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FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38024
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 16, 1997
TO: Shareholders of First Citizens Bancshares, Inc.
Dyersburg, Tennessee 38024
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 16,
1997 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 2000.
2. Approval of Carmichael, Dunn, Creswell, and Sparks, CPA as
general auditors for the year ending December 31, 1997.
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 February 28, 1997
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 13th day of March, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
Stallings Lipford
Chairman
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FIRST CITIZENS BANCSHARES, INC.
FIRST CITIZENS PLACE
DYERSBURG, TENNESSEE 38024
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 16, 1997
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 16, 1997, 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 17, 1997.
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 12/31/97. IF 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, 1996, there were 741,516
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 28, 1997. Holders of common stock shall possess full
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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.
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, 1996:
Name of Beneficial Ownership Percent
Title of Class Beneficial Owners Direct Indirect of Class
Common Capital Directors, Nominees 78,490 51,971 18.00%
Stock & 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 31,832 (1) 6.41%
Common Capital Elizabeth Magee Taylor
Stock 1789 North Highland
Jackson, TN 38301 16,677 40,652 (2) 7.80%
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Common Capital First Citizens National
Stock Bank Employee Stock
Ownership Plan & Trust 167,605 22.60%
(1) Mr. Magee serves as co-trustee on various trusts with
First Citizens National Bank and/or Elizabeth Magee Taylor
representing 31,832 shares.
(2) Mrs. Taylor serves as co-trustee on 31,695 shares with Milton
Eugene Magee and/or First Citizens National Bank. Also reported as
beneficial ownership are 8,957 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 share-holder
meetings. The present Board of Directors consists of 18 members
with one-third of the terms expiring in 1998, another one-third in 1999
and the remaining one-third in 2000. 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, 1996. This information is also
provided for continuing Directors whose terms expire in 1998 and 1999.
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
INCUMBENTS AND NOMINEES FOR ELECTION WHOSE TERMS WILL EXPIRE IN 2000
EDDIE EUGENE ANDERSON 49 1984 7,504 *
Partner, Anderson Farms II.
Previously, Anderson Farms
until January 1, 1997.
E.H. LANNOM, JR. 72 1962 7,079 *
President, Forcum-Lannom, Inc.,
building contractor and building
materials distributor.
MILTON E. MAGEE 60 1969 47,499 6.41%
Partner, Magee and Taylor, FLP
Previously Chic Farms until 1997.
*less than one percent
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Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
MARY F. MCCAULEY 66 1991 368 *
Professor Emeritus, Dyersburg
State Community College.
Professor of English at DSCC
until her retirement in 1994.
G.W. SMITHEAL, III 41 1993 821 *
Partner, Smitheal Farms &
Biesel and Smitheal Cattle
Company.
P.H. WHITE, JR. 65 1978 2,509 *
Partner, P.H. White Farms
& manufacturer & distributor
of livestock insecticide
applicators.
INCUMBENTS WHOSE TERMS WILL EXPIRE IN 1999
J. WALTER BRADSHAW 35 1993 6,603 *
Vice President & Director,
Bradshaw & Co. Insurors,
an independent insurance agency.
LARRY W. GIBSON 50 1995 1,224 *
President, Roberts-Gibson, Inc.,
gasoline jobber company.
L.D. PENNINGTON 68 1989 2,855 *
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 41 1991 334 *
Business Manager, Johnson
Funeral Home.
KATIE S. WINCHESTER 56 1990 6,405 *
February, 1996 appointed
CEO & President of First
Citizens National Bank.
April, 1996 appointed CEO
and President of First
Citizens Bancshares, Inc.
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.
*Less than one percent
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Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
BILLY S. YATES 71 1973 3,814 *
President, General Appliance
and Furniture Company, retail
furniture & appliance outlet.
INCUMBENTS WHOSE TERMS WILL EXPIRE IN 1998
WILLIAM C. CLOAR 60 1991 3,760 *
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 47 1993 552 *
Partner, Flatt Heating &
Air Conditioning.
RICHARD W. DONNER 46 1985 643 *
Vice President of Sales,
Dyersburg Fabrics, Inc., a
textile manufacturing plant.
JOHN E. HECKETHORN 79 1980 884 *
Retired, Heckethorn Manufacturing
Company, defense contractor &
manufacturer of automotive
components.
STALLINGS LIPFORD 66 1960 17,699 2.39%
Chairman of the Board of
First Citizens Bancshares, Inc.
and First Citizens National Bank.
Served both the Company and the
Bank as Chairman & CEO until
the year 1996. Mr. Lipford
also served as President of the
Company and Bank until April, 1992.
BARRY T. LADD 56 1996 4,508 *
Executive Vice President and
Chief Administrative Officer
of First Citizens Bancshares,
Inc. and First Citizens National
Bank. Until February, 1996
served the Bank as Senior Vice
President and Senior Lending
Officer.
*Less than one percent
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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
five times during 1996 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. 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
(Chairman), Milton E. Magee, L. D. Pennington, P. H. White, Jr., Katie
Winchester, and Billy S. Yates. Thirty-nine meetings were held in 1996.
The Compensation Committee is composed of five directors who are not
employees of the Bank or any of its subsidiaries. The Committee makes
recommendations to the Board of Directors as to the amount and form of
officer compensation. The compensation programs of the Bank are
designed to align compensation with business objectives and performance,
and to enable the Bank to attract, retain and reward executives who
contribute to the long term success of First Citizens Bancshares, Inc.
and its subsidiaries. Therefore, the Bank provides an executive
compensation program which includes base pay, annual cash bonuses and
retirement benefits through annual contributions to an Employee Stock
Ownership Plan. In addition all Executive Officers are provided with
permanent life insurance. Base salary is established annually based on
individual performance and pay levels of similar positions at peer
financial institutions consistent with the Tennessee Bankers Association
Annual Salary Survey. When establishing base pay, consideration is
given to both the statewide and West Tennessee average. The Committee
annually evaluates experience, individual performance and Corporate
performance when setting base pay. Base salaries for new executive
officers are initially determined by evaluating the responsibilities of
the position and the experience of the individual, and by reference to
the competitive marketplace for experienced executive talent in the
financial services industry. The Compensation Committee is made up of
the following Directors: E. H. Lannom, Jr., Milton E. Magee, L. D.
Pennington, P. H. White, Jr., and Billy S. Yates.
<PAGE>
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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 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. Five meetings were held during 1996.
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.
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 1996. 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,
Katie Winchester, and a cross section of managers from various
departments within the bank. Two meetings were held throughout 1996.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Fees are established by the Board on an annual basis. Fees
for 1996 were set at $500.00 per meeting for each Director and advanced
on a per meeting attended basis. In 1996 an annual retainer fee of
$1,500.00 per director was paid for services on the Board of the
Corporation. 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 $100,000.00. As the Holding Company pays no
salaries, this information relates to all compensation paid by First
Citizens National Bank. The following tabulation is for the period
ending December 31, 1996.
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SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- All
Name Annual stricted Securities Other
and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs (#) ($) ($)
Stallings 1996 150,320 49,000 15,000 -0- -0- -0- 9,137
Lipford(1) (2) (3) (4)
Chairman 1995 142,027 33,278 15,000 -0- -0- -0- 9,137
of Board of (2) (3) (4)
Directors 1994 134,976 38,036 15,000 -0- -0- -0- 9,137
of Banc- (2) (3) (4)
shares and
of the Bank.
Katie(1) 1996 129,830 42,000 15,000 -0- -0- -0- 1,487
Winchester (2) (3) (4)
CEO & 1995 115,032 26,250 14,210 -0- -0- -0- 968
President (2) (3) (4)
& Director 1994 108,726 29,249 13,880 -0- -0- -0- 914
of First (2) (3) (4)
Citizens
Bancshares
& First
Citizens
National Bank.
Hughes 1996 81,853 55,244 13,964 -0- -0- -0- 840
Clardy (3) (4)
Vice 1995 79,254 31,300 11,288 -0- -0- -0- 504
President (3) (4)
of First 1994 76,433 22,394 10,219 -0- -0- -0- 462
Citizens (3) (4)
Bancshares,
Inc. & Sr.
Vice
President &
Sr. Trust
Officer
First Citizens
National Bank
<PAGE>
<PAGE>10
SUMMARY COMPENSATION TABLE (Continued)
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- All
Name Annual stricted Securities Other
and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs (#) ($) ($)
Ralph 1996 93,520 14,950 10,781 -0- -0- -0- 951
Henson (2) (3) (4)
Executive 1995 86,006 12,250 9,925 -0- -0- -0- 691
Vice (2) (3) (4)
President 1994 82,121 13,575 10,159 -0- -0- -0- 562
& Loan (2) (3) (4)
Administrator
of First
Citizens
National
Bank & Vice
President
of First
Citizens
Bancshares Inc.
Barry T. 1996 77,506 24,500 10,833 -0- -0- -0- 450
Ladd(5) (2) (3) (4)
Executive 1995 60,557 6,000 6,598 -0- -0- -0- 225
Vice (2) (3) (4)
President 1994 57,617 5,250 6,222 -0- -0- -0- 104
and CAO of (2) (3) (4)
First
Citizens
National
Bank &
Executive
Vice
President
of Bancshares.
(1) Katie Winchester was named CEO & President of First Citizens
Bancshares Inc. on April 16, 1996. The position of CEO was
previously held by Chairman Lipford.
(2) Salaries reported includes Director Fees up to $7,500.00 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) Barry Ladd was named Executive Vice President and CAO of
Bancshares, and the Bank in April, 1996.
<PAGE>
<PAGE>11
COMPENSATION PLANS
Incentive Compensation Plan
Executive Officers are eligible for annual cash bonuses. The
senior management incentive plan provides bonus compensation based on
corporate performance, business unit performance and individual
performance. The level of incentive compensation for Executive
Officers is based on Return on Assets with a minimum qualifying ROA
of 1%.
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, three 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, 1996 totaled $65,578. 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, 1996 were
approximately $399,138.00.
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, Barry T. Ladd, 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
<PAGE>12
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
acquire(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.
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 four 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 Executive Vice President &
CAO, and range between $5,000.00 and $10,000.00 for other Executive
Officers.
The Company has provided and paid premiums 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.
<PAGE>13
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, 1996 was $4,723,000 as of
September 30, 1996. The amount outstanding as of December 31, 1996
was $4,448,000 at an average interest rate of 8.89%. The debt was
incurred over a period of time and served to finance business
ventures and purchase real estate. As of December 31, 1995,
$4,445,000 was loaned at an average interest rate of 8.89%. On
December 31, 1996, the Holding Company, through its only subsidiary,
First Citizens National Bank, had an aggregate net loan total of
$211,374,825. Loans to Executive Officers and Directors of the
Holding Company comprised 2.05% 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. 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.
<PAGE>
<PAGE>14
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.
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<PAGE>15
RELATIONSHIP WITH INDEPENDENT AUDITORS
The firm of Carmichael, Dunn, Creswell, and Sparks, CPAs served
First Citizens National Bank and First Citizens Bancshares, Inc. as
auditors for the year ending December 31, 1996. The Board is
proposing that this firm serve as auditors for the current year
(1997). 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, 1996 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 1998 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, 1997. 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.
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<PAGE>16
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 judgement 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, 1996, accompanies this report. A copy of the
10-K report to the Securities and Exchange Commission for the year
ended December 31, 1996 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 13, 1997
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<PAGE>17
FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38024
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 28, 1997, at the Annual Meeting of Shareholders to be held
in the Annex of First Citizens National Bank, on Wednesday, April 16,
1997, 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
INCUMBENT NOMINEES FOR ELECTION WHOSE TERMS WILL EXPIRE IN 2000
Eddie E. Anderson, E. H. Lannom, Jr., Milton E. Magee, Mary
F.McCauley, G. W. Smitheal III, P. H. White, Jr.
(2) Approval of Carmichael, Dunn, Creswell, and Sparks, CPAs as
auditor for the year ending December 31, 1997.
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 13, 1997
Signature
Signature if jointly held
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE>18
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 13, 1997 /s/Stallings Lipford
Stallings Lipford, Chairman
