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FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38025-0370
N O T I C E O F A N N U A L M E E T I N G O F S H A R E H O L D E R S
WEDNESDAY, APRIL 20, 1994
TO: Shareholders of First Citizens Bancshares, Inc.
Dyersburg, Tennessee 38025-0370
Notice is hereby given that the Annual Meeting of Shareholders of
First Citizens Bancshares, Inc. will be held in the Annex of First Citizens
National Bank, Dyersburg, Tennessee, on Wednesday, April 20, 1994 at 10:00
A.M. to consider and act upon the following proposals:
1. The election of six directors for term of three years expiring in
1997.
2. To consider and vote upon amendments to the Company's Charter (i)
to increase the authorized shares of common stock to 2,000,000
shares, and (ii) to amend the par value of each share of common
stock to $1.00 per share.
3. Approval of Carmichael, Enoch and Associates as auditors for the
year ending December 31, 1994.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on February 28, 1994
are entitled to notice of and to vote at the Annual Shareholders' Meeting.
Please date, sign and return the enclosed Proxy immediately in the
stamped envelope provided. It is important that you sign and return the
Proxy, even though you plan to attend the meeting in person. You may
revoke the Proxy at any time before the Proxy is exercised by giving
written notice to the Company or by advising us at the meeting.
This 18th day of March, 1994.
BY ORDER OF THE BOARD OF DIRECTORS
Stallings Lipford
Chairman & CEO
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FIRST CITIZENS BANCSHARES, INC.
P.O. BOX 370
DYERSBURG, TENNESSEE 38025-0370
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 20, 1994
SOLICITATION
THE PROXY ACCOMPANYING THIS STATEMENT IS SOLICITED BY AND ON BEHALF
OF THE BOARD OF DIRECTORS OF FIRST CITIZENS BANCSHARES, INC. (the "Company"
or "Holding Company") for use at the Annual Meeting of Shareholders to be
held April 20, 1994, and any adjournment thereof. The time and place of
the meeting is set forth in the accompanying Notice of Meeting.
The expense of preparing, assembling, printing and mailing the Proxy
Statement and the materials used in the solicitation of Proxies for the
meeting will be borne by the Company. It is contemplated that Proxies will
be solicited principally through use of the mail, but officers, directors
and employees of the Holding Company and its subsidiary, First Citizens
National Bank (the "Bank") may solicit Proxies personally or by telephone,
without receiving special compensation therefor. Brokers, custodians, and
other like parties will be requested to send Proxy material to beneficial
owners of stock and will be reimbursed for their reasonable expenses. It
is anticipated that this Proxy Statement and accompanying Proxy will be
mailed to shareholders on or about March 18, 1994.
All Proxies in the accompanying form which are properly executed and
returned to management will be voted in accordance with directions given
therein. Any Proxy delivered pursuant to this solicitation is revocable,
at the option of the person executing same, at any time before it is
exercised, by written notice delivered to Judy Long, Secretary of First
Citizens Bancshares, Inc. Powers of Proxy holders will be suspended if the
person executing the Proxy is present at the meeting and elects to vote in
person by advising the Chairman of the Meeting of his/her election to vote
in person, and voting in person at the meeting.
IF NO INSTRUCTION IS SPECIFIED IN YOUR PROXY WITH RESPECT TO THE
ELECTION OF DIRECTORS OR OTHER MATTERS ADDRESSED HEREIN, THE SHARES
REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED "FOR" THE NOMINEES FOR
ELECTION AS DIRECTORS AND FOR THE PROPOSED AMENDMENTS TO THE CHARTER OF
FIRST CITIZENS BANCSHARES, INC. AND FOR THE ELECTION OF CARMICHAEL, ENOCH &
ASSOCIATES TO SERVE AS THE COMPANY'S AUDITORS FOR THE YEAR ENDING 12/31/94.
IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE MEETING, THE PROXY WILL
BE VOTED IN ACCORDANCE WITH RECOMMENDATIONS OF THE COMPANY'S BOARD OF
DIRECTORS.
VOTING SECURITIES
At the close of business December 31, 1993, there were 706,656 shares
of Common Capital Stock, par value of $10.00, of First Citizens Bancshares,
Inc. outstanding and entitled to vote, as the sole class of voting
securities. On any matter submitted to a vote of the shareholders, each
holder of the Holding Company's common stock will be entitled to one vote,
in person or by proxy, for each share of common stock he or she held of
record on the books of the Holding Company as of February 28, 1994.
Holders of common stock shall possess full voting rights for the election
of Directors and for all other purposes. In connection with the election
of Directors, shares may be voted cumulatively if a shareholder present at
the Meeting gives notice at the Meeting prior to the voting for election of
Directors, of his or her intention to vote cumulatively. If any share-
holder of the company gives such notice, then all shareholders eligible to
vote will be entitled to cumulate their shares in voting for the
election of Directors. Cumulative voting allows a shareholder to cast a
number of votes equal to the number of shares held in his or her name as of
the Record Date, multiplied by the number of Directors to be elected.
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These votes may be cast for any one nominee, or may be distributed among as
many nominees as the shareholder sees fit. If cumulative voting is
declared at the meeting, votes represented by Proxies delivered pursuant to
this Proxy Statement may be cumulated in the discretion of the Proxy
Holder, in accordance with management's recommendation.
Tennessee Law does not provide for Dissenters Rights of Appraisal when
considering the matters as set forth herein. Holders of shares of Common
Stock will be entitled to receive dividends if and when declared payable by
the Board of Directors of First Citizens Bancshares, Inc. Shareholders of
the Company are not entitled to preemptive rights to subscribe for or
purchase securities. In the event of a liquidation, dissolution or winding
up of the affairs of the Holding Company, assets and funds of the
corporation shall be distributed, pro rata, among the holders of Common
Stock according to their respective shares.
The following table sets forth the number of shares of common capital
stock owned by Directors, Nominees and Officers of First Citizens
Bancshares, Inc. as of December 31, 1993:
Amount and Nature of
Name of Beneficial Ownership Percent
Title of Class Beneficial Owners Direct Indirect of Class
Common Capital Stock Directors, Nominees 62,384 45,019 15.19%
& Officers (18)
PRINCIPAL SHAREHOLDERS
As of this date, persons or entities beneficially owning in excess of
5% of the Common Capital Stock of First Citizens Bancshares, Inc. are set
forth in the following table:
Beneficial Ownership Percent
Title of Class Name and Address Direct Indirect of Class
Common Capital Milton Eugene Magee
Stock 421 Lattawoods
Dyersburg, TN 38024 15,667 34,988 (1) 7.17%
Common Capital Elizabeth Magee Taylor
Stock 1789 North Highland
Jackson, TN 38301 16,162 43,157 (2) 8.39%
Common Capital First Citizens National
Stock Bank Employee Stock
Ownership Plan & Trust 151,845 21.49%
(1) Mr. Magee serves as co-trustee on various trusts with First Citizens
National Bank and/or Elizabeth Magee Taylor representing 34,849
shares. Additionally, he serves as custodian for his children on a
total of 139 shares.
(2) Mrs. Taylor serves as co-trustee on 34,849 shares with Milton Eugene
Magee and/or First Citizens National Bank and on 40 shares with First
Citizens National Bank for E.M. Taylor, Grantor. Also reported as
beneficial ownership are 8,268 shares owned by Mrs. Taylor's spouse
individually, through a trust and by virtue of an affiliated interest.
ELECTION OF DIRECTORS
The maximum number of directors is fixed by the Company's Charter at
twenty-two and may be altered only by an amendment to same. The Board of
Directors may, by majority vote, increase the membership of the Board up
to the maximum number set out in the Charter and by like vote appoint
qualified persons to fill vacancies which might occur between shareholder
meetings. The present Board of Directors consists of 18 members with
one-third of the terms expiring in 1995, another one-third in 1996 and the
remaining one-third in 1997.
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The following individuals have been nominated by the Board of Directors
to serve a term of three years. Once elected, each Director shall serve
the stated term or until his/her successor has met the necessary
qualifications and has been elected. Should any nominee determine that
he/she is unable to serve, the persons named in the accompanying proxy
intend to vote for the balance of those named.
The following information sets forth the name of each nominee, age,
principal occupation for the past five years, name and business of the
corporation or other organization with which he/she is affiliated, year of
initial election to the Board, and beneficial ownership of Common Stock of
the Company as of December 31, 1993. This information is also provided for
continuing Directors whose terms expire in 1995 and 1996.
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 1997
Eddie Eugene Anderson (46) is a partner in Anderson Farms. He was
elected to the Board in 1984 and serves on the Community Reinvestment Act
Committee. He beneficially owns 6,060 shares (.86%) of Common Capital
Stock of the Company.
E.H. Lannom, Jr. (69) is President of Forcum-Lannom, Inc., a building
contractor and building materials distributor. He has served on the Board
of the Company since his initial election in 1962. Mr. Lannom is a member
of the Investment and Executive Committees. He beneficially owns 5,979
shares (.84%) of Common Capital Stock of the Company.
Milton E. Magee (57) is a partner in Chic Farms. He was first elected
to serve on the Board in 1969. Mr. Magee serves on the Investment and
Executive Committees and beneficially owns 50,655 shares (7.17%) of Common
Capital Stock of the Company.
Mary F. McCauley (63) is a professor of English at Dyersburg State
Community College. She was appointed to serve as Director of First
Citizens Bancshares, Inc. on January 16, 1991 and serves on the Community
Reinvestment Act Committee. Ms. McCauley beneficially owns 308 shares
(.04%) of Common Capital Stock of the Company.
G.W. Smitheal, III (38) is a partner in Smitheal Farms and Biesel and
Smitheal Cattle Company. Mr. Smitheal was appointed to the Board in July,
1993 to serve the remainder of the unexpired term of Director G. W.
Smitheal, Jr. Mr. Smitheal beneficially owns 303 shares (.04%) of Common
Capital Stock of the Company.
P.H. White, Jr. (62) is a partner in P.H. White Farms and a
manufacturer and distributor of livestock insecticide applicators. Mr.
White was initially elected to the Board in 1978. He is a member of the
Investment and Executive Committees and beneficially owns 2,137 shares
(.30%) of Common Capital Stock of the Company.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1995
William C. Cloar (57) is Vice President of Administration and Human
Resources with Dyersburg Fabrics, Inc., a textile manufacturing plant.
From October, 1983 until May, 1990 Mr. Cloar served Dyersburg Fabrics as
Vice President of Data Processing. He was appointed to serve as Director
of First Citizens Bancshares, Inc. on January 16, 1991. Mr. Cloar
beneficially owns 3,392 shares (.48%) of Common Capital Stock of the
Company.
James Daniel Carpenter (44) is a partner in Flatt Heating & Air
Conditioning. He was appointed to the Board in July, 1993. Mr. Carpenter
beneficially owns 498 shares (.07%) of Common Capital Stock of the Company.
Richard W. Donner (43) is Vice President of Sales with Dyersburg
Fabrics, Inc., a textile manufacturing plant. Mr. Donner has been a
Director since 1985 and presently serves on the Audit Committee. He owns
beneficially 580 shares (.08%) of Common Capital Stock of the Company.
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John E. Heckethorn (76) retired, Heckethorn Manufacturing Company, a
defense contractor and a manufacturer of automotive components. He serves
as a member of the Community Reinvestment Act Committee. His initial
election to the Board of Directors was in 1980. Mr. Heckethorn owns 798
shares (.11%) of the Common Capital Stock of the Company.
Stallings Lipford (63) is Chairman and Chief Executive Officer of both
the Company and First Citizens National Bank (the principal subsidiary of
the Company). Mr. Lipford also served as President of the Company and the
Bank until April, 1992. He was initially elected to the Board in 1960 and
has served since that time. He is a member of the Executive and Investment
Committees. He owns beneficially 16,880 shares (2.39%) of Common Capital
Stock of the Company.
H.P. Tigrett, Jr. (82) retired, Tigrett & Shibley Insurance, Newbern,
Tennessee, an independent insuror. He was first elected to the Board in
1969. Mr. Tigrett owns 1,812 shares (.25%) of Common Capital Stock of the
Company.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1996
J. Walter Bradshaw (32) is Vice President and Director of Bradshaw &
Co. Insurors, an independent insurance agency. Mr. Bradshaw was appointed
to the Board in July, 1993, to serve the remainder of the unexpired term of
Director Sam Bradshaw, Jr. Mr. Bradshaw beneficially owns 5,376 shares
(.76%) of Common Capital Stock of the Company.
James H. Carver (53) retired in 1993 from Colonial Rubber Works, Inc.,
a company engaged in the manufacture of rubber and plastic compounds. Mr.
Carver had served Colonial Rubber as Chairman of the Board since January 1,
1988. He was appointed to the Board in February, 1992 and beneficially
owns 1,650 shares (.23%) of Common Capital Stock of the Company.
L.D. Pennington (65) is Chairman of the Board and Director of Forcum-
Lannom Associates, Inc., a company of contractors, engineers and
developers. Mr. Pennington served as President and Chief Executive Officer
of the company until 1993. He was elected to the Board in 1989 and serves
on the Executive, Investment and Trust Committees. Mr. Pennington owns
beneficially 2,323 shares (.33%) of Common Capital Stock of the Company.
Dwight Steven Williams (38) is Business Manager, Funeral Director and
Embalmer of Johnson Funeral Home. He was appointed to serve as Director of
First Citizens Bancshares, Inc. on January 16, 1991 and serves on the Trust
Committee. Mr. Williams beneficially owns 301 (.04%) shares of Common
Capital Stock of the Company.
Katie S. Winchester (53) is President of First Citizens Bancshares,
Inc. and President and Chief Administrative Officer of First Citizens
National Bank (the principal subsidiary of the Company). Ms. Winchester
was appointed by the Board of Directors to the position of President of the
bank and the Company in April, 1992. Previous to the appointment, she
served the company as Vice President and Secretary and the Bank as
Executive Vice President and Chief Administrative Officer. Ms. Winchester
was initially elected to the Board in 1990 and serves on the Investment,
Executive, Community Reinvestment Act, and Trust Committees. She owns
beneficially 5,155 shares (.73%) of Common Capital Stock of the company.
Billy S. Yates (68) is President of General Appliance and Furniture
Company, a retail furniture and appliance outlet. Mr. Yates was initially
elected to the Board in 1973 and serves on the Investment and Executive
Committees. He beneficially owns 3,196 shares (.45%) of Common Capital
Stock of the Company.
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DESCRIPTION OF THE BOARD AND ITS COMMITTEES
Each Director of First Citizens Bancshares, Inc. also serves as a
Director of First Citizens National Bank. The Board of Bancshares met eight
times during 1993 and the Board of the Bank held twelve meetings. There
were no incumbent Directors attending fewer than 75% of the aggregate of
Board and Committee meetings. There are no family relationships between
Directors, Officers or Officers and Directors.
There were no transactions entered into between First Citizens National
Bank or First Citizens Bancshares, Inc., and Directors, Nominees for
Directors and/or Executive Officers of either the Bank or Bancshares in
which the charges involved exceeded $60,000 unless such transactions were
accomplished on the basis of competitive bidding or were considered to be
in the ordinary course of business.
The Holding Company has no specific committees. However, the Holding
Company's principal subsidiary, First Citizens National Bank, has various
committees that serve the Bank.
The Executive Committee is appointed by the Board to act on it's
behalf when the Board is unable to act as a whole. It is the
responsibility of the Executive Committee to review certain loan
applications in accordance with Loan Policy; to make recommendations to the
Board on issues affecting the operations of the Bank and to counsel
management on matters presented for committee consideration. The Executive
Committee acts as a nominating committee by considering the performance of
incumbent directors and officers and by recommending nominations for
re-election. When acting as the compensation committee, the Executive
Committee reviews and approves salaries of senior management and recommends
to the Board compensation for service on the Board and Board Committees.
The Executive Committee also serves as the Investment Committee. The
committee meets at such times as meetings are called. Forty-two meetings
were held in 1993.
The Audit Committee reviews results of audits performed by the Bank's
Internal Auditor and makes a determination as to the adequacy of such
audits. Further, this committee determines the need and frequency for
external audits, reviews engagement letters to determine the overall
effectiveness of proposed audits, and reviews the results of any audit upon
completion. Based on results of these audits, this committee determines
the adequacy of existing internal controls and reports their findings to
the full Board. The Audit Committee held four meetings during 1993.
The Trust Committee is composed of four Directors and two Trust
Officers. It is the responsibility of this committee to work with the
Trust Officers and staff to formulate policies and procedures relative to
the administering of fiduciary powers; to accept or reject all
executorships, trusteeships, and other fiduciary relationships of the bank;
and to invest, retain, or dispose of funds that are in the possession of
the Trust Department. Thirteen Trust Committee meetings were held during
the year ending December 31, 1993.
The Investment Committee consists of six members appointed by the
Board, and the Bank's Investment Officer. It is the responsibility of this
committee to set and monitor investment activity guidelines. Three
meetings were held during 1993.
The Community Reinvestment Act Committee was established within the
Community Reinvestment Act Program. It is the responsibility of this
Committee to develop, review, and implement ongoing CRA projects. The CRA
Committee consists of four directors and a cross section of managers from
various departments within the bank. Two Community Reinvestment Act
Committee meetings were held throughout 1993.
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Fees are established by the Board on an annual basis. Fees
for 1993 were set at $500.00 per meeting for each Director and advanced on
a per meeting attended basis. Additional amounts are paid for service on
various committees as follows (annually): Executive/Investment Committee
$7,500.00, Audit Committee $3,600.00, Trust Committee $4,500.00 and CRA
Committee $4,500.00. Executive Officers who are also Directors receive no
additional compensation for service on a Board Committee.
The following table discloses individually Executive Officers of the
Holding Company and its subsidiaries who received direct annual
remuneration in excess of $100,000.00. As the Holding Company pays no
salaries, this information relates to all compensation paid by First
Citizens National Bank. The following tabulation is for the period ending
December 31, 1993.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Res- All
Name Annual tricted Other
and Compen- Stock LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs (#) ($) ($)
Stallings 1993 128,262.38 36,225.07 17,143.28 -0- -0- -0- 69,399.97
Lipford (1) (2) (3)
Chairman of
Board of
Directors
& CEO
Katie 1993 100,252.74 27,562.39 13,336.60 867.00
Winchester (1) (2) (3)
President,
CAO, &
Director
</TABLE>
(1) Salaries reported includes Director Fees of $6,000.00 paid to each
Executive for service on the Board of Directors.
(2) Contributions made by the Bank to Employee Stock Ownership Plan.
(3) Economic Benefit of Life Insurance Policy.
COMPENSATION PLANS
Incentive Compensation Plan
An Employee Incentive Plan was adopted by the Company on
December 16, 1992, effective January 1, 1993. Executive participants of
the Plan include the Chief Executive Officer and President of First
Citizens National Bank (the Bank) and First Citizens Bancshares, Inc. (the
Company). Bonuses paid to Executives included in this Plan are based on
the overall performance of the Bank. Participants are eligible to receive
an annual bonus equal to 20%, 25% or 30% of their base salary equivalent to
the Company's return on assets at .85% to 1.00%, 1.00% to 1.15% and 1.15%
and above respectively. Executive bonuses paid in 1993 were 30% of the
Executive base salary based on a pre-bonus return on assets of 1.24%.
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Employee Stock Ownership Plan
Effective December 31, 1984 the Board of Directors of the Bank
approved a resolution establishing the First Citizens National Bank
Employee Stock Ownership Plan and Trust, designed to invest primarily in
Holding Company Stock. Of the eighteen Directors, two of which are
Executive Officers of the Bank Holding Company, two were Plan participants
receiving a distribution. Benefits accruing to the accounts of individuals
named in the Summary Compensation Table for the plan year ending December
31, 1993 totaled $30,479.88. The distribution and vesting of the amount
allocated is not subject to future events.
Administration of the Plan is the responsibility of an administrative
committee as directed by the Board of First Citizens National Bank. Any
employee who has completed one (1) year of service (1,000 hours) and who
has reached the age of 21 shall be eligible to participate. Distribution
of benefits can be made in stock, cash or a combination of the two, per the
requirements of TRA of 1986. Benefits are payable as a single distribution
or equal annual installments at normal retirement date, coinciding with or
following the participant's 65th birthday.
Also included in the Plan are provisions for distribution of benefits
to the participant or designated beneficiary upon early retirement,
becoming totally and permanently disabled, or upon the death of the
participant. Allocations of stock to the account of each participant will
be based on the ratio of his/her compensation to all participant's
compensation for the plan year. Total contributions to the plan for the
year ending December 31, 1993 were approximately $337,500.00.
Executive Employment Agreements
Executive Employment Agreements were entered into in April, 1993 by
and between First Citizens National Bank (the "Bank"), First Citizens
Bancshares, Inc. (the "Company") and Stallings Lipford, Katie S.
Winchester, Ralph E. Henson and H. Hughes Clardy, Executive Officers of the
First Citizens Bancshares, Inc. (the "Company"). The Agreements provide
for terms of employment and compensation and benefits in the event of
termination by "action of the Company" or "change in control". A "change
in control", as defined in the Agreement, is deemed to occur if any person,
firm or corporation shall obtain "control" of the Company through the
acquisition, directly or indirectly, by any person or group of persons of
shares in the Bank or Bancshares, which, when added to any other shares,
the beneficial ownership of which is held by such acquirer(s), shall result
in ownership by any person(s) of ten percent (10%) of such stock or which
would require prior notification under any federal or state banking law or
regulation; or the occurence of any merger, consolidation or reorganization
of the Bank to which the Bank or Bancshares is not a surviving entity, or
the sale of all or substantially all of the assets of the Bank or
Bancshares.
In the event of the officer's termination caused by "action of the
Company" not for cause of a "change in control" or in the event the
officer's termination is caused by a "change in control", the officer shall
be entitled to receive severance pay within 30 days following the date of
termination, an amount equal to two times the compensation paid in the
preceding calendar year, or scheduled to be paid to the Executive during
the year of the notice of termination, whichever is greater, plus an
additional amount sufficient to pay United States income tax on the lump
sum amount so paid. Executive officers terminated for failure to
satisfactorily perform his/her regular duties will receive no severance
pay.
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Executive Management Life Insurance Plans
Executive Management Life Insurance Plans were provided for in
Executive Employment Agreements adopted by the Company in April, 1993. A
Collateral Assignment Split Dollar Life Insurance Plan was provided for the
President and two other Executive Officers of the Company in which the
Company agreed to pay life insurance premiums not to exceed $12,500.00 per
year. The Company's obligation to pay this premium shall cease upon
termination of the Executive's employment. The Executive agreed to repay
the Company the full amount of premiums paid by the Company when employment
is terminated. Repayment of premiums under any circumstances cannot exceed
the cash value of the policy. Premiums paid in 1993 for Collateral
Assignment Split Dollar Life Insurance for Executive Officers totaled
$12,500.00 for the President and $10,000.00 for other Executive Officers.
The Company has provided and paid premium payments on a whole life
insurance policy on the life of the Chief Executive Officer since December,
1984. As an additional employee benefit, the Company has agreed to
continue to pay premiums not to exceed $10,000.00 per year on the existing
life insurance policy in the amount of $250,000.00. Ownership of the whole
life policy including current cash value was transferred from the Company
to the Chief Executive Officer upon execution of the Employment Agreement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the officers, directors, and principal shareholders of the
Holding Company (and their associates) have deposit accounts and other
transactions with First Citizens National Bank, including loans in the
ordinary course of business. An Associate includes a corporation or other
entity of which an officer or director of the Company is an officer,
partner, or 10% shareholder; any Trust or Estate of which he is a Trustee,
Executor or significant beneficiary; or any relative or spouse or spouse's
relative who lives in his home.
Banking transactions in the ordinary course of business with directors,
officers, principal stockholders, and their associates are on the same terms,
including interest rates and collateral on loans, as those prevailing at the
same time for comparable transactions with others. Loans to directors,
officers and principal shareholders, and their associates, are made on the
same terms and conditions afforded other borrowers with similar credit
standing who are not associated with the Bank. These loans generally do not
represent unfavorable features or more than a normal risk of
collectability. The largest aggregate amount of debt outstanding both
direct and indirect, during the twelve month period ending December 31,
1993 was $2,846,926.20 as of September 30, 1993. The amount outstanding as
of December 31, 1993 was $2,796,469.60 at an average interest rate of
9.34%. The debt was incurred over a period of time and served to finance
business ventures and purchase Real Estate. As of December 31, 1992,
$2,708,213.04 was loaned at an average interest rate of 9.22%. Changes in
holdings of securities by insiders were reported to the Securities and
Exchange Commission on a timely basis with exception to one Form 4 filing.
A Director of Bancshares purchased seventy-two (72) shares of common stock
on October 8, 1993 that was not reported until December 7, 1993. Changes
in beneficial ownership of securities must be filed with the SEC on or
before the 10th day after the end of the month in which any change
occurred.
On December 31, 1993, the Holding Company, through its only subsidiary,
First Citizens National Bank, had an aggregate net loan total of
$149,322,000.00. Loans to Executive Officers and Directors of the Holding
Company comprised 1.91% of this total. No Director or Officer of First
Citizens National Bank or First Citizens Bancshares, Inc. is directly
indebted to the Holding Company.
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AMENDMENT OF CHARTER
The Board of Directors of the Company recommends two amendments
to Section 6 of the Charter of the Company as discussed below. The
proposed amendments must be approved by the holders of a majority of the
common stock of the Company.
The proposed amendments to Section 6 of the Charter would (1) increase
from 750,000 to 2,000,000 the number of shares of common stock the
Corporation is authorized to issue, and (2) change the par value of a share
of common stock from $10.00 per share to $1.00 per share.
The holders of the Company's common stock will vote on amending
Section 6 of the Charter to read as follows:
The maximum number of shares which the corporation shall have the
authority to issue is Two Million (2,000,000) shares, each of which
shall have a par value of One Dollar ($1.00).
The holders of common stock are entitled to one vote per share. The
holders of common stock do not have preemptive rights to purchase any
securities subsequently issued by the Company pursuant to a provision in
the Charter. The holders of common stock are entitled to receive dividends
as may be declared by the Board of Directors of the Company with a respect
to the common stock out of funds legally available therefor. In the event
of liquidation, dissolution or winding-up of the affairs of the Company,
the holders of outstanding shares of common stock will be entitled to share
pro rata according to their respective interests in the Company's assets
and funds remaining after payment or provision for payment of all debts and
other liabilities of the Company.
The proposed increase in the number of shares of common stock that the
Company is authorized to issue from 750,000 to 2,000,000 is intended to
allow the Company greater flexibility with respect to its capitalization
and the number of shares from time to time outstanding. The Board of
Directors will have discretion in regard to the issuance of the additional
authorized shares, subject to applicable laws and regulations that may
require shareholder vote. The Company does not currently have any plans to
issue the authorized shares, but the Company will have the flexibility to
issue such shares for sale or in an exchange transaction in connection with
a merger or acquisition or for other appropriate corporate purposes, and
management has expressed interest in an acquisition to another banking
institution that might involve the issuance of the Company's stock. If
additional shares are issued, the general effect upon the rights of
existing security holders will be to reduce their percentage of ownership,
and depending upon the consideration received for any additional shares
issued, may increase or decrease the value of the outstanding shares.
The reduction in par value has no effect on the value of the common
stock.
The Company's Charter and Bylaws contain certain anti-takeover
features. Section 9 of the Company's Charter requires the affirmative vote
of at least 80% of the outstanding voting stock in order to authorize a
merger or consolidation with, or a sale, exchange or lease of all or
substantially all the assets of the Company to any person or entity.
Tennessee law requires the affirmative vote of two-thirds of a business
corporation's outstanding voting stock to approve such a transaction unless
greater voting requirements are required by the Charter. Section 9 of the
Charter has the effect of making it more difficult to approve a transaction
because the provision requires the affirmative vote of 80% of the
outstanding stock of the Company. Accordingly, any stockholder or group of
stockholders having a substantial minority interest might have a veto power
over such a transaction. Section 9 is operative only if the transaction
being proposed to stockholders is not supported by management and
recommended by the Board. Consistent with Tennessee law, Section 9 also
requires a vote of 80% of the outstanding voting stock to amend or repeal
the provision in order to prevent its circumvention by amendment or appeal.
<PAGE>
<PAGE>11
The Company's Bylaws contain certain provisions which become operative
if the Company should become the subject of a tender offer, exchange offer
or other takeover attempt. Article II, Section 9 of the Bylaws explicitly
requires the Board of Directors to consider all factors it deems relevant
in evaluating any proposed tender offer or exchange offer for the Company's
stock, any proposed merger or consolidation of the Company into another
corporation and any proposal to purchase or otherwise acquire all the
assets of the Company. This provision requires the Board to evaluate
whether the proposal is in the best interests of the Company by considering
the best interests of the stockholders and other factors as it deems to be
relevant, including the social, legal and economic effects on employees,
customers and the communities served by the Company and its subsidiary or
subsidiaries. In evaluating the best interests of stockholders, this
provision requires the Board to evaluate the consideration being offered in
relation to the then current market value of the Company, the then current
market value of the Company in a freely negotiated transaction, and the
Board's then estimate of the future value of the Company as an independent
entity.
These provisions in the Charter and Bylaws could have the effect of
reducing the attractiveness of the Company to persons who might wish to
make a tender offer, exchange offer or other takeover bid for the Company's
common stock, thereby reducing the possibility that existing stockholders
might be offered premiums over the market value of their stock, a situation
often associated with takeover bids. The provisions may have the overall
effect of rendering more difficult the accomplishment of mergers or the
assumption of control of the Company, and thus make the removal of
management more difficult. These provisions could make the accomplishment
of a future transaction more difficult even if it is favorable to the
interests of the shareholders. At the present time, management of the
Company has no knowledge of and no reason to believe that any person or
entity is considering an offer of the type which would be affected by
either or both of these provisions.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The firm of Carmichael, Enoch & Associates served Bancshares and First
Citizens as auditors for the year ending December 31, 1993. The Board is
proposing that this firm serve as auditors for the current year. They have
no direct financial interest or material indirect financial interest in the
company. Audit services provided by the auditors for the year ending
December 31, 1993, consisted of (but not limited to) examination of the
financial statements of both the Bank and the Holding Company and reporting
on such statements. A representative of Carmichael, Enoch and Associates
will be in attendance at the Annual Shareholders Meeting to answer
questions and offer comments regarding their audit.
PROPOSALS BY SECURITY HOLDERS
Shareholder proposals intended to be presented in the Proxy materials
to be mailed in 1995 other than nominees to be proposed for election to the
Board of Directors must be submitted by certified or registered mail to
Judy Long, Secretary First Citizens Bancshares, Inc., P.O. Box 370,
Dyersburg, TN 38025-0370, no later than December 1, 1994. Nominees to be
proposed for election to the Board of Directors of the Corporation, other
than nominations made by the existing Board of Directors, must be delivered
in writing to the Secretary of the Corporation and received no later than
ninety (90) days prior to the month and day that the proxy materials
regarding the last election of Directors to the Board of the Corporation
were mailed to Shareholders.
OTHER BUSINESS
The Board of Directors knows of no other business other than that set
forth herein to be transacted at the meeting; but, if other matters
requiring a vote of shareholders arise, the persons designated as proxies
will vote their judgment on such matters. If a shareholder specifies a
different choice on the Proxy, his/her shares of Common Stock will be voted
in accordance with the specifications so made.
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<PAGE>12
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1993, accompanies this report. A copy of the 10-K
report to the Securities and Exchange Commission for the year ended
December 31, 1993 will be furnished any shareholder requesting such a copy
free of cost. Request should be in writing to Judy Long, Secretary, First
Citizens Bancshares, Inc., P.O. Box 370, Dyersburg, TN 38025-0370.
BY ORDER OF THE BOARD OF DIRECTORS
Judy Long
Secretary
Dyersburg, TN
March 9, 1994
<PAGE>
<PAGE>13
FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38025-0370
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a shareholder of First Citizens Bancshares, Inc.,
hereby appoints P. H. White, Jr., and John E. Heckethorn, and each of them
severally, proxies of the undersigned, with full power of substitution, to
vote the shares of Capital Stock of First Citizens Bancshares, Inc.
standing in the name of the undersigned on February 28, 1994, at the Annual
Meeting of Shareholders to be held in the Annex of First Citizens National
Bank, on Wednesday, April 20, 1994, at 10:00 A.M., and at all adjournments
thereof:
(1) Election of Directors
For all nominees listed below Withhold Authority to vote
for all nominees listed
below
INSTRUCTIONS: YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE LISTED
BELOW BY LINING THROUGH OR STRIKING OUT SUCH INDIVIDUAL'S
NAME
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 1997
Eddie Eugene Anderson, E. H. Lannom, Jr., Milton E. Magee, Mary
F. McCauley, G. W. Smitheal, III, P. H. White, Jr.
(2) To consider and vote upon amendments to the Company's Charter (i)
to increase the authorized shares of common stock to 2,000,000
shares, and (ii) to amend the par value of each share of common
stock to $1.00 per share.
FOR AGAINST ABSTAIN
(3) Approval of Carmichael, Enoch and Associates as auditor for the
year ending December 31, 1994.
FOR AGAINST ABSTAIN
(4) To transact other business as may properly come before the
meeting or any adjournments thereof
FOR AGAINST ABSTAIN
This proxy confers authority to vote "For" the propositions listed
unless "Against" or "Abstain" is indicated. If no direction is given, this
proxy will be voted for the election of all nominees named and for approval
of Carmichael, Enoch and Associates as auditors for the current year.
Please sign exactly as name appears below.
When shares are held by joint tenants both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please sign full
title. If more than one trustee, all should sign.
Dated March 18, 1994
Signature
Signature if jointly held
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE>
<PAGE>14
SIGNATURES
I certify that the statements made in this statement are true,
complete, and correct to the best of my knowledge and belief.
First Citizens Bancshares, Inc.
(Registrant)
Date: March 9, 1994 Stallings Lipford
Stallings Lipford, Chairman & CEO
