<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 [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
LIBERTY NATIONAL BANCORP, INC.
.............................................................................
(Name of Registrant as Specified In Its Charter)
LIBERTY NATIONAL BANCORP, INC.
..............................................................................
(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: _/
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
_/ 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:
......................................................
Notes:
<PAGE>
LOGO
NOTICE OF 1994 ANNUAL MEETING
OF SHAREHOLDERS AND PROXY MATERIAL
LIBERTY NATIONAL BANCORP, INC.
416 WEST JEFFERSON STREET
LOUISVILLE, KENTUCKY 40202-3244
<PAGE>
LOGO
March 18, 1994
Dear Shareholder:
This package contains Liberty National Bancorp, Inc.'s 1993 Annual Report to
Shareholders, along with a proxy statement and proxy form for Liberty's 1994
Annual Meeting to be held on April 27, 1994 at 10:30 a.m. at the Commonwealth
Convention Center in Louisville, Kentucky.
The only matter we intend to consider at the Annual Meeting is the election of
directors. Liberty continues to work together with Banc One Corporation
towards completion of our previously announced affiliation. We expect to have
a special meeting of shareholders this summer to consider and act upon the
Banc One proposal. At the special meeting, Liberty shareholders will be able
to consider the proposal closer to the period when the Banc One stock will be
valued for purposes of the transaction, and closer to the anticipated
consummation date.
I look forward to seeing you at the Annual Meeting. Whether or not you are
able to attend, please mark, sign and return the enclosed proxy.
Thank you for your continuing interest and support for Liberty.
Sincerely,
LOGO
Malcolm B. Chancey, Jr.
LOGO
<PAGE>
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON
APRIL 27, 1994
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Liberty
National Bancorp, Inc. ("Liberty") will be held at the Commonwealth Convention
Center, 221 Fourth Avenue, Rooms 105 and 106, Louisville, Kentucky, at 10:30
a.m. on Wednesday, April 27, 1994, for the following purposes:
1. ELECTION OF DIRECTORS. To elect six directors.
2. OTHER BUSINESS. To act upon such other matters as may properly be
brought before the Annual Meeting or any adjournment thereof.
Information regarding the matters to be acted upon at the meeting is contained
in the Proxy Statement accompanying this Notice.
Only those holders of Liberty Common Stock of record at the close of business
on March 16, 1994, are entitled to notice of and to vote at the Annual Meeting
and any adjournment thereof.
By Order of the Board of Directors
LOGO
Malcolm B. Chancey, Jr.
Chairman of the Board
Louisville, Kentucky
March 18, 1994
YOUR VOTE IS IMPORTANT
Please date, sign and promptly return the enclosed Proxy Form in the
accompanying postage-paid envelope.
<PAGE>
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
LIBERTY NATIONAL BANCORP, INC., TO BE HELD ON APRIL 27, 1994
The accompanying proxy form is solicited by the Board of Directors of Liberty
National Bancorp, Inc. ("Liberty"), for use at the Annual Meeting of
Shareholders to be held at 10:30 a.m. on Wednesday, April 27, 1994, at the
Commonwealth Convention Center, 221 Fourth Avenue, Rooms 105 and 106,
Louisville, Kentucky. All expenses of preparing, printing, mailing and
delivering the proxy form and all materials used in the solicitation thereof
will be borne by Liberty. In addition, Liberty has retained D. F. King & Co.,
Inc., to assist in the solicitation of proxies by Liberty for a fee not to
exceed $5,000 plus reasonable out-of-pocket expenses. In addition to the use of
the mails, proxy forms may be solicited by personal interview, telephone and
telegraph by directors, officers and other employees of Liberty, none of whom
will receive additional compensation for such services. Liberty will also
request brokerage houses, custodians and nominees to forward soliciting
materials to the beneficial owners of Liberty's common stock ("Common Stock")
held of record by them and will pay reasonable expenses of such persons for
forwarding such materials. This Proxy Statement and the accompanying proxy form
are first being sent or given to shareholders on or about March 18, 1994. The
mailing address of Liberty's principal executive offices is P.O. Box 32500,
Louisville, Kentucky 40232-2500.
Only holders of record of Common Stock at the close of business on March 16,
1994, are entitled to notice of and to vote at the 1994 Annual Meeting. On
March 16, 1994, there were 25,741,735 shares of Common Stock issued,
outstanding and entitled to vote at the 1994 Annual Meeting.
Each holder of Common Stock has one vote per share on all matters coming before
the meeting, except the election of directors. In the election of directors
each shareholder may vote the number of shares held by him or her on the record
date for each vacancy to be filled, may cumulate votes and cast for one nominee
a number of votes equal to the number of his or her shares multiplied by the
total number of vacancies to be filled, or may distribute such votes among as
many nominees as he or she chooses. The Board of Directors is soliciting
discretionary authority for the proxies to cumulate votes. Because the election
of directors is the only scheduled item for the Annual Meeting, broker non-
votes will not be counted in any way for this meeting. Proxy forms may be
revoked at any time before the taking of the vote at the meeting. Pursuant to
Liberty's Bylaws, any proposal presented by a shareholder for consideration by
Liberty's shareholders must be seconded by another shareholder.
PENDING MERGER
On November 3, 1993, Liberty and BANC ONE CORPORATION ("BANC ONE") announced
they had signed an agreement for the merger of Liberty with a subsidiary of
BANC ONE (the "Merger Agreement").
Terms of the agreement call for Liberty shareholders to receive $35.00 in value
of BANC ONE stock if BANC ONE shares are trading between $37.79 and $40.00 a
share. If BANC ONE shares are trading at or below $37.79 per share, Liberty
shareholders will receive 0.9262 shares of BANC ONE stock for each share of
Liberty. If BANC ONE is trading at or above $40.00, Liberty shareholders will
receive 0.8750 shares of BANC ONE stock for each Liberty share.
Under the terms of the agreement, Liberty has the right to terminate the
transaction if BANC ONE shares are trading below $34.55 per share and at or
above $31.82 per share, unless BANC ONE agrees to issue additional shares to
Liberty shareholders so that the value of BANC ONE shares received by Liberty
shareholders is not less than $32.00 per Liberty share. Under further terms of
the agreement, Liberty may terminate the transaction if the BANC ONE shares are
trading at less than $31.82 per BANC ONE share. Liberty's right to terminate
the transaction in these circumstances occurs shortly prior to the anticipated
closing of the transaction when BANC ONE stock is valued for purposes of the
1
<PAGE>
transaction. The value of BANC ONE stock will be determined by averaging
trading prices during a 15-day trading period ending eight trading days prior
to the closing.
The BANC ONE share prices and the exchange ratio discussed in the previous
paragraphs have been adjusted to reflect a 10 percent stock dividend payable on
March 4, 1994, to BANC ONE shareholders of record as of February 16, 1994,
which BANC ONE declared on January 25, 1994.
In connection with the Merger Agreement, Liberty has granted BANC ONE an option
to purchase up to 19.9 percent of its common stock under certain circumstances.
Liberty expects to have a special meeting of shareholders this summer to
consider and act upon the BANC ONE proposal. At the special meeting, Liberty
shareholders will be able to consider the proposal closer to the period when
the BANC ONE stock will be valued for purposes of the transaction, and closer
to the anticipated consummation date.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to each person
known to Liberty to have owned beneficially, as of December 31, 1993, five
percent or more of the outstanding Common Stock. The table also sets forth (1)
the beneficial ownership of Common Stock by all of the directors and officers
of Liberty, and (2) direct and certain other beneficial ownership of Common
Stock by the directors, officers, directors emeriti, advisory directors and
certain employees of Liberty and its wholly owned subsidiaries as a group.
Liberty's wholly owned subsidiary banks as of December 31, 1993, were: Liberty
National Bank and Trust Company of Kentucky ("Liberty Bank"); Farmers Deposit
Bank of Brandenburg in Brandenburg, Kentucky; First Federal Savings Bank in
Hopkinsville, Kentucky; Hardin County Bank and Trust, Inc., in Radcliff,
Kentucky; Liberty National Bank of Madisonville in Madisonville, Kentucky;
Liberty National Bank of Northern Kentucky in Erlanger, Kentucky; Liberty
National Bank of Owensboro in Owensboro, Kentucky; Liberty National Bank of
Shelbyville in Shelbyville, Kentucky; Liberty National Bank and Trust Company
of Hardin County in Elizabethtown, Kentucky; and Liberty National Bank and
Trust Company of Indiana in Charlestown, Indiana. On February 21, 1994, Farmers
Deposit Bank of Brandenburg, Hardin County Bank and Trust, Inc., and Liberty
National Bank and Trust Company of Hardin County merged to become Liberty
National Bank and Trust Company of Central Kentucky, in Elizabethtown,
Kentucky. All of the foregoing banks, including Liberty Bank, are sometimes
collectively referred to herein as the "Banks."
<TABLE>
<CAPTION>
NUMBER OF SHARES AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OF CLASS/1/
<S> <C> <C>
J.J.B. Hilliard, W. L. 1,297,668 shares./2/ Hilliard Lyons holds 5.04%
Lyons, Inc.; Hilliard 1,081,806 shares with sole voting power and
Lyons Trust Co. sole investment power. No shares are held
(collectively "Hilliard with either shared voting or shared invest-
Lyons") Hilliard Lyons ment power
Center Louisville,
Kentucky
Liberty National Bank and 4,554,020 shares/3/ held in fiduciary 17.70%
Trust Company of Kentucky capacity, as trustee, executor or
("Liberty Bank") otherwise. Liberty Bank holds 2,086,956
416 West Jefferson Street shares with sole voting power; 2,145,288
Louisville, Kentucky shares with shared voting power, including
2,103,338 shares held as trustee for The
Liberty 1992 Restated Thrift Plan and Trust
(the "Thrift Plan"); 321,776 shares without
voting power; 1,028,658 shares with sole
investment power; 523,842 shares with
shared investment power; and 3,001,520
shares without investment power, including
2,103,338 shares held as trustee for the
Thrift Plan/4/
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OF CLASS/1/
<S> <C> <C>
The Liberty 1992 Restated 2,103,338 shares held as sole trustee, with 8.17%
Thrift Plan and Trust respect to which shares Liberty Bank, as
416 West Jefferson Street trustee, has shared voting and no
Louisville, Kentucky investment power/4/
All Directors and Officers 2,703,544 shares/5/ 10.23%
of Liberty as a Group (30
in number)
All Directors, Officers, 7,128,986 shares/6/ 26.76%
Directors Emeriti,
Advisory Directors and
Certain Employees of
Liberty and its
Subsidiaries as a Group
</TABLE>
- ---------------------
/1/In this Proxy Statement shares of Common Stock subject to currently
exercisable options are deemed outstanding for computing the percentage of
class for the person or group holding such options but are not deemed
outstanding for computing the percentage of class for any other person or
group.
/2/Includes shares beneficially owned by officers of Hilliard Lyons affiliates
and shares held by Hilliard Lyons affiliates in a fiduciary capacity. Hilliard
Lyons disclaims beneficial ownership with respect to 215,862 shares.
/3/Includes 399,780 shares held by the Banks (other than Liberty Bank) in
fiduciary capacity, as trustee, executor or otherwise.
/4/As to 2,084,474 shares, participants in the Thrift Plan direct Liberty
Bank, as trustee, to vote the vested portion of the participant's account
balance attributable to whole shares of Common Stock. The other 18,864 shares
held by Liberty Bank, as trustee, under the Thrift Plan (together with any
shares for which no directions are received from participants in the Thrift
Plan) must then be voted in the same proportions as the directions given to
Liberty Bank, as trustee, by the respective participants. Under the Thrift
Plan, participants have the right to direct the investment of funds
contributed by the participant, including funds invested in Common Stock,
subject to certain timing and other restrictions. Participants have no power
to direct the investment of funds contributed by the employer, all of which
are invested in Common Stock. Under the Thrift Plan, participants or their
beneficiaries are eligible to receive the balance of their accounts in-kind
upon retirement, death or disability. The vested portion of a participant's
account balance in the Thrift Plan is eligible for distribution in-kind upon
termination of employment.
/5/For a description of the voting and investment powers with respect to
directors' shares as well as the number of these shares owned by directors
that are included in the Thrift Plan, see the footnotes to the table under
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS. The non-director officers of
Liberty own 246,934 shares beneficially, including 126,150 shares subject to
currently exercisable stock options and 72,744 shares held in the Thrift Plan
with respect to which each of them has the voting and investment powers
described in footnote 4.
/6/The Group contains 1,930 members, including without limitation present,
former and retired employees who hold shares in the Thrift Plan. For a
description of the voting and investment powers with respect to the shares
owned by the directors of Liberty, see footnote 5. The Group holds 913,313
shares subject to currently exercisable stock options, and 2,084,474 vested,
whole shares are held by present, former and retired employees of the Banks
and certain other subsidiaries of Liberty in the Thrift Plan with the voting
and investment powers described in footnote 4. Liberty has not undertaken the
expense
3
<PAGE>
and effort of compiling the number of shares the directors, officers, directors
emeriti, advisory directors and employees of the Banks and such other
subsidiaries, other than directors and officers of Liberty, may hold
beneficially other than directly in their own names or in the Thrift Plan.
- ---------------------
ELECTION OF DIRECTORS
Effective at the 1994 Annual Meeting, Liberty's Board of Directors has set the
number of directors at 19. Liberty's Board of Directors currently consists of
19 members, six of whose terms expire at the 1994 Annual Meeting. All six of
these directors (George N. Gill, Nancy Lampton, Martin S. Margulis, Joseph W.
Phelps, Max L. Shapira and Dr. Robert L. Taylor) have been nominated for
reelection as directors for terms expiring at the 1997 Annual Meeting. Joseph
W. Phelps, the immediate past Chairman of Liberty, would ordinarily not be
eligible for renomination under Liberty's Bylaws because he is now 67 years
old. However, Liberty has amended the applicable retirement-age provision in
its Bylaws to permit Mr. Phelps to continue his service as a director. Liberty
has made this exception because Mr. Phelps' service as a director, a member of
the Examining Committee and the former Chairman of the Board includes the
period during which the proposed merger with BANC ONE was considered. Liberty
and Mr. Phelps have an informal agreement under which he will retire as a
director effective at the 1995 Annual Meeting.
Liberty's Articles of Incorporation provide that its Board of Directors will
have not fewer than nine nor more than 30 members, the exact number to be fixed
from time to time by the Board of Directors. Between meetings of shareholders
held for the election of directors, the Board of Directors may fill not more
than three newly created directorships resulting from an increase in the
authorized number of directors fixed by the Board of Directors. Any vacant
directorship, whether resulting from an increase in the number of directors or
otherwise, may be filled by the affirmative vote of a majority of the
directors, whether or not a quorum of the Board, for a term of office
continuing only until the next election of directors by the shareholders. A
decrease in the number of directors, however, shall not have the effect of
shortening the term of any incumbent director.
If any named nominee should refuse or be unable to serve, the Board of
Directors believes the proxies will vote the shares represented by the enclosed
proxy form for such substitute nominee, if any, as may be proposed by the Board
of Directors. No circumstances are now known, however, that would prevent any
of the nominees from serving. The proxies designated by the Board of Directors
may cumulatively vote each proxy form received if such action is deemed by them
to be appropriate. Shares represented by the proxy forms cannot be voted for a
greater number of persons than the number of nominees named.
The six nominees receiving the most votes cast in their favor at the Annual
Meeting will be elected as directors. Shares represented by proxy forms
withholding authority to vote for a named nominee will not be voted for that
nominee, and broker nonvotes will not be counted. The Board of Directors is
soliciting discretionary authority to vote shares represented by signed proxy
forms on which no vote is indicated for each of the named nominees, or their
substitutes, if any.
4
<PAGE>
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
The following information is furnished as of December 31, 1993 (except as noted
otherwise), with respect to each person nominated for election as a director at
the 1994 Annual Meeting, and each director whose term will continue after the
1994 Annual Meeting.
<TABLE>
<CAPTION>
YEAR FIRST NUMBER OF
BECAME SHARES OF
DIRECTOR OF PRESENT PRINCIPAL COMMON STOCK PERCENT OF
LIBERTY OR OCCUPATION; OTHER BENEFICIALLY COMMON
NAME AGE* PREDECESSOR** DIRECTORSHIPS OWNED STOCK
NOMINEES FOR TERMS TO EXPIRE AT 1997 ANNUAL MEETING
<S> <C> <C> <C> <C> <C>
George N. Gill 59 1987 Retired; former President 4,664 ***
and Publisher, Courier-
Journal and Louisville Times
Company (Newspaper publisher)
Nancy Lampton 51 1967 Chairman of the Board, 1,131,861/1/ 4.40%
American Life and Accident
Insurance Company of
Kentucky (Insurance)
Martin S. Margulis 61 1989 Consultant, Mercantile 2,666 ***
Stores Co. (Retailing);
former President, Bacons &
Son (Retailing)
Joseph W. Phelps 67 1970 Retired; former Chairman of 360,187/2/ 1.39%
the Board and Chief
Executive Officer of Liberty
and Liberty Bank; Director,
Kentucky Home Mutual Life
Insurance Company and
Kentucky Home Life Insurance
Company (Insurance)
Max L. Shapira 50 1976 Executive Vice President, 45,706/3/ ***
Heaven Hill Distilleries,
Inc. (Distillery); Vice
President, Shapira
Corporation (Retail dry
goods)
Dr. Robert L. Taylor 54 1988 Dean, University of 2,666/4/ ***
Louisville College of
Business and Public
CONTINUING DIRECTORS UNTIL 1995 ANNUAL MEETINGAdministration (University
graduate school)
Malcolm B. Chancey, 62 1985 Chairman of the Board and 245,724/5/ ***
Jr. Chief Executive Officer of
Liberty and Liberty Bank;
President of Liberty;
Director, Medical Management
Resources, Inc. (Health care
claims services)
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST NUMBER OF
BECAME SHARES OF
DIRECTOR OF PRESENT PRINCIPAL COMMON STOCK PERCENT OF
LIBERTY OR OCCUPATION; OTHER BENEFICIALLY COMMON
NAME AGE* PREDECESSOR** DIRECTORSHIPS OWNED STOCK
<S> <C> <C> <C> <C> <C>
Frank B. Hower, Jr. 65 1966 Retired; former Chairman of 175,416/6/ ***
the Board and Chief
Executive Officer of Liberty
and Liberty Bank; Director,
American Life and Accident
Insurance Company of
Kentucky (Insurance);
Director, Blue Cross and
Blue Shield of Kentucky,
Inc. (Health insurance);
Director, Churchill Downs,
Incorporated (Horse racing)
James W. McDowell, 52 1989 President, McDowell 634/7/ ***
Jr. Associates (Business
management consulting);
former Chief Executive
Officer, Dairymen, Inc.
(Dairy cooperative);
Director, Blue Cross and
Blue Shield of Kentucky,
Inc. (Health insurance)
John C. Nichols II 62 1981 Vice Chairman, National 13,705/8/ ***
Records Management
Corporation (Records
management)
Gouverneur H. Nixon 66 1979 Chairman of the Board, The 5,255/9/ ***
Williamson Group, Inc.
(Caramel color manufacturer)
Cyrus S. Radford, Jr. 64 1966 President, The Radford 97,585 ***
Company (Investments)
CONTINUING DIRECTORS UNTIL 1996 ANNUAL MEETING
Stanley S. Dickson 62 1980 Retired; former President, 2,735/1//0/ ***
Kentucky Division, and Vice
President, South Central
Bell Telephone Company
(Telephone services)
C. H. Dishman III 62 1972 President, Tri-City 133,015/1//1/ ***
Oldsmobile, Inc. (Automobile
dealer)
Wallace H. Dunbar 62 1976 Chairman of the Board, 95,417/1//2/ ***
Americo Group (Vinyl
laminator); Director, Thomas
Industries, Inc. (Lighting
manufacturer)
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST NUMBER OF
BECAME SHARES OF
DIRECTOR OF PRESENT PRINCIPAL COMMON STOCK PERCENT OF
LIBERTY OR OCCUPATION; OTHER BENEFICIALLY COMMON
NAME AGE* PREDECESSOR** DIRECTORSHIPS OWNED STOCK
<S> <C> <C> <C> <C> <C>
Owsley Brown Frazier 58 1990 Vice Chairman, Brown-Forman 10,200 ***
Corporation (Maker of
liquor, wine, china, crystal
and luggage)
George E. Gans III 54 1990 President and Chief 237/1//3/ ***
Executive Officer, Paul
Semonin Company (Real
estate)
R. K. Guillaume 50 1992 Executive Vice President of 128,804/1//4/ ***
Liberty; President of
Liberty Bank
Leonard E. Lyles 58 1992 President, Lyles 133 ***
Enterprises, Inc. (Business
consulting)
<CAPTION>
NUMBER OF
YEAR FIRST POSITIONS WITH LIBERTY AND SHARES OF
BECAME LIBERTY BANK AND OTHER COMMON STOCK PERCENT OF
OFFICER OF POSITIONS DURING LAST FIVE BENEFICIALLY COMMON
NAME AGE* LIBERTY BANK YEARS OWNED STOCK
CERTAIN NON-DIRECTOR EXECUTIVE OFFICERS/1//5/
<S> <C> <C> <C> <C> <C>
Ronald M. Holt 47 1990 Executive Vice President of 235/1//6/ ***
Liberty Bank since 1990;
Executive Vice President,
First American Trust
Company, 1986-1990
Carl R. Page 45 1976 Secretary of Liberty and 62,306/1//7/ ***
Liberty Bank; Executive Vice
President of Liberty Bank
W. LeGrande Rives 53 1989 Executive Vice President of 26,250/1//8/ ***
Liberty Bank since 1989;
Executive Vice President,
Centerre Bancorporation,
1985-1989
Jack H. Shipman 57 1970 Executive Vice President of 52,888/1//9/ ***
Liberty since 1992;
Executive Vice President of
Liberty Bank
Carl E. Weigel 62 1974 Treasurer and Chief 30,748/2//0/ ***
Financial Officer of
Liberty; Cashier of Liberty
Bank since 1990; Executive
Vice President and
Comptroller of Liberty Bank
</TABLE>
- ---------------------
*As of March 15, 1994.
**Because Liberty Bank is the predecessor of Liberty, and because Liberty and
Liberty Bank are successors to the business of United Kentucky, Inc. and
United Kentucky Bank, Inc., respectively, the years shown indicating when
the listed individuals first became directors include prior directorships
at these institutions. Messrs. Hower and Phelps became directors of Liberty
in 1979, when Liberty was formed, and Ms. Lampton and Messrs. Dishman,
Dunbar, Nixon, Radford and Shapira became directors of Liberty in 1980. Mr.
Dickson became a director of Liberty in 1982, when United Kentucky, Inc.
was merged into Liberty. Mr. Nichols became a director of Liberty in 1989.
All others became directors of Liberty when indicated in the preceding
table.
7
<PAGE>
***Represents less than 1% of outstanding shares.
/1/Includes 1,115,104 shares owned by American Life and Accident Insurance
Company of Kentucky, of which Ms. Lampton is an officer, director and
shareholder and with respect to which Ms. Lampton has shared voting and
investment power; 4,097 shares held by Liberty Bank as trustee for Ms. Lampton
with respect to which Ms. Lampton has neither voting nor investment power; and
3,077 shares held by Liberty Bank in an individual retirement account for Ms.
Lampton with respect to which Ms. Lampton has sole voting and investment
power.
/2/Includes 232,661 shares subject to currently exercisable stock options.
/3/Includes 4,690 shares held by Mr. Shapira's wife as custodian under the
Kentucky Uniform Transfers to Minors Act for their children; and 896 shares
held by Mr. Shapira's wife as trustee for their children.
/4/Includes 200 shares held in an individual retirement account for Dr. Taylor
with respect to which Dr. Taylor has sole voting and investment power.
/5/Includes 175,265 shares subject to currently exercisable stock options and
32,011 shares held in the Thrift Plan with respect to which Mr. Chancey has
the voting and investment powers described in footnote 4 to the Principal
Shareholders table.
/6/Includes 56,423 shares subject to currently exercisable stock options;
51,021 shares held by Liberty Bank in an individual retirement account for Mr.
Hower with respect to which Mr. Hower has sole voting and investment power;
7,272 shares owned by Mr. Hower's wife; 2,848 shares held by Liberty Bank as
custodian for the benefit of Mrs. Hower with respect to which Mrs. Hower has
sole voting and investment power; and 2,817 shares held in trust for the
benefit of Mrs. Hower with respect to which neither Mr. Hower nor Mrs. Hower
has either voting or investment power.
/7/Includes 117 shares held in an individual retirement account for Mr.
McDowell with respect to which Mr. McDowell holds sole voting and investment
power; and 117 shares held in an individual retirement account for Mr.
McDowell's wife with respect to which Mrs. McDowell has sole voting and
investment power.
/8/Includes 2,326 shares held in an individual retirement account for Mr.
Nichols with respect to which Mr. Nichols has sole voting and investment
power; 730 shares held in an individual retirement account for Mr. Nichols'
wife, with respect to which Mrs. Nichols has sole voting power and for which
Mr. and Mrs. Nichols have shared investment power; and 4,649 shares held by an
unaffiliated bank and Mr. Nichols as co-trustees and with respect to which Mr.
Nichols has shared voting and investment power.
/9/Includes 2,135 shares held by Liberty Bank as custodian for the benefit of
Mr. Nixon, with respect to which Mr. Nixon has sole voting and investment
power; 1,048 shares held by Liberty Bank as custodian for the benefit of Mr.
Nixon's wife, with respect to which Mrs. Nixon has sole voting and investment
power; and 400 shares owned by Mrs. Nixon.
/1//0/Includes 545 shares held in a pension plan for Mr. Dickson and 400 shares
owned by Mr. Dickson's wife.
/1//1/Includes 12,298 shares held by Liberty Bank as co-executor, along with
Mr. Dishman, of the estate of Mr. Dishman's father; 13,500 shares held by
Liberty Bank as trustee of three trusts for the benefit of Mr. Dishman's
daughters; 5,332 shares owned by Mr. Dishman's wife; and 793 shares held by
Mr. Dishman's wife as custodian for their daughters.
/1//2/Includes 40,000 shares owned by The Huntington Corporation, of which Mr.
Dunbar is an officer and director and sole shareholder, and 21,081 shares
owned by The Huntington Corporation Retirement Trust, of which Mr. Dunbar is a
trustee and beneficiary and with respect to which Mr. Dunbar has shared voting
and investment power.
/1//3/Includes 37 shares held by Mr. Gans as custodian under the Kentucky
Uniform Transfers to Minors Act for his son.
8
<PAGE>
/1//4/Includes 100,539 shares subject to currently exercisable stock options;
19,957 shares held in the Thrift Plan; and 1,345 shares held by Mr.
Guillaume's wife.
/1//5/In addition to the named individuals and Messrs. Chancey and Guillaume,
who serve as directors of Liberty and Liberty Bank, 17 others were deemed to
be "executive officers" for reporting purposes under the Securities Exchange
Act of 1934, as amended, as of December 31, 1993.
/1//6/Represents the 235 vested shares held in the Thrift Plan with respect to
which Mr. Holt has the voting and investment powers described in footnote 4 to
the Principal Shareholders table.
/1//7/Includes 27,320 shares subject to currently exercisable stock options;
1,849 shares held by Liberty Bank as custodian for the benefit of Mr. Page's
uncle, with respect to which Mr. Page holds power of attorney; 9,876 shares
held by Mr. Page as co-trustee for life insurance trusts; and 13,079 shares
held in the Thrift Plan, with respect to which Mr. Page has the voting and
investment powers described in footnote 4 to the Principal Shareholders table.
/1//8/Includes 10,790 shares subject to currently exercisable stock options and
2,000 vested shares held in the Thrift Plan, with respect to which Mr. Rives
has the voting and investment powers described in footnote 4 to the Principal
Shareholders table.
/1//9/Includes 33,912 shares subject to currently exercisable stock options and
17,643 shares held in the Thrift Plan, with respect to which Mr. Shipman has
the voting and investment powers described in footnote 4 to the Principal
Shareholders table.
/2//0/Includes 21,363 shares subject to currently exercisable stock options;
198 shares held in the Thrift Plan, with respect to which Mr. Weigel has the
voting and investment powers described in footnote 4 to the Principal
Shareholders table; and 9,187 shares owned by Mr. Weigel's wife.
- ---------------------
Based upon its review of Forms 3, 4 and 5 and amendments thereto furnished to
Liberty during or with respect to 1993, Liberty believes that each of its
directors and officers, as defined under Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), timely filed all reports required
by Section 16(a) of the Exchange Act during 1993, except Robert G. Scherer, who
retired as an officer of Liberty Bank in June 1993 and who filed a Form 5
sixteen days after the due date to report certain employee-benefit-plan
transactions during 1993.
The Banks have had, and expect to have in the future, banking transactions in
the ordinary course of business with various directors and officers of Liberty
and the Banks, and many of their associates, 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 management, such loans
did not involve more than normal risk of collectibility or present other
unfavorable features.
STANDING COMMITTEES
Liberty's Examining Committee (comprised entirely of directors who are not
officers or employees of Liberty) reviews the audit plans and the results of
audits of Liberty and its wholly owned subsidiaries performed by Liberty's
senior auditor and independent certified public accountants and has
participated in Liberty's strategic planning process. It also reviews and
recommends to the Board of Directors certain aspects of Liberty's officers'
compensation and reviews reports of Liberty's loan review officer. During 1993,
the Examining Committee met 16 times. Liberty Bank also has an Examining
Committee, which, among other things, reviews certain reports as required by
federal banking regulations. Liberty Bank's Examining Committee also reviews
and recommends to its Board of Directors the compensation of Liberty Bank's
principal officers, which compensation represents the significant portion of
Liberty's officers' remuneration. The present members of Liberty's and Liberty
Bank's Examining Committees are Messrs. Margulis, McDowell, Nichols and Phelps,
together with Mr. Frazier, who serves as chairman of both committees.
9
<PAGE>
The Board of Directors and the Examining Committee consider the nomination of
directors but do not have a standing nominating committee. The following is the
provision in Liberty's Bylaws governing the nomination of directors by
shareholders.
Section 2.12 NOMINATION OF DIRECTORS
(a) Nominations for election to the Board of Directors may be made by the
Board of Directors or by any shareholder. Any shareholder who intends to
nominate or to cause to have nominated any candidate for election to the Board
of Directors (other than a candidate nominated by the Board of Directors) shall
deliver or mail written notification of the nomination to the Chairman of the
Board not less than fourteen days nor more than fifty days before any meeting
of shareholders called for the election of directors. Provided, however, that
if less than twenty-one days notice of the meeting is given to shareholders,
such notification shall be delivered or mailed to the Chairman of the Board not
later than the close of business on the seventh day following the day on which
the notice of the meeting was mailed. Any such notification shall contain the
following information to the extent known to the notifying shareholder or
shareholders:
(1) the name and address of each proposed nominee;
(2) the principal occupation of each proposed nominee;
(3) the total number of shares that to the knowledge of the notifying
shareholder or shareholders will be voted for each proposed
nominee;
(4) the name and residence address of each notifying shareholder; and
(5) the number of shares owned by each notifying shareholder.
(b) The chairman of any meeting of shareholders held for the election of
directors may in his discretion disregard any votes cast for any nominee whose
nomination was not made in accordance with the provisions of this section.
MEETINGS OF THE BOARD AND DIRECTOR COMPENSATION
During 1993, the Board of Directors of Liberty held five regularly scheduled
and two special meetings, and the Board of Directors of Liberty Bank held 13
regularly scheduled meetings and one special meeting. Six meetings of the Board
of Directors of Liberty and 14 meetings of the Board of Directors of Liberty
Bank are scheduled for 1994, including meetings already held. During 1993, all
of Liberty's directors attended a total of more than 75 percent of the meetings
of the Board of Directors of Liberty and Liberty Bank and Board committees on
which they serve.
Directors of Liberty and Liberty Bank, including those who are officers of
Liberty, are paid $1,000 for each meeting of the Board of Liberty or Liberty
Bank attended. Directors who are members of Liberty's Examining Committee (none
of whom is an officer or employee of Liberty) currently receive the following
amounts for any committee meeting attended: chairman of the meeting--$850;
other members--$750.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Examining Committees of Liberty and Liberty Bank (collectively, the
"Committee") review and recommend to Liberty's and Liberty Bank's Boards of
Directors the compensation of executive officers. See "Standing Committees"
under BOARD OF DIRECTORS AND EXECUTIVE OFFICERS. Below is the report of the
Committee concerning the compensation of Liberty's executive officers.
10
<PAGE>
- ---------------------
Compensation Philosophy and Corporate Performance. The Committee has
articulated the following general philosophy for establishing salaries and
incentive plans for Liberty's executive officers:
It is the philosophy of the Examining Committee of the Board to provide a
compensation package to the Chief Executive Officer and other top executive
officers that consists of (1) competitive base salaries, (2) the
opportunity to earn additional cash compensation if corporate performance
goals are achieved, and (3) grants of stock options in order to directly
link an element of pay to shareholder return.
The Committee annually reviews the base salaries of Liberty's executive
officers, using published survey data and an analysis, prepared for the
Committee by an independent consulting firm, of executive compensation
reported in the proxy statements of a peer group of companies to determine
competitive practices. The Committee also compares certain key financial
ratios for each such peer company, including returns on average assets and
average equity, to Liberty's performance. Base salaries of executive officers
are established at a level that the Committee considers to be competitive
within the peer group (which generally has approximated the median),
appropriate for the experience and ability of each executive officer, and
internally equitable when compared with salaries of other Liberty executive
officers.
The peer group was composed in 1991 by an independent consulting firm, using
15 other, independent banking companies reasonably comparable to Liberty in
asset size (the median for 1991 average assets of peer group, including
Liberty: approximately $5.3 billion, compared with Liberty's then-$3.9
billion) and geographical location (Midwest, South and Southeast). Since the
initial composition of the peer group, companies routinely have been deleted
from the peer group if acquired by other companies; no companies have been
added. In comparing Liberty's total return to shareholders to the performance
of other banking companies in the stock performance chart in Liberty's Proxy
Statement, Liberty has chosen to use the KBW 50 Total Return Index, a
published, market-capitalization-weighted index of banking-company stocks,
rather than the peer group, because the wide availability of the index and the
number of companies comprising the index allow ready comparison of Liberty's
stock performance with an industry benchmark.
Liberty's Amended and Restated Management Incentive Compensation Plan, as
further amended as of December 31, 1993 (the "Incentive Plan"), is designed to
provide executive and other officers with the opportunity to earn additional
cash compensation based on Liberty's achievement of certain corporate
performance goals. The Annual Plan component of the Incentive Plan bases
awards for Liberty's Executive Committee (currently Messrs. Chancey, Guillaume
and Shipman) solely upon the annual increase in earnings per share, comparing
actual results to a predetermined performance standard. Annual Plan awards for
other Incentive Plan participants are based in part on evaluations of
individual performance. The Longer-term Plan component of the Incentive Plan
is based upon Liberty's (1) average annual increase in earnings per share
(weighted as 25 percent of target Longer-term Plan incentive compensation);
(2) average return on average equity (weighted as 37.50 percent); and (3)
average return on average assets (weighted as 37.50 percent), for a three-year
period, comparing actual results to predetermined performance standards. The
separate target award funds for the Annual Plan and Longer-term Plan
components of the Incentive Plan for Liberty's Executive Committee are 16
percent of aggregate salaries; the maximum award fund for each component is
150 percent of the target, or 24 percent of salaries for the Executive
Committee.
For the Annual Plan bonus for 1993, Liberty's 12.43-percent increase in
earnings per share in 1993 over 1992 fell within the targeted range. For the
Longer-term Plan bonus for 1993, which was based on Liberty's performance over
the three-year period ending 1993, inclusive, Liberty's three-year average
increase in earnings per share of 13.54 percent exceeded the targeted range,
Liberty's three-year average return on average equity of 13.09 percent fell
below the targeted range, and Liberty's three-year average return on average
assets of 1.01 percent fell within the targeted range.
11
<PAGE>
The Committee believes that grants of stock options to executive officers
directly and appropriately link a portion of compensation to the return to
Liberty's shareholders. Liberty's 1986 Stock Option Plan, as amended and
restated as of January 10, 1990, and as further amended as of February 16, 1993
(the "Option Plan"), encourages key employees' stock ownership, provides
incentive for maximum effort, and is a means of retaining and attracting key
personnel. Options for most of the shares of Liberty stock available for
issuance under the Option Plan already have been granted, however, and no
grants of stock options were made to any Liberty executive officers in 1992 or
1993.
Chief Executive Officer Compensation. Malcolm B. Chancey, Jr., assumed the
offices of Chairman and Chief Executive Officer of Liberty and Liberty Bank on
January 1, 1993, retaining his previous position as President of Liberty. At
its regular meeting in December 1992, the Committee set Mr. Chancey's salary
for 1993. The peer-group survey data available to the Committee at that meeting
showed that Liberty's return on average equity and return on average assets for
1991, then the most recent full fiscal year, were 13.41 percent and 1.00
percent, respectively, which exceeded the corresponding median ratios of 12.92
percent and 0.81 percent for the peer group. The survey data also showed that
Mr. Chancey's 1992 total cash compensation was 70 percent of the median 1991
total cash compensation reported by the peer group of companies for each
company's highest-paid officer. The Committee considered Mr. Chancey's
assumption of significant new responsibilities as well as his retention of
previous duties. The Committee also expressed a belief that the year-over-year
percentage increase in Mr. Chancey's salary should be reasonable. Accordingly,
the Committee set Mr. Chancey's salary for 1993 at $414,000, an increase of 20
percent from his 1992 salary, noting that the relationship between Mr.
Chancey's 1993 salary and the salaries of other executive officers appeared
appropriate.
Mr. Chancey's bonuses for 1993 under both the Annual Plan and Longer-term Plan
components of the Incentive Plan (16 percent and 11 percent of salary,
respectively) were determined in accordance with the formulas applied to
measures of Liberty's corporate performance in comparison with predetermined
standards, as discussed above.
Owsley Brown Frazier, Chairman
Frank B. Hower, Jr. (Committee member until April 1993)
Martin S. Margulis
James W. McDowell, Jr.
John C. Nichols II
Joseph W. Phelps (Committee member since April 1993)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Liberty's and Liberty Bank's Examining Committees are comprised entirely of
directors who are not officers or employees of Liberty or Liberty Bank. One
member of both current Examining Committees, Joseph W. Phelps, served as
Chairman and Chief Executive Officer of Liberty and Liberty Bank until his
retirement in December 1992. Frank B. Hower, Jr., who was a member of both
Examining Committees until April 1993, served as Chairman and Chief Executive
Officer of Liberty and Liberty Bank until his retirement in February 1990.
12
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- -----------------
AWARDS PAYOUTS
OTHER ------- ---------
NAME AND ANNUAL LTIP ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION OPTIONS PAYOUTS** COMPENSATION
POSITION YEAR ($) ($) ($) (#)* ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Malcolm B. 1993 $414,000 $66,240 $3,596/1/ 0 $45,540 $58,420/3/
Chancey, 1992 345,000 82,800 5,337/2/ 0 12,420 50,616
Jr., 1991 310,000 39,680 50,103 14,880
Chairman and
Chief
Executive
Officer of
Liberty and
Liberty
Bank;
President of
Liberty
R.K. 1993 300,000 48,000 3,598/1/ 0 33,000 41,507/4/
Guillaume, 1992 270,000 64,800 4,212/2/ 0 9,720 20,038
Executive 1991 245,000 31,360 39,596 11,760
Vice
President of
Liberty;
President of
Liberty Bank
Jack H. 1993 203,000 32,480 2,497/1/ 0 22,330 18,231/6/
Shipman, 1992 178,000 32,040 0/5/ 0 4,806 12,992
Executive 1991 164,000 15,744 13,252 5,904
Vice
President of
Liberty and
Liberty Bank
W. LeGrande 1993 170,000 20,400 0/5/ 0 14,025 11,750/7/
Rives, 1992 160,000 28,800 0/5/ 0 4,320 10,662
Executive 1991 150,000 14,400 12,123 5,400
Vice
President of
Liberty Bank
Ronald M. 1993 161,000 19,320 0/5/ 0 13,283 9,511/8/
Holt, 1992 150,000 27,000 0/5/ 0 0 9,279
Executive 1991 139,000 13,344 11,232 0
Vice
President of
Liberty Bank
</TABLE>
- ---------------------
*Adjusted for stock splits.
**Represents long-term incentive plan payouts under the Longer-term Plan
component of the Management Incentive Compensation Plan.
/1/Represents reimbursement for payment of taxes in connection with use of
company automobile. The value of aggregate personal benefits did not exceed
the lesser of $50,000 or 10 percent of base salary and bonus.
/2/Represents reimbursement for payment of taxes in connection with use of
company automobile and financial planning services. The value of aggregate
personal benefits did not exceed the lesser of $50,000 or 10 percent of base
salary and bonus.
/3/Includes $21,150 in director's fees, $20,700 in matching contributions to
Mr. Chancey's Thrift Plan and nonqualified defined contribution plan accounts,
and $16,570 in premiums for executive life insurance plan.
/4/Includes $20,750 in director's fees, $15,000 in matching contributions to
Mr. Guillaume's Thrift Plan and nonqualified defined contribution plan
accounts, and $5,757 in premiums for executive life insurance plan.
/5/The value of aggregate personal benefits did not exceed the lesser of
$50,000 or 10 percent of base salary and bonus.
/6/Includes $2,400 in director's fees, $10,150 in matching contributions to
Mr. Shipman's Thrift Plan and nonqualified defined contribution plan accounts,
and $5,681 in premiums for executive life insurance plan.
/7/Includes $8,500 in matching contributions to Mr. Rives' Thrift Plan and
nonqualified defined contribution plan accounts and $3,250 in premiums for
executive life insurance plan.
13
<PAGE>
/8/Includes $8,050 in matching contributions to Mr. Holt's Thrift Plan and
nonqualified defined contribution plan accounts and $1,461 in premiums for
executive life insurance plan.
- ---------------------
AGGREGATED STOCK OPTION EXERCISES IN 1993 AND 1993 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT FISCAL YEAR- VALUE OF UNEXERCISED
SHARES END IN-THE-MONEY OPTIONS
ACQUIRED VALUE (#) AT FISCAL YEAR-END ($)/2/
ON EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($)/1/ EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
<S> <C> <C> <C> <C>
Malcolm B.
Chancey,
Jr. 0 $ 0 175,265/0 $3,121,609/0
R. K.
Guillaume 1,775 49,680 100,539/0 1,761,379/0
Jack H.
Shipman 2,667 38,670 33,912/0 598,265/0
W. Le-
Grande
Rives 0 0 10,790/0 192,818/0
Ronald M.
Holt 0 0 0/0 0/0
</TABLE>
- ---------------------
/1/Represents the difference between the closing market price for Liberty
Common Stock on the date of exercise and the option price paid upon exercise.
/2/Represents the difference, as of December 31, 1993, between the closing
market price of $30.25 per share for Liberty Common Stock and the option price
for unexercised options.
LONG-TERM INCENTIVE PLANS--AWARDS IN 1993
<TABLE>
<CAPTION>
PERFORMANCE
OR OTHER ESTIMATED FUTURE PAYOUTS UNDER
PERIOD NON-STOCK-PRICE-BASED PLANS/1/
UNTIL ----------------------------------------
NAME PAYOUT THRESHOLD TARGET MAXIMUM
<S> <C> <C> <C> <C>
Malcolm B. Chancey, Jr. 3 years $13,248 $66,240 $99,360
R. K. Guillaume 3 years 9,600 48,000 72,000
Jack H. Shipman 3 years 6,496 32,480 48,720
W. LeGrande Rives 3 years 4,080 20,400 30,600
Ronald M. Holt 3 years 3,864 19,320 28,980
</TABLE>
- ---------------------
/1/Estimated future payouts are based on 1993 salaries.
- ---------------------
Liberty's Incentive Plan is comprised of an Annual Plan and a Longer-term Plan.
Participation is limited to certain executive officers of Liberty (currently
Messrs. Chancey, Guillaume and Shipman) (Group I), certain other officers of
the Banks selected by the Executive Committee (Group II) and certain other
selected officers of the Banks (Group III). The Incentive Plan is an unfunded
plan. The target award funds as a percentage of aggregate salaries for Groups
I, II and III are 16%, 12% and 8%, respectively. Payouts under the Longer-term
Plan for each group are based upon the average annual increase in earnings per
share ("EPS"), average return on average equity ("ROE") and average return on
average assets ("ROA") for a three-year period. The target award will be earned
if Liberty's average annual increase in EPS, average ROE and average ROA fall
within a targeted range established for each such performance measure. The
threshold award will be earned if Liberty achieves 83% of the lowest average
increase in EPS within the targeted range, 90% of the lowest average ROE within
the targeted range, and 90% of the lowest average ROA within the targeted
range. (The estimated threshold payouts in the table assume Liberty achieves
the threshold levels for each of the performance measures.) The highest award
will be earned if Liberty achieves 108% of the highest average increase in EPS
within the targeted range, 106% of the highest average ROE within the targeted
range, and 105% of the highest average ROA within the targeted range.
14
<PAGE>
PENSION PLAN TABLE*
<TABLE>
<CAPTION>
HIGHEST CONSECUTIVE
FIVE-YEAR AVERAGE YEARS OF CREDITED SERVICE
ANNUAL COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
<S> <C> <C> <C> <C> <C>
$100,000 $ 31,871 $ 42,494 $ 53,118 $ 53,118 $ 53,118
150,000 49,871 66,494 83,118 83,118 83,118
200,000 67,871 90,494 113,118 113,118 113,118
250,000 85,871 114,494 143,118 143,118 143,118
300,000 103,871 138,494 173,118 173,118 173,118
350,000 121,871 162,494 203,118 203,118 203,118
400,000 139,871 186,494 233,118 233,118 233,118
450,000 157,871 210,494 263,118 263,118 263,118
500,000 175,871 234,494 293,118 293,118 293,118
550,000 193,871 258,494 323,118 323,118 323,118
600,000 211,871 282,494 353,118 353,118 353,118
</TABLE>
- ---------------------
*The annual benefit amounts illustrated assume (i) an employee is age 65 and
retiring on January 1, 1994, with annual covered compensation (for purposes
of the qualified plan portion) of $24,600 and an annual social security
benefit (for purposes of the Excess Benefit Plan portion) of $13,764; (ii)
the employee was hired by Liberty Bank before January 1, 1983; and (iii) the
employee is eligible for both the qualified plan and the Excess Benefit
Plan. The aggregate benefits for an employee in different circumstances
could be lower.
- ---------------------
The Liberty 1989 Retirement Plan (the "Retirement Plan") covers substantially
all employees of the Banks and certain other subsidiaries of Liberty who have
met certain age and service requirements. The Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), limits the amount of benefits
derived from employer contributions that may be paid to participants. As
permitted by ERISA, Liberty Bank has adopted an Excess Benefit Plan to pay to
select members of management and certain highly compensated employees any
benefits that exceed that limit, and those benefits to which they would have
been entitled if the Retirement Plan's formula had not been changed to lower
benefits for highly compensated employees to comply with the Tax Reform Act of
1986. Participants who have fulfilled tenure requirements will receive, upon
reaching the normal retirement age of 65, benefits based upon their highest
consecutive five-year average annual base compensation (base compensation under
both plans is regular earnings, exclusive of all forms of extraordinary
earnings, but includes compensation reduction amounts under various benefit
plans). Based upon various assumptions, as noted below, the foregoing table
illustrates the additional annual retirement benefit payable to a participant
in specified average annual base compensation and years of service
classifications. As of December 31, 1993, the persons named in the Executive
Compensation table had the following credited years of service under the
Retirement Plan: Mr. Chancey--26 years; Mr. Guillaume--29 years; Mr. Shipman--
24 years; and Mr. Rives--4 years; and Mr. Holt--3 years. For such persons, the
salaries set forth in the Summary Compensation Table constituted current base
compensation within the meaning of the plans.
OFFICER COMPENSATION CONTINUATION AGREEMENTS
Liberty and Liberty Bank have entered into contracts (the "Continuation
Agreements") with the officers named in the Summary Compensation Table and
certain other officers of Liberty and Liberty Bank (the "Covered Officers") to
provide an additional incentive for such officers to remain in the employ of
Liberty and Liberty Bank if a change in control of Liberty occurs or is
threatened. These Continuation Agreements were not entered into because of any
belief by management that a change in control of Liberty was imminent. Certain
other officers of one of the Banks other than Liberty Bank have entered into
employment agreements that contain provisions generally comparable to the
Continuation Agreements.
15
<PAGE>
The Continuation Agreements automatically renew for successive three-year
periods unless written notice of termination is given 90 days before the
renewal term is to commence.
The Continuation Agreements provide for the payment of compensation to the
Covered Officers if a change in control of Liberty, as defined in the
Continuation Agreement, occurs and then (a) Liberty terminates a Covered
Officer or (b) the Covered Officer subsequently terminates his employment for
"good reason." Covered Officers who have terminated their employment may be
considered to have terminated their employment for good reason after a change
in control and become entitled to receive compensation under the Continuation
Agreement if any of the following occurs: (a) a change in the Covered Officer's
responsibilities, offices or duties without his consent; (b) a reduction in the
Covered Officer's base salary; (c) a relocation of the Covered Officer to
outside of the Covered Officer's geographic area or relocation of the principal
executive offices of the respective Covered Officer's employing Bank to a
location outside that area; (d) a failure to continue, or a material change or
reduction in, any applicable benefit or compensation plan, life insurance plan,
health or accident plan or disability plan; (e) a reduction in the number of
paid vacation days; (f) certain types of medically determinable physical or
mental impairments; (g) Liberty does not obtain the assumption of the
Continuation Agreement by any successor corporation; or (h) a purported
termination of the Covered Officer other than by formal written notice
detailing the reasons for such termination.
Compensation to be paid under the Continuation Agreements includes (a) the
unpaid balance of the Covered Officer's base salary through the date of
termination; (b) the Covered Officer's base salary for 36 months following the
date of termination; (c) relocation expenses; (d) legal fees and expenses
incurred in contesting any termination or enforcing a Continuation Agreement;
(e) continued participation for 36 months from the date of termination in all
employee benefit plans to the extent possible or participation in substantially
similar plans if continued participation is barred; and (f) the right to
exercise all unexercised stock options, whether or not currently exercisable,
under the Option Plan. Covered Officers will not be required to seek other
employment, and compensation will not be reduced by any income received from
other sources. Compensation will not be paid for any portion of the 36-month
period occurring after the Covered Officer would reach mandatory retirement
age.
OFFICERS
Covered Officers may have rights under the terms of the Continuation Agreements
as a result of the proposed BANC ONE Merger Agreement. See "PENDING MERGER."
16
<PAGE>
LIBERTY COMMON STOCK PERFORMANCE
The following graph illustrates the cumulative total return to shareholders for
the five-year period ended December 31, 1993, among Liberty Common Stock, a
broad market index and an index of stocks of companies in the banking
industry./1/
- ---------------------
/1/Assumes $100.00 invested on December 31, 1988, in Liberty Common Stock, the
S&P 500 Index and the KBW 50 Total Return Index, a market-capitalization-
weighted bank-stock index published by Keefe, Bruyette & Woods, Inc. Total
return assumes reinvestment of dividends. Figures shown are for fiscal years
ended December 31.
<TABLE>
<CAPTION>
INDEX 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Liberty Common Stock $100.00 $114.55 $94.04 $166.67 $237.61 $289.06
- -----------------------------------------------------------------------------
S&P 500 100.00 131.69 127.60 166.47 179.15 197.21
- -----------------------------------------------------------------------------
KBW 50 Total Return 100.00 118.91 85.40 135.16 172.23 181.79
</TABLE>
INFORMATION CONCERNING INDEPENDENT AUDITORS
The firm of Coopers & Lybrand, Certified Public Accountants, has served as
independent auditors for Liberty and Liberty Bank since 1991. Representatives
of Coopers & Lybrand will be present at the 1994 Annual Meeting and will have
the opportunity to make a statement, if they desire to do so, and to respond to
appropriate questions. Liberty has not selected independent auditors for the
current fiscal year, which ends on December 31, 1994, because Liberty generally
does not make this selection until the second quarter of its fiscal year.
OTHER MATTERS
The officers and directors of Liberty do not know of any matters to be
presented for shareholder approval at the meeting other than those described in
this Proxy Statement. If any other matters should
17
<PAGE>
come before the meeting, the Board of Directors intends that the persons named
in the enclosed proxy form, or their substitutes, will vote the shares
represented by such proxy form in accordance with their best judgment on such
matters.
SUBMISSION OF PROPOSALS OF SHAREHOLDERS
Any proposals by shareholders to be presented at the 1995 Annual Meeting must
be received by the Secretary of Liberty not later than November 18, 1994, to be
included in the Proxy Statement for the 1995 Annual Meeting.
By order of the Board of Directors.
LOGO
Malcolm B. Chancey, Jr.
Chairman of the Board
LIBERTY NATIONAL BANCORP, INC.
Louisville, Kentucky
March 18, 1994
18
<PAGE>
LIBERTY NATIONAL BANCORP, INC. ("LIBERTY")
Louisville, Kentucky
THIS PROXY FORM IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints DAVID R. BASS or W. C. FISHER, JR., or
GILBERT L. PAMPLIN, or any one of them (with full power to act alone), my
proxy, with Liberty's Chairman having the power to appoint a proxy's
substitute, to represent me to vote all of the Common Stock of Liberty held of
record by me or which I am otherwise entitled to vote, at the close of business
on March 16, 1994, at the 1994 Annual Meeting of its Shareholders to be held on
April 27, 1994, at 10:30 a.m. and at any adjournments thereof, with all powers
the undersigned would possess if personally present, as follows:
1. ELECTION OF DIRECTORS.
FOR all nominees listed below
WITHHOLD AUTHORITY
(except as otherwise indicated below) [_]
to vote for all nominees
listed below [_]
George N. Gill; Nancy Lampton; Martin S. Margulis; Joseph W. Phelps; Max L.
Shapira; Dr. Robert L. Taylor
The Board of Directors recommends a vote "FOR" all of the nominees.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line below.)
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2. OTHER BUSINESS. In their discretion, the proxies are authorized to act
upon such other matters as may properly be brought before the Annual Meeting
or any adjournment thereof.
THIS PROXY FORM IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS
SPECIFIED AND IN ACCORDANCE WITH THE ACCOMPANYING PROXY STATEMENT. IF NO
INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" ALL OF THE NOMINEES
LISTED IN ITEM 1.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign full corporate name by
President or other authorized
officer. If a partnership, please
sign partnership name by
authorized person.
Date ______________________ , 1994 --------------------------------------
Signature
PLEASE MARK, SIGN, DATE AND RETURN --------------------------------------
THE PROXY FORM PROMPTLY USING THE Signature if held jointly
ENCLOSED ENVELOPE.
