SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Farmers Capital Bank Corporation
----------------------------------------------
Name of Registrant as Specified In Its Charter
----------------------------------------------------------------------
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Payment of Filing Fee (Check appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
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4) Date Filed:
<PAGE>
FARMERS CAPITAL BANK CORPORATION
202 West Main Street
Frankfort, Kentucky 40601
Notice of Annual Meeting of Shareholders
to be Held May 11, 1999
The Annual Meeting of Shareholders of Farmers Capital Bank Corporation (the
"Corporation") will be held at the main office of Farmers Bank & Capital Trust
Co., 125 West Main Street, Frankfort, Kentucky, on Tuesday, May 11, 1999 at
11:00 a.m. for the following purposes:
1. The election of four directors for three-year terms ending in 2002 or until
their successors have been elected and qualified;
2. The transaction of such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on April 1, 1999 will
be entitled to receive notice of and to vote at this meeting, or any adjournment
thereof. The stock transfer books will not be closed.
It is desirable that as many shareholders as possible be represented at the
meeting. Consequently, whether or not you now expect to be present, please
execute and return the enclosed proxy. You may revoke the proxy at any time
before the authority therein is exercised.
By order of the Board of Directors,
/s/ JH Childers
James H. Childers
Secretary
Frankfort, Kentucky
April 2, 1999
YOUR VOTE IS IMPORTANT
Please date, sign and promptly return the enclosed proxy in the
accompanying postage-paid envelope.
<PAGE>
FARMERS CAPITAL BANK CORPORATION
202 West Main Street
Frankfort, Kentucky 40601
502/227-1600
Proxy Statement
Annual Shareholders Meeting-May 11, 1999
GENERAL
The Board of Directors of Farmers Capital Bank Corporation (the
"Corporation") hereby solicits your proxy for use at the 1999 Annual
Shareholders' Meeting (the "Meeting"). The Meeting will be held at the main
office of Farmers Bank & Capital Trust Co. ("Farmers Bank"), 125 West Main
Street, Frankfort, Kentucky, on Tuesday, May 11, 1999 at 11:00 a.m. The persons
named as proxies in the form of proxy, Charles S. Boyd and Frank W. Sower, Jr.,
have been designated as proxies by the Board of Directors.
When the enclosed proxy is executed and returned before the Meeting, the
shares represented thereby will be voted at the Meeting as specified thereon.
Any person executing the enclosed proxy may revoke it prior to the voting at the
Meeting by giving written notice of revocation to the Secretary of the
Corporation, by filing a proxy bearing a later date with the Secretary or by
attending the Meeting and voting his or her shares in person.
This Proxy Statement and the accompanying form of proxy are first being
sent to shareholders on or about April 2, 1999.
VOTING
Voting rights are vested exclusively in the holders of shares of
Corporation Common Stock. A shareholder is entitled to one vote per share of
Corporation Common Stock owned on each matter coming before the Meeting, except
that voting rights are cumulative in connection with the election of directors.
Shareholders being present at the meeting in person or by proxy representing a
majority of the outstanding shares of Corporation Common Stock will constitute a
quorum.
Shares represented by a limited proxy, such as where a broker may not vote
on a particular matter without instructions from the beneficial owner and no
instructions have been received (i.e., "broker nonvote"), will be counted to
determine the presence of a quorum but will not be deemed present for other
purposes and will not be the equivalent of a "no" vote on a proposition. Shares
represented by a proxy with instructions to abstain on a matter will be counted
in determining whether a quorum is in attendance and in determining the number
of shares present at the meeting. An abstention is not the equivalent of a "no"
vote on a proposition.
In the election of directors, each shareholder is entitled to as many votes
as are equal to the number of such shareholder's shares of Corporation Common
Stock multiplied by the number of directors to be elected, and the shareholder
may cast all such votes for a single nominee or distribute such votes among two
or more nominees as the shareholder sees fit. For example, if you own 100 shares
of Corporation Common Stock you can give each of the four nominees 100 votes,
one of the nominees all 400 votes or any other division of your 400 votes among
the nominees as you see fit. Any vote for the election of directors on the Board
of Directors proxy form as described herein will constitute discretionary
authority to the named proxies to cumulate the votes to which such proxy forms
relate as they shall determine. If a quorum is present, the four individuals who
receive the largest number of votes are elected as directors.
Only shareholders of record at the close of business on April 1, 1999 will
be entitled to receive notice of and to vote at the Meeting. On March 1, 1999
there were 7,511,348 shares of Corporation Common Stock issued and outstanding.
PRINCIPAL BENEFICIAL OWNERS
The following table gives information as to all persons or entities
known to the Corporation to be beneficial owners of more than five percent (5%)
of the shares of Corporation Common Stock. Unless otherwise indicated,
beneficial ownership includes both sole voting power and sole investment power.
Amount and Nature
of Beneficial
Ownership of
Corporation
Name and Address of Common Stock as of Percent
Beneficial Owner March 1, 1999 of Class 1
- ------------------------------------------------------------------
Farmers Bank & Capital 1,034,042.1887 2 13.77
Trust Co., as Fiduciary
125 West Main Street
Frankfort, KY 40601
1 Based on 3,780,120 shares of Corporation Common Stock outstanding as of March
1, 1999.
2 The shares indicated are held by the Trust Department of Farmers Bank &
Capital Trust Co., a wholly owned subsidiary of the Corporation, in fiduciary
capacities as trustee, executor, agent or otherwise. Of the shares indicated,
Farmers Bank has the sole right to vote 935,307.1887 shares, or approximately
12.45% of the outstanding shares. It has no voting rights with respect to 98,735
shares or 1.3% of the outstanding shares.
In addition, of the shares indicated, Farmers Bank has sole investment power
with respect to 724,597.8815 shares or 9.66% of outstanding shares, shared
investment power with respect to 250,144.3072 shares or 3.33% of the outstanding
shares, and no investment power with respect to 59,300 shares or .78% of the
shares outstanding.
<PAGE>
ELECTION OF DIRECTORS
At the 1999 Annual Meeting of Shareholders, four directors will be elected
to hold office for three-year terms ending in 2002 or until their successors are
elected and qualified.
The enclosed proxy will be voted for the election of the nominees listed in
the table below under the caption, "Nominees For Three-Year Terms Ending in
2002", for the Office of Director. If any of the nominees has become unavailable
for any reason at the time of the Meeting, the proxy will vote for such
substitute nominee as the Corporation's Board of Directors shall determine. The
Board of Directors currently knows of no reason why any of the nominees listed
below is likely to become unavailable. If considered desirable, cumulative
voting will be exercised to elect as many of such nominees as possible.
Principle
Has Served Position and Occupation
Nominee As Director Offices with During the
and age Since 1 Corporation 2 Past Five Years
- --------------------------------------------------------------------------------
NOMINEES FOR THREE-YEAR TERMS ENDING IN 2002
Stokes A. Baird, IV Chairman Attorney At Law
(55) of the Board of
Directors of Kentucky
Banking Centers, Inc.
G. Anthony Busseni 1996 Director; President, President, CEO and
(51) CEO and Director of Director of Farmers
Farmers Bank & Capital Bank and Trust
Trust Co. ("Farmers Company ("Farmers
Bank") Georgetown")
James H. Childers 1996 Director; Executive Executive Vice
(56) Vice President, President, Secretary and
Secretary and General General Counsel of the
Counsel of the Corporation
Corporation; Director since January 1995;
of Kentucky Banking Senior Vice President,
Centers, First Secretary and General
Citizens Bank and Counsel, prior to
Farmers Bank January 1995
Michael M. Sullivan Director of FCB Retired, Senior Vice
(61) Services, Inc. and President, FCB
Farmers Bank Services, Inc.
<PAGE>
Principle
Has Served Position and Occupation
Nominee As Director Offices with During the
and age Since 1 Corporation 2 Past Five Years
- --------------------------------------------------------------------------------
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2000
Frank W. Sower, Jr. 1996 Director Appeals Officer,
(59) Internal Revenue
Service
J. Barry Banker3 1996 Director President of Stewart
(47) Home School
Charles S. Boyd 1992 Director; President President and CEO of
(57) and CEO of the the Corporation, since
Corporation; January 1992
Director of United
Bank & Trust Co.
("United Bank"),
Lawrenceburg
National Bank
("Lawrenceburg
Bank"), Farmers
Georgetown, Farmers Bank,
First Citizens Bank,
Ky. Banking Centers,
and FCB Services
Cecil D. Bell, Jr. 1997 Director; Chairman Farmer
(58) of the Board, Farmers
Georgetown
<PAGE>
Principle
Has Served Position and Occupation
Nominee As Director Offices with During the
and age Since 1 Corporation 2 Past Five Years
- --------------------------------------------------------------------------------
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 2001
Lloyd C. Hillard, Jr. 1996 Director; President, President and CEO of
(52) CEO and Director of First Citizens Bank
First Citizens Bank
and FCB Services
Harold G. Mays 1996 Director President of H. G.
(64) Mays Corp. (asphalt
paving contractor)
Robert Roach, Jr. 1998 Director Retired Teacher
(60)
John D. Sutterlin 1998 Director, Chairman of Dentist, Sutterlin &
(58) the Board of Bradshaw, P.S.C.
Directors of Farmers
Bank
1 refers to the year in which the nominee or the continuing director became a
director of the Corporation.
2 All corporations listed in this column either are the Corporation itself or
subsidiaries of the Corporation.
3 J. Barry Banker is the son-in-law of Dr. John P. Stewart, the Chairman
Emeritus. The foregoing is the only "family relationship" between any director,
executive officer, or person nominated or chosen to become a director or
executive director. "Family relationship" means a relationship by blood,
marriage or adoption, not more remote than first cousin.
- --------------------------------------------------------
<PAGE>
None of the nominees or continuing directors is a director of any company
with a class of securities registered with the Securities and Exchange
Commission pursuant to Section 12 of the Securities Exchange Act of 1934 or
subject to the requirements of Section 15(d) of that Act, or any company
registered as an investment company under the Investment Company Act of 1940.
In addition to the nominees and continuing directors listed in the table
above, Mr. Charles T. Mitchell and Dr. John P. Stewart serve as an Advisory
Directors to the Corporation. The retirement policy for directors of the
Corporation states that a director shall retire effective as of the Annual
Meeting of Shareholders next following the date on which the director attains
age 70. Thereafter, any such director may, at the discretion of the Board of
Directors, become an Advisory Director. Bruce Dungan may become an advisory
director when his current term expires.
There were eight meetings of the Board of Directors during 1998, and all
directors attended at least 75% of the total number of Board meetings and the
meetings of the committees to which they belong.
COMMITTEES OF THE BOARD OF DIRECTORS
There are three standing committees of the Board of Directors of the
Corporation: the Retirement Committee, the Audit Committee and the Compensation
Committee. The Corporation has no standing nomination committee. The Retirement
Committee consists of Thomas P. Porter - Executive Vice President of Farmers
Georgetown, Charles S. Boyd, G. Anthony Busseni, Brenda Rogers - Secretary of
Farmers Bank, James E. Staples - Vice President of the Corporation, Paul H.
Vaughn - Executive Vice President of Lawrenceburg Bank, Charles T. Mitchell, and
Harold G. Mays. During 1998, the Retirement Committee met two times. The
Committee establishes investment policy and monitors investment results for the
plans. It also, from time to time, recommends amendments to the plans to the
Board of Directors.
The Audit Committee consists of Charles T. Mitchell, Dr. John P. Stewart,
Frank W. Sower, Jr. and J. Barry Banker. During 1998, the Audit Committee met
four times. The Committee reviews the reports from the internal audit staff and
recommends appropriate actions.
The Compensation Committee for 1998 consisted of Dr. John P. Stewart,
Charles T. Mitchell and Frank W. Sower, Jr. The Compensation Committee met one
time during 1998. The Committee establishes the salary of the chief executive
officer, approves his recommendations of salaries for the other executive
officers, and determines participation in the Stock Option Plan and the extent
of participation therein.
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The table below gives information as to the shares of Corporation Common
Stock beneficially owned by all directors and nominees, advisory directors and
executive officers. Unless otherwise indicated, beneficial ownership includes
both sole voting power and sole investment power.
Amount and Nature of
Beneficial Ownership of Percent
Corporation Common of
Name Stock as of February 15, 1999 1 Class 2
- --------------------------------------------------------------------------------
Stokes A. Baird, IV** 1,900 3 .02
J. Barry Banker 4,795.885 4 .04
Cecil D. Bell, Jr. 2,000 .03
James E. Bondurant* 110 .00
Charles S. Boyd 23,415.272 5 .31
G. Anthony Busseni 875.753 6 .01
James H. Childers 20,954.173 7 .28
E. Bruce Dungan* 81,820.666 8 1.09
Lloyd C. Hillard, Jr. 3,165.528 9 .04
Harold G. Mays 5,404.721 10 .07
Charles T. Mitchell 33,000 11 .44
Robert Roach, Jr. 20,000 .27
Frank W. Sower, Jr. 54,816 12 .73
John P. Stewart 79,500 13 1.06
Michael M. Sullivan** 223,707.036 14 2.98
John D. Sutterlin 55,300 15 .74
All directors and nominees,
advisory directors and
officers as a group 610,765.034 8.13
<PAGE>
*The terms of Messr. Bondurant and Dungan end May 11, 1999.
**Mr. Baird and Mr. Sullivan are nominees for three-year terms ending in 2002.
1 All entries are based on information provided to the Corporation by its
directors and officers. The persons listed, unless otherwise indicated, are the
sole owners of the reported securities and accordingly exercise both sole voting
and sole investment power over the securities.
2 Based on 7,511,348 shares of Corporation Common Stock outstanding as of March
1, 1999.
3 Includes 400 shares held by two of his children.
4 Includes 3,400 shares held by Farmers Bank in trust for Mr. Banker's wife and
100.73 shares held for each of his three children.
5 Includes 10,626.894 shares held by Mr. Boyd's wife, Nora Lee Boyd; and 938.348
shares held for him in the Employee's Stock Ownership Plan (the "ESOP").
6 Includes 534.86 shares held for him in the ESOP; and 112.34 shares held by his
wife as custodian for his daughter, Kristen E. Busseni.
7 Includes 755.837 shares held in a Keogh Plan Account; 1,350 shares held in
trust for his children with his wife serving as trustee; and 848.336 shares held
by the ESOP; and 2,000 shares held jointly with his father.
8 Includes 5,250 shares owned by Mr. Dungan's son, Bruce G. Dungan, a Vice
President of Farmers Bank; 2,200 shares held by Mr. Dungan's son, Patrick M.
Dungan; 42,000 shares owned by Mr. Dungan's wife, Peggy D. Dungan; and 1,370.666
shares held by the ESOP.
9 Includes 105.922 shares held for him by the ESOP; 200 shares held in a
self-directed IRA for the benefit of his wife Judy; 1,532.07 shares held in a
self-directed IRA for his benefit; and 200 shares held in a profit sharing trust
for the benefit of his wife.
10 Includes 5,404.721 shares held by H. G. Mays Corp. of which he is the
president and principal shareholder.
11 Includes 8,000 shares owned by Mr. Mitchell's wife, Jean G. Mitchell; 5,600
shares in an IRA established by Mr. Mitchell with Farmers Bank serving as
trustee.
12 Includes 30,316 shares held by himself and his brother, John R. Sower, and
his sister, Lynn S. Bufkin, in various trusts for the benefit of his children
and the other grandchildren of his parents and 2,900 shares held by his
children.
13 Includes 61,500 shares held by Dr. Stewart as trustee for his own benefit;
and 10,000 shares held in trust by Farmers Bank for the benefit of three of his
children.
14 Includes 2,650 shares held by Mr. Sullivan's three children; 15,560 shares
held by his wife, Lynne; 51,000 shares held by the Sullivan Family Partnership;
34,080 shares held by the Sullivan Insurance Agency of which Mr. Sullivan is the
president; 2,000 shares held by Mr. Sullivan as trustee of a charitable
remainder trust; and 647.036 shares held by the ESOP.
15 Includes 17,900 shares held in an Individual Retirement Plan Trust for his
benefit.
<PAGE>
FURTHER INFORMATION AS TO MANAGEMENT
COMPENSATION
The following table sets forth all compensation for services in all
capacities to the Corporation and its subsidiaries during the last three fiscal
years by the Corporation's Chief Executive Officer and the Corporation's other
four highest-paid executive officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------------------------------
Long Term Compensation
Annual Compensation Awards Payouts
Other
Name Annual Restricted All Other
and Compen- Stock Securities LTIP Compen-
Principal sation Awards Underlying Payouts sation 2
Position Year Salary($) Bonus($) ($) ($) Options 1(#) ($) ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Charles S.
Boyd 1996 234,330.75 17,625.00 13,500.00
President 1997 244,715.47 7,350.00 58,000 shs. 15,342.00
& CEO 1998 264,323.08 13,328.00
William R.
Sykes
President
& CEO 1996 173,134.94 12,977.62 13,500.00
Farmers 1997 176,884.94 5,308.05 20,000 shs. 19,470.00
Bank3 1998 191,217.73 13,328.00
James H.
Childers
Ex.V.Pres., 1996 114,556.97 7,696.12 9,221.15
Secr.,Gen. 1997 120,889.98 3,214.95 20,000 shs. 8,567.22
Counsel 1998 144,550.72 9,649.13
G. Anthony
Busseni
Ex.V.Pres.
& Chief
Operating
Officer 1996 99,128.22 6,868.49 8,223.99
Farmers 1997 106,372.92 2,864.40 20,000 shs. 7,629.79
Bank 4 1998 129,412.26 10,000.95
Lloyd C.
Hillard, Jr.
President
& CEO
First 1996 93,327.12 6,874.96 8,393.22
Citizens 1997 95,416.12 2,866.98 20,000 shs. 7,633.16
Bank 1998 113,063.71 8,772.97
</TABLE>
1 The shares reported in this column reflect the Corporation's two-for-one stock
split. Under the Corporation's stock option plan, the number of shares covered
by outstanding options and the exercise price of the options are required to be
adjusted proportionately to reflect any stock split.
2 In 1998, includes (a) Corporation's contributions to the Corporation Pension
Plan (Mr. Boyd $6,400.00, Mr. Sykes $6,400.00, Mr. Childers $4,626.03, Mr.
Busseni $4,736.49, and Mr. Hillard $4,122.55); (b) Corporation's contributions
to the Corporation Salary Savings Plan (Mr. Boyd $6,400.00, Mr. Sykes $6,400.00,
Mr. Childers $4,495.10, Mr. Busseni $4,736.46, and Mr. Hillard $4,122.42); and
(c) the value of insurance premiums paid by Corporation on behalf of the named
executive officers ($528.00 for each of the named executive officers).
3 Effective December 31, 1998, Mr. Sykes retired as President and CEO of Farmers
Bank.
4 Effective June 30, 1998, Mr. Busseni resigned as President and CEO of Farmers
Georgetown to assume the position of Executive Vice President and Chief
Operating Officer of Farmers Bank. Effective January 1, 1999, Mr. Busseni
assumed the position of President and CEO of Farmers Bank.
- ----------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Value December 31, 1998 (#) December 31, 1998 ($)3
Name on Exercise(#)1 Realized($)2 Exercisable1 Unexercisable 1 Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles S. Boyd 1,000 12,500 10,600 46,400 137,800 603,200
William R. Sykes 5,000 54,688 0 0 0 0
James H. Childers 2,000 20,000 2,000 16,000 26,000 208,000
G. Anthony Busseni 0 0 3,333 16,667 43,329 216,671
Lloyd C. Hillard 1,000 6,500 2,333 16,667 30,329 216,671
</TABLE>
1 The shares reported in this column reflect the Corporation's two-for-one stock
split. Under the Corporation's stock option plan, the number of shares covered
by outstanding options and the exercise price of the options are required to be
adjusted proportionately to reflect any stock split.
2 Represents the difference between the closing price of the Corporation's
Common Stock on the NASDAQ SmallCap Market tier on the date of the exercise and
the option exercise price.
3 The value of unexercised in-the-money options is calculated by multiplying the
number of underlying shares by the difference between the closing price of the
Corporation's Common Stock on the NASDAQ SmallCap Market tier at fiscal year end
($37.50) and the option exercise price for those shares. These values have not
been realized.
- --------------
COMPENSATION OF DIRECTORS
Directors of the Corporation, other than the Chief Executive Officer,
whether active or advisory, receive a quarterly fee of $1,500.00. Frank W.
Sower, Jr. receives $2,000.00 per quarter for serving as Chairman of the Board.
In addition, active and advisory directors receive $250.00 per meeting for
serving on committees of the Board. All active and advisory directors receive a
year end retainer of $4,000.00.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
According to information provided to the Corporation by its directors and
officers, all are in compliance with Section 16(a) of the Securities Exchange
Act of 1934.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee is composed of Dr. John P. Stewart and Mr. Frank
W. Sower, Jr. who are directors, and Mr. Charles T. Mitchell, a former director
who now is an advisory director. All are independent, outside directors or
advisory directors. During 1998, Mr. Sower assumed the Chairmanship of the
Compensation Committee; formerly, Dr. Stewart served as Chairman of the
Committee.
The Corporation's executive compensation objective is to link compensation
with corporate and individual performance in a manner which, recognizing the
marketplace practices of other bank holding companies, will attract and retain
executives who can achieve the short and long term goals of the Corporation. The
compensation policy is to provide for competitive base salaries, which reflect
individual levels of responsibility and performance, and annual incentive
payments, which are based upon the annual Corporation performance. This
executive compensation is also intended to provide an incentive for the
Corporation's executive officers to pursue the long term best financial interest
of the Corporation and its shareholders. Consistent with this, the Corporation
during 1997 awarded stock options to certain employees and executive officers
(these awards were ratified by shareholders at the 1998 annual meeting). The
Corporation, however, elected to grant no additional stock options during 1998.
Except for the annual incentive compensation described in the following
paragraph, executive compensation is not directly linked to corporate
performance.
As a part of its annual incentive compensation, described above, the
Corporation established an incentive compensation plan, which is administered by
the Compensation Committee and designed to award incentive payments to all
full-time employees of the Corporation and its subsidiaries, including named
executive officers, when certain threshold levels of performance are met. The
Committee establishes the incentive threshold at the earnings level recommended
by the management of the Corporation. As the earnings of the Corporation exceed
that threshold, certain incentive percentages are triggered. For example, if
earnings exceed the budgeted threshold by an amount equal to 1% of the full-time
employee salaries, then the employees get a 1/2 of 1% incentive payment.
Likewise, if the earnings exceed the threshold by 2% of full-time employee
salaries, the employees get a 1% incentive payment.
The Chief Executive Officer is responsible for recommending to the
Compensation Committee the total pool for annual base salary increases for the
Corporation's executive officers. The Chief Executive Officer then sets the
individual annual base salaries for each executive officer from the total pool
as approved by the Compensation Committee. The recommendation by the Chief
Executive Officer for the pool for 1998 salary increases was accepted by the
Compensation Committee without objection.
The 1998 salary for Mr. Boyd, the Chief Executive Officer of the
Corporation, was set by the Compensation Committee in an amount considered
competitive with the salary levels for chief executive officers of comparable
institutions and in light of the recent performance of the Corporation. In
determining salary levels at comparable institutions, the Committee did not
utilize consultants or market surveys but relied instead on its own experience
and knowledge of market conditions. The Committee also considered in setting Mr.
Boyd's salary the recent strong performance of the Corporation under Mr. Boyd's
leadership. Thus, for example, the Committee considered that the 1997 earnings
exceeded those for 1996, even though the 1996 earnings included a $2.1 million
nonrecurring gain on the sale of loans in 1996. The Committee, however, in
setting Mr. Boyd's salary, established no specific relationship between his
salary and corporate performance.
No action or recommendation of the Compensation Committee during 1998 was
modified or rejected by the Board.
All amounts of compensation indicated are deductible for income tax
purposes.
Dr. John P. Stewart, M.D.
Charles T. Mitchell, C.P.A.
Frank W. Sower, Jr.
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG FARMERS CAPITAL BANK CORPORATION,
NASDAQ MARKET INDEX, AND BANK INDUSTRY PEER GROUP INDEX
The following graph sets forth a comparison of the five year cumulative
total returns among the common shares of the Corporation, the NASDAQ Market
Index (broad market index) and MG Industry Group Index (peer group index).
Cumulative shareholder return is computed by dividing the sum of the cumulative
amount of dividends for the measurement period and the difference between the
share price at the end and the beginning of the measurement period by the share
price at the beginning of the measurement period. The NASDAQ Market Index
comprises all domestic common shares traded on the NASDAQ National Market and
the NASDAQ SmallCap Market. The MG Industry Group Index consists of 48 banking
companies in the southeastern United States. The Corporation is among the 48
companies included in the MG Industry Group Index.
Measurement Period Farmers Capital NASDAQ MG
(Fiscal Year Covered) Bank Corporation Market Index Group Index
- ------------------------------------------------------------------------
(Measurement point - 12/31/93; $100.00)
FYE 12/31/94 115.51 104.99 98.95
FYE 12/31/95 130.05 136.18 146.35
FYE 12/31/96 134.17 169.23 186.82
FYE 12/31/97 218.35 207.00 323.28
FYE 12/31/98 263.12 291.96 307.89
Total return assumes reinvestment of dividends.
Assumes $100.00 invested on December 31, 1993.
CORPORATION PENSION PLAN
The Corporation and its subsidiaries maintain a Pension Plan for their
respective employees. The Pension Plan has two components, which are the
employee stock ownership plan and the money purchase pension plan. Employees who
have attained the age of 21 and who have completed one year of service are
eligible to participate in the Pension Plan. For purposes of the Plan, a year of
service is a twelve-month period in which an employee works at least 1000 hours.
The money purchase portion of the Pension Plan provides that the
Corporation shall contribute to the Plan on behalf of each participant an amount
equal to 4% of such participant's compensation for the Plan Year.
Under the employee stock ownership portion of the Pension Plan, the
Corporation may at its discretion contribute additional amounts (up to the
maximum imposed by federal law), which will be allocated to all participants in
the ratio that each participant's compensation bears to all participants'
compensation. Such discretionary contributions will be utilized to purchase
shares of Corporation Common Stock to be held in the participants' accounts. A
1% contribution was made to the employee stock ownership portion of the Pension
Plan in 1996; no contribution was made to the Pension Plan in 1997 or 1998.
The Pension Plan is managed by the trust department of Farmers Bank (the
fund manager), a subsidiary of the Corporation. The investment decisions
respecting the contributions made by the Corporation to the accounts of
participants under the money purchase pension plan portion of the Pension Plan
are made at the sole discretion of the fund manager. The benefits which a
participant can ultimately expect to receive from the Pension Plan are based
upon the amount of the annual contributions made by the Corporation to his or
her account together with the accumulated value of all earnings on those
contributions. The Pension Plan's vesting schedule is as follows: three years of
service, 20% vested; four years of service, 40% vested; five years of service,
60% vested; six years of service, 80% vested; and seven years of service, 100%
vested.
CORPORATION SALARY SAVINGS PLAN
The Corporation and its subsidiaries maintain a Salary Savings Plan for
their employees who have attained the age of 21 and who have completed one year
of service with the Corporation or its subsidiaries. A year of service is a
twelve-month period in which an employee works at least 1,000 hours. The Savings
Plan provides for three types of contributions, as follows:
1. Voluntary tax deferred contributions made by the participant.
2. Matching contributions made by the Corporation.
3. Discretionary Corporation contributions.
A participant is permitted to make tax-deferred voluntary contributions
under a salary reduction agreement. This deferral of compensation is subject to
certain limitations, one of which is the limit imposed by the Internal Revenue
Code of 1986, as amended, upon the dollar amount of the deferral. In 1998, such
limit was $10,000.00.
All contributions made by a participant up to 4% of such participant's
compensation are matched by the Corporation. The Corporation may, in its sole
discretion, make additional contributions to the Savings Plan on behalf of
participants. The Corporation made no discretionary contribution to the Savings
Plan in 1998. Discretionary contributions are allocated among participants in
the ratio that each participant's compensation bears to all participants'
compensation.
Participants' contributions to the Savings Plan are considered as part of
the participant's compensation for purposes of computing the Corporation's
contribution to the Savings Plan.
The Savings Plan participants are immediately vested in 100% of their
contributions, and Corporation contributions vest on a schedule that mirrors
that of the Corporation Pension Plan enumerated above.
TRANSACTIONS WITH MANAGEMENT
The bank subsidiaries of the Corporation have had and expect in the future
to have banking transactions in the ordinary course of business with directors
and executive officers of the Corporation and their associates. All loans to
such persons or their associates have been on the same terms, including interest
rates and collateral on loans, as those prevailing at the same time for
comparable transactions with others, and have not involved more than normal risk
of collectability or other unfavorable features.
The Corporation and Farmers Bank purchase certain insurance coverage
through the Pat Sullivan Insurance Agency, Inc., paying an annual premium which
was $510,291 for the Corporation in 1997. Mr. Michael M. Sullivan, a former
director and officer of FCB Services, Inc. (retired August 1997), is the
president, a director, and significant shareholder of the Pat Sullivan Insurance
Agency, Inc. Mr. Sullivan is a nominee for director of the Corporation.
Farmers Bank leases the second floor and basement of a building located at
201 West Main Street, Frankfort, Kentucky, to the Charles T. Mitchell Company
for $30,505 per year. Mr. Charles T. Mitchell is an advisory director of the
Corporation and is a former partner (now retired) in the Charles T. Mitchell
Company.
Kentucky Banking Centers, Inc. leases space for its Munfordville Banking
Center in a building that is partially owned by director nominee, Stokes A.
Baird, IV. The total annual rent paid for the space is $10,800.00.
GENERAL
2000 ANNUAL MEETING. It is presently contemplated that the 2000 Annual
Meeting of the Shareholders will be held on or about May 9, 2000. In order for
any shareholder proposal to be included in the proxy material of the Corporation
for the 2000 Annual Meeting of Shareholders, it must be received by the
Secretary of the Corporation no later than December 6, 1999. It is urged that
any proposals be sent by certified mail, return receipt requested.
EXPENSES. The expense of this solicitation of proxies will be borne by the
Corporation.
SOLICITATIONS. Solicitations will be made by the use of mails, except
that proxies may be solicited by telephone by directors and officers of the
Corporation. The Corporation does not expect to pay any other compensation for
the solicitation of proxies, but will reimburse brokers and other persons
holding stock in their names, or in the name of nominees, for their expenses in
sending proxy materials to their principals.
NO APPRAISAL RIGHTS. Under Kentucky law, there are no appraisal or similar
rights of dissenters with respect to any matter to be acted upon at the Meeting.
OTHER BUSINESS
The Board of Directors does not presently know of any matters which will be
presented for action at the Meeting. However, if any other matters properly come
before the Meeting, the holders of proxies solicited by the Board of Directors
of the Corporation will have the authority to vote the shares represented by all
effective proxies on such matters in accordance with their best judgment.
By Order of the Board of Directors,
/s/ JH Childers
James H. Childers
Secretary
Frankfort, Kentucky
April 2, 1999
<PAGE>
Farmers Capital
Bank Corporation
Notice of Annual Meeting
and Proxy Statement
Annual Meeting Of
Shareholders
May 11, 1999
<PAGE>
Farmers Capital Bank Corporation Proxy
Solicited by the Board of Directors in accordance with the notice of Annual
Meeting of Shareholders and Proxy Statement dated April 2, 1999 for the Annual
Meeting of Shareholders to be held May 11, 1999.
The undersigned shareholder hereby appoints Charles S. Boyd and Frank W. Sower,
Jr., or any of them with full power of substitution, to act as proxy for and to
vote the stock of the undersigned at the Annual Meeting of Shareholders of
Farmers Capital Bank Corporation to be held at Farmers Bank & Capital Trust Co.,
125 West Main Street, Frankfort, Kentucky on Tuesday, May 11, 1999, at 11:00
a.m., local time, notice of which meeting and accompanying Proxy Statement being
hereby acknowledged as having been received by the undersigned, and at any
adjournment or adjournments thereof, as fully as the undersigned would be
entitled to vote if then and there personally present. Without limiting the
general authorization and power hereby given, the above proxies are directed to
vote as follows:
1. The election of the following nominees as directors of the Corporation as set
forth in the Board of Director's Proxy Statement, including discretionary
authority of selective cumulation: 1) Stokes A. Baird, IV, 2) G. Anthony
Busseni, 3) James H. Childers, 4) Michael M. Sullivan;
2. The transaction of such other business as may properly come before the
meeting.
<PAGE>
Farmers Capital Bank Corporation Proxy Reply Card
This Proxy when properly executed will be voted in the manner directed herein by
the shareholder. If no specific direction is given, this proxy will be voted FOR
all the nominees referred to in Item 1 (including any substitute nominee in the
case of unavailability).
1. [ ] FOR ALL NOMINEES
[ ] WITHHOLD ALL NOMINEES
[ ] FOR ALL NOMINEES EXCEPT
THOSE LISTED
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2. [ ] FOR
[ ] AGAINST
[ ] ABSTAIN
PLEASE DATE AND SIGN ON REVERSE, AND RETURN IN THE ENCLOSED ENVELOPE.This proxy
is solicited by the Board of Directors and will be voted as stated herein.
<PAGE>
Farmers Capital Bank Corporation Proxy
I hereby vote my shares (listed below) as indicated on the reverse side.
Please sign your name below exactly as it appears on your stock certificate(s).
Joint owners must each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title.
Date 1999
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Signature of Shareholder(s)
