DEF 14A 1 proxy2001-1843.txt ANNUAL PROXY 2001 SCHEDULE 14A INFORMATION (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ___) Filed by the Registrant [x] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ]Preliminary Proxy Statement [ ]Confidential, for Use of the [x]Definitive Proxy Statement Commission Only (as permitted [ ]Definitive Additional Materials by Rule 14a-6(e)(2)) [ ]Soliciting Material Under Rule 14a-12 HCB BANCSHARES, INC. -------------------------------------------------------------------------------- (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] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1. Title of each class of securities to which transaction applies: ----------------------------------------------------------------------- 2. Aggregate number of securities to which transaction applies: ----------------------------------------------------------------------- 3. Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ----------------------------------------------------------------------- 4. Proposed maximum aggregate value of transaction: ----------------------------------------------------------------------- 5. Total fee paid: ----------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials:___________________________ [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1. Amount Previously Paid: ----------------------------------------------------------------------- 2. Form, Schedule or Registration Statement No.: ----------------------------------------------------------------------- 3. Filing Party: ----------------------------------------------------------------------- 4. Date Filed: ----------------------------------------------------------------------- [LETTERHEAD OF HCB BANCSHARES, INC.] October 15, 2001 Dear Stockholder: We invite you to attend the annual meeting of stockholders of HCB Bancshares, Inc. to be held at the Charles O. Ross Center, located at 746 California Avenue, Camden, Arkansas, on Thursday, November 15, 2001 at 10:00 a.m., local time. The accompanying notice and proxy statement describe the formal business to be transacted at the meeting. During the meeting, we will also report on the operations of the Company's subsidiary, HEARTLAND Community Bank. Directors and officers of the Company, as well as representatives of Deloitte & Touche, LLP, the Company's independent auditors, will be present to respond to any questions the stockholders may have. ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING. Your vote is important, regardless of the number of shares you own. This will not prevent you from voting in person but will assure that your vote is counted if you are unable to attend the meeting. Sincerely, /s/ Cameron D. McKeel Cameron D. McKeel President and Chief Executive Officer HCB BANCSHARES, INC. 237 JACKSON STREET, S.W. CAMDEN, ARKANSAS 71701-3941 (870) 836-6841 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 15, 2001 NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual Meeting") of HCB Bancshares, Inc. (the "Company") will be held at the Charles O. Ross Center, located at 746 California Avenue, Camden, Arkansas, on Thursday, November 15, 2001 at 10:00 a.m., local time. A proxy statement and proxy card for the Annual Meeting accompany this notice. The Annual Meeting is for the purpose of considering and acting upon: 1. The election of two directors of the Company for three-year terms; and 2. The transaction of such other matters as may properly come before the Annual Meeting or any adjournments thereof. The Board of Directors is not aware of any other business to come before the Annual Meeting. Any action may be taken on any one of the foregoing proposals at the Annual Meeting on the date specified above or on any date or dates to which, by original or later adjournment, the Annual Meeting may be adjourned. Stockholders of record at the close of business on October 4, 2001 are the stockholders entitled to vote at the Annual Meeting and any adjournments thereof. A list of the stockholders of the Company entitled to vote at the Annual Meeting shall be open to the examination of any stockholder for any purpose germane to the Annual Meeting during ordinary business hours for a period of ten days prior to the Annual Meeting. Such list will be held at the Company's office located at 237 Jackson Street, S.W., Camden, Arkansas. You are requested to fill in and sign the accompanying proxy card which is solicited by the Board of Directors and to mail it promptly in the accompanying envelope. The proxy card will not be used if you attend and vote at the Annual Meeting in person. BY ORDER OF THE BOARD OF DIRECTORS /s/ Paula J. Bergstrom PAULA J. BERGSTROM SECRETARY Camden, Arkansas October 15, 2001 IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. THE ACCOMPANYING PROXY CARD IS ACCOMPANIED BY A SELF-ADDRESSED ENVELOPE FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. PROXY STATEMENT OF HCB BANCSHARES, INC. 237 Jackson Street, S.W. Camden, Arkansas 71701-3941 ANNUAL MEETING OF STOCKHOLDERS NOVEMBER 15, 2001 GENERAL This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of HCB Bancshares, Inc. (the "Company") to be used at the annual meeting of stockholders (the "Annual Meeting") which will be held at the Charles O. Ross Center, located at 746 California Avenue, Camden, Arkansas, on Thursday, November 15, 2001 at 10:00 a.m., local time. This proxy statement and the accompanying notice and proxy card are being first mailed to stockholders on or about October 15, 2001. VOTING AND REVOCABILITY OF PROXIES Stockholders who execute proxies retain the right to revoke them at any time. Unless so revoked, the shares represented by such proxies will be voted at the Annual Meeting and all adjournments thereof. Proxies may be revoked by written notice to Paula J. Bergstrom, Secretary of the Company, at the address shown above, by filing a later-dated proxy prior to a vote being taken on a particular proposal at the Annual Meeting or by attending the Annual Meeting and voting in person. Proxies solicited by the Board of Directors of the Company will be voted in accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE VOTED FOR THE NOMINEES FOR DIRECTORS SET FORTH IN THIS PROXY STATEMENT. The proxy confers discretionary authority on the persons named therein to vote with respect to the election of any person as a director where the nominee is unable to serve or for good cause will not serve, and matters incident to the conduct of the Annual Meeting. If any other business is presented at the Annual Meeting, proxies will be voted by those named therein in accordance with the determination of a majority of the Board of Directors. Proxies marked as abstentions, as well as shares held in street name which have been designated by brokers on proxy cards as not voted, will not be counted as votes cast. Proxies marked as abstentions or as broker non-votes, however, will be treated as shares present and eligible to vote for purposes of determining whether a quorum is present. VOTING SECURITIES AND BENEFICIAL OWNERSHIP Stockholders of record as of the close of business on October 4, 2001 (the "Record Date") are entitled to one vote for each share then held. As of October 4, 2001, the Company had 1,911,929 shares of common stock, par value $.01 per share (the "Common Stock"), issued and outstanding. The presence, in person or by proxy, of at least one-third of the total number of shares of Common Stock outstanding and entitled to vote will be necessary to constitute a quorum at the Annual Meeting. Persons and groups owning in excess of 5% of the Company's Common Stock are required to file certain reports regarding such ownership pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The following table sets forth as of October 4, 2001, certain information as to the Common Stock believed by management to be beneficially owned by persons owning in excess of 5% of the Company's Common Stock and by all directors and executive officers of the Company as a group.
PERCENT OF SHARES NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OUTSTANDING ------------------- ----------------------- ------------------ HCB Bancshares, Inc. 1998 Stock 110,000 (2) 5.75% Option Plan Trust ("SOP Trust") 237 Jackson Street, S.W. Camden, Arkansas 71701 HCB Bancshares, Inc. 203,631 (3) 10.65 Employee Stock Ownership Plan ("ESOP") 237 Jackson Street, S.W. Camden, Arkansas 71701 Joseph Stilwell 150,850 (4) 7.89 26 Broadway, 23rd Floor New York, New York 10004 All directors, nominees for director and executive officers as a group (11 persons) 373,869 (5) 18.63 (5) _____________ (1) Includes all shares as to which the beneficial owner had sole or shared voting and/or investment power. (2) Such shares are voted by the trustees of the SOP Trust in the same ratio as the unallocated ESOP shares are voted. (3) These shares are held in a suspense account for future allocation among participating employees as the loan used to purchase the shares is repaid. The ESOP trustee, Regions Bank, Little Rock, Arkansas, votes all allocated shares in accordance with instructions of the participants. Unallocated shares and shares for which no instructions have been received, if any, are voted by the ESOP trustee in the same ratio as participants direct the voting of allocated shares or, in the absence of such direction, as directed by the Company's Board of Directors. As of October 4, 2001, 76,671 shares had been allocated and 126,960 shares were unallocated. (4) The information provided herein is based upon a Schedule 13D, dated June 14, 2001, filed jointly by Joseph Stilwell, Stilwell Value Partners IV, L.P., Stilwell Associates, L.P. and Stilwell Value LLC (collectively, the "Group"). The Schedule 13D reported that each member of the Group shared voting and investment power with respect to all 150,850 shares reported as beneficially owned. (5) Includes 204,848 shares which all directors and executive officers as a group had a right to purchase pursuant to the exercise of stock options exercisable within 60 days. To the extent available, such shares are assumed to be transferred upon the exercise of options to directors and executive officers from the SOP Trust, while the remaining shares are assumed to be newly issued. Does not include unallocated shares held by the ESOP (see above) or 21,329 shares held by the Company's Management Recognition Plan Trust, which shares are voted by Directors Akin, Murry, Parker, Purtle and Steelman as trustees for such trusts. Such shares are required to be voted in the same proportion as the unallocated shares under the ESOP.
ELECTION OF DIRECTORS GENERAL The Company's Board of Directors consists of seven members. The Company's Certificate of Incorporation requires that directors be divided into three classes, as nearly equal in number as possible, with approximately one-third of the directors elected each year. The Board of Directors has nominated Vida H. Lampkin and Clifford O. Steelman, each to serve as directors for a three-year period. Under Oklahoma law, directors are elected by a plurality of all shares present and entitled to vote at a meeting at which a quorum is present. In addition, at its October 2001 Board meeting, the Board of Directors will amend the Company's Bylaws to increase the number of directors from seven to eight and will appoint John G. Rich as a director to serve in the class of directors with terms expiring at the 2003 annual meeting of stockholders. 2 If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such substitute as the Board of Directors may recommend or the size of the Board may be reduced to eliminate the vacancy. At this time, the Board knows of no reason why any nominee might be unavailable to serve. The following table sets forth the names of the persons nominated by the Board of Directors for election as directors. Also set forth is certain other information with respect to each person's age, the year he or she first became a director of the Company's subsidiary, HEARTLAND Community Bank (the "Bank"), the expiration of his or her term as a director and the number and percentage of shares of Common Stock beneficially owned. Each director of the Company is also a member of the Board of Directors of the Bank. With the exception of Messrs. Purtle, Akin and Rich, all individuals were initially appointed as a director of the Company in 1996 in connection with the Company's incorporation.
SHARES OF YEAR FIRST COMMON STOCK ELECTED AS CURRENT BENEFICIALLY AGE AS OF THE DIRECTOR TERM OWNED AS OF THE PERCENT NAME RECORD DATE OF THE BANK TO EXPIRE RECORD DATE (1) OF CLASS 2 ---- ----------- ----------- --------- --------------- ---------- BOARD NOMINEES FOR TERMS TO EXPIRE IN 2004 Vida H. Lampkin 63 1983 2001 88,546 4.63% Clifford O. Steelman 60 1984 2001 42,194 2.21 DIRECTORS CONTINUING IN OFFICE Cameron D. McKeel 62 1996 2002 66,584 3.48 Bruce D. Murry 62 1994 2002 23,116 1.21 F. Michael Akin 45 2000 2002 500 * Carl E. Parker, Jr. 54 1981 2003 45,194 2.36 Ned Ray Purtle 65 2000 2003 23,250 1.22 DIRECTOR TO BE APPOINTED John G. Rich 45 (3) 2003 -- -- ---------- (1) Includes all shares as to which the beneficial owner had sole or shared voting and/or investment power. Amounts shown include 50,784, 15,872, 47,612, 15,872, 0, 15,872 and 0 shares which may be acquired by Directors Lampkin, Steelman, McKeel, Murry, Akin, Parker and Purtle, respectively, upon the exercise of options exercisable within 60 days of October 4, 2001. Does not include unallocated shares held by the ESOP (see above) or shares held by Directors Akin, Murry, Parker, Purtle and Steelman as trustees for the Company's Management Recognition Plan Trust, which shares are required to be voted in the same proportion as the unallocated shares under the ESOP or, in the absence thereof, as directed by the Company's Board of Directors. (2) Assumes shares issued upon exercise of options are newly issued shares. (3) Mr. Rich will be appointed as a director in October 2001 and will serve in the class of directors with terms expiring at the 2003 annual meeting of stockholders. * Amount beneficially owned is less than 1% of outstanding Common Stock.
3 Set forth below is information regarding the Company's directors and nominee for director. Unless otherwise stated, all directors have held the positions indicated for at least the past five years. VIDA H. LAMPKIN served as President and Chief Executive Officer of the Company from December 1996 until December 1999 and served as President and Chief Executive Officer of the Bank from January 1990 until December 1999. Mrs. Lampkin is currently the Chairman of the Board of the Company as well as Chairman of the Board of the Bank. Mrs. Lampkin is currently a Board member of the Arkansas League of Savings Institutions, a member of the Governmental Affairs Council of America's Community Bankers and a Board member of Arkansas Quality Award. CLIFFORD O. STEELMAN serves as Senior Human Resource Administrator for Atlantic Research Corporation located in Camden, Arkansas. Mr. Steelman retired from the Camden Kraft Packaging Plant, International Paper, Camden, Arkansas, in 1997 after having been employed there since 1968. Mr. Steelman is a member of the Board of Directors of the Camden Fairview School District and a member of the Camden Chamber of Commerce. CAMERON D. MCKEEL has served as President and Chief Executive Officer of the Company and Bank since December 1999. From November 1997 to December 1999, Mr. McKeel served as Executive Vice President of the Company and from May 1996 to November 1997 was Vice President of the Company. In addition, from May 1996 to December 1999, Mr. McKeel served as Executive Vice President of the Bank. Prior to joining the Bank, Mr. McKeel was Executive Vice President of Arkansas State Bank in Clarksville, Arkansas. He is a member of the Camden Lions Club and is the immediate President of the Ouachita Area United Way. BRUCE D. MURRY is owner of Bruce's, Inc., a retail establishment, located in Camden, Arkansas. Mr. Murry is a current member of the Camden Lions Club and the Camden Chamber of Commerce. F. MICHAEL AKIN has served as President and CEO of Akin Industries, a manufacturer of furniture for the healthcare and hospitality industries for the past 13 years. Prior to that, Mr. Akin was with Arkansas Louisiana Gas in sales and marketing for two years. Mr. Akin currently serves as Chairman of the Arkansas Economic Development Commission, a commission he has served on since 1997. He is a charter board member of the Arkansas Wood Manufacturers Association and served as President in 1995-96. In addition, Mr. Akin is a board member of the Monticello Economic Development Commission and is Chairman of the Drew County Work Force Training Advisory Council. CARL E. PARKER, JR. has been General Manager of Camden Monument Company from 1970 to the present. He is a member of the Camden Rotary Club. NED RAY PURTLE is owner and manager of Purtle and Son Ranches in Hope, Arkansas. Previously he was in banking in Clarksville, Arkansas. As the principal owner of Arkansas State Bank in Clarksville, Mr. Purtle served as Vice Chairman from 1988 to 1995 and Chairman from 1995 to 1997. During that time, Mr. Purtle was also owner and Chairman of the Board of Automated Solutions, Inc. in Knoxville, Arkansas. Mr. Purtle currently serves on the Board of Trustees of the University of Arkansas and for the past 28 years served on the board of Citizens National Bank in Hope. In addition, Mr. Purtle is a member of the board of Arkansas Farm Bureau, Arkansas Farm Bureau Mutual Insurance Company, the Arkansas Cattleman's Foundation, and the Arkansas State Fair, of which he has served as Chairman since 1997. In 2000, Mr. Purtle was named Graduate of Distinction from his alma mater, Oklahoma State University, and he received the Man of the Year Award in Arkansas Agriculture from the Progressive Farmer magazine in 1997. JOHN G. RICH has been an attorney with the law firm of Eppenstein & Eppenstein in New York, New York since 1995. 4 EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS The following table sets forth information regarding the executive officers of the Company who do not serve on the Board of Directors.
AGE AT JUNE 30, NAME 2001 TITLE ---- --------- ----- William C. Lyon 60 Senior Vice President of the Company; Senior Vice President and Chief Lending Officer of the Bank Paula J. Bergstrom 46 Senior Vice President Administration and Secretary of the Company; Senior Vice President Administration and Secretary of the Bank Scott A. Swain 39 Senior Vice President and Chief Financial Officer of the Company; Senior Vice President and Chief Financial Officer of the Bank
The following paragraph sets forth information regarding the principal occupation of the executive officer designated above. WILLIAM C. LYON has served as Vice President of the Company since December 1996 and has been Senior Vice President and Chief Lending Officer of the Bank since May 1996. Mr. Lyon was named Senior Vice President of the Company in November 1997. From January 1994 to May 1996, Mr. Lyon was a self-employed banking consultant and from 1991 to 1994 he served as Senior Vice President of American National Bank and Trust Company in Shawnee, Oklahoma. Mr. Lyon is the immediate past President of the Camden Chamber of Commerce and serves on various Chamber of Commerce committees. Mr. Lyon serves on the Board of Ouachita Partnership of Economic Development (OPED) and currently serves as OPED Secretary-Treasurer. He is a member of the Camden Lions Club. PAULA J. BERGSTROM has served as Secretary of the Company since December 1996 and was named Senior Vice President Administration of the Company in November 2000. From February 1992 to December 1997, Mrs. Bergstrom served as Vice President Compliance & Data Processing of the Bank. In January 1997, Mrs. Bergstrom was named Secretary of the Bank and served as the Bank's Vice President Administration from December 1997 to November 2000 at which time she was named the Bank's Senior Vice President Administration. SCOTT A. SWAIN served as Vice President and Chief Financial Officer of the Company from February 1999 to November 2000 at which time he was named the Company's Senior Vice President and Chief Financial Officer. Mr. Swain served as Vice President and Chief Financial Officer of the Bank from February 1999 to November 2000 at which time he was named the Bank's Senior Vice President and Chief Financial Officer. Mr. Swain also serves as the Treasurer of the Company and as the Bank's Interim Compliance Officer. Mr. Swain is a 2001 Camden Area Leadership Graduate. COMMITTEES OF THE BOARD OF DIRECTORS The Board of Directors of the Company holds regular monthly meetings and special meetings as needed. During the year ended June 30, 2001, the Company's Board met 15 times. No director attended fewer than 75% in the aggregate of the total number of Board and committee meetings held while he or she was a member during the year. The fiscal year 2001 Board of Directors' Audit Committee consisted of Directors Akin, Murry, Parker, Purtle and Steelman, who serves as Chairman. The members of the Audit Committee are "independent," as "independent" is defined in Rule 4200(a)(15) of the National Association of Securities Dealers listing standards. The Audit Committee met seven times during the year ended June 30, 2001 to examine and approve the audit report 5 prepared by the independent auditors of the Company, to review and recommend the independent auditors to be engaged by the Company, to review the internal audit function and internal accounting controls, and to review and approve Company policies. The Company's Board of Directors has adopted a written charter for the Audit Committee. A copy of the Audit Committee's charter is attached to this Proxy Statement as Exhibit A. The Compensation Committee for fiscal year 2001 consisted of Directors Akin, Murry, Parker, Purtle and Steelman. This committee reviews the performance of the officers of the Company and determines compensation. The Compensation Committee met one time during the year ended June 30, 2001. The Company does not have a standing nominating committee. Under the Company's current Bylaws, the Company's full Board of Directors selects the management nominees for election of directors. The Board of Directors met one time in this capacity with respect to the nominees for election as directors at the Annual Meeting. The Company's Certificate of Incorporation sets forth procedures that must be followed by stockholders seeking to make nominations for directors. In order for a stockholder of the Company to make any nominations, he or she must give written notice thereof to the Secretary of the Company not less than thirty days nor more than sixty days prior to the date of any such meeting; provided, however, that if less than forty days' notice of the meeting is given to stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Company not later than the close of business on the tenth day following the day on which notice of the meeting was mailed to stockholders. Each such notice given by a stockholder with respect to nominations for the election of directors must set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice; (ii) the principal occupation or employment of each such nominee; and (iii) the number of shares of stock of the Company which are beneficially owned by each such nominee. In addition, the stockholder making such nomination must promptly provide any other information reasonably requested by the Company. EXECUTIVE COMPENSATION Summary Compensation Table. The following table sets forth the cash and noncash compensation for each of the three fiscal years ended June 30, 2001 awarded to or earned by the Company's Chief Executive Officer for services rendered in all capacities to the Company and its subsidiaries.
LONG-TERM COMPENSATION AWARDS -------------------------- ANNUAL COMPENSATION(1) RESTRICTED SECURITIES FISCAL ---------------------- STOCK UNDERLYING ALL OTHER NAME AND POSITION YEAR SALARY BONUS AWARD(S) OPTIONS COMPENSATION(2) ----------------- ---- ------ ----- --------- ---------- --------------- Cameron D. McKeel (3) 2001 $103,935 $ -- $ -- -- $ 63,527 President and Chief Executive 2000 98,224 -- -- -- 70,690 Officer of the Company and 1999 90,000 -- -- 47,612 (4) 72,156 Bank Vida H. Lampkin 2001 114,474 -- -- -- 139,035 Chairman of the Board 2000 108,485 -- -- -- 140,199 of the Company and the Bank 1999 100,000 -- -- 50,784 (4) 162,042 _____________ (1) Executive officers of the Company receive indirect compensation in the form of certain perquisites and other personal benefits. The amount of such benefits received by each named executive officer in fiscal year 2001 did not exceed 10% of each executive officer's salary and bonus. (2) For Mr. McKeel for fiscal 2001, includes life, health, dental and disability insurance ($5,677), the value of shares allocated under the ESOP ($9,350) and the annual contribution under the Bank's Director's Retirement Plan ($48,500); for Mrs. Lampkin for fiscal 2001, includes life, health, dental and disability insurance ($4,708), the value of shares allocated under the ESOP ($11,153), and the annual contribution under the Bank's Director's Retirement Plan ($123,174). (3) Mr. McKeel was appointed President and Chief Executive Officer of the Company and the Bank on December 16, 1999. (4) These options represent the repricing of options granted in fiscal year 1998.
6 Year-End Option/SAR Values. The following table sets forth information concerning the number and potential realizable value at the end of the fiscal year of options held by officers listed on the Summary Compensation Table. Neither Mr. McKeel nor Mrs. Lampkin exercised any options during fiscal year 2001.
NUMBER OF SECURITIES VALUE OF UNEXERCISED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1) --------------------------- --------------------------- NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- ------------- ----------- ------------- Cameron D. McKeel 47,612 -- $169,023 $ -- Vida H. Lampkin 50,784 -- $180,283 $ -- ____________ 1 Based on the difference between the fair market value of the underlying Common Stock of $12.675, which was the average of the high and low sale price for the Common Stock on June 30, 2001, as reported on the Nasdaq Small Cap Market, and the exercise price of $9.125 per share.
EMPLOYMENT AGREEMENTS The Company and the Bank maintain separate employment agreements (the "Employment Agreements") with Cameron D. McKeel who as of December 16, 1999 became President and Chief Executive Officer of the Company and Bank and Vida H. Lampkin, who served as President and Chief Executive Officer of the Bank and the Company until December 16, 1999 and currently serves as Chairman of the Board (together, the "Employees"). In such capacities, the Employees are responsible for overseeing all operations of the Bank and the Company, and for implementing the policies adopted by the Board of Directors. Such Boards believe that the Employment Agreements assure fair treatment of the Employees in relation to their careers with the Company and the Bank by assuring them of some financial security. The Employment Agreements provide for terms of one year and an annual base salary of $103,935 and $114,474 for Mr. McKeel and Mrs. Lampkin, respectively. On each anniversary date of the Employment Agreements' effective date (the "Effective Date"), the term of employment will be extended for an additional one-year period beyond the then effective expiration date, upon a determination by the Board of Directors that the performance of the Employee has met the required performance standards and that the Employee's respective Employment Agreement should be extended. The Employment Agreements provide each Employee with a salary review by the Boards of Directors not less often than annually, as well as with inclusion in any discretionary bonus plans, retirement and medical plans, customary fringe benefits, vacation and sick leave. Each Employment Agreement will terminate upon the Employee's death, may terminate upon the Employee's disability and is terminable by the Bank for "just cause" (as defined in the Employment Agreements). In the event of termination for "just cause," no severance benefits are available. In the event of (i) the Employee's involuntary termination of employment for any reason other than "just cause" or (ii) the Employee's voluntary termination within 90 days of the occurrence of a "good reason" (as defined in the Employment Agreements), the Employee will be entitled to receive (a) his or her salary up to the Employment Agreements' expiration date (the "Expiration Date") plus an additional 12-month salary, (b) a put option requiring the Bank or the Company to purchase Common Stock held by the Employee to the extent that it is not readily tradeable on an established securities market, and (c), at the Employee's election, either cash in an amount equal to the cost of benefits the Employee would have been eligible to participate in through the Expiration Date or continued participation in the benefits plans through the Expiration Date. If the Employment Agreements are terminated due to the Employee's "disability" (as defined in the Employment Agreements), the Employee will be entitled to a continuation of his or her salary and benefits through the date of such termination, including any period prior to the establishment of the Employee's disability. In the event of the Employee's death during the term of the Employment Agreements, his or her estate will be entitled to receive his or her salary through the last day of the calendar month in which the Employee's death occurred. The Employee is able to voluntarily terminate his or her Employment Agreements by providing 90 days' written notice to the Boards of Directors of the Bank and the Company, in which case the Employee is entitled to receive only his or her compensation, vested rights and benefits up to the date of termination. 7 In the event of (i) a "change in control," or (ii) the Employees' termination for a reason other than just cause during the "protected period (as defined in the Employment Agreements)," the Employees will be paid within 10 days following the later to occur of such events an amount equal to the difference between (i) 2.99 times their "base amount," as defined in Section 280G(b)(3) of the Internal Revenue Code, and (ii) the sum of any other parachute payments, as defined under Section 280G(b)(2) of the Internal Revenue Code, that the Employee receives on account of the change in control. "Change in control" generally refers to (i) the acquisition, by any person or entity, of the ownership or power to vote more than 25% of the Bank's or Company's voting stock, (ii) the transfer by the Bank of substantially all of its assets to a corporation which is not an "affiliate" (as defined in the Employment Agreements), (iii) a sale by the Bank or the Company of substantially all the assets of an affiliate which accounts for 50% or more of the controlled group's assets immediately prior to such sale, (iv) the replacement of a majority of the existing board of directors by the Bank or the Company in connection with an initial public offering, tender offer, merger, exchange offer, business combination, sale of assets or contested election, or (v) a merger of the Bank or the Company which results in less than seventy percent (70%) of the outstanding voting securities of the resulting corporation being owned by former stockholders of the Company or the Bank. The Employment Agreements provide that within 10 business days of a change in control, the Bank shall fund, or cause to be funded, a trust in the amount of 2.99 times the Employee's base amount, that will be used to pay the Employee amounts owed to the Employee. The aggregate payments that would be made to the Employees, assuming their termination of employment under the foregoing circumstances at June 30, 2001, would have been approximately $318,630 and $348,637 for Mr. McKeel and Mrs. Lampkin, respectively. These provisions may have an anti-takeover effect by making it more expensive for a potential acquiror to obtain control of the Company. In the event that the Employee prevails over the Company and the Bank in a legal dispute as to the Employment Agreements, the Employee will be reimbursed for his or her legal and other expenses. DIRECTOR COMPENSATION General. Non-employee directors receive fees of $1,000 per month. This fee includes any committee meeting(s), as well as service on the board of directors of one or more subsidiaries of the Company. Employee directors do not receive fees for service as directors. For fiscal year 2001, directors' fees totaled $60,000. In addition, directors are eligible to receive awards under the Company's Stock Option Plan and Management Recognition Plan. During the year ended June 30, 2001, no new awards were made to directors under these plans. Because of their concern for the level of the Company's earnings, each director voluntarily suspended further vesting of their MRP awards until May 1, 2003. Directors' Retirement Plan. The Bank's Board of Directors adopted a directors' retirement plan, effective June 13, 1996, for directors who are or were members of the Board of Directors at any time on or after the plan's effective date, provided that an employee who becomes a director after June 30, 1996 will not become a participant unless the Board of Directors adopts a specific resolution to that effect. On the first day of each calendar month, each participant who is a director on said date, with the exception of Directors Lampkin and McKeel, has his or her account credited with an amount equal to the product of $158.33 and the Safe Performance Factor for the preceding fiscal year. With the exception of Directors Lampkin and McKeel, the aggregate principal credits to a director's account may not exceed $38,000. The Safe Performance Factor is between 0 and 1.2 and is determined annually by the Board taking into consideration the Company's performance as compared to targets set for the fiscal year. In addition, each participant's account is credited with a rate of return, on any vested amounts previously credited, equal to any appreciation or depreciation determined according to the participant's investment election. Amounts credited to the accounts of participants other than Directors Lampkin and McKeel will be fully vested at all times. The amounts credited to Director Lampkin and Director McKeel become vested at the rate of 1.18% for each full month of service as a director, starting with 15% vested interest on January 1, 1996, and becoming fully vested after 72 or more months of service after January 1, 1996. Upon a non-employee director's termination of service on the Board due to death, disability, or mandatory retirement due to age restrictions, the director's account will be credited with an amount equal to the difference between $38,000 and the amount previously credited to her or his account, exclusive of investment returns. In the event of Director Lampkin's or Director McKeel's disability or death prior to her or his attainment of 50% vesting, the vested percentage on her or his account will be increased to 50%. If Director Lampkin's or Director McKeel's service on the Board is terminated for any reason other than "just cause" following a change in control, the vested percentage of her or his account will become 100%. Distribution of account balances will be made in cash, over a 8 ten-year period, unless the participant elects to receive a lump sum or annual installments over a period of less than ten years. If a participant dies before receiving all benefits payable under the plan, distribution will be made to her or his beneficiary or, in the absence of a beneficiary, to her or his estate, in a lump sum, unless the participant has elected to have the distribution made in installments over a period of up to ten years. Benefits under the Directors' Plan are non-transferable. The Bank will pay all benefits in cash from its general assets, and has established a trust in order to hold assets with which to pay benefits. Trust assets will be subject to the claims of the Bank's general creditors. In the event a participant prevails over the Bank in a legal dispute as to the terms or interpretation of the Directors' Plan, he or she will be reimbursed for his or her legal and other expenses. TRANSACTIONS WITH MANAGEMENT The Bank offers loans to its directors, officers and employees. These loans currently are made in the ordinary course of business with the same collateral, interest rates and underwriting criteria as those of comparable transactions prevailing at the time and do not involve more than the normal risk of collectibility or present other unfavorable features. At June 30, 2001, the Bank's loans to directors, nominees for director and executive officers totaled approximately $1,839,139. COMPENSATION COMMITTEE REPORT ON EMPLOYEE COMPENSATION The Compensation Committee of the Board of Directors consists of the non-employee directors, which for fiscal 2001 consisted of Directors Akin, Murry, Parker, Purtle and Steelman. This committee reviews the performance of the executive officers of the Company and its subsidiaries and recommends employee compensation structures and amounts to the Board. The Compensation Committee's compensation philosophy for all employees, including executive officers, is to provide competitive levels of compensation, integrate employees' pay with the achievement of the Company's performance goals, reward exceptional corporate performance, recognize individual initiative and achievement and assist the Company in attracting and retaining qualified employees. The committee expressly endorses the position that equity ownership by employees is beneficial in aligning employees' and stockholders' interests in the enhancement of stockholder value. Salaries are determined by evaluating the responsibilities of each position and by reference to the competitive marketplace for qualified employees, including with respect to executive officers comparisons of salaries for comparable positions at comparable companies within the banking industry. Annual salary changes are determined by evaluating changes in compensation in the marketplace, the performance of the Company and the responsibilities and performance of the employee. For fiscal year 2001, the base salaries of the chief executive officer and other executive officers were established in accordance with the foregoing policies. The Compensation Committee reviewed proposed salaries for all bank employees, individually and in total, then reviewed each executive's salary history. Salaries for the executives were increased by percentages consistent with the percentage increase for all employees, maintaining the existing proportion of executive salaries to all salaries. In establishing Mr. McKeel's compensation the Committee takes into account his experience, tenure, abilities, job performance and other considerations. Mr. McKeel's base salary is established in accordance with the terms of the employment agreement entered into between the Company and Mr. McKeel on February 17, 2000 (see "Executive Compensation -- Employment Agreements") and is currently $103,935. Members of the Compensation Committee F. Michael Akin Bruce D. Murry Carl E. Parker, Jr. Ned Ray Purtle Clifford O. Steelman 9 STOCK PERFORMANCE The following graph shows the cumulative total return on the Company's Common Stock from the commencement of trading on May 7, 1997 through June 30, 2001 compared with the cumulative total return of the CRSP Index for Nasdaq stocks of savings institutions (U.S. Companies, SIC 6030-39) (the "Industry Index") and the CRSP Index for the Nasdaq Stock Market (U.S. Companies, all SICs) (the "Market Index") over the same period, as if $100 were invested on May 7, 1997 in the Company's Common Stock and each index. Total cumulative return on the Common Stock or the index equals the total increase or decrease in value since May 7, 1997, assuming reinvestment of all dividends paid. The shareholder returns shown on the performance graph are not necessarily indicative of the future performance of the Common Stock or of any particular index. CUMULATIVE TOTAL SHAREHOLDER RETURN COMPARED WITH PERFORMANCE OF SELECTED INDEXES MAY 7, 1997 THROUGH JUNE 30, 2001 [Line graph appears here depicting the cumulative total shareholder return of $100 invested in the Common Stock as compared to $100 invested in all companies whose equity securities are traded on the NASDAQ Stock Market and savings institutions traded on the NASDAQ Stock Market. Line graph plots the cumulative total return from May 7, 1997 to June 30, 2001. Plot points are provided below.]
5/7/97 6/30/97 6/30/98 6/30/99 6/30/00 6/30/01 ------ ------- ------- ------- ------- ------- HCB Bancshares, Inc. 100 102.0 120.5 76.1(1) 59.8 120.0 Savings Institutions 100 113.1 163.0 142.6 117.8 191.6 Nasdaq Stock Market 100 109.2 143.8 206.8 305.7 165.8 _________ 1 The Common Stock was not listed on the Nasdaq Stock Market on June 30, 1999. The total return figure at June 30, 1999 is based on the average of the high and low sales price for the Common Stock on that date. The Common Stock was relisted on the Nasdaq Small Cap Market on November 22, 1999.
10 RELATIONSHIP WITH INDEPENDENT AUDITORS Deloitte & Touche, LLP, Little Rock, Arkansas, served as the Company's independent auditors for the fiscal year ended June 30, 2001. A representative of Deloitte & Touche, LLP is expected to be present at the Meeting to respond to appropriate questions and to make a statement, if so desired. The Board of Directors has not yet selected a firm to serve as independent auditors for the Company for the 2002 fiscal year. The Board of Directors currently is investigating the range of services offered by other firms that may add value to the Company. REPORT OF THE AUDIT COMMITTEE The Audit Committee of the Board of Directors (the "Audit Committee") has: 1. Reviewed and discussed the audited financial statements for the fiscal year ended June 30, 2001 with the management of the Company. 2. Discussed with the Company's independent auditors the matters required to be discussed by Statement of Accounting Standards No. 61, as the same was in effect on the date of the Company's financial statements; and 3. Received the written disclosures and the letter from the Company's independent auditors required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as the same was in effect on the date of the Company's financial statements, and discussed with the independent auditors the independent auditors' independence. Based on the foregoing materials and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements for the fiscal year ended June 30, 2001 be included in the Company's Annual Report on Form 10-K for the year ended June 30, 2001. Members of the Audit Committee F. Michael Akin Bruce D. Murry Carl E. Parker, Jr. Ned Ray Purtle Clifford O. Steelman AUDIT AND OTHER FEES PAID TO INDEPENDENT ACCOUNTANT AUDIT FEES During the fiscal year ended June 30, 2001, the aggregate fees billed for professional services rendered for the audit of the Company's annual financial statements and the reviews of the financial statements included in the Company's Quarterly Reports on Form 10-Q filed during the fiscal year ended June 30, 2001 were $188,655. FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES The Company did not engage Deloitte & Touche, LLP to provide advice to the Company regarding financial information systems design and implementation during the fiscal year ended June 30, 2001. ALL OTHER FEES For the fiscal year ended June 30, 2001, the aggregate fees paid by the Company to Deloitte & Touche, LLP for all other services (other than audit services and financial information systems design and implementation services) were $11,701. 11 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Pursuant to regulations promulgated under the Exchange Act, the Company's officers, directors and persons who own more than ten percent of the outstanding Common Stock ("Reporting Persons") are required to file reports detailing their ownership and changes of ownership in such Common Stock (collectively, "Reports"), and to furnish the Company with copies of all such Reports. Based solely on its review of the copies of such Reports or written representations that no such Reports were necessary that the Company received during the past fiscal year or with respect to the last fiscal year, management believes that during the fiscal year ended June 30, 2001, all of the Reporting Persons complied with these reporting requirements. OTHER MATTERS The cost of soliciting proxies will be borne by the Company. The Company will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of Common Stock. In addition to solicitations by mail, directors, officers and regular employees of the Company may solicit proxies personally or by telegraph or telephone without additional compensation. The Company's annual report to stockholders, including financial statements, is being mailed to all stockholders of record as of the close of business on the Record Date. Any stockholder who has not received a copy of such annual report may obtain a copy by writing to the Secretary of the Company. Such annual report is not to be treated as a part of the proxy solicitation materials or as having been incorporated herein by reference. STOCKHOLDER PROPOSALS In order to be eligible for inclusion in the Company's proxy materials for next year's Annual Meeting of Stockholders, any stockholder proposal to take action at such meeting must be received at the Company's main office at 237 Jackson Street, S.W., Camden, Arkansas 71701-3941, no later than June 17, 2002. Stockholder proposals, other than those submitted pursuant to the Exchange Act, must be submitted in writing to the Secretary of the Company at the above address not less than thirty days nor more than sixty days prior to the date of any such meeting in accordance with procedural and substantive requirements under the Company's Certificate of Incorporation; provided, however, that if less than forty days' notice of the meeting is given to stockholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Company not later than the close of business on the tenth day following the day on which notice of the meeting was mailed to stockholders. For consideration at the Annual Meeting, a stockholder proposal must be delivered or mailed to the Company's Secretary no later than October 25, 2001. BY ORDER OF THE BOARD OF DIRECTORS /s/ Paula J. Bergstrom PAULA J. BERGSTROM SECRETARY Camden, Arkansas October 15, 2001 FORM 10-K A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 2001 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO EACH STOCKHOLDER AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, HCB BANCSHARES, INC., 237 JACKSON STREET, S.W., CAMDEN, ARKANSAS 71701-3941. 12 EXHIBIT A HCB BANCSHARES, INC. HEARTLAND COMMUNITY BANK AUDIT COMMITTEE CHARTER ----------------------- Organization ------------ There shall be a Committee of the Board of Directors to be known as the Audit Committee. The Audit Committee shall be composed of a minimum of three members and be comprised of directors who are independent of the management of the Company and are free of any relationships that, in the opinion of the Board of Directors, would interfere with their exercise of independent judgment as a committee member. Determination of independence will be governed by the NASD/AMEX listing standards requiring all members of the Audit Committee to be independent and will be disclosed in the Company's annual proxy statement. Members of the Committee shall have a working familiarity with accounting and related financial management practices. The Chairman of the Audit Committee will be responsible for developing an Audit Committee charter outlining the Committee's mission and responsibilities. Statement of Policy ------------------- The Audit Committee shall provide assistance to the Corporate Directors in fulfilling their responsibility of corporate governance to the shareholders, potential shareholders, and investment community relating to (a) reviewing the corporate accounting and reporting practices of the Company, and the quality and integrity of the financial and regulatory reports of the Company, (b) determining that Management has established and maintained processes to assure that an adequate system of internal control is functioning within the Company, and (c) determining that Management has established and maintained processes to assure compliance by the Company with all applicable laws, regulations, and Company policy. In so doing, it is the responsibility of the Audit Committee to maintain free and open means of communication between the Directors, the independent auditors, the internal auditors, and the financial management of the Company. The independent auditor and internal auditor will be accountable to the Board of Directors and the Audit Committee. The Committee will meet four (4) times per year or more frequently as circumstances require as determined by the Committee Chairman. Responsibilities ---------------- In carrying out its responsibilities, the Audit Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to ensure to the Directors and shareholders that the corporate accounting and reporting practices of the Company are in accordance with all requirements and are of the highest quality. In carrying out these responsibilities, the Audit Committee will: o Review and recommend to the Directors the independent auditors to be selected to audit the financial statements of the Company and its subsidiaries in accordance with generally accepted auditing standards. Evaluating, together with the Board and Management, the performance of the independent auditors and, where appropriate, replacing such auditors. o Meet with the independent auditors and financial management of the Company to review the scope of the proposed audit for the current year and the audit procedures to be utilized, and at the conclusion thereof review such audit, including any comments or recommendations of the independent auditors to include Management's response. In addition, discuss the independent auditors' judgment about the quality, not just the acceptability, of the Company's accounting principles and underlying estimates in its financial statements. Additionally, discuss the matters outlined in SAS No. 61, Communication with Audit Committees, as amended with SAS No. 90, Audit Committee Communications, with the independent auditors and discuss independence issues with the independent auditors and receive communications required by the Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees. Based on the review and discussions with the A-1 independent auditors, the Committee will recommend to the Board of Directors whether the audited financial statements be included in the Company's annual report on Form 10-K. The Committee will report the aforementioned items in a report to be included in the Company's annual proxy statement. o Review the financial statements and financial information contained in the annual report to shareholders and SEC filings (Form 10-Q and Form 10-K) with Management and the independent auditors to determine that the independent auditors are satisfied with the disclosure and content of the financial statements to be presented to the shareholders and regulatory authorities. Any changes in accounting principles should be reviewed. o Issuing annually a report to be included in the Company's proxy statement as required by the rules of the Securities and Exchange Commission. o Review the internal audit function of the Company including the independence and authority of its reporting obligations, the proposed audit plan for the coming year, and the coordination of such plan with the independent auditors. Receive prior to each meeting, a summary of findings from completed internal audits and a progress report on the proposed internal audit plan, with explanations for any deviations from the original plan. o Review with the independent auditors, the Company's internal auditor, and financial and accounting personnel, the adequacy and effectiveness of the accounting and financial controls of the Company, and elicit any recommendations for the improvement of such internal control procedures or particular areas where new or more detailed controls or procedures are desirable to ensure accurate financial and regulatory reporting. Particular emphasis should be given to the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper. Further, the Committee should periodically review Company policy statements to determine their adherence to the code of conduct. Additionally, discuss with the Company's legal counsel and Management any legal matters that may have a material impact on the Company's financial statements to include regulatory authorities. o Review all regulatory examination reports and Management's response for adequacy of corrective action taken. o Provide sufficient opportunity for the internal and independent auditors to meet with the members of the Audit Committee without members of Management present (at least annually). Among the items to be discussed in these meetings are the independent auditors' evaluation of the Company's financial, accounting, and internal auditing personnel, and the cooperation that the independent auditors received during the course of the audit and the internal auditor's observations and challenges with Company/Bank Management. o Review with the compliance auditor the results of the compliance audits as appropriate and ensure Management responds accordingly with corrective action, if warranted. o Submit the minutes of all meetings of the Audit Committee to, or discuss the matters discussed at each committee meeting, with the Board of Directors. o Investigate any matter brought to its attention within the scope of its duties, with the power to retain outside legal counsel for this purpose if, in its judgment, that is appropriate. o The Board of Directors may assign other duties from time to time to the Committee. Annual Review ------------- The Committee will review and reassess the adequacy of the Audit Committee charter on an annual basis. The Board of Directors will review and approve the Audit Committee charter on an annual basis. A-2
REVOCABLE PROXY PLEASE MARK VOTES AS IN THIS EXAMPLE HCB BANCSHARES, INC. ------------------------------------------------------------------------------------------------------------------------- ANNUAL MEETING OF STOCKHOLDERS WITH- NOVEMBER 15, 2001 1. The election as directors FOR HOLD EXCEPT of all nominees listed The undersigned hereby appoints F. Michael Akin and Carl E. (except as marked to the Parker, Jr., with full powers of substitution, to act as contrary below): [ ] [ ] [ ] proxies for the undersigned, to vote all shares of common stock of HCB Bancshares, Inc. (the "Company") which the VIDA H. LAMPKIN undersigned is entitled to vote at the Annual Meeting of CLIFFORD O. STEELMAN Stockholders, to be held at the Charles O. Ross Center, located at 746 California Avenue, Camden, Arkansas, on Thursday, November 15, 2001 at 10:00 a.m., local time, and at any and all adjournments thereof, as follows: -------------------------------------------------------------------------------------------------------------------------- INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW. -------------------------------------------------- THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED NOMINEES. THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE NOMINEES STATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN ACCORDANCE WITH THE DETER-MINATION OF A MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL MEETING. -------------------------------------------------------------------------------------------------------------------------- THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. -------------------------------------------------------------------------------------------------------------------------- Please be sure to sign and date | Date this proxy in the box below | -------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------- Stockholders sign above Co-holder (if any) sign above --------------------------------------------------------------------------------------------------------------------------
------------------------------------perforation--------------------------------- -------------------------------------------------------------------------------- DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE-PAID ENVELOPE ENCLOSED. HCB BANCSHARES, INC. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Should the abovesigned be present and elect to vote at the Annual Meeting or at any adjournment thereof, and after notification to the Secretary of the Company at the Annual Meeting of the stockholder's decision to terminate this proxy, then the power of said attorneys and proxies shall be deemed terminated and of no further force and effect. The above signed acknowledges receipt from the Company prior to the execution of this proxy of notice of the Annual Meeting, a proxy statement dated October 15, 2001 and a 2001 annual report to stockholders. Please sign exactly as your name appears on this proxy card. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If shares are held jointly, each holder should sign. PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY TODAY --------------------------------------------------------------------------------