NATIONAL CITY BANCSHARES INC, DEF 14A, 1994-03-18

NATIONAL CITY BANCSHARES INC
DEF 14A, 1994-03-18
STATE COMMERCIAL BANKS

Previous: NATIONAL CITY BANCSHARES INC, 8-K, 1994-03-18

Next: WESTWOOD ONE INC /DE/, 10-C, 1994-03-18

<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934

Filed by the registrant / /

Filed by a party other than the registrant / /

Check the appropriate box:

/ / Preliminary proxy statement

/X/ Definitive proxy statement

/ / Definitive additional materials

/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

NATIONAL CITY BANCSHARES, INC.

(Name of registrant as specified in its charter)

Harold A. Mann, Secretary

(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)

/ / Fee computed on table below par Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies: ______
____________________________

(2) Aggregate number of securities to which transaction applies: _________
____________________________

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: __________________________________

(4) Proposed maximum aggregate value of transaction: _____________________

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid: ______________________________________________

(2) Form, schedule or registration statement no.: ________________________

(3) Filing party: ________________________________________________________

(4) Date filed: __________________________________________________________
<PAGE> 2

NATIONAL CITY BANCSHARES, INC.
227 MAIN STREET
EVANSVILLE, INDIANA 47708

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD APRIL 19, 1994

TO THE HOLDERS OF SHARES OF COMMON STOCK:

NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of NATIONAL
CITY BANCSHARES, INC. (the "Corporation") will be held at The National City
Bank of Evansville, 227 Main Street in Evansville, Indiana, on Tuesday, April
19, 1994, at 9:30 a.m., C.S.T., for the purpose of considering and voting upon
the following matters:

1. The election of six (6) directors (to comprise Class II of the
Corporation's staggered Board of Directors), each to serve a term of three
years, until mandatory retirement or until their successors shall have
been duly elected and qualified.

2. To ratify the appointment of McGladrey & Pullen as the independent
certified public accountants for the Corporation and its subsidiaries for
the fiscal year ending December 31, 1994.

3. Whatever other business that may be brought before the meeting or any
adjournment thereof. The Board of Directors at present knows of no other
business to be presented by or on behalf of the Corporation.

Shareholders of record at the close of business on March 11, 1994, are the only
shareholders entitled to notice of and to vote at the Annual Shareholders
Meeting.

By Order of the Board of Directors,

HAROLD A. MANN, Secretary

March 18, 1994

IMPORTANT

WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED SELF-ADDRESSED ENVELOPE AS
PROMPTLY AS POSSIBLE. NO POSTAGE IS REQUIRED.
<PAGE> 3
NATIONAL CITY BANCSHARES, INC.
EVANSVILLE, INDIANA

PROXY STATEMENT

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of National City Bancshares, Inc. (the "Corporation") of
proxies to be voted at the Annual Meeting of Shareholders to be held on
Tuesday, April 19, 1994, in accordance with the foregoing notice.

The Corporation is a multi-bank holding company consisting of the following ten
banks and an insurance agency, all of which are wholly owned subsidiaries:

<TABLE>
<S> <C>
The Bank of Mitchell, Mitchell, Indiana Pike County Bank, Petersburg, Indiana
The Farmers and Merchants Bank, Fort Branch, Indiana Poole Deposit Bank, Poole, Kentucky
Farmers State Bank, Sturgis, Kentucky The Spurgeon State Bank, Spurgeon, Indiana
Lincolnland Bank, Dale, Indiana The State Bank of Washington, Washington, Indiana
The National City Bank of Evansville, Evansville, Indiana Ayer-Wagoner-Deal Insurance Agency, Inc.
The Peoples National Bank of Grayville, Grayville, Illinois
</TABLE>

The solicitation of proxies on the enclosed form is made on behalf of the Board
of Directors of the Corporation. All cost associated with the solicitation
will be borne by the Corporation. The Corporation does not intend to solicit
proxies other than by use of the mails, but certain officers and employees of
the Corporation or its subsidiaries, without additional compensation, may use
their personal efforts by telephone or otherwise, to obtain proxies. The proxy
materials are first being mailed to shareholders on March 18, 1994.

Any shareholder executing a proxy has the right to revoke it by the execution
of a subsequently dated proxy, by written notice delivered to the Secretary of
the Corporation prior to the exercise of the proxy or in person by voting at
the meeting. The shares will be voted in accordance with the direction of the
shareholder as specified on the proxy. In the absence of instructions, the
proxy will be voted "FOR" the election of the six (6) persons listed in this
Proxy Statement, and "FOR" the ratification of the Corporation's accountants
described in the Proxy Statement.

VOTING SECURITIES

Only shareholders of record at the close of business on March 11, 1994, will be
eligible to vote at the Annual Meeting or any adjournment thereof. As of March
11, 1994, the Corporation had outstanding 3,741,227 shares of Common Stock, par
value $3.33 1/3 per share. Shareholders are entitled to one (1) vote for each
share of common stock owned as of the record date, and shall have the right to
cumulate votes in the election of directors, in accordance with Article IX,
Section 4 of the Corporation's Amended Articles of Incorporation. Cumulative
voting permits a shareholder to multiply the number of shares held by the
number of directors to be elected, and cast those votes for one candidate or
spread those votes among several candidates as he or she deems appropriate.

As of March 11, 1994, The National City Bank of Evansville held 360,210 shares
of the Corporation's outstanding shares in their Trust Department in regular or
nominee accounts. This total represents 9.63% of the outstanding shares. Any
shares voted by the Trustee are voted only in accordance with directions
received from beneficial owners.

1
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Listed in the following tables are the only beneficial owner known by the
Corporation as of March 11, 1994, of more than 5% of the Corporation's
outstanding common stock and the number of shares owned by all directors and
executive officers as a group:

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) CLASS (2)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Edgar Mulzer 218,428 5.84%
401 10th Street
Tell City, IN 47586
</TABLE>

SECURITY OWNERSHIP OF MANAGEMENT

<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF PERCENT OF
CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) CLASS (2)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Benjamin W. Bloodworth 835 (3) 0.02%
Common Stock Donald B. Cox 5,334 0.14%
Common Stock Michael F. Elliott 109,039 (4) 2.91%
Common Stock Mrs. N. Keith Emge 8,417 (5) 0.22%
Common Stock Michael D. Gallagher 365 0.01%
Common Stock Donald G. Harris 4,773 0.13%
Common Stock Robert H. Hartmann 8,244 0.22%
Common Stock C. Mark Hubbard 2,131 0.06%
Common Stock Edgar P. Hughes 7,114 0.19%
Common Stock R. Eugene Johnson 9,979 (6) 0.27%
Common Stock Edwin F. Karges, Jr. 7,657 0.20%
Common Stock Robert A. Keil 1,946 (7) 0.05%
Common Stock John D. Lippert 14,286 (8) 0.38%
Common Stock Harold A. Mann 930 (9) 0.02%
Common Stock John Lee Newman 74,949 (10) 2.00%
Common Stock Ronald G. Reherman 2,854 (11) 0.08%
Common Stock Laurence R. Steenberg 11,798 0.32%
Common Stock C. Wayne Worthington 81,350 (12) 2.17%
Common Stock George A. Wright 10,316 (13) 0.28%

Common Stock All Directors and Executive 362,317 9.68%
Officers as a Group (19 persons)
</TABLE>

(1) Beneficial Ownership includes those shares over which an individual has
sole or shared voting, or investment powers, such as beneficial interest
of the spouse, minor children, and other relatives living in the home of
the named person. The nature of beneficial ownership, unless otherwise
noted, represents sole voting and investment power.

(2) The calculations of percent of class is based on the number of shares of
Common Stock outstanding as of March 11, 1994.

(3) All shares with shared voting and investment power with spouse.

2
<PAGE> 5
(4) Includes 106,416 shares with sole voting and investment power and 2,623
shares held by a trust with shared voting and investment power.

(5) Includes 618 shares with sole voting and investment power; 5,203 shares
with shared voting and investment power with spouse; and 2,596 shares with
sole voting and investment power by spouse.

(6) Includes 5,512 shares with sole voting and investment power; 1,331 shares
with shared voting and investment power with spouse; and 3,136 shares with
voting power only.

(7) All shares with shared voting and investment power with spouse.

(8) Includes 363 shares with sole voting and investment power and 13,923
shares with shared voting and investment power with spouse.

(9) Includes 82 shares with sole voting and investment power and 848 shares
with shared voting and investment power with spouse.

(10) Includes 53,154 shares with sole voting and investment power and 21,795
shares held by a charitable foundation of which Mr. Newman is a director,
thereby sharing voting and investment power.

(11) Includes 884 shares with sole voting and investment power; 1,537 shares
with shared voting and investment power with spouse; and 433 shares with
investment power only.

(12) Includes 34,040 shares with sole voting and investment power; 38,201
shares with shared voting and investment power with spouse; and 9,109
shares with sole voting and investment power by spouse.

(13) Includes 8,836 shares with sole voting and investment power and 1,480
shares with sole voting and investment power by spouse.

ITEM 1. ELECTION OF DIRECTORS AND
INFORMATION WITH RESPECT TO DIRECTORS AND OFFICERS

The following information is provided with respect to each nominee for director
and each present continuing director whose term of office extends beyond the
Meeting of the Corporation's Shareholders. The affirmative vote of the holders
of at least a majority of the outstanding shares of Common Stock voted is
required for the election of any director.

CLASS II

The following are nominees for directorship in Class II of the Board of
Directors, whose terms shall expire at the Annual Meeting of Shareholders in
1997 (except for Edgar P. Hughes, who will reach mandatory retirement January
31, 1996).

Mrs. N. Keith Emge 52 1979 1985
Vice President for Corporate and Community Services,
Deaconess Hospital, Inc. (1990 to Present)
President, Deaconess Hospital Foundation, Inc. (1984 to 1990)
Treasurer, Emge Realty Company, Inc.
Permanent Director, United Way of Southwestern Indiana
</TABLE>

3
<PAGE> 6

Edgar P. Hughes 70 1975 1985
Retired President, The National City Bank of Evansville
Consultant, The National City Bank of Evansville (1984 to 1992)
First Vice President of Corporation (1985 to 1989)
First Vice President, The National City Bank of Evansville (1984 to 1990)

Robert A. Keil 50 N/A 1993
President of the Corporation (June 1993 to Present)
Executive Vice President, The National City Bank of
Evansville and the Corporation (1991 to June 1993)
Senior Vice President, The National City Bank
of Evansville (1987 to 1991)
Assistant Secretary and Assistant Treasurer (1985 to June 1993)

John Lee Newman 65 1984 1985
Real Estate and Investments

Laurence R. Steenberg 55 1983 1985
President, BST Incorporated (Oil Production)
Assistant Professor, University of Evansville
Treasurer, Rickrich Surgical Supplies, Inc. (1988 to 1991)
</TABLE>

The following Directors shall continue to serve as Directors until their
respective terms expire, and are not up for election at this Annual Meeting of
Shareholders:

<TABLE>
<CAPTION>
CLASS III
(Continuing Directors with Term to Expire 1995)

<S> <C> <C> <C>
Michael D. Gallagher 42 1990 1990
Vice President, Gallagher Drilling, Inc.
(Oil Producer and Drilling Contractor)

C. Mark Hubbard 47 1983 1985
President and Treasurer, Evansville Sheet Metal Works, Inc.
(Manufacturer)
</TABLE>

4
<PAGE> 7

<TABLE>
<CAPTION>
DIRECTOR OF DIRECTOR OF
NAME AND PRINCIPAL OCCUPATION NATIONAL CITY CORPORATION
(PAST FIVE YEARS) AGE BANK SINCE SINCE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John D. Lippert 60 1981 1985
Chairman of the Board and Chief Executive Officer of
the Corporation and The National City Bank of Evansville
(June 1993 to Present)
Chairman of the Board, President and Chief Executive Officer
of the Corporation and The National City Bank of Evansville
(1992 to June 1993)
President of the Corporation (1985 to 1992)
President and Chief Executive Officer, The National City
Bank of Evansville (1989 to 1992)
President, The National City Bank of Evansville (1984 to 1989)

Ronald G. Reherman 57 1985 1985
Chairman of the Board, President and Chief Executive
Officer, Southern Indiana Gas and Electric Company (SIGECO)
(1992 to Present) (Public Utility)
President and Chief Executive Officer, SIGECO (1990 to 1992)
President, SIGECO (1988 to 1990)

<CAPTION>
CLASS I
(Continuing Directors with Term to Expire 1996, except
Edwin F. Karges, Jr. who will reach mandatory retirement September 30, 1994,
and C. Wayne Worthington, who will reach mandatory retirement March 31, 1995)

<S> <C> <C> <C>
Donald B. Cox 65 1979 1985
Owner, Don Cox and Associates
(Corporate Consultant 1994 to Present)
(Governmental Consultant 1991 to Present)
(Realtor Prior to 1991)

Donald G. Harris 61 1986 1986
Retired President, Mead Johnson Worldwide Nutritional Group
President, Mead Johnson Worldwide Nutritional Group
(1989 to January 1993)
President, Bristol-Myers, U.S. Nutritional Group (1987 to 1989)

R. Eugene Johnson 64 1963 1985
Attorney, Statham, Johnson and McCray (1989 to Present)
Merrill, Johnson and Kimpel (Prior to 1989)
</TABLE>

5
<PAGE> 8

C. Wayne Worthington 71 1966 1985
Retired Chairman of the Board of the Corporation and
The National City Bank of Evansville
Chairman of the Board and Chief Executive Officer of the
Corporation and Chairman of the Board of The National City
Bank of Evansville (Prior to March 1992)
Consultant, The National City Bank of Evansville
(July 1992 to December 1992)

George A. Wright 67 1963 1985
President, Wright Motors, Inc. (Automobile Dealer)
</TABLE>

The business experience of each of the above-listed nominees and directors
during the past five years was that typical to a person engaged in the
principal occupation listed. Unless otherwise indicated, each of the nominees
and directors has had the same position or another executive position with the
same employer during the past five years.

The following director of National City Bancshares, Inc. held a directorship in
a company with a Class of Securities registered pursuant to Section 12 or
Section 15(d) of the Securities Exchange Act of 1934:

<TABLE>
<CAPTION>
NAME REGISTERED COMPANY
<S> <C>
Ronald G. Reherman Southern Indiana Gas and Electric Company
Evansville, Indiana
</TABLE>

COMMITTEES OF THE BOARD OF DIRECTORS

The Corporation has standing executive, compensation and audit committees, but
does not have a nominating committee. The Corporation's nominating function is
performed by the Executive Committee for recommendation to the Board of
Directors. The subsidiaries have their own committees which perform these
functions.

In addition to the regular monthly meetings of the Board of Directors, some of
the directors also serve on one or more of the various Board committees.
During 1993, the Board of Directors met 11 times. All of the directors
attended at least 75% of the regular board and committee meetings with the
exception of Robert H. Hartmann, who attended 73%.

The Compensation Committee is explained later under "Compensation of Executive
Officers". Following is a brief explanation of the executive and audit
committees:

6
<PAGE> 9
The Executive Committee formulates and recommends to the Board of Directors,
for its approval, general policies and plans regarding the long-range
operations, growth, and business of the Corporation. The Executive Committee
is further responsible for the nominations of directors for the ensuing term.
Shareholders are entitled to nominate any candidate for election by notifying
the Corporation no less than forty-five days prior to the Annual Meeting date
following the procedure outlined in the Corporation's bylaws requiring advance
notice to the Corporation of such nomination and certain information regarding
the proposed nominee, and provided that such shareholder is the owner of shares
of the Corporation as of the date such nomination is made. The Executive
Committee met 11 times during 1993. Members of the Committee are:

C. Wayne Worthington, Chairman, Mrs. N. Keith Emge, R. Eugene Johnson,
Robert A. Keil, John D. Lippert, Ronald G. Reherman, Laurence R. Steenberg,
and George A. Wright.

The Audit Committee approves and reviews the internal audit programs of the
Corporation and its subsidiaries. The committee reviews the results of the
independent accountant's audit and reports to the Board of Directors. The
Audit Committee met 11 times during 1993. The committee is comprised of six
outside directors and the members are:

Edwin F. Karges, Jr., Chairman, Donald B. Cox, Donald G. Harris, Robert
Hartmann, John Lee Newman, and George A. Wright.

Directors of the Corporation, other than those who also serve as a corporate or
subsidiary officer, receive for their services an annual retainer of $2,500,
plus $150 for each Board of Directors meeting attended from the Corporation and
a like retainer and meeting fee plus $125 for each committee meeting attended
from The National City Bank of Evansville.

COMPENSATION OF EXECUTIVE OFFICERS

The President of the Corporation is its only employee. The Corporation does
not directly compensate any of its other officers and has no other employees.
Its wholly owned subsidiaries, The National City Bank of Evansville, Poole
Deposit Bank, The Peoples National Bank of Grayville, The Farmers and Merchants
Bank, Farmers State Bank, Lincolnland Bank, The Bank of Mitchell, Pike County
Bank, The Spurgeon State Bank, The State Bank of Washington and
Ayer-Wagoner-Deal Insurance Agency, Inc. do separately compensate their
officers, who include the same individuals as the other Executive Officers of
the Corporation.

The following table sets forth the compensation for the Chief Executive Officer
of the Corporation and the Corporation's and its subsidiaries' Executive
Officers, whose compensation in 1993 exceeded $100,000.

7
<PAGE> 10
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation
-------------------------
Name and Principal Position Year Salary Bonus All Other Compensation
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John D. Lippert 1993 $200,000 $ ----- $23,646 (2)
Chairman of the Board and 1992 193,750 ----- 23,549 (2)
Chief Executive Officer 1991 175,000 ----- 18,752 (2)

Michael F. Elliott (1) 1993 156,000 45,000 16,964 (3)
Executive Vice President 1992 150,700 35,000 18,616 (3)
1991 143,200 20,000 16,111 (3)

Max D. Elliott 1993 93,726 25,000 9,032 (3)
President and Chief Executive Officer, 1992 92,806 25,000 10,312 (3)
The Pike County Bank 1991 86,118 10,000 7,627 (3)
</TABLE>

(1) Michael F. Elliott was President and Chief Executive Officer
of Sure Financial Corporation during the periods presented.
Sure Financial Corporation was acquired by the Corporation on
December 17, 1993.

(2) Amounts shown represent amounts contributed to the profit
sharing plan provided for all employees of the Corporation and
its subsidiaries who complete one year of service.

(3) Amounts shown represent amounts contributed to the profit
sharing 401(k) plan provided for all employees of Sure
Financial Corporation and its subsidiaries.

PENSION PLAN

The following table shows the estimated annual pension benefit payable to a
covered participant at normal retirement age (age 60) under the qualified
defined benefit pension plan covering the Corporation and all subsidiary banks,
based on remuneration that is covered under the plan and years of service with
the Corporation and its subsidiaries:

PENSION PLAN TABLE
<TABLE>
<CAPTION>

YEARS OF SERVICE
----------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $37,500 $ 50,000 $ 62,500 $ 75,000 $ 87,500
150,000 45,000 60,000 75,000 90,000 105,000
175,000 52,500 70,000 87,500 105,000 122,500
200,000 60,000 80,000 100,000 120,000 140,000
225,000 67,500 90,000 112,500 135,000 157,500
250,000 75,000 100,000 125,000 150,000 175,000
</TABLE>

(The benefits shown above may be limited by law.)

8
<PAGE> 11
Each employee who completes one year of eligible service is an eligible
participant under the Plan. The Plan generally provides for a prospective
benefit calculated as follows: 2% of the average annual base salary (annual
salary excluding bonuses and other annual compensation) of the five highest
consecutive years within the last ten calendar years of credited service for
each year of credited service up to 40 years maximum. The Plan provides for
early retirement at age 55 with reduced benefits or normal retirement with full
benefits starting at age 60. Employees who participate in the Plan become
fully vested with the completion of 5 years of eligible service. The normal
form of pension payment is in the form of a life annuity. For a married
participant, the payment is in the form of a qualified joint and survivor
annuity benefit. Participants may elect to receive their accrued retirement
benefit in a single lump sum. The annual pension benefit is not subject to any
deduction for social security.

Covered compensation for John D. Lippert, as of the end of the last calendar
year, was $200,000; and his years of service were fourteen (14) years. Michael
F. Elliott and Max D. Elliott will complete their year of eligible service and
enter the Pension Plan January 1, 1995.

REPORT OF THE COMPENSATION COMMITTEE

In compliance with the Securities and Exchange Commission Regulation S-K, the
Corporation is required to provide certain data and information regarding
compensation and benefits provided to the Corporation's Chief Executive Officer
and each of the four most highly paid executive officers whose compensation
exceeded $100,000. The disclosure requirements as applied to the Corporation
include John D. Lippert, Chairman of the Board and Chief Executive Officer;
Michael F. Elliott, Chairman of the Board and Chief Executive Officer of The
State Bank of Washington and Executive Vice President of National City
Bancshares, Inc.; and Max D. Elliott, President and Chief Executive Officer of
Pike County Bank.

The Corporation had no named executive officers as defined in Regulation S-K,
retire or leave the Corporation for other reasons during 1993.

Compensation Committee Structure and Philosophy

Early in 1993, the Corporation's Board of Directors appointed a standing
Compensation Committee for the purpose of setting executive salaries and
benefits. The Committee is comprised of six outside directors including Edgar
P. Hughes (retired President of The National City Bank of Evansville) who acts
as Committee Chairman. The Committee directors do not share any for-profit
Board positions with any inside director or executive officer, except that all
members are also directors of The National City Bank of Evansville. The
Committee met six times during the year to establish, among other actions, the
compensation of John D. Lippert, the Corporation's Chairman and Chief Executive
Officer.

Essentially, the executive compensation program of the Corporation has been
designed to:

- Support a pay-for-performance policy that awards executive officers for
corporate performance.

- Motivate key senior officers to achieve strategic goals.

- Provide compensation opportunities which are comparable to those offered
by other banking companies, thus allowing the Corporation to compete for
and retain talented executives who are critical to the Corporation's
long-term success.

Salary

In December 1993, two regional bank holding companies were acquired by the
Corporation, Sure Financial Corporation (with four subsidiaries: The Bank of
Mitchell, Pike County Bank, The Spurgeon State Bank and The State Bank of
Washington) and Lincolnland Bancorp, Inc. (with two subsidiaries: Lincolnland
Bank and Ayer-Wagoner-Deal Insurance Agency, Inc.). Compensation of executive
officers of these two named corporations was the responsibility of the Boards
of Directors of those corporations during 1993 and for 1994 base salary.
Future compensation will be determined by the Compensation Committee of
National City Bancshares, Inc. for all chief executive officers of the
Corporation's ten banks, in addition to all Corporate executive officers.

9
<PAGE> 12
The Compensation Committee retained the services of McGladrey & Pullen,
Certified Public Accountants and Consultants, to assist in the process of
establishing adequate, fair compensation and benefits for the Corporation's and
its member banks' executive officers. The consultant provided, among other
information, current recognized compensation studies. The data gave the
Committee comparisons of compensation and benefits for like positions among
various peer groups. The Committee did not increase Chief Executive Lippert's
salary for 1993. It was determined Chairman Lippert's base compensation was
within an acceptable percentile of competitive base compensation from available
data. The Committee, with the assistance of their consultant, reviewed the
following published compensation surveys to establish competitive compensation
data: Illinois Banker's Association Midwest Bank Holding Company Compensation
Survey, Cole Survey (National), Wyatt Data Services (National), Indiana Bankers
Association Survey, Illinois Bankers Association Survey, Kentucky Bankers
Association Survey, Bank Administration Institute (Regional) Compensation
Survey and the Community Bankers Association of Illinois Survey.

Management Incentive Compensation Plan

Additionally, the Committee, with the further assistance from McGladrey &
Pullen, designed a management incentive compensation plan. The plan was
subsequently approved by the full Board of Directors for implementation in 1994
with the first possible payout to be in 1995 based on 1994 performance. A
brief summary of the Plan follows:

In 1994, the Corporation implemented an annual management incentive plan
(the plan) covering certain key Corporate and member bank executives.
The purpose of the plan is to help improve overall Corporate performance
by providing executives with variable award opportunities in return for
outstanding measured performance.

The plan provides incentive opportunities based on the achievement of a
combination of Corporation, member bank and individual executive goals.
Specific measurable performance goals are established at the beginning of
each year, and approved by the Compensation Committee of the Board of
Directors. At the end of the year, actual performance relative to the
predetermined goals determine earned incentive awards. The Corporation
must exceed a threshold return on assets percentage to provide an
incentive. The plan is designed to pass the majority of incremental
income to shareholders' equity. The Compensation Committee approves all
incentive payouts.

Employment and Severance Agreements

The Corporation does not have any employment or severance agreements with
executive officers.

Compensation Committee Members

The above report on compensation was submitted by the Compensation Committee,
whose members are:

Edgar P. Hughes, Chairman, Donald G. Harris, C. Mark Hubbard, Ronald G.
Reherman, Laurence R. Steenberg, and George A. Wright.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Director Edgar P. Hughes is Chairman of the Compensation Committee and is a
retired President of The National City Bank of Evansville.

10
<PAGE> 13
STOCK PERFORMANCE GRAPH

The following is a line graph comparing the cumulative total shareholder return
among National City Bancshares, Inc. (NCBE); the Center for Research in
Securities Prices (CRSP), at the University of Chicago, Total Return Index for
Nasdaq Bank Stocks (NASDAQ BANKS); and the CRSP Total Return Index for The
Nasdaq Stock Market, U.S. Companies only, (NASDAQ STOCK MARKET). It assumes
that $100 is invested December 31, 1988, and all dividends are reinvested.
Fiscal year ending December 31 data is used.

PERFORMANCE GRAPH DATA POINTS

<TABLE>
<CAPTION>
NASDAQ
NASDAQ STOCK
YEAR NCBE BANKS MARKET
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 81.35 111.15 121.24
1990 78.26 81.40 102.96
1991 74.93 133.57 165.21
1992 101.97 194.19 192.10
1993 131.09 221.32 219.21
</TABLE>

TRANSACTIONS WITH MANAGEMENT

Directors and principal officers of The National City Bank of Evansville, Poole
Deposit Bank, The Peoples National Bank of Grayville, The Farmers and Merchants
Bank, Farmers State Bank, Lincolnland Bank, The Bank of Mitchell, Pike County
Bank, The Spurgeon State Bank, The State Bank of Washington and
Ayer-Wagoner-Deal Insurance Agency, Inc. and the Corporation and their
associates were customers of, and have had transactions with, the Banks in the
ordinary course of business during 1993.

These transactions consisted of extensions of credit by the banks in the
ordinary course of business and were made on substantially the same terms as
those prevailing at the time for comparable transactions with other persons.
In the opinion of the management of the banks, those transactions do not
involve more than a normal risk of being collectible or present other
unfavorable features. The banks expect to have, in the future, banking
transactions in the ordinary course of its business with directors and their
associates on the same terms, including interest rates and collateral on loans,
as those prevailing at the time on comparable transactions with others.

COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's
officers and directors, and persons who own more than ten percent of a
registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the Nasdaq National Market. Officers, directors, and greater than
ten-percent shareholders are required by SEC regulation to furnish the
Corporation with copies of all Section 16(a) forms they file.

11
<PAGE> 14
Based solely on review of the copies of such forms furnished to the
Corporation, or written representations that no Forms 5 were required, the
Corporation believes that during 1993 all Section 16(a) filing requirements
applicable to its officers, directors, and greater than ten-percent beneficial
owners were complied with, except for the failure to timely file a required
Form 5 by Michael D. Gallagher.

ITEM 2. SELECTION OF AUDITORS

The Board of Directors proposes for the approval by the shareholders at the
Annual Meeting the appointment of McGladrey & Pullen, Certified Public
Accountants and Consultants as independent accountants to audit the financial
statements of the Corporation and its subsidiaries for the year 1994. Although
approval of the shareholders of the Corporation's independent accountants is
not required, the Corporation deems it desirable to submit such selection to
the shareholders. McGladrey & Pullen audited the books and records of the
Corporation and its subsidiaries for the year 1993. Gaither Rutherford & Co.,
formerly Gaither Koewler Rohlfer Luckett & Co., ("Gaither") audited the books
and records of the Corporation and its subsidiaries from 1985 through 1992.
The Board of Directors had determined it to be in the best interest of the
Corporation to change independent accountants for 1993. This change was
ratified by the Corporation's shareholders at last year's annual meeting. In
the event that the shareholders do not approve the selection of McGladrey &
Pullen, the Board of Directors will reconsider the selection of such accounting
firm to act as the Corporation's independent accountants. Representatives of
both firms are expected to be present at the Annual Meeting and will have the
opportunity to make statements if desired and to respond to appropriate
questions from shareholders.

The financial statements provided by Gaither in 1991 and 1992 did not contain
any adverse opinions or any disclaimers of opinions, nor were they qualified or
modified as to uncertainty, audit scope or accounting reasons.

Further, there have been no disagreements between Gaither and the Corporation.

ITEM 3. OTHER MATTERS

The Board of Directors of the Corporation is not aware of any other matters
that may come before the meeting. However, the enclosed Proxy will confer
discretionary authority with respect to matters which are not known to the
Board of Directors at the time of printing hereof and which may properly come
before the meeting. A copy of the Corporation's 1993 report filed with the
Securities and Exchange Commission, on Form 10-K, will be available without
charge to shareholders upon request on or after March 31, 1994. Address all
requests, in writing, for this document to Harold A. Mann, Secretary, National
City Bancshares, Inc., P. O. Box 868, Evansville, Indiana 47705-0868.

SHAREHOLDER PROPOSALS

Any proposals to be considered for inclusion in the proxy material to be
provided to shareholders of the Corporation for its next annual meeting to be
held in 1995 must be made by a qualified shareholder and must be received by
the Corporation no later than November 24, 1994.

By Order of the Board of Directors,

HAROLD A. MANN
Secretary

March 18, 1994

12
<PAGE> 15

PROXY
<TABLE>
<S> <C>
NATIONAL CITY BANCSHARES, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
227 Main Street, P.O. Box 868 The undersigned hereby appoints Waller S.Clements, Ole J. Olsen, Jr., and Henry W. Ruston,
Evansville, IN 47705-0868 Proxies, each with the power to appoint his or her substitute, and hereby authorizes them to
repesent and to vote as designated below, all the shares of Common Stock of National City
Bancshares, Inc., held of record by the undersigned on March 11, 1994, at the Annual Meeting of
Shareholders to be held on April 19, 1994, or any adjournment thereof.
</TABLE>
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for all nominees listed below / /

<CAPTION>
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through the nominee's name in the list below.

CLASS II (term to expire 1997)
[except for Edgar P. Hughes, who will reach mandatory retirement January 31, 1996]

<S> <C>
Mrs. N. Keith Emge Robert A. Keil
Robert H. Hartmann John Lee Newman
Edgar P. Hughes Laurence R. Steenberg
</TABLE>

2. PROPOSAL TO RATIFY THE APPOINTMENT OF MCGLADREY & PULLEN as the
Corporation's Independent Certified Public Accountants for the fiscal
year ending December 31, 1994.

<TABLE>
<S> <C> <C>
FOR / / AGAINST / / ABSTAIN / /
</TABLE>

(continued, and to be signed on other side)

(FACE OF PROXY CARD)
<PAGE> 16
(continued from other side)

3. The Proxies are authorized to vote in accordance with the
recommendations of the Board of Directors upon such other business as
may properly come before the Meeting.

THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION LISTED ABOVE UNLESS
"AGAINST" OR "ABSTAIN" IS INDICATED. (IF ANY OTHER BUSINESS IS PRESENTED AT
SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS
OF THE BOARD OF DIRECTORS.)
<TABLE>
<S> <C>
When shares are held by joint tenants, both should sign. When signing as an
Please sign exactly as name appears below. attorney, executor, administrator, trustee, or guardian, please give full title as
such. If a corporation, please sign full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
____________ No. of Shares Voted
DATED__________________________________________, 1994

_____________________________________________________
SIGNATURE

_____________________________________________________
SIGNATURE IF HELD JOINTLY
</TABLE>

PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE

(REVERSE OF PROXY CARD)