March 27, 1995
The Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Premier Bankshares Corporation
Dear Sir:
Enclosed for filing on behalf of the above-referenced corporation are eight
copies of proxy materials for the annual meeting of stockholders to be held on
April 20, 1995. These materials include the Notice to Stockholders, Proxy
Statement, form of Proxy, and Exhibit A. Our Check in the amount of $125 is
being wired to SEC Account 910-8739 at the Mellon Bank, ABA number 043000261.
In response to instruction 5 of item 10 or rule 14A-101, issuance of the
options or rights under the plan will not involve a "sale". The shares to be
issued upon exercise of option will be registered on Form S-8, to be filed
prior to the issuance of any such shares.
Yours very truly,
/s/ Ellen Simpson
Ellen Simpson
Corporate Secretary
ES/kc
Enclosures
PREMIER BANKSHARES CORPORATION
P. O. Box 1199
Bluefield, Virginia 24605
PROXY SOLICITED BY BOARD OF DIRECTORS
The undersigned hereby appoints William G. Jackson and Harry
H. Hall or either of them, as proxies, with full power of
substitution, to vote all common stock of the undersigned at the
Annual Meeting of Stockholders of the Corporation, April 20, 1995
at 2:00 p.m., and at any adjournment thereof, as follows:
(1) To vote for election to the Board of Directors all
nominees listed below, unless authority is withheld by
inserting the word "no" at the end of this sentence.
_______________________.
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY LINING
THROUGH OR OTHERWISE STRIKING OUT HIS NAME BELOW.
Nominees for Class B Directors to serve until the 1998 Annual
Meeting of Stockholders and until their successors are elected
and have qualified are:
John W. Gillispie Gene H. James
N. Stanley King, Sr. Donald B. Baker
James R. Wheeling
(2) To approve the proposed 1995 Long-Term Incentive Plan,
unless one of the following two alternatives is chosen:
AGAINST ( ); ABSTAIN ( ).
(3) To vote for appointment of Persinger and Company as
independent auditor of Premier Bankshares Corporation for
the year 1995, unless one of the following two alternatives
is chosen:
AGAINST ( ); ABSTAIN ( ).
(4) To vote upon such other business as may be properly
brought before the meeting.
THE STOCK REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED.
IF AUTHORITY IS NOT WITHHELD, OR IF NO CHOICE IS SPECIFIED, THE
STOCK REPRESENTED BY THIS PROXY WILL BE VOTED FOR ALL NOMINEES
NAMED ABOVE TO BE ELECTED TO THE BOARD OF DIRECTORS, IN FAVOR OF
THE PROPOSED 1995 LONG-TERM INCENTIVE PLAN AND FOR APPOINTMENT OF
PERSINGER AND COMPANY AS INDEPENDENT AUDITOR FOR PREMIER
BANKSHARES CORPORATION FOR 1995.
Please sign your name(s) exactly as shown imprinted hereon. If
stock is registered in more than one name, all owners must sign.
If acting as executor or trustee or otherwise in a fiduciary
capacity, please sign as such fiduciary.
_____________________________________________________________
Signature of Stockholder
_____________________________________________________________
Signature of Stockholder
Date:_____________________________________
PREMIER BANKSHARES
CORPORATION
March 24, 1995
Dear Stockholder:
You are cordially invited to attend the annual meeting of
Stockholders of Premier Bankshares Corporation. The meeting will
convene at 2:00 p.m. on Thursday, April 20, 1995 at the company's new
headquarters, 29 College Drive, Bluefield, Virginia.
You are also invited to an open house and tour, and to enjoy hor
deuvres and cocktails, beginning at 11:30 a.m. A map is
enclosed to help you locate the headquarters in case you are not
familiar with Bluefield.
Please note that a survey form is also enclosed. The survey form
will be used to assess shareholder interest in a dividend reinvestment
plan that is being considered. If the plan is adopted, and you elect
to participate, your dividends would automatically be paid in
additional Premier stock. Benefits of such a plan include the
generation of additional capital when Premier stock is strong,
support for Premier's stock price when it lags, improvement of
Premier's stock liquidity, and provision to shareholders of a
convenient method to augment their current holdings, if desired.
There will be modest costs to administer the program, but management
believes the benefits greatly outweigh the cost, assuming there is
even moderate participation. Any indication you make on this survey
form does not bind you in any way. You will be given an opportunity
to make an election to participate, or not, at a later date, if such a
plan is adopted.
Please sign and date the enclosed proxy and survey form and mail
it in the envelope provided at your earliest convenience.
Sincerely,
/s/ James R. Wheeling
James R. Wheeling
President and CEO
PREMIER BANKSHARES CORPORATION
P. O. Box 1199
Bluefield, Virginia 24605
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Premier Bankshares Corporation:
NOTICE is hereby given that the 1995 Annual Meeting of
Stockholders of Premier Bankshares Corporation will be held at the
Corporate Offices, 29 College Drive, Bluefield, Virginia, on April
20, 1995, at 2:00 p.m. for the following purposes:
(1) Electing five Class B Directors for three-year terms.
(2) Approving the proposed 1995 Long-Term Incentive Plan.
(3) Appointing an independent auditor for the year 1995.
(4) Transacting such other business as may properly come
before the meeting, or any adjournments thereof.
Only stockholders of record at the close of business on March 15,
1995, are entitled to notice of and to vote at such meeting, or any
adjournments thereof.
Your attention is directed to the Proxy Statement accompanying
this notice for a more complete statement regarding matters proposed
to be acted upon at the meeting.
To ensure that your shares are represented at the meeting, please
fill in, date, sign, and mail promptly the enclosed proxy, for which a
return envelope is provided. Your proxy is revocable at any time
prior to its exercise.
By Order of the Board of Directors
/s/ Ellen Simpson
Ellen Simpson
Corporate Secretary
March 24, 1995
PREMIER BANKSHARES CORPORATION
P. O. Box 1199 --- Bluefield, Virginia 24605
PROXY STATEMENT
FOR 1995 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
APRIL 20, 1995
The Board of Directors of Premier Bankshares Corporation (the
Corporation) solicits the enclosed 1995 proxy to be used at the 1995
Annual Meeting of Stockholders to be held at the Corporate Offices, 29
College Drive, Bluefield, Virginia, on Thursday, April 20, 1995, at
2:00 p.m., and at any adjournment thereof.
The cost of solicitation of proxies will be borne by the
Corporation. Solicitations will be made only by mail, except that, if
necessary, officers and regular employees of the Corporation or its
affiliates may make solicitations of proxies by telegram, telephone or
personal calls. Brokerage houses and other nominees may request that
copies of the proxy soliciting material be furnished to them for
mailing to the beneficial owners of the stock held of record by such
brokerage houses and nominees. The Corporation may reimburse them for
their reasonable expenses in this connection.
All properly executed proxies delivered pursuant to this
solicitation will be voted at the meeting in accordance with the
instructions therein contained, if any. Any person signing and
mailing the enclosed proxy may, nevertheless, revoke the proxy at any
time prior to the actual voting thereof. Directors are elected by a
plurality of votes properly cast, assuming a quorum is present. All
other matters coming before the meeting will be approved if the votes
favoring such matter exceed those opposing it. Abstentions and broker
non-votes thus have no direct effect on the election of directors or
any other matter.
An Annual Report to Stockholders, including the Corporation's
financial statements for the year ended December 31, 1994, accompanies
this proxy statement. This proxy statement and the accompanying proxy
are first being sent or delivered to stockholders of the Corporation
on or about March 24, 1995.
As of March 15, 1995, the Corporation had outstanding 4,987,805
shares of its common stock, each of which is entitled to one vote at
the Annual Meeting. Only stockholders of record at the close of
business March 15, 1995, will be entitled to vote at the meeting, or
any adjournment thereof.
ELECTION OF DIRECTORS
The Articles of Incorporation divide the directors into three (3)
classes with terms to expire as indicated below. At the meeting, five
Class B directors will be elected, to serve until the 1998 Annual
Meeting of Stockholders.
In the event that any nominee becomes unavailable for election,
the proxies will be voted for a substitute nominee. However, the
Board of Directors does not anticipate that any nominee will be
unavailable for election, and all have consented to be named and to
serve if elected. Each nominee hereinafter named has been recommended
for election by the Board of Directors.
INFORMATION CONCERNING NOMINEES
CLASS B, serving until the 1998 Annual Meeting of Stockholders
and until a successor shall be elected and qualify:
Name Age Principal Occupation and
Director Since Employment Last Five Years
DONALD BAKER 57 Retired-Coal Mining, Mayor of Town of
Clintwood, Virginia
(New)
JOHN W. GILLESPIE 86 Attorney
1986
GENE H. JAMES 64 Farming
1986
N. STANLEY KING, SR. 68 Real Estate Broker and Farmer
1986
JAMES R. WHEELING 39 President and CEO of Premier
Bankshares Corporation; formerly,
1992 President and CEO of Tazewell National
Bank, Managing Agent for RTC;
President ELK National Bank,
Charleston WV, National Bank Examiner
INFORMATION CONCERNING REMAINING DIRECTORS
CLASS C, serving until the 1996 Annual Meeting of Stockholders
and until a successor shall be elected and qualify:
Name Age Principal Occupation and
Director Since Employment Last Five Years
HARRIS HART, II 66 Partner, Law Firm of
1986 Gillespie, Hart, Altizer
& Whitesell, P. C.
MILES L. HILLMAN 70 Farming & Real Estate Developer
1986
ROBERT C. JAMES 54 Real Estate Broker and Developer
1986
CLAUDE H. VANDYKE 70 President of Candlewax Smokeless
1986 Fuel Company
INFORMATION CONCERNING REMAINING DIRECTORS
CLASS A, serving until the 1997 Annual Meeting of Stockholders
and until a successor shall be elected and qualify:
Name Age Principal Occupation and
Director Since Employment Last Five Years
JACK P. CHAMBERS 66 Retired; formerly President and CEO of Premier
1986 Bankshares Corporation, formerly of Counsel,
Gillespie, Chambers, Altizer, Givens &
Walk, Attorneys at Law
JAMES E. CHILDRESS 70 President of Grundy Oil Company, Inc.
1986
CHARLES C. HENLEY 67 Retired; formerly President of Bank of Speedwell
1986
JOHN A. JOHNSTON 58 Consultant, Educational Administration
1986
GEORGE R. SMITH 68 Physician
1990
PROPOSAL TO APPROVE THE 1995 LONG-TERM INCENTIVE PLAN
The Corporation's 1995 Long-Term Incentive Plan (the "Plan") was
approved by the Board of Directors on February 16, 1995. A copy of
the Plan is attached hereto as Exhibit A, and the following summary
description is qualified in its entirety by reference to the Plan.
The purposes of the Plan are to advance the long-term interests of the
Corporation by motivating outside directors and key employees with the
opportunity to obtain an equity interest in the Corporation, and to
attract and retain key employees upon whose judgment the success of
the Corporation largely depends. Under the terms of the Plan, the
Personnel Committee may grant stock options, stock appreciation
rights, limited stock appreciation rights, restricted stock awards,
performance shares, and performance units to key employees of the
Corporation.
Under the recommended plan, stock options are granted at the
prevailing market price and, accordingly, only produce value if the
Corporation's stock price increases. Option grants vest in equal
portions over a three-year period, and executives must be employed by
the Corporation at the time of vesting to exercise options. In
determining the number of stock options to grant each of the executive
officers, the Committee considers, in order of significance: (i) the
Committee's subjective assessment of the executive's actual and
anticipated contribution to the Corporation's business; (ii) the
executive's total proposed compensation for the year, which, for the
named executive officers as a group in fiscal 1995 will be targeted at
the average of compensation opportunities at comparable banking
organizations in a selected Compensation Peer Group; and (iii) the
executive's holdings of Company stock.
The Compensation Peer Group is comprised of regional banking
organization of similar size and customer markets. These corporations
may differ from the corporations that comprise the Index used in the
performance graph on page 10. The Corporation uses the Compensation
Peer Group instead of the Index for purposes of evaluating its
compensation practices because the Index is comprised of banking
organizations outside of its immediate marketing area and, as a
result, may not provide an adequate basis from which to accurately
assess market conditions. The Corporation believes that the targeted
comparison afforded by the Compensation Peer Group is a more stable
and accurate indicator of compensation practices of its competitors in
the banking industry.
The Plan will be effective as of February 16, 1995, subject to
stockholder approval, and will remain in effect so long as shares of
Common Stock available for grants or awards thereunder until the Plan
expiration date of February 16, 2005.
Number of Shares
The Plan provides that one and one-quarter percent (currently
62,348 shares) of the outstanding shares at the beginning of each
calendar year, but no more than 625,000 shares of the Corporation's
Common Stock, will be available in the aggregate for the grant of
stock options, stock appreciation rights, limited stock appreciation
rights, restricted stock awards, performance shares, and performance
units from time to time. No more than one-half of one percent (0.5%)
of the total number of shares of Common Stock subject to the Plan may
be awarded in any year to any participant in the Plan.
These numbers are subject to adjustment to reflect certain
extraordinary distributions of cash or shares of stock and certain
stock changes such as stock dividends, stock splits and share
exchanges. Shares of Common Stock available for issuance under the
Plan may be authorized but unissued shares. In most cases, shares of
Common Stock covered by lapsed, canceled, surrendered or terminated
options or other awards will be available
again for grant under the Plan.
Administration; Eligibility
The Plan will be administered by the Personnel Committee (the
"Committee") of the Corporation's Board of Directors composed of not
less than three directors, each of whom shall be a "disinterested
person" as that term is used and defined under Rule 16(b)-3 under the
Securities Exchange Act of 1934, as amended. Members of the Committee
will be appointed by and will serve at the pleasure of the Board of
Directors. The initial members of Committee are Messrs. Childress,
Hart, James, Johnston, and VanDyke, and Dr. Smith. The selection of
the participants in the Plan and the extent of the participation of
each will be determined by the Committee. Such participants will be
employees of the Corporation and its subsidiaries whose performance,
as determined by the Committee, can have an effect on the growth,
profitability and success of the Corporation (Approximately 3
persons). Outside directors (currently 13 persons) will be eligible
for automatic grants of non-qualified stock options on the date of
each stockholders meeting.
Stock Options
The Committee may grant a participant the option to purchase shares
of Common Stock of the Corporation through incentive stock options
qualified under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") or options not qualified under Section 422 of the
Code ("non-qualified stock options") or a combination of both.
Incentive and non-qualified stock options must be granted at not less
than 100% of the fair market value of the underlying Common Stock on
the date the option is granted, except that up to 25% of the shares
may be granted in the form of non-qualified stock options priced at no
less than 50% of the fair market value of the shares of Common Stock
on the date of grant. Upon exercise, the option price is to be paid
in full in cash, in shares of Common Stock, in such other
consideration as the Committee may deem appropriate, or through an
arrangement with a broker. Options will be exercisable in whole or in
such installments and at such times as may be determined by the
Committee, provided that no stock option may be exercisable sooner
than six months and no more than ten years after the date of its
grant. The total market value of all shares which may underly stock
options under the plan is $1,076,916 as of March 17, 1995.
Stock Appreciation Rights
The Committee may grant key employees the right to receive a
payment equal to the appreciation in market value of a stated number
of shares of Common Stock from the date of the agreement granting the
stock appreciation right (the "base price") to its date of exercise.
These stock appreciation rights may or may not be granted in tandem
with stock options.
Stock appreciation rights granted in tandem with stock options will
be exercisable only to the extent the related stock option is
exercisable and upon exercise of such a tandem stock appreciation
right, the related stock option shall be canceled to the extent of the
number of stock appreciation rights exercised and such shares will not
thereafter be eligible for grant under the Plan. The base price for a
tandem stock appreciation right will be determined by the Committee,
but it must not be less than the exercise price of the related stock
option.
Free-standing stock appreciation rights will be exercisable at the
time or times determined by the Committee. The base price for a free-
standing stock appreciation right will be determined by the Committee,
but it must not be less than the fair market value of the Common Stock
on the date of the grant of the stock appreciation right.
Limited Stock Appreciation Rights
The Committee may grant key employees the right to receive a
payment in cash equal to the appreciation over the base price by the
greater of either the highest price of shares of Common Stock paid in
connection with a change in control or the highest price of the shares
of Common Stock during the 60 days prior to the change in control.
These limited stock appreciation rights may be granted at the time an
option or stock appreciation right is granted or at any time
thereafter. Limited stock appreciation rights are exercisable in full
for a period of seven months following the date of a change in
control.
If limited stock appreciation rights are exercised, any stock
options and stock appreciation rights to which they are attached can
no longer be exercised. If the stock options or stock appreciation
rights are exercised or terminated, the limited stock appreciation
rights are simultaneously canceled.
Restricted Stock Awards
The Plan permits the Committee to award restricted stock to key
employees of the Corporation (without payment of consideration by the
participant) with such terms, conditions, restrictions or limitations
as the Committee deems appropriate. While the restrictions are in
effect, the Committee may permit a participant the right to vote
shares and the right to receive any dividends. Restricted stock
awards may be evidenced by stock certificates, book-entry
registrations or in such other manner as the Committee determines.
Performance Shares and Performance Units
The Plan permits the Committee to grant performance shares and
performance units to key employees, which will entitle the participant
to convert the performance shares or performance units into shares of
Common Stock or into cash or into a combination thereof, as determined
by the Committee, if pre-determined performance targets or goals are
met. Performance goals will include one or more of the following:
deposit growth, asset quality, net earnings, operating income, cash
flow, return on equity, return on capital employed, return on assets,
and total stockholder return. The Committee will determine the length
of the performance period. Award payments made in cash rather than by
the issuance of shares shall not result in additional shares being
available for reissuance under the Plan.
Employment; Transferability
The Committee is authorized under the Plan to adopt policies
regarding the entitlement of participants who cease to be employed by
the Corporation because of death, disability, resignation, termination
or retirement. These policies may vary depending upon the specific
circumstances and the individual involved.
The rights and interests of a participant under the Plan, and in
any security issued or granted under the Plan, may not be assigned,
sold, encumbered or transferred except by will or the laws of descent
and distribution in the event of the death of the participant.
Amendments
The Committee may suspend, reinstate and terminate the Plan or any
portion thereof at any time. In addition, the Committee may, from
time to time, amend the Plan in any manner, but may not without
stockholder approval adopt any amendment which would (a) materially
increase the benefits accruing to participants under the Plan, or (b)
materially increase the number of shares of Common Stock which may be
issued under the Plan (except in the event of certain extraordinary
distributions of cash or shares of stock, as described in the Plan).
Initial Awards
Subject to stockholder approval of the Plan, the Corporation
proposed initial grants of stock options under this Plan on February
16, 1995. The exercise price is $16.75, representing 100% of the fair
market value of the common stock on the date of the proposed grants.
Incentive stock options were proposed for executive officers and
employees, and nonqualified options were proposed for directors.
Name and Position Number of Options
James R. Wheeling, President &
CEO & Director 8,340
All Executive Officers as a Group 14,860
Directors Who Are Not
Executive Officers 4,940
Non-Executive Officer 6,930
Employee Group*
*Includes Chief Executive Officers of Subsidary Banks
Federal Income Tax Consequences
The following is a summary of the Federal income tax treatment of
the incentive stock options, non-qualified stock options, stock
appreciation rights, limited stock appreciation rights, restricted
stock awards, performance shares and performance units that may be
granted under the Plan based upon the current provisions of the Code
and regulations promulgated thereunder.
Incentive Stock Options. Incentive stock options under the Plan
are intended to meet the requirements of Section 422 of the Code.
Under this section of the Code, if an option holder acquires stock
upon the exercise of an option, no income will result to the option
holder and the Corporation will be allowed no deduction as a result of
such exercise if the following conditions are met: (a) at all times
during the period beginning with the date of the grant of the option
and ending on the date three months before the date of such exercise,
the option holder is an employee of the Corporation or of a
subsidiary; and (b) the option holder makes no disposition of the
stock within two years from the date the option is granted nor within
one year after the option is exercised. In the event of a sale of
such stock by the option holder after compliance with these
conditions, any gain realized over the price paid for the stock will
ordinarily be treated as a long-term capital gain, and any loss will
ordinarily be treated as a long-term capital loss, in the year of
sale. The exercise of an incentive stock option may result in
alternative minimum tax liability to the option holder.
If the option holder fails to comply with the employment or
holding period requirements discussed above, he will be treated as
having received compensation taxable as ordinary income or having
received a capital gain in accordance with the provisions of the Code.
If the option holder is treated as having received compensation
because of this failure to comply with either condition above, an
equivalent deduction from income will be allowed to the Corporation in
the same year.
Non-Qualified Stock Options. An option holder who exercises a
non-qualified stock option will generally realize compensation taxable
as ordinary income in an amount equal to the difference between the
option price and the fair market value of the shares on the date of
exercise, and the Corporation will be entitled to a deduction from
income in the same amount. The option holder's basis in such shares
will be the fair market value on the date exercised, and long-term or
short-term capital gain or loss, depending on the holding period of
the shares, will be recognized in the year of sale.
Stock Appreciation Rights. The grant of a stock appreciation
right will not result in tax consequences to the Corporation or to an
option holder. An option holder who exercises a stock appreciation
right will realize compensation taxable as ordinary income in an
amount equal to the cash or the fair market value of the shares
received on the date of exercise, and the Corporation will be entitled
to a deduction in the same amount.
If an employee allows a stock appreciation right to expire,
otherwise than as a result of exercising the related option, the
Internal Revenue Service may contend that the employee will have
taxable income in the year of expiration equal to the amount of cash
or the fair market value of stock which he would have received if he
had exercised his stock appreciation right immediately before it
expired. In addition, under Treasury Regulations governing incentive
stock options, a stock appreciation right with respect to an incentive
stock option must be granted at the same time the incentive stock
option is granted in order to ensure that the incentive stock option
remains qualified as such.
Limited Stock Appreciation Rights. The grant of a limited stock
appreciation right will not result in tax consequences to the
Corporation or to a participant. A participant who exercises a
limited stock appreciation right will realize compensation taxable as
ordinary income in an amount equal to the cash or the fair market
value of the shares received on the date of exercise, and the
Corporation will be entitled to a deduction in the same amount. A
participant who does not exercise at the time of a change in control
and allows the limited stock appreciation rights to lapse could be
taxed as though exercise had occurred at either of those two dates.
Restricted Stock Awards. Restricted stock awards granted under
the Plan will constitute taxable income to the recipient, and a
deductible expense to the Corporation, in the year in which the
restrictions lapse unless the participant elects to recognize income
in the year the award is made. Unless such an election is made, the
amount of the taxable income and corresponding deduction will be equal
to the excess of the fair market value of the stock on the date the
restrictions lapse over the amount, if any, paid for such stock. The
Corporation is also allowed a compensation deduction for dividends
paid to participants (provided they have not elected to recognize
income at the time of the award) on restricted stock while the
restrictions remain in force.
Performance Shares and Performance Units. Performance shares and
performance units awarded under the Plan will not constitute a taxable
event to the recipient until such time as the recipient actually
receives shares of Common Stock or cash related to such award. The
amount of taxable income will be equal to the amount of cash received
or the fair market value of stock received at such time. The
Corporation will be entitled to a corresponding deduction in the same
year.
The Board of Directors recommends approval of the Plan.
OWNERSHIP OF COMMON STOCK
No stockholder beneficially owns in excess of five percent
of the outstanding common stock of the Corporation. The
following table sets forth the beneficial ownership of the Common
Stock of the Corporation as of March 15, 1995, by each director
(including the CEO) and nominee and all directors and executive
officers as a group.
Number of Shares
Name or Group Beneficially Owned(1) Percent of
Class
Jack P. Chambers 55,740 1.12
James E. Childress 10,100 (2)
John W. Gillespie 64,795 1..30
Harris Hart, II 30,288 (2)
Charles C. Henley 36,112 (2)
Miles L. Hillman 81,000 1.62
Gene H. James 52,078 1.04
Robert C. James 42,523 (2)
John A. Johnston 4,415 (2)
N. Stanley King, Sr. 89,892 1.80
George R. Smith 17,650 (2)
Larry H. Sykes 37,751 (2)
Claude H. VanDyke 182,390 3.66
James R. Wheeling 8,411 (2)
All directors and executive
officers as a group (16 persons) 714,506 14.33
(1) Includes shares which may be deemed beneficially owned by
virtue of family relationships, joint ownership, voting power or
investment power.
(2) Less than 1 percent.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Other Annual
Name and Principal Position Year Salary Bonus
Compensation
*James R. Wheeling 1994 $110,000 $16,673 $17,780
*Mr. Wheeling was hired as Chief Executive Officer on January 1, 1994.
Period Ending
12/31/8 12/31/ 12/31/9 12/31/ 12/31/ 12/31/
9 90 1 92 93 94
SNL OTC Bank 100.00 74.44 122.28 174.45 193.45 193.94
Index
All Nasdaq US 100.00 84.92 136.28 158.58 180.93 176.92
Stocks
Premier 100.00 79.88 93.50 192.17 170.75 159.51
Bankshares
EMPLOYEE BENEFIT PLANS
The Corporation maintains a discretionary profit sharing plan and
defined contribution retirement plan for employees. Total expenses
(funded as accrued) related to these plans were $814,000, $812,000,
and $689,000 for 1994, 1993 and 1992, respectively. This defined
contribution plan is currently being funded at a minimum rate of 10
percent of the annual eligible compensation of participants. There
are no other funding requirements and no other liabilities or
commitments for any of this plan. The amounts shown in the
compensation table include contributions under this plan for the
person indicated.
DIRECTORS MEETINGS, COMMITTEES AND FEES
Directors of the Corporation currently receive an annual retainer
of $2,400 payable in two semiannual installments if they attend at
least two-thirds of the required board meetings as well as two-thirds
of the required committee meetings. In addition to the retainer,
directors receive a fee of $400 for each Board and $200 for each
committee meeting attended. See "Initial Awards" on page 7 for stock
options granted to directors. The Board of Directors held seven
meetings during the last fiscal year, and nine committee meetings were
held. All incumbent directors attended at least 75 percent of the
aggregate number of meetings held by the Board, and meetings of
committees on which they served.
The Board of Directors has appointed an Audit Committee
consisting of the following nonemployee directors: Harris Hart, II,
Gene H. James, Robert C. James, and Larry Sykes. The Audit Committee,
which met two times during 1994, reviews the financial records and
reports of the Corporation and each of its affiliates.
The Board of Directors has appointed a Nominating Committee,
consisting of N. Stanley King, Sr., Charles C. Henley, Miles L.
Hillman, and John W. Gillespie, to consider nominees to stand for
election to the Board of Directors. This committee met one time
during 1994. The Nominating Committee has no formal procedure for
considering nominees proposed by the shareholders.
Mr. Johnston inadvertently failed to file the required Form 4
relating to a single stock purchase during 1994. Such filing was made
when the omission was brought to his attention.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The Compensation Committee (the "Committee") of the Board of Directors
administers the Corporation's executive compensation program for
senior executives, evaluates the performance of corporate officers,
and considers management succession and related matters. The
Committee reviews with the Board all aspects of compensation for the
Chief Executive Officer and reviews in general the compensation of all
other executives. The Committee is currently comprised of six non-
employee outside directors, whose names are set forth following this
report.
The Committee's overall goal is to provide a compensation program
that will attract and retain qualified executives for the Corporation
and to provide them with incentives to achieve performance goals and
increase shareholder value. Accordingly, the Corporation's
compensation policy is intended to align individual performance
objectives with the Corporation's performance and the interests of
stockholders. In addition, such policy attempts to use the elements
of compensation to support achievement of short-term business plans
and long-term strategic goals, reward individuals for outstanding
contributions to the Corporation's success and attract, motivate and
retain executives of the highest quality.
Compensation Components
The Corporation's executive compensation's is based on two components
- --base salary and annual incentives --each of which plays an integral
role in the Corporation's overall compensation program. In addition,
as a result of a study conducted by an independent compensation
consulting firm, the Corporation is recommending to stockholders the
adoption of a long-term incentive compensation program to further
align the interests of executives and stockholders (See "Proposal to
Approve the 1995 Long-Term Incentive Plan.").
Base Salaries
The Committee believes that, due to the Corporation's success in its
principal markets, other companies seeking proven executives may view
members of the Corporation's experienced executive team as potential
targets. The base salaries paid to the Corporation's executive
officers in 1994 were believed necessary to retain their services.
Base salaries, including that of the Chief Executive Officer, are
reviewed annually and are adjusted based on the performance of the
executive, any increased responsibilities assumed by the executive,
average salary increases or decreases in the industry and the going
rate for similar positions at comparable companies. The Committee set
the salary of the Chief Executive Officer and Mr. Wheeling recommended
the 1994 base salaries of the Corporation's other executive officers.
Each executive officer's base salary was reviewed in accordance with
the above criteria by the members of the Committee and thereafter
approved.
Annual Bonus Program
The Corporation maintains an annual bonus program under which
executive officers and other key management employees have the
opportunity to earn cash bonuses. The program is intended to motivate
and reward executives for the achievement of individual performance
objectives and for the attainment by the Corporation of strategic and
financial performance goals, including specified levels of return on
assets (ROA).
The Corporation maintains a profit sharing plan under which employees
can receive annual cash awards if performance exceeds a 1.25% return
on assets threshold. The profit sharing pool is allocated to
individual subsidiary banks based on their performance and is
distributed to full-time employees according to the proportion of the
total full-time payroll represented by their compensation.
A second bonus plan focuses on each subsidiary banks' performance and
awards subsidiary bank Chief Executive Officers (CEOs) through a
sliding ROA scale that is multiplied by an earnings asset percentage.
Based on this scale, the CEO of each subsidiary bank can receive an
award equal to from 8% to 15% of base pay. The CEO's award is then
multiplied by 3 to generate a subsidiary bank-wide bonus pool which is
distributed to full-time employees on a relative compensation basis.
Long-Term Compensation
At this time the Corporation has no long-term incentive compensation
program for its executives or other employees. The Corporation is
recommending to stockholders approval of the 1995 Long-Term Incentive
Plan. This aspect of the Corporation's compensation program is
intended to retain executives and motivate them to improve the long-
term value of shareholders' investments in the Corporation.
Chief Executive Officer Compensation
During 1994, Mr. Wheeling received a base salary increase from $70,720
to $110,000 in recognition of his promotion to Chief Executive Officer
and his providing leadership for the Corporation during the year.
Mr. Wheeling also received during 1994, for the year ended December
31, 1993, $2,566 (3.63% of his 1993 base salary) and $7,114 (10.06%
of his 1993 base salary) , respectively, under the subsidiary bank
profit sharing and bonus plans, as a result of Tazewell National Bank
achieving a return on assets of 1.73% in 1993.
James E. Childress
Harris Hart, II
Robert C. James
Dr. George R. Smith, Jr.
Claude H. VanDyke
CERTAIN TRANSACTIONS
Some of the directors and officers of the Corporation and
their families are at present, as in the past, customers of
banking affiliates of the Corporation, and have had and expect to
have transactions with the affiliate banks in the ordinary course
of business. In addition, some of the directors and officers of
the Corporation are at present, as in the past, also directors
and officers of corporations which are customers of the affiliate
banks and which have had and expect to have transactions with
such banks in the ordinary course of business. Such transactions
were made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other
persons, and did not involve more than normal risk of
collectibility or present other unfavorable features.
APPOINTMENT OF INDEPENDENT AUDITOR
Persinger & Company is being recommended to the stockholders
of the Corporation for appointment as independent auditor for the
year ending December 31, 1995. Representatives of Persinger &
Company are expected to attend the meeting and have the
opportunity to make a statement and respond to appropriate
questions from stockholders.
STOCKHOLDER PROPOSALS FOR 1996
If any eligible stockholder intends to present a proposal at
the 1996 Annual Meeting of Stockholders, such proposal must be
received by the Corporation at its principal executive office, 29
College Drive, P. O. Box 1199, Bluefield, Virginia 24605, on or
before November 24, 1995. Otherwise, such proposal will not be
considered for including in the Corporation's proxy statement for
such meeting.
MISCELLANEOUS
All properly executed proxies received by the Corporation
will be voted at the meeting in accordance with the instructions
contained therein.
The Board of Directors knows of no matter not identified
herein which may properly come before the meeting for action.
However, if any other matter does properly come before the
meeting, the person or persons named in the proxy form enclosed
will vote in accordance with their judgment upon such matter.
You are urged to execute and return promptly the enclosed
form of proxy.
By Order of the Board of Directors
/s/ Ellen Simpson
Ellen Simpson
Corporate Secretary
EXHIBIT A
PREMIER BANKSHARES CORPORATION
The 1995 Long-Term Incentive Plan
SECTION 1. PURPOSES. The purposes of the 1995 Premier Bankshares
Long-Term Incentive Plan (the "Plan") are to encourage directors and
selected key employees and Premier Bankshares Corporation (the
"Corporation") to acquire a proprietary and vested interest in the
growth and performance of the Corporation, and to generate an
increased incentive to contribute to the Corporation's future success
and prosperity, thereby enhancing the value of the Corporation for the
benefit of stockholders and the ability of the Corporation to attract
and retain individuals of exceptional talent.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms
shall have the meanings set forth below:
(a) "Award" shall mean any Option, Stock Appreciation Right, Limited
Stock Appreciation Right, Restricted Stock Award, Performance Share,
Performance Unit, Other Stock Unit Award, or any other right,
interest, or option granted pursuant to the provisions of the Plan.
(b) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted hereunder
and signed by both the Corporation and the Participant or by both the
Corporation and an Outside Director.
(c) "Board" shall mean the Board of Directors of the Corporation,
including the Boards of Directors of Subsidiaries, except as any
differences may be noted in this Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, including the rules, regulations, and
interpretations promulgated thereunder.
(e) "Committee" shall mean the Personnel Committee of the
Corporation's Board, composed of not less than three directors each of
whom is a Disinterested Person.
(f) "Corporation" shall mean Premier Bankshares Corporation.
(g) "Disinterested Person" shall have the meaning set forth in Rule
16b-3(d)(3) promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, or any
successor definition adopted by the Commission.
(h) "Dividend Equivalent" shall mean any right granted pursuant to
Section 14(i) hereof to receive an equivalent amount of interest or
dividends with respect to the number of shares covered by an Award.
(i) "Employee" shall mean any salaried employee of the Corporation or
its Subsidiaries.
(j) "Fair Market Value" shall mean, with respect to any property, the
market value of such property determined by such methods or procedures
as shall be established from time to time by the Committee.
(k) "Incentive Stock Option" shall mean an Option granted under
Section 6 hereof that is intended to meet the requirements of Section
422 of the Code or any successor provision thereto.
(l) "Limited Stock Appreciation Right" shall mean a Stock Appreciation
Right that can only be exercised in the event of a change in control,
according to the definition and provisions of Section 8 of the Plan.
(m) "Non-qualified Stock Option" shall mean an Option granted to a
Participant under Section 6 hereof that is not intended to be an
Incentive Stock Option. "Non-qualified Stock Option" shall also mean
an Option granted to an Outside Director pursuant to the terms of
Section 11 hereof.
(n) "Option" shall mean any right granted to a Participant under the
Plan allowing such Participant to purchase Shares at such price or
prices and during such period or periods as the Committee shall
determine.
(o) "Outside Director" shall mean a member of the Board who is not an
Employee of the Corporation.
(o) "Participant" shall mean an Employee who is selected by the
Committee to receive an Award under the Plan.
(p) "Performance Award" shall mean any Award of Performance Shares or
Performance Units pursuant to Section 10 hereof.
(q) "Performance Period" shall mean that period established by the
Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the
Committee with respect to such Award are to be measured.
(r) "Performance Share" shall mean any grant pursuant to Section 10
hereof of a unit valued by reference to a designated number of Shares,
which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including, without
limitation, cash, Shares, or any combination thereof, upon achievement
of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.
(s) "Performance Unit" shall mean any grant pursuant to Section 10
hereof of a unit valued by reference to a designated amount of
property other than Shares, which value may be paid to the Participant
by delivery of such property as the Committee shall determine,
including, without limitation, cash, Shares, or any combination
thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of
such grant or thereafter.
(t) "Person" shall mean any individual, corporation, partnership,
association, joint-stock Corporation, trust, unincorporated
organization, or government or political subdivision thereof.
(u) "Restricted Stock" shall mean any Share issued with the
restriction that the holder may not sell, transfer, pledge, or assign
such Share and with such other restrictions as the Committee, in its
sole discretion, may impose (including, without limitation, any
restriction on the right to vote such Share, and the right to receive
any cash dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as
the Committee may deem appropriate.
(v) "Restricted Stock Award" shall mean an award of Restricted Stock
under Section 9 hereof.
(w) "Shares" shall mean shares of the common stock of the Corporation,
$2.00 par value, and such other securities of the Corporation as the
Committee may from time to time determine.
(x) "Stock Appreciation Right" shall mean any right granted to a
Participant pursuant to Section 7 hereof to receive, upon exercise by
the Participant, either, the excess of the Fair Market Value of one
Share on the date of exercise or, if the Committee shall so determine
in the case of any such right other than one related to any Incentive
Stock Option, the excess of the Fair Market Value of one Share at any
time during a specified period before the date of exercise over the
grant price of the right as specified by the Committee, in its sole
discretion, on the date of grant, which shall not be less than the
Fair Market Value of one Share on such date. Any payment by the
Corporation in respect of such right may be made in cash, Shares,
other property, or any combination thereof, as the Committee, in its
sole discretion, shall determine.
(y) "Stockholder Meeting" shall mean the annual meeting of
stockholders of the Corporation held each year.
(z) "Subsidiaries" shall mean any corporation or corporations in which
the Corporation owns directly, or indirectly through subsidiaries, at
least fifty percent (50%) of the total combined voting power of all
classes of stock, or any other entity (including, but not limited to,
partnerships and joint ventures) in which the Corporation owns at
least fifty percent (50%) of the combined equity thereof.
SECTION 3. ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall have full power and authority, subject
to such orders or resolutions not inconsistent with the provisions of
the Plan as may from time to time be adopted by the Board, to: (i)
select the Employees of the Corporation to whom Awards may from time
to time be granted hereunder; (ii) determine the type or types of
Award to be granted to each Participant hereunder; (iii) determine the
number of Shares to be covered by each Award granted hereunder;
provided, however, that Shares subject to any form of award granted to
any individual employee during any calendar year shall not exceed one-
half of one percent (0.5%) ______ of the total number of Shares,
subject to any adjustment according to the terms of Section 4(b); (iv)
determine the terms and conditions, not inconsistent with the
provisions of the Plan, of any Award granted hereunder; (v) determine
whether, to what extent and under what circumstances Awards may be
settled in cash, Shares or other property or canceled or suspended;
(vi) determine whether, to what extent and under what circumstances
cash, Shares and other property and other amounts payable with respect
to an Award under this Plan shall be deferred either automatically or
at the election of the Participant; (vii) interpret and administer the
Plan and any instrument or agreement entered into under the Plan;
(viii) establish such rules and regulations and appoint such agents as
it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that
the Committee deems necessary or desirable for administration of the
Plan. Decisions of the Committee shall be final, conclusive and
binding upon all persons, including the Corporation, any Participant,
any stockholder, and any employee of the Corporation or its
Subsidiaries. A majority of the members of the Committee may
determine its actions and fix the time and place of its meetings.
SECTION 4. SHARES SUBJECT TO THE PLAN.
(a) Subject to adjustment as provided in Section 4(b), the total
number of Shares available for grant under the Plan in each calendar
year shall be one and one-quarter percent (1.25%)one percent (1.0%) of
the total outstanding Shares as of the first day of such year for
which the Plan is in effect; provided that such number shall be
increased in any year by the number of Shares available for grant
hereunder in previous years but not covered by Awards granted
hereunder in such years, as well as Shares subject to Awards forfeited
or terminated in the manner noted below; and provided further, that no
more than six hundred and twenty-five thousand (625,000)five hundred
thousand (500,000) Shares shall be cumulatively available for grant
under the Plan. In addition, any Shares issued by the Corporation
through the assumption or substitution of outstanding grants from an
acquired Corporation shall not reduce the shares available for grants
under the Plan. Any Shares issued hereunder may consist, in whole or
in part, of authorized and unissued shares or treasury shares. If any
Shares subject to any Award granted hereunder are forfeited or such
Award otherwise terminates without the issuance of such Shares or of
other consideration in lieu of such Shares, the Shares subject to such
Award, to the extent of any such forfeiture or termination, shall
again be available for grant under the Plan.
(b) In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate
structure affecting the Shares, such adjustment shall be made in the
aggregate number of Shares which may be delivered under the Plan, and
in the number of Shares subject to outstanding Options granted under
the Plan, and in the price or number of Shares subject to Awards
granted under the Plan as may be determined to be appropriate by the
Committee, in its sole discretion, and provided that the number of
Shares subject to any Award shall always be a whole number, and
provided further, that the number of shares subject to outstanding
Options granted to Outside Directors pursuant to Section 11 hereof and
the number of shares subject to future Option grants pursuant to
Section 11 shall be subject to adjustment only as set forth in Section
11.
SECTION 5. ELIGIBILITY. Any Employee (excluding any member of the
Committee) shall be eligible to be selected as a Participant. All
Outside Directors shall automatically be eligible to receive Awards
pursuant to Section 11.
SECTION 6. STOCK OPTIONS. Options may be granted hereunder to
Participants either alone or in addition to other Awards granted under
the Plan. Any Option granted to a Participant under the Plan shall be
evidenced by an Award Agreement in such form as the Committee may from
time to time approve. Any such Option shall be subject to the
following terms and conditions and to such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the
Committee shall deem desirable:
(a) Option Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee in its sole discretion;
provided that such purchase price in the case of Incentive Stock
Options shall not be less than the Fair Market Value of the Share on
the date of the grant of the Option. In no event shall the Option
Price of any Non-qualified Stock Option be less than 50% of the Fair
Market Value of the Shares on the date of grant, and the number of
such below-market Options shall be limited to 25% of the Options
available for grant in any calendar year.
(b) Option Period. The term of each Option shall be fixed by the
Committee in its sole discretion; provided that no Incentive Stock
Option shall be exercisable after the expiration of ten years from the
date the Option is granted.
(c) Exercisability. Options shall be exercisable at such time or
times as determined by the Committee at or subsequent to grant.
Unless otherwise determined by the Committee at or subsequent to
grant, no Incentive Stock Option shall be exercisable during the year
ending on the day before the first anniversary date of the granting of
the Incentive Stock Option.
(d) Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need
not be the same for each grant or for each Participant.
(e) Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Corporation, setting forth the number of
Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. The Option price shall be
payable in full to the Corporation either: in cash or its equivalent,
or by tendering to the Corporation, or certifying by the Participant
to the satisfaction of the Corporation, previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to
the total Option price (provided that the Shares which are tendered or
certified must have been held by the Participant for at least six (6)
months prior to their tender or certification), or by a combination of
these methods. The Committee may also allow cashless exercise as
permitted under the Federal Reserve Board's Regulation T, subject to
applicable securities law restrictions, or by any other means the
Committee determines to be consistent with the Plan's purpose and
applicable law.
(f) Incentive Stock Options. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value
(determined as of the time of grant) of the Shares with respect to
which Incentive Stock Options held by any Participant which are
exercisable for the first time by such Participant during any calendar
year under the Plan (and under any other benefit plans of the
Corporation or subsidiary of the Corporation) shall not exceed
$100,000 or, if different, the maximum limitation in effect at the
time of grant under Section 422 of the Code, or any successor
provision, and any regulations promulgated thereunder. The terms of
any Incentive Stock Option granted hereunder shall comply in all
respects with the provisions of Section 422 of the Code, or any
successor provision, and any regulations promulgated thereunder.
SECTION 7. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may
be granted hereunder to Participants either alone or in addition to
other Awards granted under the Plan and may, but need not, relate to a
specific Option granted under Section 6. The provisions of Stock
Appreciation Rights need not be the same with respect to each
recipient. Any Stock Appreciation Right related to a Non-qualified
Stock Option may be granted at the same time such Option is granted or
at any time thereafter before exercise or expiration of such Option.
Any Stock Appreciation Right related to an Incentive Stock Option must
be granted at the same time such Option is granted. In the case of
any Stock Appreciation Right related to any Option, the Stock
Appreciation Right or applicable portion thereof shall terminate and
no longer be exercisable upon the termination or exercise of the
related Option, except that a Stock Appreciation Right granted with
respect to less than the full number of Shares covered by a related
Option shall not be reduced until the exercise or termination of the
related Option exceeds the number of shares not covered by the Stock
Appreciation Right. Any Option related to any Stock Appreciation
Right shall no longer be exercisable to the extent the related Stock
Appreciation Right has been exercised. The Committee may impose such
conditions or restrictions on the exercise of any Stock Appreciation
Right as it shall deem appropriate.
SECTION 8. LIMITED STOCK APPRECIATION RIGHTS.
Limited Stock Appreciation Rights may be granted hereunder to
Participants in addition to or related to any Option or Stock
Appreciation Right granted under the Plan. A Limited Stock
Appreciation Right may be granted at the time the Option or Stock
Appreciation Right is granted or at any time thereafter. Limited
Stock Appreciation Rights are exercisable in full for a period of
seven months following the date of a Change in Control as defined in
Section 12(b).
(a) Amount of Payment. The amount of payment to which a Participant
shall be entitled upon the exercise of each Limited Stock Appreciation
Right shall be equal to the difference between the Option price of the
Shares covered by the related Option or Stock Appreciation Right and
the Market Price of such Shares. Market Price is defined to be the
greater of (i) the highest price of the Shares paid in connection with
a Change in Control and (ii) the highest price of the Shares reflected
in the New York Stock Exchange Transactions Report during the 60-day
period prior to the Change in Control.
(b) Form of Payment. Payments to Participants upon the exercise of
Limited Stock Appreciation Rights shall be made solely in cash.
(c) Effect of Exercise. If Limited Stock Appreciation Rights are
exercised, the Options and Stock Appreciation Rights related to them
cease to be exercisable. Upon the exercise or termination of the
Options or Stock Appreciation Rights, the related Limited Stock
Appreciation Rights terminate.
SECTION 9. RESTRICTED STOCK.
(a) Issuance. Restricted Stock Awards may be issued hereunder to
Participants, for no cash consideration, either alone or in addition
to other Awards granted under the Plan. The provisions of Restricted
Stock Awards need not be the same with respect to each recipient.
(b) Registration. Any Restricted Stock issued hereunder may
be evidenced in such manner as the Committee in its sole discretion
shall deem appropriate, including, without limitation, book-
entry registration or issuance of a stock certificate or certificates.
In the event any stock certificate is issued in respect of shares
of Restricted Stock granted under the Plan, such certificate shall
be registered in the name of the Participant, and shall bear
an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award.
(c) Forfeiture of Restricted Stock Award. Except as otherwise
determined by the Committee at the time of grant, upon termination of
employment for any reason during the restriction period, all shares of
Restricted Stock still subject to restriction shall be forfeited by
the Participant and reacquired by the Corporation; provided that in
the event of a Participant's retirement, permanent disability, other
termination of employment or death, or in cases of special
circumstances, the Committee may, in its sole discretion, when it
finds that a waiver would be in the best interests of the Corporation,
waive in whole or in part any or all remaining restrictions with
respect to such Participant's shares of Restricted Stock.
Unrestricted Shares, evidenced in such manner as the Committee shall
deem appropriate, shall be issued to the grantee promptly after the
period of forfeiture, as determined or modified by the Committee.
SECTION 10. PERFORMANCE AWARDS. Performance Awards, including
Performance Shares and Performance Units, may be issued hereunder to
Participants, for no cash consideration or for such minimum
consideration as may be required by applicable law, either alone or in
addition to other Awards granted under the Plan. The performance
standards to be used during any Performance Period shall include
measures such as net earnings, operating income, cash flow, return on
equity, return on capital employed, return on assets, and total
stockholder return. The performance standards selected and the length
of the Performance Period shall be determined by the Committee upon
the grant of each Performance Award. Except as provided in Section
12, Performance Awards will be paid only after the end of the relevant
Performance Period. Performance Awards may be paid in cash, Shares,
other property or any combination thereof, in the sole discretion of
the Committee at the time of payment. The performance levels to be
achieved for each Performance Period and the amount of the Award to be
distributed shall be conclusively determined by the Committee.
Performance Awards may be paid in a lump sum or in installments
following the close of the Performance Period or, in accordance with
procedures established by the Committee, on a deferred basis. The
maximum cash award paid to any Participant during any plan year shall
be no more than five hundred thousand dollars ($500,000).
SECTION 11. OUTSIDE DIRECTORS' OPTIONS.
(a) Grant of Options. On February 16, 1995, each Outside Director of
the Corporate Board shall automatically be granted an Option
to purchase $2,000 worth of Shares of the Company; and each
Outside Director of a Subsidiary Board shall automatically be granted
an Option to purchase $1,000 worth of Shares of the Company; on each
subsequent February 16 for the duration of this Plan, the same grant
shall automatically be made to each Outside Director. The number of
shares granted shall be determined by dividing $2,000 for Corporate
Directors or $1,000 for Subsidiary Directors by an estimate of the
present value of one Share of Company stock using a stock option
valuation methodology and rounding to the nearest ten (10) shares.
All such options shall be Non-qualified Stock Options. The price at
which each share of common stock covered by such Options may be
purchased shall be one hundred percent (100%) of the Fair Market Value
of the Shares on the date the Option is granted. Fair Market Value
for purposes of this Section 11 shall be deemed to be the average of
the high and low prices of the Shares for composite transactions as
published by major newspapers for the date the Option is granted or,
if no sale of the Shares shall have been made on that day, the next
preceding day on which there was a sale of the Shares of stock.
(b) Exercise of Options. Except as set forth in this Section 11,
thirty-three and one-third percent (33.33%) of the total number of the
Shares subject to an Option granted to an Outside Director shall
become exercisable on the first, second, and third anniversaries from
the Date of Grant. The right to purchase Shares with respect to
shares which have become exercisable shall be cumulative during the
term of the Option. Any Option that has been outstanding for more
than one (1) year shall immediately become exercisable in the event of
a Change in Control, as hereinafter defined. The Option may be
exercised by the Outside Director during the period that the Outside
Director remains a member of the Board and for a period of five (5)
years following retirement or permanent and total disability, provided
that only those Options exercisable at the date of the Outside
Director's retirement may be exercised during the period following
retirement or permanent and total disability and, provided further,
that in no event shall the Option be exercisable more than ten (10)
years after the date of grant. In the event of the death or permanent
and total disability of an Outside Director, the Option shall
be exercisable only within the twelve (12) months next succeeding the
date of death, and then only (i) by the executor or administrator of
the Outside Director's estate or by the person or persons to whom
the Outside Director's rights under the Option shall pass by the
Outside Director's will or the laws of descent and distribution, and
(ii) if and to the extent that the Outside Director was entitled to
exercise the Option at the date of the Outside Director's death,
provided that in no event shall the Option be exercisable more than
ten (10) years after the date of grant.
(c) Payment. An Option granted to an Outside Director shall
be exercisable only upon payment to the Company of the full purchase
price of the shares with respect to which the Option is being
exercised. Payment for the shares shall be in United States dollars,
payable in cash or by check.
(d) Adjustment of Options. In case there shall be a
merger, reorganization, consolidation, recapitalization, stock
dividend or other change in corporate structure such that the shares
of common stock of the Company are changed into or become exchangeable
for a larger or smaller number of shares, thereafter the number of
shares subject to outstanding Options and the number of shares subject
to Options to be granted to Outside Directors pursuant to the
provisions of this Section 11 shall be increased or decreased, as the
case may be, in direct proportion to the increase or decrease in the
number of shares of common stock of the Company by reason of such
change in corporate structure, provided that the number of shares
shall always be a whole number, and the purchase price per share of
any outstanding Options shall, in the case of an increase in the
number of shares, be proportionately reduced, and in the case of a
decrease in the number of shares, shall be proportionately
increased.
SECTION 12. CHANGE IN CONTROL.
(a) In order to maintain the Participants' rights in the event of
any Change in Control of the Corporation, as hereinafter defined,
the Committee, as constituted before such Change in Control, may, in
its sole discretion, as to any Award, either at the time an Award is
made hereunder or any time thereafter, take any one or more of the
following actions: (i) provide for the acceleration of any time
periods relating to the exercise or realization of any such Award so
that such Award may be exercised or realized in full on or before a
date fixed by the Committee; (ii) provide for the purchase of any such
Award, upon the Participant's request, for an amount of cash equal to
the amount that could have been attained upon the exercise of such
Award or realization of the Participant's rights had such Award been
currently exercisable or payable; (iii) make such adjustment to any
such Award then outstanding as the Committee deems appropriate
to reflect such Change in Control; or (iv) cause any such Award
then outstanding to be assumed, or new rights substituted therefor, by
the acquiring or surviving corporation after such Change in Control.
The Committee may, in its discretion, include such further provisions
and limitations in any agreement documenting such Awards as it may
deem equitable and in the best interests of the Corporation.
(b) A Change in Control shall be deemed to have occurred for the
purposes of the Plan if any Person other than a trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation, and other than the Corporation or its Subsidiaries, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of
securities of the Corporation representing 20% or more of the combined
voting power of the Corporation's then outstanding securities; or if
individuals who constitute the Board and any new Director whose
election by the Board or nomination for election by the Corporation's
stockholders was approved by at least two-thirds (2/3) of the
Directors then still in office who either were Directors or whose
election or nomination for election was previously so approved, cease
for any reason to constitute a majority thereof.
SECTION 13. AMENDMENTS AND TERMINATION. The Board may amend, alter
or discontinue the Plan, but no amendment, alteration, or
discontinuation shall be made that would impair the rights of a
or Participant under an Award heretofore granted, without the
Participant's consent, or that without the approval of
the stockholders would:
(a) except as is provided in Section 4(b) of the Plan, increase the
total number of shares reserved for the purposes of the Plan;
(b) change the employees or class of employees eligible to participate
in the Plan; or
(c) change in any way the Options provided for in Section 11 of the
Plan.
The Committee may amend the terms of any Award heretofore granted
(except Options granted pursuant to Section 11 hereof), prospectively
or retroactively, but no such amendment shall impair the rights of
any Participant without his consent. The Committee may also
substitute new Awards for Awards previously granted to Participants,
including without limitation previously granted Options having Fair
Market Value or higher option prices, except the number of Options
substituted shall not exceed ten percent (10%) of the total number of
shares authorized under the Plan. The Plan shall terminate on the day
following the tenth anniversary of the Plan's approval by Stockholders
and such termination shall not impair the rights of a Participant
under an Award heretofore granted.
SECTION 14. GENERAL PROVISIONS.
(a) No Award shall be assignable or transferable by a Participant
otherwise than by will or by the laws of descent and distribution;
provided that, if so determined by the Committee, a Participant may,
in the manner established by the Committee, designate a beneficiary to
exercise the rights of the Participant with respect to any Award upon
the death of the Participant. Each Award shall be exercisable, during
the lifetime of the Participant or the Outside Director, only by the
Participant or the Outside Director or, if permissible under
applicable law, by the guardian or legal representative of the
Participant or Outside Director.
(b) The term of each Award shall be for such period of months or
years from the date of its grant as may be determined by the
Committee; provided that in no event shall the term of any Incentive
Stock Option or any Stock Appreciation Right related to any Incentive
Stock Option exceed a period of ten (10) years from the date of its
grant.
(c) No Employee or Participant shall have any claim to be granted any
Award under the Plan and there is no obligation for uniformity of
treatment of Employees or Participants under the Plan.
(d) The prospective recipient of any Award under the Plan shall
not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award, until
and unless such recipient shall have executed an agreement or other
instrument evidencing the Award and delivered a fully executed copy
thereof to the Corporation, and otherwise complied with the then
applicable terms and conditions.
(e) The Committee shall be authorized to make adjustments
in Performance Award standards or in the terms and conditions of
other Awards in recognition of unusual or nonrecurring events
affecting the Corporation or its financial statements or changes in
applicable laws, regulations or accounting principles. The Committee
may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent
it shall deem desirable to carry it into effect. In the event the
Corporation shall assume outstanding employee benefit awards or the
right or obligation to make future such awards in connection with the
acquisition of another corporation or business entity, the Committee
may, in its discretion, make such adjustments in the terms of Awards
under the Plan as it shall deem appropriate. Notwithstanding the
above, the Committee shall not have the right to make any adjustments
in the terms or conditions of the Options granted pursuant to Section
11.
(f) The Committee shall have full power and authority to determine
any other type and form of Award beyond those enumerated above to
grant a Participant for the furtherance of the purposes of the Plan.
(g) The Committee shall have full power and authority to
determine whether, to what extent and under what circumstances any
Award (other than Options granted pursuant to Section 11) shall be
canceled or suspended. In particular, but without limitation, all
outstanding Awards to any Participant shall be canceled if the
Participant, without the consent of the Committee, while employed by
the Corporation or after termination of such employment, becomes
associated with, employed by, renders services to, or owns any
interest in (other than any nonsubstantial interest, as determined by
the Committee), any business that is in competition with the
Corporation or with any business in which the Corporation has a
substantial interest as determined by the Committee.
(h) All certificates for Shares delivered under the Plan pursuant
to any Award shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Shares are then
listed, and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(i) Subject to the provisions of this Plan and any Award Agreement,
the recipient of an Award (including, without limitation, any deferred
Award, but excluding Options granted pursuant to Section 11) may, if
so determined by the Committee, be entitled to receive, currently or
on a deferred basis, interest or dividends, or interest or
Dividend Equivalents, with respect to the number of shares covered by
the Award, as determined by the Committee, in its sole discretion, and
the Committee may provide that such amounts (if any) shall be deemed
to have been reinvested in additional Shares or otherwise reinvested.
(j) As circumstances may from time to time require, the Committee may
in its sole discretion make available to Participants loans for the
purpose of exercising Options. These loans shall include such terms
as the Committee deems reasonable in its sole discretion.
(k) The Corporation shall be authorized to withhold from any Award
granted or payment due under the Plan the amount of withholding taxes
due with respect to an Award or payment hereunder and to take
such other action as may be necessary in the opinion of the
Corporation to satisfy all obligations for the payment of such taxes.
The Corporation shall also be authorized to accept the delivery of
shares by a Participant in payment for the withholding of federal,
state and local taxes (but not for social security and Medicare taxes)
up to the Participant's marginal tax rate.
(l) Nothing contained in this Plan shall prevent the Board of
Directors from adopting other or additional compensation arrangements,
subject to stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(m) The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Virginia and applicable Federal law.
(n) If any provision of this Plan is or becomes or is deemed
invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Award under any law deemed applicable by
the Committee, such provision shall be construed or deemed amended to
conform to applicable laws or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially
altering the intent of the Plan, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.