NBC CAPITAL CORPORATION
Starkville, Mississippi
NOTICE OF ANNUAL SHAREHOLDERS MEETING
To the Shareholders of
NBC Capital Corporation
Notice is hereby given that pursuant to call of its directors and in
compliance with the By-laws, the Annual Meeting of Shareholders of NBC
Capital Corporation, the holding company of National Bank of Commerce of
Mississippi and National Bank of Commerce of Tuscaloosa, will be held at
the National Bank of Commerce of Mississippi, Columbus Banking Center,
803 Main, Columbus, Mississippi on Tuesday, April 8, 1997 at 5:00 P. M.
for the purpose of considering and voting on the following proposals:
1. Election of Directors: Fixing the number of directors at
twenty-five and the election of the twenty-two directors
set forth in the Proxy Statement dated March 17, 1997
accompanying this notice of said meeting.
2. To consider and act upon whatever other business might be
brought before the meeting or any adjournment thereof.
Only those shareholders of record at the close of business March 3,
1997 shall be entitled to notice of meeting.
By Order of the Board of Directors
L. F. Mallory, Jr.
Chairman of the Board and Chief
Executive Officer
Dated and Mailed at
Starkville, Mississippi
March 17, 1997
Enclosures:
1. Proxy
2. Business reply envelope
3. Annual Report
Whether or not you are able to personally attend the meeting, the Board of
Directors respectfully requests that you sign and return the enclosed proxy
at your earliest convenience.
Your presence at the Annual Meeting is encouraged.
NBC CAPITAL CORPORATION
Starkville, Mississippi
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 8, 1997
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of NBC Capital Corporation (hereinafter sometimes
referred to as the "Corporation") of proxies for the Annual Meeting of
Shareholders to be held at the National Bank of Commerce, Columbus Banking
Center, 803 Main, Columbus, Mississippi, Tuesday, April 8, 1997 at 5:00
P. M., and any adjournment thereof, for the purpose stated below.
Shareholders of record as of March 3, 1997 are entitled to vote at the
meeting or any adjournment thereof. On March 3, 1997 there were
outstanding and entitled to vote, 1,200,000 shares of common stock, each
of which entitles the holder to one vote on all business of the meeting
and to vote in the election of directors as presented below.
Any person giving a proxy has the power to revoke it at any time before
it is exercised. Notice shall be given in writing or in person for those
attending the meeting and voting in person. Additionally, a proxy may be
revoked by a subsequently dated proxy. The proxy will be voted in
accordance with the specifications given by the shareholder. The Board
of Directors will vote any proxy received, without a directive of the
shareholder, in favor of Proposal One.
The cost of soliciting proxies will be borne by the Corporation. In
addition to solicitations by mail, directors, officers and regular
employees may solicit personally or by telephone or other electronic
means as deemed appropriate.
The Corporation has no knowledge as of March 3, 1997 that any person
beneficially owned, directly or indirectly, more than five percent of
the outstanding common stock of the Corporation, except as noted
herein:
Amount and Nature Percent
Name and Address of Of Beneficial Ownership Of
Beneficial Owner As of March 3, 1997 Class
_________________________ _______________________ _______
Estate of J. R. Scribner,
Deceased
P. O. Box 840
Amory, Mississippi 230,567* 19.2
Employee Stock Ownership
Plan 83,633 7.0
*Sarah Scribner Prude, J. R. Scribner, Jr. and James R. Prude are
co-executors of the J. R. Scribner estate. All are being presented
for election to the Corporation's Board of Directors. Above ownership
includes the Scribner Equipment Company account.
ELECTION OF DIRECTORS
The nominees are to be elected for a term of one year or until their
respective successors are duly elected and have qualified. It is
intended that shares represented by proxies solicited by management
will be voted in accordance with specifications of the shareholders as
to election of directors on all nominees listed below. Designated
proxy agents may vote proxies in any manner in which the individual
shareholder may vote unless otherwise instructed by the shareholder.
In the event any nominees are unavailable as candidates, the proxy
agents will vote for other persons who in their best judgment, are
qualified as substitute candidates. The Certificate of Incorporation
states that at all elections of directors of the Corporation, each
shareholder shall be entitled to as many votes as shall equal the
number of votes which he would be entitled to cast for the election
of directors with respect to his shares multiplied by the number of
directors to be elected, and he may cast all such votes for a single
director, or may distribute them among the number to be voted for,
or any two or more of them, as he may see fit.
Other nominations for the office of director may be made only in
accordance with the by-laws, as amended, which provide:
That it is required that non-management director nominations be made
by written notice to the Secretary and received no later than
ninety (90) days prior to the month and day that the proxy material
regarding the last election of directors to the Board of Directors of
the Corporation was mailed to the shareholders. Notice must include
the full name of the director nominated, his age and date of birth,
his educational background, and a list of business experience and
positions held for at least the preceding five years. The notice
must include home and office addresses and telephone numbers and
include a signed representation by the nominee to timely provide all
information requested by the Corporation as part of its disclosure in
regard to the solicitation of proxies for election of directors. The
name of each such candidate for director must be placed in nomination
at the Annual Meeting by a shareholder present in person and the
nominee must be present in person at the meeting for the election of
directors. Additionally, all relevant outstanding SEC rules and
regulations must be followed by any shareholder making a proposal
covered by this section. A vote for a person who has not been duly
nominated pursuant to these requirements is void.
The following schedule sets forth, as to each person nominated for
election to the Board of Directors of the Corporation, information as
to his principal occupation, year in which he began his period of
service as a director of the Corporation, his other position or office
with the Corporation, if any, and the common stock of the Corporation
of which he is the beneficial owner. Unless otherwise noted, each
individual has sole voting and investment power in the ownership
reflected.
Stock of
Corporation
Member Beneficially
Of the Owned as of Percent
Name and Occupation and Board March 3, Of
Residence Age Experience Since 1997 Stock
__________________ ___ ______________________ ______ ____________ _______
Mark A. Abernathy 40 Executive Vice 1994 1,000 .1
2007 Woodlake President and Chief
Drive Operating Officer,
Starkville, MS NBC Capital Corpora-
tion and National
Bank of Commerce of
Mississippi,
Starkville, MS
Robert A.
Cunningham 51 Planter
340 Deerbrook Brooksville, MS 1990 16,358 1.4
Road
Brooksville, MS
J. Nutie Dowdle 53 President, Dowdle 1990 9,184 .8
521 Huckleberry Butane Gas Co.,
Hills Inc., and
Columbus, MS Wholesale LP Gas
Co., Columbus, MS
Clifton B. Fowler 48 Vice President, 1991 1,315 .1
1306 South NBC Capital
Montgomery Corporation and
Starkville, MS President, National
Bank of Commerce
of Mississippi,
Starkville Banking
Center,
Starkville, MS
James C.
Galloway, Jr. 44 President, 1997 2,003(1) .2
551 Timber Creek Galloway-Chandler-
Drive McKinney Insurance
Columbus, MS Agency, Inc.
Columbus, MS
Hunter M. Gholson 64 Attorney at Law, 1974 16,209(2) 1.4
110 6th Street No. Gholson, Hicks &
Columbus, MS Nichols, Columbus,
MS and Secretary
of the Board, NBC
Capital Corporation
and National Bank
of Commerce of
Mississippi
Bobby L. Harper 55 Chairman of 1977 5,718 .5
1524 Briarwood Executive Commit-
Circle tee, NBC Capital
Columbus, MS Corporation and
National Bank of
Commerce of
Mississippi and
President,
National Bank of
Commerce of
Mississippi,
Columbus Banking
Center, Columbus,
MS
Robert S. Jones 65 President, 1973 5,597 .5
803 19th Ave. No. Fletcher-Jones,
Columbus, MS Inc., Columbus,
MS
Kenneth A. Madison 64 Vice President, 1991 2,665 .2
529 Popular Ave. NBC Capital
Philadelphia, MS Corporation and
President,
National Bank of
Commerce of
Mississippi,
Philadelphia
Banking Center
Philadelphia, MS
Lewis F. 54 Chairman of the 1969 17,889(3) 1.5
Mallory, Jr. Board and
513 Greensboro President, NBC
Street Capital
Starkville, MS Corporation and
National Bank
of Commerce of
Mississippi,
Starkville, MS
Robert D. Miller 67 Certified Public 1975 6,402 .5
Treas Lake Road Accountant,
Aberdeen, MS R.D. Miller &
Co., C.P.A.
Aberdeen, MS
Edith D. Millsaps 72 Chairman of the 1977 3,190 .3
Mayhew Road Board and
Starkville, MS Secretary-
Treasurer,
Millsaps
Chevrolet-
Pontiac-Buick-
GMC Truck, Inc.
Starkville, MS
Ralph E. Pogue 67 Attorney at Law 1979 3,896(4) .3
Lakewood Street Pogue and Faulks
Aberdeen, MS Aberdeen, MS
Thomas J.
Prince, Jr. 55 Vice President, 1990 2,622 .2
301 Bellview NBC Capital
Aberdeen, MS Corporation and
President,
National Bank
of Commerce of
Mississippi,
Aberdeen Banking
Center,
Aberdeen, MS
James R. Prude 43 Independent Bank 1994 272,133(5) 22.7
4407 Southcrest Consultant and (6)
Road Vice President,
Dallas, TX Scribner
Equipment, Inc.
Amory, MS
Sarah Scribner 70 Secretary- 1987 235,610(5) 19.6
Prude Treasurer,
Highway 25 South Scribner
Amory, MS Equipment
Company, Inc.
Amory, MS
Allen B.
Puckett, III 46 President, 1987 34,920 2.9
Jolly Road Columbus Brick
Columbus, MS Company
Columbus, MS
Dr. James C. 65 Brooksville 1978 1,437(7) .1
Ratcliff Medical
East Depot St. Association
Brooksville, MS Brooksville, MS
J. R. 69 President, 1971 235,610(5) 19.6
Scribner, Jr. Scribner
Highway 25 South Equipment
Amory, MS Company, Inc.
Amory, MS
Sammy J. Smith 57 Owner, Smith & 1977 1,119 .1
20 Tally Ho Drive Byars Men's
Starkville, MS Clothing,
Starkville, MS
Henry S. Weiss 66 President, 1988 7,638 .6
Waring Road Industrial
Columbus, MS Fabricators,
Inc., and
Columbus Scrap
Material Co.,
Inc.
Columbus, MS
E. Lloyd Wood 68 President, 1994 1,000 .1
23 Ridgeland Lloyd Wood
Tuscaloosa, AL Construction,
Inc.
Tuscaloosa, AL
All Officers
and Directors 31* 430,432 35.9
* Includes only executive officers as designated by the Corporation's
Board of Directors.
[1] Includes 675 shares which beneficial owner has shared voting and
investment power.
[2] Includes 6,934 shares which beneficial owner has shared voting and
investment power.
[3] Includes 535 shares which beneficial owner has shared voting and
investment power.
[4] Includes 166 shares which beneficial owner has shared voting and
investment power.
[5] Includes shares held in J. R. Scribner Estate for which Director
may exercise voting control.
[6] Includes 20,783 shares for which beneficial owner serves as
trustee.
[7] Includes 372 shares which beneficial owner has shared voting and
investment power.
The Corporation does not have a Nominating Committee. The Corporation
does have a standing Audit Committee.
Audit Committee (1996)
Edith D. Millsaps, Chairperson Robert A. Cunningham J. Nutie Dowdle
Robert D. Miller Ralph E. Pogue Allen B. Puckett, III
Dr. James C. Ratcliff J. R. Scribner, Jr. E. Lloyd Wood
Function: The Audit Committee, which reports directly to the Board of
Directors and is composed of non-officer directors, evaluates the work
product of the Audit Department and offers general supervision without
imposing any limitation on the scope of the audit function. The committee
considers and recommends changes which might improve the internal audit
function. The committee had four meetings during 1996.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
CASH COMPENSATION
The following table presents information concerning compensation paid
or accrued for services to the Corporation for the years 1994, 1995,
and 1996 for the CEO and the four highest compensated executive
officers whose total annual salary and bonus exceeded $100,000 for
the most recent year. Perquisites and other personal benefits are less
than 10 percent of annual compensation and bonuses and, therefore,
excluded.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
NAME AND ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION [1]
____________________________ ____ ________ ________ ____________
Lewis F. Mallory, Jr. 1996 $248,000 $101,340 5,925*
Chairman of the Board & 1995 234,000 72,540 6,050
Chief Executive Officer 1994 225,000 69,750 5,963
Mark A. Abernathy 1996 150,000 43,500 1,878*
Executive Vice President & 1995 144,200 38,934 N/A
Chief Operating Officer 1994 N/A N/A N/A
Carl M. Holloway 1996 108,500 26,040 5,297*
Executive Vice President 1995 105,370 24,235 5,204
1994 102,800 23,464 5,018
Joel C. Clements 1996 105,100 25,224 4,388*
Executive Vice President 1995 101,140 23,262 4,037
1994 97,250 22,368 3,863
Thomas P. Hester 1996 106,068 13,259 4,693*
President and Chief 1995 101,500 8,500 5,691
Executive Officer 1994 96,250 8,900 3,826
NBC of Tuscaloosa
* The Employee Stock Ownership Plan portion of the 1996 "All Other
Compensation" is a good faith estimate since allocation data has not
been received from the actuarial firm responsible for administrative
recordkeeping. The 1994 and 1995 amounts have been revised to reflect
actual amounts.
For information regarding Phantom Stock Benefit Plan for Lewis F.
Mallory, Jr., and Mark A. Abernathy see subsequent table. Also, see
subsequent disclosure regarding Executive Employment Agreement for
Lewis F. Mallory, Jr.
[1] All other compensation includes the Corporation's contribution to a
401-K Thrift Plan and Employee Stock Ownership Plan which are defined
contribution plans. All employees become participants in these plans
following one year of service and attainment of age 21. The individual's
interest in the Employee Stock Ownership Plan is determined by the ratio
of his annual compensation to the total compensation of all participants
times the annual contribution, which was $187,100, $200,000 and $200,000
for calendar years 1994, 1995 and 1996, respectively. Contributions for
the 401-K plan are a matching 25 percent contribution for all individuals
voluntarily contributing to the plan. Individual voluntary contributions
are limited to 5 percent of annual compensation for matching purposes.
Contributions to the 401-K plan for all employees totaled $54,180,
$54,866 and $59,426 for the years 1994, 1995, and 1996, respectively.
LONG TERM INCENTIVE AWARDS
The Corporation provides a phantom employee stock benefit plan whereby
shares of the Corporation's stock have been assigned for the benefit of
two key employees at retirement. Under the terms of the plan, retirement
payments will be equal to the fair market value of the stock plus any
cash or stock dividends paid since the adoption of the agreement.
Compensation expense was recorded at the establishment date based on
the market value of the stock. Any increase or decrease in the market
value of the stock during the year is recorded as an adjustment to
employee benefit expense.
BENEFIT OBLIGATION PERFORMANCE OR OTHER PERIOD
NAME AS OF 12-31-96 UNTIL MATURATION OR PAYOUT
______________ __________________ ___________________________________
Lewis F.
Mallory, Jr. $163,047 Payable in cash at the earlier of
disability, death, or normal
Mark A. retirement, defined as 65. Benefit
Abernathy 50,285 accrued includes the cash
equivalent of stock market value
with accumulated dividends, whether
cash or stock.
DEFINED BENEFIT PLAN
NBC Capital Corporation maintains a retirement plan for employees who are
21 years or older who have completed one year of service. The following
table specifies the estimated benefits payable upon retirement under the
plan to persons in the following remuneration and years of service
classifications.
5 Year Average
Annual Earnings 10 20 30 40 45
_______________ _______ _______ _______ _______ _______
$ 50,000 $ 8,621 $17,242 $25,864 $27,851 $28,476
75,000 13,621 27,242 40,864 43,913 44,851
100,000 18,621 37,242 55,864 59,976 61,226
125,000 23,621 47,242 70,864 76,038 77,601
150,000 or more 28,621 57,242 85,864 92,101 93,976
Benefits payable under the retirement plan are based on a formula that
takes into account the individual's average compensation using the five
highest earnings years and the number of years of credited service.
The above figures reflect the benefit and compensation limits under
federal law in effect for 1996. For that year, the compensation limit
was $150,000 and benefit limit was $112,153 (for distribution under
"life & 10 years certain" option).
The above amounts assume that the service period was completed in 1996
with the benefit in effect for years prior to 3/1/65 being used for
service to that date and the current formula being used for service after
3/1/65. Benefits are not subject to any deduction for Social Security
benefits or other offset amounts and are payable at age 65.
Credited years of service for those officers whose compensation is
disclosed in the summary compensation table follows:
CREDITED SERVICE AS OF YEAR INDIVIDUAL
NAME JANUARY 1, 1997 REACHES AGE 65
________________________ ______________________ _________________
Lewis F. Mallory, Jr. 32 2008
Mark A. Abernathy 2 2022
Carl M. Holloway 23 2012
Joel C. Clements 13 2012
Thomas P. Hester 1 1998
COMPENSATION OF DIRECTORS
The annual basic retainer of non-employee directors is $7,500. In
addition to the basic retainer, non-employee directors were paid $475
per special committee meeting attended. Assuming attendance at all
1996 meetings, Salary Committee, Audit Committee, Corporate
Responsibility Committee, and Trust Investment Committee members
were paid an additional $1,900. Executive Committee members consisting
of Hunter M. Gholson, Robert S. Jones, Robert D. Miller, James R.
Prude, Sarah Scribner Prude, A. C. Puckett, Allen B. Puckett, III,
William H. Ward and Henry S. Weiss were additionally compensated in
the amount of $6,600 for serving in that capacity. The Secretary of
the Board received an additional $22,000. Additionally, Director
James R. Prude was reimbursed $4,360 for air fare to attend board
meetings.
There were eleven meetings of the Board of Directors held during 1996. Of
those directors serving during 1996 all attended more than 75 percent of
the Board meetings and meetings of those committees of which they were
members, with the exception of Directors A. C. Puckett, James C. Ratcliff
and E. Lloyd Wood, who were either out of town or ill at the time.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive officer compensation, including that of Chief Executive Officer
Mallory, is evaluated by a compensation committee consisting of outside
directors. For 1996, members of this committee, which reports its
recommendations to the full Board, included Robert S. Jones, Chairman,
Hunter M. Gholson, Robert D. Miller, James R. Prude, Sarah Scribner Prude,
Allen B. Puckett, III, J. R. Scribner, Jr., William H. Ward and Henry S.
Weiss.
The Committee develops its recommendations after reviewing information
compiled by The Wyatt Company, an actuarial and consulting company with
offices in principal cities around the world. This company annually
provides recommended salary adjustments on all of the Corporation's
salaried positions. The Wyatt Company was retained in 1985 to design and
implement a Salary Administration Program which would provide a basis for
paying fair and competitive salaries throughout the Corporation, while
including a pay for performance philosophy as an underlying principle.
It is the policy of NBC Capital Corporation to pay fair and equitable
salaries based on the relative value of each position to the Corporation,
giving due consideration to compensation paid for comparable work by peer
banks of similar size and financial performance in its geographical area.
The Corporation's position is intended to foster the following goals: (1)
attract and retain highly qualified individuals by paying salaries which
are competitive in the market place, (2) provide maximum motivation to
employees by paying salaries within the latitude of established salary
grade ranges, based on individual job performance and (3) promote a
progressive work force through which the Corporation can attain its
objectives.
To support the Corporation in these goals, The Wyatt Company annually
surveys the market to determine the value of each salaried position. This
survey data, the individual's level of responsibility, the length of
experience at this level, job performance (reviewed annually using a formal
management performance appraisal process), and the Corporation's financial
performance become components of a written salary recommendation provided
by the Consultant. The Salary Committee evaluates Wyatt's recommendations,
gives additional consideration to recommendations of the CEO for
subordinate executive officers, and makes adjustments as necessary to
maintain internal equity in keeping with budgetary considerations. The
Committee's action is subject to approval by the full Board of Directors,
excluding those Directors who also serve as officers. The Board of
Directors did not modify or reject in any material way any action or
recommendation of the Salary Committee for 1996.
Based upon the Salary Committee's recommendation, the Board of Directors
has established a discretionary bonus policy which distributes to all staff
(excluding certain executive officers) a portion of earnings exceeding a
specific annual income goal. For general staff, participation in such
bonus pool, if any, is determined by the pro rata share to total
participating salaries of all staff participating in the bonus pool. The
Chief Executive Officer and Executive Division Heads, including those
executives whose total compensation is disclosed in the Summary
Compensation Schedule, participate in a separate discretionary bonus pool
based upon the attainment the annual corporate income goal as well as a
specific annual Return on Average Asset goal. Peer group comparisons are
reviewed from the Consultant and Sheshunoff and Company, a bank analyst
firm, to ensure that the goals, if attained, position the Corporation in
the upper 25th performance percentile, nationally. CEO Mallory's accrued
bonus for 1996 was 33% of base salary. The bonus for other executives was
24% of base salary with the exception of COO Abernathy which was 29% of
base salary.
The Securities and Exchange Commission requires that the Company include in
its Proxy Statement a line graph presentation comparing cumulative,
five-year shareholder returns on an indexed basis with a performance
indicator of the overall stock market and either a nationally recognized
industry standard or an index of peer companies selected by the Company.
The broad market index used in the graph is the NASDAQ Market Index. The
Company has chosen to use Media General Financial Services Industry Group
045-East South Central Banks as its peer group index. A list of the
companies included in that index follows the graph presentation.
The graph presentation assumes that $100 was invested in shares of relevant
issuers on January 1, 1992, and the dividends were immediately invested in
additional shares. The value of the initial $100 investment is shown at
one year intervals for a five year period ending 12/31/96. For purposes of
constructing this data, the returns of each component issuer have been
weighed according to that issuer's market capitalization.
GRAPH
FIVE YEAR CUMULATIVE TOTAL RETURN
OF NBC, NASDAQ MARKET AND MG GROUP INDEX
1/1/92 1992 1993 1994 1995 1996
______ ______ ______ ______ ______ ______
NBC 100.00 123.05 168.48 218.00 254.37 306.13
NASDAQ 100.00 103.98 121.13 127.17 164.96 204.98
MG GROUP 100.00 100.98 109.63 110.09 147.93 191.11
MG INDUSTRY GROUP 045-EAST SOUTH CENTRAL BANKS:
ALABAMA NATIONAL BANCORP DEPOSIT GUARANTY CORP PEOPLES BANCTRUST CO
AMSOUTH BANCORPORATION EUFAULA BANCCORP INC PEOPLES FIRST CORP
AREA BANCSHARES CORP FARMERS CAPITAL BANK CP PEOPLES HOLDING CO
BANCO CENTRAL HISPANO SA FIRST AMERICAN CORP TN PREMIER FINANCIAL BANCP
BANCORPSOUTH INC FIRST FEDERAL FINL KY REGIONS FINANCIAL CORP
BRITTON & KOONTZ CAP CP FIRST M & F CORPORATION S.Y. BANCORP INC
CARDINAL BANCSHARES INC FIRST TENNESSEE NATL CP SOUTH ALABAMA BANCORP
CBT CORP FORT THOMAS FINANCIAL CP SOUTHERN BANC CO INC
COLONIAL BANCGROUP CL A GATEWAY BANCORP INC KY SOUTHFIRST BANCSHARES
COMMUNITY FEDERAL BANCP HANCOCK HOLDING CO SOUTHTRUST CORP
COMMUNITY FINANCIAL GRP KENTUCKY FIRST BANCORP TF FINANCIAL CORP
COMMUNITY TRUST BNCP INC MID AMERICA BANCORP TRANS FINANCIAL INC
COMPASS BANCSHARES INC NATIONAL COMMERCE BANCP TRUSTMARK CORP
UNION PLANTERS CORP
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
All members of the Salary Committee are non-officer directors. Member
Hunter M. Gholson is a partner in a law firm which was retained by the
Corporation during 1996 and which is anticipated to be retained during
1997. During 1996, no executive officer of the Corporation or any of
its subsidiaries served as a member of the compensation committee (or
other board or committee performing similar functions) or the board of
directors of another entity, one or more of whose executive officers
served on the Executive Committee or the Board of Directors of the
Corporation.
OTHER INFORMATION
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers to file with the Securities
and Exchange Commission initial reports of ownership of common stock.
Executive officers and directors are required by Securities and Exchange
Commission regulation to furnish the Company with copies of all Section
ended December 31, 1996 all Section 16(a) filing requirements applicable
to the Company's executive officers and directors were complied with.
During the calendar year 1996, the law firms of Gholson, Hicks and
Nichols; Pogue and Faulks: and Ward and Rogers rendered legal services
both to the Corporation and its subsidiary and billed for those services,
for which they were compensated. Director Gholson is associated with
Gholson, Hicks and Nichols, a professional association. Director Pogue
is associated with Pogue and Faulks, a professional association. William
Ward, a director in 1996, is associated with Ward and Rogers, a
professional association. Gholson, Hicks, and Nichols received a total of
$151,198 in legal fees during the calendar year 1996.
Corporate directors and executive officers and their associates were
customers of, and had transactions with, the Corporation's subsidiaries,
National Bank of Commerce of Mississippi and/or National Bank of Commerce
of Tuscaloosa, Tuscaloosa, Alabama, in the ordinary course of business
during 1996, and thus far in 1997. Additional transactions may be
expected in the future.
All outstanding loans and commitments included in such transactions are
made in the ordinary course of business, are made on substantially the
same terms, including interest rates and collateral, as those prevailing
at the time for comparable transactions with other persons, and do not
involve more than the normal risk of collectibility or present other
unfavorable features.
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company has entered into an Executive Employment Agreement with
Chief Executive Officer Lewis F. Mallory, Jr. The Agreement which
expires December 31, 1998 provides for continued employment for a period
of five (5) years from the date of a material change of ownership and
ensures that during said period of employment, the salary, bonuses, and
benefits shall be at least as great as currently paid by the Bank. In
the event of a change in control (defined as sale, transfer or exchange
of 80% or more of the capital stock), the Company shall pay Officer
Mallory a termination benefit equal to three (3) times the average annual
compensation paid during the five calendar years preceding such change
in control. In the absence of a material change in ownership or change
in control, employment may be terminated by the Company at the discretion
of the Board of Directors.
SELECTION OF AUDIT FIRM
The CPA firm of T. E. Lott and Company served as auditors for the
Corporation in 1996 and will serve as auditors for 1997. In addition to
the audit function, the firm was engaged to perform other accounting
functions for which they were compensated. All professional services
rendered by the firm were approved by the Board of Directors.
Representatives of T. E. Lott and Company are expected to be present at
the shareholders meeting with the opportunity to make a statement, if
they desire to do so, and will be available to respond to appropriate
questions, should questions arise.
SHAREHOLDER PROPOSALS
Any shareholder who intends to make a proposal for inclusion in the
Corporation's proxy statement and form of proxy to be presented at the
1998 Annual Shareholders Meeting must make such proposal on or before
December 10, 1997, and must comply with all the requirements of
rule 14a-8 under the Securities and Exchange Act of 1934. Any such
proposals should be sent to the attention of Mr. L. F. Mallory, Jr.,
Chairman of the Board and Chief Executive Officer of the Corporation at
its principal executive office located at NBC Plaza, Starkville,
Mississippi, 39759.
FORM 10-K
THE CORPORATION WILL FURNISH A COPY OF THE ANNUAL REPORT ON FORM
10-K TO ANY SHAREHOLDER, UPON REQUEST AND WITHOUT CHARGE, FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1996. SUCH REQUEST SHOULD BE DIRECTED TO THE
ATTENTION OF RICHARD T. HASTON, TREASURER AND ASSISTANT SECRETARY, P. O.
DRAWER 1187, STARKVILLE, MISSISSIPPI, 39760.
OTHER BUSINESS
The Board of Directors at the present knows of no other business to be
brought before this meeting. If any other business is presented at the
meeting or adjournment thereof, the accompanying proxy solicited by the
Board of Directors will be voted in accordance with the recommendation of
the Board of Directors.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ HUNTER M. GHOLSON
Hunter M. Gholson
Secretary
