8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 8-K 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

June 17, 2021

Date of Report (Date of earliest event reported)

Southside Bancshares, Inc.

(Exact Name of Registrant as Specified in its Charter)

Texas	000-12247	75-1848732
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1201 S. Beckham Avenue,	Tyler,	TX	75701
(Address of Principal Executive Offices)			(Zip Code)

Registrant's telephone number, including area code: (903) 531-7111

NA

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $1.25 par value	SBSI	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
	Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.		☐

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On June 17, 2021, the Board of Directors of Southside Bancshares, Inc. (the “Company”) approved a new Annual Incentive Program (the “Program”), to be administered by the Company’s Compensation Committee (the “Committee”). Participants of the Program for 2021 include named executive officers Lee R. Gibson, Chief Executive Officer, Julie N. Shamburger, Chief Financial Officer, Tim Alexander, Chief Lending Officer, and Brian K. McCabe, Chief Operating Officer, as well as other key executive officers.

The Program provides participants with an opportunity to earn cash awards based on achievement of pre-established performance measures. Performance measures include quantitative performance goals and a qualitative scorecard. Weightings are used to differentiate the relative importance or priority of the performance measures. Each performance measure is weighted a minimum of 5%, with the total quantitative performance goals consisting of 75% and the qualitative scorecard of 25%. The payout for performance measures ranges from minimum threshold of 50%, target of 100% and maximum of 150%. Payout for performance between the minimum threshold, target and maximum is calculated on a straight line basis, and performance below the minimum threshold results in no payout. Each participant is assigned a target award by the Committee, calculated as a percentage of base earnings for the Program year, which represents 100% target payout of all performance measures. Target awards for 2021 for the named executive officers range from 32.5% to 45% of base earnings.

Item 9.01.  Financial Statements and Exhibits

(D)Exhibits.  The following materials are furnished as exhibits to this Current Report on Form 8-K:

Exhibit Number	Description of Exhibit
10.1	Southside Bancshares, Inc. Annual Incentive Program
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Southside Bancshares, Inc.
Date:  June 21, 2021	By:	/s/ JULIE N. SHAMBURGER
		Julie N. Shamburger, CPA
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-10.1

EXHIBIT 10.1

Annual Incentive Program

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This is a summary of the Annual Incentive Program and is nota formal legal document.

Southside Bancshares, Inc. Annual Incentive Program

Introduction

Southside Bancshares, Inc. (“Southside” or the “Bank”) is committed to rewarding key Executive employees for their contributions to Southside’s success. The Southside Annual Incentive Program (“the “Program”) is part of a total compensation package which includes base salary, annual incentives, long-term incentives and benefits. The Program is designed to:

•Recognize and reward achievement of the Bank’s profitable growth and stable financial operating conditions.

•Motivate and reward superior performance.

•Attract and retain talent needed for Southside’s success.

•Encourage teamwork and collaboration.

•Ensure incentives are appropriately risk-balanced.

Effective Date and Program Administrator

The Program is effective January 1, 2021. The Program Administrator is the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”). Participation and payments under this Program are recommended and approved by the Compensation Committee.

Performance Period / Program Year

The performance period is January 1st through December 31st (the “Program Year”).

Participation

The President & CEO participates in the Program unless the Committee deems otherwise. The President & CEO recommends other executives/senior officers for approval by the Committee. New hires must be employed prior to October 1st to be eligible to participate in the Program for the performance period. Participants hired after that date must wait until the next Program Year to be eligible for an award under the Program.

Incentive Award Opportunities

Each participant is assigned a target award, calculated as a percentage of base earnings for the Program Year. Award opportunities vary based on participant roles and are approved by the Committee at the beginning of the Program Year.

Base earnings are defined as the base salary actually earned during the course of the year. Base earnings does not include any bonuses, commissions, reimbursed expenses, employer credits or contributions to nonqualified compensation Programs (other than salary reduction contributions such as 401(K) plan, health and welfare plans or nonqualified deferred compensation plans), or any additional cash or noncash compensation.

Establishment of Performance Measures, Goals and Weightings

At the beginning of each Program Year, the President & CEO recommends to the Committee for approval the participants and their respective incentive award opportunities, together with performance measures,

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goals and weightings (except for his/her own performance measures, goals and weightings, which are determined by the Compensation Committee).

Definitions

For purposes of this Program, these terms have the following meanings:

Performance Measures – The criteria for which awards may be paid. Performance measures may be financial or non-financial. Each performance measure is described at the beginning of the Program Year. Qualitative measures should carry, at a minimum, a general description of the criteria which will be reviewed in order to make an assessment regarding performance.

Goals – Identifies the specific results required to achieve a certain level of performance. Goals may be quantitative or qualitative. For each performance measure, a threshold, target and maximum goal is established. The threshold is the minimum level of performance, below the threshold no incentive is paid out. Once threshold performance is achieved, incremental incentives are awarded up to the maximum annual incentive opportunity. Payouts for performance are as follows:

Threshold	50%
Target	100%
Maximum	150%

See Schedule A for an illustration of the payout calculation.

Weightings – Weightings are used to differentiate the relative importance/priority of the performance measures. Each performance measure is weighted a minimum of 5%, and the total quantitative weighting will be 75% and total qualitative makes up to 25%, totaling 100% for all performance measures in a Program Year.

Target Award – Salary X award weighting percentage (determined by committee) X 100% payout

Maximum Annual Incentive Opportunity – Salary X award weighting percentage (determined by committee) x 150% payout

Award Payout Schedule

Award payouts are based on a schedule using the following format:

Performance Measure	Weight	Threshold	Target	Maximum	Actual	Payout
Bank Goal #1	X%	TBD	TBD	TBD	TBD
Bank Goal #2	X%	TBD	TBD	TBD	TBD
Bank Goal #3	X%	TBD	TBD	TBD	TBD
Qualitative Scorecard	25%	n/a	n/a	n/a
Payouts
Threshold	Target	Maximum
50%	100%	150%

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Determination of Payout Level

At the end of the Program Year, actual performance is compared to the established goals. Individual incentive awards are based on a participant’s base earnings and performance against the award payout schedule.

Award Payouts

Awards will be paid no later than March 15th following the end of the Program Year. Awards will be paid out as a percentage of a participant’s annual base earnings as of December 31st.

Awards paid in cash are considered taxable income to participants in the year paid and will be subject to withholding for required income and other applicable taxes.

Participants must be employed on a full or part-time basis on the last day of the Program Year (i.e. December 31st), unless retired, deceased or disabled. Participants on a performance improvement plan or have an unsatisfactory performance rating at the time of payment are not eligible for a payout.

Qualitative Scorecard

In addition to the quantitative metrics, qualitative components are included in order to recognize efforts and performance of a NEO that results in substantial benefits for the Company. Qualitative metrics are utilized in order to review key performance goals that define success for the year and align with strategic priorities of the bank. The total qualitative scorecard for a specific NEO shall not exceed twenty five percent (25%) of the maximum annual incentive opportunity for that specific NEO.

New Hires, Reduced Work Schedules, Promotions and Transfers

New hires that meet the eligibility criteria and are hired prior to October 1st of the Program Year will receive a pro-rated award based on the number of days worked during the Program Year. New hires employed by the Bank on or after October 1st are not eligible to receive an award for the current Program Year.

Participants that are promoted or change roles where the participant becomes eligible or ineligible for an award or experience a change in incentive opportunity will be paid out on a pro-rated basis using their status and the effective date of the promotion or role change. Award amounts will be calculated using the participant’s base earnings and the incentive opportunity for the applicable period.

Participants that have an approved leave of absence are eligible to receive a pro-rated award calculated using their time in active status as permitted by the Family Medical Leave Act or other applicable state and federal laws and regulations.

Termination of Employment

To encourage retention, a participant must be an active employee of the Bank at the end of the Program Year (i.e. December 31st) to receive an award (please see exceptions for death, disability and retirement below.) Participants who terminate employment during the Program Year will not be eligible to receive an award. Participants who have given notice of resignation during the Program Year are not eligible to receive an award.

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Death, Disability or Retirement

If a participant ceases to be employed by the Bank due to disability as defined under the Bank’s long-term disability program, his/her cash incentive award for the Program Year will be pro-rated to the date of termination.

In the event of death, the Bank will pay to the participant’s estate the pro rata portion of the cash award that had been earned by the participant during his/her period of employment. 

Individuals who retire, defined as the date in which the Participant attains age 65, are eligible to receive a cash incentive payout if they are actively employed through September 30th of the Program Year.

Program Documentation

Each participant will receive documentation at the beginning of the Program Year indicating their incentive opportunities and their specific performance measures, weightings and goals for the Program Year. Each participant will also receive a copy of this Program Summary and any subsequent changes upon becoming a Program participant.

Administration

The Program is authorized by the Board and administered by the Committee. The Program will be reviewed annually to ensure proper alignment with Southside’s business objectives. The Committee has the sole authority to interpret the Program and to make or nullify any rules and procedures, as necessary, for proper administration of the Program. Any determination by the Committee will be final and binding on all participants. The Committee retains the rights as described below to amend or modify the Program at any time.

Program Changes or Discontinuance

The Bank has developed the Program on the basis of existing business, market and economic conditions; current services; and staff assignments. If substantial changes occur that affect these conditions, services, assignments, or forecasts, the Committee may add to, amend, modify or discontinue any of the terms or conditions of the Program at any time. Examples of substantial changes may include mergers, dispositions or other corporate transactions, changes in laws or accounting principles or other events that would in the absence of some adjustment, frustrate the intended operation of this arrangement.

The Committee may, at its sole discretion, waive, change or amend the Program as it deems appropriate. 

No Entitlement to Incentive Compensation

Each Program participant is eligible for a payout under the Program only upon attainment of certain performance objectives defined under the Program and after the approval of the award by the Committee.

Participants Rights not Assignable

Any participant awards shall not be subject to assignment, pledge or other disposition, nor shall such amounts be subject to garnishment, attachment, transfer by operation of law, or any legal process. Nothing contained in this Program shall confer upon any employee any right to continued employment, nor does the Program affect the right of Southside to terminate a Program participant’s employment. Participation in the Program does not confer rights to participation in other Bank Programs, including annual or long-term incentive Programs, non-qualified retirement or deferred compensation Programs or other perquisite Programs.

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Clawback

In the event that an award payout is due to error, omission or fraud (as determined by the Program Administrator), each participant shall reimburse the Bank for part or the entire incentive award made to such participant on the basis of having exceeded specific thresholds for performance periods. For purposes of this policy, (i) the term “incentive awards” means awards under this Southside Annual Incentive Program, the amount of which is determined in whole or in part upon specific performance thresholds relating to the financial results of Southside; and (ii) the term participant means current or former employees who have participated in the Southside Annual Incentive Program. The Bank may seek to reclaim incentives within a three-year period of the incentive payout. Reimbursement may be fulfilled through reductions in compensation or other payments to the participant.

Risk Mitigation

Southside seeks to appropriately balance risk with financial rewards in the Program design and implementation. The compensation arrangements in this Program are designed to be sufficient to incent participants to achieve approved strategic and tactical goals while at the same time not be excessive or lead to material financial loss to the Bank.

Awards may be reduced or eliminated if after a review of the Bank’s performance, the Committee considers it imprudent to provide awards under this Program.

Ethics and Interpretation

If there is any ambiguity as to the meaning of any terms or provisions of this Program or any questions as to the correct interpretation of any information contained therein, the Bank's interpretation expressed by the Committee will be final and binding.

The altering, inflating, and/or inappropriate manipulation of performance/financial results or any other infraction of recognized ethical business standards, will subject the employee to disciplinary action up to and including termination of employment.  In addition, any incentive compensation as provided by this Program to which the employee would otherwise be entitled will be revoked or if paid, be obligated to repay any incentive award earned during the award period in which the wrongful conduct occurred regardless of employment status.

Severability

Each provision in this Program is severable, and if any provision is held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not, in any way, be affected or impaired thereby.

Choice of Law

The Program and the transactions and payments hereunder shall, in all respect, be governed by, and construed and enforced in accordance with the laws of the state of Texas, except to the extent preempted by federal law.

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Schedule A: Payout Calculation

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XML

Document and Entity Information Document	Jun. 17, 2021
Cover [Abstract]
Entity Central Index Key	0000705432
Document Type	8-K
Document Period End Date	Jun. 17, 2021
Entity Registrant Name	Southside Bancshares, Inc.
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	TX
Entity File Number	000-12247
Entity Tax Identification Number	75-1848732
Entity Address, Address Line One	1201 S. Beckham Avenue,
Entity Address, City or Town	Tyler,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75701
City Area Code	903
Local Phone Number	531-7111
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $1.25 par value
Trading Symbol	SBSI
Security Exchange Name	NASDAQ
Amendment Flag	false