<PAGE>
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
VIRGINIA FIRST FINANCIAL CORPORATION
(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
<PAGE>
VIRGINIA FIRST FINANCIAL CORPORATION
Dear Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders
of Virginia First Financial Corporation ("Virginia First"), which will be held
on Wednesday, October 23, 1996 at 4:00 p.m., at the Main Office of Virginia
First Savings Bank, F.S.B., Corner of Franklin & Adams Streets, Petersburg,
Virginia. At the Meeting, three directors of Virginia First will be elected for
a term of three years.
Whether or not you plan to attend in person, it is important that your
shares be represented at the meeting. Please complete, sign, date and return
promptly the form of proxy which is enclosed in the outer address pouch of this
mailing. If you later decide to attend the Meeting and vote in person, or if you
wish to revoke your proxy for any reason prior to the vote at the Meeting, you
may do so and your proxy will have no further effect.
The Board of Directors and management of Virginia First appreciate your
continued support and look forward to seeing you at the Annual Meeting.
Sincerely yours,
CHARLES A. PATTON
President and
Chief Executive Officer
Petersburg, Virginia
September 25, 1996
PAGE
<PAGE>
VIRGINIA FIRST FINANCIAL CORPORATION
Franklin and Adams Streets
Petersburg, Virginia 23803
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on October 23, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Virginia First
Financial Corporation ("Virginia First") will be held at the Main Office of
Virginia First Savings Bank, F.S.B., at the Corner of Franklin and Adams
Streets, Petersburg, Virginia on October 23, 1996 at 4:00 p.m., for the
following purposes:
(1) To elect three directors for a term of three years or until their
respective successors are elected and qualified;
(2) To ratify the appointment by the Board of Directors of the firm of KPMG
Peat Marwick LLP as Virginia First's independent auditors for the
fiscal year 1997; and
(3) 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 Annual Meeting.
The Board of Directors has fixed the close of business on September 13,
1996 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
Paul W. Walk, Jr.
Secretary
Petersburg, Virginia
September 25, 1996
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THIS 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, DATE AND RETURN THE ENCLOSED PROXY
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.
- --------------------------------------------------------------------------------
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<PAGE>
VIRGINIA FIRST FINANCIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
October 23, 1996
GENERAL INFORMATION
This Proxy Statement is furnished to holders of common stock, $1.00 par
value per share ("Common Stock"), of Virginia First Financial Corporation
("Virginia First"), in connection with the solicitation of proxies by the Board
of Directors (the "Board") of Virginia First to be used at the Annual Meeting of
Stockholders to be held on October 23, 1996 at 4:00 p.m. at Virginia First's
principal executive offices and any adjournment thereof (the "Annual Meeting").
The principal executive offices of Virginia First are located at
Franklin and Adams Streets, Petersburg, Virginia. The approximate date on which
this Proxy Statement, the accompanying proxy card and Annual Report to
Stockholders (which is not part of Virginia First's soliciting materials) are
being mailed to Virginia First's stockholders is September 25, 1996.
The proxy solicited hereby, if properly signed and returned to Virginia
First 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 received will be voted "for" the proposals described herein. Any
stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing written notice thereof with the Secretary of Virginia
First (Paul W. Walk, Jr., Secretary, Virginia First Financial Corporation,
Franklin and Adams Streets, P. O. Box 2009, Petersburg, Virginia 23804-2009);
(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.
Only stockholders of record at the close of business on September 13,
1996 (the "Record Date") will be entitled to vote at the Annual Meeting. On the
Record Date, there were 5,743,267 shares of Common Stock of Virginia First
issued and outstanding and 1,185 record holders. Each share of Common Stock is
entitled to one vote at the Annual Meeting. Virginia First had no other class of
voting securities outstanding at the Record Date.
PAGE
<PAGE>
ELECTION OF DIRECTORS; SECURITY OWNERSHIP OF
MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Election of Directors; The Nominees
The Articles of Incorporation of Virginia First provide that the Board
shall be divided into three classes as nearly equal in number as possible. The
members of each class are to be elected for a term of three years and until
their successors are elected and qualified. One class of directors is elected
each year. At the 1997 annual meeting the directors whose terms expire at that
meeting will be reclassified so that each class of director has three members.
The following table sets forth the names of the current directors and the years
in which their terms of office will expire:
1996 (1) 1997 1998
-------- ---- ----
Charles A. Patton Frasier W. Brickhouse Preston H. Cottrell
Benjamin S. Gill William A. Patton William L. Eure, Jr.
George R. Mercer Francis R. Payne, Jr.
John H. VanLandingham, Jr.
(1) These three directors are the nominees for election at the Annual
Meeting for a three-year term expiring in 1999 or until their successors are
elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE NOMINEES BE ELECTED AS DIRECTORS.
The Board of Directors
Unless authority is withheld in the proxy, each proxy executed and
returned by a stockholder will be voted for the election of the nominees listed
above. Proxies distributed in conjunction herewith may not be voted for persons
other than the nominees named thereon. If any person named as 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. At this time, the Board knows 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.
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.
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There is set forth hereafter as to each of the nominees, and the
remaining directors who will continue to serve, certain information including
age, principal occupation and, as of September 1, 1996, information respecting
beneficial ownership of Common Stock. The date shown for first election as a
director in the information below represents the year in which the nominee or
continuing director was first elected to the Board of Virginia First or
previously to the Board of Virginia First Savings Bank, F.S.B. (the "Savings
Bank"). Unless otherwise indicated, the business experience and principal
occupations shown for each nominee or continuing director has extended five or
more years.
William A. Patton, 70, has been a director since 1956.
Mr. Patton is Chairman of the Board of Virginia First and the Savings
Bank.
Francis R. Payne, Jr., 76, has been a director since 1964.
Dr. Payne is a retired physician associated with Petersburg Obstetrics
and Gynecology Associates, Ltd., Petersburg, Virginia.
John H. VanLandingham, 73, has been a director since 1956.
Mr. VanLandingham is Chairman of the Board of Builders Supply Co. of
Petersburg, Inc., Petersburg, Virginia.
Frasier W. Brickhouse, 59, has been a director since 1983.
Mr. Brickhouse is Assistant Dean, School of Business, Virginia State
University, Petersburg, Virginia.
William L. Eure, Jr., 66, has been a director since 1971.
Mr. Eure is Chairman of Eure Communications, Inc., Charlottesville,
Virginia.
Benjamin S. Gill, 62, has been a director since 1971.
Mr. Gill is the owner of Benny's BBQ, Richmond, Virginia.
George R. Mercer, 86, has been a director since 1952.
Mr. Mercer is Chairman of Mercer Rug Cleaning and Carpet Sales and
George Marshall Corp., a real estate holding corporation, Richmond,
Virginia.
Charles A. Patton, 40, has been a director since 1986.
Mr. Patton is President and Chief Executive Officer of Virginia First
and the Savings Bank.
Preston H. Cottrell, 47, has been a director since 1992.
Mr. Cottrell is President and Chief Executive Officer of Cottrell
Communications, a private provider of telecommunications services,
Richmond, Virginia.
Security Ownership of Management
The following table sets forth information as of September 1, 1996
regarding the number of shares of Common Stock beneficially owned by all
directors and nominees, by each of the executive officers named in the "Summary
Compensation Table" herein and by all directors and executive officers in the
group. Unless otherwise noted, beneficial ownership includes shares, if any,
held in the name of the spouse, minor children or other relatives of the nominee
living in such person's home, as well as shares, if any, held in the name of
another person under an arrangement whereby the director or executive officer
can vest title in himself at once or at some future time.
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<PAGE>
<TABLE>
<CAPTION>
Common Stock
Name Beneficially Owned Percent of Class
- ---- ------------------ ----------------
<S> <C>
Directors
William A. Patton 1,064,745 (1) 18.38%
Francis R. Payne, Jr. 83,056 1.45%
John H. VanLandingham, Jr. 20,790 *
Frasier W. Brickhouse 26,076 *
William L. Eure, Jr. 68,562 1.19%
Benjamin S. Gill 10,568 *
George R. Mercer 60,060 1.05%
Charles A. Patton 1,201,185 (1) 20.56%
Preston H. Cottrell 39,220 *
Named Executives
Gary L. Martin 10,000 *
Hosie L. Maxwell 22,156 *
Steven A. Whitley 13,700 *
All present executive officers and directors as a
group (14 persons) 1,675,325 (2) 28.16%
</TABLE>
- --------------------
* Indicated holdings amount to less than 1% of the issued and outstanding Common
Stock.
(1) William A. Patton, Charles A. Patton, J. Dale Patton and Patton
Associates Limited Partnership are parties to a Voting Agreement under which
they share voting power over 1,014,745 issued and outstanding shares of Virginia
First Common Stock, including 449,651 shares held by William A. Patton, 263,194
shares held by Charles A. Patton,1,900 shares held by J. Dale Patton and 300,000
shares held by Patton Associates Limited Partnership. The Voting Agreement also
will apply to 50,000 shares and 100,000 shares of Virginia First Common Stock
that William A. Patton and Charles A. Patton, respectively, have the right to
acquire under presently exercisable stock options, if and when such options are
exercised. The Voting Agreement does not affect the parties' power to dispose of
shares with respect to which any has or shares the power of disposition and does
not cover any shares held in a fiduciary capacity or with respect to which a
party shares voting power with a person who is not a party to the Voting
Agreement. Charles A. Patton beneficially owns 86,440 shares of Virginia First
Common Stock that are not subject to the Voting Agreement. J. Dale Patton
beneficially owns 7,600 shares of Virginia First Common Stock that are not
subject to the Voting Agreement. Not included are 16,000 shares held by the wife
of Charles A. Patton, as to which he disclaims beneficial ownership.
(2) Includes beneficial ownership of shares issuable upon the exercise
of stock options exercisable within 60 days of September 1, 1996 by: William A.
Patton, 50,000 shares; Charles A. Patton, 100,000 shares, Hosie L. Maxwell,
20,000 shares; Steven A. Whitley, 10,000 shares; Gary L. Martin, 10,000 shares
and 205,000 shares by all directors and executive officers as a group.
Mr. William A. Patton is the father of Charles A. Patton, President,
Chief Executive Officer and a director of Virginia First. There are no other
family relationships among the officers or directors of Virginia First.
- 4 -
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<PAGE>
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information about those persons
believed by management to be beneficial owners of more than 5% of the shares of
Virginia First Common Stock outstanding on September 1, 1996. Persons and groups
owning in excess of 5% of Virginia First Common Stock are required to file
certain reports regarding ownership with Virginia First and the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Other than those persons listed below, Virginia
First is not aware of any person or group that owned more than 5% of Virginia
First's Common Stock at September 1, 1996.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Title of Class Name and Address of Beneficial Owner Beneficial Ownership Class
- -------------- ------------------------------------ -------------------- -----
<S> <C>
Common Stock William A. Patton, Charles A. Patton, J. Dale
Patton and Patton Associates Limited
Partnership c/o William A. Patton,
P. O. Box 2009
Petersburg, VA 23804 1 1,164,745 19.76%
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, Wisconsin 396,500 6.90%
</TABLE>
(1) William A. Patton, Charles A. Patton, J. Dale Patton and Patton
Associates Limited Partnership are parties to a Voting Agreement under which
they share voting power over 1,014,745 issued and outstanding shares of Virginia
First Common Stock, including 449,651 shares held by William A. Patton, 263,194
shares held by Charles A. Patton, 1,900 shares held by J. Dale Patton and
300,000 shares held by Patton Associates Limited Partnership. The Voting
Agreement also will apply to 50,000 shares and 100,000 shares of Virginia First
Common Stock that William A. Patton and Charles A. Patton, respectively, have
the right to acquire under presently exercisable stock options, if and when such
options are exercised. The Voting Agreement does not affect the parties' power
to dispose of shares with respect to which any has or shares the power of
disposition and does not cover any shares held in a fiduciary capacity or with
respect to which a party shares voting power with a person who is not a party to
the Voting Agreement. Charles A. Patton beneficially owns 86,440 shares of
Virginia First Common Stock that are not subject to the Voting Agreement. J.
Dale Patton beneficially owns 7,600 shares of Virginia First Common Stock that
are not subject to the Voting Agreement.
The Board of Directors and Its Committees
Meetings of the Board are held regularly, and there is also an
organizational meeting following the conclusion of the Annual Meeting of
Stockholders. The Board held 10 meetings in the year ended June 30, 1996. All
directors of Virginia First also are directors of the Savings Bank. The Board of
the Savings Bank held 12 meetings in the year ended June 30, 1996. For the year
ended June 30, 1996, none of Virginia First's nine directors attended fewer than
75% of the aggregate number of Board meetings and meetings of committees of
which the respective directors are members.
The Board has a Nominating Committee, an Audit Committee, a Stock
Option Committee, a Compensation Committee and an Executive Committee.
For fiscal 1996 the Nominating Committee consisted of Messrs Cottrell
and VanLandingham, and Dr. Payne. 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
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basis of recognized achievements and their ability to bring skill and experience
to the deliberations of the Board. The Nominating Committee met once in the year
ended June 30, 1996, and recommended the nominees named herein. Virginia First's
Bylaws provide, however, that stockholders entitled to vote for the election of
directors may name nominees for election to the Board.
Under Virginia First's Bylaws, notice of a proposed nomination meeting
certain specified requirements must be received by Virginia First not less than
60 nor more than 90 days prior to any meeting of stockholders called for the
election of directors, provided in each case that if fewer than 70 days' notice
of the meeting is given to stockholders, such written notice shall be received
not later than the close of the tenth day following the day on which notice of
the meeting was mailed to stockholders.
The Bylaws of Virginia First require that the stockholder's notice set
forth as to each nominee (i) the name, age, business address and residence
address of such nominee, (ii) the principal occupation or employment of such
nominee, (iii) the class and number of shares of Virginia First which are
beneficially owned by such nominee, and (iv) any other information relating to
such nominee that is required under federal securities laws to be disclosed in
solicitations of proxies for the election of directors, or is otherwise required
(including, without limitation, such nominee's written consent to being named in
a proxy statement as nominee and to serving as a director if elected). The
Bylaws of Virginia First further require that the stockholder's notice set forth
as to the stockholder giving the notice (i) the name and address of such
stockholder and (ii) the class and amount of such stockholder's beneficial
ownership of Virginia First capital stock. If the information supplied by
stockholder is deficient in any material aspect or if the foregoing procedure is
not followed, the chairman of the Annual Meeting may determine that such
stockholder's nomination should not be brought before the Annual Meeting and
that such nominee shall not be eligible for election as a director of Virginia
First.
The Audit Committee consists of Mr. Eure, as Chairman, Messrs.
Brickhouse and VanLandingham and Dr. Payne. The Audit 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 Virginia First's independent
auditors and federal examiners. The Audit Committee met seven times during the
year ended June 30, 1996.
The Executive Committee, which acts for the Board when the Board is not
in session, with certain exceptions as delineated by the Bylaws, is composed of
Mr. William A. Patton, Chairman, Messrs. Charles A. Patton, Eure, Gill and Dr.
Payne. The Executive Committee met 3 times during the year ended June 30, 1996.
The Executive Committee also functions as the Compensation Committee.
Executive Officers Who Are Not Directors
Stephen R. Kinnier (Age 44) is a Senior Vice President and Chief
Financial Officer of Virginia First and the Savings Bank. Prior to joining
Virginia First in February 1991, he was Senior Vice President for Investors
Financial Corporation from July 1986 to October 1990; and prior thereto was
Senior Tax Manager for Price Waterhouse from January 1976 to July 1986.
Gary L. Martin (Age 43), a Senior Vice President, joined the Savings
Bank in 1991 when it acquired Southern Atlantic Mortgage from Home Savings Bank
of Norfolk and serves as the chief operating officer of Virginia First Mortgage.
Before September 1991 he operated Southern Atlantic Mortgage for Home Savings
Bank.
Hosie L. Maxwell (Age 52) is Senior Vice President-Operations of the
Savings Bank in charge of Human Resources and MIS. Prior to joining the Savings
Bank in May 1994, he held positions as President of a savings bank in Kansas
City, as President of a data processing company and as an auditor with Arthur
Andersen & Co.
Paul W. Walk, Jr. (Age 51) has been a Senior Vice President of Virginia
First, the Savings Bank and Southside Service Corporation since October 1984,
was the Vice President and Marketing Director of Virginia First from November
1983 until October 1984, and joined Virginia First in 1974.
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<PAGE>
Steven A. Whitley (Age 49) is a Senior Vice President of the Savings
Bank in charge of retail banking operations. Prior to joining Virginia First in
November 1991, he held a similar position with Coreast Federal Savings Bank from
1989 to 1991.
Compliance With Filing Requirements Under the Securities Exchange Act of 1934
The Exchange Act requires Virginia First's Directors and executive
officers, and any persons owning more than 10% of a class of Virginia First's
stock, to file certain reports of ownership and changes in ownership with the
SEC and the National Association of Securities Dealers, Inc. The reporting
requirements are complex, and the following filings were made late: On January
2, 1995, William A. Patton transferred a 42.67% limited partnership interest in
Patton Associates Limited Partnership, which holds 300,000 shares of Virginia
First Common Stock, to Charles A. Patton as a gift. The gift should have been
reported by William A. Patton and Charles A. Patton on or before August 14,
1995. The gift was reported by both on November 21, 1995.
REMUNERATION
Compensation Committee Interlocks and Insider Participation
The Executive Committee of the Board of Virginia First, of which
William A. Patton and Charles A. Patton are members, also serves as the
Compensation Committee by making recommendations to the Board with respect to
employee benefits, compensation changes and policy. William A. Patton and
Charles A. Patton abstain from voting on their own compensation. None of the
remaining members of the Executive Committee (Mr. Eure, Mr. Gill and Dr. Payne)
is an employee of Virginia First or any of its subsidiaries, nor does any
executive officer of Virginia First serve as a director or member of the
compensation committee of any entity of which Mr. Eure, Mr. Gill or Dr. Payne is
an executive officer.
Committee Report on Compensation
Recommendations on compensation of Virginia First's executive officers
are made by the Executive Committee of the Board. Subject to Board approval, the
Committee establishes and controls compensation for the Company's senior
management through review and approval of salaries, incentive programs and
executive benefits.
The three primary components of executive compensation are base salary,
bonuses and stock option grants. The Compensation Committee recommends to the
Board the salaries and bonuses of the executive officers and stock option or
restricted stock grants. All components of executive compensation are reviewed
for competitiveness in relation to a group of companies in the financial
services and mortgage banking industries.
Base Salary. Base salaries for senior management of Virginia First and the
Savings Bank, which the Committee believes are consistent with industry
standards, are based on peer group data, individual performance,
responsibilities, tenure and internal comparability. In general, base salary
levels are set at the minimum levels believed by the Committee to be sufficient
to attract and retain qualified executives when considered with other components
of the Company's compensation structure.
Base salaries for the year ended June 30, 1996 reported in this Proxy
Statement were determined by the Committee in August, 1995. In the year ended
June 30, 1996, William A. Patton's salary was not directly related to any
specific measure of corporate performance.
Incentive Compensation. The Incentive Compensation Plan (the "Plan") effective
as of July 1, 1993 offers the potential for additional compensation to eligible
senior officers based upon Virginia First's financial performance. Specific
levels of incentive compensation, based on Virginia First's return on average
assets or beginning equity have been established, above which participating
officers receive incentive compensation. In the event qualifying earnings are
less than the minimum threshold, no incentive compensation is paid. Earnings
above the minimum
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<PAGE>
threshold will provide an incentive payment to participating officers on a
graduated scale. The earnings ranges necessary to produce a financial incentive
are modified for the subsequent fiscal year to an amount reflective of Virginia
First's equity as of the end of the current fiscal year or average assets for
the subsequent fiscal year.
The Plan provides for any incentive payment to be allocated equally to
two categories. Generally, the first category provides a cash payment to
participating officers as the product of a fraction, the numerator of which is
the individual officer's salary and the denominator of which is the sum of the
salaries of all participants. However, the allocation percentages can be
modified by the Compensation Committee.
The Plan's second category provides for the remaining one half of any
earned incentive payment to be allocated by the Board's Compensation Committee.
The Plan provides that earned incentives are to be allocated on the basis of
individual achievement. Such allocation can be made in the form of cash, stock
(restricted or unrestricted) or any other method reasonably determined by the
Compensation Committee.
For the fiscal year ended June 30, 1996, the Compensation Committee
approved the allocation of the second category's resources to the eligible
officers in the form of restricted stock, taking into consideration the
evaluation of each participant's performance together with the degree to which
the officer, in the opinion of the Committee, contributed to the overall success
of Virginia First. The participants were also assessed on the basis of their
leadership, dedication, community involvement and commitment to the long term
success of Virginia First.
The Plan provides for the inclusion of certain senior officers;
however, in the year ended June 30, 1996 it did not include William A. Patton.
Stock Options. In contrast to salaries and bonuses, the value to each executive
officer of stock option grants is tied directly to stock price performance. The
Stock Option Committee, consisting of Messrs. Eure and Gill and Dr. Payne,
recommends stock option grants under the stockholder-approved option plans. All
options have been granted with an exercise price equal to the market price at
the date of grant. If there is no appreciation in the market price of Virginia
First's Common Stock, the options are valueless. In the year ended June 30,
1996, Virginia First granted no stock options to its executive officers.
Annual Compensation Review. During the fourth quarter of each year, the Chief
Executive Officer submits an annual salary plan for senior executives (other
than the Chief Executive Officer) to the Committee, and the Committee reviews
that plan, makes any modifications it deems appropriate, and recommends the plan
to the Board. The salary plan is developed based on industry peer groups,
surveys, and performance judgments as to the past and expected further
contributions of the individual senior executives. The Committee reviews and
recommends the base salary of the Chief Executive Officer based upon similar
competitive compensation data and the Committee's assessment of his past
performance and its expectation as to his future contributions in leading
Virginia First.
Other Compensation Plans. At various times Virginia First has adopted certain
broad-based employee benefit plans in which executive officers are permitted to
participate on the same terms as non-executive employees who meet applicable
eligibility criteria, subject to any legal limitations on the amounts that may
be contributed to or the benefits that may be payable under the plans.
Compensation Committee
The Executive Committee of the Board of Virginia First also serves as
the Compensation Committee. The Committee's members as of the fiscal year ended
June 30, 1996 were Messrs. William A. Patton, Eure, Gill and Dr. Payne and Mr.
Charles A. Patton.
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<PAGE>
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended June 30, 1996,
1995 and 1994, the cash compensation paid by Virginia First, as well as certain
other compensation paid or accrued for those years, to each of the named
Executive Officers in all capacities in which they served:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Restricted Options/ All Other
Name and Stock Awards SAR Compensation
Principal Position Year Salary ($) Bonus ($) ($) (a) (#) ($) (b)
------------------ ---- ---------- --------- ------- --- -------
<S> <C>
William A. Patton 1996 250,000 -0- -0- -0- 39,710
Chairman of the Board 1995 226,000 -0- -0- -0- 39,632
and CEO 1994 215,000 -0- -0- 50,000 39,131
Charles A. Patton 1996 204,634 50,000 61,250 -0- 20,785
President and CEO 1995 194,250 33,331 49,252 -0- 20,759
1994 185,000 26,707 25,912 100,000 20,122
Gary L. Martin 1996 120,000 166,908 -0- -0- 5,817
Chief Operating Officer 1995 183,075 -0- -0- -0- 3,323
Virginia First 1994 50,000 531,097 -0- 10,000 4,447
Mortgage
Steven A. Whitley 1996 110,250 30,000 24,500 -0- 3,973
Senior Vice President 1995 105,000 17,951 14,768 -0- 3,583
1994 100,000 14,440 13,850 10,000 3,000
Hosie L. Maxwell 1996 105,000 10,047 12,250 -0- 1,706
Senior Vice President 1995 100,000 17,115 12,804 -0- -0-
</TABLE>
- -----------------
(a) The values set forth in the column above for restricted stock awards are as
of June 30, 1994, June 30, 1995 and June 30, 1996, respectively. The aggregate
number of shares of restricted stock held and their values on June 30, 1996 were
as follows: Charles A. Patton, 13,829 shares valued at $190,149; Mr. Whitley,
5,318 shares valued at $73,123; and Mr. Maxwell, 3,035 shares valued at $41,731.
Normal dividends will be paid on the shares. Shares of restricted stock will
vest at the rate of 20% per year, beginning July 1, 1995, for shares granted for
the year ended June 30, 1994, July 1, 1996 for shares granted for the year ended
June 30, 1995, and July 1, 1997 for shares granted for the year ended June 30,
1996.
(b) "All Other Compensation" includes, as to William A. Patton, premiums paid on
a life insurance policy ($35,012 in 1996, 1995 and 1994) and matching
contributions by Virginia First to its 401(k) Plan ($4,698 in 1996, $4,620 in
1995, and $4,119 in 1994). For Charles A. Patton, it includes amounts paid in
consideration of the termination of a supplemental retirement income agreement
($16,000 in 1996, 1995 and 1994) and matching contributions by
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<PAGE>
Virginia First to its 401(k) Plan ($4,785 in 1996, $4,759 in 1995 and $4,122 in
1994). For Messrs. Martin, Whitley and Maxwell, it includes matching
contributions by Virginia First to its 401(k) Plan.
Supplemental Retirement Benefit
Under an agreement between Virginia First and William A. Patton that
was entered into in 1980 and amended in 1993, Virginia First will pay Mr. Patton
a retirement benefit for life to supplement his benefits under Virginia First's
former defined benefit pension plan, which was terminated in 1989. The amount of
the annual benefit will be equal to 80% of the average of Mr. Patton's salary
for his final three years of employment, reduced by Social Security and the
benefit he receives in respect of the amount accumulated for his benefit under
such defined benefit pension plan. The annual benefit to Mr. Patton under the
agreement will be $66,000.
Options/SAR Grants in Last Fiscal Year
For the fiscal year ended June 30, 1996, no stock options or stock
appreciation rights were granted to the named Executive Officers.
Option Exercises and Holdings
Except for Mr. Charles A. Patton, none of the named Executive Officers
exercised options or stock appreciation rights during the fiscal year ended June
30, 1996. All options held by named executive officers at June 30, 1996 were
exercisable. The following table sets forth information with respect to
exercised and unexercised options held by such officers as of the end of the
fiscal year:
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION/SAR VALUE
<CAPTION>
Value of
unexercised
Number of in-the-money
unexercised options/SARs
options/SARs at fiscal year
Shares acquired Value at June 30, end
Name on exercise (#) Realized ($) 1996 (#) ($) (a)
- ---- --------------- ------------ -------- -------
<S> <C>
William A. Patton -0- -0- 50,000 $337,500
Charles A. Patton 124,870 $1,245,716 100,000 675,000
Gary L. Martin -0- -0- 10,000 67,500
Steven A. Whitley -0- -0- 10,000 67,500
Hosie L. Maxwell -0- -0- 20,000 135,000
</TABLE>
- ---------------------
(a) The value of unexercised in-the-money options at fiscal year end
was calculated by determining the difference between the fair market value of
the Common Stock of Virginia First underlying the options on June 30, 1996
($13.75 per share), which was the last sales price of the Common Stock on such
date as reported on the NASDAQ/NMS, and the exercise price of the options.
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<PAGE>
Directors' Fees
Directors, including directors who are officers of Virginia First,
received fees of $800 for each meeting of the Board attended and $300 for each
Executive and Audit Committee meeting attended during fiscal 1996.
Employment Agreements
Virginia First and William A. Patton are parties to an employment
agreement which provides for Mr. Patton to serve as Chairman of the Board of
Virginia First. Mr. Patton retired as the Chief Executive Officer, effective
July 1, 1996, but continues to serve as Chairman of the Board. The agreement is
for a five year period ending December 31, 2000 and initially provided for a
base salary of $250,000, which was reduced to $100,000, effective July 1, 1996.
If Mr. Patton's employment is terminated for reasons other than cause or
resignation without good reason, he will be entitled to receive his base salary
and certain benefits for the remainder of the term of the agreement. If his
employment is terminated subsequent to a change in control of Virginia First (as
defined in the employment agreement), Mr. Patton will be entitled to additional
benefits equal to 1.5 times the compensation paid to him for the twelve months
prior to the date of termination.
Virginia First and Charles A. Patton, President, have also entered into
an employment agreement. That agreement is for a five year period ending
December 31, 2000 and initially provided for a base salary of $204,000, which
the Board increased to $225,000, effective June 28, 1996, when Mr. Patton was
named Chief Executive Officer. It also provides the same severance and change of
control benefits as described above for William A. Patton.
If termination of employment due to a change in control had occurred in
fiscal 1996, Messrs. William A. Patton and Charles A. Patton would be entitled
to severance payments amounting to approximately $375,000 and $306,000,
respectively and their salaries and fringe benefits for the remaining terms of
their employment agreements.
Gary L. Martin was first employed by Virginia First in connection with
its acquisition of Southern Atlantic Mortgage. Under Mr. Martin's employment
arrangement, he receives a salary of $120,000 per year and a bonus, based on
residential mortgage loan production of Virginia First Mortgage. The bonus paid
under Mr. Martin's employment arrangement in the fiscal year ended June 30, 1996
was $166,908. There are no severance provisions or provisions for payments in
connection with a change in control of Virginia First.
Indebtedness of Management
No loans to directors or officers involve more than the normal risks of
collectibility or present other unfavorable features. None of the loans was
non-accrual, past-due, restricted or potential problem loans, as of August 31,
1996. All such loans were originated on substantially the same terms, including
interest rates, as those prevailing at the time for comparable transactions with
other persons.
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<PAGE>
Stock Performance Graph
The following graph compares the cumulative total return on Virginia
First's Common Stock with the cumulative total return of the NASDAQ Stock Market
- - U.S. Index and the NASDAQ Bank Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG VIRGINIA FIRST FINANCIAL CORPORATION,
THE NASDAQ STOCK MARKET-US INDEX AND THE NASDAQ BANK INDEX
[GRAPH]
6/91 6/92 6/93 6/94 6/95 6/96
---- ---- ---- ---- ---- ----
Virginia First Financial
Corporation 100 160 380 564 710 1,123
NASDAQ Bank 100 148 188 214 242 315
NASDAQ Stock Market-US 100 120 151 153 204 261
*$100 invested on June 30, 1991 in stock or index--including reinvestment of
dividends. Fiscal year ending June 30.
- 12 -
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<PAGE>
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board has appointed KPMG Peat Marwick LLP, independent certified
public accountants, to perform the audit of Virginia First's financial
statements for the year ending June 30, 1997, and further directed that the
selection of the auditors be submitted for ratification by the stockholders at
the Annual Meeting. KPMG Peat Marwick LLP has acted as Virginia First's, and its
predecessor's, independent accountants since 1961.
Representatives from KPMG Peat Marwick LLP 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS FOR FISCAL
1997.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have presented at the next
annual meeting of stockholders, to be held in October, 1997, must be received no
later than June 25, 1997. If such proposal complies with all of the requirements
of Rule 14a-8 of the Exchange Act, it will be included in the Proxy Statement
and set forth in the form of proxy issued for the next Annual Meeting of
Stockholders. It is urged that any such proposals be sent by certified mail,
return receipt requested.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of Virginia First's Annual Report to Stockholders for the year
ended June 30, 1996 accompanies this Proxy Statement/Prospectus. Additional
copies may be obtained by written request to the Secretary of Virginia First at
the address indicated below. Such Annual Report is not part of the proxy
solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST OF ANY PERSON WHO, ON THE RECORD
DATE, WAS RECORD OWNER OF VIRGINIA FIRST 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 STOCKHOLDERS, VIRGINIA FIRST WILL
FURNISH TO SUCH PERSON, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED JUNE 30, 1996 AND ITS QUARTERLY REPORTS ON FORM 10- Q
AND THE EXHIBITS THERETO REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934. ANY SUCH REQUEST SHOULD BE
MADE IN WRITING TO PAUL W. WALK, JR., SECRETARY, VIRGINIA FIRST, CORNER OF
FRANKLIN AND ADAMS STREETS, P. O. BOX 2009, PETERSBURG, VIRGINIA 23804-2009. THE
FORM 10-K AND QUARTERLY REPORTS ON FORM 10-Q ARE NOT PART OF THE PROXY
SOLICITATION MATERIALS.
OTHER MATTERS
The Board of Directors of Virginia First 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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<PAGE>
VIRGINIA FIRST FINANCIAL CORPORATION
Franklin & Adams Streets
Petersburg, Virginia 23803
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
Proxy Solicited by the Board of Directors
The undersigned hereby constitutes John H. VanLandingham, Jr., Frasier
W. Brickhouse and William L. Eure, Jr. or any of them, attorneys and
proxies, with power of substitution in each, to act for the undersigned
with respect to all shares of Common Stock of Virginia First Financial
Corporation ("Virginia First") held of record by the undersigned on
September 13, 1996, at the Annual Meeting of Stockholders to be held at
the Main Office of Virginia First at the Corner of Franklin & Adams
Streets, Petersburg, Virginia on October 23, 1996, at 4:00 p.m., or any
adjournment thereof, for the following purposes:
1. Election of Directors
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below)
Charles A. Patton, Benjamin S. Gill and George R. Mercer
2. To ratify the appointment by the Board of Directors of the firm of
KPMG Peat Marwick LLP as Virginia First's independent auditors for the
fiscal year 1997; and
|_| FOR |_| AGAINST |_| ABSTAIN
3. To vote on such other business as may property come before the meeting.
This proxy when properly executed will be voted in the manner directed
by the undersigned stockholder. If no direction is made, this proxy will
be voted for 1 and 2.
Please sign name exactly as it appears on the stock
certificate. Only one of several joint owners need
sign. Fiduciaries should give full title.
--------------------------- --------------
Signature Date
--------------------------- --------------
Signature Date
I plan ____, do not plan ___, to attend the 1996
Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY PROMPTLY.
