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
[X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SOUTH ALABAMA BANCORPORATION, INC.
__________________________________________
(Name of Registrant as Specified in its Charter)
N/A
-------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than 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:
(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 party 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:
South Alabama Bancorporation, Inc.
Post Office Box 3067
Mobile, Alabama 36652
Telephone 334/431-7800
F. MICHAEL JOHNSON
CHIEF FINANCIAL OFFICER
AND SECRETARY
To the Shareholders of
South Alabama Bancorporation, Inc.
NOTICE IS HEREBY GIVEN that, pursuant to call of its Directors, the Annual
Meeting of the Shareholders of South Alabama Bancorporation, Inc. will be held
at 100 St. Joseph Street, Mobile, Alabama, on May 11, 2000, at 10:00 a.m.,
C.D.T., for the purpose of considering and voting upon the following matters:
1. Election of Directors. Election as directors of the eighteen nominees
named in the enclosed Proxy Statement.
2. Other Business. Transaction of such other business as may be brought
before the meeting or any adjournment thereof. Management currently knows of
no other business to be presented.
Only those shareholders of record at the close of business on March 24,
2000, shall be entitled to notice of and to vote at the meeting.
We hope very much that you will attend the meeting, but, whether you plan
to attend or not, we would appreciate your signing and returning the enclosed
Proxy. Should you attend the meeting in person, the Proxy can be revoked at
your request.
Management sincerely appreciates your support and cooperation, and we
earnestly solicit your continued help during 2000.
By Order of the Board of Directors,
/s/F. Michael Johnson
F. Michael Johnson
Chief Financial Officer
and Secretary
NOTICE: YOUR PROXY FORM AND RETURN ENVELOPE ARE INSIDE THIS ENVELOPE.
SOUTH ALABAMA BANCORPORATION, INC.
100 St. Joseph Street, Mobile, Alabama 36602
PROXY STATEMENT
Annual Meeting, May 11, 2000, 10:00 a.m., C.D.T.
This Proxy Statement and the enclosed Proxy are first being mailed on or
about April 10, 2000, to shareholders of South Alabama Bancorporation, Inc.
("South Alabama") in connection with the solicitation of proxies by the Board
of Directors of South Alabama for use at the Meeting of Shareholders on May
11, 2000, and any adjournment thereof.
South Alabama is the parent company and owner of 100% of the stock of South
Alabama Bank, (the "Mobile Bank"), headquartered in Mobile, Alabama, First
National Bank, Brewton (the "Brewton Bank"), located in Brewton, Alabama, The
Monroe County Bank (the "Monroeville Bank"), headquartered in Monroeville,
Alabama, The Commercial Bank of Demopolis (the "Demopolis Bank"),
headquartered in Demopolis, Alabama, Sweet Water State Bank (the "Sweet Water
Bank"), headquartered in Sweet Water, Alabama and South Alabama Trust Company,
Inc. (the "Trust Company"), headquartered in Mobile, Alabama.
VOTING SECURITIES
South Alabama's only class of stock outstanding is its Common Stock, $.01
par. All shareholders of record at the close of business March 24, 2000, will
be entitled to vote their shares on any matter brought before the meeting.
The number of shares of South Alabama Common Stock outstanding on March 24,
2000, was 8,587,055. Each share is entitled to one vote. Cumulative voting
is not permitted in the election of directors.
Security Ownership of Directors,
Nominees, 5% Shareholders and Officers
As of the record date there were no known 5% shareholders of South Alabama.
The tabulation below reflects the number of shares beneficially owned by (i)
each director and nominee of South Alabama; (ii) the executive officers named
in the Summary Compensation Table; and (iii) the directors and officers of
South Alabama as a group.
<TABLE>
Number of Shares and Nature of
Beneficial Ownership as of March 24, 2000(1)
<CAPTION>
Voting/Investment Power Percentage
Name of Beneficial Owner or Group ----------------------- of Total
(and Address of 5% Shareholders) Sole Shared Aggregate Outstanding(2)
---------- ----------
<S> <C> <C> <C> <C>
John B. Barnett, III . . . . . . . . . . .94,628 70,484(3) 165,112 1.92%
Stephen G. Crawford . . . . . . . . . . .88,000 46,950(4) 134,950 1.57
Haniel F. Croft . . . . . . . . . . . 17,743(5) 0 17,743 .20
David C. De Laney . . . . . . . . . . . .19,500 39,350(6) 58,850 .68
Lowell J. Friedman . . . . . . . . . . . 110,299 5,000(7) 115,299 1.34
Broox G. Garrett, Jr. (8). . . . . . . . . 6,541 76,959(9) 83,500 .97
W. Dwight Harrigan . . . . . . . . . . . 213,250 30,000(10) 243,250 2.83
James P. Hayes, Jr . . . . . . . . . . . . 5,115 37,618(11) 42,733 .49
Clifton C. Inge (12) . . . . . . . . . . .37,950 0 37,950 .44
Jack O. Kerby, Sr (13)(14) . . . . . . . .38,643 18,534(15) 57,177 .66
W. Bibb Lamar, Jr . . . . . . . . . . 89,542(16) 1,342(17) 90,884 1.04
Stratton F. Lewis, Jr.(14)(18) . . . . . .34,787 36,188(19) 70,975 .82
Richard S. Manley. . . . . . . . . . . . .25,000 0 25,000 .29
Kenneth R. McCartha . . . . . . . . . . . 5,000 0 5,000 .05
Thomas E. McMillan, Jr.(20). . . . . 103,805(21) 309,459(22) 413,264 4.81
J. Richard Miller, III (23) . . . . 167,913(24) 0 167,913 1.95
Harris V. Morrissette(12). . . . . . . . .16,804 0 16,804 .19
J. Stephen Nelson . . . . . . . . . . 51,921(25) 592(26) 52,513 .59
Paul D. Owens, Jr.(20) . . . . . . . . . .71,092 256,880(27) 327,972 3.81
Earl H. Weaver (8)(23) . . . . . . . . . .59,421 46,038(28) 105,459 1.22
A.G. Westbrook . . . . . . . . . . . . . .16,356 30,338(29) 46,694 .54
All directors and officers of of South
Alabama as a group (24 persons) . . . 1,358,940 833,721 2,192,661(30) 25.00%
(1) The number of shares reflected encompasses shares that, under applicable
regulations, are deemed to be beneficially owned. Shares deemed to be
beneficially owned, under those regulations, include shares as to which,
through any contract, relationship, arrangement, understanding, or otherwise,
either voting power or investment power is held or shared directly or
indirectly. Shares deemed to be beneficially owned also include shares which
may be acquired within sixty days. The total number of shares beneficially
owned is broken down, when applicable, into the following two categories: (i)
shares as to which voting power/investment power is held solely; and (ii)
shares as to which voting power/investment power is shared. The percentage
calculation is based on the aggregate number of shares beneficially owned as
a percentage of outstanding shares on the record date.
(2) The percentage calculations for Mr. Nelson, Mr. Lamar and Mr. Croft
assume that all 128,038 shares subject to their exercisable outstanding
options at March 24, 2000, were outstanding. The percentage calculation for
all directors and officers of South Alabama, as a group, assumes that all
182,538 shares subject to exercisable outstanding options at March 24, 2000,
were outstanding.
(3) Includes 11,232 shares owned by Mr. Barnett's wife and 59,252 shares
held by Mr. Barnett as co-trustee of three separate irrevocable trusts for
his three children. Mr. Barnett disclaims beneficial ownership of these
shares.
(4) Includes 35,500 shares owned by the trustee of Mr. Crawford's
self-directed subaccount of his law firm's retirement plan. The figure also
includes the following shares as to which Mr. Crawford disclaims any actual
beneficial ownership: 4,500 shares owned by Mr. Crawford as trustee for two
of his children; 3,700 shares owned by his wife; and 3,250 shares owned by
his wife as custodian for two of his children under the Uniform Transfers to
Minors Act.
(5) Includes 14,500 shares subject to purchase within 60 days pursuant to
options granted to Mr. Croft, as to which he would have sole voting and
investment power.
(6) All such shares are owned by the trustee of Mr. De Laney's employer's
retirement plan. Mr. De Laney may be deemed to share voting and investment
power with respect to those shares.
(7) All such shares are owned by Mr. Friedman's wife.
(8) Mr. Garrett and Mr. Weaver are first cousins.
(9) Includes 67,233 shares owned by Mr. Garrett as trustee of the Broox G.
Garrett Family Trust and 9,726 shares owned jointly with his wife.
(10) All such shares are owned by Mr. Harrigan's wife as trustee of two
separate trusts of which Mr. Harrigan's children are the beneficiaries. Mr.
Harrigan may be deemed to share voting and investment power with respect to
those shares.
(11) All such shares are owned by Mr. Hayes as co-trustee of the Elizabeth
Brannon Hayes Marital Trust.
(12) Mr. Inge is Mr. Morrissette's uncle.
(13) Mr. Kerby is the father of J. Olen Kerby, Jr., an executive officer of
South Alabama.
(14) Mr. Kerby is Mr. Lewis' uncle.
(15) All such shares are owned by Mr. Kerby's wife.
(16) Includes 64,000 shares subject to purchase within 60 days pursuant to
options granted to Mr. Lamar, as to which he would have sole voting and
investment power.
(17) Includes 1,125 shares owned by Mr. Lamar as custodian under the
Uniform Transfers to Minors Act and 217 shares owned by his wife through her
self-directed IRA account.
(18) Mr. Lewis is the first cousin of J. Olen Kerby, Jr., an executive
officer of South Alabama.
(19) Includes 33,128 shares owned jointly by Mr. Lewis with his son, 4,491
as to which he disclaims any actual beneficial ownership, and 3,060 shares
owned jointly by Mr. Lewis with his mother, all as to which he disclaims any
actual beneficial ownership.
(20) Mr. McMillan and Mr. Owens are brothers-in-law.
(21) Includes 44,400 shares owned by Thomas, Ltd., a limited partnership.
Mr. McMillan is managing general partner of the partnership.
(22) Includes 172,434 shares owned by McMillan, Ltd., a limited partnership
of which Mr. McMillan is a managing partner, and 108,054 shares and 28,971
shares owned by Mr. McMillan as co-trustee under the wills of his grandmother
and grandfather, respectively.
(23) Mr. Miller is Mr. Weaver's wife's first cousin.
(24) Includes 167,178 shares owned by Miller Investments, a general
partnership. Mr. Miller is Managing Partner of the partnership.
(25) Includes 49,538 shares subject to purchase within 60 days pursuant to
options granted to Mr. Nelson, as to which he would have sole voting and
investment power.
(26) All such shares are owned by Mr. Nelson's wife.
(27) Includes 172,434 shares owned by McMillan, Ltd., a limited partnership
of which Mr. Owens is a managing partner, 69,100 shares owned as trustee of
two revocable management trusts for his daughters, 6,264 shares owned jointly
with his wife and 9,082 shares owned by his wife.
(28) Includes 41,547 shares owned by Mr. Weaver's wife, as to which Mr.
Weaver disclaims any actual beneficial ownership, and 4,441 shares owned
jointly with his wife.
(29) Includes 7,063 shares owned by Mr. Westbrook's wife, as to which Mr.
Westbrook disclaims any actual beneficial ownership, and 23,275 shares owned
jointly with his wife.
(30) Includes 182,538 shares subject to purchase within 60 days pursuant to
options granted to officers of South Alabama, as to which they would have
sole voting and investment power.
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires that South
Alabama's directors and executive officers, and persons who own more than ten
percent of South Alabama's common stock, file with the Securities and
Exchange Commission reports relating to their ownership and changes in
ownership of common stock and other equity securities of South Alabama.
Management believes, based solely upon information furnished to South Alabama
and written representations that no other reports were required, that all
persons subject to the reporting requirements of Section 16(a) during 1999
filed the reports on a timely basis.
ELECTION OF DIRECTORS
Number and Term
The Bylaws of South Alabama provide that the number of directors to be
elected at the Annual Meeting will be fixed by resolution of the Board of
Directors. The Board has adopted a resolution fixing at eighteen the number
of directors to be elected at the 2000 Annual Meeting. The directors so
elected will serve a term of one year.
Nominees
The persons named below are the Board's nominees for election as directors,
and each has agreed to serve if elected. All nominees are members of the
current South Alabama Board of Directors.
John B. Barnett, III
A South Alabama director since 1996
Mr. Barnett, age 47, has been Executive Vice President since 1996 of South
Alabama, Chairman since 1994, and a director since 1983, of the Monroeville
Bank and a director since 1998 of the Trust Company. Mr. Barnett is a member
of the law firm of Barnett, Bugg, Lee & Holzborn, L.L.C., Monroeville,
Alabama, and has practiced law since 1983. From 1989 to 1994, Mr. Barnett was
Vice Chairman of the Monroeville Bank. From 1983 until its merger with South
Alabama, Mr. Barnett served as Vice President and a director of the
Monroeville Bank's holding company.
Stephen G. Crawford
A South Alabama director since 1985
Mr. Crawford, age 60, a member of the law firm Hand Arendall, L.L.C., Mobile,
Alabama, has practiced law since 1964. Mr. Crawford has been a director of
the Mobile Bank since 1986 and a director since 1998 of the Trust Company.
Haniel F. Croft
A South Alabama director since 1996
Mr. Croft, age 59, has been President since 1979, Chief Executive Officer
since 1988, and a director since 1972, of the Monroeville Bank. From 1982
until its merger with South Alabama, Mr. Croft served as Vice President and a
director of the Monroeville Bank's holding company.
David C. De Laney
A South Alabama director since 1985
Mr. De Laney, age 52, is President of First Small Business Investment Company
of Alabama, Mobile, Alabama, a position he has held since 1978. Mr. De Laney
has been a director of the Mobile Bank since 1986.
Broox G. Garrett, Jr.
A South Alabama director since 1993
Mr. Garrett, age 51, is an attorney and partner in the law firm of Thompson,
Garrett and Hines, L.L.P., Brewton, Alabama, where he has been employed since
1973. Mr. Garrett has been a director of the Brewton Bank since 1983 and a
director of the Trust Company since 1998.
W. Dwight Harrigan
A South Alabama director since 1997
Mr. Harrigan, age 62, has alternated annually, since 1983, as President and
Executive Vice President of Scotch Lumber Company, Fulton, Alabama. Mr.
Harrigan has also served, since 1987, as Chairman of Harrigan Lumber Company,
Monroeville, Alabama. Mr. Harrigan has been a director of the Mobile Bank
since 1986.
James P. Hayes, Jr.
A South Alabama director since 1993
Mr. Hayes, age 52, is Senior Advisor to the Governor of the State of Alabama,
a position he has held since December 1999. From January-December, 1999,
Mr. Hayes served as Revenue Commissioner for the State of Alabama. He is
also a financial consultant and has served as President of J.P. Hayes &
Company, Inc., Birmingham, Alabama, since 1985. Mr. Hayes has served since
1985 as a director of the Brewton Bank.
Clifton C. Inge
A South Alabama director since 1985
Mr. Inge, age 63, has served since 1999 as a consultant for Willis of Mobile,
Inc., Mobile, Alabama, a subsidiary of Willis Group Limited,insurance brokers.
Mr. Inge is retired Chairman of the Board of Willis of Mobile, Inc., a
position he held from 1991-1998. Mr. Inge has been a director of the Mobile
Bank since 1986 and a director of the Trust Company since 1998.
W. Bibb Lamar, Jr.
A South Alabama director since 1989
Mr. Lamar, age 56, has been President, Chief Executive Officer and a director
of South Alabama since 1989 and Chairman since 1998, Chief Executive Officer
and a director since 1989 of the Mobile Bank. Mr. Lamar has also been a
director of the Trust Company since 1998. Mr. Lamar served as President of
the Mobile Bank from 1989-1998.
Stratton F. Lewis, Jr.
A South Alabama director since 1999
Mr. Lewis, age 50, has been Executive Vice President of South Alabama since
1999, Chairman since 1994, and President, CEO and a director since 1987 of
the Sweet Water Bank. Mr. Lewis served as Chairman, from 1994-1999 and
President, CEO and director from 1987-1999 of Sweet Water Bank's holding
company prior to its merger with South Alabama.
Richard S. Manley
A South Alabama director since 1999
Mr. Manley, age 67, is a partner in the law firm of Manley, Traeger, Perry &
Stapp, Attorneys, Demopolis, Alabama, where he has practiced law since 1958.
Mr. Manley has served as a director of the Demopolis Bank since 1985.
Kenneth R. McCartha
A South Alabama director since 1997
Mr. McCartha, age 62, retired in 1996 as Superintendent of Banks, State of
Alabama Banking Department, a position he held by gubernatorial appointment
from 1993 until his retirement.
Thomas E. McMillan, Jr.
A South Alabama director since 1985
Mr. McMillan, age 51, has been President of the general partner of Smackco,
Ltd., Brewton, Alabama, a limited partnership engaged in oil and gas
development, since 1974. Mr. McMillan has been a director of the Brewton Bank
since 1977.
J. Richard Miller, III
A South Alabama director since 1991
Mr. Miller, age 53, has been managing partner since 1992 of Miller
Investments, a Brewton, Alabama partnership engaged in private investments.
Mr. Miller has been a director of the Brewton Bank since 1990 and a director
of the Mobile Bank since 1991.
Harris V. Morrissette
A South Alabama director since 1997
Mr. Morrissette, age 40, has been president of Marshall Biscuit Company,
Inc., Mobile, Alabama, since 1994 and has also served as Chairman of Azalea
Aviation, Inc. since 1993. Mr. Morrissette has been a director of the Mobile
Bank since 1990. Mr. Morrissette is also a director of the following
companies that file reports with the Securities and Exchange Commission:
Energy South and The Williamsburg Investment Trust.
J. Stephen Nelson
A South Alabama director since 1993
Mr. Nelson, age 62, has been Chairman since 1993 of South Alabama and
Chairman, since 1993, and a director, since 1979, of the Brewton Bank and has
also been a director of the Trust Company since 1998. Mr. Nelson served as
Chief Executive Officer of the Brewton Bank from 1984-1998.
Paul D. Owens, Jr.
A South Alabama director since 1997
Mr. Owens, age 54, is an attorney in the private practice of law in Brewton,
Alabama, where he has practiced since 1970. Mr. Owens has been a director of
the Mobile Bank since 1986.
Earl H. Weaver
A South Alabama director since 1993
Mr. Weaver, age 61, has been the sole proprietor of Earl H. Weaver Management
Services, a timber, oil, gas and general management concern, since 1979. Mr.
Weaver has served since 1981 as a director of the Brewton Bank and since 1998
as a director of the Trust Company.
Although the Board of Directors does not contemplate that any nominee named
on pages 6-7 will be unavailable for election, if vacancies occur unexpectedly,
the shares covered by the Proxy will be voted for the Board's substitute
nominees, if any, or in such other manner as the Board of Directors deems
advisable.
The Bylaws of South Alabama permit the Board of Directors, between annual
meetings of shareholders, to increase the membership of the Board and to fill
any position so created and any vacancy otherwise occurring. Any new director
so elected holds office until the next annual shareholders' meeting.
DIRECTOR COMMITTEES AND ATTENDANCE
The South Alabama Board of Directors held six meetings during 1999. The
Board has the following standing committees: Executive, Audit and
Personnel/Compensation. The Executive Committee (whose members presently are
Messrs. Barnett, Crawford, Friedman, Lamar, McMillan, Miller, Nelson and
Weaver) between meetings of the Board may exercise all powers of the Board
except as limited by the Bylaws. Actions taken by the Executive Committee
are subject to ratification by the Board at its next regular meeting. There
were no meetings of the Executive Committee in 1999.
The Audit Committee (whose members presently are Messrs. De Laney, Friedman
and Garrett) reviews the scope and plan of internal and external audits,
audit results and the adequacy of internal accounting controls and makes
recommendations to the Board on the appointment of outside accountants.
The committee held three meetings in 1999.
The Personnel/Compensation Committee (whose members presently are
Messrs. Crawford, Hayes, Inge and McMillan) sets compensation for officers of
South Alabama and certain officers of its subsidiaries and reviews guidelines
within which the subsidiary Boards of Directors fix compensation. The
committee held four meetings in 1999. During 1999, director Manley attended
fewer than 75% of the total number of meetings of the Board of Directors of
South Alabama and meetings of committees of which he was a member.
Each subsidiary has standing committees composed of directors from their
respective Boards. The Mobile Bank, Brewton Bank, Monroeville Bank, Demopolis
Bank and Sweet Water Bank all have a Finance (or Loan), Audit and Personnel
(or Salary) Committee. In addition, the Mobile Bank and the Brewton Bank have
Directors Nominating Committees, the Mobile Bank has an Executive Committee,
and the Trust Company has a Trust Audit Committee.
EXECUTIVE COMPENSATION
Compensation
The table below reflects annual compensation for W. Bibb Lamar, Jr., J.
Stephen Nelson, Haniel F. Croft, Stratton F. Lewis, Jr. and W. Gaillard
Bixler for services rendered in 1999, 1998 and 1997 to South Alabama, the
Mobile Bank, the Monroeville Bank, the Sweet Water Bank and the Brewton Bank.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation(1) Long Term Compensation
---------------------------------- ---------------------------------------
Awards
Shares Underlying All Other
Name and Principal Position Year Salary($)(2) Bonus($)(3) Options/SARs(4) Compensation($)(5)
<S> <C> <C> <C> <C> <C>
W. Bibb Lamar, Jr. 1999 $150,000 $40,000 10,000 $13,360
CEO, President and Director, 1998 $141,000 $35,000 11,250 $11,721
South Alabama; CEO, Chairman 1997 $132,500 $35,000 7,500 0
and Director, Mobile Bank;
Director, Trust Company
J. Stephen Nelson 1999 $141,000 $25,000 8,000 $13,137
Chairman and Director, 1998 $133,600 $25,000 7,500 $11,776
South Alabama; Chairman and 1997 $122,000 $25,000 7,500 $ 6,570
Director, Brewton Bank;
Director, Trust Company
Haniel F. Croft 1999 $126,000 $12,500 4,000 $12,231
Director, South Alabama; 1998 $126,000 $12,096 3,000 $10,163
CEO, President and Director, 1997 $122,400 $ 7,013 7,500 $ 7,470
Monroeville Bank
Stratton F. Lewis, Jr. 1999 $113,100 $ 8,791 0 $ 6,673
Director and EVP, South Alabama; 1998 $109,500 $ 8,541 0 $ 6,460
CEO, Chairman, President and 1997 $104,200 $ 8,125 0 $ 6,148
Director, Sweet Water Bank
W. Gaillard Bixler 1999 $100,000 $12,500 4,000 $ 9,434
EVP and COO, South Alabama; 1998 $ 94,617 $13,393 3,000 $ 8,166
CEO, President and Director, 1997 $ 88,471 $12,254 3,000 $ 6,570
Brewton Bank
(1) Although Messrs. Lamar, Nelson, Croft, Lewis and Bixler received
perquisites and other personal benefits in the years shown, the value of these
benefits did not exceed in the aggregate the lesser of $50,000 or 10% of their
salary and bonus in any year.
(2) Includes for Mr. Nelson and Mr. Bixler in 1997 both salary and $3,600 in
director's fees paid by the Brewton Bank. Includes for Mr. Lewis director fees
paid by the Sweet Water Bank amounting to $7,600 in 1999, $7,000 in 1998 and
$6,700 in 1997.
(3) Amounts represented were paid by South Alabama for Mr. Lamar and Mr.Nelson
for all years shown and for Mr. Croft, Mr. Lewis and Mr. Bixler in 1999 only.
In 1998 and 1997, amounts represented were paid by the Monroeville Bank
Performance Compensation Plan for Mr. Croft, the Sweet Water Bank Bonus Plan
for Mr. Lewis and the Brewton Bank Incentive Compensation Plan for Mr. Bixler.
(4) All stock options shown have been adjusted for the 3 for 2 stock split
paid in June 1998.
(5) Represents employer matching and contributions to the South Alabama
Savings and Profit Sharing Plan for Messrs. Lamar, Nelson, Croft and Bixler
in 1999 and 1998; in 1997, represents employer contributions to the Brewton
Bank Profit Sharing Plan for Mr. Nelson and Mr. Bixler, the Monroeville Bank
Profit Sharing Plan for Mr. Croft; represents for Mr. Lewis for all years
shown contributions paid by the Sweet Water Bank SEP Plan.
</TABLE>
Stock Options
The following table sets forth the grant of stock options during 1999 to
Mr. Lamar, Mr. Nelson, Mr. Croft, Mr. Lewis and Mr. Bixler.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Potential
<CAPTION>
Number of % of Total Realizable Value
Shares Options/SARs Assuming Rates of
Underlying Granted to Exercise Stock Price
Options/SARs Employees or Base Expiration Appreciation(1)
Name Granted in Fiscal Year Price ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
W. Bibb Lamar, Jr. 10,000(2) 23.25% $15.6250 01/19/09 $116,533 $318,497
J. Stephen Nelson 8,000(2) 18.60% $15.6250 01/19/09 $ 93,226 $254,798
Haniel F. Croft 4,000(2) 9.30% $15.6250 01/19/09 $ 46,611 $127,396
Stratton F. Lewis, Jr. 0 0 0 0 0 0
W. Gaillard Bixler 4,000(2) 9.30% $15.6250 01/19/09 $ 46,611 $127,396
(1) Calculated by comparing the exercise price of such options and the market
value of the shares of common stock subject to such options, assuming the
market price of such shares increases by 5% and 10%, respectively, over the
term of the options.
(2) Incentive Stock Options which became exercisable on January 19, 2000.
</TABLE>
The following table includes information with respect to unexercised options
held by Mr. Lamar, Mr. Nelson, Mr. Croft, Mr. Lewis and Mr. Bixler. All
options shown have been adjusted for the 3 for 2 stock split paid in June
1998.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Shares Underlying Value of Unexercised
Unexercised Options/SARs Held In-the-Money Options/SARs At
At December 31, 1999 (#) December 31, 1999 ($)(1)
----------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
W. Bibb Lamar, Jr. 11,250 10,000 0 0
7,500 $24,922
7,500 $23,671
7,500 $26,171
9,000 $31,406
11,250 $66,249
J. Stephen Nelson 7,500 8,000 0 0
7,500 $24,922
7,500 $23,671
7,500 $26,171
11,538 $40,262
Haniel F. Croft 3,000 4,000 0 0
7,500 $23,671
Stratton F. Lewis, Jr. 0 0 0 0
W. Gaillard Bixler 3,000 4,000 0 0
3,000 $ 9,969
3,000 $ 9,468
4,500 $15,703
7,500 $26,171
(1) Based on the average of the closing bid and ask prices quoted in the
NASDAQ inter-dealer system on December 31, 1999, minus the exercise price.
</TABLE>
Pension Plans
South Alabama maintains a pension plan and certain other long-term
compensation plans, as described below.
The following table reflects estimated annual benefits payable under the
Retirement Plan for Employees of South Alabama (the "South Alabama Plan") in
effect as of December 31, 1999 at various salary and years of service levels,
assuming retirement at age 65.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Compensation Years of Credited Service
----------------------------------------------------
10 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C>
25,000 $ 2,500 $ 3,750 $ 5,000 $ 6,250 $ 7,500 $ 8,750
50,000 5,000 7,500 10,000 12,500 15,000 17,500
75,000 7,500 11,250 15,000 18,750 22,500 26,250
100,000 10,000 15,000 20,000 25,000 30,000 35,000
125,000 12,500 18,750 25,000 31,250 37,500 43,750
150,000 15,000 22,500 30,000 37,500 45,000 52,500
175,000* 15,000 22,500 30,000 37,500 45,000 52,500
*Maximum Compensation for 1999 under IRC 401(a)(17) is $160,000.
</TABLE>
The amounts reflected are single life benefits computed under the South
Alabama Plan's basic formula. The South Alabama Plan provides generally for a
monthly benefit commencing at age 65 equal to 1% of the employee's average
monthly base compensation during the highest 5 consecutive calendar years out
of the 10 calendar years preceding retirement, multiplied by years of
credited service, not to exceed 40 years. Alternative plan formulas which may
apply to certain participants who participated in predecessor pension plans,
might produce a greater benefit in some situations. Joint and survivor
benefits would be less. Social Security benefits do not affect payments made
under the South Alabama Plan. As of December 31, 1999, Mr. Lamar was credited
with 11 years of service, Mr. Nelson was credited with 20 years of service,
Mr. Croft was credited with 30 years of service and Mr. Bixler was credited
with 10 years of service.
The Mobile Bank. The Mobile Bank maintains an unfunded and unsecured
Supplemental Retirement Plan (the "Supplemental Plan") designed to supplement
the benefits payable under the South Alabama Plan for certain key employees
selected by the Mobile Bank's Board of Directors. Each participant was a
participant in a pension plan of another bank prior to his employment by the
Mobile Bank, and the Supplemental Plan is designed to afford the participant
the same pension he would receive under the South Alabama Plan if he were
given years-of-service credit as if he were employed by the Mobile Bank his
entire banking career, reduced by benefits actually payable to him under the
South Alabama Plan and any retirement benefit payable to him under any such
plan of another bank. Benefits for total and permanent disability are
supplemented in the same manner.
Because the Supplemental Plan is intended to complement benefits otherwise
available to the participants, the exact amounts to be paid, if any, to any
participant, including Mr. Lamar, cannot be determined until retirement or
disability. Management of the Mobile Bank does not believe any current
expense and any liabilities associated with the Supplemental Plan are
material.
Savings and Profit Sharing Plan. South Alabama maintains the South
Alabama Bancorporation Savings & Profit Sharing Plan. Subject to certain
employment and vesting requirements, all South Alabama personnel are permitted
to participate in the plan. An eligible employee may defer up to 10% of his
or her pay into the plan. The employer makes a matching contribution as
follows: $1.00 for $1.00 on the first 2%, $0.75 for $1.00 on the next 2% and
$0.50 for $1.00 on the next 2%. If an employee defers 6% of pay, that
employee would receive a 4.5% matching contribution. At the beginning of each
year the South Alabama Board of Directors sets the profit sharing goal and at
the end of the year the Board of Directors determines the amount of the
profit sharing contribution to be made. The profit sharing contribution is
allocated to each eligible employee based on an individual compensation to
total participant compensation ratio.
The Sweet Water Bank. The Sweet Water Bank maintained a Simplified Employee
Pension Plan (SEP). Benefits under this arrangement are 100% vested and
contributions are allocated to each eligible employee based on an individual
compensation to total compensation ratio. Effective January 1, 2000 this plan
terminated and all eligible employees are covered under the South Alabama
Bancorporation Savings & Profit Sharing Plan.
Change in Control Compensation Agreements
The Mobile Bank entered into a Change in Control Compensation Agreement with
Mr. Lamar on November 14, 1995. The Brewton Bank entered into Change in
Control Compensation Agreements with Mr. Nelson and Mr. Bixler on November 29,
1995. The Monroeville Bank entered into a Change in Control Compensation
Agreement with Mr. Croft on March 31, 1997. These Change in Control
Compensation Agreements (the "Agreements") provide that if Mr. Lamar, Mr.
Nelson, Mr. Bixler or Mr. Croft, are terminated other than for "cause" (as
defined), following a change in control, or if their assigned duties or
responsibilities are diminished such that they are inconsistent with their
present positions, they shall be entitled to receive a cash payment equal to
three times their average annual earnings (as defined), in the case of Mr.
Lamar and Mr. Nelson, two times average annual earnings in the case of Mr.
Croft and one and one-half times average earnings in the case of Mr. Bixler.
Certain other existing employee benefits may also be available to each of Mr.
Lamar, Mr. Nelson, Mr. Croft and Mr. Bixler under terms of these Agreements
for a period after termination of three years for Mr. Lamar and Mr. Nelson
and eighteen months for Mr. Croft and Mr. Bixler. The Agreements
automatically renew each calendar year unless terminated by the Mobile Bank,
the Brewton Bank or the Monroeville Bank at least 90 days prior to any
December 31.
Compensation of Directors
South Alabama directors who are not officers are paid a $1,500 annual
retainer, $400 for each Board meeting attended and $200 for each committee
meeting attended.
Five Year Total Stockholder Return Comparison
The following indexed graph compares South Alabama's five-year cumulative
total stockholder return with the NASDAQ Market Index and with a published
peer group industry index, prepared by Media General Financial Services,
comprised of bank holding companies in the southeast regional section of the
United States. The comparison assumes the investment of $100 on December 31,
1994, with dividends reinvested quarterly through December 31, 1999. Returns
of each component issuer have been weighted according to that issuer's market
capitalization.
Graph of Five Year Total Stockholder Return Comparison chart
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
SOUTH ALABAMA BANCORPORATION $100 $112.45 $111.76 $226.89 $212.24 $177.19
MGFS SOUTHEAST REGIONAL BANKS 100 147.91 188.81 326.72 311.16 258.80
NASDAQ MARKET INDEX 100 129.71 161.18 197.16 278.08 490.46
</TABLE>
Report of Personnel/Compensation Committee of the Board of Directors
General Policies
The Personnel/Compensation Committee of the Board of Directors of South
Alabama (the "Committee") has responsibility for recommending to the Board
the salaries and bonuses of all South Alabama officers. Additionally, the
Committee has oversight responsibility with respect to the compensation of
all other executive officers of South Alabama's subsidiaries. Other than
South Alabama officers, all salaries are set at the subsidiary level.
The overall objectives of South Alabama's compensation program are to
attract and retain the best possible banking talent, to motivate its officers
to achieve the goals established in the business strategy, to recognize both
individual contributions and overall business results and to link shareholder
and executive interests through long term equity-based plans.
Base Salary. Except as noted above, executive officer salaries are reviewed
annually by the appropriate subsidiary personnel committee. Individual
salaries are set only after consideration of the officer's level of
responsibility, experience and individual performance, and review of external
competitive practices. In order to determine external competitive practices,
the personnel committees review, and expect to continue to review, salary
surveys conducted by independent compensation consulting firms. In
establishing the base salaries for the executive officers, the personnel
committees consider the results of such surveys, but may establish the base
salary for executives above or below the averages indicated in those surveys.
The amounts paid to the Chief Executive Officer and the Chairman of South
Alabama, and to the Chief Executive Officers and Presidents of the Monroeville
Bank, the Sweet Water Bank and the Brewton Bank in 1999 are shown in the
Summary Compensation Table under the heading "Annual Compensation-Salary."
The Mobile Bank Bonus Plan. Based on individual and departmental
performance and net income profitability goals, the Chief Executive Officer
of the Mobile Bank recommends for consideration to the personnel committee of
the Mobile Bank annual bonuses to officers. Consideration is given to the
officer's level of responsibility and the judgment of the Mobile Bank's
personnel committee of that officer's potential contribution to the overall
performance of the Mobile Bank. Additional consideration was given to the
effect the savings and profit sharing plan had on officer compensation.
The Brewton Bank Incentive Compensation Plan. Each year the Brewton Bank
establishes a pool of funds equal to 15% of total officers' salaries. Based
upon the performance of the Brewton Bank, the department and the individual,
an officer can earn up to 15% of his or her base salary, payable in a lump
sum after the close of the year. For each officer other than the top two
executives of the Brewton Bank, the formula is based 40% on the Brewton Bank's
achievement of required levels of return on assets, 40% on achievement of
individual and departmental goals as established at the beginning of the year,
and 20% on the results of the officer's annual review as conducted by his or
her supervisor. Each of the two most highly ranked officers automatically
receives the same percentage of his or her total available amount as the
average for all other officers. The amount awarded to the Chief Executive
Officer and President of the Brewton Bank under the Brewton Bank's Incentive
Compensation Plan for 1998 is set forth in the "Annual Compensation-Bonus"
column of the Summary Compensation Table.
The Monroeville Bank Performance Compensation Plan. The Monroeville Bank
Performance Compensation Plan was designed to maximize long-term shareholder
value by maximizing and balancing long-term profit and growth. After the budget
is completed, senior management meets and sets goals for increases over the
previous year for loan volume, deposit volume, net interest margin,
non-interest income, loan losses and productivity. Each category is weighted
depending on where management feels the need to place the most emphasis for
that year. At the end of the year, if goals are exceeded compensation is paid
to the officers and employees based on the weighted categories and the amount
by which the goals are exceeded. All officers and employees receive the same
percent of their gross annual salary. The amount awarded to the Chief
Executive Officer and President of the Monroeville Bank under the Monroeville
Bank's Incentive Compensation Plan for 1998 is set forth in the "Annual
Compensation-Bonus" column of the Summary Compensation Table.
The Demopolis Bank Bonus Plan. Each year the Demopolis Bank's salary
committee, after review with the Demopolis Bank Board of Directors, awards a
fixed bonus to eligible employees. All officers and full-time employees
receive $600, and part-time employees receive a pro-rata share of $600, based
on the number of hours worked.
The Sweet Water Bank Bonus Plan. The Sweet Water Bank maintains a bonus
plan for all full-time eligible employees. Each December, after a review of
profitability and other performance related goals achieved through November,
the bank awards eligible employees the equivalent of one month's salary as a
bonus.
The Trust Company Incentive Compensation Plan. The Trust Company
establishes annually a pool of funds equal to 15% of total trust officers'
salaries. Each trust officer has the opportunity to earn an additional 15%
of his or her annual base compensation, based upon the financial performance
of the company and the individual performance of the officer in achieving his
or her personal goals. All officers are eligible to participate, exclusive of
the Chief Executive Officer of the Trust Company, and payments are made in a
lump sum payment at the end of each year.
Stock Options. Stock options are South Alabama's and its subsidiaries'
principal long-term incentive vehicle. The Committee believes that stock
options not only motivate and reward executives for exceptional performance,
but also align their goals more closely with those of the South Alabama
shareholders by affording the recipients an opportunity for stock ownership
in South Alabama. The stock option plan is designed to encourage a long-term
perspective by providing a ten-year term, which includes a nine-year exercise
period and a one-year period after the date of grant during which the option
cannot be exercised.
The number of options awarded to each officer generally is tied to the
officer's level of responsibility, with the result that senior executive
officers typically receive greater awards than other officers. The Committee
takes into consideration previous grants to an individual officer as well as
all other factors.
The shares of the Common Stock covered by options awarded during 1999 to
the Chief Executive Officer and the other named executive officers are shown
in the table entitled "Option Grants in Last Fiscal Year," and the options
previously granted and outstanding at year-end are shown in the table
entitled "Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values."
Other Compensation. Additionally, South Alabama's subsidiaries maintain
broad-based employee benefit plans, including pension plans and 401(k)
savings and profit sharing plans, as described elsewhere in this document in
the section entitled "Pension Plans." Officers of South Alabama participate
in such plans on the same basis as other employees.
Chief Executive Compensation
The Committee meets in executive sessions to review the Chief Executive
Officer's salary and from time to time, but not necessarily annually, consults
with salary administration firms and/or uses compensation surveys with
respect to competitors' practices. Compensation of the Chief Executive Officer
is determined in accordance with the same basic factors as described above
for other executive officers.
The 1999 base salary increase for the Chief Executive Officer was established
after a review of market data from independent compensation surveys. The
Committee is empowered to recommend to the Board the Chief Executive Officer's
base salary in its discretion and without regard to particular factors. The
Committee considered, however, that 1998 corporate earnings objectives had
been exceeded. The Committee also considered the achievement of certain other
strategic objectives, both financial and otherwise, under his leadership,
including acceptable asset quality, capital ratios, liquidity ratios,
interest rate margins and other financial goals.
The 1999 bonus for the Chief Executive Officer for achieving the net income
goal was $40,000, an amount equal to approximately 26% of his 1999 salary. In
setting the amount of the bonus, the Committee considered the continued
improvement in the financial performance of South Alabama during the year as
well as the successful attainment of other non-financial related goals.
The Committee also granted to the Chief Executive Officer options to
purchase 10,000 shares of South Alabama Common Stock, as described in the
table entitled "Option Grants in Last Fiscal Year."
The members of the Committee are as follows: Stephen G. Crawford, James P.
Hayes, Jr., Clifton C. Inge and Thomas E. McMillan, Jr.
CERTAIN TRANSACTIONS AND MATTERS
Some of the directors, executive officers, and nominees for election as
directors of South Alabama, as well as firms and companies with which they
are associated, are and have been customers of its subsidiary banks and as
such have had banking transactions, including loans and commitments to loan,
with subsidiary banks during 1999. These loans and commitments to loan,
including loans and commitments outstanding at any time during the period,
were made in the ordinary course of business on substantially the same terms,
including rates and collateral, as those prevailing at the time for
comparable transactions with other persons and, in the opinion of subsidiary
bank management, did not involve more than the normal risk of collectibility
or present other unfavorable factors.
Stephen G. Crawford, a director and nominee, is a member of the law firm of
Hand Arendall, L.L.C., which serves as counsel for South Alabama and the
Mobile Bank and the Trust Company. Broox G. Garrett, Jr., a director and
nominee, is a partner in the law firm of Thompson, Garrett & Hines, L.L.P.,
which serves as counsel for the Brewton Bank and the Trust Company. John B.
Barnett, III, a director, executive officer and nominee, is a member of the
law firm of Barnett, Bugg, Lee & Holzborn, L.L.C., which serves as counsel
for the Monroeville Bank. Richard S. Manley, director and nominee, is a
partner in the law firm of Manley, Traeger, Perry & Stapp, which serves as
counsel for the Demopolis Bank.
APPOINTMENT OF AUDITORS
The Board of Directors of South Alabama, on recommendation of the Audit
Committee, engaged Arthur Andersen LLP as South Alabama's independent
accountant and auditor beginning in 1995. The engagement was entered into on
September 27, 1995. Arthur Andersen will have representatives present at the
annual meeting to respond to appropriate questions and to make a statement if
they so desire.
OTHER MATTERS
Management currently does not know of any other matters to be presented at
the meeting.
If a Proxy in the form enclosed is executed properly and is returned, the
shares represented thereby will be voted in accordance with the directions
given in that Proxy. If no specific directions are given, the shares will be
voted, subject to and in accordance with the provisions herein contained,
"For" the Board of Directors' nominees in the election of directors. If any
other matter is presented at the meeting, the shares will be voted in
accordance with the recommendations of the Board of Directors. At any time
prior to its exercise, a Proxy may be revoked by written notice or a
subsequently dated Proxy delivered to the Secretary of South Alabama.
Solicitation of proxies will be made initially by mail. In addition, proxies
may be solicited in person or by telephone by directors, officers, and other
employees of South Alabama and its subsidiary banks. The cost of printing,
assembling, and mailing this Proxy Statement and related material furnished
to shareholders and all other expenses of solicitation, including the expenses
of brokers, custodians, nominees, and other fiduciaries who, at the request of
South Alabama, mail material to or otherwise communicate with beneficial
owners of shares held by them, will be borne by South Alabama.
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum of the shareholders to
take action at the meeting. Once a quorum is established, (i) directors must
be elected by a plurality of the shares of Common Stock present, in person or
by proxy, and (ii) any other action to be taken must be approved by a
majority of the shares of Common Stock present, in person or by proxy. For
voting purposes, abstentions and broker non-votes will in effect count as
"no" votes.
Stockholder proposals intended to be submitted for consideration at the 2001
Annual Meeting of the Shareholders of South Alabama must be submitted in
writing to and received by the Secretary of South Alabama not later than
December 11, 2000 to be included in South Alabama's Proxy Statement and form
of Proxy relating to that meeting. The named proxies for the 2001 annual
meeting will have discretionary voting authority with respect to any
shareholder proposal not received in writing by February 24, 2001, and they
will exercise their authority in accordance with the recommendations of South
Alabama's Board of Directors.
/s/F. Michael Johnson
F. Michael Johnson
Chief Financial Officer
and Secretary
Enclosures
April 10, 2000
SOUTH ALABAMA BANCORPORATION, INC.
Proxy for Annual Meeting of Stockholders, May 11, 2000
Solicited by the Board of Directors
KNOW ALL MEN BY THESE PRESENTS that I, the undersigned shareholder of South
Alabama Bancorporation, Inc., do hereby nominate, constitute, and appoint
Dan Britton and Kay I. McKee and each of them, with full power to act alone,
my true and lawful attorneys and proxies with full power of substitution, for
me and in my name, place, and stead to vote all of the Common Stock of South
Alabama Bancorporation, Inc. standing in may name on its books on March 24,
2000, at the Annual Meeting of its shareholders to be held at 100 Saint
Joseph Street, Mobile, Alabama, on May 11, 2000, at 10:00 a.m. C.D.T., and at
any adjournment thereof, with all powers that the undersigned would possess
if personally present, conferring upon my said attorneys and proxies all
discretionary authority permitted by applicable law and regulations, as
follows:
1. Election of Directors.
___ FOR all nominees listed below (except ___ AGAINST all nominees
as marked to the contrary below) listed below
John B. Barnett, III, Stephen G. Crawford, Haniel F. Croft, David C. De Laney,
Broox G. Garrett, Jr., W. Dwight Harrigan, James P. Hayes, Jr., Clifton C.
Inge, W. Bibb Lamar, Jr., Stratton F. Lewis, Jr., Richard S. Manley, Kenneth
R. McCartha, Thomas E. McMillan, Jr., J. Richard Miller, III, Harris V.
Morrissette, J. Stephen Nelson, Paul D. Owens, Jr. and Earl H. Weaver.
(Instruction: To withhold your vote for any individual nominee, write that
nominee's name in the space provided below.
- ---------------------------------------------------------------------------
(Continued and to be signed on the other side)
2. Other Business.
Transaction of such other business as may be brought before the meeting or
any adjournment thereof. Management currently knows of no other business
to be presented.
If properly executed and returned, the shares represented by this Proxy will
be voted in accordance with the directions given herein. If no specific
directions are given, the shares will be voted, subject to and in accordance
with the provisions contained in the Board of Directors' Proxy Statement dated
April 10, 2000, "FOR" the Board's nominees in the Election of Directors. If
any other business is presented at the meeting, the shares will be voted in
accordance with the recommendations of the Board of Directors.
This Proxy may be revoked at any time prior to its exercise by delivery of
written notice or a subsequently dated Proxy to the Secretary of South
Alabama Bancorporation, Inc.
Please date, sign , and mail this Proxy in the envelope provided.
Postage not necessary if mailed in the United States.
Number of
Shares
----------- DATED: _______________________, 2000
SIGNED: _______________________
(Please sign exactly as the
name appears hereon. If
stock is held in the names of
joint owners, each should
sign. Attorneys, Executors,
Administrators, etc. should
so indicate)
