SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement [ ]Confidential, for Use of the
[x]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material Under Rule 14a-12
HCB BANCSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charger)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] 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:
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4. Date Filed:
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[LETTERHEAD OF HCB BANCSHARES, INC.]
October 17, 2000
Dear Stockholder:
We invite you to attend the annual meeting of stockholders of HCB
Bancshares, Inc. to be held at the Camden Country Club, located at 1915
Washington Street, S.W., Camden, Arkansas, on Thursday, November 16, 2000 at
10:00 a.m., local time.
The accompanying notice and proxy statement describe the formal
business to be transacted at the meeting. During the meeting, we will also
report on the operations of the Company's subsidiary, HEARTLAND Community Bank.
Directors and officers of the Company, as well as representatives of Deloitte &
Touche, LLP, the Company's independent auditors, will be present to respond to
any questions the stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY
PLAN TO ATTEND THE ANNUAL MEETING. Your vote is important, regardless of the
number of shares you own. This will not prevent you from voting in person but
will assure that your vote is counted if you are unable to attend the meeting.
Sincerely,
/s/ Cameron D. McKeel
Cameron D. McKeel
President and Chief Executive Officer
HCB BANCSHARES, INC.
237 JACKSON STREET, S.W.
CAMDEN, ARKANSAS 71701-3941
(870) 836-6841
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 16, 2000
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual
Meeting") of HCB Bancshares, Inc. (the "Company") will be held at the Camden
Country Club, located at 1915 Washington Street, S.W., Camden, Arkansas, on
Thursday, November 16, 2000 at 10:00 a.m., local time.
A proxy statement and proxy card for the Annual Meeting accompany this
notice.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company for three-year
terms; and
2. The transaction of such other matters as may properly come before
the Annual Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Annual Meeting.
Any action may be taken on any one of the foregoing proposals at the Annual
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Annual Meeting may be adjourned. Stockholders
of record at the close of business on October 5, 2000 are the stockholders
entitled to vote at the Annual Meeting and any adjournments thereof.
You are requested to fill in and sign the accompanying proxy card which is
solicited by the Board of Directors and to mail it promptly in the accompanying
envelope. The proxy card will not be used if you attend and vote at the Annual
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Paula J. Berstrom
PAULA J. BERGSTROM
SECRETARY
Camden, Arkansas
October 17, 2000
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. THE ACCOMPANYING
PROXY CARD IS ACCOMPANIED BY A SELF-ADDRESSED ENVELOPE FOR YOUR CONVENIENCE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
PROXY STATEMENT
OF
HCB BANCSHARES, INC.
237 JACKSON STREET, S.W.
CAMDEN, ARKANSAS 71701-3941
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 16, 2000
GENERAL
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of HCB Bancshares, Inc. (the "Company") to
be used at the annual meeting of stockholders (the "Annual Meeting") which will
be held at the Camden Country Club, located at 1915 Washington Street, S.W.,
Camden, Arkansas, on Thursday, November 16, 2000 at 10:00 a.m., local time. This
proxy statement and the accompanying notice and proxy card are being first
mailed to stockholders on or about October 17, 2000.
VOTING AND REVOCABILITY OF PROXIES
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Annual Meeting and all adjournments thereof. Proxies may be revoked by
written notice to Paula J. Bergstrom, Secretary of the Company, at the address
shown above, by filing a later-dated proxy prior to a vote being taken on a
particular proposal at the Annual Meeting or by attending the Annual Meeting and
voting in person.
Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE
INDICATED, PROXIES WILL BE VOTED FOR THE NOMINEES FOR DIRECTORS SET FORTH IN
THIS PROXY STATEMENT. The proxy confers discretionary authority on the persons
named therein to vote with respect to the election of any person as a director
where the nominee is unable to serve or for good cause will not serve, and
matters incident to the conduct of the Annual Meeting. If any other business is
presented at the Annual Meeting, proxies will be voted by those named therein in
accordance with the determination of a majority of the Board of Directors.
Proxies marked as abstentions, as well as shares held in street name which have
been designated by brokers on proxy cards as not voted, will not be counted as
votes cast. Proxies marked as abstentions or as broker non-votes, however, will
be treated as shares present and eligible to vote for purposes of determining
whether a quorum is present.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP
Stockholders of record as of the close of business on October 5, 2000
(the "Record Date") are entitled to one vote for each share then held. As of
September 15, 2000, the Company had 2,250,424 shares of common stock, par value
$.01 per share (the "Common Stock"), issued and outstanding. The presence, in
person or by proxy, of at least one-third of the total number of shares of
Common Stock outstanding and entitled to vote will be necessary to constitute a
quorum at the Annual Meeting.
Persons and groups owning in excess of 5% of the Company's Common Stock
are required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The following
table sets forth as of September 15, 2000, certain information as to the Common
Stock believed by management to be beneficially owned by persons owning in
excess of 5% of the Company's Common Stock and by all directors and executive
officers of the Company as a group.
PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OUTSTANDING
- ------------------- ----------------------- ------------------
HCB Bancshares, Inc.
Employee Stock Ownership Plan ("ESOP")
237 Jackson Street, S.W.
Camden, Arkansas 71701 148,120 (2) 6.5%
All directors, nominees for director
and executive officers as a group (9 persons) 349,542 (3) 15.5%
<FN>
___________
(1) Includes all shares as to which the beneficial owner had sole or shared
voting and/or investment power.
(2) Represents unallocated shares held in a suspense account for future
allocation among participating employees as the loan used to purchase the
shares is repaid; does not include 63,480 allocated shares. The ESOP
trustee, Regions Bank, Little Rock, Arkansas, votes all allocated shares in
accordance with instructions of the participants. Unallocated shares and
shares for which no instructions have been received, if any, are voted by
the ESOP trustee in the same ratio as participants direct the voting of
allocated shares or, in the absence of such direction, as directed by the
Company's Board of Directors.
(3) Includes 166,644 shares which all directors and executive officers as a
group had a right to purchase pursuant to the exercise of stock options
exercisable within 60 days; does not include unallocated shares held by the
ESOP (see above) or 24,555 shares held by Directors Moseley, Murry, Parker,
Silliman and Steelman as trustees for the Company's Management Recognition
Plan Trust, which shares are required to be voted in the same proportion as
the unallocated shares under the ESOP or, in the absence thereof, as
directed by the Company's Board of Directors.
</FN>
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors consists of seven members. The
Company's Certificate of Incorporation requires that directors be divided into
three classes, as nearly equal in number as possible, with approximately
one-third of the directors elected each year. The Board of Directors has
nominated Carl E. Parker, Jr. and Ned Ray Purtle each to serve as directors for
a three-year period. Carl E. Parker, Jr. currently is a member of the Board. Mr.
Purtle has been nominated to fill the vacancy caused by the retirement of
director Roy Wayne Moseley from the Board, which will be effective at the Annual
Meeting. In addition, Lula Sue Silliman has announced that she will be retiring
from the Board following the Annual Meeting, and the Board has appointed Michael
Akin to fill the vacancy that will be created by Ms. Silliman's retirement.
Pursuant to Oklahoma law and the Company's Certificate of Incorporation, Mr.
Akin will be nominated for election by the stockholder upon the expiration of
the term to which eh will be appointed. Under Oklahoma law, directors are
elected by a plurality of all shares present and entitled to vote at a meeting
at which a quorum is present.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the size of the Board may be reduced to eliminate the
vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
The following table sets forth the names of the persons nominated by
the Board of Directors for election as directors. Also set forth is certain
other information with respect to each person's age, the year he or she first
became a director of the Company's subsidiary, HEARTLAND Community Bank (the
"Bank"), the expiration of his or her term as a director and the number and
percentage of shares of Common Stock beneficially owned. Each director of the
Company is also a member of the Board of Directors of the Bank. With the
exception of Messrs. Purtle and Akin, all individuals were initially appointed
as a director of the Company in 1996 in connection with the Company's
incorporation.
2
SHARES OF
YEAR FIRST COMMON STOCK
ELECTED AS CURRENT BENEFICIALLY
AGE AS OF THE DIRECTOR TERM OWNED AS OF THE PERCENT
NAME RECORD DATE OF THE BANK TO EXPIRE RECORD DATE (1) OF CLASS
- ---- ----------- ----------- --------- --------------- --------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2003
Carl E. Parker, Jr. 53 1981 2000 41,226 1.8%
Ned Ray Purtle (2) 64 N/A N/A 35,000 1.6
DIRECTORS CONTINUING IN OFFICE
Vida H. Lampkin 62 1983 2001 74,725 3.3
Clifford O. Steelman 59 1984 2001 38,226 1.7
Cameron D. McKeel 61 1996 2002 53,737 2.4
Bruce D. Murry 61 1994 2002 19,148 *
Michael Akin (2) 44 N/A N/A -- --
DIRECTORS RETIRING AT THE ANNUAL MEETING
Roy Wayne Moseley 64 1990 2000 23,103 1.0
Lula Sue Silliman 73 1962 2002 23,226 1.0
<FN>
- ----------
(1) Includes all shares as to which the beneficial owner had sole or shared
voting and/or investment power. Amounts shown include 11,904, 38,088,
11,904, 35,709, 11,904, 11,904 and 11,904 shares which may be acquired
by Directors Parker, Lampkin, Steelman, McKeel and Murry and Directors
Emeritus Moseley and Silliman, respectively, upon the exercise of
options exercisable within 60 days of September 15, 2000. Messrs.
Purtle and Akin do not have any options to acquire Common Stock. Does
not include unallocated shares held by the ESOP (see above) or shares
held by Directors Moseley, Murry, Parker, Silliman and Steelman as
trustees for the Company's Management Recognition Plan Trust, which
shares are required to be voted in the same proportion as the
unallocated shares under the ESOP or, in the absence thereof, as
directed by the Company's Board of Directors.
(2) Mr. Purtle has been nominated for election as a director for a
three-year term to commence upon his election by the stockholders. If
elected by the stockholders, Mr. Purtle will fill the vacancy on the
Board that will occur upon the retirement of Roy Wayne Moseley, whose
term as a director will expire at the Annual Meeting. Mr. Akin has been
appointed to fill the unexpired portion of director Lula Sue Silliman's
term that will occur upon her retirement from the Board following the
Annual Meeting.
* Amount beneficially owned is less than 1% of outstanding Common Stock.
</FN>
3
Set forth below is information regarding the Company's directors and
nominee for director. Unless otherwise stated, all directors have held the
positions indicated for at least the past five years.
CARL E. PARKER, JR. has been General Manager of Camden Monument Company
from 1970 to the present. He is a member of the Camden Rotary Club and Camden
Chamber of Commerce.
NED RAY PURTLE is owner and manager of Purtle and Son Ranches in Hope,
Arkansas. Previously he was in banking in Clarksville, Arkansas. As the
principal owner of Arkansas State Bank in Clarksville, Mr. Purtle served as Vice
Chairman from 1988 to 1995 and Chairman from 1995 to 1997. During that time, Mr.
Purtle was also owner and Chairman of the Board of Automated Solutions, Inc. in
Knoxville, Arkansas. Mr. Purtle currently serves on the Board of Trustees of the
University of Arkansas and for the past 28 years served on the board of Citizens
National Bank in Hope. In addition, Mr. Purtle is a member of the board of
Arkansas Farm Bureau, Arkansas Farm Bureau Mutual Insurance Company, the
Arkansas Cattleman's Foundation, and the Arkansas State Fair, of which he has
served as Chairman since 1997. In 2000, Mr. Purtle was named Graduate of
Distinction from his alma mater, Oklahoma State University, and he received the
Man of the Year Award in Arkansas Agriculture from the Progessive Farmer
magazine in 1997.
VIDA H. LAMPKIN served as President and Chief Executive Officer of the
Company from December 1996 until December 1999 and served as President and Chief
Executive Officer of the Bank from January 1990 until December 1999. Mrs.
Lampkin is currently the Chairman of the Board of the Company as well as
Chairman of the Board of the Bank. Mrs. Lampkin is currently a Board member and
the immediate past Chairman of the Arkansas League of Savings Institutions, a
member of the Governmental Affairs Council of America's Community Bankers and a
Board member of Arkansas Quality Award.
CLIFFORD O. STEELMAN serves as Senior Human Resource Administrator for
Atlantic Research Corporation located in Camden, Arkansas. Mr. Steelman retired
from the Camden Kraft Packaging Plant, International Paper, Camden, Arkansas, in
1997 after having been employed there since 1968. Mr. Steelman is a member of
the Board of Directors of the Camden Fairview School District.
CAMERON D. MCKEEL has served as President and Chief Executive Officer of
the Company and Bank since December 1999. From November 1997 to December 1999,
Mr. McKeel served as Executive Vice President of the Company and from May 1996
to November 1997 was Vice President of the Company. In addition, from May 1996
to December 1999, Mr. McKeel served as Executive Vice President of the Bank.
Prior to joining the Bank, Mr. McKeel was Executive Vice President of Arkansas
State Bank in Clarksville, Arkansas. He is a member of the Camden Lions Club and
President of the Ouachita Area United Way.
BRUCE D. MURRY is owner of Bruce's, Inc., a retail establishment, located
in Camden, Arkansas. He was president of the Camden Chamber of Commerce in 1995.
Mr. Murry is a current member and a past president of the Camden Lions Club.
MICHAEL AKIN has served as President and CEO of Akin Industries, a
manufacturer of furniture for the healthcare and hospitality industries for the
past 12 years. Prior to that, Mr. Akin was with Arkansas Louisiana Gas in sales
and marketing for two years. Mr. Akin currently serves as Chairman of the
Arkansas Economic Development Commission, a commission he has served on since
1997. He is a charter board member of the Arkansas Wood Manufacturers
Association and served as President in 1995-96. In addition, Mr. Akin is a board
member of the Monticello Economic Development Commission and is Chairman of the
Drew County Work Force Training Advisory Council.
4
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth information regarding the executive officer
of the Company who does not serve on the Board of Directors.
AGE AT
JUNE 30,
NAME 2000 TITLE
- ---- --------- -----
William C. Lyon 59 Senior Vice President of the Company; Senior Vice
President and Chief Lending Officer of the Bank
The following paragraph sets forth information regarding the principal
occupation of the executive officer designated above.
WILLIAM C. LYON has served as Vice President of the Company since
December 1996 and has been Senior Vice President and Chief Lending Officer of
the Bank since May 1996. Mr. Lyon was named Senior Vice President of the Company
in November 1997. From January 1994 to May 1996, Mr. Lyon was a self-employed
banking consultant and from 1991 to 1994 he served as Senior Vice President of
American National Bank and Trust Company in Shawnee, Oklahoma. Mr. Lyon is
President of the Camden Chamber of Commerce and serves on various Chamber of
Commerce committees. Mr. Lyon serves on the Board of Ouachita Partnership of
Economic Development (OPED) and currently serves as OPED Secretary-Treasurer. He
is a member of the Camden Lions Club.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company holds regular monthly meetings
and special meetings as needed. During the year ended June 30, 2000, the
Company's Board met 15 times. No director attended fewer than 75% in the
aggregate of the total number of Board and committee meetings held while he or
she was a member during the year.
The Board of Directors' Audit Committee consisted for fiscal year 2000
of Directors Moseley, Murry, Parker, Silliman and Steelman, who serves as
Chairman. The Audit Committee met six times during the year ended June 30, 2000
to examine and approve the audit report prepared by the independent auditors of
the Company, to review and recommend the independent auditors to be engaged by
the Company, to review the internal audit function and internal accounting
controls, and to review and approve Company policies.
The Compensation Committee for fiscal year 2000 consisted of Directors
Moseley, Murry, Parker, Silliman and Steelman. This committee reviews the
performance of the officers of the Company and determines compensation. The
Compensation Committee met four times during the year ended June 30, 2000.
The Company does not have a standing nominating committee. Under the
Company's current Bylaws, the Company's full Board of Directors selects the
management nominees for election of directors. The Board of Directors met one
time in this capacity with respect to the nominees for election as directors at
the Annual Meeting. The Company's Certificate of Incorporation sets forth
procedures that must be followed by stockholders seeking to make nominations for
directors. In order for a stockholder of the Company to make any nominations, he
or she must give written notice thereof to the Secretary of the Company not less
than thirty days nor more than sixty days prior to the date of any such meeting;
provided, however, that if less than forty days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed, as
prescribed, to the Secretary of the Company not later than the close of business
on the tenth day following the day on which notice of the meeting was mailed to
stockholders. Each such notice given by a stockholder with respect to
nominations for the election of directors must set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed in
such notice; (ii) the principal occupation or employment of each such nominee;
and (iii) the number of shares of stock of the Company which are beneficially
owned by each such nominee. In addition, the stockholder making such nomination
must promptly provide any other information reasonably requested by the Company.
5
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the cash and
noncash compensation for each of the three fiscal years ended June 30, 2000
awarded to or earned by the Company's Chief Executive Officer for services
rendered in all capacities to the Company and its subsidiaries.
LONG-TERM COMPENSATION
AWARDS
--------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
FISCAL ------------------- STOCK UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY BONUS AWARD(S) OPTIONS COMPENSATION(1)
- ----------------- ---- ------ ----- -------- ---------- ---------------
Cameron D. McKeel(2) 2000 $ 98,224 $ -- $ -- -- $ 25,523
President and Chief 1999 90,000 -- -- 47,612 (3) 29,127
Executive Officer of the
Company and Bank
Vida H. Lampkin 2000 108,485 -- -- -- 25,725
Chairman of the Board 1999 100,000 -- -- 50,784 (3) 52,933
of the Company and the Bank 1998 94,500 -- 211,584(4) 50,784 46,252
<FN>
_____________
(1) For Mr. McKeel for fiscal 2000, includes directors fees ($6,000), life,
health, dental and disability insurance ($6,723) and the value of shares
allocated under the ESOP ($12,800); for Mrs. Lampkin for fiscal 2000,
includes directors fees ($6,000), life, health, dental and disability
insurance ($5,485) and the value of shares allocated under the ESOP
($14,240); does not include indirect compensation in the form of certain
perquisites and other personal benefits which did not exceed 10% of salary
and bonus.
(2) Mr. McKeel was appointed President and Chief Executive Officer of the
Company and the Bank on December 16, 1999.
(3) These options represent the repricing of options granted in fiscal year
1998.
(4) Values shown in the table are based on the closing price of the Common
Stock of $16.00 as quoted by the Nasdaq National Market on the date of
grant, May 1, 1998. 5,790 and 6,612 shares of restricted Common Stock
awarded to Mr. McKeel and Mrs. Lampkin, respectively, under the MRP are
currently vested. Vesting of MRP shares was suspended from May 1, 2000 to
May 1, 2003. Therefore, commencing on May 1, 2003, an additional 2,895
shares for Mr. McKeel and 3,306 shares for Mrs. Lampkin will vest, and an
additional 2,895 shares for Mr. McKeel and 3,306 shares for Mrs. Lampkin
will vest on May 1, 2004. As of June 30, 2000, based on the average of the
high and low sales price of the Common Stock of $6.125, as quoted on the
Nasdaq SmallCap Market, the value of the unvested 5,790 shares of
restricted Common Stock awarded to Mr. McKeel and the 6,612 shares of
restricted Common Stock awarded to Mrs. Lampkin was $17,732 and $20,249,
respectively. In addition, at June 30, 2000, the Company's MRP Trust held
$2,596 and $2,711 in cash representing accrued dividends for the benefit of
Mr. McKeel and Mrs. Lampkin, respectively. In the event the Company pays
dividends with respect to its Common Stock, when shares of restricted stock
vest and/or are distributed, the holder will be entitled to receive any
cash dividends and a number of shares of Common Stock equal to any stock
dividends, declared and paid, with respect to a share of restricted Common
Stock between the date the restricted stock was awarded and the date the
restricted stock is distributed, plus interest on cash dividends, provided
that dividends paid with respect to unvested restricted stock must be
repaid to the Company in the event the restricted stock is forfeited prior
to vesting.
</FN>
6
Year-End Option/SAR Values. The following table sets forth information
concerning the number and potential realizable value at the end of the fiscal
year of options held by officers listed on the Summary Compensation Table.
Neither Mr. McKeel nor Mrs. Lampkin exercised any options during fiscal year
2000.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Cameron D. McKeel 35,709 11,903 $ -- $ --
Vida H. Lampkin 38,088 12,696 $ -- $ --
<FN>
____________
(1) At June 30, 2000, the fair market value of the underlying Common Stock
of $6.125, which was the average of the high and low sale price for the
Common Stock on June 30, 2000, was below the exercise price of $9.125
per share.
</FN>
EMPLOYMENT AGREEMENTS
The Company and the Bank maintain separate employment agreements (the
"Employment Agreements") with Cameron D. McKeel who as of December 16, 1999
became President and Chief Executive Officer of the Company and Bank and Vida H.
Lampkin, who served as President and Chief Executive Officer of the Bank and the
Company until December 16, 1999 and currently serves as Chairman of the Board
(together, the "Employees"). In such capacities, the Employees are responsible
for overseeing all operations of the Bank and the Company, and for implementing
the policies adopted by the Board of Directors. Such Boards believe that the
Employment Agreements assure fair treatment of the Employees in relation to
their careers with the Company and the Bank by assuring them of some financial
security.
The Employment Agreements provide for terms of one year and an annual
base salary of $103,935 and $114,150 for Mr. McKeel and Mrs. Lampkin,
respectively. On each anniversary date of the Employment Agreements' effective
date (the "Effective Date"), the term of employment will be extended for an
additional one-year period beyond the then effective expiration date, upon a
determination by the Board of Directors that the performance of the Employee has
met the required performance standards and that the Employee's respective
Employment Agreement should be extended. The Employment Agreements provide each
Employee with a salary review by the Boards of Directors not less often than
annually, as well as with inclusion in any discretionary bonus plans, retirement
and medical plans, customary fringe benefits, vacation and sick leave. Each
Employment Agreement will terminate upon the Employee's death, may terminate
upon the Employee's disability and is terminable by the Bank for "just cause"
(as defined in the Employment Agreements). In the event of termination for "just
cause," no severance benefits are available. In the event of (i) the Employee's
involuntary termination of employment for any reason other than "just cause" or
(ii) the Employee's voluntary termination within 90 days of the occurrence of a
"good reason" (as defined in the Employment Agreements), the Employee will be
entitled to receive (a) his or her salary up to the Employment Agreements'
expiration date (the "Expiration Date") plus an additional 12-month salary, (b)
a put option requiring the Bank or the Company to purchase Common Stock held by
the Employee to the extent that it is not readily tradeable on an established
securities market, and (c), at the Employee's election, either cash in an amount
equal to the cost of benefits the Employee would have been eligible to
participate in through the Expiration Date or continued participation in the
benefits plans through the Expiration Date. If the Employment Agreements are
terminated due to the Employee's "disability" (as defined in the Employment
Agreements), the Employee will be entitled to a continuation of his or her
salary and benefits through the date of such termination, including any period
prior to the establishment of the Employee's disability. In the event of the
Employee's death during the term of the Employment Agreements, his or her estate
will be entitled to receive his or her salary through the last day of the
calendar month in which the Employee's death occurred. The Employee is able to
voluntarily terminate his or her Employment Agreements by providing 90 days'
written notice to the Boards of Directors of the Bank and the Company, in which
case the Employee is entitled to receive only his or her compensation, vested
rights and benefits up to the date of termination.
7
In the event of (i) a "change in control," or (ii) the Employees'
termination for a reason other than just cause during the "protected period (as
defined in the Employment Agreements)," the Employees will be paid within 10
days following the later to occur of such events an amount equal to the
difference between (i) 2.99 times their "base amount," as defined in Section
280G(b)(3) of the Internal Revenue Code, and (ii) the sum of any other parachute
payments, as defined under Section 280G(b)(2) of the Internal Revenue Code, that
the Employee receives on account of the change in control. "Change in control"
generally refers to (i) the acquisition, by any person or entity, of the
ownership or power to vote more than 25% of the Bank's or Company's voting
stock, (ii) the transfer by the Bank of substantially all of its assets to a
corporation which is not an "affiliate" (as defined in the Employment
Agreements), (iii) a sale by the Bank or the Company of substantially all the
assets of an affiliate which accounts for 50% or more of the controlled group's
assets immediately prior to such sale, (iv) the replacement of a majority of the
existing board of directors by the Bank or the Company in connection with an
initial public offering, tender offer, merger, exchange offer, business
combination, sale of assets or contested election, or (v) a merger of the Bank
or the Company which results in less than seventy percent (70%) of the
outstanding voting securities of the resulting corporation being owned by former
stockholders of the Company or the Bank. The Employment Agreements provide that
within 10 business days of a change in control, the Bank shall fund, or cause to
be funded, a trust in the amount of 2.99 times the Employee's base amount, that
will be used to pay the Employee amounts owed to the Employee. The aggregate
payments that would be made to the Employees, assuming their termination of
employment under the foregoing circumstances at June 30, 2000, would have been
approximately $311,000 and $341,000 for Mr. McKeel and Mrs. Lampkin,
respectively. These provisions may have an anti-takeover effect by making it
more expensive for a potential acquiror to obtain control of the Company. In the
event that the Employee prevails over the Company and the Bank in a legal
dispute as to the Employment Agreements, the Employee will be reimbursed for his
or her legal and other expenses.
DIRECTOR COMPENSATION
General. Non-employee directors receive fees of $1,000 per month.
Employee directors received directors' fees through December 31, 1999. After
this date, employee directors did not receive directors' fees. This fee includes
any committee meeting(s), as well as service on the board of directors of one or
more subsidiaries of the Company. For fiscal year 2000, directors' fees totaled
$72,000. In addition, directors are eligible to receive awards under the
Company's Stock Option Plan and Management Recognition Plan. During the year
ended June 30, 2000, no new awards were made to directors under these plans.
Because of their concern of the level of the Company's earnings, each director
voluntarily suspended further vesting of their MRP awards until May 1, 2003.
Directors' Retirement Plan. The Bank's Board of Directors adopted a
directors' retirement plan, effective June 13, 1996, for directors who are or
were members of the Board of Directors at any time on or after the plan's
effective date, provided that an employee who becomes a director after June 30,
1996 will not become a participant unless the Board of Directors adopts a
specific resolution to that effect. On the effective date, (1) the account of
each participant who was a director on the effective date (other than Directors
Lampkin and McKeel) was credited with an amount of $1,900 for each full year of
service as a director; (2) the account of Director Lampkin was credited with an
amount projected to provide her with an annual retirement benefit, commencing at
age 65 and continuing for her lifetime, in an amount equal to the difference
between (i) 70% of her projected annual rate of pay at retirement, and (ii) the
annuity value of her accrued benefits under the Bank's tax-qualified retirement
plans plus her annual social security benefit at age 65; and (3) the account of
Director McKeel was credited with an amount projected to provide him with an
annual retirement benefit, commencing at age 65 and continuing for a period of
ten years, in an amount equal to the difference between (i) 40% of his projected
annual rate of pay at retirement, and (ii) the annuity value of his accrued
benefits under the Bank's tax-qualified retirement plans plus his annual social
security benefit at age 65.
On the first day of each calendar month after the effective date, each
participant who is a director on said date, with the exception of Directors
Lampkin and McKeel, will have his or her account credited with an amount equal
to the product of $158.33 and the Safe Performance Factor for the preceding
fiscal year. The Safe Performance Factor is determined annually based on the
Bank's return on equity, non-performing asset ratio, and regulatory composite
rating for the year as compared to targets set for the fiscal year. In addition,
each participant's account will be credited with a rate of return, on any vested
amounts previously credited, equal to any appreciation or depreciation
determined according to the participant's election. Amounts credited to the
accounts of participants other than Directors Lampkin and McKeel will be fully
vested at all times. The amounts credited to Director
8
Lampkin and Director McKeel will become vested at the rate of 1.18% for each
full month of service as a director, starting with 15% vested interest on
January 1, 1996, and becoming fully vested after 72 or more months of service
after January 1, 1996.
Upon a non-employee director's termination of service on the Board due
to death, disability, or mandatory retirement due to age restrictions, the
director's account will be credited with an amount equal to the difference
between $38,000 and the amount previously credited to her or his account,
exclusive of investment returns. In the event of Director Lampkin's or Director
McKeel's disability or death prior to her or his attainment of 50% vesting, the
vested percentage on her or his account will be increased to 50%. If Director
Lampkin's or Director McKeel's service on the Board is terminated for any reason
other than "just cause" following a change in control, the vested percentage of
her or his account will become 100%. Distribution of account balances will be
made in cash, over a ten-year period, unless the participant elects to receive a
lump sum or annual installments over a period of less than ten years. If a
participant dies before receiving all benefits payable under the plan,
distribution will be made to her or his beneficiary or, in the absence of a
beneficiary, to her or his estate, in a lump sum, unless the participant has
elected to have the distribution made in installments over a period of up to ten
years. Benefits under the Directors' Plan are non-transferable. The Bank will
pay all benefits in cash from its general assets, and has established a trust in
order to hold assets with which to pay benefits. Trust assets will be subject to
the claims of the Bank's general creditors. In the event a participant prevails
over the Bank in a legal dispute as to the terms or interpretation of the
Directors' Plan, he or she will be reimbursed for his or her legal and other
expenses.
TRANSACTIONS WITH MANAGEMENT
The Bank offers loans to its directors, officers and employees. These
loans currently are made in the ordinary course of business with the same
collateral, interest rates and underwriting criteria as those of comparable
transactions prevailing at the time and do not involve more than the normal risk
of collectibility or present other unfavorable features. At June 30, 2000, the
Bank's loans to directors, nominees for director and executive officers totaled
approximately $1,793,479.
COMPENSATION COMMITTEE REPORT ON EMPLOYEE COMPENSATION
The Compensation Committee of the Board of Directors consists of the
non-employee directors, which for fiscal 2000 consisted of Directors Moseley,
Murry, Parker, Silliman and Steelman. This committee reviews the performance of
the executive officers of the Company and its subsidiaries and recommends
employee compensation structures and amounts to the Board.
The Compensation Committee's compensation philosophy for all employees,
including executive officers, is to provide competitive levels of compensation,
integrate employees' pay with the achievement of the Company's performance
goals, reward exceptional corporate performance, recognize individual initiative
and achievement and assist the Company in attracting and retaining qualified
employees. The committee expressly endorses the position that equity ownership
by employees is beneficial in aligning employees' and stockholders' interests in
the enhancement of stockholder value.
Salaries are determined by evaluating the responsibilities of each
position and by reference to the competitive marketplace for qualified
employees, including with respect to executive officers comparisons of salaries
for comparable positions at comparable companies within the banking industry.
Annual salary changes are determined by evaluating changes in compensation in
the marketplace, the performance of the Company and the responsibilities and
performance of the employee.
For fiscal year 2000, the base salaries of the chief executive officer
and other executive officers were established in accordance with the foregoing
policies. The Compensation Committee reviewed proposed salaries for all bank
employees, individually and in total, then reviewed each executive's salary
history. Salaries for the executives were increased by percentages consistent
with the percentage increase for all employees, maintaining the existing
proportion of executive salaries to all salaries.
9
Mrs. Vida Lampkin was employed by the Bank for 42 years and served as
President and Chief Executive Officer for over 10 years. Mrs. Lampkin's salary
was established in accordance with the terms of the employment agreements
between the Bank and the Company and Mrs. Lampkin. In December 1999, Mrs.
Lampkin resigned as President and Chief Executive Officer of the Bank and
Company. Mrs. Lampkin continues to serve as Chairman of the Board of the Company
and the Bank.
On December 16, 1999, Mr. Cameron McKeel was appointed President and
Chief Executive Officer of the Bank and Company. In establishing Mr. McKeel's
compensation the Committee takes into account his experience, tenure, abilities,
job performance and other considerations. Mr. McKeel's base salary is
established in accordance with the terms of the employment agreement entered
into between the Company and Mr. McKeel on February 17, 2000 (see "Executive
Compensation -- Employment Agreements") and is currently $103,935.
The Committee believes that stock-related award plans are an important
element of compensation since they provide executives with incentives linked to
the performance of the Common Stock. Accordingly, during fiscal 1998 the
Committee recommended and the Board of Directors adopted the HCB Bancshares,
Inc. 1998 Stock Option Plan (the "Option Plan") and the HCB Bancshares, Inc.
Management Recognition Plan (the "MRP"). These plans were approved by the
Company's stockholders at a special meeting in May 1998. Upon the implementation
of the Option Plan, directors, officers and employees were granted options to
acquire 317,400 shares of the Common Stock, in the aggregate. These options were
subject to vesting over a period of three or four years. The Committee believes
that the Option Plan serves as a means of providing key employees with the
opportunity to acquire a proprietary interest in the Company and links their
interests with those of the Company's stockholders. In addition, upon the
implementation of the MRP, directors, officers and employees were granted awards
of 52,900 shares of the Common Stock, in the aggregate. These awards also were
subject to vesting over a period of three or four years. The purpose of the MRP
is to reward and retain personnel of experience and ability in key positions of
responsibility by providing such employees with a proprietary interest in the
Company as compensation for their past contributions to the Company and the Bank
and as an incentive to make further contributions in the future. Because of
their concern of the level of the Company's earnings, each director voluntarily
suspended further vesting of their MRP awards until May 1, 2003.
Roy Wayne Moseley Lula Sue Silliman
Bruce D. Murry Clifford Steelman
Carl E. Parker, Jr.
10
STOCK PERFORMANCE
The following graph shows the cumulative total return on the Company's
Common Stock from the commencement of trading on May 7, 1997 through June 30,
2000 compared with the cumulative total return of the CRSP Index for Nasdaq
stocks of savings institutions (U.S. Companies, SIC 6030-39) (the "Industry
Index") and the CRSP Index for the Nasdaq Stock Market (U.S. Companies, all
SICs) (the "Market Index") over the same period, as if $100 were invested on May
7, 1997 in the Company's Common Stock and each index. Total cumulative return on
the Common Stock or the index equals the total increase or decrease in value
since May 7, 1997, assuming reinvestment of all dividends paid. The shareholder
returns shown on the performance graph are not necessarily indicative of the
future performance of the Common Stock or of any particular index.
CUMULATIVE TOTAL SHAREHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
May 7, 1997 through June 30, 2000
[Line graph appears here depicting the cumulative total shareholder return of
$100 invested in the Common Stock as compared to $100 invested in all companies
whose equity securities are traded on the NASDAQ Stock Market and savings
institutions traded on the NASDAQ Stock Market. Line graph plots the cumulative
total return from May 7, 1997 to June 30, 2000. Plot points are provided below.]
5/7/97 6/30/97 6/30/98 6/30/99 6/30/00
------ ------- ------- ------- -------
HCB Bancshares, Inc. 100 102.0 120.5 76.1 (1)(2) 59.8
Savings Institutions 100 113.0 160.5 142.6 117.5
Nasdaq Stock Market 100 109.2 144.1 207.1 305.9
<FN>
_____________
(1) The Common Stock was not listed on the Nasdaq Stock Market on June 30,
1999. The total return figure at June 30, 1999 is based on the average of
the high and low sales price for the Common Stock on that date.
(2) The Common Stock was relisted on the Nasdaq Small Cap Market on November
22, 1999.
</FN>
11
RELATIONSHIP WITH INDEPENDENT AUDITORS
Effective October 1, 1998, the Company engaged Deloitte & Touche, LLP,
Little Rock, Arkansas, as the Company's independent auditors beginning with the
fiscal year ended June 30, 1998.
The Board of Directors has ratified the appointment of Deloitte &
Touche, LLP to be the Company's independent certified public accountants for the
fiscal year ending June 30, 2001. A representative of Deloitte & Touche, LLP is
expected to be present at the Meeting to respond to appropriate questions and to
make a statement, if so desired.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated under the Exchange Act, the
Company's officers, directors and persons who own more than ten percent of the
outstanding Common Stock ("Reporting Persons") are required to file reports
detailing their ownership and changes of ownership in such Common Stock
(collectively, "Reports"), and to furnish the Company with copies of all such
Reports. Based solely on its review of the copies of such Reports or written
representations that no such Reports were necessary that the Company received
during the past fiscal year or with respect to the last fiscal year, management
believes that during the fiscal year ended June 30, 2000, all of the Reporting
Persons complied with these reporting requirements.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company. The
Company has engaged Registrar & Transfer Company to act as proxy solicitor for
the Annual Meeting. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy materials to the beneficial owners of Common Stock. In addition to
solicitations by mail, directors, officers and regular employees of the Company
may solicit proxies personally or by telegraph or telephone without additional
compensation.
The Company's annual report to stockholders, including financial
statements, is being mailed to all stockholders of record as of the close of
business on the Record Date. Any stockholder who has not received a copy of such
annual report may obtain a copy by writing to the Secretary of the Company. Such
annual report is not to be treated as a part of the proxy solicitation materials
or as having been incorporated herein by reference.
12
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's main office at 237
Jackson Street, S.W., Camden, Arkansas 71701-3941, no later than June 19, 2001.
Stockholder proposals, other than those submitted pursuant to the Exchange Act,
must be submitted in writing to the Secretary of the Company at the above
address not less than thirty days nor more than sixty days prior to the date of
any such meeting in accordance with procedural and substantive requirements
under the Company's Certificate of Incorporation; provided, however, that if
less than forty days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the Secretary of
the Company not later than the close of business on the tenth day following the
day on which notice of the meeting was mailed to stockholders. For consideration
at the Annual Meeting, a stockholder proposal must be delivered or mailed to the
Company's Secretary no later than October 27, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Paula J. Bergstrom
PAULA J. BERGSTROM
SECRETARY
Camden, Arkansas
October 17, 2000
FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 2000 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT CHARGE TO EACH STOCKHOLDER AS OF THE RECORD DATE UPON WRITTEN
REQUEST TO THE SECRETARY, HCB BANCSHARES, INC., 237 JACKSON STREET, S.W.,
CAMDEN, ARKANSAS 71701-3941.
13
REVOCABLE PROXY
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE HCB BANCSHARES, INC.
- --------------------------------------------------------------- -------------------------------- -------------------------------
ANNUAL MEETING OF STOCKHOLDERS WITH-
November 16, 2000 1. The election as directors FOR HOLD EXCEPT
of all nominees listed
The undersigned hereby appoints Vida H. Lampkin and Clifford (except as marked to the
O. Steelman, with full powers of substitution, to act as contrary below): [ ] [ ]
proxies for the undersigned, to vote all shares of common
stock of HCB Bancshares, Inc. (the "Company") which the Carl E. Parker, Jr.
undersigned is entitled to vote at the Annual Meeting of Ned Ray Purtle
Stockholders, to be held at the Camden Country Club, located
at 1915 Washington Street, S.W., Camden, Arkansas, on
Thursday, November 16, 2000 at 10:00 a.m., local time, and at
any and all adjournments thereof, as follows:
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INSTRUCTION: To withhold authority to vote for any individual
nominee, mark "EXCEPT" and write that nominee's name in the
space provided below.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED
NOMINEES. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
LISTED NOMINEES.THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF
NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE
NOMINEES STATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD
OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS
PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO
VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE
THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT
SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL
MEETING.
- --------------------------------------------------------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
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Please be sure to sign and date Date
this proxy in the box below
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Stockholders sign above Co-holder (if any) sign above
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- ------------------------------ perforation -------------------------------------
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN
POSTAGE-PAID ENVELOPE ENCLOSED.
HCB BANCSHARES, INC.
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Should the abovesigned be present and elect to vote at the Annual Meeting or at
any adjournment thereof, and after notification to the Secretary of the Company
at the Annual Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect.
The above signed acknowledges receipt from the Company prior to the execution
of this proxy of notice of the Annual Meeting, a proxy statement dated October
17, 2000 and a 2000 annual report to stockholders. Please sign exactly as your
name appears on this proxy card. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title. If shares are
held jointly, each holder should sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY TODAY
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