SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
MainStreet BankGroup, Incorporated
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
Dear Shareholder:
The Directors of MainStreet BankGroup Incorporated invite you to attend
our Annual Meeting of Shareholders to be held in the Auditorium of the Henry
County Administration Building, 3300 Kings Mountain Road, Collinsville, Virginia
on Wednesday, April 23, 1997 at 11:00 a.m.
In addition to the election of directors, at this year's meeting we are
asking shareholders to approve the 1997 Stock Incentive Plan, which we believe
is an integral part of our program for recruiting and retaining outstanding
officers and employees. My staff and I will report to our shareholders our
progress in moving closer to realizing the vision we set for our corporation,
and we will be available for your questions and comments.
Whether or not you plan to attend the meeting, after you have reviewed
the Proxy Statement please return the enclosed proxy card, properly completed,
as soon as possible. A postage-paid envelope is enclosed for your convenience.
Your Board of Directors and I look forward to seeing you at our Annual
Meeting.
Sincerely,
/s/Michael R. Brenan
--------------------
Michael R. Brenan
Chairman, President and
Chief Executive Officer
March 24, 1997
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON April 23, 1997
To the Holders of Common Stock Of
MainStreet BankGroup Incorporated:
The Annual Meeting of Shareholders of MainStreet BankGroup Incorporated will be
held on Wednesday, April 23, 1997, at 11:00 a.m., at The Henry County
Administration Building, 3300 Kings Mountain Road, Collinsville, Virginia. The
items of business are:
1. To elect a Board of Directors consisting of 11 members for the ensuing
year; and
2. To approve the MainStreet BankGroup Incorporated 1997 Stock Incentive
Plan; and
3. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
These items are more fully described in the accompanying Proxy Statement. The
Board of Directors has determined that holders of Common Stock of record at the
close of business on February 28, 1997 will be entitled to notice of and to vote
on all questions at the Annual Meeting or any adjournment thereof.
By Order of the Board of Directors
/s/Rebecca J. Jenkins
---------------------
Rebecca J. Jenkins
Secretary
March 24, 1997
YOUR VOTE IS IMPORTANT!
Please mark, sign, and date the enclosed proxy card and
mail it promptly in the enclosed pre-paid envelope.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 23, 1997
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation
by and on behalf of the Board of Directors of the enclosed proxy to be used at
the 1997 Annual Meeting of Shareholders of MainStreet BankGroup Incorporated
("BankGroup") to be held at The Henry County Administration Building, 3300 Kings
Mountain Road, Collinsville, Virginia, on Wednesday, April 23, 1997, at 11:00
a.m., and at any adjournment thereof. The shares represented by any proxy will
be voted as instructed, and in the absence of instructions will be voted FOR the
election of Directors and approval of the 1997 Stock Incentive Plan.
Any shareholder who has executed a proxy and attends the Annual Meeting
may elect to vote in person rather than by proxy. A shareholder may revoke his
proxy at any time before it is exercised by filing written notice thereof or by
filing a later valid proxy with the Secretary of BankGroup. However, any such
revocation will not affect any vote previously taken. Presence at the Annual
Meeting does not of itself revoke such proxy.
OUTSTANDING COMMON STOCK, RECORD DATE, AND SOLICITATION
The Directors of BankGroup have fixed February 28, 1997, as the record
date for shareholders entitled to notice of and to vote at the Annual Meeting.
Only shareholders of record at the close of business on that date will be
entitled to vote. As of February 28, 1997, 11,207,533 shares of Common Stock
were outstanding. Each share of Common Stock is entitled to one vote on all
matters presented at the meeting. See "Security Ownership of Management and
Principal Shareholders."
The cost of solicitation of proxies will be borne by BankGroup.
Solicitations will be made only by the use of the mail, except that Directors,
officers and regular employees of BankGroup, or its affiliates, may make
solicitations of proxies by telephone, telegraph, or by personal calls.
Brokerage houses and nominees will be requested to forward the proxy soliciting
material to the beneficial owners of the Common Stock held of record by such
persons, and BankGroup will reimburse them for their reasonable charges and
expenses in this connection.
A majority of the votes entitled to be cast on matters to be considered
at the meeting constitutes a quorum. If a share is represented for any purpose
at the meeting, for quorum purposes it is present for all matters considered at
the meeting. Abstentions and shares held of record by a broker or its nominee
("Broker Shares") that are voted on any matter are included in determining the
number of votes present or represented at the meeting. Broker Shares that are
not voted on any matter at the meeting are not included in determining whether a
quorum is present. Votes that are withheld and Broker Shares that are not voted
(commonly referred to as "broker non-votes") are not included in determining the
number of votes cast in the election of directors or on other matters.
<PAGE>
ITEM 1 - ELECTION OF DIRECTORS
At the Annual Meeting, 11 Directors are to be elected to hold office
until the next annual meeting of shareholders or until their respective
successors are duly elected and qualified.
It is the intention of the persons named in the enclosed proxy to vote
for the election of the 11 persons named herein, all of whom currently are
Directors. Proxies will be voted for the election as Directors of the nominees
listed below (or, if unexpectedly unavailable, for such substitutes as the Board
of Directors may designate) to serve until the next annual meeting of
shareholders and until their respective successors have been duly elected and
qualified. The Board of Directors does not anticipate any nominees will be
unavailable for election.
All nominees other than Phillip W. Dean and George J. Kostel have been
elected by shareholders at previous annual meetings. Mr. Dean was elected to the
Board by the Directors in February 1997 pursuant to provisions of BankGroup's
agreement to acquire Hanover Bank, and Mr. Kostel was elected to the Board by
the Directors in December 1996 pursuant to similar provisions in BankGroup's
agreement to acquire The First National Bank of Clifton Forge. As provided in
each acquisition agreement, the eligibility of both nominees for election at
annual meetings is governed by BankGroup's bylaws.
The election of each nominee for director requires the affirmative vote
of the holders of a plurality of the shares of Common Stock cast in the election
of directors. Unless otherwise specified in the accompanying form of proxy, it
is intended that votes will be cast for the election of all of the nominees as
directors.
<PAGE>
<TABLE>
<CAPTION>
Position with BankGroup or Other Director
Nominees (Age) Principal Occupation and Directorships Since
- -------------- -------------------------------------- -----
<S> <C> <C>
W. Christopher Beeler, Jr. President and Chief Executive Officer, Virginia Mirror Company, 2/92
(45) Inc. and Virginia Glass Products Corporation (mirror manufacturer),
Martinsville, Virginia. Mr Beeler is a Director of Hooker Furniture
Corporation (furniture manufacturer), Martinsville, Virginia.
Thomas B. Bishop Owner & Manager, Berry Enterprise, (lumber retailer building 4/93
(43) contractor) Chilhowie, Virginia.
Michael R. Brenan Chairman of the Board, President, and Chief Executive Officer of 6/94
(44) MainStreet BankGroup Incorporated. Mr. Brenan was President and
Chief Operating Officer of Bank One, Youngstown, N.A., Youngstown,
Ohio from January 1992 to June 1994.
William L. Cooper, III President and Chief Executive Officer, Cooper Wood Products 4/92
(42) (furniture component manufacturer), Rocky Mount, Virginia.
Billy P. Craft President, Village Motors, Inc. (franchised automobile dealer) 4/94
(67) Lynchburg, Virginia.
Phillip W. Dean Executive Vice President and CEO, Leadbetter, Inc., 2/97
(54 ) (Rental Property Management), Ashland, Virginia
I. Patricia Henry Plant Manager, Eden - Plant, Miller Brewing Company 2/96
(49) (beverage manufacturer), Eden, North Carolina
Larry E. Hutchens Chairman, Hutchens Petroleum (petroleum marketer), 8/86
(51) Stuart, Virginia.
George J. Kostel Retired Attorney and Banking Executive 12/96
(69 )
William O. McCabe, Jr.,M.D. Physician and retired President, Forest Family 8/85
(65) Physicians, Inc., Forest, Virginia.
Albert L. Prillaman Chairman, Chief Executive Officer and President, 4/94
(51) Stanley Furniture Company, Inc. (furniture
manufacturer), Stanleytown, Virginia.
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth information as of January 31, 1997,
concerning the beneficial ownership, direct or indirect, of Common Stock by
Directors, nominees for Director, the Chief Executive Officer, the four most
highly compensated Executive Officers, all Directors and Executive Officers as a
group, and persons beneficially owning more than 5% of Common Stock.
<TABLE>
<CAPTION>
Sole Voting & Aggregate
Investment Aggregate Percentage
Name Power(1) Other (2) Total Owned
---- -------- --------- ----- -----
<S> <C> <C> <C> <C>
James E. Adams 5,770(3) --- 5,770 *
S. Richard Bagby 6,505(4) --- 6,505 *
W. Christopher Beeler, Jr. 5,633 946 6,579 .1
Thomas B. Bishop 1,100 --- 1,100 *
Michael R. Brenan 22,420(5) --- 22,420 .2
William L. Cooper, III 6,240 2,508 8,748 .1
Billy P. Craft 97,224 --- 97,224 .9
Phillip W. Dean 15,381 388 15,769 .1
Larry E. Hutchens 8,086 9,253 17,339 .2
Rebecca J. Jenkins 5,290(6) 4,076(7) 9,366 .1
George J. Kostel 45,359 40,029 85,388 .8
William O. McCabe, Jr. M.D. 11,657 --- 11,657 .1
Albert L. Prillaman 5,450 --- 5,450 *
R. M. Simmons, Jr.** 28,154 25,812 53,966 .5
Thomas B. Stanley, Jr**. 824 36,060 36,884 .3
R. Bruce Valley 13,167(8) --- 13,167 .1
Directors and Executive 289,678 118,074 407,752 3.6
Officers as a Group
(21 persons)
MainStreet Trust (9) 505,463 572,778 1,078,241 9.5
Company, NA
- -----------------------
* Denotes less than .1% of outstanding shares.
** Messrs. Simmons and Stanley are retiring from the Board at the 1997 annual
meeting in accordance with Bylaw provisions for retirement of directors.
</TABLE>
<PAGE>
(1) Includes 23,777 shares that may be acquired by certain officers and by
Director Phillip W. Dean pursuant to options granted under BankGroup's
stock option plans.
(2) Includes shares owned by relatives and in certain trust relationships,
which shares may be deemed to be beneficially owned under rules and
regulations of the Securities and Exchange Commission. The inclusion of
these shares does not constitute an admission of beneficial ownership.
(3) Includes 2,387 shares of a restricted stock award as to which Mr. Adams
has current voting rights.
(4) Includes 1,997 shares of a restricted stock award as to which Mr. Bagby
has current voting rights.
(5) Includes 6,597 shares of restricted stock awards as to which Mr. Brenan
has current voting rights.
(6) Includes 1,847 shares of a restricted stock award as to which Ms. Jenkins
has current voting rights.
(7) Includes 1,396 shares of a restricted stock award as to which Ms.
Jenkins' spouse has current voting rights.
(8) Includes 2,383 shares of a restricted stock award as to which Mr. Valley
has current voting rights.
(9) BankGroup's affiliate, MainStreet Trust Company, NA, 200 East Church
Street, Martinsville, Virginia, held through the normal conduct of its
trust business, 1,078,241 shares of Common Stock as of January 31, 1997.
Of these shares, MainStreet Trust Company, NA has sole voting and
investment power as to 505,463 shares, shared voting and investment power
as to 215,702 shares, and sole investment power as to 201,358 shares.
Virginia law prohibits MainStreet Trust Company, NA from voting shares as
to which it has sole voting power, but shares as to which it has shared
voting power can be voted by the person with whom it shares such power.
Pursuant to Virginia law, a co-fiduciary may be appointed for all of the
shares held by MainStreet Trust Company, NA with sole power to vote, in
order that such shares may be voted at the Annual Meeting.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires that
BankGroup's directors and executive officers, and persons who own more than 10%
of a registered class of BankGroup's equity securities, file with the Securities
and Exchange Commission initial reports of ownership and reports of change in
ownership of Common Stock and other equity securities of BankGroup. The same
persons are also required by Securities and Exchange Commission regulation to
furnish BankGroup with copies of all Section 16(a) forms that they file.
Based solely on its review of the forms required by Section 16(a) of
the Securities Exchange Act of 1934 that have been received by BankGroup or
written representations from certain reporting persons that no annual statements
on Form 5 were required, BankGroup believes that its officers and Directors and
beneficial owners of greater than 10% of its Common Stock complied with all
applicable filing requirements
<PAGE>
COMMITTEES OF THE BOARD
The Board of Directors has established an Audit Committee, a
Compensation Committee, a Corporate Governance and Nominating Committee, a
Corporate Responsibility and Compliance Committee, an Executive Committee and a
Corporate Objectives and Finance Committee and has assigned certain
responsibilities to each of those Committees. The Audit Committee recommends to
the Board of Directors, the firm to be employed as its independent accountants
to audit BankGroup's consolidated financial statements; reviews and approves the
scope, purpose and type of audit services to be performed by the internal and
external auditors; reviews the activities and findings of the internal and
external auditors to determine the effectiveness of the audit function; reviews
procedures for ensuring compliance with BankGroup's policies on conflict of
interest; and renders regular reports to the Board of Directors on its
activities and findings. The Compensation Committee recommends, to the Board of
Directors, the compensation to be paid to the executive officers of BankGroup
and its subsidiaries, approves the general salary administration policies for
BankGroup's other officers and employees, and approves the overall structure of
the benefits program. The Compensation Committee also administers BankGroup's
stock option plans. The Audit Committee and the Compensation Committee each
consist of non-employee Directors. The Corporate Governance and Nominating
Committee reviews the qualifications of possible candidates for the Board of
Directors including candidates recommended by shareholders and recommends these
candidates to the Board of Directors, evaluates the performance of the Board of
Directors and evaluates the performance of the Chief Executive Officer at least
annually. Shareholder recommendation of possible candidates must be submitted in
writing to the Secretary of BankGroup, must be accompanied by a statement signed
by the recommended candidates of their willingness to serve, if elected, and
must be received at least 90 days before the date of the annual meeting at which
the recommended candidates, if approved by the Corporate Governance and
Nominating Committee and the Board of Directors, would be nominated for election
by shareholders. The Corporate Objectives and Finance Committee is responsible
for overseeing the strategic planning process, assisting Management with setting
a strategic direction for BankGroup, focusing the attention of the Board of
Directors on long-range objectives, monitoring the operational and financial
results of BankGroup and assessing management's achievement of BankGroup's
long-range objectives. The Executive Committee has all powers of the full Board
not prohibited to it under the Virginia Stock Corporation Act and will be called
to meet in the event of emergencies or when action of the Board of Directors is
necessary between meetings and it is not possible or practicable to call a
special meeting. The Corporate Responsibility and Compliance Committee is
responsible for ensuring that standards of ethical behavior and proper
compliance programs are established and maintained throughout BankGroup.
Executive Committee -- W. Christopher Beeler, Jr., Michael R. Brenan
(Chairman), William L. Cooper, III, Larry E. Hutchens, Albert L. Prillaman, and
Thomas B. Stanley, Jr.
Audit Committee -- W. Christopher Beeler, Jr. (Chairman), William L.
Cooper, III, Billy P. Craft, Phillip W. Dean, George J. Kostel, and Richard M.
Simmons Jr.
Compensation Committee -- William L. Cooper, III (Chairman), Larry E.
Hutchens, William O. McCabe, Jr., M.D., and Albert L. Prillaman.
Corporate Governance and Nominating Committee -- Thomas B. Bishop, Michael
R. Brenan, Billy P. Craft, Phillip W. Dean, I. Patricia Henry, Albert L.
Prillaman, Richard M. Simmons, Jr., and Thomas B. Stanley, Jr. (Chairman).
<PAGE>
Corporate Objectives & Finance Committee -- W. Christopher Beeler, Jr.,
William L. Cooper, III, Billy P. Craft, Phillip W. Dean, Larry E. Hutchens,
George J. Kostel, Albert L. Prillaman (Chairman), Richard M. Simmons, Jr., and
Thomas B. Stanley, Jr.
Corporate Responsibility & Compliance Committee -- Thomas B. Bishop, Larry
E. Hutchens (Chairman), I. Patricia Henry, George J. Kostel, William O. McCabe,
Jr., M.D., and Richard M. Simmons, Jr.
ATTENDANCE
The Board of Directors held nine meetings during 1996, the Audit
Committee met five times, the Compensation Committee met four times, the
Corporate Governance and Nominating Committee met three times, the Corporate
Objectives & Finance Committee met three times, the Corporate Responsibility &
Compliance Committee met two times, and the Executive Committee met once. During
1996, each director attended more than 75% of the meetings of the Board and of
any committee on which they served with the exception of I. Patricia Henry,
elected during the year, who attended 60% of such meetings. Ms. Henry's absences
were due to previously scheduled business commitments with her employer.
COMPENSATION OF DIRECTORS
In 1996, Directors who were not also employees of BankGroup were paid
an annual retainer of 200 shares of BankGroup Common Stock plus $2,088 in cash,
a fee of $300 for each Board and Committee meeting attended with the Committee
Chariman paid $400 each Committee meeting chaired, and their expenses for
attending meetings.
REPORT OF COMPENSATION COMMITTEE
This report by the Compensation Committee is required by rules of the
Securities and Exchange Commission. It is not to be deemed incorporated by
reference by any general statement which incorporates by reference this Proxy
Statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, and it is not to be otherwise deemed filed under either
such Act.
In 1996, the Compensation Committee consisted of four members of the
BankGroup Board of Directors who were not officers of BankGroup or a BankGroup
subsidiary bank ("Subsidiary Bank"). This committee considered the
recommendations of the Subsidiary Bank Boards and made final compensation
decisions on the Chief Executive Officers of the Subsidiary Banks and BankGroup
Executive Officers.
Compensation Policies and Overall
Objectives of Executive Compensation Programs
The 1996 executive compensation program of BankGroup and of each
Subsidiary Bank was designed to provide each executive the opportunity to earn a
competitive level of compensation relative to the officer's individual
performance, experience and responsibility and the financial success of the
bank. The following objectives express the fundamental philosophy of BankGroup,
the Subsidiary Bank Boards and the Compensation Committee:
<PAGE>
. Provide a competitive compensation package that enables BankGroup to
attract and retain key executives by evaluating comparable historical
and industry information, with emphasis on peer group bank holding
companies and banks.
. Evaluate bonus programs that would be based upon the annual and
long-term performance of BankGroup and the Subsidiary Banks and
individual performance.
. Provide variable stock compensation opportunities directly linked with
the performance of BankGroup and the Subsidiary Banks, aligning
executive remuneration with the interests of shareholders.
Compensation Program Components
BankGroups' overall compensation programs have been established with
the objectives of having pay levels and incentive opportunities competitive with
peer group bank holding companies and banks and reflect the performance of
BankGroup and the Subsidiary Banks. The programs consisted of three main
components: base salary, the potential for an executive officer to receive an
annual bonus based on overall performance and stock based incentives. The
particular elements of the compensation program for executive officers are
further explained below.
Salary - The Compensation Committee and Subsidiary Bank Boards
determined salary parameters through comparisons with companies of similar size
and complexity of BankGroup. The Subsidiary Bank Boards and the Compensation
Committee relied on the Watson Wyatt salary information service and survey data
from the Virginia Bankers Association for comparative historical compensation
information and comparative industry information. The objective was to have base
salaries, when considered as part of total compensation, be adequate and
competitive with the Subsidiary Bank's peer group, based on asset size.
BankGroup's salary administration policy and procedures for executive
compensation which were approved by the Compensation Committee permit the Boards
of Directors of the Subsidiary Banks to set the base salaries of their executive
officers in accordance with the salary administration guidelines prepared from
peer group data. The salaries of the Chief Executive Officers of the Subsidiary
Banks are approved by the Compensation Committee in consultation with the
Subsidiary Bank Boards of Directors.
Annual Bonus - In 1995, the Compensation Committee established a Key
Management Incentive Plan (the "Plan") for the Subsidiary Bank Chief Executive
Officers and the principal officers of BankGroup. The Plan is designed to offer
incentives to those employees whose performance directly affects BankGroup's
profitability as determined by the Compensation Committee. Each individual
selected as a Plan participant is assigned a target potential bonus award
computed as a predetermined percentage ranging from 20% to 30% of the
participant's annual base salary based upon achievement of performance goals set
by the Compensation Committee on an annual basis relating to Return On Assets,
Return on Equity, Net Income and Efficiency Ratios. Under the Plan a participant
could receive from a minimum of 50% of the target salary percentage award to a
maximum of 200% of the target salary percentage depending upon the performance
of BankGroup as a whole and that of each individual Subsidiary Bank. The formula
for the Subsidiary Bank Chief Executive Officers except for the CEO of the Trust
Bank Subsidiary was weighted more heavily to the performance of the individual
Subsidiary Bank while the Plan as applied to BankGroup principal officers and
the CEO of the Trust Subsidiary was based entirely upon the consolidated
<PAGE>
performance of BankGroup. The 1996 performance of BankGroup resulted in the
principal officers of BankGroup and the CEO of the Trust Subsidiary receiving
cash bonus awards equal to 106.5% of their target salary percentages and the
Subsidiary Bank Chief Executive Officers receiving bonus awards ranging from
98.4% to 131.2% of their target salary percentages.
Stock Award Program - The program included the potential for awarding
stock-based incentives to principal officers of BankGroup and its Subsidiary
Banks in an amount equal to 37.5% of each participant's base salary if
BankGroup's performance goals were achieved. The philosophy of the committee is
to award the principal officers of BankGroup and its Subsidiary Banks' chief
executive officers for outstanding performance of BankGroup on a consolidated
basis. For 1996, 18,446 incentive stock options were awarded to the Named
Executive Officers (excluding Michael R. Brenan) of BankGroup as set forth in
the Summary Compensation Table.
Compensation of the Chief Executive Officer - In establishing the
salary of the Chief Executive Officer of BankGroup, the Compensation Committee
retained an independent consulting firm which designed a customized peer group
for BankGroup consisting of banks and bank holding companies determined to be
similar in size and complexity to BankGroup. The Compensation Committee also
reviewed data from Watson Wyatt Data Services, Financial Institutions Benchmark
Compensation Report; BAI Foundation, The Bank Key Executive Compensation Survey;
and the Virginia Bankers Association current salary survey data. In 1995, the
Compensation Committee had established a salary range designed with a midpoint
reflecting the median compensation for chief executive officers in the
established peer group and the minimum set at 80% of the midpoint. In June of
1996, the Compensation Committee recommended, and the Board of Directors
approved, a merit increase of 10.8% in Mr. Brenan's annual base salary from
$185,000 to $205,000.
Mr. Brenan participates in the Key Management Incentive Plan both with
regard to cash bonus and stock incentives. Mr. Brenan's target salary percentage
for cash bonus purposes was set by the Compensation Committee for 1996 at 40%
and the stock incentive target percentage at 52.5% of his annual base salary.
The performance benchmarks for Mr. Brenan with regard to ROA, ROE, net income
and efficiency ratios were identical with those set for the other principal
officers of BankGroup and his awards were determined by the consolidated
performance of BankGroup. In 1996, BankGroup achieved record earnings, and
outperformed peer group bank averages with regard to return on assets, return on
equity, net interest margin and efficiency ratio. Based on this performance the
application of the Plan formula resulted in Mr. Brenan being awarded a cash
bonus equal to 106.5% of his target salary percentage and 10,192 incentive stock
options.
Compensation Committee
William L. Cooper, III (Chairman)
Larry E. Hutchens
William O. McCabe, Jr., M.D.
Albert L. Prillaman
<PAGE>
SUMMARY COMPENSATION TABLE
The following table presents information relating to total compensation
of the Chief Executive Officer and the four other most highly compensated
executive Officers of BankGroup and its subsidiaries for the fiscal year ended
December 31, 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
----------------------------------------------------------------------------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name and Compensation Award(s) Option/ Compensation
Principal Position Year Salary($) Bonus($) $ (1) $ SARS(#) (2)($)
- ------------------ ---- --------- -------- ----- - ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael R. Brenan 1996 $201,000 $87,302 $50,960(3) --- 10,192 $14,975
Chairman of the 1995 171,309 65,182 41,986(3) $97,125 --- $15,179
Board, President 1994 85,312 75,000 50,014(3) 64,000(4) 20,000 ---
and Chief Executive
Executive Officer,
MainStreet BankGroup
Incorporated (hired 6/94)
James E. Adams 1996 $137,150 $45,290 --- --- 5,036 $35,572
Executive Vice 1995 128,249 40,015 --- $49,688 --- 7,561
President, Chief 1994 20,592 25,000 $15,327(5) --- --- ---
Financial Officer
and Treasurer
(hired 11/94)
R. Bruce Valley 1996 $134,800 $41,205 --- --- 4,876 $26,306
President and Chief 1995 131,078 47,123 --- $49,613 --- 9,019
Executive Officer 1994 114,580 18,207 --- --- 3,400 6,351
Piedmont Trust Bank
Rebecca J. Jenkins 1996 $113,750 $39,925 --- --- 4,439 $17,440
Executive Vice 1995 97,871 30,955 --- $38,438 --- 5,783
President and 1994 29,124 11,500 $6,140(6) --- --- ---
Secretary
(hired 9/94)
S. Richard Bagby 1996 $113,100 $30,689 --- --- 4,095 $28,171
Senior Vice President 1995 107,950 27,910 --- $41,588 --- 6,332
Chief Credit Officer 1994 101,156 --- --- --- 1,000 5,334
</TABLE>
<PAGE>
(1) Amounts of Other Annual Compensation earned by the named executive
officers, other than Mr. Brenan for 1996, 1995 and 1994 and Mr. Adams and
Ms. Jenkins for 1994, did not meet the threshold reporting requirements.
(2) Consists of 401(k) matching contributions made by Piedmont Trust Bank and
BankGroup and the portion of life insurance premiums paid by the Company
and Piedmont Trust Bank for the Named Executives under a Split-Dollar Life
Insurance Program provided for senior officers of the Company and its
subsidiary Banks. BankGroup's 401(k) Plan provides for matching
contributions all Plan participants. The 1996 401(k) matching contributions
for the Named Executives are as follows: Mr. Brenan, $4,239; Mr. Adams,
$4,770; Mr. Valley, $3,396; Ms. Jenkins, $3,987; and Mr. Bagby, $4,003. The
portion of the life insurance premium under the Split-Dollar Program paid
by the Company and Piedmont Trust Bank on behalf of the Named Executives
for 1996 was as follows: Mr. Brenan, $10,736; Mr. Adams, $30,802; Mr.
Valley, $22,901; Ms. Jenkins, $13,453; and Mr. Bagby, $24,168. The
Split-Dollar Life Insurance contract between the participants and the
Company and subsidiary Banks provides for the recapture over time of 100%
of the premiums paid on behalf of the participants by the Company or the
banks and the Company and banks retain a lien on the proceeds of each
policy to ensure repayment of premium amounts advanced.
(3) The Other Annual Compensation paid to Mr. Brenan in 1996 included the
vesting of 1,600 shares of restricted BankGroup Common Stock valued at
$26,600 and $20,231 for "gross-up" of taxes regarding the value of the
stock award. The Other Annual Compensation paid to Mr. Brenan in 1995
included the vesting of 1,600 shares of restricted BankGroup Common Stock
valued at $20,500 and $15,532 for "gross-up" of taxes regarding the value
of the stock award. The Other Annual Compensation paid to Mr. Brenan in
1994 included an award of 800 shares of BankGroup Common Stock valued at
$16,300.00.
(4) Mr. Brenan's initial compensation package in June 1994 included a
restricted award of 8,000 shares of BankGroup Common Stock which shares are
scheduled to vest ratably on his anniversary date over a period of five
years. Mr. Brenan receives dividends on the total number of awarded shares
vested and unvested. The 1,600 shares which vested in each of June 1994,
1995 and 1996, are reflected as Other Annual Compensation . The value of
the remaining 3,200 shares of restricted stock held by Mr. Brenan as of
December 31, 1996 was $62,400.
(5) The other annual compensation paid to Mr. Adams in 1994 was comprised of
$5,784 for relocation expenses, $3,543 representing gross-up for taxes
regarding relocation payments and expenses and $6,000 for club initiation
fees.
(6) The other annual compensation paid to Ms. Jenkins in 1994 included $6,000
for club initiation fees.
<PAGE>
STOCK OPTION PLANS
The following table presents information concerning stock options and
stock appreciation rights ("SARs") for the individuals named in the Summary
Compensation Table(1).
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of Shares Value of
Underlying Unexercised Unexercised In-the-Money
Options/SARs at FY-End Options/SARs at FY-End(2)
---------------------- -------------------------
Number of
Shares
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Brenan 0 0 12,000 8,000 $105,000 $70,000
R. Bruce Valley 625 11,094 3,400 0 28,900 0
S. Richard Bagby 0 0 1,000 0 8,500 0
</TABLE>
(1) Mr. Adams and Ms. Jenkins had not been awarded any Options or SARs as of
December 31, 1996.
(2) Computed based upon the difference between aggregate market value at the
exercise date or December 31, 1996, as the case may be, and aggregate
exercise price.
PENSION PLAN
BankGroup and its subsidiaries have a non-contributory retirement plan
established in 1995 covering substantially all employees who meet certain age,
tenure, and hours worked criteria, and a supplemental executive retirement plan
covering certain key executives, including those in the Summary Compensation
Table. The Summary Compensation Table does not include the amount of the
contribution payment or accrual for any executive officer in these plans, as
these amounts cannot be readily separated or individually calculated and are
based upon actuarial assumptions for the population as a whole.
The retirement plan formula provides 1.5% for each year of service up
to the Social Security covered compensation level for each year of service, and
an additional .65% of compensation above the Social Security covered
compensation level for each year of service not to exceed 35 years, times the
average of the highest five years compensation. Early retirement date is age 60,
with five years of service subsequent to May 1, 1995.
<PAGE>
The supplemental retirement plan provides for 65% of highest
compensation in the last five years, provided the executive has completed five
years of total service, subsequent to November 1, 1995 and attained age 65,
offset by any payments received from primary Social Security, the participants"
accrued benefit under the retirement plan, and the participants' defined
contribution offset amount from a prior plan. Normal retirement is age 65.
Benefits are reduced by .42% for each month of early retirement, which may be
elected at age 55 or later, provided the participant has completed at least five
years of service subsequent to November 1, 1995. BankGroup has purchased life
insurance contracts on the participants in the plan, payable to BankGroup.
The maximum annual benefits payable at normal retirement age to
eligible participants in the retirement plan and the supplemental retirement
plan combined, including the executives named in the Summary Compensation Table,
are illustrated in the following table:
<TABLE>
<CAPTION>
YEARS OF SERVICE
Highest Base Salary
Previous 5 Years 15 20 25 30 35
---------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
100,000 $ 65,000 $ 65,000 $ 65,000 $ 65,000 $ 69,381
125,000 81,250 81,250 81,250 81,250 88,193
150,000 97,500 97,500 97,500 97,500 107,006
175,000 113,750 113,750 113,750 113,750 113,750
200,000 130,000 130,000 130,000 130,000 130,000
250,000 162,500 162,500 162,500 162,500 162,500
</TABLE>
(1) Benefit amounts include benefits from the retirement plan and the
supplemental plan, if participant is eligible for both.
(2) Supplemental retirement benefits amounts listed are offset by payments
received under primary Social Security, the participants' accrued
benefit, and the participants' defined contribution offset amount from
a prior plan.
(3) Retirement plan calculations are based on straight life annuity
assuming full benefit at age 65, and covered compensation of $25,800
for a person age 65 in 1995. Compensation is currently limited to
$150,000 by federal tax law.
The compensation covered by the retirement plan is base salary and
wages, paid or accrued to the employee (plus any contribution by the employee to
any tax qualified 401(k) plans, excluding overtime pay, bonus, fringe benefits
and any other form of additional compensation).
Ages and credited years of service under the retirement plan for such
persons are as follows: Mr. Brenan (44) -- 3; Mr. Valley (56) -- 19; Mr. Adams
(52) -- 2; Mr. Bagby (57) --16; and Ms. Jenkins (47) --2.
<PAGE>
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
BankGroup's Officers and Directors, and other corporations, business
organizations, and persons with which some of BankGroup's Officers and Directors
are associated, customarily have banking transactions with Subsidiary Banks. All
such transactions were made in the ordinary course of business on substantially
the same terms, including interest rates and security for loans, as those
prevailing at the time in comparable transactions with others and did not
involve more than the normal risk of collectibility or present other unfavorable
features.
TERMINATION OF EMPLOYMENT AND CHANGE
OF CONTROL ARRANGEMENTS
BankGroup has a severance agreement arrangement with Messrs. Brenan,
Valley, Adams, and Bagby, Ms. Jenkins and 14 other Officers of BankGroup and its
affiliates. The agreements for all the officers, except Mr. Brenan are identical
except for the period for which benefits will be paid and are designed to
solidify employment arrangements.
The agreements provide for certain benefits in the event of a "change
in control" of BankGroup which is not approved by the Board of Directors,
followed by termination of employment without cause, demotion, or
disproportionate reduction of compensation within 12 months of the change in
control. If a change in control not approved by the Board of Directors occurs,
the principal benefits an employee receives under the agreements are: (i) salary
payments continue for 12 months with an officer being paid the average monthly
salary as in effect for the 12-month period preceding his termination date, or
the monthly salary as in effect for the full month prior to such date; (ii)
insurance benefits continue for one year; (iii) in addition to benefits entitled
to be received under the Profit Sharing Plan and Pension Plan (or any successor
plan or program in effect on the date of termination), full vesting in the
Profit Sharing and Pension Plan (or successor plan or program) as of the date of
termination; and (iv) if during the one-year period the officer obtains
employment which requires relocation extending beyond 100 miles of the city
where the officer was principally employed, BankGroup will purchase the
employee's principal residence at its appraised value or pay the employee a sum
in cash equal to the difference between the sales price and appraised value, if
the employee fails to sell the principal residence or fails to receive upon any
sale at least the appraised value of the principal residence.
No benefits are payable under the agreement if the change in control is
approved by BankGroup's Board of Directors.
All agreements provide for initial terms of three years, with reviews
by the Board of Directors to consider extending the term for an additional year.
During 1996, the Board of Directors extended the term of each of the severance
agreements for one additional year.
Mr. Brenan's agreement is identical with the previously described
agreements, except for the addition of a clause entitling Mr. Brenan to receive
a payment equal to three times his total compensation in the event that a change
in control occurs within three years of his employment date followed by
termination of employment without cause, demotion or disproportionate reduction
of compensation within twelve months of the change of control. If a change of
control occurs after June 15, 1997, Mr. Brenan's benefits under the change of
control agreement will be identical to those of the other officers set forth
above.
<PAGE>
PERFORMANCE OF BANKGROUP COMMON STOCK
The graph below compares the total returns (assuming reinvestment of
dividends) of BankGroup Common Stock, The Nasdaq US Stocks Index, the SNL
Securities Southeast Bank Index and the SNL Securities Bank ($500 million - $1
billion assets) Index. The graph assumes $100 invested on December 31, 1991 in
BankGroup Common Stock and each of the indices. The shareholder return graph is
not necessarily indicative of future performance.
(GRAPHIC-GRAPH PLOTTED TO POINTS BELOW)
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
MainStreet BkGrp 100.00 174.67 193.68 177.47 253.72 381.51
Nasdaq-Total US 100.00 116.38 133.60 130.59 184.68 227.16
Banks (Southeast) 100.00 137.67 144.61 144.93 217.37 298.39
Banks ($500M - $1B) 100.00 141.98 178.12 190.16 252.46 315.61
</TABLE>
APPROVAL OF THE 1997 STOCK INCENTIVE PLAN
The Board of Directors recommends that shareholders approve the
MainStreet BankGroup 1997 Stock Incentive Plan (the "1997 Plan"), adopted by the
Board on February 26, 1997, subject to approval by BankGroup's shareholders. The
1997 Plan permits the grant of options to purchase shares of Common Stock from
BankGroup, Stock Appreciation Rights ("SARs"), Stock Awards and Performance
Shares.
Shareholders approved the 1990 Stock Option Plan at the 1990 annual
meeting. As of the date of this proxy statement, 80,901 shares of Common Stock
remain available for awards under the 1990 Incentive Plan. The Board believes it
needs additional shares available for officer and employee incentive programs.
Approval of the 1997 Plan will not affect the Company's ability to make
additional awards under the 1990 Stock Option Plan, subject to its share
authorization.
<PAGE>
The Board believes that the 1997 Plan will benefit BankGroup by (i)
assisting it in recruiting and retaining the services of employees with ability
and initiative, (ii) providing greater incentive for employees who provide
valuable services to BankGroup and (iii) associating the interests of such
persons with those of BankGroup through opportunities for increased stock
ownership and performance-based incentive compensation. The more significant
features of the 1997 Plan are described below.
Administration
A committee of non-employee Directors appointed by the Board (the
"Committee") will administer the 1997 Plan. The Committee will have the
authority to select the individuals who will participate in the 1997 Plan
("Participants"), to grant Options and SARs, and to make Stock Awards and awards
of Performance Shares upon such terms as the Committee considers appropriate. In
addition, the Committee will have authority to interpret the 1997 Plan, to
prescribe the form of agreements evidencing awards under the 1997 Plan, to
adopt, amend and rescind rules and regulations pertaining to the administration
of the 1997 Plan, and to make all other determinations for administration of the
1997 Plan.
Eligibility
Any employee of BankGroup or its Subsidiary Banks is eligible to
participate in the 1997 Plan if the Administrator determines that such person
has contributed or can be expected to contribute to the profits or growth of
BankGroup or a Subsidiary Bank. The Company is not able to estimate the number
of individuals that the Administrator will select to participate in the 1997
Plan or the type or size of awards that the Administrator will approve.
Awards
Options. Options granted under the 1997 Plan may be incentive stock
options ("ISOs") or nonqualified stock options. A stock option entitles the
Participant to purchase shares of Common Stock at the option price. The option
price will be fixed by the Administrator at the time the option is granted, but
in the case of an ISO the price cannot be less than the shares' fair market
value on the date of grant. The option price may be paid in cash or, with the
Administrator's consent, with shares of Common Stock, or a combination of cash
and Common Stock. Options may be exercised at such times and subject to such
conditions as may be prescribed by the Administrator. The maximum period in
which an option may be exercised will be fixed by the Administrator at the time
the option is granted but cannot exceed 10 years.
No employee may be granted ISOs, under the 1997 Plan or any other plan
of the Company that are first exercisable in a calendar year for Common Stock
having an aggregate fair market value (determined as of the date the option is
granted) exceeding $100,000.
SARs. SARs generally entitle the Participant to receive the excess of
the fair market value of a share of Common Stock on the date of exercise over
the initial value of the SAR. The initial value of the SAR is the fair market
value of a share of Common Stock on the date of grant or, in the case of a
Corresponding SAR (as hereinafter defined), the option price of the related
option. The 1997 Plan provides that the Administrator may prescribe that the
Participant will realize appreciation on a different basis than described in the
preceding sentences. For example, the Administrator may limit the amount of
appreciation that may be realized upon the exercise of an SAR.
<PAGE>
SARs may be granted in relation to option grants ("Corresponding SARs")
or independently of option grants. The difference between these two types of
SARs is that to exercise a Corresponding SAR, the Participant must surrender
unexercised that portion of the stock option to which the Corresponding SAR
relates and vice versa.
SARs may be exercised at such times and subject to such conditions as
may be prescribed by the Administrator. The maximum period in which an SAR may
be exercised will be fixed by the Administrator at the time the SAR is granted
but cannot exceed ten years.
Stock Awards. The 1997 Plan permits the grant of Stock Awards, i.e.,
shares of Common Stock. A Stock Award may be, but is not required to be,
forfeitable or otherwise restricted until certain conditions are satisfied.
These conditions may include, for example, a requirement that the Participant
complete a specified period of service or that certain objectives be achieved.
Any restrictions imposed on a Stock Award will be prescribed by the
Administrator.
Performance Shares. The 1997 Plan permits the award of Performance
Shares, i.e., an award stated with reference to a number of shares of Common
Stock that entitles the holder to receive a payment equal to the fair market
value of the Common Stock if the performance objectives are achieved. The
Administrator will determine the performance criteria at the time Performance
Shares are granted. To the extent that a Performance Share award is earned, it
may be settled in cash, with Common Stock or a combination of cash and Common
Stock.
Transferability
Options, SARs, Performance Shares and Incentive Awards will be
nontransferable except by will or the laws of descent and distribution. Share
Authorization
Under the 1997 Plan, a maximum of 550,000 shares of Common Stock may be
issued upon the exercise of options and SARs and the grant of Stock Awards and
the settlement of Performance Shares. This limitation will be adjusted as the
Committee determines is appropriate in the event of a change in the number of
outstanding shares of Common Stock by reason of a stock dividend, stock split,
combination, reclassification, recapitalization, or other similar events. The
terms of outstanding awards and the limitations on individual grants also may be
adjusted by the Administrator to reflect such changes. On March 12, 1997, the
closing sales price of the Common Stock on NASDAQ was $22.75.
Amendment and Termination
No option or SAR may be granted and no Stock Awards may be issued under
the 1997 Plan after April 22, 2007. The Board may, without further action by
shareholders, terminate or suspend the 1997 Plan in whole or in part. The Board
also may amend the 1997 Plan except that no amendment that materially increases
the number of shares of Common Stock that may be issued under the 1997 Plan or
materially changes the class of individuals who may be selected to participate
in the 1997 Plan will become effective until it is approved by shareholders.
<PAGE>
Federal Income Tax Consequences
BankGroup has been advised by counsel regarding the federal income tax
consequences of the 1997 Plan. No income is recognized by a Participant at the
time an option is granted. If the option is an ISO, no income will be recognized
upon the Participant's exercise of the option. Income is recognized by a
Participant when he disposes of shares acquired under an ISO. The exercise of a
nonqualified stock option generally is a taxable event that requires the
Participant to recognize, as ordinary income, the difference between the shares'
fair market value and the option price.
No income is recognized upon the grant of an SAR. The exercise of an
SAR generally is a taxable event. The Participant must recognize income equal to
any cash that is paid and the fair market value of Common Stock that is received
in settlement of an SAR.
Income is recognized on account of the grant of a Stock Award when the
shares first become transferable or are no longer subject to a substantial risk
of forfeiture. At that time the Participant recognizes income equal to the fair
market value of the Common Stock.
No income is recognized on account of the award of Performance Shares.
The Participant must recognize income equal to any cash that is paid and the
fair market value of Common Stock that is received in settlement of a
Performance Share award.
The employer (either BankGroup or a Subsidiary Bank) will be entitled
to claim a federal income tax deduction on account of the exercise of a
nonqualified stock option or SAR or the vesting of a Stock Award or the
settlement of Performance Shares. The amount of the deduction is equal to the
ordinary income recognized by the Participant. The employer will not be entitled
to a federal income tax deduction on account of the grant or the exercise of an
ISO. The employer may claim a federal income tax deduction on account of certain
dispositions of ISO stock.
The 1997 Plan must be approved by the holders of a majority of the
shares of Common Stock represented at the Annual Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE 1997 STOCK
INCENTIVE PLAN.
<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1998 annual
meeting must be received by BankGroup not later than November 21, 1997 in order
to be included in the proxy statement and form of proxy relating to such Annual
Meeting. Such proposals should be sent to the Secretary at BankGroup's principal
office in Martinsville, Virginia by certified mail, return receipt requested.
In addition to other applicable requirements, the Bylaws establish an
advance notice procedure for the nomination of candidates for election as
directors, other than by the Board of Directors of BankGroup, and for certain
matters to be brought before an annual shareholders' meeting of BankGroup. A
shareholder must give BankGroup notice not less than 90 days prior to a
shareholders' meeting to: (a) nominate persons to be elected directors of
BankGroup at such meeting or (b) propose business matters to be considered at
such meeting. A shareholder must give BankGroup notice, within seven days
following the announcement of a special meeting to elect directors, to nominate
persons to be elected directors at such special meeting.
BankGroup's bylaws provide that a shareholder of BankGroup entitled to
vote for the election of directors may nominate persons for election to the
Board at any meeting of shareholders by mailing written notice to the Secretary
of BankGroup not later than (i) with respect to an election to be held at an
annual meeting of shareholders, 90 days prior to such meeting, and (ii) with
respect to an election to be held at a special meeting of shareholders for the
election of directors, the close of business on the seventh day following the
date on which notice of such meeting is given to shareholders. Any such
shareholder's notice shall include (i) the name and address of the shareholder
and of each person to be nominated, (ii) a representation that the shareholder
is a holder of record of stock of BankGroup entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate each person
specified, (iii) a description of all arrangements or understandings between the
shareholder and each nominee and any other person (naming such person) pursuant
to which the nomination is made by the shareholder, (iv) such other information
regarding each nominee as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission had
the nominee been nominated by the Board, and (v) the consent of each nominee to
serve as a director of BankGroup if so elected.
1996 ANNUAL REPORT ON FORM 10-K
BankGroup's 1996 Annual Report on Form 10-K, which includes
consolidated balance sheets as of December 31, 1996 and 1995 and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1996,
together with related notes and the independent auditors' report of Coopers &
Lybrand L.L.P., BankGroup's independent public accountants for 1996, is being
mailed along with this Proxy Statement to shareholders of record as of the close
of business on February 28, 1997.
OTHER BUSINESS
The Board of Directors does not know of any matters which may be
presented for consideration at the meeting other than those specifically set
forth in the Notice of Annual Meeting. However, in the event other proper
matters are presented at the meeting, it is the intention of the proxy holders
named in the enclosed Proxy to take such action as shall be in accordance with
their best judgment with respect to such matters.
<PAGE>
Shareholders are urged to specify choices on the enclosed Proxy and to
date and return it in the enclosed envelope. Your prompt response and
cooperation will be appreciated.
By Order of the Board of Directors
/s/Rebecca J. Jenkins
---------------------
Rebecca J. Jenkins
Secretary
Dated: March 24, 1997
<PAGE>
REVOCABLE PROXY
MAINSTREET BANKGROUP INCORPORATED
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
April 23, 1997
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints James E. Adams and Michael R. Blevins, and
each of them, with full power of substitution in each, Proxies to vote all the
shares of Common Stock of MainStreet BankGroup Incorporated, which the
undersigned is entitled to vote, at the Annual Meeting of Stockholders of the
Corporation to be held Wednesday, April 23, 1997, at 11:00 a.m., and at any and
all adjournments thereof.
ITEM 1: ELECTION OF DIRECTORS THE NOMINEES FOR DIRECTORS ARE:
W.C. BEELER, JR.; T. B. BISHOP; M. R. BRENAN; W. L.COOPER, III; B. P. CRAFT; P.
W. DEAN; I. P. HENRY; L. E. HUTCHENS; G. J. KOSTEL; W. O. McCABE, JR., M.D.; AND
A. L. PRILLAMAN;
[ ] For [ ] Withhold [ ] For All Except
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
ITEM 2: APPROVAL OF 1997 STOCK INCENTIVE PLAN. Approval of the MainStreet
BankGroup 1997 Stock Incentive Plan, pursuant to which a maximum of 550,000
shares of MainStreet BankGroup Common Stock may be issued.
[ ] For [ ] Against [ ] Abstain
ITEM 3: In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
[ ] For [ ] Against [ ] Abstain
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. [ ]
<PAGE>
This Proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder(s). If no direction is made, this Proxy will be
voted FOR Item 1.
Please sign exactly as your name appears hereon. Joint owners should each
sign. When signing as Executor, Administrator, Attorney, Trustee or Guardian,
please give full title as such. If a corporation, please sign in full corporate
name by President, or other authorized officer, giving full title. If a
partnership, please sign in partnership name by an authorized person, giving
full title.
Please be sure to sign and date
this Proxy in the box below.
___________________
Date
____________________________________________________
Stockholder sign above
____________________________________________________
Co-holder (if any) sign above
<PAGE>
Detach above card, sign, date and mail in postage paid envelope provided.
MAINSTREET BANKGROUP INCORPORATED
c/o Registrar and Transfer Company, 10 Commerce Drive, Cranford, NJ 07016
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
