SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
(Mark One)
[X] Annual Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1996
or
[ ] Transition report pursuant to Section 15(d) of the
Securities Exchange Act of 1934
Commission file number 0-9101
Jefferson Bankshares, Inc.
Deferred Compensation and Stock Purchase Plan
for Non-Employee Directors
(Full title of the Plan)
Jefferson Bankshares, Inc.
123 East Main Street
Charlottesville, Virginia 22902
(Name of Issuer of the Securities held
pursuant to the Plan and address of its
principal executive offices)
KPMG Peat Marwick LLP
Suite 1900
1021 East Cary Street
Richmond, Virginia 23219-4023
Independent Auditors' Report
The Board of Directors
Jefferson Bankshares, Inc.:
We have audited the statements of assets available for plan benefits of the
Jefferson Bankshares, Inc. Deferred Compensation and Stock Purchase Plan for
Non-Employee Directors ("the Plan") as of December 31, 1996 and 1995 and the
related statements of changes in assets available for plan benefits for each of
the years in the three-year period ended December 31, 1996. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for plan benefits of the Jefferson
Bankshares, Inc. Deferred Compensation and Stock Purchase Plan for Non-Employee
Directors as of December 31, 1996 and 1995 and the changes in assets available
for plan benefits for each of the years in the three-year period ended December
31, 1996 in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
January 28, 1997
JEFFERSON BANKSHARES, INC. DEFERRED COMPENSATION AND STOCK
PURCHASE PLAN FOR NON-EMPLOYEE DIRECTORS
Statements of Assets Available for Plan Benefits
December 31, 1996 and 1995
<TABLE>
<C> <C>
1996 1995
Receivable from Jefferson Bankshares, Inc. - cash $ 53,044 59,882
Receivable from Jefferson Bankshares, Inc.- common stock 1,101,238 939,576
Receivable from Jefferson National Bank - cash 189,658 184,624
Assets available for plan benefits $1,343,940 1,184,082
See accompanying notes to financial statements.
</TABLE>
JEFFERSON BANKSHARES, INC. DEFERRED COMPENSATION AND STOCK
PURCHASE PLAN FOR NON-EMPLOYEE DIRECTORS
Statements of Changes in Assets Available for Plan Benefits
Years Ended December 31, 1996, 1995 and 1994
<TABLE>
<C> <C> <C>
1996 1995 1994
Interest income $ 10,433 29,285 30,132
Dividend income 40,235 11,969 -
Contributions:
Jefferson Bankshares, Inc. 47,175 28,500 28,250
Jefferson National Bank 99,900 72,400 65,400
Total contributions 147,075 100,900 93,650
Total additions 197,743 142,154 123,782
Benefits paid directly to
plan participants 37,885 22,000 34,517
Net additions to assets available 159,858 120,154 89,265
for plan benefits
Assets available for plan benefits:
Beginning of year 1,184,082 1,063,928 974,663
End of year $1,343,940 1,184,082 1,063,928
See accompanying notes to financial statements.
</TABLE>
JEFFERSON BANKSHARES, INC. DEFERRED COMPENSATION AND STOCK
PURCHASE PLAN FOR NON-EMPLOYEE DIRECTORS
Notes to Financial Statements
December 31, 1996, 1995 and 1994
(1) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements of the Jefferson Bankshares, Inc.
Deferred Compensation and Stock Purchase Plan for Non-Employee Directors
("the Plan") have been prepared on the accrual basis of accounting.
Accordingly, contributions and income are recorded when earned and
benefits payable are recorded when payable according to the provisions of
the Plan.
Use of Estimates
Management makes certain estimates in the preparation of the Plan's
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments consist of receivables of cash and common stock
from Jefferson Bankshares, Inc. ("the Plan Sponsor") and receivables of
cash from the Plan Sponsor's wholly-owned bank subsidiary, Jefferson
National Bank ("JNB"). The Plan Sponsor, in conjunction with The Bank of
New York and Wachovia Bank of North Carolina, N.A. (the trustee of the
trust that holds the common stock of the Plan Sponsor for this Plan ("the
Trustee")), maintains book accounts for the benefit of each plan
participant and periodically credits such accounts for fees earned, stock
purchased and income and records any withdrawals. As discussed in note 2,
all deferred fees shall be a part of the general assets of the Plan
Sponsor. Common stock is valued at cost.
Interest Income
Interest income is allocated to each plan participants account on a
quarterly basis using an interest rate equal to the Plan Sponsor's
published six-month certificate of deposit rate for denominations of
$10,000 or greater.
Federal Income Taxes
Because the Plan's assets and income are included in the financial
statements of the Plan Sponsor, a separate income tax provision is not
required for the Plan.
(2) Summary of Significant Provisions of the Plan
The following brief description of the Plan is provided for general
information purposes only. Plan participants should refer to the plan
document for more complete information.
General
The Plan is a nonqualified plan established by the Plan Sponsor to enable
non-employee directors of the Plan Sponsor and JNB to defer annual
retainer and meeting fees for personal income tax purposes. The Plan
Sponsor amended and restated the Plan on December 13, 1994 to provide plan
participants the additional option of investing in Jefferson Bankshares,
Inc. common stock. In connection with this amendment, the Plan Sponsor
registered 150,000 shares of Jefferson Bankshares, Inc. common stock for
this purpose. Deferred fees of plan participants are invested in interest
bearing cash accounts or common stock of the Plan Sponsor, as elected by
the plan participants. The Plan is administered by an Administrative
Committee appointed by the Plan Sponsor. The Plan is not subject to the
Employee Retirement Income Security Act of 1974.
Plan participants do not retain any proprietary interest in the Plan
Sponsor or any of its assets and for all purposes are deemed to be general
creditors of the Plan Sponsor. The interests of the plan participants
cannot be pledged or assigned and shall not be subject to the claims of
creditors of the plan participants.
Eligibility and Contributions
The Plan covers non-employee directors of the Plan Sponsor and JNB.
Participation is voluntary and participants make no contributions to the
Plan. All administrative costs of the Plan are borne by the Plan Sponsor.
Vesting Provisions
Participants are fully vested in the Plan at all times.
Retirement and Death Benefits
Plan participants (or their beneficiaries, collectively "Plan
participants") are eligible for distribution of their benefits upon death,
disability or upon termination of membership on the Board of Directors.
The Plan also provides for discretionary distributions at the request of
Plan participants, subject to approval by the Administrative Committee.
Plan participants may receive lump sum or equal annual payments at their
option.
(3) Subsequent Event - Plan Amendment
On January 28, 1997, the Plan Sponsor amended the Plan to clarify that the
Trustee shall exercise all voting, tender and similar rights with respect
to common stock held in trust for plan participants.
</PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of Jefferson Bankshares, Inc.'s Directors Deferred Compensation
Committee have duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
DEFERRED COMPENSATION AND
STOCK PURCHASE PLAN FOR
NON-EMPLOYEE DIRECTORS
Date: February 28, 1997 By: O. Kenton McCartney
Member, Director
Deferred Compensation Committee
</PAGE>
Exhibit Index
Exhibit No.
23 Consent of KPMG Peat Marwick LLP
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Jefferson Bankshares, Inc.:
We consent to incorporation by reference in the Registration Statement No. 33-
57461 on Form S-8 of Jefferson Bankshares, Inc. of our report dated January
28,1997 relating to the statements of assets available for plan benefits of
the Jefferson Bankshares, Inc. Deferred Compensation and Stock Purchase Plan
for Non-Employee Directors as of December 31, 1996 and 1995 and the related
statements of changes in assets available for plan benefits for each of the
years in the three-year period ended December 31, 1996, which report appears
in the December 31, 1996 annual report on Form 11-K of the Jefferson
Bankshares, Inc. Deferred Compensation and Stock Purchase Plan for Non-
Employee Directors.
KPMG PEAT MARWICK LLP
Richmond, Virginia
February 28, 1997
