SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JAMES RIVER BANKSHARES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
JAMES RIVER BANKSHARES, INC.
101 E. Washington Street
Suffolk, Virginia 23434
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
THURSDAY, APRIL 24, 1997
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Shareholders of James
River Bankshares, Inc. will be held at the Holiday Inn Suffolk, 2864 Pruden
Boulevard, Suffolk, Virginia 23434, at 2:00 p.m. Eastern Time, on Thursday,
April 24, 1997, for the following purposes:
1. To elect eleven (11) directors to hold office for a term of one
year and until their successors are elected and qualified;
2. To act on a proposal to ratify the appointment of Goodman &
Company, L.L.P. as independent auditors for the ensuing year; and
3. To act upon such other matters as may properly come before the
meeting or any adjournment thereof.
Information concerning the matters to be acted upon at the meeting is
set forth in the accompanying Proxy Statement. The Board of Directors has
established the close of business on March 14, 1997 as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof.
By Order of the Board of Directors
----------------------------------
Harold U. Blythe, President and
Chief Executive Officer
Suffolk, Virginia
March 31, 1997
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON
OR THROUGH YOUR PROXY.
<PAGE>
PROXY STATEMENT
This Proxy Statement and the enclosed proxy card ("Proxy") are
furnished in connection with the solicitation of proxies on behalf of the Board
of Directors of James River Bankshares, Inc. (the "Company") to be voted at the
Annual Meeting of Shareholders (the "Annual Meeting") to be held at Holiday Inn
Suffolk, 2864 Pruden Boulevard, Suffolk, Virginia 23434, at 2:00 p.m., Eastern
Time, on Thursday, April 24, 1997, and at any adjournment thereof, for the
purposes set forth in the accompanying Notice of Meeting.
Only shareholders of record at the close of business on March 14, 1997
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting.
This Proxy is being mailed on or about March 31, 1997.
REVOCABILITY OF PROXY
Execution of the enclosed Proxy will not affect a shareholder's right
to attend the Annual Meeting and vote in person. If your Proxy is properly
signed, received by the Company and not revoked by you, the shares to which it
pertains will be voted at the Annual Meeting in accordance with your
instructions. If a shareholder does not return a signed Proxy, his or her shares
cannot be voted by proxy.
PERSON MAKING THE SOLICITATION
The cost of soliciting Proxies will be borne by the Company. The
Company has retained Corporate Investor Communications, Inc., 111 Commerce Road,
Carlstadt, New Jersey 07072-2586, to assist in the solicitation of Proxies from
brokers and nominees for a fee of approximately $2,000 plus out-of-pocket
expenses. First Union National Bank, Two First Union Center, Charlotte, North
Carolina 28288-1154, will assist in the counting of proxies. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodians, nominees and fiduciaries to send proxy material to the beneficial
owners and to secure their voting instructions if necessary. The Company, upon
request, will reimburse them for their expenses in so doing. Officers and
regular employees of the Company may solicit Proxies personally, by telephone or
by telegram from some shareholders if Proxies are not received promptly, for
which no additional compensation will be paid.
VOTING SHARES AND VOTE REQUIRED
On the Record Date, the Company had 2,458,292 shares of Common Stock
outstanding. Each share of Common Stock is entitled to one vote on each matter
presented at the Annual Meeting. Directors are elected by a plurality of votes
cast by shareholders at the Annual Meeting. A majority of votes cast is required
to ratify the appointment of auditors. Abstentions, broker non-votes, and
withheld votes will not be considered "votes cast" based on the Company's
understanding of state law requirements and the Company's Articles of
Incorporation and Bylaws.
All shareholder meeting proxies, ballots and tabulations that identify
individual shareholders are kept secret and no such document shall be available
for examination, nor shall the identity or the vote of any shareholder be
disclosed except as may be necessary to meet legal requirements and the laws of
Virginia. Votes will be counted and certified by Susan H. Simpkins and Elizabeth
M. Kessinger, who are employees of the Company and will serve as the Proxy
Committee at the Annual Meeting and act as the inspectors of elections.
Unless specified otherwise, the Proxy will be voted (i) FOR the
election of the eleven nominees to serve as directors of the Company for a one
year term and until their successors are duly elected and qualified, and (ii)
FOR the ratification of the appointment of Goodman & Company, L.L.P. as
independent auditors for 1997. In the discretion of the Proxy holders, the
Proxies will also be voted for or against such other matters as may properly
come before the Annual Meeting. Management is not aware of any other matters to
be presented for action at the Annual Meeting.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 14, 1997,
relating to the beneficial ownership of the Company's Common Stock by (i) each
of the Company's directors and named executive officers who own Common Stock,
and (ii) all of the Company's directors and named executive officers as a group.
The Company is not aware of any person or group of affiliated persons who owns
more than 5% of the Common Stock of the Company. All of the Company's directors
and named executive officers receive mail at the Company's principal executive
offices at 101 East Washington Street, Suffolk, Virginia 23434.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned Outstanding Shares
---- ------------------ ------------------
<S> <C>
Harold U. Blythe 19,239(1) *
James E. Butler, Jr. 38,270(2) 1.56
Bruce B. Gray 65,331(3) 2.66
Elmon T. Gray 34,820(4) 1.42
G. P. Jackson 105,000 4.27
Ben P. Kanak 50,084(5) 2.04
Glenn T. McCall 1,785(6) *
John A. Ramsey, Jr. 34,512(7) 1.40
Robert E. Spencer, Jr. 26,964 1.10
E. V. Stephenson, Jr 44,170 1.80
James C. Stewart 71,849(8) 2.92
Directors and Executive 492,024 19.85
Officers as a Group
(11 persons)
</TABLE>
- ----------
* Less than 1% ownership
(1) Includes (i) 1,450 shares owned jointly by Mr. Blythe and his wife,
(ii) 50 shares owned by Mr. Blythe's wife, for which Mr. Blythe
disclaims beneficial ownership, and (iii) 1,000 shares owned by a
family trust for which Mr. Blythe has voting and investment power.
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<PAGE>
(2) Includes 2,990 shares owned by Mr. Butler's wife, for which Mr. Butler
disclaims beneficial ownership.
(3) Includes (i) 29,138 shares owned by a family trust for which Mr. Bruce
Gray and Mr. Garland Gray, II share voting and investment power, (ii)
196 shares held by Mr. Bruce Gray as custodian for Elmon T. Gray, II,
(iii) 196 shares held by Mr. Bruce Gray as custodian for Garland Gray,
III, (iv) 1,150 shares held by Mr. Bruce Gray as custodian for Pamela
G. Herbert, (v) 842 shares held by Mr. Bruce Gray as custodian for
Charles C. Herbert, III, and (vi) 1,076 shares owned by a trust for
which Mr. Bruce Gray and Mr. Garland Gray, II share voting and
investment power. Does not include any shares beneficially owned or
otherwise described in this Proxy Statement by or with respect to Mr.
Elmon T. Gray or by Mr. Garland Gray, II, Mr. Bruce Gray's father and
brother, respectively. Mr. Bruce Gray disclaims beneficial ownership of
any shares other than the 65,331 shares listed above.
(4) Includes (i) 6,297 shares owned by Mr. Elmon Gray's wife, Pamela B.
Gray, and (ii) 24,882 shares owned by various family trusts for which
Mr. Elmon Gray shares voting and investment power with NationsBank.
Does not include (i) 56,481 shares owned collectively by Elizabeth Gray
Duff, Mr. Elmon Gray's sister, and her husband and various children,
(ii) 62,600 shares owned collectively by Florence Gray Tullidge, Mr.
Elmon Gray's sister, and her husband and various children, (iii) 63,935
shares owned collectively by Mary G. Stettinius, Mr. Elmon Gray's
sister, and her husband and various children, or (iv) 10,614 shares
owned collectively by Katharine T. Gray, Mr. Elmon Gray's daughter, and
her various children. Also does not include any shares beneficially
owned or otherwise described in this Proxy Statement by or with respect
to Mr. Bruce Gray or Mr. Garland Gray, II, who are both sons of Mr.
Elmon Gray. Mr. Elmon Gray disclaims beneficial ownership of any shares
other than the 24,882 shares owned by family trusts as described above.
(5) Includes 1,714 shares owned by Mr. Kanak's wife, for which Mr. Kanak
disclaims beneficial ownership.
(6) Includes 595 shares owned jointly by Mr. McCall and his wife.
(7) Includes 17,928 shares owned jointly by Mr. Ramsey and his wife and 880
shares owned by Mr. Ramsey's wife. Mr. Ramsey disclaims beneficial
ownership of the 880 shares owned directly by his wife.
(8) Includes 988 shares owned by Mr. Stewart's wife, for which Mr. Stewart
disclaims beneficial ownership. Also includes 16,882 shares held by the
First Colonial Bank, FSB ("FCB") ESOP, which acquired an interest in
the Company's Common Stock in connection with the Company's acquisition
of FCB in February 1996 ("FCB Acquisition"). Also includes options to
acquire 18,346 shares of the Company's Common Stock. These options were
formerly held by Mr. Stewart in the form of options to acquire FCB
stock and were converted into options to acquire the Company's Common
Stock in connection with the FCB Acquisition.
PROPOSAL 1. ELECTION OF DIRECTORS
All directors are elected for a one year term and until their
successors are duly executed and qualified. The Board of Directors recommends
that the following eleven nominees be elected as directors: Harold U. Blythe,
James E. Butler, Jr., Bruce B. Gray, Elmon T. Gray, G. P. Jackson, Ben P. Kanak,
Glenn T. McCall, John A. Ramsey, Jr., Robert E. Spencer, Jr., E. V. Stephenson,
Jr., and James C. Stewart. Proxies received will be voted for the election of
such nominees unless marked to the contrary. A shareholder who desires to
withhold voting of the Proxy for all or one or more of the nominees may so
indicate on the Proxy. All of the nominees are currently members of the Board of
Directors and all have consented to be named and have indicated their intent to
3
<PAGE>
serve if elected. If any nominee becomes unable to serve, an event which is not
anticipated, the Proxy will be voted for a substitute nominee to be designated
by the Board of Directors, or the number of directors will be reduced.
The Company's Bylaws provide that the number of directors shall be
between seven and seventeen. In two separate transactions that closed in
February 1996, the Company acquired First Colonial Bank, FSB ("FCB") in
Hopewell, Virginia ("FCB Transaction") and Bank of Isle of Wight ("BIW") in
Smithfield, Virginia ("BIW Transaction"), pursuant to which FCB and BIW became
wholly owned banking subsidiaries of the Company. In accordance with the
respective negotiated terms of the FCB Transaction and BIW Transaction, Ben P.
Kanak and James C. Stewart, directors of FCB, and John A. Ramsey, Jr. and Robert
E. Spencer, Jr., directors of BIW, were all appointed to the Company's Board of
Directors in March 1996. The separate terms of the FCB Transaction and BIW
Transaction require that Messrs. Kanak and Stewart, on the one hand, and Messrs.
Ramsey and Spencer, on the other hand, be nominated for election as directors at
the Annual Meeting to serve a one year term and that they also be nominated for
election as directors at the 1998 annual meeting of the Company's shareholders
to serve one year terms.
The following information relates to the eleven director-nominees.
There are no family relationships among any of the director-nominees, except
that Mr. Elmon Gray is the father of Mr. Bruce Gray, nor is there any
arrangement or understanding between any director-nominee and any other person
pursuant to which the director-nominee was selected, except as otherwise
described above with respect to Messrs. Kanak, Stewart, Ramsey and Spencer.
Director-Nominees
Harold U. Blythe, 54, the Company's President and Chief Executive
Officer, has been a director of the Company since it was initially organized in
December 1994 and is currently a director, President and Chief Executive Officer
of Bank of Suffolk ("BOS"), one of the Company's wholly owned banking
subsidiaries. Mr. Blythe has been a director of BOS since 1989 and an employee
of BOS since 1988. Mr. Blythe is also Chairman of the Board of James River
Support, Inc., the Company's non-banking operations subsidiary ("James River
Support").
James E. Butler, Jr., 71, has been a director of the Company since
December 1994 and a director of BOS since 1973. Mr. Butler is the President of
Butler Paper Company.
Bruce B. Gray, 43, has been a director of the Company since December
1994, Chairman of the Board of James River Bank ("JRB"), one of the Company's
wholly owned banking subsidiaries, since 1993 and has been a director of JRB
since 1977. Mr. Bruce Gray was Vice-President of Gray Lumber Co. from 1977 to
1992 and has been Vice-President of Gray Land & Timber Co. since 1992. Mr. Bruce
Gray is also a managing partner of Grayland Co.
Elmon T. Gray, 71, the Company's Chairman of the Board, has been a
director of the Company since December 1994. Mr. Elmon Gray was a director of
JRB from 1949 until 1996, serving as Chairman of the Board from 1977 to 1993.
Mr. Elmon Gray was President of Gray Lumber Co. from 1953 to 1992 and President
of Gray Land & Timber Co. from 1992 until 1993. Mr. Gray is a managing partner
of Grayland Co.
4
<PAGE>
G. P. Jackson, 70, the Company's Vice-Chairman, has been a director of
the Company since December 1994. Mr. Jackson also is currently the Chairman of
the Board of BOS and has been a director of BOS since 1967. Mr. Jackson is
engaged in real estate rentals and contracting, and serves as President of G. P.
Jackson, Inc., Jackson & Jackson Bros., Inc., Holland & Jackson, Inc. and
Suffolk Glass, Inc.
Ben P. Kanak, 74, was appointed to the Board of Directors in March 1996
after consummation of the FCB Transaction as described above. Mr. Kanak is
currently Chairman of the Board of Directors of FCB, a position he has held
since 1982. Mr. Kanak has been a director of FCB since FCB was formed in 1972.
Mr. Kanak also serves as a member of the Board of Directors of Plant Foods
Products, Inc. Mr. Kanak has been an independent farmer since 1942.
Glenn T. McCall, 64, the Company's Senior Vice-President and Chief
Financial Officer, has been a director of the Company since December 1994 and is
currently a director of JRB and James River Support. Mr. McCall has been a
director of JRB since 1987 and was an employee of JRB from 1983 through 1996,
serving as Executive Vice President and CEO from 1983 until 1992, and President
and CEO from 1992 through 1996.
John A. Ramsey, Jr., 67, was appointed to the Board of Directors in
March 1996 after consummation of the BIW Transaction as described above. Mr.
Ramsey has been Chairman of the Board of Directors of BIW since 1991, and is a
charter director of BIW, having served as a director since 1971. Mr. Ramsey is a
farmer, and is President of Ramsey Brothers, Inc., which farms numerous
properties in and around Isle of Wight County, Virginia.
Robert E. Spencer, Jr., 55, was appointed to the Board of Directors in
March 1996 after consummation of the BIW Transaction. Mr. Spencer joined BIW in
1986, and has served in the capacity of director, President, and Chief Executive
Officer of BIW since that time. From 1970 until 1986, Mr. Spencer was affiliated
with three other community banks within Virginia.
E. V. Stephenson, Jr., 76, has been a director of the Company since
December 1994 and a director of BOS since 1973. Mr. Stephenson also serves as
the Company's Secretary. Mr. Stephenson is now retired. From 1977 until 1996, he
was a general insurance underwriter for Nurney-Stephenson Insurance Corporation.
James C. Stewart, 58, was appointed to the Board of Directors in March
1996 after the consummation of the FCB Transaction. Mr. Stewart is currently a
director, President and Chief Executive Officer of FCB, a position he has held
since 1973. From 1958 until 1973, Mr. Stewart was employed by other financial
institutions.
Meetings and Committees of the Board of Directors
The business of the Company is managed under the direction of the Board
of Directors. The Board of Directors meets on a regularly scheduled basis during
the year to review significant developments affecting the Company and to act on
matters requiring approval by the Board of Directors. It also holds special
meetings when an important matter requires action by the Board of Directors
5
<PAGE>
between scheduled meetings. The Board of Directors held 12 meetings during 1996.
In accordance with the Rules of the NASDAQ National Market System, the
interdealer quotation system on which the Company's Common Stock trades, Messrs.
Butler, Bruce Gray, Elmon Gray, Jackson, Kanak, Ramsey and Stephenson are
independent directors. During 1996, each member of the Board of Directors
participated in at least 75% of all meetings of the Board of Directors and at
least 75% of all meetings of the applicable committees during the period for
which he was a director.
The Board of Directors has established Executive, Audit and
Compensation Committees. Messrs. Blythe, Bruce Gray, Jackson, McCall, Spencer
and Stewart serve on the Executive Committee. Mr. Spencer and Mr. Stewart were
appointed to the Executive Committee in accordance with the negotiated terms of
the FCB Transaction and BIW Transaction, respectively. Messrs. Butler, Elmon
Gray and Jackson serve on the Compensation Committee. Messrs. Butler, Bruce Gray
and Stephenson serve on the Audit Committee.
The Executive Committee is delegated the power, with certain
exceptions, of the Board of Directors to act in place of the full Board during
all periods between regular meetings of the Board. The Executive Committee met
11 times in 1996. The Audit Committee is empowered by the Board of Directors to,
among other things, recommend the firm to be employed by the Company as its
independent auditor and to consult with such auditor regarding audits and the
adequacy of internal accounting controls. The Audit Committee met two times in
1996. The Compensation Committee makes recommendations to the Board of Directors
as to, among other things, the compensation of the Chief Executive Officer, each
officer who is also a director of the Company and designated other members of
senior management, as well as to new compensation and stock plans. The
Compensation Committee met five times in 1996.
The Company does not currently have a Nominating Committee. The
functions customarily attributable to such a committee are performed by the
Board of Directors as a whole. The Company will consider director-nominees
recommended by shareholders, although it has not actively solicited
recommendations from shareholders for nominees nor has it established any
procedure for this purpose for the Annual Meeting other than as set forth in the
Company's Articles of Incorporation ("Articles"). Article IV(c)(iii) of the
Articles provides that in the case of a nomination to be made by a shareholder
of the Company at an annual or special meeting of shareholders, except in the
case of a nomination by which proxies are being solicited under applicable
regulations of the Securities and Exchange Commission ("SEC"), written notice of
the shareholders' intent to make a nomination at a meeting of shareholders must
be filed with the Secretary of the Company not later than ten (10) calendar days
after the notice to shareholders for the meeting is sent to shareholders, or at
least twenty-one (21) calendar days prior to the date fixed for holding the
meeting at which the nomination is intended to be made, whichever is later. Any
such notice of an intent to nominate must contain or be accompanied by the
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<PAGE>
following information: (i) the name and residence of the shareholder of the
Company who intends to make the nomination; (ii) a representation that the
shareholder is a holder of record of Common Stock of the Company entitled to
vote and that the shareholder intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (iii) such
information regarding each nominee as would have been required to be included in
a proxy statement filed under the applicable regulations of the SEC had the
Board of Directors of the Company nominated or intended to nominate such
nominee, which information must include such nominees' name and address; (iv) a
description of all arrangements or understandings among the nominating
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; and (v) the consent of each nominee to serve as a director of
the Company if so elected. If the Company's Chairman of the meeting at which
directors are to be elected determines that a nomination by a shareholder was
not made in accordance with the procedure set forth above, the nomination will
be declared void.
EXECUTIVE COMPENSATION
Summary Executive Compensation Table
The following table presents an overview of executive compensation paid
during 1996, 1995 and 1994 to Harold U. Blythe, President and Chief Executive
Officer of the Company and BOS, Glenn T. McCall, Senior Vice-President and Chief
Financial Officer, and James C. Stewart, President of FCB. Because the Company
did not commence operations until June 1, 1995, information presented for 1994
consists of, and information for 1995 includes, compensation paid to Messrs.
Blythe and McCall by BOS and JRB, respectively, in their capacities as executive
officers of those institutions. All of the compensation information for Mr.
Stewart consists of amounts paid by FCB, which was acquired by the Company in
February 1996, other than director fees paid by the Company to Mr. Stewart in
1996. No other executive officer of the Company or any banking subsidiary
received combined salary and bonus in excess of $100,000 during the relevant
periods.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------- ------------
Securities
Name and principal position Underlying All Other
- --------------------------- Year Salary Bonus Options(#) Compensation
---- ------ ----- ---------- ------------
<S> <C>
Harold U. Blythe, President and CEO 1996 $132,000(1) $6,600 25,000(2) $18,882(3)
of the Company and BOS 1995 111,156 1,500 0 2,314(3)
1994 88,056 15,000 0 2,186(3)
Glenn T. McCall, Senior Vice- 1996 114,030(4) 4,400 15,000(2) 28,586(5)
President and Chief Financial Officer 1995 93,252 5,022 0 12,765(5)
1994 77,668 2,594 0 13,139(5)
James C. Stewart, President 1996 126,960(6) 0 15,000(2) 22,191(7)
of FCB 1995 111,175 7,442 0 20,237(7)
1994 102,287 0 0 18,424(7)
</TABLE>
- -----------------
(1) Includes $22,800 of director fees paid by the Company and BOS.
(2) Options granted pursuant to the 1996 Employee Stock Option Plan.
(3) Consists of premiums paid for life insurance policies and contributions
to 401(k) Plan. For 1996, includes life insurance premiums paid by the
Company to fund Mr. Blythe's benefits under his Deferred Compensation
Agreement, as described below.
(4) Includes $25,200 of director fees paid by the Company and JRB.
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<PAGE>
(5) Consists of premiums paid for life insurance policies and contributions
to 401(k) Plan. Also includes life insurance premiums paid by JRB to
fund Mr. McCall's retirement benefits under his Deferred Compensation
Agreement, as described below.
(6) Includes $23,500 of director fees paid by the Company and FCB.
(7) Consists of funding of FCB's ESOP and life insurance premiums paid by
FCB to fund Mr. Stewart's supplemental income plan. For 1996, includes
contributions to 401(k) Plan.
Option Grants in Last Fiscal Year
The table below sets forth information regarding stock option grants to
the executive officers listed in the Summary Compensation Table above during the
fiscal year ended December 31, 1996. All of the grants were made pursuant to the
1996 Employee Stock Option Plan.
<TABLE>
<CAPTION>
Number of Securities % of Total Options
Underlying Options Granted to Employees Exercise Grant
Name Granted in Fiscal Year Price Expiration Date Date
---- ------- -------------- ----- --------------- ----
<S> <C> Value(1)
Harold U. Blythe 25,000 20% $20.33 November 4, 2006 $176,250
Glenn T. McCall 15,000 12% $20.33 November 4, 2006 $105,750
James C. Stewart 15,000 12% $20.33 November 4, 2006 $105,750
</TABLE>
- ----------
(1) Value determined using the Black-Scholes option-pricing model with the
following weighted average assumptions: dividend yield of 2%, expected
volatility of 37%, risk-free interest rate of 6.2% and expected life of
5 years. The actual value, if any, that may be realized on the options
will depend on the excess of the stock price over the exercise price on
the date the option is exercised. Accordingly, there can be no
assurance that the value realized on the options will be at or near the
value estimated by the Black-Scholes model.
Fiscal Year End Options Table
No stock options were exercised in 1996 by the executive officers whose
compensation is disclosed in the Summary Executive Compensation Table above,
other than the exercise by Mr. Stewart of options to acquire 2,225 shares of
Company Common Stock. The table below sets forth information regarding options
exercised by Mr. Stewart in 1996, as well as exercisable and unexercisable stock
options held as of December 31, 1996, by Messrs. Blythe, McCall and Stewart, all
of which were granted pursuant to the 1996 Employee Stock Option Plan except as
otherwise indicated.
8
<PAGE>
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Options Value of Unexercised In-The-Money
at Fiscal Year-End (#) Options at Fiscal Year-End ($)(1)
---------------------- ---------------------------------
Shares
Acquired
Upon Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable(2)
- ---- ----------- ----------- ----------- ------------- ----------- ----------------
<S> <C>
Harold U. Blythe 0 0 0 25,000 0 0
Glenn T. McCall 0 0 0 15,000 0 0
James C. Stewart 2,225(3) $22,473(4) 18,346(3) 15,000 $176,122(3) 0
</TABLE>
- ----------
(1) The closing sale price of the Company's Common Stock on NASDAQ/NMS on
December 31, 1996 was $20.25.
(2) The exercise price of all the unexercisable options is $20.33 per
share.
(3) These options were originally granted by FCB and were converted into
options to buy the Company's Common Stock when the Company acquired FCB
in February 1996. The exercise price of the options is $10.65 per
share.
(4) On November 27, 1996, the date of exercise, the closing sale price of
the Company's Common Stock on NASDAQ/NMS was $20.75 per share.
Compensation of Directors
Directors of the Company who serve on the Executive Committee are paid
a fee of $1,500 per month and directors who do not serve on the Executive
Committee are paid a fee of $1,000 per month. The Chairman of the Board of the
Company, who serves on the Executive Committee, is paid a fee of $1,700 per
month. Directors also receive annual retainers and monthly fees for serving on
the Boards of the Company's subsidiary banks. The fees are based on the asset
sizes of those banks and are payable in accordance with the following schedule:
<TABLE>
<CAPTION>
ASSETS: $0-50 $51-100 $101-150 $151-200
--------------------------------------------------------------------
(dollars in millions)
<S> <C>
FEES:
--------------------------------------------------------------------
Annual retainer payable monthly $2,400 $3,000 $3,600 $4,200
Monthly board meeting: 100 150 200 250
Board chairman per board meeting 150 200 250 300
Committee meeting 50 75 100 125
</TABLE>
In addition to the fees payable above, Mr. Jackson also receives $600
per month from BOS, of which he is Chairman of the Board, for appraisal review
services. Effective September 1, 1996, Messrs. Blythe and McCall no longer
receive director fees but their salaries have been increased by an amount equal
to the director fees they would otherwise be paid. Directors of the Company
currently have the option of receiving registered shares of Common Stock of the
Company in lieu of receiving cash payments for director fees.
Executive Officer Employment Agreements
Harold U. Blythe, a director and the President and Chief Executive
Officer of both the Company and BOS, is currently compensated pursuant to an
Employment Agreement ("Blythe Employment Agreement") that was entered into in
June 1995 in connection with the capitalization and formation of the Company by
BOS and JRB. The Blythe Employment Agreement has a term of seven years,
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commencing on July 1, 1995. In 1995, the Compensation Committee of the Board of
Directors ("Compensation Committee") established an initial annual salary of
$109,200 under the Blythe Employment Agreement to be adjusted periodically,
provided that no adjustment can be made that would provide for a salary lower
than the initial annual salary of $109,200. Mr. Blythe's current annual salary
under the Blythe Employment Agreement is $136,224, which includes amounts
formerly payable to Mr. Blythe as director fees that are now paid as salary. The
Blythe Employment Agreement provides that in the event of a change of control of
the Company following which Mr. Blythe is not given reasonably equivalent,
acceptable duties and responsibilities as he had prior to the change of control,
Mr. Blythe may be terminated or resign, and, in either such case, Mr. Blythe is
entitled to receive 2.99 times his annual base compensation then being paid to
him pursuant to the Blythe Employment Agreement. In the event the Company
terminates Mr. Blythe's employment without cause, and provided that Mr. Blythe
does not thereafter compete with the Company, the Blythe Employment Agreement
provides that Mr. Blythe will receive his regular compensation for a period of
one year following termination, or during the remaining term of the agreement,
whichever is less.
Effective May 1, 1996, the Company and Mr. Blythe entered into a
deferred compensation agreement ("Blythe Deferred Agreement"). The Blythe
Deferred Agreement provides for the payment of certain retirement, death and
disability benefits provided that Mr. Blythe is employed by the Company until
May 1, 1998, unless employment is sooner terminated as a result of death or
disability. The retirement benefit is payable if Mr. Blythe retires at any time
after the age of 60. Thereafter, the Company will pay Mr. Blythe or his
beneficiaries a base monthly benefit of $2,000 per month for 120 consecutive
months. The monthly payment is subject to upward or downward adjustment based on
cost of living increases or decreases. In the event that Mr. Blythe dies before
his retirement date, the Company will pay $5,000 per month for 120 consecutive
months to Mr. Blythe's designated beneficiary. In the event Mr. Blythe's
employment with the Company terminates prior to retirement as a result of
disability, the Company will pay Mr. Blythe a disability benefit of $3,166 per
month. The disability benefit will continue throughout the period of disability
or until Mr. Blythe reaches age 60, at which time Mr. Blythe will commence
receiving the retirement benefit described above. Finally, in the event Mr.
Blythe terminates his employment with the Company for any reason other than
death or disability after May 1, 1998, but prior to attaining age 60, the
Company will pay Mr. Blythe a lump sum termination benefit. Commencing May 1,
1998, the termination benefit is $25,000 and increases by $25,000 on May 1 of
each year thereafter for a total of a $100,000 termination benefit should Mr.
Blythe terminate employment under the conditions described in the preceding
sentence between May 1, 2001 and April 30, 2002. After May 1, 2002, Mr. Blythe
is eligible for full retirement benefits. Mr. Blythe's deferred compensation
arrangement is funded by a life insurance policy on the life of Mr. Blythe for
which the Company pays premiums and is the beneficiary.
Glenn T. McCall, a director of the Company and JRB, and the Company's
Senior Vice-President and Chief Financial Officer, is also currently compensated
pursuant to an employment agreement ("McCall Employment Agreement") that was
entered into in June 1995 in connection with the capitalization and formation of
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the Company. The terms of the McCall Employment Agreement are the same as the
terms of the Blythe Employment Agreement, except that the McCall Employment
Agreement has a five year term commencing July 1, 1995 and the Compensation
Committee established an initial salary of $83,800, subject to adjustment on the
same general terms under which the Blythe Employment Agreement can be adjusted.
Mr. McCall's current annual salary under the McCall Employment Agreement is
$112,488, which includes amounts formerly payable to Mr. McCall as director fees
that are now paid as salary.
Mr. McCall and JRB also entered into a deferred compensation agreement
("McCall Deferred Agreement") in January 1989, pursuant to which he will receive
a benefit of $1,000 per month in each of the ten years following his retirement.
The arrangement is funded by a life insurance policy on the life of Mr. McCall,
for which JRB pays premiums and is the beneficiary. Pursuant to the McCall
Deferred Agreement, a percentage of Mr. McCall's retirement benefit vests each
month.
As described in this Proxy Statement under the heading "Proposal 1.
Election of Directors" above, in February 1996 the Company acquired FCB and BIW
in the FCB Transaction and BIW Transaction, respectively. Pursuant to the
negotiated terms of the FCB Transaction, James C. Stewart is compensated as
President and Chief Executive Officer of FCB under an employment agreement with
FCB ("Stewart Employment Agreement"). The Stewart Employment Agreement is for an
initial term of three years commencing March 1, 1996, renewable annually
thereafter, and provides that Mr. Stewart will receive compensation at least
equal to the compensation he received from FCB prior to the FCB Transaction. FCB
is currently paying Mr. Stewart a base salary of $103,460. The Stewart
Employment Agreement also contains a change of control provision that is the
same as that provided for in the Blythe Employment Agreement and the McCall
Employment Agreement. In the event FCB terminates Mr. Stewart's employment
without cause, and provided that Mr. Stewart does not thereafter compete with
the Company, the Stewart Employment Agreement provides that Mr. Stewart will
continue to receive his salary for the later of (i) the remaining term of the
Stewart Employment Agreement, or (ii) a period of one year following
termination.
Pursuant to the terms of the BIW Transaction, Robert E. Spencer, Jr. is
now compensated as President and Chief Executive Officer of BIW under an
employment agreement with BIW ("Spencer Employment Agreement"). The Spencer
Employment Agreement has terms substantially the same as those of Mr. Stewart,
except that the initial term of the Spencer Employment Agreement is five years
and Mr. Stewart would receive his salary for a period of one year following a
termination of employment without cause. BIW is currently paying Mr. Spencer a
base salary of $80,412.
Compensation Committee Interlocks and Insider Participation
No member of the Company's Compensation Committee was an officer or
employee of the Company during 1996. During 1996, no executive officer of the
Company served as a member of the Compensation Committee of another entity, nor
did any executive officer of the Company serve as a director of another entity,
one of whose executive officers served on the Company's Compensation Committee.
Two members of the Compensation Committee, Messrs. Jackson and Butler, have
outstanding loans with certain of the Company's banking subsidiaries. Each of
these loans was made in the ordinary course of business on substantially the
same terms, including interest rates, collateral and repayment terms, as those
prevailing at the time for comparable transactions with unrelated parties and
did not involve more than the normal risk of collectibility or present other
unfavorable features. See " - Certain Relationships and Related Transactions"
below.
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Compensation Committee Report Concerning Compensation of Certain Executive
Officers
This report describes the Company's executive officer compensation
strategy, the components of the compensation program and the manner in which the
1996 compensation determinations were made for the Company's President and Chief
Executive Officer, Harold U. Blythe, and the Company's other executive officers
(collectively "Executive Officers").
In addition to the information set forth above under "Executive
Compensation," the Compensation Committee is required to provide shareholders a
report explaining the rationale and considerations that led to the fundamental
executive compensation decisions affecting the Company's Executive Officers. In
fulfillment of this requirement, the Compensation Committee, at the direction of
the Company's Board of Directors, has prepared the following report for
inclusion in this Proxy Statement. None of the members of the Compensation
Committee are executive officers or employees of the Company.
Compensation Philosophy
The compensation of the Company's Executive Officers is designed to
attract, retain, motivate and reward qualified, dedicated executives, and to
directly link compensation with (i) the Executive Officer's previous and
anticipated performance, (ii) the contributions and responsibilities of the
Executive Officer to the Company and (iii) the Company's profitability. None of
these three factors is given more relative consideration than any other. The
principal components of an Executive Officer's compensation package in 1996 were
(i) a base salary at a stated annual rate, together with certain other benefits
as may be provided from time to time, (ii) discretionary cash bonuses, and (iii)
awards of stock options pursuant to the Company's 1996 Employee Stock Option
Plan. During 1996, the Company paid discretionary cash bonuses of $6,600 and
$4,400 to Mr. Blythe and Mr.
McCall, respectively.
Employment Agreements
The Company has entered into Employment Agreements with certain
Executive Officers as described below. The Compensation Committee believes that
written employment agreements are necessary to attract and retain a quality
management team and are consistent with the Company's compensation philosophy.
Chief Executive Officer and Chief Financial Officer Employment
Agreements. Harold U. Blythe, the Company's and BOS' President and Chief
Executive Officer and Glenn T. McCall, the Company's Senior Vice-President and
Chief Financial Officer, are both employed pursuant to employment agreements
with the Company. The specific terms of Mr. Blythe's and Mr. McCall's Employment
Agreements are set forth in this Proxy Statement under the heading "- Executive
Officer Employment Agreements" above. The form of both employment agreements was
negotiated and agreed upon by BOS and JRB in connection with the capitalization
and formation of the Company in June 1995. However, the form of the employment
agreements did not provide a specific salary. For 1996, Mr. Blythe's base annual
salary under his employment agreement remained $109,200 and Mr. McCall's base
annual salary remained $83,000. However, effective September 1, 1996, Messrs.
Blythe and McCall began receiving as salary amounts formerly paid to them as
12
<PAGE>
director fees. In addition, the Compensation Committee awarded Messrs. Blythe
and McCall a 3.2% increase to base salary for 1997. After giving effect to this
increase and the allocation of director fees to salary, the base annual salaries
of Messrs. Blythe and McCall for 1997 are $136,224 and $112,488, respectively.
The Compensation Committee has established the base salaries of Mr. Blythe and
Mr. McCall based on their employment duties and responsibilities and the
relative contributions they are anticipated to make to the Company. In
establishing the base salaries, the Compensation Committee reviewed and
considered base salary levels of comparable officers in comparable companies.
As also described above in this Proxy Statement under the heading "-
Executive Officer Employment Agreements," Mr. Blythe and the Company, and Mr.
McCall and JRB, have entered into deferred compensation agreements. The
Compensation Committee believes that the deferred compensation arrangement for
Mr. Blythe is consistent with the Company's compensation philosophy. Mr.
McCall's agreement was entered into in 1989 and therefore was not negotiated by
either the Company's Board of Directors or the Compensation Committee. However,
the Compensation Committee believes that Mr. McCall's deferred compensation
agreement also is consistent with the Company's compensation philosophy.
Employment Agreements for Chief Executive Officers of FCB and BIW. As
described above in "- Executive Officer Employment Agreements," James C. Stewart
is compensated as president and Chief Executive Officer of FCB pursuant to an
employment agreement with FCB and Robert E. Spencer, Jr. is compensated as
President and Chief Executive Officer of BIW pursuant to an employment agreement
with BIW. The forms of these employment agreements were negotiated by the
Company as part of the FCB Transaction and BIW Transaction. Accordingly, the
Compensation Committee did not directly determine the initial compensation
arrangements for Mr. Stewart and Mr. Spencer, and under current Company policy
the respective boards of FCB and BIW review salaries payable to Messrs. Stewart
and Spencer under their employment agreements. For 1997, BIW increased Mr.
Spencer's base annual salary by 3.2% from $77,914 to $80,412 and FCB increased
Mr. Stewart's base annual salary by 1.2% from $102,225 to $103,460. The
Compensation Committee believes that the compensation currently payable to Mr.
Stewart and Mr. Spencer under their respective employment agreements is
consistent with the Company's compensation philosophy.
1996 Employee Stock Option Plan
During 1995, the Board and the Compensation Committee studied and
considered means by which the Company could award and compensate key employees
of the Company in a manner that would align closely the interests of such key
employees with the interests of the Company's shareholders. In furtherance of
this goal, the Board adopted the 1996 Employee Stock Option Plan ("Option
Plan"), which was approved by the Company's shareholders at the 1996 Annual
Meeting. The purpose of the Option Plan is to support the business goals of the
Company and to attract, retain and motivate management officials of high caliber
by providing incentives that will, through the award of options to acquire the
Company's Common Stock, associate more closely the interests of Executive
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Officers and key employees of the Company with the interests of the Company's
shareholders. Participation is limited to Executive Officers and other key
employees of the Company who are in positions in which their decisions, actions
and efforts significantly contribute to the success of the Company.
On November 5, 1996, the Compensation Committee granted stock options
to Messrs. Blythe, McCall, Stewart and Spencer. Mr. Blythe received options to
purchase 25,000 shares of the Company's Common Stock and Messrs. McCall, Stewart
and Spencer each received options to purchase 15,000 shares of the Company's
Common Stock. The exercise price of all of these options is $20.33 per share,
which was the fair market value of the Company's Common Stock on the date of
grant, as required under the Option Plan. All of these options vest in five
equal tranches commencing November 5, 1997, with the last tranche vesting
November 5, 2001. All options expire if unexercised on November 4, 2006. In
addition to grants to these Executive Officers, the Compensation Committee also
granted an additional 55,000 options to other eligible employees pursuant to the
Option Plan in 1996, all of which are on the same general terms as described
above except with respect to the number of options granted and exercise price.
Limitation on Deductibility of Certain Compensation for Federal Income Tax
Purposes
Section 162(m) of the Internal Revenue Code ("162(m)") precludes the
Company from taking a deduction for compensation in excess of $1 million for the
Chief Executive Officer or certain of its other highest paid officers. Certain
performance based compensation, however, is specifically exempt from the
deduction limit. The Compensation Committee has considered 162(m) and has
determined that 162(m) will not impact the Company in 1997 because it is not
anticipated that compensation in excess of $1 million will be paid to any
employee of the Company. However, in adopting the Option Plan, the Board and
Compensation Committee duly considered Section 162(m) and structured it to
satisfy the performance based compensation exemptions under 162(m).
- James E. Butler, Jr.
- Elmon T. Gray
- G. P. Jackson
THE PRECEDING "COMPENSATION COMMITTEE REPORT CONCERNING COMPENSATION OF
CERTAIN EXECUTIVE OFFICERS," AND THE STOCK PERFORMANCE GRAPH BELOW, SHALL NOT BE
DEEMED TO BE SOLICITING MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, OR INCORPORATED BY REFERENCE IN ANY DOCUMENTS
SO FILED.
14
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Company Stock Price Performance
The following graph shows a comparison of cumulative total shareholder
returns for the Company, the S & P 500 Stock Index and an industry peer group
constructed by the Company from the period June 29, 1995, the date the Company
became subject to the reporting requirements of the Securities Exchange Act of
1934, through December 31, 1996. The industry peer group consists of the Company
and the following companies: Main Street Bankgroup, Inc., Premier Bankshares
Corporation, Inc., Union Bank & Trust Company, George Mason Bankshares, Inc.,
F&M National Corporation and First Patriot Bankshares Corporation. The total
shareholder return assumes $100 invested at the beginning of the period in the
Company's Common Stock, the S & P 500 Stock Index and in the peer group index.
In developing the industry peer group index, the returns of the companies were
weighted according to stock market capitalization at the beginning of each
period for which a return is indicated.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
S & P 500 STOCK INDEX AND PEER GROUP INDEX*
Base Period Return Return
June 29, 1995 December 1995 December 1996
------------- ------------- -------------
S & P 500 Index 100 117.10 143.99
James River Bankshares, Inc. 100 119.03 107.25
Peer Group 100 122.36 152.07
- --------------------
*$100 invested on 6/29/95 in stock or index, including reinvestment of
dividends.
15
<PAGE>
Certain Relationships and Related Transactions
The directors and executive officers of the Company and its banking
subsidiaries, and their family members and certain business organizations and
individuals associated with each of them, have been customers of the Company's
various subsidiary financial institutions with which they are affiliated, have
had normal banking transactions, including loans, with them, and are expected to
continue to do so in the future. As of December 31, 1996, the Company's banking
subsidiaries had aggregate direct and indirect loans to the directors and
executive officers of the Company and its banking subsidiaries totaling
approximately $8.9 million, which represented approximately 24% of the Company's
shareholders' equity as of that date. Each of these transactions was made in the
ordinary course of business on substantially the same terms, including interest
rates, collateral and repayment terms, as those prevailing at the time for
comparable transactions with unrelated parties and did not involve more than the
normal risk of collectibility or present other unfavorable features.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors, officers and persons who beneficially own more than 10% of a
registered class of equity securities of the Company to file initial reports of
ownership (Forms 3) and reports of changes in beneficial ownership (Forms 4 and
5) with the SEC and NASDAQ. Such persons are also required under the rules and
regulations promulgated by the SEC to furnish the Company with copies of all
Section 16(a) forms they file. Based solely on a review of the copies of such
forms furnished to the Company, the Company believes that all reporting
requirements under Section 16(a) for 1996 were met in a timely manner by its
directors, officers and greater than 10% beneficial owners, other than the
reporting by E. V. Stephenson, Jr. of a sale of 500 shares of Common Stock in
August 1996, which was reported on a Form 5 in February 1997.
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected and approved Goodman & Company,
L.L.P. ("Goodman & Company") as the firm of independent certified public
accountants to audit the financial statements of the Company for the fiscal year
ending December 31, 1997, and the Board of Directors desires that such
appointment be ratified by the Company's shareholders. Goodman & Company also
audited the Company's financial statements for the fiscal year ended December
31, 1996.
On December 14, 1995, the Company's Board of Directors voted to engage
Goodman & Company to replace the firm of Frank Edward Sheffer & Co. ("Sheffer"),
which declined to stand for reelection as the Company's independent public
accountants after serving in that capacity for the fiscal year ended December
31, 1995. During the fiscal year ended December 31, 1995 and the subsequent
interim period, through March 29, 1996, there were no disagreements with Sheffer
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of Sheffer would have caused that firm to make reference in
connection with its audit report to the subject matter of the disagreement or
any reportable events. Sheffer's report on the Company's combined and restated
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<PAGE>
financial statements contained no adverse opinion or disclaimer of opinion and
was not qualified as to uncertainty, audit scope or accounting principles. The
Company has received from Sheffer a letter addressed to the Securities and
Exchange Commission stating that it agrees with the above statements.
A representative of Goodman & Company will be present at the Annual
Meeting, will have the opportunity to make a statement if he or she desires, and
will be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors does not know of any matters that will be
presented for action at the Annual Meeting other than those described above or
matters incident to the conduct of the Annual Meeting. If, however, any other
matters not presently known to management should come before the Annual Meeting,
it is intended that the shares represented by the Proxy will be voted on such
matters in accordance with the discretion of the holders of such Proxy.
SUBMISSION OF PROPOSALS FOR 1998
The next Annual Meeting of Shareholders will be held on or about April
23, 1998. Any shareholder who wishes to submit a proposal for consideration at
that meeting, and who wishes to have such proposal included in the Company's
proxy statement for that meeting, must submit the proposal in writing to Harold
U. Blythe, President and Chief Executive Officer, at 101 East Washington Street,
Suffolk, Virginia 23434, no later than November 30, 1997.
GENERAL
The Company's 1996 Annual Report to Shareholders accompanies this Proxy
Statement. The 1996 Annual Report to Shareholders does not form any part of the
material for the solicitation of proxies. Upon written request, the Company will
provide shareholders with a copy of its Annual Report on Form 10-K for the year
ended December 31, 1996 (the "Form 10-K"), as filed with the Securities and
Exchange Commission, without charge. Please direct written requests for a copy
of the Form 10-K to: Harold U. Blythe, President and Chief Executive Officer, at
101 East Washington Street, Suffolk, Virginia 23434.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY
By Order of the Board of Directors
March 31, 1997
<PAGE>
JAMES RIVER BANKSHARES, INC.
Proxy Solicited on Behalf of the
Board of Directors for
Annual Meeting of Shareholders
to be Held April 24, 1997
The undersigned, having received the Annual Report to Shareholders
and the accompanying Notice of Annual Meeting of Shareholders and Proxy
Statement dated March 31, 1997, hereby appoints Elmon T. Gray and Harold U.
Blythe (each with power to act alone) as proxies, with full power of
substitution, and hereby authorizes them to represent and vote, as directed
below, all the shares of the Common Stock of James River Bankshares, Inc.
held of record by the undersigned on March 14, 1997, at the Annual Meeting of
Shareholders to be held on April 24, 1997, and any adjournment thereof.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR"
PROOSALS 1 AND 2
1. ELECTION OF DIRECTORS
FOR all nominees listed (except as indicated to the contrary) [ ]
WITHHOLD AUTHORITY to vote for all nominees listed [ ]
Harold U. Blythe Glenn T. McCall
James E. Butler, Jr. John A. Ramsey, Jr.
Bruce B. Gray Robert E. Spencer
Elmon T. Gray E. V. Stephenson, Jr.
G. P. Jackson James C. Stewart
Ben P. Kanak
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THE NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- -------------------------------------------------------------------------------
2. TO RATIFY the appointment by the Board of Directors of Goodman & Company,
L.L.P. as the Company's independent auditors for the year ending December
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION, on such other matters as may properly come before the
meeting, or, if any nominee listed in Proposal 1 above is unable to serve
for any reason, to vote or refrain from voting for a substitute nominee or
nominees.
This proxy is revocable at any time prior to its exercise. This proxy, when
properly executed, will be voted as directed. Where no direction is given,
this proxy will be voted for Proposals 1 and 2.
<PAGE>
Please sign your name(s) exactly as they appear hereon. If signer is a
corporation, please sign the full corporate name by duly authorized officer.
If any attorney, guardian, administrator, executor, or trustee, please give
full title as such. If a partnership, sign in partnership name by authorized
person.
Date: _________________________ , 1997
--------------------------------------
--------------------------------------
Please complete, date, sign and return
this proxy promptly in the accompanying
envelope.
