AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 2003
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST COMMUNITY BANCSHARES, INC.
(Exact Name of Registrant as specified in its charter)
NEVADA 55-0694814
(State of incorporation) (I.R.S. Employer Identification No.)
ONE COMMUNITY PLACE
BLUEFIELD, VIRGINIA 24605
(276) 326-9000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
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JOHN M. MENDEZ
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FIRST COMMUNITY BANCSHARES, INC.
ONE COMMUNITY PLACE
BLUEFIELD, VIRGINIA 24605
(Name, Address Including Zip Code, and Telephone Number Including Area Code, of
Agent for Service)
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COPIES TO:
NORMAN B. ANTIN, ESQ.
JEFFREY D. HAAS, ESQ.
KELLEY DRYE & WARREN LLP
8000 TOWERS CRESCENT DRIVE
SUITE 1200
VIENNA, VA 22182
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
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If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
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Common Stock, $1.00 par value.......... 21,533 shares(2) $33.18 $714,465 $58
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high and low prices on April 1, 2003, as
reported by the Nasdaq National Market.
(2) Together with an indeterminable number of additional shares which may be
necessary to adjust the number of shares as a result of a stock split, stock
dividend or similar adjustment of the outstanding Common Stock of the
Registrant.
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PROSPECTUS
FIRST COMMUNITY BANCSHARES, INC.
21,533 SHARES OF COMMON STOCK
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This prospectus relates to the offer and sale by certain selling
stockholders named herein (the "Selling Stockholders") of up to 21,533 shares
(the "Shares") of common stock, $1.00 par value per share ("Common Stock"), of
First Community Bancshares, Inc. (the "Company" or "we"). We issued an aggregate
of 8,409 Shares to the Selling Stockholders in connection with the acquisition
of Stone Capital Management, Inc., a Virginia corporation ("Stone Capital"), in
January 2003. Additional Shares will be issued to the Selling Stockholders in
three installments to the extent Stone Capital meets certain proscribed revenue
milestones for the years ending December 31, 2003, 2004 and 2005. The maximum
number of additional Shares that may be issued to the Selling Stockholders will
have an aggregate value equal to $87,500, $87,500 and $87,500 for the years
ending December 31, 2003, 2004 and 2005, respectively, with the number of Shares
to be issued to be based on the average closing sales price of the Common Stock
for the 30 trading-day period ending on each of December 31, 2003, 2004 and
2005. Based on an assumed average closing sales price of $20.00, up to an
additional 13,124 Shares will be issued to the Selling Stockholders in three
installments to the extent Stone Capital meets the proscribed revenue milestones
for the years ending December 31, 2003, 2004 and 2005. The Selling Stockholders
may sell these Shares from time to time on the over-the-counter market in
regular brokerage transactions, in transactions directly with market makers or
in certain privately negotiated transactions. For additional information on the
methods of sale, you should refer to the section entitled "Plan of Distribution"
on page 6. We will not receive any portion of the proceeds from the sale of
these shares.
Each of the Selling Stockholders may be deemed to be an "Underwriter," as
such term is defined in the Securities Act of 1933, as amended.
The Common Stock is presently quoted on the Nasdaq National Market under
the symbol "FCBC."
On April 7, 2003, the last sale price of the common stock on the Nasdaq
National Market was $33.45 per share.
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" REFERENCED ON PAGE 3 IN DETERMINING
WHETHER TO PURCHASE OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THE PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OBLIGATIONS OF ANY
BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, BANK
INSURANCE FUND, SAVINGS ASSOCIATION INSURANCE FUND, OR ANY OTHER GOVERNMENTAL
AGENCY.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is April 8, 2003
TABLE OF CONTENTS
PAGE
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ADDITIONAL INFORMATION AVAILABLE TO YOU..................... 1
INFORMATION INCORPORATED BY REFERENCE....................... 1
THE COMPANY................................................. 2
RISK FACTORS................................................ 2
USE OF PROCEEDS............................................. 5
ISSUANCE OF COMMON STOCK TO STOCKHOLDERS.................... 5
SELLING STOCKHOLDERS........................................ 6
PLAN OF DISTRIBUTION........................................ 6
LEGAL MATTERS............................................... 7
EXPERTS..................................................... 7
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You should
not rely on any unauthorized information. This prospectus does not offer to sell
or buy any shares in any jurisdiction in which it is unlawful. The information
in this prospectus is current as of the date on the cover.
ADDITIONAL INFORMATION AVAILABLE TO YOU
This prospectus is part of a Registration Statement on Form S-3 that we
filed with the Securities and Exchange Commission ("SEC"). Certain information
in the Registration Statement has been omitted from this prospectus in
accordance with the rules of the SEC. We file our annual, quarterly and special
reports, proxy statements and other information with the SEC. You can inspect
and copy the Registration Statement as well as reports, proxy statements and
other information we have filed with the SEC at the public reference room
maintained by the SEC at 450 Fifth Street, NW, Washington, D.C. 20549. You can
obtain copies from the public reference room of the SEC at 450 Fifth Street, NW,
Washington, D.C. 20549 upon payment of certain fees. You can call the SEC at
1-800-732-0330 for further information about the public reference room. We are
also required to file electronic versions of these documents with the SEC, which
may be accessed through the SEC's World Wide Web site at http://www.sec.gov. Our
common stock is quoted on the Nasdaq National Market. Reports, proxy and
information statements and other information concerning us may be inspected at
the Nasdaq Stock Market at 1735 K Street, NW, Washington, D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus certain
of our publicly-filed documents, which means that information included in these
documents is considered part of this prospectus. Information that we file with
the SEC subsequent to the date of this prospectus will automatically update and
supersede this information. We incorporate by reference the documents listed
below (in each instance, our SEC file number is 000-19297) and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), until we no longer
maintain the effectiveness of this Registration Statement, as described under
"Plan of Distribution."
The following documents filed with the SEC are incorporated by reference in
this prospectus:
1. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2002
dated March 25, 2003 and amended on March 31, 2003.
2. Our Current Reports on Form 8-K filed on January 16, 2003, January 27, 2003,
January 28, 2003, February 26, 2003, March 4, 2003, March 25, 2003, March 26,
2003 and March 28, 2003.
3. The description of our Common Stock contained in the Registrant's Form 8-A as
filed with the SEC pursuant to Section 12(g) of the Exchange Act, on May 20,
1991.
We will furnish without charge to you, on written or oral request, a copy
of any or all of the documents incorporated by reference herein, other than
exhibits to such documents that are not specifically incorporated by reference
therein. You should direct any requests for documents to Robert L. Schumacher,
One Community Place, P.O. Box 989, Bluefield, Virginia, 24605.
THE COMPANY
We are a bank holding company incorporated under the laws of the State of
Nevada and the parent company of First Community Bank, National Association (the
"Bank"), a national bank that conducts commercial banking operations within the
states of Virginia, West Virginia and North Carolina. United First Mortgage,
Inc. ("UFM") is a wholly-owned subsidiary of the Bank and serves as a wholesale
and retail distribution channel for the Bank's mortgage banking business
segment. Stone Capital, an asset management company, is also a wholly-owned
subsidiary of the Bank. We and our wholly-owned subsidiaries have total assets
of approximately $1.5 billion at December 31, 2002 and conduct commercial and
mortgage banking business through the 41 branches of the Bank and 11 mortgage
brokerage offices of UFM. Our principal executive offices are located at One
Community Place, Bluefield, Virginia 24605. Our telephone number is (276)
326-9000.
The Bank engages in a general commercial and retail banking business
through its branch facilities. It provides safe deposit services and makes all
types of loans, including commercial, mortgage and personal loans. The Bank also
provides trust services and its deposits are insured by the Federal Deposit
Insurance Corporation ("FDIC"). The Bank is a member of the Federal Reserve
System and is a member of the Federal Home Loan Bank of Atlanta. Regulatory
oversight of the Bank is conducted by the Office of the Comptroller of the
Currency. UFM provides for the origination and sale of mortgages to secondary
sources.
On January 27, 2003, we announced the signing of a definitive merger
agreement pursuant to which the Bank will acquire The CommonWealth Bank, a
Virginia-chartered commercial bank ("CommonWealth Bank"). The acquisition will
expand the Bank's commercial banking operations to the Richmond, Virginia market
area and complement its existing mortgage banking and brokerage network which is
currently headquartered in Richmond. CommonWealth Bank has four full service
offices located in the Richmond metropolitan area. CommonWealth Bank had total
assets of $134 million, total deposits of $107 million and total stockholders'
equity of $8.3 million as of December 31, 2002.
RISK FACTORS
WE ARE SUBJECT TO INTEREST RATE RISK AND VARIATIONS IN INTEREST RATES MAY
NEGATIVELY AFFECT OUR FINANCIAL PERFORMANCE.
We are unable to predict actual fluctuations of market interest rates with
complete accuracy. Rate fluctuations are affected by many factors, including:
- inflation;
- recession;
- a rise in unemployment;
- tightening money supply; and
- domestic and international disorder and instability in domestic and
foreign financial markets.
Changes in the interest rate environment may reduce profits. We expect that
the Company and the Bank will continue to realize income from the differential
or "spread" between the interest earned on loans, securities and other
interest-earning assets, and interest paid on deposits, borrowings and other
interest-bearing liabilities. Net interest spreads are affected by the
difference between the maturities and repricing characteristics of interest-
earning assets and interest-bearing liabilities. The Company is vulnerable to
continued declines in interest rates because of its slightly asset-sensitive
balance sheet profile, in which its assets will reprice downward at rates
exceeding the repricing characteristics of liabilities. As a result, material
and prolonged declines in interest rates
2
would decrease the Company's net interest income. Conversely, an increase in the
general level of interest rates may adversely affect the ability of some
borrowers to pay the interest on and principal of their obligations.
Accordingly, changes in levels of market interest rates could materially and
adversely affect the Company's net interest spread, asset quality, levels of
prepayments and cash flows as well as the market value of its securities
portfolio and overall profitability.
Changes in interest rates affect the net interest income earned on the
Company's debt securities portfolios as well as the value of the securities
portfolio. In addition, changes in interest rates affect the net interest income
the Bank and UFM earn on loans held for investment and loans held for sale. To
the extent UFM pools loans in the future and is not adequately hedged, its
interest rate and market risk with respect to its loans held for sale may
increase. Consequently, changes in the levels of market interest rates could
materially and adversely affect the Company's net interest spread, the market
value of the loans and securities and the overall profitability.
THE BANK'S ABILITY TO PAY DIVIDENDS IS SUBJECT TO REGULATORY LIMITATIONS WHICH,
TO THE EXTENT THE COMPANY REQUIRES SUCH DIVIDENDS IN THE FUTURE, MAY AFFECT OUR
ABILITY TO PAY ITS OBLIGATIONS AND PAY DIVIDENDS.
The Company is a separate legal entity from the Bank and its subsidiaries
and does not have significant operations of its own. We currently depend on the
Bank's cash and liquidity as well as dividends from the subsidiary to pay our
operating expenses and dividends to shareholders. No assurance can be made that
in the future the Bank will have the capacity to pay the necessary dividends and
that the Company will not require dividends from the Bank to satisfy the
Company's obligations. The availability of dividends from the Bank is limited by
various statutes and regulations. It is possible, depending upon the financial
condition of the Company and other factors, that the OCC could assert that
payment of dividends or other payments by the Bank are an unsafe or unsound
practice. In the event the Bank is unable to pay dividends sufficient to satisfy
the Company's obligations and the Bank is unable to pay dividends to the
Company, the Company may not be able to service its obligations as they become
due, or pay dividends on the Company's common stock. Consequently, the inability
to receive dividends from the Bank could adversely affect our financial
condition, results of operations, cash flows and prospects.
OUR ALLOWANCE FOR LOAN LOSSES MAY NOT BE ADEQUATE TO COVER ACTUAL LOSSES.
Like all financial institutions, we maintain an allowance for loan losses
to provide for loan defaults and non-performance. Our allowance for loan losses
may not be adequate to cover actual loan losses, and future provisions for loan
losses could materially and adversely affect the Company's operating results.
Our allowance for loan losses is determined by analyzing historical loan losses,
current trends in delinquencies and charge-offs, plans for problem loan
resolution, the opinions of our regulators, changes in the size and composition
of the loan portfolio and industry information. Also included in management's
estimates for loan losses are considerations with respect to the impact of
economic events, the outcome of which are uncertain. The amount of future losses
is susceptible to changes in economic, operating and other conditions, including
changes in interest rates, that may be beyond our control, and these losses may
exceed current estimates. Federal regulatory agencies, as an integral part of
their examination process, review our loans and allowance for loan losses. While
we believe that our allowance for loan losses is adequate to cover current
losses, we cannot assure you that we will not need to increase our allowance for
loan losses or that regulators will not require us to increase this allowance.
Either of these occurrences could materially and adversely affect our earnings
and profitability.
OUR BUSINESS IS SUBJECT TO VARIOUS LENDING AND OTHER ECONOMIC RISKS THAT COULD
ADVERSELY IMPACT OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Changes in economic conditions, particularly an economic slowdown, could
hurt our business. Our business is directly affected by political and market
conditions, broad trends in industry and finance, legislative and regulatory
changes, changes in governmental monetary and fiscal policies and inflation, all
of which are beyond
3
our control. A deterioration in economic conditions, in particular an economic
slowdown within the Company's geographic region, could result in the following
consequences, any of which could hurt our business materially:
- loan delinquencies may increase;
- problem assets and foreclosures may increase;
- demand for our products and services may decline; and
- collateral for loans made by the Company may decline in value, in turn
reducing a client's borrowing power, and reducing the value of assets and
collateral associated with our loans held for investment.
A downturn in the real estate market could hurt our business. Our business
activities and credit exposure are concentrated in West Virginia, Virginia,
North Carolina and the surrounding mid-Atlantic region. A downturn in this
regional real estate market could hurt our business because of the geographic
concentration within this regional area. If there is a significant decline in
real estate values, the collateral for our loans will provide less security. As
a result, our ability to recover on defaulted loans by selling the underlying
real estate would be diminished, and we would be more likely to suffer losses on
defaulted loans.
THE COMPANY'S LEVEL OF CREDIT RISK IS INCREASING DUE TO THE EXPANSION OF ITS
COMMERCIAL LENDING, AND THE CONCENTRATION ON MIDDLE MARKET CUSTOMERS WITH
HEIGHTENED VULNERABILITY TO ECONOMIC CONDITIONS.
At December 31, 1997, commercial loans totaled $285.1 million. At December
31, 2002, this portfolio has increased to $360.0 million. The level of credit
risk has increased as a result of this shift in the loan portfolio mix.
Commercial real estate loans generally are considered riskier than single-family
residential loans because they have larger balances to a single borrower or
group of related borrowers. Commercial business loans involve risks because the
borrower's ability to repay the loan typically depends primarily on the
successful operation of the business or the property securing the loan. Most of
the commercial business loans are made to middle market customers who may have a
heightened vulnerability to economic conditions. Moreover, a portion of these
loans has been made by the Company in the last several years and the borrowers
may not have experienced a complete business or economic cycle.
THE BANK MAY SUFFER LOSSES IN ITS LOAN PORTFOLIO DESPITE ITS UNDERWRITING
PRACTICES.
The Bank seeks to mitigate the risks inherent in the Bank's loan portfolio
by adhering to specific underwriting practices. These practices include analysis
of a borrower's prior credit history, financial statements, tax returns and cash
flow projections, valuation of collateral based on reports of independent
appraisers and verification of liquid assets. Although the Bank believes that
its underwriting criteria are appropriate for the various kinds of loans it
makes, the Bank may incur losses on loans that meet its underwriting criteria,
and these losses may exceed the amounts set aside as reserves in the Bank's
allowance for loan losses.
THE COMPANY AND ITS SUBSIDIARIES ARE SUBJECT TO EXTENSIVE REGULATION WHICH COULD
ADVERSELY AFFECT THEM.
We are subject to extensive regulation by federal, state and local
governmental authorities and are subject to various laws and judicial and
administrative decisions imposing requirements and restrictions on part or all
of our operations. We believe that we are in substantial compliance in all
material respects with applicable federal, state and local laws, rules and
regulations. Because our business is highly regulated, the laws, rules and
regulations applicable to it are subject to regular modification and change.
There are currently proposed various laws, rules and regulations that, if
adopted, would impact our operations, including, among other things, matters
pertaining to corporate governance, requirements for listing and maintenance on
national securities exchanges and over the counter markets, SEC rules pertaining
to public reporting disclosures and banking regulations governing the amount of
loans that a financial institution, such as the Bank, can acquire for investment
from an affiliate, such as UFM. In addition, the Financial Accounting Standards
Board, or FASB, is considering changes which may require, among other things,
the expensing of the costs relating to the issuance of stock options. There can
be no assurance that these proposed laws, rules and regulations, or any other
laws, rules or regulations, will not be adopted in the future, which could make
compliance more difficult or expensive, restrict our ability to
4
originate, broker or sell loans, further limit or restrict the amount of
commissions, interest or other charges earned on loans originated or sold by the
Bank or UFM or otherwise adversely affect our business, financial condition or
prospects.
WE FACE STRONG COMPETITION FROM OTHER FINANCIAL INSTITUTIONS, FINANCIAL SERVICE
COMPANIES AND OTHER ORGANIZATIONS OFFERING SERVICES SIMILAR TO THOSE OFFERED BY
THE US AND OUR SUBSIDIARIES, WHICH COULD HURT OUR BUSINESS.
Our business operations are centered primarily in West Virginia, Virginia,
North Carolina and the surrounding mid-Atlantic region. Increased competition
within this region may result in reduced loan originations and deposits.
Ultimately, we may not be able to compete successfully against current and
future competitors. Many competitors offer the types of loans and banking
services that we offer. These competitors include other savings associations,
national banks, regional banks and other community banks. We also face
competition from many other types of financial institutions, including finance
companies, brokerage firms, insurance companies, credit unions, mortgage banks
and other financial intermediaries. In particular, the Bank's competitors
include other state and national banks and major financial companies whose
greater resources may afford them a marketplace advantage by enabling them to
maintain numerous banking locations and mount extensive promotional and
advertising campaigns.
Additionally, banks and other financial institutions with larger
capitalization and financial intermediaries not subject to bank regulatory
restrictions have larger lending limits and are thereby able to serve the credit
needs of larger clients. These institutions, particularly to the extent they are
more diversified than us, may be able to offer the same loan products and
services that we offer at more competitive rates and prices. If we are unable to
attract and retain banking clients, we may be unable to continue the Bank's loan
and deposit growth and the Company's business, financial condition and prospects
may be negatively affected.
USE OF PROCEEDS
The proceeds from the sale of Shares offered pursuant to this prospectus
are solely for the account of the Selling Stockholders. Accordingly, the Company
will not receive any proceeds from the sale of the Shares from the Selling
Stockholders.
ISSUANCE OF COMMON STOCK TO STOCKHOLDERS
On January 15, 2003, we issued an aggregate of 8,409 Shares to the Selling
Stockholders in connection with the Bank's acquisition of Stone Capital pursuant
to a Stock Purchase Agreement, dated as of January 3, 2003 (the "Purchase
Agreement"), among the Company, the Bank, Stone Capital and Joseph D. Stone, III
and Timothy G. Elliot. In addition, pursuant to the Purchase Agreement, we
agreed to issue additional Shares to the Selling Stockholders in three
installments if Stone Capital meets certain proscribed revenue milestones for
the twelve months ending December 31, 2003, 2004 and 2005 set forth in the
Purchase Agreement (the "Earn-Out"). The maximum number of additional Shares
that may be issued to the Selling Shareholders pursuant to the Earn-Out will
have an aggregate value equal to $87,500, $87,500 and $87,500 for the years
ending December 31, 2003, 2004 and 2005, respectively, with the number of Shares
to be issued to be based on the average closing sales price of the common stock
for the 30 trading-day period ending on each of December 31, 2003, 2004 and
2005. Based on an assumed average sales price of $20.00, up to an additional
13,124 Shares will be issued to the Selling Stockholders in three installments
to the extent Stone Capital meets the proscribed revenue milestones for the
years ending December 31, 2003, 2004 and 2005.
5
SELLING STOCKHOLDERS
The following table sets forth certain information known to us with respect
to beneficial ownership of the Company's Shares as of March 31, 2003 by each
Selling Stockholder. The following table assumes that the Selling Stockholders
sell all of the Shares.
SHARES
SHARES BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO THE OWNED AFTER THE
OFFERING OFFERING(1)
------------------- SHARES OFFERED BY ----------------
SELLING STOCKHOLDERS SHARES PERCENT(2) THIS PROSPECTUS(3) SHARES PERCENT
-------------------- ------ ---------- ------------------ ------ -------
Joseph D. Stone, III....................... 4,625 * 11,843 -- --
Timothy G. Elliot.......................... 3,784 * 9,690 -- --
---------------
* Less than 1%.
(1) Assumes that each Selling Stockholder will sell all of the Shares set forth
in the column "Shares Offered by this Prospectus." There can be no assurance
that the Selling Stockholders will sell all or any of the Shares offered
hereunder.
(2) Percentage of beneficial ownership is based on 9,846,092 shares of Common
Stock outstanding as of March 31, 2003.
(3) Includes additional Shares that Mr. Stone and Mr. Elliot, respectively, can
earn, based on an assumed average sales price of $20.00, if Stone Capital
meets certain proscribed revenue milestones for the twelve months ending
December 31, 2003, 2004 and 2005 as described under "Issuance of Common
Stock to Stockholders."
PLAN OF DISTRIBUTION
The Shares covered hereby may be offered and sold from time to time by the
Selling Stockholders. The Selling Stockholders will act independently of the
Company in making decisions with respect to the timing, manner and size of each
sale. The Selling Stockholders may sell the Shares being offered hereby: (i) on
The Nasdaq National Market or otherwise at prices and at terms then prevailing
or at prices related to the then current market price; or (ii) in private sales
at negotiated prices directly or through a broker or brokers, who may act as
agent or as principal or by a combination of such methods of sale. The Selling
Stockholders and any underwriter, dealer or agent who participate in the
distribution of such Shares may be deemed to be "underwriters" under the
Securities Act of 1933, as amended ("Securities Act"), and any discount,
commission or concession received by such persons might be deemed to be an
underwriting discount or commission under the Securities Act.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholders (and, if acting as agent for the
purchaser of such Shares, from such purchaser). Usual and customary brokerage
fees will be paid by the Selling Stockholders. Broker-dealers may agree with the
Selling Stockholders to sell a specified number of Shares at a stipulated price
per share, and, to the extent such a broker-dealer is unable to do so acting as
agent for the Selling Stockholders, to purchase as principal any unsold Shares
at the price required to fulfill the broker-dealer commitment to the Selling
Stockholders. Broker-dealers who acquire Shares as principal may thereafter
resell such Shares from time to time in transactions (which may involve crosses
and block transactions and which may involve sales to and through other
broker-dealers, including transactions of the nature described above) in the
over-the-counter market, in negotiated transactions or by a combination of such
methods of sale or otherwise at market prices prevailing at the time of sale or
at negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such Shares commissions computed as described above.
The Selling Stockholders may indemnify any broker-dealer that participates
in transactions involving the sale of the Shares against certain liabilities,
including liabilities arising under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any such broker-dealers, and any profits
received on
6
the resale of such Shares, may be deemed to be underwriting discounts and
commissions under the Securities Act if any such broker-dealers purchase Shares
as principal.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, the
Shares may not be sold unless the Shares have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
We have advised the Selling Stockholders that the anti-manipulation rules
under Regulation M of the Exchange Act may apply to sales of the Shares in the
market and to the activities of the Selling Stockholders and their affiliates.
The Selling Stockholders will also be subject to trading windows imposed by the
Company.
We have agreed to use our best efforts to maintain the effectiveness of
this Registration Statement with respect to the Shares offered hereunder by the
Selling Stockholders until the earlier of when all the Shares have been sold or
until such earlier date that all Shares shall be saleable without registration
pursuant to the Securities Act.
No sales may be made pursuant to this prospectus after such date unless we
amend or supplement this prospectus to indicate that we have agreed to extend
such period of effectiveness. There can be no assurance that the Selling
Stockholders will sell all or any of the Shares offered hereunder.
LEGAL MATTERS
The validity of our common stock offered by this prospectus will be passed
upon for us and the Selling Stockholders by Kelley Drye & Warren LLP.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of the Company incorporated by reference in its annual
report on form 10-K for the year ended December 31, 2002, as set forth in their
report, which is incorporated by reference in this prospectus and elsewhere in
the registration statement. The consolidated financial statements of the Company
are incorporated by reference in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
7
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant will bear no expenses in connection with any sale or other
distribution by the Selling Stockholders of the shares being registered other
than the expenses of preparation and distribution of this Registration Statement
and the prospectus included in this Registration Statement. Such expenses are
set forth in the following table. All of the amounts shown are estimates except
the Securities and Exchange Commission ("SEC") registration fee and the NASD
listing fee.
SEC registration fee........................................ $ 58
Legal fees and expenses..................................... 10,000
Accounting fees and expenses................................ 5,000
NASD listing fee............................................ --
Miscellaneous expenses...................................... 442
-------
Total..................................................... $15,500
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 27 of the Registrant's Bylaws requires indemnification of the
Registrant's directors and officers and any person serving as such for another
corporation at our request, against costs and expenses at any time reasonably
incurred by the director or officer arising out of or in connection with any
claim, action, suit or proceeding, civil or criminal, against him or to which he
may be made a party by reason of his being or having been such director or
officer except in relation to matters as to which he shall be adjudged in such
action, suit or proceeding to be liable for gross negligence or willful
misconduct in the performance of his duty to the Registrant. If, in the judgment
of the Board of Directors of the Registrant, a settlement of any claim, action,
suit or proceeding so arising be deemed in the best interests of the Registrant,
any such director or officer shall be reimbursed for any amounts paid by him in
effecting such settlement and reasonable expenses incurred in connection
therewith. The foregoing right of indemnification shall be, in addition to, any
and all rights to which any director or officer may be entitled as a matter of
law.
The Nevada General Corporation Law provides as follows:
78.7502 DISCRETIONARY AND MANDATORY INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS: GENERAL PROVISIONS.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he:
(a) Is not liable pursuant to NRS 78.138; or
(b) Acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent, does
not, of itself, create a presumption that the person is liable pursuant to NRS
78.138 or did not act in good faith and in a manner which he reasonably believed
to be in or not opposed
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to the best interests of the corporation, or that, with respect to any criminal
action or proceeding, he had reasonable cause to believe that his conduct was
unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he:
(a) Is not liable pursuant to NRS 78.138; or
(b) Acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to which such
a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
78.751 AUTHORIZATION REQUIRED FOR DISCRETIONARY INDEMNIFICATION; ADVANCEMENT OF
EXPENSES; LIMITATION ON INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
1. Any discretionary indemnification pursuant to NRS 78.7502, unless
ordered by a court or advanced pursuant to subsection 2, may be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel
in a written opinion.
2. The articles or incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
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3. The indemnification pursuant to NRS 78.7502 and advancement of expenses
authorized in or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
articles or incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except
that indemnification, unless ordered by a court pursuant to NRS 78.7502 or
for the advancement of expenses made pursuant to subsection 2, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct,
fraud or a knowing violation of the law and was material to the cause of
action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
78.752 INSURANCE AND OTHER FINANCIAL ARRANGEMENTS AGAINST LIABILITY OF
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
1. A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses incurred by him in his
capacity as a director, officer, employee or agent, or arising out of his status
as such, whether or not the corporation has the authority to indemnify him
against such liability and expenses.
2. The other financial arrangements made by the corporation pursuant to
subsection 1 may include the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the corporation.
(d) The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection may provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification ordered by a court.
3. Any insurance or other financial arrangement made on behalf of a person
pursuant to this section may be provided by the corporation or any other person
approved by the board of directors, even if all or part of the other person's
stock or other securities is owned by the corporation.
4. In the absence of fraud:
(a) The decision of the board of directors as to the propriety of the
terms and conditions of any insurance or other financial arrangement made
pursuant to this section and the choice of the person to provide the
insurance or other financial arrangement is conclusive; and
(b) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to personal liability
for his action, even if a director approving the insurance or other
financial arrangement is a beneficiary of the insurance or other
financial arrangement.
5. A corporation or its subsidiary which provides self-insurance for itself
or for another affiliated corporation pursuant to this section is not subject to
the provisions of Title 57 of NRS.
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ITEM 16. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
------- -----------
5.1 Opinion of Kelley Drye & Warren LLP regarding the legality
of the Common Stock being registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1
hereto).
24.1 Power of Attorney (included in the signature page of this
Registration Statement).
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of this offering.
(4) The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, as amended, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934, as amended) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Commonwealth of Virginia, on April 7, 2003.
FIRST COMMUNITY BANCSHARES, INC.
By: /s/ JOHN M. MENDEZ
------------------------------------
John M. Mendez
President and Chief Executive
Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each person whose signature appears below,
hereby makes, constitutes and appoints John M. Mendez or his true and lawful
attorney, with full power to sign for such person and in such person's name and
capacity indicated below, and with full power of substitution, any and all
amendments to this Registration Statement, hereby ratifying and confirming such
person's signature as it may be signed by said attorney to any and all
amendments.
NAME TITLE DATE
---- ----- ----
/s/ ALLEN T. HAMNER Director April 7, 2003
------------------------------------------------
Allen T. Hamner
/s/ B. W. HARVEY Director April 7, 2003
------------------------------------------------
B. W. Harvey
/s/ I. NORRIS KANTOR Director April 7, 2003
------------------------------------------------
I. Norris Kantor
/s/ JOHN M. MENDEZ President, Chief Executive Officer and April 7, 2003
------------------------------------------------ Director (Principal executive officer)
John M. Mendez
/s/ A. A. MODENA Director April 7, 2003
------------------------------------------------
A. A. Modena
/s/ ROBERT L. SCHUMACHER Chief Financial Officer (Principal April 7, 2003
------------------------------------------------ Financial and Accounting Officer)
Robert L. Schumacher
/s/ ROBERT E. PERKINSON, JR. Director April 7, 2003
------------------------------------------------
Robert E. Perkinson, Jr.
/s/ WILLIAM P. STAFFORD Chairman of the Board and Director April 7, 2003
------------------------------------------------
William P. Stafford
/s/ WILLIAM P. STAFFORD, II Director April 7, 2003
------------------------------------------------
William P. Stafford, II
/s/ W. W. TINDER, JR. Director April 7, 2003
------------------------------------------------
W. W. Tinder, Jr.
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