<PAGE>1
FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38025-0370
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 17, 1996
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 17, 1996 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 1999.
2. Approval of Carmichael, Dunn, Creswell, and Sparks, CPA as
auditors for the year ending December 31, 1996.
3. 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
29, 1996 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. If you will need special assistance at the meeting
because of a disability, please contact Judy Long, Secretary at
(901) 287-4254.
This 27th day of March, 1996.
BY ORDER OF THE BOARD OF DIRECTORS
Stallings Lipford
Chairman & CEO
<PAGE>2
FIRST CITIZENS BANCSHARES, INC.
FIRST CITIZENS PLACE
DYERSBURG, TENNESSEE 38024
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 1996
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 17, 1996, 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 27, 1996.
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 ELECTION OF
CARMICHAEL, DUNN, CRESWELL & SPARKS CPAs TO SERVE AS THE COMPANY'S
AUDITORS FOR THE YEAR ENDING 12/31/96. 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, 1995, there were 733,399
shares of Common Capital Stock, par value of $1.00, 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 29, 1996. 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 shareholder 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.
<PAGE>3
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
at 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, 1995:
Name of Beneficial Ownership
Percent
Title of Class Beneficial Owners Direct Indirect of
Class
Common Capital Stock Directors, Nominees 74,799 49,876 17.00%
& Executive Officers
(21)
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 30,726 (1) 6.33%
Common Capital Elizabeth Magee Taylor
Stock 1789 North Highland
Jackson, TN 38301 15,997 39,416 (2) 7.56%
Common Capital First Citizens National
Stock Bank Employee Stock
Ownership Plan & Trust 160,890 21.94%
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<PAGE>4
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 1997, another one-third in 1998 and the
remaining one-third in 1999. 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, 1995. This information is also provided for
continuing Directors whose terms expire in 1997 and 1998.
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 1999
J. WALTER BRADSHAW 34 1993 6,251 *
Vice President & Director,
Bradshaw & Co. Insurors,
an independent insurance agency
LARRY W. GIBSON 49 1995 1,132 *
President, Roberts-Gibson, Inc.,
gasoline jobber company
L.D. PENNINGTON 67 1989 2,757 *
Chairman of Board, Centex
Forcum-Lannom Inc., a
company of contractors,
engineers and developers.
Served as President & CEO
of Forcum-Lannom Assoc. Inc.
until 1994.
DWIGHT STEVEN WILLIAMS 40 1991 322 *
Business Manager, Johnson
Funeral Home.
KATIE S. WINCHESTER 55 1990 6,216 *
February, 1996 appointed
CEO & President of First
Citizens National Bank
April, 1992 to February, 1996
served as President & Chief
Administrative Officer.
Previous to 1992, Vice President
& Secretary of the Company &
Executive Vice President, Chief
Administrative Officer and
Secretary to First Citizens
National Bank.
BILLY S. YATES 70 1973 3,682 *
President, General Appliance
and Furniture Company, retail
furniture & appliance outlet.
*Less than one percent
<PAGE>5
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1998
WILLIAM C. CLOAR 59 1991 3,629 *
Vice President of Training and
Employee Development, Dyersburg
Fabrics, Inc., a textile manufact-
uring plant. Previous to 1995 was
Vice President of Administration.
Served Dyersburg Fabrics as Vice
President of Administration &
Human Resources from 1990 to 1994.
JAMES DANIEL CARPENTER 46 1993 533 *
Partner, Flatt Heating &
Air Conditioning.
RICHARD W. DONNER 45 1985 621 *
Vice President of Sales,
Dyersburg Fabrics, Inc., a
textile manufacturing plant.
JOHN E. HECKETHORN 78 1980 854 *
Retired, Heckethorn Manufacturing
Company, defense contractor &
manufacturer of automotive
components.
STALLINGS LIPFORD 65 1960 18,132 2.50%
Chairman of the Board & CEO of
First Citizens Bancshares, Inc.
Chairman of the Board of First
Citizens National Bank. Served
both the Company and the Bank as
Chairman & CEO until February,
1996. Mr. Lipford also served
as President of the Company and
Bank until April, 1992.
H.P. TIGRETT, JR. 84 1969 1,939 *
Retired,
Tigrett & Shibley
Insurance, independent insuror.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1997
EDDIE EUGENE ANDERSON 48 1984 7,244 *
Partner, Anderson Farms.
E.H. LANNOM, JR. 71 1962 6,833 *
President, Forcum-Lannom, Inc.,
building contractor and building
materials distributor.
MILTON E. MAGEE 59 1969 46,392 6.33%
Partner, Chic Farms.
MARY F. MCCAULEY 65 1991 356 *
Professor Emeritus, Dyersburg
State Community College.
Professor of English at DSCC
until her retirement in 1994.
*Less than one percent
<PAGE>6
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
G.W. SMITHEAL, III 40 1993 794 *
Partner, Smitheal Farms &
Biesel and Smitheal Cattle
Company.
P.H. WHITE, JR. 64 1978 2,422 *
Partner, P.H. White Farms
& manufacturer & distributor
of livestock insecticide
applicators.
*Less than one percent
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 five times during
1995 and the Board of the Bank held twelve meetings. Director H. P. Tigrett,
Jr. was the only incumbent Director 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 and is
comprised of E. H. Lannom, Jr., Stallings Lipford, Milton E. Magee, L. D.
Pennington, P. H. White, Jr., Katie Winchester, and Billy S. Yates. Forty
meetings were held in 1995.
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 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 is
comprised of J. Walter Bradshaw, James D. Carpenter, Richard W. Donner, E. H.
Lannom, Jr., and Green W. Smitheal, III. Four meetings were held during 1995.
The Trust Committee is composed of five 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.
Directors serving on this committee are William C. Cloar, Larry W. Gibson, L.
D. Pennington, Dwight Steven Williams, and Katie Winchester. Twelve meetings
were held during the year.
<PAGE>7
The Investment Committee consists of seven 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. Four meetings were held
during 1995. The Executive Committee serves as the Investment Committee.
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 compliance efforts. The CRA
Committee consists of five directors, Eddie E. Anderson, James D. Carpenter,
John E. Heckethorn, Mary F. McCauley, and Katie Winchester, and a cross section
of managers from various departments within the bank. Three meetings were held
throughout 1995.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Fees are established by the Board on an annual basis. Fees for
1995 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
$2,000.00. 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 $100,000.00. As the Holding Company pays no salaries, this
information relates to all compensation paid by First Citizens National Bank.
The following tabulation is for the period ending December 31, 1995.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- All
Name Annual stricted Securities Other
and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs (#) ($) ($)
Stallings 1995 142,027 33,278 15,000 -0- -0- -0- 9,137
Lipford (2) (3) (4)
Chairman 1994 134,976 38,036 15,000 -0- -0- -0- 9,137
of Board of (2) (3) (4)
Directors 1993 128,262 36,225 17,143 -0- -0- -0- 69,399
& CEO of (2) (3) (4)
Bancshares.
Chairman
of Board of
the Bank.
(1)
Katie 1995 115,032 26,250 14,210 -0- -0- -0- 968
Winchester (2) (3) (4)
CAO &
President 1994 108,726 29,249 13,880 -0- -0- -0- 914
& Director (2) (3) (4)
of First
Citizens 1993 100,252 27,562 13,336 -0- -0- -0- 867
Bancshares. (2) (3) (4)
President,
CEO & Director
of the Bank.
<PAGE>8
SUMMARY COMPENSATION TABLE (Continued)
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- All
Name Annual stricted Securities Other
and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs (#) ($) ($)
Hughes 1995 79,254 31,300 11,288 -0- -0- -0- 504
Clardy (3) (4)
V. President
of First 1994 76,433 22,394 10,219 -0- -0- -0- 462
Citizens (3) (4)
Bancshares,
Inc. & Sr. 1993 58,525 4,274 -0- -0- -0- -0- -0-
V. President (5)
& Sr. Trust
Officer
First Citizens
National Bank
(1) Katie Winchester was named CEO & President of First Citizens
National Bank on February 17, 1996. The position of CEO was
previously held by Chairman Lipford.
(2) Salaries reported includes Director Fees of $6,000.00 paid to each
Executive for service on the Board of Directors.
(3) Contributions made by the Bank to Employee Stock Ownership Plan.
(4) Economic Benefit of Life Insurance Policy.
(5) Salary paid from 4/1/93 (date of employment) to 12/31/93.
COMPENSATION PLANS
Incentive Compensation Plan
An Employee Incentive Compensation Plan was adopted by the Company
on December 16, 1992, effective January 1, 1993. Since 1993, the plan
has been modified to include plans which reward each employee for
individual performance and group plans which reward groups or teams of
employees for increased productivity resulting from the combined effort
of all employees. The Employee Incentive Plan was last modified and
approved by the Board of Directors in July, 1995. The Chairman of the
Board, Chief Executive Officer and President participate in a budget
based incentive plan that affords them the opportunity to earn an annual
bonus equal to 20%, 25%, 30%, or 35% of their base salary equivalent to
the Company's return on assets at .85% to 1.00%, 1.00% to 1.15%, l.15%
to 1.25% and 1.25% and above respectively. Executive bonuses paid in
1995 were 25% of the Executives' base salary based on a pre-bonus return
on assets of 1.06%. Other Executive Officers participate in a budget
based incentive plan as well as other plans developed to motivate
performance in each officer's specific area of responsibility. Payment
of budget based bonuses are realized only if the bank meets it annual
budget goal and achieves an ROA of .85% or above. Points are assigned
ranging from 170 (met budget projection) to 200 (Exceeded budget
projection by 15%) and dollar value per point ranging from $20.00 to
$35.00 are allocated when achieving a ROA of .85% to 1.25% or above.
The Loan Administrator incentive plan will qualify the Loan
Administrator to an incentive compensation equal to 10% of current
year's salary. Incentive goals are based on criticized loans as a
percent of average capital less than .35%; annual net loan losses as a
percent of average loans less than .45%; average non-performing loans
as a percent of average loans less than 1.7%; average OREO as a percent
of average capital less than 3.0%; and loan volume increase exceeds
budget. Each category is assigned a <PAGE>9
percentage of the total goal of 100% with loan quality counting for 80%
of the total. Failure to accomplish 85% of the total objective will
result in no incentive being paid. Investment Management and Trust
Services Division Manager incentive plan is based on the Division's pre-
tax profit at year end. The incentive payment ranges from 10% to 30%
of the manager's annual base salary when realizing a pre-tax profit of
$50,000 to $300,000 or more. The Chief Financial Officer participates
in a budget based incentive plan that awards 10%, 15%, 20% and 25% of
annual base salary when achieving ranges of ROA discussed in the CEO and
Presidents bonus plan.
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 are also
Executive officers of the Bank Holding Company and 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, 1995 totaled $40,499. The distribution and vesting
of the amount allocated is not subject to future events.
Administration of the Plan is the responsibility of an admini-
strative 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 both. Benefits are payable as a single distribution or
equal annual installments at normal retirement date, coinciding with or
following the participant's 65th birthday. An amendment made in 1994
provided for the elimination of the investment diversification option
of the plan. This option in the plan stated that for five years after
attaining age 55 and completing 10 years of plan participation, ESOP
participants would be given an opportunity to either diversify 25% of
their ESOP Account Investments or receive distribution of 25% of the
account. In the sixth year this option applies to 50% of the account
balance. With the elimination of diversification option, plan
participants will only have the option of receiving a distribution that
can be transferred directly to an IRA or to an investment account
selected and managed by the participant.
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, 1995 were approximately
$390,252.00.
Executive Employment Agreements
Executive Employment Agreements are currently in effect by and
between First Citizens National Bank (the "Bank"), First Citizens
Bancshares, Inc. (the "Company") and Stallings Lipford, Katie S.
Winchester, Ralph E. Henson, H. Hughes Clardy and Jeffrey Agee. 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 occurrence 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.
<PAGE>10
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.
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 three other Executive Officers of the Company in
which the Company agreed to pay individual 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 annually for Collateral Assignment Split Dollar Life
Insurance for Executive Officers totaled $12,500.00 for the President
& CEO and range between $5,000.00 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 Chairman of the Board 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 Chairman 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 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, 1995 was $4,278,000 as of September 30, 1995. The
amount outstanding as of December 31, 1995 was $4,145,000 at an average
interest rate of 8.98%. The debt was incurred over a period of time and
served to finance business ventures and purchase Real Estate. As of
December 31, 1994, $2,535,000 was loaned at an average interest rate of
8.87%. On December 31, 1995, the Holding Company, through its only
subsidiary, First Citizens National Bank, had an aggregate net loan
total of $189,690,000. Loans to Executive Officers and Directors of the
Holding Company comprised 2.30% of this total. No Director or Officer
of First Citizens National Bank or First Citizens Bancshares, Inc. is
directly indebted to the Holding Company. Changes in holdings of
securities by insiders were reported to the Securities and Exchange
commission on a timely basis with exception of one Form 4 <PAGE>11
filing. A stock transaction of 173 shares, acquired on July 6, 1995 by
Director Green W. Smitheal, III, was inadvertently overlooked and not
reported to the SEC until September 8, 1995. This oversight was the
result of a procedural error by the bank and not the fault of Mr.
Smitheal. 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.
TOTAL SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph reflects First Citizens Bancshares' cumulative
return (including dividends) as compared to the S & P 500 and the Nasdaq
Banking Stocks over a 5-year period beginning December 31, 1990.
<PAGE>12
RELATIONSHIP WITH INDEPENDENT AUDITORS
The firm of Carmichael & Associates served First Citizens National
Bank and First Citizens Bancshares, Inc. as auditors for the year ending
December 31, 1995. In July, 1995, the name of the accounting firm changed
to Carmichael, Dunn, Creswell, and Sparks, CPAs. The change was the result
of a merger of Carmichael & Associates and Dunn, Creswell, and Sparks, and
should have no affect to either First Citizens or Bancshares. The Board
is proposing that this firm serve as auditors for the current year (1996).
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, 1995 consisted of (but not limited to) examination
of the financial statements of both the Bank and Holding Company and
reporting on such statements. A representative of Carmichael, Dunn,
Creswell, and Sparks, CPAs 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 1997 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, 1996. 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.
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1995, accompanies this report. A copy of the 10-K
report to the Securities and Exchange Commission for the year ended
December 31, 1995 will be furnished any shareholder requesting such copy
free of cost. Requests 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 27, 1996
<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 G. W. Smitheal, III, 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 29, 1996, at the Annual
Meeting of Shareholders to be held in the Annex of First Citizens National
Bank, on Wednesday, April 17, 1996, 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 1999
J. Walter Bradshaw, Larry W. Gibson, L. D. Pennington, Dwight
Steven Williams, Katie S. Winchester, Billy Yates.
(2) Approval of Carmichael, Dunn, Creswell, and Sparks, CPAs as
auditor for the year ending December 31, 1996.
FOR AGAINST ABSTAIN
(3) 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, Dunn, Creswell, and Sparks, CPAs 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 27, 1996
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 27, 1996 /s/Stallings Lipford
Stallings Lipford, Chairman
