SCHEDULE 14A
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or (section mark) 240.14a-12
[ ] Confidential, for use of the Commission only (as permitted
by Rule 14 a-6 (e) (2)
CBT CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22 (a)(2) of Schedule 14 A.
[ ] $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:
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:
<PAGE>
CBT CORPORATION
333 Broadway
Paducah, KY 42002
March 1, 1995
Dear Stockholder:
The annual meeting of stockholders will be held on Tuesday,
April 18, 1995, at
2:00 P.M., Paducah time, at the main office of Citizens Bank and
Trust Company, 333 Broadway, Paducah, Kentucky. The formal
Notice of the Meeting and Proxy Statement appear in the pages
that follow.
In addition to the election of directors, stockholders will be
asked to consider and vote upon an amendment to the Articles of
Incorporation regarding the indemnification of officers and
directors.
We recommend that you vote for the amendment referred to above,
which is set forth in more detail in the accompanying Proxy
Statement.
Sincerely,
(Signature of William J. Jones)
William J. Jones
President and Chief Executive Officer
Please sign and date the enclosed proxy and return it
promptly in the enclosed envelope, if you do not expect
to be personally present and wish your stock to be voted.
If you later find that you may be present or for any other
reason desire to revoke your proxy, you may do so prior to
the time the presence of a quorum has been determined and
declared.
<PAGE>
CBT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 18, 1995
To the Holders of Common Stock of CBT Corporation:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders
of CBT Corporation, (the "Corporation"), a Kentucky corporation,
will be held at the main office of Citizens Bank and Trust
Company, 333 Broadway, Paducah, Kentucky, on Tuesday, April 18,
1995, at 2:00 p.m., Paducah time, for the following purposes:
1) To elect directors to hold office until the next annual
election and until their successors shall be duly elected and
qualified;
2) To amend the Articles of Incorporation to adopt a new
Article XIII dealing with the indemnification of officers
and directors; and
3) To transact such other business as may properly come before
the meeting.
Only holders of common stock of record at the close of business
on February 10, 1995, will be entitled to vote at the meeting or
any adjournment thereof.
By Order of the Board of Directors,
(Signature of William J. Jones)
William J. Jones
President and Chief Executive Officer
March 1, 1995
<PAGE>
CBT CORPORATION
333 Broadway
Paducah, Kentucky 42002
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of CBT Corporation (the
"Corporation") of proxies to be voted at the annual meeting of
stockholders to be held on Tuesday, April 18, 1995. Any
stockholder giving a proxy has the right to revoke it by a
written notice delivered to the Secretary of the Corporation,
P.O. Box 2400, Paducah, Kentucky, 42002-2400, or in person at the
meeting, prior to the time the presence of a quorum has been
determined and declared. All proxies will be voted in accordance
with the directions of the stockholder and to the extent no
directions are given, will be voted "for" the nominees for
directors and "for" the amendment to the Articles of
Incorporation.
This Proxy Statement and form of proxy are first being mailed
to stockholders commencing on or about March 1, 1995.
The Corporation will bear the entire cost of soliciting
proxies. Solicitation will be primarily by mail. Certain
officers of the Corporation and its subsidiaries may solicit
proxies personally or by telephone or special letter, but such
persons will not be specially compensated for such services.
SHARES OUTSTANDING AND VOTING
Only stockholders of record at the close of business on
February 10, 1995 are entitled to notice of, and to vote at, the
annual meeting. As of February 10, 1995, there were issued and
outstanding 7,952,358 shares of common stock. The Corporation
has no class of stock other than common stock. Each share of the
common stock is entitled to one vote on all matters presented to
the stockholders with the exception of the election of directors.
In the election of directors, cumulative voting rules apply.
Under cumulative voting, each stockholder is entitled to cast as
many votes in the aggregate as shall equal the number of shares
of the common stock owned by him or her multiplied by the number
of directors to be elected. Each stockholder, or his or her
proxy, may cast all of his or her votes (as thus determined) for
a single nominee for director or may distribute them among two or
more nominees, at the stockholder's discretion. As to the
authority of the persons named as proxies in the accompanying
proxy card to accumulate votes, see the section entitled
"Election of Directors".
As of February 10, 1995, the trust department of Citizens Bank
and Trust Company ("Citizens") held of record 992,130 shares of
the Corporation's common stock in a fiduciary
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<PAGE>
capacity representing approximately 12.5 percent of the
Corporation's outstanding shares of common stock. With respect
to 366,540 shares (approximately 4.6 percent), the instrument
creating the trust or fiduciary relationship specifically directs
Citizens to vote the shares and the shares will be voted "for"
the proposals presented for consideration. The remaining shares
held by the trust department of Citizens will be voted at the
direction of the beneficial owners.
As of February 10, 1995, to the knowledge of the Corporation,
there were no other record or beneficial owners of more than 5
percent of the Corporation's issued and outstanding common stock.
Under cumulative voting, the seventeen nominees receiving the
most votes cast for the election of directors at the annual
meeting will be elected, which means that abstentions and broker
non-votes will have no effect on the outcome of the vote. Under
the Corporation's articles of incorporation and bylaws and the
Kentucky Business Corporation Act, the proposal to amend the
articles of incorporation to add a new Article XIII relating to
indemnification will require an affirmative vote of a majority of
the shares of common stock voted on the proposal, with shares
owned by or voted under the control of any director and related
entities excluded. Abstentions and broker non-votes are not
counted in determining the number of votes cast and in effect
represent no action taken on the matter by the shareholder,
although they do reduce the number of votes required for the
approval of the proposal.
BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
OF COMMON STOCK OF THE CORPORATION
Set forth below is information with respect to shares of common
stock of the Corporation beneficially owned as of February 10,
1995 by the current director-nominees, the executive officers
named in the Summary Compensation Table herein, and all director-
nominees and executive officers of the Corporation as a group.
Unless otherwise noted, the named person has sole voting and
investment powers with respect to the reported shares. Where the
holdings of a family member are noted as being held
"individually", the family member has sole voting and investment
power with respect to the shares. Where joint ownership is
noted, the joint owners share voting and investment power as to
the shares.
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Amount and Nature of
Name Beneficial Ownership Percent
of Class
Irving P. Bright, Jr. 57,339 **(1)
John Burman 47,954 **(2)
Patrick J. Cvengros 87,160 1.1(3)
William H. Dyer 54,568 **
Louis A. Haas 347,330 4.4(4)
Joe Tom Haltom 291,032 3.7
Kerry B. Harvey 29,464 **(5)
F. Donald Higdon 2,838 **
M. Leon Johnson 59,609 **(6)
William J. Jones 42,959 **(7)
Ted S. Kinsey 19,750 **(8)
Louis M. Michelson 6,646 **(9)
Billy B. Morgan 213,267 2.7(10)
C. Thomas Murrell, III 4,371 **(11)
Louis D. Myre, MD 36,640 **(12)
J. Russell Ogden, III 34,540 **(13)
David M. Paxton 3,300 **(14)
Robert P. Petter 24,420 **
Joseph A. Powell 22,098 **(15)
John E. Sircy 200 **
William A. Usher 8,000 **
All directors and named executive officers
of the Corporation and its subsidiaries
as a group (26 persons) 1,423,858 17.9
**Represents less than 1 percent of total outstanding shares of
common stock.
(1) Shares represented include 6,172 shares owned
individually by Mr. Bright's wife and 12,000 shares in a trust
for which she serves as Trustee.
(2) Shares represented include 22,474 shares
individually owned by Mr. Burman's wife.
(3) Shares represented include 32,676 shares owned
jointly by Mr. Cvengros and his wife and 5,294 shares of
vested stock options.
(4) Shares represented include 5,904 shares held in
custodian accounts for Mr. Haas' children, 7,886 shares
owned jointly by he and his wife and 177,108 shares of an estate
for which Mr. Haas serves as executor.
(5) Shares represented include 19,500 shares owned
jointly by Mr. Kinsey and his wife, 100 shares owned
jointly by Mr. Harvey's wife and daughter, and 16 shares owned
jointly by Mr. Kinsey and his daughter.
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(6) Shares represented include 9,861 vested shares
held by the Corporation's Retirement, Savings, and Profit
Sharing Plan
(7) Shares represented include 2,556 vested shares
held by the Corporation's Retirement, Savings, and Profit
Sharing Plan and 39,167 shares of vested stock options.
(8) Shares represented include 10,884 shares jointly
owned by Mr. Kinsey and his wife, 300 shares owned individually
by Mr. Kinsey's wife, and 2,000 shares owned individually by Mr.
Kinsey's children.
(9) Shares represented include 1,596 shares owned by
Michelson Jewelers, Inc.
(10)Shares represented include 4,850 shares owned by Mr. Morgan's
wife, 98,724 shares owned by Mr. Morgan's father, 600 shared
owned by Mr. Morgan's son, 1,745 shares owned by Mr. Morgan's
daughter and son-in-law, 9,704 shares owned by Mr. Morgan's
sister and brother-in-law, 1,504 shares owned by Mr. Morgan's
sister and brother-in-law, and 4,384 shares owned by Mr.
Morgan's brother and sister-in-law.
(11)Shares represented include 304 vested shares held by the
Corporation's Retirement, Savings, and Profit Sharing Plan
and 3,167 shares of vested stock options.
(12)Shares represented include 15,312 shares owned individually
by Dr. Myre's wife and 4,140 shares in a trust for
which she serves as a Trustee.
(13)Shares represented include 90 shares held in custodian
accounts for Mr. Ogden's children, 8,784 vested shares held
by the Corporation's Retirement, Savings, and Profit Sharing Plan
and 25,167 shares of vested stock options.
(14)Shares represented include 3,200 shares owned jointly by Mr.
Paxton and his wife.
(15)Shares represented include 3,438 shares owned individually by
Mr. Powell's wife.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Corporation's executive officers, directors and persons who
own more than ten percent (10%) of the Corporation's common stock
to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). Such persons are
required by SEC regulation to furnish the Corporation with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received
by it or representations from such persons that no Form 5's were
required, the Corporation believes that all filing requirements
applicable to its officers, directors and greater than ten
percent (10%) beneficial owners were complied with in 1994 with
the following exceptions: failure to file the required Form 3 on
a timely basis on behalf of John E. Sircy, Jimmie J. Ellington,
and John E. Peck, with respect to their election as executive
officers of the Corporation; failure to file a timely Form 4
covering two transactions on behalf of M. Leon Johnson, executive
officer of the Corporation; failure to file a timely Form 4
covering one transaction on behalf of Kerry B. Harvey, director
of the
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Corporation; failure to file an accurate Form 3 on a
timely basis on behalf of Ted S. Kinsey, director of the
Corporation; and failure to file timely three Form 4's covering
one transaction each on behalf of Ted S. Kinsey, director of the
Corporation. All of the preceding exceptions were corrected as
soon as they were discovered.
PROPOSAL ONE
ELECTION OF DIRECTORS
Among items to be acted upon at the annual meeting of
stockholders is the election of seventeen directors to the Board
of Directors of the Corporation. Each of the persons elected
will serve a term in office of one year and until his successor
is duly elected and qualified. All nominees for director are
currently directors of the Corporation.
Set out below is information concerning all of the current
directors and director-nominees of the Corporation, including
their positions held with Citizens Bank and Trust Company
("Citizens"), Bank of Marshall County ("BMC"), Pennyrile Citizens
Bank and Trust ("Pennyrile"), Graves County Bank, Inc.
("Graves"), United Commonwealth Bank, F.S.B.("United"), and
Fidelity Credit Corporation ("FCC").
Irving P. Bright, Jr., 62, Business Consultant. Until 1994, Mr.
Bright was the President and Chief Executive Officer of Bright's,
Inc.,(a retail clothing store). Mr. Bright has been a director
of the Corporation since 1983. He also serves as a director of
Citizens.
John L. Burman, 61, Manager of Kentucky Farm Bureau. Mr.
Burman has been a director of the Corporation since 1993. He
also serves as a director of Pennyrile.
Patrick J. Cvengros, 58, retired. Until 1992, Mr. Cvengros
served as the President and Chief Executive Officer of the
Corporation. Mr. Cvengros has been a director of the Corporation
since 1983. Mr. Cvengros also serves as a director of Citizens
and FCC, as well as serving as a director of Computer Services,
Inc., of Paducah, Kentucky.
William H. Dyer, 59, President and Chief Executive Officer of
Tennessee Valley Towing (a river barge company). Mr. Dyer has
been a director of the Corporation since 1991. Mr. Dyer also
serves as a director of Citizens.
Louis A. Haas, 53, Investor. Mr. Haas was formerly the President
and Chief Executive Officer of DuBois Pharmaceutical, (a
wholesale pharmaceuticals company). Mr. Haas has been a director
of the Corporation since 1991. Mr. Haas also serves as a
director of Citizens.
Joe Tom Haltom, 67, Chairman BMC. Mr. Haltom previously served
as Chairman of BMC Bankcorp, Inc., which was acquired by the
Corporation on May 31, 1994. Mr. Haltom was named a director of
the Corporation in 1994. Mr. Haltom also serves as a director of
BMC, Graves, and United.
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Kerry B. Harvey, 37, a partner in the law firm of Owen, Harvey
and Carter. Mr. Harvey was named a director of the Corporation
in 1994. Mr. Harvey also serves as a director of BMC and
United.
F. Donald Higdon, 63, retired. Mr. Higdon was formerly the
General Manager of Kraft Food Service, Inc. (a wholesale food
distributor). Mr. Higdon has been a director of the Corporation
since 1991. Mr. Higdon also serves as a director of Citizens.
William J. Jones, 39, President and Chief Executive Officer the
Corporation. Mr. Jones served as Executive Vice President of
the Corporation until January 1992, when he assumed his current
position. Mr. Jones has been a director of the Corporation since
1991. Mr. Jones also serves as a director of Citizens, BMC, FCC,
and Pennyrile.
Ted S. Kinsey, 49, President and Chief Executive Officer of
Parkway Chrysler (an automobile dealership). Mr. Kinsey was
named a director of the Corporation in 1994. Mr. Kinsey also
serves as a director of BMC.
Louis M. Michelson, 50, President and Chief Executive Officer of
Michelson Jewelers, Inc. Mr. Michelson has been a director of
the Corporation since 1991. Mr. Michelson also serves as a
director of Citizens.
Billy B. Morgan, 65, investor. Until 1992, Mr. Morgan served as a
Brigadier General in the United States Air Force. Mr. Morgan was
named a director of the Corporation in 1994. Mr. Morgan also
serves as a director of BMC and Graves.
Louis D. Myre, 68, retired physician since 1989. Dr. Myre has
been a director of the Corporation since 1983. Dr. Myre also
serves as a director of Citizens.
David M. Paxton, 38, Vice President and Chief Financial Officer
of Paxton Media Group (a television and newspaper publishing
company). Mr. Paxton has been a director of the Corporation
since 1991. Mr. Paxton also serves as a director of Citizens.
Robert P. Petter, 59, President and Chief Executive Officer of
Henry A. Petter Supply Company (an industrial supply wholesaler).
Mr. Petter has been a director of the Corporation since 1983.
Mr. Petter also serves as a director of Citizens.
Joseph A. Powell, 62, President and Chief Executive Officer of
Old Hickory Clay Company (a mining company). Mr. Powell has
been a director of the Corporation since 1991. Mr. Powell also
serves as a director of Citizens.
William A. Usher, 65, Chairman and Chief Executive Officer of
Usher Transportation Company (a trucking and transportation
company). Mr. Usher has been a director of the Corporation since
1991. Mr. Usher also serves as a director of Citizens.
The Board of Directors has no reason to believe that any of the
nominees will be unavailable to serve as director. If any
nominee should become unavailable before the Annual Meeting, the
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persons named in the enclosed proxy card, or their substitutes,
or a majority of them, reserve the right to vote for a substitute
nominee selected by the Board of Directors. In addition, if any
stockholder or stockholders shall vote shares cumulatively or
otherwise for the election of a director or directors other than
the nominees named above, or substitute nominees, or for less
than all of them, the persons named in the enclosed proxy card,
or their substitutes, or a majority of them, shall have the
right, in their discretion, to vote cumulatively for some number
less than all of the nominees named above or any substitute
nominees, and for such of the persons nominated as they may
choose.
Meetings and Committees
During 1994, the board of directors of the Corporation held
nine regular meetings and two special meetings. During 1994 the
Executive Committee met fifteen times, the Audit Committee met
three times, and the Investment Committee met two times.
Each of the directors attended at least 75% of the aggregate of
(a) the total number of meetings of the Board of Directors held
during the period for which he was a director, and (b) the total
number of meetings held by all committees of the Board which he
served.
The members of the Executive Committee are Irving B. Bright,
Jr., Patrick J. Cvengros, Louis A. Haas, Joe Tom Haltom, William
J. Jones, David M. Paxton, and William A. Usher. The functions
performed by the Committee included: acting as the Compensation
Committee; making recommendations to the board of directors in
matters involving dividends, expansion plans, significant
expenditures and strategic initiatives; reviewing and making
recommendations to the board of directors regarding proposed
directors, the compensation of directors and the composition and
size of the board and its committees; and reviewing credit
policies and the adequacy of the allowance for credit losses of
each subsidiary.
The members of the Audit Committee are Louis A. Haas, Kerry B.
Harvey, F. Donald Higdon, David M. Paxton, Robert P. Petter, and
Joseph A. Powell. The Committee recommends to the Board the
engagement of independent auditors; reviews with independent
auditors the scope and results of the audit engagement; reviews
the scope, frequency, and results of internal audits and
examinations; reviews the adequacy of the Corporation's system of
internal accounting controls; and reviews the examination reports
of the Corporation and its subsidiaries.
The members of the Investment Committee are Patrick J.
Cvengros, William J. Jones, Billy B. Morgan, David M. Paxton, Dr.
Charles W. Ransler, and William A. Usher. Dr. Ransler serves on
the board of directors of Citizens. The Committee reviews the
composition and performance of the investment securities
portfolios of each subsidiary bank; establishes policies for
monitoring the composition of subsidiary's investment securities
portfolios; and establishes policies for monitoring interest rate
risk for the Corporation.
The Corporation has no standing nominating committees. All
nominations for membership on the board originated with the board
of directors.
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Compensation of Directors
In 1994, each non-management director of the Corporation was
paid $200 for each board meeting or committee meeting attended.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table contains information concerning
compensation paid or accrued by the Corporation and its
subsidiaries to, or on behalf of, the Corporation's Chief
Executive Officer and each of the four other most highly
compensated executive officers of the Corporation during 1994
whose compensation exceeded $100,000, for the fiscal years ended
December 31, 1992, 1993, and 1994.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Annual Compensation Long-Term Compensation
Name and Other Annual Securities Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($)(1) Options (# Shares)(2) Compensation(3)
<S> <C> <C> <C> <C> <C> <C>
William J. Jones 1994 $ 180,000 $ 54,216 $ 0 20,000 $ 26,069
President and Chief 1993 165,000 48,411 0 14,000 20,788
Executive Officer, CBT 1992 125,000 49,170 0 18,000 16,927
and Citizens
John E. Sircy(4) 1994 88,461 30,000 6,358 10,000 18,416
Executive Vice President and 1993 0 0 0 0 0
Chief Operating Officer, 1992 0 0 0 0 0
CBT and Citizens
M. Leon Johnson 1994 92,800 29,591 0 6,000 16,927
President and Chief Executive 1993 86,800 33,984 0 0 11,088
Officer, FCC 1992 82,000 27,657 0 0 12,308
C. Thomas Murrell, III 1994 115,513 30,000 0 6,000 12,284
Executive Vice President 1993 105,000 17,965 0 6,500 10,920
Commercial and Consumer 1992 100,000 17,400 0 3,000 6,206
Banking, Citizens
J. Russell Ogden, III 1994 106,072 18,610 0 5,000 11,132
Executive Vice President 1993 96,720 16,549 0 6,500 9,923
Financial Services, Citizens 1992 93,000 16,182 0 9,000 9,968
</TABLE>
(1) The amount shown in column (e) represents the amount
reimbursed to Mr. Sircy in 1994 for the payment of taxes incurred
in connection with relocation expenses.
(2) All option grants have been adjusted to reflect the October
1994 2-for-1 stock split.
(3) The amounts shown in column (g) for each named executive
officer is the total of the Corporation's contribution to the
401(k) and Money Purchase retirement plans, subsidiary directors'
fees, reimbursement for relocation expenses, and term life
insurance premiums as summarized below:
<TABLE>
<CAPTION>
Term Life Directors' Fees Relocation 401(k)/MPP Totals
<S> <C> <C> <C> <C> <C>
Mr. Jones $ 387 $ 9,500 $ 0 $ 16,182 $ 26,069
Mr. Sircy 155 2,750 15,511 0 18,416
Mr. Johnson 229 7,400 0 9,298 16,927
Mr. Murrell 240 0 0 12,044 12,284
Mr. Ogden 221 0 0 10,911 11,132
</TABLE>
(4) Mr. Sircy joined the Corporation in April, 1994.
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Option Grants in Last Fiscal Year
Shown below is information on grants of stock options during
the fiscal year ended December 31, 1994, to the named executive
officers.
<TABLE>
<CAPTION>
Number of Potential Realizable Value
Securities Underlying % of Total Options Exercise or At Assumed Annual Rates
Options Granted to Employees Base Price Expiration of Stock Price Appreciation
Name Granted (1) In Fiscal Year 1994(2) Per Share Date For Option Term
5% 10%
<S> <C> <C> <C> <C> <C> <C>
William J. Jones 20,000 23.8% $ 19.125 01/04 $ 210,883 $ 519,415
John E. Sircy 4,000 4.8% 20.375 04/04 44,933 110,673
6,000 7.1% 19.875 06/04 67,400 166,009
M. Leon Johnson 6,000 7.1% 19.125 01/04 63,265 155,824
C. Thomas Murrell, III 6,000 7.1% 19.125 01/04 63,265 155,824
J. Russell Ogden, III 5,000 6.0% 19.125 01/04 52,721 129,854
</TABLE>
(1) Options are not exercisable during the first two years
after the date of the grant. Thereafter, options may be
exercised on or after the anniversary date of the grant in three
equal installments so that the full grant may be exercised no
sooner than four years after the date of the grant.
(2) A total of 84,000 options were granted under the Plans
to a total of seventeen (17) officers of the Corporation and its
subsidiaries during 1994.
Fiscal Year-End Option Values
Shown below is information with respect to the unexercised
options to purchase the Corporation's common stock held by the
named executive officers at December 31, 1994.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options as of 12/31/94 At 12/31/94
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
William J. Jones 28,500 46,000 $343,710 $262,427
John E. Sircy 0 10,000 0 9,249
M. Leon Johnson 0 6,000 0 11,250
C. Thomas Murrell, III 1,000 14,500 11,160 75,820
J. Russell Ogden, III 20,500 17,500 243,805 118,592
</TABLE>
*Amounts shown represent the difference between exercise price
and December 31, 1994 market value of $21.00.
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Executive Officers
Information regarding the current executive officers of the
Corporation, including their names, ages, positions with the
Corporation, and a brief description of their business experience
during the past five years, is presented below. Executive
officers are elected annually by the Board of Directors.
William J. Jones, 39, President and Chief Executive Officer and a
director. Mr. Jones also serves as President and Chief Executive
Officer of Citizens. Mr. Jones has been associated with the
Corporation for the past 10 years. Additional information
regarding Mr. Jones is set forth on page 5.
John E. Sircy, 38, Executive Vice President and Chief Operating
Officer. Mr. Sircy also serves as Executive Vice President and
Chief Operating Officer of Citizens. Mr. Sircy joined the
Corporation in his current role in April 1994. Prior to that,
he served as Vice President and Chief Financial Officer of First
Illini Bancorp, Inc., Galesburg, Illinois, until January 1991.
At that time, Mr. Sircy became Vice President and Controller of
Norwest Bank Iowa, N.A. in Des Moines, Iowa, until August 1992,
when he was named Senior Vice President and Chief Financial
Officer, a position he held until April 1994.
M. Leon Johnson, 54, President and Chief Executive Officer, FCC.
Mr. Johnson has been associated with the Corporation for 10
years, serving in his current role.
C. Thomas Murrell, III, 51, Executive Vice President-Commercial
and Consumer Banking, Citizens. Mr. Murrell joined the
Corporation in November 1991 as Senior Vice President and Chief
Credit Officer. Prior to that, he served as Executive Vice
President of the Corporate Banking Group at First Security
National Bank and Trust Company, Lexington, Kentucky. Mr.
Murrell assumed his current role in March 1994.
J. Russell Ogden, III, 47, Executive Vice President-Financial
Services, Citizens. Mr. Ogden served as Senior Vice President of
Trust and Investments until March 1994, when he assumed his
present position. He has been associated with the Corporation
for 13 years.
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Compensation Committee Interlocks
and Insider Participation
The Corporation does not have a compensation committee of the
Board of Directors. However, all compensation matters, including
executive compensation, are decided by the Executive Committee of
the Corporation, except as set forth below. The following
directors served on the Executive Committee during 1994: Irving
P. Bright, Jr., Patrick J. Cvengros, Louis A. Haas, Joe Tom
Haltom, William J. Jones, David M. Paxton, and William A. Usher.
Director Cvengros was an employee of the Corporation during 1994
and was until 1992, President and Chief Executive Officer of the
Corporation. Mr. Jones, President and Chief Executive Officer,
did not participate in any discussion or decisions regarding his
own compensation.
Compensation Committee Report
on Executive Compensation
The Executive Committee of the Board of Directors (the
"Committee") determines annually the compensation to be paid to
the Corporation's chief executive officer and other executive
officers, including the executive officers named in the Summary
Compensation Table except that the Stock Option Committee,
consisting of all members of the Committee, except Mr. Jones,
made all decisions about awards under the Corporation's stock
option plans. This report discusses the objectives and
procedures used by the Committee to establish 1994 compensation
for the chief executive officer and the four other officers named
in the Summary Compensation Table.
Objectives
The Committee's executive officer compensation policies are
structured to reward contributions to the Corporation's
performance and to enable the Corporation to compete favorably
with peer institutions in attracting and retaining highly-
qualified individuals as executive officers. The Corporation
generally defines its peers as financial institutions of similar
size located in non-metropolitan areas in the southeast region of
the United States. The primary objective of the Committee's
compensation policies is to pay for performance. As a result, a
significant portion of each executive officer's compensation for
1994 consisted of an incentive component with a pay-out based on
the Corporation's or subsidiary's performance for the year and
the executive officer's contribution to that performance.
Executive Officer Compensation
Executive officer compensation consists primarily of annual
compensation (comprised of base salary and an incentive amount)
and long-term compensation (consisting of stock options).
Annual Compensation
To establish annual compensation levels for 1994, the Committee
evaluated the Corporation's projected 1994 performance and
available 1993 compensation data from national surveys of
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industry peers. The compensation levels for 1994 were
established to place the executive officers of the Corporation
essentially at the median of industry peers based upon projected
performance. The performance factors considered by the Committee
include return on common equity, asset growth and total
shareholder return.
Individual base salaries for executive officers other than Mr.
Jones are recommended by the Corporation's chief executive
officer and approved by the Committee. Mr. Jones' base salary is
determined by the Committee. Salaries are reviewed annually and
adjusted periodically, typically at 12 months intervals. A
salary range for each executive officer position is established
using survey data. Adjustments are based upon the relationship
of the executive officer's current salary to the range for the
position and a subjective evaluation of overall company and
personal performance. Base salaries paid in 1994 to executive
officers named in the Summary Compensation Table were near the
median of estimated base salaries of the industry peer survey
data available. With respect to Mr. Jones, the Committee
considered his current salary compared to the median of peer
institutions and that the Corporation compared favorably to peers
in 1993 in terms of return on equity, asset growth, and total
shareholder return. The Committee did not weigh any one factor
more than another, but looked at the Corporation's overall
results.
The Committee also set 1994 incentive ranges, payable in cash,
expressed as percentages of base salary, for each executive
officer other than Mr. Johnson who, as President and Chief
Executive Officer of FCC, is awarded incentive bonuses under a
separate plan. These incentive ranges were determined by
reviewing survey data and evaluating the impact of various
incentive payments on total annual compensation for executive
officers.
Incentive awards are determined based on a two-step process.
The first step involves the calculation of actual performance
with respect to previously identified key performance measurement
factors and peer group target levels. Executive officers earn a
corresponding percentage of base salary for each performance
factor based on actual performance results using a weighted
tiered matrix. The performance measurement factors (which for
each of the named executive officers, were measured by the
results of the Corporation's lead bank) and corresponding
weightings, in parenthesis, for 1994 consisted of non performing
loans (10 percent), net charge-offs (10 percent), net overhead
expense (20 percent), net interest margin (20 percent), and
return on average equity (40 percent). Depending on position,
the percentages of base salary varies. Executive officers may
receive a maximum percentage of base salary of 43 percent. As a
second step, individual payouts, excluding the President and
Chief Executive Officer, are then calculated based on the
percentage completion of quantitative and qualitative individual
performance measurements established at the beginning of the
year. The Chief Executive Officer received 100 percent of the
award calculated under the matrix based upon his individual
performance during 1994. Under a separate incentive bonus plan
applicable to FCC, the President and Chief Executive Officer of
FCC receives 2 percent of FCC's pre-tax net income.
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Long-Term Compensation
Long-term compensation is provided in the form of stock options
granted and is intended to increase management ownership of stock
and to provide an incentive to executive officers to improve long-
term Corporation performance. All options are granted at fair
market value and exerciseable in accordance with the terms of the
Corporation's incentive stock option plans.
In fixing the grants of stock options to the individual
executive officers, other than the President and Chief Executive
Officer, the Committee reviewed with the President and Chief
Executive Officer his recommended individual awards, taking into
account the respective responsibilities and contributions of each
of the executive officers. The award to the Chief Executive
Officer was fixed separately by the Committee and was based,
among other things, on a review of competitive compensation data
from national surveys, data from selected industry peers, his
total compensation, and his currently outstanding stock options.
The Committee also evaluated his past contributions and expected
future contributions to the Corporation's achievement of its long-
term performance goals including the fact that total shareholder
return increased 12.2 percent during 1994.
Members of the Committee:
Irving P. Bright, Jr.
Patrick J. Cvengros
Louis A. Haas
Joe Tom Haltom
William J. Jones
David M. Paxton
William A. Usher
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Comparative Stock Performance
The Performance Graph set forth below compares the cumulative
total stockholder return on CBT Corporation's common stock for
the last five fiscal years with the cumulative total return on
the NASDAQ Market Value Index ("Broad Market Index") and the MG
Industry Group 045 Index, the latter consisting of thirty-four
bank holding companies, ranging in asset size from $500 million
to $10 billion, located in the East South Central United States
("Peer Group Index"). The cumulative total stockholder return
computations set forth in the Performance Graph assume the
investment of $100 in CBT common stock, the Broad Market Index
and the Peer Group Index on December 31, 1989 and the
reinvestment of all dividends.
Comparison of Five Year Cumulative Total Return of Company,
Peer Group and Broad Market Index
(Comparison Graph appears here--see appendix)
Employment Contracts and Termination of Employment
and Change-in-Control Arrangements
Upon a Change in Control of the Corporation, as hereafter
defined, with respect to the Corporation's 1993 Incentive Stock
Option Plan (the "1993 Plan"), and upon a takeover or merger of
the Corporation, with respect to the Corporation's 1986 Stock
Option Plan (the "1986 Plan"), the exercise dates of all
outstanding options under the Corporation's stock option plans
will accelerate so that each option outstanding may be exercised
on or after the date of the Change in Control. In addition, the
shares subject to the Corporation's stock option plans will be
converted into (automatically in the 1993 Plan and at the
discretion of the Plan Committee under the 1986 Plan) and
replaced by shares of common stock or other equity securities
having rights and preferences no less favorable than common stock
of the successor and the number of shares subject to the options
and the purchase price per share upon exercise of the options
will be correspondingly adjusted so the there will be no change
in the aggregate purchase price payable upon exercise of any such
option. Change in Control of the Corporation, for purposes of
the 1993 Plan, means (a) any share exchange or merger or
consolidation of the Corporation or a significant subsidiary of
the Corporation if either (i) the Corporation will not be the
surviving or
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acquiring corporation or will not own 100 percent of
the outstanding capital stock of the surviving or acquiring
corporation following consummation of the transactions
contemplated by the plan or agreement of exchange, merger or
consolidation, or (ii) there will be a substantial change in the
proportionate ownership of outstanding shares of voting stock of
the Corporation as a result of the transactions contemplated by
such plan or agreement of exchange, merger or consolidation; (b)
any sale, lease, exchange, transfer or other disposition of all
or any substantial part of the assets of the Corporation or a
subsidiary of the Corporation followed by a liquidation of the
Corporation; (c) the commencement of any tender offer, exchange
offer or other purchase offer for, and/or any agreement to
purchase, as much as (or more than) 30 percent of the outstanding
Common Stock of the Corporation or a subsidiary of the
Corporation; or (d) the Board or the shareholders of the
Corporation approve, adopt, agree to recommend, or accept any
agreement, contract, offer or other arrangement providing for, or
any series of transactions resulting in, any of the transactions
described above.
Transactions with Executive Officers and Directors
The executive officers and directors of the Corporation are at
present, as in the past, customers of subsidiaries of the
Corporation and have had and expect to have business and banking
transactions with such in the ordinary course of business. In
addition, some of the executive officers and directors of the
Corporation are at present, as in the past, also officers,
directors or principal stockholders of corporations which are
customers of subsidiaries of the Corporation and which had and
expect to have business and banking transactions with the
Corporation in the ordinary course of business. All such banking
transactions were made in the ordinary course of business, were
made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with other persons and, in the opinion of management
of the Corporation and its subsidiaries, did not involve more
than normal risk of collectibility or present other unfavorable
or unusual features.
Mr. Harvey, a director of the Corporation and BMC is a partner
in the law firm of Owen, Harvey, and Carter, Benton, Kentucky,
which was retained by BMC in the last fiscal year and is proposed
to be retained in the current fiscal. In 1994, Mr. Harvey's law
firm received payment by BMC of approximately $140,000 for legal
fees and retainers.
PROPOSAL TWO
AMENDMENT TO ARTICLES OF INCORPORATION
REGARDING INDEMNIFICATION
General
The Board of Directors recommends that the stockholders of the
Corporation consider and approve a proposal to amend the Articles
of Incorporation of the Corporation to add a new Article XIII
which relates to indemnification of directors, officers,
employees and others. The text of proposed Article XIII (the
"Proposed Amendment") is attached to the Proxy Statement as
Appendix A, and the following description is qualified in its
entirety by reference to such text.
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The Corporation's Board of Directors believes that it is
appropriate and advisable that the stockholders of the
Corporation adopt the Proposed Amendment to define those
circumstances under which the directors and officers may be
indemnified by the Corporation. In assessing the recommendations
of the Board, stockholders should consider that all current
directors may benefit from the proposed amendments, and may thus
be viewed to have a conflict of interest.
Background and Reasons for the Proposed Amendment
In performing his or her duties, a director of a Kentucky
corporation is obligated to exercise his or her business judgment
in good faith, on an informed basis and in a manner he or she
honestly believes to be in the best interests of the corporation.
Decisions made on that basis are protected by the so-called
"business judgment rule". The business judgment rule is designed
to protect directors from personal liability to the corporation
or its stockholders when their business decisions are
subsequently challenged. However, the expense of defending
lawsuits, the frequency with which unwarranted litigation is
brought against directors and the inevitable uncertainties with
respect to the outcome of applying the business judgment rule to
particular facts and circumstances mean that, as a practical
mater, directors and officers of a corporation rely on indemnity
from, and insurance procured by, the corporation they serve as a
financial backstop in the event of such expenses or unforeseen
liability.
Changes in recent years in the market for directors' and
officers' liability insurance have resulted in the unavailability
in many cases of any meaningful liability insurance coverage.
Insurance carriers have in certain cases declined to renew
existing directors' and officers' liability policies, or have
increased premiums to such an extent that the cost for obtaining
such insurance has become prohibitive. Moreover, current
policies often exclude coverage for areas where the service of
qualified independent directors is most needed. For example,
many policies do not cover liabilities or expenses arising from
directors' and officers' activities in response to attempts to
take over a corporation. In addition, policy deductibles have
increased.
Although the Corporation has to date been able to obtain
insurance coverage for its directors and officers on a basis
which it believes acceptable, there is no assurance that such
liability insurance will be available in the future on acceptable
terms.
The purpose of the Proposed Amendment is to insure that the
Corporation will continue to be able to attract individuals of
the highest quality and ability to serve as its officers and
directors by offering them significant assurance that they will
not suffer inappropriate monetary liability for actions taken in
good faith and in a manner they believed to be in the best
interests of the Corporation. The Board of Directors of the
Corporation believes that the continued success of the
Corporation in attracting and retaining qualified directors and
officers is dependent, at least in part, on the Corporation's
ability to be competitive with other corporations in providing
the maximum available possible protection from personal financial
risks.
The Corporation's Bylaws, as adopted in 1983, acknowledge the
Corporation's responsibilities to its officers, directors,
employees and agents by way of indemnification under
circumstances set forth and the limitations contained in
Kentucky's Business Corporation Act (the "Act"). The
Corporation's Articles of Incorporation presently do not contain
any provision concerning
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indemnification. The Proposed Amendment will provide greater rights
of indemnification than those contained in the Act and thus take
advantage of the Act's present provisions allowing for expansion upon
the statutory indemnifica tion provisions.
There are no pending or, to the knowledge of the Corporation or
any director or officer, threatened claims against any of the
directors or officers of the Corporation in their capacity as
such for breach of their duty of care. Nor is the Corporation or
any director or officer aware of any facts or events giving rise
to a claim for indemnification.
Kentucky Statutory Provisions for Indemnification
Under the Act, a corporation may (but is not required to)
indemnify a director or officer against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
in connection with specified actions, suits or proceedings,
whether civil, criminal administrative or investigative (other
than an action by or the right of the corporation, i.e., a
"derivative action"), even if a director or officer is not
successful on the merits, if the director acted in good faith and
in a manner he or she reasonably believed to be in (or not
opposed to) the best interests of the corporation, (and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe such conduct was unlawful). A corporation must
indemnify directors and officers who are wholly successful, on
the merits or otherwise, in the defense of any proceeding,
against reasonable expenses.
A similar standard of care is applicable in the case of
derivative actions, except that indemnification only extends to
expenses (including attorneys' fees) incurred in connection with
defense or settlement of such an action, and the Act does not
permit indemnification where the person seeking indemnification
has been found liable to the corporation unless a court
determines that, in view of all of the circumstances, he is
entitled to indemnity for such portion of the expenses as the
court deems proper.
Permitted indemnification as described above may only be made
if it is determined that indemnification is proper because the
applicable standard of conduct has been met. This determination
may be made by a quorum of disinterested directors, independent
legal counsel or the shareholders. Upon application of the
person seeking indemnification, a court may also award
indemnification if the court determines that the director or
officer is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances. A corporation's board of
directors may also authorize the advancement of litigation
expenses to a director or officer upon receipt of an undertaking
by him to repay such expenses, if it is ultimately determined
that he is not entitled to be indemnified for them.
Existing Provisions Eliminating Liability in Certain Circum
stances
Article XII of the Corporation's Articles of Incorporation
provides that a director of the Corporation shall not be
personally liable to the Corporation or its stockholders for
monetary damages for breach of duties as director except for
liability (i) for any transaction in which the director's
personal financial interest is in conflict with the financial
interests of the Corporation or its shareholders, (ii) for acts
or omissions not in good faith or which involve intentional
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misconduct or a knowing violation of law, (iii) for paying a
dividend or approving a stock repurchase, redemption, or other
distribution in violation of the Act, or (iv) for any transaction
from which the director derived an improper personal benefit.
Such provision effectively eliminates monetary liability of
directors for a breach of the duty of care, including in
connection with mergers, takeovers and other business combination
transactions involving the Company. Articles XII applies only to
claims against a director arising out of his or her role as a
director and does not apply to the director's role as an officer
or in any other capacity or to the director's responsibilities
under other law, such as the federal securities laws. Article
XII relates only to liabilities of directors to the Corporation
and its subsidiaries and does not affect liability to third
parties.
Indemnification as Provided by Proposed Article XIII
At present, unless any director or officer involved in
litigation has been successful, on the merits or otherwise, the
Corporation may choose not to provide indemnification in any
particular case (although a person denied such indemnification
may apply to a court therefor). The Proposed Amendment provides
that the Corporation shall indemnify a director to the fullest
extent permitted by law and may indemnify an officer, employee or
agent of the Corporation to the fullest extent provided by law.
The Proposed Amendment provides indemnification for any person
who at any time is or was a director of the Corporation and who
is threatened to be or is made a party to any threatened, pending
or completed action, suit or proceeding by reason of the fact
that such person is a director of the Corporation or served at
the request of the Corporation as a director or in another
similar capacity for another corporation. The Proposed Amendment
covers civil, criminal, administrative or investigative
proceedings. The Corporation will hold such person harmless and
will indemnify such person to the fullest extent authorized by
the Act. In the event that the Act is amended, the
indemnification will expand to include any broader
indemnification rights provided by the amended Act. The
indemnification will cover any expense, liability and loss
reasonably incurred or suffered by such person in connection with
any of such proceedings. Such person may be paid in advance of
the final disposition of such proceeding only if such person
delivers an undertaking to the Corporation to repay all amounts
so advanced if its is ultimately determined that the he or she is
not entitled to indemnification.
If a written claim for indemnification under the Proposed Am
endment has been received by the Corporation, and the Corporation
has not paid the claim in full within 30 days, the claimant may
bring suit against the Corporation to recover the unpaid amount
of the claim. If the claimant is successful, the Corporation
will pay the expense of prosecuting such claim. The Corporation
has the burden of proof to show that the claimant has not met the
standards of conduct which make it permissible under the Act for
the Corporation to indemnify the claimant. The termination of
any action, suit or proceeding by judgment, settlement, or by a
plea of nolo contendere or its equivalent, will not, of itself,
create a presumption that the person did not meet the standards
of conduct described in the first paragraph of this section.
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The indemnification provided by the Proposed Amendment is not
exclusive of any other rights to which a person seeking indemnifi
cation may be entitled. Under the Proposed Amendment, the
Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the
Corporation against any expense, liability or loss, whether or
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Act or the
Proposed Amendment.
In addition, although the Board of Directors has no current
plans to provide for such additional indemnification, the Board
of Directors could, without stockholder approval, provide
indemnification to directors, officers and employees broader than
that provided for under the Proposed Amendment, but only to the
extent permitted by applicable law. Limitations on the scope of
indemnification which may be provided under such arrangements
have been held by courts to be subject to public policy
considerations and by substantive restrictions in certain areas
of the law.
The Proposed Amendment could increase costs to the Corporation
in the future in the event that claims for indemnification
covered thereby were to be asserted. Any increased costs,
including potentially large damage awards, may be satisfied
directly from the Corporation's funds and may therefore affect a
stockholder's investment.
Insofar as indemnification for liabilities arising under the
federal securities laws may be permitted to directors, officers,
or other persons pursuant to the Proposed Amendment, the
Corporation understands that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
and therefore unenforceable. The Corporation may be required to
undertake to submit issues regarding such indemnification to a
court of appropriate jurisdiction and to be governed by the
outcome.
VOTE REQUIRED
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THIS PROPOSAL. Because all current directors of the
Corporation may be viewed to have a conflict of interest, the
affirmative vote of a majority of the issued and outstanding
shares of the Common Stock voted on the proposal (excluding
shares owned by or voted under the control of any director or any
entity in which a director has a material financial interest or
in which he is a general partner) is required to approve Proposal
2.
INDEPENDENT PUBLIC ACCOUNTANTS
For the fiscal year ending December 31, 1994, the accounting
firm of Deloitte & Touche, LLP served as the Corporation's
independent public accountants and auditors. A representative
from the firm of Deloitte & Touche, LLP is expected to be present
at the annual meeting and will be available to make a statement
should he desire to do so, and respond to questions of
stockholders.
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ANNUAL REPORT
Upon written request, the Corporation will provide without
charge to each stockholder, a copy of the Corporation's Annual
Report on Form 10-K which is required to be filed with the
Securities and Exchange Commission for the year ended December
31, 1994. Address all requests to:
Secretary
CBT Corporation
P. O. Box 2400
Paducah, Kentucky 42002-2400
STOCKHOLDERS' PROPOSALS AND OTHER MATTERS
Proposals by stockholders to be presented at the 1996 Annual
Meeting of stockholders must be received by the President of the
Corporation at its principal office no later than November 1,
1995, for inclusion in the proxy statement and form of proxy
relating to that meeting.
The Board of Directors of the Corporation does not know of any
matters for action by stockholders at the Annual Meeting other
than the matters described in the notice. However, the enclosed
Proxy will confer discretionary authority with respect to any
other matters which may properly come before the meeting.
It is important that proxies be returned promptly.
Stockholders, whether or not they expect to attend in person, are
requested to return their Proxies in order that a quorum may be
assured. Return may be made in the enclosed envelope, to which
no postage need be affixed.
By Order of the Board of Directors
(Signature of William J. Jones)
William J. Jones
President and Chief Executive Officer
Paducah, Kentucky
March 1, 1995
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APPENDIX A
Proposed Amendment to Articles of Incorporation
of
CBT Corporation
The Articles of Incorporation of the Corporation shall be
amended to adopt a new Article XIII which shall read as follows:
Article XIII
Indemnification of Officers and Directors
SECTION 1. DIRECTORS' RIGHT TO INDEMNIFICATION. Each person
who was or is made a party or is threatened to be made a party to
or is involved in any threatened, pending or completed action,
suit or proceeding, formal or informal whether brought in the
name of the corporation or otherwise and whether civil, criminal,
administrative or investigative (hereafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director of the corpora
tion or is or was serving at the request of the corporation as a
director of another corporation, including service with respect
to employee benefit plans, whether the basis of such proceeding
is alleged action or inaction in an official capacity or in any
other capacity while serving as a director, shall, subject to the
terms of any express agreement between the corporation and such
person, be indemnified and held harmless by the corporation to
the fullest extent authorized by Kentucky law, as the same exists
or may hereafter be amended, (but, in the case of any such
amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said
law permitted the corporation to provide prior to such amendment)
against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement)
reasonably incurred by such person in connection therewith and
such indemnification shall continue as to a person who has ceased
to be a director and shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that the
corporation shall indemnify any such person seeking indemnity in
connection with an action, suit or proceeding (or part thereof)
initiated by such person only if such action, suit or proceeding
(or part thereof) was authorized by the board of directors of the
corporation. Such right shall be a contract right and shall
include the right to be paid by the corporation expenses incurred
in defending any such proceeding in advance of its final
disposition; provided, however, that, the payment of such
expenses incurred by a director in his or her capacity as a
director (and not in any other capacity in which service was or
is rendered by such person while a director, including, without
limitation, service to an employee benefit plan) in advance of
the final disposition of such proceeding, shall be made only upon
delivery to the corporation of an undertaking, by or on behalf of
such director, to repay all amounts so advanced if it should be
determined ultimately that such director is not entitled to be
indemnified under this Section or otherwise. Repayment of all
amounts so advanced shall be upon such terms and conditions, if
any, as the board of directors deems appropriate.
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SECTION 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under
Section 1 of this Article XIII is not paid in full by the
corporation within ninety days after a written claim has been
received by the corporation, the claimant may at any time thereaf
ter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final
disposition where the required undertaking has been tendered to
the corporation) that the claimant has not met the standards of
conduct which make it permissible under Kentucky law for the
corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the corporation.
The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption
that the claimant has not met the applicable standard of conduct
set forth in Kentucky law. Neither the failure of the
corporation (including its board of directors, independent legal
counsel, or its stockholders) to have made a determination prior
to the commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in Kentucky law, nor
an actual determination by the corporation (including its board
of directors, independent legal counsel, or its stockholders)
that the claimant had not met such applicable standard of
conduct, shall be a defense to the action or create a presumption
that a claimant had not met the applicable standard of conduct.
SECTION 3. OFFICERS', EMPLOYEES' AND AGENTS' RIGHT TO
INDEMNIFICATION. Each person who was or is made a party or is
threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding,
formal or informal whether brought in the name of the corporation
or otherwise and whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative,
is or was an officer, employee or agent of the corporation or is
or was serving at the request of the corporation as an officer,
employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such
proceeding is alleged action or inaction in an official capacity
or in any other capacity while serving as an officer, employee or
agent, may, subject to the terms of any express agreement between
the corporation and such person, by action of the board of
directors, be indemnified and held harmless by the corporation to
the fullest extent authorized by Kentucky law, as the same exists
or may hereafter be amended, (but, in the case of any such
amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said
law permitted the corporation to provide prior to such amendment)
against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement)
reasonably incurred by such person in connection therewith;
provided, however, that the corporation may, by action of the
board of directors, indemnify any such person seeking indemnity
in connection with an action, suit or proceeding (or part
thereof) initiated by such person only if such action, suit or
proceeding (or part thereof) was authorized by the board of
directors of the corporation. The board of directors may, in its
discretion, advance the payment of expenses.
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SECTION 4. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on
any person by Sections 1, 2 and 3 of this Article XIII shall not
be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of the articles of
incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 5. INSURANCE. The corporation may maintain insurance,
at its expense, to protect itself and any director, officer,
employee or agent of the corporation or another corporation,
partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense,
liability or loss under applicable law.
SECTION 6. SEPARABILITY. Each and every paragraph, sentence,
term and provision of this Article XIII is separate and distinct
so that if any paragraph, sentence, term or provision hereof
shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or
enforceability of any other paragraph, sentence, term or
provision hereof. To the extent required, any paragraph,
sentence, term or provision of this Article XIII may be modified
by a court of competent jurisdiction to preserve its validity and
to provide the claimant with, subject to the limitations set
forth in this Article XIII and any agreement between the
corporation and the claimant, the broadest possible
indemnification permitted under applicable law.
SECTION 7. EFFECT OF REPEAL OR MODIFICATION. Any repeal or
modification of this Article XIII shall not adversely affect any
right of indemnification of a director, officer, employee or
agent existing at the time of such repeal or modification with
respect to any action or omission occurring prior to such repeal
or modification.
24
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APPENDIX
On the Dear Stockholder page the signature of William J. Jones appears
where indicated.
On the Notice of Annual Meeting of Stockholders page the signature
of William J. Jones appears where indicated.
On Page 15 the Comparison of Five Year Cumulative Total Return graph
appears where indicated. The plot points are listed as follows:
1989 1990 1991 1992 1993 1994
CBT CORPORATION 100 114.44 153.85 269.33 373.79 419.37
INDUSTRY INDEX 100 88.18 144.25 149.62 158.14 158.80
BROAD MARKET 100 91.12 104.14 105.16 126.14 132.44
On page 21 the signature of William J. Jones appears where indicated.
