SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[ ] 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 Under Rule 14a-12
</TABLE>
BENCHMARK BANKSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
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<PAGE>
BENCHMARK BANKSHARES, INC.
100 South Broad Street
Kenbridge, Virginia 23944
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 20, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Benchmark
Bankshares, Inc. (the "Company") will be held in the lobby of Benchmark
Community Bank (the "Bank"), 100 South Broad Street, Kenbridge, Virginia on
April 20, 2000 at 7:30 p.m. for the following purposes:
I. To elect three (3) directors for a term of three (3) years or until
their respective successors are elected and qualified;
II. To transact such other business as may properly come before the
meeting. Management is not aware of any other business, other than
procedural matters incident to the conduct of the meeting.
The Board of Directors has fixed the close of business on March 1, 2000 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Wayne J. Parrish
Wayne J. Parrish
Secretary
Kenbridge, Virginia
March 20, 2000
________________________________________________________________________________
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO BE
PRESENT, YOU ARE URGED TO COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY AND RETURN
IT PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
________________________________________________________________________________
<PAGE>
BENCHMARK BANKSHARES, INC.
______________________
PROXY STATEMENT
___________
ANNUAL MEETING OF SHAREHOLDERS
April 20, 2000
GENERAL INFORMATION
This Proxy Statement is furnished to holders of common stock, $0.21 par
value per share ("Common Stock"), of Benchmark Bankshares, Inc. (the "Company"),
in connection with the solicitation of proxies by the Board of Directors (the
"Board") of the Company to be used at the Annual Meeting of Shareholders to be
held on April 20, 2000 at 7:30 p.m. in the lobby of Benchmark Community Bank
(the "Bank"), 100 South Broad Street, Kenbridge, Virginia 23944, and any
adjournment thereof (the "Annual Meeting").
The principal executive offices of the Company are located at 100 South
Broad Street, Kenbridge, Virginia 23944. The approximate date on which this
Proxy Statement, the accompanying proxy form, and Annual Report to Shareholders
(which is not part of the Company's soliciting materials) are being mailed to
the Company's shareholders is March 20, 2000.
Voting and Revocability of Proxy
The proxy solicited hereby, if properly signed and returned to the Company
and not revoked prior to its use, will be voted in accordance with the
instructions contained thereon. If no contrary instructions are given, each
proxy will be voted FOR the slate of director nominees and FOR any other
proposals designated in the Proxy. Any shareholder giving a proxy has the power
to revoke it any time before it is exercised by (i) filing written notice
thereof with the Secretary of the Company (Wayne J. Parrish, Secretary,
Benchmark Bankshares, Inc., P. O. Box 569, Kenbridge, Virginia 23944); (ii)
submitting a duly executed proxy bearing a later date; or (iii) appearing at the
Annual Meeting or at any adjournment thereof and giving the Secretary notice of
his or her intention to vote in person. Proxies solicited hereby may be
exercised only at the Annual Meeting and any adjournment thereof and will not be
used for any other meeting.
Persons Making the Solicitation
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, officers and regular employees of the Company may solicit
proxies in person or by telephone. Also the Company will request banks, brokers
and other custodians, nominees and fiduciaries to send proxy materials to the
beneficial owners and to secure their voting instructions, if necessary. The
Company, upon request, will reimburse such fiduciaries for their expenses in so
doing.
<PAGE>
Voting Securities
Only shareholders of record at the close of business on March 1, 2000 (the
"Record Date") will be entitled to vote at the Annual Meeting. On the Record
Date, there were 3,015,661.710 shares of Common Stock issued and outstanding and
983 record holders. Of this number of shares issued and outstanding, 3,015,416
are whole shares, eligible to be voted. Each whole share of Common Stock is
entitled to one vote on each matter presented at the Annual Meeting. The Company
had no other class of equity securities outstanding at the Record Date.
In the election of directors, those receiving the greatest number of votes
will be elected even if they do not receive a majority. Abstentions and broker
non-votes will not be considered a vote for, or a vote against, a director.
PROPOSAL I. ELECTION OF DIRECTORS
The Nominees
The Company's Articles of Incorporation provide for the Board of Directors
to be divided into three classes, as nearly equal in number as possible, each of
which will serve for three years, with one class being elected each year. At the
2000 Annual Meeting, three directors, comprising Class B, will be nominated for
election to serve until the Year 2003 Annual Meeting of Shareholders or until
their successors are elected and qualified.
There is set forth below as to each of the nominees certain information
including name, age and business experience. The dates shown for first election
as a Director represent the year in which the nominee was first elected to the
Board of the Company or to one of its predecessor corporations. Unless otherwise
indicated, the business experience and principal occupations shown for each
nominee has extended five or more years.
Class B (to serve until the Year 2003 Annual Meeting of Stockholders)
1. R. Michael Berryman, age 59, a Director since 1978. Mr. Berryman is a
pharmacist and is a principal in the firms of Smith's Pharmacy, Inc. and
Pharmacy Associates, Inc., Kenbridge, Virginia. During last year, he
retired as Interim President of Community Memorial Healthcenter, South
Hill, Virginia. He presently serves as Chairman of the Board of the Company
and of the Bank, is a member of the Executive and Technology Committees of
the Bank, and is an ex-officio member of the other standing committees.
2. William J. Callis, age 57, a Director since 1989. Mr. Callis is Vice
President of Kenbridge Construction Co., Inc., Kenbridge, Virginia. He
presently serves as Vice Chairman of the Board, is a member of the
Executive, Bank Properties, Technology, and Risk Management Committees of
the Bank, and is an ex-officio member of the other standing committees.
3. C. Edward Hall, age 59, a Director since 1971. Mr. Hall is a pharmacist
and is a partner in Victoria Drug Company, Victoria, Virginia. He presently
serves as a member of the Loan and Human Relations & Compensation
Committees of the Bank.
- 2 -
<PAGE>
Election of Directors
Unless authority is withheld in the proxy, each proxy executed and returned
by a shareholder will be voted for the election of the three (3) nominees listed
on the preceding page. Proxies distributed in conjunction herewith may not be
voted for persons other than the nominees named thereon. If any person named as
a nominee should be unable or unwilling to stand for election at the time of the
Annual Meeting, the proxy holders will nominate and vote for a replacement
nominee or nominees recommended by the Board. All of the nominees listed above
have consented to be nominated and to serve if elected, and at this time, the
Board knows of no reason why any of the nominees listed above may not be able to
serve as a director if elected. The proxy also confers discretionary authority
upon the persons named therein, or their substitutes, with respect to any other
matter that may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE NOMINEES BE ELECTED AS
DIRECTORS.
DIRECTORS CONTINUING IN OFFICE
There are seven directors whose present terms of office will continue until
2001 or 2002, as indicated below, or until their respective successors are duly
elected and qualified. Each has served continuously since the year he joined the
Board. Unless otherwise indicated, the business experience and principal
occupations shown for each nominee has extended five or more years.
Class A (to serve until the Year 2002 Annual Meeting of Stockholders)
1. Earl C. Currin, Jr., age 56, a Director since 1986. Dr. Currin is
Provost of the John H. Daniel Campus of Southside Virginia Community
College, Keysville, Virginia. He presently serves on the Human Relations &
Compensation, Audit & Finance, Technology, and Risk Management Committees
of the Bank.
2. Wayne J. Parrish, age 61, a Director since 1979. Mr. Parrish is
principal of Parrish Trucking Company, Inc., Kenbridge, Virginia. He
presently serves on the Policy & Planning, Loan, and Human Relations &
Compensation Committees of the Bank.
3. Ben L. Watson, III, age 56, a Director since 1976. Mr. Watson is
President and Chief Executive Officer of the Company and of the Bank. He
presently serves as a member of the Executive and Risk Management
Committees of the Bank, and is an ex-officio of the other standing
committees.
- 3 -
<PAGE>
Class C (to serve until the Year 2001 Annual Meeting of Stockholders)
1. Lewis W. Bridgforth, age 60, a Director since 1971. Dr. Bridgforth is a
physician in private general practice in Victoria, Virginia. He presently
serves on the Policy & Planning, Audit & Finance, and Risk Management
Committees of the Bank.
2. J. Ryland Hamlett, age 57, a Director since 1986. Mr. Hamlett retired
in 1997 as Manager of Human Resources for Southside Electric Cooperative,
Crewe, Virginia. He presently serves on the Human Relations & Compensation,
Audit & Finance, and Technology Committees of the Bank.
3. H. Clarence Love, age 74, a Director since 1971. Mr. Love retired in
1987 as President of Common- wealth Tobacco Company, Kenbridge, Virginia.
He presently serves on the Policy & Planning, Loan, and Audit & Finance
Committees of the Bank.
4. Mark F. Bragg, age 38, elected as a Director on December 16, 1999. Mr.
Bragg is a principal of Atlantic Medical, Inc., South Hill, Virginia. He
presently serves on the Technology Committee of the Bank.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE MANAGEMENT
The following table sets forth information as of March 1, 2000 regarding
the beneficial ownership of the Company's Common Stock by (i) all directors and
nominees and (ii) its Chief Executive Officer, and (iii) by all directors and
executive officers as a group. For the purposes of this table, beneficial
ownership has been determined in accordance with the provisions of Rule 13d-3
under the Securities and Exchange Act of 1934 (the "Exchange Act"), as amended,
under which, in general, a person is deemed to be a beneficial owner of a
security if he has or shares the power to vote or direct the voting of the
security or the power to dispose or direct disposition of the security, or if he
has the right to acquire beneficial ownership of the security within 60 days.
<TABLE>
<CAPTION>
Number of Shares and Nature Percent
Name of Director or Nominee of Beneficial Ownership of Class
--------------------------- ----------------------------- --------
<S> <C> <C>
R. Michael Berryman 89,843.886 (1) 2.98%
Mark F. Bragg 897.409 (2) *
Lewis W. Bridgforth 35,680.657 (3) 1.18%
William J. Callis 28,120.974 (4) *
Earl C. Currin, Jr. 13,178.000 *
C. Edward Hall 31,145.037 (5) 1.03%
J. Ryland Hamlett 10,721.000 *
H. Clarence Love 83,200.000 (6) 2.76%
Wayne J. Parrish 27,409.872 (7) *
Ben L. Watson, III 16,471.508 (8) *
*Less than 1.00%
All Directors and Executive Officers
as a Group (12 persons) 384,654.718 12.76%
</TABLE>
- 4 -
<PAGE>
(1) Includes 2,114.494 shares held jointly with Mr. Berryman's wife,
38,302.704 shares owned solely by her, and 5,728.074 shares held as
custodian for one of his children.
(2) Includes 97.409 shares held jointly with Mr. Bragg's wife.
(3) Includes 20,337.218 shares owned solely by Dr. Bridgforth's wife.
(4) Includes 17,140.644 shares held jointly with Mr. Callis's wife.
(5) Includes 260 shares owned solely by Mr. Hall's wife.
(6) Includes 65,400 shares held jointly with Mr. Love's wife, and 4,100
shares owned solely by her.
(7) Includes 6,971.168 shares held jointly with Mr. Parrish's wife, and
5,925.035 shares owned solely by her.
(8) Includes 457.508 shares owned solely by Mr. Watson's wife.
Section 16(a) Beneficial Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who beneficially own
more than 10% of the Company's Common Stock to file initial reports of ownership
and reports of changes in ownership of Common Stock with the Securities and
Exchange Commission. Such persons are required by Commission regulation to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely upon a review of the copies of
such reports furnished to the Company, the Company believes that all applicable
Section 16(a) filing requirements were satisfied for events and transactions
that occurred in 1999.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Meetings of the Board of Directors are held regularly each month, including
an organizational meeting following the conclusion of the Annual Meeting of
Shareholders. The Board held twelve meetings in the year ended December 31,
1999. For such year, none of the Company's ten directors attended fewer than 75%
of the aggregate number of Board Meetings and meetings of committees of which
the respective directors are members except Mr. Bragg who was elected to the
Board in December of 1999.
The Board of Directors has, among others, a Nominating Committee, an Audit
& Finance Committee, and a Human Relations & Compensation Committee.
Since the 1999 Annual Meeting, the Nominating Committee has consisted of
Messrs. Bridgforth, Love, and Parrish. The duties of this committee are to
advise the Board with respect to the nomination of directors. It recommends
candidates to the Board as nominees for election at the Annual Meeting.
Directors are selected on the basis of recognized achievements and their ability
to bring skills and experience to the deliberations of the Board. The Nominating
Committee met once and recommended the nominees named herein. The Company's
- 5 -
<PAGE>
By-Laws provide, however, that stockholders entitled to vote for the election of
directors may name nominees for election to the Board of Directors. In order for
such a nomination to be effective, a nominating shareholder must strictly comply
with the applicable provisions of the Bylaws, which include: (a) such nomination
shall be made at a meeting of shareholders; (b) the nominating shareholder shall
give notice to the Company, which notice shall be received by the Company not
less than sixty days nor more than ninety days prior to the shareholders'
meeting, provided, however, that in the event that less than seventy days'
notice or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the nominating shareholder must be received not later
than the close of business on the tenth day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made;
and (c) the nominating shareholder's notice shall set forth (i) as to each
director nominee proposed by the shareholder, the name, age, business address
and residence of such nominee, the principal occupation or employment of such
nominee, the class and number of shares of the Company beneficially owned by the
nominee and any other information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or as otherwise
required, pursuant to Regulation 14A under the Exchange Act, and (ii) as the
nominating shareholder, his or her name and address as they appear on the
Company's books and the class and number of shares of the Company which are
beneficially owned by such shareholder.
The Audit & Finance Committee consists of Messrs. Hamlett, Bridgforth,
Currin, and Love. This committee is responsible for the selection and
recommendation of the independent accounting firm for the annual audit and to
establish, and assure the adherence to, a system of internal controls. It
reviews and accepts the reports of the Company's independent auditors and
federal examiners and the reports of the Bank's internal auditor. The Audit &
Finance Committee met three times during the year ended December 31, 1999.
The Human Relations & Compensation Committee consists of Messrs. Currin,
Hall, Hamlett, and Parrish. It is responsible for reviewing, and making
recommendations with respect to, the compensation of all employees of the
Company. This committee met four times during the past fiscal year.
DIRECTORS' FEES
No fees are paid to Directors for service on the board of the Company.
During 1999, for service on the Board of the Bank, a fee of $1,200 per director
was paid, based on the performance of the Bank, plus $250 for each Bank Board
meeting attended and, except for Mr. Watson, $175 for each Bank Board Committee
meeting attended during the year.
Effective April 20, 1995, the Company adopted the Outside Directors' Stock
Option Plan (the "Outside Directors' Plan"). On October 2, 1997, the Common
Stock split two-for-one (the "Stock Split"), and pursuant to Section 3(d) of the
Outside Directors' Plan, the Board of Directors increased the maximum aggregate
number of shares of Common Stock that may be issued pursuant to the Outside
Directors' Plan from 40,000 shares to 80,000 shares. The Outside Directors' Plan
is administered by a committee appointed by the Board of Directors, and the Plan
will terminate on March 16, 2005, unless terminated earlier by the Board of
Directors.
When the Company's shareholders approved the Outside Directors' Plan on
April 15, 1995, each outside director then serving on the Board of Directors
received an award of a stock option to purchase three thousand (3,000) shares of
the Common Stock on the effective date of the Outside Directors' Plan.
Thereafter, any outside director elected to the Board of Directors who had not
previously received such an award will automatically be granted an award
consisting of a stock option to purchase three thousand (3,000) shares, except
that following
- 6 -
<PAGE>
the two-for-one stock split on October 2, 1997, the number of shares already
granted to directors became 6,000, and the number of shares to be granted to any
newly-elected directors became 6,000. Concurrent with the Stock Split and
pursuant to Section 3(d) of the Outside Directors' Plan, the Board of Directors
adjusted the exercise price of stock options granted under the Outside
Directors' Plan from the Fair Market Value (as defined therein) of the Common
Stock, plus $1.00, on the date of the grant, to the Fair Market Value, plus
$0.50, on the date of the grant. Each stock option is granted for a term of ten
years and is first excercisable on the date which is one year from the date of
the grant of the option. Options granted under the Outside Directors' Plan may
be exercised by the outside director, by a legatee or legatees of such stock
option under the outside director's last will or by his or her executors,
personal representatives or distributees, by delivering to the Secretary of the
Company written notice of the number of shares of Common Stock with respect to
which the stock is being exercised.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
1. Michael O. Walker, age 49, Recording Secretary of the Company since
1983. He has also served as Senior Vice President of the Bank since 1993 with
responsibility for branch administration and marketing. He joined the Bank in
1974, and previous positions include Branch Manager, Assistant Vice President
and Vice President.
2. Janice C. Whitlow, age 53, Cashier and Treasurer of the Company since
1985. She has served as Senior Vice President, Cashier, Assistant Secretary and
Compliance Officer for the Bank since 1993. She joined the bank in 1971, and
previous positions include Operations Officer, Assistant Vice President and Vice
President.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31, 1999,
1998, and 1997, the cash compensation paid by the Bank, as well as certain other
compensation paid or accrued for those years, to the Chief Executive Officer of
the Company in all capacities in which he served, and to other Executive
Officers whose total compensation exceeded $100,000 in any of the three years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------------------- --------------- All
Other Number of Se- Other
Name and Incentive Deferred Annual Compen- curities Under- Compen-
Principal Position Year Salary Bonus Compensation sation(a)(b) lying Option sation
- ------------------ ---- ------ ----- ------------ -------------- --------------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ben L. Watson, III 1999 $106,004 $21,442 $10,000 $4,200 6,000(c) None
President and 1998 $102,500 $34,271 $10,000 $4,800 7,000(c) None
Chief Executive 1997 $85,000 $55,239 $10,000 $5,900 8,000 None
Officer
Michael O. Walker 1999 $83,708 $15,167 $1,300 $1,800 6,000 None
Senior Vice Presi- 1998 $81,600 $22,277 $900 $1,800 6,000 None
dent 1997 $62,568 $33,553 $2,100 $2,100 6,000 None
Janice C. Whitlow 1999 $80,008 $15,167 $5,000 None 5,850(c) None
Senior Vice Presi- 1998 $79,500 $22,277 $3,000 None 5,850(c) None
dent
___________
</TABLE>
- 7 -
<PAGE>
(a) The value of perquisites and other personal benefits did not exceed the
lesser of $50,000 or ten percent of total annual salary and
incentive bonus.
(b) Other Annual Compensation represents director's fees paid to Mr. Watson
for services performed as a director of the Bank, and fees paid to
Mr. Walker for services performed as Recording Secretary of the
board of the Bank.
(c) Mr. Watson exercised 1,000 options on March 2, 1998 and 1,000 options
on February 5, 1999; Mrs. Whitlow exercised 150 options on January
27, 1998.
Stock Options and Option Exercises and Holdings
No stock options were granted to the executive officers named in the
summary table during the fiscal year ended December 31, 1999. The following
table sets forth information with respect to the value of all stock options held
by such officers as of the end of the fiscal year:
Exercises in Last Fiscal Year and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Securities Under- Value of Unexercised
Shares lying Unexercised Options In-the-Money Options
Acquired at Fiscal Year End(1) at Fiscal Year End(2)
on Value --------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ben L. Watson, III, President 1,000 $5,620 6,000 0 $20,220 $0
and Chief Executive Officer
Michael O. Walker, Senior 0 $0 6,000 0 $20,220 $0
Vice President
Janice C. Whitlow, Senior 0 $0 5,850 0 $19,715 $0
Vice President
____________
</TABLE>
(1) The options were granted on March 16, 1995. The options became vested
and exercisable on March 16, 1996.
(2) The value of the unexercised options at fiscal year end is calculated
by determining the difference between the fair market value of the
Common Stock on December 31, 1999 and the exercise price of such
options. The average of the high and low sales prices of the Common
Stock of the Company on December 31, 1999, as reported by the Nasdaq
National Market, was $10.75.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Commission, the Company is required to
provide certain information with respect to the compensation and benefits
provided to the Company's Chief Executive Officer, Ben L. Watson, III, and the
other Named Executive Officers. The following report of the Compensation
Committee of the Board of Directors addresses the Company's compensation
policies in effect during 1999.
Role of Compensation Committee
Decisions on compensation of certain executive officers of the Company are
made by the Compensation Committee of the Board of Directors. The Compensation
Committee is responsible for reviewing and making recommendations with respect
to the compensation of all employees of the Company and recommends to the Board
of Directors such other forms of remuneration as the Company deems appropriate.
All decisions by the Compensation Committee relating to the compensation of the
Company's executive officers are reported to the full Board of Directors.
- 8 -
<PAGE>
The following is the text of the report adopted by the Compensation
Committee with respect to executive compensation for 1999.
Executive Compensation Policies
The Compensation Committee's executive compensation policies are designed
to provide competitive levels of compensation that integrate pay with the
Company's annual and long-term performance goals, recognize individual
initiative and achievement and assist the Company in attracting and retaining
highly qualified executives. They provide for competitive base salaries which
reflect individual performance and level of responsibility, annual bonuses
payable in cash on the basis of Company financial success, individual merit and
achievement in obtaining annual performance goals and long-term stock-based
incentive opportunities which strengthen the mutuality of interests between
management and the Company's shareholders.
In furtherance of its responsibility to determine executive compensation,
the Compensation Committee annually, or more frequently, reviews the Company's
executive compensation program. The Compensation Committee evaluates the
salaries and compensation structures of executive officers of peer companies in
the industry in order to establish general parameters within which it may fix
competitive compensation for its executive officers. The Compensation Committee
then determines the appropriate salary and management incentive opportunity for
each executive officer using a number of factors, including the executive
officer's individual duties and responsibilities in the Company, tenure, his or
her relative importance to the overall success of the Company's short- and long-
term goals and attainment of individual performance goals, if appropriate.
1999 Base Salaries and Annual Incentives
In 1999, Ben L. Watson, III, Chief Executive Officer, received a base
salary of $106,004. This annual base salary was set based on Mr. Watson's
individual duties and responsibilities, his tenure and salaries paid to the
chief executive officers of the Company's peer group companies. In addition, Mr.
Watson is to receive an annual incentive bonus as established and modified from
time to time by the Committee. In awarding the annual incentive bonus to Mr.
Watson for 1999, the Committee considered his individual merit and achievement
in attaining annual performance goals, the Company's financial success and Mr.
Watson's leadership in strategically focusing the Company. Mr. Watson is also
entitled to receive stock option awards as determined by the Company. Of the
incentive bonus awarded for the year of 1998, 75% was paid to Mr. Watson in
1998, and the final 25%, or $6,679, was paid in February, 1999, upon receipt of
audited financial statements for the year. On December 15, 1999, the
Compensation Committee awarded Mr. Watson an incentive bonus of $19,482, based
on profitability projections for the year of 1999, 75% of which, or $14,763, was
paid in December of 1999. Thus, total incentive bonus payments to Mr. Watson
during calendar year 1999 amounted to $21,442.
No stock options were granted to any of the executive officers during the
fiscal year ended December 31, 1999.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS:
/s/ Earl C. Currin, Jr.
/s/ C. Edward Hall
/s/ J. Ryland Hamlett
/s/ Wayne J. Parrish
- 9 -
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ben L. Watson, III, Chief Executive Officer, serves as an ex-officio member
of the Board's Committees, including the Compensation Committee.
SHAREHOLDER RETURN
The Company is subject to the rules of the Securities and Exchange
Commission that require certain public companies to present a graph of total
investment return in their annual proxy statements. The graph below compares the
yearly percentage change in the Company's cumulative total shareholder return
with the cumulative total return of the Nasdaq Stock Market Index which is a
broad equity market index, and the Nasdaq National Market ("Nasdaq/NM") Bank
Index, assuming that investments of $100 were made on December 31, 1994, and
that dividends were reinvested.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Benchmark Bankshares, Inc. Performance Index 100 93.77 115.74 206.82 184.26 145.18
Nasdaq Stock Market Index 100 139.92 171.69 208.85 291.61 541.21
Nasdaq/NM Bank Index 100 145.58 183.66 300.46 265.09 243.94
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CERTAIN TRANSACTIONS
Some of the directors and officers of the Company and some of the
corporations and firms with which these individuals are associated are also
customers of the Company in the ordinary course of business, or are indebted to
the Company with respect to loans, and it is anticipated that some of the
persons, corporations and firms will continue to be customers of, and indebted
to, the Company on a similar basis in the future. All loans extended to such
persons, corporations and firms were made in the ordinary course of business,
did not involve more than normal collection risk or present other unfavorable
features, and were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the same time for comparable Bank
transactions with unaffiliated persons. No such loan as of December 31, 1999 was
non-accruing, past due or restructured. At December 31, 1999, the aggregate
amount of loans outstanding to all directors and executive officers of the
Company and members of their immediate families was approximately $3,212,200
representing 15.25% of the total equity of the Company. Also as of December 31,
1999, only one director, W. J. Callis, had aggregate outstanding loans in excess
of 5% of shareholders' equity, which total of loans amounted to $1,996,623 as of
that date.
Management is not aware of any arrangements which may at a subsequent date
result in a change in control of the Company.
Management of the Company is not aware of any material proceedings to which
any Director, officer or affiliate of the Company, any owner of record or
beneficial owner of more than five percent of the Company's Common Stock, or any
associate of any such Director, officer, affiliate of the Company, or
shareholder is a party adverse to the Company or the Bank or has a material
interest adverse to the Company.
AUDITORS
Creedle, Jones & Alga, P.C., of South Hill, Virginia, served as the
Company's independent certified public accountants for the year ended December
31, 1999. Representatives from Creedle, Jones & Alga, P.C. will be present at
the Annual Meeting and will be given the opportunity to make a statement, if
they so desire, and will be available to respond to appropriate questions from
stockholders.
SHAREHOLDER PROPOSALS
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 2001 Annual
Meeting of Shareholders must cause such proposal to be delivered, in proper
form, to the Secretary of the Company, whose address is P. O. Box 569, 100 South
Broad Street, Kenbridge, Virginia 23944, no later than December 19, 2000, in
order for the proposal to be considered for inclusion in the Company's Proxy
Statement. The Company anticipates holding the 2001 Annual Meeting on April 19,
2001. It is recommended that such proposals be sent by certified mail, return
receipt requested.
The Company's Bylaws also prescribe the procedure a shareholder must follow
to nominate directors or to bring other business before shareholders' meetings.
For a shareholder to nominate a candidate for director or to bring other
business before a meeting, written notice must be received by the Company not
less than 60 days and not more than 90 days prior to the date of the meeting.
Based on an anticipated meeting date of April 19, 2001, for the 2001 Annual
Meeting of Shareholders, the Company must receive such notice no later than
February 19, 2001 and no earlier than January 19, 2001. If shareholders receive
notice less than 70 days prior to the meeting or public
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disclosure of the meeting date is made less than 70 days prior to the meeting,
written notice must be received by the Company not later than the close of
business on the tenth day on which such notice of the date of the annual meeting
was made or such public disclosure was made.
Notice of a nomination for director must describe various matters regarding
the nominee and the shareholder giving notice. Notice of other business to be
brought before the meeting must include a description of the proposed business,
the reasons therefor, and other specified matters. Any shareholder may obtain a
copy of the Company's Bylaws, without charge, upon written request to the
Secretary of the Company.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1999 accompanies this Proxy Statement. Additional copies may be
obtained by written request to the Treasurer of the Company at the address
indicated below. Such Annual Report is not part of the proxy solicitation
materials.
UPON RECEIPT OF A WRITTEN REQUEST FROM ANY PERSON WHO, ON THE RECORD DATE,
WAS RECORD OWNER OF THE COMPANY'S COMMON STOCK OR WHO REPRESENTS IN GOOD FAITH
THAT HE OR SHE WAS ON SUCH DATE THE BENEFICIAL OWNER OF SUCH STOCK ENTITLED TO
VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS, THE COMPANY WILL FURNISH TO SUCH
PERSON, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10KSB FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1999 AND THE EXHIBITS THERETO REQUIRED TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION UNDER THE EXCHANGE ACT. ANY SUCH REQUEST
SHOULD BE MADE IN WRITING TO MRS. JANICE C. WHITLOW, TREASURER, BENCHMARK
BANKSHARES, INC., P.O. BOX 569, KENBRIDGE, VIRGINIA 23944. THE FORM 10-KSB IS
NOT PART OF THE PROXY SOLICITATION MATERIALS.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters
that may come before the Annual Meeting. However, the proxies may be voted with
discretionary authority with respect to any other matters that may properly come
before the Annual Meeting.
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P R O X Y
FOR ANNUAL MEETING OF SHAREHOLDERS
April 20, 2000
BENCHMARK BANKSHARES, INC.
100 South Broad Street
Kenbridge, Virginia 23944
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Earl C. Currin, Jr. and J. Ryland Hamlett,
jointly and severally, as proxies, with full power to act alone, and with full
power of substitution, to represent the undersigned and to vote, as designated
below, all shares of Common Stock which the undersigned would be entitled to
vote at the Annual Meeting of Shareholders of Benchmark Bankshares, Inc., (the
"Company"), to be held on Thursday, April 20, 2000, at 7:30 p.m., local time, or
any adjournments thereof, for the following purposes:
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I. ELECTION OF DIRECTORS: _____ FOR all nominees listed below _____ WITHHOLD AUTHORITY to
(except as marked to the contrary) vote for all nominees
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NOMINEES: R. MICHAEL BERRYMAN WILLIAM J. CALLIS C. EDWARD HALL
__________________________________
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
such nominee's name on the line above.)
II. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed herein
by the shareholder. If no direction is given, this proxy will be voted FOR all
nominees listed in Item I.
IMPORTANT NOTE: For this proxy to be
valid, ALL PARTIES, as shown on the
pre-printed label to the right, MUST
SIGN. Signatures must be PRECISELY as
shown. In the case of Custodial ac-
counts, CUSTODIAN(S), not Beneficiaries,
must sign.
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_____________________________________ _____________________________________ _____________________________________
(Signature, 1st Party) (Signature, 2nd Party, if any) (Signature, 3rd Party, if any)
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DATE: _____________________________________
PLEASE MARK, SIGN, AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE PROMPTLY. THANK YOU.
