SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended DECEMBER 31, 1998
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______ to ______.
CNB BANCSHARES, INC. 0-11510
(Exact name of registrant as specified (Commission file number)
in its charter)
INDIANA 35-1568731
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
20 N.W. THIRD STREET, EVANSVILLE, INDIANA 47739
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (812) 456-3400
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
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COMMON STOCK, NO PAR VALUE NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant was $1,259,576,000 as of March 5, 1999.
The number of shares outstanding of the registrant's common stock, without
par value, as of March 5, 1999 was 35,206,103 shares.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1998. (Part I, Part II and Part IV)
(2) Portions of the Registrant's Proxy Statement for Annual Meeting of
Shareholders to be held April 21, 1999. (Part III)
Exhibit index is on pages 20 and 21.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(A) FINANCIAL STATEMENTS AND SCHEDULES
(1) The following consolidated financial statements of the Corporation,
included on pages 38 through 62 of the Corporation's Annual Report
to Shareholders for the year ended December 31, 1998, are hereby
incorporated by reference herein:
- Consolidated Balance Sheet at December 31, 1998 and 1997.
- Consolidated Statement of Income, years ended December 31,
1998, 1997 and 1996.
- Consolidated Statement of Changes in Shareholders' Equity,
years ended December 31, 1998, 1997 and 1996.
- Consolidated Statement of Cash Flows, years ended December 31,
1998, 1997 and 1996.
- Notes to Consolidated Financial Statements.
- Independent Auditors' Report.
(2) All schedules are omitted because they are not applicable or not
required, or because the required information is included in the
consolidated financial statements or related notes.
(B) REPORTS ON FORM 8-K
None.
(C) EXHIBITS
(1) Exhibits required to be filed by Item 601(a) of Regulation S-K are
included as exhibits to or incorporated by reference in this Report
as follows:
3(i) - Restated Articles of Incorporation of the Corporation, filed
as Exhibit 3(a) to the Corporation's Registration Statement
on Form S-8 POS dated May 18, 1998, Registration Statement
No. 333-46837, is incorporated herein by reference.
3(ii) - Amended Bylaws of the Corporation as in effect prior to June
15, 1999.
3(iii) - Amendment to Amended Bylaws of the Corporation adopted June
15, 1999.
4 - No long-term debt instrument issued by the Corporation
exceeds 10% of the consolidated total assets of the
Corporation and its subsidiaries. In accordance with
paragraph 4 (iii) of Item 601(b) of Regulation S-K, the
Corporation will furnish to the Securities and Exchange
Commission upon request copies of long-term debt instruments
and related agreements.
<PAGE>
10* - (1) The following Executive Compensation Plans and
Arrangements, filed as Exhibits 10(1)(c) and (d) to the
Corporation's 1992 Annual Report on Form 10-K, are
incorporated herein by reference:
(a) CNB Bancshares, Inc. 1992 Incentive Stock Option
Plan; and
(b) Citizens Incentive Savings Plan.
(2) The following Management Contract and Executive
Compensation Plans, filed as exhibits 10 (3)(b) and 10
(3)(c) to the Corporation's 1994 Annual Report on Form
10-K, are incorporated herein by reference.
(a) CNB Bancshares, Inc. Savings Equalization Plan, dated
May 1, 1994.
(b) CNB Bancshares, Inc. Pension Equalization Plan, dated
May 1, 1994.
(3) The CNB Bancshares Inc. 1995 Incentive Stock Option Plan
is incorporated herein by reference to the Corporation's
filing with the Securities and Exchange Commission as an
exhibit to a Registration Statement on Form S-8,
Registration No. 33-60431.
(4) The following Management Contracts are incorporated
herein by reference to the Corporation's filing with the
Securities and Exchange Commission as exhibits (10) (a)
through (10) (e) to a Registration Statement on Form S-4,
Registration No. 333-46837:
(a) Change of Control Agreement, effective August 8,
1997, between the Corporation and M. Lynn Cooper; and
(b) Change of Control Agreement, effective June 3, 1997,
between the Corporation and James J. Giancola; and
(c) Change of Control Agreement, effective June 3, 1997,
between the Corporation and Marvin Huff, Jr.; and
(d) Change of Control Agreement, effective May 28, 1997,
between the Corporation and David L. Knapp; and
(e) Change of Control Agreement, effective May 23, 1997
between the Corporation and John R. Spruill.
(5) The following Management Contracts filed as exhibits
10(5)(a) through 10(5)(d) to the Corporation's 1997
Annual Report on Form 10-K, are incorporated herein by
reference:
(a) Change of Control Agreement, effective May 23, 1997,
between the Corporation and John N. Daniel, Jr.; and
(b) Change of Control Agreement, effective June 9, 1997,
between the Corporation and James R. Dodd; and
(c) Change of Control Agreement, effective May 23, 1997,
between the Corporation and Douglas R. Hanks; and
(d) Change of Control Agreement, effective May 23, 1997,
between the Corporation and David M. Viar.
<PAGE>
(6) (a) Change of Control Agreement, effective February 16,
1998, between the Corporation and Roger Forystek; and
(b) Change of Control Agreement, effective January 12,
1998, between the Corporation and Thomas A. Galovic;
and
(c) Change of Control Agreement, effective January 1,
1998, between the Corporation and Anthony L.
Guerrerio; and
(d) Change of Control Agreement, effective January 1,
1998, between the Corporation and David A. Rolfe; and
(e) Employment and Non-Compete Agreement, effective
January 1, 1998, among the Corporation, Wedgewood and
Anthony L. Guerrerio; and
(f) Employment and Non-Compete Agreement, effective
January 1, 1998, among the Corporation, Wedgewood and
David A. Rolfe.
(7) The CNB Bancshares, Inc. 1999 Stock Incentive Plan.
13 - Portions of the Annual Report to Shareholders for the year
ended December 31, 1998.
21 - Significant Subsidiaries of the Corporation.
23 - Consent of KPMG LLP
23(a) - Consent of Olive LLP
27 - Financial Data Schedule
99 - Annual financial statements and independent auditor's report
thereon for Citizens Incentive Savings Plan for the year
ended December 31, 1998.
* The documents identified herein as 10-(1)(a) and 10-(1)(b), 10-(2)(a) and
10-(2)(b), 10-(3), 10-(4)(a) through 10-(4)(e), 10-(5)(a) through 10-(5)
(d), 10-(6)(a) through 10-(6)(f) and 10-(7) constitute all management
contracts and compensatory plans and arrangements required to be filed as
an exhibit to this Form, pursuant to Item 14(c) of this Report.
Exhibit 3(ii)
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AMENDED BY-LAWS OF CNB BANCSHARES, INC.
(ADOPTED AND APPROVED FEBRUARY 12, 1985)
(AS AMENDED ON APRIL 19, 1995)
(Incorporated under the laws of the State of Indiana)
ARTICLE I
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of CNB
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Bancshares, Inc. ("Corporation") for the election of Directors and for the
transaction of such other business as may properly come before the meeting shall
be held within five (5) months after the close of each fiscal year at such place
within the State of Indiana and on such date and at such time as may be
determined from time to time by resolution of the Board of Directors, which
place, date, and time shall be designated in the notice of the meeting.
Nominations for election to the Board of Directors may be made by the Board of
Directors or by any shareholder of any outstanding class of capital stock
entitled to vote for the election of Directors. Nominations, other than those
made by or on behalf of the existing management, shall be made in writing and
shall be delivered or mailed to the Chairman of the Board of the Corporation not
less than fourteen (14) days nor more than fifty (50) days prior to any meeting
of shareholders called for the election of Directors, provided however, that if
less than twenty-one (21) days notice of the meeting is given to shareholders,
such nominations shall be mailed or delivered to the Chairman of the Board not
later than the close of business on the seventh day following the day on which
the notice of meeting was mailed.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders shall
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be held at such place within the State of Indiana and on such date and at such
time as is designated in the notice of the meeting, and may be called by the
Chairman of the Board ("Chairman"), President, a majority of the Board of
Directors, or by the holders of
Page
not less than eighty percent (80%) of all the shares outstanding and entitled to
vote on business proposed to be transacted at such meeting.
SECTION 3. NOTICE OF MEETINGS. Written or printed notice of each meeting
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of the shareholders shall be delivered or mailed at least ten (10) days before
the date of the meeting to each shareholder of record entitled to vote at the
meeting. Each such notice shall state the date, time, and place of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called. Each such notice shall be prepared and delivered by or at
the direction of the Chairman of the Board, the President, the Secretary, the
Board of Directors, or the persons calling the meeting. Any notice of a
shareholders' meeting sent by mail shall be deemed delivered when deposited in
the United States mail, postage prepaid, addressed to the shareholder at his
address as it appears on the records of the Corporation. Attendance by a
shareholder at any meeting shall constitute a waiver of notice of the meeting,
except when a shareholder attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened. Any notice required by this section may also be waived as provided in
Article VIII below.
SECTION 4. ORGANIZATION OF MEETINGS. Each regular and special meeting of
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the shareholders of the Corporation shall be convened by the Chairman of the
Board, or in the absence of the Chairman, the President, at the time and place
on the date specified in the notice of the meeting. If the Chairman, or in the
absence of the Chairman, the President, fails or refuses to do so, the Secretary
shall so convene the meeting, or in case of a special meeting when all of them
fail or refuse to do so, one of the persons calling the meeting by notice given
as provided above shall so convene the meeting. If the Chairman, or in the
absence of the Chairman, the President, is present at the meeting, he shall act
as its chairman, but if he fails or refuses to so act, a chairman for the
meeting shall be elected. If the Secretary is present at the meeting, he shall
act as
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its secretary, but if he fails or refuses to so act, the Chairman shall appoint
the secretary for the meeting.
SECTION 5. QUORUM. A majority of the outstanding shares entitled to vote
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at any meeting of the shareholders, represented in person or by proxy, shall
constitute a quorum for the transaction of business (except as otherwise
provided in or required by the Articles of Incorporation) at the meeting, but if
the holders of a majority of the outstanding shares entitled to vote at a
meeting are not represented in person or by proxy at the time and place fixed
for such meeting, then a majority of the shares actually represented in person
or by proxy at such meeting may adjourn the meeting successively to a specified
date not more than ninety (90) days after the adjournment, and no notice need be
given of the adjournment to shareholders not present at the meeting.
SECTION 6. PROXIES. Each shareholder entitled to vote at a meeting of the
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shareholders may vote either in person or by proxy executed in writing by the
shareholder or his duly authorized attorney-in-fact and filed with the Secretary
at or before the meeting. A telecopied proxy, which on its face purports to be
properly dated and signed, shall be a valid proxy.
SECTION 7. VOTING AND REQUISITE VOTE. In voting on all matters, each
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outstanding share entitled to vote shall be entitled to one vote on each matter
submitted to a vote at any meeting of the shareholders; and every decision of
the majority of a quorum shall be valid as a corporate act unless a larger vote
is required at any time by law, by the Articles of Incorporation, or by these
By-Laws.
SECTION 8. LIST OF SHAREHOLDERS. At least five (5) days before each
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meeting of the shareholders at which Directors are to be elected, the Officer
having charge of the transfer book for shares of the Corporation shall make a
complete list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, with the address of each shareholder and the number of
shares held by each shareholder. The
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list shall be kept on file at the registered office of the Corporation for five
(5) days prior to the meeting and shall be subject to inspection by any
shareholder at any time during usual business hours. The list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to inspection by any shareholder during the meeting.
ARTICLE II
DIRECTORS
SECTION 1. POWERS AND NUMBER. The property and business of the
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Corporation shall be managed by the Board of Directors. The number of Directors
to constitute the Board of Directors shall not be less than six (6) nor more
than twenty (20), with the number of Directors to be fixed or changed from time
to time, within the minimum and maximum of the foregoing range, by resolution of
the Board of Directors. No person may be elected to the Board of Directors at a
time when he has reached the age of seventy (70) years.
SECTION 2. ELECTION AND TERMS OF DIRECTORS AND FILLING OF VACANCIES.
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Directors shall be classified and shall serve for terms as more particularly set
forth in Article VII of the Articles of Incorporation. Vacancies upon the Board
of Directors shall be filled in the manner set forth in said Article VII of the
Articles of Incorporation.
SECTION 3. REMOVAL OF DIRECTORS. Directors shall be subject to removal
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from office in accordance with applicable provisions of law and the provisions
of Section 2 of Article VII of the Articles of Incorporation of the Corporation.
SECTION 4. REGULAR MEETINGS. Immediately following each annual meeting of
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the shareholders, a regular meeting of the Board of Directors shall be held for
the election of Officers and for such other business as may properly come before
the meeting. Other regular meetings of the Board of Directors shall be held,
without notice, on the third Tuesday of each month at the principal business
office of the Corporation
4
or at any other convenient place duly authorized by the Board, except that no
regular meetings of the Board of Directors shall be held in the months of
February and August. When any regular meeting of the Board falls upon a
holiday, the meeting shall be held on the next banking business day unless the
Board shall designate some other day.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Directors
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may be held at any date, time, and place upon the call of the Chairman of the
Board or the President or twenty-five percent (25%) of the members of the Board
of Directors. Written notice of the date, time, place, and purposes of each
special meeting shall be delivered personally to each Director by or at the
direction of the Chairman, the President, or the Secretary at least forty-eight
(48) hours before the time set for the meeting, or shall be sent by mail at
least ninety-six (96) hours before the time set for the meeting or by telegraph
forty-eight (48) hours before the time set for the meeting, to the last known
address of each Director.
SECTION 6. NOTICES AND WAIVER THEREOF. Any notice of a regular or special
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meeting of the Board of Directors sent by mail or telegraph shall be deemed to
be delivered: (i) in the case of notice by mail, when deposited in the United
States mail, postage prepaid, addressed to the Director at his last known
address; or (ii) in the case of notice by telegraph, when delivered in written
form, cost prepaid, addressed to the Director at his last known address, to a
telegraph office for transmission. Any required notice of a regular or special
meeting of the Board of Directors shall be deemed to have been waived by any
Director who attends the meeting, except when a Director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Any required notice of a regular or
special meeting of the Board of Directors also may be waived as provided in
Article VIII below.
SECTION 7. QUORUM AND POWERS OF THE MAJORITY. A majority of the Board of
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Directors shall constitute a quorum for the transaction of business. The action
of a
5
majority of the Directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
SECTION 8. ACTION OF THE BOARD OF DIRECTORS WITHOUT A MEETING. Any action
--------- --------------------------------------------------
which is required to be or may be taken at a meeting of the Directors may be
taken without a meeting if consents in writing, setting forth the action so
taken, are signed by all of the Directors. The consents shall have the same
force and effect as a unanimous vote of all the Directors at a meeting duly
held, and may be stated as such in any certificate or document filed under the
Indiana General Corporation Act. The Secretary shall file the consents with the
minutes of the meetings of the Board of Directors.
ARTICLE III
OFFICERS
SECTION 1. ELECTION. The Board of Directors shall elect a Chairman of the
--------- --------
Board and a Chief Executive Officer, both of whom shall be members of the Board
of Directors (the same person may hold both positions) and shall elect a
Secretary. In addition, the Board of Directors may elect a President, a
Treasurer and such number of Vice Presidents, Assistant Secretaries, Assistant
Treasurers, and other Officers as the Board of Directors may from time to time
deem necessary.
SECTION 2. TENURE. Each Officer shall hold his office for the term of one
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year and until his successor is duly elected and qualified, unless sooner
removed by the Board of Directors. Any Officer elected by the Board of
Directors may be removed by the Board of Directors whenever in its judgment the
best interests of the Corporation will be served by the Officer's removal, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. A vacancy in any office for any reason may be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 3. CHAIRMAN OF THE BOARD. The Chairman shall preside at each
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meeting of the shareholders and the Board of Directors. He shall be an ex
officio member of all committees established by the Board of Directors with the
exception of
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the Audit Committee and the Compensation and Corporate Structure Committee. He
may sign and execute in the name of the Corporation deeds, mortgages, bonds,
contracts, and other instruments, except in cases where the signing and
execution thereof shall be expressly delegated by the Board or by the By-Laws to
some other Officer or agent of the Corporation, or shall be required by law
otherwise to be signed or executed; and, in general, he shall perform all duties
incident to the office of the Chairman and other such duties as from time to
time may be assigned to him by the Board.
SECTION 4. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall
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have general executive powers in conducting the affairs of the Corporation as
well as the specific powers conferred by these By-Laws. The Chief Executive
Officer shall be the principal officer of the Corporation and shall have all
powers of the Board of Directors pertaining to the management of the business of
the Corporation between meetings of the Board and the Executive Committee and
such further powers as may be conferred upon him by these By-Laws or the Board
of Directors or the Executive Committee, from time to time. The Chief Executive
Officer, in the absence of the Chairman of the Board, shall perform the duties
and exercise the powers of the Chairman.
SECTION 5. PRESIDENT. The President of the Corporation, in the absence of
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the Chairman of the Board, shall preside at each meeting of the shareholders and
the Board of Directors. He shall also serve the Association in such capacities
and perform such duties as may be assigned to him, from time to time, by the
Board of Directors or the Chief Executive Officer.
SECTION 6. VICE PRESIDENT. If the President is unable to act, then the
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Vice Presidents in order of their election to office, or if there is no Vice
President, the
7
Secretary, shall become Acting President and in that capacity perform all of the
duties of the President, unless some other Officer is designated by the Board of
Directors to perform those duties. The Vice Presidents shall perform such other
duties as may from time to time be prescribed by the Board of Directors or by
the Chairman.
SECTION 7. THE SECRETARY. The Secretary shall be secretary of all
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meetings of the shareholders. The Secretary shall also be secretary of all
meetings of the Board of Directors when he is present. The Secretary shall keep
the minutes of meetings of the shareholders and the Board of Directors, and all
shareholders' and Directors' consents to action, in books maintained for that
purpose. The Secretary shall have custody of the seal of the Corporation (if
any), shall have custody of all books, instruments, documents, and papers of the
Corporation entrusted to the Secretary by the Board of Directors or other
Officers, and shall perform such other duties as are provided elsewhere in these
By-Laws and as may from time to time be prescribed by the Board of Directors or
by the Chairman. If the Secretary is unable to act, then the Assistant
Secretaries (if any) in order of their election to office shall perform the
Secretary's duties. The Secretary or any Assistant Secretary may affix the seal
(if any) to all instruments, documents, and papers required to be sealed and may
attest the seal and the signature of other Officers when necessary.
SECTION 8. THE TREASURER. The Treasurer, under the supervision and
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control at all times of the Board of Directors or the Chairman, shall have
custody of the funds and securities of the Corporation, shall keep such funds
and securities deposited in such financial institutions or in such other manner
as the Board of Directors may from time to time direct, shall keep full and
accurate account of the income and expenses of the Corporation in books kept for
that purpose, and shall perform such other duties as may from time to time be
prescribed by the Board of Directors or by the Chairman. If the Treasurer is
unable to act, then the Assistant Treasurers (if any) in the order of their
election to office shall perform the Treasurer's duties.
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SECTION 9. EXECUTION OF INSTRUMENTS, DOCUMENTS, AND PAPERS. All
---------- ----------------------------------------------------
instruments, documents, and papers required to be executed by the Corporation
shall be signed by such Officer or Officers or such other person or persons and
in such manner as the Board of Directors may from time to time prescribe, except
that all instruments, documents, and papers required to be executed in the
ordinary course of business of the Corporation, and all instruments, documents,
and papers which the Board of Directors have determined shall be executed by the
Corporation but have not required to be executed by any particular Officer or
Officers or other person or persons, may be signed by the Chairman of the Board
or the President, and the seal (if any) and the Chairman of the Board's or
President's signature thereto may be attested by the Secretary or any Assistant
Secretary, without prior authorization by the Board of Directors.
ARTICLE IV
FISCAL YEAR
The fiscal year of the Corporation shall be as established from time to
time by the Board of Directors.
ARTICLE V
STOCK
SECTION 1. CERTIFICATES. The shares of stock of the Corporation shall be
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represented by certificates (except fractional shares, which may be represented
by certificates or, in the discretion of the Board of Directors, scrip) in such
form, not inconsistent with the Articles of Incorporation, as are approved by
the Board of Directors. Each certificate shall be signed by the Chairman,
President or a Vice President and also by the Secretary, an Assistant Secretary
or such other officer as designated by the Board and sealed with the seal of the
Corporation (if any). Each certificate shall designate the name of the person
to whom issued and shall have
9
plainly stated upon its face the number and class of shares which it represents
and the par value of each share or a statement that such shares have no par
value. No share of stock of the Corporation shall be issued until the entire
consideration for the share has been received by the Corporation. When issued,
all shares of stock of the Corporation shall be deemed full-paid and are non
assessable.
SECTION 2. REGISTERED OWNERS. Except as otherwise provided by law, only
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the persons whose names are registered on the books of the Corporation as
shareholders shall have the right to vote and to receive dividends.
SECTION 3. TRANSFER. Transfer of shares of stock of the Corporation shall
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be registered on the books of the Corporation only when the certificates
representing the shares are presented for transfer at the principal office of
the Corporation by the owner of the certificates or the owner's
attorney-in-fact. The Board of Directors may adopt such rulings and regulations
not inconsistent with law or these By-Laws as it deems expedient concerning the
issuance, transfer, and registration of certificates.
SECTION 4. CLOSING OF TRANSFER BOOKS AND FIXING OF RECORD DATES. The
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Board of Directors shall have power to close the share transfer books of the
Corporation for a period not exceeding fifty (50) days prior to the date of any
meeting of the shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change, conversion, or
exchange of shares will become effective; provided, however, that instead of
closing the share transfer books the Board of Directors may fix in advance a
date, not exceeding fifty (50) days prior to the date of any meeting of
shareholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change, conversion, or exchange of
shares becomes effective, as a record date for the determination of the
shareholders entitled to notice of, and to vote at, the meeting and any
adjournment of the meeting, or entitled to receive payment of the dividend, or
entitled to the allotment of rights, or entitled to exercise rights in respect
of the change,
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conversion, or exchange of shares, as the case may be. Only the shareholders
who are shareholders of record on the date of closing the share transfer books,
or on the record date so fixed, shall be entitled to notice of, and to vote at,
the meeting and any adjournment of the meeting, or to receive payment of the
dividend, or to receive the allotment of rights, or to exercise rights in
respect of the change, conversion, or exchange of shares, as the case may be,
notwithstanding any transfer of any shares on the books of the Corporation after
the date of closing of the share transfer books or the record date so fixed. If
the Board of Directors does not close the share transfer book or so fix a record
date, the twentieth (20th) day prior to the date of the meeting, or the date the
dividend is declared, or the date the other right is announced, as the case may
be, shall be the record date.
SECTION 5. DIVIDENDS. Subject to limitations upon the payment of
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dividends as may from time to time be imposed by law, the Articles of
Incorporation, or these By-Laws, the Board of Directors in its discretion may
from time to time declare and cause the Corporation to pay dividends on its
outstanding shares in cash, property, or shares of stock of the Corporation.
ARTICLE VI
INDEMNIFICATION
SECTION 1. Every person (and the heirs, executors and administrators of
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such person) who is or was a Director or Officer of this Corporation or who, at
the request of this Corporation, served in any position or capacity or on any
committee for this Corporation or in any other corporation, partnership,
association, trust, foundation, not-for-profit corporation, employee benefit
plan or other organization or entity, shall be indemnified by the Corporation
against any and all liability and reasonable expense that may be incurred by him
in connection with or resulting from any claim, action, suit or proceeding in
which either (i) such person is wholly successful, thereby entitling such person
to Mandatory Indemnification, or (ii) such person is not wholly successful but
it is
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nevertheless determined, pursuant to the procedures set forth below in Section 2
of this Article VI of these By-Laws, that such person acted in good faith and
that such person reasonably believed that (a) in the case of conduct in his
official capacity, his conduct was in the Corporation's best interests, or (b)
in all other cases, his conduct was at least not opposed to the best interests
of such Corporation, entity or organization, and, in addition with respect to
any criminal action or proceeding, either had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful, thereby entitling such person to Permissive Indemnification. The
terms "claim," "action," "suit" or "proceeding" shall mean and include any
claim, action, suit or proceeding (whether brought by or in the right of the
Corporation or any other corporation or otherwise), civil, criminal,
administrative or investigative action, or threat thereof, in which a Director
or Officer of the Corporation (or his heirs, executors or administrators) may
become involved as a party or otherwise:
(a) by reason of his being or having been a Director or Officer of the
Corporation, or of any subsidiary corporation of the Corporation,
or of any other corporation where he served as such at the request of
the Corporation, or
(b) by reason of his acting or having acted in any position or capacity or
on any committee for this Corporation or any subsidiary
corporation of the Corporation, or in any position or capacity in
or for a partnership, association, trust, foundation, not-for-
profit corporation, employee benefit plan or other organization or
entity where he served as such at the request of the Corporation, or
(c) by reason of any action taken or not taken by him in any such capacity,
whether or not he continues in such capacity at the time such
liability or expense shall have been incurred.
12
The terms "liability" and "expenses" shall include, but shall not be limited to,
counsel fees and disbursements and amounts of judgments, fines or penalties
against, and amounts paid in settlement by or on behalf of, a person, and excise
taxes assessed with respect to an employee benefit plan, but shall not in any
event include any liability or expenses on account of profits realized by him in
the purchase or sale of securities of the Corporation. The term "wholly
successful" shall mean termination of any action, suit or proceeding against the
person in question without any finding of liability or guilt against him or the
expiration of a reasonable period of time after the making of any claim or
threat of an action, suit or proceeding without the institution of the same,
without any payment or promise made to induce a settlement.
SECTION 2. With regard to Permissive Indemnification, the determination
----------
that a person acted in good faith and that such person reasonably believed that
(a) in the case of conduct in his official capacity, his conduct was in the
Corporation's best interests, or (b) in all other cases, his conduct was at
least not opposed to the best interests of the Corporation, and, in addition,
with respect to any criminal action or proceeding, either had reasonable cause
to believe that his conduct was lawful or had no reasonable cause to believe
that his conduct was unlawful with regard to a specific claim, action, suit or
proceeding in or as to which such person is not wholly successful shall be made
by or for the Board of Directors of the Corporation in the manner hereinafter
described. Any request for such indemnification must first be proposed to the
Board of Directors of the Corporation, and a motion for such indemnification may
be made by any Director of the Corporation, including a Director who is seeking
such indemnification for himself. If a quorum of Directors eligible to decide
the matter exists with the limitations and requirements of I.C.
23-1-37-12(b)(1), such Directors may either (i) decide the question themselves;
(ii) refer the matter to Special Legal Counsel for decision pursuant to I.C.
23-1-37-12(b)(3)(A); or (iii) decline to take any action to either decide the
question of such indemnification or refer the matter for decision to Special
13
Legal Counsel. If there does not exist a quorum of Directors eligible to decide
the matter within the limitations and requirements of I.C. 23-1-37-12(b)(1), a
majority of the entire Board of Directors may either (i) refer the matter to a
committee of two or more Directors who are eligible to vote thereon pursuant to
I.C. 23-1-37-12(b)(2) who may either decide the matter themselves or refer the
matter to Special Legal Counsel for decision pursuant to I.C.
23-1-37-12(b)(3)(A); (ii) if such a committee cannot be appointed, refer the
matter to Special Legal Counsel pursuant to the procedures described in I.C.
23-1-37-12(b)(3)(B); or (iii) decline to take any action to refer the matter of
such indemnification to a committee or to Special Legal Counsel. Any decision
on the question of entitlement to such Permissive Indemnification by a majority
of a quorum of the Board of Directors eligible to vote pursuant to I.C.
23-1-37-12(b)(1); by a special committee of eligible Directors pursuant to I.C.
23-1-37-12(b)(2); or by Special Legal Counsel duly appointed pursuant to the
provisions of I.C. 23-1-37-12(b)(3), shall be in the sole and absolute
discretion of such person or persons who are to make such determination. If it
is determined and decided that such Permissive Indemnification should be given
in a specific situation, the authorization for such indemnification and a
determination of the amount thereof shall be made in accordance with the
procedures and requirements of I.C. 23-1-37-12(c). For purposes of this Section
2, Permissive Indemnification shall be deemed to have been denied (i) if a
majority of any group of persons who are to decide the question do not vote in
favor of the proposed indemnification; (ii) if the Board of Directors or any
committee thereof declines to take any permitted action to either decide the
question, refer it to a committee, or refer it to Special Legal Counsel; (iii)
if no decision is made by the person or persons who were to decide such question
within a period of six (6) months after such indemnification was first proposed
to the Board of Directors of the Corporation; or (iv) to the extent that the
dollar amount of any indemnification to be made by the Corporation is less than
the total dollar amount of indemnification proposed or
14
requested to be made. If proposed Permissive Indemnification is denied, the
question may not be reconsidered at any subsequent time by the Corporation.
SECTION 3. Expenses incurred with respect to any claim, action, suit or
----------
proceeding may be advanced by the Corporation (by action of the Board of
Directors, whether or not a disinterested quorum exists) prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount unless he is entitled to indemnification under
this Article of these By-Laws.
SECTION 4. The rights of Mandatory and Permissive Indemnification provided
---------
in this Article of the By-Laws shall be in addition to any rights to which any
such person may otherwise be entitled by contract, as matter of law, or pursuant
to I.C. 23-1-37. Any person claiming the right to indemnification pursuant to
any provisions of these By-Laws may at any time apply for indemnification to or
seek review of any decision denying indemnification or determining the amount
thereof by a court pursuant to I.C. 23-1-37-11. Persons who are not Directors
or Officers of the Corporation but who are Directors or Officers of any
subsidiary may be indemnified to the extent authorized at any time or from time
to time by the Board of Directors.
SECTION 5. Irrespective of the provisions of this Article of the By-Laws,
----------
the Board of Directors may, at any time or from time to time, approve
indemnification of Directors and Officers or other persons to the full extent
permitted by the provisions of the Indiana Business Corporation Law at the time
in effect, whether on account of past or future transactions.
SECTION 6. To the extent not inconsistent with Indiana law as in effect
----------
from time to time, the Board of Directors may, at any time or from time to time,
approve the purchase and maintenance of insurance on behalf of any such
Director, Officer or other person arising out of his status as a Director,
Officer, Employee or agent of the Corporation or any corporation, partnership,
association, employee benefit plan, trust, foundation, not-for-profit
corporation or other organization or entity in which he served
15
as such at the request of the Corporation, whether or not the Corporation would
have the power to indemnify him under the provisions of this Article of the
By-Laws. In the event that any expense or liability otherwise subject to
indemnification hereunder is covered entirely or in part by any insurance, the
indemnification provided for by this Article of these By-Laws shall only be
available, if at all, as to any uninsured liability or expense or that portion
which is in excess of the amount of all available insurance coverage. Under no
circumstances shall any insurer or other person making payment under such an
insurance policy or contract be subrogated to the rights of any person entitled
to indemnification under this Article of these By-Laws.
SECTION 7. Any and all references contained in Article VI of these By-Laws
---------
to any provision, section, sub-section or portion of the Indiana Code (I.C.)
shall mean the Indiana Code as the same existed on January 1, 1987, and no
subsequent amendment, repeal, modification, change, or judicial invalidation of
any provision of the Indiana Code subsequent to January 1, 1987, shall alter,
modify, or otherwise affect these By-Laws, and these By-Laws shall be construed
and interpreted under the statutory law of the State of Indiana as it existed as
of the date of adoption of these By-Laws.
SECTION 8. The indemnification herein required or permitted by these
----------
amended indemnification By-Laws shall be a contractual obligation, undertaking
and commitment of the Corporation as to any person who either continued to serve
or commenced to serve, following the date of the adoption of these amended
indemnification By-Laws, as a Director or Officer of this Corporation or any
subsidiary of this Corporation, or in any other position or capacity, at the
request of this Corporation or any subsidiary corporation, on any committee,
partnership, association, trust, foundation, not-for-profit corporation,
employee benefit plan, or other organization or entity, and no subsequent
amendment or repeal of these By-Laws and no judicial decision invalidating the
legislation authorizing the indemnification provided for by these By-Laws or
invalidating
16
all or any part of these indemnification By-Laws shall in any manner deny,
diminish, limit, restrict, or qualify the indemnification herein provided for
any such person who so continued to serve or commenced to serve with regard to
any claim concerning any matter which occurred, which commenced to occur, or
which continued to occur subsequent to the adoption of these amended
indemnification By-Laws and prior to any such amendment, repeal, or judicial
invalidation.
ARTICLE VII
SEAL
If the Board of Directors so determines, the Corporation shall adopt
as a seal a circular device with the name of the Corporation around the border.
ARTICLE VIII
WAIVER OF NOTICE
Whenever any notice of a meeting is required to be given by law, the
Articles of Incorporation, or these By-Laws, a waiver of the notice in writing,
signed by the person or persons entitled to the notice, whether before or after
the meeting for which the notice would otherwise be required, and filed with the
Chairman of the Board, the President or Secretary, shall be deemed equivalent to
the giving of the notice.
ARTICLE IX
ADOPTION AND AMENDMENT OF BY-LAWS
The Board of Directors shall have the power to make, alter, amend, or
repeal the By-Laws of the Corporation and to adopt new or additional By-Laws
which are not inconsistent with applicable law and the Articles of
Incorporation; provided, however, that notice of each proposed amendment of or
other change in the By-Laws shall be given to each Director at least ten (10)
days prior to the date of the meeting at which
17
the proposed amendment or other change will be submitted for consideration and
action by the Board of Directors.
ARTICLE X
COMMITTEES
SECTION 1. COMMITTEES. The Board of Directors may, upon the
---------- ----------
recommendation of the Chairman of the Board, by resolution designate two or more
Directors to constitute such committee or committees as the Board shall deem
advisable and shall designate Directors to constitute the committees provided
for in the following Sections of this Article X. Each such committee, to the
extent provided in these By-Laws or any such resolution, shall have and exercise
all of the authority of the Board of Directors in the management of the
Corporation; provided that the designation of such committee or committees and
the delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or him
by law. The Board of Directors may designate officers, employees or other
persons who are not Directors of the Corporation to serve as ex officio members
of any committee.
SECTION 2. EXECUTIVE COMMITTEE. The Board of Directors shall designate
---------- --------------------
three or more Directors to constitute an Executive Committee, which Committee
shall have and may exercise all of the authority of the Board of Directors in
the management of the Corporation, except such as the Board only, by law, is
authorized to perform. The Chairman of the Board shall be a member of such
Committee and shall act as Chairman thereof; a majority of the members of such
Committee shall be Directors who are not officers or employees of the
Corporation. The Committee shall report its actions in writing at each regular
meeting of the Board of Directors, which shall approve or disapprove the report
and record such action in the minutes of the meeting.
SECTION 3. AUDIT COMMITTEE. The Board of Directors shall designate three
---------- ---------------
or more Directors to constitute an Audit Committee. Audit Committee members
shall be
18
appointed by the Board annually or more often. The membership, structure and
responsibilities of the Audit Committee shall be such as to be in compliance
with Section 36 of the Federal Deposit Insurance Act, as amended, 12 CFR Part
363, the official Guidelines and Interpretations thereto, and any other related
implementing regulations, as the same are applicable to a holding company
performing for its subsidiaries comparable services and functions as are
required of the subsidiaries under such laws and regulations.
The Audit Committee shall have and may exercise all of the authority of the
Board of Directors with respect to the review and examination of the financial
affairs and the accounting and control matters of the Corporation and its
subsidiaries. The results of such examinations shall be reported, in writing,
to the Board at the regular meeting thereafter.
It shall also be the duty of the Audit Committee to oversee and review the
Corporation's annual internal audit; to nominate the independent auditors of the
Corporation for appointment by the Board of Directors; to ratify all
accountants' fees rendered during the year; and to recommend to the Board such
changes in the manner of doing business, etc., as shall be deemed advisable.
It shall also be the duty of the Audit Committee to review and discuss with
the Board of Directors and the Corporation's independent public accountant:
management's reports concerning compliance with safety and soundness laws,
internal control structures and procedures for financial reporting; the
independent public accountant's reports and attestations; the resolution of
identified material weaknesses and reportable conditions in internal controls,
including the prevention or detection of management override or compromise of
the internal control system; the scope of the audit services; significant audit
policies; audit conclusions regarding significant accounting estimates; the
selection and termination and resolution of any significant disagreements with
the independent public accountant.
19
The Audit Committee shall also be authorized to engage independent legal
counsel at its discretion. The Audit Committee shall further be authorized to,
at its sole discretion, consult and consider the advice of a panel of advisors
made up of members of the Board of Directors of The Citizens National Bank of
Evansville as to the discharge of any of its responsibilities hereunder.
SECTION 4. COMPENSATION AND CORPORATE STRUCTURE COMMITTEE. The Board of
---------- -----------------------------------------------
Directors shall designate three or more Directors to constitute a Compensation
and Corporate Structure Committee. Compensation and Corporate Structure
Committee members shall be appointed by the Board annually or more often. The
Compensation and Corporate Structure Committee shall review the competency and
effectiveness of management of the Corporation and its subsidiaries; the
soundness and adequacy of compensation programs, including fringe benefit plans
and programs, compliance with regulations and the like; the approval of salaries
of Corporation officers and salaries of senior management of its subsidiaries;
the formulation of policy on and administration of special Corporation programs
such as stock option plans, executive incentive plans, stock purchase plans for
employees and the like. It shall also be the duty of the Compensation and
Corporate Structure Committee to formulate and adopt overall management
structure and organization policies, including selection, recruiting, management
development and succession of the senior management of the Corporation and its
subsidiaries. The Compensation and Corporate Governance Committee shall report
all of its findings and recommendations to the Board of Directors for its action
thereon.
SECTION 5. NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Board of
---------- -----------------------------------------------
Directors shall designate three or more Directors to constitute a Nominating and
Corporate Governance Committee. Nominating and Corporate Governance Committee
members shall be appointed by the Board annually or more often. The Nominating
and Corporate Governance Committee shall recommend to the Board a slate of
nominees
20
for directors to be presented on behalf of the Board for election by
shareholders at each annual meeting of the Corporation and shall recommend to
the Board persons to fill vacancies on the Board. It shall also be the duty of
the Nominating and Corporate Governance Committee to review the procedures and
other matters related to the governance of the Corporation and its subsidiaries
generally, including, but not limited to, the composition, size and committee
structure of the boards of directors of the Corporation's subsidiaries and the
background and qualifications of the members of the boards of directors of the
Corporation's subsidiaries and to submit to the full Board of Directors any
recommended actions to be taken with respect to matters within the Committee's
jurisdiction.
SECTION 6. LOAN COMMITTEE. The Board of Directors may designate three or
---------- --------------
more Directors to constitute a Loan Committee. Loan Committee members shall be
appointed by the Board annually or more often. In the absence of the
appointment of a Loan Committee, the Executive Committee shall perform the
functions of the Loan Committee. The Loan Committee shall have and may exercise
all of the authority of the Board of Directors with respect to the adequacy of
credit policies and procedures adopted by the Corporation and its subsidiaries;
the monitoring of trends in the loan portfolio of the Corporation and its
subsidiaries; and the approval of loans, and review of loans previously
approved, that exceed an amount specified by resolution of the Board of
Directors of the Corporation or its subsidiaries.
SECTION 7. SHAREHOLDER VALUE COMMITTEE. The Board of Directors shall
------------------------------------------
designate three or more Directors to constitute a Shareholder Value Committee.
Shareholder Value Committee members shall be appointed by the Board annually or
more often. The Shareholder Value Committee shall review and consider the
Corporation's ongoing long-range strategic plans, with specific emphasis on the
expansion of the Corporation's business in both existing and new market areas,
and the maximization of the long-term value of the Corporation's franchise,
including merger
21
and acquisition activity. The Shareholder Value Committee shall report all of
its findings and recommendations to the Board of Directors for its action
thereon.
SECTION 8. APPOINTMENT OF COMMITTEES. The Board of Directors may appoint,
-------------------------------------
from time to time, other committees for such purposes and with such powers and
tenure as the Board may determine to be advisable.
ARTICLE XI
REDEMPTION OF CONTROL SHARES
SECTION 1. CORPORATE SHARE ACQUISITIONS. The Indiana Business
----------- ------------------------------
Corporation Law (Indiana Code 23-1-42-1 et seq.) contains a "control share
-- ---
acquisition" provision which is designed to increase the protection of dispersed
shareholders when a prospective acquirer seeks to obtain a dominant position in
an Indiana corporation which has stock registered under the federal securities
laws. The provision permits disinterested shareholders (defined in Indiana Code
23-1-42-3 as essentially all shareholders other than the acquiror, officers of
the corporation or employees who are also directors of the corporation) to
decide whether voting power should be given to an acquirer's "control shares."
Control shares are not all shares owned by an acquiring person, but only shares
acquired in a control share acquisition (which can be acquired in separate
purchases over a considerable period of time, see Indiana Code 23-1-42-2) that,
when added to the acquiring person's pre-acquisition holdings, put the acquirer
over any one of three thresholds of corporate voting power -- one-fifth,
one-third or one-half. If any person proposing to make or who has made a
control share acquisition does not file an "acquiring person statement" with the
issuing corporation or if the control shares are not accorded full voting rights
by disinterested shareholders, the control shares are subject to redemption at
the option of the corporation; provided that the articles of incorporation or
bylaws of the corporation whose shares are acquired
22
authorize such redemption. By virtue of this Article XI, the Corporation is
authorized to redeem control shares as permitted under Indiana Code 23-1-42-1
et seq. in accordance with the procedures set forth in Section 3 of this Article
- -- ---
XI. All capitalized terms used in Sections 2 through 4 of this Article XI have
the meanings set forth in Section 4 of this Article XI.
SECTION 2. RIGHT OF REDEMPTION. The Corporation may redeem, at any time
---------- -------------------
during the Redemption Period, Control Shares from an Acquiring Person for an
amount equal to the Fair Value of the Control Shares.
SECTION 3. REDEMPTION PROCEDURE. In the event that the Corporation
----------- ---------------------
shall desire to exercise its right to redeem Control Shares as provided in this
Article XI, it shall give notice of such redemption to the Acquiring Person by
mailing first class, postage prepaid, a notice of such redemption to the
Acquiring Person's address as it shall appear upon the Corporation's books. The
notice of redemption shall (i) describe the Control Shares to be redeemed, (ii)
state the date fixed for redemption, (iii) indicate the Fair Value of the
Control Shares, and (iv) state that payment of the Fair Value of the Control
Shares to be redeemed shall be made at the principal offices of the Corporation
upon presentation and surrender of the certificate or certificates representing
such Control Shares (duly endorsed to the Corporation or in blank). Any notice
of redemption which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Acquiring
Person receives such notice. If the notice of redemption shall have been given
as above provided, the Fair Value of the Control Shares shall become due and
payable on the date and at the place stated in such notice upon presentation and
surrender of the certificate or certificates representing such Control Shares
(duly endorsed to the Corporation or in blank). From and after the date of the
notice of redemption, the Control Shares shall no longer be deemed issued and
outstanding and all rights of the Acquiring Person with
23
respect to such Control Shares shall cease and terminate, except for the
Acquiring Person's right to receive Fair Value for such Control Shares as herein
provided.
SECTION 4. DEFINITIONS. As used in Section 2 through 4 of this Article
----------- -----------
XI, the following terms shall have the respective meanings set forth below:
"Acquiring Person" shall mean any Person (or two or more Persons
acting cooperatively or in concert) that acquires Control Shares.
"Acquiring Person Statement" shall mean a written notice from an
Acquiring Person to the Corporation which satisfies the requirements of Indiana
Code 23-1-42-6.
"Control Shares" shall have the meaning provided therefor in Indiana
Code 23-1-42-1.
"Fair Value" shall mean the mean average per share closing price for
shares of the same class as the Control Shares on the principal exchange on
which such shares are listed for trading or, if not traded on an exchange, then
the average of the closing bid and asked prices quoted over-the-counter or the
average closing price reported on the NASDAQ National Market System, if admitted
for quotation thereon, for the 20 business days immediately preceding the
earlier of the public announcement or the commencement of the Control Share
acquisition by the Acquiring Person (as such prices are reported in the Wall
Street Journal or, if not so reported, in any nationally recognized financial
journal or newspaper).
"Person" shall have the meaning provided therefor in Indiana Code
23-1-20-18.
"Redemption Period" shall mean the period commencing on the date that
an Acquiring Person first acquires Control Shares and ending on the earlier to
occur of (i) the date sixty (60) days after the last acquisition of Control
Shares by such Acquiring Person, or (ii) the date that the Corporation receives
an Acquiring Person Statement from such Acquiring Person; provided, however,
-------- -------
that in the event that, pursuant to
24
Indiana Code 23-1-42-9, the Control Shares are not accorded full voting rights
by the shareholders of the Corporation, the Redemption Period shall also include
the period from and after the date of the shareholder meeting (referred to in
Indiana Code 23-1-42-7) at which the shareholders determined not to grant full
voting rights to the Control Shares.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 1. PRIOR BY-LAWS SUPERSEDED. All present and existing By-Laws of
---------- ------------------------
this Corporation are hereby expressly repealed and superseded by these By-Laws.
SECTION 2. GENDER. As used herein, all references to the masculine, all
---------- ------
masculine pronouns and masculine forms of other words or phrases shall be
construed as also meaning and including the feminine.
* * * * * * * * * * * * * * * * *
CERTIFICATION
Certified to be a true copy of the By-Laws, now in force and effect, of CNB
Bancshares, Inc., Evansville, Indiana.
Dated this 28th day of April, 1995.
(SEAL)
/s/ David L. Knapp
Secretary of the Board
25
Exhibit 3(iii)
--------------
AMENDMENT TO AMENDED BYLAWS OF THE CORPORATION ADOPTED JUNE 15, 1999
The Amended Bylaws of the Corporation were amended by a resolution of the
Board of Directors adopted on June 15, 1999, by adding a new Section 5 to
Article XI (entitled "Redemption of Control Shares") to read in its entirety as
follows:
"Section 5. Exclusion of Fifth Third Bancorp. Anything in this Article XI
--------- --------------------------------
to the contrary notwithstanding, the "control share acquisition" provisions of
the Indiana Business Corporation Law (Indiana Code 23-1-42-1 et seq.) shall
------
not apply to any shares of common stock of the Corporation that maybe acquired
by Fifth Third Bancorp pursuant to that certain Affiliation Agreement between
Fifth Third Bancorp and the Corporation, providing for the merger of the
Corporation with and into Fifth Third Bancorp, and that certain Stock Option
Agreement between the Corporation, as issuer, and Fifth Third Bancorp, as
grantee, entered into in connection with the Affiliation Agreement, each as
described further in the resolutions of the Board of Directors adopted June 15,
1999.
Exhibit 10(7)
-------------
CNB BANCSHARES, INC.
1999 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of the CNB Bancshares, Inc. 1999 Stock Incentive Plan is to
provide incentives and rewards for key Employees and non-Employee Directors of
the Corporation and its Subsidiaries (i) to support the execution of the
Corporation's business strategies and the achievement of its goals, (ii) to
associate the interests of key Employees and non-Employee Directors with those
of the Corporation's stockholders and (iii) to help provide a competitive
compensation program that will enable the Corporation to attract and retain the
highest quality Employees and non-Employee Directors.
2. DEFINITIONS
(a) "Award" includes, without limitation, stock options (including incentive
stock options under Section 422 of the Code), stock appreciation rights,
performance share or unit awards, dividend or equivalent rights, stock awards,
restricted share or unit awards, or other awards that are valued in whole or in
part by reference to, or are otherwise based on, the Corporation's Common Stock
("other Common Stock-based Awards"), all on a stand alone, combination or tandem
basis, as described in or granted under this Plan.
(b) "Award Summary" means a written summary setting forth the terms and
conditions of each Award made under this Plan.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(e) "Committee" means the Compensation and Corporate Structure Committee of
the Board or such other committee of the Board as may be designated by the Board
from time to time to administer this Plan; provided, however, that no
person may serve on the Committee who would not be considered (i) a
"non-employee director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act, and (ii) an "outside director" within the meaning of Section
162(m) of the Code.
(f) "Common Stock" means the $1.00 stated value Common Stock of the
Corporation.
(g) "Corporation" means CNB Bancshares, Inc., an Indiana corporation.
(h) "Director" means a non-Employee director of the Corporation. For
purposes of Awards granted pursuant to Section 7(b) only, the term "Director"
may, at the discretion of the Committee, include directors and advisory
directors of Subsidiaries.
(i) "Employee" means an employee of the Corporation or a Subsidiary.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "Fair Market Value" means the fair market value of the Common Stock as
of the date on which a determination is to be made, as determined by the
Committee.
(l) "Participant" means a key Employee who has been granted an Award under
this Plan.
1
(m) "Plan" means this CNB Bancshares, Inc. 1999 Stock Incentive Plan.
(n) "Plan Year" means a twelve-month period beginning with January 1 of each
year.
(o) "Subsidiary" means any corporation or other entity, whether domestic or
foreign, in which the Corporation has or obtains, directly or indirectly, a
proprietary interest of more than 50% by reason of stock ownership or otherwise.
3. ELIGIBILITY
Awards may be granted from time to time to key Employees as determined by
the Committee in its discretion. Awards consisting of non-qualified stock
options shall be granted to Directors in accordance with Section 7 hereof.
4. PLAN ADMINISTRATION
(a) This Plan shall be administered by the Committee. The Committee shall
periodically make determinations with respect to the participation of Employees
and directors and advisory directors of Subsidiaries in this Plan and, except as
otherwise required by law or this Plan, the grant terms of Awards including
vesting schedules, price, length of relevant performance, restriction or option
period, dividend rights, post-retirement and termination rights, payment
alternatives such as cash, stock, contingent awards or other means of payment
consistent with the purposes of this Plan, and such other terms and conditions
as the Committee deems appropriate. Awards may be granted as replacements of
Awards outstanding under the Plan or under previous stock incentive plans
maintained by the Corporation.
(b) The Committee shall have authority to interpret and construe the
provisions of this Plan and the Award Summaries and make determinations pursuant
to any Plan provision or Award Summary which shall be final and binding on
all persons. No member of the Committee shall be liable for any action or
determination made in good faith, and the members shall be entitled to
indemnification and reimbursement in the manner provided in the Corporation's
Articles of Incorporation, as it may be amended from time to time.
(c) The Committee may designate persons other than its members to carry out
its responsibilities under such conditions or limitations as it may set, other
than its determinations with respect to the participation of Employees in this
Plan and its authority with regard to the Awards granted to Employees who are
officers and directors of the Corporation for purposes of Section 16 of the
Exchange Act.
5. STOCK SUBJECT TO PROVISIONS OF PLAN
(a) The stock subject to the provisions of this Plan shall be shares of
authorized but unissued Common Stock. Subject to adjustment in accordance with
the provisions of Section 11 hereof, and subject to Section 5(c) and Section
6(b) hereof, the total number of shares of Common Stock available for grants of
Awards in any Plan Year shall not exceed 1.5% of the outstanding Common Stock as
reported in the Corporation's Annual Report on Form 10-K for the fiscal
year ending immediately prior to such Plan Year.
(b) The exercise of an option or stock appreciation right granted in tandem
therewith will reduce proportionately the amount of shares subject to the tandem
stock appreciation right or option and any shares ceasing to be subject to
the related option or stock appreciation right because of such reduction shall
not increase the number of shares of Common Stock available for future Awards
granted under this Plan. The grant of a performance or restricted share unit
Award shall be deemed to be equal to the maximum number of shares which may be
issued under the Award and where the value of an Award is variable on the date
it is granted, the value shall be deemed to be the
2
maximum limitation of the Award. Awards payable solely in cash will not reduce
the number of shares available for Awards granted under this Plan.
(c) There shall be carried forward and be available for Awards under this
Plan in succeeding Plan Years, in addition to shares available for grant under
Section 5(a), all of the following: (i) any unused portion of the limit set
forth in Section 5(a) for a prior Plan Year; (ii) shares represented by Awards
which are forfeited, surrendered, terminated, paid in cash or expire
unexercised; and (iii) the excess amount of variable Awards which become fixed
at less than their maximum limitations.
(d) The maximum number of shares of Common Stock underlying stock options
and stock appreciation rights which are granted to any one Participant during
one calendar year shall be 150,000 shares.
6. AWARDS TO EMPLOYEES UNDER PLAN
As the Committee may determine, the following types of Awards and other
Common Stock-based Awards may be granted under this Plan on a stand alone,
combination or tandem basis:
(a) Non-Qualified Stock Option. A right to buy a specified number of shares
of Common Stock at a fixed exercise price during a specified time, all as
the Committee may determine; provided that the exercise price of any option
shall not be less than 100% of the Fair Market Value of the Common Stock on the
date of grant of the Award.
(b) Incentive Stock Option. A right, in the form of a stock option which
shall comply with the requirements of Section 422 of the Code or any successor
Section as it may be amended from time to time, to buy a specified number of
shares of Common Stock at a fixed exercise price during a specified time, all as
the Committee may determine; provided that the exercise price of any option
shall not be less than 100% of the Fair Market Value of the Common Stock on the
date of grant of the Award. Subject to adjustment in accordance with the
provisions of Section 11 hereof, the aggregate number of shares which may be
subject to incentive stock option Awards under this Plan shall not exceed
2,000,000 shares, subject in any Plan Year to the limitations of Section 5
hereof.
(c) Stock Appreciation Right. A right to receive in cash the excess of the
Fair Market Value of a share of Common Stock on the date the stock appreciation
right is exercised over the Fair Market Value of a share of Common Stock on the
date the stock appreciation right was granted.
(d) Restricted and Performance Shares. A transfer of Common Stock to a
Participant, subject to such restrictions on transfer or other incidents of
ownership, or subject to specified performance standards, for such periods of
time as the Committee may determine.
(e) Restricted and Performance Share Unit. A fixed or variable share or
dollar denominated unit subject to such conditions of vesting, performance and
time of payment as the Committee may determine, which unit may be paid in Common
Stock, cash or a combination of both.
(f) Dividend or Equivalent Right. A right to receive dividends or their
equivalent in value in Common Stock, cash or in a combination of both with
respect to any new or previously existing Award.
(g) Stock Award. An unrestricted transfer of ownership of Common Stock.
(h) Other Stock-Based Awards. Other Common Stock-based Awards which are
related to or serve a similar function to those Awards set forth in this Section
6.
3
7. AWARDS TO DIRECTORS UNDER PLAN
(a) On the first business day following the Corporation's Annual Meeting of
Shareholders (commencing with the 1999 Annual Meeting), each person elected,
reelected or continuing as a Director shall automatically receive non-qualified
stock options to purchase 1,000 shares of Common Stock (as adjusted pursuant to
Section 11 hereof).
(b) Prior to the beginning of any fiscal year, the Committee, subject to
Board approval, may permit each Director to elect to receive non-qualified stock
options in lieu of all or a portion of the Director fees which would otherwise
be payable to the Director during such fiscal year. Options will be granted
pursuant to this paragraph (b) at the time a cash payment of fees would
otherwise become payable to the Director during the fiscal year.
(c) The Board, at its discretion, may issue additional non-qualified stock
options to Directors.
(d) If legal counsel to the Corporation determines that, on the date options
would otherwise be granted to Directors, the Corporation is in possession
of material non-public information concerning its affairs, such grant shall be
delayed until the third day on which trading occurs following the public
dissemination of such information or the date of an event which renders such
information immaterial.
(e) The terms of the non-qualified stock options granted to Directors under
Section 7(a) shall be as follows:
(i) Unless otherwise specifically provided below or in the Award
Summary, each non-qualified stock option shall expire on the date which is ten
years after the date of grant.
(ii) The non-qualified stock options shall be exercisable beginning on
the second anniversary of the date of grant.
(iii) If an optionee's status as a Director ceases for reasons other
than termination on or after attaining age fifty-five, death or disability (as
defined in Section 22(e)(3) of the Code) the non-qualified stock options shall
terminate three months after the date of the termination of the optionee's
status as a Director.
(iv) If an optionee's status as a Director ceases due to termination
on or after attaining age fifty-five or disability (as defined in Section 22(e)
(3) of the Code) the non-qualified stock options shall terminate two years after
the date of the termination of the optionee's status as a Director.
(v) If an optionee dies while serving as a Director, the non-
qualified stock options shall terminate two years after the date of death.
(vi) The per share purchase price of each share of Common Stock which
is subject to a non-qualified stock option under this Section 7(a) shall be the
fair market value of a share of Common Stock on the date of grant. For purposes
of this paragraph (vi), "fair market value" shall mean the per share closing
price as reported in the Wall Street Journal (Midwest Edition). If there were
no sales of Common Stock on the date of grant, "fair market value" shall mean
the per share closing price on the next preceding date on which such selling
prices were recorded.
(f) The terms of the non-qualified stock options granted to Directors
under Sections 7(b) and 7(c) will be determined by the Committee, subject to
Board approval.
8. AWARD SUMMARIES
Each Award under this Plan shall be evidenced by an Award Summary.
Delivery of an Award Summary to each Participant or Director, as the case may
be, shall constitute an agreement, subject to Section 9 hereof, between the
Corporation and the Participant or Director, as the case may be, as to the terms
and conditions of the Award.
4
9. OTHER TERMS AND CONDITIONS
(a) Assignability. Except as otherwise provided below, no Award shall be
assignable or transferable except by will or the laws of descent and
distribution and, during the lifetime of a Participant or Director, the Award
shall be exercisable only by such Participant or Director or such Participant's
or Director's guardian, legal representative. The Committee, in its discretion,
may permit a Participant or Director, during their lifetime, to transfer a
non-qualified stock option, for no consideration, to or for the benefit of the
Participant's or Director's immediate family (including a trust for the benefit
of the Participant's or Director's immediate family) or to a partnership or
limited liability company for one or more members of the Participant's or
Director's immediate family), subject to such limits as the Committee may
establish, and the transferee shall remain subject to all the terms and
conditions applicable to the Option prior to such transfer. Any vesting period
applicable to such option shall, however, continue to be measured in terms of
the Participant's employment by or the Director's service to the Corporation or
its Subsidiaries. The term "immediate family" shall mean the Participant's or
Director's spouse, parents, children, stepchildren, adoptive children, sisters,
brothers and grandchildren (and, for these purposes, shall also include the
Participant or Director).
(b) Termination of Employment. The Committee shall determine the disposition
of the grant of each Award in the event of disability, death or other
termination of a Participant's employment.
(c) Rights as a Stockholder. A Participant or Director shall have no rights
as a stockholder with respect to shares covered by an Award until the date
the Participant or Director or their respective nominee, guardian or legal
representative is the holder of record of such shares. No adjustment shall be
made for cash dividends or other rights for which the record date is prior to
such date.
(d) No Obligation to Exercise. The grant of an Award shall impose no
obligation upon the Participant or Director to exercise the Award.
(e) Exercise of Options. Options granted under this Plan that have vested
under the terms of the Award may be exercised, in whole or in part, at any time
during the option term by giving written notice of exercise to the Corporation
specifying the number of shares of Common Stock subject to the option to be
exercised and by making payment of the exercise price in accordance with the
terms of the Award.
(f) Payments by Participants or Directors. The Committee may determine that
Awards for which a payment is due from a Participant or a Director may be
payable: (i) in U.S. dollars by personal check, bank draft or money order
payable to the order of the Corporation, by money transfers or direct account
debits; (ii) through the delivery or deemed delivery based on attestation to the
ownership of shares of Common Stock held by the payor for at least six months,
with a Fair Market Value equal to the total payment due; (iii) by a combination
of the methods described in (i) and (ii) above; (iv) in the case of a
non-qualified stock option, by authorizing a third party to sell shares of
Common Stock (or a sufficient portion of the shares) acquired upon exercise of
the option and remit to the Corporation a sufficient portion of the sale
proceeds to pay the entire exercise price and any tax withholding resulting from
such exercise, or (v) by such other methods as the Committee may deem
appropriate.
(g) Withholding. Except as otherwise provided by the Committee, (i) the
deduction of withholding and any other taxes required by law shall be made from
all amounts paid in cash, and (ii) in the case of payments of Awards in shares
of Common Stock, a number of shares the Fair Market Value of which equals the
amount required to be withheld shall be deducted from the payment. The
Committee may provide for shares of Common Stock to be withheld for tax
withholding purposes in excess of the required minimum amount but not in excess
of a Participant's or Director's maximum marginal tax rate.
(h) Payments by Corporation. Awards may be settled through cash payments,
the delivery of shares of Common Stock, the granting of replacement Awards, or
combination thereof as the Committee shall determine. Any Award settlement,
including payment deferrals, may be subject to such conditions, restrictions and
contingencies as the Committee may provide in the terms of the Awards. The
Committee may permit or require the deferral of any Award payment, subject to
such rules and procedures as it may establish, which may include provisions for
the payment or crediting of interest, or dividend equivalents, including
converting such credits into deferred Common
5
Stock equivalents. Notwithstanding the above, no Award will be settled in cash
if such payment would make a transaction involving the Corporation ineligible
for pooling of interests accounting under APB No. 16.
10. AMENDMENTS
The Board may alter, amend, suspend or discontinue this Plan to the extent
permitted by law; provided, however, that no alteration, amendment, suspension
or discontinuance of this Plan shall adversely affect any right acquired by any
Participant or Director under an Award granted before the date of such
alteration, amendment, suspension or discontinuance of this Plan. Any such
action of the Board may be taken without the approval of the Corporation's
stockholders, but only to the extent that such stockholder approval is not
required by applicable law or regulation, including specifically Section 422 of
the Code and the rules or policies of the New York Stock Exchange or, if the
Common Stock is not then traded on the New York Stock Exchange, then of the
primary exchange or trading system on which the Common Stock is then traded.
11. RECAPITALIZATION
The aggregate number of shares of Common Stock as to which Awards may be
granted hereunder, the number of shares thereof covered by each outstanding
Award, and the price per share thereof in each such Award, shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without receipt of consideration
by the Corporation, or other change in corporate or capital structure; provided,
however, that any fractional shares resulting from any such adjustment shall be
eliminated. The Committee shall make the foregoing changes and any other
changes, including changes in the classes of securities available, to the extent
necessary or desirable to preserve the intended benefits of this Plan for the
Corporation and the Participants and Directors in the event of any other
reorganization, recapitalization, merger, consolidation, spin-off, extraordinary
dividend or other distribution or similar transaction.
12. NO RIGHT TO EMPLOYMENT
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant or Director the
right to be retained in the employ of the Corporation or a Subsidiary. The
Corporation and each Subsidiary further expressly reserve the right at any time
to dismiss a Participant free from any liability, or any claim under this Plan,
except as provided herein or in any Award Summary issued hereunder.
13. CHANGE OF CONTROL
(a) Notwithstanding anything contained in this Plan or any Award Summary to
the contrary, in the event of a Change of Control, as defined below, the
following shall occur with respect to any and all Awards outstanding as of such
Change of Control:
(i) automatic maximization of performance standards, lapse of all
restrictions and acceleration of any time periods relating to the exercise,
realization or vesting of such Awards so that such Awards may be immediately
exercised, realized or vested in full on or before the relevant date fixed in
the Award Summary;
(ii) performance shares or performance units shall be paid entirely in
cash; and
(iii) upon exercise of a non-qualified stock option or an incentive
stock option (collectively an "Option") during the 60-day period from and after
the date of a Change of Control, the Director or Participant exercising the
Option may in lieu of the receipt of Common Stock upon the exercise of the
Option, elect by written notice to the Corporation to receive an amount in cash
equal to the excess of the aggregate Value (as defined below) of the shares of
Common Stock covered by the Option or portion thereof surrendered
6
determined on the date the Option is exercised, over the aggregate exercise
price of the Option (such excess is referred to herein as the "Aggregate
Spread"); As used in this Section 13(a)(iii) the term "Value" means the higher
of (i) the highest Fair Market Value during the 60-day period from and after the
date of a Change of Control, and (ii) if the Change of Control is the result of
a transaction or series of transactions described in paragraphs (i) or (iii) of
the definition of Change of Control set forth in Section 13(b), the highest
price per share of the Common Stock paid or to be paid in such transaction or
series of transactions (which in the case of paragraph (i) shall be the highest
price per share of the Common Stock as reflected in a Schedule 13D by the person
having made the acquisition). Notwithstanding the foregoing, if any right
granted pursuant to this clause (iii) would make a Change of Control transaction
ineligible for pooling of interests accounting under APB No. 16 that but for
this clause (iii) would otherwise be eligible for such accounting treatment,
Common Stock (having a Fair Market Value equal to the cash otherwise payable
hereunder) shall be substituted for the cash payable hereunder.
(b) A "Change of Control" of the Corporation shall be deemed to have
occurred upon the happening of any of the following events:
(i) the acquisition, other than from the Corporation, by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either the then
outstanding shares of Common Stock of the Corporation or the combined voting
power of the then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors, but excluding, for this purpose,
any such acquisition by the Corporation or any of its Subsidiaries, or any
employee benefit plan (or related trust) of the Corporation or its Subsidiaries,
or any corporation with respect to which, following such acquisition, more than
60% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Common Stock and voting securities of the
Corporation immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of the
then outstanding shares of Common Stock of the Corporation or the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors, as the case may be;
(ii) individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of the Corporation (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act); or
(iii) approval by the stockholders of the Corporation of a
reorganization, merger or consolidation of the Corporation, in each case, with
respect to which all or substantially all of the individuals and entities who
were the respective beneficial owners of the Common Stock and voting securities
of the Corporation immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of Common Stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or a complete liquidation or
dissolution of the Corporation or of the sale or other disposition of all or
substantially all of the assets of the Corporation.
7
14. GOVERNING LAW
To the extent that federal laws do not otherwise control, this Plan and the
Awards issued hereunder shall be construed in accordance with and governed by
the law of the State of Indiana to the extent not inconsistent with Section 422
of the Code and regulations issued thereunder.
15. SAVINGS CLAUSE
This Plan is intended to comply in all aspects with applicable law and
regulation, including, with respect to the Directors and those Employees who are
officers or directors for purposes of Section 16 of the Exchange Act, Rule 16b-3
promulgated by the Exchange Act. In case any one or more of the provisions of
this Plan shall be held invalid, illegal or unenforceable in any respect under
applicable law and regulation (including Rule 16b-3), the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the invalid, illegal or unenforceable provision shall be
deemed null and void; however, to the extent permissible by law, any provision
which could be deemed null and void shall first be construed, interpreted or
revised retroactively to permit this Plan to be construed in compliance with all
applicable laws (including Rule 16b-3) so as to foster the intent of this Plan.
16. SUCCESSORS
Awards issued under the Plan should be binding upon, and inure to the
benefit of, the Corporation and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Corporation's assets and business.
17. EFFECTIVE DATE AND TERM
The effective date of this Plan is March 16, 1999, subject to its approval
by the stockholders of the Corporation at the annual meeting to be held on April
21, 1999, or any adjournment thereof. This Plan shall remain in effect until
March 15, 2009 unless terminated earlier by the Board.
8
Exhibit 23(a)
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
CNB Bancshares, Inc. on Form S-8 of our report dated May 13, 1999, incorporated
in the Annual Report on Form 11-K of Citizens Incentive Savings Plan for the
year ended December 31, 1998.
/s/ Olive LLP
Evansville, Indiana
June 24, 1999
Exhibit 99
----------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBIT TO FORM 10-K
(FORM 11-K)
ANNUAL REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1998
--------------------------------------.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to_________________
Commission file number 0-11510
--------------------------.
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
CITIZENS INCENTIVE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CNB BANCSHARES, INC.
20 N.W. THIRD STREET
EVANSVILLE, INDIANA 47739-0001
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITIZENS INCENTIVE SAVINGS PLAN
-------------------------------
(Name of the Plan)
Date: June 24, 1999 By /s/ James R. Dodd
--------------------- ----------------------
James R. Dodd
President, Trust & Investment
Management Division
CIVITAS BANK, Trustee
Page
CITIZENS INCENTIVE
SAVINGS PLAN
Financial Statements
December 31, 1998 and 1997
With Supplemental Schedules
Page
CITIZENS INCENTIVE SAVINGS PLAN
TABLE OF CONTENTS
PAGE
- ----------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Statement of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4
SUPPLEMENTAL SCHEDULES
Item 27a-Schedule of assets held for investment purposes 17
Item 27d-Schedule of reportable transactions 18
Page
[Olive Letterhead]
INDEPENDENT AUDITOR'S REPORT
Advisory Committee
Citizens Incentive Savings Plan
CNB Bancshares, Inc.
Evansville, Indiana
We have audited the accompanying statement of net assets available for benefits
of Citizens Incentive Savings Plan as of December 31, 1998 and 1997, and the
related statement of changes in net assets available for benefits for each of
the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Citizens
Incentive Savings Plan as of December 31, 1998 and 1997 and the changes in its
net assets available for benefits for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedules as listed in the
accompanying table of contents are presented for the purpose of additional
analysis and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Olive LLP
Evansville, Indiana
May 13, 1999
Page
CITIZENS INCENTIVE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31 1998 1997
- ---------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at fair value $56,023,239 $49,204,764
Accrued income receivable 19,278
Employee contributions receivable 130,895 68,723
Employer contributions receivable 125,220 80,678
Cash 8,436 56,723
-------------------------------
Total assets 56,287,790 49,430,166
LIABILITIES
Amount payable for securities purchased 0 112,426
-------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $56,287,790 $49,317,740
===============================
</TABLE>
See notes to financial statements.
(2)
CITIZENS INCENTIVE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1998 1997 1996
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADDITIONS
Investment income
Net appreciation in fair value
of investments $ 3,490,104 $ 8,631,988 $11,067,367
Interest 159,979 152,337 96,599
Dividends 112,716 142,460 18,134
Employee contributions 3,815,986 2,696,741 2,536,828
Employer contributions 1,507,703 1,042,026 962,144
Rollovers 336,923 704,837 1,046,430
Merger 196,050
-------------------------------------------------
Total additions 9,619,461 13,370,389 15,727,502
DEDUCTIONS
Benefits paid to participants 2,649,411 2,458,622 1,082,691
-------------------------------------------------
NET INCREASE 6,970,050 10,911,767 14,644,811
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 49,317,740 38,405,973 23,761,162
-------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $56,287,790 $49,317,740 $38,405,973
=================================================
</TABLE>
See notes to financial statements.
(3)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF PLAN
The following description of Citizens Incentive Savings Plan (Plan) provides
only general information. Participants should refer to the Plan agreement for a
more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan sponsored by CNB Bancshares, Inc. and
its wholly-owned subsidiaries (Company) for the benefit of employees who have
attained age 21 and completed one year of service and who have worked 1,000
hours in a 12-month period. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). Civitas Bank (formerly The
Citizens Trust Company of Indiana, N.A.) is the trustee of the Plan.
CONTRIBUTIONS
The Plan permits eligible employees through a salary reduction election to have
the Company make annual contributions of up to 15% of eligible compensation.
Employee rollover contributions are also permitted. The Company makes matching
contributions of employees' salary reduction amounts of 50% up to 6% of
employees' compensation. Company matching contributions are invested in the CNB
Bancshares Stock Fund.
PARTICIPANT INVESTMENT ACCOUNT OPTIONS
Investment account options available include various funds. Each participant
has the option of directing his contributions into any of the separate
investment accounts and may change the allocation daily.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
allocation of the Company's contribution and Plan earnings. Allocations are
based on participant account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account.
VESTING
Participants are immediately vested in all of their accounts plus the actual
earnings thereon.
PAYMENT OF BENEFITS
Upon termination of service, participants may elect to receive a lump-sum amount
equal to the value of their accounts. Retirees (age 55 or older) may elect to
receive their benefits in equal monthly installments over a period elected by
the participant, not to exceed their life expectancy. Withdrawals other than
for termination are permitted under circumstances provided by the Plan.
LOANS
The plan agreement includes provisions authorizing loans from the Plan to active
eligible participants. Loans are made to any eligible participant demonstrating
a qualifying need. The minimum amount of a loan shall be $400. The maximum
amount of a loan is determined by the available loan balance restricted to the
lesser of $50,000 or 50% of the voluntary savings and vested portion of Company
contributions. All loans are covered by demand notes and are repayable through
payroll withholdings or periodic payments over a period not to exceed five years
(except for loans for the purchase of a primary residence). Interest on the
loans is based on market rates.
(4)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will become 100% vested in their accounts.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING
The accompanying financial statements are prepared on the accrual method of
accounting.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of net assets and changes in net assets available
for benefits. Actual results could differ from those estimates.
INVESTMENTS
Investments are valued at quoted market price or prices established by local
security brokers. Securities traded on a National Securities exchange are
valued at quoted market prices on the last business day of the plan year.
Collective investment funds are valued at estimated fair value as determined by
the plan trustee. Certificates of deposit and certain investments are valued at
cost, which approximates market. Purchases and sales of securities are recorded
on a trade-date basis.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
ADMINISTRATIVE EXPENSES
All expenses incurred in the administration of the Plan are paid by the Company.
(5)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INVESTMENTS
The Plan's investments are held by a bank-administered trust fund. The Plan's
investments (including investments bought, sold, and held during the year)
appreciated in fair value as follows:
<TABLE>
<CAPTION>
NET APPRECIATION
IN FAIR VALUE FAIR VALUE AT
DURING YEAR END OF YEAR
-----------------------------------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1998
Investments at fair value as determined by quoted
prices in an active market
Mutual funds $ 589,154 $ 3,710,034
Investments at estimated fair value
Cash equivalents 2,348,790
Participant loans 728,045
Collective investment funds 2,900,950 49,236,370
-----------------------------------
$ 3,490,104 $ 56,023,239
===================================
YEAR ENDED DECEMBER 31, 1997
Investments at fair value as determined by quoted
prices in an active market
Mutual funds $ 143,954 $ 2,035,574
Investments at estimated fair value
Cash equivalents 1,880,173
Participant loans 618,057
Collective investment funds 8,488,034 44,670,960
------------------------------------
$ 8,631,988 $ 49,204,764
====================================
YEAR ENDED DECEMBER 31, 1996
Investments at fair value as determined by quoted
prices in an active market
Mutual funds $ 119,449 $ 1,375,104
Investments at estimated fair value
Cash equivalents 1,546,041
Participant loans 437,707
Collective investment funds 10,947,918 34,762,750
-----------------------------------
$ 11,067,367 $ 38,121,602
===================================
</TABLE>
(6)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
The fair value of individual investments that represent five percent or more of
the Plan's net assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31 1998 1997
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Collective Investment Funds
Core Equity Fund-99,308 and 97,516 units $ 5,912,685 $ 4,556,538
Income Fund-19,498 and 17,164 units 3,346,536 2,660,105
CNB Bancshares Stock Fund-1,813,594 and 1,762,011 units 37,772,184 35,304,157
</TABLE>
NOTE 4 - NET ASSETS BY SEPARATE INVESTMENT ACCOUNTS
The net assets and changes in net assets available for plan benefits by separate
investment accounts are as follows:
<TABLE>
<CAPTION>
1998
---------------------------------------------------------------------------------------------
PARTICIPANT DIRECTED
---------------------------------------------------------------------------------------------
FIDELITY FIDELITY SCUDDER INTERMEDIATE VALUE SPARTAN U.S.
MONEY MAGELLAN INTERNATIONAL INCOME INCOME EQUITY EQUITY
DECEMBER 31 MARKET FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions
Investment income
Net appreciation
(depreciation) in fair
value of investments $ 506,090 $ 32,516 $ 328,381 $ 11,210 $ 161,258 $ 50,548
Interest $ 103,360
Dividends 104,499 7,012 1,205
Employee contributions 177,955 383,410 251,437 393,741 26,309 463,120 104,085
Rollovers 21,478 9,908 9,967 6,752 3,741 20,009 9,931
Merger 397 42,925 29,065 6,550 55,677
---------------------------------------------------------------------------------------------
303,190 1,046,832 329,997 735,424 41,260 700,064 165,769
Deductions
Benefits paid to participants 141,285 78,185 56,315 177,942 6,436 93,706 3,195
---------------------------------------------------------------------------------------------
Net Increase Prior to Interfund
Transfers 161,905 968,647 273,682 557,482 34,824 606,358 162,574
Interfund Transfers 420,175 (42,596) 94,509 169,699 (525,902) (35,289) 250,547
---------------------------------------------------------------------------------------------
Net Increase (Decrease) 582,080 926,051 368,191 727,181 (491,078) 571,069 413,121
Net Assets Available for Benefits,
Beginning of Year 1,573,710 1,335,044 738,366 2,657,783 491,078 1,673,066
---------------------------------------------------------------------------------------------
Net Assets Available for Benefits,
End of Year $2,155,790 $2,261,095 $1,106,557 $ 3,384,964 $ 0 $2,244,135 $413,121
=============================================================================================
</TABLE>
(7)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
1998
--------------------------------------------------------------------
NON-PARTICIPANT
PARTICIPANT DIRECTED DIRECTED
-----------------------------------------------------
CORE CNB LOAN CNB
EQUITY BANCSHARES TRUST BANCSHARES
DECEMBER 31 FUND STOCK FUND FUND STOCK FUND TOTAL
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions
Investment income
Net appreciation (depreciation)
in fair value of investments $1,280,935 $ 706,529 $ 412,637 $ 3,490,104
Interest $ 56,619 159,979
Dividends 112,716
Employee contributions 454,493 1,561,436 3,815,986
Employer contributions 1,507,703 1,507,703
Rollovers 29,919 225,218 336,923
Merger 61,436 196,050
--------------------------------------------------------------------
1,826,783 2,493,183 56,619 1,920,340 9,619,461
Deductions
Benefits paid to participants 175,651 1,250,547 26,303 639,846 2,649,411
--------------------------------------------------------------------
Net Increase Prior to Interfund
Transfers 1,651,132 1,242,636 30,316 1,280,494 6,970,050
Interfund Transfers (271,701) (154,438) 49,842 45,154
--------------------------------------------------------------------
Net Increase (Decrease) 1,379,431 1,088,198 80,158 1,325,648 6,970,050
Net Assets Available for Benefits,
Beginning of Year 4,572,505 22,922,483 656,323 12,697,382 49,317,740
--------------------------------------------------------------------
Net Assets Available for Benefits,
End of Year $5,951,936 $24,010,681 $ 736,481 $14,023,030 $56,287,790
====================================================================
</TABLE>
(8)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
1997
---------------------------------------------------------------------------------
PARTICIPANT DIRECTED
---------------------------------------------------------------------------------
FIDELITY FIDELITY SCUDDER INTERMEDIATE VALUE
MONEY MAGELLAN INTERNATIONAL INCOME INCOME EQUITY
DECEMBER 31 MARKET FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions
Investment income
Net appreciation (depreciation)
in fair value of investments $ 172,254 $(28,300) $ 240,100 $ 30,443 $ 312,736
Interest $ 99,023
Dividends 66,952 75,508
Employee contributions 110,694 267,401 202,667 275,808 85,496 300,606
Rollovers 10,342 39,582 28,905 159,248 7,169 134,522
---------------------------------------------------------------------------------
220,059 546,189 278,780 675,156 123,108 747,864
Deductions
Benefits paid to participants 176,237 85,747 31,305 211,390 18,948 42,018
---------------------------------------------------------------------------------
Net Increase Prior to Interfund
Transfers 43,822 460,442 247,475 463,766 104,160 705,846
Interfund Transfers (136,791) (23,700) 7,633 (146,450) 28,705 267,324
---------------------------------------------------------------------------------
Net Increase (Decrease) (92,969) 436,742 255,108 317,316 132,865 973,170
Net Assets Available for Benefits,
Beginning of Year 1,666,679 898,302 483,258 2,340,467 358,213 699,896
---------------------------------------------------------------------------------
Net Assets Available for Benefits,
End of Year $1,573,710 $1,335,044 $738,366 $2,657,783 $491,078 $1,673,066
=================================================================================
</TABLE>
(9)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
1997
------------------------------------------------------------------
NON-PARTICIPANT
PARTICIPANT DIRECTED DIRECTED
-------------------------------------------------------
CORE CNB LOAN CNB
EQUITY BANCSHARES TRUST BANCSHARES
DECEMBER 31 FUND STOCK FUND FUND STOCK FUND TOTAL
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions
Investment income
Net appreciation (depreciation)
in fair value of investments $1,061,706 $ 4,403,713 $ 2,439,336 $ 8,631,988
Interest $ 53,314 152,337
Dividends 142,460
Employee contributions 285,687 1,168,382 2,696,741
Employer contributions 1,042,026 1,042,026
Rollovers 196,031 129,038 704,837
-----------------------------------------------------------------
1,543,424 5,701,133 53,314 3,481,362 13,370,389
Deductions
Benefits paid to participants 208,447 1,114,529 30,354 539,647 2,458,622
-----------------------------------------------------------------
Net Increase Prior to Interfund
Transfers 1,334,977 4,586,604 22,960 2,941,715 10,911,767
Interfund Transfers (74,685) (1,927,028) 261,052 1,743,940
-----------------------------------------------------------------
Net Increase (Decrease) 1,260,292 2,659,576 284,012 4,685,655 10,911,767
Net Assets Available for Benefits,
Beginning of Year 3,312,213 20,262,907 372,311 8,011,727 38,405,973
-----------------------------------------------------------------
Net Assets Available for Benefits,
End of Year $4,572,505 $22,922,483 $ 656,323 $12,697,382 $49,317,740
=================================================================
</TABLE>
(10)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
1996
-----------------------------------------------------------------------------
PARTICIPANT DIRECTED
-----------------------------------------------------------------------------
FIDELITY FIDELITY SCUDDER INTERMEDIATE VALUE
MONEY MAGELLAN INTERNATIONAL INCOME INCOME EQUITY
DECEMBER 31 MARKET FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions
Investment income
Net appreciation in fair value
of investments $ 78,175 $ 41,274 $ 53,440 $ 13,253 $109,651
Interest $ 75,878
Dividends 3,601 12,919
Employee contributions 110,057 281,071 185,984 282,994 78,370 211,260
Rollovers 4,779 77,411 31,185 27,137 16,366 41,732
-----------------------------------------------------------------------------
190,714 440,258 271,362 363,571 107,989 362,643
Deductions
Benefits paid to participants 55,709 23,917 16,098 135,744 83,791 21,467
-----------------------------------------------------------------------------
Net Increase Prior to Interfund
Transfers 135,005 416,341 255,264 227,827 24,198 341,176
Interfund Transfers 5,702 9,141 8,932 61,032 (409) 62,772
-----------------------------------------------------------------------------
Net Increase 140,707 425,482 264,196 288,859 23,789 403,948
Net Assets Available for Benefits,
Beginning of Year 1,525,972 472,820 219,062 2,051,608 334,424 295,948
-----------------------------------------------------------------------------
Net Assets Available for Benefits,
End of Year $1,666,679 $ 898,302 $483,258 $2,340,467 $358,213 $699,896
=============================================================================
</TABLE>
(11)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
1996
-----------------------------------------------------------------
NON-PARTICIPANT
PARTICIPANT DIRECTED DIRECTED
---------------------------------------------------
CORE CNB LOAN CNB
EQUITY BANCSHARES TRUST BANCSHARES
DECEMBER 31 FUND STOCK FUND FUND STOCK FUND TOTAL
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions
Investment income
Net appreciation in fair value
of investments $ 542,758 $ 7,354,996 $2,873,820 $11,067,367
Interest $ 20,721 96,599
Dividends 1,614 18,134
Employee contributions 213,684 1,173,408 2,536,828
Employer contributions 962,144 962,144
Rollovers 78,871 768,949 1,046,430
------------------------------------------------------------------
835,313 9,298,967 20,721 3,835,964 15,727,502
Deductions
Benefits paid to participants 135,126 447,980 12,691 150,168 1,082,691
------------------------------------------------------------------
Net Increase Prior to Interfund
Transfers 700,187 8,850,987 8,030 3,685,796 14,644,811
Interfund Transfers 48,502 (252,190) 118,241 (61,723)
------------------------------------------------------------------
Net Increase 748,689 8,598,797 126,271 3,624,073 14,644,811
Net Assets Available for Benefits,
Beginning of Year 2,563,524 11,664,110 246,040 4,387,654 23,761,162
------------------------------------------------------------------
Net Assets Available for Benefits,
End of Year $3,312,213 $20,262,907 $ 372,311 $8,011,727 $38,405,973
==================================================================
</TABLE>
(12)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - PARTY-IN-INTEREST TRANSACTIONS
Party-in-interest transactions include those with fiduciaries or employees of
the Plan, any person who provides services to the Plan, an employer whose
employees are covered by the Plan, an employee organization whose members are
covered by the Plan, a person who owns 50 percent or more of such an employer or
employee association, or relatives of such persons.
The Company provides certain administrative services at no cost to the Plan.
The Plan owns shares of common stock of CNB Bancshares, Inc. (via the CNB
Bancshares Stock Fund). CNB Bancshares, Inc. is the sole stockholder of Civitas
Bank (formerly The Citizens Trust Company of Indiana, N.A.,) trustee of the
Plan. Additionally, the Plan invests in units of the following collective
investment funds maintained by the trustee. Information regarding these
transactions is as follows:
(13)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
INCOME FUND
------------------------------------------------------------------
1998 1997 1996
------------------------------------------------------------------
SHARES AMOUNT Shares Amount Shares Amount
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1 17,164 $2,660,105 16,325 $2,300,496 13,788 $1,897,404
Purchases 4,017 656,725 3,999 574,351 5,391 738,021
Redemptions (1,724) (305,225) (3,160) (454,842) (2,854) (388,369)
Appreciation 328,381 240,100 53,440
Mergers 41 6,550
------------------------------------------------------------------
Balances, December 31 19,498 $3,346,536 17,164 $2,660,105 16,325 $2,300,496
==================================================================
Percent of total fair value
of investments 5.97% 5.41% 6.03%
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE TERM INCOME FUND
--------------------------------------------------------------
1998 1997 1996
--------------------------------------------------------------
UNITS AMOUNT Units Amount Units Amount
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1 3,474 $ 484,494 2,745 $356,834 2,143 $268,463
Purchases 4,109 583,153 1,089 145,491 1,331 167,492
Redemptions (7,583) (1,078,857) (360) (48,274) (729) (92,374)
Appreciation 11,210 30,443 13,253
--------------------------------------------------------------
Balances, December 31 0 $ 0 3,474 $484,494 2,745 $356,834
==============================================================
Percent of total fair value
of investments 0% .98% .94%
====== ======== ========
</TABLE>
<TABLE>
<CAPTION>
VALUE EQUITY FUND
----------------------------------------------------------------
1998 1997 1996
----------------------------------------------------------------
UNITS AMOUNT Units Amount Units Amount
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1 36,516 $1,665,666 21,876 $ 781,917 6,509 $189,620
Purchases 23,833 1,168,489 17,627 692,798 16,842 530,275
Redemptions (16,745) (846,125) (2,987) (121,785) (1,475) (47,629)
Appreciation 161,258 312,736 109,651
Mergers 1,117 55,677
----------------------------------------------------------------
Balances, December 31 44,721 $2,204,965 36,516 $1,665,666 21,876 $781,917
================================================================
Percent of total fair value of
investments 3.94% 3.39% 2.05%
========= ========= =========
</TABLE>
(14)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CORE EQUITY FUND
-----------------------------------------------------------------------
1998 1997 1996
-----------------------------------------------------------------------
SHARES AMOUNT Shares Amount Shares Amount
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1 97,516 $4,556,538 91,122 $3,249,901 82,935 $2,446,779
Purchases 12,571 643,407 15,476 620,593 18,839 604,197
Redemptions (11,961) (629,631) (9,082) (375,662) (10,652) (343,833)
Appreciation 1,280,935 1,061,706 542,758
Mergers 1,182 61,436
-----------------------------------------------------------------------
Balances, December 31 99,308 $5,912,685 97,516 $4,556,538 91,122 $3,249,901
=======================================================================
Percent of total fair value of
investments 10.55% 9.26% 8.53%
========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
CNB BANCSHARES STOCK FUND
--------------------------------------------------------------------------------
1998 1997 1996
--------------------------------------------------------------------------------
UNITS AMOUNT Units Amount Units Amount
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1 1,762,011 $35,304,157 1,734,553 $28,073,602 1,552,014 $15,856,851
Purchases 189,982 3,692,146 186,922 3,029,660 254,887 2,832,055
Rollovers 59,218 684,187
Redemptions (138,399) (2,343,285) (159,464) (2,642,154) (131,566) (1,534,616)
Appreciation 1,119,166 6,843,049 10,235,125
--------------------------------------------------------------------------------
Balances, December 31 1,813,594 $37,772,184 1,762,011 $35,304,157 1,734,553 $28,073,602
================================================================================
Percent of total fair value of
investments 67.42% 71.75% 73.64%
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
CITIZENS MONEY FUND
--------------------------------------------------------
1998 1997
--------------------------------------------------------
UNITS AMOUNT Units Amount
--------------------------------------------------------
<S> <C> <C> <C> <C>
Balances, January 1 321,812 $ 321,812 0 $ 0
Purchases 10,839,668 10,839,668 4,512,990 4,512,990
Redemptions (10,951,672) (10,951,672) (4,191,178) (4,191,178)
--------------------------------------------------------
Balances, December 31 209,808 $ 209,808 321,812 $ 321,812
========================================================
Percent of total fair value of
investments .37% .65%
======== ========
</TABLE>
(15)
CITIZENS INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - TAX STATUS
The Internal Revenue Service has advised that the Plan constitutes a qualified
plan under Section 401 of the Internal Revenue Code and that the trust
established under the Plan is therefore exempt from federal income taxes. The
Plan has been amended since receiving the determination letter. However, the
plan administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue
Code and that the Plan was qualified and the related trust was tax exempt as of
the financial statement date.
NOTE 7 - AFFILIATE MERGERS
During 1998, the AAK, Inc. 401(k) Plan merged into the Plan. This merger
resulted in the transfer of $196,050 of assets at fair market value.
NOTE 8 - YEAR 2000
Like all entities, the Plan is exposed to risks associated with the Year 2000
Issue, which affects computer software and hardware; transactions with
customers, vendors, and other entities; and equipment dependent upon microchips.
It is not possible for any entity to guarantee the results of its own
remediation efforts or to accurately predict the impact of the Year 2000 Issue
on third parties with which the Plan does business. If remediation efforts of
the Plan or third parties with which the Plan does business are not successful,
the Year 2000 Issue could have negative effects on the Plan's financial
condition and results of operations in the near term.
NOTE 9 - SUBSEQUENT EVENT
Effective January 1, 1999, approximately $435,000 of assets from the National
Bancorp Employee Stock Ownership Plan were merged into the Plan.
(16)
SUPPLEMENTAL SCHEDULES
Page
CITIZENS INCENTIVE SAVINGS PLAN
ITEM 27A-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
EMPLOYER IDENTIFICATION NUMBER: 35-1568731 PLAN NUMBER: 002
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUE, INCLUDING MATURITY DATE,
BORROWER, LESSOR OR RATE OF INTEREST, COLLATERAL, CURRENT
SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH EQUIVALENTS
Fidelity Primary Obligations #59 2,138,982 units, 4.93% $ 2,138,982 $ 2,138,982
*Citizens Money Fund 209,808 units, 4.86% 209,808 209,808
-----------------------------
2,348,790 2,348,790
-----------------------------
MUTUAL FUNDS
Fidelity Magellan Fund #021 Mutual fund, 18,479 units 1,652,457 2,225,620
Scudder International Fund #68 Mutual fund, 22,283 units 1,071,804 1,085,159
Spartan U.S. Equity Fund #650 Mutual fund, 9,080 units 348,294 399,255
-----------------------------
3,072,555 3,710,034
-----------------------------
LOANS - Various Plan Participants Participant Loan Notes
Highest interest rate-10.0%
Lowest interest rate-7.0%
Through 9-12-12 728,045
-----------------------------
COLLECTIVE INVESTMENT FUNDS
*Value Equity Fund 44,721 units 1,933,193 2,204,965
*Core Equity Fund 99,308 units 3,034,460 5,912,685
*Income Fund 19,498 units 2,626,636 3,346,536
*CNB Bancshares Stock Fund 1,813,594 units 20,180,603 37,772,184
-----------------------------
27,774,892 49,236,370
-----------------------------
$33,196,237 $56,023,239
=============================
</TABLE>
*Party-in-interest
(17)
<TABLE>
<CAPTION>
CITIZENS INCENTIVE SAVINGS PLAN
ITEM 27D-SCHEDULE OF REPORTABLE TRANSACTIONS
(TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS AT BEGINNING OF YEAR)
YEAR ENDED DECEMBER 31, 1998
EMPLOYER IDENTIFICATION NUMBER: 35-1568731 PLAN NUMBER: 002
CURRENT VALUE
IDENTITY OF EXPENSES OF ASSET ON
PARTY PURCHASE SELLING LEASE INCURRED WITH COST OF TRANSACTION NET GAIN
INVOLVED DESCRIPTION OF ASSETS PRICE PRICE RENTAL TRANSACTION ASSET DATE OR (LOSS)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuer CNB Bancshares Stock Fund
Purchases $3,692,146 $3,692,146 $3,692,146
Sales $2,703,526 1,722,661 2,703,526 $980,865
Issuer Citizens Money Fund
Purchases 10,839,668 10,839,668 10,839,668
Sales 10,951,672 10,951,672 10,951,672
Issuer Fidelity Primary Obligations #59
Purchases 1,911,258 1,911,258 1,911,258
Sales 1,330,637 1,330,637 1,330,637
</TABLE>
(18)
