<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CNB Bancshares, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CNB Bancshares, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
[LOGO] CNB BANCSHARES, INC.
Notice of
Annual Meeting
and Proxy Statement
Annual Meeting of Shareholders
April 16, 1996
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 22, 1996
To the Shareholders of
CNB Bancshares, Inc.
Notice is hereby given that the Annual Meeting of Shareholders of CNB
Bancshares, Inc. will be held at the Vanderburgh Auditorium, 715 Locust Street,
Evansville, Indiana on April 16, 1996, at 5:00 p.m., local time, for the purpose
of considering and voting upon the following matters:
1. The election of three Directors to Class II of the Company's Board of
Directors, each to serve a term of three years, until a successor shall
have been duly elected and qualified;
2. Any other business which may be brought before the meeting or any
adjournment thereof.
DAVID L. KNAPP
SECRETARY
PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER
YOU PLAN TO ATTEND THE MEETING IN PERSON OR NOT. IF YOU DO ATTEND THE MEETING,
YOU MAY THEN WITHDRAW YOUR PROXY, IF YOU WISH.
2
<PAGE>
CNB BANCSHARES, INC.
20 N.W. THIRD STREET
EVANSVILLE, INDIANA 47739-0001
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 16, 1996
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of CNB Bancshares, Inc. (the "Company") of proxies to be
voted at the Annual Meeting of Shareholders of the Company (the "Meeting") to be
held on April 16, 1996, at 5:00 p.m., local time, at the Vanderburgh Auditorium,
715 Locust Street, Evansville, Indiana, and at any adjournment thereof. This
Proxy Statement and the form of proxy were first mailed to shareholders on March
22, 1996. Any shareholder executing a proxy which is solicited hereby has the
power to revoke it. Revocation may be made effective by giving written notice
to the Company at any time prior to exercise of the proxy.
Proxies will be solicited by mail. They also may be solicited by officers
and regular employees of the Company, personally or by telephone, or other
electronic means, but such persons will not be specially compensated for their
services. All expenses of solicitation will be paid by the Company.
As of March 4, 1996, there were 17,845,131 outstanding shares of the
Company's Common Stock, no par value (the "Common Stock"). The Common Stock is
the Company's only class of stock outstanding. Only holders of record of such
Common Stock at the close of business on March 4, 1996, are entitled to notice
of and to vote at the Meeting. Each holder of Common Stock of record on that
date is entitled to one vote for each share of Common Stock held.
With respect to each matter to be acted upon at the Meeting, abstentions on
properly executed proxy cards will be counted for purposes of determining a
quorum at the Meeting; however, such abstentions and shares not voted by brokers
and other entities holding shares on behalf of beneficial owners will not be
counted in calculating voting results on those matters for which the shareholder
has abstained or the broker has not voted.
CERTAIN BENEFICIAL OWNERSHIP
The following table sets forth, as of December 31, 1995, the name and
address of the only person or entity known to management of the Company to
beneficially own more than 5% of the Company's Common Stock:
<TABLE>
<CAPTION>
VOTING POWER INVESTMENT POWER TOTAL SHARES PERCENT
NAME & ADDRESS OF ----------------- ------------------ BENEFICIALLY OF
BENEFICIAL OWNER SOLE SHARED SOLE SHARED OWNED CLASS
- ---------------------- --------- ------ --------- ------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
CNB Bancshares, Inc. 1,415,492 85,550 1,856,600 163,490 2,061,532 (a) 11.52
</TABLE>
(a) The Company (20 N. W. Third Street, Evansville, Indiana 47739-0001) itself
holds no shares as record owner. Subsidiaries of the Company, however, hold
shares in various fiduciary capacities and, by virtue of sole or shared
voting or investment power with respect to such shares, are deemed to own
them beneficially. As parent of its subsidiaries, the Company may be deemed
to share voting power or investment power, or both, as to all shares
beneficially owned by those subsidiaries and, therefore, may be deemed a
beneficial owner of all such shares. It is the practice of the subsidiaries
when holding shares as sole trustee or sole executor to vote said shares
but, where shares are held as co-executor or co-trustee, approval is
obtained from the co-fiduciary prior to voting.
3
<PAGE>
ELECTION OF DIRECTORS AND
INFORMATION WITH RESPECT TO DIRECTORS AND EXECUTIVE OFFICERS
In accordance with the provisions of the Company's Articles of
Incorporation, the Board of Directors is divided into three classes, as nearly
equal in number as possible, with all Directors to serve three-year terms, and
one class to be elected at each Annual Meeting of Shareholders.
The only item scheduled to be acted upon at the Meeting is the election of
three Directors to Class II of the Board of Directors, each to hold office for
three years (until the 1999 Annual Meeting of Shareholders) and until his
successor shall have been duly elected and qualified. The Indiana Business
Corporation Law requires that Directors be elected by a plurality of the votes
cast and, therefore, the three nominees receiving the greatest number of votes
cast will be elected as Class II Directors.
All proxies which are received by the Secretary in proper form prior to the
election of Directors at the Meeting, and which have not been revoked, will be
voted "FOR" the Board of Directors' three nominees for Class II, subject to any
specific voting instructions contained therein. All nominees have consented to
be named as candidates in this Proxy Statement and have agreed to serve if
elected. In the event any nominee declines or is unable to serve, it is
intended that the proxies will be voted for a successor nominee designated by
the Board of Directors. The Board of Directors knows of no reason to believe
that any nominee will decline or be unable to serve, if elected. Each of the
nominees listed herein currently serves as a Director of the Company.
The following information is provided with respect to each nominee for
Director and each present continuing Director whose term of office extends
beyond the Meeting:
INFORMATION REGARDING NOMINEES FOR
CLASS II DIRECTORS
------------------
(Term Expiring 1999)
<TABLE>
<CAPTION>
SHARES OF COMPANY STOCK
BENEFICIALLY OWNED AS OF
PRINCIPAL OCCUPATION(S) DECEMBER 31, 1995
FOR PAST 5 YEARS AND --------------------------
NAME, AGE OTHER DIRECTORSHIPS NUMBER % (b)
- --------- ------------------- -------------- ----------
<S> <C> <C> <C>
H. LEE COOPER, 57 (c) Chairman of the Board and Chief Executive Officer of the 88,701 (a) .47
Director of Company since 1983 Company.
JOHN D. ENGELBRECHT, 44 President, South Central Communications Corporation (a 28,047 .15
Director of Company since 1983 broadcasting and communications company).
ROBERT K. RUXER, 46 President, Ruxer Farms, Inc.; and Rolling Fields, Inc. 247,063 1.31
Director of Company since 1991
</TABLE>
4
<PAGE>
INFORMATION REGARDING DIRECTORS CONTINUING IN OFFICE
CLASS III DIRECTORS
-------------------
(Term Expiring 1997)
<TABLE>
<CAPTION>
SHARES OF COMPANY STOCK
BENEFICIALLY OWNED AS OF
PRINCIPAL OCCUPATION(S) DECEMBER 31, 1995
FOR PAST 5 YEARS AND -------------------------
NAME, AGE OTHER DIRECTORSHIPS NUMBER % (b)
- --------- ----------------------- ------ --
<S> <C> <C> <C>
JAMES J. GIANCOLA, 47 (c) President and Chief 45,995 (a) .24
Director of Company since Operating Officer of
1994 the Company since
1994, Executive Vice
President and Chief
Operating Officer of
the Company since
1992; prior to 1992,
President of Gainer
Bank, Merrillville,
Indiana.
ROBERT L. KOCH II, 57 President and Chief 39,678 .21 (d)
Director of Company since Executive Officer,
1983 George Koch Sons, Inc.
(manufacturing). Mr.
Koch also serves as a
director of SIGCORP,
Inc. (a gas and
electric utility
holding company) and
Bindley Western
Industries (a national
wholesale distributor
of pharmaceutical and
related products).
PAUL G. WADE, 56 President, Wade Oil 30,227 .16
Director of Company since Corporation (a
1989 regional crude oil
producer).
LAWRENCE J. KREMER, 54 Corporate Vice 200 --
Director of Company since President, Materials,
1995 Emerson Electric
Company (a
manufacturer of
electronic products
and systems) since
1993; prior to 1993,
Senior Vice President,
Whirlpool Corp.
</TABLE>
INFORMATION REGARDING DIRECTORS CONTINUING IN OFFICE
CLASS I DIRECTORS
-----------------
(Term Expiring 1998)
<TABLE>
<CAPTION>
SHARES OF COMPANY STOCK
BENEFICIALLY OWNED AS OF
PRINCIPAL OCCUPATION(S) DECEMBER 31, 1995
FOR PAST 5 YEARS AND -------------------------
NAME, AGE OTHER DIRECTORSHIPS NUMBER % (b)
- --------- ----------------------- ------ --
<S> <C> <C> <C>
JERRY A. LAMB, 61 Chairman of the 48,374 .26
Director of Company since Board, American
1983 Sheet Extrusion
Corporation (a
manufacturer of
custom and
proprietary plastic
products). Mr. Lamb
also serves as a
director of SIGCORP,
Inc. (a gas and
electric utility
holding company).
BURKLEY F. MCCARTHY, 65 President, Fendrich 14,228 .08
Director of Company since Industries, Inc.
1983 (diversified
manufacturer).
THOMAS W. TRAYLOR, 56 President, Traylor 167,971 .89
Director of Company since Bros., Inc.
1983 (underground and
marine construction).
</TABLE>
- ----------------------------------------
(a) The number of shares listed for Messrs. Cooper and Giancola includes the
number of exercisable stock options disclosed in the table on page 9 of the
Aggregated Option Exercises in Last Fiscal Year Table.
(b) The total number of outstanding shares of the Company's Common Stock used to
compute the percent of class assumes the exercise of options and convertible
debentures for the purchase of 910,966 shares.
(c) Mr. Giancola was elected to the additional position of Chief Executive
Officer of the Company on March 11, 1996. Mr. Cooper will continue as
Chairman of the Board of the Company.
(d) In addition to the shares shown above, Mr. Koch has contingent voting power
with respect to 127,513 shares held in a trust by his father's estate, in
the event that those shares are not voted by his mother.
5
<PAGE>
The business experience of each of the above listed nominees and Directors
during the past five years was that typical to a person engaged in the principal
occupation listed. Unless otherwise indicated, each of the nominees and
Directors has had the same position or another executive position with the same
employer during the past five years. Beneficial ownership of shares, as
determined in accordance with applicable Securities and Exchange Commission
rules, includes shares as to which a person directly or indirectly has or shares
voting power and/or investment power.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held ten regular meetings during the
fiscal year ended December 31, 1995. During 1995, each Director attended 75% or
more of the aggregate number of meetings of the Board of Directors and of any
committee of which he was a member, except for Thomas W. Traylor, who attended
74% of such meetings.
Company Directors, other than those who also serve as officers of the
Company or its subsidiaries, receive for their services a fee of $5,000 per year
and $500 per meeting attended, plus $500 per meeting of other committees
attended, with the exception of joint committee meetings held with the Directors
of The Citizens National Bank of Evansville, for which a fee of $375 per meeting
is paid. Under the terms of the Company's 1995 Stock Incentive Plan, the non-
employee Directors of the Company automatically receive 1,000 non-qualified
stock options each year on the first business day following each Annual Meeting
of Stockholders of the Company at which he or she is elected, reelected, or
continues as a Director. The exercise price per share of Common Stock subject to
such options equals the market value of a share of Common Stock as of the date
of grant and the options become exercisable on the second anniversary of the
date of grant. During 1995, each of the seven non-employee Directors of the
Company received 1,050 options each with an exercise price of $28.46 per share
of Common Stock, as adjusted to reflect the 5% stock dividend issued on November
20, 1995.
The Board of Directors has an Audit Committee. During 1995, the Audit
Committee, consisting of Burkley F. McCarthy (Chairman), Ronald C. Coleman
(until May 1995) and Robert K. Ruxer, met four times. The Audit Committee is
responsible for monitoring the accounting, auditing and financial reporting
practices of the Company and its subsidiaries. The Audit Committee also
recommends to the Board of Directors the appointment of the Company's
independent auditors.
The Board of Directors has a Nominating and Corporate Governance Committee
(the "Nominating Committee"). During 1995, the members of the Nominating
Committee were Robert L. Koch II (Chairman), John D. Engelbrecht, Jerry A. Lamb,
Burkley F. McCarthy, Robert K. Ruxer and H. Lee Cooper. The Nominating
Committee, which met twice in 1995, is responsible for promoting effective
recruiting, staffing, and organization of the Company's Board of Directors as
well as managing the Board's self-appraisal process. The Nominating Committee
will consider nominees for Director submitted in writing to the Secretary of the
Company.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of December 31, 1995, the number of
shares of Common Stock of the Company owned beneficially, including currently
exercisable options and options which become exercisable within 60 days, by
certain executive officers including those officers named in the Summary
Compensation Table and by Directors and executive officers as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERS NUMBER (a) PERCENT OF CLASS (b)
----------------- ---------- ----------------
<S> <C> <C>
H. Lee Cooper 88,701 .47
James J. Giancola 45,995 .24
William E. Vieth 70,796 .38
David L. Knapp 46,183 .25
M. Lynn Cooper 23,404 .12
John R. Spruill 6,608 .04
All Directors, Nominees and Executive 974,473 5.18
Officers as a group....................
</TABLE>
(a) The number of shares listed for each named executive officer includes the
number of exercisable stock options disclosed in the table on page 9 of the
Aggregated Option Exercises in Last Fiscal Year, and the number of shares
listed for Mr. Spruill includes 3,716 stock options which became exercisable
on March 11, 1996.
(b) The total number of outstanding shares of the Company's Common Stock used to
compute the percent of class assumes the exercise of options and convertible
debentures for the purchase of 910,966 shares.
6
<PAGE>
Under Federal securities laws, the Company's Directors, its executive
officers, and any persons holding more than 10% of the Company's Common Stock,
if any, are required to report their initial ownership of the Company's Common
Stock and any subsequent changes in that ownership to the Company, the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. Specific due dates for these reports have been established, and
the Company is required to disclose in this Proxy Statement any failure to file
such reports by these dates during 1995. To the Company's knowledge, based
solely on written representations of its Directors and executive officers and a
review of copies of the reports that they have filed with the Securities and
Exchange Commission, all of these filing requirements were satisfied during the
fiscal year ended December 31, 1995.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
awarded or paid during each of the Company's last three fiscal years to the
Company's Chief Executive Officer and each of the Company's four other most
highly compensated executive officers, based on salary and bonus earned during
1995. In addition to the named executive officers below, Mr. John R. Spruill,
Executive Vice President and Chief Financial Officer, joined the Company in
September 1995. Prior to joining the Company, Mr. Spruill held a similar
position with Southern National Corporation in North Carolina.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation
Compensation Awards
---------------------------------------------------
Option All Other
Name & Principal Position Year Salary Bonus Shares Compensation
- -----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c)
<S> <C> <C> <C> <C> <C>
H. Lee Cooper 1995 $301,600 $60,320 17,118 $8,783
Chairman and 1994 290,000 97,875 16,055 8,700
Chief Executive Officer (d) 1993 265,000 37,763 16,008 6,697
James J. Giancola 1995 222,425 44,485 9,237 6,408
President and 1994 194,334 51,013 8,027 5,830
Chief Operating Officer (d) 1993 175,000 26,250 8,004 3,919
William E. Vieth 1995 195,000 29,250 6,917 5,585
Executive Vice President 1994 187,917 32,885 8,027 5,688
1993 175,000 24,063 8,004 5,638
David L. Knapp 1995 182,450 27,368 7,577 5,209
Executive Vice President 1994 159,584 41,891 6,699 4,788
1993 142,000 19,525 6,671 4,615
M. Lynn Cooper 1995 157,410 23,612 5,584 4,245
Executive Vice President 1994 143,100 17,888 3,985 4,293
1993 135,000 16,875 4,003 4,387
=============================================================================================================================
(a) These amounts represent bonuses payable pursuant to the Company's Short Term Incentive Plan (STIP) described elsewhere in
this Proxy Statement.
(b) The options listed have been adjusted to reflect stock dividends.
(c) These amounts represent the Company's 401(k) Plan and CNB Bancshares, Inc. Savings Equalization Plan ("SEP") contributions.
The purpose of the SEP is to provide a supplemental savings program for eligible employees unable to make adequate
contributions to the Company's 401(k) Plan because of Internal Revenue Service regulations.
(d) Mr. Giancola was elected to the additional position of Chief Executive Officer of the Company on March 11, 1996.
Mr. H. Lee Cooper will continue as Chairman of the Board of the Company.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
STOCK OPTIONS
The following tables summarize option grants to and exercises by the
named executive officers during 1995 as well as the value of options held by
such persons at the end of the year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Individual Grants Potential Realizable
- -------------------------------------------------------------------- Value at Assumed Annual
Number of % of Total Rates of Stock Price
Securities Options Exercise or Appreciation
Underlying Granted to Base Price For Option Term (b)
Options Employees in ($ Per Expiration -----------------------
Name Granted (a) Fiscal Year Share) Date 5% 10%
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
H. Lee Cooper 17,118 14.43% $28.33 6/02/05 $305,017 $772,972
James J. Giancola 9,237 7.78 28.33 6/02/05 164,589 417,101
William E. Vieth 6,917 5.83 28.33 6/02/05 123,250 312,341
David L. Knapp 7,577 6.39 28.33 6/02/05 135,011 342,143
M. Lynn Cooper 5,584 4.71 28.33 6/02/05 99,498 252,148
==============================================================================================
(a) All options were granted on June 2, 1995, and the exercise price was
established at the then current market value. All options became
exercisable on December 2, 1995.
(b) Pre-tax gain. The dollar amounts under these columns represent potential
realizable value at the end of the 10-year option term, assuming annual
appreciation in the Common Stock price of 5% and 10%, respectively, less
the exercise price. The appreciation rates are set by the Securities and
Exchange Commission and, therefore, are not intended to forecast possible
future appreciation in the Common Stock price.
===============================================================================
</TABLE>
8
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options In-The-Money Options
Shares at Fiscal Year-End at Fiscal Year-End (a)
Acquired Value -----------------------------------------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
H. Lee Cooper --- --- 40,198 24,991 $160,761 $53,637
James J. Giancola --- --- 30,397 2,875 104,716 2,596
William E. Vieth --- --- 28,077 2,875 104,329 2,596
David L. Knapp --- --- 27,618 --- 89,428 ---
M. Lynn Cooper --- --- 16,908 --- 48,515 ---
- -----------------------------------------------------------------------------------------------------
(a) Pre-tax gain. Calculated as the fair market value of Common Stock at year-end of $28.50 per
share less the exercise price.
- -----------------------------------------------------------------------------------------------------
</TABLE>
CHANGE OF CONTROL
Messrs. H. Lee Cooper, Giancola, Vieth, Knapp, M. Lynn Cooper, and Spruill
each have entered into an employment agreement with the Company which becomes
effective upon any future change of control of the Company and provides for a
three-year term commencing as of that date. If during the term of the agreement,
or the one-year period prior thereto, the officer's employment is terminated by
the Company (other than for cause), or if the officer voluntarily leaves the
employ of the Company during the term under certain circumstances, the agreement
provides for a payment to the officer of an amount equal to a maximum of three
times the officer's annual authorized base salary. The amount of any such
payments would be limited to the amount deductible by the Company for Federal
income tax purposes at the time the agreements were entered into. The agreement
also provides for the continuation of medical and hospitalization insurance
coverage to the officer, after any such termination of employment. The officer
would be responsible for the cost of all such insurance premiums. In addition,
upon receiving any payment under the agreement, the officer is prohibited, prior
to age 65, or within three years of the date of a change of control, whichever
occurs first, from engaging in any competing banking or bank holding company
business within a 60 mile radius of Evansville, Indiana.
PENSION PLAN
On an ongoing basis, the Company combines the various pension plans of its
newly-acquired subsidiaries into one noncontributory pension plan, the CNB
Bancshares, Inc. Employee Pension Plan (the "Pension Plan"). The Pension Plan is
for the benefit of all full-time and eligible part-time employees. Additionally,
certain executive officers (including four executive officers named in the
Summary Compensation Table) of the Company participate in the CNB Bancshares,
Inc. Pension Equalization Plan (the "PEP"). The purpose of the PEP is to
supplement the benefits payable under the Pension Plan to the extent they are
reduced on account of the maximum compensation and maximum benefit limitations
imposed by the Internal Revenue Code.
Full-time employees become eligible to participate in the Pension Plan when
they have reached the age of 21 and have one year of continuous service.
Participants are fully vested after five years of continuous service in the
Pension Plan. The Pension Plan provides for full monthly benefits upon reaching
age 65, the normal retirement age. Early retirement becomes available at age 55
with reduced monthly benefits. The cost of the Pension Plan is based on
actuarial valuations in accordance with the requirements of the Internal Revenue
Service and the Department of Labor.
9
<PAGE>
The following tables present annual retirement benefits upon reaching age
65 under the Pension Plan and the PEP combined based upon the highest five
years' average earnings and years of service indicated and when those years of
service were credited.
<TABLE>
<CAPTION>
PENSION PLAN TABLE A
- --------------------------------------------------------------------------------------------
Estimated Annual Pension
Based upon Years of Service Indicated
Average Annual Earnings for the Highest ---------------------------------------------------
Compensated Five Years of Service 5 Years 10 Years 15 Years 20 Years 25 Years
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 50,000................ $ 5,375 $10,750 $ 16,125 $ 21,500 $ 26,875
100,000................ 11,000 22,000 33,000 44,000 55,000
150,000................ 16,625 33,250 49,875 66,500 83,125
200,000................ 22,250 44,500 66,750 89,000 111,250
250,000................ 27,875 55,750 83,625 111,500 139,375
300,000................ 33,500 67,000 100,500 134,000 167,500
350,000................ 39,125 78,250 117,375 156,500 195,625
400,000................ 44,750 89,500 134,250 179,000 223,750
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE B
- --------------------------------------------------------------------------------------------
Estimated Annual Pension
Based upon Years of Service Indicated
Average Annual Earnings for the Highest ---------------------------------------------------
Compensated Five Years of Service 5 Years 10 Years 15 Years 20 Years 25 Years
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 50,000................ $ 3,602 $ 7,204 $ 10,806 $ 14,408 $ 18,010
100,000................ 7,852 15,704 23,556 31,408 39,260
150,000................ 12,102 24,204 36,306 48,408 60,510
200,000................ 16,352 32,704 48,056 65,408 81,760
250,000................ 20,602 41,204 61,806 82,408 103,010
300,000................ 24,852 49,704 74,556 99,408 124,260
350,000................ 29,102 58,204 87,306 116,408 145,510
400,000................ 33,352 66,704 100,056 133,408 166,760
- --------------------------------------------------------------------------------------------
</TABLE>
Benefits under the Pension Plan and the PEP are based upon (a) the
participant's average base compensation (annual salary as reported in the
Summary Compensation Table excluding bonuses) during the five consecutive years
in which his compensation was the highest, (b) the number of years of service,
and (c) the years in which that service was credited. On January 1, 1994 the
benefits under the Pension Plan and the PEP were amended such that all years of
service credited after January 1, 1994 result in annual retirement benefits as
listed in Pension Table B. All years of service credited prior to January 1,
1994 result in annual retirement benefits as listed in Pension Table A. Eligible
compensation under the Pension Plan is limited to the amount on which a pension
expense deduction may be based under current Internal Revenue Service
regulations (which amount was $150,000 in 1995). Compensation in excess of the
Internal Revenue Service limitations is taken into account under the PEP. The
years of service factor under the Pension Plan reaches its peak after 25 years
of service. The annual retirement benefits are not subject to any deduction for
Social Security or other offset amounts.
The five executive officers named in the Summary Compensation Table of the
Company during 1995 have accumulated the following number of years of credited
service under Pension Plan A: H. Lee Cooper, 25; William E. Vieth, 25; James J.
Giancola, 1; David L. Knapp, 25; M. Lynn Cooper, 7. Messrs. James J. Giancola
and M. Lynn Cooper have each earned three years of credited service under
Pension Plan B.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Corporate Structure Committee (the "Compensation
Committee") of the Board of Directors, which consists solely of the non-employee
Directors named below, met seven times in 1995. The Compensation Committee is
responsible for establishing and administering an equitable salary and benefits
program for all officers. The Compensation Committee also administers the
Company's Executive Compensation Program, which was originally adopted in 1988
to support long and short-term objectives critical to the success of the
Company. These objectives are to:
. attract and retain a pool of high caliber executive talent;
. motivate and reward outstanding executive and corporate performance; and
. link shareholder related performance measures of earnings per share and
return on average assets with Company and individual performance goals.
In order to achieve these objectives, the Executive Compensation Program
consists of three elements: 1) base salary, 2) a Short-Term Incentive Plan, and
3) a Long-Term Stock Incentive Plan. The overall program is reviewed at least
annually by the Compensation Committee, and any modifications are approved by
the entire Board of Directors of the Company.
The Compensation Committee believes the Executive Compensation Program
should be based on maintaining base salaries at sufficient levels to attract and
retain qualified executive talent. Further, the Compensation Committee believes
that a substantial portion of cash compensation should be related to specific
annual performance criteria such as earnings per share growth and return on
average assets, thereby emphasizing achievement of near-term results that
directly affect shareholder value. In order to appropriately align management's
objectives with the long-term financial interests of shareholders, and to
maintain a balance between short-term and long-term goals, the Compensation
Committee encourages management to have a proprietary interest in the Company
through increased stock ownership. The Compensation Committee has not
established target equity ownership levels for its executives, but it does
achieve increased stock ownership through the annual grant of stock options and
the payment of incentive awards through a combination of cash and Common Stock.
The Compensation Committee believes the annual award of stock options and the
payment of incentive awards to be an important part of the Executive
Compensation Program.
BASE SALARY PLAN
The Compensation Committee determines the annual base salaries and salary
ranges for the top four corporate officers. The Compensation Committee also
approves the salary ranges for other officers of the Company. The determination
of base salaries and ranges is based upon competitive norms for similar
positions in a comparison group of fourteen regional bank holding companies. The
companies in the comparison group are similar to the Company in either asset
size, earnings performance, or geographic location. In order to assist in this
process, the Company retains an independent consultant to provide such
information to the Compensation Committee. Actual base salaries are tied to the
performance of the individual executives against standards established for each
officer at the beginning of each year, as well as the relationship of actual
salary to the midpoint of the applicable salary range. These standards were
considered by the Compensation Committee in establishing the base salary of the
Chief Executive Officer. In setting the salary, the Committee evaluated the
performance of the Chief Executive Officer on the basis of the Company's
earnings, the strength and depth of management, and the increase in shareholder
value during the year. The base salaries of the Chief Executive Officer and the
other officers as provided in the Summary Compensation Table were set at or near
the midpoints of the respective salary ranges by the Compensation Committee.
11
<PAGE>
SHORT-TERM INCENTIVE PLAN
Since 1989, the Company has maintained an annual Short-Term Incentive Plan
(the "STIP") for certain key officers. Fifty-four officers, including those
named in the Summary Compensation Table, participated in the STIP during 1995.
The STIP provides for the payment of additional compensation contingent upon the
achievement of certain corporate and shareholder-related performance goals and
the participant's achievement of certain individual performance goals. The
awards are based upon a percentage of the participant's base salary. STIP
participants are required to receive at least one-third of their award in
Company Stock, which is valued at market price on award date. The Company
retains an independent consultant to assist the Compensation Committee in its
annual review of the STIP and in the design of annual corporate and shareholder-
related performance goals. The corporate and shareholder-related goals are
intended to stretch the efforts of management to achieve higher performance
levels given the facts and circumstances known to the Compensation Committee at
the time the goals are established. At the beginning of each plan year,
participants establish individual goals which are linked to the Company's
business and strategic plans. The individual goals relate to the specific
business segments for which the participant has responsibility and are intended
to challenge the participants to perform beyond expected levels of performance.
The Compensation Committee has established four three-tier payout matrices
based on specific corporate and shareholder-related performance goals relating
to the Company's return on average assets and growth of earnings per share.
Participants have been assigned to one of the four payout matrices based upon
their level of responsibility and expected level of contribution to the
Company's achievement of its corporate and shareholder-related performance
goals. The payout matrices used to determine the amount of awards based solely
upon the Company's performance range from 7-1/2% to 60% of a participant's base
salary. The actual amount of a participant's award under the STIP is calculated
as follows. First, the corporate component of the participant's award is
determined by reference to the tier to which the participant had been assigned
under the payout matrix and the performance of the Company in relation to the
pre-established corporate and shareholder-related performance goals. Second, the
amount of the participant's award, determined under the first step, may be
increased or decreased (up to a maximum of 50% of the award) based upon the
participant's achievement of his or her individual goals during the plan year.
The STIP allows for the payment of awards of up to a maximum of 5% of a
participant's base salary in the event the participant achieves his or her
individual performance goals, but the Company fails to achieve its corporate and
shareholder-related performance goals.
For 1995, the Company exceeded the earnings per share target but fell just
short of the return on average assets (ROA) target. In evaluating the Company's
performance against these targets, the Compensation Committee considered the
$980 million (37%) increase in the Company's assets from 1994 to 1995. The
increase was largely due to the completion of seven mergers and acquisitions the
largest of which, UF Bancorp., Inc. ("UFB"), occurred in the third quarter and
accounted for more than one-half of the increase. The Compensation Committee
also took into consideration the fact that net income in 1995 was significantly
reduced by the restatement of the Company's earnings for the first half of the
year to include, under the pooling of interests accounting rules, the pre-merger
operating results of UFB with the Company. Further, the regulatory approval
process on two acquisitions was completed later in the year than anticipated,
delaying the implementation of cost reduction strategies and reducing expected
earnings benefits in 1995. Each of these factors contributed to ROA being below
the target level that was established at the beginning of the year. After
considering the foregoing factors, the Compensation Committee decided to award
bonuses, at the minimum level of their respective payout matrices, to each
participant, including the Chief Executive Officer, who achieved their
individual performance goals.
12
<PAGE>
LONG-TERM STOCK INCENTIVE PLAN
The Company maintains the Long-Term Incentive Stock Option Plan (the "ISOP)
and the 1995 Stock Incentive Plan (the "Plan"). The Plan, which was established
in 1995, essentially replaced the ISOP, which was established in 1992. Although
no further grants are contemplated under the ISOP, all unexercised options
granted thereunder will remain outstanding until they are exercised and/or
forfeited or otherwise expire pursuant to their terms. The Board and the
Compensation Committee believe that a flexible long-term, stock-based incentive
plan will enhance the Company's ability to attract, retain and reward management
with exceptional talent and will provide the Company with the ability to develop
incentive programs which are responsive to the demands of the marketplace. The
Compensation Committee also believes that the stock option grants afford a
desirable long-term compensation method because they closely align the interests
of management with those of shareholders. Thirty-seven officers, including those
listed in the Summary Compensation Table, participate in the Plan. During 1995,
the Compensation Committee granted stock options to eligible Plan participants.
In determining the grants of stock options to the Chief Executive Officer, as
well as other named officers in the Summary Compensation Table, the Compensation
Committee took into account the respective scope of responsibility, performance
requirements, and recent and expected contributions of the Plan participants to
the Company's achievement of its long-term performance objectives.
1995 Compensation Committee Robert L. Koch II, Chairman
John D. Engelbrecht
Jerry A. Lamb
Burkley F. McCarthy
SHAREHOLDER RETURN PERFORMANCE COMPARISONS
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock against the cumulative total return of the
S&P 500 and the NASDAQ Bank Indices over the past five years based on an initial
$100 investment on December 31, 1990. This analysis assumes that all dividends
are reinvested. In prior years, the Company has compared its cumulative total
shareholder return to the NASDAQ Composite Index rather than the S&P 500 Index
as presented below. The Company believes the S&P 500 to be a better indicator of
the performance of the broader stock market than the NASDAQ Composite Index
which is heavily weighted with companies in the technology industry. The
cumulative total return for the five years ended December 31, 1995 of the
Company's Common Stock was 118% as compared to 296% and 115% for the NASDAQ
Composite and S&P 500 Indices, respectively. The compound annual total return
for CNB Bancshares, Inc. from 1990 through 1995 was approximately 17%.
Comparison of Five Year Cumulative
Total Return of CNB Bancshares, Inc. Versus
S&P 500 and NASDAQ Bank Indices
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CNB 100 121 163 199 211 218
S&P 500 100 130 140 154 156 215
Nasdaq Banks 100 164 239 272 271 404
</TABLE>
13
<PAGE>
TRANSACTIONS WITH DIRECTORS, OFFICERS AND ASSOCIATES
Directors and officers of the Company, and some of the corporations and
firms with which certain Directors and officers are associated, have been
indebted to the Company's subsidiary banks for loans of $60,000 or more, and it
is anticipated that some of these persons, corporations and firms will continue
to be indebted to the subsidiary banks on a similar basis in the future. All
loans extended to such persons, corporations and firms, since the beginning of
the last full fiscal year, were made in the ordinary course of business and did
not involve more than normal risk of collectibility or present other unfavorable
features. All such loans were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the same time for
comparable bank transactions with unaffiliated persons.
Outside of normal customer relationships, none of the Directors or officers
of the Company, or the corporations and firms with which such persons are
associated, currently maintains or has maintained since the beginning of the
last full fiscal year, any significant business or personal relationship with
the Company or its subsidiaries.
INDEPENDENT AUDITORS
During the year ended December 31, 1995, Geo. S. Olive & Co., LLC was
employed to perform the annual audit and to render other services. Geo. S. Olive
& Co., LLC has served as independent auditors of the Company each year since its
formation in 1984.
Representatives of Geo. S. Olive & Co., LLC will be present at the Meeting
and will be available to answer questions and discuss matters pertaining to the
Independent Auditor's Report contained in the 1995 Annual Report to
Shareholders, and they will have the opportunity to make a statement, if they so
desire.
SHAREHOLDER PROPOSALS
Shareholder proposals to be considered for inclusion in the proxy statement
and considered at the Meeting must be submitted on a timely basis. Proposals for
the 1997 Annual Meeting of Shareholders must be received by the Company no later
than November 22, 1996. Any such proposals, together with supporting statements,
should be directed to the Secretary of the Company.
OTHER MATTERS
The Company will provide without charge to each shareholder, upon written
request, a copy of the Company's 1995 Annual Report on Form 10-K, including the
financial statements and schedules thereto, required to be filed with the
Securities and Exchange Commission. All written requests should be directed to
Mr. Ralph L. Alley, Senior Vice President and Controller, CNB Bancshares, Inc.,
P.O. Box 778, Evansville, Indiana, 47705-0778.
The Board of Directors of the Company is not aware of any other matters
which will be presented for consideration at the Meeting. The proxies may,
however, be voted with discretionary authority with respect to any other matters
that may properly come before the Meeting.
By Order of the Board of Directors
DAVID L. KNAPP
Secretary
March 22, 1996
14
<PAGE>
PROXY
CNB BANCSHARES, INC.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 16, 1996
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned shareholder of CNB Bancshares, Inc., an Indiana corporation
(the "Company"), hereby appoints James J. Giancola, John R. Spruill, Robert L.
Koch II, and each of them with full power to act alone, the true and lawful
attorneys-in-fact and proxies of the undersigned, with full power of
substitution and revocation, and hereby authorizes them and each of any of them,
to represent and to vote all shares of Common Stock of the Company held of
record on March 4, 1996, which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held at the Vanderburgh Auditorium,
715 Locust Street, Evansville, Indiana on April 16, 1996, at 5:00 p.m., local
time, and at any adjournment thereof, with all powers the undersigned would
possess if personally present, as follows:
PLEASE SPECIFY CHOICES BY CLEARLY MARKING THE APPROPRIATE LINE.
ELECTION OF DIRECTORS:
Nominees: H. Lee Cooper, John D. Engelbrecht, and Robert K. Ruxer
FOR all nominees listed above (except vote withheld from the
------- following nominees, if any.)
------------------------------------------------------------
WITHHOLD AUTHORITY to vote for all nominees above.
-------
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE
NOMINEES OF THE BOARD OF DIRECTORS. IF ANY OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF
MANAGEMENT.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears at left.
If signing as a representative, please
include capacity.
--------------------------------------------
Signature of Shareholder
Dated: , 1996
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Signature of Shareholder
Dated: , 1996
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