<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
RESOURCE BANKSHARES CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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[_] 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:
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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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Notes:
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April 20, 2000
Dear Fellow Shareholders:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of Resource Bankshares Corporation (the "Company") to be held on Thursday, May
25, 2000, at 9:30 a.m., at the Clarion Hotel, 4453 Bonney Road, Virginia Beach,
Virginia 23462. The accompanying Notice and Proxy Statement describe the items
of business to be considered at the Annual Meeting. Please read these documents
carefully.
Specifically, you will be asked to consider and approve four items of
business: (i) the approval of an amendment to the Company's Articles of
Incorporation to create a classified Board of Directors with staggered three
year terms, (ii) the approval of an amendment to the Company's Articles of
Incorporation to provide that shareholders may only remove directors for cause,
(iii) the election of seven incumbent directors, each of whom will be appointed
to a specific class for purposes of future elections, and (iv) the ratification
of the appointment of Goodman & Company, L.L.P. as independent auditors for the
2000 fiscal year. The Board of Directors encourages you to read carefully the
enclosed Proxy Statement and to VOTE FOR all the matters to be considered at the
Annual Meeting.
We hope you can attend the Annual Meeting. Whether or not you plan to
attend, please complete, sign, and date the enclosed Proxy card and return it
promptly in the enclosed envelope. Your vote is important regardless of the
number of shares you own. We look forward to seeing you at the Annual Meeting,
and we appreciate your continued loyalty and support.
Sincerely,
RESOURCE BANKSHARES CORPORATION
/s/ Lawrence N. Smith
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Lawrence N. Smith
President and Chief Executive Officer
<PAGE>
RESOURCE BANKSHARES CORPORATION
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 25, 2000
To Our Shareholders:
The 2000 Annual Meeting of Shareholders of Resource Bankshares Corporation
(the "Company") will be held at the Clarion Hotel, 4453 Bonney Road, Virginia
Beach, Virginia 23462, on Thursday, May 25, 2000, at 9:30 a.m., for the
following purposes:
1. To consider and vote upon a proposed amendment to the Company's
Articles of Incorporation to create a classified Board of Directors with
staggered three year terms.
2. To consider and vote upon a proposed amendment to the Company's
Articles of Incorporation to provide that directors may only be removed by
shareholders for cause.
3. To elect a total of seven (7) incumbent directors:
3.1 Two of whom will be Class A directors to hold office for a term
of one year and until their successors are elected and qualified.
3.2 Two of whom will be Class B directors to hold office for a term
of two years and until their successors are elected and qualified.
3.3 Three of whom will be Class C directors to hold office for a term
of three years and until their successors are elected and qualified.
4. To consider and vote upon the ratification of the appointment of
Goodman & Company, L.L.P. as independent auditors for the 2000 fiscal year.
5. To transact such other business as may properly come before the
meeting.
If proposal 1. above regarding the creation of a classified board of
directors is not approved by shareholders, any elected directors would serve a
one year term and until their successors are elected and qualified.
Shareholders of record at the close of business on April 3, 2000, will be
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. The Board of Directors of the Company unanimously recommends that
shareholders vote FOR approval of each of the items indicated in 1., 2., 3., and
4. above.
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR THROUGH YOUR PROXY.
By Order of the Board of Directors
/s/ Debra C. Dyckman
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Debra C. Dyckman
Secretary of the Board
April 20, 2000
<PAGE>
PROXY STATEMENT
This Proxy Statement and the enclosed proxy card ("Proxy") are furnished in
connection with the solicitation of proxies on behalf of the Board of Directors
of Resource Bankshares Corporation (the "Company") to be voted at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at the Clarion Hotel,
4453 Bonney Road, Virginia Beach, Virginia 23462, at 9:30 a.m., Eastern Time, on
Thursday, May 25, 2000, and at any adjournment thereof, for the purposes set
forth in the accompanying Notice of Meeting.
Only shareholders of record at the close of business on April 3, 2000 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting.
This Proxy is being mailed on or about April 20, 2000.
REVOCABILITY OF PROXY
Execution of the enclosed Proxy will not affect a shareholder's right to
attend the Annual Meeting and vote in person. If your Proxy is properly signed,
received by the Company and not revoked by you, the shares to which it pertains
will be voted at the Annual Meeting in accordance with your instructions. If a
shareholder does not return a signed Proxy, his or her shares cannot be voted by
proxy.
SOLICITATION OF PROXIES
The cost of soliciting Proxies will be borne by the Company. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodians, nominees and fiduciaries to send proxy materials to the beneficial
owners and to secure their voting instructions if necessary. The Company, upon
request, will reimburse them for their expenses in so doing. Officers and
regular employees of the Company may solicit Proxies personally, by telephone or
by telegram from some shareholders if Proxies are not received promptly, for
which no additional compensation will be paid.
VOTING SHARES AND VOTE REQUIRED
On the Record Date, the Company had 2,555,579 shares of Common Stock
outstanding. Each share of Common Stock is entitled to one vote on each matter
presented at the Annual Meeting. Under the terms of the Company's existing
Articles of Incorporation, the affirmative vote of more than a majority of the
outstanding shares of Common Stock is required to approve the proposed
amendments to the Company's Articles of Incorporation. Directors are elected by
a plurality of votes cast by shareholders at the Annual Meeting. A majority of
votes cast is required to ratify the appointment of auditors. Abstentions,
broker non-votes, and withheld votes will be counted for purposes of determining
whether a quorum exists for the transaction of business at the Annual Meeting,
but such votes (i) will have the effect of a vote against the proposed
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amendments to the Company's Articles of Incorporation and (ii) will not be
considered "votes cast" based on the Company's understanding of state law
requirements and the Company's Articles of Incorporation and Bylaws.
All shareholder meeting proxies, ballots and tabulations that identify
individual shareholders are kept secret and no such document shall be available
for examination, nor shall the identity or the vote of any shareholder be
disclosed except as may be necessary to meet legal
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requirements and the laws of Virginia. Votes will be counted and certified by
the Proxy Committee of the Board of Directors, whose members are Alfred
Abiouness, John Bernhardt, and Lawrence Smith. The members of the Proxy
Committee will also act as the inspectors of elections at the Annual Meeting as
required under Virginia law.
Unless specified otherwise, Proxies will be voted (i) FOR the proposed
amendment to the Company's Articles of Incorporation to create a classified
Board of Directors with staggered three year terms, (ii) FOR the proposed
amendment to the Company's Articles of Incorporation to provide that directors
may only be removed by shareholders for cause, (iii) FOR the election of the two
nominees to serve as Class A directors of the Company until the 2001 Annual
Meeting and until their successors are duly elected and qualified, (iv) FOR the
election of the two nominees to serve as Class B directors of the Company until
the 2002 Annual Meeting and until their successors are duly elected and
qualified, (v) FOR the election of the three nominees to serve as Class C
directors until the 2003 Annual Meeting and until their successors are duly
elected and qualified and (vi) FOR the ratification of the appointment of
Goodman & Company, L.L.P. as independent auditors for 2000. In the discretion
of the Proxy holders, the Proxies will also be voted for or against such other
matters as may properly come before the Annual Meeting. Management is not aware
of any other matters to be presented for action at the Annual Meeting.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of April 3, 2000, relating to
the beneficial ownership of the Company's Common Stock by (i) each of the
Company's director-nominees (who also constitute all of the current directors of
the Company) and named executive officers who own Common Stock and (ii) all of
the Company's director-nominees and executive officers as a group. The named
executive officers consist of those individuals for whom compensation
information is provided in the "Summary Executive Compensation Table" appearing
elsewhere in this Proxy Statement. Except as otherwise set forth below, the
Company is not aware of any person or group of affiliated persons who owns more
than 5% of the Common Stock of the Company. All of the Company's director-
nominees and named executive officers receive mail at the Company's principal
executive offices at 3720 Virginia Beach Blvd., Virginia Beach, Virginia 23452.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned Outstanding Shares
---- ------------------ ------------------
<S> <C> <C>
Director - Nominees and
Named Executive Officers
- ------------------------
Alfred E. Abiouness 69,846/(1)/ 2.70
John B. Bernhardt 50,164/(2)/ 1.93
Thomas W. Hunt 60,828/(3)/ 2.38
Louis R. Jones 241,819/(4)/ 9.39
A. Russell Kirk 105,096/(5)/ 4.09
Lawrence N. Smith 131,734/(6)/ 5.04
Elizabeth A. Twohy 40,340/(7)/ 1.57
Debra C. Dyckman 38,394/(8)/ 1.49
T. A. Grell, Jr. 1,066 *
</TABLE>
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<TABLE>
<S> <C> <C>
Harvard R. Birdsong, II 1,100 *
Directors and Executive
Officers as a Group
(11 Persons) 757,569 27.39
</TABLE>
_______________________________
* Less than 1% ownership
(1) Includes options to purchase 30,166 shares that are currently exercisable.
(2) Includes options to purchase 46,832 shares that are currently exercisable.
(3) Includes 30,414 shares owned by Mr. Hunt's wife and 13,860 shares owned by
Mr. Hunt's children, for which Mr. Hunt shares voting and investment power.
Also does not include 40,964 shares held jointly by Mr. Hunt's spouse and
Alan M. Voorhees as trustees for the benefit of Mr. Voorhees'
grandchildren, for which Mr. Hunt does not share voting or investment
power.
(4) Includes options to purchase 20,166 shares that are currently exercisable.
(5) Includes options to purchase 13,500 shares that are currently exercisable.
(6) Includes options to purchase 58,266 shares that are currently exercisable.
Also includes 52,202 shares owned by the Smith Family Partnership for which
Mr. Smith shares voting and investment power.
(7) Includes options to purchase 20,166 shares that are currently exercisable.
Also includes 6,000 shares owned by Ms. Twohy's minor children.
(8) Includes options to purchase 21,065 shares that are currently exercisable.
Also includes 1,200 shares that are held jointly by Ms. Dyckman and her
mother.
PROPOSALS 1. AND 2.
AMENDMENTS TO ARTICLES OF INCORPORATION
Background Information and Effects of Proposed Amendments.
The Company's Board of Directors ("Board") has unanimously approved and
recommended that the shareholders of the Company approve two amendments to the
Company's Articles of Incorporation. The first proposed amendment provides for
the classification of the Board into three classes of directors with staggered
terms of office and the second proposed amendment provides that directors may
only be removed by shareholders for cause (these two amendments collectively the
"Anti-Takeover Amendments"). Each of the Anti-Takeover Amendments will be acted
upon as a separate proposal at the Annual Meeting and approval of one Anti-
Takeover Amendment is not conditioned upon approval of the other Anti-Takeover
Amendment.
Virginia law permits the Company to include a provision in its Articles of
Incorporation that provides for a classified board of directors with staggered
three year terms. Absent such a provision, Virginia law provides that all
directors serve a one year term and until their successors are duly elected and
qualified. The proposed classified board amendment to the Company's Articles of
Incorporation would provide that directors will be classified into three
classes, as nearly equal in number as possible. One class would hold office
initially for a term expiring at the 2001 Annual Meeting, one class would hold
office initially for a term expiring at the 2002 Annual Meeting, and the other
class would hold office initially for a term expiring at the 2003 Annual
Meeting. At each Annual Meeting following this initial classification and
election, the successors to the class of directors whose terms expire at that
meeting would be elected for a term of office to expire at the third succeeding
Annual Meeting after their election, and until their successors have been duly
elected and qualified. Under Virginia law, directors chosen to fill vacancies
on the classified board would hold office until the next shareholders meeting at
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which directors were elected, even if a new director was filling an unexpired
term in a class with more than one year remaining in its term.
If the classified board proposal is adopted, the election procedure
described above would be applicable to every election of directors, without
regard to whether a change of control of the Company is likely to occur. If the
proposed amendment to create a classified board is not adopted by shareholders,
all seven director-nominees will be nominated and elected to serve a one-year
term until the Company's 2001 Annual Meeting of Shareholders. The Company's
Articles of Incorporation do not authorize cumulative voting for directors and
the proposed amendments would not change the requirement that any directors
standing for reelection must be elected by a plurality of votes cast.
The second proposed amendment provides that directors may only be removed
by shareholders for cause. Virginia law provides that directors may be removed
by shareholders with or without cause, unless a corporation's articles of
incorporation provide that directors may be removed only with cause. The
Virginia law that allows a corporation to provide in its Articles of
Incorporation that directors may be removed only for cause does not define the
term "cause." Further, the Board does not believe that any Virginia case law
delineates the meaning of the term "cause" in the context of removal of
directors. To provide the Board and shareholders with more certainty regarding
the meaning of the term cause, the proposed amendment provides that cause shall
be deemed to mean willful misconduct or a knowing violation of the criminal law
or of any federal or state securities law, including, without limitation, any
claim of unlawful insider trading or manipulation of the market for any
security. This standard is the same standard under which Virginia corporations
may not limit the liability of a director or officer in any proceeding brought
against a director or officer by or in the right of a corporation or by or on
behalf of shareholders of the corporation.
The proposals are not intended as a takeover-resistive measure in response
to a specific threat, but rather are being recommended to assure fair treatment
of the Company's shareholders in takeover situations. Although the Board may
review other possible anti-takeover programs, the Board has no present intention
of proposing additional amendments to the Articles of Incorporation that would
affect the ability of a third party to change control of the Company.
The Company's Articles of Incorporation and Bylaws currently do not contain
any provisions intended by the Company to have a specific anti-takeover effect.
However, the existing Articles of Incorporation authorize the issuance of shares
of preferred stock and further authorize the Board to determine, subject to the
provisions of Virginia law, the designations, preferences and rights, including
voting rights, of any series or shares of preferred stock. Currently, no shares
of preferred stock are issued or outstanding. Although the Board currently has
no intention of doing so, shares of preferred stock could be issued to a holder
that may thereby have sufficient voting power to assure that any proposal to
remove directors, or any proposal to alter, amend or repeal the provisions that
the Board proposes to add to the Company's Articles of Incorporation, would not
receive the requisite shareholder vote. Accordingly, the power to issue shares
of preferred stock could enable the Board to make it more difficult to replace
incumbent directors.
While all directors and named executive officers of the Company in the
aggregate beneficially own approximately 27% of the outstanding shares of Common
Stock, the Board still believes that the proposed amendments are in the best
interests of the shareholders of the
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Company. Any future growth by the Company could require the issuance of capital
stock, which in turn could have the effect of diluting the percentage of shares
owned by officers and directors. Also, any sales of common stock by these
individuals in the future could also have the effect of diluting their ownership
percentage.
Advantages of Amendments.
The Board has observed that certain tactics, including the accumulation of
substantial stock positions as a prelude to an attempted takeover or significant
corporate restructuring, have become relatively common in corporate takeover
practice. The Board is of the opinion that such tactics can be highly
disruptive to a company and can result in dissimilar treatment of a company's
shareholders. The proposed amendments will, by making it more time consuming
and difficult for a substantial shareholder or shareholders to gain control of
the Board without its consent, ensure some continuity in the management of the
business and affairs of the Company and provide the Board with sufficient time
to review both takeover proposals and appropriate alternatives. The Board also
believes that the proposed amendments will serve to encourage any person
intending to attempt a takeover to negotiate in advance with the Board, which in
turn would allow the Board to protect better the interests of the Company's
shareholders. In addition to these advantages, the Board also believes that
making directors removable only for cause will ensure that the purpose of having
a classified board as an anti-takeover measure will not be circumvented by
removing directors without cause.
Disadvantages of Amendments.
Shareholders should be aware that the proposed classified board will extend
the time required to effect a change in control of the Board and may discourage
hostile takeover bids for the Company, even if such a bid might be deemed by
shareholders to be in their best interests. If shareholders approve the
amendment to the Company's Articles of Incorporation to create a classified
board of directors, it will take at least two annual meetings for a majority of
shareholders to effectuate a change in control of the Board. Currently, a
majority of shareholders could effectuate a change in control of the Board at
one shareholder meeting. Because of the additional time required to change
control of the Board, and the limitation on the removal of directors, the
proposed amendments to the Articles of Incorporation will tend to perpetuate
present management. The Board also believes that the proposed amendments (i)
will significantly reduce the possibility that a third party could affect a
sudden or surprise change in majority control of the Board without the support
of the incumbent Board, and (ii) will have significant effects on the ability of
the Company's shareholders to cause immediate changes in the composition of the
Board and otherwise to exercise their voting power to affect the composition of
the Board.
In addition, since the proposed amendments are designed to discourage
accumulations of large blocks of Common Stock by purchasers whose objective is
to have such stock repurchased by the Company at a premium, adoption of the
amendments could tend to reduce any temporary fluctuations in the market price
of the Common Stock that are caused by such accumulations. Accordingly,
shareholders could be deprived of certain opportunities to sell their stock at a
temporarily higher market price. Because the classified board proposal will
increase the amount of time required for a takeover bidder to obtain control of
the Company without the cooperation of the Board, even if the takeover bidder
were to acquire a majority of the Company's outstanding stock, a classified
board may tend to discourage certain tender offers that would
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otherwise allow shareholders the opportunity to realize a premium over the
market price of their stock. The proposed amendments to the Articles of
Incorporation will also make it more difficult for the Company's shareholders to
change the composition of the Board even if the shareholders believe such a
change would be desirable based on the performance of directors and the Company.
Vote Required to Approve Amendments.
At the Annual Meeting, shareholders will be asked to vote separately on the
two proposed amendments to the Company's Articles of Incorporation. As allowed
under Virginia law, the Company's Articles of Incorporation currently provide
that any amendment to the Articles of Incorporation must be approved by a
majority of the votes entitled to be cast on the amendment. As a result, the
affirmative vote of a majority of the outstanding shares of Common Stock is
required to approve each of the proposed amendments. Each of the two proposed
amendments will be acted upon as a separate proposal at the Annual Meeting and
approval of one proposed amendment is not conditioned upon approval of the other
proposed amendment.
A copy of the proposed amendments to the Company's Articles of
Incorporation is attached to this Proxy Statement as Exhibit A.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE (i) FOR APPROVAL OF THE PROPOSED
---
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO CREATE A CLASSIFIED
BOARD OF DIRECTORS WITH STAGGERED THREE YEAR TERMS AND (ii) FOR APPROVAL OF THE
---
PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO PROVIDE THAT
DIRECTORS MAY ONLY BE REMOVED BY SHAREHOLDERS FOR CAUSE.
PROPOSAL 3. ELECTION OF DIRECTORS
The Company's Bylaws provide that the number of directors shall be between
5 and 15. There are currently 7 directors serving on the Board. Subject to
approval of the proposed amendment to the Company's Articles of Incorporation to
create a classified Board of Directors, the Board of Directors will be divided
into three (3) classes, Class A, Class B and Class C as such directors are
elected at the 2000 Annual Meeting. The initial terms of the Class A directors
elected at the 2000 Annual Meeting will expire at the Company's 2001 Annual
Meeting. The initial terms of the Class B directors elected at the 2000 Annual
Meeting will expire at the Company's 2002 Annual Meeting. The initial terms of
the Class C directors elected at the 2000 Annual Meeting will expire at the
Company's 2003 Annual Meeting. Commencing with the 2001 Annual Meeting,
directors will be elected to serve for three year terms and until their
successors are duly elected and qualified. If the proposal to create a
classified board is not approved, all seven nominees to serve as directors will
be nominated and elected to serve a one year term.
Two persons have been nominated by the Board of Directors to serve as the
Class A directors until the 2001 Annual Meeting, two persons have been nominated
by the Board of Directors to serve as the Class B directors until the 2002
Annual Meeting and three persons have been nominated by the Board of Directors
to serve as the Class C directors until the 2003 Annual Meeting.
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The Board of Directors recommends that the two nominees to serve as Class A
directors, Louis Jones and Russell Kirk, be elected to serve as the Class A
directors until the 2001 Annual Meeting, that the two nominees to serve as Class
B directors, Alfred Abiouness and Elizabeth Twohy, be elected to serve as the
Class B directors until the 2002 Annual Meeting and that the three nominees to
serve as Class C directors, John Bernhardt, Thomas Hunt and Lawrence Smith, be
elected to serve as the Class C directors until the 2003 Annual Meeting.
Proxies received by the Company will be voted for the election of all seven
nominees unless marked to the contrary. A shareholder who desires to withhold
voting of the Proxy for all or one or more of the nominees may so indicate on
the Proxy. All of the nominees are currently members of the Board and all have
consented to be named and have indicated their intent to serve, if elected. If
any nominee becomes unable to serve, an event which is not anticipated, the
Proxy will be voted for a substitute nominee to be designated by the Board or
the number of directors will be reduced.
The Company does not have a separate nominating committee. The functions
customarily attributable to such a committee are performed by the Board as a
whole. For information regarding the Company's bylaw provisions that govern
shareholder nominations of director candidates, see "Submission of Proposals and
Other Matters Related to 2001 Annual Meeting" elsewhere in this Proxy Statement.
Names of Director-Nominees and Committee Memberships
The following table and accompanying footnotes set forth the names, ages
and date of each nominee's first election to the Board and also provide
information on Board committees:
<TABLE>
<CAPTION>
Name Age Director Since/(1)/
---- --- -------------------
<S> <C> <C>
Alfred E. Abiouness(A)(B)(C)(D) 68 1988
John B. Bernhardt(A)(B)(C)(D) 70 1992
Thomas W. Hunt(A)(B)(D) 44 1997
Louis R. Jones(A)(B)(D) 64 1993
A. Russell Kirk(A)(B)(D) 52 1992
Lawrence N. Smith(A)(C) 62 1992
Elizabeth A. Twohy(A)(B)(D) 47 1993
</TABLE>
____________________
/(1)/ At the 1998 Annual Meeting of Resource Bank (the "Bank"), the
shareholders of the Bank approved a Plan of Reorganization pursuant to
which each share of Bank Common Stock was exchanged for two shares of the
Company's Common Stock and the Bank became a wholly owned banking
subsidiary of the Company ("Plan of Reorganization"). The effective date
of the Plan of Reorganization was July 1, 1998. Prior to the effective
date of the Plan of Reorganization, the director-nominees served on the
Board of Directors of the Bank. Since the effective date of the Plan of
Reorganization, the director-nominees have served on the Company's Board
of Directors and have continued to serve on the Bank's Board of
Directors. The dates set forth above indicate the dates on which the
director-nominees first served on the Bank's Board of Directors. All
share figures in this Proxy Statement give effect to the 2:1 share
exchange effectuated pursuant to the Plan of Reorganization.
(A) Member of the Credit Risk Committee of the Bank. The Credit Risk
Committee reviews all loan activity and policy of the Bank, acts upon
large loan requests presented to the Bank, and monitors outstanding loans
and collection efforts. Also member of the Market Risk and Liquidity Risk
Committees of the Bank. Each of these three committees held 12 meetings
in 1999.
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(B) Member of the Audit Committee. The Audit Committee is empowered by the
Board of Directors to, among other things, recommend the firm to be
employed by the Company as its independent auditor and to consult with such
auditor regarding audits and the adequacy of internal accounting controls.
The Audit Committee held two meetings in 1999.
(C) Member of the Proxy Committee, which collects and accounts for all proxies
and exercises proxy authority at all shareholder meetings. The Proxy
Committee held one meeting in 1999.
(D) Member of the Compensation Committee, which recommends to the Board the
salaries for officers and the compensation to be paid directors, and
determines the persons to whom incentive stock options are granted, the
number of shares subject to option, and the appropriate vesting schedule.
The Compensation Committee held one meeting in 1999.
Background and Experience
The following information relates to the business background of the seven
director-nominees. There are no family relationships among any of the director-
nominees nor is there any arrangement or understanding between any director-
nominees and any other person pursuant to which the director-nominee was
selected.
Nominees for Class A Directors Whose Terms Will Expire in 2001
Mr. Jones has been President of Hollomon-Brown Funeral Home, Inc. since
1954. Mr. Jones is also Chairman of the Board of Snelling Funeral Homes, Inc.
and is President of Allstate Leasing Corporation, Memorial Services Planning
Corporation, Advance Charge Plan, Inc., Tidewater Cemetery Corporation and Lu-El
Realty, Inc. Mr. Jones has also been active in civic affairs and serves on the
City Council of Virginia Beach.
Mr. Kirk has been President of Armada/Hoffler Holding Company (a real
estate land development, construction and properties management firm) since 1983
and has been Co-CEO of Goodman Segar Hogan Hoffler since 1993. Mr. Kirk is also
Chairman and Commissioner of the Virginia Port Authority, Norfolk, Virginia.
Nominees for Class B Directors Whose Terms Will Expire in 2002
Mr. Abiouness has been President of Abiouness, Cross & Bradshaw, Inc., a
Norfolk structural engineering and architectural consulting firm, since 1974.
Mr. Abiouness is a past Commissioner of the Norfolk Redevelopment and Housing
Authority.
Ms. Twohy is President of Capital Concrete, Inc. of Norfolk, Virginia, a
ready-mixed concrete manufacturer, and has been employed by the Company since
1975. Ms. Twohy is on the Board of Directors of Tidewater Builders Association
and is past president of the Virginia Ready-Mixed Concrete Association.
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Nominees for Class C Directors Whose Terms Will Expire in 2003
Mr. Bernhardt has over 30 years of commercial banking experience. Mr.
Bernhardt served as Executive Vice President of Virginia National Bank and
Virginia National Bankshares, Inc. from 1972 to 1979, and as President and
Director of those institutions from 1980 to 1983. From 1984 to 1988, Mr.
Bernhardt was the Vice Chairman of the Board of Directors of Sovran Financial
Corporation, Norfolk, Virginia, and Sovran Bank, N.A., Richmond, Virginia. He
was also the President and Chief Executive Officer of Sovran Services from 1986
to 1988. Mr. Bernhardt resigned from all of his Sovran positions in April of
1988. He is currently a Managing Director of Bernhardt/Gibson, Inc., a
financial services firm, with whom he has been employed since 1988. Mr.
Bernhardt is also a director of Dominion Resources, Inc.
Mr. Hunt is the Vice President of Summit Enterprises, Inc. of McLean,
Virginia, an investment management company focused primarily on venture capital
opportunities, and he has been employed by Summitt Enterprises since 1984. He
is the former Chairman of the Board of Directors of Eastern American Bank, FSB,
which the Bank acquired in 1997. Mr. Hunt is a director of Bryce Office
Systems, Inc., Intelisys Electronic Commerce and Digital Access Control.
Mr. Smith joined the Bank in December 1992 and served as its President and
Chief Executive Officer until the implementation of the Plan of Reorganization,
after which he was appointed President and Chief Executive Officer of the
Company. Mr. Smith continues to serve as the Chief Executive Officer of the
Bank. Mr. Smith has over 19 years of experience with United Virginia
Bank/Seaboard National and United Virginia Bank - Eastern Region, predecessor of
Crestar Bank - Eastern Region ("Crestar"). From 1973 until May 1983, Mr. Smith
was President of Crestar and also served on major committees of the holding
company, United Virginia Bankshares, Inc., predecessor of Crestar Bankshares,
Inc. He retired from Crestar in May 1983. Mr. Smith formed Essex Financial
Group, Inc., a financial holding company, in May 1983. Mr. Smith serves on the
board of directors of Heilig-Meyers Corporation, a national furniture retailer,
Empire Machinery and Supply Corporation, a Norfolk based supplier of industrial
products, and he has been active in civic affairs for the past 30 years.
Board Meetings
The business of the Company is managed under the direction of the Board.
The Board meets at least monthly to review significant developments affecting
the Company and to act on matters requiring approval by the Board. The Board
held 12 meetings in 1999. During 1999, each member of the Board participated in
at least 75% of all meetings of the Board and at least 75% of all applicable
committee meetings, except that Mr. Bernhardt attended one of the two Audit
Committee meetings held in 1999.
EXECUTIVE COMPENSATION
Summary Executive Compensation Table
The following table presents an overview of executive compensation paid by
the Company and its subsidiaries during 1999, 1998 and 1997 to Lawrence N.
Smith, President and Chief Executive Officer, and to the other executive
officers of the Company whose combined salary and bonus exceeded $100,000 in
1999 (collectively, the "Named Executive Officers").
9
<PAGE>
Compensation information includes compensation paid by the Bank to the Named
Executive Officers in their capacity as executive officers of the Bank. There
are an additional 12 current employees of the Bank who earned in excess of
$100,000 in combined salary, bonus and commissions in 1999, but who are not
executive officers of the Company.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
-------------------- ------------
Securities
Underlying All Other
Name and principal position Year Salary($) Bonus($) Options(#) Compensation($)/(1)/
- --------------------------- ---- --------- ------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
Lawrence N. Smith, President and CEO 1999 $262,500 $ 0 -- $5,078
of Resource Bankshares Corporation 1998 250,000 200,000 -- 5,000
1997 200,000 160,000 -- 4,744
T. A. Grell, Jr., President of Resource 1999 200,000 46,900 15,000 5,100
Bank/(2)/ 1998 12,179 0 -- 377
Harvard R. Birdsong, II, Senior Vice 1999 110,250 20,000 -- 2,034
President, Chief Credit Officer - Resource 1998 90,000 45,000 -- 2,021
Bank 1997 75,000 22,500 15,000 1,970
Debra C. Dyckman, Senior Vice President 1999 101,000 25,000 -- 2,014
of Operations 1998 92,900 45,000 -- 2,053
1997 84,000 29,400 -- 1,964
</TABLE>
_________________
(1) Consists of Company contributions to 401(k) Plan.
(2) Mr. Grell became employed by Resource Bank effective December 9, 1998.
Option Grants in Last Fiscal Year
The table below sets forth information regarding stock option grants to T.
A. Grell, Jr. during the fiscal year ended December 31, 1999. No other Named
Executive Officer was granted stock options during the year ended December 31,
1999.
<TABLE>
<CAPTION>
Number of Percent of Total Options
Securities Granted to Employees in Grant Date
Name Underlying Options Fiscal Year Exercise Price Expiration Date Present Value/(1)/
---- ------------------- ----------- -------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
T. A. Grell, Jr. 14,571 16.1% $17.87 1/4/2009 $100,675
429 .5% $21.75 5/27/2009 $ 3,600
</TABLE>
____________
(1) The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted average
assumptions: risk free interest rate of 6.25%, dividend yield of 2.35%,
volatility factor of the expected market price of the Company's common stock of
.36, and a weighted-average expected life of the options of 7.5 years. The
actual value, if any, that may be realized will depend on the excess of the
stock price over the exercise price on the date the option is exercised, so
there can be no assurance that the value realized will be at or near the value
estimated by the Black-Scholes model.
Fiscal Year-End Options Table
The table below sets forth information regarding (i) the exercise of stock
options by the Named Executive Officers in 1999 and (ii) exercisable and
unexercisable stock options held as of December 31, 1999 by the Named Executive
Officers.
10
<PAGE>
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised
Options Value of Unexercised In-The-Money
at Fiscal Year-End (#) Options at Fiscal Year-End ($)(1)
---------------------- ---------------------------------
Shares
Acquired
Upon Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence N. Smith 0 0 48,266 -- 01,296/(2)/ --
T. A. Grell, Jr. 0 0 -- 15,000 -- --/(3)/
Harvard Birdsong 0 0 -- 15,000 -- --/(4)/
Debra C. Dyckman 3,333 53,328/(5)/ 21,065 -- 71,690/(6)/ --
</TABLE>
(1) The closing price of the Company's Common Stock on AMEX ("Closing Price")
on December 31, 1999 was $8.625 per share.
(2) 26,666 of the options are exercisable at $3.00 per share and 21,600 of the
options are exercisable at $6.25 per share.
(3) 14,571 of the options are exercisable at $17.87 per share and 429 of the
options are exercisable at $21.75 per share.
(4) The exercise price of these options is $15.75 per share.
(5) The exercise price of these options was $3.00 per share and the Closing
Price on July 6, 1999, the date of exercise, was $19.00 per share.
(6) 6,665 of the options are exercisable at $3.00 per share and 14,400 of the
options are exercisable at $6.25 per share.
Retirement Savings Plan
Mr. Smith and other eligible employees are eligible to participate in the
Bank's Retirement Savings Plan ("Plan"). The Plan is a combined 401(k) profit
sharing, stock bonus and employee stock ownership plan, which means that
contributions may be made by the Bank to the Plan in either cash or Company
Common Stock and are derived from current or accumulated profits. The Plan's
assets may be invested in shares of Company Common Stock purchased either
directly from the Company or from third parties. The Plan's 401(k) provisions
permit employees to contribute to the Plan through voluntary payroll savings on
a pretax basis. These contributions are matched by the Bank in an amount equal
to 50% of payroll savings contributions made by employees, up to 6% of an
employee's total compensation.
Retirement Benefits and Key Man Insurance Policies
During 1996, the Board of Directors of the Bank approved a plan for the
payment of retirement benefits to certain key employees and entered into limited
binding agreements with these key employees. Under the terms of the plan, the
Bank may fund the liabilities associated with this plan with life insurance
contracts. In connection with funding the projected retirement benefits, the
Bank paid premiums on applicable life insurance contracts in the amount of
approximately $646,445 during 1999, and may continue to pay, in its sole
discretion, the same annual amount of insurance premiums over the next three
years. The Bank owns the insurance polices and, under the plan, upon the death
of the individual officer the Bank will recoup all the premiums advanced.
Stock Option Plans
The Company has three stock option plans under which its directors and
officers have been granted options. These plans were initially adopted by the
Bank and were converted into plans of the Company when the Plan of
Reorganization became effective. The 1993 Long-Term
11
<PAGE>
Incentive Plan (the "1993 Plan") provided for the issuance of options to
purchase shares of Company Common Stock to key employees of the Company. The
1994 Long-Term Director Incentive Plan ("1994 Plan") provided for the issuance
of options to purchase shares of Company Common Stock to directors as specified
in the Plan.
The 1996 Long-Term Incentive Plan ("Incentive Plan"), as amended, provides
for the issuance of options to purchase 87,500 shares of Company Common Stock to
directors, 82,500 of which options have been granted, and permits the grant of
options to purchase up to 160,000 shares of Company Common Stock to key
employees of the Company, all of which options have been granted. At the
Company's 1999 Annual Meeting, the Company's shareholders approved an amended
and restated Incentive Plan that, in addition to other amendments, authorized
the issuance to directors and key employees of options to purchase an additional
150,000 shares of Common Stock. Under the terms of the Incentive Plan, the Board
has the discretion to allocate these 150,000 shares among option awards to key
employees and directors. Since the Incentive Plan was amended to authorize the
issuance of 150,000 additional option shares, a total of 114,429 options have
been granted to key employees pursuant to the Incentive Plan.
Compensation of Directors
Directors who are employees of the Company or the Bank do not receive any
extra compensation for attendance at Board or Committee meetings of the Company
or the Bank. The members of the Company's Board of Directors and Bank's Board
of Directors are currently the same and directors do not receive separate
compensation for serving on the Company's Board of Directors. During 1999, non-
employee directors of the Bank received compensation for their service on the
Bank's Board of Directors in the amount of $1,250 for each meeting attended. In
addition, an annual retainer of $12,000 was paid to the Chairman of the Bank's
Board and an annual retainer of $10,000 was paid to the Bank's other non-
employee directors. Non-employee directors also received $500 for each Audit
Committee and Compensation Committee meeting attended.
Executive Officer Employment Agreements
The Bank has entered into an Employment Agreement with Lawrence N. Smith
dated January 1, 1999, pursuant to which Mr. Smith serves as the President and
Chief Executive Officer of the Company and Chief Executive Officer of the Bank
("Smith Employment Agreement"). The initial term of the Smith Employment
Agreement is 5 years. Under the terms of the Smith Employment Agreement, Mr.
Smith's initial annual base salary was required to be at least $262,500. In
1999, Mr. Smith's annual salary was $262,500. Mr. Smith's current annual salary
under the Smith Employment Agreement is $275,625. On an ongoing basis, the
Bank's Board of Directors will determine Mr. Smith's annual salary in a manner
commensurate with his position and performance. Mr. Smith is also eligible to
participate in benefit, disability and retirement plans and in bonus programs as
determined by the Company's and Bank's Boards of Directors from time to time. In
January 2000, Mr. Smith was granted options to purchase 20,000 shares pursuant
to the Incentive Plan, 10,000 of which are exercisable at $9.12 per share and
10,000 of which are exercisable at $18.50 per share.
If the Bank terminates Mr. Smith's employment "without cause", the Bank is
required to pay Mr. Smith his regular base salary for the lesser of (i) the
remainder of the initial five year
12
<PAGE>
term or (ii) a three year period following termination; provided, however, that
no such payments would be payable after the date Mr. Smith violated the non-
competition covenants set forth in the Smith Employment Agreement. Upon a
"change of control" of the Company in which Mr. Smith is not given reasonably
equivalent duties, responsibilities and compensation, Mr. Smith's employment
with the Bank may be terminated or he may resign and in either case Mr. Smith
will be entitled to receive a one time payment of 2.99 times the average of his
regular base salary for the three year period prior to the change of control
(or, if he has been employed less than three years at the time of the change of
control, a one time payment of 2.99 times his regular base salary then in
effect.)
In addition to the Smith Employment Agreement, the Bank has entered into an
Employment Agreement with T.A. Grell, Jr. dated January 1, 1999 ("Grell
Employment Agreement"), pursuant to which Mr. Grell serves as President of the
Bank. The Grell Employment Agreement has substantially the same terms as the
Smith Employment Agreement, except that Mr. Grell's annual base salary in 1999
was $200,000. Mr. Grell's current annual salary under the Grell Employment
Agreement is $210,000. In January 1999, Mr. Grell was granted options pursuant
to the Incentive Plan to purchase 5,000 shares at $9.12 per share.
The Bank has also entered into written employment agreements with its other
executive officers, including Debra C. Dyckman and Harvard Birdsong. These
employment agreements are substantially similar to the Grell Employment
Agreement, except that (i) initial annual base salaries differ from employee to
employee and (ii) severance payments upon termination of employment without
cause generally would be made for the lesser of the remainder of the initial
term of the agreements or eighteen months following termination of employment.
The current annual salary under Ms. Dyckman's employment agreement is $106,050
and the current annual salary under Mr. Birdsong's employment agreement is
$115,763. In January 1999, each of Ms. Dyckman and Mr. Birdsong was granted
options to purchase 2,500 shares at $9.12 per share pursuant to the Incentive
Plan.
The employment agreements of the Bank's retail mortgage division executive
officers (i) have an initial term of two years, (ii) provide for severance
payments upon termination without cause for only the remainder of the term of
the agreements and (iii) provide for change of control payments of two times
base salary.
Compensation Committee Interlocks and Insider Participation
No member of the Company's Compensation Committee was an officer or
employee of the Company during 1999. During 1999, Lawrence Smith served on the
Compensation Committee of Heilig-Meyers Company, a public company, but no
directors, officers or other employees of Heilig-Meyers other than Mr. Smith
served (or currently serve) on the Company's or the Bank's Boards of Directors
or any committees thereof. In addition, during 1999 John Bernhardt served on the
Compensation Committee of Dominion Resources, Inc., also a public company, but
no directors, officers or other employees of Dominion Resources other than Mr.
Bernhardt served (or currently serve) on the Company's or the Bank's Boards of
Directors or any committees thereof. During 1999, no executive officer of the
Company other than Mr. Smith served as a member of the Compensation Committee of
another entity, nor did any executive officer of the Company serve as a director
of another entity, one of whose executive officers served on the Company's
Compensation Committee. Three members of the Compensation Committee, Alfred
Abiouness, Russell Kirk and Elizabeth Twohy, have outstanding loans with
13
<PAGE>
the Bank. Each of these loans was made in the ordinary course of business on
substantially the same terms, including interest rates, collateral and repayment
terms, as those prevailing at the time for comparable transactions with
unrelated parties and did not involve more than the normal risk of
collectibility or present other unfavorable features. See " - Certain
Relationships and Related Transactions" below.
Compensation Committee Report Concerning Compensation of Certain Executive
Officers
This report describes the Company's executive officer compensation
strategy, the components of the compensation program and the manner in which the
1999 compensation determinations were made for the Company's President and Chief
Executive Officer, Lawrence N. Smith, and the Company's and Bank's other
executive officers (collectively "Executive Officers").
In addition to the information set forth above under "Executive
Compensation," the Compensation Committee is required to provide shareholders a
report explaining the rationale and considerations that led to the fundamental
executive compensation decisions affecting the Company's Executive Officers. In
fulfillment of this requirement, the Compensation Committee, at the direction of
the Company's Board of Directors, has prepared the following report for
inclusion in this Proxy Statement. None of the members of the Compensation
Committee are executive officers or employees of the Company.
Compensation Philosophy
The compensation of the Company's Executive Officers is designed to
attract, retain, motivate and reward qualified, dedicated executives, and to
directly link compensation with (i) the Executive Officer's previous and
anticipated performance, (ii) the contributions and responsibilities of the
Executive Officer to the Company and (iii) the Company's profitability. None of
these three factors is given more relative consideration than any other. The
principal components of an Executive Officer's compensation package in 1999 were
(i) a base salary at a stated annual rate, together with certain other benefits
as may be provided from time to time and (ii) discretionary cash bonuses. See "-
Bonus Program" below. In addition, stock option awards have been made in the
past, and will continue to be made in the future, to the Company's Executive
Officers pursuant to the Company's Incentive Plan. In 1999, the Compensation
Committee granted options to purchase an aggregate of 90,500 shares of Common
Stock to key employees pursuant to the Incentive Plan.
Employment Agreements
The Company and the Bank have entered into Employment Agreements with
certain Executive Officers. The Compensation Committee believes that written
employment agreements are necessary to attract and retain a quality management
team and are consistent with the Company's compensation philosophy. To
strengthen the Company's and Bank's ability to retain quality management,
numerous written employment agreements were entered into between the Bank and
certain Executive Officers effective January 1, 1999. The principal terms of
these employment agreements are described under "- Executive Officer Employment
Agreements" above.
14
<PAGE>
Bonus Program
The Bank has historically awarded annual cash bonuses to Executive Officers
based upon individual performance and financial performance of the Company and
the Bank. 1999 bonus awards to Executive Officers are reflected in the "Summary
Executive Compensation Table" above. The Compensation Committee expects that
such bonuses will continue to be awarded in the future.
1996 Long-Term Incentive Plan
The Board and the Compensation Committee strive to compensate key employees
of the Company and the Bank in a manner that aligns closely the interests of
such key employees with the interests of the Company's shareholders. In
furtherance of this goal, in 1996 the Board adopted the Incentive Plan, which
was approved by shareholders. The purpose of the Incentive Plan is to support
the business goals of the Company and to attract, retain and motivate management
officials of high caliber by providing incentives that will, through the award
of options to acquire the Company's Common Stock, associate more closely the
interests of Executive Officers and key employees of the Company and the Bank
with the interests of the Company's shareholders. In 1999, the Compensation
Committee granted options to purchase an aggregate of 90,500 shares of Common
Stock to Executive Officers pursuant to the Incentive Plan.
Limitation on Deductibility of Certain Compensation for Federal Income Tax
Purposes
Section 162(m) of the Internal Revenue Code ("162(m)") precludes the
Company from taking a deduction for compensation in excess of $1 million for the
Chief Executive Officer or certain of its other highest paid officers. Certain
performance based compensation, however, is specifically exempt from the
deduction limit. The Compensation Committee does not believe that 162(m) will
impact the Company in 2000 because it is not anticipated that compensation in
excess of $1 million will be paid to any employee of the Company.
. Alfred E. Abiouness
. John B. Bernhardt
. Thomas W. Hunt
. Louis R. Jones
. A. Russell Kirk
. Elizabeth A. Twohy
THE PRECEDING "COMPENSATION COMMITTEE REPORT CONCERNING COMPENSATION OF
CERTAIN EXECUTIVE OFFICERS," AND THE STOCK PERFORMANCE GRAPH BELOW, SHALL NOT BE
DEEMED TO BE SOLICITING MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, OR INCORPORATED BY REFERENCE IN ANY DOCUMENTS
SO FILED.
15
<PAGE>
Company Stock Price Performance
The following graph shows a comparison of cumulative total shareholder
returns for (i) the Company, (ii) the S & P 500 Stock Index, and (iii) the SNL
Southeast Bank Index for the period beginning December 31, 1994 and ending
December 31, 1999. The trading history of the Company's Common Stock set forth
below for periods prior to the implementation of the Plan of Reorganization
reflects performance of the Bank's Common Stock on NASDAQ. Effective July 23,
1998, the Company's Common Stock began trading on the American Stock Exchange
("AMEX") instead of the NASDAQ National Market System. The total shareholder
return assumes $100 invested at the beginning of the period in the Company's
Common Stock, the S & P 500 Stock Index, and the SNL Southeast Bank Index,
including reinvestment of dividends.
Comparison of Cumulative Total Return Among The Company,
S & P 500 Stock Index,
and SNL Southeast Bank Index
<TABLE>
<CAPTION>
Return Return Return Return Return
December 31, December December December December December
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Resource Bankshares Corporation 100.00 186.36 311.67 740.00 709.12 328.54
S & P 500 Stock Index 100.00 137.58 169.03 225.44 289.79 350.78
SNL Southeast Bank Index 100.00 149.98 205.88 312.10 332.25 261.46
</TABLE>
Certain Relationships and Related Transactions
The directors and executive officers of the Company and the Bank, and their
family members and certain business organizations and individuals associated
with each of them, have been customers of the Bank, have had normal banking
transactions, including loans, with the Bank, and are expected to continue to do
so in the future. As of December 31, 1999, the Bank had aggregate direct and
indirect loans to the directors and executive officers of the Company and the
Bank totaling approximately $5.88 million, which represented approximately 37.1%
of the Company's shareholders' equity as of that date. Each of these
transactions was made in the ordinary course of business on substantially the
same terms, including interest rates, collateral
16
<PAGE>
and repayment terms, as those prevailing at the time for comparable transactions
with unrelated parties and did not involve more than the normal risk of
collectibility or present other unfavorable features.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, officers and persons who beneficially own more than 10% of a
registered class of equity securities of the Company to file initial reports of
ownership (Forms 3) and reports of changes in beneficial ownership (Forms 4 and
5) with the Securities and Exchange Commission ("SEC") and AMEX. Such persons
are also required under the rules and regulations promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company, the
Company believes that all reporting requirements under Section 16(a) for 1999
were met in a timely manner by its directors, officers and greater than 10%
beneficial owners, except that four separate gifts of Common Stock by Mr. Kirk
in December 1999 were not reported until March 2000 on a Form 5.
PROPOSAL 4. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected and approved Goodman & Company, L.L.P.
("Goodman & Company") as the firm of independent certified public accountants to
audit the financial statements of the Company for the fiscal year ending
December 31, 2000, and the Board of Directors desires that such appointment be
ratified by the Company's shareholders. Goodman & Company audited the Company's
financial statements for the fiscal years ended December 31, 1998 and December
31, 1999, and audited the Bank's financial statements from 1992 through 1997. A
representative of Goodman & Company will be present at the Annual Meeting, will
have the opportunity to make a statement if he or she desires, and will be
available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors does not know of any matters that will be presented
for action at the Annual Meeting other than those described above or matters
incident to the conduct of the Annual Meeting. If, however, any other matters
not presently known to management should come before the Annual Meeting, it is
intended that the shares represented by the Proxy will be voted on such matters
in accordance with the discretion of the holders of such Proxy.
SUBMISSION OF PROPOSALS AND OTHER MATTERS RELATED TO 2001 ANNUAL MEETING
The next Annual Meeting will be held on or about May 24, 2000. Any
shareholder who wishes to submit a proposal for consideration at that meeting,
and who wishes to have such proposal included in the Company's proxy statement,
must comply with SEC Rule 14a-8 and must submit the proposal in writing no later
than December 21, 2000. The deadline for shareholders to notify the Company of
non-Rule 14a-8 matters that may be raised for consideration at the next Annual
Meeting is March 6, 2001. All such proposals and notifications should be sent
to Lawrence N. Smith, President and Chief Executive Officer, at 3720 Virginia
Beach Boulevard, Virginia Beach, Virginia 23452.
17
<PAGE>
Under the terms of the Company's bylaws, March 6, 2001 is also the deadline
for shareholders to notify the Company of an intention to nominate candidates
for directors at the next Annual Meeting. Such nominations must comply with the
notice provisions included in the Company's bylaws. These notice provisions
require that nominations by shareholders of director candidates set forth the
following information: (1) as to each individual nominated (i) the name, date
of birth, business address and residence address of such individual, (ii) the
business experience during the past five years of such nominee, (iii) whether
the nominee is or has ever been at any time a director, officer or owner of 5%
or more of any class of capital stock or other equity interest of any
corporation or other entity, (iv) any directorships held by such nominee in any
company with a class of securities registered under the Exchange Act, (v)
whether in the last five years such nominee has been convicted in a criminal
proceeding or been subject to certain other legal proceedings, including
bankruptcies, and (vi) such other information regarding the nominee as would be
required to be included in a proxy statement filed pursuant to the Exchange Act
had the nominee been nominated by the Board of Directors; and (2) as to the
person submitting the nomination notice and any person acting in concert with
such person, (i) the name and business address of such person, (ii) the name and
address of such person as they appear on the Company's books, (iii) the class
and number of shares of the Company that are beneficially owned by such person,
(iv) a representation that the shareholder (A) is a holder of record of Common
Stock of the Company entitled to vote at the meeting at which directors will be
elected and (B) intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice and (v) a description of
all arrangements or understandings between the shareholder and each nominee and
any other person or persons pursuant to which the nomination or nominations are
to be made by the shareholder. Generally, nominations are required to be
delivered to the Company not later than 45 days before the date on which the
Company first mailed its proxy materials for the prior year's annual meeting of
shareholders.
GENERAL
The Company's 1999 Annual Report to Shareholders accompanies this Proxy
Statement. The 1999 Annual Report to Shareholders does not form any part of the
material for the solicitation of proxies. Upon written request, the Company
will provide shareholders with a copy of its Annual Report on Form 10-K for the
year ended December 31, 1999 (the "Form 10-K"), as filed with the SEC, without
charge. Please direct written requests for a copy of the Form 10-K to: Lu Ann
Klevecz, Assistant Vice President-Corporate Communications, Resource Bank, 3720
Virginia Beach Boulevard, Virginia Beach, Virginia 23452.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY
By Order of the Board of Directors
April 20, 2000
18
<PAGE>
EXHIBIT A
---------
Proposed Amendments to Articles of Incorporation
(To be added as a new Article VII)
(a) Classified Board of Directors. Commencing with the 2000 Annual
Meeting, the Board of Directors shall be divided into three classes, Class A,
Class B and Class C, as nearly equal in number as possible. At the 2000 annual
meeting of shareholders, directors of the first class (Class A) shall be elected
to hold office for a term expiring at the 2001 annual meeting of shareholders,
directors of the second class (Class B) shall be elected to hold office for a
term expiring at the 2002 annual meeting of shareholders, and directors of the
third class (Class C) shall be elected to hold office for a term expiring at the
2003 annual meeting of shareholders. At each annual meeting of shareholders
after the 2000 annual meeting, the successors to the class of directors whose
terms shall then expire shall be identified as being of the same class as the
directors they succeed and elected to hold office for a term expiring at the
third succeeding annual meeting of shareholders. When and if the number of
directors is changed, any newly created directorships or any decrease in
directorships shall be apportioned among the classes by the Board of Directors
as to make all classes as nearly equal in number as possible.
(b) Removal of Directors by Shareholders. Any director elected by the
holders of the Corporation's common stock may only be removed by shareholders
for cause. For purposes of this provision, the term "cause" shall mean engaging
in willful misconduct or a knowing violation of the criminal law or of any
federal or state securities law, including, without limitation, any claim of
unlawful insider trading or manipulation of the market for any security.
<PAGE>
RESOURCE BANKSHARES CORPORATION
Proxy Solicited on Behalf of the
Board of Directors for
Annual Meeting of Shareholders
to be Held May 25, 2000
The undersigned, having received the Annual Report to Shareholders and the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement dated
April 20, 2000, hereby appoints Lawrence N. Smith and John B. Bernhardt (each
with power to act alone) as proxies, with full power of substitution, and hereby
authorizes them to represent and vote, as directed below, all the shares of the
Common Stock of Resource Bankshares Corporation held of record by the
undersigned on April 3, 2000, at the Annual Meeting of Shareholders to be held
on May 25, 2000 and any adjournment thereof.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR"
PROPOSALS 1, 2, 3, AND 4
1. Amendment to Company's Articles of Incorporation to create a classified
Board of Directors with staggered three year terms.
[_] FOR [_] AGAINST [_] ABSTAIN
2. Amendment to Company's Articles of Incorporation to provide that directors
may only be removed by shareholders for cause.
[_] FOR [_] AGAINST [_] ABSTAIN
3 ELECTION OF DIRECTORS
3.1 To elect the following Class A directors to hold office for a term of
one year.
Louis R. Jones
A. Russell Kirk
3.2 To elect the following Class B directors to hold office for a term of
two years.
Alfred E. Abiouness
Elizabeth A. Twohy
3.3 To elect the following Class C directors to hold office for a term of
three years.
John B. Bernhardt
Thomas W. Hunt
Lawrence N. Smith
If proposal 1 related to the creation of a classified Board of Directors is
not approved, all director-nominees elected at the Annual Meeting will serve a
one year term.
FOR all nominees listed (except as indicated below to the contrary) [_]
WITHHOLD AUTHORITY to vote for all nominees listed [_]
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee write the nominee's name on the line provided below.)
__________________________________________________________
<PAGE>
4. TO RATIFY the appointment by the Board of Directors of Goodman & Company,
L.L.P. as the Company's independent auditors for the year ending December
31, 2000
[_] FOR [_] AGAINST [_] ABSTAIN
5. IN THEIR DISCRETION, on such other matters as may properly come before the
meeting, or, if any nominee listed in Proposal 3 above is unable to serve
for any reason, to vote or refrain from voting for a substitute nominee or
nominees.
This proxy is revocable at any time prior to its exercise. This proxy, when
properly executed, will be voted as directed. Where no direction is given,
this proxy will be voted for Proposals 1, 2, 3, and 4.
Please sign your name(s) exactly as they
appear hereon. If signer is a corporation,
please sign the full corporate name by duly
authorized officer. If an attorney, guardian,
administrator, executor, or trustee, please
give full title as such. If a limited
liability company or partnership, sign in
limited liability company or partnership name
by authorized person.
Date: __________________, 2000
_____________________________________________
_____________________________________________
Please complete, date, sign and return this
proxy promptly in the accompanying envelope.
