<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
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
[x] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST STERLING BANKS, INC.
--------------------------
(Name of Registrant as Specified In Its Charter)
T. KENNERLY CARROLL, JR.
------------------------
(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)(1) 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:
---------------------------------------------------------------------------
<PAGE>
[ ] 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:
---------------------------------------------------------------------------
-2-
<PAGE>
FIRST STERLING BANKS, INC.
1200 BARRETT PARKWAY
KENNESAW, GEORGIA 30144
TELEPHONE: (770) 499-2265
FACSIMILE: (770) 499-7229
April 28, 1997
To the Shareholders of
First Sterling Banks, Inc.
The Annual Meeting of Shareholders of First Sterling Banks, Inc. will be held at
the Crowne Plaza Ravinia Hotel, 4355 Ashford Dunwoody Road, Atlanta, Georgia, in
the Oakwood Room B, on Wednesday, May 28, 1997, at 10:00 a.m. local time.
Although the business session will begin at 10:00 a.m., our directors, officers,
attorneys and auditors will be available to meet and have coffee with you
starting at 9:30 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 May 28, and thank you for being a shareholder.
Sincerely,
Edward C. Milligan
Chairman of the Board of Directors
and Chief Executive Officer
<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 Crowne Plaza Ravinia Hotel, 4355
Ashford Dunwoody Road, Atlanta, Georgia, in the Oakwood Room B at 10:00 a.m.,
local time, on May 28, 1997, for the following purposes:
1. ELECT CLASS III DIRECTORS. To elect two (2) Class III directors to
serve for three-year terms expiring at the 2000 Annual Meeting of
Shareholders or until their successors are duly elected and qualified.
2. 1997 DIRECTORS STOCK OPTION PLAN. To approve the 1997 Directors Stock
Option Plan.
3. 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 April 25, 1997,
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
Chairman of the Board of Directors
and Chief Executive Officer
Enclosures
April 28, 1997
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>
TABLE OF CONTENTS
Page
----
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Record Date, Solicitation and Revocability of Proxies . . . . . . . . . 1
Votes Required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PROPOSAL ONE - ELECTION OF CLASS III DIRECTORS OF THE COMPANY. . . . . . . . 2
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
DIRECTOR COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Westside Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Eastside Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECURITY OWNERSHIP OF MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . 13
PROPOSAL TWO - APPROVAL OF THE 1997 DIRECTORS STOCK OPTION PLAN. . . . . . . 13
Recommendation of the Board of Directors. . . . . . . . . . . . . . . . 15
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Relationship with Independent Public Accountants. . . . . . . . . . . . 15
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . 16
1998 Annual Meeting - Shareholder Proposals . . . . . . . . . . . . . . 16
1996 Annual Report on Form 10-KSB . . . . . . . . . . . . . . . . . . . 16
APPENDIX A...................................................................A-1
1997 Directors Stock Option Plan........................................A-1
i
<PAGE>
FIRST STERLING BANKS, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 1997
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 the 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 10:00 a.m., local time on May 28,
1997, and at any adjournments thereof ("Annual Meeting").
At the Annual Meeting, the shareholders of the Company will be asked to:
(1) elect two (2) Class III directors each to serve for a three-year term, or
until his successor is duly elected and qualified; (2) approve the First
Sterling Banks, Inc. 1997 Directors Stock Option Plan (the "1997 Plan"); and
(3) transact such other business as may properly come before the Annual Meeting
or any adjournments thereof.
This Proxy Statement is dated April 28, 1997, and is first being mailed to
the shareholders of the Company on or about April 28, 1997. The 1996 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
April 25, 1997, 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 1,291,581 shares of Common
Stock issued and outstanding and held by approximately 857 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
1
<PAGE>
SHARES OF COMMON STOCK WILL BE VOTED FOR THE ELECTION OF THE NOMINATED
DIRECTORS, FOR APPROVAL OF THE 1997 DIRECTORS STOCK OPTION PLAN 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.
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 two (2) nominees for Class III membership on the Board of
Directors; and the affirmative vote of a majority of the shares of Common Stock
represented at the Annual Meeting at which a quorum is present is necessary to
approve the 1997 Directors Stock Option Plan. The presence, in person or by
proxy, of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum at the Annual Meeting.
PROPOSAL ONE - ELECTION OF CLASS III DIRECTORS OF THE COMPANY
At the Annual Meeting two (2) Class III directors shall be elected each 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 term of the
Class III directors expires at the 1997 Annual Meeting. The Board of Directors
has set the number of the Class III Board of Directors at two (2). The Board of
Directors has nominated the following persons for Class III membership on the
Board, and unanimously recommends a vote "FOR" the election of these persons:
The Honorable P. Harris Hines and John S. Thibadeau, Jr. Justice Hines and Mr.
Thibadeau are currently serving as Class III directors.
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 two (2) Class
2
<PAGE>
III nominees listed above. In the event that any 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 nominees listed above.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
TWO (2) NOMINEES LISTED ABOVE.
BOARD OF DIRECTORS
The following table sets forth the name of each current director and each
nominee for Class III 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 & Trust Company ("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 March 31, 1997 and the number of shares of Common Stock
beneficially owned by him as of March 31, 1997, 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 term of the Class
II director expires in 1999 and the terms of the Class III directors expire in
1997.
<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 53 Justice 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, Justice Hines served as Judge of the
Class III Superior Court of Cobb County, Georgia. Since
Nominee July 26, 1995, Justice Hines has served as a
Justice of the Supreme Court of the State of
Georgia.
- ----------------------------------------------------------------------------------------------------
Harry L. Hudson, Jr. 53 Mr. Hudson is an agent for the State Farm 21,150(3)
(1996) Insurance Company. Mr. Hudson has been 1.63%
associated with State Farm since January 1,
1970. Mr. Hudson has served as Chairman of
Class I the Board of Directors of Eastside Bank since
February, 1993. He has been a member of the
Board of Eastside Bank since its organization in
1990.
- ----------------------------------------------------------------------------------------------------
3
<PAGE>
<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>
Edward C. Milligan 52 Mr. Milligan is Chairman of the Board of 38,660(4)
(1994) Directors, President and Chief Executive 2.85%
Officer of the Company and has served as
President and Chief Executive Officer of
Class I Westside Bank since its organization in 1990.
- ----------------------------------------------------------------------------------------------------
John S. Thibadeau, Jr. 49 Since 1973, Mr. Thibadeau has been President 10,000(5)
(1996) of Deauton Corporation, a real estate 0.77%
construction and development firm. As a
licensed real estate broker, Mr. Thibadeau is
Class III an officer and principal in Thibadeau-Burton
Nominee 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(6)
(1994) Directors of Westside Bank from its 2.49%
organization until April 1991. Prior to his
retirement in 1997, Dr. Wofford, since 1970,
Class II has been a physician specializing in plastic
and cosmetic surgery in Marietta, 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.
(3) Includes 5,000 shares of Common Stock obtainable upon the exercise of
options.
(4) Includes 19,680 shares of Common Stock obtainable upon the exercise of the
options and 500 shares held by Mr. Milligan's minor children.
(5) Includes 5,000 shares of Common Stock obtainable upon the exercise of
options.
(6) Includes 6,150 shares of Common Stock obtainable upon the exercise of
options and 5,000 shares held as joint tenant with spouse.
4
<PAGE>
BOARD COMMITTEES AND ATTENDANCE
The business and affairs of the Company are under the direction of the
Company's Board of Directors.
During 1996, 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 James J. Tidwell, Sr. who resigned from the
Board on July 30, 1996, in connection with the merger of Eastside Holding
Corporation into the Company.
During 1996, 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
1996, the Executive Committee did not meet.
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 1996, the Directors
Stock Option Committee did not meet.
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
5
<PAGE>
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 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, 1996, 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 1996, 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:
- --------------------------------------------------------------------------------
NAME COMPANY WESTSIDE BANK EASTSIDE BANK
- --------------------------------------------------------------------------------
Edward C. Milligan Chairman of Board/ President/Chief
President/Chief Executive Officer
Executive Officer
- --------------------------------------------------------------------------------
Barbara J. Bond Secretary/Treasurer Senior Vice
President/
Secretary
- --------------------------------------------------------------------------------
Michael J. Henderson Senior Vice President
- --------------------------------------------------------------------------------
Reggie D. Cox President/Chief
Executive
Officer
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
Fredrick D. Jones Senior Vice
President/
Secretary
- --------------------------------------------------------------------------------
The table set forth below shows for each officer of the Company (a) the
person's name, (b) his or her age at March 31, 1997, (c) the year he or she was
first elected as an officer of the Company, and (d) his or her present positions
with the Company and his or her other business experience for the past five
years.
- --------------------------------------------------------------------------------
FIRST
YEAR
NAME AGE ELECTED BUSINESS EXPERIENCE
- --------------------------------------------------------------------------------
Edward C. Milligan 52 1994 Mr. Milligan serves as the Chairman of
the Board of Directors of the Company
and as President and Chief Executive
Officer of the Company and Westside
Bank.(1)
- --------------------------------------------------------------------------------
Barbara J. Bond 48 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.
- --------------------------------------------------------------------------------
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 and Eastside Bank for services rendered in all capacities during the fiscal
year ended December 31, 1996 to the chief executive officers of the respective
banks who were the only executive officers of the Company, Westside Bank or
Eastside Bank whose compensation exceeded $100,000, are as follows:
<PAGE>
SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
AWARDS
--------------------------------
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL YEAR SALARY BONUS OPTIONS COMPENSATION
POSITION ($) ($) (#) ($)
- --------------------------------------------------------------------------------
Edward C. Milligan 1996 122,136.00 42,000.00 --- 7,882.00(1)
President of the 1995 117,425.00 34,800.00 7,380 5,348.00(1)
Company; 1994 110,005.00 22,000.00 --- 4,450.00(1)
President/CEO
Westside Bank
- --------------------------------------------------------------------------------
Reggie D. Cox 1996 100,000.00 16,500.00 5,000 10,050.00(2)
President/CEO 1995 96,000.00 1,000.00 --- 7,400.00(2)
Eastside Bank 1994 85,000.00 --- 4,000 6,000.00(2)
- --------------------------------------------------------------------------------
NOTES TO TABLE
(1) Amounts contributed by Westside Bank during 1994, 1995 and 1996 to Mr.
Milligan's account in Westside Bank's 401(k) Plan were $2,245.00, $2,348.46
and $2,382.00 respectively. Mr. Milligan was paid $2,200 in 1994, $3,000
in 1995, and $5,500 in 1996 as fees for his services as a director of
Westside Bank.
(2) $6,000.00 was paid to Mr. Cox in each year as an automobile allowance and
he was paid $1,400.00 in 1995 and $4,050.00 in 1996 as fees for his
services as a director of Eastside Bank.
STOCK OPTIONS
The following table sets forth information in regard to incentive stock
options granted to executive officers in 1996 whose compensation exceeded
$100,000:
OPTION GRANTS IN LAST FISCAL YEAR
[Individual Grants]
- --------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE
- --------------------------------------------------------------------------------
Reggie D. Cox 5,000(1) 29% 13.00 2/20/2006
- --------------------------------------------------------------------------------
8
<PAGE>
NOTE TO TABLE
(1) The options were granted to Mr. Cox by Eastside Holding Corporation ("EHC")
prior to its merger with the Company and were assumed by the Company. The
options are vested and exercisable upon continuous employment with the
Company (including EHC) and/or Eastside Bank and/or any subsidiary or
affiliate thereof as follows: one-third of the shares commencing on
February 21, 1997; one-third of the shares commencing on February 21, 1998;
and one-third of the shares commencing on February 21, 1999. The options
are immediately vested upon any change in control of the Company as defined
in Mr. Cox's Incentive Stock Option Agreement.
The following table sets forth information in regard to exercise of stock
options and the fiscal year-end value of exercised options for each of the
named executives:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS AT OPTIONS AT
SHARES FY-END (#) FY-END ($)
ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Edward C. Milligan - 0 - - 0 - 19,680(1) 151,634*
- -----------------------------------------------------------------------------------------
Reggie D. Cox - 0 - - 0 - 14,000 / 5,000 119,380 / 18,750
- -----------------------------------------------------------------------------------------
</TABLE>
NOTE TO TABLE
(1) All options owned by Mr. Milligan are exercisable.
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 was $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.
9
<PAGE>
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, 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
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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 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
Eastside Bank entered into an employment agreement with Reggie D. Cox on
April 11, 1997, whereby Mr. Cox is employed as the president and chief executive
officer of Eastside Bank. The term of the agreement is through December 31,
1997, and is automatically extended for an additional twelve (12) months on
January 1, 1998, and on each succeeding January 1 thereafter unless either party
provides a written notice of intention not to renew the Agreement on or before
October 1 of the preceding calendar year.
Mr. Cox's initial base salary is $100,000.00. The base salary may be
increased from time to time by the Board of Directors of Eastside Bank. Mr. Cox
is also entitled to such fringe benefits such as health, life and disability
insurance, and automobile allowance and club membership as provided to him by
Eastside Bank at the time that the employment agreement was executed. He is
also entitled to participate in any bonus and incentive plans which are approved
for key management employees of Eastside Bank. In the event that Mr. Cox's
employment is involuntarily terminated "without cause" as defined in the
employment agreement prior to a "change in control" as defined in the agreement,
he shall be paid fifty percent (50%) of his annual base salary which shall be
paid over a six (6) month period and Eastside Bank will continue all insurance
benefits in effect at the time of his termination with Eastside Bank paying the
same amount of premiums on behalf of Mr. Cox as when Mr. Cox was employed. The
insurance shall be provided for a period of six (6) months from the termination
date or until he is employed by another employer which includes self employment
whichever period of time is shorter. These payments are in full settlement of
any claims which Mr. Cox may have against Eastside Bank for contractual damages
arising out of his termination without cause.
After a "change in control" has occurred, if Mr. Cox is either terminated
"without cause" or has an adverse change in duties or salary and resigns as a
result of such change, he shall be entitled to receive severance compensation in
an amount equal to his annual base salary then in
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effect which amount shall be paid in a lump sum within fourteen (14) days
following the date of termination or resignation.
DIRECTOR COMPENSATION
WESTSIDE BANK
During 1996, the directors of Westside Bank were paid $500 for each Board
meeting attended and, other than Mr. Milligan, were paid $100 for each committee
meeting attended. During 1996, the directors of Westside Bank were paid a total
of $82,800 for such services. During 1997, the chairman of the board shall be
paid $300 for each Board meeting attended and Messrs. Milligan and Wofford shall
be paid $200 per meeting attended and the other directors of Westside Bank shall
be paid $500 for each Board meeting attended. Except for Mr. Milligan, each
director shall be paid $100 for each committee meeting attended in 1997.
The Company's 1995 Directors Stock Option Plan ("1995 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. Under the
1995 Plan, 73,685 shares of common stock may be granted by the Company to all
directors of the Company or Westside Bank who are not employees of the Company
or Westside Bank; and any emeritus director who was a voting member of the Board
of Directors within the 12 months preceding the date of any grant of options to
such emeritus director. The following options are currently outstanding under
the 1995 Plan, 43,665 options were issued at an exercise price of $9.12 in April
1995; 27,060 options were issued at an exercise price of $12.40 in September
1995; and 2,460 options were issued at an exercise price of $13.82 in November
1995. In 1995, options to purchase 500 shares were exercised at $11.22 per
share. There are no remaining options to be issued under the 1995 Plan.
EASTSIDE BANK
During 1996, the chairman of the board of Eastside Bank was paid $500 per
month and the other directors of Eastside Bank were paid $350 per month and,
other than Mr. Cox and Mr. Horn, $75 for each committee meeting attended.
During 1996, the directors of Eastside Bank were paid a total of $57,425 for
such services. During 1997, the chairman of the board shall be paid $300 and
Messrs. Milligan and Thibadeau shall be paid $200 for each Board meeting
attended and the other directors shall be paid $400 for each Board meeting
attended. Except for Messrs. Cox, Horn and Milligan, each director shall be
paid $100 for each committee meeting attended.
The Company's 1997 Director's Stock Option Plan (the "1997 Plan") was
adopted by the Company's Board of Directors on March 26, 1997, subject to the
approval of the shareholders of the Company at the 1997 annual shareholder's
meeting. Under the 1997 Plan, 45,000 shares of common stock may be granted by
the Company to the directors of Eastside Bank who are not
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employees of the Company or Eastside Bank. Upon the adoption of the 1997 Plan
and subject to the approval of the 1997 Plan by the Company's shareholders, each
director of Eastside Bank who was not an employee of the Company or the Bank was
granted an option to purchase 5,000 shares of the Company's common stock with an
exercise price of $18 per share. The options expire on March 25, 2007. See
Proposal II - Approval of the 1997 Director's Stock Option Plan for a more
detailed discussion of the 1997 Plan.
COMPANY
During 1996, the Company's directors did not receive any compensation for
service on the Company's Board of Directors. During 1997, each director shall
be paid $1,950 per calendar quarter for all services as a member of the
Company's Board of Directors.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of March 31, 1997, regarding
the ownership of common stock by all directors and executive officers of the
Company as a group. Information regarding such ownership 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 III DIRECTORS OF THE COMPANY -
Board of Directors."
- --------------------------------------------------------------------------------
AMOUNT AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP(1) OF CLASS
- --------------------------------------------------------------------------------
All directors and 129,047 9.59%
executive officers as
a group (6 persons)
- --------------------------------------------------------------------------------
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.
PROPOSAL TWO - APPROVAL OF THE 1997 DIRECTORS STOCK OPTION PLAN
On March 26, 1997, the Board of Directors of the Company adopted the First
Sterling Banks, Inc. 1997 Directors Stock Option Plan (the "1997 Plan") for
voting members of the Board of Directors of Eastside Bank who are not employees
of the Company or Eastside Bank. The 1997 Plan is set forth in APPENDIX A
attached to this Proxy Statement. The 1997 Plan is effective March 26, 1997
subject to the approval of the shareholders of the Company at the 1997 Annual
Meeting. The 1997 Plan is intended to encourage the directors of Eastside Bank
to remain with and devote their best efforts to Eastside Bank and the Company.
The following discussion of the principal features and effects of the 1997 Plan
is qualified in its entirety by reference to the text of the 1997 Plan set forth
in APPENDIX A.
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The Plan will be administered by a committee ("Committee") appointed by the
Company's Board of Directors who are not participants in the 1997 Plan. The
Committee will construe and interpret the 1997 Plan. The shares to be issued
under the 1997 Plan will be currently authorized shares. The number of shares
of Common Stock available under the 1997 Plan will be subject to adjustment upon
the occurrence of certain events, pursuant to the terms of the 1997 Plan. The
total number of shares of Common Stock that may be purchased pursuant to options
under the 1997 Plan shall not exceed 45,000 shares of Common Stock or 3.5% of
current outstanding shares.
The Committee is authorized to grant stock options under the 1997 Plan only
to voting members of the Board of Directors of Eastside Bank or the Company who
are not employees of the Company or Eastside Bank. The period during which each
option may be exercised shall be ten (10) years from the date the option is
granted. The price at which shares of stock may be purchased under an option
granted pursuant to the 1997 Plan shall be determined by the board but shall not
be less than the fair market value of such shares as determined by the board on
the date that the option is granted. Any stock option granted under the 1997
Plan must be granted on or before March 25, 2007. The options granted under the
1997 Plan are nontransferable except by will or by the laws of descent and
distribution. All unexercised stock options under the 1997 Plan will terminate
immediately upon their lapse by their terms. All unexercised stock options
under the 1997 Plan will terminate on the earlier of the expiration dates of
such option or two (2) years after the optionee ceases to be a director of the
Company or an emeritus director of Eastside Bank due to death or disability.
If an optionee ceases to be a director of the Company or an emeritus director of
Eastside Bank other than by his or her death or disability, all options held by
him or her will terminate at the earlier of the expiration dates of such options
or twelve (12) months from the date that the optionee ceases to be a director of
the Company or an emeritus director of Eastside Bank, but the Board of Directors
of the Company may extend such date for an additional twelve (12) months.
Upon exercise, the exercise price may be paid in cash or in shares of the
Company's Common Stock previously held by the optionee or a combination of both.
Shares surrendered in payment of the option price shall be valued at their fair
market value as of the date of exercise.
The Company intends that the tax effect of any stock option granted under
the 1997 Plan should be determined under Section 83 of the Internal Revenue Code
of 1986 (the "Code"). The following is a brief description of the tax
consequence under the Code. Neither the Company nor the option holder has
income tax consequences from the issuance or receipt of the options granted
under the 1997 Plan. Generally, in the tax year when an option holder exercises
an option, the option holder recognizes ordinary income in the amount by which
the fair market value of the shares at the time of exercise exceed the option
price for such shares. The Company will have a deduction in the same amount as
the ordinary income recognized by the option holder in the Company's tax year in
which or with which the option holder's tax year (of exercise) ends. If an
option holder exercises an option by paying the option price with previously
acquired Company Common Stock, the option holder will recognize income (relative
to the new shares he is
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receiving) in two steps. In the first step, a number of new shares equivalent
to the number of older shares tendered (in payment of the options exercised) is
considered to have been exchanged in accordance with Section 1036 of the Code
and the rulings thereunder, and no gain or loss is recognized. In the second
step, with respect to the number of new shares acquired in excess of the number
of old shares tendered, the option holder will recognize income on those new
shares equal to their fair market value less any non-stock consideration
tendered. The new shares equal to the number of the older shares tendered will
receive the same basis the option holder had in the older shares, and the option
holder's holding period with respect to the tendered older shares will apply to
those new shares. The excess new shares received will have a basis equal to the
amount of income recognized by the option holder by exercise, increased by any
nonstock consideration tendered. Their holding period will commence upon the
exercise of the option.
The 1997 Plan may be amended or terminated by the Board of Directors at any
time. However, no amendments shall be made in the 1997 Plan without the
approval of the shareholders of the Company which: (a) increase the total
number of shares for which options may be granted under the 1997 Plan; (b)
change the minimum purchase price for the optioned shares; (c) affect any
outstanding option or any unexercised right thereunder; (d) extend the option
period; or (e) extend the termination date of the Plan.
On March 26, 1997, the Board of Directors and the Committee granted options
to each director of Eastside Bank, other than Messrs. Milligan, Cox and Horn, to
purchase 5,000 shares of Common Stock subject to approval of the 1997 Plan by
the Company's shareholders at the 1997 Annual Meeting. If approved by the
shareholders, a total number of 45,000 shares shall be subject to these options
which have been granted to the nine current directors of Eastside Bank who are
not officers of the Company or Eastside Bank. The term of these options is ten
(10) years and the option exercise price is $18.00 per share which the Board of
Directors of the Company determined to be the fair market value of the shares
subject to the options on the date of grant, March 26, 1997.
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock represented at the Annual Meeting is necessary to approve
and adopt the 1997 Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF THE 1997 DIRECTORS STOCK OPTION PLAN.
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MISCELLANEOUS
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Mauldin & Jenkins served as the independent accountants for the year ended
December 31, 1996, and performed an audit of the Company's 1996 financial
statements which are included in the 1996 Annual Report to Shareholders which
accompanies this Proxy Statement. The Company has selected Mauldin & Jenkins as
its independent accountants for the 1997 fiscal year.
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.
1998 ANNUAL MEETING - SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company intended to be presented at the
1998 Annual Meeting must be received by the Company on or before January 7, 1998
to be included in the Company's Proxy Statement or Form of Proxy for the 1998
Annual Meeting of Shareholders.
1996 ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's 1996 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 which is 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
Chairman of the Board of Directors
and Chief Executive Officer
Kennesaw, Georgia
April 28, 1997
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APPENDIX A
FIRST STERLING BANKS, INC.
1997 DIRECTORS STOCK OPTION PLAN
1. DEFINITIONS
a. "Bank" - The Eastside Bank & Trust Company.
b. "Code" - IRS Code Section 83.
c. "Committee" - a committee named specifically to administer this Plan.
d. "Common Stock" - common voting stock of the Corporation.
e. "Corporation" - FIRST STERLING BANKS, INC.
f. "Directors" - voting members of the Board of Directors of either The
Eastside Bank & Trust Company or First Sterling Banks, Inc.
g. "Emeritus Director" - non-voting advisory member of the Emeritus Board
of Directors of The Eastside Bank & Trust Company.
h. "Fair Market Value" - determined in good faith by the Board of
Directors if shares are not listed on any exchange or quoted in the
NASDAQ National Market System or over-the-counter market.
i. "Option" - right to purchase shares of Common Stock.
j. "Option Agreement" - formal agreement for each grant with specific
terms and conditions not inconsistent with this Plan.
k. "Optionee" - an eligible person under Section 5 below who has been
granted options under Plan.
2. PURPOSE
To advance the interests of the Bank and the Corporation and its
shareholders by providing Bank Directors who are not employees a sense of
proprietorship and personal involvement and to encourage Bank Directors to
remain with and devote their best efforts to the Bank or the Corporation.
3. SHARES SUBJECT TO THE PLAN
There shall be authorized and reserved for issuance upon the exercise of
Options to be granted under the Plan, 45,000 shares of Common Stock, or
3.5% of current outstanding shares.
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4. ADMINISTRATION
A Committee appointed by the Board of Directors with not less than three
members who are not participants in the Plan will have complete authority
to interpret the Plan, make grants, and determine terms and conditions
within the context of the Plan.
5. ELIGIBILITY
The following persons are eligible to receive options under the Plan: All
Bank Directors who are not employees of the Corporation or the Bank. To the
extent that shares are available, Directors who take office subsequent to
the effective date of the Plan shall be eligible to receive Options.
6. GRANTING OF OPTIONS; OPTION EXERCISE PRICE
All Options granted under the Plan will be Non-Qualified Options as
evidenced by a Non-Qualified Option Agreement. Each eligible Director in
office on the effective date of the Plan will receive an Option to purchase
5,000 shares of Common Stock at a price per share equal to the Fair Market
Value of a share on that date. The Committee may make additional grants of
options as desirable. Any Option granted hereunder shall have a per share
option exercise price at least equal to the Fair Market Value of a share on
the date of the grant as determined in good faith by the Board of
Directors.
7. TERM OF OPTION
Options granted hereunder shall be exercisable in whole or in part, from
time to time, during the ten year period subsequent to the date of the
grant. Except as provided in Section 11, no Option granted under the Plan
may be exercised prior to six months after the date it is granted.
8. MANNER OF EXERCISE
The Options shall be exercised by written notice, delivered to the
Corporation and signed by the Director or his successors stating the number
of shares with respect to which the Option is being exercised. Payment in
full of the Option price of the said shares must be made at the time of
exercise, and payment may be made in cash or shares of the Common Stock
previously held by the Optionee or a combination. Payment in shares may be
made with shares received upon the exercise or partial exercise of an
Option, whether or not involving a series of exercises or partial exercises
and whether or not share certificates for such shares surrendered have been
delivered to the Optionee. Shares surrendered in payment of the Option
Price shall be valued at the Fair Market Value as of the date of the
exercise.
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Except as otherwise provided herein at the time of the exercise of an
Option, the Optionee must be a Director or an Emeritus Director.
9. NON-TRANSFERABILITY
Options can only be transferred by will or by the laws of descent and
distribution.
10. TERMINATION OF SERVICE AS A DIRECTOR
At the later of the time that an Optionee ceases to be a Director or an
Emeritus Director other than by his or her death or disability, all Options
held by him or her at the time of such termination shall be exercisable by
such Optionee but only:
a. if and to the extent the same were exercisable at the time such
Optionee ceases to be a Director or Emeritus Director, and
b. prior to the earlier of (1) the expiration dates of such Options or
(2) that date which is twelve (12) months from the date such Optionee
ceases to be a Director or an Emeritus Director, such twelve (12)
month period to include the date on which such termination occurs,
provided that the Board may in its discretion extend such date for an
additional twelve (12) months.
If an Optionee ceases to be a Director or an Emeritus Director as a result
of such Optionee's death or disability, then all Options held by such
Optionee on the date of such termination shall be exercisable in full,
whether or not exercisable on the date of such termination, at any time
prior to the earlier of (1) the expiration dates of such Options or (2)
that date which is two years from the date such Optionee ceases to be a
Director or Emeritus Director. In the event of the death of an Optionee,
then such Optionee's Options shall be exercisable to the extent herein
otherwise provided by the executor or personal representative of the
Optionee's estate or by any person who acquired the right to exercise such
Options by bequest under the Optionee's will or by inheritance.
If any Optionee ceases to be a Director and immediately is appointed to the
Emeritus Board of Directors, then the provisions of this Paragraph 10 shall
not apply until he or she ceases to be an Emeritus Director.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; ACCELERATION OF EXERCISE RIGHTS
The total number of shares on which Options may be granted under the Plan
and Option rights (both as to the number of shares and the option price)
shall be appropriately adjusted for any increase or decrease in the number
of outstanding shares of Common Stock of the Corporation resulting from
payment of a stock dividend on the Common
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Stock, a subdivision or combination of shares of the Common Stock, or a
reclassification of the Common Stock, and in the event of a merger or
consolidation in accordance with the following paragraph.
After any merger, consolidation or reorganization of any form involving the
Corporation as a party thereto involving any exchange, conversion,
adjustment or other modification of the outstanding shares of the
Corporation's Common Stock, each Optionee at the time of such
reorganization shall, at no additional cost, be entitled, upon any exercise
of his Option, to receive, in lieu of the number of shares as to which such
Option shall then be so exercised, the number and class of shares of stock
or other securities or such other property to which such Optionee would
have been entitled pursuant to the terms of the agreement of merger or
consolidation, if at the time of such merger or consolidation, such
Optionee had been a holder of record of a number of shares of the Common
Stock of the Corporation equal to the number of shares as to which such
Option shall then be so exercised. Comparable rights shall accrue to each
Optionee in the event of successive mergers or consolidations of the
character described above.
The foregoing adjustments and the manner of their application will be in
the sole discretion of the Committee to determine.
In the event of (1) the adoption of a plan of merger or consolidation in
which the Corporation's shareholders as a group would receive less than 50%
of the voting capital stock of the surviving entity; (2) the approval by
the Board of Directors of the Corporation of an agreement providing for the
sale or transfer (other than as security for obligations of the
Corporation) of substantially all the assets of the Corporation; or (3) the
acquisition of more than 20% of the Corporation's voting capital stock by
any person as defined by Section 13(d)(3) of the Securities and Exchange
Act of 1934, other than a person, or group including a person who
beneficially owned, as of the effective date of the Plan, more than 3% of
the Corporation's securities, in the absence of a prior expression of
approval of the Board Of Directors of the Corporation, any Option granted
hereunder shall become immediately exercisable in full, subject to any
appropriate adjustments in the number of shares subject to Option and the
Option Price, and shall remain exercisable for the remaining term of such
Option, regardless of whether such option has been outstanding for six
months or of any provision contained in the Stock Option Agreement with
respect to limitations of the exercisability of the Option or any portion
thereof for any length of time.
Anything contained herein to the contrary notwithstanding, upon the
dissolution or liquidation of the Corporation each Option granted under the
Plan shall terminate.
The grant of an Option pursuant to this Plan shall not in any way affect
the right or power of the Corporation to make adjustments,
reclassifications, or changes of its capital or
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business structure, or to merge or consolidate, or to dissolve, liquidate
or sell, or transfer all or any part of its business or assets.
12. EFFECTIVENESS OF THE PLAN
The effective date of the Plan shall be March 26, 1997, the date of the
approval of the Plan by the Board of Directors of the Corporation, subject
to the approval of the Plan by the shareholders of the Corporation within
one (1) year following such date. No Option granted hereunder may be
exercised prior to the approval of the Plan by the shareholders of the
Corporation, and in the event that the shareholders fail to approve the
Plan within one year of any Option grants made pursuant to the Plan, then
all such Options shall be void.
No Options may be granted under the Plan after the expiration of ten years
from and including the effective date of the Plan.
13. AMENDMENT AND TERMINATION
The Plan may be amended or terminated by the Board of Directors at any time
as deemed in the best interests of the Corporation; provided, however, no
amendments shall be made in the Plan without the approval of the
shareholders of the Corporation which:
a. Increase the total number of shares for which options may be granted
under the Plan except as provided in Section 11.
b. Change the minimum purchase price for the optioned shares except as
provided in Section 11.
c. Affect any outstanding option or any unexercised right thereunder
except as provided in Section 11.
d. Extend the option period provided in Section 7.
e. Extend the termination date of the Plan.
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FIRST STERLING BANKS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 1997
The undersigned hereby appoints Edward C. Milligan, P. Harris Hines and
Harry L. Hudson, Jr. or any one of them, as Proxies, with the power to appoint
his substitute, and hereby authorizes them or any one 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 Crowne Plaza Ravinia
Hotel, 4355 Ashford Dunwoody Road, Atlanta, Georgia, on May 28, 1997, at 10:00
a.m. local time, and at any adjournments thereof, upon the proposals 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 PROPOSALS
PROPOSAL Election of Class III Directors. The election of the following named
ONE: persons each to serve as a Class III Director for a three year term
expiring at the 2000 Annual Meeting of Shareholders or until his
successor is duly elected and qualified.
/ / For all the nominees / / Withhold authority to vote
listed below for all nominees listed below
(except as marked to the
contrary below)
(Instructions: To withhold authority to vote for any individual nominee or
nominees, strike a line through the nominee's name or names
listed below.)
P. Harris Hines and John S. Thibadeau, Jr.
PROPOSAL Approval of the 1997 Director's Stock Option Plan. The approval of the
TWO: Company's 1997 Director's Stock Option Plan as described in and
attached as APPENDIX A to the Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
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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 PROPOSALS.
DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS TO ALL OTHER MATTERS WHICH MAY
COME BEFORE THE ANNUAL MEETING.
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 certificate(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: _______________________ , 1997
(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.
