<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2)
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 Pursuant to Rule 14a-11(c) or Rule 14a-12
PINNACLE 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.
[ ] 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):
------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
------------------------------------------------------------
5. Total fee Paid:
------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form, Schedule or Registration Statement No.:
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3 Filing Party:
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4. Date Filed:
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<PAGE> 2
April 30, 1997
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders (the "Annual
Meeting") of Pinnacle Bancshares, Inc. (the "Company") to be held at The
Chamber of Commerce of Walker County Auditorium, Jasper, Alabama on Wednesday,
May 28, 1997 at 11:00 a.m., local time. This will be our first meeting of
stockholders since the conversion of Pinnacle Bank (the "Bank") to an
Alabama-chartered commercial bank and the reorganization of the converted Bank
into the holding company form of ownership.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Annual Meeting. Stockholders will
consider and vote upon the election of three directors.
As an integral part of the Annual Meeting, we will report on the
operations of the Company and the Bank. Directors and officers of the Company
and the Bank will be present to respond to any questions that our stockholders
may have. Detailed information concerning our activities and operating
performance is contained in our Annual Report which also is enclosed.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. On
behalf of the Board of Directors, we urge you to please sign, date and return
the enclosed proxy card in the enclosed postage-prepaid envelope as soon as
possible even if you currently plan to attend the Annual Meeting. This will
not prevent you from voting in person, but will assure that your vote is
counted if you are unable to attend the Annual Meeting.
Sincerely,
-------------------------- ---------------------------
Al H. Simmons Robert B. Nolen, Jr.
Chairman of the Board President and Director
<PAGE> 3
PINNACLE BANCSHARES, INC.
1811 SECOND AVENUE
JASPER, ALABAMA 35502-1388
(205) 221-4111
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 28, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Pinnacle Bancshares, Inc. (the "Company") will be held at
The Chamber of Commerce of Walker County Auditorium, Jasper, Alabama, on
Wednesday, May 28, 1997 at 11:00 a.m., local time.
The Annual Meeting is for the following purposes, which are more
completely described in the accompanying Proxy Statement:
1. The election of three directors of the Company.
2. Such other matters as may properly come before the Annual
Meeting or any adjournment 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 or any adjournments thereof. Stockholders of record at the
close of business on April 21, 1997, are the stockholders entitled to vote at
the Annual Meeting and any adjournment thereof.
You are requested to fill in and sign the enclosed proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Annual
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
THOMAS L. SHERER
SECRETARY
Jasper, Alabama
April 30, 1997
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF A
FURTHER REQUEST FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
<PAGE> 4
PROXY STATEMENT
PINNACLE BANCSHARES, INC.
1811 SECOND AVENUE
P.O. BOX 1388
JASPER, ALABAMA 35502-1388
(205) 221-4111
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
MAY 28, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Pinnacle Bancshares, Inc. (the "Company")
for the Annual Meeting of Stockholders (the "Annual Meeting") to be held at The
Chamber of Commerce of Walker County Auditorium, Jasper, Alabama on Wednesday,
May 28, 1997, at 11:00 a.m., local time. The accompanying Notice of Annual
Meeting and this Proxy Statement, together with the enclosed form of proxy, are
first being mailed to stockholders on or about May 7, 1997.
VOTING AND REVOCATION OF PROXIES
Proxies solicited by the Board of Directors of the Company will be voted
in accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE
GIVEN, PROPERLY EXECUTED PROXIES WHICH HAVE NOT BEEN REVOKED WILL BE VOTED FOR
THE NOMINEES FOR DIRECTORS SET FORTH BELOW. 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 with respect to 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 will not be counted as votes cast. In addition, shares held in
street name which have been designated by brokers on proxy cards as not voted
("broker no votes") will not be counted as votes cast. Proxies marked as
abstentions or as broker no votes, however, will be treated as shares present
for purposes of determining whether a quorum is present.
Stockholders who execute the form of proxy enclosed herewith retain the
right to revoke such proxies at any time prior to exercise. Unless so revoked,
the shares represented by properly executed proxies will be voted at the Annual
Meeting and all adjournments thereof. Proxies may be revoked at any time prior
to exercise by written notice to the Secretary of the Company or by the filing
of a properly executed, later-dated proxy. A proxy will not be voted if a
stockholder attends the Annual Meeting and votes in person. The presence of a
stockholder at the Annual Meeting alone will not revoke such stockholder's
proxy.
1
<PAGE> 5
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The securities which can be voted at the Annual Meeting consist of shares
of the Company's common stock, $.01 par value per share ("Common Stock").
Stockholders of record as of the close of business on April 21, 1997 (the
"Record Date") are entitled to one vote for each share of Common Stock then
held on all matters. As of the Record Date, 889,824 shares of the Common Stock
were issued and outstanding. The presence, in person or by proxy, of at least
a majority 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
The following table sets forth, as of the Record Date, certain information
as to the persons believed by management to be the beneficial owners of more
than 5% of the outstanding shares of Common Stock and as to the shares of
Common Stock beneficially owned by all executive officers and directors of the
Company as a group. Persons and groups owning in excess of 5% of Common Stock
are required to file certain reports regarding such ownership with the Company
and the Securities and Exchange Commission ("SEC") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). This information is
based on the most recent reports filed by such persons or information provided
to the Company by such persons.
<TABLE>
<CAPTION>
Percent of Shares
Name and Address of Amount and Nature of of Common Stock
Beneficial Owners Beneficial Ownership(1) Outstanding
--------------------------- ----------------------- -----------------
<S> <C> <C>
All Executive Officers and 92,341 (2) 0.1%
Directors as a Group
(11 persons)
Heartland Advisors, Inc. 74,951 (3) 8.4%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Jeffrey L. Gendell 88,000 (4) 9.9%
Tontine Partners, L.P.
31 West 52nd Street
New York, New York 10019
</TABLE>
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is
considered to "beneficially own" any shares of Common Stock (a) over which
he has or shares voting or investment power, or (b) of which he has the
right to acquire beneficial ownership at any time within 60 days of the
Record Date. As used herein, "voting power" is the power to vote or
direct the vote of shares, and "investment power" is the power to dispose
or direct the disposition of shares.
(2) Includes shares owned directly by directors and officers of the Company
as well as shares held by their spouses and minor children and trusts of
which certain directors are trustees, but does not include shares held or
beneficially owned by other relatives as to which they disclaim beneficial
ownership. Also includes shares of Common Stock underlying options granted
under the Pinnacle Bancshares, Inc. 1996 Stock Option and Incentive Plan
(the "Option Plan") which are exercisable within 60 days of the Record
Date.
(3) Heartland Advisors, Inc., a registered investment advisor, reported sole
dispositive power of 74,951 shares and sole voting power of 71,451 shares
as of December 31, 1996.
(4) Mr. Gendell serves as the Managing Member of Tontine Management, L.L.C.
which is the general partner of Tontine Partners, L.P., a Delaware limited
partnership ("Tontine"). Mr. Gendell reported sole voting and dispositive
power of 3,000 shares and shared voting and dispositive power with Tontine
of 85,000 shares as of January 7, 1997.
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<PAGE> 6
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than 10% stockholders
are required to furnish the Company with copies of all such reports. Based
solely on its review of copies of such reports received by it, or written
representations from certain reporting persons that no annual report of change
in beneficial ownership is required, the Company believes that, during the
period ended December 31, 1996, all such filing requirements were complied
with.
PROPOSAL I -- ELECTION OF DIRECTORS
The Company's Certificate of Incorporation requires that directors be
divided into three classes, as nearly equal in number as possible, the members
of each class to serve for a term of three years and until their successors are
elected and qualified. As a result of the death of John D. Baird and the
resignation of Carlton Mayhall, Jr. effective April 22, 1997, the Board of
Directors currently consists of nine members. The Board of Directors has
nominated James W. Cannon, Robert B. Nolen, Jr. and Max W. Perdue to serve for
three-year terms or until their successors are elected and qualified. Delaware
law provides that directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy and entitled to vote on the
election of directors.
It is intended that the persons named in the proxies solicited by the
Board of Directors will vote for the election of the named nominees.
Stockholders are not entitled to cumulate their votes for the election of
directors. If any nominee is unable to serve, the shares represented by all
valid proxies will be voted for the election of such substitute director as the
Board of Directors may recommend or the Board of Directors may reduce the
number of directors to eliminate the vacancy.
The following table sets forth for each nominee and for each director
continuing in office, such person's name, age, the year he first became a
director and the number of shares and percentage of Common Stock beneficially
owned.
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<PAGE> 7
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES NAMED BELOW AS
DIRECTORS OF THE COMPANY.
<TABLE>
<CAPTION>
PRESENT SHARES OF
YEAR FIRST TERM COMMON STOCK PERCENT
ELECTED TO BENEFICIALLY OF
NAME AGE(1) DIRECTOR (2) EXPIRE OWNED (3) CLASS
---- ------ ------------ ------- ------------ -------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2000
<S> <C> <C> <C> <C> <C>
James W. Cannon 53 1990 1997 10,249 1.2%
Robert B. Nolen, Jr. 38 1994 1997 4,168 *
Max W. Perdue 63 1991 1997 5,028 *
<CAPTION>
DIRECTORS CONTINUING IN OFFICE
<S> <C> <C> <C> <C> <C>
Greg Batchelor 41 1983 1998 5,510 *
Melvin R. Kacharos 70 1989 1998 4,650 *
O. H. Brown 52 1989 1999 5,100 *
Sam W. Murphy 49 1981 1999 11,930 1.3%
Al H. Simmons 49 1979 1999 42,856 4.8%
J. T. Waggoner 59 1996 1999 850 *
</TABLE>
- -------------------
* Less than 1% of shares outstanding.
(1) At December 31, 1996.
(2) Includes term of office as director of Pinnacle Bank (the "Bank") prior
to formation of the Company as the holding company for the Bank in January
1997. Each director of the Company is also a director of the Bank.
(3) At the Record Date. In accordance with Rule 13d-3 under the Exchange
Act, a person is considered to "beneficially own" any shares of Common
Stock (a) over which he has or shares voting or investment power, or (b)
as to which he has the right to acquire beneficial ownership at any time
within 60 days of the Record Date. As used herein, "voting power" is the
power to vote or direct the vote of shares, and "investment power" is the
power to dispose or direct the disposition of shares. Includes shares
owned directly by the named individuals as well as shares held by their
spouses and minor children and trusts of which certain of such persons are
trustees, but does not include shares held or beneficially owned by other
relatives as to which they disclaim beneficial ownership. Also includes
shares of Common Stock underlying options granted under the Option Plan
which are exercisable within 60 days of the Record Date. See "Voting
Securities and Principal Holders Thereof."
4
<PAGE> 8
Listed below is certain information about the principal occupations of the
Board nominees and the other directors of the Company. Unless otherwise noted,
all such persons have held these positions for at least five years.
JAMES W. CANNON is Senior Vice President - Operations of Burton
Manufacturing Company, a manufacturer of golf bags headquartered in Jasper,
Alabama.
ROBERT B. NOLEN, JR. joined the Company in 1987 as First Vice President,
Chief Financial Officer and Treasurer. In 1990, Mr. Nolen was appointed
Executive Vice President of the Company, and in 1994, Mr. Nolen was appointed
President and Chief Executive Officer of the Company.
MAX W. PERDUE retired in 1991 as Jasper, Alabama District Manager of the
Alabama Power Company, having served with the company for thirty years in
various engineering and management positions. Mr. Perdue is past-president of
the Jasper Area Chamber of Commerce and resides in Jasper, Alabama.
GREG BATCHELOR has been President of Dependable True Value Hardware, Inc.
in Russellville, Alabama since 1992. Prior to that, he was Manager.
MELVIN R. KACHAROS was Executive Vice President of Vulcan Asphalt, Inc.,
Cordova, Alabama, from which position he retired in 1988. Mr. Kacharos is a
Lieutenant Colonel, Retired, of the U.S. Army Reserve and resides in Cordova,
Alabama.
O. H. BROWN, is a certified public accountant, presently with the
accounting firm of Lapidus, Tuck, Raymond & Fowler, P.C., Jasper, Alabama.
From 1976 to June 1991, Mr. Brown had his own accounting practice, also in
Jasper, Alabama.
SAM W. MURPHY is Chairman of the Board, Chief Executive Officer and Sales
Manager of Murphy Furniture Manufacturing Co., Inc., a furniture manufacturer
located in Jasper, Alabama.
AL H. SIMMONS joined the Company in 1973 and served as President of the
Company from 1979 until 1994. In October 1989, Mr. Simmons was elected
Chairman of the Board of Directors. Mr. Simmons is the son of Chairman of the
Board Emeritus A. R. Simmons. Mr. Simmons is self-employed in Birmingham,
Alabama.
J. T. WAGGONER is Vice President, Community and Public Affairs,
HealthSouth Corporation, Birmingham, Alabama. He also serves as an Alabama
State Senator.
OTHER EXECUTIVE OFFICER
MARY JO GUNTER, age 43, is Vice President of the Company and Senior Vice
President -- Banking Services of the Bank. Ms. Gunter joined the Bank in 1974
and has served in various lending related positions within the Bank. She is
responsible for branch operations, personnel, loan servicing and other customer
service areas.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held two meetings during the
six-month period ended December 31, 1996. The members of the Company's Board
of Directors are also members of the Bank's Board of Directors, which held six
meetings during the six-month period ended December 31, 1996. All incumbent
directors attended 75% or more of the total number of Board meetings held
during the six-month period ended December 31, 1996 and the total number of
meetings held by committees on which such directors served during such period.
The Board of Directors of the Company serves as a nominating committee for
selecting the management nominees for election as directors. While the Board
of Directors will consider nominees recommended by stockholders, it has not
actively solicited recommendations from stockholders for nominees, nor has it
established
5
<PAGE> 9
any procedures for this purpose. Subsequent to December 31, 1996 the Board of
Directors held one meeting in its capacity as a nominating committee to
nominate the individuals named herein for election as directors at the Annual
Meeting.
There are no standing committees of the Board of Director of the Company.
The Board of Directors of the Bank carries out many of its duties through
committees.
The Executive Committee, currently composed of directors Perdue, Kacharos,
Murphy, Brown, Simmons and Nolen, meets when deemed necessary by the President
of the Bank to discuss and approve any business coming before the Board between
monthly Board meetings. During the six-month period ended December 31, 1996
the Executive Committee held six meetings.
The Audit Committee, composed of directors Kacharos, Murphy and Brown, is
responsible for the review and evaluation of the Bank's annual audit reports
with the Bank's independent auditors and reports all findings and
recommendations to the Board of Directors. The audit committee also directs
the activities of the Bank's internal auditor. During the six-month period
ended December 31, 1996, the Audit Committee held two meetings.
The Compensation Committee, currently composed of directors Perdue, Cannon
and Murphy, meets annually or at the direction of the Company's President to
review and adjust employee salaries. During the six months ended December 31,
1996, the Compensation Committee held two meetings.
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation for the
six-month period ended December 31, 1996 and the fiscal years ended June 30,
1996, 1995 and 1994 awarded to or earned by the Chief Executive Officer. No
other executive officer earned in excess of $100,000 in salary and bonus.
Salary amounts reported for the period ended December 31, 1996, represent only
a six-month period and have not been adjusted or annualized for comparative
purposes.
SUMMARY COMPENSATION TABLE
<TABLE>
Long-Term Compensation
-----------------------------------------
Annual Compensation Awards Payouts
------------------------------------- ------------------------ ---------------
Restricted Securities All Other
Name and Other Annual Stock Underlying LTIP Compen-
Principal Position Year Salary Bonus Compensation(1) Award(s) Options Payouts sation(2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert B. Nolen, Jr 1996(3) $50,000 $ -- -- -- 10,000(4) -- $1,874
President, Chief 1996 80,696 25,000 -- -- -- -- 2,424
Executive Officer of 1995 72,782 22,000 -- -- -- -- 1,929
the Company and the 1994 72,782 10,000 -- -- -- -- 2,069
Bank
</TABLE>
- ---------------
(1) Executive officers of the Company receive indirect compensation in the
form of certain perquisites and other personal benefits. The amount of
such benefits in the fiscal year by the named executive officer did not
exceed 10% of the executive's annual salary and bonus.
(2) Represents contributions under the Company's 401(k) plan.
(3) Represents six-month period ended December 31, 1996.
(4) Represents options granted under the Option Plan.
DIRECTORS' COMPENSATION
The members of the Board of Directors of the Company currently do not
receive fees in their capacity as such.
Directors of the Bank currently each receive a monthly fee of $600.
Members of the Executive Committee also receive a fee of $200 per month. In
addition, directors receive a fee of $200 for each Executive Committee
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<PAGE> 10
attended, $200 for each Building Committee meeting attended and $100 for each
other committee meeting attended. Directors emeritus of the Bank receive $200
for each Board meeting attended. Officers of the Bank do not receive fees for
committee or advisory board meetings attended.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------
Number of Percent of
Securities Total Options
Underlying Granted To Exercise
Options Granted Employees in Base Price Expiration
(Number of Shares) Fiscal Year ($per Share) Date
------------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
Robert B. Nolen, Jr 10,000(1) 100.0% $17.625 08/28/06
</TABLE>
- -------------------------
(1) Options vest as follows: 3,334 shares on January 29, 1997 and 3,333
shares upon completion of each of the two years subsequent to August 28,
1996.
YEAR END OPTION VALUES
To date, no options have been exercised under the Option Plan. The
following table sets forth information concerning the value of options held by
the named executive officer at December 31, 1996.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year Ended Fiscal Year End (1)
---------------------------- -----------------------
Exercisable/Unexercisable Exercisable/
Name (Number of Shares) Unexercisable
- ---- ---------------------------- -----------------------
<S> <C> <C>
Robert B. Nolen, Jr. 3,334/6,666 $0/$0
</TABLE>
(1) Difference between fair market value of underlying Common Stock at
December 31, 1996 ($17.375 per share, based on the closing sales price)
and the exercise price ($17.625 per share). Options are in-the-money if
the fair market value of the underlying securities exceeds the exercise
price of the option.
EMPLOYMENT AGREEMENT
In 1991, the Bank entered into an employment agreement with Robert B.
Nolen, Jr. The agreement, as subsequently amended in 1993, provided for Mr.
Nolen to serve as Executive Vice President of the Bank for a term of three
years ending in 1996 and receive a base salary of $72,782 per annum, subject to
annual adjustments. Effective July 1, 1994, the agreement was amended to
provide for Mr. Nolen to serve as President and Chief Executive Officer of the
Bank and receive a base salary of $72,782 per annum, subject to annual
adjustments. The agreement provides for a salary review by the Board of
Directors not less often than annually, as well as for an extension for an
additional one-year period beyond the then effective expiration date. The
agreement provides for a severance payment in the event employment is
terminated following a "change in control," as defined in the agreement. These
payments would be equal to the amount of 2.99 times the average annual
compensation to Mr. Nolen during the five years immediately prior to the change
of control. Based on Mr. Nolen's annual compensation as of December 31, 1996,
if the severance payment provisions discussed above were to be effective, it
would result in a payment to Mr. Nolen of up to $295,800. The agreement also
provides for the inclusion of Mr. Nolen in any present or future employee
benefit plans or programs of the Bank for which executives are or will become
eligible, customary fringe benefits, vacation and sick leave.
7
<PAGE> 11
In connection with the recently completed holding company reorganization,
the Company and the Bank have agreed to enter into a new employment agreement
with Mr. Nolen to serve as President and Chief Executive Officer of the Company
and the Bank. It is expected that such agreement generally will provide for a
three-year term and may be extended for an additional year beyond the then
effective expiration date so that the remaining term would continue to be three
years. In addition, the employment agreement will provide for, among other
things, a base salary approximating Mr. Nolen's current salary, a discretionary
cash bonus, participation in employee benefit plans, death benefits and a
severance payment (subject to the limits under his current agreement) to be
paid upon a change in control of the Company or the Bank.
CERTAIN TRANSACTIONS
The Bank makes available loans to directors, officers and other employees,
including mortgage loans for the purchase or refinancing of their residences.
It is the belief of management that these loans neither involve more than
normal risk of collectability nor present other unfavorable features. Such
loans have been made in the ordinary course of business on substantially the
same terms, including interest rates, collateral and repayment terms, as those
prevailing for comparable transactions with non-affiliated persons. Management
believes that all loans made by the Bank to directors, officers and other
employees were in compliance with federal regulations in effect at the time the
loans were made.
The Bank's former main office building is owned by the Bank and is
situated on land leased from entities associated with the Simmons family and of
which Chairman Emeritus A. R. Simmons is a partner or trustee. Under the terms
of the lease for this office, a monthly payment of $1,050 is made for the
grounds and 36 parking spaces. The lease was renewed in December 1996 for five
years with an option to renew for three additional terms of five years. The
Bank has been granted a right of first refusal to purchase the land. The
Jasper Mall Branch building is also owned by the Bank and is situated on land
leased from an entity associated with the Simmons family. The lease for the
land on which the Jasper Mall Branch is located currently provides annual
rental of $20,304 to the entity associated with the Simmons family. The lease
runs through 2017.
The Bank leases its Haleyville Branch Office facilities from Cecil
Batchelor, the father of director Greg Batchelor. The lease currently
provides for an annual rental of $24,645.
In 1986, the Company entered into an employment agreement with Al H.
Simmons. The agreement, as subsequently amended, provided for Mr. Simmons to
serve as President and Chief Executive Officer of the Company for a term of
three years ending in 1996 and receive a base salary of $109,080 per annum,
subject to annual adjustments. In May 1994, the Company and Mr. Simmons
entered into a termination agreement whereby the parties agreed to terminate
Mr. Simmons' employment agreement and to provide for a lump sum payment to Mr.
Simmons of certain severance benefits in satisfaction of Mr. Simmons' rights
under the employment agreement. In connection therewith, Mr. Simmons agreed to
resign as President and Chief Executive Officer of the Company effective July
1, 1994, and the Company agreed to pay to Mr. Simmons a benefit having a
present value equal to $362,447. Such benefit is being paid in 60 payments of
$7,000 per month that began in July 1994. In the event of a "change of
control," as defined in the agreement, Mr. Simmons may direct the Company to
contribute to an irrevocable trust assets having a present value equal to the
total amount payable to Mr. Simmons during the remaining term of the agreement.
Under such circumstances, payments due Mr. Simmons under the agreement would
be made from the trust; provided, however, that if the assets of the trust are
insufficient to satisfy the Company's obligations under the agreement, the
Company would remain obligated to make such payments directly to Mr. Simmons.
8
<PAGE> 12
INDEPENDENT AUDITORS
Arthur Andersen LLP served as the Company's independent auditors for the
six-month period ended December 31, 1996. The Board of Directors has appointed
Arthur Andersen LLP to serve as the Company's independent auditors for the
fiscal year ending December 31, 1997. A representative of Arthur Andersen LLP
is expected to be present at the Annual Meeting to respond to appropriate
questions and will have the opportunity to make a statement if he so desires.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this Proxy Statement
and matters incident to the conduct of the Annual Meeting. Properly executed
proxies in the accompanying form that have not been revoked confer
discretionary authority on the persons named therein to vote at the direction
of a majority of the Board of Directors on any other matters presented at the
Annual Meeting.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to the beneficial owners of Common Stock. In addition to solicitations by
mail, directors, officers and regular employees of the Company and the Bank may
solicit proxies personally, by telegraph or telephone without additional
compensation. Corporate Communications, Inc. has been retained to assist in
the management of the Company's investor relations and other stockholder
communications issues for a fee of approximately $500 per month plus
reimbursement of out-of-pocket expenses. As part of its duties, Corporate
Communications, Inc. may assist in the solicitation of proxies.
The Annual Report to Stockholders for the six months ended December 31,
1996, 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 part of
the proxy solicitation material nor as having been incorporated herein by
reference.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the proxy statement and proxy
relating to the 1998 annual meeting of stockholders of the Company, which will
be held on or May 27, 1998, any stockholder proposal to take action at such
meeting must be received by the Secretary of the Company at 1811 Second Avenue,
P.O. Box 1388, Jasper, Alabama no later than January 7, 1998. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to the 1998 annual meeting any stockholder
proposal which does not meet all of the requirements for inclusion established
by the SEC or the Company's Certificate of Incorporation or Bylaws in effect at
the time such proposal is received.
9
<PAGE> 13
ANNUAL REPORT ON FORM 10-KSB
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE SIX-MONTH PERIOD
ENDED DECEMBER 31, 1996, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT
CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE
SECRETARY, PINNACLE BANCSHARES, INC., 1811 SECOND AVENUE, P.O. BOX 1388,
JASPER, ALABAMA 35502-1388.
BY ORDER OF THE BOARD OF DIRECTORS
THOMAS L. SHERER
SECRETARY
Jasper, Alabama
April 30, 1997
10
<PAGE> 14
APPENDIX A
REVOCABLE PROXY
PINNACLE BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 28, 1997
The undersigned stockholder of Pinnacle Bancshares, Inc. (the "Company")
hereby appoints O. H. Brown and Sam W. Murphy, or either of them, with full
powers of substitution, as attorneys and proxies for the undersigned, to vote
all shares of Common Stock of the Company which the undersigned is entitled to
vote at the Annual Meeting of Stockholders, to be held at The Chamber of
Commerce of Walker County Auditorium, Jasper, Alabama on Wednesday, May 28,
1997 at 11:00 a.m., local time, and at any and all adjournments thereof, as
indicated below and as determined by a majority of the Board of Directors with
respect to such other matters as may come before the Annual Meeting.
<TABLE>
<CAPTION>
VOTE
FOR WITHHELD
--- --------
<S> <C> <C>
I. Election as directors of all nominees
listed below (except as marked to the / / / /
contrary).
James W. Cannon
Robert B. Nolen, Jr.
Max W. Perdue
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR
ANY NOMINEE(S), WRITE THAT NOMINEE'S
NAME ON THE LINE BELOW.
</TABLE>
II. Such other matters as may properly come before the Annual Meeting or any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSITIONS.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY AS DETERMINED BY 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.
<PAGE> 15
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned 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 undersigned hereby revokes any and all
proxies heretofore given with respect to shares of Common Stock of the Company
which the undersigned is entitled to vote at the Annual Meeting.
The undersigned stockholder acknowledges receipt from the Company, prior
to the execution of this proxy, of Notice of the Annual Meeting, a Proxy
Statement, and the Annual Report to Stockholders.
Dated: , 1997
-----------
---------------------------------- -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
---------------------------------- -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in which this card was
mailed. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held jointly, each holder
should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
