SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Scott & Stringfellow Financial, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) 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:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[LOGO]
Scott & Stringfellow Financial, Inc.
909 EAST MAIN STREET
RICHMOND, VIRGINIA 23219
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF SCOTT & STRINGFELLOW FINANCIAL, INC.:
The 1995 Annual Meeting of Shareholders of Scott & Stringfellow Financial,
Inc. (the "Company") will be held at the Crestar Bank Building, 919 East Main
Street, Richmond, Virginia, on Tuesday, October 17, 1995, at 4:30 p.m., Eastern
Daylight Time, for the following purposes:
1. To elect four directors for three-year terms and one director for a
two-year term;
2. To approve a 150,000 share increase in the total number of common shares
authorized for issuance and purchase under the Scott & Stringfellow Financial,
Inc. Employee Stock Purchase Plan;
3. To ratify the selection by the Board of Directors of KPMG Peat Marwick
LLP as independent certified public accountants of the Company for the fiscal
year ending June 28, 1996; and
4. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only holders of record of shares of Common Stock at the close of business
on September 8, 1995, will be entitled to vote at the meeting and any
adjournments thereof. Your attention is directed to the accompanying Proxy
Statement and 1995 Annual Report.
All Shareholders are cordially invited to attend the meeting. Whether or
not you plan to attend the meeting, it is important that your shares be
represented and voted at the meeting. Please promptly vote, date, sign, and
return the enclosed proxy card using the envelope provided. Thank you.
By Order of the Board of Directors,
DAVID PLAGEMAN
EXECUTIVE VICE PRESIDENT
AND SECRETARY
September 21, 1995
<PAGE>
Scott & Stringfellow Financial, Inc.
909 EAST MAIN STREET
RICHMOND, VIRGINIA 23219
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement, mailed to shareholders on or about September 21,
1995, is furnished in connection with the solicitation by Scott & Stringfellow
Financial, Inc. (the "Company") of proxies in the accompanying form for use at
the Annual Meeting of Shareholders (the "Annual Meeting") to be held on October
17, 1995, and at any adjournments thereof. A copy of the Annual Report of the
Company for the fiscal year ended June 30, 1995, has been mailed to you with
this Proxy Statement.
In addition to the solicitation of proxies by mail, the Company's officers
and regular employees, without compensation other than regular compensation, may
solicit proxies by telephone, telegraph, and personal interview. The Company
will bear the cost of all solicitation.
On September 8, 1995, the date for determining shareholders entitled to
vote at the meeting, there were 2,109,420 shares of common stock of the Company
("Common Stock") outstanding and entitled to vote. Each such share of Common
Stock entitles the holder thereof to one vote.
Any shareholder giving a proxy may revoke it at any time before it is
voted. A proxy may be revoked by filing with the Secretary of the Company
written notice of revocation bearing a later date than the proxy, by duly
executing a later dated proxy relating to the same shares, or by attending the
Annual Meeting and voting in person. A proxy, if executed and not revoked, will
be voted for the election of the nominees for director named herein, for the
proposed amendment of the Employee Stock Purchase Plan as described herein, and
for the ratification of KPMG Peat Marwick LLP as independent certified public
accountants of the Company unless such proxy contains specific instructions to
the contrary, in which event it will be voted in accordance with such
instructions.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide for three classes of
directors with staggered terms of office and provide that upon the expiration of
the term of office for a class of directors, nominees for that class shall be
elected for a term of three years. At this year's Annual Meeting, William P.
Schubmehl, Robert L. Hintz and David Plageman are nominees for re-election for
three-year terms as directors. In addition, John Sherman, Jr. and Steven C.
DeLaney, both of whom have been appointed to the Board of Directors since the
last Annual Meeting, are being presented to the shareholders for election as
directors. Mr. Sherman is a nominee for a three-year term expiring in 1998 and
Mr. DeLaney is a nominee for a two-year term expiring in 1997. Proxies may not
be voted for a greater number of persons than the number of nominees named
herein.
Although the Company anticipates that all of the nominees will be able to
serve, if at the time of the meeting any nominees are unable or unwilling to
serve, shares represented by properly executed proxies will be voted at the
discretion of the persons named therein for such other person or persons as the
Board of Directors may designate.
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The Company was formed in 1984 for the purpose of becoming the holding
company of Scott & Stringfellow, Inc. ("Scott & Stringfellow"). Accordingly, all
service by the Company's officers and directors prior to 1984 refers to service
as an officer or director of Scott & Stringfellow.
The following contains certain information concerning the nominees for
election and those directors whose terms continue beyond the date of the Annual
Meeting.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" ALL OF THE NOMINEES.
NOMINEES FOR ELECTION FOR THREE-YEAR TERMS
WILLIAM P. SCHUBMEHL, age 63, has served as a director of the Company since
1981. He was named to the position of President and Chief Executive Officer of
the Company and Scott & Stringfellow in April 1992. Mr. Schubmehl served as
Executive Vice President from 1990 until April 1992, and as Senior Vice
President from 1986 to 1990, during which periods he had primary responsibility
for branch administration and retail sales. Mr. Schubmehl, a member of the
Executive Committee, joined Scott & Stringfellow in 1978.
ROBERT L. HINTZ, age 65, has served as a director of the Company since 1989. He
is Chairman of the Board of R. L. Hintz and Associates, a management consulting
firm. He was an Executive Vice President of CSX Corporation from 1984 to 1988,
during which time he held the additional positions of Chief Executive Officer of
CSX Energy and Property Groups, 1985-1988, and Chairman and Chief Executive
Officer of Sea-Land Corporation, 1987-1988. Mr. Hintz is a director of Reynolds
Metals Company, Chesapeake Corporation, and Ashland Coal, Inc.
DAVID PLAGEMAN, age 55, has served as a director of the Company since 1976. He
has served as Executive Vice President and Secretary of the Company since 1984.
Mr. Plageman, an Investment Broker, joined Scott & Stringfellow in 1974. Mr.
Plageman was a member of the Executive Committee until January 1995.
JOHN SHERMAN, JR., age 49, was appointed a director of the Company in January
1995, and is standing for election to his first three-year term. He was elected
Executive Vice President and Chief Operating Officer in July 1995 and is a
member of the Executive Committee. From August 1993 until July 1995, he served
as Senior Vice President for Branch Administration. Mr. Sherman joined the
Company in July 1988 and served as Branch Manager of the Kinston, N.C. office
until August 1993.
NOMINEE FOR ELECTION FOR TWO-YEAR TERM
STEVEN C. DELANEY, age 41, was appointed a director in July 1995 and is standing
for election for a two-year term in order to balance the number of directors in
each class. Mr. DeLaney serves as Senior Vice President and Chief Financial
Officer with responsibility for the finance, accounting, operations and
technology functions. He was appointed First Vice President and Chief Financial
Officer in October 1992. Prior to joining the Company in July 1992, Mr. DeLaney
was a senior financial executive for a financial services holding company for
over fifteen years.
DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 1996
SIDNEY BUFORD SCOTT, age 62, has served as Chairman of the Board of the
Company and Scott & Stringfellow since 1974. Mr. Scott, a first cousin of Mr.
Bocock (see below), joined Scott & Stringfellow in 1958. He is a member of the
Executive Committee, and serves as a Director of Ethyl Corporation, Albemarle
Corporation, and Great Eastern Energy and Development Corporation.
JOHN J. MULDOWNEY, age 56, has been a director of the Company since 1974.
Mr. Muldowney, an Investment Broker and Chairman of the internal Credit
Committee, joined Scott & Stringfellow in 1970 and was named Senior Vice
President in 1980. Prior to January 1994, Mr. Muldowney also served as head of
the Over-the-Counter Trading Department.
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<PAGE>
WILLIAM W. BERRY, age 63, has been a director of the Company since June of
1993. He is retired from the position of Chairman of the Board of Dominion
Resources, Inc., which he held from May 1990 to December 1992. Prior to May
1990, he served as Chairman of the Board and Chief Executive Officer of Dominion
Resources since July 1986. Mr. Berry is a director of Ethyl Corporation,
Albemarle Corporation, and Universal Corporation.
WILLIAM F. CALLIOTT, age 51, has served as a director of the Company since
October 1993. He has been an Executive Vice President and director of Scott &
Stringfellow since the 1989 acquisition of Investment Corporation of Virginia,
which he joined in 1967. Mr. Calliott is an Investment Broker in Scott &
Stringfellow's Norfolk office.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
FREDERIC SCOTT BOCOCK, age 63, Vice Chairman of the Board of Directors, has
served as a director of the Company since 1974. He also serves as Chairman and
Managing Director of Scott & Stringfellow Capital Management, an investment
advisory affiliate of the Company, and is a member of the Executive Committee.
Mr. Bocock, a first cousin of Mr. Scott (see above), joined Scott & Stringfellow
in 1957.
R. BRUCE CAMPBELL, age 55, joined Scott & Stringfellow in 1971 and has
served as a director of the Company since 1978. Mr. Campbell, an Investment
Broker in the Staunton office, has held the position of Senior Vice President
since 1987 and has responsibility for the nine branch offices which comprise the
Blue Ridge Region.
R. GORDON SMITH, age 57, has served as a director of the Company since
1987. He is a partner in the law firm of McGuire, Woods, Battle & Boothe,
L.L.P., which serves as General Counsel to the Company.
CERTAIN INFORMATION CONCERNING THE
BOARD OF DIRECTORS AND ITS COMMITTEES
COMMITTEES OF THE BOARD AND BOARD MEETINGS
The Board of Directors held 11 meetings during the fiscal year ended June
30, 1995. All directors attended at least 75% of the aggregate of the meetings
of the Board and the meetings of all committees thereof on which they serve.
Messrs. Scott, Bocock, Schubmehl, Sherman and DeLaney serve on the
Executive Committee, which held approximately 50 meetings during fiscal 1995.
Mr. Plageman served on the Executive Committee until January 1995. Mr. Sherman
and Mr. DeLaney began serving on the Executive Committee in January and July
1995, respectively. The Executive Committee is empowered to exercise all of the
authority of the Board of Directors during the interim between Board meetings,
subject to the limitations of the Virginia Stock Corporation Act.
Messrs. Plageman, Schubmehl, Berry, Hintz, and Smith serve on the Audit
Committee, which held four meetings during fiscal 1995. The Audit Committee
meets with the Company's internal auditing staff and reviews and reports to the
Board with respect to various auditing and accounting matters, including the
selection and fees of the Company's independent auditors, the scope of audit
procedures, the nature of services to be performed by the independent auditors,
and the Company's accounting practices.
The Board has established two standing committees which administer and
monitor certain executive and management compensation programs. These committees
are the Compensation Committee consisting of Messrs. Berry, Hintz, and Smith,
and the Stock Option Committee consisting of Messrs. Berry, Hintz, and Smith.
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<PAGE>
For additional information on these two committees and the compensation programs
which they administer, see the section of this Proxy Statement entitled
COMMITTEE REPORT ON EXECUTIVE COMPENSATION.
The Company does not have a standing Nominating Committee.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no fees for serving as
directors or for serving on any committee of the Board. Any director who is not
an employee of the Company receives an annual director's fee of $6,000.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding shares of Common Stock
beneficially owned as September 8, 1995 by (i) each person who is known by the
Company to beneficially own more than 5% of the outstanding shares of Common
Stock; (ii) each director and nominee for director of the Company; and (iii) the
directors and executive officers as a group. Unless otherwise noted, each
individual has sole voting power and sole investment power with respect to the
number of shares set forth opposite his name. The address of Mr. Bocock and Mr.
Scott is 909 East Main Street, Richmond, Virginia 23219. The address of Mr.
Kellogg is c/o Spear, Leeds & Kellogg, 120 Broadway, New York, New York 10271.
<TABLE>
<CAPTION>
PERCENT OF
NAME NUMBER OF SHARES(6) OUTSTANDING SHARES
<S> <C> <C>
Peter R. Kellogg (1) 239,500 11.3%
Frederic Scott Bocock (2) 193,320 9.1
Sidney Buford Scott (3) 172,320 8.2
John J. Muldowney 85,104 4.0
William F. Calliott 50,613 2.5
David Plageman (4) 48,018 2.3
R. Bruce Campbell (5) 31,944 1.5
William P. Schubmehl 31,546 1.5
John Sherman, Jr. 13,875 0.7
Robert L. Hintz 6,000 0.3
R. Gordon Smith 4,800 0.2
William W. Berry 2,400 0.1
Steven C. DeLaney 905 0.0
All directors and executive officers
as a group (17 persons) 653,533 30.7
</TABLE>
(1) Information concerning the shares owned by Mr. Kellogg was derived from
a Form 4 filed with the Securities and Exchange Commission on February 2, 1995.
According to this filing, Mr. Kellogg owns 60,000 shares directly. He also
indirectly controls: 84,500 shares through a corporation which he owns; 60,000
shares owned by his wife; and 35,000 shares owned by a charitable foundation.
Mr. Kellogg disclaims beneficial ownership of the shares owned by the
corporation, his wife, and the charitable foundation.
(2) Includes 108,000 shares owned by Mr. Bocock's children and trusts for
his children, as to which shares Mr. Bocock disclaims beneficial ownership.
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<PAGE>
(3) Includes 16,000 shares owned by Mr. Scott's wife and children, as to
which shares Mr. Scott disclaims beneficial ownership.
(4) Includes 2,200 shares owned by Mr. Plageman's children as to which Mr.
Plageman shares voting and/or investment power.
(5) Includes 15,000 shares owned by Mr. Campbell's wife, as to which shares
Mr. Campbell disclaims beneficial ownership.
(6) Beneficial ownership shown for the following individuals and group
includes the indicated number of shares of Common Stock that may be purchased
upon the exercise of stock options which are exercisable within the next sixty
days: Mr. Bocock (3,720), Mr. Scott (1,920), Mr. Muldowney (1,104), Mr. Calliott
(1,920), Mr. Plageman (1,560), Mr. Campbell (1,944), Mr. Schubmehl (1,268), Mr.
Sherman (264), Mr. DeLaney (120), and all other executive officers as a group
(5,520).
EXECUTIVE COMPENSATION
The following table provides information concerning the compensation and
stock option grants received by the Company's Chief Executive Officer and each
of its four other most highly compensated executive officers for the fiscal year
ended June 30, 1995, and for each of the two previous fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION ALL OTHER
NAME AND BONUS OTHER ANNUAL OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY (1) COMPENSATION (2) GRANTED (#)(3) (4)(5)(6)
<S> <C> <C> <C> <C> <C> <C>
William P. Schubmehl 1995 $154,350 $120,000 $2,106 0 $ 19,758
President and 1994 154,350 188,000 1,200 2,400 26,152
Chief Executive Officer 1993 147,000 165,000 0 2,400 28,513
Frederic Scott Bocock 1995 40,000 94,195 2,106 0 222,868
Vice Chairman 1994 25,000 143,602 1,100 0 258,297
1993 25,000 100,138 0 1,800 267,521
Sidney Buford Scott 1995 0 84,000 2,106 0 252,057
Chairman of the Board 1994 0 130,000 0 0 238,728
1993 0 110,000 0 1,800 244,174
John Sherman, Jr. 1995 110,000 90,000 13,337 2,500 28,073
Executive Vice President and 1994 96,250 68,958 29,305 2,400 56,484
Chief Operating Officer 1993 -- -- -- -- --
Steven C. DeLaney 1995 90,000 73,000 1,581 2,500 7,575
Senior Vice President and 1994 80,000 80,000 0 2,400 7,695
Chief Financial Officer 1993 63,807 10,000 0 600 3,425
</TABLE>
(1) The Company pays discretionary cash bonuses to executive and management
personnel based on individual performance and Company financial results. SEE
COMMITTEE REPORT ON EXECUTIVE COMPENSATION -- CASH BONUSES. Included in the
amounts shown as Bonus for 1995, are the following discretionary cash bonuses:
Mr. Schubmehl -- $120,000; Mr. Bocock -- $81,000; Mr. Scott -- $84,000; Mr.
Sherman -- $7,650; and
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Mr. DeLaney -- $73,000. The 1995 Bonus amounts also include certain bonuses paid
to the following officers based on individual department results: Mr.
Bocock -- $13,195 and Mr. Sherman -- $82,350.
(2) Other Annual Compensation includes forgivable loan expense of $12,887
paid to Mr. Sherman, and the following amounts representing spousal travel or
other miscellaneous income: Mr. Schubmehl -- $2,106; Mr. Bocock -- $2,106; Mr.
Scott -- $2,106; Mr. Sherman -- $450; and Mr. DeLaney -- $1,581.
(3) The stock options granted to Mr. Sherman and Mr. DeLaney in the year
ended June 30, 1995, carry an exercise price of $12.00 per share which was the
fair market value of the Company's Common Stock as of the date of grant, which
was March 21, 1995. The options have a ten-year term and vest at the rate of 20%
per year beginning on the second anniversary of the date of grant. SEE COMMITTEE
REPORT ON EXECUTIVE COMPENSATION -- STOCK OPTIONS.
(4) Includes in All Other Compensation for fiscal 1995, the following
amounts of commissions and incentives earned from securities brokerage
activities: Mr. Schubmehl -- $7,396; Mr. Bocock -- $200,507; Mr.
Scott -- $230,798; and Mr. Sherman -- $18,690.
(5) The Company has a voluntary contributory profit sharing plan that
covers substantially all employees. SEE COMMITTEE REPORT ON EXECUTIVE
COMPENSATION -- PROFIT SHARING AND DEFERRED PLANS. Company contributions to the
plan may be in the form of either discretionary matching contributions or
additional discretionary contributions. Included in All Other Compensation for
fiscal year 1995 are the following amounts representing Company contributions to
the profit sharing plan: Mr. Schubmehl -- $5,722; Mr. Bocock -- $5,722; Mr.
Scott -- $5,722; Mr. Sherman -- $5,722; and Mr. DeLaney -- $5,722.
(6) The Company has established a non-qualified deferred compensation plan
for selected highly-compensated employees. SEE COMMITTEE REPORT ON EXECUTIVE
COMPENSATION -- PROFIT SHARING AND DEFERRAL PLANS. Included in All Other
Compensation for fiscal 1995 are the following amounts which represent Company
contributions and voluntary deferrals under the deferred compensation plan: Mr.
Schubmehl -- $6,640; Mr. Bocock -- $16,640; Mr. Scott -- $15,037; Mr.
Sherman -- $3,661; and Mr. DeLaney -- $1,653.
The following table provides a summary of the stock options granted to the
Company's five most highly-compensated executive officers during the fiscal year
ended June 30, 1995.
OPTION GRANTS TABLE
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS GRANTED APPRECIATION RATES
OPTIONS TO EMPLOYEES EXERCISE PRICE EXPIRATION (2)
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
William P. Schubmehl 0 N/A N/A N/A N/A N/A
Frederic Scott Bocock 0 N/A N/A N/A N/A N/A
Sidney Buford Scott 0 N/A N/A N/A N/A N/A
John Sherman, Jr. 2,500 5.81% $12.00 3-21-05 $18,875 $47,800
Steven C. DeLaney 2,500 5.81% 12.00 3-21-05 18,875 47,800
</TABLE>
(1) The fiscal 1995 option grants shown above were made pursuant to the
terms of the Scott & Stringfellow Financial, Inc. Stock Option Plan as amended
in 1993. The exercise price of the options granted was equal to the fair market
value of the Company's Common Stock on the date of grant. The options are not
exercisable during the first two years from the date of grant, and thereafter
vest at the cumulative rate of 20% on each anniversary of the date of grant
beginning with the second anniversary, such that the options are fully vested on
the sixth anniversary of the date of grant.
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<PAGE>
(2) The potential realized values shown above assume that the market price
of the Company's Common Stock appreciates at the compound annual percentage
rates indicated from the date of grant to the end of the ten-year option term.
These amounts are provided only to comply with Securities and Exchange
Commission rules and are based on theoretical assumptions. There is no assurance
that the actual values realized will approximate the amounts shown above.
The following table provides information concerning any stock options
exercised in the fiscal year ended June 30, 1995 by the Company's five most
highly-compensated executive officers and the value of their unexercised stock
options at June 30, 1995.
AGGREGATE OPTION EXERCISES DURING FISCAL
1995 AND FISCAL YEAR END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES ACQUIRED VALUE JUNE 30, 1995(#) AT JUNE 30, 1995($)(1)(2)
NAME ON EXERCISE(#)(1) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
William P. Schubmehl 2,952 $14,730 960 6,168 $ 330 $ 8,243
Frederic Scott Bocock -- -- 3,240 3,360 11,597 6,614
Sidney Buford Scott -- -- 1,920 2,880 3,577 3,209
John Sherman, Jr. -- -- 264 5,596 82 2,604
Steven C. DeLaney -- -- 120 5,380 82 2,604
</TABLE>
(1) The closing price of the Company's Common Stock was $12.25 per share on
June 30, 1995.
(2) The value of unexercised options is determined by the difference
between the fair market value of the option shares ($12.25 per share) and the
exercise prices of the options held at June 30, 1995.
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors of the Company has granted authority to three
committees to administer the various forms of compensation paid to executive
officers. These committees include the Compensation Committee, the Stock Option
Committee, and the Executive Committee (collectively, the "Committees"). The
recommendations of each of these Committees are reviewed and approved by the
full Board of Directors.
THE COMMITTEES
The Compensation Committee consists of the three outside directors: Mr.
Berry, Mr. Hintz, and Mr. Smith. The primary function of this committee is to
recommend to the Board of Directors the amount of any discretionary annual
bonuses paid to each executive officer under the Company's executive and
management bonus plan.
The Stock Option Committee is responsible for the granting of stock option
awards to executive officers and other employees under the Company's Stock
Option Plan. This committee is comprised of the three outside directors: Messrs.
Berry, Hintz and Smith.
The Executive Committee has the responsibility for determining the base
salary to be paid to each executive officer except Mr. Scott, Mr. Bocock, and
Mr. Schubmehl, whose salaries are set by the Board of Directors. In addition,
the Executive Committee makes a recommendation to the Board of Directors with
respect to the annual discretionary contribution to the Company's profit sharing
plan, and determines which executive officers and other employees are eligible
to participate in the deferred compensation plan.
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<PAGE>
GENERAL OBJECTIVE
The Company believes that maintaining and motivating a highly qualified
management team is essential for the continued growth and prosperity of the
Company, and will inure to the benefit of the shareholders. The objective of the
Company's compensation programs is to provide its executive officers with both a
short-term incentive for maintaining and improving the profitability of the
Company long-term deferred compensation, and a long-term incentive aligned with
the interests of the shareholders. Accordingly, the Company's compensation
program consists of five principal components: base salary, annual cash bonus,
profit sharing contributions, non-qualified deferred compensation, and stock
option awards.
BASE SALARY
The Company strives to maintain base salaries for full-time management at
levels which are generally competitive with the marketplace. Annual increases in
base salary are determined largely by individual performance subject to a
percentage limitation based in part on Company performance and the rate of
inflation among other things. Given the relatively cyclical nature of the
securities industry, the Company attempts to limit its exposure to fixed salary
expense by providing its executives with the opportunity for additional cash
bonus payments when the Company's performance dictates.
ANNUAL CASH BONUS
The Company has traditionally established a calendar year cash bonus pool
based largely on Company financial performance. Individual awards made from this
bonus pool are determined by the Compensation Committee with input from
executive management and are based on factors such as individual and
departmental performance and length of service. In the year ended June 30, 1995,
total cash bonus awards of $641,000 were paid to a total of twenty three (23)
individuals. This total bonus amount was equivalent to 13% of operating income
before discretionary compensation and income taxes for calendar year 1994.
PROFIT SHARING AND DEFERRAL PLANS
The Company maintains a voluntary contributory profit sharing plan which
covers substantially all of its employees. At its discretion, the Company may
make both matching contributions on employee contributions and additional
contributions based on Company performance. Employee participants may contribute
up to fifteen percent of their earnings to the plan per year, subject to a
maximum Internal Revenue Code limitation. For the year ended June 30, 1995, the
Company's contributions to the profit sharing plan included matching
contributions of approximately $280,000, and an additional discretionary
contribution of approximately $800,000, of which $6,000 was used to pay expenses
related to the plan and $794,000 was paid to the plan for allocation to
participants. The additional discretionary contribution was equivalent to
approximately 16% of operating income before discretionary compensation and
income taxes for calendar 1994.
In addition, the Company has established the Scott & Stringfellow, Inc.
Deferral Plan for selected highly compensated employees. This non-qualified and
unfunded deferred compensation plan allows participants to defer compensation
and to receive discretionary profit sharing contributions beyond the Internal
Revenue Code limitations governing the Company's profit sharing plan. For the
year ended June 30, 1995, the Company's discretionary contribution to the
deferral plan on behalf of 43 participants was approximately $120,000.
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<PAGE>
STOCK OPTION PLAN
The Stock Option Committee generally awards stock option grants on an
annual basis to those officers and employees of the firm who have contributed to
the growth and profitability of the Company and who can be expected to continue
to make such contributions in the future. Under the terms of the Company's Stock
Option Plan, the option price may not be less than the fair market value of the
stock on the date of grant. Options are generally granted with ten-year terms
and are subject to vesting over a six-year period. In the year ended June 30,
1995, options to acquire a total of 43,000 shares of common stock at a price of
$12.00 per share were granted to a total of 66 officers and employees.
SUBMITTED BY THE FOLLOWING COMMITTEES
OF THE COMPANY'S BOARD OF DIRECTORS:
<TABLE>
<S> <C>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
William W. Berry William W. Berry
Robert L. Hintz Robert L. Hintz
R. Gordon Smith R. Gordon Smith
</TABLE>
EXECUTIVE COMMITTEE
Sidney Buford Scott
Frederic Scott Bocock
William P. Schubmehl
David Plageman (until January 1995)
John Sherman, Jr.
Steven C. DeLaney
9
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph and table compare the cumulative total shareholder
return on the Company's Common Stock for the last five fiscal years with the
cumulative total return of the NASDAQ Market Value Index and the cumulative
total return of a Peer Group Index consisting of eleven (11) publicly-held,
regional investment companies, which management believes are relatively
comparable to the Company. The peer group index, which is weighted by market
value, consists of the Common Stock of the following companies:
<TABLE>
<S> <C>
A.G. Edwards, Inc. Morgan Keegan, Inc.
Alex. Brown Inc. Piper Jaffray Companies
First Albany Companies Inc. Raymond James Financial, Inc.
Interstate/Johnson Lane, Inc. Scott and Stringfellow Financial, Inc.
Legg Mason, Inc. The Ziegler Company, Inc.
McDonald & Company Investments, Inc.
</TABLE>
The graph and table assume that $100 was invested on June 30, 1990, in the
Company's Common Stock, the NASDQ Market Value Index and the peer group index,
and that all dividends were reinvested over the ensuing 5-year period.
[GRAPH]
<TABLE>
<CAPTION>
FISCAL YEARS ENDED JUNE,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Scott and Stringfellow Financial $100 $150 $182 $222 $215 $239
NASDAQ Market Value Index $100 $ 94 $102 $125 $137 $160
Selected Peer Group Index $100 $125 $152 $206 $203 $285
</TABLE>
10
<PAGE>
APPROVAL OF INCREASE IN SHARES AUTHORIZED FOR ISSUANCE
AND PURCHASE UNDER THE SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
INTRODUCTION
At the October 1992 Annual Meeting, shareholders of the Company approved
the Scott & Stringfellow Financial, Inc. 1992 Employee Stock Purchase Plan (the
"Purchase Plan"). The Purchase Plan became effective January 1, 1993, subject to
an initial authorization of 120,000 shares of Common Stock. From January 1, 1993
through June 30, 1994, a total of 52,800 shares of Common Stock were issued
under the Purchase Plan, resulting in a balance of 67,200 authorized and
unissued shares at June 30, 1994. This number of remaining shares was increased
by 13,440 shares to an adjusted total of 80,640 as a result of a 20% stock
dividend distributed on August 26, 1994. Since July of 1994, an additional
43,066 shares have been issued under the Purchase Plan reducing the authorized
and unissued shares to 37,574 at June 30, 1995.
On June 27, 1995, the Board of Directors of the Company, subject to
shareholder approval, authorized an additional 150,000 of Common Stock for
issuance under the Purchase Plan. Along with the initial authorization of
120,000 shares, adjusted to 144,000 due to the 20% stock dividend, the 150,000
additional shares bring the total shares which could be issued under the
Purchase Plan to 294,000 shares. This total would be equal to approximately 13%
of total shares outstanding if, and when, all authorized shares were issued
under the Purchase Plan.
The principal features of the Purchase Plan are summarized below under
General Description. This summary is qualified by reference to the complete text
of the Purchase Plan, which is attached as Exhibit A to this Proxy Statement.
GENERAL DESCRIPTION
All present and future employees of the Company are eligible to participate
in the Purchase Plan, other than employees (a) whose customary employment is
twenty hours or less per week or is for not more than five months in a calendar
year, or (b) who have not been employed for more than one year.
A participant in the Purchase Plan may authorize monthly salary deductions
of a maximum of 15% and a minimum of $75 of quarterly base compensation. The
amounts so deducted and contributed are applied to the purchase of full and
fractional shares of unissued Common Stock at 85% of the fair market value of
such shares on the date of purchase. Shares will be purchased by the Purchase
Plan's trustee (the "Trustee") for participating employees on the last business
day of each calendar quarter. The fair market value of shares purchased under
the Purchase Plan for a participant in any calendar year cannot exceed $25,000.
In addition, once a participant owns (or is considered as owning within the
meaning of Code section 424(d) and treating any outstanding options as
exercised) stock possessing 5% or more of the voting power of the Company, he
will not be able to purchase any more stock under the Purchase Plan.
Shares purchased under the Purchase Plan will be held by the Trustee in
separate accounts for each participant. Dividends paid on shares held in such
accounts will be used to purchase additional shares.
It is contemplated the shares required for the Purchase Plan will be
purchased from the Company but, if the Committee deems it to be appropriate, the
Trustee may be directed to make purchases of shares on the open market or in
private transactions, in which case the Company will make up the difference
between the purchase price and the price at which the shares will be purchased
for participants.
11
<PAGE>
Participants may increase or decrease their payroll deductions at any time
but not more than once each calendar quarter. Participants may also withdraw
from the Purchase Plan at any time. If a participant withdraws from the Purchase
Plan, he may elect to have his shares sold and the proceeds, less selling
expenses, remitted to him or he may elect to have a certificate for the full
shares credited to his account forwarded to him. In that instance, any
fractional shares will be sold and the proceeds, less selling expense, remitted
to him. A participant who has withdrawn may not participate in the Purchase Plan
again for twelve months.
In the event of retirement or termination of employment, any contributions
which have not yet been used to purchase shares will be refunded and a
certificate issued for the full shares in the participant's account. Instead, a
participant may elect to have his shares sold and the proceeds, less selling
expenses, remitted to him. In the event of a participant's death, any
contributions which have not yet been used to purchase shares and all shares in
his account will be delivered to his beneficiary designated in writing and filed
with the Company or, if no beneficiary has been designated or survives the
participant, to his estate.
ADMINISTRATION AND FUTURE AMENDMENTS
The Purchase Plan will be administered by the Committee, unless the
directors appoint another committee. Insofar as it is necessary to satisfy the
requirements of Section 16(b) of the Securities Exchange Act of 1934, no member
of the Committee may participate in the Purchase Plan.
The directors may at any time, or from time to time, amend the Purchase
Plan in any respect; provided, however, that the shareholders of the Company
must approve any amendment that would materially (i) increase the benefits
accruing to participants under the Purchase Plan, (ii) increase the number of
securities that may be issued under the Purchase Plan, or (iii) modify the
requirements as to eligibility for participation in the Purchase Plan.
FEDERAL INCOME TAX CONSEQUENCES
A participant will not incur federal income tax as a result of
participating in the Purchase Plan or as a result of the purchase of Common
Stock at 85% of fair market value. An employee who, either through sale, gift or
transfer (other than at death or because of a corporate reorganization),
disposes of Common Stock acquired under the Purchase Plan, will recognize
capital gain or loss if the disposition occurs at least two years after the date
the shares were acquired. A participant disposing of such shares before two
years have expired will have ordinary income generally equal to the difference
between the purchase price and the fair market value of the Common Stock on the
date of purchase, and long-term or short-term capital gain (depending on how
long the employee held the shares) on the excess, if any, on the fair market
value on the date of sale over the fair market value on the date of purchase.
The Company will not be entitled to a business expense deduction in
connection with the sale of shares under the Purchase Plan, unless a participant
disposes of Common Stock received under the Purchase Plan in violation of the
above holding period requirements. In that case, the Company will be entitled to
a business expense deduction to the extent ordinary income is recognized by the
participant.
This summary of federal income tax consequences does not purport to be
complete. Reference should be made to applicable provisions of the Code. There
may also be state and local income taxes applicable to the transactions
contemplated by the Purchase Plan.
12
<PAGE>
VOTE REQUIRED
Approval of the increase of 150,000 shares to the total shares authorized
for issuance to the Purchase Plan requires the affirmative vote of the holders
of a majority of the shares of Common Stock voting at the annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
INCREASE IN AUTHORIZED SHARES FOR THE PURCHASE PLAN.
CERTAIN TRANSACTIONS
Certain directors and executive officers maintain margin accounts with
Scott & Stringfellow. Such extensions of credit are made in the ordinary course
of business, on the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons, and
do not involve more than the normal risk of collectability or present other
unfavorable features.
McGuire, Woods, Battle & Boothe, L.L.P., of which R. Gordon Smith is a
partner, serves as General Counsel to the Company and its subsidiaries.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
designated KPMG Peat Marwick LLP to serve as the independent certified public
accountants of the Company for its fiscal year ending June 28, 1996, and has
directed a vote of shareholders to be taken to ascertain their approval or
disapproval of that designation. In the event the shareholders do not ratify the
appointment of KPMG Peat Marwick LLP, the election of other independent auditors
will be considered by the Board of Directors.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPOINTMENT OF
KPMG PEAT MARWICK LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING JUNE 28, 1996.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting. He will have an opportunity to make a statement if he so desires
and will be available to answer appropriate questions from shareholders.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
If any other matters should properly come before the meeting, and any
adjournment thereof, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy in the manner they deem best.
PROPOSALS FOR THE 1996 ANNUAL MEETING
Any shareholder desiring to make a proposal to be acted upon at the 1996
Annual Meeting of Shareholders must present such proposal to the Company at its
principal office in Richmond, Virginia, no later than May 24, 1996, in order for
the proposal to be considered for inclusion in the Company's Proxy Statement.
SIDNEY BUFORD SCOTT
CHAIRMAN OF THE BOARD
13
<PAGE>
EXHIBIT A
SCOTT & STRINGFELLOW FINANCIAL, INC.
1992 EMPLOYEE STOCK PURCHASE PLAN
AMENDMENT AND RESTATEMENT
(AS OF JUNE 27, 1995)
1. PURPOSE AND EFFECT OF PLAN
The purpose of the Plan is to secure for the Company and its stockholders
the benefits of the incentive inherent in the ownership of Common Stock by
present and future employees of the Company and its Subsidiaries. The Plan
conforms to the provisions of Rule 16b-3 of the Act and is intended to comply
with the terms of Code section 423.
2. SHARES RESERVED FOR THE PLAN
There shall be reserved for issuance and purchase by employees under the
Plan an aggregate of 294,000 shares of Common Stock, subject to adjustment as
provided in Section 12. Shares subject to the Plan shall be authorized but
unissued shares. Shares needed to satisfy the needs of the Plan may be acquired
from the Company or by purchases at the expense of the Company on the open
market or in private transactions.
3. DEFINITIONS
Where indicated by initial capital letters, the following terms shall have
the following meanings:
a. ACT: The Securities Exchange Act of 1934.
b. BASE COMPENSATION: The regular earnings of an Eligible Employee,
including overtime, bonuses, and salary reduction contributions pursuant to
elections under a plan subject to Code section 125 or 401(k).
c. BOARD: The Board of Directors of the Company.
d. CODE: The Internal Revenue Code of 1986, as amended, or any subsequently
enacted federal revenue law. A reference to a particular section of the Code
shall include a reference to any regulations issued under the section and to
the corresponding section of any subsequently enacted federal revenue law.
e. COMMITTEE: The committee established pursuant to Section 4 to be
responsible for the general administration of the Plan.
f. COMMON STOCK: The Company's common stock, $.10 par value.
g. COMPANY: Scott & Stringfellow Financial, Inc. and any successor by
merger, consolidation or otherwise.
h. ELIGIBLE EMPLOYEE: Any employee of the Company or its Subsidiaries who
meets the eligibility requirements of Section 5.
i. ENROLLMENT FORM: The form filed with the Committee authorizing payroll
deductions pursuant to Section 6.
j. FAIR MARKET VALUE: The average of the closing bid and asked prices as
reported by NASDAQ for the five trading days prior to the last trading day
of the calendar quarter.
A-1
<PAGE>
k. INVESTMENT ACCOUNT: The account established for each Participating
Employee to hold Common Stock purchased under the Plan pursuant to
Section 7.
l. INVESTMENT DATE: When shares of Common Stock are acquired from the
Company, the last business day of each calendar quarter on which shares of
Common Stock are or could be traded over-the-counter. When shares of Common
Stock are acquired in the over-the-counter market, the date on which the
shares of Common Stock are purchased.
m. PARENT: Any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, as of an Investment Date, each of
the corporations other than the Company owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
n. PARTICIPATING EMPLOYEE: Eligible Employees who elect to participate in
the Plan by filing an Enrollment Form pursuant to Section 6.
o. PAYROLL DEDUCTION ACCOUNT: The account established for a Participating
Employee to hold payroll deductions pursuant to Section 6.
p. PLAN: The "Scott & Stringfellow Financial, Inc. Employee Stock Purchase
Plan," as set forth herein and as amended from time to time.
q. PURCHASE PRICE: The price for each whole and fractional share of Common
Stock, including those purchased by dividend reinvestment, which shall be
85% of the Fair Market Value of such whole or fractional share on the
Investment Date.
r. SUBSIDIARY OR SUBSIDIARIES: Any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, as of an
Investment Date, each of the Corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
s. TRUSTEE: Mellon Bank, N.A.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee, consisting of not less
than two members appointed by the Board. The Committee shall be the Compensation
Committee unless the Board shall appoint another committee to administer the
Plan. The Board from time to time may appoint members previously appointed and
may fill vacancies, however caused, in the Committee. Insofar as it is necessary
to satisfy the requirements of Section 16(b) of the Securities Exchange Act of
1934, no member of the Committee shall be eligible to participate in (i) the
Plan or (ii) in any other plan of the Company or any Parent or Subsidiary of the
Company providing for discretionary participation or award to participants of
the right to acquire stock, stock options or stock appreciation rights of the
Company or any Parent or Subsidiary of the Company, and (iii) no person shall
become a member of the Committee if, within the preceding one-year period, the
person shall have been eligible to participate in a plan described in (i) or
(ii).
Subject to the express provisions of the Plan, the Committee shall have the
authority to take any and all actions (including directing the Trustee as to the
acquisition of shares) necessary to implement the Plan and to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to it, and
to make all other determinations necessary or advisable in administering the
Plan. All of such determinations shall be final and
A-2
<PAGE>
binding upon all persons. A quorum of the Committee shall consist of a majority
of its members and the Committee may act by vote of a majority of its members at
a meeting at which a quorum is present, or without a meeting by a written
consent to their action taken signed by all members of the Committee. The
Committee may request advice or assistance or employ such other persons as are
necessary for proper administration of the Plan.
5. ELIGIBLE EMPLOYEES
All employees of the Company or its Subsidiaries shall be Eligible
Employees, except an employee (a) whose customary employment is twenty hours or
less per week or is for not more than five months in a calendar year, or (b) who
has not been employed for more than one year.
No director of the Company or of any Subsidiary who is not an employee
shall be eligible to participate in the Plan.
6. ELECTION TO PARTICIPATE; WITHDRAWALS AND SALES
Each Eligible Employee may become a Participating Employee effective on the
first day of any calendar quarter coincident with or following the first
anniversary of the date he becomes an Eligible Employee by filing with the
Committee an Enrollment Form authorizing specified regular payroll deductions
from his Base Compensation. Such regular payroll deductions shall be subject to
a quarterly minimum deduction of $75 and a maximum deduction of 15% of quarterly
Base Compensation. All regular payroll deductions shall be credited to the
Payroll Deduction Account that the Company has established in the name of the
Participating Employee.
A Participating Employee may at any time withdraw from the Plan and cease
to be a Participating Employee. An employee who has ceased to be a Participating
Employee may not again become a Participating Employee for twelve months. A
Participating Employee may, effective as of the first day of the next following
calendar quarter, increase or decrease his payroll deduction by filing a new
Enrollment Form.
Once per calendar year, at a time specified by the Committee, a
Participating Employee may direct the Trustee to sell or withdraw part or all of
the shares of Common Stock in his Investment Account (whole shares only). If a
Participating Employee directs the Trustee to sell or withdraw not more than 50%
of the shares in his Investment Account in a calendar year, he may continue to
be considered a Participating Employee. If a Participating Employee directs the
Trustee to sell or withdraw more than 50% of his shares in a calendar year, he
shall cease to be a Participating Employee for twelve months and shall not
become a Participating Employee until a new election is made, effective as of
the first day of a subsequent calendar quarter.
If a Participating Employee directs the Trustee to withdraw shares, the
Trustee shall distribute to the Participating Employee a certificate for the
shares of Common Stock to be withdrawn. If a Participating Employee directs the
Trustee to sell shares, the Trustee shall sell the shares and remit the
proceeds, less expenses of sale, to the Participating Employee.
Enrollment Forms must be filed with the Committee not less than fourteen
days before the beginning of a calendar quarter to be effective for that
quarter, unless a shorter period of time is prescribed by the Committee. An
Enrollment Form not filed within the prescribed filing period shall be effective
the first day of the calendar quarter following the calendar quarter when it
would otherwise become effective.
7. METHOD OF PURCHASE AND INVESTMENT ACCOUNTS
Each Participating Employee having eligible funds in his Payroll Deduction
Account on an Investment Date shall be deemed, without any further action, to
have purchased the number of whole and fractional shares which
A-3
<PAGE>
the eligible funds in his Payroll Deduction Account could purchase at the
Purchase Price on that Investment Date. All whole and fractional shares
purchased (rounded to the nearest ten thousandth) shall be maintained by the
Trustee in separate Investment Accounts for Participating Employees. All
dividends paid with respect to the whole and fractional shares of the Common
Stock and shares so purchased shall be reinvested in Common Stock and added to
the shares held for a Participating Employee in his Investment Account. Expenses
incurred in the purchase of shares and the expenses of the Trustee shall be paid
by the Company.
8. STOCK PURCHASES
The Trustee shall acquire shares of Company Stock for Participating
Employees as of each quarterly Investment Date from the Company or, if directed
by the Committee, by purchases on the open market or in private transactions
using total payroll deduction amounts received by the Trustee at least five
Business Days before the last business day of the calendar quarter for all
Participating Employees. If shares are purchased in one or more transactions on
the open market or in private transactions at the direction of the Committee,
the Company will pay the Trustee the difference between the Purchase Price and
the price at which such shares are purchased for Participating Employees.
9. LIMITATION ON PURCHASES
No Participating Employee may purchase during any one calendar year under
the Plan (or under any other plan qualified under Code section 423) shares of
Common Stock having a Fair Market Value (determined by reference to the Fair
Market Value on each date of purchase) in excess of $25,000. The purpose of this
limitation is to comply with Code section 423(b)(8).
A Participating Employee's Payroll Deduction Account may not be used to
purchase Common Stock on any Investment Date to the extent that after such
purchase the Participating Employee would own (or be considered as owning within
the meaning of Code section 424(d)) stock possessing 5 percent or more of the
total combined voting power of the Companywor its Parent or Subsidiary.
For this purposes stock which the Participating Employee may purchase under
any outstanding option shall be treated as owned by such Participating Employee.
As of the first Investment Date on which this paragraph limits a Participating
Employee's ability to purchase Common Stock, the employee shall cease to be a
Participating Employee.
10. TITLE OF ACCOUNTS
The Trustee shall maintain an Investment Account for each Participating
Employee. Each Investment Account shall be in the name of the Participating
Employee or, if he so indicates on his Enrollment Form, in his or her name
jointly with a member of his family, with right of survivorship. A Participating
Employee who is a resident of a jurisdiction which does not recognize such a
toint tenancy may have an Investment Account in his name as tenant in common
with a member of his or her family, without right of survivorship.
11. RIGHTS AS A SHAREHOLDER
A Participating Employee shall have the right, as described in Section 6,
to obtain a certificate for the full shares of Common Stock credited to his
Investment Account.
A Participating Employee shall have the right, as described in Section 6,
to direct that any full shares in his Investment Account be sold and that the
proceeds, less expenses of sale, be remitted to him.
A-4
<PAGE>
If a Participating Employee ceases to be such, the Participating Employee
may elect to have his shares sold by the Trustee and the proceeds, after selling
expenses, remitted to him, or he may elect to have a certificate for the full
shares of Common Stock credited to his Investment Account forwarded to him. In
either event, the Trustee will sell any fractional interest held in his
Investment Account and remit the proceeds of such sale, less selling expenses,
to him.
As a condition of participation in the Plan, each Participating Employee
agrees to notify the Company if he sells or otherwise disposes of any of his
shares of Common Stock within two years of the Investment Date on which such
shares were purchased.
12. RIGHTS NOT TRANSFERABLE
Rights under the Plan are not transferable by a Participating Employee.
13. CHANGE IN CAPITAL STRUCTURE
In the event of a stock dividend, stock split or combination of shares,
recapitalization or merger in which the Company is the surviving corporation or
other change in the Company's capital stock (including, but not limited to, the
creation or issuance to shareholders generally of rights, options or warrants
for the purchase of common stock or preferred stock of the Company), the number
and kind of shares of stock or securities of the Company to be subject to the
Plan, the maximum number of shares or securities which may be delivered under
the Plan, the selling price and other relevant provisions shall be appropriately
adjusted by the Committee, whose determination shall be binding on all persons.
If the Company is a party to a consolidation or a merger in which the
Company is not the surviving corporation, a transaction that results in the
acquisition of substantially all of the Company's outstanding stock by a single
person or entity, or a sale or transfer of substantially all of the Company's
assets, the Committee may take such actions with respect to the Plan as the
Committee deems appropriate.
Notwithstanding anything in the Plan to the contrary, the Committee may
take the foregoing actions without the consent of any Participant, and the
Committee's determination shall be conclusive and binding on all persons for all
purposes.
14. RETIREMENT, TERMINATION AND DEATH
In the event of a Participating Employee's retirement or termination of
employment, or if a Participating Employee ceases to be such, the amount in his
Payroll Deduction Account shall be refunded to him, and, unless otherwise
elected, certificates will be issued for full shares held. If a Participating
Employee elects to have his shares sold, he will receive the proceeds of less
selling expenses. In the event of his death, the amount in his Payroll Deduction
Account and all shares in his Investment Account shall be delivered to the
beneficiary designated by the Participating Employee in a writing filed with the
Company. If no beneficiary has been designated, or if the designated beneficiary
does not survive the Participating Employee, such amount and all shares shall be
delivered to his estate.
15. AMENDMENT OF THE PLAN
The Board of Directors may at any time, or from time to time, amend the
Plan in any respect; provided, however, that the shareholders of the Company
must approve any amendment that would materially (i) increase the benefits
accruing to Participating Employees under the Plan, (ii) increase the number of
securities that may be issued under the Plan, or (iii) modify the requirements
as to eligibility for participation in the Plan.
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<PAGE>
16. TERMINATION OF THE PLAN
The Plan and all rights of employees hereunder shall terminate:
(a) on the Investment Date that Participating Employees become
entitled to purchase a number of shares greater than the number of reserved
shares remaining available for purchase; or
(b) at any date at the discretion of the Board of Directors.
In the event that the Plan terminates under circumstances described in (a)
above, reserved shares remaining as of the termination date shall be issued to
Participating Employees on a prorata basis. Upon termination of the Plan, all
amounts in an employee's Payroll Deduction Account that are not used to purchase
Common Stock will be refunded.
17. EFFECTIVE DATES OF PLAN
The Plan was approved by the Board of Directors on August 6, 1992 and
became effective on January 1, 1993. This Amendment and Restatement was approved
by the Board of Directors on June 27, 1995, and shall become effective upon
receipt of shareholder approval.
18. GOVERNMENT AND OTHER REGULATIONS
The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and the Company's obligation to sell and deliver shares upon the
exercise of rights to purchase shares, shall be subject to all applicable
federal, state and foreign laws, rules and regulations, and to such approvals by
any regulatory or government agency as may, in the opinion of counsel for the
Company, be required.
19. INDEMNIFICATION OF COMMITTEE
Service on the Committee shall constitute service as a director of the
Company so that members of the Committee shall be entitled to indemnification
and reimbursement as directors of the Company pursuant to its Articles of
Incorporation and Bylaws.
A-6
<PAGE>
FOR all
nominees listed (except as marked to the contrary)
WITHHOLD AUTHORITY to vote for all nominees listed
to the right
1. ELECTION OF DIRECTORS for the terms set forth in the Proxy Statement.
WILLIAM P. SCHUBMEHL, ROBERT L. HINTZ, DAVID PLAGEMAN, JOHN
SHERMAN, JR., AND STEVEN C. DELANEY.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
_______________________________________________________________________
2. To approve the 150,000 share increase to the total
number of shares authorized for issuance and purchase under the Employee
Stock Purchase Plan.
3. To ratify the selection of KPMG Peat Marwick LLP as
independent certified public accountants for the fiscal year ending June
28, 1996.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before meeting.
FOR AGAINST ABSTAIN
Please sign exactly as name appears to the left. Executors, trustees, etc.,
should so indicate when signing. If a corporation, sign in full corporate name
by authorized officer. If a partnership, sign in partnership name by authorized
person.
____________________________________________________________
(Signature)
____________________________________________________________
(Signature)
____________________________________________________________
Dated: ________________________________________________ , 1995
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE.
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
SCOTT & STRINGFELLOW FINANCIAL, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 17, 1995
The undersigned hereby appoints R. GORDON SMITH and JOHN J.
MULDOWNEY (each with power to act alone and with power of substitution) as
Proxies, and hereby authorizes them to represent and vote, as directed below,
all the shares of Common Stock of Scott & Stringfellow Financial, Inc. held
of record by the undersigned on September 8, 1995, at the Annual Meeting of
Shareholders to be held on October 17, 1995, and any adjournment thereof.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted FOR each of the nominees named in proposal 1 and FOR
proposals 2 and 3.
FOLD AND DETACH HERE
<PAGE>
FOR all
nominees listed (except as marked to the contrary)
WITHHOLD AUTHORITY to vote for all nominees listed
to the right
1. ELECTION OF DIRECTORS for the terms set forth in the Proxy Statement.
WILLIAM P. SCHUBMEHL, ROBERT L. HINTZ, DAVID PLAGEMAN, JOHN
SHERMAN, JR., AND STEVEN C. DELANEY.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
_______________________________________________________________________
2. To approve the 150,000 share increase to the total
number of shares authorized for issuance and purchase under the Employee
Stock Purchase Plan.
3. To ratify the selection of KPMG Peat Marwick LLP as
independent certified public accountants for the fiscal year ending June
28, 1996.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before meeting.
FOR AGAINST ABSTAIN
Please sign exactly as name appears to the left. Executors, trustees, etc.,
should so indicate when signing. If a corporation, sign in full corporate name
by authorized officer. If a partnership, sign in partnership name by authorized
person.
____________________________________________________________
(Signature)
____________________________________________________________
(Signature)
____________________________________________________________
Dated: ________________________________________________ , 1995
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE.
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
FOLD AND DETACH HERE
SCOTT & STRINGFELLOW FINANCIAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 17, 1995
The undersigned hereby instructs the Trustee to vote all shares of
Common Stock of Scott & Stringfellow Financial, Inc. held of record by the
undersigned on September 8, 1995, and credited to my account under the
Employee Stock Purchase Plan, at the Annual Meeting of Shareholders to be
held on October 17, 1995, and any adjournment thereof.
This proxy when properly executed will be voted as you specify,
provided written instructions are received by the Trustee by October 11,
1995. If no direction is made this proxy will be voted FOR each of the
nominees named for proposal 1 and FOR proposals 2 and 3.
YOUR VOTING INSTRUCTIONS WILL BE KEPT CONFIDENTIAL
FOLD AND DETACH HERE
