March 15, 1996
Dear Shareholders:
You are cordially invited to attend our annual meeting of the
shareholders of Highlands Bankshares, Inc. on Tuesday, April 9, 1996, at
3:00 p.m., at The Grant County Bank, 1 North Main Street (the "Old Bank
Building"), Petersburg, West Virginia.
Enclosed in this mailing you will find formal notice of the meeting, a
proxy and a Proxy Statement detailing the matters upon which the
shareholders will act at the annual meeting. Our Company's Annual Report
for 1995 is also enclosed.
We urge you to complete, date and sign the proxy, and return it as
soon as possible in the enclosed postage prepaid envelope, even if you
intend to attend the meeting. You may revoke your proxy at any time prior
to its exercise.
Sincerely,
John G. VanMeter
Chairman of the Board
Page 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Highlands Bankshares, Inc.
The annual meeting of shareholders of Highlands Bankshares, Inc. will
be held on Tuesday, April 9, 1996 at 3:00 p.m., at The Grant County Bank, 1
North Main Street (the "Old Bank Building"), Petersburg, West Virginia, for
the following purposes:
1. Election of eight directors to serve until the next annual
meeting of shareholders.
2. Ratification of the appointment of S. B. Hoover and Company,
L.L.P. as independent auditors for 1996.
3. Transaction of other business as may properly come before the
meeting.
Only shareholders of record at the close of business on March 1, 1996
are entitled to notice of and to vote at the annual meeting or any
adjournments thereof.
To assure that your shares are represented at the annual meeting,
please complete, date and sign the enclosed proxy, and return it as soon as
possible in the enclosed postage prepaid envelope. You may revoke your
proxy at any time prior to its exercise.
By Order of the Board of Directors
Clarence E. Porter
Corporate Secretary
March 15, 1996
Page 3
HIGHLANDS BANKSHARES, INC.
P.O. Box 929
Petersburg, West Virginia 26847
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies for use at the annual meeting of shareholders of Highlands
Bankshares, Inc. (Highlands or the Company) to be held Tuesday, April 9,
1996 at 3:00 p.m., at The Grant County Bank, 1 North Main Street (the "Old
Bank Building"), Petersburg, West Virginia, and at any adjournments thereof
(Annual Meeting). The accompanying proxy is solicited by the Board of
Directors of the Company (the Board). The principal executive offices of
the Company are located at 3 North Main Street, Petersburg, West Virginia
26847. The approximate mailing date of the Proxy Statement and the
accompanying proxy is March 15, 1996.
The cost of the solicitation of proxies will be borne by the Company.
Solicitations will be made only by the use of the mail, except that, if
necessary, officers, directors and regular employees of the Company, or its
affiliates, may make solicitations of proxies by telephone, telegraph or by
personal calls. Brokerage houses and nominees may be requested to forward
the proxy solicitation material to the beneficial owners of the stock held
of record by such persons, and the Company may reimburse them for their
charges and expenses in this regard.
All properly executed proxies delivered pursuant to this solicitation
will be voted at the Annual Meeting in accordance with any instructions
thereon. Any person signing and mailing the enclosed proxy may,
nevertheless, revoke the proxy at any time prior to the actual voting
thereof.
A 1995 Annual Report to shareholders, including current financial
statements, is being mailed to the Company's shareholders concurrently with
this Proxy Statement, but should not be considered proxy solicitation
material.
Interested shareholders may obtain, without charge, a copy of the
Company's Form 10-KSB, as filed with the Securities and Exchange
Commission, upon written request to Clarence E. Porter, Corporate
Secretary, Highlands Bankshares, Inc., P.O. Box 929, Petersburg, West
Virginia 26847.
OUTSTANDING SHARES AND VOTING RIGHTS
Only shareholders of record at the close of business on March 1, 1996,
will be entitled to vote at the Annual Meeting. As of such date, the
Company had outstanding 514,066 shares of its common stock, $5 par value
(Common Stock), each of which is entitled to one vote at the Annual
Meeting. Cumulative voting rights are available for the election of
directors, as further described in this Proxy Statement.
Page 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
As of March 1, 1996, William G. VanMeter, 32 North Main Street,
Petersburg, West Virginia 26847, was the only individual who beneficially
owned more than 5% of Common Stock. As of such date, Mr. VanMeter
individually owned 34,200 shares of Common Stock, or 6.7% of all
outstanding Common Stock. The following table sets forth the number and
percentage of shares of Common Stock held as of March 1, 1996 by each of
the Company's directors, and all of the Company's directors and officers as
a group.
Amount Beneficially Percent of
Name of Owner Owned Class
Leslie A. Barr 1,838 1 *
George B. Moomau 7,740 2 1.5%
Clarence E. Porter 112 3 *
Harold B. Roby 18,400 4 3.6%
Courtney R. Tusing 816 *
John G. VanMeter 12,200 5 2.4%
Jack H. Walters 1,608 6 *
L. Keith Wolfe 2,860 7 *
8 directors and all officers
of Highlands as a group 45,574 8.9%
* Denotes less than 1% of class
1 Includes 940 shares owned directly and 898 shares owned jointly
with his wife.
2 Includes 3,100 shares owned directly, 4,440 shares owned jointly
with his wife and 200 shares held by his wife over which he holds
no voting or dispositive powers.
3 Includes 100 shares owned directly and 12 shares held by his wife
over which he holds no voting or dispositive powers.
4 Includes 1,000 shares owned directly and 17,400 shares owned
jointly with his wife.
5 Includes 440 shares owned directly, 11,560 shares owned jointly
with his wife, and 200 shares held by his wife over which he holds
no voting or dispositive powers.
6 Includes 1,508 shares owned directly and 50 shares held as co-
guardian for each of his two minor children.
7 Includes 2,610 shares owned directly, 100 shares held jointly with
each of his two minor children, and 50 shares held by his wife over
which he holds no voting or dispositive powers.
Page 5
PROPOSAL ONE ELECTION OF DIRECTORS
There are currently eight directors of the Board, all of whom have
been recommended by the Board for election at the Annual Meeting. Seven of
the eight current directors were elected by the shareholders of Highlands
at its 1995 Annual Meeting of shareholders. On July 19, 1995, Director
James E. Frye, Sr. died, after which the Board elected Courtney R. Tusing
on August 14, 1995 to serve the remainder of Mr. Frye's term. The
directors elected at the Annual Meeting shall serve until the next annual
meeting of the Company's shareholders.
In the election of directors, the Company's shareholders shall have
as many votes as the number of shares they own, multiplied by the number of
directors to be elected. When voting by proxy or in person at the Annual
Meeting, shareholders may do one of the following:
1. Shareholder may vote FOR all of the director nominees. If the
shareholder wishes to withhold authority as to certain nominees, however,
he may do so by writing the name of the person or persons for whom he does
not want to vote in a space provided on the proxy.
2. A shareholder may WITHHOLD AUTHORITY to vote for all of the
director nominees, in which case none of the nominees receives any of the
shareholder's vote.
3. A shareholder may CUMULATE all of his votes for one director
nominee or distribute them among as many nominees as he chooses. For
example, the election of eight directors entitles a shareholder who owns
100 shares of stock to 800 votes. The shareholder may vote all 800 votes
for one director, or may allocate his votes among two or more of the
directors. Shareholders wishing to cumulate their vote on the enclosed
proxy should direct that their votes be cumulated on behalf of the
directors for whom they vote by writing the name of the director or
directors in the space provided on the proxy and indicating the number of
votes to be cast for each such director.
It is the intention of the persons named as proxies in the
accompanying form of proxy, unless instructed otherwise, to vote for the
election of each of the nominees for directors set forth below. If any
nominee should become unavailable to serve, the proxy may be voted for the
election of a substitute nominee designated by the Board. The Board has no
reason to believe any of the nominees will be unable to serve if elected.
The Board recommends for election each of the nominees set forth below.
INFORMATION CONCERNING NOMINEES
The following information, including the principal occupation during
the past five years, is given with respect to the nominees, all of whom are
current directors, for election to the Board at the Annual Meeting.
Page 6
Nominees
Name and Position Director Principal Occupation During
With the Company Age Since the Last Five Years
Leslie A. Barr 58 7/87 President and Chief Executive
President Officer of Capon Valley Bank
since August 1985
George B. Moomau 75 5/85 Chairman of the Board of The
Grant County Bank since
October 1988; prior thereto,
President of The Grant County
Bank
Clarence E. Porter 47 4/92 President and Chief Executive
Secretary/Treasurer Officer of The Grant County
Bank since August 1991; Vice
President of The Grant County
Bank from August 1988 until
August 1991
Harold B. Roby 73 5/85 Retired; former self-employed
farmer
Courtney R. Tusing 70 8/95 Retired; President and
Chairman of the Board of
First United National Bank &
Trust and First United Corp.
John G. VanMeter 58 5/85 Attorney at Law; Partner,
Chairman of the Board VanMeter & VanMeter
Jack H. Walters 48 7/87 Attorney at Law; Partner,
Walters & Krauskopf
L. Keith Wolfe 69 5/85 Owner of Petersburg Motor
Company
Board Meetings and Compensation
The Board met 12 times during 1995. All incumbent members of the
Board attended at least 75% of the aggregate of the total number of
meetings of the Board. For 1995, the Company had a Compensation Committee
which consisted of Courtney R. Tusing, L. Keith Wolfe, John G. VanMeter and
Jack H. Walters. The Company did not have a standing audit or nominating
committee. Directors of the Company received $100.00 for attending Board
meetings and $75.00 for attending Committee meetings.
Loans made by The Grant County Bank and Capon Valley Bank to director
nominees and their affiliates were made in the ordinary course of business,
were made 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.
Page 7
SUMMARY COMPENSATION
The Summary Compensation Table below sets forth the compensation of
the Chief Executive Officer of The Grant County Bank and Capon Valley Bank,
the Company's two wholly-owned bank subsidiaries, for the last three years.
Summary Compensation Table
Annual Compensation
Name and
Principal Position Year Salary Bonus
Clarence E. Porter 1995 $ 72,000 $
President and Chief Executive 1994 67,000
Officer of The Grant County Bank 1993 62,000
Leslie A. Barr 1995 66,600 6,050
President and Chief Executive 1994 61,600 5,633
Officer of Capon Valley Bank 1993 55,597 5,133
PROPOSAL TWO APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
S. B. Hoover & Company, L.L.P. of Harrisonburg, Virginia, were
auditors for 1995 and are being recommended to the Company's shareholders
for appointment as auditors for 1996. A representative of S. B. Hoover &
Company, L.L.P. is expected to attend the Annual Meeting with the
opportunity to make a statement or to respond to appropriate questions from
shareholders.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's
1997 Annual Meeting must be received by the Secretary of the Company, at
its principal executive offices, 3 North Main Street, Petersburg, West
Virginia 26847, for inclusion in its Proxy Statement relating to the
meeting by November 14, 1996.
By Order of the Board of Directors
Clarence E. Porter
Corporate Secretary
March 15, 1996
Page 8
PROXY
HIGHLANDS BANKSHARES, INC.
Annual Meeting of Shareholders, April 9, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints George B. Moomau and Leslie A. Barr,
or either of them, with full power of substitution, as proxies to vote, as
designated below, at the Annual Meeting of Shareholders to be held on April
9, 1996, and at any adjournment thereof, the shares of Highlands
Bankshares, Inc. common stock held of record by the undersigned as of March
1, 1996.
The shares to which this proxy relates will be voted as specified. If
no specification is made, such shares will be voted in favor of the
proposals set forth on this proxy.
PROPOSAL ONE: ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all nominees listed below
Leslie A. Barr, George B. Moomau, Clarence E. Porter, Harold B. Roby, John
G. VanMeter, Jack H. Walters, L. Keith Wolfe and Courtney R. Tusing
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
CUMULATE votes among the nominees
(INSTRUCTION: To cumulate your votes for any individual nominee(s) set
forth below, write the name(s) of the nominee(s) in the space below and
indicate the number of votes you want to cast for such person(s). The
total number of votes cast among the nominee(s) should equal your number of
shares multiplied by 8 as described in the Proxy Statement.)
PROPOSAL TWO: APPOINTMENT OF S. B. HOOVER & COMPANY, L.L.P.
AS INDEPENDENT PUBLIC ACCOUNTANTS
FOR AGAINST ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
Please complete, date and sign the proxy and return it as soon as
possible in the enclosed postage prepaid envelope. The proxy must be
signed exactly as the name or names appear on the label attached to this
proxy. If signing as a trustee, executor, etc., please so indicate.
Date Signed:
Signature(s)
