SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
and Exchange Act of 1934
Filed by Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to par. 240.14a-11(c) or par. 240.14a-12
First Financial Bankshares, Inc.
(Name of Registrant as Specified in its Charter)
Curtis R. Harvey
(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:
<PAGE>
FIRST FINANCIAL BANKSHARES, INC.
400 Pine Street
Abilene, Texas 79601
(915)675-7155
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 26, 1994
TO OUR SHAREHOLDERS:
The annual meeting of shareholders of First Financial
Bankshares, Inc. will be held in the Abilene Civic Center, 1100
North 6th Street, Abilene, Texas, at 10:30 a.m. on Tuesday, April
26, 1994, for the following purposes:
(1) To elect 15 Directors of the Company.
(2) To approve the appointment by the Board of
Directors of Arthur Andersen & Co. as the
independent accountants of the Company for the year
1994.
(3) To approve amendment to Articles of Incorporation
to increase from five million (5,000,000) to ten
million (10,000,000) the aggregate number of shares
of stock which the Corporation shall have authority
to issue.
(4) To act on such other business as may properly come
before the meeting, or any adjournment thereof.
The Board of Directors ("management") is not aware
of any other business to come before the meeting.
The transfer books of the Company will not be closed, but only
the holders of common stock of record at the close of business on
March 18, 1994, will be entitled to notice of and to vote at the
annual meeting.
The management sincerely desires your presence at the annual
meeting and luncheon to be held immediately thereafter, but,
nevertheless, respectfully urges you to sign and return the
enclosed proxy in order to remove any question of your vote being
counted. If you sign and return the proxy, but later desire to
vote in person, you may revoke your proxy by a written request to
either of the named proxies. Revocation of your proxy can be done
either before or at the annual meeting, so long as your written
request is received by one of the named proxies before your proxy
is voted.
By order of the Board of Directors.
KENNETH T. MURPHY,
Chairman
March 31, 1994
<PAGE>
FIRST FINANCIAL BANKSHARES, INC.
400 Pine Street
Abilene, Texas 79601
(915) 675-7155
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 26, 1994
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited by and on behalf of the
Board of Directors of First Financial Bankshares, Inc., a Texas
corporation (the "Company"), for use at the annual meeting of
shareholders to be held on Tuesday, April 26, 1994, at the time and
place and for the purposes set forth in the accompanying notice and
at any recess ar adjournments thereof. The solicitation will be by
mail. The total expense of such solicitation will be borne by the
Company and will include reimbursement paid to brokerage firms and
other custodians, nominees and fiduciaries for their expenses in
forwarding solicitation material regarding the meeting to
beneficial owners. It may be that further solicitation of proxies
will be made by telephone or oral communication with some of the
shareholders of the Company following the original solicitation.
All further solicitation will be made by the officers of the
Company who will not be additionally compensated therefor.
The accompanying proxy, even though executed and returned, may
be revoked at any time prior to voting of the proxy by written
request to either of the named proxies by the shareholder of
record.
The proxy materials were mailed to shareholders on March 31,
1994. Only shareholders of record at the close of business on
March 18, 1994, will be entitled to vote at such meeting. On such
date there were 3,971,367 shares of common stock outstanding and
entitled to vote. The holders of common stock will be entitled to
one vote per share and cumulative voting is not permitted.
ELECTION OF DIRECTORS
A Board of Directors is to be elected at the annual meeting.
Each Director elected will hold office until the next annual
meeting of the shareholders and until his or her successor shall be
elected and qualified. Under the Bylaws of the Company, an
individual may not stand for election or reelection as Director
upon attainment of 72 years of age unless such individual owns at
least 1% of the outstanding shares of the Company and is less than
75 years of age. While Bylaws of the Company fix the number of
Directors at a number not less than three nor more than thirty,
fifteen nominees are named and proposed by management. The reason
that the number of Directors authorized exceeds the number of
nominees is to avoid the necessity of amending the Bylaws of the
Company each time that it would appear to be to the advantage of
the Company to increase the number of its Directors. The proxies
accompanying this proxy statement cannot be voted by the proxy
committee for a greater number of persons than the number of
nominees named. Other Directors could be elected after nominations
from the floor of the meeting, if such nominees each receive a
majority vote of the shareholders. Although the management of the
Company does not contemplate that any of the nominees will be
unable to serve, if such a situation arises prior to the meeting,
the proxy committee will vote in accordance with its best judgment.
<PAGE>
The names and principal occupations of the nominees, together
with the length of service as a Director and the number of shares
of common stock of the Company beneficially owned by each of them
on December 31, 1993, are as follows:
<TABLE>
<CAPTION>
Shares of
<F1> The Company Percent
Years as Principal Occupation Beneficially of Shares
Name Age Office Director (1) During Last Five Years Owned Outstanding
<S> <C> <C> <C> <C> <C> <C>
J. Allen Baird 71 Director 30 Chairman, Mrs Baird's 7,344 0.2
Bakeries, Inc. since
December 16, 1992;
President, Mrs Baird's
Bakeries, Inc.
<F2>
F. Scott Dueser (2) 40 Director 3 President and Chief 19,733 0.5
Executive Officer,
First National Bank of
Abilene, Abilene, Texas*
since May 18, 1993; President,
First National Bank of
Abilene, Abilene,Texas*,
January 15, 1991, to May 18,
1993; Executive Vice President,
First National Bank of
Abilene, Abilene, Texas*
Patrick N. Gerald 54 Director 13 Chairman and President, 12,401 0.3
First National Bank,
Sweetwater, Sweetwater,
Texas*
<F2><F3><F4><F5>
Robert E. Hitt 69 Director 21 Investments 41,439 1.1
(2) (3) (4) (5)
<F2><F3>
Ralph N. Hooks
(2) (3) 74 Director 38 Chairman, Lydick-Hooks 78,255 2.0
Roofing Company
<F5>
Joe B. Matthews (5) 49 Director 6 Geologist 1,131
<F3>
Raymond A. McDaniel, 60 Director 2 McDaniel Associates 11,757 0.3
Jr. (3)
<F5>
Bynum Miers (5) 57 Director 2 Ranching and Investments 10,575 0.3
<F2>
Kenneth T. Murphy
(2) 56 Chairman, 22 See "Executive Officers" 37,871 1.0
President on Page 6
and Chief
Executive
Officer, and
Director
Dian Graves Owen 54 Director 1 Chairman, Owen Healthcare,Inc. 9,938 0.3
<F2><F3><F4>
James M. Parker 63 Director 21 President, Parker 158,777 4.0
(2) (3) (4) Properties, Inc.
<F2><F3><F4>
W.V. Ramsey, Jr., M.D.
(2) (5) (4) 66 Director 23 Chairman, Abilene Aero, 85,000 2.1
Inc. since July 1, 1991;
Radiology Associates
Craig Smith 51 Director 4 Chairman and President, 18,221 0.5
Hereford State Bank,
Hereford, Texas*
<F2><F5>
H.T. Wilson (2) (5) 66 Director 11 Chairman, Eastland National 41,349 1.0
Bank, Eastland, Texas*
<F5>
Stanley P. Wilson
(5) 71 Director 23 Retired Executive Vice 7,101 0.2
President and General
Counsel, Central and South
West Corporation
Shares beneficially owned by all Executive Officers and Directors as a group 541,552 13.6
*The bank shown is a subsidiary of the Company.
<PAGE>
<FN>
<F1> (1) The years indicated are the approximate number of years each person has continuously served as Director of the
Company, or, prior thereto, of First National Bank of Abilene, which became a wholly-owned subsidiary of the
Company in April, 1973, when all the then Directors of First National Bank of Abilene became Directors of the
Company.
<F2> (2) This Director/Nominee is a member of the Executive Committee.
<F3> (3) This Director/Nominee is a member of the Stock Option Committee.
<F4> (4) This Director/Nominee is a member of the Administrative Committee of the Company Profit Sharing and Pension Plan.
<F5> (5) This Director/Nominee is a member of the Directors' Audit Committee.
</TABLE>
MEETINGS OF BOARD OF DIRECTORS
During the last full year, four regular quarterly meetings of
the Board of Directors were called and held. All directors were
able to attend at least 75% of the aggregate of the meetings of the
Board of Directors and the meetings held by all committees of the
Board on which they served. Directors who are not officers of the
Company receive $800 for each Board meeting attended.
COMMITTEES
First Financial Bankshares, Inc. does not have a standing
nominating or compensation committee of the Board of Directors.
The Company has a standing Executive Committee whose
responsibilities include functioning as a compensation committee
and a nominating committee with appropriate recommendations to the
entire Board. The Executive Committee met nine times during 1993
and, among other items, considered and took action on matters
relating to its capacity as Compensation and/or Nominating
Committee. In its capacity as Nominating Committee, the Executive
Committee will consider director nominations from security holders.
There are no prescribed procedures which the security holder must
follow. The Company has a Directors' Audit Committee which has the
responsibility of acting on behalf of the Board in receiving and
reviewing both internal and external audit reports. During 1993
the Audit Committee met two times. The Company also has an
Administrative Committee for the Profit Sharing, Pension and
Flexible Spending Account Benefit Plans. Pursuant to the 1992
Incentive Stock Option Plan for Key Employees of First Financial
Bankshares, Inc. and its Subsidiaries, the Board of Directors has
also appointed a Stock Option Committee composed of five members.
The directors serving on these committees are indicated in the
section titled "ELECTION OF DIRECTORS". Directors who are not
officers of the Company receive $400 for each committee meeting
attended.
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Arthur Andersen & Co. to
serve as independent certified public accountants to the Company
and its subsidiaries for the year 1994 and to serve until the next
annual meeting in April, 1995. Arthur Andersen & Co. has served as
the Company's independent accountants since 1990. The Company has
been advised by Arthur Andersen & Co. that neither its firm nor any
of its members has any financial interest, direct or indirect, in
the Company or any of its subsidiaries, nor has had any connection
with the Company or any of its subsidiaries in any capacity other
than independent accountants.
The Board of Directors recommends that you vote for the
approval of the appointment of Arthur Andersen & Co. If the
shareholders do not approve the appointment of Arthur Andersen &
Co., then the appointment of independent accountants will be
reconsidered by the Board of Directors.
Representatives of Arthur Andersen & Co. are expected to be
present at the annual Shareholders meeting, and they may have the
opportunity to make a statement, if they desire to do so, and to
respond to appropriate questions.
APPROVAL TO INCREASE AUTHORIZED SHARES
The Board of Directors recommends that you vote for the
amendment to the Articles of Incorporation to increase from five
million (5,000,000) to ten million (10,000,000) the aggregate
number of shares of stock which the Corporation shall have
authority to issue. The additional authorized shares considered
are necessary for future stock dividends and additional
acquisitions through exchange of stock.
<PAGE>
EXECUTIVE OFFICERS
The executive officers of First Financial Bankshares, Inc.
are:
<TABLE>
<CAPTION>
Term of Years Served Principal Occupation
Name Age Office Office In Such Office During Past 5 Years
<S> <C> <C> <C> <C> <C>
Kenneth T. Murphy 56 Chairman, 1 year 7 years Chairman, President and Chief
President and Executive Officer; Chairman,
Chief Executive First National Bank of Abilene,
Officer Abilene, Texas* <F1>
Curtis R. Harvey 48 Executive Vice 1 year 3 years Executive Vice President and
President and Chief Financial Officer since
Chief Financial December 1, 1990; Executive Vice
Officer President, Bank One, Texas, N.A.
<F1> * The bank shown is a subsidiary of the Company.
</TABLE>
COMPENSATION OF OFFICERS
The following table provides individual compensation
information on the Chief Executive Officer and the four most highly
compensated officers of the Company and its subsidiaries.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation
Compensation Awards
All Other
Compensation
Name and Principal Position Year Salary($) Options(#) (1)(2)<F1><F2>
<S> <C> <C> <C> <C>
Kenneth T. Murphy, Chairman,
President & CEO - First Financial
Financial Bankshares, Inc. 1993$ 257,000 4,712 $ 79,016
1992 237,000 7,221 36,400
1991 217,750 3,000 22,981
F. Scott Dueser, President & CEO 1993 151,2502,647 18,382
First National Bank of Abilene 1992 130,0002,155 16,305
1991 114,167 2,000 12,415
Patrick N. Gerald, Chairman & 1993 132,0001,507 14,031
President & CEO - First National 1992 125,0004,775 13,702
Bank, Sweetwater 1991 121,000 1,000 11,713
Craig Smith, Chairman and 1993 124,500 1,509 15,299
President & CEO - 1992 117,500 1,817 15,905
Hereford State Bank 1991 110,000 1,500 13,745
Curtis R. Harvey, Executive
Vice President and CFO - 1993 117,000 1,225 13,050
First Financial Bankshares, Inc. 1992 110,000 750 13,024
1991 105,000 1,500 10,852
<F1> (1) The Company's 1993 contribution to Profit Sharing Plan.
<F2> (2) The amounts for Mr. Murphy include the Company's accruals for deferred
compensation which totaled $52,500 in 1993 and $8,750 in 1992.
</TABLE>
<PAGE>
COMPENSATION PURSUANT TO PLANS
General
Effective January 1, 1984, the Company adopted First Financial
Bankshares, Inc. Pension and Profit Sharing Plans, at which time
the authority for the Plans was placed under the directors of the
Company. These Plans were previously under authority of the
directors of First National Bank of Abilene as these plans had
originated through that bank. Legislation known as TRA '86
requires that all employee benefit plans be amended to comply with
said legislation and subsequent regulations. Currently the
deadline for amending these plans is December 31, 1994. During
1991 and effective January 1, 1987, the Company and its
subsidiaries, except First National Bank in Cleburne, adopted an
amendment and restatement of the Company Profit Sharing Plan as
required by the aforementioned legislation. Although the Company
Pension Plan has not yet been amended and restated, the directors
adopted a benefit formula effective January 1, 1989, which complies
with new regulations. An employee is eligible to become a
participant in the Company Pension and Profit Sharing Plans on
January 1, coincident with or immediately following date of
employment. The Company and all of its then subsidiary banks
adopted a Flexible Spending Account Benefit Plan for all employees
which became effective in 1988. First National Bank in Cleburne
adopted all benefit plans effective in 1991. Stephenville Bank &
Trust Co., which was acquired on February 25, 1993, adopted all
benefit plans effective in 1993.
Profit Sharing Plan
Each participating employer (that is, the Company and each
subsidiary which has adopted the Plan) determines on an annual
basis the contribution which it will make to the Profit Sharing
Plan from such employer's operating profits. Contributions under
the Profit Sharing Plan are administered by an Administrative
Committee appointed by the Board of Directors of First Financial
Bankshares, Inc. for the exclusive benefit of Plan participants
under the provisions of a Trust Agreement. Under the Profit
Sharing Plan, eligible employees may contribute between 1% and 5%
of their eligible earnings, although contributions by employees are
not required as a condition of participation. Each employer's
annual contribution is allocated among the accounts of the active
Plan participants employed by such employer, in the ratio that each
participant's compensation bears to the total compensation of all
participants of such employer. Compensation means the total amount
paid to an employee during the year including bonuses, commissions,
and overtime pay, but excluding reimbursed expenses, director fees,
group insurance benefits and pension and profit sharing
contributions. Notwithstanding the foregoing, the compensation
amount used to calculate a participant's benefit is limited by the
IRS to a maximum of $235,840. Additionally, the Annual Addition
which may be allocated to a participant is limited to $30,000.
Effective January 1, 1988, compensation also includes the amount
elected by an employee as salary reduction under the Flexible
Spending Account Benefit Plan.
The Profit Sharing Plan provides for benefits to vest (become
nonforfeitable) in graduated percentages for the first six (6)
years of participation, with benefits being fully vested after
seven (7) years of credited service. Generally, an employee's
benefit at normal retirement will be the contributions allocated to
his account while a participant, increased by gains and decreased
by losses from investments of the trust and increased by any
forfeitures allocated to his account. An employee is always fully
vested with respect to any voluntary contributions he makes, and
death or disability of a participant while employed by the Company
or one of its subsidiaries results in immediate full vesting with
respect to employer contributions. If a participant terminates
employment for any other reason, the total amount of his employee
contribution account and the vested portion of his employer
contribution account are distributed to him.
Pension Plan
The Company's Pension Plan requires annual contributions
sufficient to provide the pension benefits accruing to employees
under the Plan. The annual benefit for a participant in the
Pension Plan who retires on his normal retirement date is the
Accrued Benefit at December 31, 1988, plus 1.25% of average
compensation multiplied by years of service from January 1, 1989.
"Average Compensation" is the average compensation during the 10
years immediately preceding the date of determination.
Compensation means the total amount paid to an employee during the
year including bonuses, commissions, and overtime pay, but
excluding reimbursed expenses, director fees, group insurance
benefits and pension and profit sharing contributions. There are
provisions in the Plan for early retirement with reduced benefits.
There is no vesting of Plan benefits until a participant has 5 or
more years of credited service with participating employers. Full
(100%) vesting occurs upon the completion of 5 years of credited
service or upon reaching age 65 without regard to credited service.
<PAGE>
The Company Pension Plan is subject to the minimum funding
requirements of the Employee Retirement Income Security Act of 1974
(ERISA) and there is no present funding deficiency. Only one of
the six banks is not fully funded where its past service costs
require current funding of any significance.
Contributions to the Company Pension Plan for the past five
years (1989-1993) have been $54,397, $90,042, $99,602, $98,097, and
$162,052, respectively.
The following table illustrates estimated retirement benefits
under the Company Pension Plan for persons in specified
remuneration and years of service categories and which benefits are
payable annually for life with 10 years certain. The benefits
listed in the table are not subject to any deduction for social
security or other offset amounts. This illustration does not
reflect any benefit which a participant may have accrued at
December 31, 1988.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Years of Service
Remuneration 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$ 25,000 $ 4,688 $ 6,250 $ 7,813 $ 9,375 $ 10,938
50,000 9,375 12,500 15,625 18,750 21,875
75,000 14,063 18,750 23,438 28,125 32,813
100,000 18,750 25,000 31,250 37,500 43,750
125,000 23,438 31,250 39,063 46,875 54,688
150,000 28,125 37,500 46,875 56,250 65,625
200,000 37,500 50,000 62,500 75,000 87,500
250,000 46,875 62,500 78,125 93,750 109,375
</TABLE>
The maximum annual pension benefit payable allowable under current
law is $112,221.
As of December 31, 1993, Mr. Murphy was credited with 23 years
of service under the Company Pension Plan, Mr. Gerald was credited
with 18 years of service, Mr. Smith was credited with 24 years of
service, Mr. Dueser was credited with 17 years of service, and Mr.
Harvey was credited with 3 years of service. The covered
compensation of each of these officers and directors during 1993
was $235,840, $132,966, $124,500, $152,482, and $118,810,
respectively.
Flexible Spending Account Benefit Plan
Effective January 1, 1988, the Company and its subsidiaries
adopted a Flexible Spending Account Benefit Plan. An employee is
eligible to become a participant in this plan on the first day of
the month following completion of two months of service. The
Flexible Spending Account Benefit Plan allows each participant to
redirect a portion of his/her salary, before taxes, to pay certain
medical and/or dependent care expenses. This plan is administered
by the Administrative Committee appointed by the Board of Directors
of First Financial Bankshares, Inc.
STOCK OPTIONS
At the 1992 Annual Meeting, the "1992 Incentive Stock Option
Plan" was approved and adopted. The purposes of the Plan are to
attract and retain key employees and to encourage employee
performance by providing them with a proprietary interest in the
Company through the granting of stock options. The maximum
aggregate number of shares of the Company's common stock which may
be issued under the Plan is 100,000, subject to adjustment for
stock dividends and similar events. The 1992 Plan includes
substantially the same features as the expired 1982 Plan and is
administered by a Stock Option Committee appointed by the Board of
Directors. The following table contains information concerning
options granted during 1993 to the Company's chief executive
officer and four other most highly compensated executive officers.
<PAGE>
<TABLE>
Option Grants in 1993
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options
Granted toExercise
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#)(1)<F1> Year ($/Sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Kenneth T. Murphy 395 1.10 % $ 13.77 10/02/94 $ - $ -
454 1.26 10.77 07/28/97 176,813 223,970
413 1.15 13.50 03/12/00 181,383 274,782
450 1.25 18.18 11/26/01 187,918 313,218
<F2>3,000(2) 8.32 40.00 06/29/03 70,581 183,468
F. Scott Dueser 182 .50 10.77 07/28/97 - -
165 .46 13.50 03/12/00 43,527 65,940
300 .83 18.18 11/26/01 125,279 208,812
<F2>2,000(2) 5.55 40.00 06/29/03 47,054 122,312
Patrick N. Gerald 109 .30 10.77 07/28/97 42,432 53,749
248 .69 13.50 03/12/00 108,838 164,881
150 .42 18.18 11/26/01 62,639 104,406
<F2>1,000(2) 2.77 40.00 06/29/03 23,527 61,156
Craig Smith 36 .10 10.77 07/28/97 - -
248 .69 13.50 03/12/00 65,311 98,941
225 .62 18.18 11/26/01 93,959 156,609
<F2>1,000(2) 2.77 40.00 06/29/03 23,527 61,156
Curtis R. Harvey 225 .62 18.18 11/26/01 75,167 125,287
<F2>1,000(2) 2.77 40.00 06/29/03 23,527 61,156
<F1> (1) All 1993 grants, except those labeled (2), represent adjustment to options granted in prior
years and resulted from the Company's ten percent stock dividend issued on June 1, 1993.
<F2> (2) Granted under incentive stock option plan.
</TABLE>
<PAGE>
The following table contains information
concerning each exercise of stock options during the last fiscal
year by each of the persons named below and the fiscal year-end
value of unexercised options.
<TABLE>
Aggregated Option Exercises in 1993
and FY-End Option Values
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) UnexercisableUnexercisable
<S> <C> <C> <C> <C>
Kenneth T. Murphy 4,343$ 113,536 7,797 213,248
9,683 170,485
F. Scott Dueser 2,723 77,611 660 15,391
5,729 100,869
Patrick N. Gerald - - 2,617 71,575
3,954 69,617
Craig Smith 1,851 50,921 495 11,543
4,614 81,237
Curtis R. Harvey 495 11,296 - -
2,980 36,982
</TABLE>
The following line graph compares the Company's cumulative total
shareholder return with a broad market index (S & P 500 Index) and
a published banking industry index (KBW 50 Total Return Index):
The required performance graph is
not included in this electronic
filing. The graph has been
provided to shareholders of the
Company and has been filed
separately in paper under cover of
Form SE to the Securities and
Exchange Commission.
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person who served as a member of the Executive Committee
in its capacity as Compensation Committee was, during the past
fiscal year, an officer or employee of the Company or any of its
subsidiaries, or had any relationship requiring disclosure in this
Notice to Shareholders except for Mr. Tom Wilson who is a former
subsidiary bank officer. However, committee members Ralph Hooks,
James Parker, and Dr. Wayne Ramsey, Jr. did obtain loans from a
subsidiary bank during the past year. In each case, such loans
were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other
persons and did not involve more than the normal risk of
collectibility or present other unfavorable features. No executive
officer of the Company served as a member of the Compensation
Committee (or other board committee performing equivalent functions
or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers
served as a director of the Company.
EXECUTIVE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During the past fiscal year the Company's executive
compensation program was administered by the Executive Committee
acting in the capacity of Compensation Committee. The Company's
executive compensation program consists of base salary, profit
sharing, and incentive stock options. With the exception of the
Chief Executive Officer, the base salaries for the executive
officers named on page 6 of this Notice are reviewed in December of
each year with adjustments made effective January 1. Included
among the factors which the Committee considers when approving
annual base salaries are: attainment of planned goals and
objectives, scope of responsibility (asset size of subsidiary bank
and/or degree of influence on the Company's profitability and
operations), tenure with the Company, evaluation input from
subsidiary bank directors, and relationship of base salary to the
base salaries of other members of the executive officer group.
The base salary for Mr. Murphy was reviewed in March 1993 with
an adjustment made effective April 1, 1993. The increase was based
on the following factors:
- - The Company's financial performance for 1992 which reflected
a 27% increase in net income.
- - Performance of Chief Executive Officer's duties which relate
primarily to leading and managing the Company within the broad
guidelines set by the Board of Directors.
- - Successful negotiation and completion of acquisition
transaction.
- - Base salary compared to Wyatt Data Services compensation
survey data for chief executive officers of similar size
organizations within the industry.
- - Subjective evaluations of Mr. Murphy's contribution to the
overall success of the Company.
In 1992 the Board of Directors approved a deferred
compensation agreement between First Financial Bankshares, Inc. and
Kenneth T. Murphy, Chairman, President and Chief Executive Officer.
The agreement was made in recognition of his contribution to the
success of the Company and as an inducement to remain, subject to
the discretion of the Board of Directors, in the employ of the
Company. The agreement provides that following retirement in
December 2002, or such later date as may be mutually agreed upon by
the parties, the Company will pay Mr. Murphy, or his beneficiary,
the sum of $6,250 per month for a period of 84 months. The monthly
amount is considered to be an appropriate level of supplemental
income to partially offset Mr. Murphy's reduction in personal
income following retirement and is based on an analysis of the
difference in projected final year compensation and retirement
compensation. The agreement also provides for 70% vesting at age
62, 80% vesting at age 63, and 90% vesting at age 64.
Stock options are granted under the Incentive Stock Option
Plan upon recommendation of the Stock Option Committee of the Board
of Directors. The Executive Committee believes that the Stock
Option Plan is an integral part of the executive compensation
program which encourages key employees to align their long-range
interest with those of shareholders by accomplishing longer-term
corporate goals. When granting options to all named executive
officers for 1993, the Committee evaluated the total number of
shares available, the number of unexercised options held by the
individual, Company's and individual's performance, and the
individual's level of responsibility.
The line graph on page 10 compares cumulative total
shareholder return with a performance indication of the overall
stock market, the S&P 500 Stock Index, and a nationally-recognized
banking industry index, the Keefe, Bruyette and Woods, Inc. (KBW)
50 Total Return Index, which is comprised of fifty of the nation's
top banking companies.
Robert E. Hitt W.V. Ramsey, Jr., M.D.
Ralph N. Hooks H.T. Wilson
James Parker
<PAGE>
PRINCIPAL SHAREHOLDERS OF FIRST FINANCIAL BANKSHARES, INC.
At December 31, 1993, management was not aware of any
person [including any "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934] who is the
beneficial owner of more than five percent (5%) of the Company's
common stock. However, First National Bank of Abilene and First
National Bank, Sweetwater, held of record in various fiduciary
capacities an aggregate of 803,156 shares of such stock. Of the
total shares held, these subsidiaries of the Company had sole power
to vote 386,275 shares (10.3%) and 64,548 shares (1.7%),
respectively. First National Bank of Abilene also shared, with
other persons, the power to vote the remaining 352,423 shares. All
the shares held by each subsidiary Bank, which are registered in
its name as fiduciary or in the name of its nominee, are owned by
many different accounts, each of which is governed by a separate
instrument which sets forth the powers of the fiduciary with regard
to the securities held in such accounts.
INTEREST IN CERTAIN TRANSACTIONS
As has been true in the past, some of the Company's
officers and directors, members of their families, and other
businesses with which they are affiliated, are or have been
customers of one or more of the subsidiary banks of the Company
(First National Bank of Abilene, Abilene, Texas; Hereford State
Bank, Hereford, Texas; First National Bank, Sweetwater, Sweetwater,
Texas; Eastland National Bank, Eastland, Texas; First National Bank
in Cleburne, Cleburne, Texas; Stephenville Bank & Trust Co.,
Stephenville, Texas). As customers, they have had transactions in
the ordinary course of business with such banks including
borrowings, all of which were on substantially the same terms,
including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and did not
involve more than a normal risk of collectibility or present any
other unfavorable features to the subsidiary banks involved. None
of the transactions involving subsidiary banks of the Company and
the Company's officers and directors, or other businesses with
which they may be affiliated, have been classified or disclosed as
nonaccrual, past due, restructured or potential problems.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the
next annual meeting, to receive consideration, must be submitted in
writing and delivered to the Company no later than December 1,
1994.
UNDERTAKING TO FURNISH INFORMATION
The Company will furnish a copy of its Annual Report for
the year 1993 on Form 10-K, including the financial statements and
schedules thereto required to be filed with the Securities and
Exchange Commission, without charge to any person whose proxy is
solicited herewith upon such person's written request therefor,
which request shall contain a good faith representation that, as of
the record date for the annual meeting of the Company's
shareholders, the person making the request was a beneficial owner
of securities entitled to vote at such meeting and such request
shall be addressed to Curtis R. Harvey, Executive Vice President
and Chief Financial Officer, First Financial Bankshares, Inc., P.O.
Box 701, Abilene, Texas 79604. Exhibits to the 10-K Annual Report
shall also be furnished upon the payment of a specified reasonable
fee, which fee shall be limited to the Company's reasonable
expenses in furnishing such exhibits.
OTHER BUSINESS
Management does not know of any other matters that are
likely to be brought before the meeting for action. However, if
any matters do properly come before the meeting, it is intended
that the enclosed proxy will be voted in accordance with the
judgment of the person voting the proxy.
By Order of the Board of Directors.
KENNETH T. MURPHY, Chairman
March 31, 1994
<PAGE>
FIRST FINANCIAL BANKSHARES, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 1994
The undersigned hereby appoints Ralph N. Hooks and Robert E.
Hitt as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of First Financial
Bankshares, Inc. held of record by the undersigned on March 18,
1994, at the annual meeting of shareholders to be held on Tuesday,
April 26, 1994, at 10:30 a.m. in the Abilene Civic Center, 1100
North 6th Street, Abilene, Texas, or any adjournments thereof. The
Proxies are authorized to vote in their discretion upon such other
business as may properly come before the meeting.
The Board of Directors recommends a vote "FOR"
1.ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as written to the contrary below) to vote for all
nominees listed below
J.A. Baird, F.S. Dueser, P.N. Gerald, R.E. Hitt, R.N. Hooks, J.B.
Matthews, R.A. McDaniel, Jr., B. Miers, K.T. Murphy, D.G. Owen,
J.M. Parker, W.V. Ramsey, Jr., M.D., C. Smith, H.T. Wilson, and
S.P. Wilson.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below.)
2. PROPOSAL TO APPROVE APPOINTMENT OF ARTHUR ANDERSEN & CO. AS
INDEPENDENT ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO INCREASE
FROM FIVE MILLION (5,000,000) TO TEN MILLION (10,000,000) THE
AGGREGATE NUMBER OF SHARES WHICH THE CORPORATION SHALL HAVE
AUTHORITY TO ISSUE
[ ] FOR [ ] AGAINST [ ] ABSTAIN
SHARES WILL BE VOTED IN ACCORDANCE WITH THE ABOVE
SPECIFICATIONS. IF NO SPECIFICATION IS MADE ABOVE, THE PROXY WILL
BE EXERCISED AND VOTED FOR THE MATTERS STATED ABOVE.
Receipt of the annual report, financial information, notice of
meeting and proxy statement is hereby acknowledged. Please date
your proxy and sign, exactly as your name or names appear below;
when signing as attorney, executor, administrator, trustee or
guardian, please give title. Each joint owner is required to sign.
SIGNED: DATED: 1994.
Whether or not you plan to attend the meeting in person, please
date, sign and return this proxy as promptly as possible in the
enclosed envelope to Sandy Lester, First Financial Bankshares,
Inc., P.O. Box 701, Abilene, Texas 79604. You may withdraw your
proxy by a request in writing to either of the named proxies at any
time before this proxy is voted.
