SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement [ ]Confidential, for Use of the
[x]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material Under Rule 14a-12
NORTH ARKANSAS BANCSHARES, INC.
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(Name of Registrant as Specified in Its Charger)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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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>
NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112
October 27, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of North Arkansas Bancshares, Inc. to be held at Newport Federal
Savings Bank, 200 Olivia Drive, Newport, Arkansas on Wednesday, November 22,
2000 at 4:00 p.m., local time. Your Board of Directors and Management look
forward to personally greeting those stockholders able to attend.
The attached Notice of Annual Meeting 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. Directors and officers of the
Company will be present to respond to any questions the stockholders may have.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED 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. On behalf of your Board of Directors, thank you
for your interest and support.
Sincerely,
/s/ Brad Snider
Brad Snider
President
<PAGE>
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NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112
(870) 523-3611
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 22, 2000
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of North Arkansas Bancshares, Inc. (the "Company"), will be held at
Newport Federal Savings Bank, 200 Olivia Drive, Newport, Arkansas at 4:00 p.m.
on Wednesday, November 22, 2000.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The 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
Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on October 25, 2000, are the stockholders
entitled to notice of and to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of 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 Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Pamela Decker
PAMELA DECKER
SECRETARY
Newport, Arkansas
October 27, 2000
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. PLEASE ACT PROMPTLY.
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<PAGE>
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PROXY STATEMENT
OF
NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 22, 2000
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of North Arkansas Bancshares, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting") which will be held at Newport Federal Savings Bank, 200 Olivia Drive,
Newport, Arkansas on Wednesday, November 22, 2000, at 4:00 p.m., local time. The
accompanying Notice of Meeting and this Proxy Statement are being first mailed
to stockholders on or about October 27, 2000.
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VOTING AND REVOCABILITY OF PROXIES
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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 Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company, at the address shown above, by filing of
a later-dated proxy prior to a vote being taken on a particular proposal at the
Meeting or by attending the 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 DIRECTOR 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 matters incident to the conduct of the Meeting.
Proxies marked as abstentions, and shares held in street name which have been
designated by brokers on proxies as not voted, will not be counted as votes
cast. Proxies marked as abstentions or as broker non-votes will, however, be
treated as shares present for purposes of determining whether a quorum is
present.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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The securities entitled to notice of and to vote at the Meeting consist
of the Company's common stock, par value $.01 per share (the "Common Stock").
Stockholders of record as of the close of business on October 25, 2000 (the
"Record Date"), are entitled to one vote for each share of Common Stock then
held. As of the Record Date, there were 299,943 shares of 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 Meeting.
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") with the
Company and the Securities and Exchange Commission ("SEC"). Based on such
reports (and certain other written information received by the Company),
management knows of no persons other than those set forth below who owned more
than 5% of the outstanding shares of Common Stock as of the Record Date. The
following table sets forth, as of the Record Date, certain information as to
those persons who were the beneficial owners of more than five percent (5%) of
the Company's outstanding shares of Common Stock and the shares of Common Stock
beneficially owned by all executive officers and directors of the Company as a
group.
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OUTSTANDING
------------------- ----------------------- -----------------
<S> <C> <C> <C>
North Arkansas Bancshares, Inc. 29,624 (2) 9.88%
Employee Stock Ownership Plan
200 Olivia Drive
Newport, Arkansas 72112
Jeffrey L. Gendell 29,029 9.68%
Tontine Management, L.L.C.
Tontine Financial Partner, L.P.
Tontine Overseas Associates, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166
All Executive Officers and Directors 58,464 (3) 18.25%
as a Group (5 persons)
<FN>
_________
(1) For purposes of this table, a person is deemed to be the beneficial
owner of any shares of Common Stock if he or she has or shares voting
or investment power with respect to such Common Stock or has a right to
acquire beneficial ownership at any time within 60 days from the Record
Date. As used herein, "voting power" is the power to vote or direct the
voting of shares and "investment power" is the power to dispose or
direct the disposition of shares. Except as otherwise noted, ownership
is direct, and the named persons exercise sole voting and investment
power over the shares of the Common Stock.
(2) These shares are held in a suspense account for future allocation among
participating employees as the loan used to purchase the shares is
repaid. The trustees of the North Arkansas Bancshares, Inc. Employee
Stock Ownership Plan (the "ESOP"), currently Directors Minor, Guinn and
Hodges, vote all allocated shares in accordance with instructions of
the participants. Unallocated shares and shares for which no
instructions have been received generally are voted by the ESOP
trustees 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. As of the Record Date, 5,924 shares
had been allocated.
(3) Includes 1,729 shares which have been allocated to the accounts of
executive officers under the ESOP, 20,442 shares underlying currently
exercisable stock options granted to directors and officers under the
Company's 1998 Stock Option and Incentive Plan (the "Option Plan").
Does not include 1,028 shares with respect to which Directors Minor,
Guinn and Hodges may be deemed to have voting power by virtue of their
positions as trustees of a trust formed to hold assets of the MRP. Does
not include 23,700 unallocated shares held by the ESOP.
</FN>
</TABLE>
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is composed of five members. The
Company's Charter requires that directors be divided into three classes, as
nearly equal in number as possible, each class to serve for a three year period,
with approximately one-third of the directors elected each year. The Board of
Directors has nominated John Minor and Brad Snider to serve as directors for a
three-year period.
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.
Under the Company's Bylaws, directors shall be elected by a plurality
of the votes of the shares present in person or by proxy at the Meeting. Votes
which are not cast at the Meeting, either because of abstentions or broker
non-votes, are not considered in determining the number of votes which have been
cast for or against the election of
2
<PAGE>
a nominee. Unless otherwise specified on the proxy, it is intended that the
persons named in the proxies solicited by the Board will vote for the election
of the named nominees.
The following table sets forth the name of the Board's nominees for
election as directors of the Company and of those directors who will continue to
serve as such after the Meeting. Also set forth is certain other information
with respect to each person's age, the year he first became a director of the
Company's wholly owned subsidiary, Newport Federal Savings Bank (the "Bank" or
"Newport Federal"), the expiration of his term as a director, and the number and
percentage of shares of the Common Stock beneficially owned. All of the
individuals were initially appointed as director of the Company in 1997 in
connection with the Company's incorporation, except Mr. McMinn who was appointed
in September 1998 to fill the vacancy caused by the death of Paul K. Holmes.
<TABLE>
<CAPTION>
SHARES OF
YEAR FIRST COMMON STOCK
ELECTED AS BENEFICIALLY
AGE AT THE DIRECTOR CURRENT TERM OWNED AT THE PERCENT OF
NAME RECORD DATE OF THE BANK TO EXPIRE RECORD DATE (1) CLASS
---- ----------- ----------- --------- --------------- -----
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2003
<S> <C> <C> <C> <C> <C>
John Minor 66 1971 2000 13,660 (2) 4.51%
Brad Snider 40 1991 2000 14,902 (3) 4.79%
DIRECTORS CONTINUING IN OFFICE
J. C. McMinn 65 1998 2001 1,000 0.33%
O. E. Guinn, Jr. 71 1971 2002 15,661 (4) 5.17%
Kaneaster Hodges, Jr. 61 1979 2002 13,241 (5) 4.37%
<FN>
_____________
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; stock allocated through certain employee benefit plans of the
Company; stock in which the individual either has or shares voting and/or
investment power and shares which the individual has the right to acquire
at any time within 60 days of the Record Date. Each person or relative of
such person whose shares are included herein exercises sole or shared
voting and dispositive power as to the shares reported. Does not include
shares with respect to which Directors Minor, Guinn and Hodges have "voting
power" by virtue of their positions as trustees of the trust holding 29,624
shares under the Company's ESOP. The ESOP trustees must vote all allocated
shares held in the ESOP in accordance with the instructions of the
participants. Unallocated shares and allocated shares for which no timely
direction is received are voted by the ESOP trustees in proportion to the
participant-directed voting of allocated shares. Does not include shares
with respect to which Directors Minor, Guinn, Hodges have "voting power" by
virtue of their positions as trustees of the trust holding 1,028 shares
under the Company's MRP.
(2) Includes 4,603 shares held in IRA and 4,600 shares held by spouse's IRA.
Also includes 3,111 shares that may be purchased pursuant to the exercise
of options.
(3) Includes 11,109 shares underlying currently exercisable stock options
granted under the Option Plan, 1,729 shares allocated to Mr. Snider's
account under the ESOP, and 330 shares held by spouse.
(4) Includes 500 shares held by spouse, 4,204 shares held in an IRA account and
4,500 shares held by spouse's IRA account. Also includes 3,111 shares that
may be purchased pursuant to the exercise of options. Mr. Guinn's business
address is 200 Olivia Drive, Newport, Arkansas 72112.
(5) Includes 5,000 shares held by spouse and 2,000 shares held in a trust. Also
includes 3,111 shares that may be purchased pursuant to the exercise of
options.
</FN>
</TABLE>
3
<PAGE>
The principal occupation of each director of the Company for the last five
years is set forth below.
JOHN MINOR is an insurance and real estate salesman in Newport. He is Past
President of the Arkansas Professional Insurance Agents' League, Past President
of the Lions Club, the Newport Booster Club and the Jackson County Wildlife
Federation. He is a former member of the Newport School Board.
BRAD SNIDER has served as President and Chief Executive Officer and
Director since 1991. He has served as President of the Newport Area Chamber of
Commerce and serves on the boards of the United Way of Jackson County, the
Arkansas League of Savings, the Newport Industrial Development Association and
the Arkansas State University/Newport Foundation. He is also a Commissioner of
the Newport Housing Authority of the City of Newport and is a member of the
Rotary Club.
J. C. MCMINN has served as Manager of Eldridge Supply Company, a farm
implement supply company based in Newport since 1987. He is a member of the
Newport Kiwanis Club. He served on the Newport Civil Service Commission, the
City Beautiful Commission, the American Legion Baseball Committee and the
Chamber of Commerce Agricultural Committee.
O. E. GUINN, JR. has been retired since 1994. Prior to his retirement, he
was self-employed as an insurance salesman specializing in fire and casualty
insurance. He is a member of the Chamber of Commerce and the Newport Lions Club.
KANEASTER HODGES, JR. is an attorney in private practice in Newport. He is
also involved in farming and real estate investments and operates a
Newport-based energy conservation firm, PSE, LLC. He is a member of the Newport
Relief Society, the Newport Levee District and the Walton Family Charitable
Support Foundation. He also serves on the White River Basin Study Commission and
the Arkansas State University-Beebe Charitable Foundation, Inc.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
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The Board of Directors conducts its business through meetings of the board
and through activities of its committees. During the year ended June 30, 2000,
the board of directors held 12 regular meetings and one special meetings. No
director attended fewer than 75% of the total meetings of the board of directors
and committees on which such director served during the year ended June 30,
2000.
The Company's Nominating Committee consists of the entire Board of
Directors. The Board met one time in this capacity during fiscal year 2000.
The full Board functions as an Audit Committee, in conjunction with
regularly scheduled Board meetings.
The Investment Committee consists of Directors Snider, Hodges and Guinn. In
addition to addressing investment issues on regular Board meetings, the
Committee meets as needed for analysis and decision making.
4
<PAGE>
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EXECUTIVE COMPENSATION
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SUMMARY COMPENSATION TABLE. The following table sets forth the cash and
non-cash compensation awarded to or earned by the Chief Executive Officer of the
Company and the Bank. No other employee earned in excess of $100,000 for the
year ended June 30, 2000.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS
-------------------------------------- --------------------------
RESTRICTED SECURITIES
FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME YEAR SALARY BONUS COMPENSATION(1) AWARD(S)(2) OPTIONS COMPENSATION
---- ---- ------ ----- --------------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brad Snider 2000 $ 75,245 $ $ 10,500 $ -- $ -- $4,085 (3)
1999 75,245 -- 10,500 18,057 (2) 11,109 4,085
1998 75,245 -- 10,500 -- -- 4,085
<FN>
-----------
(1) Consists of director fees.
(2) As of June 30, 2000, Mr. Snider held 617 shares of restricted stock which,
based on the closing price of the Common Stock of $7.50 at June 30, 2000,
had a value of $4,628. Shares of restricted stock awarded during fiscal
year 1999 will fully vest upon the completion of two years from the date of
award. (3) Consists of premiums paid on behalf of Mr. Snider for
split-dollar life insurance ($2,465) and disability insurance ($1,620).
</FN>
</TABLE>
YEAR-END OPTION 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 of the Company and the Bank.
Mr. Snider did not exercise any options during fiscal 2000.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
---------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Brad Snider 11,109 -- $ -- $ --
<FN>
-----------
(1) The exercise price of the options ($9.25 per share) exceeded the market
value of the Common Stock at June 30, 2000.
</FN>
</TABLE>
PENSION PLAN TABLE. The following table indicates the annual retirement
benefit that would be payable under the plan upon retirement at age 65 to a
participant electing to receive his retirement benefit in the standard form of
benefit, assuming various specified levels of plan compensation and various
specified years of credited service. Mr. Snider's credited years of service
under the plan are 8.5 years.
<TABLE>
<CAPTION>
YEARS OF SERVICE
CAREER AVERAGE --------------------------------------------------------------
COMPENSATION 15 20 25 30 35
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 20,000 $ 4,500 $ 6,000 $ 7,500 $ 9,000 $ 10,500
40,000 9,000 12,000 15,000 18,000 21,000
60,000 13,500 18,000 22,500 27,000 31,500
80,000 18,000 24,000 30,000 36,000 42,000
100,000 22,500 30,000 27,500 45,000 52,500
</TABLE>
5
<PAGE>
EMPLOYMENT AGREEMENT. The Bank has entered into an employment agreement
with President, Brad Snider. Mr. Snider's current base salary under the
employment agreement is $72,245. The employment agreement has a term of three
years. The agreement was amended in September 2000 to extend the term for an
additional three years. The agreement is terminable by the Bank for "just cause"
as defined in the agreement. If the Bank terminate Mr. Snider without just cause
or if Mr. Snider terminates his employment for "good reason", Mr. Snider will be
entitled to a continuation of his salary from the date of termination through
the remaining term of the agreement, plus an additional 12 months. The
employment agreement also contains a provision stating that in the event of the
termination of employment in connection with any change in control of the
Company or the Bank, Mr. Snider will be paid a lump sum amount equal to 2.99
times his five year average annual taxable cash compensation. If such payments
had been made under the agreement as of June 30, 2000, such payments would have
equaled approximately $219,000. The aggregate payments that would have been made
to Mr. Snider would be an expense to the Bank, thereby reducing the Bank's net
income and the Bank's capital by that amount. The agreement may be renewed
annually by the board of directors upon a determination of satisfactory
performance within the board's sole discretion. If Mr. Snider shall become
disabled during the term of the agreement, he shall continue to receive payment
of 100% of the base salary for a period of up to 180 days. Such payments shall
not be reduced by any other benefit payments made under other disability program
in effect for employees. If Mr. Snider's employment terminates for a reason
other than just cause, he will be entitled to purchase from the Bank family
medical insurance through any group health plan maintained by the Bank.
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DIRECTORS' COMPENSATION
--------------------------------------------------------------------------------
Each of the directors is paid an annual fee of $10,500. Total aggregate
fees paid to the directors for the year ended June 30, 2000 were $52,500.
DIRECTOR RETIREMENT PLAN. The Bank adopted the Newport Federal Savings
Bank Retirement Plan for Directors, effective May 29, 1997. On the effective
date, the Bank established a bookkeeping account in the name of each
non-employee director, and credited each account with an amount equal to the
product of (i) $2,898, and (ii) the director's full years of service as a
director, up to 20 years. On each fiscal year end, each participant who is then
a director and has 20 or fewer years of service shall have his account credited
with an amount equal to the product of $2,898 and the safe performance factor,
which is determined based on actual performance as compared to budgeted goals
for return on average equity, non-performing assets and composite regulatory
rating, provided that the safe performance factor may not exceed 1.2. Also on
the effective date, the account of Brad Snider was credited for $60,000. On each
June 30 during each of the years from 1998 until 2006, his account will be
credited with an additional amount equal to the product of $19,600 and the safe
performance factor. In the event Mr. Snider should die or become disabled, his
account will be credited with an amount equal to the difference (if any) between
(i) 50% of the present value of all benefits which would have been credited to
his account if he had otherwise remained employed by the Bank to age 65, and
(ii) the benefits which are actually credited to his account at the time of his
death or disability. If his employment terminates in connection with or
following a "change in control" of the Bank, his account will be credited with
an amount equal to the difference (if any) between (i) 100% of the present value
of all benefits which would have been credited to his account if he had
otherwise remained employed by the Bank to age 65, and (ii) the benefits which
are actually credited to his account at the time of his termination, subject to
applicable "golden parachute" limitations under federal income tax laws. At June
30, 2000, approximately $110,000 would have been credited to Mr. Snider's
account had a change in control occurred at such date and his employment
agreement was also in effect. All amounts credited to participants' accounts are
fully vested at all times. Until distributed in accordance with the terms of the
plan, each participant's account will be credited with a rate of return equal to
the Bank's highest rate of interest paid on certificates of deposit having a
term of one year. Following the Bank's mutual to stock conversion, each
participant may prospectively elect to have the dividend-adjusted rate of return
on the Common Stock measure future appreciation.
Each participant may elect to receive plan benefits in a lump sum cash
payment or over a period shorter than ten years, and in the absence of an
election will receive payments in ten substantially equal installments. In the
6
<PAGE>
event of a participant's death, the balance of his plan account will be paid in
a lump sum (unless the participant elects a distribution period up to ten years)
to his designated beneficiary, or if none, his estate.
Any compensation accrued under the plan will be paid from the Bank's
general assets. The Bank has established a trust in order to hold assets with
which to pay compensation. Trust assets would be subject to 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 plan, he would be reimbursed
for his legal and other expenses. Upon the implementation of the plan, the Bank
recognized compensation expense totaling $286,000 to provide for participants'
initial account balances.
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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 to not involve more than the normal risk
of collectibility or present other unfavorable features. Under current law, the
Bank's loans to directors and executive officers are required to be made on
substantially the same terms, including interest rates, as those prevailing for
comparable transactions and must not involve more than the normal risk of
repayment or present other unfavorable features. Furthermore, loans above the
greater of $25,000 or 5% of the Bank's capital and surplus (i.e., up to
$500,000) to such persons must be approved in advance by a disinterested
majority of the board of directors. At June 30, 2000, the Bank's loans to
directors and executive officers totaled $693,634, or 14.23% of the Company's
stockholders' equity at that date.
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RELATIONSHIP WITH INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
Baird Kurtz & Dobson, Certified Public Accountants, was the Company's
independent public accountants for the 2000 fiscal year. The Board of Directors
presently intends to renew the Company's arrangement with Baird Kurtz & Dobson,
Certified Public Accountants for the fiscal year ending June 30, 2001. A
representative of Baird, Kurtz & Dobson, Certified Public Accounts is expected
to be present at the Meeting to respond to appropriate questions and to make a
statement, if so desired.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the
Company's officers, directors and persons who own more than ten percent of the
outstanding Common Stock are required to file reports detailing their ownership
and changes of ownership in such Common Stock, and to furnish the Company with
copies of all such reports. Based on the Company's review of such reports which
the Company received during the last fiscal year, or written representations
from such persons that no annual report of change in beneficial ownership was
required, the Company believes that, during the last fiscal year, all persons
subject to such reporting requirements have complied with the reporting
requirements with the exception that two sales by Mr. Snider and one purchase by
Mr. Guinn were not reported on a Form 4 but were reported on a Form 5.
--------------------------------------------------------------------------------
OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the determination of the Board of Directors.
7
<PAGE>
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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 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.
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STOCKHOLDER PROPOSALS
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In order to be eligible to be considered for inclusion in the Company's
proxy materials for the Company's Annual Meeting in 2001, any stockholder
proposal to take action at such meeting must be received at the Company's
executive office at 200 Olivia Drive, Newport, Arkansas 72112, no later than
June 29, 2001. Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Exchange Act.
Stockholder proposals to be considered at such Annual Meeting, other
than those submitted pursuant to the Exchange Act, must be stated in writing,
delivered or mailed to the Secretary of the Company, not less than thirty days
nor more than sixty days prior to the date of the Annual Meeting. If less than
forty days' notice of the meeting is given to stockholders, such notice shall be
delivered or mailed to the Secretary not later than the close of business on the
tenth day following the day on which notice of the meeting was mailed to
stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Pamela Decker
PAMELA DECKER
SECRETARY
Newport, Arkansas
October 27, 2000
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FORM 10-KSB
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A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30,
2000 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED
WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE
SECRETARY, NORTH ARKANSAS BANCSHARES, INC., 200 OLIVIA DRIVE, NEWPORT, ARKANSAS
72112.
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8
<PAGE>
NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J. C. McMinn, O. E. Guinn, Jr. and Kaneaster
Hodges, with full powers of substitution, to act as attorneys and proxies for
the undersigned, to vote all shares of Common Stock of North Arkansas
Bancshares, Inc. (the "Company") which the undersigned is entitled to vote at
the Annual Meeting of Stockholders (the "Annual Meeting"), to be held at Newport
Federal Savings Bank, 200 Olivia Drive, Newport, Arkansas, on Wednesday,
November 22, 2000, at 4:00 p.m., Local Time, and at any and all adjournments
thereof, as indicated below and in accordance with the determination of a
majority of the Board of Directors with respect to other matters which come
before the Annual Meeting.
A VOTE "FOR" THE NOMINEES IS RECOMMENDED BY THE BOARD OF DIRECTORS
1. Election of directors
[ ] FOR the nominees listed below (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for the nominees
John Minor
Brad Snider
Instructions: To withhold authority to vote for any individual nominees, write
the nominee's name in the space provided. ________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE NOMINEES LISTED ABOVE. 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. 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.
___________________________________, 2000
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Signature
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Signature if Held Jointly
Please sign exactly as your name appears above. For joint accounts, both owners
should sign. When signing as executor, administrator, attorney, trustee or
guardian, etc., please give your full title. If a corporation, please sign in
full corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
