[SWVA BANCSHARES, INC.]
September 18, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of SWVA Bancshares,
Inc., (the "Company"), I cordially invite you to attend the Annual Meeting of
Stockholders (the "Meeting") to be held at the Holiday Inn - Tanglewood, 4468
Starkey Road, Roanoke, Virginia on October 23, 1996, at 10:30 a.m. The attached
Notice of Annual Meeting and Proxy Statement describe the formal business to be
transacted at the Meeting. During the Meeting, I will also report on the
operations of the Company. Directors and officers of the Company, as well as
representatives of Cherry Bekaert & Holland L.L.P., certified public
accountants, will be present to respond to any questions stockholders may have.
The matters to be considered by stockholders at the Meeting are
described in the accompanying Notice of Annual Meeting and Proxy Statement. The
Board of Directors of the Company has determined that the matters to be
considered at the Meeting are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY SHEET AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID RETURN
ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you
from voting in person at the Meeting, but will assure that your vote is counted
if you are unable to attend the Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/B.L. Rakes
B.L. Rakes
President
SWVA Bancshares, Inc.
Southwest Virginia Savings Bank, FSB
<PAGE>
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SWVA BANCSHARES, INC.
302 SECOND STREET, S.W.
ROANOKE, VIRGINIA 24011-1597
(540) 343-0135
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 23, 1996
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of SWVA Bancshares, Inc., (the "Company") will be held at Holiday Inn -
Tanglewood, 4468 Starkey Road, Roanoke, Virginia on Wednesday, October 23, 1996,
10:30 a.m. A proxy sheet and a proxy statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the following
matters:
1. The election of three directors of the Company; and
2. The ratification of the appointment of Cherry Bekaert & Holland L.L.P.
as independent auditors of the Company for the fiscal year ending
June 30, 1997.
The transaction of such other matters as may properly come before the
Meeting or any adjournments thereof may also be acted upon at the Meeting. The
Board of Directors is not aware of any other business to come before the
Meeting. Any action may be taken on the foregoing proposals at the Meeting on
the date specified above or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Stockholders of record at the close
of business on September 9, 1996 are the stockholders entitled to vote at the
Meeting and any adjournments thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE
REVOKED BY FILING A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER
DATE WITH THE SECRETARY OF THE COMPANY. ANY STOCKHOLDER PRESENT AT THE MEETING
MAY REVOKE HIS OR HER PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE
MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN
YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO
VOTE IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Barbara C. Weddle
Barbara C. Weddle
Secretary
Roanoke, Virginia
September 18, 1996
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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<PAGE>
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
SWVA BANCSHARES, INC.
302 SECOND STREET, S.W.
ROANOKE, VIRGINIA 24011-1597
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- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 23, 1996
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General
- --------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of SWVA Bancshares, Inc. (the "Company") to be
used at the Annual Meeting of Stockholders of the Company (the "Meeting") which
will be held at the Holiday Inn - Tanglewood, 4468 Starkey Road, Roanoke,
Virginia on Wednesday, October 23, 1996, 10:30 a.m., local time. The
accompanying Notice of Meeting and this Proxy Statement are being first mailed
to stockholders on or about September 18, 1996. The Company is the sole
shareholder of Southwest Virginia Savings Bank, FSB (the "Bank").
At the Meeting, stockholders will consider and vote upon (i) the
election of three directors, and (ii) the ratification of the appointment of
Cherry Bekaert & Holland L.L.P. as independent auditors of the Company for the
fiscal year ending June 30, 1997. The Board of Directors of the Company (the
"Board" or the "Board of Directors") knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxy holder the discretionary authority to vote the
shares represented by such proxy in accordance with their best judgment on such
other business, if any, that may properly come before the Meeting or any
adjournment thereof.
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Voting and Revocability of Proxies
- --------------------------------------------------------------------------------
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors will be voted in
accordance with the directions given therein. Where no instructions are
indicated, signed proxies will be voted "FOR" the nominees for directors set
forth below and "FOR" the other listed proposal. The proxy confers discretionary
authority on the persons named therein to vote with respect to the election of
any person as a director where the nominee is unable to serve, or for good cause
will not serve, and matters incident to the conduct of the Meeting.
- --------------------------------------------------------------------------------
Voting Securities and Principal Holders Thereof
- --------------------------------------------------------------------------------
Stockholders of record as of the close of business on September 9, 1996
(the "Record Date"), are entitled to one vote for each share of common stock of
the Company (the "Common Stock") then held. As of the Record Date, the Company
had 541,190 shares of Common Stock issued and outstanding.
<PAGE>
The Articles of Incorporation of the Company ("Articles of
Incorporation") provide that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit") be entitled or permitted to any vote with respect
to the shares held in excess of the Limit. Beneficial ownership is determined
pursuant to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates or associates
(as such terms are defined in the Articles of Incorporation), shares which such
person or his or her affiliates or associates have the right to acquire upon the
exercise of conversion rights or options and shares as to which such person and
his or her affiliates or associates have or share investment or voting power,
but shall not include shares beneficially owned by any employee stock ownership
plan or similar plan of the issuer or any subsidiary.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (any shares held in excess
of the Limit shall not be considered entitled to vote) is necessary to
constitute a quorum at the Meeting. Any shares for which a broker indicates on
the proxy that it does not have discretionary authority to vote on such matter,
are considered "Broker Non-Votes." In the event there are not sufficient votes
for a quorum or to ratify any proposals at the time of the Meeting, the Meeting
may be adjourned in order to permit the further solicitation of proxies.
As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees proposed by the
Board, or to withhold authority to vote for one or more of the nominees being
proposed. Directors are to be elected by a plurality of votes cast by the shares
entitled to vote in the election at a meeting of stockholders at which a quorum
is present.
As to the ratification of independent auditors as set forth in Proposal
II, by checking the appropriate box, a stockholder may: vote "FOR" the item,
(ii) vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on such item. Under the
Articles of Incorporation and Bylaws, unless otherwise required by law, all
other matters shall be determined by a majority of votes cast affirmatively or
negatively without regard to (a) Broker Non-Votes or (b) proxies marked
"ABSTAIN" as to that matter.
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The following
table sets forth, as of the Record Date, persons or groups who own more than 5%
of the Common Stock and the ownership of all executive officers and directors of
the Company as a group. Other than as noted below, management knows of no person
or group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
-2-
<PAGE>
<TABLE>
<CAPTION>
Percent of Shares
Amount and Nature of of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- -----------
<S> <C> <C>
Southwest Virginia Savings Bank, FSB 45,292 8.24%
Employee Stock Ownership Plan
302 Second Street, S.W.
Roanoke, Virginia 24011-1597
All Directors and Executive Officers 77,801(1)(2)(3) 14.16%
as a Group (9 persons)
</TABLE>
- ----------------------------------
(1) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which shares
the individuals effectively exercise sole voting and investment power,
unless otherwise indicated. Includes 5,476 shares of Common Stock that
executive officers have a right to acquire pursuant to the exercise of
options within 60 days from the Record Date. Includes 3,406 shares of
Common Stock allocated under the ESOP to executive officers, over which
such individuals exercise shared voting and investment power.
(2) Excludes 36,517 unallocated shares of Common Stock held under the
Employee Stock Ownership Plan ("ESOP") for which certain directors serve
as members of the administrative committee ("ESOP Committee") or as
trustees for the ESOP ("ESOP Trustees"). Such individuals disclaim
beneficial ownership with respect to such shares held in a fiduciary
capacity. The ESOP purchased such shares for the exclusive benefit of
ESOP participants with funds borrowed from the Company. These shares are
held in a suspense account and will be allocated among ESOP participants
annually on the basis of compensation as the ESOP debt is repaid. The
Board of Directors has appointed B.L. Rakes, John L. Hart, and Michael
M. Kessler to serve as the ESOP Committee and Michael M. Kessler, James
H. Brock, and Glen C. Combs to serve as the ESOP Trustees. The ESOP
Committee or the Board instructs the ESOP Trustees regarding investment
of ESOP plan assets. The ESOP Trustees must vote all shares allocated to
participant accounts under the ESOP as directed by ESOP participants.
Unallocated shares and shares for which no timely voting direction is
received will be voted by the ESOP Trustees as directed by the ESOP
Committee.
(3) Includes 22,812 shares of Common Stock held by the Southwest Virginia
Savings Bank, FSB Management Stock Bonus Plan ("Management Stock Bonus
Plan") as of the close of business on the Record Date. Directors Hart,
Hoge, Brock, Combs, and Kessler collectively serve as trustees to the
Management Stock Bonus Plan' trust, and exercise shared voting and
dispositive power over the shares of Common Stock held by such trust.
- --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
The Common Stock is registered pursuant to Section 12(g) of the 1934
Act. The officers and directors of the Company and beneficial owners of greater
than 10% of the Common Stock ("10% beneficial owners") are required to file
reports on Forms 3, 4, and 5 with the SEC disclosing changes in beneficial
ownership of the Common Stock. Based on the Company's review of such ownership
reports, to the best of the Company's knowledge, no officer, director, or 10%
beneficial owner of the Company failed to file such ownership reports on a
timely basis for the fiscal year ended June 30, 1996.
-3-
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL I - ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
The Articles of Incorporation requires that the Board of Directors be
divided into three classes, each of which contains approximately one-third of
the members of the Board. The directors are elected by the stockholders of the
Company for staggered three-year terms, or until their successors are elected
and qualified. One class of directors, consisting of James H. Brock, Glen C.
Combs, and Michael M. Kessler, has a term of office expiring at the Meeting. A
second class, consisting of John L. Hart, and B.L. Rakes, has a term of office
expiring at the annual meeting of stockholders to be held in 1997. A third
class, consisting of F. Courtney Hoge and Barbara C. Weddle, has a term of
office expiring at the annual meeting of stockholders to be held in 1998. The
Board of Directors currently consists of seven members. Three directors will be
elected at the Meeting to serve for three-year terms or until a successor has
been elected and qualified.
James H. Brock, Glen C. Combs, and Michael M. Kessler have been
nominated by the Board of Directors to serve as directors. Messrs. Brock, Combs,
and Kessler are currently members of the Board and have been nominated for
three-year terms to expire in 1999. It is intended that the persons named in the
proxies solicited by the Board will vote for the election of the named nominees.
If a nominee is unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitute as the Board of Directors may
recommend or the size of the Board may be reduced to eliminate the vacancy. At
this time, the Board knows of no reason why a nominee might be unavailable to
serve.
The following table sets forth the nominees and the directors continuing
in office, their name, age, the year they first became a director of the Company
or the Bank, the expiration date of their current term as a director, and the
number and percentage of shares of the Common Stock beneficially owned. Each
director of the Company is also a member of the Board of Directors of the Bank.
<TABLE>
<CAPTION>
Shares of
Year First Current Common Stock
Elected or Term to Beneficially Owned Percent
Name Age(1) Appointed(2) Expire (3)(4) of Class(5)
- ---- ------ ------------ ------ ------ -----------
BOARD NOMINEES FOR TERM TO EXPIRE IN 1999
<S> <C> <C> <C> <C> <C>
James H. Brock 54 1985 1996 27,414(6)(13)(14) 4.99%
Glen C. Combs 49 1987 1996 33,382(7)(13)(14) 6.07%
Michael M. Kessler 44 1987 1996 27,707(8)(13)(14) 5.04%
DIRECTORS CONTINUING IN OFFICE
John L. Hart 76 1960 1997 33,382(9)(13)(14) 6.07%
B.L. Rakes 63 1977 1997 14,140(10)(13) 2.57%
F. Courtney Hoge 55 1979 1998 26,882(11)(14) 4.89%
Barbara C. Weddle 59 1987 1998 4,796(12) .87%
</TABLE>
(footnotes appear on next page)
-4-
<PAGE>
(footnotes to table on prior page)
- ---------------------
(1) At June 30, 1996.
(2) Refers to the year the individual first became a director of the Company
or the Bank. All directors of the Bank during June 1994 became directors
of the Company when it was incorporated in June 1994.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust, and other indirect ownership, over which
shares the individuals effectively exercise sole voting and investment
power, unless otherwise indicated.
(4) Beneficial ownership as of the Record Date.
(5) Percentages are calculated on the basis of the amount of outstanding
Common Stock, excluding Common Stock held by or for the account of the
Company or its subsidiaries, plus Common Stock deemed outstanding
pursuant to the Rules under the 1934 Act. The amount of Common Stock
that an individual has a right to acquire (e.g., pursuant to the
exercise of options or through the vesting of restricted stock) within
60 days from the Record Date is included when calculating that
individual's percentage of Common Stock beneficially owned.
(6) Includes 3,500 shares owned by Mr. Brock jointly with his wife over
which he exercises joint voting and investment power, 321 shares owned
by Mr. Brock through an IRA over which Mr. Brock exercises sole voting
and investment power, and 211 shares held as custodian for his son over
which he exercises sole voting and investment power. Includes 570 shares
of Common Stock that the individual has a right to acquire pursuant to
the exercise of options within 60 days from the Record Date.
(7) Includes 5,000 shares owned directly by Mr. Combs over which he
exercises sole voting and investment power and 5,000 shares owned by Mr.
Combs' spouse over which he exercises joint voting and investment power.
Includes 570 shares of Common Stock that the individual has a right to
acquire pursuant to the exercise of options within 60 days from the
Record Date.
(8) Includes 2,200 shares directly owned by Mr. Kessler and 2,125 shares
held in Mr. Kessler's IRA. Includes 570 shares of Common Stock that the
individual has a right to acquire pursuant to the exercise of options
within 60 days from the Record Date.
(9) Includes 2,652 shares of Common Stock held directly by Mr. Hart, 5,047
shares held by Mr. Hart's IRA, 2,236 shares held by the IRA of Mr.
Hart's wife, and 65 shares held by Mr. Hart's wife. Includes 570 shares
of Common Stock that the individual has a right to acquire pursuant to
the exercise of options within 60 days from the Record Date.
(10) Includes 1,222 shares of Common Stock allocated to Mr. Rakes under the
ESOP, over which shares Mr. Rakes exercises shared voting and investment
power. Includes 2,219 shares which Mr. Rakes owns directly and over
which he exercises sole voting and investment power, and 7,031 shares
owned by his wife over which he exercises joint voting and investment
power. Includes 2,853 shares of Common Stock that the individual has a
right to acquire pursuant to the exercise of options and 815 shares of
Common stock that will vest under the Management Stock Bonus Plan within
60 days from the Record Date.
(11) Includes 570 shares of Common Stock that the individual has a right to
acquire pursuant to the exercise of options within 60 days from the
Record Date.
(12) Includes 889 shares of Common Stock allocated to Ms. Weddle under the
ESOP, over which shares Ms. Weddle exercises shared voting and
investment power. Includes 1,483 shares of Common Stock that the
individual has a right to acquire pursuant to the exercise of options
and 424 shares of Common stock that will vest under the Management Stock
Bonus Plan within 60 days from the Record Date.
(13) Excludes 36,517 unallocated shares of Common Stock held under the ESOP
for which certain directors serve as members of the ESOP Committee or as
ESOP Trustees. Such individual disclaims beneficial ownership with
respect to such shares held in a fiduciary capacity. The ESOP purchased
such shares for the exclusive benefit of ESOP participants with funds
borrowed from the Company. These shares are held in a suspense account
and will be allocated among ESOP participants annually on the basis of
compensation as the ESOP debt is repaid. The Board of Directors has
appointed B.L. Rakes, John L. Hart, and Michael M. Kessler to serve as
the ESOP Committee and Michael M. Kessler, James H. Brock, and Glen C.
Combs to serve as the ESOP Trustees. The ESOP Committee or the Board
instructs the ESOP Trustees regarding investment of ESOP plan assets.
The ESOP Trustees must vote all shares allocated to participant accounts
under the ESOP as directed by ESOP participants. Unallocated shares and
shares for which no timely voting direction is received will be voted by
the ESOP Trustees as directed by the ESOP Committee. As of the Record
Date, 9,130 shares have been released for allocation under the ESOP to
participant accounts.
(14) Includes 22,812 shares of Common Stock held by the Management Stock
Bonus Plan's trust, to which the individual serves as trustee, and
exercises shared voting and dispositive power over such shares.
-5-
<PAGE>
Biographical Information
Set forth below is certain information with respect to the directors of
the Company. All directors have held their present positions for five years
unless otherwise stated.
James H. Brock is currently President of Rusco Window Company, Roanoke,
Virginia, a manufacturer and distributor of home improvement products which has
employed Mr. Brock since 1970. He is a member and past President of the Rotary
Club of Roanoke, past President of the Better Business Bureau, and a former
member of the board of directors of the Credit Marketing and Management
Association.
Glen C. Combs is the President and sole owner of M&M Brokerage, a food
brokerage located in Roanoke, Virginia. Mr. Combs is a former member of the
Rotary Club of Roanoke and the Roanoke Food Brokers Association and a Board
member of Inter-City Athletic Association.
Michael M. Kessler has been the President and sole stockholder of
Kessler Associates, Ltd., a photo processing company, since 1984. He is also a
member and past President of the Rotary Club of Roanoke, past President of the
Virginia Professional Photographers Association, a member of the Board of
Governors of the Southeastern Professional Photographers Association, past
chairman of the Specialist Group of the Professional Photographers of America
and a past Board Member of the Better Business Bureau.
John L. Hart has been an attorney-at-law with his own general civil
practice in Roanoke since 1950. He also serves as General Counsel to the Bank
and has a retainer agreement with the Bank (see "Certain Relationships and
Related Transactions" below).
B.L. Rakes has been President, Chief Executive Officer and Chief
Financial Officer of the Bank since 1977 and has been employed by the Bank since
1959. He served as Vice President and Treasurer from 1973 to 1977, and as
Secretary from 1974 to 1977. He is a member and past President of the Rotary
Club of Roanoke and an arbitrator for the Roanoke Better Business Bureau.
F. Courtney Hoge has been an insurance sales representative for New York
Life Insurance Company, Roanoke, Virginia since 1967. He is a member of the
Board of Directors of the Roanoke Chapter of the American Red Cross, President
of the E. Price Ripley Memorial Foundation and a member of the board of
directors of the Rescue Mission.
Barbara C. Weddle has been Senior Vice President of the Bank since 1985,
in which capacity she oversees the savings, accounting and personnel
departments. She has served as Secretary of the Bank since 1977. She has been
employed by the Bank since 1965 in various capacities and served as a Vice
President from 1977 until 1985.
Stockholder Nominations
Pursuant to the Company's Articles of Incorporation, nominations, other
than those made by or at the direction of the Board of Directors, shall be made
pursuant to timely notice in writing as set forth in the Articles of
Incorporation. To be timely, a stockholder's notice shall be received by the
Chairman of the Nominating Committee of the Board (which notice may be sent to
such Chairman in care of the Secretary of the Company) or, in the absence of
such a Nominating Committee, by the Secretary of the Company, not less than 14
days nor more than 60 days prior to any meeting of the stockholders called for
the election of directors; provided, however, that if fewer than 21 days notice
of the meeting is given
-6-
<PAGE>
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 stockholder's notice must contain certain information as required by
and set forth in the Articles of Incorporation. In addition, the stockholder
making such nomination shall promptly provide any other information reasonably
requested by the Company.
The nomination made by a stockholder may be made only at a meeting of
the stockholders of the Company called for the election of directors at which
such stockholder is present in person or by proxy, and can only be made by a
stockholder who has theretofore complied with the notice provisions set forth in
the Articles of Incorporation.
Meetings and Committees of the Board of Directors
The Company's Board of Directors conducts its business through meetings
of the Board. The Board of Directors of the Company did not have committees
during the fiscal year ended June 30, 1996, but the committees of the Bank's
Board of Directors acted as committees for both the Company and the Bank. During
the fiscal year ended June 30, 1996, the Board of Directors of the Company held
11 regular meetings. No director of the Company attended fewer than 75% of the
total meetings of the Board of Directors of the Company and committees on which
such director served during the fiscal year ended June 30, 1996.
The Company's full Board of Directors acts as a nominating committee
("Nominating Committee") for selecting the management nominees for election of
directors in accordance with the Company's Bylaws. In its deliberations, the
Nominating Committee considers the candidate's knowledge of the banking business
and involvement in community, business, and civic affairs. While the Board of
Directors will consider nominees recommended by stockholders, it has not
actively solicited recommendations from the Company's stockholders for nominees
nor, subject to the procedural requirements set forth in the Articles of
Incorporation and Bylaws, established any procedures for this purpose. The Board
of Directors of the Company met 1 time as the Nominating Committee during the
1996 fiscal year.
The Audit Committee is comprised of Directors Hart (Chairman), Hoge,
Brock, Combs, and Kessler. The Audit Committee annually selects the independent
auditors and meets with the accountants to discuss and review the annual audit.
The Audit Committee is further responsible for internal controls for financial
reporting. The Audit Committee met once during the fiscal year ended June 30,
1996.
The Executive Committee consists of Directors Hart (Chairman), Rakes,
Combs, and Hoge. The Executive Committee meets on call. It offers guidance to
the Bank's and the Company's management. When necessary, it performs functions
of the full Board during the intervals between meetings of the Board of
Directors. The Executive Committee held one meeting during the fiscal year ended
June 30, 1996. The Executive Committee also acts as the Personnel Committee. The
Personnel Committee meets annually to review and recommend salary adjustments
for senior management.
The Retirement Committee consists of Directors Hoge (Chairman), Hart,
and Weddle. The Retirement Committee meets on call to review and study the
Bank's retirement plans. The Retirement Committee met 0 times during the fiscal
year ended June 30, 1996.
-7-
<PAGE>
Directors' Compensation
The Company pays Board of Director fees of $3,600 per year to each
member of its Board of Directors. The Company paid a total of $25,200 in
directors fees during the fiscal year ended June 30, 1996.
The Bank also pays Board of Director fees. Chairman Hart receives $400
monthly and $350 per meeting attended and all other directors are paid $350 per
meeting attended. Directors Rakes and Weddle do not receive fees for attendance
of meetings of the Board of Directors of the Bank or any of its committees. Each
non-employee director attending a meeting of the Executive Committee, Retirement
Committee, or Loan Committee of the Bank receives a fee of $100 per meeting
attended. The Bank paid a total of $32,900 in board and committee fees to
members of the Board of Directors during the fiscal year ended June 30, 1996.
Stock Awards. On October 25, 1995, the stockholders of the Company
approved the SWVA Bancshares, Inc. 1994 Stock Option Plan ("1994 Stock Option
Plan") and the Southwest Virginia Savings Bank, FSB Management Stock Bonus Plan
("Management Stock Bonus Plan"). Directors Hart, Hoge, Brock, Combs, and Kessler
each received (as of the date of stockholder approval) options to purchase 2,852
shares of Common Stock under the 1994 Stock Option Plan and 1,141 shares of
restricted stock under the Management Stock Bonus Plan. The options granted to
these directors will be first exercisable at a rate of 20% one year from the
date of grant and 20% annually thereafter. Restricted stock granted to the above
named directors will vest 14.28% one year from the date of grant and 14.28%
annually thereafter.
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the Chief Executive Officer of the
Company. No executive officer of the Company had a salary and bonus during the
fiscal year ended June 30, 1996 that exceeded $100,000 for services rendered in
all capacities to the Company.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
--------------------------------------- ---------------------------
Securities
Restricted Underlying
Name and Fiscal Other Annual Stock Options/ All Other
Principal Position Year Salary Bonus Compensation(1) Awards($)(2) SARs(#) Compensation
- ------------------ ---- ------ ----- --------------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
B.L. Rakes 1996 $95,995 $ -- $4,760 $95,202(3) 14,264 $32,395(4)
President 1995 $95,995 $ -- $2,900 -- -- $19,574(5)
1994 $92,302 $ -- $ 100 -- -- $11,711(6)
</TABLE>
- ------------------------
(1) Consists of board of director fees from the Company and Southwest Virginia
Service Corp. Does not include the value of certain other benefits, such as
automobile allowances, which do not exceed 10% of the total salary and
bonus of the individual.
(2) Mr. Rakes has 5,705 shares of restricted stock in the aggregate which have
a total value of $88,998 (calculated by multiplying the aggregate number of
restricted stock by the Common Stock's closing market price as of the last
day of the fiscal year). Dividends will be paid on the restricted stock
awarded.
(footnotes are continued on next page)
-8-
<PAGE>
(footnotes continued from prior page)
(3) The value of restricted stock granted is calculated by multiplying (i) the
number of restricted stock granted by (ii) the Common Stock's closing
market price as of the date of grant.
(4) Includes 1,222 shares of Common Stock allocated under the ESOP as of June
30, 1996 with a market value as of June 30, 1996, of $15.60 per share, for
a total value of $19,063, and (includes accruals under the Bank's
Supplemental Executive Retirement Plan of $13,332 for the fiscal year
ending June 30, 1996.
(5) Includes 596 shares of Common Stock allocated under the ESOP as of June 30,
1995 with a market value as of June 30, 1995, of $11.938 per share, for a
total value of $7,079. Includes accruals under the Supplemental Executive
Retirement Plan of $12,495 for the fiscal year ended June 30, 1995.
(6) Includes accruals under the Supplemental Executive Retirement Plan of
$11,711 for the fiscal year ended June 30, 1994.
Employment Agreement
The Bank maintains an employment agreement with B.L. Rakes,
President and Chief Executive Officer of the Bank. The employment agreement is
for a term of three years at his then current salary level. The employment
agreement may be terminable by the Bank for "just cause" as defined in the
employment agreement. If the Bank terminates Mr. Rakes without just cause, he
will be entitled to a continuation of his salary from the date of termination
through the remaining term of the employment agreement. The employment agreement
contains a provision stating that in the event of his involuntary termination of
employment in connection with, or within one year after, any change in control
of the Bank, Mr. Rakes will be paid in a lump sum an amount equal to 2.99 times
his average annual compensation for the prior five years. If Mr. Rakes becomes
disabled he will receive 100% of his salary for the first twelve months of his
disability and 65% of his salary for the next 24 months or the remaining term of
the employment agreement, whichever is less. The employment agreement may be
renewed annually by the Board of Directors upon a determination of satisfactory
performance.
Other Benefits
Employee Stock Ownership Plan. The Bank has established an
employee stock ownership plan, the ESOP, for the exclusive benefit of
participating employees. Participating employees are employees who have
completed one year of service with the Company or its subsidiary and attained
age 21.
Pension Plan. The Bank is a participating employer in a
multiple-employer pension plan sponsored by the Financial Institutions
Retirement Fund (the "Pension Plan"). All full-time employees of the Bank are
eligible to participate after one year of service and attainment of age 21. A
qualifying employee becomes fully vested in the Pension Plan upon completion of
five years service or when the normal retirement age of 65 is attained. The
Pension Plan is intended to comply with the Employee Retirement Income Security
Act of 1974, as amended.
The Pension Plan provides for monthly payments to each
participating employee at normal retirement age. The annual allowance payable
under the Pension Plan is equal to 1.5% of the average annual salary (excluding
overtime and bonuses) for the five highest years of salary during benefits
service multiplied by the number of years of credited service. A participant who
is vested in the Pension Plan may take an early retirement and elect to receive
a reduced monthly benefit beginning as early as age 55. The Pension Plan also
provides for payments in the event of disability or death. At June 30, 1996, Mr.
Rakes had 36 years of credited service under the Pension Plan.
The following table indicates the annual retirement benefit that
would be payable under the Pension Plan upon retirement at age 65 to a
participant electing to receive his retirement benefit in the
-9-
<PAGE>
standard form of benefit, assuming various specified levels of plan compensation
and various specified years of credited service. All benefits are in addition to
any benefits payable under the Federal Social Security System.
<TABLE>
<CAPTION>
Years of Benefit Service
Average ----------------------------------------------------------------
Annual Compensation 15 20 25 30 35
- ------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$ 20,000 $ 4,500 $ 6,000 $ 7,500 $ 9,000 $10,500
40,000 9,000 12,000 15,000 18,000 21,000
60,000 13,500 18,000 22,500 27,000 31,500
80,000 18,000 24,000 30,000 36,000 42,000
100,000 22,500 30,000 37,500 45,000 52,000
120,000 27,000 36,000 45,000 54,000 63,000
</TABLE>
Supplemental Executive Retirement Plan
The Bank has adopted a supplemental executive retirement plan ("SERP")
for the benefit of B.L. Rakes, President and Barbara C. Weddle, Senior Vice
President. The purpose of the SERP is to furnish each individual with
supplemental post-retirement benefits in addition to those which will be
provided under the Pension Plan and other retirement benefits. In accordance
with the SERP, upon retirement at age 65, each participant will receive a
monthly payment for a period of 240 months equal to the equivalent monthly
amount constituting 75% of the highest five year average salary reduced by
benefits payable under the Pension Plan. Benefits may be paid upon early
retirement after age 55 and 15 years of service with the Bank. Payments under
the SERP will be accrued for financial reporting purposes during the period of
employment of the participant. The SERP will be unfunded. All benefits payable
under the SERP will be paid from current assets of the Bank. There are no tax
consequences to either the participant or the Bank related to the SERP prior to
payment of benefits. Upon receipt of payment of benefits, the participant will
recognize taxable ordinary income in the amount of such payments received and
the Bank will be entitled to recognize a tax-deductible compensation expense at
that time. Benefits under the SERPs shall be immediately payable upon death or
disability of the participant, or upon termination of participant within one
year of a change in control of the Bank.
1994 Stock Option Plan
Pursuant to the SWVA Bancshares, Inc. 1994 Stock Option Plan ("1994
Stock Option Plan"), 57,059 shares of Common Stock were reserved for issuance by
the Company upon exercise of stock options granted to officers, directors, and
key employees of the Company (or any present of future parent or subsidiary of
the Company). The purpose of the 1994 Stock Option Plan is to provide additional
incentive to certain officers, directors, and key employees by facilitating
their purchase of a stock interest in the Company. The 1994 Stock Option Plan
became effective on October 25, 1995 and provides for a term of ten years, after
which no awards may be made, unless earlier terminated by the Board of Directors
pursuant to the terms of the 1994 Stock Option Plan.
-10-
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
- ----------------------------------------------------------------------------------------------------------
Percent of
Number of Total Options/
Securities SARs Granted
Underlying to Employees Exercise or
Options/SARs in Fiscal Base Price
Name Granted (#) Year ($/Sh) Expiration Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
B.L. Rakes 14,264 52% $16.69 October 25, 2005
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- ----------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End
Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
B.L. Rakes 0 $0 0 / 14,264 $0 / $0 (1)
</TABLE>
- ---------------
(1) Based upon an exercise price of $16.69 per share versus a closing price of
$16.50 at June 30, 1996.
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
Director Hart serves as the Bank's General Counsel and has a retainer
agreement with the Bank. During the fiscal year ended June 30, 1996, Director
Hart earned legal fees of $17,596 from the Bank in connection with title,
foreclosure, and deed services and retainer fees.
Except as noted below, no directors, executive officers, or immediate
family members of such individuals were engaged in transactions with the Bank or
any subsidiary involving more than $60,000 during the fiscal year ended June 30,
1996. Furthermore, the Bank had no "interlocking" relationships existing on or
after June 30, 1996 in which (i) any executive officer is a member of the Board
of Directors/Trustees of another entity, one of whose executive officers is a
member of the Bank's Board of Directors, or where (ii) any executive officer is
a member of the compensation committee of another entity, one of whose executive
officers is a member of the Bank's Board of Directors.
The Bank, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors, and employees. Such
loans have been made in the ordinary course of business and on substantially the
same terms, including interest rates as those prevailing at the time for
comparable transactions with the Bank's other customers, and do not involve more
than the normal risk of collectability, nor present other unfavorable features.
Adjustable-rate first mortgage loans made to full-time employees and junior
officers (assistant vice presidents, assistant secretaries, and assistant
treasurers), are made at 1% above the Bank's cost of funds while adjustable-rate
second mortgages and cash out refinances are made at 1.5% above the Bank's cost
of funds. Such rates are only effective while such persons are employees of the
Bank and continue to occupy the real estate securing the loans as their primary
residence. All loans by the Bank to its directors and executive officers are
subject to OTS regulations restricting loans and other transactions with
affiliated persons of the Bank.
-11-
<PAGE>
Set forth below is certain information as of June 30, 1996,
relating to mortgage and other loans given to executive officers and directors
and their immediate family who had aggregate outstanding loan balances with the
Bank of $60,000 or greater.
<TABLE>
<CAPTION>
Highest Unpaid
Balance
Outstanding
During Last Unpaid
Original Interest Prevailing Rate Two Fiscal Balance As
Name of Officer Date Loan Rate at Time Loan Years Ended Of June 30,
or Director Type of Loan Originated Amount Charged was Made June 30, 1996 1996
----------- ------------ ----------- ------ ------- -------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
James H. Brock Home Mortgage 05/30/86 $80,000 5.25%(1) 8.50% $62,151 $48,866
</TABLE>
- ----------------------
(1) Adjustable rate mortgage loan. This loan was modified at the time the
loan was made to 1% above the cost of the Bank's funds rounded to the
next one-quarter percent. The rates on this loan adjust annually.
- --------------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
Cherry Bekaert & Holland L.L.P. served as the Company's auditors for the
fiscal year ended June 30, 1996. The Board of Directors has approved the
selection of Cherry Bekaert & Holland L.L.P. as its auditors for the fiscal year
ended June 30, 1997, subject to ratification by the Company's stockholders. A
representative of Cherry Bekaert & Holland L.L.P. is expected to be present at
the Meeting to respond to stockholders' questions and will have the opportunity
to make a statement if he or she so desires.
Ratification of the appointment of the auditors requires the approval of
a majority of the votes cast by the stockholders of the Company at the Meeting.
The Board of Directors recommends that stockholders vote "FOR" the ratification
of the appointment of Cherry Bekaert & Holland L.L.P. as the Company's auditors
for the fiscal year ended June 30, 1997.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the persons named in the accompanying proxy.
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
-12-
<PAGE>
The Company's 1996 Annual Report to Stockholders, including financial
statements, will be mailed to all persons who were stockholders of record as of
the close of business on September 9, 1996. Any stockholder who has not received
a copy of the 1996 Annual Report to Stockholders may obtain a copy by writing to
the Secretary of the Company. The 1996 Annual Report to Stockholders is not to
be treated as a part of the proxy solicitation material or as having been
incorporated herein by reference.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive offices at
302 Second Street, S.W., Roanoke, Virginia 24011-1597, no later than May 21,
1997. Any such proposals shall be subject to the requirements of the proxy rules
adopted under the 1934 Act.
- --------------------------------------------------------------------------------
FORM 10-KSB
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
JUNE 30, 1996, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, SWVA
BANCSHARES, INC., 302 SECOND STREET, S.W., ROANOKE, VIRGINIA 24011-1597.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Barbara C. Weddle
Barbara C. Weddle
Secretary
Roanoke, Virginia
September 18, 1996
-13-
<PAGE>
- --------------------------------------------------------------------------------
SWVA BANCSHARES, INC.
302 SECOND STREET, S.W.
ROANOKE, VIRGINIA 24011-1597
(540) 343-0135
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 23, 1996
- --------------------------------------------------------------------------------
The undersigned hereby appoints the Board of Directors of SWVA
Bancshares, Inc. ("Company"), or its designee, with full powers of substitution,
to act as attorneys and proxies for the undersigned, to vote all shares of
Common Stock of the Company which the undersigned is entitled to vote at the
1996 Annual Meeting of Stockholders ("Meeting"), to be held at the Holiday Inn -
Tanglewood, 4468 Starkey Road, Roanoke, Virginia on October 23, 1996, at 10:30
a.m. and at any and all adjournments thereof, in the following manner:
FOR WITHHELD
1. The election as director of all nominees
listed below: |_| |_|
James H. Brock
Glen C. Combs
Michael M. Kessler
INSTRUCTIONS: To withhold your vote for any individual nominee, insert the
nominee's name on the line provided below.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
2. The ratification of the appointment of Cherry
Bekaert & Holland as independent auditors of
the Company for the fiscal year ending
June 30, 1997. |_| |_| |_|
</TABLE>
In their discretion, such attorneys and proxies are authorized to vote
upon such other business as may properly come before the Meeting or any
adjournments thereof.
The Board of Directors recommends a vote "FOR" all of the above listed
propositions.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this proxy by filing a
subsequently dated proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders and a
proxy statement dated September 18, 1996.
Please check here if you
Dated: , 1996 |_| plan to attend the Meeting.
------------ --
- ------------------------- ------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------- ------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| 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 Rule 14a-11(c) or Rule 14a-12
SWVA Bancshares, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| $125 per Exchange Act Rule 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:
- --------------------------------------------------------------------------------
