<PAGE>1
FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38024
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 21, 1999
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 21, 1999 at 10:00 A.M. to consider and act upon the following
proposals:
1. The election of eight directors for term of three years
expiring in 2002; one director for term of two
years expiring in 2001; and one director for term of one
year expiring in 2000.
2. Approval of Carmichael, Dunn, Creswell, and Sparks, CPAs
as general auditors for the year ending December 31,
1999.
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,
1999 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 15th day of March, 1999.
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 21, 1999
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 21, 1999, 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 22, 1999.
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 INSTRUCTIONS ARE 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 THE ELECTION AS DIRECTORS AND "FOR" THE ELECTION OF
CARMICHAEL, DUNN, CRESWELL & SPARKS CPAS TO SERVE AS THE COMPANY'S
AUDITORS FOR THE YEAR ENDING 12/31/99. 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, 1998, there were
3,244,899 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, 1999. Holders of common
stock shall possess full voting rights for the election of Directors
and for all other purposes.
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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, 1998:
Name of Beneficial Ownership Percent
Title of Class Beneficial Owners Direct Indirect of Class
Common Capital Directors, Nominees 369,970 212,713 17.96%
Stock & Executive Officers
(23)
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 Elizabeth Magee Taylor
Stock 1789 North Highland
Jackson, TN 38301 69,861 105,693(1) 5.41%
Common Capital First Citizens Nat'l
Stock Bank Employee Stock
Ownership Plan
& Trust 760,434 23.43%
(1) Mrs. Taylor serves as co-trustee on 66,972 shares with Milton Eugene
Magee and/or First Citizens National Bank. Also reported as beneficial
ownership are 38,758 shares owned by Mrs. Taylor's spouse individually,
through a trust and by virtue of an affiliated interest.
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<PAGE>4
ELECTION OF DIRECTORS
The present Board of Directors consists of 24 members with one-third
of the terms expiring in 2000, another one-third in 2001 and the remaining
one-third in 2002. 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, 1998. This information is also provided
for continuing Directors whose terms expire in 2000 and 2001.
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
INCUMBENTS AND NOMINEE WHOSE TERMS WILL EXPIRE IN 2002
J. WALTER BRADSHAW 37 1993 28,142 *
Vice President & Director,
Bradshaw & Co. Insurors,
an independent insurance agency.
LARRY W. GIBSON 52 1995 6,161 *
President, Roberts-Gibson, Inc.,
gasoline jobber company.
L.D. PENNINGTON 70 1989 13,078 *
Chairman Emeritus of Board,
Centex Forcum-Lannom Inc., a
company of contractors,
engineers and developers.
Served as President & CEO of
Forcum-Lannom Assoc. Inc.
until 1994.
ALLEN G. SEARCY 57 1999 22,256 *
President of Allen Searcy
Builder-Contractor, a building
contractor for commercial and
residential properties. Mr.
Searcy is also a partner in
Allen's Building Materials
Company in Union City, TN and
owner of commercial real estate
and rental properties.
DAVID R. TAYLOR 53 1997 1,470 *
President & CEO of Centex Forcum
Lannom, Inc., a company of
contractors, engineers, and
developers.
DWIGHT STEVEN WILLIAMS 43 1991 3,159 *
Business Manager, Johnson
Funeral Home.
<PAGE>5
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
KATIE S. WINCHESTER 58 1990 28,383 *
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.
BILLY S. YATES 73 1973 17,139 *
President, General Appliance
and Furniture Company, retail
furniture & appliance outlet.
INCUMBENTS AND NOMINEE WHOSE TERMS WILL EXPIRE IN 2001
WILLIAM C. CLOAR 62 1991 15,821 *
Retired 1998 from Dyersburg
Fabrics, Inc., a textile
manufacturing plant. Mr. Cloar
served the company from 1997 to
his retirement as Senior Vice
President of Community
Relations. Previous to 1997
he served as Vice President of
Training and Employee
Development. Mr. Cloar served
Dyersburg Fabrics as Vice
President of Administration from
1994 to 1997 and as Vice President
of Administration & Human Resources
prior to the year 1994.
JAMES DANIEL CARPENTER 49 1993 2,553 *
Partner, Flatt Heating &
Air Conditioning.
RICHARD W. DONNER 48 1985 2,950 *
Vice President of Sales,
Dyersburg Fabrics, Inc., a
textile manufacturing plant.
BENTLEY F. EDWARDS 41 1997 525 *
Executive Vice President of
Burks Enterprise L.P., a
distributor of Dr. Pepper-Pepsi
Cola products. Chief Operating
Officer of Burks Beverage, L.P.
<PAGE>
<PAGE>6
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
JULIUS M. FALKOFF 69 1999 22,796 *
Owner and Managing Partner in
Reelfoot Warehousing (a rental
warehouse), Union City, TN. Mr.
Falkoff is also a owner in The
Money Place, LLC, a check
cashing, money gram and long
distance service provider.
RALPH E. HENSON 57 1997 52,045 1.60%
Vice President of First Citizens
Bancshares, Inc.; February 1993,
appointed Executive Vice
President and Loan Administrator
of First Citizens National Bank.
Previous to 1993 served First
Citizens National Bank as Senior
Vice President and Senior Loan
Officer.
STALLINGS LIPFORD 68 1960 73,955 2.28%
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.
LARRY S. WHITE 50 1997 55,532 1.71%
President of White & Associates
Insurance Agency, Inc., a general
insurance agency offering all
lines of insurance.
INCUMBENTS AND NOMINEE WHOSE TERMS WILL EXPIRE IN 2000
EDDIE EUGENE ANDERSON 51 1984 32,575 1.00%
Partner, Anderson Farms II.
Previously, Anderson Farms
until January 1, 1997.
JON MICHAEL DICKERSON 51 1999 81,361 2.44%
President, CEO, and Chairman
of the Board of First Volunteer
Bank, a subsidiary of First
Citizens Bancshares, Inc. Mr.
Dickerson served as President,
CEO, and Chairman of the Board
of First Volunteer Bank and First
Volunteer Corporation from 1987
to January 1, 1999.
<PAGE>
<PAGE>7
Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
BARRY T. LADD 58 1996 20,447 *
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.
E.H. LANNOM, JR. 74 1962 25,453 *
President, Forcum-Lannom, Inc.,
building contractor and building
materials distributor.
(Deceased February 6, 1999)
MILTON E. MAGEE 62 1969 130,184 4.01%
Partner, Chic Farm Co., general
farming. Partner Magee and Taylor,
FLP, general farming since 1997.
MARY F. MCCAULEY 68 1991 1,918 *
Professor Emeritus, Dyersburg
State Community College.
Professor of English at DSCC
until her retirement in 1994.
G.W. SMITHEAL, III 43 1993 3,506 *
Partner, Smitheal Farms &
Biesel and Smitheal Cattle
Company.
P.H. WHITE, JR. 67 1978 11,380 *
Owner, 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
seven times during 1998 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.
<PAGE>8
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 Barry Ladd, Stallings Lipford (Chairman),
Milton E. Magee, L. D. Pennington, P. H. White, Jr., Katie Winchester, and
Billy S. Yates. Director E. H. Lannom, Jr. also served on the Executive
Committee until his death in February 1999. Thirty-nine meetings were
held in 1998.
The Investment Committee consists of eight 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 1998. The Executive Committee serves as the
Investment Committee.
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: Milton E. Magee (Chairman), L. D. Pennington, P. H. White, Jr.,
and Billy S. Yates. Director E. H. Lannom, Jr. also served on the
Compensation Committee until his death in February 1999. The committee
met two times in 1998.
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
<PAGE>9
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 (Chairman), Larry Gibson, Green W.
Smitheal, III, and Larry White. Director E. H. Lannom also served onthe
Audit Committee until his death in February 1999. Four meetings were held
during 1998.
The Trust Committee is composed of seven 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 Walt Bradshaw, William C. Cloar, Larry W. Gibson, Barry T. Ladd, L. D.
Pennington, David Taylor, and Dwight Steven Williams, Trust Officers
serving on this committee are Hughes Clardy, Chairman and Sue Carolyn
Akins. Twelve meetings were held during the year.
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 three directors, Ralph Henson
(Chairman), Eddie E. Anderson, Mary F. McCauley, and a cross section of
managers from various departments within the bank. Three meetings were
held throughout 1998.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Fees are established by the Board on an annual basis. Fees
for 1998 were set at $500.00 per meeting for each Director and advanced on
a per meeting attended basis. In 1998 an annual retainer fee of $2,500.00
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 $10,000.00, 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 $100,000.00. As the Holding Company pays no
salaries, this information relates to all compensation paid by First
Citizens National Bank. The following tabulation is for the period ending
December 31, 1998.
<PAGE>
<PAGE>10
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Other Re- All
Name Annual stricted Securities Other
and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs (#) ($) ($)
Stallings 1998 161,114 55,475 16,000 -0- -0- -0- 1,678
Lipford(1) (2) (3) (4)
Chairman 1997 161,168 55,475 16,000 -0- -0- -0- 10,639
of Board of (2) (3) (4)
Directors 1996 150,320 49,000 15,000 -0- -0- -0- 9,137
of Banc- (2) (3) (4)
shares and 1995 142,027 33,278 15,000 -0- -0- -0- 9,137
of the Bank. (2) (3) (4)
Katie 1998 172,783 58,975 16,000 -0- -0- -0- 1,487
Winchester(1) (2) (3) (4)
CEO & 1997 147,298 50,225 16,000 -0- -0- -0- 1,487
President & (2) (3) (4)
Director 1996 129,830 42,000 15,000 -0- -0- -0- 1,487
of First (2) (3) (4)
Citizens 1995 115,032 26,250 14,210 -0- -0- -0- 968
Bancshares (2) (3) (4)
& First
Citizens
National Bank.
Ralph 1998 108,573 46,668 15,644 -0- -0- -0- 1,187
Henson (2) (3) (4)
Executive 1997 97,928 42,841 13,487 -0- -0- -0- 1,023
Vice (3) (4)
President 1996 93,520 14,950 10,781 -0- -0- -0- 951
& Loan (3) (4)
Administ. 1995 86,006 12,250 9,925 -0- -0- -0- 691
of First (3) (4)
Citizens
National
Bank & Vice
President
of First
Citizens
Bancshares Inc.
Barry T. 1998 111,421 37,975 15,084 -0- -0- -0- 1,346
Ladd(5) (2) (3) (4)
Executive 1997 101,186 34,475 13,967 -0- -0- -0- 1,125
Vice (2) (3) (4)
President 1996 77,506 24,500 10,833 -0- -0- -0- 450
and CAO of (2) (3) (4)
First 1995 60,557 6,000 6,598 -0- -0- -0- 225
Citizens (3) (4)
National
Bank &
Executive
Vice
President
of Bancshares.
<PAGE>
<PAGE>11
(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 $8,500.00 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.
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 twenty-one Directors, four 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, 1998 totaled $62,728. 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.
<PAGE>12
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, 1998 were approximately
$565,297.47.
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, Jeffrey
Agee, and Judy Long. 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 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 Employment Agreement in effect for Chairman Lipford also
provides for terms and conditions for part-time employment. During the
term of employment, Chairman Lipford shall serve as Chairman of the
Company or in such other position with responsibilities and authority
as may from time to time be assigned to him by the Board of Directors
of the Company. During 1998 Chairman Lipford devoted approximately 1,248
hours to the business affairs of the Company. In the year of 1999, he
will devote between 1,000 and 1,500 hours per year to the business
affairs of the Company. Beginning January 1, 2000, unless the Term of
Employment has not been extended, he will devote only such time to the
affairs of the Company as shall be appropriate in light of the
circumstances then existing. In addition, Chairman Lipford shall serve
on the Board of Directors of the Company during the Term of Employment
for so long as he is elected to such Board by the Shareholders of the
Company.
<PAGE>13
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.
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 periods
ending December 31, 1998 was $8,233,550 as of December 31, 1998. The
amount outstanding at year end 1998 was $8,233,550 at an average rate of
7.57 percent. The debt was incurred over a period of time and served to
finance business ventures and purchase real estate. As of December 31,
1997, $4,986,396 was loaned at an average interest rate of 8.05 percent.
On December 31, 1998, the Holding Company, through its only subsidiary,
First Citizens National Bank had an aggregate net loan total of
$278,220,000. Loans to Executive Officers and Directors of the Holding
Company comprised 3.33% 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.
<PAGE>
<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, 1998. The Board is proposing that this firm
serve as auditors for the current year (1999). 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,
1998 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 2000 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, 1999. 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 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, 1998, accompanies this report. A copy of the 10-K
report to the Securities and Exchange Commission for the year ended
December 31, 1998 will be furnished any shareholder requesting such copy
at no 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 15, 1999
<PAGE>
<PAGE>16
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 William C. Cloar, 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, 1999, at the
Annual Meeting of Shareholders to be held in the Annex of First Citizens
National Bank, on Wednesday, April 21, 1999, 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
INCUMBENTS AND NOMINEE FOR ELECTION WHOSE TERMS WILL EXPIRE IN 2002
J. Walter Bradshaw, Larry W. Gibson, L. D. Pennington, Allen G.
Searcy, David R. Taylor, Dwight Steven Williams, Katie S.
Winchester, Billy S. Yates.
NOMINEE FOR ELECTION WHOSE TERM WILL EXPIRE IN 2001
Julius M. Falkoff
NOMINEE FOR ELECTION WHOSE TERM WILL EXPIRE IN 2000
Jon Michael Dickerson
(2) Approval of Carmichael, Dunn, Creswell and Sparks, CPAs as
auditor for the year ending December 31, 1999
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 15, 1999
Signature
Signature if jointly held
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE>17
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 15, 1999 /s/Stallings Lipford
Stallings Lipford, Chairman
