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 Section 240.14a-11(c) or Section 240.14a-12
Grenada Sunburst System Corporation
(Name of Registrant as Specified in its Charter)
N/A
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
</PAGE>
<PAGE>1
XXX BEGIN PAGE 2 HERE XXX
GRENADA SUNBURST SYSTEM CORPORATION
P. O. BOX 947
GRENADA, MISSISSIPPI 38902-0947
NOTICE OF ANNUAL STOCKHOLDERS MEETING
TO THE STOCKHOLDERS OF
GRENADA SUNBURST SYSTEM CORPORATION:
Notice is hereby given that, pursuant to the call of its directors, the
regular Annual Meeting of Stockholders of GRENADA SUNBURST SYSTEM CORPORATION
will be held at the Corporate Administration Building, 2000 Gateway, Grenada,
Mississippi, on Monday, April 18, 1994, at 1:00 p.m., local time, for the
purpose of considering and voting upon the following matters:
1. Election of three (3) persons, listed in the Proxy Statement dated
March 18, 1994, as nominees, as members of the Board of Directors of Grenada
Sunburst System Corporation.
2. Such other matters as may properly be brought before the meeting or
any adjournment(s) thereof.
Only those stockholders of record at the close of business on March 4,
1994, shall be entitled to notice of and to vote at this meeting. You are
urged to sign and return the enclosed Proxy (in the self-addressed enclosed
envelope) as soon as possible, whether or not you plan to attend the meeting
in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ James T. Boone
-----------------------
James T. Boone
Chief Executive Officer
Dated and Mailed at
Minneapolis, Minnesota
March 18, 1994
Enclosures: 1. Proxy
2. Business Reply Envelope
3. Annual Report
</PAGE>
<PAGE>3
XXX BEGIN PAGE 3 HERE XXX
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
OF
GRENADA SUNBURST SYSTEM CORPORATION
TO BE HELD APRIL 18, 1994
This Proxy Statement is furnished to stockholders of Grenada Sunburst
System Corporation (the "Company") in connection with the solicitation by the
Board of Directors of proxies to be voted at the Annual Meeting of
stockholders to be held at the Corporate Administration Building, 2000
Gateway, Grenada, Mississippi, on Monday, April 18, 1994, at 1:00 p.m. local
time, or any adjournment(s) thereof, for the purpose of considering and
voting upon the matters set out in the foregoing Notice of Annual
Stockholders' Meeting.
VOTING
Only those stockholders of record on the books of the Company at the
close of business on March 4, 1994, shall be entitled to notice of and to
vote at the meeting. On that date, the Company had outstanding 9,492,975
shares of Common Stock. Each share is entitled to one vote. The only class
of securities of the Company is Common Stock.
Shares of Common Stock represented by properly executed proxies, unless
previously revoked, will be voted at the meeting in accordance with the
instructions thereon. If no direction is indicated, such shares will be
voted FOR the Proposals. Shares as to which authority to vote has been
withheld will be counted as present for purposes of establishing a quorum but
will not be voted in favor of the nominees. Shares not voted by an
institution holding shares in "street name," because no instructions were
received from the beneficial owner and such institution lacks discretionary
voting power, will have no effect on the vote. Any stockholder who executes
and delivers such Proxy has the right to revoke it at any time before the
vote on April 18, 1994, by filing with the Secretary of the Company either
an instrument revoking it or a duly executed Proxy bearing a later date. Any
stockholder who desires to do so may also attend the meeting and vote in
person, in which case the Proxy will not be used.
The Directors, nominees, and executive officers of the Company and its
subsidiary banks as a group number nineteen (19) persons and beneficially own
769,508, or 8.11%, of the Company's total shares outstanding as of December
31, 1993. To the best knowledge of the Company, no person owns of record or
beneficially more than 5% of the outstanding voting securities of Grenada
Sunburst System Corporation.
SOLICITATION OF PROXIES
The cost of soliciting proxies from stockholders will be borne by the
Company. The initial solicitation will be by mail. In following up the
original solicitation of the proxies by mail, the Company will request
brokers and others to send proxies and proxy material to the beneficial
owners of the shares and will reimburse them for their expenses in so doing.
If necessary, the Company may also use several of its regular employees to
solicit proxies from the stockholders, either personally or by telephone or
by special letter, but without additional compensation therefore.
ANNUAL REPORT AND FORM 10-K
The 1993 Annual Report, including Form 10-K, of the Company, includes
audited financial statements of the Company, and is enclosed for the
information of the stockholders.
PROPOSED STOCKHOLDER ACTIONS
ITEM 1. ELECTION OF DIRECTORS
The certificate of incorporation of the Company provides that the Board
shall consist of a maximum of thirty-five (35) persons. The present Board
consists of eight (8) persons. Although each nominee has consented to being
named in the Proxy Statement and to serve if elected, if any nominee should,
prior to the Annual Meeting, decline or become unable to serve as a Director,
the proxies will be voted by proxy holders for such other persons as may be
designated by the present Board of Directors. The three nominees are
Directors of the Company and, if elected, each will hold office for a three-
year term to expire at the 1997 Annual Meeting of stockholders, or until his
successor shall be elected and qualified.
Listed below are the names and certain information concerning all
Directors of the Company and all persons nominated to become Directors. The
number of shares of stock beneficially owned are those owned as of December
31, 1993. The shares of stock beneficially owned include those held in the
spouse's name or in their children's name, except where noted. It is the
intention of the person named in the Proxy to vote FOR the election of the
designated nominees.
</PAGE 2>
<PAGE>4
XXX BEGIN PAGE 4 HERE XXX
<TABLE>
XXX BEGIN TABLE HERE XXX
<CAPTION>
Principal Occupation Amount Percent
or Employment for Age & Nature of Common
the Past Five Years; Dec.31, Director Remaining of Beneficial Stock
Name Directorships 1993 Since Term Ownership Outstanding(1)
----- ---------------------- ------- -------- --------- ------------- ---------------
<S> <S> <C> <C> <C> <C> <S> <C>
James T. Boone President and Chief 43 1990 2 Years 34,375 direct .36
490 Robin Road Executive Officer, 15,507 indirect .16
Grenada, MS 38901 Grenada Sunburst
System Corporation;
Previously President
and Chief Executive Officer,
Sunburst Bank, LA;
Previously Executive
Vice-President,
Grenada Sunburst
System Corporation
E. Hayes Branscome Owner, Hayes Branscome 54 1982 2 Years 50,548 direct .53
954 Dogwood Drive Cattle Company; Real 10,050 indirect .11
Grenada, MS 38901 Estate Broker and
Land Developer
J. Russell Flowers Chairman and Chief 56 1984 Nominee 158,193 direct 1.67
Post Office Box 1439 Executive Officer,
Greenville, MS 38702 Central States
Diversified, Inc.
(manufacturing company
in packaging industry)
John T. Keeton, Jr. Retired State Senator, 70 1959 Nominee 101,340 direct 1.07
2444 Fairway Street State of MS;Retired Partner, 26,260 indirect .28
Grenada, MS 38901 Law firm of Keeton & Embry;
Tree Farmer
Robert E. Kennington,II Chairman of the Board; 61 1970 Nominee 39,410 direct .42
906 Avenue of Pines Previously Chief Executive 8,677 indirect .09
Grenada, MS 38901 Officer,Grenada Sunburst
System Corporation;
Director Mississippi Power
and Light Company
J.M. Robertson, Jr. Retired;Previously 76 1961 1 Year 13,134 direct .14
820 Avenue of Pines Senior Vice-President; 13,133 indirect .14
Grenada, MS 38901 Sunburst Bank,Grenada
J.H. Tabb Retired;Previously 85 1974 1 Year 130,583 direct 1.38
792 N.Pontotoc St. President, and Chairman 17,298 indirect(2) .18
Houston, MS 38851 of the Board, Houston
State Bank; Owner,
J.H. Tabb & Company
(land holdings)
Milton J. Womack General Contractor 67 1991 2 Years 47,604 direct .50
6500 Burden Drive (Commercial)
Baton Rouge, LA 70808
</TABLE>
(1) Based on 9,492,975 shares outstanding at December 31, 1993.
(2) These 17,298 shares are owned by Mr. Tabb's wife as to which he
disclaims beneficial ownership.
There are no family relationships between any Director and any executive
officer.
The Company's Board of Directors, which met eight (8) times in regular
session and three (3) times in special session during 1993, has among its
functions approving compensation plans and nominating Directors. Of those
Directors serving during 1993, no one attended fewer than 75% of all Board
meetings.
</PAGE>
<PAGE>5
XXX BEGIN PAGE 5 HERE XXX
COMMITTEES OF THE BOARD OF DIRECTORS
The Bylaws of the Company provide for an Executive Committee composed of
not less than three (3) members and not more than seven (7), all of whom
shall be members of the Board. J. Russell Flowers is Chairman of the
Committee. Other Committee members are John T. Keeton, Jr., Robert E.
Kennington, II, James T. Boone, E. Hayes Branscome, J. H. Tabb and J. M.
Robertson, Jr. Under the direction and control of the Board, the Executive
Committee has charge and exercises complete control of all matters which may
require attention at any time between the regular meetings of the Board and
also performs such other duties as the Board may designate. During the
intervals between the meetings of the Board, the Executive Committee
possesses and exercises all the powers of the Board in the management and
direction of the affairs of the Company. The Executive Committee met twelve
(12) times during 1993.
The Company does not have a standing Nominating Committee; however, the
Bylaws provide nomination procedures as follows. Notice of nominees to be
proposed for election to the Board of Directors of the Company, other than
nominations made by the existing Board of Directors, must be given in writing
to the Secretary of the Company received no later than 90 days prior to the
month and day that the proxy materials regarding the last election of
Directors to the Board of the Company were mailed to the stockholders.
Notice must include the full name of the nominee, his or her age and date of
birth, educational background, and a list of business experience and
positions held for at least the preceding five (5) years. The notice must
include home and office addresses and telephone numbers and include a signed
representation by the nominee to provide timely all information requested by
the Company as part of its disclosures in regard to the solicitation of
proxies for the election of Directors. The name of each such candidate for
Director must be placed in nomination at the Annual Meeting by a stockholder
present in person and the nominee must be present in person at the meeting.
The Company has a standing Audit/Loan Review Committee of its Board of
Directors which met four (4) times in regular session and one (1) time in
special session during 1993. The members of the committee are J. M.
Robertson, Jr., E. Hayes Branscome, Robert E. Kennington, II, and John T.
Keeton, Jr. The functions performed by this Committee include reviewing
audit plans, examining results of both independent and internal auditors and
management action relative to examination reports. Also included is the
review of credit policy and performance of the loan portfolio.
The Company has a Compensation Committee, composed of three (3) members
of the Company's Board of Directors, Mr. J. H. Tabb, Mr. Milton J. Womack,
Mr. J. Russell Flowers and one member from the lead subsidiary Bank's Board
of Directors, Mr. Ray K. Smith. The Committee met four (4) times during
1993. The general function of the committee is the administration of the
Company's compensation program, including salary administration and benefit
programs, determining the compensation of the Chief Executive Officer, and
making recommendations to the Board of Directors as to compensation policies
and practices.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company was paid $1,500 for each
regularly scheduled Board of Directors meeting attended. Each non-employee
Executive Committee member was paid $1,800 for each meeting attended. Each
non-employee director was paid $300 for each Compensation Committee meeting
attended.
EXECUTIVE OFFICERS
Beneficial ownership of the Company's Common Stock by executive officers
who are not members of the Board of Directors of Grenada Sunburst System
Corporation, as of December 31, 1993, is as follows:
<TABLE>
XXX BEGIN TABLE HERE XXX
<CAPTION>
Percent of
Amount & Nature of Common Stock
Name Beneficial Ownership Outstanding
----- --------------------- -------------
<S> <C> <S> <C>
Don W. Ayres 650 Direct .007
122 Indirect .001
E. Jackson Garner 1,234 Direct .01
9,353 Indirect .10
J. Daniel Garrick, III 4,711 Direct .05
3,122 Indirect .03
A. Jackson Huff, Jr. 31,485 Direct .33
4,266 Indirect .04
</TABLE>
The shares of stock beneficially owned include those held in the
spouse's name or in their children's name, except where noted.
</PAGE>
<PAGE>6
XXX BEGIN PAGE 6 HERE XXX
COMPENSATION COMMITTEE REPORT
GENERAL
The current members began serving on the Compensation Committee in 1991.
In October 1992, the Securities and Exchange Commission adopted rules (which
became effective October 21, 1992) requiring most public companies to provide
detailed information regarding compensation and benefits provided to their
Chief Executive Officer, and to the four most highly-compensated executive
officers, other than the chief executive officer, whose annual base salary
and bonus compensation was in excess of $100,000. The Company's executive
officers who are covered under these rules in 1993 are James T. Boone,
President and Chief Executive Officer; A. Jackson Huff, Jr., President and
Chief Executive Officer, Sunburst Bank, Louisiana; J. Daniel Garrick, III,
Senior Executive Vice President, Sunburst Bank, Mississippi; E. Jackson
Garner, Regional Executive, Central Region, Sunburst Bank, Mississippi; and
Don W. Ayres, Senior Executive Vice President, Sunburst Bank, Mississippi.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
No member of the compensation committee during 1993 was an officer or
employee of GSSC or any of its subsidiaries. Mr. Ray K. Smith, Chairman of
the Executive Committee for Sunburst Bank, Mississippi, was previously
President of Grenada Sunburst System Corporation.
COMPENSATION PHILOSOPHY
The Company's executive compensation program is designed to be closely
linked to corporate performance and return to stockholders. The Committee
attempts to provide competitive levels of compensation, integrate
management's pay with the achievement of the Company's annual and long-term
performance goals, reward above average corporate performance, recognize
individual initiative and achievement, and assist the Company in attracting
and retaining qualified management. The comparable groups that the Company
uses are peer banks in the State of Mississippi, peer banks in the
southeastern part of the United States, and peer banks nationwide. The
Company believes that the national peers mirror the NASDAQ peers used in the
stock performance graph. Total compensation levels within the Company are
set at the median levels found by using the above listed groups, generally
weighted equally, adjusted for asset size and geographic location.
Management compensation is intended to be set at levels that the Compensation
Committee believes are consistent with others in the banking industry, with
senior management's compensation packages weighted more heavily toward
programs contingent upon the Company's level of performance. To this end,
the Company has developed an overall compensation strategy and specific
compensation plans that tie a portion of executive compensation to the
Company's success in meeting specified performance goals.
Each year the Compensation Committee reviews the Company's executive
compensation program. The Compensation Committee's reviews include analysis
of the Company's executive compensation, corporate performance and return to
stockholders. These annual compensation reviews permit an ongoing evaluation
of the link between the Company's performance and its executive compensation
in the context of compensation programs of other companies. Each year, the
Compensation Committee also reviews the compensation package of the chief
executive officer. This includes a review of base salary, incentive
compensation and other perquisites as compared to peer banks and bank holding
companies. These reviews may periodically include reports from independent
consultants assessing the effectiveness of the Company's compensation
program.
The Compensation Committee determines the compensation of the chief
executive officer and reviews other executives, including but not limited to
the individuals whose compensation is detailed in this Proxy Statement. This
is designed to ensure consistency throughout the executive compensation
program.
The key elements of the Company's executive compensation consist of base
salary, short term incentive compensation, long term incentive compensation,
employee benefits and perquisites. The Compensation Committee's policies
with respect to each of these elements, including the basis for the
compensation awarded Mr. Boone, the Company's Chief Executive Officer, are
discussed below, including the performance measures considered and their
correlation to the awards under the Plan. In addition, while the elements of
compensation described below are considered separately, the Compensation
Committee takes into account the full compensation package afforded by the
Company to the individual, including pension benefits, insurance and other
benefits.
The Committee's policy is to maximize the tax deductibility of executive
compensation without compromising the essential framework of the existing
total compensation program.
BASE SALARIES
Base salaries for new executive management employees are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace
for management talent, including a comparison of base salaries for comparable
positions at comparable companies within the financial industry.
Annual salary adjustments are determined by evaluating the competitive
marketplace, the performance of the executive, and any increased
responsibilities assumed by the executive. Salary adjustments are determined
and normally made on a 12 month cycle.
The change in compensation for the Chief Executive Officer for 1993 was
based on the Company's performance in 1992, the assumption of duties of Chief
Executive Officer in 1992 and to bring Mr. Boone's salary in line with peer
banks, as defined in the "Compensation Philosophy" section.
</PAGE>
<PAGE>7
XXX BEGIN PAGE 7 HERE XXX
SHORT TERM INCENTIVE PLAN
The Company has a short term management incentive plan in which members
of management participate. These participants are recommended by management
and approved by the Compensation Committee. The plan, which is administered
by the Compensation Committee, annually awards in cash from 0% to 30% of an
executive's base salary. These amounts are determined based upon a
combination of the level of achievement by the Company of its strategic and
operating goals and the level of achievement of individual objectives by
participants. Senior management's awards are more highly dependent on
achievement of Company goals than are those of other levels of management.
Criteria for the 1993 plan for the chief executive officer included
earnings growth and return on assets, operating efficiency ratio as well as
asset quality goals such as non-performing assets/net loans and net charge-
offs/average loans. Criteria for other management participants were similar,
but were reflective of the subsidiary companies or business units that they
manage. These were in addition to those goals based on overall achievement
of Company objectives.
For Mr. Boone's short term incentive plan, 60% of the incentive is based
on earnings growth of the Company, 15% is based on return on assets, 5% is
based on the ratio of net charge-offs to average loans, 15% is based on the
Company's efficiency ratio and 5% is based on the ratio of non-performing
assets to average loans. For Mr. Huff's short term incentive plan, 45% of
the incentive is based on Sunburst Bank, Louisiana's earnings growth, 15% is
based on Sunburst Bank, Louisiana's return on assets, 5% is based on Sunburst
Bank, Louisiana's non-performing assets to net loans, 5% is based on Sunburst
Bank, Louisiana's net charge-offs to average loans, 5% is based on Sunburst
Bank, Louisiana's graded credits to net loans, 15% is based on a service
quality rating and subsidiary referrals, and 10% is based on Sunburst Bank,
Louisiana's operating efficiency ratio. For Mr. Ayres and Mr. Garrick, the
short term incentive plan is as follows: 45% is based on earnings growth for
the Company, 15% is based on return on assets, 5% is based on non-performing
assets to net loans, 5% is based on net charge-offs to average loans, 5% is
based on graded loans to net loans, 10% is based on a service quality rating
and some discretionary goals, and 15% is based on the Company's operating
efficiency ratio. For Mr. Garner's short term incentive plan, 40% is based
on Sunburst Bank, Mississippi's central region earnings growth, 15% is based
on return on assets for the central region for Sunburst Bank, Mississippi, 5%
is based on non-performing assets to net loans for the central region, 5% is
based on net charge-offs to average loans for the central region, 5% is based
on graded credits to average loans for the central region, 10% is based on a
service quality rating and subsidiary referrals, and 20% is based on the
operating efficiency ratio for the central region.
Each participant has three (3) benchmark levels of performance measured
with corresponding payout percentages. For Mr. Boone, Mr. Ayres, Mr. Garrick
and Mr. Huff, the payout percentages are as follows: 10% payout if threshold
goals are met, 15% payout if target goals are met, and 30% payout if maximum
goals are met. For Mr. Garner, the payout percentages are: 10% payout if
threshold goals are met, 15% payout if target goals are met and 25% payout if
maximum goals are met. Participants may also receive prorata payouts for
performance achieved between these benchmark levels. The following details
what level of performance measures were met by the executives for the short
term incentive plan. For Mr. Boone, the following goals were met: target
goals for earnings growth, return on assets and non-performing assets to
average loans, maximum goals on net charge-offs to average loans, and
threshold goals on operating efficiency ratio. For Mr. Huff, the following
goals were met: target goals for earnings growth and non-performing assets
to net loans, maximum goals for return on assets, net charge-offs to average
loans, graded credits to net loans and operating efficiency ratio, and
threshold goals for service quality and subsidiary referrals. For Mr. Ayres
and Mr. Garrick, the following goals were met: target goals for earnings
growth, return on assets, and non-performing assets to net loans, maximum
goals for net charge-offs to average loans, threshold goals for graded
credits to net loans and operating efficiency ratio. Mr. Ayres met the
target goal for service quality, and Mr. Garrick met the threshold goal for
service quality. For Mr. Garner the following goals were met: threshold for
earning growth, service quality and subsidiary referrals, and operating
efficiency ratio, target for return on assets, and maximum for net charge-
offs to average loans and non-performing assets to net loans. Mr. Garner did
not meet the threshold level for graded credits to average loans.
LONG TERM INCENTIVE PLAN
The Company also has a long term management incentive plan in which
participants are recommended by management and approved by the Compensation
Committee. This plan, which is also administered by the Compensation
Committee, establishes a three year incentive plan for improvement in Company
performance, as measured by return on equity, earnings growth and earnings
per share growth. Awards earned under the plan are paid out and/or vested
over a three year period following the determination year and may be paid in
stock options, restricted stock and/or cash. The awards of restricted stock
and stock options are subject to vesting requirements. Awards immediately
vest upon a change of control. The purposes of this plan are to (1)
recognize and reward key employees of the Company who contribute
substantially to the achievement of long term strategic objectives of the
Company, and (2) aid in attracting and retaining key management talent. The
purposes of the stock portion of this plan are as follows: (1) to facilitate
and encourage stock ownership by key employees of the Company; (2) to provide
an incentive for such employees to expand and improve the growth and
prosperity of the Company; and (3) to assist the Company in attracting and
retaining such employees. There was no long term incentive plan which ended
in 1993. The long term plan is for a three year performance period. There
was no long term incentive plan that began in 1991 due to the fact that the
Compensation Committee wanted to evaluate the performance of the Company
versus the first long term plan prior to establishing a subsequent long term
plan.
For all participants in the 1990 long term plan listed in the
compensation table, 30% of the incentive is based on earnings growth of the
Company, 40% is based on return on equity and 30% is based on earnings per
share growth. Each participant has four benchmark levels of performance with
corresponding payout percentages of base salary. For Mr. Boone, Mr. Ayres,
Mr. Garrick and Mr. Huff, the payout percentages are as follows: 0% if
threshold goals are met; 50% payout if target goals are met; 100% payout if
above goals are met, and 150% payout if maximum goals were met. For Mr.
Garner, the payout percentages are 0% for threshold goals, 33.3% for target
goals, 66.7% for above goals, and 100% for achievement of maximum goals. The
following details what level of performance measures were met by executives
for the long term incentive plan for 1990. For all participants, the
following goals were met: target goals for earnings growth and earnings per
share growth, and threshold goals for return on equity.
</PAGE>
<PAGE>8
XXX BEGIN PAGE 8 HERE XXX
EQUITY SHARE BONUS PLAN
The Company maintains an Equity Share Bonus Plan for senior management.
With the exception of Mr. Boone, who has been designated a participant by the
Compensation Committee and approved by the Board of Directors, eligible
senior managers must be nominated by the chief executive officer and approved
by the Compensation Committee and the Board of Directors. Mr. Boone was
included in the Equity Share Bonus Plan as part of his compensation package
when he assumed the responsibilities of Chief Executive Officer. At the
present time, the Compensation Committee has not seen fit to include any
other senior management in this plan. This does not preclude their being
included at some later date. The compensation package for executive officers
is structured to be in line with peer banks and current officers other than
the CEO are not included in this type of plan. On May 20, 1991, the Company
entered into an Equity Share Bonus Plan Participation Agreement with James T.
Boone, who currently is the only participant in the Plan. The agreement
provides that the Company will issue 30,000 shares of Company common stock,
registered to Mr. Boone, to an escrow account. Once the shares are placed in
the account, Mr. Boone has voting and dividend rights to all such shares.
Released shares vest at the rate of 1/3 of such shares on each anniversary of
the date of release. Shares immediately vest upon a change of control.
The shares will be released from the escrow account in installments over
a 10-year period provided that the Company meets certain performance
criteria. The performance criteria are set annually by the Compensation
Committee, subject to approval by the Board of Directors. For the year ended
December 31, 1993, the criteria for threshold achievement were a return on
assets of .96% and earnings growth of 24.06%. These goals were met for the
year, and consequently 3,000 shares were released to Mr. Boone from the
escrow account for such period. Additional shares may be released upon
achievement beyond that for threshold performance up to a total of 3,000
shares for superior performance. The criteria for superior achievement for
1993 were return on assets of 1.10% and earnings growth of 51.65%. Partial
attainment of the criteria were achieved and an additional 2,303 shares have
been released. If Mr. Boone remains employed by the Company at the, end of
the 10-year period, all shares will be released to Mr. Boone regardless of
the level of achievement of performance criteria. For Mr. Boone's equity
share bonus plan, 50% of the incentive is based on return on assets and 50%
of the incentive is based on the Company's earnings growth.
In the event of termination of Mr. Boone's employment, a certain
proportion of the shares will be forfeited, depending on the reason for
termination. In the event of retirement, all unreleased shares based on
future service will be forfeited. In the event of termination for cause, or
voluntary termination to seek other employment, all unreleased shares, and
all released shares which have not vested will be forfeited. All shares will
be released and vested immediately in the event of a change in control of the
Company, as defined in the plan.
Each participant in the plan is subject to a non-competition agreement
for 2 years after termination of employment and within a 50-mile radius of
his current location of employment. The agreement under the plan may be
terminated as to any participant for cause, on death or incapacity, or for
failure to achieve goals under the plan or any other Company performance
measure.
EMPLOYEE BENEFITS
The Company maintains a wide array of employee benefits for all
employees, including executive officers. Current plans which are provided to
employees include group health, life, long term disability, pensions, 401(k)
savings and section 125 cafeteria plan. Based on studies conducted by
compensation consultants, these benefits are considered to be competitive
when compared to peer bank and holding companies.
OTHER PERQUISITES
Other executive perquisites include split-dollar life insurance,
personal use of Company-owned automobiles, membership in Civic and Social
Clubs and relocation expenses where applicable. The degree of involvement by
the Compensation Committee with each of these varies according to the nature
of the benefit.
Although James T. Boone, President and Chief Executive Officer, is
listed below, he is listed solely in his capacity as salary administrator of
the other executive officers listed in this Proxy Statement. He is not a
member of the Compensation Committee nor does he participate in discussions
of the Compensation Committee unless called upon by the Compensation
Committee to do so. As salary administrator for the executive officers, Mr.
Boone determines the base salary compensation for the other executives who
report directly to him. This includes the individuals whose compensation is
detailed in this Proxy Statement. Mr. Boone also makes recommendations to
the Compensation Committee for inclusion in various incentive plans by these
executive officers.
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
J. Russell Flowers
J. H. Tabb
Milton J. Womack
Ray K. Smith
James T. Boone
</PAGE>
<PAGE>9
XXX BEGIN PAGE 9 HERE XXX
COMPARATIVE PERFORMANCE FOR THE COMPANY
The Securities and Exchange Commission requires the Company to present a
chart comparing the cumulative total stockholder return (including
reinvestment of dividends) on its common stock with the cumulative total
stockholder return of (1)a broad equity market index, and (2)a published
industry index or peer group. The first chart compares GSSC's common stock
with (1)the Standard and Poor's 500 Index ("S&P 500") and (2)Standard and
Poor's Major Regional Bank Index. The second chart compares GSSC's common
stock with (1)National Association of Security Dealers Automated Quotations
System (NASDAQ) and with (2)the NASDAQ Bank Index. Both charts assume an
investment of $100 on December 31, 1988. The Company used the S&P 500 Index
in last year's Proxy Statement and will use the NASDAQ Index in the future.
The NASDAQ Index is comprised of companies with an average size more similar
to GSSC and should be more appropriate for stock performance evaluations.
For this reason, both charts are shown below.
TOTAL RETURN COMPARISON
This space features two graphs. The first graph will compare the total rate
of return on GSSC common stock to 1) the S&P 500 Index and 2) the S&P
Regional Bank Index. The second graph compares the total rate of return on
GSSC common stock to 1) the NASDAQ Index and 2) the NASDAQ Bank Index. Both
graphs plot points to represent the total return amounts for the fiscal years
ending 1988 through 1993 as shown in the tables below.
<TABLE>
XXX BEGIN TABLE HERE XXX
<CAPTION>
Value of $100 Invested
December 31, 1988
Measurement Period
1988 1989 1990 1991 1992 1993
----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
GSSC $ 100 86.76 60.90 137.29 210.64 235.83
S&P 500 100 131.55 127.26 165.53 177.78 194.98
S&P Major Regional Banks 100 120.75 85.85 153.04 194.34 205.10
</TABLE>
<TABLE>
XXX BEGIN TABLE HERE XXX
<CAPTION>
Value of $100 Invested
December 31, 1988
Measurement Period
1988 1989 1990 1991 1992 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
GSSC $ 100 86.76 60.90 137.29 210.64 235.83
NASDAQ 100 121.24 102.96 165.21 192.10 219.21
NASDAQ Banks 100 111.15 81.40 133.57 194.19 221.32
</TABLE>
</PAGE>
<PAGE>10
XXX BEGIN PAGE 10 HERE XXX
MANAGEMENT REMUNERATION
The following table sets forth for the three years ended December 31,
1993, certain information as to the total remuneration received by the chief
executive officer and the four most highly paid executive officers who earn
more than $100,000 per year in salary and bonus.
<TABLE>
XXX BEGIN TABLE HERE XXX
<CAPTION>
SUMMARY COMPENSATION TABLE
-----------------------------
Long Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
- -----------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Other Restricted Underlying All
Name and Principal Year Salary Bonus Annual Stock Options/ LTIP Other
Position ($) ($) Comp. Award(s) SARs (#)(3) Payouts Comp.
($) ($)(1) ($)(4) ($)(9)
-------------------- ---- ------- ------ ------ ---------- ----------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James T. Boone 1993 245,000 45,799 2,132 129,261(2) N/A N/A 24,603
President and 1992 215,000 62,565 1,599 160,295(2) 2,327 26,030 23,190
Chief Executive 1991 175,000 38,340 1,323 48,750(2) N/A N/A 18,466
Officer
A. Jackson Huff, Jr. 1993 145,000 36,657 1,486 N/A N/A N/A 6,068
President and CEO, 1992 136,000 38,616 1,710 16,446(6) 1,472 16,466 5,336
Sunburst Bank, 1991 130,000 38,093 1,321 N/A N/A N/A 3,981
Louisiana
Don W.Ayres 1993 125,000 22,660 1,077 N/A N/A N/A 4,434
Senior Executive 1992 115,000 29,390 13,028 N/A N/A N/A 653
Vice President, 1991 26,170 N/A N/A N/A N/A N/A N/A
Sunburst Bank,
Mississippi (5)
J. Daniel Garrick,III 1993 125,000 22,039 814 N/A N/A N/A 4,647
Senior Executive 1992 107,625 30,996 538 13,022(7) 1,165 13,030 4,016
Vice President, 1991 90,850 10,486 N/A N/A N/A N/A 3,203
Sunburst Bank, MS
E. Jackson Garner 1993 130,000 15,974 922 N/A N/A N/A 4,947
Regional Executive, 1992 121,264 21,478 1,296 9,800(8) 877 9,808 4,469
Central Region, 1991 114,660 10,000 1,006 N/A N/A N/A 4,231
Sunburst Bank, MS
</TABLE>
(1) These numbers include total restricted stock awarded under Key Employees
Stock Plan for performance period 1/1/90 through 12/31/92, vested over three
years, beginning in 1993. The stock values shown are based on the stock
price on the date of award.
(2) 1993 represents $129,261, which is 5,303 shares of restricted stock based
on a January 24, 1994 stock price of $24.375 per share. 1992 includes
$134,250 of restricted stock based on a February 16, 1993 stock price of
$22.375 per share. 1991 represents $48,750 of restricted stock based on an
April 1, 1992 stock price of $16.25. This stock has been earned under the
Equity Share Bonus Plan, of which one-third vests annually beginning on award
date. Stock prices are based on price as of date of grant. At December 31,
1993, Mr. Boone owned 5,776 shares of restricted stock having an aggregate
market value of $142,956 (based on a 12/31/93 stock price of $24.750 per
share.)
(3) Represents total options awarded under Key Employees Stock Plan for the
performance period 1/1/90 through 12/31/92, with options fully exercisable
two years after grant date, conditioned on continued employment.
(4) Represents total cash award earned under Key Employees Stock Plan for
performance period 1/1/90 through 12/31/92, payable in full over three years,
conditioned on continued employment.
(5) Mr. Ayres was hired on October 9, 1991.
(6) 735 shares of restricted stock based on a February 16, 1993 stock price
of $22.375. At December 31, 1993, Mr. Huff owned 735 shares of restricted
stock having an aggregate market value of $18,191 (based on a 12/31/93 stock
price of $24.75 per share.)
(7) 582 shares of restricted stock based on a February 16, 1993 stock price
of $22.375. At December 31, 1993, Mr. Garrick owned 582 shares of restricted
stock having an aggregate market value of $14,404 (based on a 12/31/93 stock
price of $24.75 per share.)
(8) 438 shares of restricted stock based on a February 16, 1993 stock price
of $22.375. At December 31, 1993, Mr. Garner owned 438 shares of restricted
stock having an aggregate market value of $10,840 (based on a 12/31/93 stock
price of $24.75 per share.)
</PAGE>
<PAGE>11
XXX BEGIN PAGE 11 HERE XXX
(9) All other compensation is composed of the following. Life insurance is
included as follows: $827 for Mr. Boone, $1,365 for Mr. Huff, $684 for Mr.
Ayres, $618 for Mr. Garrick and $837 for Mr. Garner. Company 401(k)
contributions are included as follows: $4,497 for Mr. Boone, $4,350 for Mr.
Huff, $3,750 for Mr. Ayres, $3,750 for Mr. Garrick, and $3,900 for Mr.
Garner. Dividends on the following restricted stock earned but not yet
vested or released are listed below:
(dividends paid) 1993 1992 1991
($.72) ($.60) ($.45)
------ ------ ------
James T. Boone 26,000 30,000 30,000 (Equity Share Bonus Plan)
776 (Key Employees Stock Plan)
A. Jackson Huff, Jr. 490 (Key Employees Stock Plan)
J. Daniel Garrick, III 388 (Key Employees Stock Plan)
E. Jackson Garner 292 (Key Employees Stock Plan)
SUNBURST BANK PENSION PLAN
The following table shows the estimated annual benefits payable upon
retirement to persons in specified compensation and years-of-service
classifications. The table is based on the assumption that the employee is
retiring January 1, 1994, and has earned the maximum coverage under social
security for each year of employment.
<TABLE>
XXX BEGIN TABLE HERE XXX
<CAPTION>
PENSION PLAN TABLE
Years of Service
- -------------------------------------------------------------
Remuneration 15 20 25 30 35
- ------------ ------ ------ ------ ------- -------
<C> <C> <C> <C> <C> <C>
$ 125,000 27,552 37,569 47,586 57,603 67,620
150,000 33,426 45,568 57,710 69,852 81,995
175,000 39,302 53,569 67,836 82,103 96,370
200,000 45,177 61,569 77,961 94,353 110,745
225,000 51,052 69,569 88,086 106,603 118,800
250,000 53,599 73,038 92,476 111,915 118,800
300,000 53,599 73,038 92,476 111,915 118,800
400,000 53,599 73,038 92,476 111,915 118,800
450,000 53,599 73,038 92,476 111,915 118,800
500,000 53,599 73,038 92,476 111,915 118,800
</TABLE>
Retirement benefits are based upon a participant's average salary for
the highest 60 consecutive months of the latest 120 months of service. The
average salary is generally equal to the sum of the amounts shown under
"Salary" and "Bonus" in the Summary Compensation Table for each executive.
Benefits to married participants are generally paid as a qualified joint and
survivor annuity, and for unmarried participants benefits are generally paid
as an annuity for life. Benefits are not subject to any deduction for social
security or other offset.
The estimated credited years for the persons named in the Summary
Compensation Table are as follows: 20 years for Mr. Boone; 6 years for Mr.
Huff; 2 years for Mr. Ayres; 21 years for Mr. Garner; and 20 years for Mr.
Garrick.
EXECUTIVE EMPLOYEE AGREEMENTS
The Company entered into Executive Employment Agreements with the policy
making officers of the Company as of January 7, 1992. In the event the
executive's employment terminates after a change in control of the Company,
the executive shall be entitled to severance pay and benefits. The severance
pay shall be equal to two (2) times the average of the aggregate annual
compensation paid to the executive during the twelve calendar months
preceding the change in control of the Company. Benefits under employee
welfare benefits, principally health care, shall continue for a period of
twelve (12) months following the date of termination. Prior to a change in
control, the term of employment may be terminated by the Company at the
discretion of the Board of Directors.
</PAGE>
<PAGE>12
XXX BEGIN PAGE 12 HERE XXX
INDEPENDENT AUDITORS
KPMG Peat Marwick were the independent auditors for the Company for the
year ended December 31, 1993, and will serve as the independent auditors for
the Company for the year ended December 31, 1994. Representatives of the
firm will be present at the annual meeting and have an opportunity to make
statements if they so desire and are expected to be available to respond to
appropriate questions.
PROPOSALS OF STOCKHOLDERS
Any proposal of a shareholder to be presented for action at the annual
meeting of stockholders to be held April 17, 1995 must be received at the
Company's principal executive offices no later than November 21, 1994 if it
is to be included in management's Proxy Statement. Proposals should be
directed to the attention of James T. Boone, President and Chief Executive
Officer.
OTHER MATTERS
Management knows of no other matters that may properly be, or which are
likely to be, brought before the meeting. However, if any other matters are
properly brought before the meeting, the persons named in the enclosed Proxy
or their substitutes will vote in accordance with the recommendations of
management on such matters unless authority is expressly withheld.
By order of the Board of Directors
/s/ James T. Boone
---------------------------
James T. Boone
Chief Executive Officer
Dated March 18, 1994
</PAGE>
<PAGE>13
XXX BEGIN PAGE 13 HERE XXX
PROXY
GRENADA SUNBURST SYSTEM CORPORATION
GRENADA, MISSISSIPPI
ANNUAL MEETING OF STOCKHOLDERS
APRIL 18, 1994
The undersigned hereby appoint(s) Robert E. Kennington, II, J. M.
Robertson, Jr. and John T. Keeton, Jr., or any one of them the true and lawful
attorneys in fact for the undersigned, with full power of substitution to vote
as Proxies for the undersigned at the annual meeting of Stockholders of Grenada
Sunburst System Corporation to be held at the Corporate Administration Building,
2000 Gateway, Grenada, Mississippi, at 1:00 p.m., Central Standard Time, on
April 18, 1994, and at any and all adjournments thereof, the number of shares
which the undersigned will be entitled to vote if then personally present, for
the following purposes:
1. Election of J. Russell Flowers, John T. Keeton, Jr. and Robert E.
Kennington, II as members of the Board of Directors of the Grenada Sunburst
System Corporation.
Approve_________ Disapprove_________ Withhold Authority____________
You may withhold authority to vote for any of the below listed nominees by
lining through or striking out the name of any such nominee:
J. Russell Flowers, John T. Keeton, Jr. and Robert E. Kennington, II
If you do not indicate above that you withhold authority to vote for any
nominee, you shall be deemed to have granted such authority.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
2. Such other matters as may properly be brought before the meeting or any
adjournment(s) thereof.
Approve__________ Disapprove__________ Withhold Authority_____________
This Proxy, which is solicited on behalf of the Board of Directors of the
Grenada Sunburst System Corporation, will be voted for the above proposals,
unless a contrary direction is indicated, in which case it will be voted as
directed.
NOTE: Please date Proxy and sign exactly as name appears below. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, or guardian, please give full title as such.
If signer is corporation, please sign full corporate name by authorized
officer.
___________________________________
Signature
___________________________________
Date
___________________________________
Signature if held jointly
___________________________________
Date
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
