,
before he reaches age 55 for reasons other than his death or disability, the
company will pay him a lump sum between $0 and approximately $470,000, depending
on the number of completed plan years and the applicable vesting percentage when
such termination occurs. If Mr. Pope's employment with the company is terminated
before he reaches age 55 and while he suffers a disability, Mr. Pope may elect
to receive reduced benefit payment at age 65 or a lump sum payment similar to a
voluntary termination of employment.
If the company experiences a change in control and (1) thereafter
terminates Mr. Pope or (2) Mr. Pope terminates his employment after either a
change in job responsibilities or a reduction in his annual compensation before
he reaches age 55, the company will pay him a lump sum of approximately $400 to
approximately $470,000, depending on the number of completed plan years when
such events occur. The agreement with Mr. Pope also provides that if Mr. Pope
dies while employed with the company, the company will pay his beneficiary the
full projected annual benefit for 15 years. The company will not be obligated to
make any payment to Mr. Pope which is a non-deductible parachute payment under
the Internal Revenue Code.
The company is not required to make any payments under the agreement if Mr.
Pope's employment is terminated by the company for gross negligence or gross
neglect of duties, commission of a felony involving moral turpitude or fraud,
dishonesty or willful violation of any law committed in
11
<PAGE> 14
connection with his employment and resulting in his personal financial benefit
to the company's detriment. In addition, the company is not obligated to make
any payments to Mr. Pope under the agreement, except in the event of a change of
control, until he has been employed with the company or its subsidiaries for ten
years.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The compensation committee establishes and administers the company's
executive compensation program. The compensation committee established the
program (1) to link individual compensation and the company's performance and
(2) to provide for both short and long-term incentive programs that align the
economic interests of management and the shareholders. When the program was
developed, the compensation committee engaged an independent third party to
assist in the design of the executive compensation program. Based upon
recommendations of the independent third party, as well as competitive
competition analysis, the committee adopted an annual incentive 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 15 of this proxy statement. The compensation committee believes that the
survey group used for determining executive compensation more closely represents
the company's actual competition for executive talent.
The plan's basic goals are:
- to maintain base salary levels relatively close to the market median
for financial institutions in the company's peer group, and
- to provide for annual incentive opportunities based on the achievement
of established business plan goals with annual incentives comparable
with the market median for financial institutions in the company's
peer group, with additional upside potential for performance
significantly above the predetermined goals.
The compensation committee reviews the program on an annual basis to
determine what changes, if any, need to be made in light of present facts and
circumstances. In 1999, the compensation committee updated the executive
compensation program to include a salary continuation plan designed to encourage
key executives to remain with the company through retirement. A summary of the
terms of the salary continuation agreements entered into between the company and
key executives is set forth beginning on page 10 of this proxy statement. The
company's executive compensation program consists of the following components:
- Salary. For executive officers, the compensation committee uses
competitive compensation data and then considers experience levels to
determine actual compensation levels.
- Bonus Plan. The compensation committee approves annual bonuses for
certain executive officers of the company based upon the formula
provided for in the plan. Under the plan, officers who substantially
impact the company's performance are eligible to receive annual
incentive awards if the company achieves certain performance goals
based on profitability, asset quality and general performance as
compared to the company's peers and prior years. Profitability
measures include return on average assets for the company
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<PAGE> 15
and its bank subsidiaries. Measures of asset quality include total
nonperforming loans and total nonperforming assets. Actual award
opportunity levels depend on whether the company achieves established
performance goals. The maximum incentive award for 1999 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 company generally should have met or exceeded 100% of established
performance goals. In the event the performance goals are exceeded,
the award level could range up to 75% of annual salary. The
compensation committee retains the right to further increase annual
incentive awards if individual contributions warrant.
- Stock Options. The plan itself does not provide for issuance of stock
based awards, although the overall executive compensation program does
provide for stock options. The Southside Bancshares Corp. 1993
Non-Qualified Stock Option Plan and the Southside Bancshares Corp.
1998 Stock Option Plan allow the compensation committee to
periodically grant options to key executives of the company. There
were no stock options granted in 1999.
- Deferred Compensation. In 1996, the compensation committee established
a deferred compensation arrangement to compensate certain executive
officers for certain limitations imposed upon their participation in
the company's qualified benefit plans. Under this arrangement, the
executives and the company enter into a deferred compensation
agreement which provides for an award of performance stock each year
based on the sum of the following:
- an amount determined by multiplying the executive's excess 401(k)
amount by the sum of the highest federal and applicable state
income tax rates in effect for the year in question, plus
- an amount equal to (1) the company's matching contribution
percentage under the employee stock ownership plan for such year
multiplied by the executive's gross annual compensation,
determined without regard to the agreement, less (2) the employer
matching contributions actually made to the employee stock
ownership plan for the benefit of the executive, plus
- an amount determined by (1) multiplying the company's total
discretionary basic and optional contributions to the employee
stock ownership plan, 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 employee
stock ownership plan participants, less (2) the amount actually
contributed to the employee stock ownership plan by the company'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 company's common stock on the last business day of each
such year in the case of the first two items above, and $5.33 per
share in the case of the last item above. The performance shares
issued under this agreement are deemed to be the equivalent of one
share of common stock. The performance 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 common
stock.
13
<PAGE> 16
The executives are entitled to receive payment under the agreement
upon the occurrence of one of several events including (1) a change in
control, (2) termination of employment, (3) retirement, (4) death or
(5) 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 company's common stock as of the close of business on the
date of payment.
- Salary Continuation. A salary continuation plan was established
on December 1, 1999. The plan is designed to pay key executives
post retirement benefits based on their length of service with
the company. The plan has a ten-year vesting schedule to qualify
for payment of the accrued benefits in the event of termination
of employment and requires the executive officer to work until
age 65 to qualify for full benefit payments under the plan. The
plan further carries a life insurance feature that pays full
retirement benefits to the executive officer's beneficiaries in
the event the executive dies prior to normal retirement, while
still in the company's employment.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The President and Chief Executive Officer's compensation for 1999
consisted of:
- Base Salary. $215,000.
- Bonus. $115,000. The bonus paid during 1999 related to the 1998
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 paid
in 1999 was computed in accordance with the plan and represented
approximately 53% of Mr. Teschner's annual salary.
- Deferred Compensation. As described above, the committee
established a deferred compensation arrangement to compensate
executive officers for certain limitations imposed upon their
participation in the company's qualified benefit plans. Pursuant
to the plan, a grant of 4,538.86 shares of performance stock,
having a value on the date of grant of $39,715 ($8.75 per share),
was credited to Mr. Teschner's performance stock account as of
December 31, 1999 for the 1999 fiscal year.
- Salary Continuation Plan. This plan was established on December
1, 1999, and the total benefit accrual for Mr. Teschner in 1999
was $2,442.
- Stock Options. There were no stock options granted during 1999.
- Other Compensation. All other compensation paid to Mr. Teschner
is described in the summary compensation table on page 8.
The Compensation Committee
Joseph W. Beetz Norville K. McClain
Howard F. Etling Earle J. Kennedy, Jr.
Douglas P. Helein Richard G. Schroeder, Sr.
Daniel J. Queen
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<PAGE> 17
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the members of the compensation committee were Joseph W.
Beetz, Howard F. Etling, Norville K. McClain, Douglas P. Helein, Earle J.
Kennedy, Jr., Daniel J. Queen and Richard G. Schroeder, Sr. During 1999, no
member of the compensation committee was an officer or employee of the company
or any of its subsidiaries, and no member of the compensation committee was
formerly an officer of the company or any of its subsidiaries.
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
company's shareholders from 1994 through 1999, compared to the S&P 500 Index and
the Nasdaq Banks Index.
[LINE GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Banks Index 100 144.81 182.69 298.86 263.68 242.63
S&P 500 100 134.11 161.29 211.3 267.65 319.91
Southside 100 102.07 148.6 230.35 271.6 184.77
</TABLE>
*Assumes $100 invested on December 31, 1994 in the company's common stock,
the S&P 500 Index, and the Nasdaq Banks Index. Total return assumes reinvestment
of dividends. All plotted points are based on numbers for the last business day
of December for each of the years represented.
15
<PAGE> 18
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
The company 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 their 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 fiscal year, the company's subsidiaries had commercial
transactions in the ordinary course of business with companies with which
certain of the company's directors are affiliated. No significant business or
personal relationships with the company's subsidiaries existed by virtue of a
person's position with the company or with the company's subsidiaries or
ownership interest in the company.
SHAREHOLDER PROPOSALS
The company anticipates that the 2001 annual meeting of shareholders will
be held on April 26, 2001. If any shareholder of the company intends to submit a
proposal for inclusion in the proxy statement to be delivered in connection with
the 2001 annual meeting, the 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 company at its principal
executive offices no later than November 24, 2000. The company suggests 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
company's secretary. Under the company's bylaws, other proposals that are not
included in the proxy statement for the 2001 annual meeting will be considered
untimely and will not be considered at that meeting unless they are received by
the company's secretary prior to February 10, 2001.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities and Exchange Commission's rules require the company to
disclose late filings of reports of stock ownership and changes in stock
ownership by its directors and executive officers and certain large
shareholders. To the best of the company's knowledge, all of the required
filings were made on a timely basis in 1999, except that Mr. Queen has filed a
late report on Form 4 involving one transaction, Mr. Schroeder has filed a late
report on Form 4 involving three transactions, Mr. McClain has filed a late
report on Form 4 involving four transactions and Mr. Kennedy has failed to file
a report on Form 4 involving several transactions in 1999.
16
<PAGE> 19
ANNUAL REPORT
COPIES OF THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER
31, 1999, INCLUDING FINANCIAL STATEMENTS CERTIFIED BY THE COMPANY'S INDEPENDENT
ACCOUNTANTS, WERE MAILED ON OR ABOUT MARCH 24, 2000 TO ALL SHAREHOLDERS ENTITLED
TO VOTE AT THE ANNUAL MEETING. ADDITIONAL COPIES OF THE ANNUAL REPORT, INCLUDING
FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, ARE AVAILABLE ON
REQUEST, BY CONTACTING JOSEPH W. POPE, C/O SOUTHSIDE BANCSHARES CORP., 3606
GRAVOIS AVENUE, ST. LOUIS, MISSOURI 63116 (314) 444-7600.
By Order of the
Board of Directors
/s/ Joanne M. Schneider
-----------------------------------------
March 24, 2000 Joanne M. Schneider
St. Louis, Missouri Secretary to the Board
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<PAGE> 20
SOUTHSIDE BANCSHARES CORP.
3606 GRAVOIS AVENUE
ST. LOUIS, MISSOURI 63116
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF SOUTHSIDE BANCSHARES CORP.
The undersigned hereby appoints Mitchell P. Baden 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 the company to be held at South Side National Bank's
Telegraph Road facility, located at 4111 Telegraph Road, South St. Louis County,
Missouri, on Thursday, April 27, 2000, at 2:00 p.m., and at any adjournments
thereof: (1) as hereinafter specified upon the proposals listed below and as
more particularly described in the company'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.
<TABLE>
<S><C>
1. Election of directors: Joseph W. Beetz, Howard F. Etling and Joseph W. Pope.
[ ] FOR all nominees listed.
[ ] WITHHOLD AUTHORITY to vote for .
-------------------------------------
[ ] WITHHOLD AUTHORITY to vote for all nominees listed.
2. The ratification of the appointment of KPMG LLP as independent
certified public accountants for 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 MATTERS PROPERLY COME BEFORE THE
ANNUAL MEETING, THE PROXY HOLDERS WILL VOTE THE SHARES OF COMMON STOCK
REPRESENTED BY YOUR PROXY IN THEIR DISCRETION.
(YOU ARE REQUESTED TO COMPLETE, DATE, SIGN, AND RETURN THIS PROXY PROMPTLY)
Dated , 2000
----------------------- -----------------------------------------
Print Name:
------------------------------
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 27, 2000 [ ] Please check box if you plan to attend the annual
meeting.
SOUTHSIDE SHAREHOLDERS
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE SIGN,
DATE AND PROMPTLY RETURN THIS SOUTHSIDE PROXY CARD IN THE ENVELOPE PROVIDED. IF
YOU PLAN TO ATTEND THE ANNUAL 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 ANNUAL
MEETING.
</TABLE>
