UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment
(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)) ☒ Definitive Proxy Statement ☐ Definitive Additional Materials ☐ Soliciting Material under §240.14a-12 |
|
|
|
|
|
|
|
|
|
Virginia National Bankshares Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
☒ No fee required ☐ Fee paid previously with preliminary materials ☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
================================================================================
Virginia National Bankshares Corporation
404 People Place
Charlottesville, Virginia 22911
April 29, 202026, 2023
To All of Our Shareholders:
We are pleased to invite you to attend the 20202023 Annual Meeting of Shareholders of Virginia National Bankshares Corporation. The meeting will be held on Thursday, June 25, 202029, 2023 at 10:00 a.m. EST. We will be holdingAM local time, at the meeting in a virtual-only format to protect the health and well-being of our shareholders, directors and staff during the COVID-19 pandemic. Hilton Garden Inn, 1793 Richmond Road, Charlottesville, VA 22911.
This document also includes the notice of the meeting and the proxy statement, which provides more information about the virtual meeting. A copy of Virginia National Bankshares Corporation’s Annual Report on Form 10-K for the year ended December 31, 20192022 is made available with the proxy statement.
The formal meeting will be followed by a brief discussion of our plans and priorities.
Whether or not you plan to attend the virtual meeting, it is important your shares be represented and voted. Please complete and return the proxy card you receive as soon as possible. You can also vote your shares online or by phone using the instructions on your proxy card.
We appreciate your support as a shareholder and hope you will join us on June 25th.29th.
If your shares are held by a broker, bank or other custodian, you will need to vote
using the instruction form provided by your broker, bank or other custodian in order for your vote to be counted.
You will only be able to vote during the meeting if you obtain a legal proxy from
your broker.broker, bank or other custodian. Please see page 2 of the proxy statement for more details.
Your Vote is Important.
VIRGINIA NATIONAL BANKSHARES CORPORATION
NOTICE OF 2020 VIRTUAL2023 ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 25, 202029, 2023
The 20202023 Annual Meeting of Shareholders of Virginia National Bankshares Corporation (the “Company”) will be held on Thursday, June 25, 202029, 2023 at 10:00 a.m. EST,AM local time, at no physical location but virtually-only at https://www.issuerdirect.com/virtual-event/VABKthe Hilton Garden Inn, 1793 Richmond Road, Charlottesville, VA 22911..
The following items will be considered and voted upon at the meeting:
|
|
|
|
|
|
|
|
The Board of Directors has fixed April 21, 202019, 2023 as the record date for determination of shareholders entitled to notice of and to vote at the meeting and any adjournments or postponements thereof.
Whether or not you plan to join the meeting, it is important your shares are represented at the meeting. Please complete and return the proxy card you receive promptly. You may also vote your shares online or by phone using the instructions on your proxy card. If you are a registered shareholder, you may vote during the meeting even if you have already voted by another method.
| By Order of the Board of Directors: |
|
|
April | Donna G. Shewmake |
| Corporate Secretary |
Important Notice Regarding the Availability of Proxy Materials for the
Shareholders’ Meeting to Be Held on June 25, 202029, 2023
A complete set of proxy materials areis available at www.vnb.com/2020proxywww.vnbcorp.com/proxy. The materials available include this combined notice of the annual meeting of shareholders,and the proxy statement, the form of proxy and the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.2022.
QUESTIONS AND ANSWERS ABOUT THE MEETING
Q: When and where is the shareholders’ meeting?
A: The Annual Meeting of Shareholders (the “Annual Meeting” or “meeting”) will be on Thursday, June 29, 2023 at 10:00 AM local time, at the Hilton Garden Inn, 1793 Richmond Road, Charlottesville, VA 22911.
Q: What am I being asked to vote on?
A: At the Annual Meeting, you will be asked to vote on the following proposals:
|
|
|
|
|
|
|
|
|
|
|
|
to elect 10eleven (11) directors to serve until the next annual meeting of shareholders;
to approve, on an advisory (non-binding) basis, the Company’s executive compensation; and
to ratify the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent auditorsregistered public accounting firm for 2020.
We will also vote on any other matters that may properly come before the Annual Meeting.
Q: What do I need to do now? A: Just indicate on your proxy card how you want to vote, and sign, date and return it as soon as possible. You may also vote online or by phone using the instructions on your proxy card. If you sign and send in your proxy, or submit your vote online or by phone, and do not indicate how you want to vote, your proxy will be voted “FOR” the election of the director nominees named in the proxy statement as directors of the Company to serve until the Company’s next annual meeting of shareholders, “FOR” the approval of the Company’s executive compensation, and “FOR” for the ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for 2023. |
|
|
|
If you are a registered shareholder, you can choose to attend the Annual Meeting and vote your shares during the meeting instead of returning your completed proxy card. If you do return a proxy card, you may attend the meeting and change your vote. See “Voting and Revocation of Proxies” on page 2 of the proxy statement.
|
|
|
|
Q: If my shares are held in “street name” by my broker, will my broker vote my shares for me?
A: If you own shares that are held in street name, meaning through a broker, bank or other custodian (each, a “broker”), and you do not provide the broker holding the shares with specific voting instructions then, under applicable rules, the broker holding the shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the broker holding such shares does not receive instructions from you on how to vote your shares on a non-routine matter, that broker will inform the inspector of election and/or voting tabulator that it does not have the authority to vote on the matter with respect to the shares. This is generally referred to as a “broker non-vote.”
The election of directors (Proposal 1) and the approval of the Company’s executive compensation (Proposal 2) are matters that are considered non-routine under applicable rules, so broker non-votes may exist for these proposals. The ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent auditorsregistered public accounting firm for 20202023 (Proposal 3) is a matter considered routine under applicable rules. Since brokers may generally vote on routine matters without instructions, no broker non-votes are expected to exist in connection with Proposal 3.
Please provide instructions to your broker on how you want your shares voted by completing the voting instruction form you receive from your broker.
|
|
|
|
VIRGINIA NATIONAL BANKSHARES CORPORATION
PROXY STATEMENT
2023 ANNUAL MEETING OF SHAREHOLDERS
JUNE 25, 2020June 29, 2023
GENERAL
This proxy statement is being furnished to you as part of the solicitation of proxies by the Board of Directors of Virginia National Bankshares Corporation (the “Company” or “Virginia National”) for use at the Annual Meeting of Shareholders of the Company to be held on Thursday, June 25, 202029, 2023 at 10:00 a.m. EST in a virtual format onlyAM local time, at https://www.issuerdirect.com/virtual-event/VABK,the Hilton Garden Inn, 1793 Richmond Road, Charlottesville, VA 22911, and at any adjournment or postponement of the meeting (the “Annual Meeting” ofor “Meeting”). The Annual Meeting will be held for the purposes set forth in this proxy statement and in the preceding Notice of the Annual Meeting. The date of this proxy statement is April 23, 2020.26, 2023. This proxy statement and form of proxy (also sometimes referred to as the “proxy card”) is being furnished to shareholders beginning on or about April 29, 2020.27, 2023.
Reorganization; Merger; Affiliates
On December 16, 2013, Virginia National Bank (the “Bank”) reorganized into a holding company (the “Reorganization”). As a result of thisthe Reorganization, the Bank became a wholly-owned subsidiary of the Company, and each share of the Bank’s common stock was automatically converted to one share of the Company’s common stock. Effective JulyApril 1, 2018,2021, Fauquier Bankshares, Inc. (“Fauquier Bankshares”) merged with and into the Bank’s wholly-owned subsidiary, VNBTrust,Company, and The Fauquier Bank merged with and into Virginia National Association, was merged into the Bank. The Company is also the sole member of Masonry Capital Management, LLC (“Masonry Capital”), a Delaware limited liability company and registered investment advisor. Masonry Capital is the sole member of Masonry Capital GP, LLC, a Delaware limited liability company. References to the Company’s affiliates“Company’s affiliates” or the “Company and its affiliates” include the Bank, Masonry Capital, and Masonry Capital GP, LLC.LLC and any other affiliate or subsidiary of the Company or the Bank.
Record Date and Voting Rights of Shareholders
Only shareholders of record of the Company’s common stock (“common stock”) as of the close of business on April 21, 2020,19, 2023, the record date fixed for the Annual Meeting, are entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. As of the close of business on the record date, there were 2,704,2735,338,650 shares of common stock outstanding and entitled to vote at the Annual Meeting. The Company has no other class of stock outstanding. Each share of common stock entitles the record holder thereof to one vote for each matter to be voted upon at the Annual Meeting.
Quorum
A majority of the outstanding shares entitled to vote, represented in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Shares for which the holder has elected to abstain or to withhold the proxy’s authority to vote (including broker non-votes as discussed on the next page 2) on a matter will count toward a quorum but will not be included in determining the number of votes cast with respect to such matter. Shares held by brokers, banks or other custodians that are voted on any matter are included in the quorum. Broker shares that are not voted on any matter will not be included in determining whether a quorum is present.
Vote Required
The vote required for approval varies based on the proposal. Directors are elected by plurality; therefore, the 10eleven (11) nominees receiving the greatest number of affirmative votes cast will be elected. Approval of all other proposals contained in this proxy statement, as well as any other business that may properly come before the shareholders at the Annual Meeting, will be approved if the votes cast in favor of the proposal or other action at the Annual Meeting exceed the votes cast against that proposal or other action.
How to Attend the Meeting
Registered shareholders can attend the Annual Meeting by registering at https://www.issuerdirect.com/virtual-event/VABK using First and Last Name, Control ID and email address. In order to vote during the meeting, you will need your Control ID and your Request ID, both which are 8 digit numbers identified on the Notice Regarding Availability of Proxy Materials and/or the proxy card sent to you. If shares are held in an account with a broker, bank or other custodian, a legal proxy must be obtained and submitted as described below. The Company expects to post additional information and procedures related to the Annual Meeting at least two weeks prior to the Annual Meeting at www.vnb.com/2020proxy and at https://www.issuerdirect.com/virtual-event/VABK.
Voting and Revocation of Proxies
Execution of a proxy will not affect a registered shareholder’s right to attend the Annual Meeting and submit a vote. Any registered shareholder who has executed and returned a proxy, or submitted a vote online or by phone, may revoke it by attending the Annual Meeting and submitting a vote.vote during the meeting. A registered shareholder may also revoke his or her proxy at any time before it is exercised by filing a written notice with the Corporate Secretary of the Company or by submitting a proxy bearing a later date. All references in the proxy statement to “proxy,” other than “legal proxy,” shall refer to any method by which a shareholder authorizes the proxy holder(s) to vote shares, including proxy cards submitted by mail and votes submitted online, by phone or through any other method available. Proxies will extend to, and will be voted at, any adjourned session of the Annual Meeting.
Voting Shares Held in Accounts with Brokers, Banks and Other Custodians; Broker Non-Votes
If your shares are held in an account with a broker, bank or other custodian (each, a “broker”“Broker”), then your shares are held in “street name.” The brokerBroker holding your shares, or its nominee, is the shareholder for purposes of voting at the Annual Meeting, and you are considered the beneficial owner. As beneficial owner, you have the right to direct the brokerBroker how to vote the shares held for you, and you must follow the instructions of that brokerBroker in order to vote your shares or to change a previously submitted voting instruction. Since you are not the registered owner, you may not vote theyour shares atduring the Annual Meeting unless you (a) obtain a legal proxy from the brokerBroker holding your shares giving you the right to vote shares registered in its name at the Annual Meeting.Meeting and (b) send legal proxy to the Company in accordance with the instructions outlined below. Please note that this legal proxy is different from the proxy card or voting instructions you generally receive in the mail. If you wish to vote your shares during the Annual Meeting, please contact the brokerBroker holding your shares for a legal proxy. After you obtain a legal proxy, you must send it either via: (i) email to proxy@proxydirect.com;compliance@vnb.com; (ii) fax to 202-521-3464;434-817-7495; or (iii) mail to Virginia National Bank, ATTN: ProxyLegal Department, 1 Glenwood Ave, Suite 1001, Raleigh NC, 27603. 404 People Place, Charlottesville, VA 22911. Your legal proxy must be received at least 4four (4) business days prior to the Annual Meeting in order to issue information that will allow you a Control ID and Request ID to attend the meeting and submit your vote.vote during the Annual Meeting.
If the brokerBroker holding your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that brokerBroker does not have the authority to vote on that matter with respect to your shares. This is generally referred to as a “broker“broker non-vote.” The election of directors (Proposal 1) and the approval of the Company’s executive compensation (Proposal 2) are matters that are considered non-routine under applicable rules; therefore, broker non-votes may exist in connection with those proposals. The ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent auditorsregistered public accounting firm for 20202023 (Proposal 3) is a matter considered routine under applicable rules, so no broker non-votes are expected to exist in connection with Proposal 3.
How Shares will be Voted
Shares represented by proxies will be voted at the Annual Meeting as follows:
Properly Completed Proxies – Shares represented by a properly-completedproperly completed proxy that contains voting instructions will be voted in accordance with the voting instructions specified in the proxy.
Proxies Without Voting Instructions – Shares represented by proxies that are properly signed and dated but which do not contain voting instructions will be voted in accordance with the recommendations of the Company’s Board of Directors (the “Board”).
Abstentions – A properly executed proxy marked “ABSTAIN” will be counted for purposes of determining whether there is a quorum present at the Annual Meeting, but the shares represented by that proxy will not be voted at the Annual Meeting.
Broker Non-votes – Other than with respect to the ratification of the Company’s independent auditors,registered public accounting firm, your brokerBroker may not vote your shares unless you provide instructions to your brokerBroker on how to vote them.
Solicitation of Proxies
The Company is soliciting the proxies associated with this proxy statement and will bear all costs of the solicitation, including the cost of reimbursing brokers, bank and other custodiansBrokers for forwarding proxy materials to beneficial owners of shares they hold. Solicitation of proxies is being made by mail. The Company may also solicit proxies in person or by telephone, fax, electronic mail or special letter. Solicitations may be made by directors, officers and other employees of the Company or any subsidiary, none of whom will receive any separate or additional compensation for such solicitations.
PROPOSAL 1 – ELECTION OF DIRECTORS
General
TenEleven (11) directors will be elected at the Annual Meeting to serve until the next annual meeting of shareholders of the Company and until their successors are elected and qualified. The Company’s Board of Directors currently consists of 10 directors serving a one-year term, which expires at the next annual meeting of shareholders.
Directors will be elected by a plurality of the votes cast, so the 10eleven (11) nominees receiving the highest number of votes will be elected, even though such 10eleven (11) individuals may not receive “FOR” votes from a majority of the votes cast.
Nominations for Directors
The Board of Directors has nominated the 10eleven (11) individuals named below for election to the Board at the Annual Meeting, all of whom are currently serving on the Board.
Each person nominated has consented to being named as a nominee in this proxy statement and has indicated he or she is willing to serve as a director if elected. If, at the time of the Annual Meeting, any nominee is unable or unwilling to serve, shares represented by proxies will be voted at the discretion of the named proxies for such other person as the Board of Directors may nominate.
The following table sets forth certain information concerning the persons who have been nominated for election as directors by the Board of Directors.
Name (Age) | Principal Occupation | Director Since |
| Committee
| ||||
|
| | Chief Executive Officer and President of a real estate holding company | 2021 | * |
| CC | |
Steven W. Blaine | Attorney |
| 1998 | ** |
| AC; CC; CG | ||
Kevin T. Carter (57) | Managing Director of a resort property | 2021 | * | CC | ||||
Hunter E. Craig | Owner of a residential, commercial and industrial property company |
| 2020 | * |
| AC | ||
William D. Dittmar, Jr. | Entrepreneur, Investor and Developer |
| 1998 |
| CG | |||
|
| | Attorney | | 2021 | * | CG | |
Linda M. Houston | Retired, former Managing Director/Division Executive for Merrill Lynch |
| 2018 |
| CC; CG | |||
|
| | Chief Executive of a family office | 2021 | * | | AC | |
Glenn W. Rust | President and |
| 2006 | ** | | |||
Sterling T. Strange, III (62) | President and Chief Executive Officer of an information technology software firm | 2021 | * | AC; CG | ||||
Gregory L. Wells |
| | Independent Business Advisor |
| 2012 | ** | AC; CC | |
|
|
|
|
* Before their election to the Company’s Board of Directors, Mr. Craig served on the Bank’s board since 1998, and each of the other directors serving since 2021 previously served on the board of Fauquier Bankshares.
** Includes continuous service on the Board of the Bank prior to the Reorganization into a holding company form of ownership.
** Before their election to the Company’s Board of Directors, these nominees have served on the board of directors of the Bank as follows: Mr. Benham, since 2002; Mr. Craig, since 1998; Ms. Payne, since 1998; and Mr. Wright, since 2012.
*** AC - Audit and Compliance Committee; CC - Compensation Committee; and CG - Corporate Governance Committee.
The Board of Directors of the Company recommends that shareholders vote “FOR” the election of each of these nominees. Unless otherwise indicated on the proxy, the proxy holder(s) will vote “FOR” the election of these nominees.
The following biographies of the nominees standing for election contain information regarding the person’s business experience, public company director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes and/or skills that caused the Board of Directors to determine the person should serve as a director of the Company. Unless otherwise noted, the person has held their current position for at least five years. All nominees also serve on the board of directors of Virginia National Bank.
H. K. Benham, III, retired, practiced law withJohn B. Adams, Jr. serves as non-executive vice chairman of the firmCompany and Virginia National Bank. Mr. Adams also serves as president and chief executive officer of Harrison and Johnston in Winchester, Virginia for 50 years, specializing in corporate, tax, trust andBowman Companies, Inc., primarily a family real estate law.holding company, and was a director of Universal Corporation, a publicly traded company headquartered in Richmond, Virginia, from 2003 to 2018. He is a co-administratorwas president and chief executive officer of A. Smith Bowman Distillery from 1989 to 2003. Mr. Adams served as chairman of The National Theatre in Washington, D.C. for 38 years and has served on the foundation boards of several entities involving residentialhigher education institutions. As a result of his various leadership roles, Mr. Adams brings to the Board valuable insight and commercial real estate.business acumen, along with significant business expertise. Prior to joining the Company and Virginia National Bank boards in April 2021, Mr. Benham has extensive experience with bank trust departments, both personally,Adams served as trustee,a director of Fauquier Bankshares and as legal counsel for clients. In additionThe Fauquier Bank from 2002 to his legal expertise, Mr. Benham also has knowledgeMarch 2021. He was chairman of the Winchester marketplace.Fauquier Bankshares and The Fauquier Bank from 2010 to March 2021.
Steven W. Blaineis an attorney in the Charlottesville, Virginia, primarily practicing in business and real estate law. He is currently Of Counsel with Woods Roger, PLC. Prior to joining Woods Rogers in August 2019, Mr. Blaine was a partner with LeClairRyan since 1999 and was a partner of McGuireWoods LLP prior to that. As a practicing attorney, Mr. Blaine provides 36more than 37 years of experience as a corporate and transactional attorney. He also provides valuable insight into the local real estate economy and brings his legal perspective to bear in matters related to the Company. Mr. Blaine has served as a director of the Company since its incorporation in 2013 and a director of Virginia National Bank since its formation in 1998.
Kevin T. Carter is the managing director for Lansdowne Resort in Leesburg, Virginia. Mr. Carter formerly served as the president of Guests, Inc., a full-service hotel management company headquartered in Strasburg, Virginia, from October 2016 to December 2020 and served as the managing director for the Airlie Foundation from November 2000 to October 2016. He has been in the hospitality field for 41 years, serving on the management teams of some of the country’s most notable properties including the U.S. Grant Hotel, Intercontinental Hotel San Diego, Rancho Valencia Resort, Kiawah Island Resort, Bald Head Island Resort and The Founders Inn. Mr. Carter is currently serving as a member of the town council for Warrenton, Virginia and has served on several boards, including Fauquier Hospital & Health System and the Path Foundation. Through his personal community involvement and his professional experience, Mr. Carter provides the Board with significant market knowledge and financial management skills. Prior to joining the Company and Virginia National Bank boards in April 2021, Mr. Carter served as a director of Fauquier Bankshares and The Fauquier Bank from 2016 to March 2021.
Hunter E. Craig is Presidentpresident of Hunter E. Craig Co., a residential, commercial and industrial property company. Since 1991, Mr. Craig has been a principal real estate broker with Georgetown Real Estate. Mr. Craig is involved in various business activities and civic organizations in the Charlottesville, Virginia area. As a lifelong resident of Charlottesville and a co-founder of theVirginia National Bank, Mr. Craig provides a deep knowledge of local business conditions and has extensive community contacts. Mr. Craig has served as a director of the Company since 2020 and a director of Virginia National Bank since its formation in 1998.
William D. Dittmar, Jr. serves as the non-executive Chairman of the Boardchairman of the Company and Virginia National Bank. Mr. Dittmar is the managing member of Enterprise Properties, LLC in Charlottesville, Virginia, which is the parent company for various real estate and commercial property subsidiaries, as well as other investments. In addition to his extensive business background as a corporate executive, real estate executive and project manager, Mr. Dittmar is also well-versed in economic issues.
James T. Holland is Mr. Dittmar has served as a consultant, author and civic volunteer. He wasdirector of the president, chief executive officerCompany since its incorporation in 2013 and a director of O’Sullivan Corporation, a manufacturing company basedVirginia National Bank since its formation in Winchester, Virginia, before retiring in 1999. Prior to that, Mr. Holland was a financial consultant and project manager for a consulting firm and served in junior management positions in a bank. Mr. Holland has executive management and board experience, including prior service on bank boards, and is a civic leader in the Winchester community.1998.
Randolph D. Frostick is an attorney practicing primarily civil litigation involving real estate, commercial leasing, construction, business, and trust and estate matters. He is currently Of Counsel to Vanderpool, Frostick and Nishanian, P.C., a law firm located in Manassas, Virginia, which focuses primarily on civil litigation, business, employment, real estate transactions, financing, land use and development. Mr. Frostick co-founded the firm and was a shareholder, director, and officer of the law firm until 2020. Mr. Frostick has 41 years of experience as a civil trial attorney. In addition to practicing law, Mr. Frostick is actively involved in commercial leasing in Manassas, Virginia. Mr. Frostick brings to the Board insightful knowledge and valuable business expertise. Prior to joining the Company and Virginia National Bank boards in April 2021, Mr. Frostick served as a director of Fauquier Bankshares and The Fauquier Bank from 2009 through March 2021.
Linda M. Houston, retired, was employed with Merrill Lynch/Bank of America Corporation from 1987 to May 2017. From 2011 to 2017, Ms. Houston served as Managing Director/Division Executive.managing director/division executive. Her prior roles with Merrill Lynch included Headhead of Global Wealth and Investment Management Diversity and Inclusion Council, Regional Managing Director, National Marketingregional managing director, national marketing and Sales Manager,sales manager, and Managing Director/Market Executive.managing director/market executive. Ms. Houston has extensive experience in wealth and investment management, compliance and compensation practices. Ms. Houston has served as a director of the Company and Virginia National Bank since 2018.
Susan K. PayneJay B. Keyser has served as the chief executive of the William A. Hazel Family Office since 2015. He is Presidentalso the manager of various real estate ventures and ownertrustee of Blue Ridge Group,multiple trusts relating to the Hazel family. He currently serves on the board and was the chief executive officer of William A. Hazel, Inc., a communications consulting firmsite construction company headquartered in Charlottesville, Virginia.Chantilly, Virginia, from June 2008 to December 2014. Mr. Keyser had served for 25 years in various capacities, including chief financial officer, of this construction entity. He received his Certified Public Accountant certification in 1982 and is a member of the American Institute of Certified Public Accountants and the Virginia Society of CPAs. Mr. Keyser brings vast business and financial management knowledge and experience to the Board. Prior to 2017, Ms. Payne was the President of Payne, Ross & Associates Advertising, Inc., a marketing, public relations and advertising firm located in Charlottesville. She currently serves as the chair of the board of directors of Virginia Tourism Corporation. Ms. Payne has an extensive understanding of the markets and communities served byjoining the Company and provides marketingVirginia National Bank boards in April 2021, Mr. Keyser served as a director of Fauquier Bankshares and public relations knowledge, better enabling the CompanyThe Fauquier Bank from 2009 to communicate with existing customers, reach new customers and expand the Company’s brand.March 2021.
Glenn W. Rustis Presidentpresident and chief executive officer of the Company and the Chief Executive Officer of the Company and Virginia National Bank, as well as a managing partner of bothboth Masonry Capital Management, LLC and Masonry Capital GP, LLC. He also served as the president of Virginia National Bank from 2006 to March 2021 and from June 2021 to December 2021. He has over 48 years of experience in financial services, technology and network systems design, security, corporate restructuring and government infrastructure analysis. He served as a substantial expert on internet security and banking while working with National Infrastructure Advisory Council shortly after the September 11, 2001 attacks. Prior to joining theVirginia National Bank in 2006, he held various executive management positions at Texas Commerce Bank, Chemical Bank, J.P. Morgan, Chase and Sterling Bank in Houston, Texas, including executive vice president, chief operations officer, chief information officer, and president of the Bankruptcy Trustee Division. Bank. Mr. Rust brings wide-ranging executive bank management experience to the Company, as well as expertise in successfully managing growth opportunities. Mr. Rust also serves on the board of, and provides advice and strategic counsel to, several charitable organizations in the Charlottesville, Houston and Washington, D.C. areas. Mr. Rust brings wide-ranging executive bank management experience tohas served as a director of the Company as well as expertisesince its incorporation in successfully managing growth opportunities.2013 and a director of Virginia National Bank since 2006.
Sterling T. Strange, III is president and chief executive officer of The Solution Design Group, Inc., an information technology software firm to the public sector and higher education industries, located in Warrenton, Virginia and Orlando, Florida. Prior to founding The Solution Design Group, Inc. in 2004, Mr. Strange was president and founder of Decision Support Technologies, Inc., a transportation software company that provided solutions and services to over 100 airports and seaports worldwide. Mr. Strange has served in senior management positions in both private and public companies for over 30 years. He provides valuable entrepreneurial experience and financial management expertise to the Board. Prior to joining the Company and Virginia National Bank boards in April 2021, Mr. Strange served as a director of Fauquier Bankshares and The Fauquier Bank from 2007 to March 2021.
Gregory L. Wells is Chief Executive Officercurrently working as an independent business advisor. He was the chief executive officer of ACAC Fitness and Wellness Centers whichfrom 2006 until 2020. ACAC has centersoperations in Charlottesville and Richmond, Virginia, in West Chester, Pennsylvania, and in Baltimore and Germantown, Maryland. He also servesserved as a board member of PT@ACAC, a joint venture between Legacy Management, Inc. and Sentara Martha Jefferson Sentara.Hospital. Prior to joining ACAC in 2006, he was the Chief Executive Officerchief executive officer and an owner of Mailing Services of Virginia in Charlottesville and held executive positions with the former Centel Corporation. Mr. Wells has experience in leading companies of various sizes, including responsibilities for finance, strategic planning, operations, business development, marketing and human resources. Mr. Wells has served as a director of the Company since its incorporation in 2013 and a director of Virginia National Bank since 2012.
Bryan D. Wright is an attorney in Charlottesville, Virginia, where he serves as corporate, intellectual property and litigation counsel to entrepreneurs, businesses and public institutions. Mr. Wright has provided legal services to several Texas banks and served, for 15 years, as the legal member on a team that took over, restructured, operated and worked out business, real estate, and oil and gas ventures for the former Bankers Trust Company, New York. He is active in civic and community affairs. A frequent speaker on intellectual property, business and litigation law matters, Mr. Wright’s legal experience provides him with valuable insight on business and risk management issues.
PROPOSAL 2 – ADVISORY (NON-BINDING) VOTE
TO APPROVE EXECUTIVE COMPENSATION
Shareholders are being given the opportunity to vote on an advisory (non-binding) resolution to approve the compensation of the named executive officers pursuant to requirements of the Dodd-Frank Act and rules of the Securities and Exchange Commission.Commission ("SEC"). The named executive officers of the Company are identified in “Executive Compensation” starting“Summary Compensation Table” on page 8.13. This proposal, commonly known as a “say on pay” proposal, gives shareholders the opportunity to endorse or not endorse the Company’s executive pay program, which is outlined in “Executive Compensation.” Accordingly, shareholders of the Company are being asked to approve the following resolution:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the Executive Compensation section of this proxy statement.”
Approval of the proposed resolution requires that the votes cast “FOR” the resolution exceed the votes cast “AGAINST” the resolution.
The Company believes its compensation policies and procedures are aligned with the long termlong-term interests of its shareholders. Because this vote is advisory only, it will not be binding upon the Board of Directors. However, the Compensation Committee of the Board of Directors will take into account the outcome of the vote when considering future executive compensation recommendations and decisions.
The Board of Directors recommends that shareholders vote “FOR” approval of the named executive officers’ compensation. Unless otherwise indicated on the proxy, the proxy holder(s) will vote “FOR” approval of this proposal.
PROPOSAL 3 – RATIFICATION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit and Compliance Committee of the Board of Directors (sometimes referred to as the “Audit Committee”), under Rule 10A-3 of the Securities and Exchange Act of 1934 and the committee’s charter, has the sole authority to appoint or replace the Company’s independent auditors.registered public accounting firm. The Audit Committee has appointed Yount, Hyde & Barbour, P.C. as the independent auditorsregistered public accounting firm to audit the Company’s consolidated financial statements for the year ending December 31, 2020.2023. The Audit Committee seeks shareholder ratification of this appointment. Yount, Hyde & Barbour, P.C. has acted as the Company’s external auditorsindependent registered public account firm and has reported on consolidated financial statements since 1998. Representative(s) from Yount, Hyde & Barbour, P.C. are expected to be attend the Annual Meeting, online, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.
The appointment of the independent auditorsregistered public accounting firm will be ratified if the votes cast “FOR” ratification exceeds votes cast “AGAINST” ratification.
Should the shareholders not ratify the selection of Yount, Hyde & Barbour, P.C., it is contemplated that the appointment of Yount, Hyde & Barbour, P.C. will be permitted to stand unless the Audit Committee finds other compelling reasons for making a change. Disapproval by the shareholders will be taken into consideration for the selection of the independent registered public accounting firm for the coming year.
The Board of Directors recommends that shareholders vote “FOR” ratification of Yount, Hyde & Barbour, P.C. as the Company’s independent auditorsregistered public accounting firm for the fiscal year ending December 31, 2020.2023. Unless otherwise indicated on the proxy, the proxy holder(s) will vote “FOR” ratification.
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND BOARD COMMITTEES
Compensation of Directors
The following table provides information concerning the compensation of non-employee directors of the Company who served at any time during 2019 2022 for service on the boards and board committees of the Company and the Bank, as well as consulting services provided to the Company or the Bank. Mr. Rust, isas an employee director and doesexecutive officer, did not receive separate compensation for serving on the Board.
Name |
| Fees Earned or Paid in Cash |
|
| Stock Awards (1) |
|
| All Other |
|
| Total |
| ||||
John B. Adams, Jr. |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
Steven W. Blaine |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
Kevin T. Carter |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
Hunter E. Craig |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
William D. Dittmar, Jr. |
| $ | 25,000 |
|
| $ | 60,001 |
|
| $ | - |
|
| $ | 85,001 |
|
Randolph D. Frostick |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
James T. Holland |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | 18,000 |
|
| $ | 83,024 |
|
Linda M. Houston |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | 50,000 |
|
| $ | 115,024 |
|
Jay B. Keyser |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
Sterling T. Strange |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
Gregory L. Wells |
| $ | 25,000 |
|
| $ | 40,024 |
|
| $ | - |
|
| $ | 65,024 |
|
Name |
| Stock Awards (1) |
| All Other Compensation (2) |
| Total |
H. K. Benham, III |
| $30,031(0) |
| - |
| $30,031 |
Steven W. Blaine |
| $30,031(0) |
| - |
| $30,031 |
Hunter E. Craig |
| $30,031(3) |
| - |
| $30,031 |
William D. Dittmar, Jr. |
| $30,031(0) |
| - |
| $30,031 |
James T. Holland |
| $30,031(0) |
| $36,000 |
| $66,031 |
Linda M. Houston |
| $30,031(0) |
| $41,667 |
| $71,698 |
Susan K. Payne |
| $30,031(0) |
| - |
| $30,031 |
Gregory L. Wells |
| $30,031(0) |
| - |
| $30,031 |
Bryan D. Wright |
| $30,031(0) |
| - |
| $30,031 |
|
|
|
|
|
|
Meetings of the Board of Directors; Director Attendance
There were 910 meetings of the Board of Directors in 2019.2022. Each incumbent director who served on the Board in 2022 attended at least 75% of the meetings of the Board of DirectorsBoards and of the committees of the Board on which he or she served during 2019.2022. Board members are encouraged to attend the Annual Meeting of Shareholders, and 7 of the 9all directors serving on the Company’s Board at the time of the 20192022 Annual Meeting of Shareholders attended that meeting.
Independence of Directors
SEC rules require a company like Virginia National Bankshares Corporation, whose securities are not listed on a national securities exchange or inter-dealer quotation system, to disclose in its proxy statement whether each director, nominee for director and member of its compensation, nominating or audit committee is “independent” using a definition of independence under the rules of a national securities exchange or inter-dealer quotation system. The Board has selected to useUsing the independence definitions under theand corporate governance standards established byrequirements of Nasdaq (the “Nasdaq Standard”), the NYSE for purposes of disclosure in this proxy statement, even though those standards are not directly applicable to the Company. For the purpose of determining the independence of any individual for service on the Board of Directors of the Company, the Board has made a reasonable good faith determination, after taking into account all relevant facts and circumstances, that the individual has no material relationship with, or conflict with the interests of, the Company that would interfere with or impair the exercise of that individual’s independent business judgment.
The Board has determined that the following 9nine (9) of the 10eleven (11) current directors, all of whom are also nominees, are independent within the meaning and guidance of Section 303A.02 of the NYSE Listed Company Manual:independent: Ms. Houston, Ms. Payne, and Messrs. Benham,Adams, Blaine, Carter, Craig, Frostick, Keyser, Strange and Wells. The Board considered the consulting fees paid to Ms. Houston, as well as lease payments made to, and received from, entities controlled by Mr. Craig, in evaluating their independence. Mr. Dittmar Holland, Wellsis not independent because lease payments made by the Bank to an entity for which Mr. Dittmar is the manager and Wright.indirect owner, as described under “Related Person Transactions" on page 19, would be considered compensation in excess of Nasdaq Standard limits. Mr. Rust, who serves as an executive officer of the Company, is the only director or nominee who is not independent.
The Board has also determined that (a) each current member of the Compensation Committee is independent; (b) each current member of the Corporate Governance Committee is independent; and (c) each member of the Audit Committee is independent except Mr. Holland. While Mr. Holland is independent for purposes of serving on the Board, he is not independent under the NYSE requirements because he accepts consulting fees from the Company’s affiliate(s) for assisting with business development as previously disclosed in “Compensation of Directors.”
Committees of the Board
The Board of Directors has standing audit, compensation and corporate governance committees.
Audit and Compliance Committee. Committee ("Audit Committee"). The directors currently serving on the Audit Committee are Messrs. DittmarKeyser (chair), Blaine, Craig, Holland, WellsStrange and Wright.Wells. The primary function of the Audit Committee is to direct and monitor the internal audit and control functions and to select the Company’s independent auditingregistered public accounting firm. The Board of Directors has determined that (a) Mr. DittmarKeyser is an “audit committee financial expert,” in addition to other committee members, and (b) each member of the Audit Committee except Mr. Holland is “independent” withinunder the corporate governance standards for audit committees established by the New York Stock Exchange (“NYSE”), as described in more detail in “Independence of Directors.”Nasdaq Standard. The Audit Committee met 5four times during 2019.2022. The charter of the Audit and Compliance Committee is on the Company’s Investor Relations website at www.vnbcorp.com in the “Corporate Overview” section under “Governance Documents.”
Joint Compensation Committee. Committee (“Compensation Committee"). The directors currently serving on the Compensation Committee of the Company and the Bank are Mr. BlaineMessrs. Adams (chair), Mr. Benham,Blaine, Carter and Wells, and Ms. Houston and Mr. Wells.Houston. Each current member of thisthe Compensation Committee is “independent” using independence definitions under the corporate governance standards established by the NYSE.Nasdaq Standard. The primary function of the Compensation Committee is to review and make recommendations to the Board of Directors with respect to director compensation and the Company’s executive compensation policies and compensation for directorspolicies, and to administer the Company’s stock incentive plans. The Compensation Committee met 3two times during 2019.2022. The charter of the Compensation Committee is on the Company’s Investor Relations website at www.vnbcorp.com in the “Corporate Overview” section under “Governance Documents.”
Corporate Governance Committee. The directors currently serving on the Corporate Governance Committee are Mr. HollandMessrs. Frostick (chair), Mr. Blaine, Mr. Dittmar Ms. Houstonand Strange, and Ms. Payne. Each current member of the Committee is
“independent” using independence definitions under the corporate governance standards established by the NYSE.Houston. The primary function of the Corporate Governance Committee is to make recommendations to the full Board of Directors on matters of corporate governance, including the independence of directors and nominees. This committeeCommittee has no regular meeting schedule, but generally meets in the first quarter of each year to review and make recommendations to the Board regarding independence of directors and is otherwise available to address corporate governance matters with respect to which the full Board requests guidance. The Corporate Governance Committee met 3 timesonetime during 2019.2022. The charter of the Corporate Governance Committee is on the Company’s Investor Relations website at www.vnbcorp.com in the “Corporate Overview” section under “Governance Documents.”
Nominating Procedures
The Company’s Board of Directors does not currently have a standing nominating committee. Since January 2012, nominations are made and considered by the full Board based on the Board’s desire that all directors be actively involved in the nominating process.
The entire Board is involved in identifying and evaluating nominee candidates, and the Corporate Governance Committee assists with determining independence and/or performing other duties as may be requested. Any nominees for director must be recommended for the Board’s selection by independent directors constituting a majority of the Board’s independent directors, subject to Section 2.6 of the Company’s Bylaws.
In terms of the qualifications for nominees, the Board considers a number of factors, based on a matrix developed by the Board, in the context of the perceived needs of the Board at that point in time to complement the existing board composition. Although the Board has not adopted a formal policy relating to diversity, the Board considers a number of diverse attributes, characteristics, experiences and skills including, but not limited to: board and management experience; business and professional expertise; geographic representation and community involvement in the Company’s market area; business and other relationships with the Company and its subsidiaries; independence; potential competition or other conflicts with the Company’s business; gender; race; and availability to attend Board meetings. A nominee candidate must also complete a questionnaire designed to gather information required to be disclosed in the proxy statement as a nominee and other information about the candidate’s background and experience. After completing their evaluation, the full Board then determines whether to recommend candidates for nomination as directors for shareholders to consider and vote upon at an annual meeting.
While the Board has not established any formal policies for consideration of director candidates recommended by shareholders, nominations of persons for election to the Board may be made at an annual meeting by a shareholder in accordance with the Company’s Bylaws. See “Shareholder Nominations and Proposals” on page 17.21.
Board Leadership Structure and Role in Risk Oversight
Since 2007, the positions of Chief Executive Officer and Chairman of the Board have been separated. The current leadership structure, which allows the non-executive Chairman to maintain a more objective role in management of Board functions and the Board’s oversight of management, is deemed appropriate and effective by the Board at this time. While the Company’s management has responsibility for direct, day-to-day management of the Company, the Board has a significant role in oversight of risk. Officers are generally ratified by the Board annually, upon the recommendation of the Chief Executive Officer. The Board approves all significant policies which guide the Company’s officers and other employees in the discharge of their duties. Programs are established to monitor compliance with the policies, and compliance reviews and audits are reported to the Audit Committee. While the Board committees outlined above generally perform a more direct role in overseeing specific areas of risk, each committee provides full reports to the Board on any significant or material findingsfindings.
Board Diversity Matrix (as of April 19, 2023)
Total Number of Directors |
| 11 |
|
Part I: Gender Identity | Female | Male | Did Not Disclose Gender |
Directors | 1 | 9 | 1 |
Part II: Demographic Background |
|
|
|
Hispanic or Latinx | - | 1 | - |
White | 1 | 8 | - |
Two or More Races or Ethnicities | - | 1 | - |
Did Not Disclose Demographic Background |
| 2 |
|
EXECUTIVE COMPENSATION
Executive Officers
The following table sets forth the name and position of each of the current executive officers of the Company. These individuals are referred to throughout this document as “executive officers.” The executive officers identified in the “Summary Compensation Table” on page 1213 are referred to as “named executive officers.”officers” or "NEOs." Unless otherwise indicated, each of these officers has served as an executive officer of the Company for at least five years:
Name (Age) | Information about Executive Officers | ||
Glenn W. Rust | President and Chief Executive Officer of the | ||
Virginia R. Bayes | Chief Credit Officer and Executive Vice President of Virginia National Bank. Ms. Bayes joined the Bank in 1998 and was named an executive officer in January 2011. | ||
Donna G. Shewmake | General Counsel, Executive Vice President and Corporate Secretary of the Company and Virginia National Bank. Ms. Shewmake joined the Bank in June 2008 as General Counsel and Executive Vice President, and was named Secretary and an executive officer in May 2009. | ||
Tara Y. Harrison | Chief Financial Officer and Executive Vice President of the Company and Virginia National Bank. Ms. Harrison joined the Bank in October 2016 and was named Chief Financial Officer and Executive Vice President in February 2017. |
Compensation Discussion
Philosophy and Objectives of the Company’s Compensation Program. The Board believes compensation of its executive officers should reflect and support the Company’s strategic and financial performance goals, the primary goal being the creation of long-term value for the shareholders of the Company, while protecting the interests of the depositors of the Bank. The philosophy behind the compensation program is to provide both cash compensation, in the form of salaries and bonuses, as well as stock incentives, in an effort to promote an ownership mentality among the executive officers and other key individuals within the Company and its affiliates.
The Compensation Committee has adopted a committee charter, which was subsequently ratified by the entire Board of Directors, pursuant to which the Compensation Committee is tasked with reviewing and making recommendations regarding the Company’s executive compensation policies to ensure they are (i) competitive, (ii) performance-based, and (iii) consistent with the Company’s annual and long-term business objectives. The Compensation Committee is also responsible for administering the Company’s stock incentive plans.
The Compensation Committee specifically reviews and subjectmakes recommendations to approval by the Board establishesregarding the compensation of the President and Chief Executive Officer (“CEO”) of the Company and its affiliates based on reasonableness, competitiveness and relationship to performance. In determining the compensation to recommend for the CEO, the Compensation Committee reviews the overall financialcertain established bank performance of the Company relative to the performance of peermetrics and comparable banksgoals. During 2021 and bank holding companies, as well as the CEO’s performance against standards previously established by2022, the Compensation Committee. The Compensation Committee considersconsidered whether the CEO’s cash compensation and the stock incentive awards made to him bear athe CEO were reasonable relationship to the compensation paid to the chief executive officers of comparable banks and bank holding companies and is consistent with the desirereflective of the merger-related efforts and positive impact on the Company and shareholder value. The Compensation Committee to offer appropriate performance incentives toalso considered whether the CEOcash compensation and tothe stock incentive awards motivate him to remain at the Company. In 2018,2021, the Compensation Committee recommended, based on the CEO’s performance in 2017,2020, that (a) his salary be increased to $375,000,$425,000, (b) he be given a $80,000$150,000 cash bonus, and (c) he receive incentive5,025 shares restricted stock options for 8,000 shares vesting in equal annual installments over fivefour years. In 2019,2022, the Compensation Committee recommended, based on the CEO’s performance in 2018,2021, that (a) his salary be increased to $385,000,$500,000, (b) he be given a $125,000$200,000 cash bonus, and (c) he receive incentive5,580 shares restricted stock options for 12,000 shares vesting in equal annual installments over fivefour years. The Board approved the Compensation Committee’s recommendations in both 20182021 and 2019,2022, and the salary increases were effective during those years.
TheFor 2021 and 2022, the CEO of the Company specifically reviews and establishesestablished the compensation offor the other executive officers of the Company.NEOs. The compensation of the Company’s named executive officersNEO's is designed to be competitive with the Company’s peers and reflective of the level of responsibility and the performance of the executive officer. The philosophy behindDuring 2021 and 2022, the NEO compensation program is to provide both cash compensation, inwas reasonable and reflective of the form of salariesmerger-related efforts and bonuses, as well as stock incentives, in an effort to promote an ownership mentality among the executive officers and other key individuals withinpositive impact on the Company and its affiliates. shareholder value.
During 20182021 and 2019,2022, no compensation consultants were engaged or used by the Compensation Committee, the Board of Directors or management with respect to executive compensation. The Compensation Committee and management do use certain compensation surveys available from various organizations.
Composition of Compensation. There are four primary components of executive compensation, as follows: base salary; cash bonuses and short-term cash incentive compensation and bonuses;compensation; stock option grants or other stock awards under the Company’s stock incentive plans; and benefits.
Base Salary. Base salary provides competitive levels of compensation to executives, in accordance with their experience, duties and responsibilities. Base salaries are necessary to recruit and retain executives, and base salary adjustments are reflective of an individual’s performance or changed responsibilities.
Cash Bonuses; Short-Term Incentive Compensation. BonusesCash bonuses and other cash short-term incentive compensation are designed to align the interests of staffexecutive officers with the Company’s shareholders by rewarding executive officers and other eligible employees based on the performance of the Company. The Company does not have a formal short-term incentive compensation program at this time.time; accordingly, such bonuses and compensation are discretionary and, for Mr. Rust, subject to Board approval.
Stock Option Grants and Other Stock Incentive Awards. Periodically, stock option grants, restricted and unrestricted stock grants, or other awards under the Company’s stock incentive plans may be awarded to executive officers and others within the Company and its affiliates whose performance is critical to the ongoing success of the Company. Stock options that have been granted have a ten-year term and typically vest evenly over a four-year or five–yearfive-year period. All outstanding options have an exercise price equal to the closing price of the Company’s common stock on the date of the grant. The Company may also
grant stock, restricted stock or other stock awards, which may vest immediately or over time. The actual value that may be realized by an option holder or by the recipient of a stock grant or other stock incentive award is tied to the appreciation of the Company’s common stock, thereby aligning the option holders’ or recipients’ interests with those of the Company’s other shareholders.
In addition to the restricted stock option grant awarded to Mr. Rust in 20182021 and 2019,2022, each of the other executive officersNEOs received (a) incentive stock options for 4,400 shares granted in 2018 for 5,250 shares, vesting in five equal annual installmentsSeptember 2021 with a tax gross-up provision,four-year investing schedule and (b) 1,000 unrestricted shares of stock in 2019 and (c) 1,0002,500 shares of restricted stock granted in 2019November 2022 with a four-yearfive-year vesting schedule. Outstanding stock options and restricted stock granted to the named executive officersNEOs in 20192022 and certain prior years are included on page 1314 in “Outstanding“Outstanding Equity Awards at Fiscal Year-End 2019,Year-End.” which have been adjusted, as applicable, for the 5% five percent stock dividend issued to all shareholders of record as of April 3, 2018 (the “2018 5% Stock Dividend) and/or the 5% stock dividend issued on July 5, 2019 to all shareholders of record on June 26, 2019 (the “2019 5% Stock Dividend”)
Benefits.
Benefits.
401(k) Profit Sharing Plan. The Company has a 401(k) plan available to all employees who are at least 18 years of age. Employees are able to elect the amount to contribute, not to exceed a maximum amount as determined by IRS regulations. The Company matches 100% of the first 6% of employee contributions. “Vesting” refers to the rights of ownership to the assets in the 401(k) accounts. Matching contributions, as well as employee contributions, are fully vested immediately.
Health and Welfare Benefits. The Company also offers health and welfare benefits to the executive officers and others within the Company, including medical, dental and vision insurance, group term life insurance, disability insurance and flexible spending accounts.
Split-Dollar Life Insurance. The Company has certain split-dollar insurance or bank-owned life insurance (“BOLI”) arrangements with each named executive officer and certain other senior officers of the Company and/or its
subsidiaries. Under these BOLI arrangements, the Company is the owner of, and pays all premiums for, insurance policies on an officer’s life. Upon the death of the insured officer, a portion of the death benefit will be paid to beneficiary(ies) designated by the officer, subject to the terms and restrictions of the split-dollar endorsement agreement between the officer and the Company, and the balance is paid to the Company.
Perquisites. Perquisites may be granted to executive officers and other employees, after proper consideration of the business need. Perquisites may include memberships in local clubs and the provision of a bank-owned automobile, automobile allowance or limited reimbursement toward the purchase of a personal automobile that will be primarily used for Company business. All perquisites represent a very small portion of the Company’s compensation program, and those for the named executive officersNEOs are disclosed according to regulations in the “Summary Compensation Table” on page 12.13.
Executive and Change in Control Arrangements
Arrangements.The Company recognizes that, as a publicly-held financial services company, it is essential to maintain stability and continuity of its executive management in order to protect the interests of the shareholders and the Company, to encourage continued employment notwithstanding the potential for change in control, and to minimize uncertainty among executive management. The Company’s Board of Directors began discussions in 2015 regarding the need for, and benefits of, change in control and other management agreements in order to attract and retain talented members of executive management. The Board’s Compensation Committee was charged with reviewing and making recommendations regarding such agreements. In 2016, based on the recommendation of the Compensation Committee, the Board approved the parameters for change in control and other agreements with certain members of management of the Company and its affiliates. In early 2017, the Company entered into aan amended and restated management continuity agreement (the “CIC(a “Management Continuity Agreement”) with each of its executive officersMr. Rust, Ms. Bayes, Ms. Harrison and certain other members of executive management of the Bank (the “CIC Executives”). In connection with the CIC Agreements, the Bank also entered into a non-disclosure, non-solicitation and non-competition agreement (the “Non-Competition Agreement”) with each of the CIC Executives.Ms. Shewmake on September 28, 2020.
Each CICUnder the terms of each Management Continuity Agreement, was for an initial term that expired on December 31, 2019, provided on December 31, 2018 and each December 31st thereafter (each a “Renewal Date”), the CIC Agreement will automatically extend for an additional calendar year, so as to terminate two years from such date, unless the Company gives written noticein event of non-renewal before the Renewal Date. The Company did not give notice of non-renewal on either December 31, 2018 or December 31, 2019, so the CIC Agreements have been extended to December 31, 2021. The CIC Agreement provides for the employment of the CIC Executive following a “change in control,” ascontrol” (as defined in the CIC Agreement,agreement) of the Company, the Company or its successor is required to continue to employ each executive officer for a period of two years withfollowing the same position, position title, authority, reporting structure, duties and responsibilities as those held during the twelve-month period precedingdate of the change in control to be performed either at the place where the CIC Executive was located immediatelywith commensurate authority, responsibilities, compensation and benefits for that period. If, within six months prior to thea change in control or, if with 30 miles, the headquarters of the Company. DuringCompany or during the above-described employment period, an executive officer’s employment terminates without “cause” or for “good reason” (each as defined in the agreement), such two-year period,executive officer is entitled to receive (i) a lump sum cash payment equal to two times the CIC Executive will (i) receive asum of (A) the executive officer’s annual base salary that isin effect at least equal to the highest base annualized salary that the CIC Executive received during the 12 months before the change in control, (ii) receive an annual bonus equal totermination, plus (B) the average annual bonus paid or payable for the two years preceding the change of control, and (iii) be entitled to participate in incentive, savings, retirement welfare benefit plans, fringe benefits, and paid time off at the same level as other peer executives and at least at the level of the CIC Executive’s participation in such plans during the twelve months prior to the change in control.
The CIC Agreement provides for specified payments to the CIC Executive under certain termination scenarios during the two-year employment period. If the CIC Executive is terminated “without cause” or the CIC Executive terminates his/her employment for “good reason,” each as defined in the CIC Agreement, the CIC Executive will receive (i) a salary continuation benefit payable in a lump sum equal to two times the sum of the CIC Executive’s annual base salary in effect at the date of termination and the average annual bonus paid or payableexecutive officer for the two most recently completed years;years, plus (C) any amounts contributed by the executive officer during the most recently completed year pursuant to a salary reduction agreement or any other program that provides for pre-tax salary reductions or compensation deferrals; (ii) continuation of employee welfare benefits received prior to termination for up to 18 months following termination to the extent permissible;date of termination; and (iii) a lump sum cash payment equal to the Company’s contributions made by the Company to the CIC Executive’sexecutive officer’s account in the CompanyCompany’s sponsored 401(k) retirement savings plan duringfor the two-year period prior to termination of employment. The CIC Agreement provides that the amounts andseverance benefits payable to the CIC Executive will be reduced as necessary until no amount of benefit payable to the CIC Executive will be subjectextent necessary to avoid the imposition of the golden parachute excise tax imposedtaxes under Section 4999 of the Internal Revenue Code; provided no reduction in benefits will be made if the CIC Executive would be “better off” by $25,000 or more, if the reduction was not made.
Code. Each CICManagement Continuity Agreement also provides that any incentive based compensation or award a CIC Executivean executive officer receives will be subject to clawback by the Company as may be required by applicable law or stock exchange listing requirement.requirement and on such basis as the Board determines, but in no event with a look-back period of more than two years, unless required by applicable law or stock exchange listing requirements.
Under
As defined in each Management Continuity Agreement, the term “change in control” includes, among other things, the acquisition by any person or group of 30% or more of the Company’s outstanding shares of common stock (excluding issuance directly from the Company), individuals who serve on the Board (including successors whose nominations were approved by at least two-thirds of the Board) cease to constitute a majority of the Board, certain merger transactions, and the consummation of a sale of all or substantially all of the Company’s assets.
Each of Mr. Rust, Ms. Bayes, Ms. Harrison and Ms. Shewmake is also a party to a Non-Disclosure, Non-Solicitation and Non-Competition Agreement (a “Non-Competition Agreement”) with Virginia National Bank that was entered into on May 18, 2020 pursuant to which each CIC Executiveof the executive officers has agreed (i)(a) to protect and not disclose the confidential and proprietary information of theVirginia National Bank andor its affiliates, (collectively, “VNB”); (ii)(b) for a period of 12 months following the termination of the executive officer’s employment for any reason, not to solicit VNB’sthe customers or employees duringof Virginia National Bank or its affiliates, or to provide services or interfere with customers of Virginia National Bank or its affiliates, and (c) for a period of three months following the twelve-month period followingvoluntary termination of the CIC Executive’s employment; and (iii)executive officer’s employment for any reason or involuntary termination of executive officer’s employment for “cause” (as defined in the agreement), not to engage in any activity or work that competes with the business of Virginia National Bank or its affiliates that is competitive with VNB’s businessthe same or substantially similar to services previously provided by the executive officer within a thirty-mile30-mile radius of his/her office location, or within a ten-mile radius of any other VNBoffice location during employment and forwhere the three-month period following (A) voluntary or involuntary termination of employment inexecutive officer worked within the case of Mr. Rust, or (B) for each of the other CIC Executives, the termination of employment by the CIC Executive for any reason or VNB’s termination of the CIC Executive’s employment for “Cause” (as defined in the agreement).previous 12 months. Under the terms of the CICeach Management Continuity Agreement, the provisions of the Non-Competition Agreements will survive termination of the CIC Executive’sexecutive officer’s employment except the non-competition provisionprovisions will not apply unlessafter the CIC Executiveexecutive officer ceases to be employed by Virginia National following a change in control unless the executive officer is entitled to receive severance benefits provided under the CICManagement Continuity Agreement in connection with termination of his/her employment without cause or for good reason.
Summary Compensation Table
The following table sets forth, for the periods indicated, certain information concerning the compensation of the named executive officers.NEOs.
Name and Position |
| Year |
| Salary |
|
| Bonus |
|
| Stock |
|
| Option |
|
| All Other |
|
| Total |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Glenn W. Rust |
| 2022 |
| $ | 500,000 |
|
| $ | 200,000 |
|
| $ | 200,043 |
|
| - |
|
| $ | 75,122 |
|
| $ | 975,165 |
| |
President and Chief Executive Officer (Principal Executive Officer) |
| 2021 |
| $ | 425,000 |
|
| $ | 150,000 |
|
| $ | 150,000 |
|
| - |
|
| $ | 57,514 |
|
| $ | 782,514 |
| |
Virginia R. Bayes |
| 2022 |
| $ | 330,733 |
|
| $ | 7,600 |
|
| $ | 82,500 |
|
| - |
|
| $ | 22,007 |
|
| $ | 442,840 |
| |
Chief Credit Officer and Executive Vice President, Virginia National Bank |
| 2021 |
| $ | 283,500 |
|
| $ | 17,000 |
|
| - |
|
| $ | 25,705 |
|
| $ | 19,892 |
|
| $ | 346,097 |
| |
Donna G. Shewmake |
| 2022 |
| $ | 284,582 |
|
| $ | 9,889 |
|
| $ | 82,500 |
|
| - |
|
| $ | 23,716 |
|
| $ | 400,687 |
| |
General Counsel, Executive Vice President and Secretary |
| 2021 |
| $ | 270,470 |
|
| $ | 6,000 |
|
| - |
|
| $ | 25,705 |
|
| $ | 22,663 |
|
| $ | 324,838 |
| |
_________________
Name and Position |
| Year |
| Salary |
| Bonus |
| Stock Awards (1) |
| Option Awards (2) |
| All Other Compensation (3) |
| Total |
Glenn W. Rust President and Chief Executive Officer (Principal Executive Officer) |
| 2019 2018 |
| $377,083 $375,000 |
| $125,000 $80,000 |
| - - |
| $46,428 $58,976 |
| $46,278 $40,415 |
| $594,789 $554,391 |
Virginia R. Bayes Chief Credit Officer and Executive Vice President, Virginia National Bank |
| 2019 2018 |
| $248,842 $239,456 |
| - - |
| $75,558 - |
| - $38,703 |
| $17,075 $16,196 |
| $341,475 $294,355 |
Donna G. Shewmake General Counsel, Executive Vice President and Secretary |
| 2019 2018 |
| $242,003 $232,875 |
| - |
| $75,558 - |
| - $38,703 |
| $16,734 $15,820 |
| $334,295 $287,398 |
|
|
|
|
|
|
Outstanding Equity Awards at Fiscal Year-End 20192022
The following table provides certain information on unexercised options and restricted stock held by each of the named executive officersNEO's as of December 31, 2019.2022. There were no other equity awards outstanding to the named executive officers.NEOs.
|
| Option Awards |
| Stock Awards |
| |||||||||||||||||
|
| Number of Securities Underlying Unexercised Options (#) Exercisable |
|
| Number of Securities Underlying Unexercised Options (#) Unexercisable |
|
| Option Exercise Price ($) |
|
| Option Expiration Date |
| Number of shares or units of stock that have not vested (#) |
|
| Market value of shares or units of stock that have not vested ($) |
| |||||
Glenn W. Rust (1) |
|
| 1,379 |
|
| - |
|
| $ | 13.69 |
|
| 02/19/2023 |
|
| 3,769 |
|
| $ | 138,172 |
| |
Glenn W. Rust (2) |
|
| 6,720 |
|
|
| 1,680 |
|
| $ | 39.52 |
|
| 04/18/2028 |
|
| 5,580 |
|
| $ | 204,563 |
|
Glenn W. Rust (3) |
|
| 7,200 |
|
|
| 4,800 |
|
| $ | 37.25 |
|
| 10/15/2029 |
|
| - |
|
|
| - |
|
Glenn W. Rust (4) |
|
| 10,400 |
|
|
| 15,600 |
|
| $ | 26.00 |
|
| 03/24/2030 |
|
| - |
|
|
| - |
|
Virginia R. Bayes (5) |
|
| 4,409 |
|
|
| 1,103 |
|
| $ | 42.62 |
|
| 05/16/2028 |
|
| 250 |
|
| $ | 9,165 |
|
Virginia R. Bayes (6) |
|
| 4,000 |
|
|
| 6,000 |
|
| $ | 23.75 |
|
| 09/22/2030 |
|
| 1,250 |
|
| $ | 45,825 |
|
Virginia R. Bayes (7) |
|
| 1,100 |
|
|
| 3,300 |
|
| $ | 36.14 |
|
| 09/29/2031 |
|
| 2,500 |
|
| $ | 91,650 |
|
Donna G. Shewmake (5) |
|
| 4,409 |
|
|
| 1,103 |
|
| $ | 42.62 |
|
| 05/16/2028 |
|
| 250 |
|
| $ | 9,165 |
|
Donna G. Shewmake (6) |
|
| 4,000 |
|
|
| 6,000 |
|
| $ | 23.75 |
|
| 9/22/2030 |
|
| 1,250 |
|
| $ | 45,825 |
|
Donna G. Shewmake (7) |
|
| 1,100 |
|
|
| 3,300 |
|
| $ | 36.14 |
|
| 09/29/2031 |
|
| 2,500 |
|
| $ | 91,650 |
|
_______________
|
| Option Awards |
| Stock Awards |
| |||||||||||||||
|
| Number of Securities Underlying Unexercised Options (#) Exercisable (1) |
|
| Number of Securities Underlying Unexercised Options (#) Unexercisable (1) |
|
| Option Exercise Price ($) (1) |
| Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#) |
|
| Market Value of Shares or Units of Stock That Have Not Vested ($) |
| ||||
Glenn Rust |
| 1,379 |
|
|
| - |
|
| $13.690 |
| 02/19/2023 |
|
| - |
|
|
| - |
| |
Glenn Rust (2) |
| 1,680 |
|
| 6,720 |
|
| $39.52 |
| 04/18/2028 |
|
| - |
|
|
| - |
| ||
Glenn Rust (3) |
|
| - |
|
| 12,000 |
|
| $37.25 |
| 10/15/2029 |
|
| - |
|
|
| - |
| |
Virginia Bayes (4) |
| 1,102 |
|
| 4,410 |
|
| $42.62 |
| 05/16/2028 |
| 1,000 |
|
| $ | 37,700 |
| |||
Donna Shewmake (4) |
| 1,102 |
|
| 4,410 |
|
| $42.62 |
| 05/16/2028 |
| 1,000 |
|
| $ | 37,700 |
| |||
Pay Versus Performance Table
As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last two completed calendar years. In determining the “compensation actually paid” to our NEO, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table ("SCT"), as the SEC’s valuation methods for this section differ from those required in the SCT. The table below summarizes compensation values both previously reported in our SCT, as well as the adjusted values required in this section for the 2021 and 2022 calendar years. Note that for our NEOs other than our principal executive officer (the “PEO”), compensation is reported as an average.
Year |
| Summary Compensation Table Total for PEO (1) |
|
| Compensation Actually Paid to PEO (2) |
|
| Average Summary Compensation Table Total for Non-PEO NEOs (1) |
|
| Average Compensation Actually Paid to Non-PEO NEOs (2) |
|
| Value of Initial Fixed $100 Investment Based on TSR (3) |
|
| Net Income |
|
| ||||||
2022 |
| $ | 975,165 |
|
| $ | 983,392 |
|
| $ | 421,764 |
|
| $ | 435,784 |
|
| $ | 144.88 |
|
| $ | 23,437,900 |
|
|
2021 |
| $ | 782,514 |
|
| $ | 828,891 |
|
| $ | 335,468 |
|
| $ | 332,616 |
|
| $ | 144.56 |
|
| $ | 10,070,643 |
|
|
(1) | The |
(2) |
|
(3) |
|
|
|
Adjustments to determine compensation "actually paid" for PEO |
| 2022 |
|
| 2021 |
| ||
Deduction for amounts reported under the "Stock Awards" column in the Summary Compensation Table |
| $ | (200,043 | ) |
| $ | (150,000 | ) |
Year-end fair value of awards granted during year that remained unvested at year-end |
| $ | 204,563 |
|
| $ | 190,347 |
|
Change in fair value from prior year-end to year-end of awards granted in a prior year that were outstanding and unvested at year-end |
| $ | (4,598 | ) |
| $ | - |
|
Change in fair value from prior year-end to vesting date of awards granted in a prior year that vested during year |
| $ | (2,914 | ) |
| $ | - |
|
Increase based on dividends paid during year prior to vesting |
| $ | 11,219 |
|
| $ | 6,030 |
|
Total adjustments |
| $ | 8,226 |
|
| $ | 46,377 |
|
The amounts of the adjustments described above that were added to (or deducted from) the SCT total for the NEOs other than the PEO to arrive at compensation actually paid to non-PEO NEOs for each year are shown in the following table.
Adjustments to determine compensation "actually paid" |
| 2022 |
|
| 2021 |
| ||
Deduction for amounts reported under the "Stock Awards" column in the Summary Compensation Table |
| $ | (82,500 | ) |
| $ | - |
|
Deduction for amounts reported under the "Option Awards" column in the Summary Compensation Table |
| $ | - |
|
| $ | (25,705 | ) |
Year-end fair value of awards granted during year that remained unvested at year-end |
| $ | 91,650 |
|
| $ | - |
|
Change in fair value from prior year-end to year-end of awards granted in a prior year that were outstanding and unvested at year-end |
| $ | (1,830 | ) |
| $ | 25,484 |
|
Change in fair value from prior year-end to vesting date of awards granted in a prior year that vested during year |
| $ | 3,813 |
|
| $ | (5,818 | ) |
Increase based on dividends paid during year prior to vesting |
| $ | 2,888 |
|
| $ | 3,188 |
|
Total adjustments |
| $ | 14,020 |
|
| $ | (2,851 | ) |
The relationship between (i) the executive compensation actually paid to the PEO and the average compensation actually paid to the NEOs other than the PEO and (ii) cumulative TSR on the Company’s common stock is shown below:
The relationship between (i) the executive compensation actually paid to the PEO and the average compensation actually paid to the NEOs other than the PEO and (ii) net income of the Company for the last two years is shown below:
BENEFICIAL OWNERSHIP OF COMPANY COMMON STOCK
The following table sets forth certain information known to the Company concerningis not aware of any persons who beneficially owned more than five percent (5%) of the Company’s common stock as of April 15, 2020. Referenced footnotes follow the second table concerning the beneficial ownership of common stock by directors and executive officers of the Company. 19, 2023.
|
|
| ||||
|
|
| ||||
|
|
| ||||
The following table sets forth certain information concerning beneficial ownership of the Company’s common stock, as of April 15, 2020,19, 2023, by each director, nominee and named executive officer and by all directors, nominees and executive officers as a group.
| |||||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
|
| |||
|
| Shares of Common Stock Beneficially Owned | ||||||
Name |
| Number of Shares (1) |
| Percent of Class | ||||
John B. Adams, Jr. |
|
| 197,881 |
|
| (2) |
| * |
Virginia R. Bayes |
|
| 25,370 |
|
| (3) |
| * |
Steven W. Blaine |
|
| 11,237 |
|
|
|
| * |
Kevin T. Carter |
|
| 7,626 |
|
| (3) |
| * |
Hunter E. Craig |
|
| 235,881 |
|
| (4) |
| 4.41% |
William D. Dittmar, Jr. |
|
| 214,149 |
|
|
|
| 4.01% |
Randolph D. Frostick |
|
| 9,200 |
|
|
|
| * |
Linda M. Houston |
|
| 11,388 |
|
| (3) |
| * |
Jay B. Keyser |
|
| 10,608 |
|
| (5) |
| * |
Glenn W. Rust |
|
| 71,254 |
|
|
|
| 1.33% |
Donna G. Shewmake |
|
| 21,408 |
|
|
|
| * |
Sterling T. Strange |
|
| 7,796 |
|
|
|
| * |
Gregory L. Wells |
|
| 15,320 |
|
|
|
| * |
Directors and Executive Officers |
|
| 680,926 |
|
|
|
| 12.56% |
_______________
|
|
| Represents less than one percent of the Company’s common stock outstanding as of April 19, 2023. (1) Fractional shares are not included. All shares reported are held with sole investment power and sole voting power except as noted. Number of shares reported includes shares that may be acquired within 60 days through the exercise of stock options granted under the Company’s incentive stock option plans as follows: Ms. Bayes, 10,612 shares; 3,937 shares |
|
(2) 16,492 of the shares owned by Mr. Adams are pledged. |
(3) Includes shares held with shared voting and investment power with a spouse or shares held by a spouse as follows: Ms. Bayes, 126 shares; Mr. Holland, 1,774Carter, 603 shares; and Ms. Houston, 926; Ms. Payne, 15,198 shares; and Mr. Wright, 2,369925 shares.
(4) 227,407 of the shares owned by Mr. Benham disclaims any pecuniary interest in 15Craig are pledged.
(5) Includes (a) 2,553 shares held as custodian forin Mr. Keyser’s revocable trust over which Mr. Keyser shares voting and investment powers with his spouse and (b) 5,668 shares held in a limited liability company over which Mr. Keyser has sole voting and dispositive powers.
The Company currently does not have any policies with respect to financial instruments or transactions in derivative securities or otherwise that hedge or offset any decrease in the benefitmarket value of his grandson.the Company’s common stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each of the Company’s directors, executive officers and persons who own more than 10% of the Company’s securities areis required to file reports of ownership and changes in ownership of the Company’s securities with the Securities and Exchange CommissionSEC and to provide copies of such reports to the Company. To the Company’s knowledge, based solely on a review of the information and reports furnished to the Company, the Company believes that all reporting persons timely filed all reports required under Section 16(a) during 20192022 except that Ms. Payne did not file timely reports on four transactions related(i) a report was filed late by the Company's staff for a purchase of stock by Mr. Dittmar and (ii) a report was filed late by the Company's staff for a restricted stock grant to her standing dividend reinvestment instruction to her broker to purchase shares on the date any cash dividend is received.Mr. Rust.
RELATED PARTYPERSON TRANSACTIONS AND OTHER INFORMATION
CertainCertain of the Company’s directors and officers, and certain immediate family members and/or associated entities, are customers of the Company’s affiliates and have had transactions in the ordinary course of business with the affiliates, including loan, deposit, asset management, leases and other transactions. All such banking transactions have been on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons, and did not involve more than a normal risk of collection or present any unfavorable features for the bank.Bank. All credit transactions involving officers and directors are reviewed and approved pursuant to the Bank’s established underwriting procedures, and all credit transactions involving executive officers and directors, and/or entities with which such persons are associated, are reported to the board of directors of the Bank.
The Company had business dealings or entered into non-banking transactions with directors of the Company or with entities in which a director or principal shareholder is owner, principal or has a beneficial interest of 10% or more since January 1, 2019.2021. The Company has not adopted a formal written policy that covers the review and approval of director and other related person transactions by the Board; however, the Board, as a matter of practice, reviews all such significant transactions for approval. All such dealings and transactions have been on substantially the same terms as those prevailing at the time for comparable business dealings and transactions with unrelated persons. From January 1, 20192022 through April 15, 2020, the19, 2023, Virginia National Bank made lease and other payments of $642,889 (which included reimbursements for taxes, insurance and other fees of $79,860)$679,675 to or for the benefit of Pantops Park, LLC, of which William D. Dittmar, Jr., chairman of the Virginia National Board, is the manager and indirect owner, under a ground lease executed in 20052005. During 2021, Virginia National Bank made lease and other payments of $519,579 for the benefit of Pantops Park, LLC. . The CompanyCompany has engagedengaged in non-banking transactions with other related persons of the Company; however, the amount of such payments made to, or received by, the Company did not exceed the disclosure threshold of $120,000.
Mr. Craig was the manager of an entity at the time a special receiver was appointed in 2011 to operate the entity’s condominiums.
INDEPENDENT AUDITORS
The Company has selected Yount, Hyde & Barbour, P.C. to serve as independent auditorsregistered public accounting firm for the Company in 2020.2023. This firm audited the books and records of the Company for 20192022 and 2018.2021. The Company and its affiliates incurred the fees and out-of-pocket expenses shown in the table below for audit and other professional services provided by Yount, Hyde & Barbour, P.C., for or during the fiscal years ended December 31, 20192022 and December 31, 2018.2021.
Description |
| 2019 |
|
| 2018 |
| ||
Audit Fees (1) |
| $ | 152,912 |
|
| $ | 148,043 |
|
Audit-related Fees (2) |
| $ | 10,097 |
|
| $ | 9,581 |
|
Tax Fees (3) |
| $ | 10,480 |
|
| $ | 10,591 |
|
Total Fees |
| $ | 173,489 |
|
| $ | 168,215 |
|
Description |
| 2022 |
|
| 2021 |
| ||
Audit Fees (1) |
| $ | 190,122 |
|
| $ | 200,723 |
|
Audit-related Fees (2) |
| $ | 11,300 |
|
| $ | 9,850 |
|
Tax Fees (3) |
| $ | 12,200 |
|
| $ | 28,125 |
|
Total Fees |
| $ | 213,622 |
|
| $ | 238,698 |
|
_______________
(1) Audit fees: Audit fees consist of audit and review services, consents and review of documents filed with the SEC. (2) Audit‐related fees: Audi-related fees consist of the audit of the Bank’s 401(k) Plan. (3) Tax fees: Preparation of federal and state income tax returns and consultation on tax-related matters. |
|
|
|
|
|
|
In every case, the scope of all audit services and permissible non-audit services provided by Yount, Hyde & Barbour, P.C. was pre-approved by the Company’s Audit Committee. That committeeThe Audit Committee was directly responsible for the appointment, compensation, retention and oversight of Yount, Hyde & Barbour, P.C., and the firmwhich reported directly to the Audit Committee.
Representatives from Yount, Hyde & Barbour, P.C. are expected to be present at the Annual Meeting to make a statement if they desire to do so and to answer questions shareholder(s) may have.
Yount, Hyde & Barbour, P.C. has advised the Company that neither it, nor any of its members, has any direct financial interest or material indirect financial interest in the securities of the Company, or any connection with the Company in the capacity of promoter, underwriter, voting trustee, director, officer or employee.
AUDIT AND COMPLIANCE COMMITTEE REPORT
The Audit and Compliance Committee during 2019 consisted of Messrs. Dittmar, Holland, Wells and Wright, none of whom are employees of the Company. The Audit Committee(the “Audit Committee”) is authorized by the Board to: (A) provide independent oversight with respect to the Company’s independent audit;registered public accounting firm; (B) monitor the Company’s (i) accounting practices, procedures and policies, (ii) financial reporting processes, and (iii) compliance of the Company’s consolidated financial statements and internal controls with federalapplicable requirements and state(iv) compliance with applicable banking and securities regulatory requirements; and (C) evaluate the Company’s system of internal controls, internal audit function (whether outsourced or conducted in-house), and related areas.
The Audit Committee has reviewed and discussed the audited consolidated financial statements with management.management and with Yount, Hyde and Barbour, P.C. (“YHB”), independent registered public accounting firm. The Audit Committee has also reviewed and discussed with Yount, Hyde & Barbour, P.C., independent auditors,YHB the matters required to be discussed by the applicable requirements of Public Company Accounting Oversight Board (“PCAOB”) standards. The Audit Committee has received the written disclosures and the letter from the independent auditorsregistered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with the independent auditorsregistered public accounting firm the independence of the firm.
In performing all of these functions, the Audit Committee acts only in an oversight capacity, relying on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm, who, in their report, express an opinion on the conformity of the Company’s annual financial statements to accounting principles generally accepted in the United States of America.
Based on the review and discussions described above, the Audit Committee recommended to the Board of Directors of the Company that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20192022 for filing with the Securities and Exchange Commission.SEC.
William D. Dittmar, Jr.,March 22, 2023 Jay B. Keyser, Chair
JamesSteve W. Blaine
Hunter E. Craig
Sterling T. HollandStrange
Gregory L. Wells
Bryan D. Wright
CODE OF ETHICS
The Company has adopted a Code of Ethics that applies to all the directors, officers and employees of the Company and its subsidiaries, including the Company’s principal executive officer and principal financial officer. The Company’s Code of Ethics is available on the Company’s Investor Relations website at www.vnbcorp.com in the “Corporate Overview” section under “Governance Documents.���”
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders may communicate with all or any member of the Board of Directors by addressing correspondence to the “Board of Directors,” or to the individual director, in care of the Corporate Secretary of Virginia National Bankshares Corporation, 404 People Place, Charlottesville, Virginia 22911. All communications so addressed will be forwarded to the Chairman of the Board of Directors (in the case of correspondence addressed to the “Board of Directors”) or to any named individual director.
OTHER MATTERS
The Company is not aware of any other matters to come before the Annual Meeting. If other matters are properly raised at the Annual Meeting, the proxy holder(s) will vote the proxy in their discretion.
SHAREHOLDER NOMINATIONS AND PROPOSALS
The Company’s Bylaws provide that, in addition to any other applicable requirements, for any nomination of a director or other business to be properly brought before an annual meeting by a shareholder, the shareholder must provide written notice to the Company at least 90 but not more than 120 days prior to the first anniversary of the preceding year’s annual meeting. For the 20212024 annual meeting of shareholders, notice must be delivered to the Corporate Secretary no later than March 29, 2021.31, 2024. The notification must contain certain information as provided in the Company’s Bylaws. Any proposed nomination or business not in compliance with the requirements of the Company’s Bylaws shall be disregarded. A copy of the Company’s Bylaws is available at www.vnbcorp.com in the “Corporate“Corporate Overview” section under “Governance Documents.” A copy may also be requested by contacting the Corporate Secretary at the address below.
In order for a shareholder proposal to be considered for inclusion in the Company’s proxy materials relating to its 20212024 annual meeting of shareholders pursuant to applicable Securities and Exchange Commission rules,SEC regulations, it must be received by the Company no later than December 30, 2020.29, 2023.
Shareholder notifications and proposals should be sent to the attention of the Corporate Secretary, Virginia National Bankshares Corporation, 404 People Place, Charlottesville, Virginia 22911.
ANNUAL REPORT
The Company’s Annual Report on Form 10-K for the year ended December 31, 2019,2022, as filed with the Securities and Exchange Commission,SEC, is being made available with this proxy statement. Shareholders may also request, without charge, a copy of the Company’s 20192022 Annual Report on Form 10-K by writing to the Corporate Secretary, Virginia National Bankshares Corporation, 404 People Place, Charlottesville,, Virginia 2291122911..
Virginia national bankshares corporation p.o. Box 8016, cary, nc 27512-9903 your vote is important! Please vote by: internet go to: www.proxypush.com/vabkcast your vote online have your proxy card ready follow the simple instructions to record your vote phone call 1-866-291-7335 use any touch-tone telephone have your proxy card ready follow the simple recorded instructions mail mark, sign and date your proxy card fold anturn your proxy card in the postage-paid envelope provideou must regthe proxy/vote form. Signature (and title if applicable) proposal_page vifl date signature (if held jointly) date
VIRGINIA NATIONAL BANKSHARES CORPORATION THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF SHAREHOLDERS – THURSDAY, JUNE 25, 2020 AT 10:00 AM EST CONTROL ID: REQUEST ID: The undersigned hereby appoints
Virginia R. Bayes, Steven W. Blaine and Gregory L. Wells, anynational bankshares corporation p.o. Box 8016, cary, nc 27512-9903 virginia national bankshares corporation important notice regarding the availability of whom may act alone and with full power of substitution, as proxies, to represent and vote all shares of Virginia National Bankshares Corporation (the “Company”) of the undersigned at the Annual Meeting of Shareholders of the Companyproxy materials for virtual shareholders meeting to be held on Thursday, Junejune 23, 2022 for shareholders of record as of close of business on april 25, 2020 at 10:00 a.m. Eastern Standard Time online at https://www.issuerdirect.com/virtual-event/2022 this communication is not a form for voting and presents only an overview of more complete proxy materials available to you on the internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. To view the proxy materials, and to obtain directions to attend the meeting, go to: www.proxydocs.com/vabk the following proxy materials are available to view or receive: notice of annual meeting and proxy statement annual report on form 10-k for the year ended 12/31/2021 to vote your proxy while visiting this site, you will need the 12 digit control number in the box below. Control number: for a convenient way to view proxy materials and vote go to www.proxydocs.com/vabk or any adjournment or postponement thereof. (CONTINUED AND TO BE SIGNED ON REVERSE SIDE.) VOTING INSTRUCTIONShave the 12 digit control number located in the shaded box above available when you access the website and follow the instructions. If you votewant to receive a paper or email copy of the proxy materials, you must request one. There is no charge to you for requesting a copy. In order to receive a paper package in time for this year's meeting, you must make this request on or before june 13, 2022. To order paper materials, use one of the following methods. Internet www.investorelections.com/vabktelephone (866) 648-8133 * e-mail paper@investorelections.comwhen requesting via the internet or telephone you will need the 12 digit control number located in the shaded box above. * if requesting materials by phone, faxemail, please send a blank email with the 12 digit control number (located above) in the subject line. No other requests, instructions or other inquiries should be included with your e-mail requesting material. Virginia national bankshares corporation meeting type: date: time: place: virtual annual meeting of shareholders thursday, june 23, 2022 3:00 pm, eastern time annual meeting to be held live via the internet - please DO NOT mailvisit www.proxydocs.com/vabk for more details. You must register to attend the meeting online no later than 5:00 p.m., eastern time on june 21, 2022 at www.proxydocs.com/vabk after you register, you will receive an email confirming your proxy card. MAIL: Please mark, sign, date, and return this Proxy Card promptly usingregistration. The morning of the enclosed envelope. FAX: Completemeeting, you will receive an email with a link to attend the meeting. See reverse portion of this Proxy Card and Faxfor the items to 202-521-3464. INTERNET: https://www.iproxydirect.com/vabk PHONE: 1-866-752-VOTE(8683) To our Friends and Fellow Shareholders: The Directors and Staff of Virginia National Bankshares Corporation Cordially Invite You to Join Them for an Informal Discussion Immediately Followingbe voted before the Formal Annual Meeting please ensure you fold then detach and retain this portion of this proxymeeting
2020 ANNUAL MEETING OF THE SHAREHOLDERS OF VIRGINIA NATIONAL BANKSHARES CORPORATION PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: ☒ PROXY SOLICITED ON BEHALF OFVirginia National Bankshares Corporation Annual Meeting of Shareholders THE BOARD OF DIRECTORS RECOMMENDS A VOTE: "FOR" all directors in Proposal 1, à and "FOR" Proposals 2, 4 and 5 THE BOARD RECOMMENDS THAT AN ADVISORY VOTE ON THE COMPENSATION FOR ALL WITHHOLD ALL FOR ALL EXCEPT NAMED EXECUTIVE OFFICERS BE HELD EVERY 1 YEAR (Proposal 3). PROPOSAL 1. Election of the following persons as directors to serve until the next annual meeting of shareholders: ☐ ☐ H. K. Benham, III ☐ Directors 1.01 John B. Adams, Jr. 1.02 Steven W. Blaine ☐ CONTROL ID: 1.03 Kevin T. Carter 1.04 Hunter E. Craig ☐ REQUEST ID: 1.05 William D. Dittmar, Jr. ☐ 1.06 Randolph D. Frostick 1.07 James T. Holland ☐ 1.08 Linda M. Houston ☐ Susan K. Payne ☐ 1.09 Jay B. Keyser 1.10 Glenn W. Rust ☐ 1.11 Sterling T. Strange, III 1.12 Gregory L. Wells ☐ Bryan D. Wright ☐ Proposal 2 à FOR AGAINST ABSTAIN 2. Advisory (non-binding) approvalto approve Company's executive compensation. 3. Advisory (non-binding) vote to approve the frequency of the Company’sadvisory vote on the Company's executive compensation. ☐ ☐ ☐ Proposal 3 à FOR AGAINST ABSTAIN 4. Approval of the Virginia National Bankshares Corporation 2022 Stock Incentive Plan. 5. Ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’sCompany's independent auditorsregistered public accounting firm for 2020. ☐ ☐ ☐ Proposal 4 To transact2022. 6. Transaction of such other business as may properly come before the Meetingmeeting or any other adjournments or postponementsadjournment thereof.MARK “X” HERE IF YOU PLAN TO ATTEND THE VIRTUAL MEETING: ☐ MARK HERE FOR ADDRESS CHANGE ☐ New Address (if applicable): ____________________________ ____________________________ ____________________________ IMPORTANT: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. Dated: ________________________, 2020 (Print Name of Stockholder and/or Joint Tenant) (Signature of Stockholder) (Second Signature if held jointly) 
