<PAGE>
<PAGE>
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
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
HCB BANCSHARES, INC.
- ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
________________________________________________________________
2. Aggregate number of securities to which transaction
applies:
________________________________________________________________
3. Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee is calculated and state
how it was determined):
________________________________________________________________
4. Proposed maximum aggregate value of transaction:
________________________________________________________________
5. Total fee paid:
________________________________________________________________
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1. Amount Previously Paid:
____________________________________________
2. Form, Schedule or Registration Statement No.:
____________________________________________
3. Filing Party:
____________________________________________
4. Date Filed:
____________________________________________
<PAGE>
<PAGE>
[LETTERHEAD]
April 9, 1999
Dear Stockholder:
We invite you to attend the annual meeting of stockholders
of HCB Bancshares, Inc. to be held at the Charles O. Ross Center
located at 746 California Avenue, Camden, Arkansas, on Thursday,
May 13, 1999 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/ Vida H. Lampkin
Vida H. Lampkin
Chairman of the Board, President
and Chief Executive Officer<PAGE>
<PAGE>
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 MAY 13, 1999
NOTICE IS HEREBY GIVEN that the annual meeting of
stockholders (the "Annual Meeting") of HCB Bancshares, Inc. (the
"Company") will be held at the Charles O. Ross Center located at
746 California Avenue, Camden, Arkansas, on Thursday, May 13,
1999 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;
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 pro-
posals 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 March 26, 1999 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. Bergstrom
PAULA J. BERGSTROM
SECRETARY
Camden, Arkansas
April 9, 1999
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.
<PAGE>
<PAGE>
PROXY STATEMENT
OF
HCB BANCSHARES, INC.
237 JACKSON STREET, S.W.
CAMDEN, ARKANSAS 71701-3941
ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1999
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 Charles O. Ross Center located at 746 California
Avenue, Camden, Arkansas, on Thursday, May 13, 1999 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 April 9, 1999.
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
March 26, 1999 (the "Record Date") are entitled to one vote for
each share then held. At the Record Date, the Company had
2,598,700 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.<PAGE>
<PAGE>
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 Exchange Act. The following table
sets forth, at March 26, 1999, 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.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
NAME AND ADDRESS BENEFICIAL COMMON STOCK
OF BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING
- ------------------- ------------ ------------
<S> <C> <C>
HCB Bancshares, Inc.
Employee Stock Ownership Plan ("ESOP")
237 Jackson Street, S.W.
Camden, Arkansas 71701-0878 169,280 (2) 6.5%
Friedman, Billings, Ramsey Group, Inc.
Eric F. Billings
Emanuel J. Friedman
W. Russell Ramsey
1001 19th Street North
Arlington, Virginia 22209-1710 170,700 (3) 6.6%
All directors and executive officers
as a group (8 persons) 251,534 (4) 9.2%
<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 42,320 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) In their Schedule 13G, as amended, the reporting persons reported sole
voting and dispositive power over the reported shares through the
following subsidiaries: Friedman, Billings, Ramsey Investment
Management, Inc. and Friedman Billings Ramsey & Co., Inc.
(4) Includes 111,096 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 40,155 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>
</TABLE>
2<PAGE>
<PAGE>
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 Vida H. Lampkin and Clifford Steelman to serve as
directors for a three-year period. All nominees currently are
members of the Board. 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. All individuals were initially appointed
as a director of the Company in 1996 in connection with the
Company's incorporation.
<TABLE>
<CAPTION>
SHARES OF
YEAR FIRST COMMON STOCK
ELECTED AS CURRENT BENEFICIALLY
AGE AT DIRECTOR OF TERM OWNED AT THE PERCENT
NAME MARCH 26, 1999 THE BANK TO EXPIRE RECORD DATE(1) OF CLASS
- ---- -------------- ------------ --------- -------------- ---------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
Vida H. Lampkin 60 1983 1998 60,606 2.3%
Clifford Steelman 57 1984 1998 34,258 1.3
DIRECTORS CONTINUING IN OFFICE
Cameron D. McKeel 60 1996 1999 40,554 1.5
Bruce D. Murry 60 1994 1999 15,180 *
Lula Sue Silliman 72 1962 1999 19,258 *
Carl E. Parker, Jr. 52 1981 2000 35,258 1.4
Roy Wayne Moseley 63 1990 2000 19,135 *
<FN>
___________
(1) Includes all shares as to which the beneficial owner had sole or shared
voting and/or investment power. Amounts shown include 25,392, 7,936,
23,806, 7,936, 7,936, 7,936 and 7,936 shares which may be acquired by
Directors Lampkin, Steelman, McKeel, Murry, Silliman, Parker and Moseley,
respectively, upon the exercise of options exercisable within 60 days of the
Record Date. Amounts shown include 6,612, 1,322, 5,290, 1,322, 1,322, 1,322
and 1,322 shares which will be acquired by Directors Lampkin, Steelman,
McKeel, Murry, Silliman, Parker and Moseley, respectively, upon the vesting
of awards under
3<PAGE>
<PAGE>
the Company's Management Recognition Plan within 60 days of the Record Date.
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.
* Amount beneficially owned is less than 1% of the outstanding Common Stock.
</FN>
</TABLE>
Set forth below is information regarding the Company's
directors. Unless otherwise stated, all directors have held the
positions indicated for at least the past five years.
VIDA H. LAMPKIN has served as Chairman of the Board,
President and Chief Executive Officer of the Company since
December 1996 and has been the Chairman of the Board, President
and Chief Executive Officer of the Bank since January 1990.
Mrs. Lampkin is currently a Board member of the Arkansas League
of Savings Institutions, a member of the Arkansas Community of
Excellence Committee for Camden, a member of the Joint Council
for Economic Development, a member of the Government Affairs
Council for America's Community Bankers, and was president of
the Camden Chamber of Commerce in 1996.
CLIFFORD 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 Vice President of the
Company since December 1996 and as Executive Vice President of
the Bank since May 1996. Mr. McKeel was named as Executive Vice
President of the Company in November 1997. 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 and is a member of the
Board of Deacons of First Assembly of God Church of Camden. Mr.
Murry is a current member and a past president of the Camden
Lions Club.
LULA SUE SILLIMAN served as partner and office manager of
the Silliman Insurance Agency, Inc. from 1949 until her
retirement in 1970.
CARL E. PARKER, JR. has been General Manager of Camden
Monument Co. from 1970 to the present. He is a member of the
Camden, Arkansas Rotary Club and Chamber of Commerce.
ROY WAYNE MOSELEY was the owner of Wayne's Greenhouse, a
wholesale flower production business, in Fordyce, Arkansas from
1960 until his retirement in 1998. Mr. Moseley serves as the
Fordyce, Arkansas Fire Chief.
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.
<TABLE>
<CAPTION>
AGE AT
MARCH 26,
NAME 1999 TITLE
---- --------- -----
<S> <C> <C>
William C. Lyon 58 Senior Vice President of the
Company; Senior Vice President
and Chief Lending Officer of
the Bank
</TABLE>
4
<PAGE>
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 Co. in
Shawnee, Oklahoma. Mr. Lyon is President-elect of the Camden
Area Chamber of Commerce and serves on various Chamber of
Commerce committees.
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, 1998, the Company's Board met 14 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 Company's Board of Directors performs the functions of
an audit committee and met one time in this capacity with
respect to the fiscal 1998 audit and independent auditor's
report.
The Compensation Committee consists of the non-employee
directors, which for fiscal 1998 consisted of Messrs. Moseley,
Murry and Parker, Ms. Silliman and Mr. Steelman. This committee
reviews the performance of the officers of the Company and its
subsidiaries and met one time with respect to compensation for
fiscal 1998.
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
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash
compensation for each of the three fiscal years ended June 30,
1998 awarded to or earned by the Company's Chief Executive
Officer for services rendered in all capacities to the Company
and its subsidiaries.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-----------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
FISCAL ------------------- STOCK UNDERLYING ALL OTHER
NAME YEAR SALARY BONUS AWARDS(1) OPTIONS COMPENSATION
- ---- ------ ------ ----- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Vida H. Lampkin 1998 $94,500 $ -- $211,584 50,784 (2) $46,252 (3)
1997 90,000 -- -- -- 18,060
1996 76,000 905 -- -- 15,763
<FN>
________________
(1) Value shown in the table is 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. 3,306 shares of restricted Common Stock awarded
under the MRP are currently vested. An additional 9,918 shares will vest
over three years, with 3,306 vesting each year, As of June 30, 1998,
based on the closing sale price of the Common Stock of $10.25 as reported
on the Nasdaq National Market, the aggregate value of the 9,918 shares of
restricted Common Stock awarded to Ms. Lampkin was $101,660. In
addition, at June 30, 1998, the Company's MRP Trust held $165 in cash
representing accrued dividends for the benefit of Ms. Lampkin. 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.
(2) 12,696 of the shares underlying these stock options are immediately
exercisable. Over the next three years options to purchase 38,088 shares
will vest annually on May 1 of each year.
(3) For fiscal 1998, includes director fees ($12,000), life, health, dental
and disability insurance ($4,105) and the value of shares allocated
under the ESOP ($30,147); does not include indirect compensation in the
form of certain perquisites and other personal benefits which did not
exceed 10% of salary and bonus.
</FN>
</TABLE>
Option Grants in Last Fiscal Year. The following table
contains information concerning the grant of stock options under
the Company's Stock Option Plan to the Company's Chief Executive
Officer during fiscal 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN OR BASE EXPIRATION -----------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
- ---- ---------- ------------ ------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Vida H. Lampkin 50,784 25% $16.00 5/01/08 $510,887 $1,294,992
<FN>
_____________
(1) Mrs. Lampkin's option to purchase 50,784 shares, granted on May 1, 1998, is immediately
exercisable for 25% of the underlying shares and becomes exercisable for another 25% of the
shares over each of the next three years. To the extent not already exercisable, the options
generally become immediately exercisable in the event of a change in control of the Company.
</FN>
</TABLE>
6<PAGE>
<PAGE>
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 the Chief
Executive Officer. Mrs. Lampkin did not exercise any options
during fiscal year 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
------------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Vida H. Lampkin 12,696 38,088 $ -- $ --
<FN>
__________
(1) The closing sale price of the Common Stock on that date as reported on
the Nasdaq National Market ($10.25 per share) was below the exercise
price of the options of $16.00 per share.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
The Company and the Bank maintain separate employment
agreements (the "Employment Agreements") with Vida H. Lampkin,
President and Chief Executive Officer of the Bank and the
Company (the "Employee"). In such capacities, the Employee is
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 Employee in relation to
her career with the Company and the Bank by assuring her of some
financial security.
The Employment Agreements became effective on the date of
their execution and provide for terms of three years and an
annual base salary of $90,000. 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
such Employment Agreements should be extended. The Employment
Agreements provide the 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. The Employment Agreements will terminate upon the
Employee's death, may terminate upon the Employee's disability
and are 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) 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 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, her estate will be
entitled to receive her salary through the last day of the
calendar month in which the Employee's death occurred. The
Employee is able to voluntarily terminate 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 her compensation, vested
rights and benefits up to the date of termination.
7<PAGE>
<PAGE>
In the event of (i) a "change in control," or (ii) the
Employee's termination for a reason other than just cause during
the "protected period (as defined in the Employment
Agreements)," the Employee 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 her "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 her. The aggregate payments that would
be made to Mrs. Lampkin, assuming her termination of employment
under the foregoing circumstances at June 30, 1998, would have
been approximately $245,727. 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, she will be reimbursed
for her legal and other expenses.
DIRECTOR COMPENSATION
General. Directors receive fees of $1,000 per month.
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 1998, directors' fees totaled $84,000. 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, 1998, Directors Lampkin, McKeel,
Moseley, Murry, Parker, Silliman and Steelman received options
to purchase 50,784, 47,612, 15,872, 15,872, 15,872, 15,872 and
15,872 shares of Common Stock, respectively, at an exercise
price of $16.00 per share. Such options become exercisable at
the rate of 25% per year, with the first 25% having become
exercisable on May 1, 1998, the date of grant. In addition,
Directors Lampkin, McKeel, Moseley, Murry, Parker, Silliman and
Steelman received awards of 13,224, 10,580, 2,644, 2,644, 2,644,
2,644 and 2,644 shares, respectively, of restricted Common
Stock. Such awards vest at the rate of 25% annually, with the
first 25% having vested on May 1, 1998, the date of grant.
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
8<PAGE>
<PAGE>
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
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, 1998, the Bank's loans to directors and executive
officers totaled approximately $41,526.
COMPENSATION COMMITTEE REPORT ON EMPLOYEE COMPENSATION
The Compensation Committee of the Board of Directors
consists of the non-employee directors, which for fiscal 1998
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.
<PAGE>
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.
9<PAGE>
<PAGE>
For fiscal 1998, 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.
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.
Roy Wayne Moseley
Bruce D. Murry
Carl E. Parker, Jr.
Lula Sue Silliman
Clifford Steelman
10
<PAGE>
<PAGE>
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, 1998 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 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, 1998
[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 market. Line graph plots the
cumulative total return from May 1997 to June 1998. Plot points
are provided below.]
<TABLE>
<CAPTION>
5/7/97 6/30/97 6/30/98
------ ------- -------
<S> <C> <C> <C>
HCB Bancshares, Inc. 100 102 120.5
Savings Institutions 100 113 160.5
Nasdaq Stock Market 100 109.2 144.1
</TABLE>
11<PAGE>
<PAGE>
Effective February 2, 1999, the Company's Common Stock was
delisted and ceased trading on the Nasdaq National Market. The
last price of the Common Stock prior to delisting was $9.375 per
share.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the
Company's officers, directors and persons who own more than 10
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, 1998, all of the
Reporting Persons complied with these reporting requirements.
MISCELLANEOUS
The cost of soliciting 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 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.
Effective June 25, 1997, the Company, with the approval of
the Board of Directors, dismissed Gaunt & Co. and engaged
Miller, England & Company, Little Rock, Arkansas, as the
Company's independent certified public accountants. In
connection with their audits of the two most recent fiscal years
ended June 30, 1995 and 1996, Gaunt & Co.'s reports on the
financial statements of the Company did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting
principles. During the two most recent fiscal years and the
subsequent interim period preceding the dismissal, there were
not any disagreements between the Company and Gaunt & Co. on any
matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if
not resolved to the satisfaction of Gaunt & Co., would have
caused it to make reference to the subject matter of such
disagreement in connection with its report.
Effective June 18, 1998, the Company, with the approval of
the Board of Directors, dismissed Miller, England & Company,
Little Rock, Arkansas. In connection with their audit of the
most recent fiscal year ended June 30, 1997, and during the
subsequent interim period preceding the dismissal, there have
been no disagreements with Miller, England & Company on any
matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if
not resolved to the satisfaction of Miller, England & Company,
would have caused them to make reference to the subject of such
disagreement in connection with their reports. In addition,
there was no adverse opinion or disclaimer of opinion, or any
opinion qualified as to uncertainty, audit scope or accounting
principles, in connection with their audit of the most recent
fiscal year ended June 30, 1997, and during the subsequent
interim period preceding their dismissal.
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.
12<PAGE>
<PAGE>
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, 1999. 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.
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 17, 1999.
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
April 19, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Paula J. Bergstrom
PAULA J. BERGSTROM
SECRETARY
Camden, Arkansas
April 9, 1999
FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED JUNE 30, 1998 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<PAGE>
<PAGE>
PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE HCB BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
May 13, 1999
The undersigned hereby appoints Cameron D. McKeel and Bruce D. Murry, with
full powers of substitution, to act as proxies for the undersigned, to vote
all shares of common stock of HCB Bancshares, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Stockholders, to be
held at the Charles O. Ross Center located at 746 California Avenue, Camden,
Arkansas, on Thursday, May 13, 1999 at 10:00 a.m., local time, and at any and
all adjournments thereof, as follows:
FOR WITHHOLD EXCEPT
1. The election as directors of all
nominees listed (except as marked
to the contrary below): [ ] [ ] [ ]
VIDA H. LAMPKIN
CLIFFORD STEELMAN
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, MARK "EXCEPT" AND WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
____________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITION.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITION 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.
Please be sure to sign and date
this proxy in the box below Date
_____________________________________________________________
Stockholders sign above Co-holder (if any) sign above
- ------------------------- perforation -----------------------
________________________________________________________________
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE-PAID ENVELOPE ENCLOSED.
HCB BANCSHARES, INC.
________________________________________________________________
________________________________________________________________
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 April
9, 1999 and a 1998 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
________________________________________________________________
