<PAGE>
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
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 Section 240.14a-11(c) or Section 240.14a-12
Summit Bancshares, Inc.
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(Name of Registrant as Specified In Its Charter)
Summit Bancshares, Inc.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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SUMMIT BANCSHARES, INC.
1300 SUMMIT AVENUE
FORT WORTH, TEXAS 76102
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1998
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Summit
Bancshares, Inc. (the "Corporation") will be held at Summit National Bank, 1300
Summit Avenue, Fort Worth, Texas on April 21, 1998 at 4:30 p.m., for the
following purposes:
1. To elect a Board of Directors of the Corporation consisting of twelve
(12) persons.
2. To ratify the appointment by the Board of Directors of Stovall, Grandey
& Whatley as independent auditors of the Corporation for its fiscal year
ending December 31, 1998
3. To transact such other business as may properly come before the Annual
Meeting of Shareholders or any adjournment or adjournments thereof.
Only those shareholders of record at the close of business on March 12,
1998, are entitled to notice of and to vote at the Annual Meeting of
Shareholders or at any adjournment or adjournments thereof.
IMPORTANT
---------
All shareholders are urged to sign, date and return as promptly as possible
the enclosed proxy in the enclosed postage-paid envelope. It is important that
as many shares as possible be represented at the Annual Meeting of Shareholders.
Any person executing the accompanying proxy may revoke it at any time prior to
the actual voting thereof by filing with the Secretary of the Corporation a
written revocation thereof or a duly executed proxy bearing a later date.
Consequently, whether or not you expect to be present, please execute and return
the enclosed proxy.
By Order of the Board of Directors,
/s/ PHILIP E. NORWOOD
Philip E. Norwood, Chairman of the Board
March 17, 1998
Fort Worth, Texas
<PAGE>
SUMMIT BANCSHARES, INC.
1300 SUMMIT AVENUE
FORT WORTH, TEXAS 76102
TELEPHONE (817) 336-6817
PROXY STATEMENT FOR ANNUAL
MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1998
This statement is furnished in connection with the solicitation of proxies
by the Board of Directors of SUMMIT BANCSHARES, INC. (the "Board") to be used at
the Annual Meeting of Shareholders of SUMMIT BANCSHARES, INC. (the
"Corporation") to be held at Summit National Bank, 1300 Summit Avenue, Fort
Worth, Texas on April 21, 1998, at 4:30 p.m., and at any adjournment or
adjournments thereof. This Proxy Statement and accompanying proxy are being
mailed on or about March 17, 1998, to the shareholders of the Corporation.
The Corporation's Annual Report to Shareholders for the year ended December 31,
1997, is being furnished with this Proxy Statement to the shareholders of record
on March 12, 1998. The Annual Report to Shareholders does not constitute a part
of the proxy soliciting material.
GENERAL INFORMATION
The close of business on March 12, 1998, has been fixed as the record date
for determining the shareholders entitled to vote at the Annual Meeting of
Shareholders to be held on April 21, 1998.
The Annual Meeting of Shareholders has been called for the purposes of (i)
electing directors of the Corporation for the coming year, (ii) ratifying the
appointment by the Board of Directors of Stovall, Grandey & Whatley as
independent auditors of the Corporation for its fiscal year ending December 31,
1998, and (iii) transacting such other business as may properly come before the
Annual Meeting of Shareholders or any adjournment or adjournments thereof.
Whether you can attend the meeting or not, your vote is important. Shares
can be voted at the meeting only if the owner is present or represented by
proxy. Accordingly, it is requested that you sign and return the enclosed proxy
in the envelope provided.
Any person executing the accompanying proxy may revoke it at any time prior
to the actual voting thereof by filing with the Secretary of the Corporation a
written revocation thereof or a duly executed proxy bearing a later date.
Shares represented by each signed proxy received by the Board will be voted
in accordance with the direction specified by the shareholder, and if no
direction is specified, such shares will be voted "FOR" each proposal.
<PAGE>
The cost of soliciting proxies will be borne by the Corporation. The
solicitation will be made by mail. The Corporation will also supply brokerage
firms and other custodians, nominees and fiduciaries with such number of proxy
materials as they may require for mailing to beneficial owners, and will
reimburse them for their reasonable expenses in connection therewith. Certain
directors, officers and employees of the Corporation, not specifically employed
for the purpose, may solicit proxies, without remuneration therefore, by mail,
telephone, telegraph or personal interview.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on March 12, 1998, the record date for determining
the shareholders of the Corporation entitled to notice of and to vote at the
Annual Meeting of Shareholders, the Corporation had 6,518,094 shares of common
stock, $1.25 par value (the "Common Stock"), issued and outstanding.
The presence, in person or by proxy duly authorized in writing, of the
holders of a majority of the issued and outstanding shares of Common Stock of
the Corporation is necessary to constitute a quorum at the Annual Meeting of
Shareholders.
When a quorum is present at any meeting, the vote of the holders of a
majority of the shares having voting power, present in person or represented by
proxy, shall decide any question brought before such meeting.
Each holder of shares of Common Stock will be entitled to one vote, in
person or by proxy, for each share of Common Stock of the Corporation owned of
record at the close of business on March 12, 1998. Cumulative voting for
directors is not permitted. Directors are elected by plurality vote and,
therefore, the twelve (12) nominees receiving the highest number of affirmative
votes shall be elected as directors provided a quorum is present. All shares
represented at the Annual Meeting in person or by proxy shall be counted in
determining the presence of a quorum. Abstentions and broker non-votes (shares
held by a broker or nominee as to which a broker or nominee indicates on the
proxy that it does not have the authority, either express or discretionary, to
vote on a particular matter) are counted for the purpose of determining the
presence or absence of a quorum for the transaction of business at the Annual
Meeting. For the election of directors, abstention from voting and broker non-
votes will have the legal effect of neither a vote for nor against the nominee.
For all other matters, an abstention from voting and broker non-votes, since
they are not affirmative votes, will have the same practical effect as a vote
against the respective matters.
2
<PAGE>
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
The bylaws of the Corporation provide that the Board shall be comprised of
not more than twenty-five (25) members and that each director shall be elected
to serve until the next Annual Meeting of Shareholders and until his successor
shall be elected and shall qualify. Any vacancies on the Board may be filled by
a majority vote of the Board and any director so elected shall hold office for
the unexpired term of his predecessor or until the next election of directors by
the shareholders of the Corporation.
The Board of Directors has set the number of directors at twelve (12) and
has nominated the twelve (12) persons named below for election to the Board of
Directors of the Corporation.
Names of the nominees for directors and other information about them appear
in the following table. All of the nominees are now directors of the
Corporation and have consented to serve if elected. If for any unforeseen
reason a nominee is unable to serve if elected, the persons named in the
accompanying proxy may exercise their discretion to vote for a substitute
nominee selected by the Board. However, the Board has no reason to anticipate
that any of the nominees will not be able to serve, if elected.
3
<PAGE>
Name and Age of
Nominee; Years Principal Occupation for Past
Served as Director Five Years; Other Directorships
- --------------------- ---------------------------------------------------------
Philip E. Norwood Mr. Norwood became Chairman of the Board of Summit
Age 48 Bancshares, Inc. and Chairman of Summit Community Bank,
Director Since 1984 N.A. in January 1998 and President of Summit Community
Bank, N.A. in July 1994 and continues to serve in these
capacities. From October 1993 to January 1998 Mr. Norwood
served as President and Chief Executive Officer of the
Corporation. He has served as a director of the
Corporation since March 1984. From January 1990 to
October 1993 Mr. Norwood served as Secretary of the
Corporation, from Decem ber 1992 to October 1993 he
served as Executive Vice President of the Corporation,
and from March 1984 to January 1990 he served as
Secretary and Treasurer of the Corporation. From April
1981 to December 1992 Mr. Norwood served as President of
Alta Mesa National Bank (currently a banking office of
Summit Community Bank, N.A.). From December 1992 to
December 1995 Mr. Norwood served as Chief Executive
Officer of Alta Mesa National Bank. Mr. Norwood served as
a director of Alta Mesa National Bank from April 1981 to
March 1997 and as a director of Summit Community Bank,
N.A. since January 1990. Mr. Norwood served as a director
of Summit National Bank from March 1983 to January 1996.
Jeffrey M. Harp Mr. Harp became President of the Corporation in January
Age 49 1998 and continues to serve in that capacity. From
Director Since 1990 October 1993 to January 1998 Mr. Harp served as Chief
Operating Officer and Secretary of the Corporation. He
served as Executive Vice President of the Corporation
from December 1992 to January 1998, and Treasurer from
January 1990 to January 1998. He has served as director
of the Corporation since January 1990. He has served as
President of Summit National Bank since January 1991, and
served as Executive Vice President of Summit National
Bank from February 1985 to December 1990. He has served
as a director of Summit National Bank since January 1990.
He served as a director of Alta Mesa National Bank and
Summit Community Bank, N.A. from January 1990 to January
1996.
4
<PAGE>
Robert E. Bolen Mr. Bolen is Senior Advisor to the Chancellor of Texas
Age 71 Christian University. Mr. Bolen served as the Mayor of
Director Since 1984 the City of Fort Worth from January 1982 to May 1991. Mr.
Bolen served as a director of Alta Mesa National Bank
from April 1981 to March 1997 when he became a director
of Summit Community Bank, N.A.
Elliott S. Garsek Mr. Garsek is an attorney with, and is Chairman of the
Age 49 Board of, the law firm of Barlow & Garsek, a Professional
Director Since 1987 Corpo ration. He has served as a director of Summit
Community Bank, N.A. since June 1984.
Ronald J. Goldman Mr. Goldman is President of Ronnie's LLC, a corporation
Age 55 engaged in retail sales of fine wines and gourmet foods
Director Since 1984 and is also presently involved in personal investments.
From June 1989 to June 1991 Mr. Goldman was a consultant
to Tarrant Distributors, a wholesale liquor and wine
distributorship located in Fort Worth, Texas. Mr. Goldman
served as Presi dent of White Rose Distributing Company,
a liquor and wine distributorship located in Fort Worth,
Texas, from March 1973 until September 1989. Mr. Goldman
served as a director of Ganucheau Stupfel & Brumley
Investment Counsel, an investment advisory firm located
in Fort Worth, Texas, from 1988 to December 1993. Mr.
Goldman has served as a direc tor of Summit National Bank
since January 1975 and served as a director of Alta Mesa
National Bank from April 1981 to March 1997 when he
became a director of Summit Community Bank, N.A.
5
<PAGE>
F. S. Gunn On December 31, 1997 Mr. Gunn retired from the
Age 64 Corporation. From October 1993 to January 1998 Mr. Gunn
Director Since 1979 served as Vice Chairman of the Board of the Corporation
and continues to serve on the Board of the Corporation.
From January 1990 to October 1993 Mr. Gunn served as
President of the Corporation, and from January 1985 to
January 1990 he served as Vice Chairman of the Board of
the Corporation. Mr. Gunn has served as Chairman of the
Board of Summit National Bank since January 1991, and
served as President of Summit National Bank from October
1981 to January 1991. He has served as a director of
Summit National Bank since January 1975. He served as a
director of Alta Mesa National Bank from March 1982 to
January 1996 and as a director of Summit Community Bank,
N.A. from January 1990 to January 1996.
Robert L. Herchert Mr. Herchert has served as President and Chief Executive
Age 55 Officer of Freese & Nichols, Inc., a consulting
Director Since 1998 engineering company since 1991 and has been employed by
that firm since 1990 in various executive capacities. Mr.
Herchert has served as a director of Summit Community
Bank, N.A. since April 1996.
William W. Meadows Mr. Meadows has served as Executive Vice President of Wm.
Age 45 Rigg Insurance Co., an insurance agency, since 1986, and
Director Since 1991 has been employed by that company since 1976 in various
executive capacities. Mr. Meadows has served as a
director of Summit Community Bank, N.A. since June 1984.
Edward P. Munson Mr. Munson is an independent oil operator. He served as
Age 78 Chairman of the Board of Euratex Corporation, a
Director Since 1984 corporation engaged in oil and gas exploration,
development and production, from August 1983 to February
1984. Mr. Munson has served as a director of Summit
National Bank since March 1978.
6
<PAGE>
James L. Murray On December 31, 1997 Mr. Murray retired from the
Age 65 Corporation. From January 1985 to January 1998 Mr. Murray
Director Since 1979 served as Chairman of the Board of the Corporation and
continues to serve on the Board of the Corporation. From
January 1990 to January 1998 Mr. Murray served as
Chairman of the Board of Summit Community Bank, N.A. and
continues to serve on this Board. Mr. Murray served as
Chief Executive Officer of the Corporation from January
1990 to October 1993, as President of the Corporation
from 1979 to January 1985, as President of Summit
Community Bank, N.A. from January 1990 to January 1994,
and as Chairman of the Board of Directors of Summit
National Bank from October 1981 to January 1990. He has
served as a director of Summit Community Bank, N.A. since
April 1985. Additionally, Mr. Murray was a director of
Alta Mesa National Bank from April 1981 to April 1985. He
was reelected to the Board of Directors of Alta Mesa
National Bank in January 1990 and served until January
1996. Mr. Murray served as a director of Summit National
Bank from January 1975 to January 1996.
Byron B. Searcy Mr. Searcy has served as President of Ferree & Searcy,
Age 62 Inc., a corporation engaged in the real estate brokerage
Director Since 1984 business in Fort Worth, Texas, since 1962. Mr. Searcy has
served as a director of Summit National Bank since
January 1975 and served as a director of Alta Mesa
National Bank from April 1981 to March 1997 when he
became a director of Summit Community Bank, N.A.
Edgar Snelson Mr. Snelson has served as President of Snelson Oilfield
Age 69 Lighting Company, Inc., Fort Worth, Texas, since 1957.
Director Since 1997 Mr. Snelson served as a director of Alta Mesa National
Bank from October 1982 to March 1997 when he became a
director of Summit Community Bank, N.A.
No family relationships exist among the named Executive Officers and
directors of the Corporation. No director of the Corporation is a director of
any other company with a class of securities registered pursuant to Section 12
of the Securities Exchange Act of 1934, as amended, or subject to the
requirements of Section 15(d) of that Act or of any company registered as an
investment company under the Investment Corporation Act of 1940, as amended.
7
<PAGE>
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE ELECTION AS
DIRECTORS OF THE TWELVE (12) PERSONS NAMED ABOVE.
BOARD OF DIRECTORS
Directors are elected annually by the shareholders of the Corporation for
one year and hold office until their successors are elected and have qualified.
Various meetings of the Board are held each year, including an organizational
meeting following the conclusion of the Annual Meeting of Shareholders. The
Board has established an Executive Committee, an Audit Committee, a Compensation
and Benefits Committee (the "Compensation Committee"), an Asset/Liability
Management Committee (the "ALCO Committee"), and a Nominating Committee.
EXECUTIVE COMMITTEE
Members:James L. Murray (Chairman), Elliott S. Garsek, Ronald J. Goldman,
F. S. Gunn, Jeffrey M. Harp, Philip E. Norwood and Byron B. Searcy.
The function of the Executive Committee is to act in an emergency or on
routine matters when it is impractical to assemble the entire Board for a
meeting. The Executive Committee, during intervals between meetings of the
Board, has the authority to exercise all the powers of the full Board other than
matters coming specifically within the purview of other committees of the Board
and certain extraordinary corporate matters.
AUDIT COMMITTEE
Members: Edgar Snelson (Chairman), William W. Meadows and Edward P. Munson.
The functions of the Audit Committee are to (i) meet with the independent
auditors of the Corporation to review the annual audit and its results, (ii)
review internal audit controls and procedures of the Corporation and its
subsidiaries, Summit National Bank and Summit Community Bank, N.A. (collectively
referred to as the "Subsidiary Banks"), and (iii) make recommendations to the
Board as to the engagement of the independent auditors of the Corporation.
COMPENSATION AND BENEFITS COMMITTEE
Members:William W. Meadows (Chairman), Robert E. Bolen, F. S. Gunn, Edward
P. Munson and James L. Murray.
The function of the Compensation Committee is to make recommendations to
the Board with regard to the remuneration of the executive officers and
directors of the Corporation and
8
<PAGE>
the Subsidiary Banks. The Compensation Committee is also responsible for the
administration of the Incentive Stock Option Plans, the Defined Benefit Pension
Plan, the 401(k) Plan, the Management Security Plan and the Performance
Compensation Plan of the Corporation. See "EXECUTIVE COMPENSATION AND OTHER
INFORMATION."
ASSET/LIABILITY MANAGEMENT COMMITTEE
Members: Robert E. Bolen, Ronald J. Goldman, F.S. Gunn, Jeffrey M. Harp,
James L. Murray and Philip E. Norwood.
The functions of the Asset/Liability Committee are to review the
implementation of the Corporation's asset and liability management functions and
assure that those functions are in a workable and productive fashion. The
Committee is also responsible for monitoring asset and liability management
objectives while working within the range of operating guidelines set forth in
the Asset/Liability Management Policy.
NOMINATING COMMITTEE
Members: Robert E. Bolen (Chairman), Jeffrey M. Harp, Ronald J. Goldman,
William W. Meadows, Philip E. Norwood and Byron B. Searcy.
The function of the Nominating Committee is to make recommendations to the
Board with the regard to prospective new members of the Board of Directors.
DIRECTORS' COMPENSATION
During 1997 the Corporation paid each of its directors $100 for attendance
at each meeting of the Board and each committee meeting thereof. In addition,
each director was paid a quarterly retainer of $500. The Corporation paid a
total of $39,000 in directors' fees and $11,883 in committee fees during 1997.
During 1997 Summit National Bank paid each of its directors $300 for
attendance at a meeting of the Board of Directors of Summit National Bank and
$100 for attendance at each committee meeting thereof. Summit National Bank
paid a total of $24,900 in directors' fees and $12,350 in committee fees during
1997.
During 1997 Summit Community Bank, N.A. and its predecessor companies paid
each of its directors $300 for attendance at a meeting of the Board of Directors
and $100 for attendance at each committee meeting thereof. Summit Community
Bank, N.A. and its predecessor companies paid a total of $77,500 in directors'
fees and $31,466 in committee fees during 1997.
9
<PAGE>
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During 1997 there were thirteen (13) meetings (including regularly
scheduled and special meetings) of the Board, eleven (11) meetings of the
Executive Committee, two (2) meetings of the Audit Committee, four (4) meetings
of the ALCO Committee and four (4) meetings of the Compensation Committee. Each
director, except William W. Meadows attended at least seventy-five percent (75%)
of the total number of meetings of the Board and Committees of the Board of
which he was a member during 1997.
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval by the shareholders, the Board has selected the firm of
Stovall, Grandey & Whatley, Certified Public Accountants, as independent
auditors of the Corporation for its fiscal year ending December 31, 1998.
Stovall, Grandey & Whatley has acted in such capacity for the Corporation since
1979 and has reported that neither the firm nor any of its partners has any
material direct or indirect financial interest in the Corporation, other than as
independent auditors.
Representatives of Stovall, Grandey & Whatley will be present at the Annual
Meeting of Shareholders with the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the shares of Common
Stock of the Corporation represented at the annual meeting of shareholders is
required to ratify the appointment of Stovall, Grandey & Whatley as independent
auditors of the Corporation.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE
APPOINTMENT OF STOVALL, GRANDEY & WHATLEY AS INDEPENDENT AUDITORS OF THE
CORPORATION.
ACTION TO BE TAKEN UNDER THE PROXY
The accompanying proxy will be voted "FOR" each of the above noted
Proposals unless the proxy is marked in such a manner as to withhold authority
to so vote.
The accompanying proxy will also be voted in connection with the
transaction of such other business as may properly come before the Annual
Meeting of Shareholders, or any adjournment or adjournments thereof. Management
knows of no other matters to be considered at the Annual Meeting of
Shareholders. If, however, any other matters properly
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<PAGE>
come before the Annual Meeting of Shareholders, or any adjournment or
adjournments thereof, the persons named in the accompanying proxy will vote such
proxy in accordance with their best judgment on any such matter. The persons
named in the accompanying proxy will also, if in their judgment it is deemed to
be advisable, vote to adjourn the meeting from time to time.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
BY MANAGEMENT
The following table shows beneficial ownership of shares of Common Stock of
the Corporation by all current directors, nominees for director, and Named
Executive Officers, individually, and, together with all current executive
officers of the Corporation, as a group, at March 12, 1998.
<TABLE>
<CAPTION>
Amount and
Name of Beneficial Nature of Percent
Owner or Number Beneficial of
of Persons in Group Ownership/(1)/ Class/(2)/
- ------------------- -------------- ----------
<S> <C> <C>
Philip E. Norwood 179,734 shares/(3)/ 2.7%
Jeffrey M. Harp 159,875 shares/(4)/ 2.4%
Robert E. Bolen 19,952 shares *
Elliott S. Garsek 38,076 shares/(5)/ *
Ronald J. Goldman 265,208 shares/(6)/ 4.1%
F. S. Gunn 323,128 shares/(7)/ 4.9%
Robert L. Herchert 2,000 shares *
William W. Meadows 20,222 shares/(8)/ *
Edward P. Munson 30,008 shares/(9)/ *
James L. Murray 151,126 shares 2.3%
Bob G. Scott 41,400 shares/(10)/ *
Byron B. Searcy 43,190 shares/(11)/ *
Edgar Snelson 51,576 shares *
All directors and 1,325,495 shares/(12)/ 19.9%
executive officers as
a group (13 persons)
</TABLE>
- -------------------------
11
<PAGE>
* Less than one percent (1%) of all of the issued and outstanding shares of
Common Stock.
(1) Based on information furnished by persons named and, except as otherwise
indicated below, each person has sole voting power and investment power
with respect to all shares of Common Stock owned by such person.
(2) Based on 6,518,094 shares of Common Stock issued and outstanding as of
March 12, 1998, as adjusted for shares convertible or exercisable within
sixty (60) days of March 12, 1998 which are deemed outstanding for a
specific shareholder pursuant to Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934.
(3) Includes 135,958 shares of Common Stock owned of record; 3,776 shares of
Common Stock owned by Mr. Norwood's children; and 40,000 shares of Common
Stock which Mr. Norwood has the right to acquire within sixty (60) days
of March 12, 1998 pursuant to options granted to him under the 1993 Stock
Plan. See "EXECUTIVE COMPENSATION AND OTHER INFORMATION - Option
Exercises and Holdings."
(4) Includes 77,075 shares of Common Stock owned of record; 22,800 shares of
Common Stock owned by Mr. Harp's children in a Trust; and 60,000 shares
of Common Stock which Mr. Harp has the right to acquire within sixty (60)
days of March 12, 1998 pur suant to options granted to him under the 1993
Stock Plan. See "EXECUTIVE COMPENSATION AND OTHER INFORMATION - Option
Exercises and Holdings."
(5) Includes 36,076 shares of Common Stock owned of record and 2,000 shares
of Common Stock owned by Mr. Garsek's children.
(6) Includes 265,200 shares of Common Stock owned of record and eight (8)
shares of Common Stock owned by Mr. Goldman's son.
(7) Includes 243,000 shares of Common Stock owned of record; and 80,128
shares of Common Stock held by a trust for which Mr. Gunn serves as a co-
trustee.
(8) Includes 13,200 shares of Common Stock owned of record; 6,496 shares of
Common Stock held by a trust for which Mr. Meadows' serves as an
Independent Executor; and 526 shares of Common Stock held in trust for
the benefit of Mr. Meadows' children.
(9) Includes 400 shares of Common Stock owned of record and 29,608 shares of
Common Stock held in trust for the benefit of Mr. and Mrs. Munson.
(10) Includes 2,600 shares of Common Stock owned of record and 38,800 shares
of Common Stock which Mr. Scott has the right to acquire within sixty
(60) days of March 12, 1998 pursuant to options granted to him under the
1993 Stock Plan. See
12
<PAGE>
"EXECUTIVE COMPENSATION AND OTHER INFORMATION - Option Exercises and Holdings."
(11) Includes 41,950 shares of Common Stock owned of record and 1,240 shares
of Common Stock owned by Mr. Searcy's wife.
(12) Includes 138,800 shares of Common Stock with respect to which certain
named Executive Officers of the Corporation have the right to acquire
beneficial ownership within sixty (60) days of March 12, 1998 pursuant to
options granted to them under the 1993 Stock Plan. See "EXECUTIVE
COMPENSATION AND OTHER INFORMATION - Option Exercises and Holdings."
BY OTHERS
As of March 12, 1998 there were no known beneficial owners of more
than five percent (5%) of the outstanding shares of Common Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's executive officers, directors, and persons who own more than ten
percent (10%) of a registered class of the Corporation's equity securities to
file reports of ownership with the Securities and Exchange Commission.
Based upon a review of Forms 3, 4 and 5 and amendments thereto furnished to
the Corporation, to the best knowledge of management of the Corporation, during
1997 no directors, officers, or ten percent (10%) beneficial shareholder of
Common Stock of the Corporation failed to timely file with the Securities and
Exchange Commission one or more required reports on Form 3, 4 or 5 regarding
transactions in securities of the Corporation.
13
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued by the Corporation and its subsidiaries, to or on
behalf of the Corporation's Chief Executive Officer and each of the four other
most highly compensated executive officers of the Corporation (determined as of
the end of the last fiscal year) (referred to in this Proxy Statement as the
"Named Executive Officers") for the fiscal years ended December 31, 1995, 1996
and 1997:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------
Annual Compensation
Name and -------------------------- All Other
Principal Position Salary Bonus Compensation
as of December 31, 1997 Year ($)/(1)/ ($)/(2)/ ($)/(3)/
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James L. Murray 1997 $158,600 -0- $ 3,360
Chairman of the Board of the 1996 $154,200 $ 11,383/(4)/ $ 1,404
Corporation; Chairman of the Board of 1995 $157,100 $ 6,750/(4)/ $ 1,404
Summit Community Bank, N.A.
F. S. Gunn 1997 $139,200 -0- $ 1,872
Vice Chairman of the Board of the 1996 $138,100 -0- $ 1,404
Corporation; Chairman of the Board 1995 $141,600 -0- $ 1,404
of Summit National Bank
Philip E. Norwood 1997 $200,450 $ 43,495/(5)/ $ 3,174/(7)/
President and Chief Executive Officer of 1996 $195,375 $ 26,262/(5)/ $ 2,548/(8)/
the Corporation; President and Chief 1995 $189,100 $ 25,000/(6)/ $ 2,513/(9)/
Executive Officer of Summit Community
Bank, N.A. and its predecessor
companies
Jeffrey M. Harp 1997 $191,600 $ 38,384/(10)/ $ 464
Chief Operating Officer, Executive Vice 1996 $175,011 $ 33,988/(10)/ $ 348
President, Secretary and Treasurer of the 1995 $173,450 $ 40,000/(10)/ $ 348
Corporation; President and Chief
Executive Officer of Summit National
Bank
Bob G. Scott 1997 $112,000 $ 22,427/(11)/ $ 1,200
Senior Vice President and Chief 1996 $107,016 $ 14,077/(11)/ $ 900
Financial Officer of the Corporation 1995 $104,000 $ 5,000/(11)/ $ 900
</TABLE>
- ------------------------------
(1) Includes salary and directors' fees, if applicable.
(2) The bonus amounts were paid pursuant to the Corporation's Performance
Compensation Plan. (See detailed discussion beginning on page 21 of this
Proxy Statement under "Board Compensation Committee Report on Executive
14
<PAGE>
Compensation"). The amounts for 1997 were in recognition of achievements
performed in 1996. The amounts for 1996 were in recognition of
achievements performed in 1995. The amounts for 1995 were in recognition
of achievements performed in 1994.
(3) Except as otherwise noted, "All Other Compensation" consists of premium
payments with respect to term life insurance for the benefit of the Named
Executive Officer.
(4) Consist of a bonus from Summit Community Bank, N.A.
(5) Consist of a bonus from the Corporation in the amount of $9,969 and a bonus
from Summit Community Bank, N.A. in the amount of $33,526 in 1997 and
$7,322 from the Corporation and $18,940 from Summit Community Bank, N.A. in
1996.
(6) Consists of a bonus from the Corporation.
(7) Consists of premium payments with respect to term life insurance in the
amount of $464 and premium payments with respect to dependent health
coverage for the benefit of the named executive officer in the amount of
$2,710.
(8) Consists of premium payments with respect to term life insurance in the
amount of $348 and premium payments with respect to dependent health
coverage for the benefit of the named executive officer in the amount of
$2,200.
(9) Consists of premium payments with respect to term life insurance in the
amount of $348 and premium payments with respect to dependent health
coverage for the benefit of the named executive officer in the amount of
$2,165.
(10) Consists of a bonus from Summit National Bank in the amount of $38,384 in
1997 and $15,264 from the Corporation and $18,724 from Summit National Bank
in 1996 and $15,000 from the Corporation and $25,000 from Summit National
Bank 1995.
(11) Consist of a bonus from the Corporation.
15
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the named
executive officers concerning the exercise of stock options during the last
fiscal year and unexercised stock options held as of the end of December 31,
1997:
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
----------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1997(#) December 31, 1997($)
-------------------------------------------
Shares
Acquired on Value Realized ($)/(1)/ Exercisable/ Exercisable/
Name Exercise (#) Unexercisable Unexercisable/(2)/
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Philip E. Norwood -0- -0- 80,000/-0-/(3)/ $ 1,440,000/-0-
James L. Murray -0- -0- -0-/-0- -0-/-0-
F.S. Gunn -0- -0- -0-/-0- -0-/-0-
Jeffrey M. Harp 10,000 $116,250 60,000/-0-/(3)/ $ 1,080,000/-0-
Bob G. Scott 1,200 $ 19,500 30,800/8,000/(4)/ $ 508,200/$132,000
</TABLE>
- ------------------
(1) Market value of underlying securities at exercise, minus the exercise
price.
(2) Market value of underlying securities as of December 31, 1997 ($21.00),
minus the exercise price. These values, unlike the amounts set forth in
the column headed, "Value Realized", have not been, and may never be,
realized. The underlying options have not been, and may not be,
exercised. Actual gains, if any, on exercise will depend on the value of
the Company's stock on the date of exercise. There can be no assurance
that the value shown will be realized.
(3) These options are exercisable at $3.00 per share.
(4) These options are exercisable at $4.50 per share.
16
<PAGE>
PENSION PLAN
The following table shows the estimated annual pension benefits payable to
a participant in the Corporation's qualified defined benefit pension plan (the
"Pension Plan") at normal retirement age (age 65), based on a participant's
compensation that is covered under the Pension Plan, and years of service with
the Corporation and its subsidiaries:
ANNUAL BENEFITS* FOR YEARS OF CREDITED SERVICE
<TABLE>
<CAPTION>
Remuneration 10 15 20 25 30 35
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 90,000 $12,906 $19,359 $25,812 $32,265 $38,718 $45,171
$100,000 $14,756 $22,134 $29,512 $36,890 $44,268 $51,646
$120,000 $18,456 $27,684 $36,912 $46,140 $55,368 $64,596
$130,000 $20,306 $30,459 $40,612 $50,765 $60,918 $71,071
$150,000 $24,006 $36,009 $48,012 $60,015 $72,018 $84,021
</TABLE>
* Retirement benefits are subject to reduction for subsequent changes in the
federal social security benefit levels or taxable wage base, and are
further limited by a maximum of thirty-five (35) years of credited service.
A participant's compensation for purposes of the formula utilized by the
Pension Plan consists of salary, bonus, and all other compensation reported in
the Summary Compensation Table, as well as certain other personal benefits
which, in the aggregate, do not exceed the minimum amounts required for
disclosure thereunder.
The Pension Plan also provides that upon a participant's termination of
employment or retirement certain benefits may be paid under the Pension Plan in
a lump sum cash payment. If a participant's benefits, determined as of the date
of termination of employment or retirement, are not more than $3,500, the
Compensation Committee may direct, without the consent of the participant or his
spouse, if any, that the benefits be paid in a lump sum cash payment in lieu of
any other Pension Plan benefits. If a participant's benefits exceed $3,500, a
lump sum payment to the participant shall require his written consent and the
written consent of his spouse, if any. Any such lump sum payment must be
approved by the Compensation Committee.
Annual compensation covered under the Pension Plan and credited years of
service as of December 31, 1997 for the named executive officers are as follows:
Philip E. Norwood, $150,000 (17 years); James L. Murray, $150,000 (23 years); F.
S. Gunn, $139,200 (23 years); Jeffrey M. Harp, $150,000 (13 years) and Bob G.
Scott, $134,427 (4 years).
17
<PAGE>
MANAGEMENT SECURITY PLAN
Effective September 1, 1992 the Board adopted the Management Security Plan
of Summit Bancshares, Inc. (the "Security Plan"). The purpose of the Security
Plan is to provide specified benefits to a select group of management and highly
compensated employees who contribute materially to the continued growth,
development and future business success of the Corporation and the Subsidiary
Banks. The Security Plan, and the individual agreements established thereunder
(each a "Security Plan Agreement"), are intended to be administered by the
Compensation Committee as unfunded welfare benefit plans established and
maintained for the participants.
Under the Security Plan, if a participant remains an employee until his or
her normal retirement date, the Corporation shall pay to the participant a
retirement benefit in the amount specified in the participant's Security Plan
Agreement (the "Retirement Benefit"). Payment of the Retirement Benefit under
the Security Plan shall begin on the normal retirement date and will continue
for one hundred eighty (180) months. If a participant continues employment
beyond his or her normal retirement date, the Compensation Committee shall
specify the amount of the Retirement Benefit due to the participant upon
retirement, which shall not be less than the Retirement Benefit such participant
would otherwise have received had the participant retired at normal retirement
age.
Under the Security Plan, if a participant dies prior to attaining normal
retirement age and the Security Plan is in effect at that time, the Corporation
will pay a death benefit to such participant's beneficiary, provided the
participant was not retired, disabled or on an authorized leave of absence at
the time of death (the "Death Benefit").
The Death Benefit is (i) a sum equal to one hundred percent (100%) of the
participant's covered salary, (ii) an amount specified in the Security Plan
Agreement, paid monthly for the first twelve (12) months after death, and (iii)
fifty percent (50%) of the covered salary for the next one hundred eight (108)
months. The payments commence on the first day of the month following the date
of death.
If a participant dies after retirement but before the applicable Retirement
Benefit is paid in full, the unpaid Retirement Benefit payments to which that
participant is entitled shall continue and be paid to the participant's
beneficiary. No Death Benefit will be paid to the beneficiary of a participant
who dies after attaining normal retirement age.
A participant who ceases to be an employee after enrollment in the Security
Plan, unless such termination is for just cause (defined in the Security Plan as
theft, fraud, embezzlement or willful misconduct causing significant property
damage to the Corporation or personal injury to another employee) or has less
than five (5) years of employment from date of enrollment or employment in the
Security Plan, shall receive all or a pro-rated portion of the benefit of the
Retirement Benefit provided in the Security Plan upon the earlier of the
participant's death or attainment of normal retirement age (the "Deferred
Termination
18
<PAGE>
Benefit"). Any increase in benefit from that first established at
date of entering the Security Plan would be prorated relative to the years
employed under the Security Plan to the maximum years that could be served to
retirement. Should a participant be terminated for just cause or not remain
employed at least five (5) years from enrollment in the Security Plan, such
participant will not be eligible for benefits.
A Security Plan Agreement may be terminated by the participant upon written
notice not less than thirty (30) days prior to an anniversary date of the date
of execution of the Participant's Security Plan Agreement. In such case a
participant's entitlement to receive the Death Benefit will cease, but the
participant will still be entitled to receive the Deferred Termination Benefit.
The Security Plan may be terminated by the Corporation at any time provided
thirty (30) days notice is given to the participant and provided no payment of
benefits has been commenced and not completed.
In the event the Corporation undergoes a change of control, as defined in
the Security Plan, and the surviving corporation takes action to terminate the
Security Plan or a specific Security Plan Agreement as a result of the change in
control, the participant will, nevertheless, be entitled to receive the
Retirement Benefit, the Death Benefit, and the Deferred Termination Benefit as
described in the Security Plan.
The Corporation has entered into Security Plan Agreements with the following
individuals:
<TABLE>
<CAPTION>
Participant and Death Benefits Retirement
Position as of Date of -------------- Benefit
December 31, 1997 Agreement Year 1 Years 2-10 Years 1-15
----------------- --------- ------ ---------- ----------
(per year) (per year)
<S> <C> <C> <C> <C>
James L. Murray Sept. 1, 1992 $118,000 $59,000 $48,000
Chairman of the Board of the
Corporation
F.S. Gunn Sept. 1, 1992 118,000 59,000 48,000
Vice Chairman of the Board
of the Corporation
Philip E. Norwood Jan. 1, 1995 180,500 90,250 72,000
President & Chief Executive
Officer of the Corporation
Jeffrey M. Harp Jan. 1, 1995 187,300 93,650 72,000
Chief Operating Officer,
Executive Vice President,
and Secretary and Treasurer
of the Corporation
Bob G. Scott Sept. 1, 1995 112,000 56,000 36,000
Senior Vice President & Chief
Financial Officer of the
Corporation
</TABLE>
19
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Don R. Waters July 1, 1995 120,000 60,000 48,000
President of Northeast Office
of Summit Community Bank, N.A.
Micky Severson Jan. 1, 1997 115,000 57,500 36,000
President of Alta Mesa Office
of Summit Community Bank, N.A.
S. Tom Senor Jan. 20, 1997 105,000 52,500 24,000
President of Fossil Creek Office
Summit Community Bank, N.A.
N. David Moore Jan. 1, 1998 100,000 50,000 24,000
President of Camp Bowie Office
of Summit Community Bank, N.A.
</TABLE>
Amounts payable under the Security Plan shall be paid exclusively from the
general assets of the employer. However, under the Security Plan, the
Corporation may invest in any specific asset or fund in order to provide the
means for the payment of any benefits under the Security Plan. Security Plan
participants will have no interest whatsoever in any such fund or asset. The
Corporation has purchased life insurance policies insuring the lives of the
individual participants with the Corporation as owner, premium payor and
beneficiary of each policy, in order to indemnify itself against the liability
for the payment of any benefits under the Security Plan. The face or policy
value of these policies are as follows:
<TABLE>
<CAPTION>
Policy
Participant Amount
- ----------- ------
<S> <C>
James L. Murray $ 700,311
F.S. Gunn 649,591
Philip E. Norwood 862,939
Jeffrey M. Harp 1,009,407
Bob G. Scott 842,957
Don R. Waters 598,655
Micky Severson 501,611
Tom Senor 543,622
David Moore 345,189
</TABLE>
20
<PAGE>
BOARD COMPENSATION AND BENEFITS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the Performance Graph shall not be incorporated by reference into any
such filings.
As of December 31, 1997, the Compensation and Benefits Committee (the
"Committee") is comprised of the following non-employee members of the Board:
William W. Meadows (Chairman), Robert E. Bolen and Edward P. Munson. Among
other duties, the Committee makes recommendations to the Board with regard to
the remuneration of the execu tive officers and directors of the Corporation
and the Subsidiary Banks.
COMPENSATION PHILOSOPHY. The Corporation's executive compensation policy
incorporates the fundamental principle that executive compensation should be
linked directly to corporate performance and increases in shareholder value,
while concurrently ensuring that key employees are motivated and retained. The
following objectives set forth the Committee's general guidelines for
compensation decisions:
- The Corporation must provide a competitive total compensation package
that enables the Corporation to attract and retain key executives.
- All of the Corporation's compensation programs must be integrated with
the Corporation's annual and long-term business objectives so that
executives remain focused on the fulfillment of these objectives.
- The Corporation's compensation package must include a variable
component that directly links compensation with the overall
performance of the Corporation, thereby expressly aligning executive
compensation with the interest of shareholders.
ELEMENTS OF EXECUTIVE COMPENSATION. The Committee regularly reviews the
Corporation's compensation programs to ensure that remuneration levels and
incentive opportunities are competitive and reflect performance. The various
components of the compensation programs for executive officers are discussed
below.
(i) BASE SALARY. Base salary levels are largely determined through
comparison with banking organizations of a size similar to the Corporation's.
Surveys are utilized to establish base salaries that are within the range of
those persons holding positions of comparable responsibility at other banking
organizations of a size and complexity similar to the Corporation. Actual base
salaries also are intended to reflect individual performance contributions as
determined through performance evaluations. In addition to individual job
performance and the above-referenced market comparisons, other factors may be
taken into
21
<PAGE>
consideration, such as cost of living increases as well as an individual's
perceived potential with the Corporation. All executive officer base salary
levels, which are reviewed annually, are considered by the Committee to be
competitive and within a necessary and reasonable range.
(ii) PERFORMANCE COMPENSATION PLAN. The Board has approved Performance
Compensation Plans (the "Plans") for use within the Corporation and its
subsidiaries. The Plans are administered by the Committee. The objective of
the Plans is to create competitive levels of compensation tied directly to the
attainment of performance objectives which the Committee believes are important
for achieving long-term shareholder value. The Plans reward all employees
based on the attainment of certain goals of the Corporation and/or its
individual subsidiaries. The executive officers of the Corporation are eligible
to participate at the same level as all employees in relationship to their
respective base salaries. In addition, the executive officers through a related
program earn additional compensation for achievement of those goals. The
Committee annually determines the executive officers eligible to participate in
the supplemental program of the Plan and the potential awards to be made for
various levels of achievement under the Plan. The performance goals effective
for 1997 included specific goals for growth, profits, asset quality and
operational productivity or return on equity. In 1997, Philip E. Norwood,
Jeffrey M. Harp and Bob G. Scott participated in the supplemental program for
executive officers.
All awards under the Plans are contingent on the Corporation and the
subsidiaries attaining certain basic financial objectives such as return on
assets and/or return on equity. For the most senior executives a portion of each
years annual reward is deferred and held by the Corporation for payment at a
later date. Under the Plan the deferral period is two years. The accumulated
deferred payments may be reduced because of less than satisfactory performance
in any one year.
(iii) STOCK OPTIONS. In 1993 the Board adopted the 1993 Incentive Stock
Option Plan of Summit Bancshares, Inc. which was ratified by the shareholders of
the Corporation at the 1993 annual meeting. In 1997 the Board adopted the 1997
Incentive Stock Option Plan of Summit Bancshares, Inc. which was ratified at the
1997 annual meeting. It is the Corporation's philosophy that awarding incentive
stock options to officers of the Corporation and the Subsidiary Banks based upon
their respective positions and contributions to the Corporation's and each
Subsidiary Bank's overall success will help attract and retain high quality,
results-oriented professionals committed to creating long-term shareholder
value. The activity for 1997 of these plans can be found in Note 12 to the
Financial Statements in the Annual Report to Shareholders.
(iv) MANAGEMENT SECURITY PLAN. Certain executive officers of the
Corporation and its Subsidiary Banks participate in a Management Security Plan
that was approved by the Board of Directors of the Corporation in 1992 and is
administered by the Committee. This plan is more fully described in this proxy
statement beginning on page 18.
22
<PAGE>
Through the programs described above, a significant portion of the
Corporation's executive compensation program is linked directly to individual
and corporate performance and long-term shareholder return. The Committee will
continue to review all elements of executive compensation to ensure that the
total compensation program, and each element therein, meets the Corporation's
objectives and philosophy, as discussed above.
1997 COMPENSATION OF THE CHAIRMAN OF THE BOARD
Mr. Norwood serves as the Chairman of the Board of the Corporation and as
the president and chief executive officer of Summit Community Bank, N.A. Mr.
Norwood's 1997 base salary was established by the Board of the Corporation based
on a survey of peer group institutions and recommended to the Board by the
Committee. Mr. Norwood participates in the Performance Compensation Plan at the
all employee level and the executive officer level. In 1997 he earned an award
of $42,382 of which 53% was from the supplemental executive program. Also, 20%
of the earned award is deferred for a period of two years. The majority of the
award, net of the deferral and appropriate taxes, was paid in 1998. This
performance award was equal to 23% of Mr. Norwood's 1997 base salary. No stock
options were granted to Mr. Norwood in 1997.
In April 1993 the Committee granted options to the executive officers of
the Corporation and the Subsidiary Banks under the Stock Plan. At that time Mr.
Norwood was granted an option to purchase 80,000 shares at a price of $3.00 per
share (adjusted for stock splits). These options vested rateably in 1993, 1994
and 1995 and are now fully vested. The Committee based its decision on the
Corporation's improved performance, including net income, return on assets,
reduction in classified and non-performing assets and improved expense control.
December 31, 1997 THE COMPENSATION AND BENEFITS COMMITTEE
OF THE BOARD OF DIRECTORS
William W. Meadows, Chairman
Robert E. Bolen
Edward P. Munson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors of the
Corporation as it was constituted in 1997 was an officer or employee of the
Corporation or any of its subsidiaries, or was formerly an officer of the
Corporation or any of its subsidiaries or had any relationships requiring
disclosure by the Corporation under Item 404 of Regulation S-
23
<PAGE>
K. During 1997 no executive officer of the Corporation (i) served as a member of
the compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served on the
Compensation Committee of the Corporation, (ii) served as a director of another
entity, one of whose executive officers served on the Compensation Committee of
the Corporation, or (iii) was a member of the compensation committee (or other
board committee performing equivalent functions) of another entity, one of whose
executive officers served as a director of the Corporation.
24
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Corporation with that of the CRSP Total Return Index ("Total
Return") for The Nasdaq Stock Market (US) Index, a broad market index published
by the Center for Research in Security Prices at the University of Chicago, and
the NASDAQ Bank Stocks Index ("Bank Stock"), a bank industry stock index also
published by the Center for Research in Security Prices at the University of
Chicago. The comparison for each of the periods assumes that $100 was invested
on December 31, 1992 in each of the Common Stock of the Corporation, the stocks
included in the CRSP Total Return Index for The NASDAQ Stock Market (US) Index
and the NASDAQ Bank Stocks Index. These indexes, which reflect formulas for
dividend reinvestment and weighing of individual stocks, do not necessarily
reflect returns that could be achieved by individual investors.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE CORPORATION, THE CRSP TOTAL RETURN INDEX
FOR THE NASDAQ STOCK MARKET (US) INDEX,
AND THE NASDAQ BANK STOCKS INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
At December 31, 1992 1993 1994 1995 1996 1997
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Summit Bancshares, Inc. $100.00 $342.30 $381.08 $609.44 $847.18 $1,574.03
- ---------------------------------------------------------------------------------
Total Return $100.00 $114.80 $112.20 $158.70 $195.19 $ 239.53
- ---------------------------------------------------------------------------------
Bank Stocks $100.00 $114.04 $113.63 $169.22 $223.41 $ 377.44
- ---------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
CERTAIN TRANSACTIONS
LOANS
Certain of the officers, directors and principal shareholders (and their
affiliates) of the Corporation and the Subsidiary Banks have deposit accounts
and other transactions with the Subsidiary Banks, including loans in the
ordinary course of business. All loans or other exten sions of credit made by
the Subsidiary Banks to officers, directors and principal shareholders of the
Corporation and the Subsidiary Banks, and to affiliates of such persons, were
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 independent third parties and did not involve more
than the normal risks of collectibility or present other unfavorable features.
The Subsidiary Banks expect to continue to enter into such transactions in
the ordinary course of business on similar terms with officers, directors and
principal shareholders (and their affiliates) of the Corporation and the
Subsidiary Banks.
OTHER TRANSACTIONS
During the year ended 1997 the Corporation and Summit Community Bank, N.A.
retained Barlow & Garsek, a Professional Corporation, to perform legal services
on behalf of each. Elliott S. Garsek, a director of the Corporation, is a
shareholder of Barlow & Garsek.
DATE OF RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received by the Corporation at its principal
executive offices not later than December 18, 1998 for inclusion in the
Corporation's Proxy Statement and accompanying proxy relating to the next Annual
Meeting of Shareholders. Any such proposals shall be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934, as amended. It is anticipated that the next Annual Meeting of
Shareholders will be held on April 20, 1999.
26
<PAGE>
ANNUAL REPORTS
FORM 10-K. A copy of the Corporation's 1997 Annual Report on Form 10-K, in
cluding the financial statements and schedules thereto, required to be filed
with the Securities and Exchange Commission, may be obtained without charge
(except for exhibits to such Annu al Report, which will be furnished upon
payment of the Corporation's reasonable expenses in furnishing such exhibits) by
any shareholder whose proxy is solicited upon written request to:
Summit Bancshares, Inc.
P.O. Box 2665
Fort Worth, Texas 76113
Attention: Mr. Bob G. Scott
1997 ANNUAL REPORT TO SHAREHOLDERS. The Annual Report to Shareholders of
the Corporation for the Fiscal Year ended December 31, 1997, is enclosed
herewith. The Annual Report, which includes audited financial statements, does
not form any part of the material for the solicitation of Proxies.
BY ORDER OF THE BOARD OF DIRECTORS
By: /s/ PHILIP E. NORWOOD
----------------------------------------
Philip E. Norwood, Chairman of the Board
Fort Worth, Texas
March 17, 1998
27
<PAGE>
SUMMIT BANCSHARES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1998
The undersigned hereby constitutes and appoints James L. Murray, F.S. Gunn
and Jeffrey M. Harp, and each of them, proxies with full power of substitution
to vote, as directed below, all the shares of Common Stock of Summit Bancshares,
Inc. (the "Corporation") held of record by the undersigned at the close of
business on March 12, 1998, at the Annual Meeting of Shareholders to be held at
Summit National Bank, 1300 Summit Avenue, Fort Worth, Texas, at 4:30 p.m. on
April 21, 1998, and at any adjournment or adjournments thereof.
1. ELECTION OF DIRECTORS - Nominees: Robert E. Bolen, Elliott S. Garsek,
Ronald J. Goldman, F.S. Gunn, Jeffrey M. Harp, Robert L. Herchert,
William W. Meadows, Edward P. Munson, James L. Murray, Philip E.
Norwood, Byron B. Searcy and Edgar Snelson
MARK ONLY ONE BOX [ ] VOTE FOR all nominees listed above, except
vote to be withheld from the following
nominees, if any:
-----------------------------------------------------------------------
[ ] VOTE TO BE WITHHELD from all nominees
2. APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS. Proposal to approve
the appointment of Stovall, Grandey & Whatley as independent auditors
of the Corporation for the fiscal year ending December 31, 1998, as
described in PROPOSAL NO. 2 of the Proxy Statement dated March 17,
1998.
FOR ____ AGAINST ____ ABSTAIN ____
3. OTHER BUSINESS. In their discretion upon such other business as may
properly come before the meeting, or any adjournment or adjournments
thereof.
FOR ____ AGAINST ____ ABSTAIN ____
(continued on other side)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED AS DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" ALL THE NOMINEES LISTED ABOVE, "FOR" PROPOSAL NO. 2, AND, IN THE
DISCRETION OF THE PERSON DESIGNATED HEREIN AS PROXIES, UPON SUCH OTHER BUSINESS
AS MAY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR ADJOURNMENTS THEREOF. The
undersigned hereby revokes any proxy or proxies heretofore given and hereby
confirms all that said attorneys and proxies, or any of the, or their
substitutes may do by virtue hereof. In addition, receipt of the 1997 Annual
Report, the Notice of Annual Meeting and the Proxy Statement of Summit
Bancshares, Inc. dated March 17, 1998, is hereby acknowledged.
SHARES OF COMMON STOCK:__________ DATED:___________________________, 1998
PLEASE DATE THIS PROXY AND SIGN YOUR _______________________________________
NAME EXACTLY AS IT APPEARS HEREON,
AND MAIL TODAY. WHERE THERE IS MORE _______________________________________
THAN ONE OWNER, EACH SHOULD SIGN.
WHEN SIGNING AS AN ATTORNEY, _______________________________________
ADMINISTRATOR, EXECUTOR, GUARDIAN, Signature of Shareholder(s)
OR TRUSTEE, PLEASE ADD YOUR TITLE
AS SUCH. IF EXECUTED BY A CORPORATION, _______________________________________
THIS PROXY SHOULD BE SIGNED BY A DULY Street Address
AUTHORIZED OFFICER.
_______________________________________
City State Zip Code
NOTE: I _____ WILL _____ WILL NOT ATTEND THE SHAREHOLDERS
MEETING ON APRIL 21, 1998.
