ABIGAIL ADAMS NATIONAL BANCORP, INC.
1627 K Street, N.W.
Washington, D.C. 20006
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 17, 1995
The enclosed Proxy is being solicited by and on behalf of the Board of
Directors of Abigail Adams National Bancorp, Inc., a Delaware corporation (the
"Company"), for the Annual Meeting of Stockholders of the Company to be held on
Tuesday, October 17, 1995 at 3:00 p.m., local time, at the principal executive
offices of The Adams National Bank, a national banking association and a
wholly-owned subsidiary of the Company (the "Bank"), located at 1627 K Street,
N.W., Washington, D.C., or at any adjournment thereof.
On July 31, 1994, the Company held its annual meeting of stockholders but
failed to obtain a quorum. The meeting was adjourned until a quorum could be
obtained. Because of the resolution of the Company's ownership, it is expected
that a quorum will be present at this meeting. See "Beneficial Ownership of
Shares."
Stockholders of record at the close of business on September 20, 1995 (the
"Record Date") will be entitled to notice of, and to vote at, the meeting. On
the Record Date, the Company had 284,844 shares of common stock, par value
$10.00 per share (the "Shares"), outstanding and entitled to vote at the
meeting. Each Share is entitled to one vote. A majority of the Shares
outstanding on the Record Date represented in person or by Proxy, will
constitute a quorum for the transaction of business at the meeting. A majority
of the votes cast by stockholders in person or by proxy at the meeting will be
necessary for approval of the proposals described herein.
Abstentions and broker non-votes (shares which a broker indicates that he
or she does not have authority to vote) are counted for the purpose of
determining the presence or absence of a quorum for the transaction of business
at the Annual Meeting. Abstentions and broker non-votes will have no effect on
the outcome of the proposals presented herein since such actions do not
represent votes cast by stockholders.
The cost of solicitation of Proxies will be borne by the Company. The
Company may solicit Proxies in person or by telephone, in addition to
solicitation by mail. All such further solicitation will be made by directors,
officers or regular employees of the Company or of the Bank, who will not be
additionally compensated, or by the Company's transfer agent (The First National
Bank of Maryland, Baltimore, Maryland), in which case the costs will be borne by
the Company. Arrangements will be made by the Company for the forwarding, at the
Company's expense, of soliciting materials by brokers, nominees, fiduciaries and
other custodians and their principals.
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It is anticipated that the Proxy Statement and the accompanying Proxy will
be mailed to stockholders on or about September 28, 1995. Shares represented by
Proxies that are properly executed and received in time for the meeting will be
voted in accordance with the stockholders' specifications. In the absence of
specific instructions to the contrary, Proxies received in response to this
solicitation will be voted (1) FOR the election of the nominees for directors
listed herein; and (2) FOR ratification of the selection of KPMG Peat Marwick
LLP, as independent certified public accountants for the Company for 1994 and
1995. Should any other matters properly come before the Annual Meeting, the
persons named as Proxies will, unless otherwise specified in the Proxy, vote
upon such matters according to their discretion. A Proxy may be revoked at any
time prior to its exercise by written notice to the Company, by executing a
Proxy bearing a later date, or by attending the meeting and voting in person.
ELECTION OF DIRECTORS
At the meeting, nine directors (constituting the entire Board of Directors)
of the Company are to be elected to hold office until the next Annual Meeting of
Stockholders or until their respective successors have been elected and
qualified. All of the nominees, except for Jeanne D. Hubbard, Marshall T.
Reynolds, Robert L. Shell, Jr. and Susan Williams are now directors of the
Company. It is not contemplated that any of the nominees will become unavailable
to serve, but if that should occur before the meeting, Proxies that do not
withhold authority to vote for directors will be voted for another nominee, or
nominees, selected by the Board of Directors.
Nominees for Director
- ---------------------
The following table sets forth for each nominee his or her age, principal
occupation or employment during the past five years, beneficial ownership of the
Company's Shares as of the Record Date, and the total number of Shares
beneficially owned on the Record Date by all of the directors and executive
officers of the Company as a group:
Beneficial
Ownership of
Business Experience Shares (Percent
Name and Age and Directorships of Class Owned)
- ------------ ------------------- ---------------
Barbara Davis Blum Chairwoman of the Board of the 320
Age 54 Company and the Bank (March *
1986 to present); Director
of the Company (1984 to present)
and the Bank (1983 to present);
President and Chief Executive Officer
of the Company (1985 to present)
and the Bank (1983 to present);
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Chairwoman, Economic Development
Finance Corporation, (1987 to
present); Vice Chairwoman, Center for
Policy Alternatives (1990 to present);
Director of Kaiser Permanente Health
Care of the Mid-Atlantic States
(1990 to present); Director of the
Greater Washington Board of Trade
(1984 to present) and a Trustee
of the Federal City Council (1992 to
present); President of Direction
International, a consulting firm
(1981 to 1983); Deputy Administrator
of the U.S. Environmental Protection
Agency (1977 to 1981).
Shireen Dodson Assistant Director of Administra- 100
Age 44 tion and Planning, the National *
African American Museum Project of
the Smithsonian Institution (1993
to present); Comptroller of the Office
of Accounting and Financial Services
of the Smithsonian Institution (1985
to 1992); Commissioner, District of
Columbia Minority Business Opportunity
Commission (1989 to 1992); President
(1979 to 1980) and Advisory Committee
member (1985 to present) of the
Coalition of 100 Black Women of D.C.,
Inc.; Director of the Company
(1993 to present) and the Bank
(1992 to present).
Susan Hager President of Hager Sharp, Inc., 100
Age 51 an issues oriented communications *
consulting firm (1973 to present);
Member of the Board of Directors
of the Greater Washington Board of
Trade (1990 to present); Director
of the Lab School of Washington
(1987 to present) and Chairwoman
(1995) and a Member of the National
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Advisory Council, U.S. Small
Business Administration; President,
National Small Business United
(1992); Chairwoman of the U.S.
Department of the Treasury's Small
Business Advisory Council (1980 to
1982); Founder of the National
Association of Business Women
(1974); Director of the Bank (June
1992 to present) and the Company
(September 1992 to present).
Jeanne D. Hubbard Consultant, First Guaranty Bank, 1,500
Age 47 Hammond, Louisiana (1993 to present); (0.5%)
a variety of officer positions,
including Vice President & Senior
Commercial Lender and Chairwoman,
Loan Committee and Asset/Liability
Committee, First Bank of Ceredo,
Ceredo, West Virginia (1980 to 1993);
President, C-K Rotary Club, Citizens
Advisory Committee Chairwoman,
United Way; Director of the Bank
(1995).
Clarence L. James, Jr. Partner, Manatt, Phelps & Phillips 100
Age 61 (1995 to present); President and *
Chief Operating Officer of The Keefe
Company, a government relations
and public affairs firm (1983 to
1995); Vice President of Domestic
Affairs and General Counsel of The
Keefe Company (1981 to 1983);
Commissioner and Chairman of the
Copyright Royalty Tribunal, a
presidential appointment (1977 to
1981); Managing Partner of James,
Moore, Douglas & Co., LPA, a
corporate, tax and land development
law practice (1971 to 1977); Chairman
of the Board of Douglas James
Securities, Incorporated, a registered
broker-dealer company and a member of
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the National Association of Securities
Dealers, Inc. (1990 to present);
Director of the Company and the Bank
(February 1993 to present).
Marshall T. Reynolds President, Chief Executive Officer and 85,165 (1)
Age 58 Chairman of the Board of Directors of (29.9%)
Champion Industries, Inc., a holding
company for commercial printing and
office products companies, (1992 to
present); President and General
Manager of The Harrah and Reynolds
Corporation, (predecessor of Champion
Industries, Inc.) (1964 to 1993); Sole
shareholder of Harrah and Reynolds
Corporation (1972 to 1993); Director
(1983 to 1993) and Chairman of the
Board of Directors (1983 to 1993),
Banc One, West Virginia Corporation
(formerly Key Centurion Bancshares,
Inc.); Former Chairman, United Way of
the River Cities, Inc. and Boys and
Girls Clubs of Huntington; Director
of the Bank (1995).
Robert L. Shell, Jr. Chairman and Chief Executive Officer 27,000
Age 51 of Guyan International, a privately (9.5%)
held holding company for manufacturing
and service companies (1985 to
present); Chairman of Carolina Hose
and Hydraulics, Spartanburg, South
Carolina (1982 to present); Chairman,
Standard Leasing Co. (1990 to
present); Chairman of Permco Hydraulik
AG, a joint venture European
manufacturer of hydraulic equipment,
(1982 to present); former Chairman
of the Marshall Artists Series; Member
of The Huntington Boys and Girls Club,
The Cabell Huntington Hospital Foundation
and The West Virginia Foundation for
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Independent Colleges; Director of the
Bank (1995).
Dana Stebbins Partner, Wilkes, Artis, Hedrick & 100
Age 48 Lane (1989 to present); Special *
Counsel for Klimek, Kolodney & Casale
P.C. (1983 to 1987); Special Counsel
for the U.S. House of Representatives
Committee on Small Business (1981 to
1983); Special Assistant to the
Associate Administrator of the U.S.
Small Business Administration (1980 to
1982); Special Assistant and White
House Liaison to the Chairman of the
Commodity Futures Trading Commission
(1978 to 1980); Advisor to the White
House Office of Domestic and Urban
Policy (1977 to 1978); First Vice
President of the D.C. Chamber of
Commerce; Trustee of the Federal City
Council and member of the Board of
the Greater Washington Boys and Girls
Clubs; Director of the Company and the
Bank (September 1993 to present).
Susan J. Williams President, Bracy Williams & Company, a 100
Age 55 government and public affairs consulting *
firm (1982 to present); Representative on
Southern Growth Policies Board for the State
of Virginia (1986); Assistant Secretary for
Governmental Affairs of the U.S. Department
of Transportation (1979 to 1981); Deputy
Assistant Secretary for Governmental and
Public Affairs of the U.S. Department of
Transportation (1977 to 1979); Secretary,
Greater Washington Board of Trade (1994 to
present); Director of the Henry L. Stimson
Center and the American Institute for Public
Service; Director of the Bank (September 1994
to present).
6
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All directors and 114,685 (2)
executive officers (40.3%)
of the Company
as a group (twelve
persons)
- ---------------------------------------
* The number of Shares specified represents less than 0.1% of the outstanding
Shares.
(1) Shares are owned jointly with Shirley A. Reynolds.
(2) Includes 200 shares owned by Richard W. Naing, a current director not
standing for reelection.
For additional information relating to beneficial ownership of the
Company's Shares and related matters, see "Beneficial Ownership of Shares".
The Company's directors and executive officers, and persons who own more
than 10% of the Company's Common Stock, are required to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of any securities of the Company. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the Company and
written representations that no other reports were required, all of the
Company's directors, executive officers and greater than 10% shareholders made
all required filings during the fiscal year ended December 31, 1994, with the
exception of an initial report of ownership of Susan J. Williams which was filed
late following her election as director.
Board Meetings
- --------------
During 1994, the Board of Directors of the Company met five times. Each
incumbent member of the Board of the Company who is a nominee for reelection
attended more than 75% of the combined Board of Directors and Board Committee
meetings, except for Barbara Davis Blum who recused herself from three Board
meetings. The Personnel Committee which consisted of Susan Hager, Shireen
Dodson, Clarence L. James, Jr. and Barbara Davis Blum met two times during 1994
with all members in attendance, except for Clarence L. James, Jr. who did not
attend one of the meetings. The Personnel Committee recommends nominations to
the Board of Directors of the Company and the Bank, recommends nominations to
the Board Committees and reviews personnel and compensation issues. The Company
does not have an Audit Committee. The Audit Committee of the Bank met three
times during 1994. Directors of the Company who are members of the Bank's Audit
Committee are Shireen Dodson and Clarence L. James, Jr. Barbara Davis Blum
serves as an ex-officio member of the Audit Committee. The Audit Committee
monitors the safety and soundness of the Bank's assets and protection of
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depositors by overseeing the Bank's internal accounting controls, reviewing
internal and independent audit reports and regulatory examinations and ensuring
adequate management follow-up.
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth information, as of the Record Date, relating
to each person known by the Company to own beneficially more than 5% of the
Company's Shares. Unless otherwise noted below, the persons named in the table
have sole voting and sole investment powers with respect to each of the Shares
reported as beneficially owned by such person.
Present Beneficial
Position With Ownership of Percent of
Name and Address the Company Shares Class Owned
- ------------------ ------------ ------------ ---------
Marshall T. Reynolds and Director, Nominee
Shirley A. Reynolds, jointly -- 85,165 (1)(4) 29.9%
P.O. Box 2968
Huntington, West Virginia 25728
Shirley A. Reynolds -- 40,000 (4) 14.0%
1130 13th Avenue
Huntington, West Virginia 25701
Robert L. Shell, Jr. Director, Nominee 27,000 (4)(5) 9.5%
#5 Nichols Drive
Barboursville, West Virginia 25504
Barbara W. Beymer -- 20,000 (4) 7.0%
214 North Boulevard West
Huntington, West Virginia 25701
Robert H. Beymer and --
Barbara W. Beymer, jointly -- 7,000 (2)(4) 2.5%
4341 Route 60 East
Huntington, West Virginia 25705
Deborah P. Wright -- 20,000 (4) 7.0%
1517 Diederich Boulevard
Flatwoods, Kentucky 41139
8
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Thomas W. Wright and --
Deborah P. Wright, jointly -- 7,000 (3)(4) 2.5%
P.O. Box 716
Ashland, Kentucky 41105
Jeanne D. Hubbard Director, Nominee 1,500 (4) 0.5%
333 West 11th Avenue
Huntington, West Virginia 25701
SAG, Corp. Money Purchase -- 20,161 (6) 7.1%
Plan and Trust (Pension),
Neal R. Gross, Trustee
Ava S. Gross, Trustee
4218 Lenore Lane, N.W.
Washington, D.C. 20008
- -------------------------
(1) Marshall T. Reynolds and Shirley A. Reynolds share voting and
dispositive power with respect to 85,165 shares owned jointly. The number of
shares includes 4,627 shares acquired by Marshall T. Reynolds and Shirley A.
Reynolds, jointly, from shares tendered.
(2) Robert H. Beymer and Barbara W. Beymer share voting and dispositive
power with respect to 20,000 shares owned jointly.
(3) Thomas W. Wright and Deborah P. Wright share voting and dispositive
power with respect to 20,000 shares owned jointly.
(4) Based upon Amendment No. 1 to Schedule 13D dated July 21, 1995,
Marshall T. Reynolds, Shirley A. Reynolds, Robert L. Shell, Jr., Robert H.
Beymer, Barbara W. Beymer, Thomas W. Wright, Deborah P. Wright and Jeanne D.
Hubbard acquired 203,038 outstanding shares of the Company.
(5) Based upon Amendment No. 1 to Schedule 13D dated July 21, 1995, upon
any default under Robert L. Shell, Jr.'s loan agreement with Bank One, West
Virginia which extended financing for the purchase of Mr. Shell's shares,
Marshall T. Reynolds would be required to purchase the shares of the Company's
Common Stock attributed to Mr. Shell, increasing the number of shares held with
sole voting and dispositive power by Mr. Reynolds to 27,000 and reducing Mr.
Shell's beneficial ownership to -0-.
(6) Based upon a Schedule 13D dated September 18, 1995, Neal R. Gross and
Ava S. Gross share voting and dispositive power with respect to these shares.
For several years there has been an issue regarding the ownership of
203,038 of the Company's Shares. Citibank held a security interest in 203,038
Shares, representing
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approximately 71% of the outstanding shares (the "Pledged Shares"). Beginning in
1990 the Company and its advisors participated in various discussions with
Citibank and its advisors concerning the disposition by Citibank of the Pledged
Shares or a sale of the Company.
On April 12, 1994, the Company's Board of Directors, on the recommendation
of the Special Committee (a Board appointed Committee of Outside Directors
comprised of those of the Company's directors who were neither employees nor
significant stockholders of the Company), adopted a Rights Agreement, the
purpose of which was to provide the Board of Directors with adequate time to
respond effectively to a takeover attempt and in a manner that would maximize
the value of the Company for all shareholders.
On April 14, 1994, Citibank filed a complaint against the Company and each
of its directors in the Delaware Chancery Court seeking to enjoin the Company
from implementing the Rights Agreement or distributing the Rights. The complaint
alleged, among other things, that the Rights Agreement violated Delaware law and
that in adopting the Rights Agreement the directors of the Company violated
their fiduciary duty to all of the shareholders of the Company and tortiously
interfered with the consummation of Citibank's proposed sale of the Pledged
Shares to National Bankshares, Inc., a group with whom Citibank had negotiated
the sale of the Pledged Shares from 1992 through 1994 ("NBI"). On June 24, 1994,
the Company filed an answer to the complaint denying the allegations and in a
counterclaim against Citibank requested that the court enter a judgment
declaring the Rights Agreement valid and lawfully adopted under Delaware law
(collectively, the "Delaware Litigation").
On June 29, 1994, the Special Committee was advised by Baxter Fentriss and
Company (the Company's investment advisor) of a proposal received from Marshall
T. Reynolds ("Mr. Reynolds") to purchase the Pledged Shares from Citibank and to
make an offer to purchase up to the 81,806 shares of Common Stock that were not
owned by Citibank (the "Minority Shares"). On April 19, 1995, the Board of
Directors of the Company, on the recommendation of the Special Committee,
authorized the entry by the Company into an agreement with Mr. Reynolds pursuant
to which he agreed that if his purchase of the Pledged Shares from Citibank was
completed, he would within 20 business days commence a tender offer to purchase
the Minority Shares at a price of $21.00 per share (the "Reynolds Agreement").
Under the Reynolds Agreement, Mr. Reynolds also agreed that until the Tender
Offer was completed neither he nor any assignee of his rights to purchase the
Pledged Shares would vote the Pledged Shares, without the consent of the
Company's Board of Directors, to change in any respect the composition of the
Company's Board of Directors. In consideration for the commitment of Reynolds to
undertake the Tender Offer, the Company agreed (i) to amend the Rights Agreement
to prevent the purchase by Mr. Reynolds of the Pledged Shares or the Tender
Offer from triggering the exercisability of the Rights, (ii) to take such
actions as are necessary to ensure that neither the purchase of the Pledged
Shares nor the Tender Offer will constitute a "Change in Control" under the
Severance Agreements and (iii) not to, or not permit the Bank to (A) amend the
Severance Agreements (except as described above), (B) amend the Employment
Agreement among the Company, the Bank and Barbara Davis Blum (except that an
extension of the termination date to a date that is not more than 90 days
following the completion of the purchase
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of the Pledged Shares would be permitted), (C) issue any stock, or any options,
warrants or rights to purchase stock, or any long-term debt securities, (D)
enter into, or materially increase the level of contributions to, any pension,
retirement, stock option, profit sharing, deferred compensation, bonus, group
insurance or similar plan for directors, officers or employees, (E) other than
in the ordinary course of business, mortgage, pledge or dispose of any assets,
incur any indebtedness, increase the compensation or benefits payable to
directors, officers or employees, incur any material obligation, or enter into
any material contract, or (F) amend the Certificate of Incorporation or Bylaws
of the Company or the Articles of Association or Bylaws of the Bank. The
foregoing restrictions were subject to the exception that the Company or the
Bank was permitted to adopt a stock option plan for its directors and employees
and during the first year of the plan issue options to purchase shares of Common
Stock not in excess of 2 1/2% of the total numbers of shares outstanding.
On April 20, 1995, the Company amended the Rights Agreement to provide that
neither (i) the entry by Mr. Reynolds into an agreement with Citibank to
purchase the Pledged Shares or the purchase by Mr. Reynolds (or any of his
permitted assignees) of the Pledged Shares nor (ii) the announcement, conduct or
completion of the Tender Offer will trigger the exercisability of the Rights.
On April 21, 1995, Citibank and Mr. Reynolds entered into a Stock Purchase
Agreement pursuant to which Mr. Reynolds agreed to purchase the Pledged Shares
at a purchase price of $17.00 per share. The purchase was completed on July 21,
1995. In connection with the closing of the purchase of the Pledged Shares, the
Company, the Bank and each director of the Company (other than Mr. Naing)
delivered a release releasing Citibank and its directors, officers, employees,
agents and representatives from any and all claims relating to actions taken by
Citibank with respect to the Pledged Shares. Correspondingly, Citibank delivered
a release releasing the Company, the Bank and each director (other than Mr.
Naing who declined to deliver a release in favor of Citibank), officer,
employee, agent and representative of the Company and the Bank from any and all
claims relating to Citibank's efforts to dispose of the Pledged Shares. In
addition, the Company, the Bank and each director (other than Mr. Naing) and
executive officer of the Company delivered a release releasing NBI and its
directors, officers, employees, agents and representatives from any and all
claims relating to NBI's efforts to purchase the Pledged Shares.
Correspondingly, NBI delivered a release releasing the Company, the Bank and
each director, executive officer, employee, agent and representative of the
Company and the Bank (other than Mr. Naing who declined to deliver a release in
favor of NBI). On July 21, 1995, the Delaware Litigation was dismissed with
prejudice.
On August 16, 1995, Mr. Reynolds commenced his Tender Offer to purchase up
to 81,806 shares of Common Stock, consisting of the outstanding shares of Common
Stock that were not then owned by him or his associates at a price of $21.00 per
share net to seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated August 16, 1995 and the related Letter of
Transmittal (which together constitute the "Tender Offer"). The Tender Offer was
completed on September 15, 1995. A total of 4,627 shares were tendered and
acquired by Marshall T. Reynolds and Shirley A. Reynolds, jointly.
11
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EXECUTIVE COMPENSATION
The executive officers of the Company receive cash compensation from the
Bank in connection with their positions as executive officers of the Bank. The
Company generally does not separately compensate its executive officers.
The following table shows the cash compensation paid by the Bank during the
fiscal year ended December 31, 1994, 1993 and 1992 to the Chief Executive
Officer, who is the only executive officer of the Company and the Bank whose
cash compensation exceeded $100,000, for services rendered during the year:
Summary Compensation Table
Annual Compensation All Other
Year Salary Bonus/Other Compensation (1)(2)
------ -------- ------------- -------------
Barbara Davis Blum, 1994 $ 185,155 $ 0 $ 5,183
Chairwoman of the Board, 1993 173,040 0 4,271
President, Chief Executive 1992 161,720 0 0
Officer of the Company and
the Bank
(1) Represents the Bank's contribution to the 401k Plan for the account of
Barbara Davis Blum.
(2) Ms. Blum receives certain perquisites but the cost of providing such
perquisites did not exceed the lesser of $50,000 or 10% of her salary.
Directors' Compensation
- -----------------------
During 1994, directors of the Company who were not salaried officers of the
Company or the Bank received $250 for each meeting of the Company's Board of
Directors attended and $200 for each Committee meeting attended. Beginning in
January 1995, salaried officers who serve on the Board receive director fees.
Directors of the Bank receive $250 for each meeting of the Bank's Board of
Directors attended, $200 for each Executive Loan Committee meeting attended and
$100 for all other Bank Committee meetings attended. For the year ended December
31, 1994, the Company paid a total of $19,500 in directors fees.
Employment Agreement
- -------------------
On March 31, 1993 the Company and the Bank entered into an employment
agreement with Barbara Davis Blum providing for the employment by the Company
and the Bank of Ms. Blum as Chairwoman, President and Chief Executive Officer of
the Company and the Bank. Under the agreement, as amended July 26, 1995, the
term of the employment agreement was extended through December 31, 1995. Under
the terms of the employment agreement, Ms. Blum's salary for 1994 was $185,155.
Her annual salary for the current year is $185,155. The
12
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employment agreement provides that, in the event Ms. Blum shall resign with
60 days notification, is not elected as Chairwoman, President and Chief
Executive Officer of the Company and Bank, or is otherwise terminated as
Chairwoman, President and Chief Executive Officer of the Company and the
Bank, or if Ms. Blum is deprived in any material respect of the
responsibility and authority usual for the chief executive officer of a
national bank and bank holding company, then Ms. Blum, or any assignee,
shall be entitled to receive a payment equal to the current year's salary
then in effect in either a lump sum or in semi-monthly payments, at her
option. At the expiration of the employment agreement on December 31, 1995
and in the event no new employment agreement is entered into between the
Company, the Bank and Ms. Blum, then Ms. Blum shall be entitled to receive
a payment equal to the current year's salary then in effect in either a
lump sum or in semi-monthly salary payments, at her option. In addition,
she shall be included to the full extent eligible in all plans providing
benefits, including group life insurance, disability insurance and pension
programs for executive employees of the Company or the Bank during the term
of the employment agreement and for one year following its expiration.
Severance Agreements
- --------------------
On April 7, 1994, the Board of Directors of The Adams National Bank (the
"Bank"), the Company's wholly owned subsidiary, approved severance arrangements
for seven key management officials. These arrangements were incorporated into
Severance Agreements, dated as of April 7, 1994 (the "Severance Agreements").
The Severance Agreements provide that, in the event of a "Change in
Control" (as defined in the Severance Agreements) the officers will be entitled
to resign from the Bank within the one year period following a Change in Control
and receive a lump sum payment equal to one year's full base salary at the rate
applicable to the officer in effect at that time. The term "Change in Control"
does not include a transaction approved by a majority of the "Continuing
Directors" (as defined in the Severance Agreements) then in office. In addition,
the officers will be entitled to receive such severance payment in the event the
officer's employment with the Bank is "Terminated" (as defined in the Severance
Agreements) within the one year period following a Change in Control, prior to
the resignation of the officer. These benefits are estimated to have an
aggregate value of approximately $504,000 based on current salary levels. Any
severance payment payable under the Severance Agreements will be reduced to the
extent that any such payment constitutes an "Excess Parachute Payment" as such
term is defined in the Internal Revenue Code. The Severance Agreements are
binding on the Bank and its successors.
On September 18, 1995, a majority of the Continuing Directors of the
Company and the Bank approved the election of Ms. Hubbard, Mr. Reynolds and Mr.
Shell so that their election to the Boards of the Company and the Bank will not
constitute a change in control under the Severance Agreements.
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Nonqualified Stock Option Plan
- ------------------------------
No options have been granted to date under the Company's Non-Qualified
Stock Option Plan (the "Plan"). A total of 30,000 Shares of the Company's common
stock are authorized for issuance under the Plan, in which officers of the
Company and the Bank who have been employed for at least one year are eligible
to participate. The option exercise price of any options granted under the plan
will equal 100% of the book value of the Shares as of the date of grant. Any
options granted under the Plan will become exercisable on a cumulative basis at
a rate of 25% per year during the period of four years after the grant;
provided, however, that the first 25% will not become exercisable until the
expiration of six months after the date of grant.
401(k) Plan
- -----------
The Company has a 401(k) plan covering all full-time employees. The Company
made contributions to the plan of $40,000 in 1994.
CERTAIN TRANSACTIONS
The Bank has had, and it is expected that it will have in the future,
banking transactions in the ordinary course of business with the Company's
directors, officers and their associates on substantially the same terms,
including interest rates and collateral, as those prevailing at the same time
for comparable transactions with others. In the opinion of management, these
transactions did not in 1994 involve more than the normal risk of collectibility
or present other unfavorable features.
As of September 5, 1995, the aggregate principal amount of indebtedness to
the Bank owed by officers and directors of the Company and their associates who
were indebted to the Bank on that date was approximately $311,000. The highest
aggregate principal amount owed during 1994 by all of the officers and directors
of the Company and their associates who were indebted to the Bank during the
year was approximately $1,141,000.
The Company has engaged in transactions in the ordinary course of business
with some of its directors, officers, principal stockholders and their
associates. Management believes that all such transactions are made on the same
terms as those prevailing at the time with other persons. During 1994, the
Company engaged Hager Sharp, Inc., of which Susan Hager, a director of the
Company, is President, to provide public relations services. For the fiscal year
ended December 31, 1994, the Company paid Hager Sharp, Inc. $32,000 for such
services. In addition, Clarence James, Jr. is an attorney with the law firm of
Manatt, Phelps & Phillips which provides legal services to the Company. During
the fiscal year ended December 31, 1994, fees paid to Manatt, Phelps & Phillips
did not exceed 5% of the firm's revenues for that year.
14
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RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
It is proposed that the stockholders ratify the Board of Directors'
selection of KPMG Peat Marwick LLP as the Company's independent certified public
accountants for 1994 and 1995. KPMG Peat Marwick LLP served as the Company's
independent public accountants in 1994 and has served the Company and the Bank
in that capacity since their organization. A majority of the votes cast is
required for ratification. A representative of such firm is expected to be
present at the Annual Meeting to respond to appropriate questions and to make a
statement if he or she desires to do so.
The Board of Directors of the Company recommends that stockholders vote FOR
the ratification of selection of such firm.
OTHER MATTERS
The Board of Directors is not aware of any other matters that may come
before the meeting. If any other business properly comes before the meeting, the
persons designated as proxies will vote upon such matters in their discretion.
STOCKHOLDER PROPOSALS
A stockholder who intends to present a proposal at the Company's next
Annual Meeting of Stockholders must submit the written text of the proposal to
the Company no later than June 20, 1996 in order for the proposal to be
considered for inclusion in the proxy statement for that meeting.
ANNUAL REPORT
The Annual Report to Stockholders of the Company including financial
statements for the year ended December 31, 1994, accompanies this Proxy
Statement.
By Order of the Board of Directors
/s/ Barbara Davis Blum
Barbara Davis Blum
Chairwoman
September 28, 1995
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REMINDED TO DATE,
SIGN, AND RETURN THE ENCLOSED PROXY IN THE POSTAGE PAID ENVELOPE PROVIDED.
15
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PROXY
ABIGAIL ADAMS NATIONAL BANCORP, INC.
1627 K Street, N.W.
Washington, D.C. 20006
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ABIGAIL
ADAMS NATIONAL BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS ON OCTOBER 17, 1995
The undersigned hereby appoints Joyce R. Hertz and Alexander Beltran, and
each of them, as attorneys and proxies for the undersigned, each with full power
of substitution, and hereby authorizes them to represent and to vote as
designated below, all of the shares of Common Stock, par value $10.00 per share,
of Abigail Adams National Bancorp, Inc., a Delaware corporation (the "Company"),
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
of the Company to be held on October 17, 1995 at 3:00 p.m. local time, and at
any adjournments thereof.
The undersigned instructs said proxies to vote as follows:
1. Election of the nominees for Directors. The Board of Directors recommends a
vote FOR all the nominees listed below.
-----
----- FOR all nominees listed below (except as marked to the contrary
below).
-----
----- WITHHOLD AUTHORITY to vote for all nominees listed below.
Nominees: Barbara Davis Blum, Shireen Dodson, Susan Hager, Jeanne D.
Hubbard, Clarence L. James, Jr., Marshall T. Reynolds, Robert L. Shell,
Jr., Dana Stebbins and Susan J. Williams
INSTRUCTIONS: To withhold authority to vote for an individual nominee, write
that nominee's name on the line provided below.
----------------------------------------------
(Over)
<PAGE>
2. Ratification of the selection of the firm of KPMG Peat Marwick LLP as
independent certified public accountants for the Company for 1994 and 1995.
----- ----- ----
----- FOR ----- AGAINST ---- ABSTAIN
3. In their discretion with respect to such other business as properly
may come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is given, this Proxy will
be voted FOR proposals 1 and 2 above. If any other business is presented at the
Annual Meeting, the Proxy will be voted in accordance with the judgment of the
proxies.
Please sign your name EXACTLY as it
appears hereon. If shares are held
jointly, each holder should sign. A
corporation is requested to sign its
name by its President or other
authorized officer, with the office held
designated. A partnership should sign in
the partnership name by a partner.
Executors, trustees, administrators,
guardians and attorneys are requested
indicate the capacity in which they are
signing. Attorneys should submit powers
of attorney.
Dated______________________, 1995
-----------------------------------
-----------------------------------
(Signature of Stockholder)
PLEASE SIGN, DATE AND RETURN THIS PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID
ENVELOPE.
<PAGE>
