<PAGE> 1
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 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
NATIONAL CITY BANCSHARES, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
NATIONAL CITY BANCSHARES, INC.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
NATIONAL CITY BANCSHARES, INC.
227 MAIN STREET
EVANSVILLE, INDIANA 47708
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 18, 1995
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
18, 1995, at 9:30 a.m., C.D.T., for the purpose of considering and voting upon
the following matters:
1. The election of two directors (to comprise Class III of the Corporation's
staggered Board of Directors), each to serve a term of three years, or
until their successors shall have been duly elected and qualified.
2. To consider and act upon a proposal to amend Article V, Section 1, of the
Articles of Incorporation to provide for an increase in the number of
authorized common shares of the Corporation from 5,000,000 to 10,000,000
shares and to change from a par value of $3.33 1/3 per share to without
par value.
3. To ratify the appointment of McGladrey & Pullen, LLP as the independent
certified public accountants for the Corporation and its subsidiaries for
the fiscal year ending December 31, 1995.
4. 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 February 28, 1995, are the
only shareholders entitled to notice of and to vote at the Annual Shareholders
Meeting.
By Order of the Board of Directors,
/S/ Harold A. Mann
HAROLD A. MANN, Secretary
March 17, 1995
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 18, 1995, in accordance with the foregoing notice.
The Corporation is a multi-bank holding company consisting of the following
nine banks and a leasing company, all of which are wholly owned subsidiaries:
<TABLE>
<S> <C>
The Bank of Mitchell, Mitchell, Indiana The Peoples National Bank of Grayville, Grayville, Illinois
The Farmers and Merchants Bank, Fort Branch, Indiana Pike County Bank, Petersburg, Indiana
First Kentucky 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 NCBE Leasing Corp., Evansville, Indiana
</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 17, 1995.
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 two persons listed in this Proxy
Statement; "FOR" the proposed amendment to Article V, Section 1, of the
Articles of Incorporation; 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 February 28, 1995, will
be eligible to vote at the Annual Meeting or any adjournment thereof. As of
February 28, 1995, the Corporation had outstanding 3,658,650 shares of common
stock, par value $3.33 1/3 per share. Shareholders are entitled to one 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 February 28, 1995, the Corporation's subsidiary banks held 410,208 shares
of the Corporation's outstanding shares in their Trust Departments in regular
or nominee accounts. This total represents 11.21% 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 is the only beneficial owner known by the
Corporation as of February 28, 1995, 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 219,338 6.00%
401 Tenth 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 883(3) 0.02%
Common Stock Donald B. Cox 5,334 0.15%
Common Stock Michael F. Elliott 119,159(4) 3.26%
Common Stock Mrs. N. Keith Emge 8,520(5) 0.23%
Common Stock Nancy G. Epperson 11(6) 0.00%
Common Stock Michael D. Gallagher 415 0.01%
Common Stock Donald G. Harris 4,883 0.13%
Common Stock Edgar P. Hughes 7,114 0.19%
Common Stock Byron W. Jett 843 0.02%
Common Stock R. Eugene Johnson 8,425(7) 0.23%
Common Stock Robert A. Keil 2,235(8) 0.06%
Common Stock John D. Lippert 15,000(9) 0.41%
Common Stock Harold A. Mann 951(10) 0.03%
Common Stock John Lee Newman 74,949(11) 2.05%
Common Stock Ronald G. Reherman 2,944(12) 0.08%
Common Stock Laurence R. Steenberg 12,069 0.33%
Common Stock C. Wayne Worthington 81,117(13) 2.22%
Common Stock George A. Wright 11,880(14) 0.32%
Common Stock All Directors and Executive 356,732 9.75%
Officers as a Group (18 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 February 28, 1995.
(3) All shares with shared voting and investment power with spouse.
2
<PAGE> 5
(4) Includes 106,740 shares with sole voting and investment power; 5,050
shares with shared voting and investment power with spouse; 4,686 shares
with sole voting and investment power by spouse; and 2,683 shares held by
a trust with shared voting and investment power.
(5) Includes 573 shares with sole voting and investment power; 5,323 shares
with shared voting and investment power with spouse; and 2,624 shares with
sole voting and investment power by spouse.
(6) All shares with shared voting and investment power with spouse.
(7) Includes 5,512 shares with sole voting and investment power; 1,331 shares
with sole voting and investment power by spouse; and 1,582 shares with
voting power only.
(8) All shares with shared voting and investment power with spouse.
(9) Includes 363 shares with sole voting and investment power and 14,637
shares with shared voting and investment power with spouse.
(10) Includes 83 shares with sole voting and investment power and 868 shares
with shared voting and investment power with spouse.
(11) 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.
(12) Includes 930 shares with sole voting and investment power; 1,572 shares
with shared voting and investment power with spouse; and 442 shares with
investment power only.
(13) Includes 33,807 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.
(14) Includes 10,400 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
As a part of its strategic planning, the Board of Directors has reorganized its
membership to reduce the number of directors of the Corporation and to enhance
the identity of the Corporate Board as separate and distinct from its operating
subsidiary boards. As a general matter, it will be the policy of the
Corporation that outside members of the Corporate Board will no longer serve on
boards of the Corporation's subsidiaries. The Board of Directors believes that
a smaller board with a clearer and broader view of the Corporation's business
will be better able to provide leadership and direction to the Corporation.
The Board of Directors has implemented its restructuring through the receipt of
voluntary resignations of certain directors and the normal application of its
retirement policy.
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.
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR OF
NAME AND PRINCIPAL OCCUPATION CORPORATION
(PAST FIVE YEARS) AGE SINCE
- ------------------------------ --- -----------
<S> <C> <C>
CLASS III
---------
The following are nominees for directorship in Class III of the Board
of Directors, whose terms shall expire at the Annual Meeting of
Shareholders in 1998.
John D. Lippert 61 1985
Chairman of the Board and Chief Executive Officer of
the Corporation (June 1993 to Present)
Chairman of the Board, The National City Bank of
Evansville (1994 to Present)
Chairman of the Board and Chief Executive Officer,
The National City Bank of Evansville (1993 to 1994)
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)
Director, The National City Bank of Evansville
Ronald G. Reherman 58 1985
Chairman of the Board, President and Chief Executive
Officer, Southern Indiana Gas and Electric Company (SIGECO)
(Public Utility) (1992 to Present)
President and Chief Executive Officer, SIGECO (1990 to 1992)
President, SIGECO (1988 to 1990)
Director, The National City Bank of Evansville (1985 to 1995)
CLASS I
-------
(Continuing Directors with Term to Expire 1996)
Michael F. Elliott 43 1994
Executive Vice President of the Corporation (1993 to Present)
President, Chief Executive Officer, and Director,
The National City Bank of Evansville (1994 to Present)
Chairman of the Board, The State Bank of Washington
Chief Executive Officer, The State Bank of Washington
(1989 to 1994)
Chairman of the Board (1990 to 1993) and President and
Chief Executive Officer (1988 to 1993) of Sure Financial
Corporation
Donald G. Harris 62 1986
Retired President, Mead Johnson Nutritional Group
President, Mead Johnson Nutritional Group (1989 to January 1993)
Director, The National City Bank of Evansville (1986 to 1995)
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR OF
NAME AND PRINCIPAL OCCUPATION CORPORATION
(PAST FIVE YEARS) AGE SINCE
- ------------------------------ --- -----------
<S> <C> <C>
CLASS II
--------
(Continuing Directors with Term to Expire 1997)
Mrs. N. Keith Emge 53 1985
Vice President for Corporate and Community Services,
Deaconess Hospital, Inc.
President, Deaconess Hospital Foundation, Inc. (1984 to 1990)
Treasurer, Emge Realty Company, Inc.
Permanent Director, United Way of Southwestern Indiana
Director, The National City Bank of Evansville (1979 to 1995)
51 1993
Robert A. Keil
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)
56 1985
Laurence R. Steenberg
President, BST Incorporated (Oil Production)
Assistant Professor, University of Evansville
Part Owner, World Connection Services, LLC (1994 to Present)
Treasurer, Rickrich Surgical Supplies, Inc. (1988 to 1991)
Director, The National City Bank of Evansville (1983 to 1995)
</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:
NAME REGISTERED COMPANY
Ronald G. Reherman Southern Indiana Gas and Electric Company
Evansville, Indiana
5
<PAGE> 8
COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation has had standing Executive, Compensation, and Audit Committees,
but has not had 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 1994, the Board of Directors met eleven times. All of the directors
attended at least 75% of the regular Board and Committee meetings with the
exception of Ronald G. Reherman and Laurence R. Steenberg, who each attended
68%. Director Reherman only missed one regular Board meeting. Director
Steenberg had a teaching assignment for the University of Evansville for four
months in England.
The Compensation Committee is explained later under "Compensation of Executive
Officers." Following is a brief explanation of the Executive and Audit
Committees:
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
and by following the procedures 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 six times during 1994. Members of the Executive
Committee were as follows:
C. Wayne Worthington, Chairman; Michael F. Elliott, 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 Audit Committee reviews the results of
the independent accountant's audit and reports to the Board of Directors. The
Audit Committee met twelve times during 1994. The Audit Committee was
comprised of five outside directors and the members were as follows:
George A. Wright, Chairman; Donald B. Cox, Robert Hartmann, John Lee
Newman, and C. Wayne Worthington
Directors of the Corporation, other than those who also serve as a Corporate or
subsidiary officer, received 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 and his secretary were its only employees.
The Corporation did not directly compensate any of its other officers and had
no other employees. Its wholly owned subsidiaries, The National City Bank of
Evansville, The Peoples National Bank of Grayville, The Farmers and Merchants
Bank, First Kentucky Bank, Lincolnland Bank, The Bank of Mitchell, Pike County
Bank, The Spurgeon State Bank, The State Bank of Washington, and NCBE Leasing
Corp., do separately compensate their officers, who include the same
individuals as the other executive officers of the Corporation.
6
<PAGE> 9
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 1994 exceeded $100,000.
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 1994 $210,000 $ ----- $20,010 (2)
Chairman of the Board and 1993 200,000 ----- 23,646 (2)
Chief Executive Officer 1992 193,750 ----- 23,508 (2)
Michael F. Elliott (1) 1994 136,400 $ ----- 18,196 (2)
Executive Vice President 1993 156,400 45,000 16,964 (3)
1992 150,700 35,000 18,616 (3)
Robert A. Keil 1994 109,375 $ ----- 14,590 (2)
President 1993 87,750 ----- 10,375 (2)
1992 76,500 ----- 9,282 (2)
</TABLE>
(1) Michael F. Elliott was President and Chief Executive Officer of Sure
Financial Corporation during 1992 and 1993. 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. In addition to the pension benefit
reflected in this table, John D. Lippert will receive a supplemental retirement
benefit which is discussed on page 9 in the Report of the Compensation
Committee.
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.)
7
<PAGE> 10
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.
The OMNIBUS Budget Reconciliation Act of 1993 limited annual compensation to
$150,000 for purposes of pension calculations under tax-qualified pension plans
effective January 1, 1994. Covered compensation for John D. Lippert, as of the
end of the last calendar year, was $150,000; and his years of service were
fifteen years. Michael F. Elliott completed his year of eligible service and
entered the Pension Plan January 1, 1995. Years of service for Robert A. Keil
were twenty-nine years.
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, President and Chief Executive Officer of The National City
Bank of Evansville and Executive Vice President of National City Bancshares,
Inc.; and Robert A. Keil, President.
The Corporation had no named executive officers as defined in Regulation S-K to
retire or leave the Corporation for other reasons during 1994.
Compensation Committee Structure and Philosophy
- -----------------------------------------------
The Corporation's Board of Directors has a standing Compensation Committee for
the purpose of setting executive salaries and benefits. The Compensation
Committee was comprised of six outside directors including Edgar P. Hughes
(retired President of The National City Bank of Evansville) who acts as
Committee Chairman. The Compensation Committee directors do not share any
for-profit Board positions with any inside director or executive officer,
except that all members were also directors of The National City Bank of
Evansville. The Compensation Committee met five times during the year to
establish, among other actions, the compensation of John D. Lippert, the
Corporation's Chairman and Chief Executive Officer, and other executive
officers.
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 comparable companies, thus allowing the Corporation to compete for
and retain talented executives who are critical to the Corporation's
long-term success.
8
<PAGE> 11
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.
Compensation is determined by the Compensation Committee of National City
Bancshares, Inc. for all chief executive officers of the Corporation's
subsidiaries, in addition to all Corporate executive officers.
The Compensation Committee retained the services of McGladrey & Pullen, LLP,
Certified Public Accountants and Consultants, to advise the Compensation
Committee in their 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 Compensation Committee comparisons of compensation
and benefits for like positions among various peer groups. The Compensation
Committee increased the salary of Chairman Lippert and President Keil for 1994.
It was determined that the base compensation of these officers was not within
an acceptable percentile of competitive base compensation from available data.
The Compensation Committee, with the assistance of its 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 Compensation Committee, with the further assistance from
McGladrey & Pullen, LLP, 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
Compensation 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 subsidiary, 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.
Although there will be a payout under this Plan during 1995 based on 1994
performance, the amount of the payout is not calculable as of the current
date.
9
<PAGE> 12
Supplemental Retirement Benefit Agreement
- -----------------------------------------
During 1994 a supplemental retirement benefit agreement was signed between John
D. Lippert and The National City Bank of Evansville. The annual retirement
benefit of the Corporation's Chairman, John D. Lippert, was affected by recent
limitations imposed by the Internal Revenue Service. To compensate for this,
upon recommendation of the Corporation's Compensation Committee, the Board of
Directors of The National City Bank of Evansville established a supplemental
retirement plan for Chairman Lippert. The plan calls for annual payments to
Chairman Lippert of $25,000 upon his retirement from the Bank, but not sooner
than his sixty-fourth birthday.
Employment and Severance Agreements
- -----------------------------------
The Corporation does not have any employment or severance agreements with its
executive officers.
Compensation Committee Members
- ------------------------------
The above report on compensation was submitted by the Compensation Committee,
whose members were as follows:
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.
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, 1989, and all dividends are reinvested.
Fiscal year ending December 31 data is used.
PERFORMANCE GRAPH DATA
<TABLE>
<CAPTION>
NASDAQ
NASDAQ STOCK
YEAR NCBE BANKS MARKET
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 96.20 73.23 84.92
1991 92.11 120.17 136.28
1992 125.35 174.87 158.58
1993 161.14 199.33 180.93
1994 206.31 198.69 176.92
</TABLE>
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<PAGE> 13
TRANSACTIONS WITH MANAGEMENT
Directors and principal officers (of the Corporation and its subsidiaries) and
their associates were customers of, and have had transactions with, the Banks
in the ordinary course of business during 1994.
These transactions consisted of extensions of credit by the subsidiaries 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 subsidiaries, those transactions do not
involve more than a normal risk of being collectible or present other
unfavorable features. The subsidiaries expect to have, in the future,
financial 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 10% 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 10% shareholders are
required by SEC regulation to furnish the Corporation with copies of all
Section 16(a) forms they file.
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 1994 all Section 16(a) filing requirements
applicable to its officers, directors, and greater than 10% beneficial owners
were complied with.
ITEM 2. PROPOSED AMENDMENT OF THE ARTICLES OF INCORPORATION
AMENDMENT OF ARTICLE V OF THE ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
AND DESIGNATE ALL SHARES AS WITHOUT PAR VALUE
DESCRIPTION OF THE PROPOSED AMENDMENT OF ARTICLE V
At a meeting held on January 17, 1995, the Corporation's Board of Directors
unanimously adopted resolutions approving and submitting to a vote of the
shareholders, an amendment to Article V, Section 1, of the Corporation's
Articles of Incorporation which would increase the authorized shares of the
Corporation's common stock from 5,000,000 to 10,000,000 shares, and to change
from a par value of $3.33 1/3 per share to without par value.
On December 31, 1994, the number of the Corporation's outstanding shares of
common stock was 3,658,142 and the number of shares of common stock reserved
for issuance under the Corporation's Dividend Reinvestment Plan was 61,880.
The number of unissued shares of common stock available for issuance was
1,279,978.
DISCUSSION OF THE PROPOSED AMENDMENT OF ARTICLE V
The Board has concluded that it is in the best interest of the Corporation and
its shareholders to increase the amount of the Corporation's authorized capital
stock and to change from a par value of $3.33 1/3 per share to without par
value at this year's Annual Meeting of Shareholders. The additional shares of
common stock would be available for general corporate purposes, including
acquisitions, financings, stock dividends, or stock splits.
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<PAGE> 14
The additional shares authorized by the proposed amendment would be available
to provide flexibility in the event that shares should be needed for any
desirable corporate purpose, including the issuance of common stock in
connection with the Corporation's merger and acquisition activity. The
Corporation has two acquisitions currently pending. The maximum number of
shares which could be issued at consummation of these two acquisitions is
776,420 shares. If this proposed amendment for the increase of authorized
shares is approved by shareholders, such authorized shares may be issued at the
discretion of the Board of Directors without further shareholder approval. All
attributes of the additional shares of common stock would be the same as those
of the existing shares of authorized and unissued common stock. There
currently exists no stock option plans, warrants, or similar arrangements which
would utilize authorized but unissued shares.
The Corporation currently has two anti-takeover provisions in its Articles of
Incorporation and Bylaws, one of which requires an 80% shareholder vote to
effectuate any merger or acquisition of the Corporation unless such transaction
has been approved by the Board of Directors, and the second of which provides
for a rotating Board of Directors. The authorization of additional common
shares available for future issuance by the Board of Directors could fairly be
considered as anti-takeover in nature or effect. In the event the Corporation
becomes the target of a hostile takeover attempt, the Board of Directors could
presumably issue authorized shares into "friendly hands" for the purpose of
diluting the ownership of the potential acquirer. The overall effect of the
existence of additional authorized but unissued shares could, if utilized in
this manner, render more difficult the accomplishment of the acquisition of
control of the Corporation and thus make more difficult the removal of
management. However, the Board of Directors has no present intention to issue
such authorized but unissued shares for this purpose.
Under the Corporation's Articles of Incorporation, the shareholders of the
Corporation have no preemptive rights to subscribe to or purchase any shares of
common stock or other securities of the Corporation. Shareholders should also
note that issuance of additional shares of capital stock would dilute the
voting, dividend, liquidation, and other rights of the capital stock presently
outstanding.
The Board unanimously recommends that the shareholders vote for approval of
Item #2. Item #2 will be adopted upon receipt of the affirmative vote of the
holders of at least a majority of outstanding shares of common stock. If
sufficient votes are received, Item #2 will become effective upon filing of the
Articles of Amendment with the Indiana Secretary of State.
ITEM 3. SELECTION OF AUDITORS
The Board of Directors proposes for the approval by the shareholders at the
Annual Meeting the appointment of McGladrey & Pullen, LLP, Certified Public
Accountants and Consultants as independent accountants to audit the financial
statements of the Corporation and its subsidiaries for the year 1995. 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, LLP audited the books and records of the
Corporation and its subsidiaries for years 1993 and 1994. 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 the 1993 and 1994 annual
meetings. In the event that the shareholders do not approve the selection of
McGladrey & Pullen, LLP, 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 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.
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<PAGE> 15
ITEM 4. 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 1994 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, 1995. 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 1996 must be made by a qualified shareholder and must be received by
the Corporation no later than November 23, 1995.
By Order of the Board of Directors,
/S/ Harold A. Mann
HAROLD A. MANN
Secretary
March 17, 1995
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<PAGE> 16
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.,Esq., and
Evansville, IN 47705-0868 David L. Woll, Esq., Proxies, each with the power to appoint his or her
substitute, and hereby authorizes them to represent and to vote as
below, all the shares of Common Stock of National City Bancshares, Inc., held
of record by the undersigned on February 28, 1995, at the Annual Meeting of
Shareholders to be held on April 18, 1995, or any adjournment thereof.
1. ELECTION OF DIRECTORS -- CLASS III (term to expire 1998)
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees listed below [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.
John D. Lippert Ronald G. Reherman
2. TO CONSIDER AND ACT UPON A PROPOSAL TO AMEND ARTICLE V, SECTION 1, OF
THE ARTICLES OF INCORPORATION to provide for an increase in the number
of authorized Common Shares of the Corporation from 5,000,000 to
10,000,000 with all such shares designated as without par value.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. PROPOSAL TO RATIFY THE APPOINTMENT OF MCGLADREY & PULLEN as the
Corporation's Independent Certified Public Accountants for the fiscal
year ending December 31, 1995.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
(continued, and to be signed on other side)
(FACE OF PROXY CARD)
<PAGE> 17
(continued from other side)
<TABLE>
<S><C>
4. 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.)
When shares are held by joint tenants, both should sign. When signing
Please sign exactly as name appears below. as an 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__________________________________________, 1995
_____________________________________________________
SIGNATURE
_____________________________________________________
SIGNATURE IF HELD JOINTLY
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE
</TABLE>
(REVERSE OF PROXY CARD)
