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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE SAVANNAH BANCORP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the
appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(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 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:
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THE SAVANNAH BANCORP, INC.
25 BULL STREET
SAVANNAH, GEORGIA 31401
March 24, 1999
Dear Shareholder,
The 1999 Annual Meeting of The Savannah Bancorp, Inc. will be held at 10:00
a.m. on Tuesday, April 20, 1999, at the Marriott Savannah Riverfront, Savannah,
Georgia. The directors and officers join me in inviting you to attend the
meeting.
Enclosed are the Secretary's official Notice Of Annual Meeting, a Proxy
Statement and a Form of Proxy. Please sign the proxy and return it in the
enclosed self-addressed envelope so that your shares will be voted at the
meeting if you are unable to attend.
We look forward to seeing you on April 20.
Sincerely,
/s/ Archie H. Davis
Archie H. Davis
President and Chief
Executive Officer
Enclosures
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THE SAVANNAH BANCORP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 20, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
Savannah Bancorp, Inc. (the "Company") will be held at the Marriott Riverfront
Savannah, 100 General McIntosh Boulevard, Savannah, Georgia, on April 20, 1999,
at 10:00 a.m., Eastern Daylight Time, for the purpose of considering and acting
upon the following matters:
(1) To elect six Directors of the Third Class to serve until the annual
meeting of shareholders in 2002.
(1) To transact such other business as may come properly before the
Annual Meeting or any adjournments thereof.
Only stockholders of record of The Savannah Bancorp, Inc. at the close
of business on February 26, 1999, are entitled to notice of and to vote at the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ J. Wiley Ellis
J. Wiley Ellis
Chairman of the Board
March 19, 1999
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY TO
THE COMPANY IN THE ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY. YOUR VOTE IS IMPORTANT, WHETHER
YOU OWN A FEW SHARES OR MANY.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE IN FAVOR OF THE PROPOSALS REFERRED TO ABOVE AND DESCRIBED IN THE
ACCOMPANYING PROXY STATEMENT.
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PROXY STATEMENT
INTRODUCTION
GENERAL
This Proxy Statement is being furnished to the shareholders of The Savannah
Bancorp, Inc. (the "Company") in connection with the solicitation of Proxies by
and on behalf of the Board of Directors of the Company from holders of the
outstanding shares of the $1.00 par value common stock of the Company (the
"Common Stock") for use at the Annual Meeting of Shareholders of the Company to
be held at the Marriott Riverfront Savannah, 100 General McIntosh Boulevard,
Savannah, Georgia, on April 20, 1999, at 10:00 a.m., Eastern Daylight Time.
The Board of Directors has fixed the close of business on February 26, 1999, as
the record date for determination of the shareholders entitled to receive notice
of and to vote at the Annual Meeting. Accordingly, only holders of record of the
Common Stock at the close of business on that day will be entitled to vote at
the Annual Meeting. At the close of business on that day, there were 2,719,614
shares of Common Stock issued and 2,687,564 shares outstanding. Shares of Common
Stock represented by properly executed Proxies, if such Proxies are received in
time and are not revoked, will be voted at the Annual Meeting in accordance with
any instructions indicated in such Proxy. IF NO INSTRUCTIONS ARE INDICATED, such
shares will be voted FOR the election of six persons as Directors of the Company
and in the discretion of the persons designated in the Proxies as to any other
matter that may come properly before the Annual Meeting.
A shareholder who has submitted a Proxy may revoke it at any time prior to its
exercise at the Annual Meeting by either (I) giving written notice of revocation
to the Secretary of the Company, (ii) properly submitting to the Company a duly
executed Proxy bearing a later date or (iii) voting in person at the Annual
Meeting. All written notices of revocation and other communications with respect
to revocation of Proxies should be addressed as follows: The Savannah Bancorp,
Inc., 25 Bull Street, Savannah, Georgia 31401, Attention: J. Curtis Lewis III,
Secretary.
This Proxy Statement is dated March 19, 1999, and is first being mailed to the
shareholders of the Company on or about March 24, 1999. The 1998 Annual Report
to Shareholders of the Company, including financial statements for the year
ended December 31, 1998, has been mailed to shareholders with this Proxy
Statement.
The principal executive offices of the Company are located at 25 Bull Street,
Savannah, Georgia 31401, and the telephone number of the Company at that address
is (912) 651-8200. Where the context requires in this Proxy Statement, the term
the "Company" may be used to refer collectively to the Company and its
subsidiaries, The Savannah Bank, N.A. ("Savannah Bank") and Bryan Bank & Trust
("Bryan Bank"), collectively referred to as the "Banks."
PROPOSAL I
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three Classes, with the
terms of office of each Class ending in successive years. The terms of Directors
of the Third Class expire at this Annual Meeting. The Directors of the First
Class and the Second Class will continue in office. Currently there are six
Directors in the First and Third Class and five Directors in the Second Class.
The shareholders are being asked to vote on the reelection of the Directors in
the Third Class.
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The shares represented by the enclosed Proxy will be voted for the election of
the six nominees whose names appear below. In the event that any nominee is
unable to serve (which is not anticipated), the Proxies will cast votes for the
remaining nominees and for such other persons as they may select. A plurality of
the votes cast by the shares of Common Stock represented at the Annual Meeting,
at which a quorum must be present, is required for the election of the Directors
listed, as well as for the approval of all other proposals to be acted upon at
the Annual Meeting. Cumulative voting for Directors is not permitted.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE SIX
NOMINEES LISTED BELOW.
The following table sets forth the name of each nominee Director and each
Director continuing in office; a description of his or her positions and offices
with the Company (other than as a Director), if any; a brief description of his
or her principal occupation and business experience during at least the last
five years; directorships presently held by him or her in other companies with
registered securities; and certain other information including his or her age
and the number of shares of Common Stock beneficially owned as of February 26,
1999. For information concerning membership of committees of the Board of
Directors and other information, see "Proposal I - Election of Directors -
Information About the Board of Directors and Certain Committees."
All reports required pursuant to the insider trading regulations were
filed timely with the exception of the Form 5's filed by the new directors.
These were filed approximately one week late due to their first time for filing
under the insider trading rules.
NAME, AGE, AND YEAR AMOUNT AND
FIRST ELECTED OR NATURE OF PERCENT
APPOINTED A DIRECTOR INFORMATION ABOUT NOMINEE OR BENEFICIAL OF
OR EXECUTIVE OFFICER DIRECTOR CONTINUING IN OFFICE OWNER-SHIP(1) CLASS(2)
- -------------------- ----------------------------- ------------- --------
NOMINEES FOR DIRECTOR
THIRD CLASS
TERM EXPIRING ANNUAL MEETING 2002
Archie H. Davis (57) Mr. Davis is President and Chief 104,741 (3) 3.82
1989 Executive Officer of the Company
and Savannah Bank and a director
of Bryan Bank. Mr. Davis is also
a Director of Thomaston Mills,
Inc., a textile company head-
quartered in Thomaston, Georgia
and the Savannah Electric and
Power Company, a subsidiary of
the Southern Company.
Julius Edel (69) Mr. Edel has been President of 35,570 (4) 1.32
1989 Alexander Brothers Co., Savannah,
Georgia, previously a work clothes
manufacturing company and since
1985 a holding company for various
investments.
L. Carlton Gill (58) Mr. Gill has been employed by 66,109 (5) 2.46
1998 S. A. Allen, Inc. as a procure-
ment forester since 1964.
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Jack M. Jones (62) Mr. Jones was Chairman of the 18,425 (6) 0.68
1989 Board of Harbour Resources, Inc.,
a rehabilitation services company.
During 1993, Mr. Jones sold his
interest in Harbour Resources,
Inc. He is currently a private
investor.
Jack W. Shearouse (68) Mr. Shearouse is the President of 32,725 1.21
1989 Shearouse Lumber Company, a whole-
sale and retail lumber company in
Pooler, Georgia. Mr. Shearouse has
been employed there since 1957.
Robert T. Thompson, Mr. Thompson has been employed by 39,579 (7) 1.47
Jr. (58) CSX Incorporated, a railroad
1998 company, since 1962. He was owner
of The Hub, a men's clothing store
from 1985 to 1989.
DIRECTORS CONTINUING IN OFFICE
FIRST CLASS
TERM EXPIRING ANNUAL MEETING 2000
Robert H. Demere, Mr. Demere is President of 30,509 (8) 1.13
Jr. (50) Colonial Group, Inc., a
1989 petroleum marketing company
in Savannah, Georgia.Mr.
Demere has been employed by
Colonial since 1974.
Robert W. Groves, Mr. Groves is Chairman of the 20,625 0.77
III (49) Board of Strachan Shipping
1989 Company, Savannah, Georgia,
a stevedoring and ship agency
company with offices in most
major United States ports. Mr.
Groves has been employed by
Strachan Shipping Company
since 1973.
J. Curtis Lewis, Mr. Lewis is Secretary of the 40,815 (9) 1.52
III (46) Company and the Bank. Since
1989 1980, Mr. Lewis has been a
partner in the law firm of
Hunter, Lewis & Brannon in
Savannah, Georgia.
M. Lane Morrison (53) Mr. Morrison is a partner in the 21,450 (10) 0.80
1989 law firm of Hunter, Maclean,
Exley & Dunn, PC, Savannah,
Georgia. From 1993 through 1995
he was a partner in the law firm
of Miller, Simpson and Tatum,
Savannah, Georgia.
James Toby Roberts, Mr. Roberts has been President 48,213 (11) 1.79
Sr. (54) and owner of Roberts Truck Center,
1998 Savannah, GA since 1969.
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James W. Royal (50) Mr. Royal is President of Royal 39,336 (12) 1.46
1998 Brothers, Inc., engaged in the
retail hardware business in the
Richmond Hill area under the name
of Royal True Value and Village
True Value Hardware Stores
since 1980.
SECOND CLASS
TERM EXPIRING ANNUAL MEETING 2001
E. James Burnsed (59) Mr. Burnsed has served as Vice 62,982 (13) 2.32
1998 Chairman of the Company since
December 1998 and Chairman & CEO
of Bryan Bank & Trust since January
1999. He served as President & CEO
of Bryan Bancorp of Georgia, Inc.
and Bryan Bank & Trust from 1989
until January 1999.
Russell W.Carpenter(58) Mr. Carpenter is the President of 16,500 0.61
1989 Minis & Co., an investment advisory
firm in Savannah, Georgia. Mr.
Carpenter has been with this firm
since 1972.
J. Wiley Ellis (58) Mr. Ellis is the Chairman of the 23,265 (14) 0.86
1989 Board of Directors of the Company
and Savannah Bank and also serves
as their general counsel. He has
been a partner in the law firm of
Ellis, Painter, Ratterree & Bart
LLP since March 1, 1996. He was
President of the law firm of Adams
& Ellis, P.C., Savannah, Georgia,
from 1982 through February, 1996.
Aaron M. Levy (58) Mr. Levy is President of Levy 21,450 (15) 0.80
1989 Jewelers, a chain of four jewelry
stores in Savannah, Georgia. Mr.
Levy has been employed by Levy
Jewelers, Inc. since 1962.
Penelope S. Wirth (56) Mrs. Wirth was the owner and prin- 28,875 1.07
1989 cipal broker of Investment Real
Estate Company, Savannah, Georgia,
from 1978 - 1998. She is currently
a private investor.
All Directors and executive
officersas a group (20 persons) 714,171 25.20
(1) Information relating to beneficial ownership by Directors is based upon
information furnished by each Director using "beneficial ownership"
concepts set forth in rules promulgated by the Securities and Exchange
Commission under Section 13(d) of the Securities and Exchange Act of
1934. If not footnoted, the shares are owned with voting and dispositive
rights. Certain Director's shares include 4,125 option shares granted in
April 1990 and exercisable through April 10, 2000, in conjunction with
the initial public offering.
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(2) The percent of class is calculated on the assumption that a person's
options have been exercised and that the total number of issued and
outstanding shares of the Company have been increased correspondingly.
(3) Davis - Of the 104,741 shares beneficially owned by Mr. Davis, 24,750 are
owned individually, 18,353 shares are in his IRA, 5,250 are owned by his
children, 1,305 are owned by his wife and 1,458 shares are in his 401(k)
balance and also included are 4,125 options and 49,500 incentive stock
options.
(4) Edel - Of the 35,570 shares beneficially owned by Mr. Edel, 26,000 are
owned individually and 9,570 shares are in his IRA.
(5) Gill - Of the 66,109 shares beneficially owned by Mr. Gill, 41,190 shares
are owned jointly with his wife, 1,979 shares are in his IRA, 2,220
shares are in his wife's IRA, 19,610 shares are owned by the estate of
Louis C. Gill, of which he is the Executor and 1,110 shares are owned by
his children.
(6) Jones - Of the 18,425 shares beneficially owned by Mr. Jones, 14,300
shares are in his IRA and 4,125 shares represent the options.
(7) Thompson - Of the 39,579 shares beneficially owned by Mr. Thompson,
33,316 shares are owned individually, 1,996 are in his IRA, 3,342 shares
are in his wife's IRA, and 925 shares are owned by his children.
(8) Demere - Of the 30,509 shares beneficially owned by Mr. Demere, 23,255
are owned individually, 1,650 shares are in his IRA and 5,604 are owned
by his children.
(9) Lewis - Of the 40,815 shares beneficially owned by Mr. Lewis, 20,460
shares are owned individually, 10,200 shares are in his IRA and money
purchase retirement plan and 10,155 shares are owned by his children.
(10) Morrison - Of the 21,450 shares beneficially owned by Mr. Morrison,
10,725 are owned individually, 4,125 shares are in his IRA, 6,600 shares
are in an income trust for his benefit.
(11) Roberts - Of the 48,213 shares beneficially owned by Mr. Roberts, 37,900
shares are owned individually, 5,503 shares are in his IRA, 1,110 shares
are owned by his wife and 3,700 shares are owned by his children.
(12) Royal - Of the 39,336 shares beneficially owned by Mr. Royal, 35,636
shares are owned individually, 3,330 shares are in his IRA and 370
shares are owned by his children.
(13) Burnsed - Of the 62,982 shares beneficially owned by Mr. Burnsed, 29,048
shares are owned individually, 10,458 shares are in his IRA, 370 shares
are owned by his wife individually and 906 shares are in his wife's IRA
and 22,200 represent exercisable stock options.
(14) Ellis - Of the 23,265 shares beneficially owned by Mr. Ellis, 6,765 are
owned individually, 12,375 shares are in his IRA and 4,125 shares are
owned by a trust for his wife of which he is the trustee.
(15) Levy - Of the 21,450 shares beneficially owned by Mr. Levy, 4,125 are
owned individually, 12,375 shares are in his company, 825 shares are
owned by his wife and 4,125 shares represent the options.
MANAGEMENT STOCK OWNERSHIP
As of February 26, 1999, based on available information, all Directors and
executive officers of the Company as a group (20 persons) beneficially owned
708,621 shares of Common Stock, which represented approximately 25 percent of
the outstanding shares and exercisable options at that date. The foregoing
figure includes, in some instances, shares in which members of a Director's or
officer's immediate family have a beneficial interest by reason of shared voting
or investment power and as to which the Director or officer may disclaim
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beneficial ownership. For additional information with respect to the options
that have been granted to Directors and certain officers, see footnote (2)
above.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
The Board of Directors of the Company held four regular and four special
meetings during 1998. All Directors attended at least 75 percent of the
meetings. The Board of Directors of the Bank held 12 regular meetings and no
special meetings. All Directors attended at least 75 percent except Jack W.
Shearouse.
EXECUTIVE COMMITTEE. The Executive Committee for the Company was appointed
in January 1999. It is composed of four outside directors from The Savannah
Bank, N.A. and two outside directors from Bryan Bank & Trust. Messrs. Davis
and Burnsed serve as ex officio members of the Executive Committee. The
regular Executive Committee meetings are held during the eight "between
months" of the four quarterly board meetings. The Executive Committee's focus
is strategic in nature. Messrs. J. Wiley Ellis, Chairman, Russell W. Carpenter,
Robert H. Demere, Jr., J. Curtis Lewis III James Toby Roberts, Sr. and James W.
Royal serve on this Committee. No meetings have been missed by any of the
members since its inception.
AUDIT COMMITTEE. The Audit Committee serves as a liaison between the Board of
Directors and the independent accountants of the Company. The Committee
approves the overall scope of the audit, reviews the results of the audit and
reviews the systems of internal control of the Company. During the fiscal year
ended December 31, 1998, the Audit Committee met three times. The Committee
was composed of Messrs. J. Curtis Lewis III, Chairman, Robert H. Demere, Jr.,
Julius Edel, Robert W. Groves III, Jack M. Jones, M. Lane Morrison, Jack W.
Shearouse and Penelope S. Wirth.
PERSONNEL/COMPENSATION COMMITTEE. The Compensation Committee reviews and
approves proposed direct compensation of officers, reviews and recommends to
the Board incentive plans and benefit plans and reviews general compensation
and benefits policy. The members of the Compensation Committee were Messrs.
Jack M. Jones , Chairman, Russell W. Carpenter, Julius Edel, Robert W. Groves
III, J. Curtis Lewis and Jack W. Shearouse. The Compensation Committee held
two meetings in 1998.
The following contains certain information about executive officers of the
Company and the Bank who are not Directors.
NAME AND YEAR FIRST
ELECTED AN OFFICER POSITIONS HELD AND PRINCIPAL
OF THE COMPANY AGE OCCUPATION LAST FIVE YEARS
- ------------------- --- ----------------------------
R. Stephen Stramm 49 Executive Vice President -
1990 Lending of the Company and
Savannah Bank.
Robert B. Briscoe 47 Chief Financial Officer of
1990 the Company Executive Vice
President and Chief Financial
Officer of the Bank.
EXECUTIVE COMPENSATION AND BENEFITS
The tables below set forth certain information concerning compensation paid to
the most highly compensated executive officers whose cash compensation exceeded
$100,000 ("Named Executive Officers") for services in all capacities during the
years ended December 31, 1998, 1997 and 1996. Incentive stock options for 10,000
shares were granted to Mr. Burnsed in 1998 as specified in the Bryan merger
agreement. No other options or stock appreciation rights were granted to Named
Executive Officers.
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SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation (1) Awards
------------------------------ ----------------------
Name and Other Annual All Other
Principal Compen- Options/ Compen-
Position (2) Year Salary Bonus sation (3) SARs(4) sation (5)
- ------------ ---- -------- ------- ---------- -------- -----------
Archie H. Davis 1998 $145,000 $21,411 $ 9,534 0 $5,600
President & CEO 1997 145,000 21,048 8,253 0 5,600
1996 135,000 19,900 7,527 24,750 4,650
E. James Burnsed 1998 $ 90,000 $40,678 $152,466 (6) 10,000 $9,600
Vice Chairman and 1997 90,000 36,483 65,242 (6) 0 9,550
Chairman & CEO 1996 90,000 32,700 2,152 0 5,821
Bryan Bank & Trust
R. Stephen Stramm 1998 $ 97,500 $14,397 $ 2,475 0 $5,326
Executive Vice 1997 97,500 14,124 2,324 0 5,309
President-Lending 1996 90,000 13,300 2,299 12,375 4,902
(1) No compensation has been deferred.
(1) Only three executive officers have salary and bonus compensation that
exceeds $100,000.
(1) Includes club dues, directors fees and excess premiums on group life
insurance.
(1) Amounts shown represent the number of shares underlying stock options
granted each year.
(5) Amounts contributed on behalf of Messrs. Davis, Burnsed and Stramm to
their respective Company's Employee Savings and Profit Sharing Plan.
(6) Mr. Burnsed's other annual compensation includes personal use of auto and
income resulting from the exercise of nonqualified stock options in 1998
and 1997.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Number of
Securities Exercise Grant
Underlying % of Total Price Date
Options/SARs Options/SARs Per Expiration Present
Name Granted in Fiscal Year Share Date Value
- ---------------- ------------ -------------- ------- ---------- -------
E. James Burnsed 10,000 68% $25.63 12/14/08 $104,600
AGGREGATED YEAR-END OPTION VALUES
Shown below is information with respect to unexercised options to purchase
the Company Common Stock held by the Named Executive Officers at December 31,
1998.
<TABLE>
<CAPTION>
(1)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARS Options/SARS
# of Shares at Year-End(#) at Year-End($)
Acquired Value -------------------------- --------------------------
Name on Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ----------- ----------- ----------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Davis 0 0 53,625 0 $853,710 $ 0
Mr. Stramm 0 0 24,750 0 385,729 0
Mr. Burnsed 4,000 $140,200 12,000 10,000 240,520 3,700
</TABLE>
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(1) "Value" is calculated as the market price of the underlying securities on
December 31, 1998 minus the grant price which ranges from $5.76 to $25.63.
The market price has been determined as the closing price of the Company's
stock as quoted on the Nasdaq National Market, which was $26.00 per share
on December 31, 1998.
Directors were paid $500 per month as Director fees and no committee fees. The
Chairman of the Board received an extra $500 per month, and the Secretary
received an extra $250 per month for their additional responsibilities.
Non-employee executive committee directors receive $250 for each meeting
attended.
The Company entered into change in control agreements in February 1996 with Mr.
Davis, Mr. Stramm and Mr. Briscoe. Change in control agreements were entered
into with Mr. Burnsed and G. Michael Odom, President and Chief Operation Officer
of Bryan Bank in December 1998 under the terms of the merger agreement with
Bryan Bancorp of Georgia, Inc. Each of said agreements provides that the
employee shall continue to receive the same level of compen-sation for a period
of one year after a "change in control" occurs, and if terminated without cause
during the one-year period immediately following a "change in control", shall
continue to receive the same level of compensation for a period of one year
after such termination without cause. A "change in control" is a sale of all or
a substantial portion of the Company's assets, a merger or other reorganization
whereby the Company is not the surviving entity or a change in control as
defined by the OCC. Also, under the terms of the Bryan merger, the Company has
written employment agreements with Messrs. Burnsed and Odom that provide for a
continuance through December 2001 of similar benefits as they had at the time of
the merger.
The Bank has an incentive compensation arrangement with Messrs. Davis and Stramm
in which they can earn a performance bonus up to 20 percent of their annual
compensation, if the Bank achieves certain specified earnings, growth and
expense control objectives set forth by the Board of Directors. Mr. Burnsed has
an incentive compensation arrangement with Bryan Bank & Trust where he earns a
percentage of the Bryan Bank profits over a base amount. This incentive
compensation formula was in place for all three years presented.
COMPENSATION COMMITTEE REPORT
Decisions with respect to the compensation of the Company's Named Executive
Officers are made by the Compensation Committee (the "Committee"). During 1998,
the following non-employee Directors served on the Committee: Messrs. Jack M.
Jones , Chairman, Russell W.Carpenter, Julius Edel, Robert W. Groves III,
J. Curtis Lewis III and Jack W. Shearouse. All decisions of the Committee
relating to compensation are reviewed by the full Board of Directors. The
report of the Committee presented below addresses the Company's compensation
policies for 1998 with respect to Mr. Davis as CEO, as well as the Named
Executive Officers as a group.
GENERAL COMPENSATION POLICIES. The Company has a formal compensation plan
designed to compensate executives for actions deemed to promote long-term
shareholder value. These objectives require that compensation arrangements be
structured to: (1) provide competitive levels of compensation opportunity which
are reflective of the degree of risk inherent in the Company's business plan and
the contributions expected from senior executives; (2) integrate pay with the
Company's business strategies, short-term and long-term performance goals, and
results; (3) reward corporate performance achievements; and (4) recognize and
reward individual initiative, responsibility and achievements. The Committee
believes that stock ownership by management and stock-based performance
compensation arrangements are beneficial in aligning management and shareholder
interests in the enhancement of shareholder value. Base salaries are set by the
Board, after recommendation by the Committee, and are intended to reflect
individual performance and responsibility and to represent compensation believed
by the Committee to be appropriate if the Named Executive Officers perform in a
fully acceptable manner. In setting base salaries, consideration is also given
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to compensation paid to executives of financial institutions and other public
companies similar in size and character to the Company.
The Committee has established a compensation package consisting of base salary,
short-term incentive compensation in the form of cash bonuses based on the
performance of the Company, and long-term incentive compensation in the form of
incentive stock options.
COMPENSATION PAID IN 1998. The Company's policy as to compensation of its
executive officers, including the CEO, has to date been based upon level of
performance in relation to the responsibilities and accomplishments incident to
the individual's job description. In determining compensation, the Committee
considers the progress made by the Company in laying a foundation for future
revenue enhancements, income improvements, growth of the Company, and quality of
the loan portfolio.
Compensation paid the Named Executive Officers in 1998 consisted of the
following elements: base salary, bonus, incentive stock options and matching
contributions paid with respect to the Company's 401(k) Plan. Contributions made
by the Company under the 401(k) Plan are made to all participating employees on
a nondiscriminatory basis. The Company also has certain broad-based employee
benefit plans in which Named Executive Officers participate. The value of these
items is set forth in the Summary Compensation Table above under "All Other
Compensation." Named Executive Officers also may have received perquisites in
connection with their employment. However, such perquisites totaled less than
10% of their cash compensation in 1998. Except for bonuses and restricted stock,
the foregoing benefits and compensation are not directly or indirectly tied to
Company performance.
During 1998, total assets of the Company grew 16 percent, operating net income
increased 9 percent and operating return on average assets and average equity
increased to 1.30 percent and 13.57 percent, respectively. The Company
consummated a merger with Bryan Bancorp of Georgia, Inc. at a fair price that
significantly improved the Company's return on equity, return on assets and
earnings per share as compared to the results without the merger.
Based on Company performance, the Named Executive Officers received bonuses of
approximately 15% of their annual base salaries except for Mr. Burnsed, who
received $40,678, or 45 percent of his base salary based on a pre-existing
compensation formula for the Bryan Bank & Trust executive officers.
MR. DAVIS' 1998 COMPENSATION. Mr. Davis' 1998 compensation consisted of a base
salary and a quarterly cash bonus which totaled approximately 15 percent of
base salary for the year. Mr. Davis' base salary of $145,000 plus director's
fees of $6,000 was determined by the Committee at the beginning of the 1998 for
the year. No increase in base salary was made for 1998. Mr. Davis' cash bonus
for 1998 was determined based on specified quarterly performance goals
consisting of core earnings, loan growth, deposit growth and expense control.
These same measures were also used for the other executive officers. The
performance goals were mostly met with a pro rata reduction in the bonus
payout for the unmet goals.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. Mr. Carpenter's
company, Minis & Co., serves as an approved investment advisor for the trust
department of The Savannah Bank, N.A. The trust department serves as custodian
for certain Minis & Co. clients. Mr. Lewis, an attorney, is not general counsel
but does handle certain loan related transactions for The Savannah Bank, N.A.
Management, with the approval of the Board, from time to time engages a
compensation consultant to provide relevant analyses and compensation
alternatives to the Compensation Committee and the Board. No consultant was
engaged in 1998, but it is anticipated that one will be engaged in 1999 to
review the compensation and benefits packages for the officers and employees of
the Banks.
12
<PAGE>13
STOCK PERFORMANCE GRAPH
The following table provides a graphic comparison of the cumulative total
shareholder return (calculated based upon the stock appreciation) on the Common
Stock of the Company for the five-year period from December 31, 1993 through
December 31, 1998 with the cumulative total return on the NASDAQ Market Index,
the S&P 500 Total Return Index and the SNL less than 250M Bank Asset-Size Index
over the same period. All cumulative returns assume an initial investment of
$100 in each of the Company's shares and their investment of all dividends.
A graph prepared by SNL Securities based on the
graph information below, which was provided by
them was furnished to shareholders in this
space.
Following are the data points in which the corporate performance graph is based.
<TABLE>
<CAPTION>
PERIOD ENDING
----------------------------------------------------------
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ---------------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Savannah Bancorp, Inc. 100.00 117.60 237.59 292.70 421.70 475.54
S &P 500 Total Return Index 100.00 101.32 139.39 171.26 228.42 293.69
Nasdaq - Total US 100.00 97.75 138.26 170.01 208.58 293.21
SNL less than $250M Bank Asset -
Size Index 100.00 106.82 150.22 189.79 309.70 294.39
</TABLE>
The data included in the foregoing table was prepared by SNL Securities. The SNL
less than $250M Bank Asset-Size Index of banking companies with total assets
less than $250 million in assets. This represents the peer group comparison.
The S & P Total Return Index and the Nasdaq - Total US Index are both broad
market indexes. In prior years, the Company filed under the Securities and
Exchange Commission's Form 10-KSB regulations which did not require a corporate
performance graph or compensation committee report in the proxy statement to
shareholders.
13
<PAGE>14
OWNERSHIP OF EQUITY SECURITIES
As of March 24, 1998, there were no shareholders known by the Company to be the
beneficial owner, as defined by SEC rules, of five percent or more of the
outstanding shares of Common Stock.
OTHER MATTERS
CERTAIN TRANSACTIONS
The Bank has granted loans to certain Directors of the Bank and to their
associates. The aggregate amounts of loans were $6.701 million and $6.065
million at December 31, 1998 and 1997, respectively. During 1998, $3.944 million
of new loans were made, and repayments totaled $4.580 million. Unused lines of
credit available to related parties aggregated $682,000 and $.998,000 at
December 31, 1998 and 1997, respectively. Related party loans are made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated persons and
does not involve more than normal risk of collectibility. No other related party
transactions or services rendered to the Company or the Bank exceeded $60,000
except for legal fees of $60,871 paid to Chairman Ellis' lawfirm, Ellis,
Painter, Ratteree & Bart LLP, during 1998, primarily in connection the merger
with Bryan Bank. There are no family relationships between directors and/or
executive officers.
PROXY SOLICITATION
The cost of soliciting Proxies for the Annual Meeting will be paid by the
Company. In addition to solicitation of shareholders of record by mail,
telephone or personal contact, the Company will be contacting brokers, dealers,
banks or voting trustees or their nominees who can be identified as record
holders of Common Stock. Such holders, after inquiry by the Company, will
provide information concerning quantities of Proxy materials and 1998 Annual
Reports needed to supply such information to beneficial owners, and the Company
will reimburse them for the expense of mailing Proxy materials and 1998 Annual
Reports to such owners.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 2000 Annual Meeting of
the Company must be received by the Company on or before February 15, 2000 to be
included in the Proxy Statement and Form of Proxy relating to the 2000 Annual
Meeting of Shareholders. Proposals should be directed to The Savannah Bancorp,
Inc., 25 Bull Street, Savannah, Georgia 31401, Attention: J.
Curtis Lewis III, Secretary.
MISCELLANEOUS
The management of the Company knows of no other matters that are to be presented
for action at the Annual Meeting. If any other matters are brought properly
before the Annual Meeting, the persons designated in the enclosed Proxy will
vote on such matters in accordance with their best judgment.
UPON THE WRITTEN REQUEST OF ANY PERSON WHOSE PROXY IS SOLICITED BY THIS PROXY
STATEMENT, THE COMPANY WILL FURNISH TO SUCH PERSON WITHOUT CHARGE (OTHER THAN
FOR EXHIBITS) A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1998, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES
THERETO, AS FILED WITH THE SEC. REQUESTS SHOULD BE DIRECTED TO THE SAVANNAH
BANCORP, INC., PO BOX 188, SAVANNAH, GEORGIA 31402, ATTENTION: ROBERT B.
BRISCOE, CHIEF FINANCIAL OFFICER.
