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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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1
<PAGE>2
THE SAVANNAH BANCORP, INC.
25 Bull Street
Savannah, Georgia 31401
March 17, 2000
Dear Shareholder,
The 2000 Annual Meeting of The Savannah Bancorp, Inc. will be held at 11:00
a.m. on Tuesday, April 18, 2000, at the Hyatt Regency Savannah, 2 West Bay
Street, 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.
Shareholders who own stock in brokerage accounts and receive this information
from ADP Proxy Services may also vote their shares using the internet. Please
follow the instructions on the enclosed voting materials.
We look forward to seeing you on April 18.
Sincerely,
/s/ Archie H. Davis
Archie H. Davis
President and Chief
Executive Officer
Enclosures
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<PAGE>3
THE SAVANNAH BANCORP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
Savannah Bancorp, Inc. (the "Company") will be held at the Hyatt Regency
Savannah, 2 West Bay Street, Savannah, Georgia, on April 18, 2000, at 11:00
a.m., Eastern Daylight Time, for the purpose of considering and acting upon the
following matters:
I. To elect six Directors of the First Class to serve until the annual
meeting of shareholders in 2003.
II. To approve an additional 100,000 incentive stock option shares for future
issuance under the Incentive Stock Option Plan adopted by the
shareholders in 1995.
III. To ratify the appointment of BDO Seidman, LLP as independent accountants
to audit the Company's financial statements for the year 2000.
IV. 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 March 3, 2000, 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 17, 2000
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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<PAGE>4
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 Hyatt Regency Savannah, 2 West Bay Street, Savannah, Georgia, on
April 18, 2000, at 11:00 a.m., Eastern Daylight Time.
The Board of Directors has fixed the close of business on March 3, 2000 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 2,711,364 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 (a) For the election of six persons as Directors of the
Company, (b) For the approval of an additional 100,000 incentive stock option
shares for future issuance under the Incentive Stock Option Plan adopted by the
shareholders in 1995, (c) to ratify the appointment of BDO Seidman, LLP, and (d)
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 17, 2000, and is first being mailed to the
shareholders of the Company on or about March 22, 2000. The 1999 Annual Report
to Shareholders of the Company, including financial statements for the year
ended December 31, 1999, 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 First Class expire at this Annual Meeting. The Directors of the Second
Class and the Third Class will continue in office. Currently there are six
Directors in the First Class and five Directors in the Second and Third Classes.
The shareholders are being asked to vote on the reelection of the Directors in
the First Class.
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.
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<PAGE>5
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 March 3, 2000.
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 reports for Mr. Burnsed and Mr. Briscoe, EVP &
CFO, who each exercised options during 1999 and did not correctly report the
transactions.
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
First Class
Term Expiring Annual Meeting 2000
Robert H. Demere, Mr. Demere is President of 30,509 (3) 1.13
Jr.(51) Colonial Group,Inc.,
1989 a 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 (4) 0.76
III (50) Board of Strachan Shipping
1989 Company, Savannah, Georgia,
a stevedoring and terminal
company. Mr. Groves has been
employed by Strachan Shipping
Company since 1973.
J. Curtis Lewis Mr. Lewis is Secretary of the 41,345 (5) 1.53
III (47) Company and the Bank. Since
1989 1980, Mr. Lewis has been a
partner in the law firm of
Hunter & Lewis, LLP in
Savannah, Georgia.
M. Lane Morrison (54) Mr. Morrison is a partner in 21,450 (6) 0.79
1989 the 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 49,213 (7) 1.82
Sr. (55) and owner of Roberts Truck
1998 Center, Savannah, GA since 1969.
James W. Royal (51) Mr. Royal is President of 40,161 (8) 1.48
1998 Royal 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.
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<PAGE>6
DIRECTORS CONTINUING IN OFFICE
Second Class
Term Expiring Annual Meeting 2001
E. James Burnsed (60) Mr. Burnsed has served as Vice 70,882 (9) 2.59
1998 Chairman of the Company since
December 1998 and Chairman & CEO
of Bryan Bank since January 1999.
He served as President & CEO of
Bryan Bancorp of Georgia, Inc.
and Bryan Bank from 1989 until
January 1999.
Russell W. Carpenter (59) Mr. Carpenter is the President 16,500 0.61
1989 of Minis & Co., an investment
advisory firm in Savannah,
Georgia. Mr. Carpenter has
been with this firm since 1972.
J. Wiley Ellis (59) Mr. Ellis is the Chairman of the 23,440 (10) 0.87
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.
Penelope S. Johnson (57) Mrs. Johnson was the owner and 28,875 1.07
1989 principal broker of Investment
Real Estate Company, Savannah,
Georgia, from 1978 - 1998. She
is currently a private investor.
Aaron M. Levy (59) Mr. Levy is President of Levy 21,450 (11) 0.79
1989 Jewelers, a chain of four
jewelry stores in Savannah,
Georgia. Mr. Levy has been
employed by Levy Jewelers, Inc.
since 1962.
Third Class
Term Expiring Annual Meeting 2002
Archie H. Davis (58) Mr. Davis is President and 107,295 (12) 3.89
1989 Chief 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 headquartered in
Thomaston, Georgia and the
Savannah Electric and Power
Company, a subsidiary of the
Southern Company.
L. Carlton Gill (59) Mr. Gill has been employed by 66,109 (13) 2.44
1998 S. A. Allen, Inc. as a procure-
ment forester since 1964.
Jack M. Jones (63) Mr. Jones is a private investor. 18,425 (14) 0.68
1989 He is retired from the insurance
industry and serves as Chairman
of the Memorial Health University
Medical Center Board in Savannah.
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<PAGE>7
Jack W. Shearouse (69) Mr. Shearouse is the President 32,725 1.21
1989 of Shearouse Lumber Company, a
wholesale and retail lumber
company in Pooler, Georgia.
Mr. Shearouse has been employed
there since 1957.
Robert T. Thompson, Mr. Thompson has been employed 39,579 (15) 1.46
Jr. (59) by CSX Incorporated, a railroad
1998 company, since 1962.
All Directors and executive
officers as a group(20 persons) 695,803 26.15
(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. 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.
(2) The percent of class is calculated on the assumption that a person's
options have been exercised and that the total number of outstanding
shares of the Company have been increased correspondingly.
(3) 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.
(4) Groves - Of the 20,625 shares beneficially owned by Mr. Groves, 16,500
are owned individually and 4,125 shares represent organizer options.
(5) Lewis - Of the 41,345 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 10,685 shares are owned by his children.
(6) 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.
(7) Roberts - Of the 49,213 shares beneficially owned by Mr. Roberts, 38,700
shares are owned individually, 5,503 shares are in his IRA, 1,110 shares
are owned by his wife and 3,900 shares are owned by his children.
(8) Royal - Of the 40,161 shares beneficially owned by Mr. Royal, 36,461
shares are owned individually, 3,330 shares are in his IRA and 370
shares are owned by his children.
(9) Burnsed - Of the 70,882 shares beneficially owned by Mr. Burnsed, 34,348
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 24,800 shares represent stock options.
(10) Ellis - Of the 23,440 shares beneficially owned by Mr. Ellis, 6,765
shares are owned individually and 16,675 shares are in his IRA.
(11) Levy - Of the 21,450 shares beneficially owned by Mr. Levy, 8,250 are
owned individually, 12,375 shares are in his company and 825 shares are
owned by his wife.
(12) Davis - Of the 107,295 shares beneficially owned by Mr. Davis, 28,875
shares are owned individually, 19,788 shares are in his IRA, 5,520 shares
are owned by his children, 1,880 shares are owned by his wife, 1,732
shares are in his 401(k) plan and 49,500 shares are incentive stock
options.
(13) 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.
(14) Jones - Of the 18,425 shares beneficially owned by Mr. Jones, 4,125
shares are owned individually and 14,300 shares are in his IRA.
(15) Thompson - Of the 39,579 shares beneficially owned by Mr. Thompson,
33,316 shares are owned individually, 1,996 shares are in his IRA, 3,342
shares are in his wife's IRA, and 925 shares are owned by his children.
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<PAGE>8
PROPOSAL II
INCENTIVE STOCK OPTION PLAN
In 1995, the shareholders of the Company approved an Incentive Stock Option Plan
(the "ISO Plan") under which 29,700 shares (adjusted to 89,100 shares after
adjusting for stock splits) of the Company's Common Stock could be issued to
eligible employees. Shareholders increased the aggregate number of Reserved
Shares which could be issued pursuant to the ISO Plan by an additional 25,000
shares (adjusted to 37,500 shares after adjusting for the 3-for-2 split in 1997)
at the 1996 Annual Shareholder's Meeting. The Company also assumed a total of
13,875 incentive stock options pursuant to the merger agreement with Bryan
Bancorp of Georgia, Inc. ("BBGA") that was approved by shareholders on December
15, 1998. Additionally, 26,825 non-ISO options were also assumed in the merger
with BBGA.
As of March 3, 2000, there were a total of 130,550 unexercised incentive stock
options with exercise prices from $7.50 - $25.63. There were also 23,050 non-ISO
options outstanding with exercise prices of $5.76 to $6.35 from the BBGA merger
and from the options granted to directors of the Company in 1990. A total of
2,500 Reserved Shares approved in 1996 remain unissued.
The Board of Directors proposes to amend the ISO Plan by increasing the
aggregate number of Reserved Shares which may be issued pursuant to the ISO Plan
by an additional One Hundred Thousand (100,000) shares of the Company's Common
Stock. This proposed amendment requires the approval of the Company's
shareholders. The incentive stock options will be granted to key employees in
the future. No specific plans or commitments for future grants have been made.
The Board of Directors unanimously recommends a vote FOR an amendment to the
Incentive Stock Option Plan adopted by the shareholders in 1995 to reserve an
additional 100,000 incentive stock option shares for future issuance under the
Incentive Stock Option Plan adopted by shareholders in 1995.
PROPOSAL III
INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, upon the recommendation of its Audit
Committee, has appointed BDO Seidman, LLP, independent certified public
accountants, as independent accountants for the Company and the Banks for the
current year ending December 31, 2000. The Board of Directors voted to change to
BDO Seidman, LLP, as independent accountants, effective April 19, 1999. Arthur
Andersen LLP served as its independent accountants from 1996 through 1998.
The Board of Directors unanimously recommends a vote FOR ratification of the
appointment of BDO Seidman, LLP as independent accountants to audit the
Company's accounts for the fiscal year 2000.
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<PAGE>9
Management Stock Ownership
As of March 3, 2000, based on available information, all Directors and executive
officers of the Company as a group (20 persons) beneficially owned 695,803
shares of Common Stock, which represented approximately 26.15 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
beneficial ownership. For additional information with respect to the options
that have been granted to Directors and certain officers, see Proposal II above.
Information About the Board of Directors and Certain Committees
The Board of Directors of the Company held four regular and one special meeting
during 1999. All Directors attended at least 75 percent of the meetings.
Executive Committee. The Executive Committee for the Company was appointed
in January 1999. It is composed of four outside directors from Savannah Bank and
two outside directors from Bryan Bank. Messrs. Davis and Burnsed serve as ex
officio members of the Executive Committee. Regular Executive Committee meetings
are held during each of the remaining eight months when none of the four regular
board meetings are held. 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. All members have attended at least 75% of the
Executive Committee meetings.
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, 1999, the Audit Committee met four times. The Committee was
composed of Messrs. J. Curtis Lewis III, Chairman, L. Carlton Gill, Robert W.
Groves III, Penelope S. Johnson, Jack M. Jones, Aaron M. Levy, Robert T.
Thompson, Jr., Jack W. Shearouse and Penelope S. Johnson. All directors except
Directors Johnson and Shearouse attended at least 75% of the Audit Committee
meetings.
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 during 1999 were
Messrs. Jack M. Jones , Chairman, Russell W. Carpenter, Julius Edel, Robert W.
Groves III, J. Curtis III, Lewis and Jack W. Shearouse. The Compensation
Committee held four meetings in 1999.
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
- ------------------ --- ----------------------------
Stephen Stramm 50 Executive Vice President -
1990 Lending of the Company and
Savannah Bank.
Robert B. Briscoe 48 Chief Financial Officer of
1990 the Company, Executive Vice
President and Chief
Financial Officer of
Savannah Bank.
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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, 1999, 1998 and 1997. 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.
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 1999 $145,000 $21,351 $9,046 0 $7,000
President & CEO 1998 145,000 21,411 9,534 0 5,600
1997 145,000 21,048 8,253 0 5,600
E. James Burnsed 1999 $ 90,000 $42,930 $112,493 (6) 0 $7,841
Vice Chairman and 1998 90,000 40,67 152,466 (6) 10,000 9,600
Chairman & CEO 1997 90,000 36,483 65,242 (6) 0 9,550
Bryan Bank
R. Stephen Stramm 1999 $105,000 $15,197 $2,647 0 $5 706
Executive Vice 1998 97,500 14,397 2,475 0 5,326
President-Lending 1997 97,500 14,124 2,324 0 5,309
G. Michael Odom 1999 $ 92,000 $18,276 $4,908 0 $6,687
President-Bryan 1998 80,000 19,454 4,658 0 5,780
Bank & Trust 1997 79,167 13,690 4,891 0 4,786
(1) No compensation has been deferred.
(2) Only four executive officers have salary and bonus compensation that
exceeds $100,000.
(3) Includes club dues, directors fees, personal use of auto and excess
premiums on group life insurance.
(4) Amounts shown represent the number of shares underlying stock options
granted each year.
(5) Amounts contributed to their respective Bank's Employee Savings and Profit
Sharing Plans.
(6) Mr. Burnsed's other annual compensation includes income resulting from the
exercise of nonqualified stock options in 1999, 1998 and 1997.
No Options/SAR Grants were made to Named Executive Officers in 1999.
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Aggregated Year-End Option Values
Shown below is information with respect to unexercised options to purchase
the Company Common Stock held by the Named Executive Officers at December 31,
1999.
<TABLE>
<CAPTION>
(1)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARS Options/SARS
# of Shares at Year-End(#) at Year-End($)
Acquired Value -------------------------- -------------------------
Name on Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ----------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Davis 4,125 $ 67,813 49,500 0 $459,608 $ 0
Mr. Burnsed 7,400 105,376 16,800 8,000 201,946 0
Mr. Stramm 0 0 24,750 0 229,804 0
Mr. Odom 0 0 13,875 0 87,228 0
</TABLE>
(1) "Value" is calculated as the market price of the underlying securities on
December 31, 1999 minus the grant price that 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 $19.70 per share on December 31,
1999.
Directors were paid $7,000 per year as Director fees plus $250 for each Special
meeting attended. No committee fees were paid except for $250 per meeting
attended of the holding company Executive Committee, which meets during in the
eight months in between quarterly Board meetings. The Chairman of the Board
received an extra $500 per month, and the Secretary received an extra $250 per
month for their additional responsibilities.
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 compensation 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 2000 of similar benefits as they had at the time of
the merger.
The Savannah Bank has had an incentive compensation arrangement with Messrs.
Davis and Stramm in which they can earn a performance bonus up to 15 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 had an incentive compensation arrangement with Bryan Bank where he
earns a percentage of the Bryan Bank profits over a base amount. Bryan Bank has
an incentive compensation arrangement with Mr. Odom in which he can earn up to
40 percent of his annual compensation if the Bank achieves certain performance
goals. These incentive compensation formulas have 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 1999,
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, Jack W. Shearouse, James W. Royal and James Toby Roberts. 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 1999 with respect to Mr. Davis as CEO, as
well as the Named Executive Officers as a group.
11
<PAGE>12
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
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 1999. 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 1999 consisted of the
following elements: base salary, bonus 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 1999. Except for bonuses and incentive stock options, the
foregoing benefits and compensation are not directly or indirectly tied to
Company performance.
During 1999, total assets of the Company grew 7 percent, loans grew 21 percent,
operating net income increased 11 percent and operating return on average assets
and average equity were 1.29 percent and 14.17 percent, respectively. The
Company's loan growth was excellent. Four key lending officer hires were made.
Senior management responsibilities were restructured to add strength in areas
that needed improvement. Year 2000 preparation and plans were well executed.
Excluding the residential mortgage origination income, the Company exceeded its
consolidated earnings goals. Mortgage loan origination volumes across the
industry were down 30-50 percent due to higher mortgage interest rates during
1999.
Based on Company performance, the Messrs. Davis and Stramm received bonuses
of approximately 15% of their annual base salaries. Mr. Burnsed received
$42,930, or 48 percent of his base salary, based on a pre-existing compensation
formula for the Bryan Bank executive officers. Mr. Odom's bonus was based on an
incentive plan formula and was $18,276, or approximately 20 percent of his
salary.
Mr. Davis' 1999 Compensation. Mr. Davis' 1999 compensation consisted of a
base salary and a quarterly cash bonus that totaled approximately 15 percent of
base salary for the year. Mr. Davis' base salary of $145,000, plus director's
fees of $7,250, was determined by the Committee at the beginning of the 1999. No
increase in base salary was made for 1999. Mr. Davis' cash bonus of $21,351 for
1999 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 largely 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 Savannah Bank. The trust department serves as custodian for
certain Minis & Co. clients. Mr. Lewis, an attorney, is not general
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counsel but does handle certain loan-related transactions for the Banks. The
Company, with the approval of the Board, from time to time engages consultants
to provide relevant analyses and compensation alternatives to the Compensation
Committee and the Board.
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, 1994 through
December 31, 1999. It includes the cumulative total return on the NASDAQ Market
Index, the S&P 500 Total Return Index and the SNL <$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 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ----- -------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
The Savannah Bancorp, Inc. 100.00 202.03 248.90 358.60 404.39 313.06
S&P 500 Total Return Index 100.00 137.58 169.03 225.44 289.79 350.78
Nasdaq - Total US 100.00 141.33 173.89 213.07 300.25 542.43
SNL < $250M Bank Asset - Size Index 100.00 140.62 177.67 289.92 275.60 242.00
SNL < $500M Bank Asset - Size Index 100.00 136.80 176.08 300.16 274.06 253.69
</TABLE>
The data included in the foregoing table was prepared by SNL Securities. The SNL
Bank Indices includes banking companies with total assets less than $250 million
and less $500 million in assets. These represent the peer group comparisons. The
S & P Total Return Index and the Nasdaq - Total US Index are both broad market
indexes.
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OWNERSHIP OF EQUITY SECURITIES
As of March 17, 2000, 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 $8.755 million and $7.360
million at December 31, 1999 and 1998, respectively. During 1999, $8.898 million
of new loans were made, and repayments totaled $7.503 million. Unused lines of
credit available to related parties aggregated $2.249 million and $1.004 million
at December 31, 1999 and 1998, 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.
There are no family relationships between directors and/or executive officers.
Proxy Solicitation
The Company will pay the cost of soliciting Proxies for the Annual Meeting. 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 1999 Annual Reports
needed to supply such information to beneficial owners, and the Company will
reimburse them for the expense of mailing Proxy materials and 1999 Annual
Reports to such owners.
Shareholder Proposals for 2001 Annual Meeting
Proposals of shareholders to be presented at the 2001 Annual Meeting of the
Company must be received by the Company on or before February 15, 2001 to be
included in the Proxy Statement and Form of Proxy relating to the 2001 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, 1999, including financial statements and schedules
thereto, as filed with the Securities and Exchange Commission (SEC). Requests
should be directed to The Savannah Bancorp, Inc., PO Box 188, Savannah, Georgia
31402, Attention: Robert B. Briscoe, Chief Financial Officer. The Form 10-K is
also available on the internet from the SEC website at
http://www.sec.gov/Archives/edgar/data/860519/, where it is accessible for
immediate retrieval.
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