1
FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38024
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 18, 2001
TO: Shareholders of First Citizens Bancshares, Inc.
Dyersburg, Tennessee 38024
Notice is hereby given that the Annual Meeting of Shareholders of First Citizens
Bancshares, Inc. will be held in the Lipford Room of First Citizens National
Bank, Dyersburg, Tennessee, Wednesday, April 18, 2001 at 10:00 A.M. to consider
and act upon the following proposals:
1. To elect eight directors for a term of three years expiring in 2004.
2. Approval of Carmichael, Dunn, Creswell, and Sparks, CPAs as general
auditors for the year ending December 31, 2001.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business February 28, 2001 are
entitled to notice of and to vote at the Annual Shareholders' Meeting.
Please date, sign and return the enclosed Proxy immediately in the stamped
envelope provided. It is important that you sign and return the Proxy, even
though you plan to attend the meeting in person. You may revoke the Proxy at any
time before the Proxy is exercised by giving written notice to the Company or by
advising us at the meeting. If you will need special assistance at the meeting
because of a disability, please contact Judy Long, Secretary at (901) 287-4254.
This 16th day of March, 2001.
BY ORDER OF THE BOARD OF DIRECTORS
Stallings Lipford
Chairman
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FIRST CITIZENS BANCSHARES, INC.
FIRST CITIZENS PLACE
DYERSBURG, TENNESSEE 38024
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 18, 2001
SOLICITATION
THE PROXY ACCOMPANYING THIS STATEMENT IS SOLICITED BY AND ON BEHALF OF THE
BOARD OF DIRECTORS OF FIRST CITIZENS BANCSHARES, INC. (the "Company" or "Holding
Company") for use at the Annual Meeting of Shareholders to be held April 18,
2001, and any adjournment thereof. The time and place of the meeting is set
forth in the accompanying Notice of Meeting.
The expense of preparing, assembling, printing and mailing the Proxy
Statement and materials used in the solicitation of Proxies for the meeting will
be borne by the Company. It is contemplated that Proxies will be solicited
principally through use of the mail, but officers, directors and employees of
the Holding Company and its subsidiary, First Citizens National Bank (the
"Bank") may solicit Proxies personally or by telephone, without receiving
special compensation therefor. Brokers, custodians, and other like parties will
be requested to send Proxy material to beneficial owners of stock and will be
reimbursed for reasonable expenses. It is anticipated that this Proxy Statement
and accompanying Proxy will be mailed to shareholders on or about March 16,
2001.
All Proxies in the accompanying form which are properly executed and
returned to management will be voted in accordance with directions given
therein. Any Proxy delivered pursuant to this solicitation is revocable, at the
option of the person executing same, at any time before it is exercised, by
written notice delivered to Judy Long, Secretary of First Citizens Bancshares,
Inc. Powers of Proxy holders will be suspended if the person executing the Proxy
is present at the meeting and elects to vote in person by advising the Chairman
of the Meeting of his/her election to vote in person, and voting in person at
the meeting.
IF NO INSTRUCTIONS ARE SPECIFIED IN YOUR PROXY WITH RESPECT TO THE ELECTION
OF DIRECTORS OR OTHER MATTERS ADDRESSED HEREIN, THE SHARES REPRESENTED BY YOUR
EXECUTED PROXY WILL BE VOTED "FOR" THE NOMINEES FOR ELECTION AS DIRECTORS AND
"FOR" THE ELECTION OF CARMICHAEL, DUNN, CRESWELL & SPARKS CPAS TO SERVE AS THE
COMPANY'S AUDITORS FOR THE YEAR ENDING 12/31/01. IF ANY OTHER BUSINESS IS
PROPERLY PRESENTED AT THE MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH
RECOMMENDATIONS OF THE COMPANY'S BOARD OF DIRECTORS.
VOTING SECURITIES
At the close of business December 31, 2000, there were 3,717,593 shares of
Common Capital Stock, par value of $1.00, of First Citizens Bancshares, Inc.
outstanding and entitled to vote, as the sole class of voting securities. On any
matter submitted to a vote of the shareholders, each holder of the Holding
Company's common stock will be entitled to one vote, in person or by proxy, for
each share of common stock he or she held of record on the books of the Holding
Company as of February 28, 2001. Holders of common stock shall possess full
voting rights for the election of Directors and for all other purposes. In
connection with the election of Directors, shares may be voted cumulatively if a
shareholder present at the Meeting gives notice at the Meeting prior to the
voting for election of Directors, of his or her intention to vote cumulatively.
If any shareholder of the company gives such notice, then all shareholders
eligible to vote will be entitled to cumulate their shares in voting for the
election of Directors. Cumulative voting allows a shareholder to cast a number
of votes equal to the number of shares held in his or her name as of the Record
Date, multiplied by the number of Directors to be elected.
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These votes may be cast for any one nominee, or may be distributed among as many
nominees as the shareholder sees fit. If cumulative voting is declared at the
meeting, votes represented by Proxies delivered pursuant to this Proxy Statement
may be cumulated at the discretion of the Proxy Holder, in accordance with
management's recommendation.
Tennessee Law does not provide for Dissenters Rights of Appraisal when
considering the matters as set forth herein. Holders of shares of Common Stock
will be entitled to receive dividends if and when declared payable by the Board
of Directors of First Citizens Bancshares, Inc. Shareholders of the Company are
not entitled to preemptive rights to subscribe for or purchase securities. In
the event of a liquidation, dissolution or winding up of the affairs of the
Holding Company, assets and funds of the corporation shall be distributed, pro
rata, among the holders of Common Stock according to their respective shares.
The following table sets forth the number of shares of common capital stock
owned by Directors, Nominees and Officers of First Citizens Bancshares, Inc. as
of December 31, 2000:
Name of Beneficial Ownership Percent
Title of Class Beneficial Owners Direct Indirect of Class
Common Capital Directors, Nominees 322,400 211,848 14.37%
Stock & Executive Officers
(26)
PRINCIPAL SHAREHOLDERS
As of this date, persons or entities beneficially owning in excess of 5% of
the Common Capital Stock of First Citizens Bancshares, Inc. are set forth in the
following table:
Beneficial Ownership Percent
Title of Class Name and Address Direct Indirect of Class
Common Capital First Citizens Nat'l 719,882 19.36%
Stock Bank Employee Stock
Ownership Plan
& Trust
ELECTION OF DIRECTORS
The present Board of Directors consists of 24 members with one-third of the
terms expiring in 2002, another one-third in 2003 and the remaining one-third in
2004. The following individuals have been nominated by the Board of Directors to
serve a term of three years. Once elected, each Director shall serve the stated
term or until his/her successor has met the necessary qualifications and has
been elected. Should any nominee determine that he/she is unable to serve, the
persons named in the accompanying proxy intend to vote for the balance of those
named.
The following information sets forth the name of each nominee, age,
principal occupation for the past five years, name and business of the
corporation or other organization with which he/she is affiliated, year of
initial election to the Board, and beneficial ownership of Common Stock of the
Company as of December 31, 2000. This information is also provided for
continuing Directors whose terms expire in 2002 and 2003.
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Name and Principal Occupation Director Common Stock Percent of
for Past Five Years Age Since Beneficially Owned Class
INCUMBENTS AND NOMINEES WHOSE TERMS WILL EXPIRE IN 2004
WILLIAM C. CLOAR 64 1991 16,638 *
Retired 1998 from Dyersburg
Fabrics, Inc., a textile
manufacturing plant. Mr. Cloar
served the company from 1997 to
his retirement as Senior Vice
President of Community
Relations. Previous to 1997
he served as Vice President of
Training and Employee
Development.
JAMES DANIEL CARPENTER 51 1993 2,891 *
Partner, Flatt Heating &
Air Conditioning.
RICHARD W. DONNER 50 1985 6,623 *
Vice President of Sales,
Dyersburg Fabrics, Inc., a
textile manufacturing plant.
BENTLEY F. EDWARDS 43 1997 551 *
Executive Vice President of
Burks Enterprise L.P., a
distributor of Dr. Pepper-Pepsi
Cola products. Chief Operating
Officer of Burks Beverage, L.P.
JULIUS M. FALKOFF 71 1999 22,256 *
Owner and Managing Partner in
Reelfoot Warehousing (a rental
warehouse), Union City, TN. Mr.
Falkoff is also a owner in The
Money Place, LLC, a check
cashing, money gram and long
distance service provider.
RALPH E. HENSON 59 1997 47,872 1.29%
Vice President of First Citizens
Bancshares, Inc.; Executive Vice
President and Loan Administrator
of First Citizens National Bank.
STALLINGS LIPFORD 70 1960 49,797 1.34%
Chairman of the Board of
First Citizens Bancshares, Inc.
and First Citizens National Bank.
Served both the Company and the
Bank as Chairman & CEO until 1996.
LARRY S. WHITE 52 1997 55,553 1.49%
President of White & Associates
Insurance Agency, Inc., a general
insurance agency offering all
lines of insurance.
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INCUMBENTS AND NOMINEES WHOSE TERMS WILL EXPIRE IN 2003
EDDIE EUGENE ANDERSON 53 1984 34,034 *
Partner, Anderson Farms II.
Previously, Anderson Farms
until January 1, 1997.
BARRY T. LADD 60 1996 16,523 *
Executive Vice President and
Chief Administrative Officer
of First Citizens Bancshares,
Inc. and First Citizens National
Bank. Until February 1996
served the Bank as Senior Vice
President and Senior Lending
Officer.
JOHN M. LANNOM 47 1999 15,400 *
Attorney at Law
Private Legal Practice
MILTON E. MAGEE 64 1969 98,484 2.65%
Partner, Chic Farm Co., general
farming. Partner Magee and Taylor,
FLP, general farming since 1997.
MARY F. MCCAULEY 70 1991 2,257 *
Professor Emeritus, Dyersburg
State Community College.
G.W. SMITHEAL, III 45 1993 3,840 *
Partner, Smitheal Farm &
Biesel and Smitheal Cattle
Company.
WILLIAM F. SWEAT 50 2000 1,478 *
First Citizens National Bank
Community Bank President -
Lauderdale County since 1999.
Previous to 1999 served as Vice
President and Branch Manager.
P.H. WHITE, JR. 69 1978 11,968 *
Owner, P.H. White Farms,
manufacturer & distributor
of livestock insecticide
applicators.
INCUMBENTS AND NOMINEES WHOSE TERMS WILL EXPIRE IN 2002
J. WALTER BRADSHAW 39 1993 29,596 *
Vice President & Director,
Bradshaw & Co. Insurors,
an independent insurance agency.
LARRY W. GIBSON 54 1995 6,479 *
President, Roberts-Gibson, Inc.,
gasoline jobber company.
L.D. PENNINGTON 72 1989 14,054 *
Chairman Emeritus of Board,
Centex Forcum-Lannom Inc., a
company of contractors,
engineers and developers.
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ALLEN G. SEARCY 59 1999 23,406 *
President of Allen Searcy
Builder-Contractor, a building
contractor for commercial and
residential properties. Mr.
Searcy is also a partner in
Allen's Building Materials
Company in Union City, TN and
owner of commercial real estate
and rental properties.
DAVID R. TAYLOR 55 1997 1,544 *
President & CEO of Centex Forcum
Lannom, Inc., a company of
contractors, engineers, and
developers.
DWIGHT STEVEN WILLIAMS 45 1991 3,324 *
Business Manager, Johnson
Funeral Home.
KATIE S. WINCHESTER 60 1990 21,865 *
February 1996 appointed
CEO & President of First
Citizens National Bank.
April 1996 appointed CEO
and President of First
Citizens Bancshares, Inc.
April 1992 to February 1996
served as President & Chief
Administrative Officer.
BILLY S. YATES 75 1973 18,025 *
President, General Appliance
and Furniture Company, retail
furniture & appliance outlet.
*less than one percent
DESCRIPTION OF THE BOARD AND ITS COMMITTEES
Each Director of First Citizens Bancshares, Inc. also serves as Director of
First Citizens National Bank. The Board of Bancshares met six times during 2000
and the Board of the Bank held thirteen meetings. There were no incumbent
Directors attending fewer than 75% of the aggregate of Board and Committee
meetings. There are no family relationships between Directors, Executive
Officers, or Executive Officers and Directors.
There were no transactions entered into between First Citizens National
Bank or First Citizens Bancshares, Inc., and Directors, Nominees for Directors
and/or Executive Officers of either the Bank or Bancshares in which the charges
involved exceeded $60,000 unless such transactions were accomplished on the
basis of competitive bidding or were considered to be in the ordinary course of
business.
The Holding Company has no specific committees. However, the Holding
Company's principal subsidiary, First Citizens National Bank, has various
committees that serve the Bank.
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The Executive Committee is appointed by the Board to act on it's behalf
when the Board is unable to act as a whole. It is the responsibility of the
Executive Committee to review certain loan applications in accordance with Loan
Policy; to make recommendations to the Board on issues affecting the operations
of the Bank and to counsel management on matters presented for committee
consideration. The Executive Committee acts as a nominating committee by
considering the performance of incumbent directors and officers and by
recommending nominations for re-election. The Executive Committee also serves as
the Investment Committee. The committee meets at such times as meetings are
called and is comprised of Barry Ladd, Stallings Lipford (Chairman), Milton E.
Magee, L. D. Pennington, P. H. White, Jr., Katie Winchester, and Billy S. Yates.
Thirty-five meetings were held in 2000.
The Investment Committee consists of seven members appointed by the Board,
and is chaired by the Bank's Chief Financial Officer. It is the responsibility
of this committee to set and monitor investment activity guidelines. Three
meetings were held during 2000.
The Compensation Committee is composed of four directors who are not
officers of the Bank or any of its subsidiaries. The committee makes
recommendations to the Board of Directors as to the amount and form of officer
compensation. The compensation programs of the Bank are designed to align
compensation with business objectives and performance, and to enable the Bank to
attract, retain and reward executives who contribute to the long term success of
First Citizens Bancshares, Inc. and its subsidiaries. Therefore, the Bank
provides an executive compensation program which includes base pay, annual cash
bonuses and retirement benefits through annual contributions to an Employee
Stock Ownership Plan. In addition, all Executive Officers are provided with
permanent life insurance. Base salaries are determined annually based on
individual performance and pay levels of similar positions at peer financial
institutions. The committee annually evaluates experience, individual
performance and Corporate performance when setting base pay. Base salaries for
new executive officers are initially determined by evaluating responsibilities
of the position and the experience of the individual, and by reference to the
competitive marketplace for experienced executive talent in the financial
services industry. The Compensation Committee is made up of the following
Directors: Milton E. Magee (Chairman), L. D. Pennington, P. H. White, Jr., and
Billy S. Yates. The committee met one time in 2000.
The Audit Committee reviews results of audits performed by the Bank's
Internal Auditor and makes a determination as to the adequacy of such audits.
Further, this committee determines the need and frequency for external audits,
reviews engagement letters to determine the overall effectiveness of proposed
audits, and reviews results of any audit upon completion. Based on results of
these audits, this committee determines the adequacy of existing internal
controls and reports findings to the full Board. The Audit Committee is
comprised of J. Walter Bradshaw (Chairman), Larry Gibson and Larry White. Four
meetings were held during 2000.
In the fourth quarter of 1999, the Securities and Exchange Commission (SEC)
adopted rules requiring certain disclosures in proxy statements regarding Audit
Committees. For all proxy statements relating to votes of shareholders after
December 15, 2000, the proxy must disclose whether or not there is a written
charter for the Audit Committee. First Citizens adopted an Audit Committee
Charter on February 21, 2001 with approval by the Audit Committee and the bank's
Board of Directors. The charter was approved as follows:
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AUDIT COMMITTEE CHARTER
Purpose: The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities related to corporate
accounting, financial reporting practices, quality and integrity of financial
reports as well as legal compliance and business ethics. Key components of
fulfilling this charge include:
- - Facilitating and maintaining an open avenue of communication
among the Board of Directors, Audit Committee, Senior Management,
the independent external accountants, the internal audit staff
and the ethics and business conduct staff.
- - Serving as an independent and objective party to monitor the corporation's
financial reporting process and internal control system.
- - Reviewing and appraising efforts of the independent accountants.
- - Providing direction to and oversight of the Internal Audit function and
the Ethics and Business Conduct function.
Organization/Composition: The Audit Committee will be comprised of four or more
directors as determined by the Board, each of whom shall be independent
directors as defined in the Blue Ribbon Committee Report on Improving the
Effectiveness of Corporate Audit Committees. The members will be free from any
financial, family or other material personal relationship that, in the opinion
of the Board or Audit Committee members, would interfere with the exercise of
his or her independence from management and the corporation. All members of the
committee will have a working familiarity with basic finance and accounting
practices and at least one member must have accounting or related financial
management expertise.
Meetings: The Committee will meet at least four times annually. Additional
meetings may occur more frequently as circumstances dictate. Two meetings will
focus primarily on audit/financial issues and two meetings will focus primarily
on ethics and business conduct issues. The Committee chairman should meet with
the Ethics and Business Conduct Vice President and/or Internal Auditor prior to
the scheduled committee meetings to finalize the meeting agenda and overview
issues to be discussed. Committee members will have sole discretion in
determining the meeting attendees and agenda.
Responsibilities and Duties: The Audit Committee believes its policies and
procedures should remain flexible in order to best react to changing conditions
and provide reasonable assurance to the Board that the accounting and reporting
practices of the corporation are in accordance with requirements and an
effective legal compliance and business ethics program exists.
The Audit Committee will fulfill their duties and responsibilities as follows:
A. General
- - Adopt a formal written charter that is approved by the full Board
of Directors that specifies scope of responsibility, process,
membership, etc. The charter will be reviewed as necessary, but at
least annually, and published as an appendix to the proxy statement every
three years.
- - Maintain minutes or other records of meetings and activities. Report
Committee actions to the Board with such recommendations the Committee
may deem appropriate.
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- - As part of executing the responsibility to foster open communications,
the Committee will meet in separate executive sessions without members of
senior management present with each of the following groups. Independent
Accountants, Vice President - Ethics and Business Conduct and Vice
President - Internal Audit to discuss matters that the Committee or any
of these groups believe should be discussed privately.
- - Conduct or authorize investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be
empowered to retain independent counsel, accountants, or others to
assist it in the conduct of any investigation.
B. External/Independent Accountants
- - Recommend to the Board the selection of the independent accountants,
considering independence and effectiveness, and approve the fees to be
paid to the independent accountants. Annually, the Committee will ensure
a formal statement delineating all relationships between the accountant
and the company is received from the outside accountants. The committee
will discuss with the independent accountants all significant
relationships the accountants have with the corporation to determine the
accountants' independence.
- - Approve any replacement of the independent accountants.
- - Consult with independent accountants out of management's presence about
internal controls and the fullness/accuracy of the financial statements.
- - Meet with the independent accountants and financial management of the
company to review the scope of the proposed external audit for the current
year. The external audit scope shall include a requirement that the
independent accountants inform the Audit Committee of any significant
changes in the independent accountant's original audit plan and
that the outside accountants conduct a SAS 71 Interim Financial Review
prior to the company's filing of each quarterly report to shareholders
(Form 10-Q).
- - Review the coordination of internal and external audit procedures to
promote an effective use of resources and ensure a complete but
nonredundant audit.
- - Instruct the independent accountants that the Board of Directors
is the accountant's client.
C. Internal Audit
- - Review and approve the annual internal audit plan and any significant
changes to the internal plan.
- - Review the adequacy of internal audit staff qualifications as well as the
number of internal audit staff annually.
- - Approve the internal audit charter.
- - Inquire of the Vice President - Internal Audit regarding the adequacy and
effectiveness of accounting and financial controls and request
recommendations for improvements.
- - Review the internal audit function of the corporation including its
independence and the authority of its reporting relationships.
- - Review a summary of findings and completed internal audits and a progress
report on executing the approved internal audit plan.
- - Inquire of the Vice President - Internal Audit regarding any difficulties
encountered in the course of their audits, including any restrictions on
the scope of their work or access to required information.
- - Review and concur in the appointment, replacement, reassignment, or
dismissal of the Vice President - Internal Audit.
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D. Financial Statements/Internal Controls
- - Review annual financial statements with management and the independent
accountants to determine that the independent auditors are satisfied with
the disclosure and content of the financial statements, including the
nature and extent of any significant changes in accounting principles,
and approve such financial statements prior to release of the annual
earnings.
- - Consider external auditors' judgements regarding the quality and
appropriateness of financial statements.
- - Make inquiries of management and external auditors concerning the
adequacy of the company's system of internal controls.
- - Advise financial management and the independent auditor that they are
expected to provide a timely analysis of significant current financial
reporting issues and practices.
- - Advise financial management and the independent auditor to discuss
with the Audit Committee their qualitative judgements about the
appropriateness, not just the acceptability, of accounting
principles and financial disclosure practices used or proposed to
be adopted by the company.
E. Ethics and Business Conduct
- - Provide oversight to the business ethics and compliance program.
- - Require management to report on procedures that provide assurance that
the corporation's mission, values, and code of conduct are properly
communicated to all employees on an annual basis.
- - Review the corporation's code of conduct annually and direct management
to establish a system reasonably designed to assure compliance with
the code.
- - Review the programs and policies of the company designed by management
to assure compliance with applicable laws and regulations and monitor
the results of the compliance efforts.
- - Inquire of the Vice President - Ethics and Business Conduct regarding
any difficulties encountered in the course of her work, including any
restrictions on the scope of their work or access to required
information, and make appropriate recommendations to the Board of
Directors.
F. Legal
- - When circumstances warrant, meet with organization's legal counsel to
review any legal matters that may have a significant impact on the
company's overall financials.
The Trust Committee is composed of three Directors and two Trust Officers.
It is the responsibility of this committee to work with the Trust Officers and
staff to formulate policies and procedures relative to the administering of
fiduciary powers; to accept or reject all executorships, trusteeships, and other
fiduciary relationships of the bank; and to invest, retain, or dispose of funds
that are in the possession of the Trust Department. Directors serving on this
committee are Richard Donner, Barry T. Ladd, and David Taylor. Trust Officers
serving on this committee are Hughes Clardy, Chairman and Sue Carolyn Akins.
Eleven meetings were held during the year just ended.
The Community Reinvestment Act Committee was established within the
Community Reinvestment Act Program. It is the responsibility of this committee
to develop, review, and implement ongoing CRA compliance efforts. The CRA
Committee consists of four directors, Ralph Henson (Chairman), Mary F. McCauley,
Julius Falkoff, Katie Winchester, and a cross section of managers from various
departments within the bank. Two meetings were held throughout 2000.
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Director Fees are established by the Board on an annual basis. Fees for
2000 were set at $500.00 per meeting for each Director and advanced on a per
meeting attended basis. In 2000 an annual retainer fee of $3,000.00 per director
was paid for services on the Board of the Corporation. Additional amounts are
paid for service on various committees as follows (annually):
Executive/Investment Committee $12,500.00, Audit Committee $5,000.00, Trust
Committee $5,000.00 and CRA Committee $2,500.00. Executive Officers who are also
Directors receive no additional compensation for service on a Board Committee.
The following table discloses individually Executive Officers of the
Holding Company and its subsidiaries who received direct annual remuneration in
excess of $100,000.00. As the Holding Company pays no salaries, this information
relates to all compensation paid by First Citizens National Bank. The following
tabulation is for the period ending December 31, 2000.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Other Re- All
Name Annual stricted Securities Other
and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($) SARs (#) ($) ($)
Stallings 2000 115,284 32,850 14,823 -0- -0- -0- 2,051
Lipford (1) (2) (3)
Chairman 1999 111,528 38,149 15,173 -0- -0- -0- 1,855
of Board of (1) (2) (3)
Directors 1998 161,528 55,475 16,000 -0- -0- -0- 1,678
(1) (2) (3)
Katie 2000 209,416 61,440 19,883 -0- -0- -0- 1,736
Winchester (1) (2) (3)
CEO & 1999 188,602 64,500 16,000 -0- -0- -0- 1,690
President (1) (2) (3)
1998 172,783 58,975 16,000 -0- -0- -0- 1,487
(1) (2) (3)
Ralph 2000 132,266 36,772 16,814 -0- -0- -0- 1,275
Henson (1) (2) (3)
Executive 1999 118,995 41,223 16,000 -0- -0- -0- 1,233
Vice (2) (3)
President 1998 108,573 46,668 15,644 -0- -0- -0- 1,187
& Loan (2) (3)
Administ.
Barry T. 2000 132,465 39,070 17,110 -0- -0- -0- 1,512
Ladd (1) (2) (3)
Executive 1999 121,807 42,450 16,000 -0- -0- -0- 1,452
Vice (1) (2) (3)
President, 1998 111,421 37,975 15,084 -0- -0- -0- 1,346
& CAO (1) (2) (3)
Judy Long 2000 85,110 22,235 10,572 -0- -0- -0- 323
Executive (1) (2) (3)
Vice 1999 74,508 26,050 10,084 -0- -0- -0- 281
President (1) (2) (3)
& COO & 1998 66,623 23,100 9,002 -0- -0- -0- 293
Board (1) (2) (3)
Secretary
Jeff Agee 2000 79,797 23,836 10,393 -0- -0- -0- 302
Executive (1) (2) (3)
Vice 1999 74,695 26,065 10,102 -0- -0- -0- 270
President (1) (2) (3)
& CFO 1998 66,810 23,165 9,024 -0- -0- -0- 268
(2) (3)
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(1) Salaries reported includes Director Fees up to $9,500.00 paid to
each Executive for service on the Board of Directors.
(2) Contributions made by the Bank to Employee Stock Ownership Plan.
(3) Economic Benefit of Life Insurance Policy.
COMPENSATION PLANS
Incentive Compensation Plan
Executive Officers are eligible for annual cash bonuses. The senior
management incentive plan provides bonus compensation based on corporate,
business unit and individual performance. The level of incentive compensation
for Executive Officers is based on Return on Assets with a minimum qualifying
ROA of 1% and 25% of bonus based on meeting referral goals set for 2000.
Employee Stock Ownership Plan
Effective December 31, 1984 the Board of Directors of the Bank approved a
resolution establishing the First Citizens National Bank Employee Stock
Ownership Plan and Trust, designed to invest primarily in Holding Company Stock.
There are six Executive Officers of the Bank Holding Company who are also plan
Participants receiving a contribution to the ESOP. Benefits accruing to the
accounts of individuals named in the Summary Compensation Table for the plan
year ending December 31, 2000 totaled $89,595. The distribution and vesting of
the amount allocated is not subject to future events.
Administration of the Plan is the responsibility of an administrative
committee as directed by the Board of First Citizens National Bank. Any employee
who has completed one (1) year of service (1,000 hours) and who has reached the
age of 21 shall be eligible to participate. Distribution of benefits can be made
in stock, cash or a combination of both. Benefits are payable as a single
distribution or equal annual installments at normal retirement date, coinciding
with or following the participant's 65th birthday. An amendment made in 1994
provided for the elimination of the investment diversification option within the
plan. The revised Plan provides annual diversification elections to qualified
participants for six consecutive plan years, beginning in the plan year
following the year in which the qualified participant reaches age 55. For the
first five years after having met the age eligibility requirements, each
qualified participant is permitted to diversify up to 25% of his or her eligible
shares. In the participant's sixth and final election year, the amount subject
to diversification increases to 50%. Also included in the Plan are provisions
for distribution of benefits to the participant or designated beneficiary upon
early retirement, becoming totally and permanently disabled, or upon the death
of the participant. Allocations of stock to the account of each participant will
be based on the ratio of his/her compensation to all participant's compensation
for the plan year. Total contributions to the plan for the year ending December
31, 2000 were approximately $644,511.75.
Effective October 1, 2000, the Board of Directors of the Bank approved an
amendment of the bank's retirement benefit package to include a 401(k) plan. A
3% "Safe Harbor" contribution will be made for every eligible employee on an
annual basis. Participants may, but are not required to, make pre-tax
contributions (deferrals) to the plan. The plan allows participants to direct
the investments of the 3% "Safe Harbor" contribution as well as any pre-tax
contributions. As a result of the change, the contribution to the ESOP was
reduced from 10% to 7%. Plan participants received a 10% contribution for the
first three quarters of 2000 and 7% for the last quarter of 2000 with a 3%
contribution being made to the 401K.
13
Executive Employment Agreements
Executive Employment Agreements are currently in effect by and between
First Citizens National Bank (the "Bank"), First Citizens Bancshares, Inc. (the
"Company") and Stallings Lipford, Katie S. Winchester, Barry T. Ladd, Ralph E.
Henson, Jeffrey Agee, and Judy Long. The Agreements provide for terms of
employment and compensation and benefits in the event of termination by "action
of the Company" or "change in control". A "change in control", as defined in the
Agreement, is deemed to occur if any person, firm or corporation shall obtain
"control" of the Company through the acquisition, directly or indirectly, by any
person or group of persons of shares in the Bank or Bancshares, which, when
added to any other shares, the beneficial ownership of which is held by such
acquire(s), shall result in ownership by any person(s) of ten percent (10%) of
such stock or which would require prior notification under any federal or state
banking law or regulation; or the occurrence of any merger, consolidation or
reorganization of the Bank to which the Bank or Bancshares is not a surviving
entity, or the sale of all or substantially all of the assets of the Bank or
Bancshares.
In the event of the officer's termination caused by "action of the Company"
not for cause of a "change in control" or in the event the officer's termination
is caused by a "change in control", the officer shall be entitled to receive
severance pay within 30 days following the date of termination, an amount equal
to two times the compensation paid in the preceding calendar year, or scheduled
to be paid to the Executive during the year of the notice of termination,
whichever is greater, plus an additional amount sufficient to pay United States
income tax on the lump sum amount so paid.
Executive Employment Agreement in effect for Chairman Lipford also provides for
terms and conditions for part-time employment. During the term of employment,
Chairman Lipford shall serve as Chairman of the Company or in such other
position with responsibilities and authority as may from time to time be
assigned to him by the Board of Directors of the Company. During 1999 Chairman
Lipford devoted approximately 1,300 hours to the business affairs of the
Company. Beginning January 1, 2000, unless the Term of Employment has not been
extended, he will devote only such time to the affairs of the Company as shall
be appropriate in light of the circumstances then existing. In addition,
Chairman Lipford shall serve on the Board of Directors of the Company during the
Term of Employment for so long as he is elected to such Board by the
Shareholders of the Company.
Executive Management Life Insurance Plans
Executive Management Life Insurance Plans were provided for in Executive
Employment Agreements adopted by the Company in April 1993. A Collateral
Assignment Split Dollar Life Insurance Plan was provided for the President and
four other Executive Officers of the Company in which the Company agreed to pay
individual life insurance premiums not to exceed $12,500.00 per year. The
Company's obligation to pay this premium shall cease upon termination of the
Executive's employment. The Executive agreed to repay the Company the full
amount of premiums paid by the Company when employment is terminated. Repayment
of premiums under any circumstances cannot exceed the cash value of the policy.
Premiums paid annually for Collateral Assignment Split Dollar Life Insurance for
Executive Officers totaled $12,500.00 for the President & CEO, and Executive
Vice President & CAO, and range between $5,000.00 and $10,000.00 for other
Executive Officers.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the officers, directors, and principal shareholders of the
Holding Company (and their associates) have deposit accounts and other
transactions with First Citizens National Bank, including loans in the ordinary
course of business. An Associate includes a corporation or other entity of which
an officer or director of the Company is an officer, partner, or 10%
shareholder; any Trust or Estate of which he is a Trustee, Executor or
significant beneficiary; or any relative or spouse or spouse's relative who
lives in his home.
14
Banking transactions in the ordinary course of business with directors,
officers, principal stockholders, and their associates are on the same terms,
including interest rates and collateral on loans, as those prevailing at the
same time for comparable transactions with others. Loans to directors, officers
and principal shareholders, and their associates, are made on the same terms and
conditions afforded other borrowers with similar credit standing who are not
associated with the Bank. These loans do not represent unfavorable features or
more than a normal risk of collectability. The largest aggregate amount of debt
outstanding both direct and indirect, during the twelve month period ending
December 31, 2000 was $9,708,499. The amount outstanding at year end 2000 was
$8,858,253 at an average rate of 8.97 percent. The debt was incurred over a
period of time and served to finance business ventures and purchase real estate.
As of December 31, 1999, $8,626,698 was loaned at an average interest rate of
8.76 percent. On December 31, 2000, the Holding Company, through its only
subsidiary, First Citizens National Bank had an aggregate net loan total of
$337,196,000. Loans to Executive Officers and Directors of the Holding Company
comprised 2.63% of this total. No Director or Officer of First Citizens National
Bank or First Citizens Bancshares, Inc. is directly indebted to the Holding
Company. Changes in holdings of securities by insiders were reported to the
Securities and Exchange Commission on a timely basis. Changes in beneficial
ownership of securities must be filed with the SEC on or before the 10th day
after the end of the month in which any change occurred.
15
TOTAL SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph reflects First Citizens Bancshares' cumulative return
(including dividends) as compared to the S & P 500 and the Nasdaq Banking Stocks
over a 5-year period.
16
RELATIONSHIP WITH INDEPENDENT AUDITORS
The firm of Carmichael, Dunn, Creswell and Sparks, CPAs served First
Citizens National Bank and First Citizens Bancshares, Inc. as auditors for the
year ending December 31, 2000. The Board is proposing that this firm serve as
auditors for the current year (2001). They have no direct financial interest or
material indirect financial interest in the company. Audit services provided by
the auditors for the year ending December 31, 2000 consisted of (but not limited
to) examination of the financial statements of both the Bank and Holding Company
and reporting on such statements. A representative of Carmichael, Dunn, Creswell
and Sparks, CPAs will be in attendance at the Annual Shareholders Meeting to
answer questions and offer comments regarding their audit. Total auditor fees
paid to Carmichael, Dunn, Creswell and Sparks for the year 2000 was $47,325.00.
PROPOSALS BY SECURITY HOLDERS
Shareholder proposals intended to be presented in the Proxy materials to be
mailed in 2002 other than nominees to be proposed for election to the Board of
Directors must be submitted by certified or registered mail to Judy Long,
Secretary, First Citizens Bancshares, Inc., P.O. Box 370, Dyersburg, TN
38025-0370, no later than December 1, 2001. Nominees to be proposed for election
to the Board of Directors of the Corporation, other than nominations made by the
existing Board of Directors, must be delivered in writing to the Secretary of
the Corporation and received no later than ninety (90) days prior to the month
and day that the proxy materials regarding the last election of Directors to the
Board of the Corporation were mailed to Shareholders.
OTHER BUSINESS
The Board of Directors knows of no other business other than that set forth
herein to be transacted at the meeting; but, if other matters requiring a vote
of shareholders arise, the persons designated as proxies will vote their
judgement on such matters. If a shareholder specifies a different choice on the
Proxy, his/her shares of Common Stock will be voted in accordance with the
specifications so made.
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 2000, accompanies this report. A copy of the 10-K report to the
Securities and Exchange Commission for the year ended December 31, 2000 will be
furnished any shareholder requesting such copy at no cost. Requests should be in
writing to Judy Long, Secretary, First Citizens Bancshares, Inc., P.O. Box 370,
Dyersburg, TN 38025-0370.
BY ORDER OF THE BOARD OF DIRECTORS
Judy Long
Secretary
Dyersburg, TN
March 16, 2001
17
FIRST CITIZENS BANCSHARES, INC.
First Citizens Place
Dyersburg, Tennessee 38024
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a shareholder of First Citizens Bancshares, Inc., hereby
appoints P. H. White, Jr., and William C. Cloar, and each of them severally,
proxies of the undersigned, with full power of substitution, to vote the shares
of Capital Stock of First Citizens Bancshares, Inc. standing in the name of the
undersigned on February 28, 2001, at the Annual Meeting of Shareholders to be
held in the Lipford Room of First Citizens National Bank, on Wednesday, April
18, 2001, at 10:00 A.M., and at all adjournments thereof:
(1) Election of Directors
For all nominees listed below Withhold authority to vote for all
nominees listed below
INSTRUCTIONS: YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE LISTED BELOW
BY LINING THROUGH OR STRIKING OUT SUCH INDIVIDUAL'S NAME
INCUMBENTS AND NOMINEES FOR ELECTION WHOSE TERMS WILL EXPIRE IN 2003
William C. Cloar, James Daniel Carpenter, Richard W. Donner,
Bentley F. Edwards, Julius M. Falkoff, Ralph E. Henson, Stallings
Lipford, Larry S. White.
(2) Approval of Carmichael, Dunn, Creswell and Sparks, CPAs as auditor
for the year ending December 31, 2001
FOR AGAINST ABSTAIN
(3) To transact other business as may properly come before the
meeting or any adjournments thereof
FOR AGAINST ABSTAIN
This proxy confers authority to vote "For" the propositions listed unless
"Against" or "Abstain" is indicated. If no direction is given, this proxy will
be voted "for" the election of all nominees named and "for" approval of
Carmichael, Dunn, Creswell and Sparks, CPAs as auditors for the current year.
Please 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 sign full title.
If more than one trustee, all should sign.
Dated March 16, 2001
Signature
Signature if jointly held
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
18
SIGNATURES
I certify that the statements made in this statement are true, complete,
and correct to the best of my knowledge and belief.
First Citizens Bancshares, Inc.
(Registrant)
Date: March 16, 2001 /s/Stallings Lipford
Stallings Lipford, Chairman