SCHEDULE 14A
(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 [ ]
<TABLE>
<CAPTION>
<S> <C>
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
</TABLE>
CARDINAL FINANCIAL CORPORATION
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided in 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
CARDINAL FINANCIAL CORPORATION
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of Cardinal Financial Corporation (the "Company"), which will be held on June
14, 2000 at 7:00 p.m., at the Fair Lakes Hyatt, 12777 Fair Lakes Circle,
Fairfax, Virginia (the "Meeting"). At the Meeting, three directors will be
elected for terms of three years each, and one director will be elected for a
term of two years.
Whether or not you plan to attend in person, it is important that your
shares be represented at the Meeting. Please complete, sign, date and return
promptly the form of proxy that is enclosed with this mailing. If you decide to
attend the meeting and vote in person, or if you wish to revoke your proxy for
any reason prior to the vote at the Meeting, you may do so, and your proxy will
have no further effect.
The Board of Directors and management of the Company appreciate your
continued support and look forward to seeing you at the Meeting.
Sincerely yours,
/s/ L. Burwell Gunn, Jr.
L. BURWELL GUNN, JR.
President and
Chief Executive Officer
Fairfax, Virginia
May 11, 2000
<PAGE>
CARDINAL FINANCIAL CORPORATION
10555 Main Street
Suite 500
Fairfax, Virginia 22030
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 14, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of the holders of
shares of Common Stock ("Common Stock") of Cardinal Financial Corporation (the
"Company") will be held at the Fair Lakes Hyatt, 12777 Fair Lakes Circle,
Fairfax, Virginia on June 14, 2000 at 7:00 p.m., for the following purposes:
1. To elect three directors for terms of three years each, or
until their successors are elected and qualify;
2. To elect one director for a term of two years, or until his
successor is elected and qualifies; and
3. To transact such other business as may properly come before
the Meeting.
Holders of shares of Common Stock of record at the close of business on
April 17, 2000 will be entitled to vote at the Meeting.
You are requested to fill in, sign, date and return the enclosed proxy
promptly, regardless of whether you expect to attend the Meeting. A postage-paid
return envelope is enclosed for your convenience.
If you are present at the Meeting, you may vote in person even if you
have already returned your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Nancy K. Falck
Nancy K. Falck
Secretary
Fairfax, Virginia
May 11, 2000
<PAGE>
CARDINAL FINANCIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
June 14, 2000
GENERAL INFORMATION
This Proxy Statement is furnished to holders of the common stock, par
value $1.00 per share ("Common Stock"), of Cardinal Financial Corporation (the
"Company") in connection with the solicitation of proxies by the Board of
Directors of the Company to be used at the Annual Meeting of Shareholders to be
held on June 14, 2000 at 7:00 p.m., at the Fair Lakes Hyatt, 12777 Fair Lakes
Circle, Fairfax, Virginia, and at any adjournment thereof (the "Meeting"). At
the Meeting, three directors will be elected for terms of three years each, and
one director will be elected for a term of two years.
The principal executive offices of the Company are located at 10555
Main Street, Suite 500, Fairfax, Virginia 22030. The approximate date on which
this Proxy Statement and the accompanying proxy card are being mailed to the
Company's shareholders is May 11, 2000.
The Board of Directors has fixed the close of business on April 17,
2000 as the record date (the "Record Date") for the determination of the holders
of shares of Common Stock entitled to receive notice of and to vote at the
Meeting. At the close of business on the Record Date, there were 4,242,634
shares of Common Stock outstanding held by 256 shareholders of record. Each
share of Common Stock is entitled to one vote on all matters to be acted upon at
the Meeting. In the election of directors, those receiving the greatest number
of votes will be elected even if they do not receive a majority.
As of March 31, 2000, directors and executive officers of the Company
and their affiliates, as a group, owned of record and beneficially a total of
604,449 shares of Common Stock, or approximately 14.1% of the shares of Common
Stock outstanding on such date. Directors and executive officers of the Company
have indicated an intention to vote their shares of Common Stock FOR the
election of the nominees set forth on the enclosed proxy.
A shareholder may abstain or (only with respect to the election of
directors) withhold his vote (collectively, "Abstentions") with respect to each
item submitted for shareholder approval. Abstentions will be counted for
purposes of determining the existence of a quorum. Abstentions will not be
counted as voting in favor of the relevant item.
A broker who holds shares in "street name" has the authority to vote on
certain items when it has not received instructions from the beneficial owner.
Except for certain items for which brokers are prohibited from exercising their
discretion, a broker is entitled to vote on matters put to shareholders without
instructions from the beneficial owner. Where brokers do not have or do not
exercise such discretion, the inability or failure to vote is referred to as a
"broker nonvote." Under the circumstances where the broker is not permitted to,
or does not, exercise its discretion, assuming proper disclosure to the Company
of such inability to vote, broker nonvotes will not be counted for purposes of
determining the existence of a quorum, and also will not be counted as not
voting in favor of the particular matter.
Shareholders of the Company are requested to complete, date and sign
the accompanying form of proxy and return it promptly to the Company in the
enclosed envelope. If a proxy is properly executed
<PAGE>
and returned in time for voting, it will be voted as indicated thereon. If no
voting instructions are given, proxies received by the Company will be voted for
approval of the directors nominated for election.
Any shareholder who executes a proxy has the power to revoke it at any
time before it is voted by giving written notice of revocation to the Company,
by executing and delivering a substitute proxy to the Company or by attending
the Meeting and voting in person. If a shareholder desires to revoke a proxy by
written notice, such notice should be mailed or delivered, so that it is
received on or prior to the date of the Meeting, to Nancy K. Falck, Secretary,
Cardinal Financial Corporation, 10555 Main Street, Suite 500, Fairfax, Virginia
22030.
The cost of soliciting proxies for the Meeting will be borne by the
Company.
ELECTION OF DIRECTORS
Three directors are to be elected to serve for terms of three years
each, and one director is to be elected to serve for a term of two years. The
Board of Directors acts as a Nominating Committee for selecting the nominees for
election as directors. The Board of Directors has no reason to believe that any
of the nominees will be unavailable.
Under the Company's Bylaws, notice of a proposed nomination or a
shareholder proposal meeting certain specified requirements must be received by
the Company not less than 60 nor more than 90 days prior to any meeting of
shareholders called for the election of directors, provided in each case that,
if fewer than 70 days' notice of the meeting is given to shareholders, such
written notice shall be received not later than the close of the 10th day
following the day on which notice of the meeting was mailed to shareholders.
Assuming a date of June 14, 2001 for the 2001 annual meeting of shareholders,
the Company must receive any notice of nomination or other business no later
than April 15, 2001 and no earlier than March 16, 2001.
The Company's Bylaws require that the shareholder's notice set forth as
to each nominee (i) the name, age, business address and residence address of
such nominee, (ii) the principal occupation or employment of such nominee, (iii)
the class and number of shares of the Company that are beneficially owned by
such nominee, and (iv) any other information relating to such nominee that is
required under federal securities laws to be disclosed in solicitations of
proxies for the election of directors, or is otherwise required (including,
without limitation, such nominee's written consent to being named in a proxy
statement as nominee and to serving as a director if elected). The Company's
Bylaws further require that the shareholder's notice set forth as to the
shareholder giving the notice (i) the name and address of such shareholder and
(ii) the class and amount of such shareholder's beneficial ownership of the
Company's capital stock. If the information supplied by the shareholder is
deficient in any material aspect or if the foregoing procedure is not followed,
the chairman of the annual meeting may determine that such shareholder's
nomination should not be brought before the annual meeting and that such nominee
shall not be eligible for election as a director of the Company.
-2-
<PAGE>
The following information sets forth the names, ages, principal
occupations and business experience for the past five years for all nominees and
incumbent directors.
Nominees for Election
for Terms Expiring in 2003
Robert M. Barlow, 70, has been a director since 1997.
Mr. Barlow was the founder and principal shareholder of a group of
companies engaged in construction, manufacturing and real estate in
northern Virginia for 38 years. In 1995, he sold those ventures and is
now retired.
Anne B. Hazel, 60, has been a director since 1997.
Ms. Hazel serves as a Director of the Corcoran Museum of Art,
Washington, D.C., the Florida House, Washington, D.C., the Morikani
Museum and Japanese Gardens Foundation, Delray Beach, Florida, and the
Concert Hall at Mizner Park, Boca Raton, Florida.
James D. Russo, 53, has been a director since 1997.
Mr. Russo is the Senior Vice President, Chief Financial Officer and
Treasurer of Shire Laboratories, Inc., a pharmaceutical research and
development company in Rockville, Maryland.
Nominee for Election
for Term Expiring in 2002
J. Hamilton Lambert, 59, has been a director since 1999.
Mr. Lambert is President of J. Hamilton Lambert and Associates, a
consulting firm based in Leesburg, Virginia. He served as County
Executive of Fairfax County from August 1980 to December 1990.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE NOMINEES
SET FORTH ABOVE.
Incumbent Directors Serving
for Terms Expiring in 2001
Wayne W. Broadwater, 76, has been a director since 1997.
Mr. Broadwater served as President and CEO of Shipmates, Ltd., a chain
of tool and equipment rental and sales companies that he founded in
1972, until its sale in 1997.
Harvey W. Huntzinger, 73, has been a director since 1997.
Mr. Huntzinger is a founder of National Systems Management Corporation,
a service company organized in 1972, and was its President and CEO
until his retirement in 1998.
John H. Rust, Jr., 52, has been Chairman of the Board since 1997.
Mr. Rust is an attorney with the law firm of Wilkes Artis in Fairfax,
Virginia. He had previously been of counsel in the law firm of
McCandlish and Lillard. Mr. Rust is a member of the Virginia House of
Delegates.
-3-
<PAGE>
Incumbent Directors Serving
for Terms Expiring in 2002
Nancy K. Falck, 70, has been a director since 1997.
Ms. Falck has been Secretary of the Company since 1998. She is active
in community affairs and is past President of the Board of Directors of
the Family Respite Center (a day program that helps people with
Alzheimer's disease) and a Commissioner on the Fairfax Area Council on
Aging.
L. Burwell Gunn, Jr., 55, has been a director since 1997.
Mr. Gunn has been President and Chief Executive Officer of the Company
since 1997 and was President of Cardinal Bank, N.A., a subsidiary of
the Company, from 1997 to 1999. Prior to 1997, he was Executive Vice
President and Commercial Division Head of the Greater Washington Region
of Crestar Bank, where he worked in various positions for 25 years.
Jones V. Isaac, 68, has been a director since 1997.
Mr. Isaac is President of Isaac Enterprises, Inc., a service oriented
firm located in Potomac, Maryland. Prior to 1995, Mr. Isaac was the
Administrator of Finance and Administration for the Construction
Specifications Institute, where he had been employed since 1967.
The Board of Directors and Committees
Meetings of the Board of Directors are held regularly each month, and
there is also an organizational meeting following the conclusion of the
Company's annual meeting of shareholders. The Board of Directors held 12
meetings in the year ended December 31, 1999. For the year ended December 31,
1999, each of the Company's directors, except for Messrs. Huntzinger and
Lambert, attended at least 75% of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings of committees on
which the director served.
The Board of Directors has both an Audit Committee and a Compensation
Committee.
The Audit Committee consists of Mr. Isaac, as Chairman, Mrs. Hazel,
Mrs. Falck and Messrs. Peck and Russo. The Audit Committee is responsible for
the selection and recommendation of the independent accounting firm for the
annual audit. It reviews and accepts the reports of the Company's independent
auditors, internal auditor and federal examiners. The Audit Committee met seven
times during the year ended December 31, 1999.
The Compensation Committee consists of Mr. Russo, as Chairman, Mrs.
Hazel and Messrs. Isaac and Huntzinger. The Compensation Committee reviews
senior management's performance and compensation and reviews and sets guidelines
for compensation of all employees. The Compensation Committee met three times
during the year ended December 31, 1999.
Executive Officers Who Are Not Directors
Edgar M. Andrews, III, 53, has been Executive Vice President of the
Company and head of the Company's Alexandria loan production office since 1998.
Most recently, Mr. Andrews was President and Chief Executive Officer of the
Civil War Trust, a 501(c)(3) non-profit organization that he helped organize in
1992. Prior to 1992, Mr. Andrews held several senior management positions with
financial institutions in the Company's market area.
-4-
<PAGE>
Christopher W. Bergstrom, 40, has been President of Cardinal Bank -
Manassas/Prince William, N.A., a subsidiary of the Company, since 1999 and
Executive Vice President and Commercial Lending Officer of the Company since
1998. Prior to 1998, Mr. Bergstrom was employed with Crestar Bank, where he
served in a variety of retail and commercial functions.
Joseph L. Borrelli, 52, has been Executive Vice President and Chief
Financial Officer of the Company since 1998. Prior to 1998, Mr. Borrelli served
as the Regional Finance Manager for the greater Washington Region for Crestar
Bank.
Carl E. Dodson, 45, has been Senior Vice President and Chief Credit
Officer of the Company since 1998. From 1997 to 1998, Mr. Dodson was Chief
Financial Officer of C.C. Pace Resources, Inc., an engineering company in
Fairfax, Virginia. Prior to 1997, he was the senior commercial lending officer
of Palmer National Bank ("Palmer") in Washington, D.C. and, following Palmer's
sale to George Mason Bank ("George Mason") in 1996, Senior Vice President of
Credit Administration of George Mason.
Thomas C. Kane, 38, has been President of Cardinal Wealth Services,
Inc., a subsidiary of the Company that offers full service investment management
products, since December 1998. Prior to that time, Mr. Kane was Senior Vice
President and Division Manager, Retail Securities & Personal Trust & Investment
Management Sales for Crestar Bank in its Greater Washington Region.
F. Kevin Reynolds, 40, has been President of Cardinal Bank, N.A. since
1999 and Executive Vice President and Senior Lending Officer of the Company
since 1998. Prior to 1998, Mr. Reynolds was the senior lending officer
responsible for all facets of the commercial lending business of George Mason
and helped create George Mason's commercial lending group.
Eleanor D. Schmidt, 39, has been Senior Vice President and Retail
Banking Head of the Company since 1998. Prior to 1998, Ms. Schmidt was employed
with NationsBank, where she managed multiple branches in the Fairfax area
serving a large and diverse deposit and loan base.
Greg D. Wheeless, 38, has been President of Cardinal Bank - Dulles,
N.A., a subsidiary of the Company, since 1999 and Executive Vice President of
the Company since 1998. Prior to 1998, Mr. Wheeless was employed with Crestar
Bank, which he joined in 1989 as Vice President, Commercial Lender, and where he
served most recently as Senior Vice President and Northern Virginia Middle
Market Manager.
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<PAGE>
Security Ownership of Management
The following table sets forth information as of March 31, 2000
regarding the number of shares of Common Stock beneficially owned by each
director, by each executive officer named in the summary compensation table
below and by all directors and executive officers as a group. Beneficial
ownership includes shares, if any, held in the name of the spouse, minor
children or other relatives of the director or executive officer living in such
person's home, as well as shares, if any, held in the name of another person
under an arrangement whereby the director or executive officer can vest title in
himself at once or at some future time.
Common Stock Percentage
Name Beneficially Owned(1) of Class (%)
---- --------------------- ------------
Robert M. Barlow 100,900 2.4
Christopher W. Bergstrom 15,407 *
Joseph L. Borrelli 12,674 *
Wayne W. Broadwater 31,000 *
Nancy K. Falck 63,336 1.5
L. Burwell Gunn, Jr. 21,548 *
Anne B. Hazel 17,334 *
Harvey W. Huntzinger 90,500 2.1
Jones V. Isaac 47,400 1.1
J. Hamilton Lambert 13,000 *
Dale B. Peck 26,667 *
F. Kevin Reynolds 16,080 *
James D. Russo 63,600 1.5
John H. Rust, Jr. 40,158 *
Greg D. Wheeless 991 *
All present executive officers and
directors as a group (19 persons) 604,449 14.1
___________________________
* Percentage of ownership is less than one percent of the outstanding shares
of Common Stock.
(1) Amounts include beneficial ownership of shares of Common Stock issuable upon
the exercise of stock options exercisable within 60 days of March 31, 2000.
Amounts also include shares of Common Stock held in the Company's 401(k)
plan as of December 31, 1999.
Security Ownership of Certain Beneficial Owners
As of March 31, 2000, there are no persons known to the Company that
beneficially own five percent or more of the outstanding shares of Common Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
any persons who own more than 10% of Common Stock, to file with the Securities
and Exchange Commission ("SEC") reports of ownership and changes in ownership of
common stock. Officers and directors are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms that they file. Based solely
on review of the copies of such reports furnished to the Company or written
representation that no other reports were required, the
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<PAGE>
Company believes that, during fiscal year 1999, all filing requirements
applicable to its officers and directors were complied with, except for the
following: Thomas C. Kane, an executive officer, inadvertently filed late a
report on Form 4 covering the purchase of shares of Common Stock in April 1999;
John H. Rust, Jr., a director, inadvertently filed late reports on Form 4
covering the purchases of shares of Common Stock in July, August and October
1999; Carl E. Dodson, an executive officer, inadvertently filed late a report on
Form 4 covering the purchase of shares of Common Stock in October 1999; and
Edgar M. Andrews, III and Greg D. Wheeless, executive officers, each
inadvertently filed late a report on Form 3 disclosing his beneficial ownership
at the time that he became an executive officer of the Company.
Executive Compensation
The following table shows, for the fiscal years ended December 31,
1999, 1998 and 1997, the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid or accrued for those
years, to each of the named executive officers in all capacities in which they
served:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) Options (#)(1) Compensation ($)(2)
------------------ ---- ---------- --------- ---------------- -------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
L. Burwell Gunn, Jr. 1999 159,497 42,325 * 14,750 12,959
President and Chief Executive 1998 150,000 50,000 * 1,250 5,247
Officer 1997 27,174 25,000 * - 981
F. Kevin Reynolds 1999 104,587 26,000 * 3,131 3,685
President, Cardinal Bank, N.A. 1998(3) 98,640 30,000 * - 545
Christopher W. Bergstrom 1999 105,504 23,000 * 3,131 8,060
President, Cardinal Bank - 1998(4) 70,189 30,000 * - 3,405
Manassas/Prince William,
N.A.
Joseph L. Borrelli 1999 103,846 20,000 * 2,818 8,565
Executive Vice President and 1998(5) 90,670 27,000 * - 3,544
Chief Financial Officer
Greg D. Wheeless, 1999 103,726 18,540 * 2,159 7,301
President, Cardinal Bank - 1998(6) 30,006 13,000 * - -
Dulles, N.A.
</TABLE>
_____________________
* All benefits that might be considered of a personal nature did not exceed
the lesser of $50,000 or 10% of total annual salary and bonus.
(1) Amounts disclosed include 750 shares of Common Stock for the year ended
December 31, 1999 and 1,250 shares of Common Stock for the year ended
December 31, 1998 that underlie options granted to Mr. Gunn in his capacity
as a director of the Company.
(2) Amounts presented represent (i) gross value of payments made by the Company
pursuant to life insurance agreements between the Company and the named
executive officers and (ii) total contributions to the Company's 401(k)
plan on behalf of each of the named executive officers to match pre-tax
elective deferral
-7-
<PAGE>
contributions (which are included under the "Salary" column) made by each
to such plan. The 1997 amount reflects COBRA payments to Mr. Gunn's former
employer to continue insurance benefits.
(3) Mr. Reynolds' employment with the Company commenced on January 19, 1998.
(4) Mr. Bergstrom's employment with the Company commenced on April 6, 1998.
(5) Mr. Borrelli's employment with the Company commenced on January 1, 1998.
(6) Mr. Wheeless' employment with the Company commenced on August 31, 1998.
Stock Options
The following table sets forth for the year ended December 31, 1999 the
grants of stock options to the named executive officers.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Percent of Total
Number of Options Granted
Securities Underlying to Employees Exercise or Base
Name Options Granted(1) in Fiscal Year (%)(2) Price ($/Share) (3) Expiration Date
- ---- ------------------ --------------------- ------------------- ---------------
<S> <C> <C> <C> <C>
L. Burwell Gunn, Jr. 14,750 11.5 7.50 January 1, 2009
F. Kevin Reynolds 3,131 2.4 6.38 January 1, 2009
Christopher W. Bergstrom 3,131 2.4 6.38 January 1, 2009
Joseph L. Borrelli 2,818 2.2 6.38 January 1, 2009
Greg D. Wheeless 2,159 1.7 6.38 January 1, 2009
</TABLE>
______________________
(1) Amounts disclosed include 750 shares of Common Stock that underlie options
granted to Mr. Gunn in his capacity as a director of the Company. Such
options are immediately exercisable. All other options were granted to the
named executive officers in their capacities as such and become fully
exercisable after three years.
(2) Options to purchase a total of 127,929 shares of Common Stock were granted
to employees during the year ended December 31, 1999.
(3) Stock options were awarded at or above the fair market value of the shares
of Common Stock at the date of award.
-8-
<PAGE>
In the year ended December 31, 1999, no stock options were exercised by
any of the named executive officers. The following table sets forth the amount
and value of stock options held by the named executive officers as of December
31, 1999.
Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Fiscal Year End at Fiscal Year End ($)(2)
--------------- -------------------------
Name Exercisable(1) Unexercisable Exercisable Unexercisable
- ---- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
L. Burwell Gunn, Jr. 2,000 14,000 -- --
F. Kevin Reynolds -- 3,131 -- --
Christopher W. Bergstrom -- 3,131 -- --
Joseph L. Borrelli -- 2,818 -- --
Greg D. Wheeless -- 2,159 -- --
</TABLE>
______________________
(1) Amounts disclosed represent shares of Common Stock that underlie options
granted to Mr. Gunn in his capacity as a director of the Company.
(2) The value of in-the-money options at fiscal year end is calculated by
determining the difference between the closing price of a share of Common
Stock as reported on the Nasdaq SmallCap Market on December 31, 1999 and
the exercise price of the options. No options disclosed in the table were
in-the-money as of December 31, 1999.
Director Compensation
Directors of the Company do not receive any cash compensation. In lieu
of cash fees for service on the Board of Directors, each director of the Company
is granted annually options to purchase 2,000 shares of Common Stock. Such
options are granted with an exercise price at or above the fair market value of
the Common Stock and expire ten years from the date of grant.
Compensation and Other Employment Arrangements
On September 30, 1997, Mr. Gunn entered into an employment contract to
serve as President and Chief Executive Officer of the Company and to perform
such services and duties as the Board of Directors may designate. Under the
contract, Mr. Gunn is entitled to an annual base salary of $150,000. Any
increases in base salary are at the discretion of the Board of Directors. In
addition, Mr. Gunn earned a bonus in 1997 of $25,000 in connection with the
completion of various aspects of the organization of the Company and Cardinal
Bank, and may be entitled to up to an additional $50,000 in connection with the
first year of operations of the Company and Cardinal Bank, and up to $50,000 per
year for future performance.
The contract is for a term of three years and may be extended for at
least two additional years. Mr. Gunn serves at the pleasure of the Company's
Board of Directors. If, during the term of the contract, Mr. Gunn's employment
is terminated without cause, Mr. Gunn will be entitled to a severance payment
equal to his annual base salary at that time. The contract also provides for
certain non-competition covenants for a period of one year following Mr. Gunn's
termination.
-9-
<PAGE>
During each year under his three-year employment contract, Mr. Gunn
will be granted an option to purchase 14,000 shares of Common Stock at $7.50 per
share, or such number of shares as may be determined by the Board of Directors
in its discretion. The grant of any option for any particular year, however,
shall be conditioned on the Company's financial performance's exceeding certain
amounts budgeted for that year.
Each of F. Kevin Reynolds, Christopher W. Bergstrom, Joseph L. Borrelli
and Greg D. Wheeless have also entered into employment agreements with the
Company. Mr. Reynolds' agreement, which is dated as of February 12, 1999,
provides for his service as Executive Vice President of the Company and
President and Chief Executive Officer of Cardinal Bank, N.A. Mr. Bergstrom's
agreement, which is dated as of December 17, 1998, provides for his service as
Executive Vice President of the Company and President and Chief Executive
Officer of Cardinal Bank - Manassas/Prince William Bank, N.A. Mr. Borrelli's
agreement, which is dated as of February 17, 1999, provides for his service as
Executive Vice President and Chief Financial Officer of the Company. Mr.
Wheeless' agreement, which is dated as of August 31, 1998, provides for his
service as Executive Vice President of the Company and President and Chief
Executive Officer of Cardinal Bank - Dulles, N.A.
Each of the agreements for Messrs. Reynolds, Bergstrom, Borrelli and
Wheeless provides for annual base salaries of $100,000 and includes annual
increases at the discretion of the Board of Directors and cash bonuses up to 30%
of the salary based on the attainment of certain performance objectives by the
individual. The agreements also include stock option grants up to 20% of salary
based on the attainment of such objectives. Such grants are awarded with an
option exercise price equal to the fair market value of shares of Common Stock
at the date of grant, and the options vest and become exercisable three years
after the date of grant. Each of these agreements is for a term that expires in
2001 and may be renewed for an additional two-year period.
Transactions with Management
Some of the directors and officers of the Company are at present, as in
the past, customers of the Company and, the Company has had, and expects to have
in the future, banking transactions in the ordinary course of its business with
directors, officers, principal shareholders and their associates, on
substantially the same terms, including interest rates and collateral on loans,
as those prevailing at the same time for comparable transactions with others.
These transactions do not involve more than the normal risk of collectibility or
present other unfavorable features. The aggregate outstanding balance of loans
to directors, executive officers and their associates, as a group, at December
31, 1999 totaled approximately $2.9 million, or 9.4% of the Company's equity
capital at that date.
There are no legal proceedings to which any director, officer,
principal shareholder or associate is a party that would be material and adverse
to the Company.
INDEPENDENT AUDITORS
KPMG LLP has been appointed to perform the audit of the Company's
financial statements for the year ending December 31, 2000. KPMG LLP has acted
as the Company's auditors since 1997 and has reported on financial statements
during that period. A representative from KPMG LLP is expected to be present at
the Meeting, will have the opportunity to make a statement if he desires to do
so, and is expected to be available to respond to appropriate questions.
-10-
<PAGE>
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1999 has been furnished to shareholders. Additional copies
may be obtained by written request to the Secretary of the Company at the
address indicated below. Such Annual Report is not part of the proxy
solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST OF ANY PERSON WHO, ON THE RECORD
DATE, WAS RECORD OWNER OF COMMON STOCK OR WHO REPRESENTS IN GOOD FAITH THAT HE
OR SHE WAS ON SUCH DATE THE BENEFICIAL OWNER OF SUCH STOCK ENTITLED TO VOTE AT
THE ANNUAL MEETING OF SHAREHOLDERS, CARDINAL WILL FURNISH TO SUCH PERSON,
WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1999 AND THE EXHIBITS THERETO REQUIRED TO BE FILED WITH THE
SEC UNDER THE EXCHANGE ACT. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO NANCY
K. FALCK, SECRETARY, CARDINAL FINANCIAL CORPORATION, 10555 MAIN STREET, SUITE
500, FAIRFAX, VIRGINIA 22030. THE FORM 10-KSB IS NOT PART OF THE PROXY
SOLICITATION MATERIALS.
PROPOSALS FOR 2000 ANNUAL MEETING
Under the regulations of the SEC, any shareholder desiring to make a
proposal to be acted upon at the 2001 annual meeting of shareholders must cause
such proposal to be received, in proper form, at the Company's principal
executive offices at 10555 Main Street, Suite 500, Fairfax, Virginia 22030, no
later than January 11, 2001 in order for the proposal to be considered for
inclusion in the Company's Proxy Statement for that meeting. It is urged that
any such proposals be sent by certified mail, return receipt requested.
The Company's Bylaws also prescribe the procedures that a shareholder
must follow to nominate directors or to bring other business before
shareholders' meetings. For more information on these procedures, see "Election
of Directors."
OTHER MATTERS
The Board of Directors is not aware of any matters to be presented for
action at the meeting other than as set forth herein. However, if any other
matters properly come before the Meeting, or any adjournment thereof, the person
or persons voting the proxies will vote them in accordance with their best
judgment.
By Order of The Board of Directors
/s/ Nancy K. Falck
Nancy K. Falck
Secretary
May 11, 2000
-11-
<PAGE>
Cardinal Financial Corporation
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints L. Burwell Gunn, Jr. and Nancy K.
Falck, jointly and severally, proxies, with full power to act alone, and with
full power of substitution, to represent the undersigned and to vote, as
designated on the reverse side and upon any and all other matters that may
properly be brought before such meeting, all shares of Common Stock that the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
Cardinal Financial Corporation, a Virginia corporation (the "Corporation"), to
be held at the Fair Lakes Hyatt, 12777 Fair Lakes Circle, Fairfax, Virginia, on
Wednesday, June 14, 2000 at 7:00 p.m., local time, or any adjournments thereof,
for the following purposes:
(Continued and to be dated and signed on other side)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
CARDINAL FINANCIAL CORPORATION
June 14, 2000
Please Detach and Mail in the Envelope Provided
Please mark your
| X | votes as in this
example
<TABLE>
<CAPTION>
<S><C>
FOR WITHHOLD
Nominees listed at right AUTHORITY
(except as written on the to vote for all
line below) nominees listed at right
1. To elect as directors ___ ___ Nominees: Robert M. Barlow
the three persons | | | | Anne B. Hazel
listed as nominees |___| |___| James R. Russo
for terms of three
years each expiring at the 2003 annual meeting of shareholders.
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual
nominee listed at right, write that nominee's name on the space
provided below.)
___________________________________________________________________
<TABLE>
<CAPTION>
<S><C>
FOR WITHHOLD
Nominee listed at right AUTHORITY
(except as written on the to vote for
line below) nominee listed at right
2. To elect as a director ___ ___ Nominee: J. Hamilton Lambert
the person listed as | | | |
a nominee for a term |___| |___|
of two years expiring at the 2003 annual meeting of shareholders
</TABLE>
3. In their discretion, the proxies are authorized to vote upon any
other business that may properly come before the meeting, or any
adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN ITEMS 1 AND ITEM 2.
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY.
<TABLE>
<CAPTION>
<S><C>
Signature___________________Signature___________________Printed Name___________________Dated_________, 2000
NOTE: (If signing as Attorney, Administrator, Executor, Guardian or Trustee, please add your title as such.)
</TABLE>
