SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
PEOPLES FIRST CORPORATION
(Name of Registrant as Specified in Its Charter)
PEOPLES FIRST CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
(1) Title of each class of securities to which transactions
applies:
__________________________________________________________________
(2) Aggregate number of securities to which transaction
applies:
_________________________________________________________________
(3) Per unit price of other underlying value of transaction
computer pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
_________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
__________________________________________________________________
(5) Total fee paid:
_________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] 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:
__________________________________________________________________
March 24, 1997
Dear Shareholder:
We are enclosing Peoples First Corporation's 1996 Annual
Report, Notice of the 1997 Annual Meeting of Shareholders, proxy
statement, and proxy form. For shareholders participating in the
Corporation's Share Owner Dividend Reinvestment and Stock Purchase
Plan, the enclosed proxy form will also represent shares held in
the dividend reinvestment plan.
Please note that the Corporation's 1997 Annual Meeting will be
held at 4:00 p.m., on Thursday, May 1, 1997, at the Executive Inn,
International Rooms A and B, One Executive Boulevard, Paducah,
Kentucky.
Even if you are planning to attend the Annual Meeting in
person, we would appreciate your signing the enclosed proxy form
and returning it in the enclosed self-addressed envelope to our
proxy tabulating agent, Boatmen's Trust Company. You may revoke
the proxy form at the meeting should you desire to vote your shares
in person.
Very truly yours,
/s/Aubrey W. Lippert
Aubrey W. Lippert
Chairman of the Board, President
and Chief Executive Officer
PEOPLES FIRST CORPORATION
100 South 4th Street
Post Office Box 2200
Paducah, Kentucky 42002-2200
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 1, 1997
The Annual Meeting of Shareholders of Peoples First
Corporation (the "Corporation") will be held at 4:00 p.m. (local
time) on Thursday, May 1, 1997, at the Executive Inn, International
Rooms A and B, One Executive Boulevard, Paducah, Kentucky. The
Annual Meeting will be held for the following purposes:
1. Election of Directors. To elect six directors.
2. Ratification of Appointments to Audit Committee. To act
upon a proposal to ratify the appointment of directors to
the Audit Committee of the Corporation's Board of
Directors.
3. Other Business. To act upon such other matters as may
properly be brought before the Annual Meeting or any
adjournment thereof.
Information regarding the matters to be acted upon at the
Annual Meeting is contained in the Proxy Statement accompanying
this Notice.
Only those holders of record of the Corporation's common stock
at the close of business on March 21, 1997, are entitled to notice
of and to vote at the Annual Meeting and any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/A. Howard Arant
A. Howard Arant
Secretary
Paducah, Kentucky
March 24, 1997
YOUR VOTE IS IMPORTANT
PLEASE DATE, SIGN, AND PROMPTLY RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING POSTAGE PAID ENVELOPE.
PEOPLES FIRST CORPORATION
100 South 4th Street
Post Office Box 2200
Paducah, Kentucky 42002-2200
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD MAY 1, 1997
The Board of Directors of Peoples First Corporation (the
"Corporation") is soliciting the accompanying proxy form for use at
the 1997 Annual Meeting of Shareholders to be held at 4:00 p.m.
(local time), on Thursday, May 1, 1997, at the Executive Inn,
International Rooms A and B, One Executive Boulevard, Paducah,
Kentucky.
Only holders of record of the Corporation's common stock (the
"Common Stock") at the close of business on March 21, 1997 (the
"Record Date"), are entitled to notice of and to vote at the Annual
Meeting. On March 21, 1997, there were 10,010,071 shares of Common
Stock issued, outstanding, and entitled to vote at the Annual
Meeting.
Each holder of Common Stock has one vote per share in all
matters coming before the Annual Meeting, except for the election
of directors. In the election of directors, each shareholder is
entitled to vote the number of shares held on the Record Date
multiplied by the number of directors to be elected, and may cast
all of those votes for a single nominee or may distribute the votes
among as many nominees as desired. The Board of Directors is
soliciting authority for the proxies to vote shares in this fashion
at their discretion. Proxy forms may be revoked at any time before
the taking of the vote at the 1997 Annual Meeting by delivering
written notice of revocation to the Corporation's Secretary.
Share amounts and per share information in this Proxy
Statement have been adjusted to reflect 5% stock dividends declared
by the Corporation on April 28, 1995, January 17, 1996, and January
21, 1997.
This Proxy Statement and the accompanying proxy form are first
being sent or given to shareholders on or about March 24, 1997.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of March 21, 1997, certain
information with respect to each person known to the Corporation to
beneficially own five percent or more of the outstanding Common
Stock, as well as the aggregate number of shares of Common Stock
beneficially owned by all of the directors and officers of the
Corporation and executive officers of the Corporation's affiliate
banks (the "Banks") as a group.
<TABLE>
<CAPTION>
Number of Shares
and Nature of Percentage
Name and Address Beneficial Ownership of Class
<S> <C> <C>
Peoples First National 1,147,544(1) 11.5%
Bank and Trust Company ("PFNB")
100 S. 4th Street
P. O. Box 1920
Paducah, Kentucky 42001
All Directors and Officers
of the Corporation and Executive
Officers of the Banks as a
Group (29 persons) 1,165,406(2) 11.2%(3)
</TABLE>
________________________________
(1) Includes 847,181 shares PFNB holds in a fiduciary capacity, as
trustee, executor or otherwise, including 693,024 shares held
with sole voting and dispositive power, and 154,157 shares
held with shared voting and dispositive power. In addition,
PFNB holds 300,363 shares as Trustee for the Corporation's
Employee Stock Ownership Plan (the "ESOP"), with respect to
which PFNB has sole dispositive power. PFNB must vote 300,363
shares as specifically directed by each ESOP member with
respect to the shares allocated to that member's account.
(2) The number of shares owned by individual directors and
executive officers of the Corporation and the nature of their
beneficial ownership are set forth in the table under
"ELECTION OF DIRECTORS." Other officers of the Corporation
and executive officers of the Banks beneficially own 114,562
shares.
(3) Shares of Common Stock subject to options that are or will
become exercisable within 60 days have been deemed outstanding
for computing the percentage of class of the group, whose
members hold the options, but are not deemed outstanding for
computing the percentage of class of any other person.
ELECTION OF DIRECTORS
The Corporation's Board of Directors consists of 18 members in
three classes. Directors are elected to three-year terms, and
ordinarily one class of directors is elected at each annual meeting
of shareholders.
The Corporation will elect six directors at the 1997 Annual
Meeting. Walter L. Apperson, William R. Dibert, R. E. Fairhurst,
Jr., Dennis W. Kirtley, Aubrey W. Lippert, and Allan Rhodes, Jr.
have been nominated for election as directors for terms expiring at
the 2000 Annual Meeting.
The Corporation's Articles of Incorporation provide that the
number of its directors will be fixed from time to time by the
Board of Directors. Between meetings of shareholders held for the
election of directors, the Board of Directors may increase or
decrease the number of directors last approved by the shareholders
by thirty percent (30%) or less. Any vacant directorship, whether
resulting from an increase in the number of directors or otherwise,
may be filled by the affirmative vote of the majority of the
Directors then in office, whether or not a quorum of the Board of
Directors exists at the time of the vote, for a term of office
continuing only until the next election of directors by the
shareholders. A decrease in the number of directors, however, will
not have the effect of shortening the term of any incumbent
director.
If any named nominee should refuse or be unable to serve, the
Board of Directors believes the persons designated as proxies will
vote the shares represented by the enclosed proxy form for the
substitute nominee, if any, proposed by the Board of Directors. No
circumstances are now known, however, that would prevent any of the
nominees from serving. In the election of directors, the
designated proxies may cumulatively cast the votes authorized by
each proxy form received if such action is deemed by the Board of
Directors to be appropriate. Proxy forms cannot be voted for a
greater number of persons than the number of nominees named.
The six nominees receiving the most votes cast in their favor
at the Annual Meeting will be elected as directors. Shares
represented by proxy forms withholding authority to vote for a
named nominee will not be voted for that nominee, and broker
nonvotes will not be counted. The Board of Directors is soliciting
discretionary authority to vote shares represented by signed proxy
forms on which no vote is indicated for each of the named nominees,
or their substitutes, if any.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE ELECTION OF EACH OF THE BOARD'S
NOMINEES.
The following information is furnished as of March 21, 1997,
with respect to each person nominated for election as a director at
the 1997 Annual Meeting, each director whose term will continue
after the 1997 Annual Meeting, and each nondirector executive
officer of the Corporation. Unless otherwise indicated, each
person has been engaged in the listed occupation for the past five
years.
<TABLE>
<CAPTION>
Shares of
Name, Age, Principal Director Common Stock
Occupation or Position, or Executive Beneficially Percentage of
Other Directorships Officer Since Owned (1) Class (2)
<S> <C> <C> <C>
NOMINEES FOR A TERM ENDING IN 2000
Walter L. Apperson, 64 1992 1,981 *
President and Chief
Executive Officer,
Murray Ledger and Times,
a daily newspaper
William R. Dibert, 59 1989 11,101 *
President and Chief
Executive Officer of Crounse
Corporation, a river
transportation company
R. E. Fairhurst, Jr., 50 1987 114,943(3) 1.1%
Owner of Fairhurst Realty,
real estate brokers
Dennis W. Kirtley, 53 1994 92,277(4) *
President and Chief Executive
Officer of First Kentucky
Federal Savings Bank
Aubrey W. Lippert, 56 1983 222,537(5) 2.1%
Chairman of the Board,
President, and Chief
Executive Officer of the
Corporation;
Chairman of the Board and
Chief Executive Officer
of PFNB
Allan Rhodes, Jr. 46 1991 19,841(6) *
President of Bluegrass
Honda-BMW, Inc., an
automobile dealership
TO CONTINUE IN OFFICE UNTIL 1998
Glen Berryman, 59 1996 8,520 *
Independent insurance
agent, Berryman Insurance
Joe Dick, 69 1992 30,599(7) *
Vice Chairman of
the Corporation
William Rowland Hancock, 49 1989 42,154(8) *
President of Hancock
Fabrics, Inc., a
fabrics retailer
Joe Harry Metzger, 67 1983 27,275(9) *
Vice President of
R & M Grocery Co.
Jerry L. Page, 63 1983 135,219(10) 1.3%
Business Consultant
C. Steve Story, 50 1994 5,869(11) *
President of Peoples First
of Calloway County
Formerly President and Chief
Executive Officer of Liberty
Bank and Trust Co., Mayfield,
Kentucky
TO CONTINUE IN OFFICE UNTIL 1999
James T. Holloway, 66 1994 54,491(12) *
Consultant, Peoples
Security Finance Co.
Director, Southern
Finance Co.
Allan B. Kleet, 48 1986 77,705(13) *
Principal Accounting
Officer of the
Corporation
Rufus E. Pugh, 62 1987 8,796(14) *
President of Golden Eagle
Distributing, Inc., a
wholesale beer distributor
Neal H. Ramage, 58 1989 48,537(15) *
President of Peoples First
of Livingston County
Mary Warren Sanders, 48 1992 89,463(16) *
Certified Public Accountant
with Michael D. Pierce, CPA
Victor F. Speck, Jr., 61 1987 42,813(17) *
President of Pico Properties,
Real Estate Investments
Former President of Welders
Supply Company, Inc., a
supplier of welding products
and equipment
CERTAIN EXECUTIVE OFFICERS
George B. Shaw, 51 1993 9,044(18) *
President of PFNB
Former President and
Chief Executive Officer
of Bowling Green Bank
& Trust Co.
David A. Long, 36 1996 7,679(19) *
Chief Operating Officer
of PFNB
Former President and Chief
Executive Officer of Peoples
First Marshall County.
</TABLE>
________________________________
*Represents 1% or less of the outstanding Common Stock.
(1) In the table above, the named person has sole voting and
dispositive power with respect to the reported shares unless
otherwise indicated. When joint ownership is noted, the joint
owners share voting and dispositive power with respect to the
shares. When holdings of a family member are included but are
noted as being held "individually," the family member has sole
voting and investment powers with respect to the indicated
shares. Employees of the Corporation or PFNB have voting but
no investment power with respect to shares held in the
employee's ESOP account.
(2) Shares of Common Stock subject to currently exercisable
options are deemed outstanding for computing the percentage of
class of the person holding such options but are not deemed
outstanding for computing the percentage of class of any other
person.
(3) Of the listed shares, Mr. Fairhurst's wife holds 6,112 shares
individually, and Mr. Fairhurst's sons hold 1,110 shares. In
addition, Mr. Fairhurst holds 67,788 shares as trustee for two
trusts created by his father's estate, with respect to which
he has sole voting and investment power.
(4) Includes 72,188 shares held jointly by Mr. Kirtley and his
wife, 1,312 shares held individually by Mr. Kirtley's wife and
3,744 shares held in Mr. Kirtley's First Kentucky Federal ESOP
account for which he has voting but no investment power.
(5) Includes 133,871 shares subject to currently exercisable stock
options and 24,277 shares held in Mr. Lippert's ESOP account,
and 210 shares held by Mr. Lippert as custodian for his
grandchildren.
(6) Includes 19,378 shares held jointly by Mr. Rhodes and his
wife.
(7) Includes 586 shares held jointly by Mr. Dick and his wife.
(8) Includes 9,529 shares held jointly by Mr. Hancock and his wife
and 2,258 shares owned by Mr. Hancock's minor children.
(9) Includes 23,889 shares held individually by Mr. Metzger's
wife.
(10) Includes 112,843 shares held in trust for the joint benefit of
Mr. Page and his wife.
(11) Includes 2,118 shares owned jointly by Mr. Story and his wife,
and 3,472 shares subject to currently exercisable stock
options, and 134 shares held in Mr. Story's ESOP account.
(12) Includes 53,762 shares owned jointly by Mr. Holloway and his
wife.
(13) Includes 71,530 shares subject to currently exercisable stock
options, 753 shares held individually by Mr. Kleet's wife, and
3,825 shares held in Mr. Kleet's ESOP account. Mr. Kleet
disclaims beneficial ownership of the shares held by his wife.
(14) Includes 2,210 shares held jointly by Mr. Pugh and his wife.
(15) Includes 22,689 shares subject to currently exercisable stock
options, 904 shares held in Mr. Ramage's ESOP account, and
24,755 shares held jointly by Mr. Ramage and his wife.
(16) Includes 9,908 shares held individually by Ms. Sanders'
husband and 78,594 held in trust of which Ms. Sanders is
beneficial owner with voting and dispositive rights.
(17) Includes 5,594 shares held individually by Mr. Speck's wife.
(18) Includes 8,764 shares subject to currently exercisable stock
options, and 49 shares held in Mr. Shaw's ESOP account.
(19) Includes 5,478 shares subject to currently exercisable stock
options and 1,594 shares held in Mr. Long's ESOP account.
________________________________
The Corporation's subsidiary Banks have engaged, and expect to
engage in the future, in banking transactions in the ordinary
course of business with various directors and officers of the
Corporation and the Banks and with many of their associates. Loans
to these parties have been made on substantially the same terms
(including interest rates and collateral) as those prevailing at
the time for comparable transactions with others, and in the
opinion of management, such loans did not involve more than normal
risk of collectability except as noted below, or present other
unfavorable features. Two related commercial entities, in which
Robert P. Meriwether, a former director of the Corporation, is an
executive director and holds a substantial ownership interest, had
aggregate indebtedness to PFNB totaling $11,229,000 as of March 11,
1997 and as much as $9,020,000 in 1996. The indebtedness is
comprised of four commercial and one real estate loan, which bear
interest at annual rates of 7.00% or 8.25%. The borrowers
currently meet all applicable loan agreement terms. The aggregate
balance of outstanding loans to directors and officers of the
Corporation and the Banks and certain corporations and individuals
related to such persons totaled $23,007,000 or 15.9% of the
Corporation's stockholders' equity as of December 31, 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation's Executive Committee was established to
assist the Chairman with decision making issues that arise between
regular quarterly Board meetings. The Executive Committee also
reviews and recommends to the Board of Directors the compensation
of the principal officers of the Corporation and the Banks, and
recommends persons to fill vacancies existing on the Board of
Directors. The Executive Committee met six times during 1996. The
present members of the Executive Committee are Messrs. Apperson,
Dick, Hancock, Page, Pugh and Speck.
The Corporation's Audit Committee, which is composed entirely
of non-management directors, reviews the audit plans and results of
audits of the Corporation and the Banks performed by the
Corporation's internal audit department and independent certified
public accountants. The Audit Committee also monitors the quality
and composition of the Corporation's loan portfolio and reviews
reports of the Corporation's loan review officers. Messrs.
Fairhurst, Hancock, Rhodes, Speck and Ms. Sanders were approved as
members of the Audit Committee at the 1996 Annual Meeting. The
Audit Committee met seven times during the year.
The following is the provision of the Corporation's Bylaws
regarding the nomination of directors by shareholders.
Section 2.13 Nomination of Directors.
(a) Nominations for election to the Board of Direc-
tors may be made by the Board of Directors or by any
shareholder. Any shareholder who intends to nominate or
to cause to have nominated any candidate for election to
the Board of Directors (other than a candidate nominated
by the Board of Directors) shall deliver or mail written
notification of the nomination to the President not less
than fourteen days nor more than fifty days before any
meeting of shareholders called for the election of
directors; provided, however, that if less than twenty-one days'
notice of the meeting is given to shareholders, such notification
shall be delivered or mailed to the President not later than the
close of business on the seventh day following the notice of
meeting was mailed. Any such notification shall contain the
following information to the extent known to the notifying
shareholder or shareholders:
(1) The name and address of each proposed nominee;
(2) The principal occupation of each proposed
nominee;
(3) The total number of shares that, to the knowledge
of the notifying shareholder or shareholders, will
be voted for each proposed nominee;
(4) The name and residence address of each notifying
shareholder; and
(5) The number of shares owned by each notifying
shareholder.
(b) The chairman of any meeting of shareholders
held for the election of directors may disregard any
nomination for director not made in accordance with the
provisions of this Section, and upon the instruction of
the chairman, the inspectors of election shall disregard
all votes cast for any nominee whose nomination was not
made in accordance with the provisions of this Section.
Director Compensation
The Board of Directors held a total of seven regularly
scheduled and special meetings during 1996. Nonemployee and
employee directors other than Mr. Lippert and Mr. Kleet receive an
annual fee of $4,000 for their services. Directors may elect to
defer directors fees until they leave the Board. Deferred amounts
are deemed to have been invested in either a 30 month certificate
of deposit or (effective in May 1997) in Common Stock. In 1996,
all incumbent Directors attended at least 75 percent of the total
number of meetings of the Board of Directors and committees on
which they served as members.
Joe Dick, Vice Chairman and a director of the Corporation and
the former President, Chief Executive Officer and Chairman of Bank
of Murray (now Peoples First of Calloway County), has served as a
consultant to Peoples First of Calloway County since his retirement
as of January 1, 1993. Under the terms of a consulting and non-competition
agreement between Mr. Dick and the Corporation, Mr. Dick provides
consulting services to Peoples First of Calloway County, including
advisory services with respect to marketing, business development
and operations, for a term through December 31, 1997. For his
consulting services, Mr. Dick is paid $100,000 per year.
Dennis W. Kirtley, a director of the Corporation and President
of First Kentucky Federal Savings Bank, entered into an employment
agreement with First Kentucky as of March 10, 1994. The employment
agreement provides for Mr. Kirtley's continued employment as
President and Chief Executive Officer of First Kentucky for three
years from that date at a base salary, which was $112,224 in 1996.
Mr. Kirtley has the right to compensation or other benefits after
termination of employment only when such termination is without
"just cause" (as defined). If employment is terminated without
just cause, Mr. Kirtley is entitled to receive his salary up to the
date of termination of his employment agreement plus an additional
twelve-month period, but in no event more than three years' salary,
and the cost of his obtaining all health, life and disability
benefits for a period of one year from the date of termination,
unless he obtains comparable benefits elsewhere through other
employment prior to the end of the twelve-month period.
C. Steve Story, a director of the Corporation and President of
Peoples First of Calloway County, and formerly President and Chief
Executive Officer of Liberty Bank and Trust Co. (now Peoples First
of Graves County), entered into an employment agreement with
Liberty Bank and Peoples First dated as of October 7, 1994. The
employment agreement provides for Mr. Story's employment as
President and Chief Executive Officer of Liberty Bank, or in such
other executive capacity as the Board of Directors shall designate,
for a term expiring June 30, 1997, at an annual base salary of
$105,000. In addition, Mr. Story can earn an annual $35,000 bonus
for satisfactory performance during each calendar year and an
additional annual $35,000 bonus based on the performance of Peoples
First of Calloway County, the Corporation, and Mr. Story during
each calendar year in accordance with mutually agreed upon annual
bonus programs. In accordance with the employment agreement, Mr.
Story was awarded a one-time grant of options to purchase 17,364
shares at an exercise price of $16.84. Upon termination of his
employment, Mr. Story is entitled to receive salary and benefits
payable during the term of his employment agreement unless he
voluntarily terminates his employment or his employment is
terminated for "cause" (as defined).
REPORT OF THE EXECUTIVE COMMITTEE
ON EXECUTIVE COMPENSATION
The Corporation's Executive Committee is comprised entirely of
independent, nonemployee directors. The Executive Committee has
the responsibility for reviewing and recommending to the Board of
Directors the compensation paid to the executive officers of the
Corporation.
The Corporation's executive compensation program is structured
to help the Corporation achieve its business objectives by:
* Setting levels of compensation designed to attract and
retain talented executives in a highly competitive
banking environment;
* Providing annual cash incentive compensation based on the
Corporation's attainment of targeted earnings or other
appropriate performance goals; and
* Providing long-term incentive compensation in the form of
stock options designed to align executives' interests
with the interests of the Corporation's shareholders.
Base Salaries
The Executive Committee recommends salary levels for the
Corporation's executive officers that are intended to be consistent
with industry practice and level of responsibility, with salary
increases reflecting competitive trends, the overall financial
performance of the Corporation, and the performance of the
individual executive. The Corporation engages independent
consultants from time to time to assist with compensation policy
issues. The recommendations for 1996 base salaries for executive
officers were intended to approximate the median base salaries paid
to executives having similar responsibilities with banks or bank
holding companies of comparable asset size to the Corporation,
based on data compiled by the Corporation's consultant. Annual
increases in base salary are based on the Committee's assessment of
each executive's performance and a comparison of the executive's
salary to the median for executives with similar responsibilities
at comparable institutions.
Annual Bonus
To insure that an important portion of compensation is based
on performance, the annual bonus payable to approximately 13 senior
officers of the Corporation and its affiliates, including each
executive officer of the Corporation, is based upon the attainment
of targeted performance measurements by the Corporation or the
affiliate that employs the officer. At the beginning of each
fiscal year, the Committee establishes the range of performance
objectives that will qualify for a bonus and budgets a certain
amount for the bonus based on a percentage of salary for
participants at various levels of responsibility. For 1996, the
Corporation's two senior corporate executives were eligible to earn
a bonus based upon attainment of a specified earnings per share
target by the Corporation. The senior officers of the
Corporation's affiliates were eligible to earn a bonus based upon
the attainment of specified net income or specified loan and
deposit growth rates by their respective affiliates. The
percentage of salary payable as a bonus ranges from 4.88% of salary
for attainment of the minimum performance target to a maximum of
25.12% for attaining or exceeding the highest performance target.
In 1996, the Corporation increased earnings per share by 14%,
exceeding its earnings per share target by approximately 4% and
earning the senior officers of the Corporation a bonus of 24.34% of
salary.
Stock Option Grants
To link a portion of incentive compensation to the market
performance of the Common Stock, the Corporation has periodically
granted key employees stock options under its 1986 Stock Option
Plan (the "Option Plan"). The Option Plan, as amended at the 1994
Annual Meeting, makes available for grants of options and other
stock-based incentive awards a number of shares equal to 10% of the
total number of shares of Common Stock issued and outstanding. In
addition to providing key employees an incentive to put forth
maximum effort for the Corporation's success, the Committee
believes option grants appropriately give key employees a common
interest with its shareholders in the Corporation's long-term share
performance. In setting the number of shares subject to options
and other terms and conditions of an individual grant, the
Committee considers the individual's responsibilities and
contribution to the success of the Corporation and the individual
Bank. The aggregate exercise price of the options granted to an
executive officer generally approximate the officer's annual
salary, with adjustments based upon the Committee's assessment of
the officer's contribution to the Corporation's performance.
Consistent with the long-term incentive purpose of option grants,
each grant generally provides that options become exercisable with
respect to 10% of the underlying shares each year. In December
1996, the Committee recommended awards for options for 49,350
shares to the named executive officers.
Chief Executive Officer's Compensation in 1996
The Executive Committee believes that the compensation paid to
the Chief Executive Officer should include a base salary, the
opportunity to earn a bonus based on the Corporation's performance,
and a stock-based component.
The Chief Executive Officer's base salary is determined in
accordance with the compensation policies described under "Base
Salaries," above. The Executive Committee took into account
several factors in setting Mr. Lippert's salary for 1996 at
$247,500. The most important factors were data regarding median
base salaries paid to Chief Executive Officers of comparable bank
holding companies, the 11.9% increase in the Corporation's earnings
per share in 1995 over 1994, the Corporation's attaining a return
on equity of more than 12% for five consecutive years, and Mr.
Lippert's personal commitment to leadership of the Corporation. No
specific weighting was assigned to these criteria.
Mr. Lippert earned a $60,241 bonus based upon the
Corporation's performance under the bonus formula described under
"Annual Bonus," above. The Corporation's earnings per share for
1996 increased 14% to $1.71 per share from $1.50 per share for
1995. The Corporation's return on average equity for 1996
increased to 12.75% from 12.46% for 1995, and its average return on
assets for 1996 increased to 1.29% to 1.19% for 1995.
In December 1996, Mr. Lippert was awarded options to purchase
15,750 shares of Common Stock for $23.33 per share, the market
price at the time the options were granted. The market price per
share of Common Stock at the end of 1996 was $24.29, compared to
$21.32 and $16.85 at the end of 1995 and 1994, respectively.
EXECUTIVE COMMITTEE
OF THE BOARD OF DIRECTORS
Walter L. Apperson William Rowland Hancock Rufus E. Pugh
Joe Dick Jerry L. Page Victor F. Speck, Jr.
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the
compensation of the Corporation's Chief Executive Officer and its
most highly compensated executive officers whose total annual
salary and bonus for 1996 exceeded $100,000.
<TABLE>
<CAPTION>
Annual Compensation
Other Long-Term All
Name and Principal Annual Compensation Other Com-
Position Year Salary Bonus Compensation(1) Options (#) pensation(2)
<S> <C> <C> <C> <C> <C> <C>
Aubrey W. Lippert
Chairman of the Board, 1996 $247,500 $60,241 $0 15,750 $8,936
President and Chief 1995 225,000 43,402 0 13,230 8,798
Executive Officer 1994 225,000 0 0 13,892 8,657
of the Corporation,
Chairman of the Board
and Chief Executive
Officer of PFNB
Allan B. Kleet 1996 143,774 34,994 0 33,600 8,490
Principal Accounting 1995 138,244 26,667 0 6,836 8,036
Officer of the 1994 129,200 0 0 5,789 7,389
Corporation
George B. Shaw 1996 155,700 0 0 0 8,875
President of PFNB 1995 133,560 0 0 6,615 7,765
1994 126,000 10,282 0 5,789 3,799
Dennis W. Kirtley 1996 112,224 9,132 14,200 0 5,827
President and Chief 1995 107,096 8,674 14,200 0 6,372
Executive Officer 1994 107,341 9,132 10,200 0 6,225
of First Kentucky
Federal Savings Bank
C. Steve Story 1996 105,000 55,000 4,800 0 6,201
President of Peoples 1995 105,000 70,000 7,950 0 6,215
First of Calloway County 1994 72,000 7,250 5,900 17,364 11
</TABLE>
___________________
(1) Does not include perquisites, the value of which in all cases
did not exceed 10% of the total of the named individual's
salary and bonus. Listed amounts represent fees for service
as directors of the Corporation and affiliate Banks.
(2) The following amounts are included in the above table.
Contributions made under the Employee Stock Ownership Plans in
1996 were Mr. Lippert $3,890; Mr. Kleet $3,729; Mr. Shaw
$3,890; Mr. Kirtley $2,111; Mr. Story $2,723. Contributions
made under the 401(k) Plan in 1996 were: Mr. Lippert $4,500;
Mr. Kleet $4,312; Mr. Shaw $4,500; Mr. Kirtley $3,367; Mr.
Story $3,150. Life insurance premiums paid in 1996 were Mr.
Lippert $546; Mr. Kleet $449; Mr. Shaw $485; Mr. Kirtley $349;
Mr. Story $328.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option/SAR Term(1)
Name Number of Securities % of Total Options/ Exercise or
Underlying Options/ SARs Granted of Base Price Expiration
SARs Granted Employees in 1996 ($/sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Aubrey W. Lippert 15,750 19.0% $23.33 12/17/2006 $231,086 $ 585,617
Allan B. Kleet 33,600 40.5% 23.33 12/10/2006 492,983 1,249,316
George B. Shaw 0 -- -- -- -- --
Dennis W. Kirtley 0 -- -- -- -- --
C. Steve Story 0 -- -- -- -- --
</TABLE>
____________________
(1) If the market price of the Common Stock increased by 5% per year and 10%
per year during the term of the options, the total increase in
shareholder value would be $146,869,000 and $372,195,000, respectively.
The calculations of potential increases in shareholder value are for
illustrative purposes only and are not intended to forecast future
appreciation of the value of the Common Stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-Money
Shares Acquired Value Options at Year End(#) Options at Year End($)
Name on Exercise (#) Realized($) Exercisable(1) Unexercisable Exercisable(1) Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Aubrey W.
Lippert 0 $0 134,797 41,780 $2, 142,592 $111,114
Allan B. Kleet 0 0 71,533 46,232 1, 108,183 81,710
George B. Shaw 0 0 8,765 15,215 72,517 75,091
C. Steve Story 0 0 3,473 13,892 25,839 103,358
</TABLE>
__________________________________________
(1) Includes options that became exercisable on or before January 6, 1997.
COMMON STOCK PERFORMANCE VERSUS NASDAQ STOCK MARKET (U.S.)
AND NASDAQ BANK STOCKS INDICES
[Performance Graph]
The graph above assumes $100 invested on December 31, 1991 in the
Corporation's Common Stock, the NASDAQ Stock Market (U.S.) Index, and the
NASDAQ Bank Stocks Index, and assumes reinvestment of dividends.
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
The Corporation $100.00 $140.13 $224.80 $175.26 $228.00 $267.55
NASDAQ Stock Market
(U.S.) 100.00 116.38 133.59 130.59 184.67 227.16
NASDAQ Bank Stocks 100.00 145.55 165.99 165.38 246.32 325.60
</TABLE>
RATIFICATION OF APPOINTMENTS TO AUDIT COMMITTEE
The Board of Directors has appointed Messrs. Fairhurst,
Hancock, Rhodes and Speck and Ms. Sanders to serve on the Audit
Committee, subject to ratification by the Corporation's
shareholders at the Annual Meeting. The ratification of the
appointments to the Audit Committee by the shareholders is not
required by law or by the Corporation's Bylaws. The Board of
Directors is submitting this matter to the shareholders in the
belief that it is a good practice to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS RATIFY THE
APPOINTMENTS OF THE MEMBERS OF THE AUDIT COMMITTEE.
In the absence of instruction to the contrary, shares
represented by proxy forms will be voted in favor of the
ratification of the members of the Audit Committee. If the number
of the votes cast in favor of the ratification of the
appointments, does not exceed the number of votes cast against
ratification, the appointees will decline to serve, and the Board
of Directors will appoint other non-management directors to serve
on the Audit Committee, whose appointment will be subject to
ratification by the shareholders at the 1998 Annual Meeting.
Abstentions and broker nonvotes will not be counted as either in
favor or against this proposal.
INFORMATION CONCERNING INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP, Certified Public
Accountants, has served as independent auditors for the Corporation
since its commencement of operations in 1983. Representatives of
KPMG Peat Marwick LLP will be present at the 1997 Annual Meeting
and will have the opportunity to make a statement, if they desire
to do so, and to respond to appropriate questions.
GENERAL
All expenses of preparing, printing, mailing and delivering
the Proxy Statement and all materials used in the solicitation of
proxy forms will be borne by the Corporation. In addition to the
use of the mails, proxy forms may be solicited by personal inter-
view, telephone, and telegraph by directors, officers, and other
employees of the Corporation, none of whom will receive additional
compensation for such services. The Corporation will also request
brokerage houses, custodians, and nominees to forward soliciting
materials to the beneficial owners of the Common Stock held of
record by them and will pay reasonable expenses of such persons for
forwarding these materials.
Shareholder Proposals
Any proposals by shareholders to be presented at the 1998
Annual Meeting must be received by the Secretary of the Corporation
prior to November 24, 1997, to be included in the Proxy Statement
for the 1998 Annual Meeting.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires directors and officers of the Corporation and
persons who beneficially own ten percent or more of the Common
Stock to file reports with the Securities and Exchange Commission
and the Corporation with respect to their beneficial ownership of
the Corporation's equity securities. Based on its review of the
reports furnished to the Corporation during and with respect to
1996, the Corporation believes that its directors, officers, and
beneficial owners have filed all required reports in a timely
manner.
Other Matters
The directors and officers of the Corporation do not know of
any matters to be presented for shareholder approval at the meeting
other than those described in the Proxy Statement. If any other
matters should come before the meeting, the Board of Directors
intends that the persons designated on the enclosed proxy form, or
their substitutes, will vote the shares represented by the proxy
form in accordance with their best judgment on such matters.
A copy of the Corporation's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission is available
without charge by calling or writing Allan B. Kleet, Principal
Accounting Officer, Peoples First Corporation, P.O. Box 2200,
Paducah, Kentucky 42002.
By Order of the Board of Directors.
A. Howard Arant
Secretary
PEOPLES FIRST CORPORATION
Paducah, Kentucky
March 24, 1997
This Proxy Form is Solicited by the Board of Directors
(PLEASE DATE, MARK, SIGN AND RETURN IMMEDIATELY)
PEOPLES FIRST CORPORATION
Paducah, Kentucky
The undersigned hereby appoints Henry O. Whitlow and Gary B.
Houston, or either one of them (with full power to act alone), my
proxy, each with the power to appoint his substitute, to represent
me to vote all of the Corporation's Common Stock which I held of
record or am otherwise entitled to vote, at the close of business
on March 21, 1997, at the 1997 Annual Meeting of Shareholders to be
held on May 1, 1997, at 4:00 p.m., and at any adjournments thereof,
with all powers the undersigned would possess if personally
present, as follows:
1. ELECTION OF DIRECTORS.
___ FOR all nominees listed below (except as otherwise
indicated below)
___ AGAINST all nominees listed below
Walter L. Apperson, William R. Dibert, R.E. Fairhurst, Jr.
Dennis Kirtley, Aubrey W. Lippert, Allan Rhodes, Jr.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write the nominee's name on the line.)
________________________________________________________
2. RATIFICATION OF APPOINTMENTS TO AUDIT COMMITTEE.
_____ FOR _____ AGAINST _____ ABSTAIN
3. OTHER BUSINESS. In their discretion, the Proxies are
authorized to act upon such other matters as may properly be
brought before the Annual Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE
NOMINEES LISTED IN ITEM 1 AND "FOR" ITEM 2.
This proxy form relates to ALL shares owned by the
undersigned, including any shares of Common Stock held in the
undersigned's account under the Corporation's Share Owner Dividend
Reinvestment and Stock Purchase Plan.
This proxy form is solicited by the Board of Directors and
will be voted as specified and in accordance with the accompanying
proxy statement. If no instruction is indicated, this proxy form
will be voted "FOR" all of the nominees listed in Item 1 or
cumulatively, at the discretion of the Board of Directors, and
"FOR" Item 2.
[PLEASE SIGN AND DATE ON BACK]
Please sign exactly as name appears. When shares are held by
joint tenants, both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign full corporate name
by President or other authorized officer. If a partnership, please
sign partnership name by authorized person.
Please check one of the following:
___ I will attend the Annual Meeting.
___ I will not attend the Annual Meeting.
Date _______________, 1997
_____________________________
Signature
_____________________________
Signature if held jointly
