<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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
[X] Definitive Proxy Statement Commission on (as permitted
by Rule 14a-b(e)(21))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ONE VALLEY BANCORP, INC.
(Name of Registrant as Specified in Its Charter)
Elizabeth Osenton Lord
(Name of Person(s) Filing Proxy Statement)
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 transactions applies:
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(3) Per unit price other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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<PAGE>
[ ] 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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<PAGE>
ONE VALLEY BANCORP, INC.
CHARLESTON, WEST VIRGINIA
NOTICE OF REGULAR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 22, 1997
To the Shareholders:
The Regular Annual Meeting of Shareholders of One Valley Bancorp, Inc.,
("One Valley") will be held at the Charleston Town Center Marriott, 200 Lee
Street, East, in Charleston, West Virginia, at 10:00 a.m. on Tuesday, April 22,
1997, for the purpose of considering and voting upon proposals:
1. To elect ten directors - nine to serve for a term of
three years, and one to serve for a term of two years, and until
their successors are chosen and qualify.
2. To ratify the selection of Ernst & Young LLP by the Board of
Directors as independent Certified Public Accountants for the
year 1997.
3. To approve an amendment to the Articles of Incorporation to
update the indemnification provision of Article V.
4. To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
Only those shareholders of record at the close of business on March 4,
1997, are entitled to notice of the meeting and to vote at the meeting. We hope
that you will attend this meeting.
By Order of the Board of Directors
J. Holmes Morrison
PRESIDENT
PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. YOU MAY REVOKE YOUR PROXY AT ANY
TIME BEFORE IT IS VOTED AT THE ANNUAL MEETING.
MARCH 21, 1997
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<PAGE>
ONE VALLEY BANCORP, INC.
ONE VALLEY SQUARE
CHARLESTON, WEST VIRGINIA
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 22, 1997
This statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders of One Valley Bancorp,
Inc. ("One Valley"), to be held on Tuesday, April 22, 1997, at the time and for
the purposes set forth in the accompanying Notice of Regular Annual Meeting of
Shareholders. The approximate date on which this Proxy Statement and the form of
proxy are to be first mailed to shareholders is March 21, 1997. The mailing
address of the principal executive offices of One Valley is P. O. Box 1793,
Charleston, West Virginia 25326.
SOLICITATION OF PROXIES
The solicitation of proxies is made by management at the direction of
the Board of Directors of One Valley. These proxies enable shareholders to vote
on all matters which are scheduled to come before the meeting. If the enclosed
proxy is signed and returned, it will be voted as directed; or if not directed,
the proxy will be voted "FOR" the election of the ten management nominees as
directors for the terms specified, "FOR" the ratification of the selection of
Ernst & Young LLP as independent Certified Public Accountants and "FOR" the
amendment of One Valley's Articles of Incorporation to update the
indemnification provision of Article V. A shareholder executing the proxy may
revoke it at any time before it is voted by notifying One Valley in person, by
giving written notice to One Valley of the revocation of the proxy, by
submitting to One Valley a subsequently dated proxy or by attending the meeting
and withdrawing the proxy before it is voted at the meeting.
The expense for the solicitation of proxies will be paid by One Valley.
In addition to this solicitation by mail, officers and regular employees of One
Valley and its subsidiaries may, to a limited extent, solicit proxies personally
or by telephone or telegraph.
ELIGIBILITY OF STOCK FOR VOTING PURPOSES
Pursuant to One Valley's Bylaws, the Board of Directors has fixed March
4, 1997, as the record date for the purpose of determining the shareholders
entitled to notice of, and to vote at, the meeting or any adjournment thereof,
and only shareholders of record at the close of business on that date are
entitled to notice of and to vote at the Annual Meeting of Shareholders or any
adjournment thereof.
As of the record date for the Annual Meeting, 22,017,192 shares of
the common stock with a par value of ten dollars ($10.00) per share ("One Valley
Common Stock") of One Valley were issued and outstanding and entitled to vote.
One Valley's subsidiary banks hold of record as trustee, co-trustee, executor or
co-executor, but not beneficially, 3,986,330 shares of stock representing
18.11% of the shares of One Valley outstanding. Of these shares, the banks
hold 3,354,654 shares as co-trustee or co-executor and 631,676 shares as sole
trustee or sole executor (other principal holders of One Valley's stock are
discussed under "Principal Holders of Securities"). The 3,354,654 shares held as
co-trustee or co-executor are voted by the individual co-trustee(s) or
co-executor(s) and not by the banks. Of the remaining 631,676 shares held by the
banks as sole trustee or sole executor, 567,728 shares (or 2.58% of the total
shares outstanding) will be voted by the banks, as trustee or executor, "FOR"
the election of the ten management nominees as directors, "FOR" the
ratification of the selection of Ernst & Young LLP as independent Certified
Public Accountants, and "FOR" the amendment of One Valley's Articles of
Incorporation to update the indemnification provision of Article V. The
remaining 63,948 shares are held by the banks as sole trustee or sole executor
in personal trust and self-directed employee benefit accounts and will be voted
by the banks at the direction of the grantor, settlor or beneficiary of those
accounts.
4
<PAGE>
PURPOSE OF MEETING
1. ELECTION OF DIRECTORS
One Valley's Bylaws currently provide that the Board of Directors shall
consist of not fewer than six nor more than 33 members. The Bylaws also provide
that the exact number of directors within these minimum and maximum limits are
to be fixed and determined by resolution of the Board of Directors. There are
presently 29 directors on the Board, and at a meeting held February 18, 1997,
the Board's Executive Committee fixed at 29 the number of directors to
constitute the full Board of Directors of One Valley effective April 22, 1997.
The term of Mr. Cecil B. Highland, Jr. as a director of One Valley expires at
the 1997 Annual Meeting, and in accordance with One Valley's Directors
Retirement Policy, he will not stand for re-election. Mr. David E. Lowe has
completed his term of service and will not stand for re-election.
One Valley's Articles of Incorporation authorize classification of the
Board of Directors into three classes, each of which serves for three years,
with one class being elected each year. Pursuant to this arrangement nine
nominees have been nominated for three-year terms, and one nominee has been
nominated for a two-year term, and until their successors are chosen and
qualify. This will result in a Board composed of three classes with nine
directors in the class of 1998, eleven directors in the class of 1999 and nine
directors in the class of 2000.
MANAGEMENT NOMINEES TO THE BOARD OF ONE VALLEY
Unless otherwise directed, the proxies will be voted "FOR" the election
of the following ten directors to serve for terms expiring at the Annual
Meeting of Shareholders for the years indicated below and until their successors
are chosen and qualify.
<TABLE>
<CAPTION>
SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
NOMINEES AGE SINCE EXPIRES LAST FIVE YEARS
<S> <C> <C> <C> <C> <C>
Dennis M. Bone 45 - None 2000 1995 to present - President and Chief
Executive Officer - Bell Atlantic-
West Virginia, Inc.; formerly Director,
Regulatory Planning - Bell Atlantic-
New Jersey, Inc., Charleston, WV
H. Rodgin Cohen 52 - None 2000 Attorney - Sullivan & Cromwell, New
York, NY
Bob M. Johnson 61 1996 None 2000 1996 to present - President and
Chief Executive Officer - One
Valley Bank - Central Virginia;
formerly President and Chief
Executive Officer - Co-operative
Savings Bank, FSB, Lynchburg, VA
Robert E. Kamm, Jr. 45 1987 None 2000 President and Chief Executive
Officer - One Valley Bank of
Summersville, Inc., Summersville, WV
Edward H. Maier 53 1983 None 2000 President - General Corporation,
Charleston, WV (Real Estate
Investment and Natural Gas
Production)
5
<PAGE>
SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
NOMINEES AGE SINCE EXPIRES LAST FIVE YEARS
J. Holmes Morrison 56 1990 None 2000 President and Chief Executive Officer
- One Valley Bancorp, Inc., and
Chairman of the Board - One Valley Bank,
National Association, Charleston, WV
Angus E. Peyton (1) 70 1981 None 1999 Attorney - Brown and Peyton,
Charleston, WV
Lacy I. Rice, Jr. 65 1994 None 2000 Attorney - Bowles, Rice, McDavid,
Graff & Love; Vice Chairman of the
Board - One Valley Bancorp, Inc.,
Charleston, WV; Chairman of the
Board - One Valley Bank - East,
Martinsburg, WV; formerly Chairman
of the Board and Chief Executive
Officer - Mountaineer Bankshares of
W.Va., Inc.
Richard B. Walker 58 1991 None 2000 Chairman of the Board and Chief
Executive Officer - Cecil I. Walker
Machinery
Thomas D. Wilkerson 68 1981 None 2000 Senior Agent - Northwestern Mutual
Life Insurance Company, Charleston,
WV
</TABLE>
DIRECTORS CONTINUING TO SERVE UNEXPIRED TERMS
The following Directors will continue to serve until the expiration
of their terms:
<TABLE>
<CAPTION>
SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
DIRECTORS AGE SINCE EXPIRES LAST FIVE YEARS
<S> <C> <C> <C> <C> <C>
Phyllis H. Arnold 48 1993 None 1999 President and Chief Executive Officer
- One Valley Bank, National Association,
Charleston, WV
Charles M. Avampato 58 1984 None 1999 President - Clay Foundation, Inc.,
Charleston, WV (Charitable
Foundation)
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<PAGE>
SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
DIRECTORS AGE SINCE EXPIRES LAST FIVE YEARS
Robert F. Baronner 70 1981 None 1998 Chairman of the Board - One Valley
Bancorp, Inc., Charleston, WV;
formerly President and Chief
Executive Officer - One Valley
Bancorp, Inc., Charleston, WV
C. Michael Blair 54 1994 None 1998 Chairman of the Board, President
and Chief Executive Officer - One
Valley Bank-North, Inc.; formerly
Chairman of the Board, President
and Chief Executive Officer -
Mercantile Banking and Trust
Company, Moundsville, WV
James K. Brown 67 1981 None 1998 Attorney - Jackson & Kelly,
Charleston, WV
Nelle Ratrie Chilton 57 1989 (2) 1998 Director and Vice President -
Dickinson Fuel Co., Inc.,
Charleston, WV; TerraCo., Inc.,
Charleston, WV; TerraCare, Inc.,
TerraSalis, Inc., TerraSod, Inc.,
Malden, WV (Landscaping)
R. Marshall Evans, Jr. 55 1984 (3) 1998 President - Dickinson Co., Quincy
Coal Co., and Chesapeake Mining
Co., Charleston, WV; Vice President
- Geary Securities, Charleston, WV;
President - Hubbard Properties,
Inc., Cheyenne, WY
James Gabriel 66 1993 None 1999 President and Chief Executive
Officer - Gabriel Brothers, Inc.,
Morgantown, WV (Retail Sales)
Phillip H. Goodwin 56 1989 None 1998 President - CAMCARE and Charleston
Area Medical Center, Charleston, WV
Thomas E. Goodwin 67 1985 None 1999 Chairman of the Board - One Valley
Bank of Ronceverte, National
Association, Ronceverte, WV
John D. Lynch 56 1986 None 1999 Vice President - Davis Lynch Glass
Company, Star City, WV
Charles R. 55 1987 None 1999 President - The Neighborgall
Neighborgall, III Construction Company, Huntington, WV
Robert O. Orders, Sr. 71 1989 None 1998 Chief Executive Officer - Orders
Construction Co., St. Albans, WV
John L. D. Payne 58 1981 (3) 1998 President - Payne-Gallatin Mining
Co., Charleston, WV
7
<PAGE>
SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
DIRECTORS AGE SINCE EXPIRES LAST FIVE YEARS
Brent D. Robinson 49 1994 None 1998 1995 to present - President and
Chief Executive Officer - One
Valley Bank of Huntington,
Huntington, WV; 1993 to 1996 -
Executive Vice President, One
Valley Bancorp, Inc.; formerly
President, Chief Operating Officer
and Chief Financial Officer -
Mountaineer Bankshares of W.Va.,
Inc.
James W. Thompson 69 1983 None 1999 Chairman of the Board - One Valley
Bank of Mercer County, Inc.,
Princeton, WV
J. Lee Van Metre, Jr. 59 1986 None 1999 Attorney - Steptoe & Johnson;
Secretary of the Board - One Valley
Bank - East, National Association,
Martinsburg, WV
H. Bernard Wehrle, III 45 1991 None 1999 President - McJunkin Corporation,
Charleston, WV (Industrial
Wholesaler)
John H. Wick, III 51 1993 (2) 1999 1992 to present - Vice President -
Dickinson Fuel Co., Inc.,
Charleston, WV; 1980 to 1992 -
Harrison & Bates, Inc., Richmond,
VA (Commercial Realtor)
</TABLE>
(1) Angus E. Peyton is a member of the Board of Directors of American Electric
Power Company, Inc.
(2) Nelle Ratrie Chilton is the sister-in-law of John H. Wick, III.
(3) R. Marshall Evans, Jr. and John L. D. Payne are first cousins.
GENERAL
One Valley's Bylaws provide that in the election of directors, each
shareholder will have the right to vote the number of shares owned by that
shareholder for as many persons as there are directors to be elected, or to
cumulate such shares and give one candidate as many votes as the number of such
directors multiplied by the number of shares owned will equal, or to distribute
them on the same principle among as many candidates as the shareholder sees fit.
For all other purposes, each share is entitled to one vote. If any shares are
voted cumulatively for the election of directors, the Proxies, unless otherwise
directed, will have full discretion and authority to cumulate their votes and
vote for less than all such nominees. Directors are elected by a plurality of
votes cast, without regard to either broker non-votes or proxies as to which
authority to vote for one or more of the nominees being proposed is withheld.
One Valley's Bylaws provide that nominations for election to the Board
of Directors, other than those made by or on behalf of the existing management
of One Valley, must be made by a shareholder in writing delivered or mailed to
the President not less than 14 days nor more than 50 days prior to the meeting
called for the election of directors; provided, however, that if less than 21
days' notice of the meeting is given to shareholders, the nominations must be
mailed or delivered to the President not later than the close of business on the
7th day following the day on which the notice of meeting was mailed. To the
extent known, the notice of nomination must
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<PAGE>
contain the following information: (a) name and address of proposed nominee(s);
(b) principal occupation of proposed nominee(s); (c) total shares to be voted
for each proposed nominee; (d) name and address of notifying shareholder; and
(e) number of shares owned by notifying shareholder. Nominations not made in
accordance with these requirements may be disregarded by the Chairman of
the meeting, in which case the votes cast for the proposed nominee will
likewise be disregarded.
One Valley commenced business on September 4, 1981, as a bank holding
company. The financial operations of One Valley in 1996 primarily related to the
ownership and the establishment of policies for the management and direction of
One Valley Bank, National Association; One Valley Bank of Huntington, Inc.; One
Valley Bank of Mercer County, Inc.; One Valley Bank of Ronceverte, National
Association; One Valley Bank, Inc.; One Valley Bank of Oak Hill, Inc.; One
Valley Bank of Summersville, Inc.; One Valley Bank - East, National
Association, One Valley Bank - North, Inc.; One Valley Bank of Clarksburg,
National Association; One Valley Bank, F.S.B.; and One Valley Bank - Central
Virginia.
COMMITTEES OF THE BOARD
One Valley has a standing Audit Committee, Compensation Committee and
Nominating Committee.
The Audit Committee of One Valley consists of five members, Charles M.
Avampato, Nelle Ratrie Chilton, Edward H. Maier, John L. D. Payne and Richard B.
Walker and met four times in 1996. This Committee reviews and evaluates
significant matters relating to audit and internal controls, reviews the scope
and results of audits by independent auditors, reviews the activities of the
internal audit staff, meets with the appropriate management personnel regarding
internal and external audit results and reports its findings to the Board of
Directors.
The Compensation Committee of One Valley consists of six members,
Charles M. Avampato, Nelle Ratrie Chilton, Phillip H. Goodwin, David E. Lowe,
John L. D. Payne and H. Bernard Wehrle, III, and met four times in 1996. The
Compensation Committee administers the One Valley Bancorp, Inc., 1983 and 1993
Incentive Stock Option Plans. It also approves compensation levels for the
executive management group of One Valley and its subsidiaries.
The Nominating Committee of One Valley consists of six members, Robert
F. Baronner, Nelle Ratrie Chilton, Phillip H. Goodwin, J. Holmes Morrison, John
L. D. Payne and Angus E. Peyton and met once in 1996. The Nominating Committee
recommends nominees to fill vacancies on the Board of Directors, although the
President of One Valley will also entertain nominations made in accordance with
One Valley's Bylaws previously described.
One Valley's Board met eight times in 1996, and there were numerous
meetings of the Committees of the Board. During 1996, Directors Phillip H.
Goodwin, Angus E. Peyton and H. Bernard Wehrle, III, attended fewer than 75% of
the aggregate of the total number of One Valley Board meetings and the total
number of meetings held by all Committees on which they served.
PRINCIPAL HOLDERS OF VOTING SECURITIES
John L. Dickinson and C. C. Dickinson, sons of John Q. Dickinson, one
of the original incorporators of One Valley Bank, National Association, formerly
Kanawha Valley Bank, National Association (hereinafter "One Valley Bank"), each
owned more than 10% of the issued and outstanding stock of One Valley Bank. Both
John L. and C. C. Dickinson are deceased, and much of the stock formerly held by
them is now held by family trusts created by them or their spouses. At the time
of One Valley's formation as a one-bank holding company holding 100% of the
stock of One Valley Bank, the shares of One Valley Bank were exchanged on a one
for one basis for shares of One Valley. The John L. Dickinson Family Trusts
collectively hold 1,612,227 shares, representing 7.32% of the issued and
outstanding stock of One Valley. The C. C. Dickinson Family Trusts collectively
hold 1,083,724 shares, representing 4.92% of the issued and outstanding
stock of One Valley. The following table sets forth the names and addresses of
those shareholders who own beneficially more than 5% of the outstanding One
Valley Common Stock as of March 4, 1997, the amount and nature of the beneficial
ownership and the percentage of outstanding voting securities represented by the
amount owned. The individuals named in the table are co-trustees of certain of
the Dickinson Family Trusts and most of the shares owned by them are owned in
their capacity as co-trustees.
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<PAGE>
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) CLASS
----- ------------------- ------------------------ -----
<S> <C> <C> <C>
Common Stock Mary Price Ratrie 1,224,127(2) 5.56%
Kanawha Salines
Malden, WV 25306
Common Stock Charles C. Dickinson, III 1,126,498(3) 5.12%
1111 City National Building
Wichita Falls, Texas 76301
Common Stock R. Marshall Evans, Jr. 1,794,198(4) 8.15%
3401 Northside Parkway
Atlanta, GA 30327
</TABLE>
- - -------
(1) This table includes a duplication of beneficial ownership of securities
in cases where the named individuals have overlapping co-trustee
relationships. These three individuals hold, excluding duplication, a
total of 3,061,099 shares, or 13.90% of the total 22,017,192 shares
of One Valley Common Stock outstanding as of the record date. Although
One Valley Bank, a subsidiary of One Valley, is a co-trustee of these
various trusts, in all instances, the named individual co-trustees vote
the stock of One Valley held in the trusts.
(2) Consists of 42,498 shares owned of record; 1,083,724 shares held as
co-trustee with Charles C. Dickinson, III, and One Valley Bank (in
which trusts Mary Price Ratrie has a one-third beneficial interest);
945 shares owned by J. Q. Dickinson & Co., a sole proprietorship owned
by Mary Price Ratrie; and 96,960 shares owned by Dickinson Property
Limited Partnership in which Mary Price Ratrie is a beneficial owner.
(3) Consists of 42,774 shares owned of record and 1,083,724 shares held as
co-trustee with Mary Price Ratrie and One Valley Bank (in which trusts
Mr. Dickinson has a one-fifth beneficial interest).
(4) Consists of 1,046,857 shares held as co-trustee with an individual
co-trustee and One Valley Bank; 175,575 shares held as co-trustee with
One Valley Bank and another individual co-trustee; 149,401 shares held
with One Valley Bank as co-trustee; 28,913 shares held by his wife as
trustee of trusts for the benefit of his children; 35,627 shares owned
of record; 7,227 shares owned of record by his wife; and 350,598 shares
owned by Dickinson Company, of which Mr. Evans is an executive officer.
Not included in this total amount are 18,301 shares held in a trust
from which Mr. Evans may, at the discretion of the co-trustees, receive
distributions of income and, under certain circumstances, distributions
of principal.
OWNERSHIP OF VOTING SECURITIES BY DIRECTORS, NOMINEES AND OFFICERS
The following tabulation sets forth the number of shares of One Valley
Common Stock beneficially owned by (i) each of the nominees and directors, (ii)
each of the executive officers listed in the Summary Compensation Table, and
(iii) the directors, nominees, and executive officers of One Valley as a group
as of March 4, 1997, and indicates the percentages of One Valley Common Stock so
owned. There is no other class of voting securities issued and outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1) CLASS
<S> <C> <C>
Phyllis H. Arnold 64,723 Direct (2) *
181 Indirect
Charles M. Avampato 24,529 Direct *
3,891 Indirect
Robert F. Baronner 12,454 Direct *
7,546 Indirect
10
<PAGE>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1) CLASS
Frederick H. Belden, Jr. 27,400 Direct (3) *
2,670 Indirect
C. Michael Blair 72,974 Direct (4) *
12,777 Indirect
Dennis M. Bone 200 Direct *
James K. Brown 2,016 Direct *
3,039 Indirect
Nelle Ratrie Chilton 54,298 Direct *
H. Rodgin Cohen 1,000 Direct *
R. Marshall Evans, Jr. 35,627 Direct 8.2%
1,758,571 Indirect (5)
James Gabriel 10,602 Direct *
1,625 Indirect
Phillip H. Goodwin 2,671 Direct *
Thomas E. Goodwin 9,277 Direct *
9,347 Indirect
Cecil B. Highland, Jr. 406,131 Direct 1.9%
9,697 Indirect
Bob M. Johnson 104,912 Direct (6) *
2,707 Indirect
Laurance G. Jones 20,975 Direct (7) *
4,500 Indirect
Robert E. Kamm, Jr. 329,570 Direct (8) 1.6%
24,064 Indirect
David E. Lowe 1,401 Direct *
John D. Lynch 26,250 Direct *
3,750 Indirect
Edward H. Maier 12,500 Direct
J. Holmes Morrison 74,411 Direct (9) *
10,427 Indirect
Charles R. Neighborgall, III 1,706 Direct *
3,375 Indirect
Robert O. Orders, Sr. 21,862 Direct *
John L. D. Payne 892 Direct 2.6%
571,849 Indirect (10)
Angus E. Peyton 44,125 Direct 1.1%
207,711 Indirect
11
<PAGE>
AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1) CLASS
Lacy I. Rice, Jr. 180,576 Direct *
Brent D. Robinson 33,256 Direct (11) *
852 Indirect
Kenneth R. Summers 34,980 Direct (12) *
James W. Thompson 18,721 Direct *
7,318 Indirect
J. Lee Van Metre, Jr. 4,105 Direct *
Richard B. Walker 2,372 Direct *
H. Bernard Wehrle, III 1,475 Direct *
John H. Wick, III 12,625 Direct *
49,401 Indirect
Thomas D. Wilkerson 2,250 Direct *
All Directors, Nominees
and Executive 1,671,181 Direct
Officers as a Group
(35 individuals) 2,241,352 Indirect 17.8%
</TABLE>
*Beneficial ownership does not exceed one percent of the class.
(1) Share totals of directors include 100 directors' qualifying shares,
which each director is required to own pursuant to One Valley's Bylaws.
Shares held indirectly include shares held by family members and shares
held through trusts or corporations which in turn hold shares of One
Valley.
(2) Includes options to purchase 13,925 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 27,050 shares
pursuant to One Valley's 1993 Stock Option Plan.
(3) Includes options to purchase 4,950 shares pursuant to One Valley's 1983
Stock Option Plan. Includes options to purchase 20,825 shares pursuant
to One Valley's 1993 Stock Option Plan.
(4) Includes options to purchase 11,937 shares pursuant to One Valley's
1993 Stock Option Plan. Includes options to purchase 9,140 shares
pursuant to Mountaineer Bankshares of W.Va., Inc., Stock Option Plan.
(5) See Note (4) to Principal Holders of Voting Securities.
(6) Includes options to purchase 4,375 shares pursuant to One Valley's 1993
Stock Option Plan. Includes options to purchase 54,426 shares pursuant
to CSB Financial Corporation Stock Option Plan.
(7) Includes options to purchase 19,975 shares pursuant to One Valley's
1993 Stock Option Plan.
(8) Includes options to purchase 4,031 shares pursuant to One Valley's 1983
Stock Option Plan. Includes options to purchase 15,212 shares pursuant
to One Valley's 1993 Stock Option Plan.
(9) Includes options to purchase 26,309 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 46,875 shares
pursuant to One Valley's 1993 Stock Option Plan.
(10) Consists of 117,003 shares held in nine trusts of which John L. D.
Payne is a co-trustee, 453,946 shares held by Dickinson Company,
Payne-Gallatin Mining Company and Horse Creek Land and Mining Company
(in which companies Mr. Payne is an executive officer), and 900 shares
owned by his children; does not include 110,037 shares held in or
through trusts in which John L. D. Payne, at the discretion of the
trustees, is an income beneficiary.
12
<PAGE>
(11) Includes options to purchase 14,750 shares pursuant to One Valley's
1993 Stock Option Plan.
(12) Includes options to purchase 11,700 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 18,412 shares
pursuant to One Valley's 1993 Stock Option Plan.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
for services in all capacities to One Valley for the fiscal years ended December
31, 1996, 1995, and 1994, of those persons who were, as of December 31, 1996,
(i) the chief executive officer and (ii) the four other most highly compensated
executive officers of One Valley.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
Other Securities All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation Award(s) Options Payouts sation(1)
Position Year ($) ($) ($) ($) (#) ($) ($)
-------- ---- ------- -------- --------- ---------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Holmes Morrison 1996 362,000 173,760 0 0 12,500 0 3,750
President & CEO 1995 340,000 140,080 0 0 11,875 0 3,750
1994 315,000 110,250 0 0 11,250 0 5,476
Phyllis H. Arnold 1996 218,000 93,696 0 0 7,500 0 3,750
Exec. Vice President 1995 205,000 78,925 0 0 6,875 0 3,750
1994 190,000 63,840 0 0 6,375 0 4,531
Frederick H. Belden, Jr.1996 174,000 60,030 0 0 5,625 0 3,750
Exec. Vice President 1995 164,000 54,858 0 0 5,250 0 3,750
1994 156,000 47,190 0 0 5,000 0 4,691
Laurance G. Jones 1996 171,000 58,995 0 0 5,625 0 3,750
Exec. Vice President 1995 160,000 49,440 0 0 5,250 0 3,750
1994 150,000 43,313 0 0 4,750 0 4,687
Kenneth R. Summers 1996 152,000 46,740 0 0 5,000 0 3,750
Sr. Vice President 1995 135,000 38,813 0 0 4,687 0 3,706
1994 130,000 35,750 0 0 4,375 0 3,539
</TABLE>
(1) The amounts included in "All Other Compensation" consist of One Valley's
contributions on behalf of the listed officers to the 401(k) Plan, pursuant
to which participating employees receive a matching contribution of 50%
from One Valley for up to 5% of pay contributed to the 401(k) Plan by the
employee, to a maximum of $3,750 which represents One Valley's matching
share times $150,000, the maximum compensation allowed for benefit
calculation in a qualified plan.
13
<PAGE>
The following table sets forth further information on grants of stock
options during 1996 to (i) the listed officers and (ii) all optionees as a group
pursuant to One Valley's 1993 Incentive Stock Option Plan. The number of shares
and exercise price reflect a 5 for 4 stock split effected in the form of a 25%
stock dividend declared on September 18, 1996. The table also provides
information concerning the potential gain to all shareholders at the designated
rate of appreciation. No stock appreciation rights ("SARs") were awarded by One
Valley.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Grant Date
Individual Grants Value(1)
Number of % of Total Potential Realizable Value
Securities Options at Assumed Annual Rates
Underlying Granted to Exercise of Stock Appreciation for
Options Employees or Base Expira- Ten-Year Option Term
Granted in Fiscal Price(2) tion 0% 5% 10%
Name (#) Year ($/Sh) Date ($) ($) ($)
------- ------- ---------- --------- -------- ----- -------- --------
<S>
<C> <C> <C> <C> <C> <C> <C>
J. Holmes Morrison 12,500 10.2% 24.70 04/29/06 0 194,500 492,500
Phyllis H. Arnold 7,500 6.1% 24.70 04/29/06 0 116,700 295,500
Frederick H. Belden, Jr. 5,625 4.6% 24.70 04/29/06 0 87,525 221,625
Laurance G. Jones 5,625 4.6% 24.70 04/29/06 0 87,525 221,625
Kenneth R. Summers 5,000 4.1% 24.70 04/29/06 0 77,800 197,000
25 Optionees (including
the five listed above) 118,062 96.4% 24.70 04/29/06 0 1,837,045 4,651,643
One Optionee 4,375 3.6% 28.00 08/05/06 0 77,044 195,256
All Shareholders - - - - 0 320,291,941 811,022,011
Optionee Gain as % of
All Shareholders' Gain - - - - 0 .60% .60%
</TABLE>
(1) The actual value, if any, an officer may realize depends on the
excess of the stock price over the exercise price on the date the
option is exercised.
(2) The exercise price is the fair market value of One Valley Common Stock
on the date the options were granted. Options are exercisable
immediately and terminate upon termination of employment for reasons
other than death or retirement, upon the expiration of three months
after the date of retirement, upon the expiration of one year from the
date of death or ten years from the option date.
14
<PAGE>
The following table sets forth information concerning (i) the value
realized upon the exercise of stock options during 1996 by the listed
officers, and (ii) the number of unexercised options held by each listed
officer as of December 31, 1996, and the market value of the underlying
shares if the options had been exercised on that date. The number of shares
reflect a 5 for 4 stock split effected in the form of a 25% stock dividend
declared on September 18, 1996. No SARs have been awarded by One Valley.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares Acquired Value FY-End (#) FY-End ($)
Name On Exercise (#) Realized ($)(1) Exercisable Exercisable
---- --------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
J. Holmes Morrison 4,378 92,965 77,184 1,377,877
Phyllis H. Arnold 1,600 45,200 40,975 700,251
Frederick H. Belden, Jr. 1,000 22,120 25,775 386,464
Laurance G. Jones 1,720 22,162 22,100 318,076
Kenneth R. Summers 1,410 29,532 30,112 532,060
</TABLE>
(1) Market value of underlying securities at exercise, minus the exercise
or base price.
Compensation covered by a qualified pension plan is based on total pay,
including all Incentive Compensation Plan payments, received during the sixty
consecutive months of employment which results in the highest total divided by
five. Such compensation is directly related to the total annual salary and bonus
set forth in the Summary Compensation Table except that compensation relative to
the benefit calculation cannot exceed $150,000. In 1996, this plan was amended
a) to provide for the merger of assets and participants from Co-operative
Savings Bank, FSB (now One Valley Bank - Central Virginia); b) to adopt a "Rule
of 87" under which early retirement benefits are unreduced if a participant's
age and credited service equals or exceeds 87; and c) to change the 5% early
retirement benefit reduction factor to lower the benefit using a calculation
based on age 62 rather than age 65 when an employee with 25 years of service or
more retires prior to age 62 (unless they meet the Rule of 87, in which case
there is no reduction). As of November 1, 1996, the credited years of service
under the retirement plan for the individuals named in the table shown under
Executive Compensation were: Phyllis H. Arnold, 20.667 years; J. Holmes
Morrison, 29.17 years; Frederick H. Belden, Jr., 29 years; Laurance G.
Jones, 27.417 years; and Kenneth R. Summers, 33.417 years.
In 1990, a Supplemental Employee Retirement Plan (SERP) was established
for certain members of senior management, including the individuals named in the
Summary Compensation Table, which provides for a benefit at normal retirement of
65% of final average compensation, less (i) the retirement benefit under the
Defined Benefit Pension Plan, (ii) any retirement benefits from a previous
employer, and (iii) the employee's Social Security benefit. The plan further
provides reduced early retirement benefit target objectives and a disability
retirement benefit target of 60% of final average compensation at the time of
disability, minus the benefits paid under the employer Long-Term Disability Plan
and the employee's Social Security benefit. In 1996, the SERP was amended: a)
to redefine a "disability" to be the inability of a participant to perform his
or her usual job function performed immediately preceding the onset of
disability; b) to revise the reduced early retirement benefit target objectives
to be consistent with the change in the 5% early retirement reduction factor
made in the Defined Benefit Pension Plan; and c) to cause the SERP to include
"non-compete" provisions which must be met for any participant to receive
benefits under that plan. During 1996, $318,705 was accrued for the SERP Trust.
15
<PAGE>
The following table indicates, for purposes of illustration, the
approximate annual retirement benefits (Qualified Plan and Supplemental Plan)
that would be payable to an employee retiring on November 1, 1996, at age 65 on
the full life annuity form under various assumptions as to salary and years of
service. Benefits are not subject to deduction for Social Security or other
offset amounts.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
HIGHEST CONSECUTIVE ESTIMATED ANNUAL PENSION FOR
FIVE-YEAR REPRESENTATIVE YEARS OF CREDITED SERVICE
AVERAGE COMPENSATION 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$125,000 $27,932 $37,242 $66,274 $66,274 $66,274
150,000** 33,932 45,242 82,524 82,524 82,524
175,000 33,932 45,242 98,774 98,774 98,774
200,000 33,932 45,242 115,024 115,024 115,024
250,000 33,932 45,242 147,524 147,524 147,524
300,000 33,932 45,242 180,024 180,024 180,024
400,000 33,932 45,242 245,024 245,024 245,024
500,000 33,932 45,242 310,024 310,024 310,024
600,000 33,932 45,242 375,024 375,024 375,024
</TABLE>
**IRS Maximum for Qualified Plan.
CHANGE IN CONTROL ARRANGEMENTS
In October 1996, One Valley entered into agreements with the officers
listed in the Summary Compensation Table and with certain other officers to
encourage those key officers not to seek other employment because of the
possibility that One Valley might be acquired by another entity, and to secure
the executives' continued service and dedication in the event of an actual or
threatened change in control. The Board of Directors determined that such an
arrangement was appropriate, especially in view of the volatile banking market
and the advent of full-scale interstate branching in June 1997; however, the
agreements were not undertaken in the belief that a change in control of One
Valley was imminent. The 1996 agreements supersede previous change in control
agreements.
In general, the agreements provide that, in the event there is a change
in control of One Valley (as described below), and during the two-year period
immediately following the change in control the executive is (i) terminated by
One Valley without cause, or (ii) terminates employment for good reason (as
defined in the agreements), or (iii) in the case of executives at the level of
Executive Vice President or above, voluntarily terminates employment during the
thirteenth month after a change in control, the executive shall receive a
lump-sum cash amount equal to either three (at the level of Executive Vice
President or above) or two times the sum of (i) the executive's base salary and
average bonus for the three years preceding the change in control, (ii) a pro
rata portion of the executive's target bonus for the year in which the change in
control occurs, (iii) the continuation of welfare benefits for a 36-month
period, and (iv) retiree medical benefits following such 36-month period if the
executive has attained age 50 with ten years of service as of the date of
termination. In the event change in control related payments are subject to a
20% excise tax under Section 4999 of the Internal Revenue Code, One Valley will
reimburse executives at the level of Executive Vice President or above in an
amount sufficient to enable the executive to retain his change in control
benefits as if the excise tax had not applied; provided, however, that the
reimbursement will not be made and severance payments will be capped so no
excise tax would be due if a reduction of the severance payments by an amount
equal to less than 10% of the change in control benefits would result in no
excise tax being due. If necessary, payments for other executives under the
severance agreements will be reduced so no excise tax would be due. Pursuant to
the severance agreements, the executives agree to not voluntarily terminate
employment during the 180-day period following the commencement of a tender or
exchange offer or proxy contest or execution of an agreement which would result
in a change in control, unless and until such offer, contest or agreement is
terminated or abandoned or a change in control occurs.
Under the severance agreements, a "change in control" is defined
generally to mean: (i) a person becomes the beneficial owner of 50% or more of
the voting power of One Valley; (ii) a change in a majority of the Board (or
their approved successors); (iii) the consummation of a reorganization, merger,
consolidation or sale of substantially all of the assets of One Valley (unless
One Valley's stockholders receive more than 60% of the voting stock of the
surviving or purchasing company, no person acquires more than 50% of such voting
stock, and One Valley's Board of Directors remains a majority of the continuing
board of directors of the surviving or purchasing company); or (iv) a
liquidation, dissolution or sale or disposition of all or substantially all the
assets of One Valley.
16
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") of the Board of Directors
establishes compensation policies, plans and programs which are intended to
accomplish three objectives: to attract and retain highly capable and
well-qualified executives; to focus executives' efforts on increasing long-term
shareholder value; and to reward executives at levels which are competitive with
the marketplace for similar positions and commensurate with the performance of
each executive and of One Valley. The Committee has determined that to
accomplish these objectives, total compensation should be composed of base
salary, short-term incentive compensation and long-term incentive compensation.
The Committee meets several times annually with the Chief Executive
Officer and senior human resources executives to review, modify as appropriate,
and approve the compensation programs for executives utilizing the services of
outside compensation consultants when appropriate. In determining the salary
budget for 1996 and in fixing levels of executive compensation, the Committee
considered internal equity and external competitiveness of base compensation and
total compensation and One Valley's performance relative to its long-range
goals. In its evaluation of One Valley's corporate performance for the purpose
of fixing base salary levels, the Committee does not attempt to assign specific
weights to multiple factors which, taken together, constitute "corporate
performance." Consequently, its evaluation of corporate performance is
subjective to the extent that the Committee considers all aspects of corporate
performance, including but not limited to long-range plan goals for earnings,
asset quality, capital, liquidity and resource utilization; however, significant
emphasis is given to the annual increase in One Valley's earnings per share.
Base salaries for executive officers are determined first by an evaluation of
the officer's success as measured against annually established goals for
individual performance and the performance of the business unit(s) for which
they have responsibility. Second, base salaries are measured against market
place salaries of equivalent positions in financial institutions of comparable
size. Marketplace information is determined using data from several recognized
compensation survey services. In 1995 the Committee independently engaged a
third party consultant, Price Waterhouse LLP, to study the compensation and
benefits of the most senior executives of the corporation and to offer an
evaluation and recommendations for 1996.
In March 1996, Price Waterhouse LLP reported directly to the
Compensation Committee concerning annual cash compensation, total compensation,
an executive benefits analysis and recommendations concerning change in control
agreements. The Committee reviewed the findings and recommendations in detail
and determined that One Valley's level of executive compensation is appropriate
relative to a high performing peer group of banks. The percentage of
compensation at risk is competitive to the peer group banks. These compensation
levels are consistent with the philosophy of the Compensation Committee.
Currently, base compensation for One Valley's executives, while
competitive, is below the average for similar positions within comparable
financial institutions. The Committee believes, philosophically, that
compensation should, on the whole, be incentive driven; however, base
compensation should be reasonably competitive in the marketplace. To this end,
the Committee has set a base salary range target for executives at the 37.5
percentile of the marketplace average. The Committee believes that the
appropriate level of executive base compensation is primarily market-driven,
although base compensation is also dependent on corporate performance and on
each executive's progress toward individual goals.
The Committee believes that incentive compensation is an appropriate
adjunct to base compensation which, together with base compensation, should
approach the industry median for total compensation if established goals are
met. Short-term incentive compensation is provided to key executives, as
determined by the Compensation Committee pursuant to One Valley's Executive
Incentive Compensation Plan ("EICP"). Awards under EICP are granted based upon
individual and corporate performance. Corporate performance is measured by One
Valley's earnings per share growth relative to a target level set by the Board
of Directors, and One Valley's performance on six financial measures as compared
to a selected peer group. The comparative measures are: net operating expenses /
average assets; non-performing assets / (loans and OREO); net loan charge-offs /
average loans; efficiency ratio; return on assets; and return on equity. The
individual portion is based upon performance of the executive and the unit he or
she manages in meeting assigned objectives, and upon the executive's relative
position within One Valley. The level of annual performance of One Valley,
determined in a manner which emphasizes factors which should have a positive
impact upon total return to shareholders, has a significant impact upon total
executive compensation.
The Committee believes that shareholder value can be further enhanced
by closely aligning the financial interests of One Valley's key executives with
those of its shareholders. Awards of stock options pursuant to One Valley's
Incentive Stock Option Plan ("ISOP") are intended to meet this objective and
constitute the long-term incentive portion of executive compensation.
Participation in the ISOP is limited to approximately thirty employees of the
top management of One Valley and its affiliate banks who are deemed to have the
opportunity to most significantly affect corporate results. Under the ISOP, the
option price paid by the executive to exercise the option is the fair market
value of the One Valley Common Stock on the day the option is granted, and the
option is freely exercisable within a ten-year period. The options attain value
over that time only if the market price of the
17
<PAGE>
underlying stock increases, and the increase in value of the option is directly
tied to the increase in the value of the One Valley Common Stock. The Committee
believes the ISOP focuses the attention and efforts of executive management upon
increasing long-term shareholder value, and the Committee annually awards
options to key executives in amounts it believes are adequate to achieve the
desired objective. The total number of shares available for award in each plan
year is specified in the ISOP. These shares are generally allocated based upon
the Committee's subjective judgment, taking into account the historical levels
of awards and the relative positions with One Valley of the participants in the
ISOP. Price Waterhouse LLP reviewed long-term incentives as a part of total
compensation benchmarking. Total compensation refers to the aggregation of the
annual cash compensation and average long-term incentives. The level of One
Valley's total compensation package is competitive with the peer groups;
however, One Valley places slightly more emphasis on the long-term incentive
component of the compensation package than do the banks included in the peer
group.
Total compensation for the CEO is determined in essentially the same
way as for other executives, recognizing that the CEO has overall responsibility
for the performance of One Valley. Therefore, One Valley's performance has a
direct impact upon the CEO's compensation in that its earnings per share
determine the amount of base compensation increase and significantly impact the
EICP award; and, in addition, the market price of One Valley Common Stock
determines the value of options awarded during prior periods. The base
compensation of the CEO in 1996 was based in large measure on the corporate
results in 1995 relative to long-range plan goals for earnings, asset quality,
capital, liquidity and resource utilization. As discussed above, no attempt is
made by the Committee to assign relative weights to the various components of
corporate performance in fixing the CEO's base compensation.
The Compensation Committee reviewed the report of Price Waterhouse LLP
on executive benefits. On the whole, the executive benefits were found to be
adequate, although somewhat conservative. The Committee approved the
recommendation that executives be provided personal financial and estate
planning services. With respect to change in control strategies, Price
Waterhouse LLP recommended a complete study of One Valley's then current change
in control agreements, which it believed should be modified and expanded. (See
the subsection of this Proxy Statement captioned "Change in Control
Agreements.")
Recent revisions to the Internal Revenue Code disallow deductions in
excess of $1,000,000 for certain executive compensation. The Committee has not
adopted a policy in this regard since none of One Valley's executives receives
compensation approaching the $1,000,000 level. The report shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that One Valley
specifically incorporates this report by reference, and shall not otherwise be
filed under such Acts.
The report is submitted by the Compensation Committee, which consists of
Phillip H. Goodwin, Chairman
Charles M. Avampato
Nelle Ratrie Chilton
David E. Lowe
John L. D. Payne
H. Bernard Wehrle, III.
18
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in cumulative
total shareholder return on One Valley Common Stock for the five-year period
ending December 31, 1996, with the cumulative total return of the Standard &
Poor's 500 Stock Index and the Media General Industry Group Index - 04, which
consists of all banks and bank holding companies within the United States whose
stock has been publicly traded for at least six years. The graph assumes (i) the
reinvestment of all dividends and (ii) an initial investment of $100. There is
no assurance that One Valley's stock performance will continue in the future
with the same or similar trends as depicted in the graph. The graph shall not be
deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of 1933
or the Securities Exchange Act of 1934, except to the extent that One Valley
specifically incorporates this graph by reference, and shall not otherwise be
filed under such Acts.
FIVE-YEAR CUMULATIVE TOTAL RETURN COMPARISON
(Performance Graph appears here with the following plot points.)
FISCAL YEAR ENDING
1991 1992 1993 1994 1995 1996
One Valley Bancorp 100 155.61 148.48 154.95 177.21 271.27
All Publicly Traded Banks 100 119.14 140.83 133.61 188.94 261.26
Standard & Poor's 500 100 107.64 118.50 120.06 165.18 203.11
19
<PAGE>
COMPENSATION OF DIRECTORS
During 1996, each director who was not also an officer and full-time
employee of One Valley received $600 for each meeting of the Board of Directors
of One Valley attended. Non-employee directors who were members of the Board's
Audit Committee received $350 per meeting attended and $300 for other committee
meetings attended. In addition, Mr. Baronner received compensation in the amount
of $18,000 for serving as Chairman of the Board of Directors. During 1996, there
were no other arrangements pursuant to which any director of One Valley was
compensated for services as a director.
Directors of One Valley are eligible to defer fees pursuant to the One
Valley Deferred Compensation Plan, which was adopted in 1984, with respect to
fees received in 1984 and thereafter for services rendered as a director of One
Valley.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires One
Valley's directors and executive officers, and persons who beneficially own more
than ten percent of a registered class of One Valley's equity securities to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
One Valley. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish One Valley with copies of all Section
16(a) forms they file.
To One Valley's knowledge, based solely upon review of the copies of
such reports furnished to One Valley and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were complied
with.
CERTAIN TRANSACTIONS WITH DIRECTORS AND OFFICERS AND THEIR ASSOCIATES
One Valley and its various banking subsidiaries have had and expect to
have in the future transactions in the ordinary course of business with
directors, officers, principal shareholders and their associates. During 1996,
all of these transactions were made on substantially the same terms, including
interest rates, collateral and repayment terms on extensions of credit, as those
prevailing at the same time for comparable transactions with other unaffiliated
persons. One Valley's management believes that these transactions, which at
December 31, 1996, were, in the aggregate, 26.0% of total shareholders'
equity, did not involve more than the normal risk of collectibility or present
other unfavorable features.
Jackson & Kelly, a law firm in which Director James K. Brown is a
partner, Steptoe & Johnson, a law firm in which Director J. Lee Van Metre, Jr.,
is a partner, Bowles, Rice, McDavid, Graff & Love, a law firm in which Director
Lacy I. Rice, Jr., is a partner, McNeer, Highland & McMunn, a law firm in
which Director Cecil B. Highland, Jr., is of counsel, and Sullivan & Cromwell,
a law firm in which Nominee H. Rodgin Cohen is a partner, performed legal
services for One Valley and its subsidiaries in 1996. Based on information
provided by Messrs. Brown, Van Metre, Rice, Highland and Cohen, One Valley
believes that payments it made to these law firms were less than five percent of
each of those law firms' gross revenues in 1996. During 1996, The Neighborgall
Construction Co. received payments of $149,720 from One Valley's affiliate, One
Valley Bank of Huntington, Inc., for repair work to facilities owned by the
bank. In One Valley's opinion, these transactions were on terms as favorable to
One Valley as they would have been with third parties not otherwise affiliated
with One Valley.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, One Valley's affiliate banks and One Valley Square, Inc.,
paid $115,029 to TerraCare, Inc., for landscaping services. TerraCare, Inc., is
a wholly owned subsidiary of TerraCo, Inc. Mary Price Ratrie, a principal
shareholder of One Valley, is the principal shareholder and President of
TerraCo, Inc., and Director Nelle Ratrie Chilton is Vice President and director
of TerraCo, Inc. In the opinion of One Valley, these transactions were on terms
as favorable to One Valley as they would have been with third parties not
otherwise affiliated with One Valley. The members of One Valley's Compensation
Committee are Phillip H. Goodwin, Charles M. Avampato, Nelle Ratrie Chilton,
David E. Lowe, John L. D. Payne and H. Bernard Wehrle, III.
20
<PAGE>
2. RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of Ernst & Young LLP to
serve as independent auditors for One Valley for 1997. Although the selection of
auditors does not require shareholder ratification, the Board of Directors has
directed that the appointment of Ernst & Young LLP be submitted to shareholders
for ratification. If the shareholders do not ratify the appointment of Ernst &
Young LLP, the Board of Directors will consider the appointment of other
independent auditors. One Valley is advised that no member of this accounting
firm has any direct or indirect material interest in One Valley, or any of its
subsidiaries. A representative of Ernst & Young LLP will be present at the
Annual Meeting to respond to appropriate questions and to make a statement if
desired. The enclosed proxy will be voted "FOR" the ratification of the
selection of Ernst & Young LLP unless otherwise directed. The affirmative vote
of a majority of the shares of One Valley Common Stock represented at the Annual
Meeting of Shareholders is required to ratify the appointment of Ernst & Young
LLP.
3. PROPOSAL TO AMEND INDEMNIFICATION PROVISION OF ARTICLES OF
INCORPORATION
The Board of Directors recommends that the shareholders approve an
amendment to Article V of the Articles of Incorporation of One Valley to revise
and update the obligation of One Valley to indemnify its directors and officers.
The text of Article V, in its current form, is attached as Exhibit A to this
Proxy Statement and incorporated herein by this reference. The text of proposed
Article V is attached as Exhibit B and is also incorporated herein by this
reference.
Background and Reasons for the Proposed Amendment: Indemnification is
the practice by which a corporation pays the expenses of directors and
officers who are named as defendants or otherwise involved in litigation
relating to their activities on behalf of the corporation. Virtually all
publicly-owned corporations provide indemnification. The laws of the State of
West Virginia expressly authorize indemnification, and since One Valley was
incorporated in 1981, Article V has provided indemnification for One Valley's
directors and officers. Since 1981, there have been numerous legal and other
developments concerning indemnification. The Board of Directors believes that
One Valley's current indemnification provision should be revised and updated
to reflect these developments and to be consistent with industry standards,
so as to attract and retain qualified directors and officers.
The current indemnification provision may leave some ambiguity as to
whether the standard of conduct required for indemnification has been
satisfied. Similarly, the current provision utilizes legal terms establishing
the standard of conduct of indemnification which, in light of the developments
since 1981, may be difficult to apply. The proposed provision is designed to
reduce ambiguity and uncertainty in favor of indemnification simply "to the
fullest extent authorized by law." In the opinion of the Board of Directors,
the use of the language "to the fullest extent authorized by law" makes the
provision consistent with existing law and potential future developments in
this area. In addition, the proposed indemnity provision more clearly specifies
the payments One Valley must make, the binding contractual nature of One
Valley's commitment to do so, and the procedure that an indemnified party may
use to obtain prompt payment. The Board of Directors believes that the
proposed amendment is consistent with the original intent of Article V when
it was adopted.
The proposed indemnity provision does not authorize indemnification
which is precluded by state or federal statutes or regulations. For example, the
federal securities laws or regulations of the Federal Deposit Insurance
Corporation may preclude indemnification for certain specified violations.
Other information: Although there is currently no litigation pending,
or, to One Valley's knowledge, threatened that will trigger either the existing
or the proposed indemnification provision, incumbent directors may be deemed
to have a direct and personal interest in approval of the proposed amendment
because of possible litigation in the future. One Valley maintains directors'
and officers' liability insurance which may offset part of the cost involved
in any indemnification claim. To the extent obligations under the proposed
indemnity provision of One Valley's Articles of Incorporation exceed any
proceeds of insurance (or if such coverage is discontinued or not available),
any indemnification payments made by One Valley could have an adverse effect
upon its earnings and assets.
The Board recommends that Article V of One Valley's Articles of
Incorporation be amended and restated in its entirety as set forth in Exhibit B.
An affirmative vote of a majority of the outstanding shares of One Valley Common
Stock is required to approve the amendment. Shares voted "ABSTAIN" and shares
not voted will have the same effect as if these shares were voted "AGAINST"
approval of the amendment.
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL. The enclosed proxy will be voted "FOR" the
approval of the proposed amendment to Article V of the Articles of Incorporation
unless otherwise directed.
FORM 10-K ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
Upon written request by any shareholder to Laurance G. Jones,
Treasurer, One Valley, P. O. Box 1793, Charleston, West Virginia 25326, a copy
of One Valley's 1996 Annual Report on Form 10-K will be provided without charge.
OTHER INFORMATION
If any of the nominees for election as directors are unable to serve as
directors by reason of death or other unexpected occurrence, proxies will be
voted for a substitute nominee or nominees designated by the Board of One Valley
unless the Board of Directors adopts a resolution pursuant to the Bylaws
reducing the number of directors. The Board of Directors is unaware of any other
matters to be considered at the meeting, but if any other matters properly come
before the meeting, persons named in the proxy will vote such proxy in
accordance with the recommendation of the Board of Directors.
SHAREHOLDER PROPOSALS FOR 1998
Any shareholder who wishes to have a proposal placed before the next
Annual Meeting of Shareholders must submit the proposal to Merrell S. McIlwain
II, Secretary of One Valley, at its executive offices, no later than November
18, 1997, to have it considered for inclusion in the proxy statement of the
Annual Meeting in 1998.
J. Holmes Morrison
PRESIDENT
Charleston, West Virginia
March 21, 1997
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EXHIBIT A
ARTICLE V
-------------
Provisions for the regulation of the internal affairs of the
corporation are:
Each director and officer of this corporation, or former director or
officer of this corporation, or any person who may have served at its request as
a director or officer of another corporation, his heirs and personal
representatives, shall be indemnified by this corporation against costs and
expenses at any time reasonably incurred by him arising out of or in connection
with any claim, action, suit or proceeding, civil or criminal, against him or to
which he may be made a party by reason of his being or having been such director
or officer except in relation to matters as to which he shall be adjudged in
such action, suit or proceeding to be liable for gross negligence or willful
misconduct in the performance of a duty to the corporation. If in the judgment
of the board of directors of this corporation a settlement of any claim, action,
suit or proceeding so arising be deemed in the best interests of the
corporation, any such director or officer shall be reimbursed for any amounts
paid by him in effecting such settlement and reasonable expenses incurred in
connection therewith. The foregoing right of indemnification shall be in
addition to any and all other rights to which any director or officer may be
entitled as a matter of law.
EXHIBIT B
Proposed
ARTICLE V
---------
Provisions for the Regulation of the
Internal Affairs of the Corporation
A. Indemnification. Each person who was or is a party or is
threatened to be made a party to or is involved (including, without limitation,
as a witness or deponent) in any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative, investigative or
otherwise in nature ("Proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director or
officer of the corporation or is or was serving at the written request of the
corporation's board of directors, president or their delegate as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such Proceeding is alleged action or omission in an
official capacity as a director, officer, trustee, employee or agent or in any
other capacity, shall be indemnified and held harmless by the corporation to the
fullest extent authorized by law, including but not limited to the West Virginia
Code, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the corporation
to provide broader indemnification rights than said Code permitted the
corporation to provide prior to such amendment), against all expenses, liability
and loss (including, without limitation, attorneys' fees and disbursements,
judgments, fines, ERISA or other similar or dissimilar excise taxes or penalties
and amounts paid or to be paid in settlement) incurred or suffered by such
person in connection therewith; provided, however, that the corporation shall
indemnify any such person seeking indemnity in connection with a Proceeding (or
part thereof) initiated by such person only if such Proceeding (or part thereof)
was authorized by the Board of Directors of the corporation; provided, further,
that the corporation shall not indemnify any person for civil money penalties or
other matters, to the extent such indemnification is specifically not
permissible pursuant to federal or state statute or regulation, or order or rule
of a regulatory agency of the federal or state government with authority to
enter, make or promulgate such order or rule. Such right shall include the right
to be paid by the corporation expenses, including, without limitation,
attorneys' fees and disbursements, incurred in defending or participating in any
such Proceeding in advance of its final disposition; provided, however, that the
payment of such expenses in advance of the final disposition of such Proceeding
shall be made only upon delivery to the corporation of an undertaking, by or on
behalf of such director or officer, in which such director or officer agrees to
repay all amounts so advanced if it should be ultimately determined that such
person is not entitled to be indemnified under this Article or otherwise. The
termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
corporation, or that such person did have reasonable cause to believe that his
conduct was unlawful.
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B. Right of Claimant to Bring Suit. If a claim under this
Article is not paid in full by the corporation within thirty days after a
written claim therefor has been received by the corporation, the claimant may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful, in whole or in part, the claimant shall
be entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending or participating in any Proceeding in advance of
its final disposition where the required undertaking has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the applicable law for the corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the corporation.
Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification or
reimbursement of the claimant is permitted in the circumstances because he or
she has met the applicable standard of conduct, nor an actual determination by
the corporation (including its Board of Directors, independent legal counsel, or
its shareholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
C. Contractual Rights: Applicability. The right to be
indemnified or to the reimbursement or advancement of expenses pursuant hereto
(i) is a contract right based upon good and valuable consideration, pursuant to
which the person entitled thereto may bring suit as if the provisions hereof
were set forth in a separate written contract between the corporation and the
director or officer, (ii) is intended to be retroactive and shall be available
with respect to events occurring prior to the adoption hereof, and (iii) shall
continue to exist after the rescission or restrictive modification hereof with
respect to events occurring prior thereto.
D. Requested Service. Any director or officer of the
corporation serving, in any capacity, (i) another corporation of which five
percent (5%) or more of the shares entitled to vote in the election of its
directors is held by the corporation, or (ii) any employee benefit plan of the
corporation or of any corporation referred to in clause (i), shall be deemed to
be doing so at the request of the corporation.
E. Non-Exclusivity of Rights. The rights conferred on any
person hereunder shall not be exclusive of and shall be in addition to any other
right which such person may have or may hereafter acquire under any statute,
provision of the Certificate of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested directors or otherwise.
F. Insurance. The corporation may purchase and maintain
insurance, at its expense, to protect itself and any director, officer, employee
or agent of the corporation or another corporation, partnership, joint venture,
trust or other enterprise against such expense, liability or loss, whether or
not the corporation would have the power to indemnify such person against such
expense, liability or loss under West Virginia law.
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APPENDIX
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PROXY ONE VALLEY BANCORP, INC. PROXY
CHARLESTON, WEST VIRGINIA
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, APRIL 22, 1997
Michael A. Albert, John R. Lukens and Louis S. Southworth, II, or any one
of them, are hereby authorized to represent and to vote stock of the undersigned
in One Valley Bancorp, Inc. at the Annual Meeting of Shareholders to be held
April 22, 1997, and any adjournment thereof.
Unless otherwise specified on this Proxy, the shares represented by this
Proxy will be voted "FOR" the propositions listed on the reverse side and
described more fully in the Proxy Statement of One Valley Bancorp, Inc.,
distributed in connection with this Annual Meeting. If any shares are voted
cumulatively for the election of Directors, the Proxies, unless otherwise
directed, shall have full discretion and authority to cumulate their votes and
vote for less than all such nominees. If any other business is presented at said
meeting, this Proxy shall be voted in accordance with recommendations of the
Board of Directors.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
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ONE VALLEY BANCORP, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
The Board of Directors recommends a vote "FOR" the listed propositions.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. Election of Directors for the terms specified in the FOR WITHHOLD FOR ALL
Proxy Statement.
(Except Nominees(s)written Below
Nominees: Dennis M. Bone, H. Rodgin Cohen, Bob M. [ ] [ ] [ ]
Johnson, Robert E. Kamm, Jr., Edward H. Maier, J.
Holmes Morrison, Angus E. Peyton, Lacy I. Rice,
Jr., Richard B. Walker and Thomas D. Wilkerson
2. Ratify the selection of Ernst & Young LLP as independent FOR AGAINST ABSTAIN
Certified Public Accountants for 1997. [ ] [ ] [ ]
3. Approve an amendment to Article V of the Articles of FOR AGAINST ABSTAIN
Incorporation to update the indemnification provision. [ ] [ ] [ ]
4. Transact such other business as may properly come before the FOR AGAINST ABSTAIN
meeting and any adjournment thereof. [ ] [ ] [ ]
</TABLE>
Dated:__________________, 1997
Signature(s)___________________________________
---------------------------------------------
When signing as attorney, executor,
administrator, trustee or guardian, please
give full title. If more than one trustee, all
should sign.
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