SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
<TABLE>
<CAPTION>
<S> <C>
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 Under Rule 14a-12
</TABLE>
GUARANTY FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided in 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>
GUARANTY FINANCIAL CORPORATION
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of Guaranty Financial Corporation ("Guaranty"), which will be held on May 25,
2000, at 4:00 p.m., at the Glenmore Country Club, 1750 Piper Way, Keswick,
Virginia (the "Meeting"). At the Meeting, three directors will be elected for
terms of three years each.
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 that is enclosed with this mailing. If you 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 Guaranty appreciate your
continued support and look forward to seeing you at the Meeting.
Sincerely yours,
/s/ Thomas P. Baker
THOMAS P. BAKER
President and
Chief Executive Officer
Charlottesville, Virginia
May 1, 2000
<PAGE>
GUARANTY FINANCIAL CORPORATION
1658 State Farm Boulevard
Charlottesville, Virginia 22911
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 25, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of the
holders of shares of Common Stock ("Common Stock") of Guaranty Financial
Corporation ("Guaranty") will be held at the Glenmore Country Club, 1750 Piper
Way, Keswick, Virginia on May 25, 2000, at 4:00 p.m., for the following
purposes:
1. To elect three directors for terms of three years each, or
until their successors are elected and qualify; and
2. To transact such other business as may properly come before
the Meeting.
Holders of shares of Common Stock of record at the close of business on
April 21, 2000, will be entitled to vote at the Meeting.
You are requested to fill in, sign, date and return the enclosed proxy
promptly, regardless of whether you expect to attend the Meeting. A postage-paid
return envelope is enclosed for your convenience.
If you are present at the Meeting, you may vote in person even if you
have already returned your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Esther S. Sheler
Esther S. Sheler
Secretary
Charlottesville, Virginia
May 1, 2000
________________________________________________________________________________
YOU ARE CORDIALLY INVITED TO ATTEND THIS MEETING. IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED REGARDLESS OF THE NUMBER THAT 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.
________________________________________________________________________________
<PAGE>
GUARANTY FINANCIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 25, 2000
GENERAL INFORMATION
This Proxy Statement is furnished to holders of common stock, par value
$1.25 per share ("Common Stock"), of Guaranty Financial Corporation ("Guaranty")
in connection with the solicitation of proxies by the Board of Directors of
Guaranty to be used at the Annual Meeting of Shareholders to be held on May 25,
2000, at 4:00 p.m., at the Glenmore Country Club, 1750 Piper Way, Keswick,
Virginia, and any adjournment thereof (the "Meeting"). At the Meeting, three
directors will be elected for terms of three years each.
The principal executive offices of Guaranty are located at 1658 State
Farm Boulevard, Charlottesville, Virginia 22911. The approximate date on which
this Proxy Statement and the accompanying proxy card are being mailed to
Guaranty's shareholders is May 1, 2000.
The Board of Directors has fixed the close of business on April 21,
2000, as the record date (the "Record Date") for the determination of the
holders of shares of Common Stock entitled to receive notice of and to vote at
the Meeting. At the close of business on the Record Date, there were 1,961,727
shares of Common Stock outstanding held by approximately 1,200 shareholders.
Each share of Common Stock is entitled to one vote on all matters to be acted
upon at 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.
As of the Record Date, directors and executive officers of Guaranty and
their affiliates, as a group, owned of record and beneficially a total of
475,617 shares of Common Stock, or approximately 23.43% of the shares of Common
Stock outstanding on such date. Directors and executive officers of Guaranty
have indicated an intention to vote their shares of Common Stock FOR the
election of the nominees set forth on the enclosed proxy.
A shareholder may abstain or (only with respect to the election of
directors) withhold his vote (collectively, "Abstentions") with respect to each
item submitted for shareholder approval. Abstentions will be counted for
purposes of determining the existence of a quorum. Abstentions will not be
counted as voting in favor of the relevant item.
A broker who holds shares in "street name" has the authority to vote on
certain items when it has not received instructions from the beneficial owner.
Except for certain items for which brokers are prohibited from exercising their
discretion, a broker is entitled to vote on matters put to shareholders without
instructions from the beneficial owner. Where brokers do not have or do not
exercise such discretion, the inability or failure to vote is referred to as a
"broker nonvote." Under the circumstances where the broker is not permitted to,
or does not, exercise its discretion, assuming proper disclosure to Guaranty of
such inability to vote, broker nonvotes will not be counted for purposes of
determining the existence of a quorum, and also will not be counted as not
voting in favor of the particular matter.
Shareholders of Guaranty are requested to complete, date and sign the
accompanying form of proxy and return it promptly to Guaranty in the enclosed
envelope. If a proxy is properly executed and
<PAGE>
returned in time for voting, it will be voted as indicated thereon. If no voting
instructions are given, proxies received by Guaranty will be voted for approval
of the directors nominated for election.
Any shareholder who executes a proxy has the power to revoke it at any
time before it is voted by giving written notice of revocation to Guaranty, by
executing and delivering a substitute proxy to Guaranty or by attending the
Meeting and voting in person. If a shareholder desires to revoke a proxy by
written notice, such notice should be mailed or delivered, so that it is
received on or prior to the meeting date, to Esther S. Sheler, Secretary,
Guaranty Financial Corporation, 1658 State Farm Boulevard, Charlottesville,
Virginia 22911.
The cost of soliciting proxies for the Meeting will be borne by
Guaranty.
ELECTION OF DIRECTORS
Three directors are to be elected to serve for terms of three years
each. The Board of Directors acts as a Nominating Committee for selecting the
nominees for election as directors. The Board of Directors has no reason to
believe that any of the nominees will be unavailable.
Under Guaranty's Bylaws, notice of a proposed nomination or a
shareholder proposal meeting certain specified requirements must be received by
Guaranty not less than 60 nor more than 90 days prior to any meeting of
shareholders called for the election of directors, provided in each case that if
fewer than 70 days' notice of the meeting is given to shareholders, 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 shareholders. Assuming a date
of April 26, 2001 for the 2001 annual meeting of shareholders, Guaranty must
receive any notice of nomination or other business no earlier than January 26,
2001 and no later than February 25, 2001.
Guaranty's Bylaws require that the shareholder'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 Guaranty that 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). Guaranty's Bylaws
further require that the shareholder's notice set forth as to the shareholder
giving the notice (i) the name and address of such shareholder and (ii) the
class and amount of such shareholder's beneficial ownership of Guaranty's
capital stock. If the information supplied by the shareholder is deficient in
any material aspect or if the foregoing procedure is not followed, the chairman
of the annual meeting may determine that such shareholder's nomination should
not be brought before the annual meeting and that such nominee shall not be
eligible for election as a director of Guaranty.
The following information sets forth the names, ages, principal
occupations and business experience for all nominees and incumbent directors.
The date shown for first election as a director in the information below
represents the year in which the nominee or incumbent director was first elected
to the Board of Directors of Guaranty or previously to the Board of Directors of
Guaranty Bank. Unless otherwise indicated, the business experience and principal
occupations shown for each nominee or incumbent director has extended five or
more years.
2
<PAGE>
Nominees for Election
for Terms Expiring in 2003
Douglas E. Caton, 57, has been a director since 1981 and has been Chairman of
Guaranty's Board of Directors since 1989.
Mr. Caton is a commercial real estate investor and developer. He owns
and controls or manages over 3,500 apartment units throughout Virginia.
Mr. Caton is also Chief Executive Officer of Management Services
Corporation, a real estate management and development company that
currently has over $35,000,000 in construction projects in progress or
planned. His other business interests include cable television and
farming. A combat veteran of the Vietnam War, Mr. Caton is a Major
General, the highest rank attainable, in the United States Army Reserve
with over 32 years of service. A lawyer by background, Mr. Caton is
also an active member of the Virginia State Bar.
John R. Metz, 62, has been a director since 1980.
Mr. Metz is a pharmacist at Martha Jefferson Hospital in
Charlottesville, Virginia. He is a member of the Board of Directors of
the Virginia Pharmaceutical Association Research and Education
Foundation, the Virginia Society of Health-System Pharmacists, the
Virginia Pharmacists Association, and the Northwestern Virginia Health
Systems Agency. He is past President of Hospice of the Piedmont. Mr.
Metz is retired from the Virginia Air National Guard and U.S. Air Force
with the rank of Brigadier General.
James R. Sipe, Jr., 44, has been a director since 1996.
Mr. Sipe is an associate broker with Prudential Funkhouser &
Associates, a real estate sales company in Harrisonburg, Virginia. He
is a graduate of Richmond College and the T.C. Williams School of Law
at the University of Richmond. He is active in numerous civic
organizations and currently serves as Chairman of the Board of Trustees
of Hunter McGuire School.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE NOMINEES
SET FORTH ABOVE.
Incumbent Directors Serving
for Terms Expiring in 2001
Henry J. Browne, 67, has been a director since 1976.
Mr. Browne is an architect in private practice with studios in Keswick,
Virginia, and Boca Grande, Florida. He was President of Browne,
Eichmon, Dalgliesh, Gilpin & Paxton, an architecture firm in
Charlottesville, Virginia, from March 1958 to April 1996. Mr. Browne is
a past director of Farmington Country Club, past president of the
Virginia Chapter of the American Institute of Architects, and past
president of Downtown Charlottesville, Inc.
Robert P. Englander, 80, has been a director since 1976.
Mr. Englander is President of the Englander Agency, a life insurance
company in Charlottesville, Virginia. Mr. Englander has been an
insurance agent since 1949.
Oscar W. Smith, Jr., 69, has been a director since 1976.
Mr. Smith is President of K-B Management Co. in Charlottesville,
Virginia. He was formerly Vice President and General Manager of a large
petroleum distribution facility for many years. He has served as
President of the Albemarle Rotary Club and the University of Virginia
Touchdown Club and is a master mason.
3
<PAGE>
Incumbent Directors Serving for
Terms Expiring in 2002
John B. Syer, 60, has been a director since 1998.
Mr. Syer has been the Executive Director of the University of Virginia
Alumni Association and UVA Fund since 1994. Mr. Syer was formerly the
owner and Chief Executive Officer of S&N Transportation in Norfolk,
Virginia, President and Chief Operating Officer of Essex Financial
Group, Inc. and its affiliates in Norfolk, Virginia, and Managing
Partner of Home Health of Tidewater.
Thomas P. Baker, 54, has been a director since 1990.
Mr. Baker has served as the President and Chief Executive Officer of
Guaranty Bank since January 1, 1990.
Harry N. Lewis, 72, has been a director and Vice Chairman of Guaranty's Board of
Directors since 1976.
Mr. Lewis has been President of Lewis Insurance Agency, Inc., an
insurance sales company in Charlottesville, Virginia, since July 1952.
Mr. Lewis is an alumnus of the University of Virginia and the Darden
School of Business Administration. He holds the CPCU and the AIA
insurance designations and has served as president of the Central
Virginia Chapter of CPCU and the Charlottesville Albemarle Insurance
Agent's Association. Mr. Lewis is currently President of the
Charlottesville Albemarle SPCA and the Farmington Property Owners
Association.
Jason I. Eckford, Jr., 70, has been a director since 1999.
Mr. Eckford currently owns his own financial services business in
Charlottesville, Virginia. He has over 30 years experience in the
banking industry, having served as President at First Virginia Bank -
Monticello National and Fidelity American Bank, as well as Vice
President at Virginia National Bank and NationsBank - Trust Division.
He is a graduate of the University of Virginia's School of Arts and
Sciences, as well as its School of Bank Management and the Stonier
Graduate School of Banking. He is a member of the Board of Directors of
the Charlottesville Symphony Society and the Jefferson Area Board for
the Aging. He is a past President of the Charlottesville - Albemarle
Chamber of Commerce and has served on the Boards for the Virginia
Student Aid Foundation, Farmington Country Club, Camp Holiday Trails,
and Blue Ridge Home Builders, as well as numerous other organizations.
The Board of Directors and Committees
Meetings of the Board of Directors are held regularly each month, and
there is also an organizational meeting following the conclusion of the Annual
Meeting of Shareholders. The Board of Directors held 16 meetings in the year
ended December 31, 1999. For the year ended December 31, 1999, none of
Guaranty's directors attended fewer than 75% of the aggregate of the total
number of meetings of the Board of Directors and the total number of meetings of
committees on which the respective director served.
The Board of Directors has a Loan Committee, an Audit Committee, a
Compensation Committee and a Building Committee.
For fiscal year 1999, the Loan Committee consisted of Mr. Caton, as
Chairman, and Messrs. Eckford, Lewis, Sipe and Smith. The duties of this
committee are to review actions of the Management Loan Committee and the Asset
Management Committee. It also acts on loans in amounts that exceed the
Management Loan Committee's authority. The Loan Committee met 21 times during
the year ended December 31, 1999.
4
<PAGE>
The Audit Committee consists of Mr. Metz, as Chairman, and Messrs.
Caton, Englander and Syer. 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 Guaranty's independent auditors and federal
examiners. The Audit Committee met one time during the year ended December 31,
1999.
The Compensation Committee, which reviews senior management's
performance and compensation, and reviews and sets guidelines for compensation
of all employees, consists of Mr. Englander, as Chairman, and Messrs. Browne,
Lewis, Metz, Smith and Syer. The Compensation Committee did not meet during the
year ended December 31, 1999.
The Building Committee, formerly the Planning Committee, reviews
proposed improvements to existing facilities and proposed new facilities and
consists of Mr. Browne, as Chairman, and Messrs. Englander, Sipe and Smith. The
Building Committee met one time in the year ended December 31, 1999.
Security Ownership of Management
The following table sets forth information as of March 1, 2000,
regarding the number of shares of Common Stock beneficially owned by each
director, each executive officer named in the Summary Compensation Table below
and all directors and executive officers as a group. Beneficial ownership
includes shares, if any, held in the name of the spouse, minor children or other
relatives of the individual 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.
Common Stock
Name Beneficially Owned (1) Percentage of Class
- ---- ---------------------- -------------------
Thomas P. Baker 23,881 1.21%
Henry J. Browne 38,637 1.97%
Douglas E. Caton 305,900 15.57%
Jason I. Eckford, Jr. 1,500 *
Robert P. Englander 12,400 *
Harry N. Lewis 8,088 *
John R. Metz 16,355 *
Donna W. Richards 17,266 *
James R. Sipe, Jr. 4,100 *
Oscar W. Smith, Jr. 22,174 1.13%
Rex L. Smith, III 22,716 1.15%
John B. Syer 2,600 *
All present executive
officers and directors
as a group (12 Persons) 475,617 23.43%
___________________
* Percentage of ownership is less than one percent of the outstanding shares
of Common Stock.
(1) Includes beneficial ownership of shares issuable upon the exercise of stock
options exercisable within 60 days of March 1, 2000.
5
<PAGE>
Security Ownership of Certain Beneficial Owners
The following table sets forth information as of March 1, 2000,
regarding the number of shares of Common Stock beneficially owned by all persons
who own five percent or more of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
Common Stock
Name and Address Beneficially Owned Percentage of Class
- ---------------- ------------------ -------------------
<S> <C> <C>
Douglas E. Caton 305,900 (1) 15.57%
4 Deer Park
Earlysville, Virginia
T. Rowe Price Associates, Inc. (2) 100,000 5.10%
T. Rowe Price Financial Services Fund, Inc.
100 East Pratt Street
Baltimore, Maryland
</TABLE>
____________________
(1) Includes beneficial ownership of shares issuable upon the exercise of stock
options exercisable within 60 days of March 1, 2000.
(2) In a Schedule 13G filed with the Securities and Exchange Commission (the
"SEC") on February 4, 2000, T. Rowe Price Associates, Inc., an investment
adviser, reported that it had the sole power to dispose of 100,000 shares
of Common Stock and T. Rowe Price Financial Services Fund, Inc., an
investment company, reported that it had the sole power to vote 100,000
shares of Common Stock.
Executive Officers Who Are Not Directors
Donna W. Richards, 36, was appointed Senior Vice President of Real
Estate Lending in April 1995. Ms. Richards has been employed by Guaranty since
April 1993 and has served in the past as Manager of Loan Originations and a Loan
Officer. From December 1991 to April 1993, she was a Senior Loan Processor for
Virginia Federal.
Rex L. Smith, III, 42, has been Senior Vice President - Retail /
Commercial Services since February 1998 and was Senior Vice President -
Commercial from September 1996 to February 1997. Between March 1997 and January
1998, Mr. Smith was a Vice President with Central Fidelity National Bank. From
March 1993 until August 1996, he was Vice President/Senior Business Manager of
Crestar Financial Corporation.
6
<PAGE>
Executive Compensation
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31,
1999, 1998 and 1997, the cash compensation paid by Guaranty, as well as certain
other compensation paid or accrued for those years, to the named Executive
Officers in all capacities in which they served.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) Options Compensation ($)(1)
------------------ ---- ---------- --------- ---------------- ------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas P. Baker 1999 147,500 - * 15,000 3,750
President and Chief 1998 122,600 3,000 * - 2,930
Executive Officer 1997 115,200 3,252 * 10,000 2,869
Rex L. Smith, III 1999 137,500 - * 22,500 3,032
Senior Vice President 1998 (2) 96,250 3,000 * - -
Retail / Commercial 1997 (2) 12,800 - * - -
Donna W. Richards 1999 125,833 20,000 (3) * 22,500 3,203
Senior Vice President 1998 87,500 3,000 * - 2,297
Real Estate Lending 1997 75,927 - * - 2,206
</TABLE>
__________________
* All benefits that might be considered of a personal nature did not exceed
the lesser of $50,000 or 10% of total annual salary and bonus.
(1) Amounts reflect Guaranty's matching contribution under its Section 401(k)
retirement plan.
(2) Between March 1997 and January 1998, Mr. Smith was not employed by
Guaranty.
(3) In February 1999, Ms. Richards was paid a one-time signing bonus in
connection with her entering into an employment agreement with Guaranty.
7
<PAGE>
Stock Option Grants
The following table sets forth for the year ended December 31, 1999,
the grants of stock options to the named Executive Officers:
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Number of Percent of Total
Securities Underlying Options Granted to
Options Employees in Fiscal Exercise or Base
Name Granted (#) (1) Year (%) (2) Price ($/Share) (3) Expiration Date
---- --------------- ------------ ------------------- ---------------
<S> <C> <C> <C> <C>
Thomas P. Baker 15,000 16.3 12.00 February 23, 2009
Rex L. Smith, III 22,500 24.5 12.00 February 23, 2009
Donna W. Richards 22,500 24.5 12.00 February 23, 2009
</TABLE>
_________________
(1) Each of these options relates to shares of Common Stock.
(2) Options to purchase 92,000 shares of Common Stock were granted to employees
during the year ended December 31, 1999.
(3) Stock options were awarded at or above the fair market value of the shares
of Common Stock at the date of award.
Option Exercises and Holdings
In the year ended December 31, 1999, no stock options were exercised by
any of the named Executive Officers. The following table sets forth the amount
and value of stock options held by the named Executive Officers as of December
31, 1999.
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Fiscal Year End (#) (1) at Fiscal Year End ($) (2)
----------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Thomas P. Baker 16,666 8,334 -- --
Rex L. Smith, III 16,666 5,834 -- --
Donna W. Richards 16,666 5,834 -- --
</TABLE>
______________
(1) Each of these options relates to shares of Common Stock.
(2) No options disclosed in the table were in-the-money as of December 31,
1999.
8
<PAGE>
Directors' Fees
Directors, excluding directors who are officers of Guaranty, received
fees of $550 for each meeting of the Board of Directors attended and $300 for
each Loan, Audit, Compensation and Building Committee meeting attended during
fiscal 1999. Mr. Caton, who is an ex officio member of all Committees and
devotes additional time to Guaranty's affairs as Chairman of the Board of
Directors, received a fee of $32,500 in the fiscal year ended December 31, 1999,
in lieu of any fees for attending Board of Directors and Committee meetings.
In 1998, each director of Guaranty was granted options to purchase
4,000 shares of Common Stock. Of this amount, options to purchase 800 shares of
Common Stock vest each year and are exercisable for a period of three years.
Such options were granted with an exercise price at or above the fair market
value of the Common Stock.
Employment Agreements
Guaranty and each of the named Executive Officers are parties to an
employment agreement entered into in February 1999. Mr. Baker's employment
agreement provides for him to serve as President and Chief Executive Officer of
Guaranty and provides for a base salary of $150,000. Mr. Smith's employment
agreement provides for him to serve in a senior management or executive capacity
and provides for a base salary of $140,000. Ms. Richards' employment agreement
provides for her to serve in a senior management or executive capacity and
provides for a base salary of $130,000.
The three employment agreements have the following terms and
conditions. Each agreement is for a period ending February 26, 2004. If any of
the named Executive Officers is terminated for reasons other than cause, the
officer will be entitled to receive severance pay equal to the officer's annual
base salary in effect at the time. If the officer's employment terminates for
any reason within 120 days of a change in control, the officer will be entitled
to severance payments approximately equal to 299% of the officer's average cash
compensation for the five years that precede the change in control. If
termination of employment due to a change in control had occurred in the year
ended December 31, 1999, Mr. Baker, Mr. Smith and Ms. Richards would have been
entitled to severance payments amounting to approximately $448,500, $418,600 and
$388,700, respectively.
Transactions with Management
Some of the directors and officers of Guaranty are at present, as in
the past, customers of Guaranty, and Guaranty has had, and expects to have in
the future, banking transactions in the ordinary course of its business with
directors, officers, principal shareholders and their associates, on
substantially the same terms, including interest rates and collateral on loans,
as those prevailing at the same time for comparable transactions with others.
These transactions do not involve more than the normal risk of collectibility or
present other unfavorable features. The largest aggregate outstanding balance of
loans to directors, executive officers and their associates as a group in the
fiscal year ended December 31, 1999, was approximately $1,288,035. Such balances
totaled $1,138,899 at December 31, 1999, or 8.0% of Guaranty's equity capital at
that date.
There are no legal proceedings to which any director, officer,
principal shareholder or associate is a party that would be material and adverse
to Guaranty.
9
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Guaranty's directors and executive officers, and any
persons who own more than 10% of Common Stock, to file with the SEC reports of
ownership and changes in ownership of common stock. Officers and directors are
required by SEC regulation to furnish Guaranty with copies of all Section 16(a)
forms that they file. Based solely on review of the copies of such reports
furnished to Guaranty or written representation that no other reports were
required, Guaranty believes that, during fiscal year 1999, all filing
requirements applicable to its officers and directors were complied with.
INDEPENDENT AUDITORS
BDO Seidman, LLP has been appointed to perform the audit of Guaranty's
financial statements for the year ending December 31, 2000. BDO Seidman, LLP has
acted as Guaranty's auditors for the past six years and has reported on
financial statements during that period. A representative from BDO Seidman, LLP
is expected to be present at the Meeting, will have the opportunity to make a
statement if he desires to do so, and is expected to be available to respond to
appropriate questions.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of Guaranty's Annual Report to Shareholders for the year ended
December 31, 1999, has been furnished to shareholders. Additional copies may be
obtained by written request to the Secretary of Guaranty at the address
indicated below. The 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 COMMON STOCK OR WHO REPRESENTS IN GOOD FAITH THAT HE
OR SHE WAS ON SUCH DATE THE BENEFICIAL OWNER OF SUCH STOCK ENTITLED TO VOTE AT
THE ANNUAL MEETING OF SHAREHOLDERS, GUARANTY WILL FURNISH TO SUCH PERSON,
WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1999, AND THE EXHIBITS THERETO REQUIRED TO BE FILED WITH THE
SEC UNDER THE EXCHANGE ACT. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO ESTHER
S. SHELER, SECRETARY, GUARANTY FINANCIAL CORPORATION, 1658 STATE FARM BOULEVARD,
CHARLOTTESVILLE, VIRGINIA 22911. THE FORM 10-KSB IS NOT PART OF THE PROXY
SOLICITATION MATERIALS.
PROPOSALS FOR 2001 ANNUAL MEETING
Under the regulations of the SEC, any shareholder desiring to make a
proposal to be acted upon at the 2001 annual meeting of shareholders must cause
such proposal to be received, in proper form, at Guaranty's principal executive
offices at 1658 State Farm Boulevard, Charlottesville, Virginia 22911, no later
than January 1, 2001, in order for the proposal to be considered for inclusion
in Guaranty's Proxy Statement for that meeting. It is urged that any such
proposals be sent by certified mail, return receipt requested.
10
<PAGE>
Guaranty's Bylaws also prescribe the procedures that a shareholder must
follow to nominate directors or to bring other business before shareholders'
meetings. For more information on these procedures, see "Election of Directors."
OTHER MATTERS
The Board of Directors is not aware of any matters to be presented for
action at the meeting other than as set forth herein. However, if any other
matters properly come before the Meeting, or any adjournment thereof, the person
or persons voting the proxies will vote them in accordance with their best
judgment.
By Order of The Board of Directors
/s/ Esther S. Sheler
Esther S. Sheler
Secretary
May 1, 2000
11
<PAGE>
<TABLE>
<CAPTION>
PLEASE MARK VOTES REVOCABLE PROXY
|X| AS IN THIS EXAMPLE GUARANTY FINANCIAL CORPORATION
<S> <C>
Proxy Solicited on Behalf of The Board of Directors With- For All
For hold Except
The undersigned hereby appoints Thomas P. Baker and 1. To elect as directors the three _ _ _
Harry N. Lewis, jointly and severally, proxies, with full persons listed as nominees below. |_| |_| |_|
power to act alone, and with full power of substitution,
to represent the undersigned and to vote, as designated For Terms Expiring in 2003
below and upon any and all other matters which may Douglas E. Caton
properly be brought before such meeting, all shares of John R. Metz
Common Stock which the undersigned is entitled to vote at James R. Sipe, Jr.
the Annual Meeting of Shareholders of Guaranty Financial
Corporation, a Virginia corporation, to be held at the INSTRUCTION: To withhold authority to vote for any individual
Glenmore Country Club, 1750 Piper Way, Keswick, Virginia, nominee, mark "For All Except" and write that nominee's name in the
on May 25, 2000, at 4:00 p.m., local time, or any space provided below.
adjournments thereof, for the following purposes:
_____________________________________________________________________
2. In their discretion, the proxies are authorized to vote upon
any other business that may properly come before the meeting,
or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN ITEM 1.
In signing as Attorney, Administrator, Executor, Guardian or
Trustee, please add your title as such.
-----------------------
Please be sure to sign and date | Date |
this Proxy in the box below | |
----------------------------------------------------------
| |
| |
--Shareholder sign above---Co-holder (if any) sign above--
</TABLE>
^ Detach above card, sign, date and mail in postage paid envelope provided. ^
GUARANTY FINANCIAL CORPORATION
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| PLEASE ACT PROMPTLY |
| SIGN, DATE & MAIL YOUR PROXY CARD TODAY |
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