<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
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Pocahontas Bankshares Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
500 Federal Street
Bluefield, West Virginia 24701
March 30, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Pocahontas Bankshares Corporation, (the "Company") a West Virginia corporation
and owner of 100% of the outstanding common stock of its subsidiaries, First
Century Bank, N.A., Bluefield, West Virginia and First Century Bank, Wytheville,
Virginia, which will be held on Tuesday, April 20, 1999, 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 First Century Bank, N.A.,
(304)325-8181.
You will be asked at the meeting to fix the number of directors for the
Company for the ensuing year at fourteen (14), 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 Company
for the year ending December 31, 1999. Additionally, you will be asked to
approve an amendment to the Articles of Incorporation changing the Company's
name to First Century Bankshares, Inc.
You are urged to read this accompanying Proxy Statement carefully, as it
contains detailed information regarding the nominees for directors of the
Corporation, the independent auditors of the Corporation and the proposed
amendment to the Articles of Incorporation.
Very truly yours,
/s/ B. L. Jackson, Jr.
B. L. Jackson, Jr.
Chairman of the Board
/s/ R. W. Wilkinson, President
R. W. Wilkinson, President
and Chief Executive Officer
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
500 Federal Street
Bluefield, West Virginia 24701
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
TIME.................................. 11:00 a.m. on Tuesday, April 20, 1999
PLACE................................. Fincastle Country Club
Route 720, Double Gates
Bluefield, Virginia
ITEMS OF BUSINESS..................... (1) To fix the number of directors
for the Company for the ensuing
year at fourteen (14) and to elect
the nominees submitted for your
consideration;
(2) To approve an amendment to the
Articles of Incorporation changing
the Company's name to First Century
Bankshares, Inc.;
(3) Ratify the selection of the
Company's independent auditors for
the fiscal year ending December 31,
1999; and
(4) To transact such other business
as may properly come before the
meeting. The Board of Directors at
present knows of no other business
to come before the annual meeting.
RECORD DATE........................... Only those shareholders of record at
the close of business on March 25,
1999 shall be entitled to notice and
to vote at the meeting.
ANNUAL REPORT......................... Our 1998 Annual Report, which is not
a part of the proxy materials, is
enclosed.
PROXY VOTING.......................... It is important that your shares be
represented and voted at the Meeting.
Please MARK, SIGN, DATE and PROMPTLY
RETURN the enclosed proxy card in the
postage-paid envelope. Any proxy may
be revoked prior to its exercise at
the Meeting.
March 30, 1999........................ B. L. Jackson
Chairman of the Board
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROXY STATEMENT................................................................................................................ 1
Shareholders Entitled to Vote............................................................................................... 1
Proxies..................................................................................................................... 1
Vote By Mail................................................................................................................ 1
Voting at the Annual Meeting................................................................................................ 1
Voting of Other Matters..................................................................................................... 1
List of Shareholders........................................................................................................ 2
Required Vote............................................................................................................... 2
Cost of Proxy Solicitation.................................................................................................. 2
Shareholder Account Maintenance............................................................................................. 3
Section 16(a) Beneficial Ownership Reporting Compliance..................................................................... 3
RECENT DEVELOPMENTS............................................................................................................ 3
Acquisition of Branches..................................................................................................... 3
Consolidation of Virginia and West Virginia Subsidiaries.................................................................... 3
GOVERNANCE OF THE COMPANY...................................................................................................... 3
Board and Committee Membership.............................................................................................. 3
The Executive Committee..................................................................................................... 4
The Audit and Compliance Committee.......................................................................................... 4
Compensation Committee...................................................................................................... 4
Related Transactions........................................................................................................ 4
Indemnification............................................................................................................. 5
Fees and Benefit Plans for Directors........................................................................................ 5
Meeting Fees................................................................................................................ 5
ITEM 1 -- ELECTION OF DIRECTORS................................................................................................ 6
Security Ownership of Directors and Officers................................................................................ 6
Family Relationships........................................................................................................ 6
Retirement of John C. Shott................................................................................................. 6
NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE IN 2000.............................................................................. 7
ITEM 2 -- APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION................................................................... 9
ITEM 3 -- APPROVAL OF AUDITORS................................................................................................. 9
EXECUTIVE COMPENSATION......................................................................................................... 10
Cash Compensation........................................................................................................... 10
Summary Compensation Table.................................................................................................. 10
OPTION GRANTS IN 1998.......................................................................................................... 11
EXECUTIVE COMPENSATION COMMITTEE REPORT........................................................................................ 12
Overview of Compensation Philosophy......................................................................................... 12
Salaries................................................................................................................. 12
Executive Annual Incentive Awards........................................................................................ 12
Long-term Incentive Compensation......................................................................................... 12
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Evaluation of Executive Performance....................................................................................... 12
Total Compensation....................................................................................................... 13
Salaries................................................................................................................. 13
President and CEO................................................................................................... 13
Other Named Executive Officer........................................................................................ 13
Executive Annual Incentive Awards......................................................................................... 13
Long-Term Incentive Compensation - Stock Option Plan...................................................................... 13
President and CEO................................................................................................... 14
Other Named Executive Officer........................................................................................ 14
Glossary................................................................................................................. 14
Committee........................................................................................................... 14
Executive Bonus Awards.............................................................................................. 14
Stock Options....................................................................................................... 14
Named Executive Officers............................................................................................ 14
Peer Group.......................................................................................................... 14
The Executive Compensation Committee..................................................................................... 14
Pocahontas Bankshares.................................................................................................... 15
Retirement Savings Plan............................................................................................. 15
Pension Plan........................................................................................................ 15
PERFORMANCE GRAPH.............................................................................................................. 17
PRINCIPAL STOCKHOLDERS......................................................................................................... 18
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION
OF PROXY PROPOSALS, NOMINATION OF DIRECTORS AND
OTHER BUSINESS OF SHAREHOLDERS............................................................................................. 19
Stock Transfers............................................................................................................ 19
FORM 10-K...................................................................................................................... 19
EXHIBIT A...................................................................................................................... 20
</TABLE>
ii
<PAGE>
Pocahontas Bankshares Corporation
500 Federal Street
Bluefield, West Virginia 24701
PROXY STATEMENT
- --------------------------------------------------------------------------------
These proxy materials are delivered in connection with the solicitation by
the Board of Directors of Pocahontas Bankshares Corporation ("Pocahontas," the
"Company," "we," or "us"), a West Virginia corporation, of proxies to be voted
at our 1999 Annual Meeting of Shareholders and at any adjournment or
postponement.
You are invited to attend our Annual Meeting of Shareholders on April 20,
1999, beginning at 11:00 a.m. The Meeting will be held at the Fincastle Country
Club, Route 720, Double Gates, Bluefield, Virginia.
This Proxy Statement, form of proxy and voting instructions are being
mailed starting March 30, 1999.
Shareholders Entitled to Vote
Holders of record of Pocahontas common shares at the close of business on
March 25, 1999 are entitled to receive this notice and to vote their shares at
the Annual Meeting. As of that date, there were 2,000,000 common shares
outstanding. Each common share is entitled to one vote on each matter properly
brought before the Meeting.
Proxies
Your vote is important. Shareholders of record may vote their proxies by
mail. If you choose to vote by mail, a postage-paid envelope is provided.
Proxies may be revoked at any time before they are exercised by (1) written
notice to the Secretary of the Company, (2) timely delivery of a valid, later-
dated proxy or (3) voting at the Annual Meeting.
You may save us the expense of a second mailing by voting promptly. Choose
one of the following voting methods to cast your vote.
Vote By Mail
If you choose to vote by mail, simply mark your proxy, date and sign it,
and return it to us in the postage-paid envelope provided.
Voting at the Annual Meeting
The method by which you vote now will in no way limit your right to vote at
the Annual Meeting if you later decide to attend in person. If your shares are
held in the name of a bank, broker or other holder of record, you must obtain a
proxy, executed in your favor, from the holder of record to be able to vote at
the Meeting.
All shares that have been properly voted and not revoked will be voted at
the Annual Meeting in accordance with your instructions. If you sign your proxy
card but do not give voting instructions, the shares represented by that proxy
will be voted as recommended by the Board of Directors.
Voting of Other Matters
If any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed form of proxy will have the
discretion to vote on those matters for you. At the date this proxy statement
went to press, we do not know of any other matter to be raised at the Annual
Meeting.
1
<PAGE>
List of Shareholders
A list of shareholders entitled to vote at the Annual Meeting will be
available at theAnnual Meeting and for ten days prior to the Meeting, between
the hours of 8:45 a.m. and 4:30 p.m., at our offices at 500 Federal Street,
Bluefield, West Virginia 24701, by contacting the Secretary of the Company.
Required Vote
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the shareholders entitled to vote at the Annual
Meeting is necessary to constitute a quorum. Abstentions and broker "non-votes"
are counted as present and entitled to vote for purposes of determining a
quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.
A plurality of the votes cast is required for the election of Directors.
Abstentions and broker "non-votes" are not counted for purposes of the election
of Directors.
In the election of directors, shareholders cast one (1) vote for each
nominee for each share held. However, every shareholder has the right of
cumulative voting, in person or by proxy, in the election of directors.
Cumulative voting gives each shareholder the right to aggregate all votes which
he or she is entitled to cast in the election of directors and to cast all such
votes for one candidate or distribute them among as many candidates and in such
a manner as the shareholder desires.
At our 1999 Annual Meeting, the number of directors to be elected is
fourteen (14). Each shareholder has the right to cast fourteen (14) votes in the
election of directors for each share of stock held on the record date. If you
wish to exercise, by proxy, your right to cumulative voting in the election of
directors, you must provide a proxy showing how your votes are to be distributed
among one or more candidates. Unless contrary instructions aregiven by a
shareholder who signs and returns a proxy, all votes for the election of
directors represented by such proxy will be divided equally among the fourteen
(14) nominees. If cumulative voting is invoked by any share-holder, the vote
represented by the proxies delivered pursuant to this solicitation, which do not
contain contrary instructions, may be cumulated at the discretion of the Board
of Directors of Pocahontas Bankshares Corporation in order to elect to the Board
of Directors the maximum nominees named in this proxy statement.
On the record date, there were 2,000,000 shares of common stock outstanding
which are held by approximately 610 shareholders of record. A majority of the
outstanding shares of Pocahontas Bankshares Corporation will constitute a quorum
at the meeting.
The affirmative vote of two thirds (2/3) of the shares outstanding is
required to approve the Amendment to the Articles.
The affirmative vote of a majority of the votes cast is required to approve
the appointment of PricewaterhouseCoopers, LLP. Abstentions and broker "non-
votes" are not counted for purposes of approving this matter.
Cost of Proxy Solicitation
We will pay the expenses of soliciting proxies. Proxies may be solicited
on our behalf by Directors, officers or employees in person or by telephone,
electronic transmission, facsimile transmission or by telegram. Brokers,
fiduciaries, custodians and other nominees have been requested to forward
solicitation materials to the beneficial owners of the Company's common stock.
Upon request we will reimburse these entities for their reasonable expenses.
2
<PAGE>
Shareholder Account Maintenance
We act as our own Transfer Agent. All communications concerning accounts
of shareholders of record, including addresschanges, name changes, inquiries as
to requirements to transfer common shares and similar issues can be handled by
calling the Financial Services Division of First Century Bank, N.A. at (304)
324-3276.
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors
and executive officers to file reports of holdings and transactions in
Pocahontas shares with the SEC. Based on our records and other information, we
believe that in 1998 our Directors and executive officers met all applicable SEC
filing requirements.
- --------------------------------------------------------------------------------
RECENT DEVELOPMENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Acquisition of Branches Consolidation of Virginia and
West Virginia Subsidiaries
On December 23, 1998, the Company
executed an agreement to purchase On March 11, 1999, the Company
the assets and assume certain filed an application with the Office
liabilities of a branch owned by of the Comptroller of the Currency to
City National Bank of West consolidate its Virginia subsidiary,
Virginia. First Century Bank, into its West
Virginia subsidiary, First Century
The branch acquired from City Bank, N.A. As a result of this
National Bank of West Virginia is transaction, the Company will have a
located in Hinton, West Virginia. single subsidiary with branch offices
Pocahontas will pay approximately located in Wytheville, Fort Chiswell,
$5 million for the Hinton Branch. and Bluefield, Virginia, and
Bluefield, Oceana, Pineville and
On March 11, 1999, the Company Princeton, West Virginia.
filed an application with the
Office of the Comptroller of the Assuming receipt of regulatory
Currency to acquire the branch. approval, we anticipate the
We anticipate regulatory approval consolidation will occur on May 14,
sometime in early April. 1999.
Assuming receipt of regulatory
approval, we anticipate this
transaction will close on May 21,
1999.
</TABLE>
- --------------------------------------------------------------------------------
GOVERNANCE OF THE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Board and Committee Membership Compensation Committee. The
following directors attended fewer
During 1998, the Board of than 75% of the aggregate of the
Directors met 5 times. The Board total number of meetings of the Board
of Directors of the Company has a of Directors and all committees of
standing Executive Committee, the board on which he served: C. E.
Audit & Compliance Committee and Richner, John C. Shott, and Scott H.
Shott.
</TABLE>
3
<PAGE>
<TABLE>
Executive Audit & Compensation
Name Board Committee Compliance Committee
- ---- ----- --------- ---------- ----------
<S> <C> <C> <C> <C>
Paul Cole, Jr. X
Eustace Frederick X X*
B. L. Jackson, Jr. X*
Robert M. Jones, Jr. X X* X*
Harold L. Miller X
Charles A. Peters X X X
C. E. Richner X X
Byron K. Satterfield X X
John C. Shott X X
Scott H. Shott X X X
Walter L. Sowers X X
J. Brookins Taylor X
Frank W. Wilkinson X
R. W. Wilkinson X X
1998 Meetings 5 6 4 3
</TABLE>
- ----------------------
* Chair
The Executive Committee
The Executive Committee is comprised of five directors, Robert M. Jones,
Jr., Charles A. Peters, Byron K. Satterfield, Scott H. Shott and R. W.
Wilkinson. The Executive Committee makes recommendations regarding nominees to
the Board of Directors, and is responsible for the management of the budget,
development of policies and implementation of such policies and review of
personnel and salaries. The Executive Committee performs such duties and
exercises the powers delegated to it by the Board of Directors.
The Audit and Compliance Committee
The Compliance and Audit Committee has the primary responsibility to review
and evaluate 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. This
committee is also responsible formonitoring trust activities, including the
review of the assets in each trust as to their safety and current value, and the
advisability of retaining or disposing of such assets. Current members of this
committee are Eustace Frederick, John C. Shott and C. E. Richner as well as two
(2) directors from the subsidiary bank's board of directors.
Compensation Committee
The Compensation Committee consists of the non-employee members of the
Executive Committee. This Committee establishes the compensation and evaluates
the performance of the President and CEO and other executive officers.
Related Transactions
Directors and executive officers of the Company and its subsidiaries,
members of their immediate families, and business organizations and individuals
associated with them have been customers of, and have had normal banking
transactions with, Pocahontas Bankshares Corporation. All such transactions were
made in the ordinary course of business, were made
4
<PAGE>
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons and
did not involve more than the normal risk of collectibility or present other
unfavorable features.
Indemnification
We indemnify our Directors and officers to the fullest extent permitted by
law so that they will serve free from undue concern that they will not be
indemnified. This is required under our By-laws.
Fees and Benefit Plans for Directors
Directors of the Company do not receive a fee for their services. Board
fees are paid by our subsidiary banks. Directors of Pocahontas Bankshares
Corporation receive the following compensation.
Meeting Fees. Directors of the Company are paid $300 for each board
meeting attended during the year. Non-employee Directors also receive a fee of
$100 for each committee meeting attended. Directors of the Company who are also
directors of the various subsidiaries receive compensation as follows: First
Century Bank, N.A. - $200 for each board meeting attended and $100 for each
committee meeting attended; First Century Bank - $100 for each board meeting
attended and $50 for each committee meeting attended.
Effective immediately following last year's Annual Meeting, employee
directors no longer receive board fees for their service on the Company's Board
and on the boards of the Company's subsidiaries.
5
<PAGE>
ITEM 1 -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
The Board of Directors consists The principal occupation and certain
of one class of fourteen (14) other information about the nominees
Directors. Fourteen (14) for Director are set forth on the
Directors will be elected at our following pages.
1999 Annual Meeting to serve for
a one-year term expiring at our Security Ownership of Directors
Annual Meeting in the year 2000. and Officers
The persons named in the enclosed As of February 28, 1999, Directors
proxy intend to vote the proxy and the named executive officers of
for the election of each of the the Company:
fourteen nominees, unless you
indicate on the proxy card that .owned beneficially, directly or
your vote should be withheld from indirectly, the number of shares of
any or all of such nominees. common stock indicated; and
Each nominee elected as a
Director will continue in office .held the number of options
until his or her successor has exercisable within sixty (60) days
been elected, or until his or her after that date, to purchase the
death, resignation or retirement. number of shares indicated pursuant
to the Company's Stock Option Plans.
The Board of Directors has
proposed the following nominees All Directors and executive officers
for election as Directors with as a group owned 453,185 shares or
terms expiring in 2000 at the 22.54% of the Company's common stock.
Annual Meeting: Paul Cole, Jr.,
Eustace Frederick, B. L. Jackson, Family Relationships
Jr., Robert M. Jones, Jr., Harold
L. Miller, Charles A. Peters, C. Mr. Frank W. Wilkinson is the son of
E. Richner, Byron K. Satterfield, R. W. Wilkinson. Scott H. Shott is
John H. Shott, Scott H. Shott, John H. Shott's uncle. John H. Shott
Walter L. Sowers, J. Brookins is the son of John C. Shott.
Taylor, Frank W. Wilkinson and R.
W. Wilkinson. Retirement of John C. Shott
The Board of Directors recommends Effective April 20, 1999, John C.
a vote FOR the election of these Shott will retire from the Company's
nominees for election as Board of Directors. We thank Mr.
Directors. Shott for his many years of dedicated
service.
We expect each nominee for
election as a Director to be able
to serve if elected. If any
nominee is not able to serve,
proxies will be voted in favor of
the remainder of those nominated
and may be voted for substitute
nominees, unless the Board
chooses to reduce the number of
Directors serving on the Board.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Amount of Beneficial
Name and Age as of the Position, Principal Occupation Ownership of Shares of
April 20, 1999 Meeting Date Business Experience and Directorships Common Stock and Options
- -----------------------------------------------------------------------------------------------------------------
NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE IN 2000
- -----------------------------------------------------------------------------------------------------------------
Shares Options %
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Paul Cole, Jr. .................67 President, Cole Motor Company and Cole 20,500 1,000 1.06%
Chevrolet - Cadillac; Director of the
Company since 1998.
- -----------------------------------------------------------------------------------------------------------------
Eustace Frederick...............68 Mining Engineering Consultant; formerly 3,200 1,000 *
Senior Vice President, Consolidation Coal
Company; Director of the Company since
1987.
- -----------------------------------------------------------------------------------------------------------------
B. L. Jackson ..................74 Formerly, President, The First National Bank 12,780 1,000 *
of Bluefield. Chairman of the Board of the *
Company. Director of the Company since
1983.
- -----------------------------------------------------------------------------------------------------------------
Robert M. Jones ...............46 Physician and Surgeon. Director of the 62,856 1,000 3.17%
Company since 1993.
- -----------------------------------------------------------------------------------------------------------------
Harold L. Miller ..............64 Former President, Flat Top Insurance 3,078 1,000 *
Agency. Director of the Company since
1984.
- -----------------------------------------------------------------------------------------------------------------
Charles A. Peters .............76 President, Peters Equipment, Inc. Secretary 13,260 1,000 *
of the Company. Director of the Company
since 1983.
- -----------------------------------------------------------------------------------------------------------------
C. E. Richner .................75 President, C. E. Richner Drilling Company. 2,924 1,000 *
Director of the Company since 1989.
- -----------------------------------------------------------------------------------------------------------------
Byron K. Satterfield ..........59 Executive Vice President and Trust Officer of 17,540 - *
First Century Bank, N.A. Director of the
Company since 1984.
- -----------------------------------------------------------------------------------------------------------------
John H. Shott .................50 Attorney, Shott, Gurganus & Williamson. 2,052 1,000 *
New Nominee for Director.
- -----------------------------------------------------------------------------------------------------------------
Scott H. Shott ................72 Vice President, The Hugh I. Shott, Jr., 25,148 1,000 1.30%
Foundation. Director of the Company since
1985.
- -----------------------------------------------------------------------------------------------------------------
Walter L. Sowers ..............59 President, Pemco Corporation, Manufacturer 8,421 1,000 *
of Electrical Products. Director of the
Company since 1983.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Amount of Beneficial
Name and Age as of the Position, Principal Occupation Ownership of Shares of
April 20, 1999 Meeting Date Business Experience and Directorships Common Stock and Options
- -----------------------------------------------------------------------------------------------------------------
Shares Options %
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J. Brookins Taylor ............71 Physician. Director of the Company since 36,196 1,000 1.81%
1984.
- -----------------------------------------------------------------------------------------------------------------
Frank W. Wilkinson ............37 Vice President, Marketing and Branch 6,948 - *
Administration, First Century Bank, N.A.
Director of the Company since 1996.
- -----------------------------------------------------------------------------------------------------------------
R. W. Wilkinson ...............66 Chairman, First Century Bank. President 225,000(1) - 11.25%
and Chief Executive Officer of the Company
and First Century Bank, N.A. Director of the
Company since 1983.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* Indicates the Director owns less than 1% of the Company's issued and
outstanding shares.
(1) Includes 205,000 shares owned of record by Mr. Wilkinson. Also includes
20,000 shares owned of record by Mr. Wilkinson's wife, as to which Mr.
Wilkinson disclaims beneficial ownership.
8
<PAGE>
ITEM 2 -- APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
On February 16, 1999, your area. A copy of the proposed
Board of Directors approved amendment is attached to these proxy
for presentation at the Annual materials as Exhibit A.
Meeting, an amendment to the
Company's Articles of The Board of Directors recommends a
Incorporation changing the vote FOR the approval of the
Company's name from "Pocahontas amendment to the Articles of
Bankshares Corporation" to Incorporation changing the Company's
"First Century Bankshares, name.
Inc." The primary reason for
the proposed change is the
marketability of the proposed
new name as the Company
continues to expand beyond the
Bluefield, West Virginia
</TABLE>
ITEM 3 -- APPROVAL OF AUDITORS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The Board of Directors has The affirmative vote of a majority of
appointed votes cast on this proposal is
PricewaterhouseCoopers, LLP to required for the approval of this
serve as our independent proposal.
auditors for 1999, subject to
the ratification of our The Board of Directors recommends a
shareholders. vote FOR the approval of
Pricewaterhouse Coopers, LLP as our
Representatives of independent auditors for the year
Pricewaterhouse-Coopers, LLP 1999.
will be present at the Annual
Meeting to answer questions.
They will also have the
opportunity to make a statement
if they desire to do so.
</TABLE>
9
<PAGE>
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
Cash Compensation
Executive officers of the Company are not compensated for services rendered
to the Company. Executive officers of its subsidiaries are compensated for
services rendered. The table below sets forth the cash compensation of the
Company's Chief Executive Officer and any executive officer of Pocahontas
Bankshares Corporation or its subsidiaries earning $100,000 or more for the
years ended December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
- --------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation
- --------------------------------------------------------------------------------------------------------
Securities
Name and Other Underlying All
Principal Position Year Salary Bonus /(1)/ Compensation /(2)/ Options Other /(3)/
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. W. Wilkinson 1998 $196,760 $82,532 $1,800 23,820 $45,641
Chairman, President and CEO
- --------------------------------------------------------------------------------------------------------
1997 $187,280 $69,304 $5,100 0 $41,565
- --------------------------------------------------------------------------------------------------------
1996 $181,680 $29,533 $4,600 0 $28,669
- --------------------------------------------------------------------------------------------------------
Byron K. Satterfield 1998 $101,360 $13,971 $1,400 7,395 $13,966
Executive Vice President and
Trust Officer
- --------------------------------------------------------------------------------------------------------
1997 $ 95,680 $14,009 $3,900 0 $11,844
- --------------------------------------------------------------------------------------------------------
1996 $ 92,868 $13,361 $3,700 0 $10,998
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amounts in the Bonus column include cash bonuses paid pursuant to The
Executive Bonus Plan. Mr. Wilkinson received the following amounts under
this plan: 1998 - $30,015; 1997 - $21,137; and 1996 - $20,603. Mr.
Satterfield received the following amounts under this plan: 1998 - $10,350;
1997 - $10,795; and 1996 - $10,528. A similar bonus plan is in effect for
the fiscal year ending December 31, 1999. Additionally, under a split-
dollar life insurance arrangement, Mr. Wilkinson received the following
bonus amounts to be applied to the cost of insurance: 1998 - $52,517; 1997 -
$48,167; and 1996 - $8,930. Mr. Satterfield received the following amounts
under a similar split-dollar life insurance arrangement: 1998 - $3.621;
1997 - $3,214; and 1996 - $2,833.
(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, 1998 - $5,000;
1997 - $4,750; and 1996 - $4,220; Mr. Satterfield, 1998 - $5,000; 1997 -
$4,000; and 1996 - $4,200. 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, 1998 - $40,641; 1997 -
$36,815; and 1996 - $24,449; Mr. Satterfield, 1998 - $8,966; 1997 - $7,844;
and 1996 - $6,798.
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 $50,000 or 10% of total salary and
bonus for any individual officer.
10
<PAGE>
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
<S> <C>
This table shows all options to options. The 5% and 10% rates of
purchase our common stock granted appreciation are required to be
to each of our Named Executive disclosed by Securities and Exchange
Officers in 1998 and the potential Commission rules and are not
value of such grants at stock price intended to forecast possible future
appreciation rates of 5% and appreciation, if any, in our stock
10%, compounded annually over the price.
maximum ten-year term of the
</TABLE>
<TABLE>
<CAPTION>
Potential Realization Value at Assumed
Annual Rages of Stock Price
Individual Grants Appreciation for Option Term ($)
--------------------------------------------------------------------------------------
Percent of
Number of Total
Securities Options Exercise
Underlying Granted to or
Options Employees in Base Price Expiration
Name Granted (#)(1) Fiscal Year ($/Sh)(2) Date 5% 10%
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. W. Wilkinson 23,820 41% 20.25 July 1, 2008 303,352 768,729
- -------------------------------------------------------------------------------------------------------------------
Byron K. Satterfield 7,395 13% 20.25 July 1, 2008 94,177 238,654
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Option grants for Named Executive Officers who received grants in 1998
consisted of grants that are exercisable over five (5) years at a rate of
20% per year on each anniversary date beginning on July 1, 1999.
(2) The exercise price for all stock option grants shown in this column is the
average of the closing prices reported on the last five (5) business days
prior to the date on which the common stock traded.
11
<PAGE>
EXECUTIVE COMPENSATION COMMITTEE REPORT
Please see the glossary at the end of this report for definitions of the
capitalized terms used in this report which have not already been defined in
this Proxy Statement.
Overview of Compensation Philosophy
The Committee establishes the salaries and other compensation of the
executive officers of the Company, including its President and CEO and other
Named Executive Officers. The Committee consists entirely of independent
Directors who are not officers or employees of the Company.
The Company's executive compensation program is designed to:
.retain executive officers by paying them competitively, motivate them to
contribute to the Company's success, and reward them for their performance;
.link a substantial part of each executive officer's compensation to the
performance of both the Company and the individual executive officer; and
.encourage ownership of Company common stock by executive officers.
As discussed below, the program consists of, and is intended to balance,
three elements:
. Salaries. Salaries are based on the Committee's evaluation of individual
job performance and an assessment of the salaries and total compensation mix
paid by the Company's Peer Group to executive officers holding equivalent
positions.
. Executive Annual Incentive Awards. Executive Annual Incentive Awards are
based on an evaluation of both individual and Company performance against
qualitative and quantitative measures.
. Long-term Incentive Compensation. Long-term incentive awards, which consist
of stock options are designed to insure that incentive compensation is
linked to the long-term performance of the Company and its common stock.
Evaluation of Executive Performance
The Committee does not usually rely solely on predetermined formulae or a
limited set of criteria when it evaluates the performance of the President and
CEO and the Company's other executive officers. Instead, the Committee
considers:
.management's overall accomplishments;
.the accomplishments of the individual executives;
.the Company's financial performance; and
.other criteria discussed below.
In 1998, management continued to effectively implement its long-term
strategies, which included:
.growth and expansion of the current market share.
.growth into new markets.
The Committee believes that the success of these strategies is evidenced
by:
.the Company's strong financial performance in 1998;
.the Company's completed branch acquisition in 1998, within the Company's
current market.
.execution of an agreement to acquire a branch in the Company's target
expanded market.
12
<PAGE>
Total Compensation
Target total compensation levels of Company executives are established with
consideration given to an analysis of competitive market total compensation.
The total compensation package for each executive is then broken down into the
basic components indicated above and discussed in more detail below. In recent
years, the Committee has been directing a shift in the mix of the Company's
executive compensation towards incentive compensation, with proportionately
lesser emphasis on salaries. This strategy is intended to increase the
performance orientation of the Company's executive compensation, and the
Committee intends to continue this emphasis in 1999. Based on available public
data and the analysis of its outside compensation advisors, the total
compensation of Mr. Wilkinson and the other Named Executive Officers generally
fell in the median of total compensation paid by the Peer Group to their
executives holding equivalent positions. The Committee believes that position
was consistent with the outstanding performance of the Company compared to the
Peer Group.
Salaries
In setting salaries, the first element of executive compensation, the
Committee did not use a predetermined formula. Instead, the 1998 salaries of
the President and CEO and the other executive officers were based on:
.the Committee's evaluation of each officer's individual job performance;
.an assessment of the Company's performance; and
.a consideration of salaries paid by the Peer Group to executive officers
holding equivalent positions.
President and CEO. Mr. Wilkinson's salary in 1998 totaled $196,760.
Compensation for 1999 has not been set. It is anticipated that Mr. Wilkinson's
salary will be adjusted for inflation.
Other Named Executive Officer. The 1998 salary of Mr. Satterfield, the
other Named Executive Officer is shown in the "Salary" column of the Summary
Compensation Table.
Executive Annual Incentive Awards
The second element of the executive compensation program is the Executive
Bonus Plan.
The Board of Directors adopted the Executive Bonus Plan in 1998. Under the
terms of this plan, the Board awards a bonus based on a formula which considers
the return of average assets and overall growth of the Company.
For 1998, an annual incentive award of $30,015 for Mr. Wilkinson was
approved by the Committee and confirmed by the Board. The Annual Incentive
Awards for 1998 paid to each of the Named Executive Officers are shown in the
"Bonus" column of the Summary Compensation Table.
Long-Term Incentive Compensation -
Stock Option Plan
In 1998, Mr. Wilkinson and the other executive officers participated in the
Company's long-term incentive compensation program, the third element of
executive compensation. As discussed below, the program consisted of stock
option grants made under the Company's Stock Option Plan.
The Compensation Committee recommended and the Board approved the granting
of Stock Options to each executive officer in 1998 under the Company's Officer
Stock Option Plan. In selecting the size of the stock option grants, the
Committee reviewed:
.competitive data relating to similar grants made by the Peer Group to
executive officers holding comparable positions; and
.the individual stock ownership of the Company's executive officers.
13
<PAGE>
President and CEO. Based upon this data, Mr. Wilkinson was awarded Stock
Options for 23,820 shares of common stock.
Other Named Executive Officer. The other Named Executive Officer, Mr.
Satterfield, was awarded the number of Stock Options shown in the table headed
"Option Grants in 1998." The Key-Employee Stock Options of the Named Executive
Officers and all other executive officers will vest over a five (5) year period
with twenty (20) percent of the options vesting each year.
Glossary
Committee. The Executive Compensation Committee of the Board of Directors
which is comprised of the non-employee members of the Executive committee.
Executive Bonus Awards. These awards are annual cash payments which may
be awarded by the Committee pursuant to the Company's Bonus Plan which sets a
maximum award to each executive officer on the basis of both Company performance
and individual performance over the prior year. Qualitative and quantitative
performance indicators are used to serve as the basis for an assessment of the
performance of the executive officers are published by the Committee (and
approved by the Board in the case of the CEO) at the beginning of the
performance period.
Stock Options. Stock options granted under the Company's Stock Option
Plan to a select group of management employees are considered to have a
substantial impact on the Company's operations.
Named Executive Officers. This refers to the executive officers of the
Company who earn salaries in excess of $100,000.
Peer Group. This group consists of a national peer group of banks with
assets of 200-500 Million Dollars.
THE EXECUTIVE COMPENSATION COMMITTEE
Robert M. Jones
Charles A. Peters
Scott H. Shott
14
<PAGE>
<TABLE>
<S> <C>
Pocahontas Bankshares employee will continue to be employed at his or
Corporation Plans her present compensation until retirement at age
65.
Retirement Savings Plan. The
Company maintains a qualified 401(k) All employees who have attained the
retirement savings plan. All full time employees age of 22 and who have been employed for at
are eligible to participate on a voluntary basis, least six (6) months are eligible to participate.
after completing their first year of service. All Benefits are determined on an actuarial basis
employee contributions are matched by the under a formula which takes into consideration
Company at a rate of fifty percent (50%) of the the participant's years of service and highest
employee contribution for 1998. average earnings.
Pension Plan. The Company and its The cost of contributions to the plan is
subsidiaries have maintained a qualified, not included in the table contained under the
noncontributory pension plan for which each caption "Executive Compensation" because the
year's accrued costs are funded by the Bank. regular actuaries of the plan cannot readily
This Plan was amended January 1, 1989, to calculate the amount of the contribution
incorporate any new subsidiaries which may applicable to individual members of the plan.
become associated with the Company. Because of the present excess funded position of
the pension plan, no contributions have been
Amounts are accrued or set aside each made since 1985.
fiscal year to provide fixed benefits to
employees in the event of retirement at a The table set forth below illustrates the
specified age after a specified number of years estimated annual retirement benefits payable to
of service. The amount of estimated annual salaried employees, based on approximate
benefits upon retirement assumes that the current salary levels, assuming retirement at age
65 on January 1, 1999.
</TABLE>
<TABLE>
<CAPTION>
Average Annual
Salary, Highest
Five Years Years of Service
- -------------------- -----------------------
15 20 25 30 35 40
------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 15,000 $ 4,275 $ 5,700 $ 7,125 $ 8,550 $ 9,975 $ 11,400
- ------------------------------------------------------------------------------------------------------------
$ 25,000 7,125 9,500 11,875 14,250 16,625 19,000
- ------------------------------------------------------------------------------------------------------------
$ 35,000 9,975 13,300 16,625 19,950 23,275 26,600
- ------------------------------------------------------------------------------------------------------------
$ 45,000 12,825 17,100 21,375 25,650 29,925 34,200
- ------------------------------------------------------------------------------------------------------------
$ 55,000 15,675 20,900 26,125 31,350 36,575 41,800
- ------------------------------------------------------------------------------------------------------------
$ 65,000 18,525 24,700 30,875 37,050 43,225 49,400
- ------------------------------------------------------------------------------------------------------------
$ 75,000 21,375 28,500 35,625 42,750 49,875 57,000
- ------------------------------------------------------------------------------------------------------------
$ 85,000 24,225 32,300 40,375 48,450 56,525 64,600
- ------------------------------------------------------------------------------------------------------------
$ 95,000 27,075 36,100 45,125 54,150 63,175 72,200
- ------------------------------------------------------------------------------------------------------------
$105,000 29,925 39,900 49,875 59,850 69,825 79,800
- ------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Average Annual
Salary, Highest
Five Years Years of Service
- -------------------- -----------------------
15 20 25 30 35 40
------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$115,000 32,775 43,700 54,625 65,550 76,475 87,400
- ------------------------------------------------------------------------------------------------------------
$125,000 35,625 47,500 59,375 71,250 83,125 95,000
- ------------------------------------------------------------------------------------------------------------
$135,000 38,475 52,300 64,125 76,950 89,775 102,600
- ------------------------------------------------------------------------------------------------------------
$145,000 41,325 55,100 68,875 82,650 96,425 110,200
- ------------------------------------------------------------------------------------------------------------
$150,000 42,750 57,000 71,250 85,500 99,750 114,000
- ------------------------------------------------------------------------------------------------------------
$155,000 44,175 58,900 73,625 88,350 103,075 117,800
- ------------------------------------------------------------------------------------------------------------
$160,000 45,600 60,800 76,000 91,200 106,400 121,000
- ------------------------------------------------------------------------------------------------------------
</TABLE>
As of December 31, 1998, Mr. Wilkinson had 36 credited years of
service and Mr. Satterfield had 35 credited years of service under the pension
plan.
16
<PAGE>
PERFORMANCE GRAPH
This graph compares our total shareholder returns (assuming reinvestment of
dividends), the NASDAQ stock index and the Carson Medlin Company's Independent
Bank Index. The Independent Bank Index is the compilation of the total return
to shareholders over the past five years of a group of 23 independent community
banks located in the southeastern states of Florida, Georgia, North Carolina,
South Carolina, Tennessee, Virginia and West Virginia.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG POCAHONTAS BANKSHARES, INDEPENDENT BANK INDEX AND NASDAQ INDEX
Independent
Measurement period Pocahontas Bank NASDAQ
(Fiscal year Covered) Bankshares Index Index
Measurement PT -
1993 $100 $100 $100
1994 $147 $119 $ 98
1995 $182 $151 $138
1996 $214 $191 $170
1997 $230 $280 $209
1998 $293 $296 $293
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Pocahontas Bankshares Corporation 100 147 182 214 230 293
- -----------------------------------------------------------------------
Independent Bank Index 100 119 151 191 280 296
- -----------------------------------------------------------------------
NASDAQ Index 100 98 138 170 209 293
- -----------------------------------------------------------------------
</TABLE>
17
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of February 28, 1999, 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
Common 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 225,000/(1)/ 11.25%
2207 Orchard Way
Bluefield, West Virginia 24701
The Ethel N. Bowen Foundation 130,000/(2)/ 6.50%
500 Federal Street
Bluefield, West Virginia 24701
</TABLE>
(1) Includes 205,000 shares owned of record by Mr. Wilkinson. Also includes
20,000 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. Four of these directors are
also directors of Pocahontas Bankshares Corporation and First Century Bank,
N.A. and include: B. L. Jackson, Jr., B. K. Satterfield, F. W. Wilkinson,
and R. W. Wilkinson. The fifth director is Henry C. Bowen.
18
<PAGE>
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION
OF PROXY PROPOSALS, AND OTHER BUSINESS OF SHAREHOLDERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The Board is not aware of any Stock Transfers
matters that are expected to
come before the Annual Meeting Shares of the Company's common stock
other than those referred to in are occasionally bought and sold by
this Proxy Statement. If any private individuals, firms or
other matter should come before corporations. In many instances, the
the Annual Meeting, the persons Company does not have knowledge of
named in the accompanying proxy the purchase price or the terms of
intend to vote the proxies in the purchase. No definitive records
accordance with their best of bids and ask or sale prices are
judgment. available.
Under the rules of the SEC, If you would like information about
shareholder proposals intended firms that make a market in our
to be presented at the stock, you may contact J. Ronald
Company's 1999 Annual Meeting Hypes, Treasurer, Pocahontas
of Shareholders must be Bankshares Corporation, 500 Federal
received by us, Attention: Street, Bluefield, West Virginia
Secretary, at our principal 24701.
executive offices by December
31, 1999 for inclusion in the
proxy statement and form of
proxy relating to that meeting.
</TABLE>
- --------------------------------------------------------------------------------
FORM 10-K
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
The company will furnish without for copies of such report should be
charge to each person whose directed to J. Ronald Hypes,
proxy is being solicited, upon Treasurer, Pocahontas Bankshares
the request of any such person, Corporation, 500 Federal Street,
a copy of the company's annual Bluefield, West Virginia 24701.
report on form 10-K For 1998.
Requests
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Whether or not you plan to attend the envelope. No postage is required
Meeting, please mark, sign, date for mailing in the United States.
and promptly return the enclosed
proxy in the enclosed
By Order of the Board of Directors,
</TABLE>
March 30, 1999
19
<PAGE>
EXHIBIT A
Proposed Amendment to the Company's Articles of Incorporation
Article I which reads:
I. The undersigned agrees to become a corporation by the name of POCAHONTAS
BANKSHARES CORPORATION.
would be amended to read:
I. The undersigned agrees to become a corporation by the name of FIRST
CENTURY BANKSHARES, INC.
<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE 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 WALTER L. SOWERS, 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 20, 1999, 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 fourteen (14) directors of the Corporation for terms of one year,
and until their successors are elected and qualified.
_____FOR all nominees listed below _____WITHHOLD AUTHORITY
(except as marked to the contrary below) You also may withhold authority to
vote for any nominee by lining
through or otherwise striking out
his name.
Paul Cole, Jr. Charles A. Peters Walter L. Sowers
Eustace Frederick C. E. Richner J. Brookins Taylor, M. D.
B. L. Jackson, Jr. Byron K. Satterfield Frank. W. Wilkinson
Robert M. Jones, M.D. John H. Shott R. W. Wilkinson
Harold L. Miller Scott H. Shott
2. To approve an amendment to the Articles of Incorporation changing the
Corporation's name to First Century Bankshares, Inc.
__________FOR__________AGAINST__________ABSTAIN
3. To ratify the selection of the firm of PricewaterhouseCoopers, LLP, as
independent auditors of the Corporation for the fiscal year ending December
31, 1999.
__________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 ratably FOR Proposal 1 and will be voted FOR Proposals 2 and 3.
--- ---
Dated this______________________1999 __________________________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.)
