SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
FIRST COMMUNITY BANCSHARES, INC.
--------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rule O-11(c)(1)(ii), 14a-6(i)(l), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transaction applies:
Not applicable
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2) Aggregate number of securities to which transaction applies:
Not applicable
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule O-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
Not applicable
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4) Proposed maximum aggregate value of transaction:
Not applicable
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5) Total fee paid:
Not applicable
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[ ] Fee paid previously by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-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: Not applicable
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2) Form Schedule or Registration Statement No.: Not applicable
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3) Filing Party: Not applicable
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4) Date Filed: Not applicable
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FIRST COMMUNITY BANCSHARES, INC.
210 East Harriman
Bargersville, IN 46106
(317) 422-5171
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
May 29, 2002
The Annual Meeting of Shareholders of FIRST COMMUNITY BANCSHARES, INC., (the
"Company"), will be held at the Franklin Recreation and Cultural Arts Center,
396 South State Street, Franklin, Indiana, 46131 on May 29, 2002, at 10:00 a.m.,
local time, for the following purposes:
1. To elect two directors to serve a three year term expiring in 2005 or until
a successor is elected and qualified.
2. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Shareholders of record at the close of business on March 29, 2002 will be
entitled to vote at the meeting.
By Order of the Board of Directors
----------------------------------
Frank D. Neese, Secretary
Bargersville, Indiana
April 19, 2002
Your Vote is Important! Please mail your Proxy Promptly
************************************************
In order that there may be proper representation at the meeting, you are urged
to sign, date and return the enclosed proxy in the envelope provided.
No postage required if mailed in the United States.
PROXY STATEMENT
General
The accompanying proxy is solicited by the Board of Directors of First
Community Bancshares, Inc., an Indiana corporation (the "Company"), for use at
the Annual Meeting of Shareholders to be held on May 29, 2002, at 10:00 a.m.,
local time, or at any adjournment thereof. The meeting will be held at the
Franklin Recreation and Cultural Arts Center, 396 South State Street, Franklin,
Indiana 46131. At the meeting, only shareholders of record at the close of
business on March 29, 2002 (the "Record Date") will be entitled to vote. On that
date, the Company's outstanding capital stock consisted of 1,042,926 shares of
no par value Common Stock.
The Company is a one bank holding company which owns First Community Bank &
Trust ("First Community") and First Community Real Estate Management, Inc.
("FCREM").
This Proxy Statement and form of proxy are first being mailed or given to
shareholders on or about April 19, 2002, together with the Company's 2001 Annual
Report to Shareholders and the Form 10-K for the fiscal year ended December 31,
2001.
Persons Making the Solicitation
This proxy solicitation is made by the Company. All costs of soliciting of
proxies will be borne by the Company. The Company may also reimburse brokerage
houses and other custodians, nominees and fiduciaries for their expenses
incurred in forwarding solicitation materials to the beneficial owners of shares
held of record by such persons. It is contemplated that proxies will be
solicited principally through the mail, but directors, officers and employees of
the Company may, without additional compensation, solicit proxies personally or
by telephone, telegraph or special letter.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to Albert R. Jackson, III,
Assistant Secretary of the Company:
o a written notice of revocation,
o a duly executed proxy bearing a later date, or
o by attending the meeting and voting in person.
Quorum and Voting
Each shareholder is entitled to one vote for each share of Common Stock
held on the Record Date on all matters presented at the meeting. The required
quorum for the transaction of business at the Annual Meeting is a majority of
the votes eligible to be cast by holders of shares of Common Stock issued and
outstanding on the Record Date. Shares that are voted "FOR," "AGAINST" or
"WITHHELD FROM" a matter are treated as being present at the meeting for
purposes of establishing a quorum.
2
Shares Held in Trust
The Trust department of First Community held 121,642 shares of the
Company's common stock in regular, nominee and street name accounts on March 29,
2002 constituting approximately 11.66% of the Company's outstanding shares.
These shares of Common Stock are held by First Community in a fiduciary capacity
for the beneficial owners of the accounts, which beneficial owners have the
right to vote the shares held in the accounts. However, where authorized by law
or the governing instrument, those shares will be voted by First Community FOR
the election of the Directors set forth herein.
Stock Ownership
of Certain Beneficial Owners
and Management
The following table sets forth certain information regarding the Company's
Common Stock beneficially owned as of March 29, 2002 by (i) each person known by
the Company to beneficially own more than 5% of the Company's Common Stock; (ii)
each director or director nominee of the Company; (iii) each of the executive
officers of the Company named in the Summary Compensation Table and (iv) all
directors and executive officers of the Company as a group:
3
Shares Beneficially Owned
Name and Address Number Percent
---------------- ------ -------
Albert R. Jackson, III 31,582(1) 3.0%
5675 N. CO RD 200W
North Vernon, Indiana 47265
2.9%
Albert R. Jackson, Jr. 30,569(2)
5745 N CO RD 200W
North Vernon, Indiana
47265
Merrill M. Wesemann, M.D. 102,696(3) 9.8%
251 E Jefferson Street
Franklin, Indiana 46131
Roy Martin Umbarger 48,015(4) 4.6%
5180 W CO RD 300N
Bargersville, Indiana 46106
Frank D. Neese 135,613(5) 12.4%
1705 North Meridian Street
Indianapolis, Indiana 46202
All Officers, Nominees and Directors as a 343,112 30.5%
group (5 persons)
- --------------------------------------
- -----------------
(1) Includes 5,363 shares held jointly with his father, brother and sister as
to which he disclaims voting and dispositive power, currently exercisable
options for 7,500 shares granted under the 1996 Stock Option Plan and a
Convertible Note currently convertible into 909 shares. Mr. Jackson, III is
the son of Mr. Jackson, Jr.
(2) Includes 5,363 shares held jointly with two sons and a daughter, 2,135
shares owned by Mr. Jackson's spouse, curently exercisable options for
2,050 shares granted under the 1996 Stock Option Plan, Convertible Notes
currently convertible into 5,454 shares, and a Convertible Note owned by
his spouse currently convertible into 909 shares. Mr. Jackson, Jr. is the
father of Mr. Jackson, III.
(3) Includes 8,087 shares owned by Dr. Wesemann's spouse, currently exercisable
options for 5,050 shares granted under the 1996 Stock Option Plan,
Convertible Notes currently convertible into 3,636 shares, and a
Convertible Note owned by his spouse currently convertible into 909 shares.
(4) Includes 1,365 owned by Mr. Umbarger's spouse, 721 shares owned as a
joint-tenant with a son, 214 shares owned by his spouse jointly with her
daughter, currently exercisable options for 5,050 shares granted under the
1996 Stock Option Plan and Convertible Notes currently convertible into
4,545 shares.
(5) Includes 3,000 shares owned by Mr. Neese's spouse, 14,044 shares owned by
Mr. Neese's spouse in an IRA account, 53,377 shares owned in an IRA
account, 6,648 shares owned through a 401(k) plan, curently exercisable
options for 5,050 shares granted under the 1996 Stock Option Plan and
Convertible Notes currently convertible into 45,454 shares. Mr. Neese
disclaims beneficial ownership of the shares owned by or for the benefit of
his spouse.
4
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
beneficial owners of more than 10% of the Company's Common Stock to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. A copy of such reports must be sent to the Company.
Based solely on its review of the copies of such reports received by it, or
written representations from reporting persons, the Company believes that during
the year ended December 31, 2001, its executive officers, directors and holders
of more than 10% of the Company's Common Stock complied with all Section 16(a)
filing requirements.
ELECTION OF DIRECTORS
The Board of Directors currently consists of five (5) members who are
elected to staggered three (3) year terms by the shareholders. Frank D. Neese
and Roy Martin Umbarger have been nominated as directors of the Company for a
three year term expiring at the annual meeting to be held in 2005.
To be elected as a director, the nominee must receive the favorable vote of
a plurality of the shares represented and voting at the Annual Meeting. That is
to say, a nominee must receive more favorable than unfavorable votes.
Abstentions and broker non-votes are counted for purposes of determining whether
a quorum is present but will have no effect on the election of a director. The
persons named in the enclosed form of Proxy, unless otherwise directed therein,
intend to vote such Proxy FOR the election of the nominees named below as
directors for the specified term. If either of the nominees become unavailable
for any reason, the persons named in the form of Proxy are expected to consult
with management of the Company in voting the shares represented by them.
Management has no reason to doubt the availability of the nominees to serve and
no reason to believe that the nominees will be unavailable or unwilling to serve
if elected to office. To the best of management's knowledge, the nominees intend
to serve the term for which election is sought. Cumulative voting is not
permitted by the Articles of Incorporation of the Company.
Nominated Directors
The Board of Directors recommends that the shareholders vote "FOR" the
election of Frank D. Neese and Roy Martin Umbarger as directors of the Company.
5
The following table sets forth certain information concerning each of the
nominees for director.
Current
Director Term To
Name Age Principal Occupation Since Expire
- ---- --- -------------------- ----- ------
Frank D. Neese 64 President, Indiana 1996 2002
Securities, LLC
Roy Martin Umbarger 55 President, Roy 1996 2002
Umbarger & Sons, Inc.
Frank D. Neese has been President of Indiana Securities, LLC, a registered
broker-dealer and an investment banking firm, since January 1, 1998. Mr. Neese
served as Senior Vice President of Traub and Company, a registered
broker-dealer, from 1979 until December 31, 1997. Mr. Neese has served as a
financial advisor to First Community since 1991. Mr. Neese's current term as a
Director of the Company expires at the 2002 Annual Meeting. Mr. Neese is
Secretary and a Director of First Community and a Director of FCREM. Mr. Neese
also serves as President of the Pines of Deerfield, a privately held real estate
development company.
Roy Martin Umbarger has been the President and co-owner of Roy Umbarger &
Sons, Inc., a feed mill, grain elevator and fertilizer distributor located in
Bargersville, Indiana, since 1986. Mr. Umbarger received a degree in Business
Marketing from the University of Evansville and is a lifetime resident of
Johnson County. Mr. Umbarger is a 32 year member of the Indiana Army National
Guard and is currently Deputy Commanding General of the 38th Infantry Division.
He holds the rank of Brigadier General. Mr. Umbarger's current term as a
Director of the Company expires at the 2002 Annual Meeting. Mr. Umbarger is also
a Director of First Community and a Director of FCREM.
6
Continuing Directors
Continuing Directors whose terms are not expiring are:
Director Term To
Name Age Principal Occupation Since Expire
- ---- --- -------------------- ----- ------
Merrill M. Wesemann 67 Chairman of Board 1991 2003
Physician
Albert R. Jackson, III 41 Chief Executive and 1997 2003
Financial Officer of the
Company, and President and
CEO of First Community
Albert R. Jackson, Jr. 67 Retired Bank President 1997 2004
Merrill M. Wesemann, M.D. was a Director of Bargersville Federal Savings
Bank ("Bargersville") from January 1979 until the acquisition of Bargersville by
the Company in August 1991. Dr. Wesemann has been a Director of the Company
since August 1991and is also a Director of First Community and FCREM . Dr.
Wesemann has practiced medicine since 1961 and is a past Treasurer of the
Indiana State Medical Association. Dr. Wesemann's current term as a Director of
the Company expires at the 2003 Annual Meeting.
Albert R. Jackson, III has been President of First Community since 1994 and
CEO for both First Community and the Company since 1996. Before joining First
Community he was Senior Vice president of National City Bank. Mr. Jackson has
also served as Senior Vice President and cashier of The Seymour National Bank of
Seymour, Indiana and as Vice President for First National Bank of North Vernon,
Indiana and as Treasurer and Chief Financial Officer of that bank's holding
company, North Vernon 1st Financial Corporation. Mr. Jackson's current term as a
Director of the Company expires at the 2003 Annual Meeting. Mr. Jackson is also
a Director of First Community and FCREM. He is the son of Albert R. Jackson, Jr.
Albert R. Jackson, Jr. was the President of First National Bank of North
Vernon, Indiana from 1971 to 1989 and a Senior Executive Vice President of The
Seymour National Bank of Seymour, Indiana from 1989 to his retirement in 1994.
Mr. Jackson was appointed as a Director of the Company in May 1997 and elected
to a full three (3) year term in May 1998. Mr. Jackson's current term as a
Director of the Company expires at the 2004 Annual Meeting. Mr. Jackson is also
a Director of First Community and FCREM. He is the father of Albert R. Jackson,
III.
7
Related Party Transactions
Certain of the Directors of the Company and their affiliates have banking
and other transactions with First Community in the ordinary course of business.
Any loans and commitments to lend to such affiliated persons or entities are
made in accordance with all applicable laws and regulations and on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with unaffiliated parties of similar
creditworthiness and do not involve more than normal risk of collectibility or
present other unfavorable features to First Community. The Company believes that
all transactions between First Community on the one hand, and any officer,
director, principal shareholder, or other affiliate of the Company or First
Community on the other hand, are on terms no less favorable to First Community
than could be obtained on an arm's-length basis from unaffiliated third parties.
Meetings and Committees of the Board of Directors
For the calendar year 2001, the Board of Directors of the Company met ten
(10) times and all Directors attended all of the meetings, except for Mr.
Umbarger who missed two meetings due to obligations to the Indiana Army National
Guard.
The Board of Directors of FCREM met six (6) times and the Board of
Directors of First Community and committees thereof met a total of 53 times
during 2001. No Director of the Company attended fewer than 75% of (i) the total
number of meetings of the Board of Directors of the Company; or (ii) the total
number of meetings held by all committees of the Board of Directors of the
Company of which a Director was a member.
The Board of Directors of the Company has the authority to appoint various
committees. The Company does not currently have standing committees of the Board
of Directors other than the Audit Committee as referenced below. However, First
Community maintains several committees including a compensation committee. All
employees are compensated by First Community rather than the Company.
Audit Committee Report
The Company's Audit Committee is composed of the four members of the
Company's Board of Directors who are not otherwise employed by the Company. The
Audit Committee operates under a written charter adopted by the Board of
Directors that is attached as Appendix A to the Company's Proxy Statement for
calendar year 2001.
Although the Company's stock is not listed on the American Stock Exchange
("AMEX") or the New York Stock Exchange, and is not quoted on the Nasdaq, the
Board of Directors has elected to apply the standards for independence set forth
by the AMEX to determine the independence of its Audit Committee members. Under
these standards, three of the four members of the Audit Committee are
"independent." The fourth member, Albert R. Jackson, Jr. ("Mr. Jackson,
8
Jr."), is not "independent" under the AMEX standards by virtue of his
relationship to Albert R. Jackson, III ("Mr. Jackson, III), the Chief Executive
Officer of the Company. However, the Board of Directors has determined to
appoint Mr. Jackson, Jr., to the Audit Committee based upon its belief that it
is in the best interests of the Company and its shareholders for Mr. Jackson,
Jr., to serve on the Audit Committee and that Mr. Jackson, Jr.'s relationship
with Mr. Jackson, III, will not interfere with his exercise of independent
judgment as a member of the Audit Committee.
The Audit Committee of the Board of Directors is responsible for providing
independent, objective oversight of the Company's accounting functions and
internal controls. It oversees the financial reporting process, reviews the
financial disclosures, and meets privately, outside the presence of management,
with the Company's independent auditors to discuss internal accounting control
policies and procedures. The Audit Committee provides an open avenue of
communication between the independent accountants, the Company's financial and
executive management, its internal auditors and the Board of Directors. The
Audit Committee also considers and recommends the selection of independent
auditors, reviews the performance of the independent auditors in the annual
audit and in assignments unrelated to the audit, and reviews the independent
auditor's fees.
In the year preceding March 31, 2002, the Company's Audit Committee met two
(2) times. During these meetings, the Audit Committee reviewed and discussed the
audited financial statements with management and with the Company's independent
auditor, BKD, LLP, including those matters required to be discussed under
generally accepted auditing standards. The Board also discussed with the
independent auditor the matters required to be discussed by the Codification of
Statements on Auditing Standards, Standard No. 61, as necessary. Additionally,
the Board of Directors has received from its independent auditors the
disclosures and the letter regarding the auditors' independence required by
independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees," as may be modified or supplemented. Based upon the
Committee's review and discussions, the Committee has determined that the
audited financial statements be included in the Company's Annual Report on Form
10-K for fiscal year 2001. First Community also has an audit committee composed
of the same persons as the Company's Audit Committee, which met five (5) times
in the year ending December 31, 2001.
As reported by the Audit Committee:
Merrill M. Wesemann, M.D., Chairman
Frank D. Neese, Secretary
Albert R. Jackson, Jr.
Roy Martin Umbarger
Other Information
See also "Stock Ownership of Certain Beneficial Owners and Management."
9
Director Compensation
A. Cash Compensation. None of the Directors of the Company were compensated
for service as members of the Board of Directors or any committee of the Board.
However, all Directors of the Company were also Directors of First Community for
the fiscal year ended December 31, 2001, and cash compensation for non-employee
Directors of First Community was $1,050 per month. The Chairman's compensation
was $1,207.50 per month for 2001. First Community also provides each of First
Community's Directors with Directors' and Officers' liability insurance.
Directors are entitled to defer a portion of their compensation as directors of
First Community. Any such deferred funds are invested, pursuant to a Deferred
Compensation Agreement, in an account with an annual interest rate as determined
by the Board of Directors of First Community.
Directors are also reimbursed for reasonable expenses incurred in attending
Board and committee meetings. Directors otherwise employed by the Company or
First Community are not separately compensated for serving as a director.
B. Options. On May 15, 1996, the shareholders approved the creation of the
1996 Stock Option Plan (the "1996 Plan") for the issuance of 105,000 shares of
Common Stock. The 1996 Plan authorizes the grant of both incentive (qualified)
and non-qualified stock options. The 1996 Plan provides, among other things,
that nonstatutory options shall be automatically granted to outside directors on
a yearly basis with an exercise price equal to the fair market value of the
Common Stock on the date of grant in order to provide an incentive to outside
Directors of the Company, which grants generally have a term of ten years from
the date of grant and are exercisable only during the time the optionee remains
a director or within one year thereafter (but not beyond expiration of the
option term).
The 1996 Plan provides for adjustment of the number of shares and exercise
price of options in certain events.
The Company is not entitled to a deduction for amounts taxed as ordinary
income or capital gain to a participant holding an incentive stock option but is
entitled to a deduction for amounts taxed as ordinary income to holders of
nonstatutory stock options.
The Company has granted options under the 1996 Plan to purchase 1,050
shares, 1,000 shares, 1,000 shares, 1,000 shares and 1,000 shares of common
stock each to Dr. Wesemann, Frank Neese, Albert R. Jackson, Jr., and Roy Martin
Umbarger with an exercise price of $11.43, $11.00, $8.00, $6.875 and $5.75 per
share, respectively. In February 1998 and 1999, the Board granted an option to
purchase 5,000 shares and 2,500 shares of common stock to Albert R. Jackson, III
with an exercise price of $11.50 and $9.125 per share, respectively, and an
aggregate of 6,000 shares and 3,000 shares to three (3) other officers with an
exercise price of $11.50 and $9.125 per share, respectively.
C. Retirement Plans. In September, 2000, First Community adopted a
Supplemental Executive Retirement Plan (the "SERP"). The Board of Directors is
solely responsible for the selection of employees and members of the Board of
Directors who are eligible to become participants in the SERP. An eligible
individual becomes a participant in the SERP upon execution and delivery of a
SERP agreement. Current participants are all of the Directors and four senior
officers of First Community.
10
Under the SERP, a participant who has obtained 72 years of age, is serving
as a director or employee at that time, and has completed at least three years
of participation in the SERP is entitled to received annual payments equal to
100% of the average of the director fees such person received or would have
received had such person been a director each year for the most recent
three-year period. Such payments shall be made in equal monthly installments for
the remainder of the participant's life. If a retired participant receiving
payments should die prior to the receipt of 120 monthly payments, such monthly
payments shall continue to be paid to the participant's beneficiary until the
completion of an aggregate of 120 monthly payments.
A participant who has completed at least ten years of employment or service
as a director with First Community may elect early retirement on or after
attaining age 65. A participant electing early retirement is entitled to receive
the actuarial equivalent (present value) of the normal retirement benefit
described above.
The SERP also provides that in the event a participant dies while employed
by or serving on the Board of Directors of First Community, that participant's
beneficiary shall be paid a monthly benefit for 120 months in an amount
equivalent to the amount the participant would have received had the participant
reached normal retirement age.
Management
Name Age Position
- ---- --- --------
Albert R. Jackson, III 41 Chief Executive and Financial
Officer of the Company, and
President and CEO of First Community
Albert R. Jackson, III is also a director of the Company and additional
information concerning Mr. Jackson is at page 7.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows the compensation for each of
the three years ended December 31, 2001, of the only person who served as the
Chief Executive Officer of the Company for services in all capacities to the
Company and its subsidiaries. No executive officers received compensation above
the reportable threshold of $100,000 during the years covered by this table.
11
Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities All
Name and Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary($) Bonus($) sation($)(1) Award(s)($) SARs (#) Payout ($) sation(2)
- --------- ---- --------- -------- ------------ ----------- ---------- ---------- ---------
Albert R. Jackson, III(3) 2001 89,587 -0- 262 3,597
CEO 2000 86,000 -0- 211 2,252
1999 85,623 -0- 2,500 2,494
- ---------------------
(1) Taxable benefit on life insurance coverage above $50,000.
(2) Contribution by the Company to the executive's 401 (k) plan.
(3) In 1994, Mr. Jackson became the President of First Community. In March
1996, Mr. Jackson also became the Chief Executive Officer and Chief
Financial Officer of the Company. In 1998 Mr. Jackson also become President
and CEO of FCREM, and ceased to be CFO of the Company. In 1999 Mr. Jackson
reassumed the position of CFO of the Company.
Deferred Compensation
The Chief Executive Officer of the Company is entitled to defer a portion
of his annual compensation. Any such deferred funds are invested, pursuant to a
Deferred Compensation Agreement, in an account with an annual interest rate as
determined by the Board of Directors of First Community.
Life Insurance Plan
First Community pays the premiums on a group term life insurance policy for
all regular full-time employees who have worked for First Community for 90 days.
The amount of coverage under this plan is three times each employee's annual
salary.
Option/Sar Grants In Last Fiscal Year
Individual Grants
There were no Option/SAR grants during the last fiscal year.
12
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SAR's Options/SARs
At FY-End (#) at FY-End ($)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ---- ------------ ------------ ------------- -------------
Albert R. Jackson, III -0- -0- 7,500/-0- -0-/-0-(1)
(1) The exercise price of the Options exceeded their market value as of
December 31, 2001.
RELATIONSHIP WITH INDEPENDENT AUDITORS AND AUDITORS FEES
Appointment
BKD, LLP ("BKD"), an independent certified public accounting firm, has
audited the accounts of the Company since 1993 and has provided the Company with
other services. The Company has chosen BKD as auditor for the current year.
Representatives of BKD will attend the Annual Meeting and have the opportunity
to make a statement if they desire, and will also be available to respond to
appropriate questions.
Audit Fees
Fees aggregating $39,500 were billed for professional services rendered for
the audit of the Company's annual financial statements as of and for the year
ended December 31, 2001, and for the reviews of the quarterly financial
statements included in the Company's Forms 10-Q for the year.
Financial Information Systems Design and Implementation Fees
No fees were billed during 2001 for professional services rendered for
financial information systems services, including such services as operating or
supervising the operation of the Company's information system, or designing or
implementing a hardware or software system for use in aggregating or generating
information underlying the Company's financial statements.
All Other Fees
Fees aggregating $66,643 were billed for all other professional services
rendered during 2001 by the Company's independent auditors, which services
principally related to $5,950 for tax compliance and consulting services,
$37,650 for internal audit and Regulatory Compliance, $11,000 for loan review,
and $12,043 for accounting assistance relating to SEC filings.
13
The Board of Directors of the Company has considered whether BKD's
provision of services to the Company in addition to audit services has affected
BKD's independence, and has discussed with BKD its role as independent auditor,
and has determined that its provision of such additional services is compatible
with BKD's status as an independent auditor.
OTHER BUSINESS
At this time management knows of no other matters that may be brought
before the meeting. However, if any other matters are properly brought before
the meeting, the proxy holders named in the accompanying proxy intend to vote
the proxies on such matters in accordance with their best judgment.
FORM 10-K
The Company has forwarded to all shareholders a copy of the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 2001, as
filed with the Securities and Exchange Commission, including the financial
statements and schedules, and the Company's 2001 Annual Report to Shareholders.
The Company's Annual Report of the Company on Form 10-K was filed with the
Securities and Exchange Commission on April 1, 2002. An additional copy may be
obtained free of charge by contacting Albert R. Jackson, III, First Community
Bancshares, Inc., P.O. 970, Franklin, IN 46131, Telephone 317-346-7200.
SHAREHOLDER PROPOSALS TO BE PRESENTED AT
THE NEXT ANNUAL MEETING
Proposals of shareholders intended to be presented at the 2003 Annual
Meeting of Shareholders of the Company (i) must be received by the Company at
136 East Harriman Bargersville, IN 46106, (317) 882-5277 no later than December
31, 2002 and (ii) must satisfy the conditions established by the Securities and
Exchange Commission for shareholder proposals to be included in the Company's
Proxy Statement for that meeting.
Please date, sign and return the enclosed Proxy at your earliest convenience in
the enclosed envelope. No postage is required for mailing in the United States.
A prompt return of your Proxy will be appreciated, as it will save the expense
of further mailings.
By Order of the Board of Directors
April 19, 2002
14
Appendix - Form of Proxy
FIRST COMMUNITY BANCSHARES, INC.
Bargersville, Indiana
REVOCABLE PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 29, 2002
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints as proxies, Merrill M. Wesemann, M.D. and
Albert R. Jackson, Jr., or either of them, with full power of substitution, to
vote all shares of common stock which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of First Community Bancshares, Inc., to be held
at Franklin Recreation and Cultural Arts Center, 396 South State Street,
Franklin, Indiana, at 10:00 A.M., local time, on May 29, 2002, and adjournments
thereof, upon the following matter:
Authority to Vote
For Against Withhold
--- ------- --------
1. Election of Two Directors
Nominees:
Frank D. Neese [ ] [ ] [ ]
Roy Martin Umbarger [ ] [ ] [ ]
THIS PROXY WILL BE VOTED FOR THE ABOVE NOMINEES UNLESS A CONTRARY DIRECTION IS
GIVEN.
Should the undersigned be present and elect to vote at the Meeting or any
adjournment thereof, upon notification to the Secretary of First Community
Bancshares, Inc. at the Meeting of the shareholder's decision to terminate this
Proxy, the power of said attorneys-in fact or agents shall be deemed terminated
and of no further force and effect.
Please sign below exactly as your name appears on your stock certificate.
When signing as attorney, corporate officer or fiduciary, please give full title
as such. The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting and the Proxy Statement dated April 19, 2002, prior to the execution of
this Proxy.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY
Number of Shares -
- -------------------------------
DATE
- -------------------------------
SIGNATURE
Your signature must be exactly as your name appears in your stock
certificate(s). When signing as attorney-in-fact, executor, administrator,
trustee, guardian or corporate officer, please give full title as such.