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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (under Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
First Citizens BancShares, Inc.
(Name of Registrant as Specified In Its Charter)
First Citizens BancShares, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fees (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
5) Total fee paid:
______________________________________________________________
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________
3) Filing Party:
______________________________________________________________
4) Date Filed:
______________________________________________________________
<PAGE>
FIRST CITIZENS BANCSHARES, INC.
POST OFFICE BOX 27131
RALEIGH, NORTH CAROLINA 27611-7131
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1997
NOTICE is hereby given that the Annual Meeting of Shareholders of First
Citizens BancShares, Inc. ("BancShares") will be held as follows:
Place: Conference Room A
Raleigh Civic Center (Raleigh Convention
and Conference Center Complex)
500 Fayetteville Street Mall
Raleigh, North Carolina
Date: Monday, April 28, 1997
Time: 1:00 p.m.
The purposes of the meeting are:
1. To elect a 26-member Board of Directors, each member to hold
office for a term of one year or until his or her respective
successor is duly elected and qualified.
2. To ratify the appointment of KPMG Peat Marwick LLP as
BancShares' independent public accountants for 1997.
3. To consider the adoption of an amendment to the bylaws of
BancShares to increase the maximum authorized number of
directors from 26 to 30.
4. To transact any other business that may properly come before
the Annual Meeting.
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE THE PRESENCE OF A QUORUM, ALL SHAREHOLDERS, EVEN THOUGH THEY
PLAN TO ATTEND, ARE URGED TO COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY AND
RETURN IT PROMPTLY IN THE POSTAGE PREPAID ENVELOPE PROVIDED FOR THAT PURPOSE.
THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE IT AND VOTE IN
PERSON IF YOU ATTEND THE MEETING.
By Order of the Board of Directors
ALEXANDER G. MACFADYEN, JR., Secretary
March 14, 1997
<PAGE>
FIRST CITIZENS BANCSHARES, INC.
POST OFFICE BOX 27131
RALEIGH, NORTH CAROLINA 27611-7131
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of First Citizens BancShares, Inc.
("BancShares") for use at the Annual Meeting of Shareholders of BancShares to be
held in Conference Room A, Raleigh Civic Center (Raleigh Convention and
Conference Center Complex), 500 Fayetteville Street Mall, Raleigh, North
Carolina, at 1 o'clock p.m. on April 28, 1997, or any adjournments thereof. In
addition to solicitation by mail, proxies may be solicited personally or by
telephone by directors, officers or employees of BancShares and its subsidiary,
First-Citizens Bank & Trust Company ("Bank"). Expenses of such proxy
solicitation will be paid by BancShares. Persons named in the proxy to represent
shareholders at the meeting are: George H. Broadrick, Lewis R. Holding, Frank B.
Holding, James B. Hyler, Jr., Frank B. Holding, Jr., Carmen P. Holding, Lewis T.
Nunnelee, II, and David L. Ward, Jr. This Proxy Statement is first being mailed
to shareholders on March 14, 1997.
A proxy form that is properly executed and returned, and not revoked,
will be voted in accordance with the instructions contained in the proxy. If no
instructions are given, the proxy will be voted FOR the slate of 26 nominees
named herein for election to the Board of Directors, FOR ratification of the
appointment of KPMG Peat Marwick LLP as BancShares' independent public
accountants for 1997, and FOR amendment of the Bylaws of BancShares to increase
the maximum authorized number of directors from 26 to 30. On such other matters
as may properly come before the meeting, the proxy will be voted in accordance
with the best judgment of the persons named in the proxy to represent the
shareholders. If any nominee is unable to serve, the proxy may be voted for a
person designated by the Board of Directors to replace such nominee. A
shareholder who executes a proxy has the right to revoke it at any time before
it is voted by filing with the Secretary of BancShares either an instrument
revoking the proxy or a duly executed proxy bearing a later date, or by
attending the Annual Meeting and requesting the right to vote in person.
RECORD DATE; VOTING SECURITIES
March 6, 1997, is the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting. At the Annual Meeting
shareholders will be entitled to cast the number of votes to which they are
entitled based on the shares of BancShares' voting securities standing of record
in their respective names at the close of business on that date.
As of March __, 1997, BancShares' voting securities consisted of
9,638,297 shares of Class A Common Stock, $1 par value per share, each share
being entitled to one vote on each matter submitted for voting and on each
director to be elected, and 1,758,545 shares of Class B Common Stock, $1 par
value per share, each share being entitled to 16 votes on each matter submitted
for voting and on each director to be elected.
In the voting on each proposal described in this Proxy Statement (other
than the election of directors) abstentions will have the same effect as votes
against the proposal, but broker non-votes will have no effect.
2
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
As of March __, 1997, the shareholders identified in the following
table beneficially owned more than 5% of one or both classes of BancShares'
voting securities:
<TABLE>
<CAPTION>
Combined
Beneficial Ownership Class A and
Class A Common Class B Common Class B Common
Name and Address and Percentage and Percentage Percentage of
of Beneficial Owner of Class of Class Total Votes*
<S> <C> <C> <C>
Claire Holding Bristow 50,995(1) 100,812(1) 4.40%
Summerville, SC (.53%) (5.73%)
George H. Broadrick 1,265,048(2) 325,916(2) 17.15%
Charlotte, NC (13.13%) (18.43%)
Hope Holding Connell 39,569(3) 109,197(3) 4.73%
Raleigh, NC (.41%) (6.21%)
Elizabeth C. Holding 51,153(4) 100,885(4) 4.41%
Chapel Hill, NC (.53%) (5.74%)
Frank B. Holding 2,567,982(5) 632,021(5) 33.57%
Smithfield, NC (26.64%) (35.94%)
Frank B. Holding, Jr 55,475(6) 105,943(6) 4.63%
Raleigh, NC (.58%) (6.02%)
Lewis R. Holding 1,195,046(7) 324,094(7) 16.89%
Lyford Cay, Bahamas (12.40%) (18.43%)
Olivia B. Holding 48,656(8) 104,015(8) 4.53%
Raleigh, NC (.50%) (5.91%)
</TABLE>
- -----------------
* This column reflects the aggregate votes attributable to the combined shares
of Class A and Class B beneficially owned by each principal shareholder listed
above, as a percentage of the aggregate votes that may be cast by the holders
of all shares of BancShares' outstanding voting securities.
(1) Claire H. Bristow exercises sole voting and investment power as to
45,995 shares of Class A and 83,562 shares of Class B held
individually. She disclaims beneficial ownership as to 16,000 shares
of Class B held by her spouse as custodian for their minor children.
She exercises shared voting and investment power as to 5,000 shares
of Class A and 1,250 shares of Class B held in a trust for her
benefit in a nominee name by the Bank's Trust Department. All of such
shares also are included in the beneficial ownership shown above for
her father, Frank B. Holding, who disclaims beneficial ownership as
to such shares.
(2) George H. Broadrick exercises sole voting and investment power as to
55,742 shares of Class A held individually and as to 953,806 shares
of Class A and 262,041 shares of Class B held by him as sole trustee
of two irrevocable trusts for the benefit of the adult daughters of
Lewis R. Holding. He exercises shared voting and investment power as
to 245,500 shares of Class A and 61,375 shares of Class B held by him
and Carolyn S. Holding as co-trustees of four irrevocable trusts for
the benefit of Lewis R. Holding's adult
3
<PAGE>
daughters, which shares also are included in the beneficial ownership
of Lewis R. Holding. Mr. Broadrick disclaims beneficial ownership as
to 10,000 shares of Class A and 2,500 shares of Class B included
above and owned by his spouse. Pursuant to a notice of change of
control filed with the Federal Reserve Bank of Richmond, Virginia
during January 1997, it is anticipated that Mr. Broadrick, as sole
trustee of two trusts for the benefit of the daughters of Lewis R.
Holding, will exchange certain shares of Class A currently held by
the trusts for an equal number of shares of Class B currently held by
Lewis R. Holding, resulting in a significant increase in the
percentage of Class B shown as beneficially owned by Mr. Broadrick
and a significant decrease in the Class B beneficial ownership shown
for Mr. Holding. Such share exchange will not take place until after
the transaction has been approved by the Federal Reserve Bank of
Richmond.
(3) Hope H. Connell exercises sole voting and investment power as to
33,069 shares of Class A and 96,722 shares of Class B held
individually. She disclaims beneficial ownership as to 1,600 shares
of Class A and 11,250 shares of Class B held by her spouse
individually and/or as custodian for their minor sons. She exercises
shared voting and investment power as to an additional 4,900 shares
of Class A and 1,225 shares of Class B held in a trust for her
benefit in a nominee name by the Bank's Trust Department. All of such
shares also are included in the beneficial ownership shown above for
her father, Frank B. Holding, who disclaims beneficial ownership as
to such shares.
(4) Elizabeth C. Holding exercises sole voting and investment power as to
46,153 shares of Class A and 99,635 shares of Class B held
individually. She exercises shared voting and investment power as to
an additional 5,000 shares of Class A and 1,250 shares of Class B
held in a trust for her benefit in a nominee name by the Bank's Trust
Department. All of such shares also are included in the beneficial
ownership shown above for her father, Frank B. Holding, who disclaims
beneficial ownership as to such shares.
(5) Frank B. Holding exercises sole voting and investment power as to
1,637,834 shares of Class A held individually. He disclaims
beneficial ownership as to 320,396 shares of Class A and 514,677
shares of Class B held by his spouse, adult son and daughters and
their spouses, and 24,700 shares of Class A and 6,175 shares of Class
B held in a nominee name by the Bank's Trust Department for the
benefit of his adult son and daughters, all of which shares are
included above. He exercises shared voting and investment power as to
an aggregate of 585,052 shares of Class A and 111,169 shares of Class
B held by the following corporations and other entities which, for
beneficial ownership purposes, are deemed controlled by Mr. Holding:
First Citizens Bancorporation of South Carolina, Inc. (167,600 shares
of Class A and 45,900 shares of Class B); Fidelity BancShares (N.C.),
Inc. (100,000 shares of Class A); Southern BancShares (N.C.), Inc.
(24,584 shares of Class A and 22,219 shares of Class B); Southern
Bank and Trust Company (46,000 shares of Class A); Goshen, Inc.
(54,000 shares of Class A); The Heritage Bank (23,628 shares of Class
A); Yadkin Valley Company (18,845 shares of Class A and 1,725 shares
of Class B); Yadkin Valley Life Insurance Company (700 shares of
Class A and 175 shares of Class B); Twin States Farming, Inc. (6,320
shares of Class A and 1,225 shares of Class B); The Robert P. Holding
Foundation, Inc., a charitable foundation of which Mr. Holding is a
director (126,896 shares of Class A and 36,525 shares of Class B);
and in a nominee name by the Bank's Trust Department (16,479 shares
of Class A and 3,400 shares of Class B held in a fiduciary capacity
for the benefit of various third parties). Included in Frank B.
Holding's beneficial ownership are 262,920 shares of Class A and
41,825 shares of Class B also shown as beneficially owned by his
brother, Lewis R. Holding, of which 16,479 shares of Class A and
3,400 shares of Class B also are included in the beneficial ownership
of James B. Hyler, Jr. (See "OWNERSHIP OF SECURITIES BY MANAGEMENT"),
and 345,096 shares of Class A and 520,852 shares of Class B also are
included in the ownership of his adult son and daughters, each of
whom is listed individually in the table above.
(6) Frank B. Holding, Jr. exercises sole voting and investment power as
to 40,095 shares of Class A and 85,318 shares of Class B held
individually and 6,780 shares of Class A and 18,750 shares of Class B
held by him as custodian for his minor children. He exercises shared
voting and investment power as to an additional 4,900 shares of Class
A and 1,225 shares of Class B held in a trust for his benefit in a
nominee name by the Bank's Trust Department, and he disclaims
beneficial ownership as to 3,700 shares of Class A and 650 shares of
Class B included above and held by his spouse. All of such shares
also are included in the beneficial ownership shown above for his
father, Frank B. Holding, who disclaims beneficial ownership as to
such shares.
4
<PAGE>
(7) Lewis R. Holding exercises sole voting and investment power as to
610,935 shares of Class A and 207,706 shares of Class B held
individually. He disclaims beneficial ownership as to certain shares
included above and held by his spouse individually (48,963 shares of
Class A and 12,025 shares of Class B), by his spouse and George H.
Broadrick as co-trustees of four irrevocable trusts for the benefit
of his adult daughters (245,500 shares of Class A and 61,375 shares
of Class B) and by his adult daughters (26,728 shares of Class A and
1,163 shares of Class B). He exercises shared voting and investment
power as to an aggregate of 262,920 shares of Class A and 41,825
shares of Class B held by the following corporations and other
entities which, for beneficial ownership purposes, are deemed
controlled by Mr. Holding: Fidelity BancShares (N.C.), Inc. (100,000
shares of Class A); Yadkin Valley Company (18,845 shares of Class A
and 1,725 shares of Class B); Yadkin Valley Life Insurance Company
(700 shares of Class A and 175 shares of Class B); The Robert P.
Holding Foundation, Inc., a charitable foundation of which Mr.
Holding is a director (126,896 shares of Class A and 36,525 shares of
Class B); and in a nominee name by the Bank's Trust Department
(16,479 shares of Class A and 3,400 shares of Class B held in a
fiduciary capacity for the benefit of various third parties).
Included in Lewis R. Holding's beneficial ownership are 262,920
shares of Class A and 41,825 shares of Class B also shown as
beneficially owned by his brother, Frank B. Holding, of which 16,479
shares of Class A and 3,400 shares of Class B also are included in
the beneficial ownership of James B. Hyler, Jr. (See "OWNERSHIP OF
SECURITIES BY MANAGEMENT").
(8) Olivia B. Holding exercises sole voting and investment power as to
43,756 shares of Class A and 102,790 shares of Class B held
individually. She exercises shared voting and investment power as to
an additional 4,900 shares of Class A and 1,225 shares of Class B
held in a trust for her benefit in a nominee name by the Bank's Trust
Department. All of such shares also are included in the beneficial
ownership shown above for her father, Frank B. Holding, who disclaims
beneficial ownership as to such shares.
OWNERSHIP OF SECURITIES BY MANAGEMENT
As of March __, 1997, the beneficial ownership of BancShares' voting
securities by the directors, certain named executive officers, and by all
directors and executive officers as a group, of BancShares and the Bank was as
follows:
<TABLE>
<CAPTION>
Combined
Beneficial Ownership* Class A and
Class A Common Class B Common Class B Common
Name and Address and Percentage and Percentage Percentage of
of Beneficial Owner of Class of Class Total Votes**
<S> <C> <C> <C>
John M. Alexander, Jr 1,434(1) 225(1) .01%
Raleigh, NC (.01%) (.01%)
Ted L. Bissett 7,265(2) 1,375(2) .08%
Spring Hope, NC (.08%) (.08%)
B. Irvin Boyle 700 175 .01%
Charlotte, NC (.01%) (.01%)
George H. Broadrick 1,265,048(3) 325,916(3) 17.15%
Charlotte, NC (13.13%) (18.53%)
H. Max Craig, Jr 12,299(4) 3,550(4) .18%
Stanley, NC (.13%) (.20%)
Betty M. Farnsworth 1,561(5) 250 .01%
Pilot Mountain, NC (.02%) (.01%)
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Combined
Beneficial Ownership* Class A and
Class A Common Class B Common Class B Common
Name and Address and Percentage and Percentage Percentage of
of Beneficial Owner of Class of Class Total Votes**
<S> <C> <C> <C>
Lewis M. Fetterman 12,955(6) 2,750(6) .15%
Clinton, NC (.13%) (.16%)
Carmen P. Holding 147,929(7) 31,281(7) 1.72%
Atlanta, GA (1.53%) (1.78%)
Frank B. Holding 2,567,982(8) 632,021(8) 33.57%
Smithfield, NC (26.64%) (35.94%)
Frank B. Holding, Jr 55,475(9) 105,943(9) 4.63%
Raleigh, NC (.58%) (6.02%)
Lewis R. Holding 1,195,046(10) 324,094(10) 16.89%
Lyford Cay, Bahamas (12.40%) (18.43%)
Charles B. C. Holt 2,570(11) -0- .01%
Fayetteville, NC (.03%)
Edwin A. Hubbard 14,578(12) -0- .04%
Sanford, NC (.15%)
James B. Hyler, Jr 21,845(13) 3,500(12) .21%
Raleigh, NC (.23%) (.20%)
Gale D. Johnson 481 50 .01%
Dunn, NC (.01%) (.01%)
Freeman R. Jones 4,100 250 .02%
Midland, NC (.04%) (.01%)
Lucius S. Jones 1,000 -0- .01%
Wendell, NC (.01%)
I. B. Julian 12,000 3,500 .18%
Fayetteville, NC (.12%) (.20%)
Joseph T. Maloney, Jr 22,452 5,400 .29%
Fayetteville, NC (.23%) (.31%)
J. Claude Mayo, Jr 1,000 -0- .01%
Rocky Mount, NC (.01%)
William McKay 1,072(14) -0- .01%
Flat Rock, NC (.01%)
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Combined
Beneficial Ownership* Class A and
Class A Common Class B Common Class B Common
Name and Address and Percentage and Percentage Percentage of
of Beneficial Owner of Class of Class Total Votes**
<S> <C> <C> <C>
Brent D. Nash 12,373(15) -0- .03%
Tarboro, NC (.13%)
Lewis T. Nunnelee, II 600 450 .02%
Wilmington, NC (.01%) (.03%)
James M. Parker 842 -0- .01%
Raleigh, NC (.01%)
Talbert O. Shaw 119 -0- .01%
Raleigh, NC (.01%)
R. C. Soles, Jr 15,138 -0- .04%
Tabor City, NC (.16%)
David L. Ward, Jr 27,100(16) 8,638(16) .44%
New Bern, NC (.28%) (.49%)
All directors, nominees for director 4,685,501(17) 1,209,094(17) 63.62%(17)
and executive officers as a group (48.61%) (68.76%)
(37 persons)
</TABLE>
- ------------------
* Except as otherwise stated in the footnotes following this table,
shares shown as beneficially owned, to the best of BancShares'
management's knowledge, are owned individually by the persons named and
such persons exercise sole voting and investment power with respect to
those shares.
** This column reflects the aggregate votes attributable to the combined
shares of Class A and Class B beneficially owned by each director and
executive officer, and by the group, as a percentage of the aggregate
votes that may be cast by the holders of all shares of BancShares'
outstanding voting securities.
(1) John M. Alexander, Jr. exercises sole voting and investment power as to
534 shares of Class A held individually. He exercises shared voting and
investment power as to 900 shares of Class A and 225 shares of Class B
held of record by Raleigh Tractor & Truck Company, of which he is
President.
(2) Ted L. Bissett exercises sole voting and investment power as to 5,581
shares of Class A and 1,075 shares of Class B held individually. He
exercises shared voting and investment power as to 1,684 shares of
Class A and 300 shares of Class B held by his children.
(3) For an explanation of the nature of the beneficial ownership of George
H. Broadrick, see "PRINCIPAL HOLDERS OF VOTING SECURITIES," footnote
(2).
(4) H. Max Craig, Jr. exercises sole voting and investment power as to 699
shares of Class A and 400 shares of Class B held individually. He
exercises shared voting and investment power as to 11,600 shares of
Class A and 3,150 shares of Class B held by Gaston County Dyeing
Machine Company, of which he is President and Chairman of the Board.
7
<PAGE>
(5) Betty M. Farnsworth exercises sole voting and investment power as to
1,461 shares of Class A and 250 shares of Class B held individually.
She disclaims beneficial ownership as to 100 shares of Class A held by
an adult son.
(6) Lewis M. Fetterman exercises sole voting and investment power as to
10,146 shares of Class A and 2,200 shares of Class B held individually.
He disclaims beneficial ownership as to 2,849 shares of Class A and 550
shares of Class B included above and held in trust for his spouse.
(7) Carmen P. Holding exercises sole voting and investment power as to
25,129 shares of Class A and 581 shares of Class B held individually.
An additional 122,800 shares of Class A and 30,700 shares of Class B
are held in various family trusts for her benefit, as to which shares
she has shared voting and investment power, which shares also are
included in the beneficial ownership shown above for George H.
Broadrick and Lewis R. Holding.
(8) For an explanation of the nature of the beneficial ownership of Frank
B. Holding, see "PRINCIPAL HOLDERS OF VOTING SECURITIES," footnote (5).
(9) For an explanation of the nature of the beneficial ownership of Frank
B. Holding, Jr., see "PRINCIPAL HOLDERS OF VOTING SECURITIES," footnote
(6).
(10) For an explanation of the nature of the beneficial ownership of Lewis
R. Holding, see "PRINCIPAL HOLDERS OF VOTING SECURITIES," footnote (7).
(11) Charles B. C. Holt exercises sole voting and investment power as to
1,966 shares of Class A held individually. He exercises shared voting
and investment power as to 139 shares of Class A held by him as Trustee
of the Holt Oil Company, Inc. Retirement Plan, and disclaims beneficial
ownership as to 465 shares of Class A held by his spouse.
(12) Edwin A. Hubbard exercises sole voting and investment power as to 8,251
shares of Class A held individually. He disclaims beneficial ownership
as to 6,327 shares of Class A held by his spouse.
(13) James B. Hyler, Jr. exercises sole voting and investment power as to
5,366 shares of Class A and 100 shares of Class B held individually. He
exercises shared voting and investment power as to certain shares held
in a nominee name by the Trust Department of the Bank, which shares,
for beneficial ownership purposes, are deemed controlled by Mr. Hyler
(16,479 shares of Class A and 3,400 shares of Class B held in a
fiduciary capacity for the benefit of various third parties); such
shares also are included in the beneficial ownership shown above for
Lewis R. Holding and Frank B. Holding.
(14) William McKay exercises sole voting and investment power as to 928
shares of Class A held individually and shared voting and investment
power as to 144 shares of Class A held jointly with his spouse.
(15) Brent D. Nash exercises sole voting and investment power as to 5,645
shares of Class A held individually and disclaims beneficial ownership
as to 5,642 shares of Class A owned by his spouse and 1,086 shares of
Class A owned by his daughter.
(16) David L. Ward, Jr. exercises sole voting and investment power as to
24,100 shares of Class A and 7,513 shares of Class B held individually.
He exercises shared voting and investment power as to 1,000 shares of
Class A and 250 shares of Class B held by him and J. Troy Smith, Jr. as
Co-Trustees of the Ward and Smith, P.A. Profit-Sharing Trust. He
disclaims beneficial ownership as to 3,500 shares of Class A and 875
shares of Class B owned by his spouse.
(17) Certain numbers of shares included in the beneficial ownership of
George H. Broadrick, Carmen P. Holding, Frank B. Holding, Frank B.
Holding, Jr., Lewis R. Holding, and James B. Hyler, Jr. are reflected
separately in the beneficial ownership of each of such individuals, but
are included only once in the beneficial ownership shown for the group.
8
<PAGE>
REQUIRED REPORTS OF BENEFICIAL OWNERSHIP
BancShares' directors and executive officers are required to file
certain reports with the Securities and Exchange Commission ("SEC") regarding
the amount of and changes in their beneficial ownership of BancShares' Class A
and Class B common stock. Based on its review of copies of those reports,
BancShares' proxy materials are required to disclose failures to report shares
beneficially owned or changes in such beneficial ownership or to timely file
required reports. It has come to BancShares' attention that James B. Hyler, Jr.
(two reports) and James M. Parker (one report) inadvertently filed untimely
reports of changes in their beneficial ownership of BancShares' stock. However
each of the required reports was filed prior to the end of 1996.
PROPOSAL 1: ELECTION OF DIRECTORS
BancShares' Bylaws currently provide for not less than five nor more
than 26 directors. Within those limits, the Board of Directors has the authority
to establish the number of directors to be elected each year and has set the
number of directors at 26 for election at the Annual Meeting. No more than 26
directors may be elected at this meeting and the 26 nominees receiving the
highest numbers of votes will be deemed to have been elected.
The persons named below have been nominated by the Board of Directors
for election as directors of BancShares. Each nominee currently serves as a
director of BancShares and has been nominated to be reelected for a term of one
year or until resignation, retirement, death, or until his or her respective
successor has been duly elected and qualified:
<TABLE>
<CAPTION>
Positions with Year
BancShares First Principal Occupation and Business
Name and Age and Bank Elected(1) Experience for Past Five Years
<S> <C> <C> <C>
John M. Alexander, Jr.(2) Director 1990 President, General Manager and
47 Chief Operating Officer, Cardinal
International Trucks, Inc. (truck
dealer)
Ted L. Bissett Director 1970 President, F.D. Bissett & Son, Inc
60 (farm supplies)
B. Irvin Boyle Director 1980 Attorney, of Counsel to Johnston,
85 Taylor, Allison & Hord; former
Senior Partner of Boyle & Alexander
(attorneys)
George H. Broadrick(2) Director; Chairman 1975 Retired President and Consultant,
74 of Executive Committee; First-Citizens Bank &
Consultant Trust Company
and First Citizens BancShares, Inc.
H. Max Craig, Jr.(2) Director 1981 President, CEO and Chairman of the
66 Board, Gaston County Dyeing Machine
Company (textile machinery
manufacturing)
Betty M. Farnsworth Director 1985 Homemaker and former Director,
70 Farmers Bank, Pilot Mountain, N.C.
Lewis M. Fetterman Director 1980 President and Owner, LMF Consulting
75 & Marketing Co.; Assistant to
President, Heartland Pork
Enterprises, Inc.; Director, Lundy
Packing Co.; former Chief Executive
Officer, Fetterman Farms, Ltd.
(agribusiness)
9
<PAGE>
Positions with Year
BancShares First Principal Occupation and Business
Name and Age and Bank Elected(1) Experience for Past Five Years
Carmen P. Holding(2)(3) Director 1996 Director, First-Citizens Bank and
28 Trust Company of South Carolina and
First Citizens Bancorporation of
South Carolina, Inc.; former Office
Manager, Interweb, Inc. (web site
designer and provider); prior to
that, showroom salesperson,
Scalamandre, Inc. (decorative
fabrics manufacturer and
wholesaler)
Frank B. Holding(2)(3) Executive Vice 1962 Executive Vice Chairman of the Board,
68 Chairman of First-Citizens Bank & Trust Company and
the Board First Citizens BancShares, Inc.; Vice
Chairman of the Board, First-Citizens
Bank and Trust Company of South
Carolina and First Citizens Bancorporation
of South Carolina, Inc.
Frank B. Holding, Jr.(2)(3) President and Director 1993 President, First Citizens BancShares, Inc.
35 and First-Citizens Bank & Trust
Company; Director, Exchange Bank of
Kingstree, South Carolina
Lewis R. Holding(3) Chairman of 1957 Chairman of the Board, First-Citizens
69 the Board Bank & Trust Company and First Citizens
BancShares, Inc.
Charles B. C. Holt Director 1995 Secretary/Treasurer (former President),
64 Holt Oil Company, Inc. (wholesale
petroleum products distributor); former
Chairman of the Board, State Bank,
Fayetteville, NC
Edwin A. Hubbard Director 1996 Retired; former Chairman of the Board,
78 Stroud-Hubbard Company, Inc. (retail
shoe company); former Chairman of the
Board, Allied Bank Capital, Inc. and
Summit Savings Bank, Inc., SSB,
Sanford, NC
James B. Hyler, Jr. Vice Chairman of 1988 Vice Chairman of the Board and Chief
49 the Board Operating Officer, First-Citizens Bank &
Trust Company and First Citizens
BancShares, Inc.
Gale D. Johnson, M.D. Director 1974 Retired Surgeon; Director, Health Affairs,
77 Campbell University
Freeman R. Jones Director; Chairman of 1974 Retired; President, EFC Corporation (real
70 Salary Committee estate investment)
10
<PAGE>
Lucius S. Jones Director 1994 President and Owner, United Realty &
54 Construction Company, Inc. (residential
construction, sales and development);
former Vice Chairman of the Board,
Pioneer Bancorp, Inc. and Pioneer Savings
Bank, Inc., Rocky Mount, NC
I. B. Julian Director 1977 Retired Executive, First-Citizens
89 Bank & Trust Company
Joseph T. Maloney, Jr. Director 1976 Private Investor
67
J. Claude Mayo, Jr. Director 1994 Retired; former Owner, Mayo Insurance
69 Agency; former Chairman of the Board,
Pioneer Bancorp, Inc. and Pioneer Savings
Bank, Inc., Rocky Mount, NC
William McKay Director 1991 Retired; former President, CEO and
71 Director, First Federal Savings Bank,
Hendersonville, NC
Brent D. Nash Director 1995 Senior Vice President, First-Citizens
61 Bank & Trust Company; former President,
CEO and Director, Edgecombe Homestead
Savings Bank, Inc., SSB, Tarboro, NC
Lewis T. Nunnelee, II Director 1979 Chairman of the Board, Coastal Beverage
71 Company, Inc. (wholesale beer distributor)
Talbert O. Shaw, Ph.D. Director 1993 President, Shaw University
69 (educator)
R. C. Soles, Jr. Director 1995 Attorney and Senior Partner, Soles,
62 Phipps, Ray, Prince & Williford
(attorneys); Senator, North Carolina
Senate; former Chairman of the Board,
First Investors Savings Bank, Inc., SSB,
Whiteville, NC
David L. Ward, Jr.(2)(4) Director; Chairman of 1971 Senior Attorney and President,
61 Audit Committee Ward and Smith, P.A. (attorneys)
</TABLE>
- ---------------
(1) The term "Year First Elected" refers to the year in which a director
first took office as a director of BancShares or its predecessor, First
Citizens Corporation, or, if elected prior to the formation of First
Citizens Corporation in 1982, of the Bank.
(2) The following directors of BancShares also serve as directors of other
publicly held companies or their subsidiaries, as follows: John M.
Alexander, Jr. serves as a director of North Carolina Railroad Company,
Raleigh, N.C.; George H. Broadrick, Carmen P. Holding, and Frank B.
Holding serve as directors of First Citizens Bancorporation of South
Carolina, Inc., Columbia, S.C.; H. Max Craig, Jr. serves as a director
11
<PAGE>
of Public Service Company of North Carolina, Inc., Gastonia, N.C.;
Frank B. Holding serves as a director of Southern BancShares (N.C.),
Inc., Mount Olive, N.C.; and Frank B. Holding, Jr. serves as a director
of North Carolina Natural Gas Corporation, Fayetteville, N.C.
(3) Lewis R. Holding and Frank B. Holding are brothers. Carmen P. Holding
is the daughter of Lewis R. Holding and the niece of Frank B. Holding.
Frank B. Holding, Jr. is the son of Frank B. Holding and the nephew of
Lewis R. Holding. Frank B. Holding, Jr. and Carmen P. Holding are first
cousins.
(4) The law firm of Ward and Smith, P.A., New Bern, N.C., of which David L.
Ward, Jr. is Senior Attorney and President, served as General Counsel
for BancShares and the Bank during 1996, which relationship is expected
to continue through 1997. BancShares and the Bank paid $ in legal fees
to Ward and Smith, P.A. during 1996.
DIRECTORS' FEES AND COMPENSATION
For their services as directors, each member of the Board of Directors
(except Messrs. L. Holding, F. Holding, J. Hyler, F. Holding, Jr. and E.
Hubbard) receives an annual retainer of $10,000, plus $500 for attendance at
each meeting of the Board and $500 for attendance at each meeting of a committee
that is held on a day other than in conjunction with a meeting of the Board.
In addition to, or in lieu of, such director's fees, certain
BancShares' directors receive other compensation from BancShares or the Bank, as
follows:
William McKay receives compensation in addition to the regular
director's fees described above pursuant to various arrangements related to the
Bank's 1991 acquisition of First Federal Savings Bank, Hendersonville, N.C.
("First Federal"), of which Mr. McKay served as a director and President. At the
time of the acquisition, Mr. McKay (as well as certain other directors of First
Federal) was a party to two agreements (entered into during 1985 and 1987) with
First Federal providing for retirement benefits. Pursuant to the 1985 agreement,
Mr. McKay deferred $300 per month of his directors' fees paid by First Federal
for a period of five years and became entitled to a monthly retirement benefit
of $1,249 for a period of ten years, commencing during 1990. Pursuant to the
1987 agreement, Mr. McKay began receiving a monthly retirement benefit of $835
during August 1992, which benefits will continue for a period of ten years. The
Bank assumed First Federal's obligations for these payments as part of the
acquisition.
Brent D. Nash receives compensation in addition to the regular
director's fees described above pursuant to various arrangements related to the
1994 merger of Edgecombe Homestead Savings Bank, Inc., SSB, Tarboro, N.C.
("Edgecombe") into the Bank. The merger was effected pursuant to an agreement
providing that Mr. Nash, the former President, Chief Executive Officer and a
director of Edgecombe, would be appointed to the Board of Directors of
BancShares. Pursuant to the written agreement pertaining to the merger, as of
the effective date of the merger the Bank and Mr. Nash also entered into an
employment agreement providing for his employment as a Senior Vice President in
the Bank's Tarboro office at a salary of $113,000 per year. The employment
agreement also includes various noncompetition and nonsolicitation covenants by
Mr. Nash, provides normal employee benefits and has a term continuing to January
12, 2001, when Mr. Nash will reach age 65. Following that date, Mr. Nash will
begin receiving retirement benefits pursuant to the Bank's Pension Plan. In
addition, he will receive retirement payments pursuant to an agreement with
Edgecombe, whereby he deferred his director's fees of $300 per month over a five
year period in return for payments of $1,300 per month for a period of 120
months after age 65. The Bank assumed Edgecombe's responsibilities for such
retirement payments as part of the merger.
R. C. Soles, Jr. became a director of BancShares and the Bank in
connection with the 1995 merger of First Investors Savings Bank, Inc., SSB,
Whiteville, N.C. ("First Investors") into the Bank. Mr. Soles served as Chairman
of the Board of First Investors prior to the merger. The written agreement
pertaining to the merger provided that Mr. Soles would be appointed to the Board
of Directors of BancShares and that the former directors of First Investors,
including Mr. Soles, would become local advisory directors for the Bank and
receive for such
12
<PAGE>
services a fee of $835 per quarter until February 23, 2000. Mr. Soles receives
such fees for serving as a local advisory director in addition to the normal
director's fees described above.
Charles B. C. Holt became a director of BancShares and the Bank in
connection with the 1995 merger of State Bank, Fayetteville, N.C. ("State Bank")
into the Bank. Mr. Holt served as Chairman of the Board of State Bank prior to
the merger. The written agreement pertaining to the merger provided that Mr.
Holt would be appointed to the Board of Directors of BancShares and that the
former directors of State Bank, including Mr. Holt, would become local advisory
directors for the Bank and receive for such services a monthly fee of $250 until
March 2, 1998. Mr. Holt receives such fees for serving as a local advisory
director in addition to the normal director's fees described above.
Edwin A. Hubbard receives special compensation, in lieu of the standard
BancShares' director's fees described above, pursuant to an arrangement related
to BancShares' February 14, 1996 acquisition of Allied Bank Capital, Inc.,
Sanford, N.C. ("Allied"). Mr. Hubbard served as Chairman of the Board of Allied.
Pursuant to the Allied acquisition agreement, Mr. Hubbard was selected by
BancShares to serve as a member of the Boards of BancShares and the Bank and
receives a monthly fee of $3,250 (which is equal to the directors' fees
previously paid by Allied) until the end of his fourth elected term as a
director of BancShares. Also, Mr. Hubbard (as well as certain other directors of
Allied) was a participant in Allied's Independent Directors' Retirement Plan,
which provides for monthly retirement benefits. Pursuant to the Plan, Mr.
Hubbard will receive $1,200 per month for a period of ten years following
BancShares' acquisition of Allied. The Bank assumed Allied's obligations for
these retirement payments as part of the merger.
George H. Broadrick, since his retirement as President of the Bank in
1987, has received additional compensation of $50 per hour, plus expenses, for
services rendered pursuant to a consulting agreement with the Bank. In addition,
Mr. Broadrick receives benefits under the Bank's Pension Plan and (for a period
of 10 years following his retirement) payments of $4,778 per month pursuant to a
separate agreement with the Bank under which he has agreed to provide the Bank
with certain consultation services and that he will not "compete" (as defined in
the agreement) against the Bank during the period following his retirement.
Betty M. Farnsworth, Lucius S. Jones, I. B. Julian, Joseph T. Maloney,
J. Claude Mayo, and Lewis T. Nunnelee, II, also serve on the local advisory
boards of the Bank in their respective communities, and each receives quarterly
fees of $125 for attendance at advisory board meetings in addition to the fees
described above for their services as members of the Boards of Directors of
BancShares and the Bank.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of BancShares held four meetings in 1996. All
directors attended at least 75% of the aggregate number of meetings of
BancShares' Board of Directors and any committees on which they served during
their terms.
BancShares' Board of Directors and the Bank's Board of Directors have
the same members. The Boards of Directors have several standing committees,
including a Salary Committee and an Audit Committee. BancShares' Board of
Directors does not have a standing nominating committee or any other committee
performing an equivalent function.
The Audit Committee of BancShares and the Bank consists of David L.
Ward, Jr. - Chairman, John M. Alexander, Jr., H. Max Craig, Jr., Betty M.
Farnsworth, and J. Claude Mayo, Jr. The Audit Committee oversees the
establishment of the scope and detail of the continuous audit program conducted
by the Bank's internal audit staff. The General Auditor of the Bank reports
directly to the Audit Committee and, at least quarterly, the Committee reviews
reports on the work of the internal audit staff, the Corporate Finance
Department and the Commercial Credit Administration Department. Subject to the
approval of BancShares' Board of Directors and ratification by the shareholders,
the Audit Committee engages a qualified firm of independent certified public
accountants to conduct an annual audit of BancShares' consolidated financial
statements. It receives written reports,
13
<PAGE>
supplemented by such oral reports as it deems necessary, from such firm and
reviews non-audit services proposed by management to be provided by the
accounting firm. During 1996, the Audit Committee held four meetings.
The members of the Salary Committee of the Bank's Board of Directors
are listed below. The Salary Committee provides overall guidance for the officer
compensation programs, including salaries and other forms of compensation. At
least annually, the Salary Committee reviews the officer compensation programs,
including salary, pension and such other employee benefit matters as it deems
appropriate. In conjunction with management, it makes recommendations to the
entire Board of Directors with regard to proposed salaries and other forms of
compensation, which recommendations are subject to approval by the Board. During
1996, the Salary Committee held one meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Salary Committee are Freeman R. Jones -
Chairman, Lewis M. Fetterman and Lewis T. Nunnelee, II. After receipt of the
recommendations of the Salary Committee, the Board of Directors makes all final
decisions regarding executive compensation matters. Members of the Board of
Directors who are executive officers abstain from participation in both the
discussion of and the voting on such matters.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Bank's goal is to provide an executive compensation program that
will enable it to attract and retain qualified and motivated individuals as
executive officers. Currently, the Bank's executive compensation program
includes: (a) base salary, and (b) contributions to the individual accounts of
all participating employees (including executive officers) under the Bank's
Section 401(k) salary deferral plan. In addition, the Bank provides other
employee benefit and welfare plans customary for companies of its size.
Effective as of January 1996, the Salary Committee made recommendations
to the Board of Directors (and the Board of Directors made final decisions)
regarding the amounts of the 1996 salaries of Lewis R. Holding, Frank B.
Holding, James B. Hyler, Jr., and Frank B. Holding, Jr., and the maximum
aggregate amount for 1996 merit increases in the salaries of the Bank's other
officers and employees. With respect to Messrs. L. Holding, F. Holding, J.
Hyler, and F. Holding, Jr., the Committee's recommendations were based on its
evaluation of their individual levels of responsibility and performance and, in
the case of Mr. L. Holding in particular, his current leadership and direction
and his historical importance in the development and growth of both the Bank and
BancShares. With respect to the salaries of other executive officers, the Vice
Chairman, with the consent of the Chairman, was directed by the Board of
Directors to set 1996 salaries on an individual merit basis. In connection with
the Bank's normal annual performance review system, the performance of each such
other executive officer is graded by the person to whom that officer reports.
Based on the results of each individual officer's performance appraisal, for
1996 the officer could be awarded an annual merit increase of up to 8% of 1995
base salary. However, the performance review process and, thus, the setting of
salaries largely are subjective and, except as described above, there are no
specific formulae, objective criteria or other such mechanism by which
adjustments to the salary of each executive officer (including Messrs. L.
Holding, F. Holding, J. Hyler and F. Holding, Jr.) are tied empirically to his
individual performance or to BancShares' financial performance. The amounts of
contributions to the separate accounts of executive officers under the Bank's
401(k) salary deferral plan were determined solely by the terms of that plan.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
the deductibility of annual compensation in excess of $1,000,000 paid to certain
executive officers of public corporations. As none of
14
<PAGE>
BancShares' executive officers receive annual compensation approaching that
amount, BancShares' Board of Directors has not yet adopted a policy with respect
to Section 162(m).
Salary Committee:
FREEMAN R. JONES
LEWIS M. FETTERMAN
LEWIS T. NUNNELEE, II
EXECUTIVE OFFICERS
The following individuals have been designated by the Boards of
Directors of BancShares and the Bank as "executive officers." All executive
officers serve at the pleasure of the Board of Directors and each has served for
the past five years in the capacities indicated, with the exceptions noted
below:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Lewis R. Holding 69 Chairman of the Board of BancShares and Bank
(Chief Executive Officer)
Frank B. Holding 68 Executive Vice Chairman of the Board of
BancShares and Bank; formerly Vice Chairman
James B. Hyler, Jr. 49 Vice Chairman of the Board of BancShares and
Bank (Chief Operating Officer); formerly President
Frank B. Holding, Jr. 35 President of BancShares and Bank (Chief
Administrative Officer); formerly Area Vice
President and Regional Vice President of Bank
Kenneth A. Black 44 Vice President and Treasurer of BancShares; Group
Vice President and Treasurer of Bank (Chief
Financial Officer); formerly General Vice
President of Bank
Alexander G. MacFadyen, Jr. 55 Secretary of BancShares; Group Vice President
and Secretary of Bank; formerly General
Vice President of Bank
Wayne D. Duncan 55 Executive Vice President of Bank (Retail Lending);
formerly Senior Regional Vice President and
Regional Vice President of Bank
John R. Francis, Jr. 43 Executive Vice President of Bank (Virginia and
West Virginia Regional Executive); formerly
President, Community Bank Group, First Union
National Bank, Roanoke, VA (successor by merger
to Dominion Bank, Roanoke, VA, of which he
served as Vice President, Blue Ridge Group)
William C. Orr 54 Executive Vice President of Bank (Commercial
Credit Administration); formerly Group
Vice President and General Vice President of Bank
15
<PAGE>
James M. Parker 54 Executive Vice President of Bank (Eastern
Regional Executive); formerly Regional
Vice President of Bank
Edward L. Willingham, IV 42 Executive Vice President of Bank (Central Regional
Executive); formerly Regional Vice President and
Senior Vice President of Bank
J. Allen Woodward 46 Executive Vice President of Bank (Western Regional
Executive); formerly Vice President and Area
Executive, First Union National Bank of North
Carolina, Durham, NC
William J. Cathcart 57 Group Vice President of Bank (Trust Department);
formerly General Vice President
Joseph A. Cooper, Jr. 43 Group Vice President and Chief Information Officer
of Bank; formerly Associate Partner, Andersen
Consulting, Dallas, Texas, and Chief Technology
Officer, NationsBank of NC, Charlotte, NC
Richard H. Lane 52 Senior Vice President of Bank (General Auditor);
formerly Audit Director and Vice President of
NCNB Corp., Charlotte, NC
</TABLE>
16
<PAGE>
EXECUTIVE COMPENSATION
The following table shows, for the years ending December 31, 1996,
1995, and 1994, the cash and certain other compensation paid to or received or
deferred by each of the five named executive officers of BancShares and the
Bank.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
OTHER ALL
ANNUAL RESTRICTED OTHER
NAME AND COMPEN- STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION AWARDS SARS PAYOUTS SATION
POSITION (1) YEAR ($)(2)(3) ($)(4) ($) ($) (#) ($) ($)(5)
--------------------- ---- ----------- ------- ----- ----- ----- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lewis R. Holding 1996 570,979 -0- -0- -0- -0- -0- 9,500
Chairman of the
Board
1995 528,971 -0- -0- -0- -0- -0- 9,240
1994 504,247 29,669 -0- -0- -0- -0- 9,240
Frank B. Holding 1996 571,086 -0- -0- -0- -0- -0- 9,500
Executive Vice
Chairman of the
Board
1995 528,971 -0- -0- -0- -0- -0- 9,240
1994 504,247 29,669 -0- -0- -0- -0- 9,240
James B. Hyler, Jr. 1996 422,329 -0- -0- -0- -0- -0- 9,500
Vice Chairman of the
Board and Chief
Operating Officer
1995 384,204 -0- -0- -0- -0- -0- 9,240
1994 365,474 21,546 -0- -0- 1,197 -0- 9,240
Frank B. Holding, Jr. 1996 250,552 -0- -0- -0- -0- -0- 8,312
President and Chief
Administrative
Officer
1995 230,125 -0- -0- -0- -0- -0- 7,406
1994 210,333 12,900 -0- -0- -0- -0- 5,214
James M. Parker, 1996 199,371 -0- -0- -0- -0- -0- 6,108
Executive Vice
President of the
Bank and Eastern
Regional Executive
1995 179,856 -0- -0- -0- -0- -0- 5,940
1994 169,014 9,922 -0- -0- 551 -0- 5,940
</TABLE>
(1) Positions listed are the named executive officers' current positions
with BancShares and the Bank. See "Executive Officers" above for a
listing of each individual's previous positions.
(2) Includes amounts deferred at the election of each named executive
officer pursuant to the Bank's Section 401(k) salary deferral plan.
(3) Of the salary shown above as paid to Frank B. Holding during 1996,
1995, and 1994, the Bank was reimbursed certain amounts by two of its
affiliates as follows: First-Citizens Bank and Trust Company of South
Carolina - $90,525, $86,214, and $82,109, respectively; and Southern
Bank and Trust Company - $72,231, $68,791, and $65,512, respectively.
These payments were made pursuant to agreements between the Bank and
its affiliates whereby Mr. Holding provides certain management services
to the affiliates in return for their reimbursement to the Bank of a
portion of his salary.
(4) Consists entirely of awards paid under BancShares' annual cash
incentive plan, which was discontinued by the Board of Directors in
January 1996.
(5) Consists entirely of the Bank's matching contributions on behalf of
each named executive officer under the Bank's Section 401(k) salary
deferral plan.
17
<PAGE>
EMPLOYEE STOCK PURCHASE PLAN
During 1994 options to purchase shares of BancShares Class A Common
Stock were granted to substantially all employees of BancShares and its
subsidiaries pursuant to the 1994 Employee Stock Purchase Plan (the "1994 Stock
Plan"), which was approved by shareholders at the 1994 Annual Meeting. No
additional options have been granted since 1994, and all options remaining
unexercised as of June 15, 1996, expired on that date.
The following table contains information with respect to the exercise
of stock options during 1996:
AGGREGATED OPTION EXERCISES IN 1996
AND DECEMBER 31, 1996 OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options At In-the-Money Options
December 31, 1996 at December 31, 1996
(#) ($)
Shares
Acquired Value
on Exercise Realized
Name (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ------------- ----------- ------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Lewis R. Holding (2) -0- $ -0- -0- -0- $ -0- $ -0-
Frank B. Holding (2) -0- -0- -0- -0- -0- -0-
James B. Hyler, Jr. 561 12,437 -0- -0- -0- -0-
Frank B. Holding, Jr. (2) -0- -0- -0- -0- -0- -0-
James M. Parker 551 13,869 -0- -0- -0- -0-
</TABLE>
- ------------
(1) Represents the aggregate fair market value of shares acquired on the
dates options were exercised, minus the aggregate exercise or purchase
price paid for those shares (at $37.83 per share).
(2) Under the terms of the 1994 Stock Plan, Messrs. L. Holding, F. Holding
and F. Holding, Jr. were excluded from participation and were not
granted any options.
18
<PAGE>
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS
The following table shows the estimated benefits payable to a covered
participant at normal retirement age under the Bank's qualified defined benefit
pension plan (the "Pension Plan") based on various specified numbers of years of
service and various levels of covered compensation.
<TABLE>
<CAPTION>
Years of Service
FINAL
AVERAGE
COMPENSATION
10 Years 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
-------- --------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 16,708 $ 25,061 $ 33,415 $ 41,769 $ 50,123 58,476 $ 64,476
125,000 21,333 31,999 42,665 53,331 63,998 74,664 82,164
150,000 25,958 38,936 52,915 64,894 77,873 90,851 99,851
175,000 30,583 45,874 61,165 76,456 91,748 107,039 117,539
200,000 35,208 52,811 70,415 88,019 105,623 120,000 120,000
225,000 38,764 58,146 77,528 96,910 116,292 120,000 120,000
250,000 38,764 58,146 77,528 96,910 116,292 120,000 120,000
300,000 38,764 58,146 77,528 96,910 116,292 120,000 120,000
400,000 38,764 58,146 77,528 96,910 116,292 120,000 120,000
450,000 38,764 58,146 77,528 96,910 116,292 120,000 120,000
500,000 38,764 58,146 77,528 96,910 116,292 120,000 120,000
550,000 38,764 58,146 77,528 96,910 116,292 120,000 120,000
</TABLE>
Benefits shown in the table are computed as straight life annuities
beginning at age 65 and are not subject to a deduction for Social Security
benefits or any other offset amount. A participant's compensation covered by the
Pension Plan includes base salary (including amounts deferred pursuant to the
Bank's Section 401(k) salary deferral plan) and bonuses, and the participant's
benefits are based on his "final average compensation" which is the
participant's highest average annual covered compensation for any five
consecutive years during his last ten complete calendar years as a plan
participant. However, under current tax laws, $150,000 is the maximum amount of
compensation for 1996 that can be included for purposes of calculating a
participant's "final average compensation". The estimated years of service and
"final average compensation", respectively, as of January 1, 1997, for each of
the named executive officers are as follows: Mr. L. Holding - 43 years and
$237,904; Mr. F. Holding - 40 years and $237,372; Mr. Hyler - 17 years and
$216,942; Mr. F. Holding, Jr. - 13 years and $128,212; Mr. Parker - 30 years and
$154,146. During 1996, the maximum annual benefit permitted by tax laws for a
retiring participant was $120,000 and the maximum eligible final average
compensation was $219,224.
In addition to benefits under the Pension Plan, each of certain senior
officers of BancShares and the Bank is party to a separate agreement with the
Bank under which the Bank has agreed to pay a specified monthly amount to the
officer for a period of ten years following his retirement at age 65 (or at such
other age as is agreed upon between the Bank and the officer). In return for
such payments, each officer has agreed that he will provide certain limited
consultation services to, and will not "compete" (as defined in the agreement)
against, the Bank during the period following his retirement. If the officer
dies during the period payments are being made under the agreement, the
remaining balance of payments due under the agreement will be paid to the
officer's designated beneficiary or his estate. The amounts of monthly payments
provided for in agreements currently in effect between the Bank and each of the
named executive officers are as follows: Mr. L. Holding - $18,544; Mr. F.
Holding - $18,544; Mr. Hyler - $13,358; Mr. F. Holding, Jr. - $8,466; and Mr.
Parker - $4,134.
19
<PAGE>
PERFORMANCE GRAPH
The following line graph compares the cumulative total shareholder
return (the "CTSR") on BancShares' Class A Common Stock during the previous five
fiscal years, with the CTSR over the same measurement period of the Nasdaq-U.S.
index and the Nasdaq Banks index. Each line graph assumes $100 invested on
January 1, 1992, and that dividends were reinvested in additional shares.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN AMONG
FIRST CITIZENS BANCSHARES, INC., NASDAQ BANKS AND
NASDAQ-US COMPANIES INDICES
[GRAPHIC OMITTED]
YEAR + BANCSHARES O NASDAQ BANKS * NASDAQ-US
1991 $ 100 $ 100 $ 100
1992 186 146 116
1993 172 166 134
1994 164 165 131
1995 210 246 185
1996 296 326 227
20
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TRANSACTIONS WITH MANAGEMENT
The Bank has banking transactions in the ordinary course of business
with certain of its directors, executive officers, principal shareholders and
their associates. All extensions of credit included in such transactions have
been approved by the Board of Directors and were made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and did not involve more than the normal risk of collectibility
or present other unfavorable features.
Lewis R. Holding, Chairman and Chief Executive Officer of BancShares,
and Frank B. Holding, Executive Vice Chairman of BancShares, and George H.
Broadrick, a director and Chairman of the Executive Committee, also are
principal shareholders of First Citizens Bancorporation of South Carolina, Inc.
("Bancorp"). BancShares' directors George H. Broadrick, Carmen P. Holding, and
Frank B. Holding also serve as directors of Bancorp. During 1996, BancShares
purchased from Bancorp 16,000 shares of the Class A common stock of BancShares
at the then current market value of $66 per share, for an aggregate purchase
price of $1,056,000. The transaction was pre-approved by the Boards of Directors
of both BancShares and Bancorp.
Certain specific relationships or transactions with directors are
described above in the footnotes to the table listing directors under the
caption "PROPOSAL 1: ELECTION OF DIRECTORS".
PROPOSAL 2: RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the shareholders, the Board of Directors has
approved the engagement of KPMG Peat Marwick LLP ("Peat Marwick"), certified
public accountants, as BancShares' independent public accountants for 1997, and
a proposal to ratify that appointment will be submitted at the Annual Meeting.
Representatives of Peat Marwick are expected to be present at the
Annual Meeting and available to respond to appropriate questions and will have
the opportunity to make a statement if they so desire.
THE AUDIT COMMITTEE AND BOARD OF DIRECTORS RECOMMEND THAT SHAREHOLDERS
VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR 1997. THE AFFIRMATIVE VOTE OF A MAJORITY OF
THE VOTES REPRESENTED, IN PERSON AND BY PROXY, AND ENTITLED TO BE CAST AT THE
ANNUAL MEETING IS REQUIRED FOR APPROVAL OF PROPOSAL 2.
PROPOSAL 3: AMENDMENT OF BYLAWS
TO INCREASE MAXIMUM NUMBER OF DIRECTORS
On January 27, 1997, BancShares' Board of Directors approved, and
recommended for shareholder consideration and adoption, an amendment to
BancShares' Bylaws increasing the maximum number of BancShares' directors from
26 to 30. Under the current Bylaws, the Board of Directors has reached its
maximum membership of 26 directors, and no additional directors can be elected
without shareholder approval of the proposed bylaw amendment.
The Board of Directors recommends that shareholders vote to adopt the
proposed bylaw amendment to increase the authorized number of directorships of
BancShares. The Board believes that an increase in the authorized number of
directors will benefit BancShares by providing flexibility to expand its Board
if and when such expansion is deemed appropriate and advisable by the Board, and
if qualified candidates for such directorships have been identified.
If this proposal is approved by shareholders at the Annual Meeting,
Article III, Section 2 of BancShares' Bylaws would be amended as follows:
Section 2. Number, Term and Qualifications: The number of directors of
the corporation shall be not less than five nor more than thirty. The
directors, by a majority vote of the remaining directors, though less
than a quorum, or by the sole remaining director, shall determine the
exact number of directors, which shall not be less than five nor more
than thirty without a Bylaw modification. Each director shall hold
office until his death, resignation, retirement, removal,
disqualification, or until his successor is elected and qualified.
Directors need not be residents of the State of Delaware nor
shareholders of the corporation; provided, however, that not less
21
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than three-fourths (3/4) of the directors shall be residents of the
State of North Carolina and stock ownership for qualification shall be
subject to North Carolina law.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSED AMENDMENT OF THE BYLAWS TO INCREASE THE MAXIMUM AUTHORIZED NUMBER OF
DIRECTORS OF THE CORPORATION TO THIRTY. THE AFFIRMATIVE VOTE OF A MAJORITY OF
VOTES REPRESENTED, IN PERSON AND BY PROXY, AND ENTITLED TO BE CAST AT THE ANNUAL
MEETING IS REQUIRED FOR APPROVAL OF PROPOSAL 3.
PROPOSALS OF SHAREHOLDERS
Any proposal of a shareholder intended to be presented at the 1998
Annual Meeting must be received by BancShares at its principal office in
Raleigh, North Carolina no later than November 30, 1997, in order that any such
proposal be timely received for inclusion in the proxy solicitation materials to
be issued in connection with that meeting. It is anticipated that the 1998
Annual Meeting will be held on a date during April 1998.
ANNUAL REPORT ON FORM 10-K
BancShares is required to file with the Securities and Exchange
Commission an Annual Report on Form 10-K within 90 days following the end of
each fiscal year. ON OR AFTER MARCH 31, 1997, UPON WRITTEN REQUEST TO KENNETH A.
BLACK, CHIEF FINANCIAL OFFICER, CORPORATE FINANCE DEPARTMENT, FIRST-CITIZENS
BANK & TRUST COMPANY, POST OFFICE BOX 27131, RALEIGH, NORTH CAROLINA 27611-7131,
BY A SHAREHOLDER ENTITLED TO VOTE AT THE ANNUAL MEETING, A COPY OF BANCSHARES'
ANNUAL REPORT ON FORM 10-K FOR 1996, INCLUDING FINANCIAL STATEMENTS AND
SCHEDULES THERETO, WILL BE FORWARDED WITHOUT CHARGE TO THE SHAREHOLDER MAKING
SUCH REQUEST.
OTHER MATTERS
Management knows of no other business that will be brought before the
Annual Meeting or any adjournments thereof. Should other matters properly come
before the meeting, the persons named in the proxy to represent the shareholders
will vote in accordance with their best judgment on such matters.
By Order of the Board of Directors
ALEXANDER G. MACFADYEN, JR., Secretary
March 14, 1997
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***************************************************************
APPENDIX
FIRST CITIZENS BANCSHARES, INC.
Post Office Box 27131
Raleigh, North Carolina 27611-7131
PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned hereby appoints George H. Broadrick, Lewis R.
Holding, Frank B. Holding, James B. Hyler, Jr., Frank B. Holding, Jr., Carmen P.
Holding, Lewis T. Nunnelee, II, and David L. Ward, Jr., or any of them,
attorneys and proxies, with power of substitution, to vote all outstanding
shares of Class A and/or Class B common stock of First Citizens BancShares, Inc.
("BancShares") held of record by the undersigned on March 6, 1997, at the Annual
Meeting of Shareholders of BancShares to be held in the Conference Room A at the
Raleigh Civic Center (Raleigh Convention and Conference Center Complex), 500
Fayetteville Street Mall, Raleigh, North Carolina, at 1 o'clock p.m. on April
28, 1997, or any adjournments thereof, on the matters listed below:
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as indicated otherwise). for all nominees listed below.
NOMINEES: J.M. Alexander, Jr.; T.L. Bissett; B.I. Boyle; G.H. Broadrick;
H.M. Craig, Jr.; B.M. Farnsworth; L.M. Fetterman; C.P.
Holding; F.B. Holding; F.B. Holding, Jr.; L.R. Holding; C.B.C.
Holt; E.A. Hubbard; J.B. Hyler, Jr.; G.D. Johnson; F.R. Jones;
L.S. Jones; I.B. Julian; W. McKay; J.T. Maloney, Jr.; J.C.
Mayo, Jr.; B.D. Nash; L.T. Nunnelee, II; T.O. Shaw; R.C.
Soles, Jr.; and D.L. Ward, Jr. (INSTRUCTION: To withhold
authority to vote for any individual nominee, write that
nominee's name on the line below.)
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS: Proposal to
ratify the appointment of KPMG Peat Marwick LLP as the independent public
accountants of BancShares for 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. CONSIDERATION OF AMENDMENT TO THE BYLAWS OF BANCSHARES TO INCREASE THE
MAXIMUM AUTHORIZED NUMBER OF DIRECTORS: Proposal to amend the Bylaws of
BancShares to increase the maximum authorized number of director positions from
26 to 30.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. OTHER BUSINESS: In their discretion, the persons named herein as attorneys
and proxies are authorized to vote upon such other matters as may properly come
before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AND THIS PROXY WILL
BE CARRIED OUT IN ACCORDANCE WITH THE SPECIFIC INSTRUCTIONS ABOVE. IN THE
ABSENCE OF INSTRUCTIONS, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH OF
THE NOMINEES LISTED IN PROPOSAL 1 ABOVE AND "FOR" PROPOSALS 2 AND 3 ABOVE. IF,
AT OR BEFORE THE TIME OF THE MEETING, ANY OF THE NOMINEES LISTED IN PROPOSAL 1
HAVE BECOME UNAVAILABLE FOR ANY REASON, THE PROXYHOLDERS HAVE THE DISCRETION TO
VOTE FOR A SUBSTITUTE NOMINEE OR NOMINEES. THIS PROXY MAY BE REVOKED AT ANY TIME
BEFORE IT IS EXERCISED BY FILING WITH THE SECRETARY AN INSTRUMENT REVOKING THE
PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE OR BY ATTENDING THE ANNUAL
MEETING AND REQUESTING THE RIGHT TO VOTE IN PERSON.
Please date and sign exactly as name appears below. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign full corporate name
<PAGE>
by president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
|Dated __________________________, 1997
|
|________________________________(SEAL)
|(Signature)
|
|________________________________(SEAL)
|(Signature if held jointly)
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PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD USING THE ENCLOSED
ENVELOPE.
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