<PAGE>
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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
POCAHONTAS BANKSHARES CORPORATION
------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
Notes:
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
500 Federal Street
Bluefield, West Virginia 24701
April 1, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Pocahontas Bankshares Corporation ("Corporation"), a West Virginia Corporation
and owner of 100% of the outstanding common stock of its subsidiaries, First
Century Bank, N.A., Bluefield, West Virginia ("Bluefield") and First Century
Bank, Wytheville, Virginia, ("Wytheville") which will be held on TUESDAY, APRIL
16, 1996, AT 11:00 O'CLOCK A.M., AT FINCASTLE COUNTRY CLUB, ROUTE 720, DOUBLE
GATES, BLUEFIELD, VIRGINIA.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend the meeting, you are requested to complete, date, sign
and return the enclosed proxy in the enclosed envelope for which postage has
been paid. If you have any questions regarding the information in the attached
proxy materials, please do not hesitate to call the office of First Century
Bank, N.A., (304) 325-8181.
You will be asked at the meeting to fix the number of directors for the
Corporation for the ensuing year at fifteen (15), and to elect the nominees
submitted for your consideration in the accompanying Proxy Statement. You will
also be asked to ratify the selection of independent auditors for the
Corporation for the year ending December 31, 1996. You will also be asked to
approve a plan to amend the Articles of Incorporation to increase the number of
authorized shares of the Corporation's common stock. You are urged to read this
accompanying Proxy Statement carefully, as it contains detailed information
regarding the nominees for directors of the Corporation and the independent
auditors of the Corporation.
Very truly yours,
/s/ B. L. Jackson, Jr.
---------------------------------
Chairman of the Board
/s/ R. W. Wilkinson
---------------------------------
R. W. Wilkinson, President
and Chief Executive Officer
<PAGE>
Pocahontas Bankshares Corporation
500 Federal Street, P. O. Box 1559
Bluefield, West Virginia 24701
(304) 325-8181
----------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 16, 1996
----------------------------------------------
The Annual Meeting of Stockholders of the Corporation will be held on Tuesday,
April 16, 1996, at 11:00 a.m. at Fincastle Country Club, Route 720, Double
Gates, Bluefield, Virginia, for the following purposes:
(1) to fix the number of directors to be elected for the ensuing year at
fifteen (15) and to elect the fifteen (15) nominees submitted for
consideration in the Proxy Statement accompanying this Notice, and,
(2) to ratify the selection of Coopers & Lybrand, Certified Public
Accountants, to serve as independent auditors for the Corporation for
the year ending December 31, 1996, and,
(3) to approve a proposal to amend the Articles of Incorporation to increase
the number of authorized shares of the Corporation's common stock, and,
(4) such other business as may lawfully come before the meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business on March 27, 1996, as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting.
Whether or not you plan to attend the meeting, please mark, date, sign and
return the enclosed form of proxy to the Corporation as soon as possible. If
you attend the meeting and wish to vote your shares in person, you may do so at
any time before the proxy is exercised.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Charles A. Peters
Secretary
April 1, 1996
Bluefield, West Virginia
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
500 Federal Street, P.O. Box 1559
Bluefield, West Virginia 24701
(304)325-8181
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 16, 1996
PRELIMINARY STATEMENT
This statement is furnished in connection with the solicitation of proxies for
use at the Annual Meeting ("Annual Meeting") of Stockholders of Pocahontas
Bankshares Corporation ("Corporation"), to be held Tuesday, April 16, 1996, at
11:00 a.m. at Fincastle Country Club, Route 720, Double Gates, Bluefield,
Virginia, and any adjournments thereof.
SOLICITATION AND REVOCATION OF PROXIES
All costs of this solicitation of proxies will be borne by the Corporation.
In addition to solicitation by mail, certain directors, officers and employees
of the Corporation and the banks may solicit proxies in person or by telephone.
Such persons will not receive compensation for such solicitation. Banks,
brokerage houses and other custodians, nominees and fiduciaries will be
reimbursed for their reasonable out-of-pocket expenses, if any, incurred in
forwarding materials to their respective clients.
A stockholder who executes a proxy may revoke it at any time before it is
voted. Proxies may be revoked by written notice received prior to the Annual
Meeting or by timely submission of a subsequently dated proxy. If the enclosed
form of proxy is properly executed, returned and not revoked, it will be voted
in accordance with the specifications, if any, made by the stockholder. If the
form of proxy is signed and returned but specifications are not made, the proxy
will be voted in favor of the proposals set forth in the Notice of Annual
Meeting which accompanies the Proxy Statement. Attendance at the Annual Meeting
by a stockholder who has given a proxy shall not have the effect of revoking the
proxy unless he or she shall so notify the Secretary of the Annual Meeting
before the proxy is voted. The persons named as proxies on the accompanying
form of proxy were selected by the Board of Directors of the Corporation and are
currently directors of the Corporation.
VOTING AT THE ANNUAL MEETING
The close of business on March 27, 1996, has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. As of the close of business on March 27, 1996, there were
2,000,000 authorized shares of capital stock, $1.25 par value, of the
Corporation ("Capital Stock"), 1,000,000 of which shares were issued and
outstanding and entitled to vote at the Annual Meeting.
First Century Bank, N.A., a wholly-owned subsidiary of Pocahontas Bankshares
Corporation, holds of record as trustee, co-trustee, executor, co-executor or
agent, but not beneficially, 111,624 shares of Capital Stock representing 11.16%
of the outstanding Capital Stock of the Corporation. Of these shares the bank
holds 90,762 shares as sole trustee of certain revocable and irrevocable trusts
and as sole executor of certain estates. The shares held by the bank as co-
trustee will be voted by the individual co-trustee and not by the bank. The
shares held by the bank as sole trustee or as sole executor will be voted by the
bank in accordance with the terms of the trust agreement or at the direction of
either (a) the principal or the grantor in the case of revocable trusts, or (b)
at the direction of the majority of the adult beneficiaries in the case of
irrevocable trusts and estates in which the bank serves as sole executor.
Each stockholder will be entitled to one vote for each share of Capital
Stock registered in his or her name on the books of the Corporation as of the
close of business on March 27, 1996. The approval of the holders of a majority
of the shares eligible to vote at the meeting is required to elect an individual
to serve as director. Cumulative voting is permitted in the election of
directors. Accordingly, in voting for directors each shareholder has the right
to vote the number of shares owned by him for as many persons as there are
directors to be elected, or to cumulate such shares and give one candidate as
many votes as the number of directors multiplied by the number his shares shall
equal, or
1
<PAGE>
to distribute such vote on the same principle among as many candidates as he
shall think fit. The Board of Directors reserves the right to instruct its
proxies to vote cumulatively unless otherwise directed by the shareholder.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 27, 1996, the persons or entities
who to the best information and knowledge of the Corporation, beneficially own
more than 5% of the outstanding shares of the Corporation's Capital Stock.
Except where otherwise indicated, the following stockholders are the record
owners of, and possess sole voting and investment powers with respect to, all of
their shares.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- ---------
<S> <C> <C>
R. W. Wilkinson 115,274/(1)/ 11.5274%
2207 Orchard Way
Bluefield, West Virginia 24701
The Ethel N. Bowen Foundation 65,000/(2)/ 6.5000%
500 Federal Street
Bluefield, West Virginia 24701
</TABLE>
- ----------------------
(1) Includes 110,274 shares owned of record by Mr. Wilkinson. Also includes
5,000 shares owned of record by Mr. Wilkinson's wife, as to which
Mr. Wilkinson disclaims beneficial ownership.
(2) These shares are held by First Century Bank, N.A. as a safekeeping
custodian for The Ethel N. Bowen Foundation. The Ethel N. Bowen
Foundation is a private charitable foundation, the affairs of which are
governed by a board of directors composed of five persons. Three of these
directors are also directors of the Pocahontas Bankshares Corporation and
First Century Bank, N.A. and include: B. L. Jackson, Jr., R. W. Wilkinson,
and B. K. Satterfield. The fourth director, F.W. Wilkinson, is a director
of First Century Bank, N.A. The fifth director is Henry C. Bowen.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of March 27, 1996, to the best
information and knowledge of the Corporation, (a) the name and age of each
nominee currently serving as a director of the Corporation, (b) certain
information regarding his principal occupation during the last five years, (c)
the year in which he first became a director, (d) the number and percentage
ownership of the Corporation's Capital Stock beneficially owned by him, and (e)
the number and percentage ownership of shares of the Corporation's Capital Stock
beneficially owned by all officers and directors as a group. Unless otherwise
indicated, each director is the record owner of, and possesses sole voting and
investment power with respect to, all of his shares and has been primarily
engaged in the occupation indicated for the past five years.
<TABLE>
<CAPTION>
Amount and
Nature of
Served as a Beneficial
Principal Director of Ownership
Occupation Pocahontas Bankshares and % of
Name and Age (Five Years) Since Class
- -------------------------- ---------------------------------------- --------------------------------------- --------------
<S> <C> <C> <C>
Eustace Frederick Mining Engineering Consultant; 1987 1,600/(1)/
65 Formerly, Senior Vice President .1600%
Consolidation Coal Company
P. Stanley Hodges, C.P.A. President, Hodges, Jones & Co., P.C. 1993 6,296/(2)/
48 .6296%
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of
Served as a Beneficial
Principal Director of Ownership
Occupation Pocahontas Bankshares and % of
Name and Age (Five Years) Since Class
- -------------------------- ---------------------------------------- --------------------------------------- --------------
<S> <C> <C> <C>
B. L. Jackson, Jr. Chairman of the Board of the Corporation 1983 6,306/(3)/
71 Formerly, President, The First National .6306%
Bank of Bluefield
Robert M. Jones, Jr., M.D. Physician and Surgeon 1993 26,516
43 2.6516%
Harold L. Miller President, Flat Top Insurance Agency 1984 1,500
61 .1500%
Charles A. Peters Secretary of the Corporation, 1983 6,630
73 President, Peters Equipment Inc. .6630%
C. E. Richner President, C. E. Richner Drilling 1989 1,462
72 Company .1462%
Byron K. Satterfield Executive Vice President and Trust 1984 8,260/(4)/
56 Officer of First Century Bank, N.A. .8260%
John C. Shott Chairman of the Board, 1987 5,240
72 Paper Supply Company .5240%
Scott H. Shott Vice President, The Hugh I. 1985 12,574
69 Shott, Jr. Foundation 1.2574%
Walter L. Sowers President, Pemco Corporation, 1983 6,150
56 Manufacturer of Electrical Products .6150%
J. Brookins Taylor, M.D. Physician 1984 17,448/(5)/
68 1.7448%
James P. Thomas, M.D. Physician and Surgeon 1986 3,000
66 .3000%
Frank W. Wilkinson Vice President, Marketing and New Nominee 1,500
34 Branch Administration, First .1500%
Century Bank, N.A.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of
Served as a Beneficial
Principal Director of Ownership
Occupation Pocahontas Bankshares and % of
Name and Age (Five Years) Since Class
- -------------------------- ---------------------------------------- --------------------------------------- --------------
<S> <C> <C> <C>
R. W. Wilkinson President and Chief Executive Officer 1983 115,274/(6)/
63 of the Corporation and First Century 11.5274%
Bank, N.A., Chairman, First Century Bank
All Directors as a 219,756
Group (15 persons) 21.9756%
</TABLE>
- -------------------
(1) Includes 800 shares owned of record by Mr. Frederick. Also, includes 200
shares owned of record by Mr. Frederick's wife and 600 shares owned of
record by Mr. Frederick's children.
(2) Includes 800 shares owned of record by Mr. Hodges. Also, includes 3,336
shares owned of record by a pension plan for the company of which Mr.
Hodges is a principal, and 2,160 shares owned of record by a limited
liability company of which Mr. Hodges is a 36% owner.
(3) Includes 3,550 shares owned of record by Mr. Jackson. Also, includes 2,580
shares owned of record by Mr. Jackson's wife and 176 shares owned of record
by Mr. Jackson's children.
(4) Includes 6,010 shares owned of record by Mr. Satterfield. Also, includes
500 shares controlled by Mr. Satterfield as trustee of a family trust,
1,700 shares owned by Mr. Satterfield's wife and 50 shares owned by Mr.
Satterfield's minor son.
(5) Dr. Taylor disclaims beneficial ownership of 16,648 shares which shares are
held in trust for the benefit of Dr. Taylor's wife.
(6) Includes 110,274 shares owned of record by Mr. Wilkinson. Also includes
5,000 shares owned of record by Mr. Wilkinson's wife as to which Mr.
Wilkinson disclaims beneficial ownership. Mr. Wilkinson is a principal
stockholder of the Corporation (see "PRINCIPAL STOCKHOLDERS" above). Mr.
Wilkinson was also Chairman of the Board of Bluefield Distributing Company,
a West Virginia corporation, which filed for protection under Chapter 11 of
the federal bankruptcy laws on February 11, 1991.
- ------------------------------------------------------
Effective April 16, 1996, Mr Stelio J. Corte will retire from the
Corporation's Board of Directors. The Corporation wishes to thank Mr. Corte for
his many years of dedication and service.
4
<PAGE>
IDENTIFICATION OF EXECUTIVE OFFICERS
The table below shows the names and ages of all executive officers of the
Corporation and/or its subsidiaries and the position held by them and the dates
when elected as an executive officer of the Corporation and/or its subsidiaries
and the number of shares and percentage owned.
<TABLE>
<CAPTION>
Year Present Position with the Number of Shares
Name Age Elected Corporation and/or Banks and Percentage
- ------------------------ ------------ ---------------- ------------------------------------- -------------------
<S> <C> <C> <C> <C>
B. L. Jackson 71 1983 Chairman of the Board of the 6,306 - .6306%
Corporation
R. W. Wilkinson 63 1983 President and Chief Executive 115,274 - 11.5274%
Officer of the Corporation and First
Century Bank, N.A.; Chairman, First
Century Bank
Charles A. Peters 73 1983 Secretary of the Corporation 6,630 - .6630%
William E. Albert 44 1984 Assistant Secretary of the 500 - .0500%
Corporation; Vice President and
Cashier, First Century Bank, N.A.
Byron K. Satterfield 56 1989 Executive Vice President and 8,260 - .8260%
Trust Officer, First Century
Bank, N.A.
Ronnie S. Kennett 57 1989 Senior Vice President/Loans, 500 - .0500%
First Century Bank, N.A.
J. Ronald Hypes 34 1994 Treasurer of the Corporation; 64 - .0064%
Vice President and Comptroller
First Century Bank, N.A.
</TABLE>
COMMITTEES OF THE BOARD
The Corporation has a standing Audit and Compliance Committee which consists
of five (5) members: Messrs. Frederick, Hodges and Richner, as well as two (2)
directors from the subsidiary banks' boards of directors. The Audit and
Compliance Committee met four (4) times during 1995. This committee reviews and
evaluates significant matters relating to audit, internal control and
compliance. It reviews, with representatives of the independent auditors, the
scope and results of the examination of financial statements, audit fees and any
recommendations with respect to internal controls and financial matters. The
Audit and Compliance Committee is also responsible for monitoring trust
activities, including the review of the assets in each trust as to their safety
and current value, the advisability of retaining or disposing of such assets,
and whether trust funds awaiting investment or distribution have been held
longer than was reasonably necessary.
Although the Board of the Corporation has no standing nominating committee,
the Executive Committee makes recommendations regarding nominees to the Board of
Directors. The members of the committee are Messrs. Jones, Peters, Satterfield,
Scott Shott and Wilkinson. This committee met three (3) times during 1995.
Additionally, the Executive Committee is responsible for the management of the
budget, the development of policies and implementation of such policies, review
of personnel and salaries and to exercise, when the board is not in session, all
powers of the Board of Directors that may lawfully be delegated.
5
<PAGE>
The Board of the Corporation has no standing compensation committee. The
officers and directors of Pocahontas Bankshares who are also directors or
officers of the subsidiary banks do not receive compensation or directors' fees
from the Corporation. The salaries of the officers and employees of the
Corporation's wholly-owned subsidiaries are established by the boards of
directors and committees of those respective subsidiaries.
The Board of the Corporation met five (5) times in 1995. The following
directors attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and all committees of the board on which he
served: Messrs. Frederick, Scott Shott and Thomas.
COMPENSATION OF DIRECTORS
The directors of the Corporation were paid $250 for each Corporation board
meeting attended during 1995. Also, non-employee directors were paid $100 for
each committee meeting attended. Employee directors were not paid for committee
meetings. Directors of the Corporation who were also directors of the various
subsidiaries received compensation as follows: First Century Bank, N.A. - $150
for each board meeting attended on dates other than Corporation meeting dates
and $100 for each committee meeting attended; First Century Bank - $100 for each
board meeting attended and $50 for each committee meeting attended. During 1995
there were no other arrangements pursuant to which any director of the
Corporation was compensated for services as a director.
Also, in lieu of paying fees for attending committee meetings of the various
boards of directors of the Corporation and its subsidiaries, Messrs. Satterfield
and Wilkinson, officers of First Century Bank, N.A., were paid monthly fees for
each of the boards of directors of the Corporation and its subsidiaries on which
they serve.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth through December 31, 1995,
the information concerning compensation for services rendered during the
Corporation's past three fiscal years to the Corporation and/or its subsidiaries
in all capacities paid to or accrued for the Chief Executive Officer, and any
other executive officer whose salary and bonus exceeded $100,000.00 for those
years.
<TABLE>
<CAPTION>
Name of Individual Other All
and Capacities Cash Annual Other
in which served Year Salary Bonus/(1)/ Compensation/(2)/ Compensation/(3)/
- --------------------------- ---- -------- ------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
R. W. Wilkinson 1995 $174,480 $28,113 $4,050 $25,316
President, Chief 1994 167,190 26,628 4,650 22,436
Executive Officer 1993 162,300 24,741 4,450 19,206
and Director of the
Corporation and Bluefield;
Chairman of the Board,
Wytheville
Byron K. Satterfield 1995 $ 89,280 $12,637 $2,850 $ 9,731
Director of the 1994 85,020 11,847 4,000 9,305
Corporation and 1993 82,530 11,363 3,050 7,818
Executive Vice President
and Trust Officer of
Bluefield
</TABLE>
(1) The amounts in the Bonus column include cash bonuses paid pursuant to a
plan approved by the Board of
6
<PAGE>
Directors covering officers and employees, providing for cash bonus
payments calculated on the basis of the interaction between the
Corporation's net income and a percentage of salary formula. The
interaction of the percentage of salary formula with net income produced a
progressive scale of bonus payments from 9.03% of the participant's salary
to 11.12% of the participant's salary depending upon whether the
participant was an employee or executive officer. Mr. Wilkinson received
the following amounts under this plan: 1995 - $19,803; 1994 - $18,868; and
1993 - $18,315. Mr. Satterfield received the following amounts under this
plan: 1995 -$10,128; 1994 - $9,594; and 1993 - $9,314. A similar bonus
plan is in effect for the fiscal year ending December 31, 1996.
Additionally, under a split-dollar life insurance arrangement, Mr.
Wilkinson received the following bonus amounts to be applied to the cost of
insurance: 1995 - $8,310; 1994 - $7,760; and 1993 - $6,426. Mr.
Satterfield received the following amounts under a similar split-dollar
life insurance arrangement: 1995 - $2,509; 1994 - $2,253; and 1993 -
$2,049.
(2) Includes amounts paid for services as a director.
(3) Includes amounts contributed by the Corporation pursuant to its qualified
401(k) retirement savings plan as follows: Mr. Wilkinson, 1995 - $4,255;
1994 - $4,620; and 1993 - $4,497; Mr. Satterfield, 1995 - $3,910; 1994 -
$4,397; and 1993 - $3,763. Additionally, the current dollar value of the
benefit to executive officers of the remainder of the premiums paid by the
Corporation under a split-dollar life insurance arrangement, projected on
an actuarial basis, is as follows: Mr. Wilkinson, 1995 - $21,061; 1994 -
$17,816; and 1993 - $14,709; Mr. Satterfield, 1995 - $5,821; 1994 - $4,908;
and 1993 - $4,055.
The Corporation provides certain personal benefits to officers not directly
related to job performance, such as personal use of automobiles and the portion
of club dues and fees which may be attributable to personal use. Management of
the Corporation has concluded that the aggregate amounts of such personal
benefits do not exceed the lesser of either $50,000 or 10% of total salary and
bonus for any individual officer.
RETIREMENT SAVINGS PLAN
The Corporation maintains a qualified 401(k) retirement savings plan. All
full time employees are eligible to participate on a voluntary basis, after
completing their first year of service. All employee contributions were matched
by the Corporation at a rate of fifty percent (50%) of the employee contribution
for 1995.
PENSION PLAN
The Corporation and its subsidiaries have maintained a qualified,
noncontributory pension plan for which each year's accrued costs are funded by
the bank. This plan was amended January 1, 1989, to incorporate any new
subsidiaries which may become associated with the Corporation. Amounts are
accrued or set aside each fiscal year to provide fixed benefits to employees in
the event of retirement at a specified age after a specified number of years of
service. The amount of estimated annual benefits upon retirement assumes that
the employee will continue to be employed at his or her present compensation
until retirement at age 65. All employees who have attained the age of 20 1/2
and who have been employed for at least six (6) months are eligible to
participate. Benefits are determined on an actuarial basis under a formula
which takes into consideration the participant's years of service and highest
average earnings. The cost of contributions to the plan is not included in the
table contained under the caption "EXECUTIVE COMPENSATION" because the regular
actuaries of the plan cannot readily calculate the amount of the contribution
applicable to individual members of the plan. Because of the present excess
funded position of the pension plan, no contributions have been made since 1985.
7
<PAGE>
The table set forth below illustrates the estimated annual retirement
benefits payable to salaried employees, based on approximate current salary
levels, assuming retirement at age 65 on January 1, 1996.
<TABLE>
<CAPTION>
Average Annual Years of Service
Salary, Highest ----------------------------------
Five Years 15 20 25 30
- ---------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 15,000 $ 4,275 $ 5,700 $ 7,125 $ 8,550
25,000 7,125 9,500 11,875 14,250
35,000 9,975 13,300 16,625 19,950
45,000 12,825 17,100 21,375 25,650
55,000 15,675 20,900 26,125 31,350
65,000 18,525 24,700 30,875 37,050
75,000 21,375 28,500 35,625 42,750
85,000 24,225 32,300 40,375 48,450
95,000 27,075 36,100 45,125 54,150
105,000 29,925 39,900 49,875 59,850
115,000 32,775 43,700 54,625 65,550
125,000 35,625 47,500 59,375 71,250
135,000 38,475 51,300 64,125 76,950
145,000 41,325 55,100 68,875 82,650
</TABLE>
As of December 31, 1995, Mr. Wilkinson had 33 credited years of service and
Mr. Satterfield had 32 credited years of service under the pension plan.
CERTAIN TRANSACTIONS
EXTENSIONS OF CREDIT
The Corporation, through its wholly-owned subsidiaries, has had, and expects
to have in the future, banking transactions in the ordinary course of its
business with some of its directors, officers, principal stockholders, and the
companies with which they are associated. All loans and commitments to extend
loans included in such transactions were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons. In the opinion of management, at
the time these credits were made they did not present more than normal risk of
collectibility or present other unfavorable circumstances.
Mr. Wilkinson was Chairman of the Board and a principal stockholder of
Bluefield Distributing Company, a West Virginia corporation, which filed for
protection under Chapter 11 of the federal bankruptcy laws on February 11, 1991.
As a result of this action, credits extended to the company became non-
performing. The Corporation's lead subsidiary, First Century Bank, N.A., as
well as other local banks, had provided lending services to this company for
many years. Approximately $57,000 in related loans is in non-accrual status and
secured by accounts receivables of the company which are being used to curtail
the balance. Management does not anticipate any loss of principal.
INDEPENDENT AUDITORS
A proposal will be submitted at the Annual Meeting seeking the ratification of
the firm of Coopers & Lybrand L.L.P., Certified Public Accountants, as the
Corporation's independent auditors for the fiscal year ending December 31, 1996.
Coopers & Lybrand has served as the Corporation's independent auditors since
1993.
A representative of Coopers & Lybrand will be present at the Annual Meeting
with the opportunity to make a statement if they desire and will be available to
respond to questions of stockholders.
8
<PAGE>
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
OF POCAHONTAS BANKSHARES CORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
The Corporation's Board of Directors, at a meeting held on February 21, 1996,
unanimously adopted resolutions approving and recommending to the Stockholders
for their adoption an Amendment to the Restated Articles of Incorporation
("Articles") of the Corporation. This Amendment provides that Article VI of the
Corporation be amended and restated in order to increase the number of
authorized shares of the Corporation from 2,500,000 shares of common stock at a
par value of $1.25 each to 10,000,000 shares of authorized common stock with a
par value of $1.25 each. Specifically, Article VI of the Articles, which now
reads as follows:
"VI. The amount of the total authorized capital stock of the Corporation
shall be Two Million Five Hundred Thousand Dollars ($2,500,000.00) which
shall be divided into Two Million (2,000,000) shares of the par value of One
Dollar and Twenty-Five Cents ($1.25) each."
would be amended and restated to read:
"VI. The amount of total authorized capital stock of said Corporation shall
be Twelve Million Five Hundred Thousand Dollars ($12,500,000.00) which shall
be divided into Ten Million (10,000,000) shares of the par value of One
Dollar and Twenty-Five Cents ($1.25) each."
The proposed increase in the authorized common stock has been recommended by
the Board of Directors to assure that an adequate supply of authorized, unissued
shares is available for general corporate needs, such as future stock dividends
or stock splits, acquisitions, a dividend reinvestment plan and for other
general corporate purposes, without the expense and delay incidental to
obtaining shareholder approval of an amendment to the Articles increasing the
number of authorized shares at the time of such action.
If the proposed amendment is approved by the shareholders, the additional
shares of common stock so authorized could be issued, in the discretion of the
Board, for any proper corporate purpose, without further action by the
shareholders other than as may be required by applicable law. Existing
shareholders do not have preemptive rights with respect to future issuances of
common stock by the Corporation and their interest in the Corporation could be
diluted by such issuance with respect to any of the following: earnings per
share, voting, liquidation right and book and market value. Accordingly, the
Board of Directors will, in the exercise of their fiduciary duties to the
shareholders, weigh all the factors carefully, together with the needs and
prospects of the Corporation, before committing to the issuance of further
shares not requiring shareholder approval.
The increase of the authorized shares, if approved will take effect on the
date the Amended and Restated Articles of Incorporation are filed with the
Secretary of State of West Virginia.
VOTE REQUIRED FOR ADOPTION OF THE PROPOSED AMENDMENT
Under the Articles, any amendment to the Restated Articles of Incorporation
requires the approval of two-thirds (2/3) of the holders of the outstanding
stock of the Corporation entitled to vote at the Annual Meeting.
The Corporation's Board of Directors unanimously recommends that the
stockholders vote FOR adoption of the amendment to the Articles discussed above.
9
<PAGE>
OTHER BUSINESS
The Board of Directors and management of the Corporation are not aware of any
other matters not referred to in the enclosed Proxy which may be brought before
the Annual Meeting. However, if any matter other than the election of
directors, the ratification of the selection of independent auditors or matters
incident thereto should properly come before the Annual Meeting, the persons
named in the enclosed proxy will vote such proxy in accordance with their
judgment on such matters. As of the date of the preparation of this Proxy
Statement, no stockholder has submitted to management any proposal to be acted
upon at the Annual Meeting.
1997 ANNUAL MEETING-PROPOSALS OF STOCKHOLDERS
Any stockholder who intends to present a proposal at the Corporation's Annual
Meeting, to be held in April 1997, must submit the proposal to its principal
executive office at P. O. Box 1559, Bluefield, West Virginia 24701, (304) 325-
8181, on or before December 31, 1996, for inclusion in the Corporation's Proxy
Statement and form of Proxy for the Annual Meeting. All stockholders' proposals
should be sent by registered mail return receipt requested.
FINANCIAL INFORMATION
A COPY OF THE CORPORATION'S 1995 ANNUAL REPORT TO STOCKHOLDERS ACCOMPANIES
THIS PROXY STATEMENT. ADDITIONAL COPIES OF THE 1995 ANNUAL REPORT MAY BE
OBTAINED FREE OF CHARGE FROM J. RONALD HYPES, TREASURER, POCAHONTAS BANKSHARES
CORPORATION, P. O. BOX 1559, BLUEFIELD, WEST VIRGINIA 24701, (304) 325-8181.
THE CORPORATION WILL FILE ITS ANNUAL REPORT ON FORM 10-K WITH THE SECURITIES
AND EXCHANGE COMMISSION. A COPY OF THE ANNUAL REPORT ON FORM 10-K MAY BE
OBTAINED FROM THE CORPORATION AT THE ADDRESS INDICATED ABOVE.
B. L. JACKSON, JR.
CHAIRMAN OF THE BOARD
R. W. WILKINSON, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
Bluefield, West Virginia
April 1, 1996
10
<PAGE>
PROXY SOLICITED BY BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS OF
POCAHONTAS BANKSHARES CORPORATION
The undersigned stockholder(s) of POCAHONTAS BANKSHARES CORPORATION, hereby
appoints and constitutes CHARLES A. PETERS, C. E. RICHNER, BYRON K. SATTERFIELD
AND SCOTT H. SHOTT, or any one of them, but if more than one present, a majority
of them present, to act as lawful attorney or proxy of the undersigned, with the
power of substitution for and in the name, place and stead of the undersigned,
to vote at the Annual Meeting of Stockholders of the Corporation to be held on
April 16, 1996, at Fincastle Country Club, Route 720, Double Gates, Bluefield,
Virginia, at 11:00 a. m. or any adjournment thereof, for the following purposes
and upon any other matters that may come before the meeting or any adjournment
thereof, with all the powers the undersigned would possess if personally
present, hereby revoking all previous proxies:
1. To elect fifteen (15) directors of the Corporation for terms of one year,
and until their successors are elected and qualified.
<TABLE>
<CAPTION>
_______ FOR all nominees listed below _______ WITHHOLD AUTHORITY
(except as marked to the contrary below) You may withhold authority to vote for any nominee by
lining through or otherwise striking out his name.
<S> <C> <C>
Eustace Frederick Charles A. Peters Walter L. Sowers
P. Stanley Hodges, C.P.A. C. E. Richner J. Brookins Taylor, M. D.
B. L. Jackson, Jr. Byron K. Satterfield James P. Thomas, M. D.
Robert M. Jones, M.D. John C. Shott Frank. W. Wilkinson
Harold L. Miller Scott H. Shott R. W. Wilkinson
</TABLE>
2. To ratify the selection of the firm of Coopers & Lybrand L.L.P., Certified
Public Accountants, as independent auditors of the Corporation for the
fiscal year year ending December 31, 1995.
________ FOR _______ AGAINST ________ ABSTAIN
3. To approve the proposal to amend the Articles of Incorporation to
increase the number of authorized shares of the Corporation's common stock
from 2,000,000 shares to 10,000,000 shares.
________ FOR _______ AGAINST ________ ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly be brought before the meeting or any adjournment
thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this proxy
will be voted FOR Proposals 1 and 2.
---
Dated this _________________ 1996 ___________________________ Signature
(Please date and sign exactly as name(s)
appear on the share certificate.) ___________________________ Signature
(When signing as an attorney,
administrator, trustee or guardian,
please give full title as such. 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. For joint accounts,
each joint owner should sign.)
