<PAGE>
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
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
FIRST STERLING BANKS, INC. f/k/a
WESTSIDE FINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
T. KENNERLY CARROLL, JR.
(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:(1)
................................................................................
4) Proposed maximum aggregate value of transaction:
................................................................................
(1) 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>
FIRST STERLING BANKS, INC.
Post Office Box 2147
Marietta, Georgia 30061
404-499-2265
EDWARD C. MILLIGAN
President
August 2, 1996
To the Shareholders of
First Sterling Banks, Inc.
The Annual Meeting of Shareholders of First Sterling Banks, Inc. will be
held at The Westside Bank & Trust Company's main office, 1200 Barrett
Parkway, Kennesaw, Georgia, on Wednesday, August 28, 1996, at 8:00 a.m. local
time.
Although the business session will begin at 8:00 a.m., our directors,
officers attorneys and auditors will be available to meet with you from 7:30
until 8:00 a.m. to discuss all aspects of the Company and to answer any
questions you may have, and they will remain after the meeting as well if
there are further questions.
The items of business scheduled for vote at the meeting are explained in
the accompanying Proxy Statement. Even if you are planning to attend the
Annual Meeting, please complete the enclosed proxy card and return it to us
in the enclosed, self-addressed, stamped envelope. If you attend the Annual
Meeting, you may revoke your Proxy and vote in person.
We look forward to seeing you on August 28, and thank you for being a
shareholder.
Sincerely,
/s/ EDWARD C. MILLIGAN
Edward C. Milligan
President
<PAGE>
FIRST STERLING BANKS, INC.
1200 BARRETT PARKWAY
KENNESAW, GEORGIA 30144
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of First
Sterling Banks, Inc. will be held at The Westside Bank & Trust Company, 1200
Barrett Parkway, Kennesaw, Georgia 30144, at 8:00 a.m., local time, on
August 28, 1996, for the following purposes:
1. ELECT CLASS II DIRECTOR. To elect one (1) Class II director to
serve for a three-year term expiring at the 1999 Annual Meeting of
Shareholders or until his successor is duly elected and qualified.
2. OTHER BUSINESS. To transact such other business as may properly
come before the Annual Meeting or any adjournments thereof.
Only shareholders of record at the close of business on July 12, 1996,
will be entitled to receive notice of and vote at the Annual Meeting or any
adjournments thereof.
The Annual Meeting may be adjourned from time to time without notice
other than announcement at the Annual Meeting, and any business for which
notice of the Annual Meeting is hereby given may be transacted at a
reconvened meeting following such adjournment.
By Order of the Board of Directors,
/s/ Edward C. Milligan
Edward C. Milligan
President
Enclosures
August 2, 1996
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, PLEASE
VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR
PROXY AND VOTE IN PERSON.
<PAGE>
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY
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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE HOLDERS OF COMMON
STOCK VOTE IN FAVOR OF THE PROPOSALS ENUMERATED ABOVE AND DESCRIBED IN THE
ACCOMPANYING PROXY STATEMENT.
<PAGE>
TABLE OF CONTENTS
PAGE
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Record Date, Solicitation and Revocability of Proxies . . . . . . . . . 1
Votes Required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PROPOSAL ONE - ELECTION OF CLASS II DIRECTOR OF THE COMPANY. . . . . . . . . 3
Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board Committees and Attendance . . . . . . . . . . . . . . . . . . . . 5
Executive Committee. . . . . . . . . . . . . . . . . . . . . . . . 5
Directors Stock Option Committee . . . . . . . . . . . . . . . . . 5
Reports required by Section 16(a) of the Securities Exchange Act of
1934 (the "Act"). . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Certain Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Cash Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . 7
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
AGREEMENTS WITH EXECUTIVES . . . . . . . . . . . . . . . . . . . . . . . . . 9
Company and Westside Bank . . . . . . . . . . . . . . . . . . . . . . . 9
Eastside Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
DIRECTOR COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
The Company and Westside Bank . . . . . . . . . . . . . . . . . . . . .11
Eastside Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
OWNERSHIP OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Principal Holders of Company Stock. . . . . . . . . . . . . . . . . . .12
SECURITY OWNERSHIP OF MANAGEMENT . . . . . . . . . . . . . . . . . . . . . .13
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Relationship with Independent Public Accountants. . . . . . . . . . . .13
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . .14
1997 Annual Meeting - Shareholder Proposals . . . . . . . . . . . . . .14
1995 Annual Report on Form 10-KSB . . . . . . . . . . . . . . . . . . .14
i
<PAGE>
FIRST STERLING BANKS, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 28, 1996
INTRODUCTION
GENERAL
This Proxy Statement ("Proxy Statement") is being furnished to the
shareholders of First Sterling Banks, Inc., a corporation organized and
existing under the laws of the State of Georgia (hereinafter referred to as
the "Company"), in connection with the solicitation of proxies by the Board
of Directors of the Company from holders of outstanding shares of the common
stock of the Company ("Common Stock"), for use at the Annual Meeting of
Shareholders of the Company to be held at 8:00 a.m., local time on August 28,
1996, and at any adjournments thereof ("Annual Meeting").
At the Annual Meeting, the shareholders of the Company will be asked to:
(1) elect one (1) Class II director to serve for a three-year term, or until
his successor is duly elected and qualified; and (2) transact such other
business as may properly come before the Annual Meeting or any adjournments
thereof.
This Proxy Statement is dated August 2, 1996, and is first being mailed
to the shareholders of the Company on or about August 2, 1996. The 1995
Annual Report to Shareholders of the Company accompanies this Proxy Statement.
The principal executive offices of the Company are located at 1200
Barrett Parkway, Kennesaw, Georgia 30144, and the telephone number of the
Company at such address is 770/499-2265.
RECORD DATE, SOLICITATION AND REVOCABILITY OF PROXIES
The Board of Directors of the Company has fixed the close of business on
July 12, 1996, as the record date ("Record Date") for determination of the
Company's shareholders entitled to notice of and to vote at the Annual
Meeting. At the close of business on such date, there were 586,300 shares of
Common Stock issued and outstanding and held by approximately 547
shareholders of record. Holders of Common Stock are entitled to one vote on
each matter considered and voted upon at the Annual Meeting for each share of
Common Stock held of record at the close of business on the Record Date.
Shares of Common Stock represented by properly executed proxies, if such
proxies are received in time and not revoked, will be voted at the Annual
Meeting in accordance with any instructions indicated in such proxies. IF NO
INSTRUCTIONS ARE INDICATED, SUCH SHARES OF COMMON STOCK WILL BE VOTED FOR THE
ELECTION OF THE NOMINATED DIRECTOR AND IN THE DISCRETION OF THE PROXY HOLDER
AS TO ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR
ANY ADJOURNMENTS THEREOF.
1
<PAGE>
A shareholder who has given a proxy may revoke it at any time prior to
its exercise at the Annual Meeting by (i) giving written notice of revocation
to the Company, (ii) properly submitting to the Company a duly executed proxy
bearing a later date, or (iii) appearing in person at the Annual Meeting and
voting in person. All written notices or revocation and other communications
with respect to revocation of proxies should be addressed as follows: First
Sterling Banks, Inc., 1200 Barrett Parkway, Kennesaw, Georgia 30144,
Attention: Ms. Barbara J. Bond.
VOTES REQUIRED
The affirmative vote of the holders of a plurality of the shares of
Common Stock represented at the Annual Meeting at which a quorum is present
is necessary to elect the one (1) nominee for Class II membership on the
Board of Directors. The presence, in person or by proxy, of a majority of
the outstanding shares of Common Stock entitled to vote at the Annual Meeting
is necessary to constitute a quorum at the Annual Meeting.
RECENT DEVELOPMENTS
On July 31, 1996, Eastside Holding Corporation ("EHC"), a Georgia
corporation and a one-bank holding company which owned all of the capital
stock of The Eastside Bank & Trust Company ("Eastside Bank"), a Georgia bank,
was merged into the Company (the "Merger"). The Company was the surviving
entity of the Merger continuing under its Articles of Incorporation and
Bylaws. As a result of the Merger, each share of EHC stock owned by an EHC
shareholder was converted into the right to receive one share of Company
stock.
On July 30, 1996, the Company declared a stock split effected in the
form of a stock dividend to the Company shareholders so that each
shareholder in the Company at such time received for each share of Company
stock a distribution of .23 shares of Company stock. The reason for the
Company stock split effected in the form of a stock dividend was to provide
that the ratio of stock ownership between the Company shareholders and the
EHC shareholders after the Merger was consummated shall be in proportion to
the ratio between the Company Adjusted Book Value and the EHC Adjusted Book
Value as determined in accordance with the Merger Agreement between the
parties since the EHC shareholders shall have the right to receive one share
of Company stock for each share of EHC stock.
Pursuant to the terms of the Agreement between EHC and the Company by
which the Merger was consummated, all of the Company's directors, except for
Messrs. P. Harris Hines, Edward C. Milligan and Benjamin H. Wofford, resigned
and two directors from the EHC Board of Directors were elected to fill
certain vacancies as follows: Harry L. Hudson, Jr. as a Class I director and
John S. Thibadeau, Jr. as a Class III director.
The Company amended its Articles of Incorporation effective July 31,
1996, to change its name to "First Sterling Banks, Inc."
2
<PAGE>
PROPOSAL ONE - ELECTION OF CLASS II DIRECTOR OF THE COMPANY
At the Annual Meeting one (1) Class II director shall be elected to
serve for a three-year term of office or until his successor is duly elected
and qualified.
The Company's Articles of Incorporation divides the Board of Directors
of the Company into three classes, Class I, Class II and Class III, each of
which is as nearly equal in number as possible. The directors in each class
will hold office for staggered terms of three (3) years each, after the
initial terms of one (1) year, two (2) years and three (3) years
respectively. The Class II director was elected for an initial two (2)-year
term which expires at the 1996 Annual Meeting. The Board of Directors has
nominated the following person for Class II membership on the Board, and
unanimously recommends a vote "FOR" the election of this person: Benjamin H.
Wofford, M.D. This person is currently serving as a Class II director.
All shares of Common Stock represented by valid proxies received
pursuant to this solicitation and not revoked before they are exercised, will
be voted in the manner specified therein. If no specification is made, the
proxies will be voted for the election of the Class II nominee listed above.
In the event that the nominee is unable to serve, the persons designated as
proxies will cast votes for such other persons as they may select. The
affirmative vote of the holders of a plurality of the shares of Common Stock
represented at the Annual Meeting at which a quorum is present is required
for the election of the nominee listed above.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEE LISTED ABOVE.
BOARD OF DIRECTORS
The following table sets forth the name of each current director and the
nominee for Class II director of the Company; a description of his position
and offices with the Company (other than as a director) and with The Westside
Bank & Trust Company ("Westside Bank") and the Eastside Bank, if any; a brief
description of his principal occupation and business experience during the
past five years and certain other information, including his age as of June
30, 1996 and the number of shares of Common Stock beneficially owned by him
immediately following the consummation of the Merger of the Company and EHC
on July 31, 1996, and the percentage of the total shares of Common Stock
outstanding on such date which such beneficial ownership represents. The
table also sets forth the class of each director. The terms of the Class I
directors expire at the 1998 Annual Meeting; the terms of the Class II
directors expire in 1996 and the terms of the Class III directors expire in
1997.
3
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NAME, YEAR FIRST ELECTED COMMON STOCK
TO BOARD OF COMPANY, POSITION WITH THE COMPANY AND PRINCIPAL BENEFICIALLY
AND CLASS AGE OCCUPATION DURING THE PAST FIVE YEARS OWNED(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Honorable P. Harris Hines 52 Judge Hines has served as Chairman of the 8,948(2)
(1994) Board of Directors of Westside Bank since 0.67%
April 1992. From January 1, 1983 until July 26,
1995, Judge Hines served as Judge of the
Class III Superior Court of Cobb County, Georgia. Since
July 26, 1995, Judge Hines has served as a
Justice of the Supreme Court of the State of
Georgia.
- -------------------------------------------------------------------------------------------------------------------
Harry L. Hudson, Jr. 52 Mr. Hudson is an agent for the State Farm 16,050
(1996) Insurance Company. Mr. Hudson has been 1.23%
associated with State Farm since January 1,
1970. Mr. Hudson currently serves as Chairman
Class I of the Board of Directors of Eastside Bank. He
has been a member of the Board of Eastside
Bank since its organization in 1990.
- -------------------------------------------------------------------------------------------------------------------
Edward C. Milligan 51 Mr. Milligan is President of the Company and 38,260(3)
(1994) has served as President and Chief Executive 2.85%
Officer of Westside Bank since its organization
in 1990.
Class I
- -------------------------------------------------------------------------------------------------------------------
John S. Thibadeau, Jr. 48 Since 1973, Mr. Thibadeau has been President 5,000
(1996) of Deauton Corporation, a real estate 0.38%
construction and development firm. As a
licensed real estate broker, Mr. Thibadeau is an
Class III officer and principal in Thibadeau-Burton Realty
and serves as Vice President of University Inn
Operating Co. , a hotel/motel management firm.
He served as Chairman of the Board of Directors
of Eastside Bank from its organization until
February 1, 1991, and has been a member of the
Board of Eastside Bank since its organization in
1990.
- -------------------------------------------------------------------------------------------------------------------
Benjamin H. Wofford, M.D. 58 Dr. Wofford served as Chairman of the Board of 33,029(4)
(1994) Directors of Westside Bank from its 2.49%
organization until April 1991. Since 1970, Dr.
Wofford has been a physician specializing in
Class II plastic and cosmetic surgery in Marietta,
Nominee Georgia.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO TABLE
(1) The information shown above is based upon information forwarded to the
Company by the named persons. For the purposes of this table, the term
"beneficial ownership" is used as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended ("1934 Act"). Under
applicable SEC rules the number of outstanding shares of common stock
used in the computation of the "Percent of Class" includes currently
exercisable stock options owned by the shareholder.
(2) Includes 6,150 shares of Common Stock obtainable upon the exercise of
options.
4
<PAGE>
(3) Includes 19,680 shares of Common Stock obtainable upon the exercise of
the options and 500 shares held by Mr. Milligan's minor children.
(4) Includes 6,150 shares of Common Stock obtainable upon the exercise of
options and 5,000 shares held as joint tenant with spouse.
BOARD COMMITTEES AND ATTENDANCE
The business and affairs of the Company are under the direction of the
Company's Board of Directors.
During 1995, the Company's Board of Directors held nine (9) regular
meetings, and all of the Company's directors attended at least 75% of the
aggregate meetings of the Company's Board of Directors and the committees
thereof on which they sat except for Jane M. Carithers and Lillian B. Darden.
During 1995, the Board of Directors of the Company had established two
committees -- an Executive Committee and a Directors Stock Option Committee.
EXECUTIVE COMMITTEE. The Executive Committee is authorized to act on
behalf of the Board of Directors on all matters that may arise between
regular meetings of the Board of Directors upon which the Board of Directors
would be authorized to act. The Executive Committee is authorized to
nominate members to the Company's Board of Directors and to the various Board
committees of the Company. The current members of the Executive Committee
are: P. Harris Hines, Harry L. Hudson, Jr., Edward C. Milligan, John S.
Thibadeau, Jr., and Benjamin H. Wofford. During 1995, the Executive
Committee met one (1) time.
DIRECTORS STOCK OPTION COMMITTEE. The Directors Stock Option Committee
is responsible for administering the 1995 Directors Stock Option Plan. It
has authority to interpret the plan, make grants, and determine terms and
conditions of grants within the context of the Plan. The current members of
the Directors Stock Option Committee are: P. Harris Hines, Harry L. Hudson,
Jr., Edward C. Milligan, John S. Thibadeau, Jr., and Benjamin H. Wofford.
During 1995, the Directors Stock Option Committee met one (1) time.
REPORTS REQUIRED BY SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(THE "ACT")
The Securities and Exchange Commission ("SEC") has adopted certain rules
and forms under Section 16 of the Act relating to reports concerning stock
ownership and transactions by directors, officers, and stockholders who
directly or indirectly are the beneficial owners of more than ten percent of
any class of any equity security which is registered pursuant to Section 12
of the Act ("Principal Shareholders") (these persons are collectively
referred to as "Insiders").
The rules require that any director, officer or Principal Shareholder of
a company whose securities are registered under the Act (an "Issuer") file a
Form 3, which is an initial statement of beneficial ownership of equity
securities, a Form 4 to report any changes in beneficial ownership and a Form
5 within forty-five (45) days after the end of the Issuer's fiscal year to
report any
5
<PAGE>
securities transactions during the fiscal year that have not previously been
reported on a Form 3 or Form 4.
Any Issuer under the amended rules is required to disclose any known
late filings or failures to file by an Insider of any of the reports required
by Section 16(a) of the Act. An Issuer does not have any obligation to
research or make inquiry regarding delinquent filings, and it may rely on a
written representation from the Insider that no Form 5 filing is required.
Based on a review of Forms 3, 4 and 5 and amendment thereto and certain
written representations which have been furnished to the Company for its
fiscal year ended December 31, 1995, there were no persons who were subject
to Section 16 of the Act who failed to file on a timely basis reports
required by Section 16(a) of the Act for such fiscal year.
CERTAIN TRANSACTIONS
During 1995, Westside Bank and Eastside Bank had outstanding loans
directly to or indirectly accruing to the benefit of certain of the then
directors, nominees for director, and executive officers of the Company, and
their related interests. These loans were made in the ordinary course of
business and were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with others. In the opinion of the Company's management, such
loans do not involve more than normal risks of collectibility or present
other unfavorable features. In the future, both banks expect to have banking
transactions in the ordinary course of business with the Company's directors,
executive officers and their related interests.
OFFICERS
The officers of the Company and the executive officers of Westside Bank
and Eastside Bank are as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NAME COMPANY WESTSIDE BANK EASTSIDE BANK
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Edward C. Milligan President/Chief President/Chief Executive
Executive Officer Officer
- -------------------------------------------------------------------------------------------------------------------
Barbara J. Bond Secretary/Treasurer Senior Vice President/
Secretary
- -------------------------------------------------------------------------------------------------------------------
Michael J. Henderson Senior Vice President
- -------------------------------------------------------------------------------------------------------------------
Reggie D. Cox President/Chief Executive Officer
- -------------------------------------------------------------------------------------------------------------------
Fredrick D. Jones Senior Vice President/
Secretary
- -------------------------------------------------------------------------------------------------------------------
Ernest L. Horn, Jr. Senior Vice President
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The table set forth below shows for each officer of the Company (a) the
person's name, (b) his or her age at June 30, 1996, (c) the year he or she
was first elected as an officer of the
6
<PAGE>
Company, and (d) his or her present positions with the Company and his or her
other business experience for the past five years.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
FIRST
YEAR
NAME AGE ELECTED BUSINESS EXPERIENCE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Edward C. Milligan 51 1994 Mr. Milligan serves as President and Chief Executive
Officer of the Company and Westside Bank.(1)
- -------------------------------------------------------------------------------------------------------------------
Barbara J. Bond 47 1994 Ms. Bond serves as Secretary/Treasurer of the
Company. She serves as Senior Vice President and
Senior Operations Officer of Westside Bank and has
served in such capacities since the organization of the
bank. Ms. Bond has served as Secretary of Westside
Bank since September 18, 1991.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE TO TABLE
(1) See "Board of Directors" above for a description of Mr. Milligan's prior
business experience.
EXECUTIVE COMPENSATION
CASH COMPENSATION TABLE
No compensation was paid or provided by the Company to its officers in
1995. The cash compensation which has been paid, accrued or awarded by
Westside Bank for services rendered in all capacities during the fiscal year
ended December 31, 1995 to the chief executive officer of Westside Bank who
was the only executive officer of Westside Bank or Eastside Bank whose
compensation exceeded $100,000, is as follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
===================================================================================================================
ANNUAL LONG-TERM
NAME AND COMPENSATION COMPENSATION
PRINCIPAL YEAR --------------------------------------------------------------
POSITION ALL OTHER
STOCK COMPENSATION
SALARY BONUS OPTIONS (SHARES)
===================================================================================================================
<S> <C> <C> <C> <C> <C>
Edward C. Milligan 1995 $117,425.00 $34,800 6,000 5,348.00(1)
President of the
Company; 1994 $110,005.00 $22,000 $4,450.00(1)
President/CEO,
Westside Bank 1993 $106,260.68 $10,000 $3,125.22(1)
===================================================================================================================
</TABLE>
NOTE TO TABLE
(1) Amounts contributed by Westside Bank during 1993, 1994 and 1995 to Mr.
Milligan's account in the Bank's 401(k) Plan were $2,125.22, $2,245.00
and $2,348.46 respectively. Mr. Milligan was paid $1,000 in 1993,
$2,200 in 1994 and $3,000 in 1995 for his services as a member of
Westside Bank's Board of Directors.
7
<PAGE>
STOCK OPTIONS
The following tables set forth information in regard to incentive stock
options granted to the chief executive officer of Westside Bank who was the
only executive officer whose compensation exceeded $100,000:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
===================================================================================================================
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------------------------------------------
PERCENT OF TOTAL GRANT DATE
OPTIONS GRANTED EXERCISE OR PRESENT
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION VALUE(1)
NAME GRANTED FISCAL YEAR ($/SH) DATE $
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Edward C. Milligan 6,000 28.57% 13.00 8/15/2005 0
===================================================================================================================
</TABLE>
NOTE TO TABLE
(1) The fair market value of a share of the Company's common stock at the
date of grant, August 15, 1995, was determined to be equal to or less
than the exercise price of $13.00 per share based on the reported trades
through an independent broker prior to the date of grant.
AGGREGATE STOCK OPTION EXERCISES IN FISCAL YEAR ENDED
DECEMBER 31, 1995 AND FISCAL YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
===================================================================================================================
NUMBER OF VALUE OF
VALUE REALIZED UNEXERCISED STOCK UNEXERCISED
NUMBER OF ($) (MARKET OPTIONS AT FY-END IN-THE MONEY STOCK
NAME SHARES PRICE AT TIME OPTIONS AT FY-END(1)
ACQUIRED ON OF EXERCISE LESS -----------------------------------------------------
EXERCISE EXERCISE PRICE) NOT NOT
VESTED VESTED VESTED VESTED
===================================================================================================================
<S> <C> <C> <C> <C>
Edward C. Milligan -- -- 16,000 -- $78,000 --
===================================================================================================================
</TABLE>
NOTE TO TABLE
(1) The fair market value of a share of the Company's common stock at fiscal
year end, December 31, 1995, was determined to be $16.00 per share based
on the reported trades through an independent broker prior to January 1,
1996.
8
<PAGE>
AGREEMENTS WITH EXECUTIVES
COMPANY AND WESTSIDE BANK
The Company and Westside Bank have jointly entered into an employment
agreement with Edward C. Milligan dated August 16, 1995 whereby Mr. Milligan
is employed as the president and chief executive officer of both the Company
and Westside Bank. The term of the Agreement is a continuing term of two
years which is automatically extended each day for an additional day so that
the remaining term shall continue to be two years; but either party may by
written notice to the other party fix the term to a finite term of two years
without further automatic extension commencing with the date of such notice.
Mr. Milligan's initial base salary is $116,000 per annum. The base
salary may be increased from time to time by the boards of directors of the
Company and Westside Bank. Mr. Milligan is also entitled to such customary
fringe benefits, vacation and sick leave as are consistent with the normal
practices and established policies of the Company and Westside Bank and to
incentives and discretionary bonuses as may be authorized, declared and paid
by the board of directors to key management employees. Mr. Milligan shall be
entitled to participate in any plan relating to incentive and deferred
compensation, stock options, stock purchase, pension, thrift, profit sharing,
group life insurance, medical coverage, disability coverage, education, or
other retirement or employee benefits that the Company or Westside Bank
adopts for the benefit of its executive employees and for employees
generally, subject to the eligibility rules of such plans. Mr. Milligan
shall continue to be provided an automobile of a make and model appropriate
to his status and he shall be reimbursed reasonable expenses for dues and
capital assessments for country and dining club memberships.
In the event that Mr. Milligan's employment is involuntarily terminated
prior to a "Change in Control," as defined in the employment agreement and
discussed generally below, Mr. Milligan shall be paid his base salary and
fringe benefits up through the date of termination. In addition, in full
settlement of all claims which he may have against the Company and Westside
Bank for contractual damages for breach of the employment agreement, he shall
be paid at least the following amounts: a lump sum amount equal to one (1)
times the annual base salary paid to him over the previous twelve (12) month
period, plus a lump sum amount equal to one (1) times the annual incentive
cash bonus paid to him over the previous twelve (12) month period.
After a Change in Control has occurred, in the event that Mr. Milligan
is terminated without "cause," he shall be paid his base salary and fringe
benefits up through the date of termination. In addition, in full settlement
of all claims which Mr. Milligan shall have against the Company and Westside
Bank for contractual damages for breach of the employment agreement, he shall
be paid the following amounts: a lump sum equal to two (2) times the annual
base salary paid to him over the previous twelve (12) month period, plus a
lump sum amount equal to two (2) times the annual incentive cash bonus paid
to him over the twelve (12) month period.
In addition, in both cases he shall be entitled to participate for the
shorter of a period of twelve (12) months or twenty-four (24) months
respectively, from the date of such termination or until such time as the
officer is employed by another employer in all welfare benefit plans
practices, policies and programs at least as favorable as the most favorable
of such plan, practices,
9
<PAGE>
policies and programs in effect at any time during the ninety (90) day period
preceding his termination; provided, that in the event the officer is
employed by another employer before the end of such time period and the new
employer does not provide the same level of welfare benefits that the officer
is entitled to under the employment agreement, then the Company and Westside
Bank shall provide such supplemental benefits as necessary to ensure that the
officer has the same level of welfare benefit coverage.
After a Change in Control, if Mr. Milligan voluntarily terminates his
employment for good reason (as defined in the employment agreement which
includes among other things an adverse change in his status, title, position
or responsibilities) he shall be entitled to receive his base compensation,
incentive bonus and fringe benefits and participate in all welfare benefit
plans up through the date of termination. In addition, he shall receive the
following amounts: a lump sum amount equal to two (2) times the annual base
salary paid to the officer over the previous twelve (12) month period, plus a
lump sum amount equal to two (2) times the annual incentive cash bonus paid
to the officer over the previous twelve (12) month period.
A "Change in Control" includes: the acquisition by certain persons of
beneficial ownership within the meaning of Rule 13d-2 promulgated under the
Securities Exchange Act of 1934 (the "1934 Act") of 20% or more of the voting
power of the Company's outstanding voting stock; a change in one-third (1/3)
of the Company's board membership unless approved by two-thirds (2/3) of the
Company's board; or a merger, consolidation, reorganization, complete
liquidation or dissolution involving the Company or an agreement for the sale
or other disposition of all or substantially all of the assets of the Company
to any person (other than a transfer to a subsidiary).
EASTSIDE BANK
There are no employment agreements, contracts, or other arrangements
between Eastside Bank and any of the principal officers or directors except
for an Executive Salary Continuation Agreement ("Salary Continuation
Agreement") between Eastside Bank and Reggie D. Cox, the bank's president and
chief executive officer. Eastside Bank and Mr. Cox entered into the Salary
Continuation Agreement effective February 15, 1995 and continuing through
February 14, 1997 (the "Term"). If a "Change in Control" as defined below
occurs during the Term and as a result thereof either (i) Mr. Cox is
terminated, except "for cause" as defined below, at any time following the
Change in Control and before he reaches age 65, or (ii) Mr. Cox has a "Change
in Duties or Salary" (as defined below) and resigns as a result of such
changes, then he shall be paid immediately following such resignation or
termination an amount equal to one (1) times his average annual taxable
compensation from Eastside Bank and its affiliates for the most recent three
taxable years ending before the Change in Control. A "Change in Control"
shall mean a change in control, or the execution of a definitive agreement or
that acceptance of an offer by the Eastside Bank contemplating a change in
control, of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the 1934 Act;
provided that, without limitation, such a change in control shall be deemed
to have occurred if (a) any "person" (as such term is used in Rule 13d-3
under the 1934 Act), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act) directly or indirectly, of securities of Eastside
Bank representing 25% or more of the combined voting power of the Eastside
Bank's then outstanding voting securities; or (b) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the board of
10
<PAGE>
directors of Eastside Bank, respectively cease, for any reason, to constitute
a majority thereof unless the election or the nomination for election by
Eastside Bank's shareholders, of each new director was approved by a vote of
at least two-thirds of the directors then still in office who were directors
at the beginning of such period.
"Change in Duties or Salary" of Mr. Cox shall mean any of: (a) a change
in duties and responsibilities from his duties and responsibilities for
Eastside Bank in effect at the time a Change in Control occurs, which change
results in the assignment of duties and responsibilities inferior to his
duties and responsibilities at the time such Change in Control occurs; (b) a
reduction in rate of annual salary from such rate in effect at the time of
the Change in Control; or (c) a change in his place of assignment from
Snellville, Georgia, to any other city or geographical location that is
located further than 25 miles from the principal office of Eastside Bank in
Snellville, Georgia.
Eastside Bank shall have "Cause" to terminate Mr. Cox's employment under
the Salary Continuation Agreement only if termination shall have been
approved by at least two-thirds (2/3) of the board of directors as the result
of an act or acts of personal dishonesty, incompetence, willful misconduct,
breach of fididiary duty involving personal p fit, intentional failure to
perform stated duties, willful violation of any law, rule, or regulation
(other than traffic violations or similar offenses) or final cease-and-desist
order, or material breach of any provision of the Salary Continuation
Agreement. Mr. Cox will not be entitled to any salary continuation payment
on or after any of the following events: the insolvency of Eastside Bank;
the appointment of any conservator or receiver for the bank; a determination
by the Federal Deposit Insurance Corporation ("FDIC") or the Georgia
Department of Banking and Finance that Eastside Bank is in a "troubled"
condition, as defined in the applicable regulations; Eastside Bank is
assigned a composite rating of 4 or 5 by the FDIC under the Uniform Financial
Institutions Rating Systems of the Federal Financial Institutions Examination
Council; or, the FDIC initiates a proceeding against Eastside Bank to
terminate or suspend deposit insurance for Eastside Bank.
DIRECTOR COMPENSATION
THE COMPANY AND WESTSIDE BANK
During 1995, the Directors of Westside Bank were paid $250 for each
Board Meeting attended and, other than Mr. Milligan, were paid $75 for each
committee meeting attended. During 1995, the Directors of Westside Bank were
paid a total of $62,000 for such services. During 1996, the Directors of
Westside Bank shall be paid $500 for each Board Meeting attended and, other
than Mr. Milligan, $100 for each committee meeting attended. The Directors
of the Company receive no cash payment for Board or committee meeting
attendance.
The Company's 1995 Directors Stock Option Plan ("Plan") was adopted by
the Board of Directors of the Company on April 19, 1995 and approved by the
Company's shareholders on May 17, 1995. It was amended by the Board of
Directors of the Company on November 15, 1995 and February 21, 1996. Options
to purchase common stock may be granted under the Plan to members of the
Board of Directors of the Company or Westside Bank and to an Emeritus
Director who was a voting member of the Board of Directors within the twelve
months preceding the date of any grant of options to such Emeritus Director.
Sixty Thousand (60,000) shares of
11
<PAGE>
Common stock are authorized for issuance under the Plan. No stock options
may be granted under the Plan after April 18, 2005.
On April 19, 1995, the Company granted 36,000 options to the members of
the Board of Directors at that time who were not employees of the Company or
Westside Bank. These options have an option exercise price of $11.22 per
share and expire on April 18, 2005, which is ten (10) years from the date the
options were granted by the Company. The Board determined this price to be
equal to or greater than the fair market value of the Common Stock on April
19, 1995, by reviewing trades of the stock through an independent broker
prior to the date of the grant. On September 20, 1995, the Company granted
options to purchase 22,000 shares to the members of the Board of Directors at
that time who were not employees of the Company or Westside Bank. These
options have an option exercise price of $15.25 per share and expire on
September 19, 2005, ten (10) years after the date of grant. The Board
determined this price to be equal to or greater than the fair market value of
the Common Stock at the time of the grant. In reaching this determination it
reviewed the record of trades in the stock through an independent broker
immediately preceding September 20, 1995. On November 15, 1995, the Company
granted options to purchase 2,000 shares to an Emeritus Director at an option
price of $17.00 per share, which options expire on November 14, 2005. In
reaching the determination that this exercise price was equal to or greater
than the fair market value of the Common Stock on November 15, 1995, the
Board reviewed the record of trades of the stock through an independent
broker immediately prior to November 15, 1995.
EASTSIDE BANK
During 1995, the directors of Eastside Bank were paid $200 per month
and, other than Mr. Cox and Mr. Horn, were paid $50 for each committee
meeting attended. During 1995, the directors of Eastside Bank were paid a
total of $19,200 for such services. During 1996, the chairman of the board
shall be paid $500 per month and the other directors of Eastside Bank shall
be paid $350 per month and, other than Mr. Cox and Mr. Horn, $75 for each
committee meeting attended.
OWNERSHIP OF STOCK
PRINCIPAL HOLDERS OF COMPANY STOCK
The following table sets forth the entity who beneficially owned, on
July 31, 1996 after the consummation of the Merger, more than five percent
(5%) of the outstanding shares of Common Stock to the best information and
knowledge of the Company. Unless otherwise indicated, such entity is the
record owner of and has sole voting and investment powers over its shares.
12
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF COMMON STOCK
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(%)
--------------------- --------------------------
<S> <C>
SouthTrust of Georgia, Inc. 66,897
c/o SouthTrust Corporation 5.06%
420 North 20th Street
Birmingham, Alabama 35203
</TABLE>
NOTE TO TABLE
(1) The information shown above is based upon information available to the
Company in its stock ownership records or forwarded to the Company by
the named person. For purposes of this table, the term "beneficial
ownership" is used as defined in Rule 13d-3 under the 1934 Act. Under
applicable SEC rules, the number of outstanding shares of common stock
used in the computation of the "Percent of Class" includes currently
exercisable stock options owned by the shareholder.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of July 31, 1996 after
consummation of the Merger, regarding the ownership of Common Stock by all
directors and executive officers of the Company as a group. Information
regarding such ownership by the principal officer named in the Summary
Compensation Table above and by each director and for each nominee for
election at the Annual Meeting is set forth in the table appearing in
"PROPOSAL ONE - ELECTION OF CLASS II DIRECTOR OF THE COMPANY - Board of
Directors."
<TABLE>
<CAPTION>
===================================================================================================================
AMOUNT AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP(1) OF CLASS
===================================================================================================================
<S> <C> <C>
All directors and executive officers as
a group (6 persons) 101,287 7.66%
===================================================================================================================
</TABLE>
NOTE TO TABLE
(1) The information shown above is based upon information furnished to
the Company by the named persons. Beneficial ownership as reported
in the table above has been determined in accordance with rules
promulgated under the 1934 Act.
MISCELLANEOUS
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Mauldin & Jenkins served as the independent accountants for the year
ended December 31, 1995, and performed an audit of the Company's 1995
financial statements which are included in the 1995 Annual Report to
Shareholders which accompanies this Proxy Statement. The Company has
selected Mauldin & Jenkins as its independent accountants for the 1996 fiscal
year.
13
<PAGE>
SOLICITATION OF PROXIES
The cost of soliciting proxies for the Annual Meeting will be paid by
the Company. The Company has not engaged any outside organizations or agents
to assist in the solicitation of proxies.
1997 ANNUAL MEETING - SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company intended to be presented at the
1997 Annual Meeting must be received by the Company on or before December 27,
1996 to be included in the Company's Proxy Statement or Form of Proxy for the
1997 Annual Meeting of Shareholders.
1995 ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's 1995 Annual Report on Form 10-KSB, filed with
the Securities and Exchange Commission, is available at no charge upon
written request to:
Ms. Barbara J. Bond
First Sterling Banks, Inc.
1200 Barrett Parkway
Kennesaw, Georgia 30144
The management of the Company knows of no other matter to be presented
for action at the Annual Meeting. If other matters are properly brought
before the Annual Meeting, it is intended that the shares represented by
proxies in the accompanying form will be voted by the persons named in the
proxy in accordance with their best judgment.
Edward C. Milligan
President
Kennesaw, Georgia
August 2, 1996
14
<PAGE>
FIRST STERLING BANKS, INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 28, 1996
The undersigned hereby appoints Edward C. Milligan or P. Harris Hines,
or either of them, as Proxies, with the power to appoint his substitute, and
hereby authorizes them or either of them to represent and to vote, as
designated below, all of the Common Stock of First Sterling Banks, Inc. (the
"Company"), 1200 Barrett Parkway, Kennesaw, Georgia 30144, which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders (the "Meeting") to be held at the main office of The
Westside Bank & Trust Company, 1200 Barrett Parkway, Kennesaw, Georgia
30144, on August 28, 1996, at 8:00 a.m. local time, and at any adjournments
thereof, upon the proposal described in the accompanying Notice of the Annual
Meeting and the Proxy Statement relating to the Meeting, receipt of which are
hereby acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR THE PROPOSAL
PROPOSAL ONE: Election of Class II Director. The election of the following
named person to serve as Class II Director for three year
terms expiring at the 1999 Annual Meeting of Shareholders or
until his successor is duly elected and qualified.
/ / For the nominee listed below / / Withhold authority to
vote for the nominee
listed below
Benjamin H. Wofford
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION TO THE CONTRARY IS INDICATED, IT
WILL BE VOTED FOR THE PROPOSAL.
DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS TO ALL OTHER MATTERS WHICH MAY
COME BEFORE THE SPECIAL MEETING.
<PAGE>
If stock is held in the name of more than one person, all holders should
sign. Signatures should correspond exactly with the name or names appearing
on the stock certificates(s). When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: __________________________________, 1996
(Be sure to date your Proxy)
________________________________________
Name(s) of Shareholder(s)
________________________________________
Signature(s) of Shareholder(s)
Please mark, date and sign this Proxy, and return it in the enclosed
self-addressed return envelope. No postage is necessary.
