UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
SWVA BANCSHARES, INC.
(Name of Issuer)
Common Stock, $.10 par value
(Title of Class of Securities)
785040106
(CUSIP Number)
Charles R. Haywood
Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, Illinois 60611
(312) 755-2510
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 12, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
<PAGE>
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Richard J. Nelson
2 Check The Appropriate Box If a Member of a Group (a)[ ]
(b)[ ]
3 SEC Use Only
4 Source of Funds: Not Applicable
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
27,000 shares
Number of
Shares 8 Shared Voting Power
Beneficially 0 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 27,000 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
27,000 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
5.3%
14 Type of Reporting Person
IN
<PAGE>
Security and Issuer
This is Amendment No. 2 to the Schedule 13D (as earlier amended,
the "Original 13D") filed by Richard J. Nelson and relates to the common
stock, $.10 par value (the "Common Stock"), of SWVA Bancshares, Inc. (the
"Issuer"). The address of the principal executive offices of the Issuer
is 302 Second Street, Roanoke, Virginia 24011. The following items in the
Original 13D are amended to read in their entirety as follows:
Item 3. Source and Amount of Funds or Other Consideration
The amount of funds expended to date by Mr. Nelson to acquire
his shares as reported herein is $455,121. Such funds were provided from
Mr. Nelson's capital. The shares beneficially owned by Mr. Nelson are
held in an individual retirement account operated by J.C. Bradford & Co.
Item 4. Purpose of Transaction
Mr. Nelson's goal is to profit from appreciation in the market
price of the Common Stock. Mr. Nelson expects to actively assert
shareholder rights in connection with his goal. By letter dated September
10, 1997, Mr. Nelson stated his intent to nominate Dewey W. Chapple, Jr.
for election as a director of the Issuer at the 1997 Annual Meeting of
Stockholders. A copy of that letter is attached as Exhibit 1. Prior to
that letter, Mr. Nelson had corresponded with the Issuer regarding the
possibility of Mr. Chapple's becoming a Board nominee for election to the
Board of Directors of the Issuer. The Board refused to nominate Mr.
Chapple. By letter dated October 1, 1997, Mr. Nelson withdrew his notice
of intent to nominate Mr. Chapple for election as a director of the
Issuer. A copy of that letter is attached as Exhibit 2.
Mr. Nelson's decision to withdraw his notice of intent to
nominate Mr. Chapple followed several weeks of contentious discussions
with current management of the Issuer regarding Mr. Nelson's demand to
inspect and copy the Issuer's stockholder list and certain other corporate
books and records (the "Corporate Records") pursuant to his rights as a
stockholder under the Virginia corporate statutes. Mr. Nelson's first
demand for the Corporate Records was made by a letter dated September 10,
1997, a copy of which is attached as Exhibit 3. Mr. Nelson repeated the
demand in a letter to the Issuer dated September 12, 1997, a copy of which
is attached as Exhibit 4.
Current management of the Issuer responded to Mr. Nelson by two
separate letters on September 12, 1997, copies of which are attached as
Exhibits 5 and 6. In response, Mr. Nelson repeated his demand in letters
dated September 12 and 13, 1997, copies of which are attached as Exhibits
7 and 8, respectively, specifying a date for inspection and copying of the
Corporate Records. By letter dated September 15, 1997, a copy of which is
attached as Exhibit 9, current management again objected to Mr. Nelson's
demand on the basis of inadequate notice. Mr. Nelson responded by letter
dated September 16, 1997, a copy of which is attached as Exhibit 10,
setting a new date for inspection, and Cede & Co. provided formal notice
of the inspection date by letter dated September 17, 1997, a copy of which
is attached as Exhibit 11.
Current management of the Issuer responded to Mr. Nelson's
September 16 letter and confirmed the date set for inspection and copying
by letters dated September 18 and 19, 1997, copies of which are attached
as Exhibits 12 and 13, respectively. On September 22, 1997, Mr. Nelson
confirmed by letter, a copy of which is attached as Exhibit 14, that the
Corporate Records would be made available for inspection and copying on
the agreed date.
On September 24, 1997, Mr. Nelson received a letter from current
management of the Issuer indicating that not all of the requested
documents would be available on the date designated for inspection and
copying, but assuring Mr. Nelson that the Issuer would have available
"what you are entitled to review." A copy of that letter is attached as
Exhibit 15.
On September 25, 1997, the day appointed for inspection and
copying of the Corporate Records, a local representative of Mr. Nelson
appeared at the offices of the Issuer as scheduled. The representative
originally was denied access to the Corporate Records, and then was
granted access but denied the right to make copies of the documents. By
letter dated September 26, 1997, Mr. Nelson's Virginia counsel, Theodore
Craddock, reminded current management that failure to provide this copying
right was in contravention of Mr. Nelson's rights as a stockholder under
Virginia corporation law. A copy of that letter is attached as Exhibit
16.
Copies of some of the Corporate Records were provided to Mr.
Nelson on September 26, 1997. Exhibits 17, 18 and 19 contain additional
correspondence regarding these documents.
On September 27, 1997, Mr. Nelson sent a letter to Mr. Glen
Combs, a current director of the Issuer, describing his difficulties with
the Issuer's management and enclosing copies of correspondence regarding
his demand for the Corporate Records. A copy of that letter is attached
as Exhibit 20.
On September 29, 1997, in response to Mr. Nelson's September 27
letter to Mr. Combs and Mr. Craddock's letter of September 26, current
management of the Issuer sent Mr. Nelson a letter denying that the Issuer
had failed to meet its obligations to Mr. Nelson. Mr. Craddock responded
to that letter on October 1, 1997. Copies of those letters are attached
as Exhibits 21 and 22.
By letter to the Issuer dated May 12, 1998, Mr. Nelson submitted
a stockholder proposal (the "Proposal") together with a Statement in
Support of the Proposal (the "Statement"). A copy of that letter,
together with the Proposal and the Statement, is attached as Exhibit 23.
The Proposal and the Statement are to be included in the Issuer's proxy
statement and proxy to be used in connection with the upcoming 1998 annual
meeting (the "Meeting") of stockholders of the Issuer. Mr. Nelson
presently intends that he or his authorized representative will present
the Proposal to the stockholders of the Company at the Meeting.
Mr. Nelson's purpose in seeking a representative on the Board of
Directors was and his purpose in submitting the Proposal is primarily to
attempt to influence the Board of Directors to consider all possible
strategic alternatives available to the Issuer in order to increase the
market price of the Common Stock. One way of achieving this goal is to
seek out another financial institution and attempt to implement a business
combination. Mr. Nelson continues to be interested in influencing the
Issuer's Board of Directors to explore seriously, in consultation with
independent financial advisors, this and other possible means of improving
the market price of the Common Stock, to the extent such options may not
have already been fully explored. To the extent such influence may be
deemed to constitute a "control purpose" with respect to the Securities
Exchange Act of 1934, as amended, and the regulations thereunder, Mr.
Nelson has such a purpose.
The above-stated purpose to control is unrelated to the Office
of Thrift Supervision ("OTS") regulations. Specifically, Mr. Nelson is
aware that regulations promulgated by the OTS contain separate standards
with regard to acquisition of "control" of a federally chartered savings
institution, such as the Issuer's subsidiary bank. Those regulations
require OTS approval for acquisition of control under certain conditions.
Some of the provisions are based in part on numerical criteria. One of
the provisions creates a rebuttable presumption of control where a person
acquires more than 10 percent of the voting stock of a savings association
and other conditions are met. Another provision creates a rebuttable
presumption of control where a person acquires proxies to elect one-third
or more of the savings association's board of directors and other
conditions are met. Mr. Nelson has no present plans to cross these
numerical thresholds.
Mr. Nelson intends to continue to evaluate the Issuer and its
business prospects and intends to consult with management of the Issuer,
other shareholders of the Common Stock or other persons to further his
objectives. Mr. Nelson may make further purchases of shares of the Common
Stock or may dispose of any or all of his shares of the Common Stock at
any time. At present, and except as disclosed herein, Mr. Nelson has no
specific plans or proposals that relate to, or could result in, any of the
matters referred to in paragraphs (a) through (j), inclusive, of Item 4 of
Schedule 13D. Mr. Nelson intends to continue to explore the options
available to him. Mr. Nelson may, at any time or from time to time, review
or reconsider his position with respect to the Issuer and may formulate
plans with respect to matters referred to in Item 4 of Schedule 13D.
Item 6. Interest in Securities of the Issuer
(a)-(b) Mr. Nelson beneficially owns 27,000 shares of the Common
Stock, constituting approximately 5.3% of the issued and outstanding
shares of the Common Stock, based on the number of outstanding shares
reported on the Issuer's Quarterly Report on Form 10-Q for the period
ended March 31, 1998. Mr. Nelson has sole voting and investment power
with respect to those shares.
(c) Mr. Nelson has made no purchases or sales of the Common Stock
within the past sixty days.
Item 7. Material to be Filed as Exhibits
No. Description
1 Letter from Richard J. Nelson to Barbara C. Weddle, dated
September 10, 1997.*
2 Letter from Richard J. Nelson to Barbara C. Weddle, dated
October 1, 1997.*
3 Letter from Cede & Co. (on behalf of Mr. Nelson) to Barbara
C. Weddle, dated September 10, 1997.*
4 Letter from Richard J. Nelson to B.L. Rakes, dated
September 12, 1997.*
5 Letter from B.L. Rakes to Richard J. Nelson, dated
September 12, 1997.*
6 Letter from B.L. Rakes to Richard J. Nelson, dated
September 12, 1997.*
7 Letter from Richard J. Nelson to Barbara C. Weddle, dated
September 12, 1997.*
8 Letter from Richard J. Nelson to B.L. Rakes, dated
September 13, 1997.*
9 Letter from B.L. Rakes to Richard J. Nelson, dated
September 15, 1997.*
10 Letter from Richard J. Nelson to B.L. Rakes, dated
September 16, 1997.*
11 Letter from Cede & Co. (on behalf of Mr. Nelson) to Barbara
Weddle, dated September 17, 1997.*
12 Letter from B.L. Rakes to Richard J. Nelson, dated
September 18, 1997.*
13 Letter from B.L. Rakes to Richard J. Nelson, dated
September 19, 1997.*
14 Letter from Richard J. Nelson to B.L. Rakes, dated
September 22, 1997.*
15 Letter from B.L. Rakes to Richard J. Nelson, dated
September 24, 1997.*
16 Letter from Theodore J. Craddock to B.L. Rakes, dated
September 26, 1997.*
17 Letter from B.L. Rakes to Theodore J. Craddock, dated
September 26, 1997.*
18 Letter from Richard J. Nelson to B.L. Rakes, dated
September 26, 1997.*
19 Letter from B.L. Rakes to Richard J. Nelson, dated
September 26, 1997.*
20 Letter from Richard J. Nelson to Glen C. Combs, dated
September 27, 1997.*
21 Letter from B.L. Rakes to Richard J. Nelson, dated
September 29, 1997.*
22 Letter from Theodore J. Craddock to B.L. Rakes, dated
October 1, 1997.*
23 Letter from Richard J. Nelson to B.L. Rakes and Barbara
Weddle, dated May 12, 1998.
______
*Previously filed with the SEC as part of the Original 13D.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
Date: May 15, 1998
/s/ Richard J. Nelson
Richard J. Nelson
EXHIBIT 23
LA SALLE CAPITAL MANAGEMENT, INC.
Suite 405
259 E. Michigan Avenue
Kalamazoo, Michigan 49007
Telephone (616) 344-4993
Facsimile (616) 344-4994
May 12, 1998
VIA FEDERAL EXPRESS
Mr. B. L. Rakes, President
SWVA Bancshares, Inc.
302 Second Street, S. W.
Roanoke, VA 24011-1597
VIA FEDERAL EXPRESS
Ms. Barbara C. Weddle, Secretary
SWVA Bancshares, Inc.
302 Second Street, S. W.
Roanoke, VA 24011-1597
Dear Sir and Madam:
Pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended,
I hereby submit the enclosed Stockholder Proposal (the "Proposal") and the
enclosed Statement in Support of the Stockholder Proposal (the
"Statement"). The Proposal and the Statement are to be included in the
Proxy Statement and proxy to be used in connection with the upcoming 1998
annual meeting (the "Meeting") of stockholders of SWVA Bancshares, Inc.
(the "Company"). It is presently intended that I, or my authorized
representative, will present the Proposal to the stockholders of the
Company at the Meeting.
As indicated by the enclosed affidavit, I am the beneficial owner of at
least $1,000 in market value of voting shares of the capital stock of the
Company, have held such amount of shares for at least one year
(documentation enclosed), and will continue beneficial ownership of such
shares through the date of the 1998 Meeting. The number of shares
currently held by me and the dates on which I acquired those shares are
set forth as follows:
Shares Date of Acquisition
20,000 04/30/97
6,000 09/03/97
1,000 01/14/98
-------
27,000
If you have any questions or comments, please contact me.
Sincerely,
/s/ Richard J. Nelson
Richard J. Nelson
AFFIDAVIT
State of Michigan )
) ss.
County of Kalamazoo )
The undersigned, Richard J. Nelson, being duly sworn, deposes and states
that:
1. As of the date of this Affidavit, I am the beneficial owner of 27,000
shares of common stock, of SWVA Bancshares, Inc. (the "Company").
2. I have been the beneficial owner of shares of Common Stock having a
market value in excess of $1,000 for at least one year, and have been the
beneficial owner of such shares continuously for more than one year prior
to this date.
3. I intend to continue beneficial ownership of shares of Common Stock
having a market value in excess of $1,000 through the date on which the
1998 annual meeting of the Company's shareholders is held.
4. My business address is 259 E. Michigan Avenue, Suite 405, Kalamazoo,
Michigan 49007, and my residence address is 605 W. Inkster Avenue,
Kalamazoo, Michigan 49008.
/s/ Richard J. Nelson
Richard J. Nelson
Subscribed and sworn to before me
this 12th day of May, 1998.
/s/ Janine Scott
Janine K. Scott
Notary Public, Kalamazoo County, Michigan
Commission Expires: April 29, 2001
<PAGE>
SHAREHOLDER PROPOSAL
"RESOLVED, that the shareholders recommend that the Board of Directors of
SWVA Bancshares, Inc (the "Company") appoint a special committee of the
Board of Directors to solicit, review and negotiate offers to acquire the
Company on terms that are fair and in the best interest of the Company's
shareholders; if the committee determines an offer is financially fair to
the Company's shareholders and would receive required regulatory
approvals, the committee shall recommend to the Board that it consider and
act on the offer in accordance with applicable law."
STATEMENT IN SUPPORT OF THE PROPOSAL
Proponent believes that shareholders should review carefully the SWVA
Bancshares, Inc., Third Quarter 1998 News Release, issued by the Company
May 1, 1998. Proponent further believes that the following information,
contained in the News Release, should be of special concern to
shareholders:
At March 31, 1998, the return on average assets was .69% and return on
average equity was 6.02%.
Net interest income decreased by $7,000 or 1.03% from $677,000 for the
three months ended March 31, 1997 to $670,000 for the three months
ended March 31, 1998.
Net income increased $11,000 or 7.75%, from $142,000 for the three months
ended March 31, 1997 to income of $153,000 for the three months ended
March 31, 1998. The increase in net income was mainly due to an
increase in gain on sale of mortgage loans offset by increased non-
interest expenses.
SWVA Bancshares, Inc. has been a public company for over three years.
Proponent believes that in that three year period, SWVA Bancshares, Inc.,
should have attained significantly higher returns on assets and equity.
As more financial institution mergers and acquisitions occur, Proponent
believes that the time to actively explore the possibility of an
acquisition of SWVA Bancshares, Inc., is now. Proponent believes that the
creation of a committee of directors to carry out this effort is the best
method of enhancing and maximizing shareholder value and serving the
interests of shareholders.
