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
TYSONS NATIONAL BANK
(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] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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>
TYSONS FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, JUNE 11, 1997
The Annual Meeting of Shareholders (the "Meeting") of Tysons Financial
Corporation (the "Company") will be held at the Ritz Carlton Tysons Corner, 1700
Tysons Boulevard, McLean, Virginia 22102 (Phone number (703)506-4300) on the
11th of June 1997, at 4:30 p.m. (local time) for the following purposes:
1. To elect three (3) members to the Board of Directors
2. To consider the ratification and approval of the
appointment of KMPG Peat Marwick LLP, as the
Company's independent certified public accountants;
and
3. To consider such other matters as properly may come
before the Meeting or any adjournment of the Meeting.
Only holders of record of the Company's Common Stock at the close of
business on April 30, 1997, will be entitled to notice of and to vote at the
Meeting. The stock transfer books will remain open.
A Proxy Statement and a Proxy solicited by the Board of Directors are
enclosed. Please sign, date and return the Proxy promptly to the Company in the
enclosed postage-paid reply envelope. This will not prevent you from voting in
person, should you desire to do so, but will help to secure a quorum and will
assist us in preparing for the Meeting.
All shareholders are cordially invited to attend the Meeting.
By Order of the Board of Directors
/s/ Terrie G. Spiro
_____________________________________
Terrie G. Spiro
President and Chief Executive Officer
May 2, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE,
AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING.
<PAGE>
TYSONS FINANCIAL CORPORATION
8200 GREENSBORO DRIVE
SUITE 100
McLEAN, VIRGINIA 22102
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Wednesday, June 11, 1997
This Proxy Statement and accompanying proxy is furnished in connection
with the solicitation of proxies by the Board of Directors of Tysons Financial
Corporation (the "Company") for use at the Annual Meeting of Shareholders (the
"Meeting") to be held on June 11, 1997, and at any adjournment thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.
All proxies will be voted in accordance with the instructions contained in the
proxies. If no choice is specified, proxies will be voted FOR the election to
the Board of Directors of all the nominees listed below under "ELECTION OF
DIRECTORS", FOR the ratification and approval of the appointment of KPMG Peat
Marwick LLP as the Company's independent public accountants and, at the proxy
holder's discretion, on any other manner that may properly come before the
Meeting. Any shareholder may revoke a proxy given pursuant to this solicitation
prior to the Meeting by delivering an instrument revoking it or by delivering a
duly executed proxy bearing a later date to the Secretary of the Company. A
shareholder may elect to attend the Meeting and vote in person even if he or she
has a proxy outstanding.
The cost of soliciting proxies will be borne by the Company. In
addition to solicitations by mail, officers and regular employees of the Company
and Tysons National Bank (the "Bank") may solicit proxies personally and by
telephone, telecopy, or other means, for which they will receive no compensation
in addition to their normal compensation. Arrangements may also be made with
brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of stock held of
record by such persons and the Company may reimburse them for their reasonable
out-of-pocket and clerical expenses.
The Company has fixed April 30, 1997, as the record date (the "Record
Date") for determining the shareholders entitled to notice of and to vote at the
Meeting. At the close of business on the Record Date, there were outstanding and
entitled to vote 1,071,119 shares of common stock of the Company, par value
$5.00 per share (the "Common Stock"), with each share being entitled to one
vote. A majority of the outstanding shares of Common Stock represented at the
Meeting, in person or by proxy, will constitute a quorum.
This Proxy Statement and the accompanying form of proxy were first
mailed to shareholders on or about May 2, 1997.
Any shareholder or shareholder's representative who, because of a
disability, may need special assistance to allow him or her to participate in
the annual meeting of shareholders may request reasonable assistance from the
Company by contacting Tysons Financial Corporation, attention: Elissa A. Felix,
8200 Greensboro Drive, Suite 100,
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<PAGE>
McLean, Virginia 22102, telephone (703)556-0015, fax (703) 556-0023. To provide
the Company sufficient time to arrange for reasonable assistance, please submit
all requests by May 30, 1997.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following information sets forth certain information regarding the
beneficial ownership of Common Stock as of March 31, 1997, by each of the
Company's and the Bank's directors and nominees and by each person known by the
Company to own beneficially more than 5% of the Company's voting securities and
by the officers and directors of the Company as a group, including the number of
shares beneficially owned by and percentage ownership of each such person as of
such date.
Number of Percent of
Name of Beneficial Owner Shares Owned (1) Class (2)
------------------------ ---------------- ---------
Joel M. Birken 13,550 (3) 1.26%
8133 Leesburg Pike
Ninth Floor
Vienna, VA 22182
Michael Farnum 30,931 (4) 2.85%
1138 Swinks Mill Road
McLean, VA 22102
Alben G. Goldstein, M.D. 19,582 (5) 1.81%
6305 Castle Place
Falls Church, VA 22044
Zachary A. Kaye, M.D. 10,036 (6) 0.93%
14904 Jefferson Davis Highway
Woodbridge, VA 22191
Beth W. Newburger 14,504 (7) 1.35%
1401 North Oak Street
Arlington, Virginia 22209
J. Patrick Rowland 75,290 (8) 6.79%
9435 Lakeside Drive
Vienna, Virginia 22182
Richard Schwartz 46,517 (9) 4.26%
880 South Pickett Street
Alexandria, VA 22304
William C. Sellery, Jr. 62,818 (10) 5.70%
1619 Montmorency Drive
Vienna, Virginia 22182
2
<PAGE>
Number of Percent of
Name of Beneficial Owner Shares Owned (1) Class (2)
------------------------ ---------------- ---------
Terrie G. Spiro 41,828 (11) 3.79%
8200 Greensboro Drive, Suite 100
McLean, VA 22102
St. Clair J. Tweedie 41,117 (12) 3.77%
2665 Marcey Road
Arlington, VA 22207
Tysons Financial ESOP Trust (13) 8200
Greensboro Drive 57,171 5.34%
McLean, VA 22102
Stephen A. Wannall 11,500 (14) 1.07%
3025 Hamaker Court, Ste. 401
Fairfax, VA 22031
Officers and directors as a group of 17 439,142 (15) 34.98%
(1) Information relating to beneficial ownership of Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Under these rules, a person is deemed to be a "beneficial owner" of
a security if that person has or shares "voting power," which includes the
power to vote or direct the voting of such security, or "investment
power," which includes the power to dispose or to direct the disposition of
such security. A person is also deemed to be a beneficial owner of any
security of which that person has the right to acquire beneficial
ownership within sixty days. Under the rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may
be deemed to be a beneficial owner of securities in which he has no
beneficial interest. For instance, beneficial ownership may include
spouses, minor children and other relatives residing in the same household,
and trusts, partnerships, corporations or deferred compensation plans which
are affiliated with the principal. Included in the amount of shares
beneficially owned are shares issuable upon the exercise of stock
purchase warrants that were issued to the organizers of the Bank and the
Company. The stock purchase warrants entitle the holder of the warrants to
purchase Common Stock at $10.00 per share at any time during the term of
the warrant. The warrants became exercisable on January 2, 1992, and have
a term of ten years from July 1, 1991, the date the Bank opened for
business. In the event of a capital call upon the Bank, the Office of
the Comptroller of the Currency will require the warrants to be exercised
at a price no less than current book value or be forfeited.
(2) Percent is calculated by treating shares subject to options or warrants
held by the named individual for whom the percentage is calculated
which are exercisable within the next 60 days as if outstanding, but
treating shares subject to warrants or options held by others as not
outstanding.
3
<PAGE>
(3) Includes options to purchase 1,500 shares.
(4) Includes warrants to purchase 4,054 shares and options to purchase 9,500
shares.
(5) Includes warrants to purchase 5,160 shares and options to purchase 4,350
shares.
(6) Includes warrants to purchase 3,686 shares and options to purchase 1,350
shares.
(7) Includes warrants to purchase 4,054 shares and options to purchase 1,450
shares.
(8) Includes warrants to purchase 14,743 shares and options to purchase 22,350
shares.
(9) Includes warrants to purchase 10,688 shares and options to purchase 10,350
shares.
(10) Includes warrants to purchase 14,743 shares and options to purchase 15,300
shares.
(11) Includes warrants to purchase 7,371 shares and options to purchase 25,205
shares.
(12) Includes warrants to purchase 14,743 shares and options to purchase 5,300
shares.
(13) Pursuant to the documents governing the ESOP, each participant in the ESOP
is entitled to direct the trustees as to the manner in which the Common
Stock which is allocated to such participant is to be voted. In the
absence of such instruction, the trustees shall vote all Company Stock held
by it as part of the ESOP assets at such time and in such manner as the
Executive Committee shall direct. Terrie G. Spiro, President and
Principal Executive Officer and Director, and Janet A. Valentine, Principal
Financial and Accounting Officer, function as co-trustees and the Executive
Committee of the ESOP.
(14) Includes options to purchase 1,500 shares.
(15) Includes total warrants of 79,242 and stock options of 105,155 of which all
are outstanding.
BOARD OF DIRECTORS
The Company currently has 11 directors. The Company's articles of
incorporation and bylaws provide for staggered terms for the Board of Directors.
The Board of Directors has been divided into three classes so that, after their
initial terms, approximately one-third of the directors are elected to a
three-year term at each annual shareholders meeting. Members of the Company's
only operating subsidiary, Tysons National Bank's (the "Bank") board of
directors will serve one-year terms until the next annual meeting of the Bank's
shareholder, and thereafter until their successors are elected and qualified.
The Company's directors are elected on a staggered basis, as set forth
above. The three (3) directors to be elected for the coming year are Class III
directors. All nominees are presently serving as directors.
4
<PAGE>
Compensation of Directors
Directors of the Company receive no compensation for their services as
directors. In 1996, Directors of the Bank received $150 for every board meeting
attended, paid quarterly in arrears. In 1997, except as set forth below, each
Bank Director, will receive $1,000 per quarter. Ms. Spiro, who is President and
CEO of the Company and the Bank will receive $150 per board meeting attended and
Ms. Newburger has not received and will receive no compensation as a Director,
since April 15, 1996, when she assumed the position of Associate Administrator,
General Services Administration. All Board fees are paid quarterly, in arrears.
In 1996, a total of 97,430 options were awarded as follows to the
listed directors and advisory board directors.
<TABLE>
<CAPTION>
Shares Underlying Termination
Name Options Granted Exercise Price Date
- ---- ----------------- -------------- ----
<S> <C>
Michael Farnum 9,500 $9.125 8/26/2006
Alben G. Goldstein, M.D. 4,350 $9.125 8/26/2006
George Hill* 9,500 $9.125 8/26/2006
Zachary A. Kaye, M.D. 1,350 $9.125 8/26/2006
Letitia Marks* 5,230 $9.125 8/26/2006
Beth W. Newburger 1,450 $9.125 8/26/2006
J. Patrick Rowland 22,350 $9.125 8/26/2006
Richard Schwartz 10,350 $9.125 8/26/2006
William C. Sellery, Jr. 15,300 $9.125 8/26/2006
Terrie G. Spiro 2,650 $9.125 8/26/2006
St. Clair J. Tweedie 5,300 $9.125 8/26/2006
Nicholas Van Nelson* 10,100 $9.125 8/26/2006
</TABLE>
*Advisory board director
ELECTION OF DIRECTORS
Article XI of the Company's Articles of Incorporation provides that the
Board of Directors shall be divided into three classes with each class to be as
nearly equal in number as possible. Article XI also provides that the three
classes of directors are to have staggered terms, so that the terms of only
approximately one-third of the Board will expire at each annual meeting of
shareholders. Thirteen directors were initially elected to the Board. These
directors were apportioned among each of Classes I, II, and III to serve initial
terms of one, two, and three years, respectively. All terms after the initial
term are three years.
The current Class I directors are Joel M. Birken, Alben G. Goldstein,
M.D., Zachary A. Kaye, M.D., and Stephen A. Wannall. The current Class II
directors are Michael Farnum, Beth W. Newburger, William C. Sellery, Jr., and
St. Clair J. Tweedie. The current Class III directors are J. Patrick Rowland,
Richard Schwartz, and Terrie G. Spiro. The terms of the Class III directors
expire this year and Mr. Rowland, Mr. Schwartz and Ms. Spiro have
5
<PAGE>
been nominated for re-election. The term of Class I Directors expire in 1998
and the terms of Class II Directors expire in 1999.
The table below sets forth certain information about the nominees,
including the class of directors for which the nominee is being nominated, the
nominee's age, and the nominee's position with the Company and the Bank. All of
the nominees are currently serving as directors of the Company. It is the
intention of the persons named in the accompanying proxy to vote for the
election of the nominees identified below to serve until such time as is
specified for the particular class for which they are being nominated and until
their successors have been duly elected and have qualified or until their
earlier termination in accordance with the Corporation's Bylaws or Articles of
Incorporation. If any nominee is unable or fails to accept nomination or
election (which is not anticipated), the persons named in the proxy, unless
specifically instructed otherwise in the proxy, will vote for the election in
his stead of such other person as management may recommend.
<TABLE>
<CAPTION>
Name Age Position with the Company Position with the Bank
---- --- ------------------------- ----------------------
<S> <C>
J. Patrick Rowland 59 Director Director
Richard Schwartz 67 Director Director
Terrie G. Spiro 40 President, Principal Executive President, Chief Executive
Officer and Director Officer, and Director
</TABLE>
J. Patrick Rowland has been a Class III director and Vice Chairman of
the Board of Directors of the Company since 1989, and a director and Chairman of
the Board of the Bank since 1991. Since January 1995, he has been a business
consultant with offices in Washington, D.C. Prior to this, Mr. Rowland was
director of government relations for the Borg-Warner Security Corporation from
September of 1993 to December of 1994. For five years prior to that, he was the
Chairman of Rowland & Sellery, a Washington, D.C., business consulting firm.
Richard Schwartz has been a Class III director and Chairman of the
Board of the Company, and director and Vice Chairman of the Bank, since 1991. He
is the founder, and for more than thirty years, President of Boat Owners
Association of The United States ("BOAT/U S."). He is also the Chairman of the
Board and CEO, of Boat America Corporation, a service company. Mr. Schwartz is
an attorney and is admitted to the New York, Florida, and District of Columbia
Bars, and the Supreme Court of the United States.
Terrie G. Spiro, who is the founding President, has been
President/Chief Executive Officer and a Class III director of the Company since
1989, and President/CEO and director of the Bank since 1991. Ms. Spiro has over
seventeen years of commercial banking experience.
The Board of Directors Recommends that You Vote FOR the Election of the Three
Nominees Named Above.
Directors and Executive Officers of the Company and the Bank
6
<PAGE>
The following table sets forth certain information with respect to the
directors and executive officers of the Company and the Bank. Executive officers
of the Bank are elected by the Bank's Board of Directors for one-year terms and
serve until their successors are elected and qualified. Except as otherwise
indicated, each person has been or was engaged in his present or last principal
occupation, in the same or a similar position, for more than five years.
<TABLE>
<CAPTION>
Name Age Position Held and Principal Occupations
- ---- --- ---------------------------------------
<S> <C>
N. George Assaf 35 Mr. Assaf joined the Bank in 1993 as a commercial lender
and became the Chief Lending Officer in April, 1996. Prior
to joining the Bank, he was with Barnett Bank from 1991 to
1993. Mr. Assaf has over ten years of banking experience
in lending, credit analysis, branch operations, and
management.
Joel M. Birken 49 Mr. Birken has been a Class I director of the Company and a
director of the Bank since 1995. He is a founding
shareholder of the law firm of Rees, Broome & Diaz, P.C.,
and has practiced law with that firm in Vienna, Virginia
since 1974. Rees, Broome & Diaz, P.C. serves as the
Company's corporate counsel.
David M. Cordingley 50 Mr. Cordingley joined the Company in May 1996 as Vice
President of Branch Administration. He has over 20 years
experience in banking including the founding of Bank 1st,
N.A. in McLean, Virginia in 1987. Additionally, Mr.
Cordingley spent 15 years in various positions with First
American Bank of Virginia. Mr. Cordingley graduated from
C.W. Post College in Greenvale, New York with a B.A. in
economics.
Michael Farnum 51 Mr. Farnum has been a Class II director of the Company and
a director of the Bank since 1991. He has been, since
1991, self-employed with the Farnum Company and
concentrates on the sales and leasing of commercial and
industrial real estate. From 1973 to 1991, he was Vice
President and sales manager of two regional real estate
firms, including Weaver Bros., Inc.
Alben G. Goldstein, M.D. 51 Dr. Goldstein has been a Class I director of the Company
since 1989 and was a director of the Bank from 1991 through
January 15, 1997. He has been an individual practitioner
for more than the past fifteen years and has been the owner
and senior physician of the Arthritis Associates of
Northern Virginia, P.C. for more than the past five years.
Zachary A. Kaye, M.D. 49 Dr. Kaye has been a Class I director of the Company since
1989 and a director of the Bank since 1991. He is
currently a physician in sole practice in Woodbridge,
Virginia. He has been an individual practitioner for more
than the past fifteen years.
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<PAGE>
Name Age Position Held and Principal Occupations
- ---- --- ---------------------------------------
Beth W. Newburger(1) 59 Ms. Newburger has been a Class II director of the Company
and a director of the Bank since 1991. She was President
of Corabi International Telemetrics, Inc., a biomedical
instrumentation company from 1985 - 1995. She was appointed
to the White House Office of Women's Initiatives and
Outreach in October, 1995, and she has assumed the position
of Associate Administrator, General Services Administration
on April 15, 1996.
J. Patrick Rowland 59 Mr. Rowland has been a Class III director and Vice Chairman
of the Board of Directors of the Company since 1989, and a
director and Chairman of the Board of the Bank since 1991.
Since January, 1995, he has been a business consultant with
offices in Washington, D.C. Prior to this, Mr. Rowland was
director of government relations for the Borg-Warner
Security Corporation from September of 1993 to December of
1994. For five years prior to that, he was the Chairman of
Rowland & Sellery, Inc., a Washington, D.C., business
consulting firm.
Fred J. Rubin 35 Mr. Rubin joined the Bank as its Vice President of Credit
Policy in July, 1996. Prior to his employment by the Bank,
Mr. Rubin was a National Bank Examiner with the Office of
the Comptroller of the Currency. Mr. Rubin has over
thirteen years of banking experience in lending, credit and
regulatory relations.
Richard Schwartz(2) 67 Mr. Schwartz has been a Class III director and Chairman of
the Board of the Company, and director and Vice Chairman of
the Bank, since 1991. He is the founder, and for more than
thirty years, President of Boat Owners Association of the
United States ("BOAT/U.S."). He is also the Chairman of
the Board, CEO, and majority stockholder of Boat America
Corporation, a service company. Mr. Schwartz is an
attorney and is admitted to the New York, Florida, and
District of Columbia Bars, and the Supreme Court of the
United States.
William C. Sellery, Jr. 49 Mr. Sellery has been a Class II director of the Company
since 1989 and director of the Bank since 1991. He is
President of Sellery Associates, Inc., a business consulting
firm, since September, 1993. Prior to this, he was President
of Rowland & Sellery, Inc., from 1988 to 1993.
8
- ----------------------
(1) Ms. Newburger is married to Mr. Schwartz.
(2) Mr. Schwartz is married to Ms. Newburger.
<PAGE>
Name Age Position Held and Principal Occupations
- ---- --- ---------------------------------------
Samuel E. Smith, Jr. 41 Mr. Smith joined the Bank in June, 1994 and is its Vice
President of Retail Lending. Mr. Smith previously was
Assistant Vice President at Citizens Bank of Washington
from 1991 to 1994. From 1986 to 1991, Mr. Smith served as
Assistant Vice President of Citizens Bank of Virginia. Mr.
Smith has over nineteen years of banking experience in
lending, compliance, credit and branch administration.
Terrie G. Spiro 40 Ms. Spiro has been President/CEO and a Class III director
of the Company since 1989, and President/CEO and director
of the Bank since 1991. Ms. Spiro has over seventeen years
of commercial banking experience.
St. Clair J. Tweedie 59 Mr. Tweedie has been a Class II director of the Company and
a director of the Bank since 1991. He is currently a
management consultant. Prior to this, he was the Director
of Government Relations for American Cyanamid
Company for more than the past five years.
Janet A. Valentine 45 Ms. Valentine has served as Principal Financial and
Accounting Officer of the Company and as Senior Vice
President and Chief Financial Officer of the Bank since
February, 1996. From 1991 to 1996, she was Vice President
and Controller at Patriot National Bank of Virginia.
Ms. Valentine has over nineteen years of experience in bank
financial reporting, budgeting and management.
Stephen A. Wannall 49 Mr. Wannall was appointed to serve as a Class I director of
the Company and a director of the Bank in December, 1995,
and was subsequently elected at the 1996 Annual Meeting of
Shareholders to be a Class I director. He is the Managing
Shareholder of Brown, Dakes & Wannall, P.C., an accounting
firm located in Northern Virginia. Mr. Wannall is a
Certified Public Accountant and has over twenty five years
of experience in public accounting.
</TABLE>
Meetings and Committees of the Board of Directors
The Board of Directors of the Company met ten times in 1996. The Board
of Directors of the Bank met fifteen times during the year ended December 31,
1996. The Company's Board of Directors has no standing committees. All existing
committees are of the Bank's Board of Directors. The Bank has no standing
nominating committee.
The Bank's Audit/Compliance Committee is composed of William C.
Sellery, Jr., Chairman, St. Clair J. Tweedie and Stephen A. Wannall. The
Audit/Compliance Committee has the responsibility of reviewing the Company's
financial statements, evaluating internal accounting controls, reviewing reports
of regulatory authorities, and determining that all audits and examinations
required by law are performed. The committee recommends to the
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<PAGE>
Board the appointment of the independent auditors for the next fiscal year,
reviews and approves the auditor's audit plans, and reviews with the
independent auditors the results of the audit and management's response
thereto. The Audit Committee is responsible for overseeing the entire audit
function and appraising the effectiveness of internal and external audit
efforts. The Audit Committee reports its findings to the Board of Directors.
The Audit Committee met three times in 1996.
The Bank has a Personnel & Compensation Committee, composed of Zachary
A. Kaye, Chairman, Beth W. Newburger, William C. Sellery, Jr., and Joel M.
Birken. The Personnel & Compensation Committee is responsible for establishing
the compensation plans for the Bank. Its duties include the development with
management of all benefit plans for employees of the Bank, the formulation of
bonus plans, incentive compensation packages, stock option plans, and medical
and other benefit plans. The members of the Compensation Committee also
currently function as the stock option committee of the Company for determining
the grant of options and other stock purchase rights to employees of the Bank
pursuant to the Stock Option Plan. This Committee met six times during the year
ended December 31, 1996.
All of the directors of the Company attended at least 75% of the
meetings of the Board of Directors of the Company.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Currently, all operations of the Company are conducted at the Bank
level and the Company does not have any employees who are compensated separately
for their services to the Company. Executive officers of the Bank include the
President/Chief Executive Officer, Vice President/Chief Financial Officer, Vice
President/Chief Lending Officer, Vice President/Chief Credit Officer, Vice
President/Consumer Lending and Vice President/Branch Administration. The
executive officers are elected by the Board of Directors of the Bank for one
year terms and serve until their successors are elected and qualified.
Summary of Cash and Certain Other Compensation
The following table sets forth for the fiscal years ended December 31,
1994, 1995, and 1996, the cash compensation paid or accrued by the Company and
the Bank, as well as certain other compensation paid or accrued for those years,
for services in all capacities to the Chief Executive Officer of the Company and
the Bank, Terrie G. Spiro, and the Vice President and Chief Lending Officer,
George Assaf (the "Named Executive Officers"). One executive officer of the
Company or the Bank, other than Ms. Spiro, earned total annual compensation,
including salary and bonus, for the fiscal year ended December 31, 1996, in
excess of $100,000.
10
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation(1)(2) Awards
------------------------- ------
Securities
Underlying All Other
Name and Principal Position Year Salary($) Bonus ($) Options (1) Compensation
- --------------------------- ---- --------- --------- ----------- ------------
<S> <C>
Terrie G. Spiro - 1996 $130,000 $25,000 9,400 $19,222(3)
President and Chief
Executive Officer
1995 $105,663 $40,000 3,000 18,609
1994 $102,731 - 6,000 14,383
N. George Assaf 1996 $ 65,502 $47,636 500 - (2)
- - Vice President and
Chief Lending Officer
1995 $ 50,000 $18,564 500 -
1994 $ 45,000 $ 8,037 - -
</TABLE>
- --------------------
(1) See "Option Grants," "Option Exercises and Year-End Values" and "Stock
Option Plan" for disclosure regarding outstanding stock options.
(2) In accordance with SEC rules, perquisites constituting less than the
lesser of $50,000 or 10% of total salary and bonuses are not reported.
(3) Comprises employer contributions of term life insurance premium of
$296, disability insurance premium of $2,900, health insurance premium
of $2,306, car lease payments of $6,316, fuel and parking allowance of
$3,600, and club dues of $3,804.
Option Grants
Options granted to the Named Executive Officers during 1996 are set
forth in the following table. For disclosure regarding the terms of stock
options, see "Stock Option Plan."
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
-------------------------------------------------------------
Number of Percent of Potential Realizable
Shares Total Options Value at Assumed
Underlying Granted to Exercise Annual Rates of Stock
Options Employees Price Expiration Price Appreciation for
Name Granted (#) in 1996 ($/share) (1) Date Option Term (2)
- ---- ----------- --------- ------------- ---------- ----------------
5%($) 10%($)
----- ------
<S> <C>
Terrie G. Spiro 3,400 27.4% $ 8.50 Feb. 2006 $18,175 $ 46,059
Terrie G. Spiro 6,000 48.4% $11.00 Oct. 2006 $41,507 $105,187
N. George Assaf 500 4.0% $ 8.50 Feb. 2006 $ 2,673 $ 6,773
</TABLE>
11
<PAGE>
- ------------------
(1) The exercise price of each option was the fair market value of the
underlying Common Stock on the date of the grant, as determined by the
Board of Directors of the Company,
(2) Future value of current-year grants assuming the indicated percentage
rates per year over the applicable option term. The actual value
realized may be greater than or less than the potential realizable
values set forth in the table.
Option Exercises and Year-End Values
No stock options were exercised by the Named Executive Officers during
1996. There were no SARs outstanding during 1996. The following table sets forth
certain information regarding unexercised options held by the Named Executive
Officers as of December 31, 1996:
<TABLE>
<CAPTION>
Aggregated Fiscal Year-End Option Values
---------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year-End (#) Fiscal Year-End ($)(1)
------------------------------ ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C>
Terrie G. Spiro 9,000 (2) - $18,000 N/A
Terrie G. Spiro 3,400 (3) - $ 7,650 N/A
Terrie G. Spiro 6,000 (4) - $ 0 N/A
Terrie G. Spiro 2,630 (5) - $ 4,274 N/A
N. George Assaf 500 (2) - $ 1,000 N/A
N. George Assaf 500 (3) - $ 1,125 N/A
</TABLE>
- ------------------
(1) Value determined by Board of Directors of the Company.
(2) The exercise price of these options is $8.75 per share.
(3) The exercise price of these options is $8.50 per share.
(4) The exercise price of these options is $11.00 per share.
(5) The exercise price of these options is $9.125 per share.
Employment Contracts and Termination of Employment Agreements
In February, 1990, Terrie G. Spiro and the Company executed an
employment agreement. A first amendment to the employment agreement was signed
in April, 1992 and a second amendment was signed on March 31, 1996. In October
1996, Ms. Spiro and the Company executed a new employment agreement. The
following is a summary of the material terms of the employment agreement. The
term of employment was deemed to have commenced January 1, 1996, and continues
for a period of four years unless terminated. After completion of the initial
four years, the agreement will automatically be extended for an additional year,
and shall thereafter be extended on a year-to-year basis unless either party
gives six months prior notice of intention to terminate. According to the terms
of the employment agreement, Ms. Spiro received a base salary of $130,000 in
1996 (increased to $140,000 for 1997) and benefits including, but not limited
to, individual contributory health insurance, term life insurance policy, the
cost of annual dues to one country club and one dining club membership. Ms.
Spiro's employment agreement entitles her to receive incentive stock options
annually based upon certain performance objectives. The employment agreement
also provides for incentive bonus compensation if, during each calendar
12
<PAGE>
year, the Bank meets certain performance objectives, including but not limited
to: (i) asset quality; (ii) asset growth; and (iii) net income before taxes.
In the event of a hostile takeover or a change in control of the Company or
the Bank, the Company will pay to Ms. Spiro an amount equal to 2 times base
salary and bonuses. The Company maintains a key-person insurance policy on the
life of Ms. Spiro. Upon Ms. Spiro's death, proceeds of $500,000 under the policy
are payable to the Company.
Stock Option Plan
During 1992, the Board of Directors of the Company adopted, and the
shareholders approved, the Tysons Financial Corporation Stock Option Plan (the
"Plan"). The Plan provides that restricted stock and stock options may be
granted for the purchase of up to 160,058 shares, subject to adjustment upon
changes in capitalization. Options may be granted to employees or directors of
the Company or the Bank or any subsidiary of the Company or the Bank and may be
granted either as incentive stock options (which qualify for certain favorable
tax consequences), or as nonqualified stock options. Options may not be
transferred except by will, by the laws of descent and distribution, or by a
qualified domestic relations order and during an optionee's lifetime may be
exercised only by the optionee (or by his or her guardian or legal
representative, should one be appointed).
The Plan is administered by the Personnel & Compensation Committee.
Insofar as discretionary options or shares of restricted stock are granted to
persons who are subject to Section 16 of the Exchange Act, the committee will
consist of at least two directors who within the preceding year have not
received discretionary grants under the Plan. The committee determines the
employees and directors who will receive options or restricted stock and, based
on each such person's position and current and potential contribution to the
Company or the Bank, the amount of restricted stock or the number of shares that
will be covered by their options. The committee also determines the periods of
time (not exceeding ten years from the date of grant in the case of an incentive
stock option) during which options will be exercisable and determines whether
termination of an optionee's employment under various circumstances would
terminate options granted under the Plan to that person. In addition, the
committee determines the restriction period and vesting conditions, the
consequences of any termination of employment, and the other terms of any grant
of restricted stock. The option price per share is an amount determined by the
Board of Directors but will not be less than 100% of the fair market value per
share on the date of grant for incentive stock options. The option is payable in
full upon exercise. The Company and the Bank receive no consideration upon the
granting of an option.
The Board of Directors has the right at any time to terminate or amend
the Plan, but no such action may terminate options already granted or otherwise
affect the rights of any optionee under any outstanding option without the
optionee's consent. Without shareholder approval, the Board of Directors may not
adopt any amendment of the Plan that would (1) increase the total number of
shares issuable pursuant to incentive stock options under the Plan or materially
increase the total number of shares of Common Stock subject to options, (ii)
change or modify the class of employees eligible to receive incentive stock
options that may participate in the Plan or materially change or modify the
class of persons that may participate, or (iii) otherwise materially increase
the benefits accruing to participants thereunder.
13
<PAGE>
Employee Stock Ownership Plan
Effective January 1, 1993, the Company established the Tysons Financial
Corporation Employee Stock Ownership Plan (the "ESOP") for all eligible
employees. The ESOP covers all salaried employees of the Company or its
subsidiaries, 21 years of age or older, who work a minimum of 1,000 hours per
year and who have completed at least one year of service with the Company.
Contributions are at the discretion of, and determined annually by, the Board of
Directors based on the Company's performance. Contributions are not to exceed
the maximum amount deductible under the applicable section of the Internal
Revenue Code of 1986 (the "Code"). Contributions under the ESOP will be used to
purchase Common Stock which is allocated to participants on the basis of the
participant's compensation for the year compared to total compensation of all
eligible employees. An employee's interest in the amount contributed becomes 20%
vested after three years of service and increases incrementally to become 100%
vested after seven years of service.
During the second quarter of 1994, the ESOP purchased shares of the
Company's Common Stock using $500,000 of funds borrowed from a director of the
Company. The long-term borrowing of $500,000 requires quarterly principal
payments of $12,500 and quarterly interest payments of prime plus 2% with a lump
sum payment in June, 1998. As of December 31, 1996, the outstanding balance of
the loan was $375,000.
Interests of Management and Directors in Certain Transactions
Except as described in this Proxy Statement, there are no agreements in
existence or anticipated between any organizer, director, or officer of the Bank
or the Company relating to the premises, furnishings, equipment, fixtures, or
any other property or service of the Bank or the Company. During 1996, certain
directors and executive officers were indebted to the Bank. These transactions
are made in the ordinary course of business, on substantially 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 collectibility or present other unfavorable features. As of
December 31, 1996, loans to directors and executive officers of the Company, and
their affiliates, including loans guaranteed by such persons and unfunded
commitments made, aggregated $1,370,073, or approximately 16.6% of stockholders'
equity of the Company.
In June 1994, the Company funded the ESOP with a loan provided by
Richard Schwartz, a director of the Company, in the original principal amount of
$500,000.00. The terms of the loan include quarterly principal payments of
$12,500.00 and quarterly interest payments at prime plus 2% with a final payment
on June 1, 1998. In management's opinion, the loan is at market terms. The
outstanding balance on December 31, 1996, was $375,000.00.
Joel M. Birken, a Director of the Company is a shareholder in the law
firm of Rees, Broome & Diaz, P.C., which regularly acts as counsel to the
Company and the Bank. During the fiscal years ending 1995 and 1996, Rees, Broome
& Diaz, P.C. performed legal services for the Bank and was paid $99,490 and
$112,156, respectively.
14
<PAGE>
APPROVAL AND RATIFICATION OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of the Holding Company has appointed KPMG Peat
Marwick LLP independent certified public accountants ("KPMG"), as independent
certified public accountants for the Company for the fiscal year ending December
31, 1997. KPMG has served the Company as its independent certified public
accountants since 1994. The firm is presently serving both the Company and the
Bank as independent auditors. A representative of KPMG is expected to attend the
Meeting and will be given the opportunity to make a statement on behalf of the
firm if she desires to do so. A representative of KPMG is also expected to be
available to respond to appropriate questions from shareholders.
Although not required by the Company's Articles of Incorporation or
Bylaws, the Board of Directors deems it to be in the best interests of the
Company to submit to the shareholders a proposal to ratify the appointment of
KPMG. If the appointment is not approved by a majority of the votes cast at the
meeting on this proposal by the holders of the shares of Common Stock of the
Company, the appointment of the independent auditors will be reconsidered by the
Board of Directors.
The Board of Directors recommends a vote FOR ratification of KPMG as
independent certified public accountants for the fiscal year ending December 31,
1997.
VOTE REQUIRED TO APPROVE MATTERS
Assuming the presence of a quorum, the affirmative vote of a plurality
of the votes of the shares present in person or by proxy and entitled to vote on
the election of Directors is required for the election of Directors. The
ratification of the appointment of KPMG as independent certified public
accountants of the Company requires the affirmative vote of a majority of the
shares present in person or by proxy at the meeting and entitled to vote on such
ratification.
Votes cast by proxy or in person at the meeting will be tabulated by
the inspector of elections appointed for the meeting. Proxies marked with
abstentions as to any proposal, and abstentions on any proposal by shareholders
present at the meeting, will be treated as present and entitled to vote for
purposes of determining the existence of a quorum and will have the practical
effect of a negative vote as to that proposal. In the event of a broker non-vote
(i.e., a proxy from brokers marked to indicate that such persons have not
received instructions from the beneficial owner or other persons entitled to
vote shares as to the vote on a particular matter with respect to which the
brokers or nominees do not have discretionary power to vote) with respect to any
issue, the proxy will be counted as present for purposes of determining the
existence of a quorum but will not be deemed as present and entitled to vote as
to that issue for purposes of determining the total number of shares of which a
majority is required for adoption.
SHAREHOLDER PROPOSALS FOR THE
1998 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals to be presented at the 1998 Annual Meeting of
Shareholders must be received at the Company's executive offices at Suite 100,
8200 Greensboro Drive, McLean, Virginia 22102 by January 2, 1998, in
15
<PAGE>
order to be included in the Company's proxy statement and form of proxy
relating to that meeting. Proposals must comply with the proxy rules of the
Securities and Exchange Commission in order to be included in the Company's
proxy materials.
OTHER MATTERS
Management of the Company knows of no matters other than those stated
above that are to be brought before the Meeting. If any other matters properly
come before the Meeting, it is the intention of the persons named in the
enclosed Proxy to vote on such matters in accordance with his or her judgment.
By Order of the Board of Directors.
/s/ Terrie G. Spiro
_____________________________________
TERRIE G. SPIRO
President and Chief Executive Officer
May 2, 1997
<PAGE>
TYSONS FINANCIAL CORPORATION
8200 Greensboro Drive, Suite 100, McLean, Virginia 22102
This Proxy is Solicited by the Board of Directors
The undersigned hereby appoints William C. Sellery, Jr. and Janet A.
Valentine as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote as designated below all the shares of
common stock of Tysons Financial Corporation held of record by the undersigned
on April 30, 1997, at the Annual Meeting of shareholders to be held at the Ritz
Carlton Tysons Corner, 1700 Tysons Boulevard, McLean, Virginia 22102
(703-506-4300) on Wednesday, June 11, 1997, or any adjournment thereof.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
(arrow) Please Detach and Mail in the Envelope Provided (arrow)
A [X] Please mark your
votes as in this
example.
<TABLE>
<S> <C>
FOR all nominees
listed at right (except WITHHOLD AUTHORITY
as marked to the all nominees to vote for all
contrary below) nominees listed at right
1. Election of
Directors (all [ ] [ ] Nominees: J. Patrick Rowland
nominees are Richard Schwartz
nominated for Terrie G. Spiro
Class III):
</TABLE>
(Instruction: To withhold authority to vote for any
individual nominee, write that nominee's name on the
space provided below)
_____________________________________________________
FOR AGAINST ABSTAIN
2. Ratification and approval of the Company's [ ] [ ] [ ]
independent public accountants.
3. In their discretion, the Proxies are authorized to vote upon 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 undersigned shareholder. If no direction is made, this Proxy will be voted
(i) FOR the election of all listed nominees, (ii) FOR the ratification and
approval of the appointment of the Company's independent public accountants, and
(iii) at the discretion of the Proxies on any other matter that may properly
come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
YES NO
Please note if you are planning to attend [ ] [ ]
Dated:_____________________________, 1997
____________________________________ _____________________________________
Signature Please Print Name
____________________________________ _____________________________________
Signature if held jointly Please Print Name
NOTE: Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
