<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ___________________
COMMISSION FILE NUMBER 0-10196
INDEPENDENT BANKSHARES, INC.
EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
INDEPENDENT BANKSHARES, INC.
547 Chestnut Street
Abilene, Texas 79604
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
DECEMBER 31, 1994 AND 1993
CONTENTS
Page
-----
FINANCIAL STATEMENTS:
Independent Auditors' Report 3
Statements of Net Assets Available for Plan Benefits 4
Statements of Changes in Net Assets Available for Plan Benefits 5
Notes to Financial Statements 6
SUPPLEMENTARY INFORMATION:
Independent Auditors' Report on Supplementary Information 10
Schedule of Assets Held for Investment Purposes 11
Schedule of Reportable Transactions 12
Signature 13
Index to Exhibits 14
2
<PAGE>
[LETTERHEAD]
February 15, 1995
TO THE EMPLOYEE STOCK OWNERSHIP/401(K) PLAN COMMITTEE OF
INDEPENDENT BANKSHARES, INC.
ABILENE, TEXAS
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying statements of net assets available for plan
benefits of INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K)
PLAN as of December 31, 1994 and 1993, and the related statements of changes
in net assets available for plan benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN as of
December 31, 1994 and 1993, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
CONDLEY AND COMPANY, L.L.P.
Certified Public Accountants
3
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1994 1993
-------- --------
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS $ 30,472 $ 64,630
CONTRIBUTIONS RECEIVABLE 5,397 0
INVESTMENTS AT FAIR VALUE (NOTE 5) 682,593 734,006
NOTE RECEIVABLE (NOTE 6) 764 0
ACCRUED INCOME 3,306 3,626
-------- --------
TOTAL ASSETS 722,532 802,262
LIABILITIES 3,844 3,020
-------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $718,688 $799,242
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1994 1993
-------- --------
<S> <C> <C>
ADDITIONS:
Investment Income (Expenses):
Net unrealized appreciation (depreciation)
in fair value of investments $(88,456) $254,211
Dividend income 15,472 25,070
Interest income 3,444 1,927
Gain (loss) on sale of investments (551) 111
-------- --------
Total Investment Income (Expenses) (70,091) 281,319
Employer contributions 61,911 65,957
Employee contributions 40,032 40,688
-------- --------
Total Additions 31,852 387,964
-------- --------
DEDUCTIONS:
Distributions to participants 93,928 30,707
Administrative expenses 18,478 10,511
-------- --------
Total Deductions 112,406 41,218
-------- --------
NET INCREASE (DECREASE) (80,554) 346,746
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of Year 799,242 452,496
-------- --------
End of Year $718,688 $799,242
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
NOTE 1: DESCRIPTION OF PLAN
INDEPENDENT BANKSHARES, INC. ("Company") established the INDEPENDENT
BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP PLAN ("Plan") effective January 1,
1987. The Plan is an employee stock ownership plan (ESOP), and is designed
to comply with Section 4975(e)(7) and the regulations thereunder of the
Internal Revenue Code of 1986, as amended (Code) and is subject to the
applicable provisions of the Employee Retirement Income Security Act of 1974,
as amended (ERISA). The Plan is administered by INDEPENDENT BANKSHARES, INC.
Employers participating in the Plan during the year are INDEPENDENT
BANKSHARES, INC. and its wholly owned subsidiaries FIRST STATE BANK, N.A.,
ABILENE, TEXAS; FIRST STATE BANK, N.A., ODESSA, TEXAS; AND THE FIRST NATIONAL
BANK IN STAMFORD, STAMFORD, TEXAS. FIRST STATE BANK, N.A., ODESSA, TEXAS is
the Plan's trustee.
The Plan was amended in 1993 to add a 401(K) provision. This allows
plan participants to make salary deferrals which are credited to each
participant's account. The Plan name was changed to the INDEPENDENT
BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(k) PLAN.
The more significant aspects of the Plan are summarized below:
ELIGIBILITY TO PARTICIPATE
An employee becomes a participant on the January 1 or July 1 coincident
with or immediately following the later of the date on which he or she
completes one year of service (1,000 hours), and attains age 21.
EMPLOYER'S CONTRIBUTIONS
The Company, at its discretion, annually will determine the amount of
its contribution, if any, to the Plan. The Company may make its contribution
to the Plan in cash or in the Company's common stock or such property that is
acceptable to the trustee. For each plan year the Company and its
subsidiaries contribute to the Plan, the allocation of the contribution will
be based upon a participant's proportionate share of the total compensation
paid during that plan year to all participants in the Plan. The Company may
also, at its discretion, make a matching contribution of up to 5% of eligible
participants' yearly compensation.
EMPLOYEE CONTRIBUTIONS
The Plan permits (but does not require) employees to make voluntary
contributions or salary deferrals up to the maximum amount allowable by law.
6
<PAGE>
VESTING
An employee's interest in the contributions by the Company and its
subsidiaries to the Plan for the employee's benefit becomes 100% vested
(nonforfeitable) upon the employee attaining age 65, or if the employee
terminates employment because of death or disability. If an employee
terminates employment prior to normal retirement age for any reason other
than death or disability, then the employee's interest in the contributions
by the Company and its subsidiaries to the Plan for the employee's benefit
becomes vested in accordance with the following schedule:
<TABLE>
<CAPTION>
YEARS OF SERVICE NONFORFEITABLE
WITH THE EMPLOYER ACCRUED BENEFIT
--------------------------------- ------------------------------
<S> <C>
Less than 2 None
2 10%
3 20%
4 40%
5 60%
6 80%
7 100%
</TABLE>
FORFEITURES
The Plan provides two methods of vesting forfeiture. The primary
method of vesting forfeiture is the "forfeiture break in service" rule. The
secondary method of forfeiture is the "cash out" rule. Termination of
employment alone will not result in a forfeiture under the Plan unless an
employee does not return to employment with the Company before incurring a
"forfeiture break in service" (a period of 5 consecutive plan years). The
cash out rule becomes operative if an employee terminates employment and
receives a total distribution of the vested portion of his or her account
balance.
DISTRIBUTIONS
Distributions after an employee attains age 65 will be paid as soon
thereafter as is practical.
If an employee dies prior to receiving all of his or her benefits under
the Plan, the trustee will pay the balance of their account to their
beneficiary.
If an employee becomes disabled, the trustee will pay his or her
account balance as if he or she had retired.
If an employee terminates employment prior to attaining normal
retirement age, the trustee will distribute the employee's vested interest in
lump sum or in equal installments over a fixed period of time. The Employee
Stock Ownership/401(K) Committee will direct the trustee to distribute the
employee's vested interest in the Plan at any time prior to the close of the
plan year in which the employee separates from service, postpone distribution
until after the plan year in which the employee separates from service, or
postpone distribution until the employee attains age 65.
PLAN TERMINATION
The Company reserves the right to terminate the Plan at any time,
subject to Plan provisions. Upon such termination of the Plan, the interest
of each participant will be distributed to such participant or his or her
beneficiary at the time prescribed by the Plan terms and the Internal Revenue
Code.
7
<PAGE>
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
The common shares of the Company are valued at fair value on December
31 of each year. Fair value is determined by the average of the bid and ask
price according to the NASDAQ stock exchange.
Each preferred share of the Company is convertible to 13.781 common
shares. The preferred shares are valued using the fair value of the common
shares on December 31 of each year.
Mutual funds owned by the Company are valued at fair value on December
31 of each year. Fair value is determined by the fair value on December 31 as
published in the Wall Street Journal.
Dividend income is accrued on the ex-dividend date.
Purchases and sales of securities are recorded on a trade-date basis.
Realized gains and losses from security transactions are reported on the
specific identification method.
CONTRIBUTIONS
Contributions are recognized in the year in which they are declared and
not received.
NOTE 3: TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated June 28, 1988, that the Plan is qualified and tax-exempt under
the appropriate sections of the Code.
NOTE 4: ADMINISTRATION OF PLAN ASSETS
The Plan's assets, which consist principally of the Company's Common
Stock and Series C Preferred Stock and mutual funds are held by the trustee
of the Plan.
Contributions are held and managed by the trustee under the direction
of the Employee Stock Ownership/401(K) Plan Committee. The trustee invests
contributions received, interest, and dividend income and makes distributions
to participants.
Certain administrative functions are performed by officers or employees
of the Company or its subsidiaries. No such officer or employees receives
compensation from the Plan.
8
<PAGE>
NOTE 5: INVESTMENTS
The Plan's investments, at December 31, are presented in the following
table:
<TABLE>
1994
--------------------------------------
NUMBER OF
SHARES HELD COST FAIR VALUE
------------ -------- -----------
<S> <C> <C> <C>
Independent Bankshares, Inc. Common Stock 37,633 $191,084 $305,768
Independent Bankshares, Inc. Series C
Preferred Stock 2,918 122,556 326,728
Federated Stock and Bond Mutual Fund 815.302 13,305 12,833
Federated Stock Trust Mutual Fund 354.3176 9,113 8,567
Federated Intermediate Government Trust
Mutual Fund 1,107.8549 11,650 11,090
Federated Growth Trust Mutual Fund 327.5359 7,336 6,538
Federated Bond Mutual Fund 1,183.8423 10,221 11,069
-------- --------
Total $365,265 $682,593
======== ========
1993
--------------------------------------
NUMBER OF
SHARES HELD COST FAIR VALUE
------------ -------- ----------
Independent Bankshares, Inc. Common Stock 35,327 $171,275 $326,775
Independent Bankshares, Inc. Series C
Preferred Stock 2,918 122,556 371,987
Federated Stock and Bond Mutual Fund 445.527 7,280 7,440
Federated Stock Trust Mutual Fund 221.4656 5,677 5,643
Federated Intermediate Government Trust
Mutual Fund 977.9473 10,432 10,493
Federated Growth Trust Mutual Fund 194.4579 4,465 4,583
Federated Bond Mutual Fund 654.8119 6,996 7,085
------- -------
Total $328,681 $734,006
======== ========
</TABLE>
NOTE 6: NOTE RECEIVABLE
Note receivable consists of a note dated July 1, 1994 from a
participant, payable in monthly installment of $44.89 including interest at
7.25%. Principal balance of this note was $764 at December 31, 1994.
9
<PAGE>
SUPPLEMENTARY INFORMATION
<PAGE>
[LETTERHEAD]
February 15, 1995
TO THE EMPLOYEE STOCK OWNERSHIP/401(K) PLAN COMMITTEE OF
INDEPENDENT BANKSHARES, INC.
ABILENE, TEXAS
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment and reportable transactions are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
CONDLEY AND COMPANY, L.L.P.
Certified Public Accountants
10
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
EIN 75-1717279
PLAN NO. 003
PLAN YEAR ENDED DECEMBER 31, 1994
ITEM 30a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
<TABLE>
<CAPTION>
a b c d
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE
IDENTITY OF ISSUE, BORROWER, OF INTEREST, COLLATERAL, PAR OR COST CURRENT
LESSOR, OR SIMILAR PARTY MATURITY VALUE VALUE
---------------------------- ------------------------------- -------- --------
<S> <C> <C> <C>
Independent Bankshares, Inc. 37,633 shares of $0.25 par value
Common Stock $191,084 $305,768
Independent Bankshares, Inc. 2,918 shares of 10% Series C,
Cumulative Convertible, $10 par
value Preferred Stock 122,556 326,728
Federated Stock and Bond
Mutual Fund 815.3020 fund units 13,305 12,833
Federated Stock Trust Mutual
Fund 354.3176 fund units 9,113 8,567
Federated Intermediate Government
Trust Mutual Fund
1,107.8549 fund units 11,650 11,090
Federated Growth Trust Mutual
Fund 327.5359 fund units 7,336 6,538
Federated Bond Mutual
Fund 1,183.8423 fund units 10,221 11,069
</TABLE>
11
<PAGE>
INDEPENDENT BANKSHARES, INC. EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
EIN 75-1717279
PLAN NO. 003
PLAN YEAR ENDED DECEMBER 31, 1994
ITEM 30d - SCHEDULE OF REPORTABLE TRANSACTIONS
<TABLE>
<CAPTION>
a b c d e f g h i
DESCRIPTION OF CURRENT
ASSET (INCLUDE EXPENSE VALUE OF
IDENTITY INTEREST RATE INCURRED ASSET ON
OF PARTY AND MATURITY IN PURCHASE SELLING LEASE WITH COST OF TRANSACTION NET GAIN
INVOLVED CASE OF A LOAN) PRICE PRICE RENTAL TRANSACTION ASSET DATE OR (LOSS)
-------- --------------- -------- ------- ------ ----------- ------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
None
</TABLE>
12
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 27, 1995 INDEPENDENT BANKSHARES, INC.
EMPLOYEE STOCK OWNERSHIP/401(K) PLAN
By: /s/ Connie R. Pollard
------------------------------------
Connie R. Pollard, Trustee, Senior
Vice President and Trust Officer
13
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Page No.
----------- ------------- ---------
11.1 Consent of Independent Public Accountants 15
14
<PAGE>
EXHIBIT 1.1
[LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K into the Company's
currently effective Registration Statement on Form S-8 regarding the Company's
Employee Stock Ownership/401(k) Plan.
CONDLEY AND COMPANY, L.L.P.
Certified Public Accountants
Abilene, Texas
March 20, 1995
15
