March 18, 1997
Dear F & M Bank Corp. Shareholders:
You are cordially invited to attend our annual meeting of shareholders
on Saturday, April 12, 1997 at 5:30 P.M. at McGaheysville Fire Department
Activity Building, McGaheysville, Virginia. Please note the time. This will
be a dinner meeting which will be served by the members of the
McGaheysville Ladies Auxiliary. You are invited to this dinner and we are
enclosing a reservation card for your convenience in letting us know
whether or not you can be with us. We must receive this card on or before
March 28, 1997 to make proper preparations for the meal.
We are enclosing a formal notice of the meeting, a proxy and a Proxy
Statement detailing the matters upon which the shareholders will act at the
annual meeting. Our Company's Annual Report for 1996 is also enclosed.
We urge you to complete, date and sign the proxy, and return it as
soon as possible in the enclosed postage prepaid envelope. Should you
decide to attend the meeting and vote in person, you may revoke your proxy
at any time prior to its exercise.
Sincerely,
F & M BANK CORP.
Dan B. Todd
Chairman
Page 2
PROXY
F & M BANK CORP.
Annual Meeting of Shareholders, April 12, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert L. Halterman, Wayne L. Long
and Michael W. Pugh, any or all of whom may act, with full power of
substitution, as proxies to vote, as designated below, at the Annual
Meeting of Shareholders to be held April 12, 1997 at 5:30 P.M. and at any
adjournment thereof, the shares of F & M Bank Corp. common stock held of
record by the undersigned as of March 4, 1997.
The shares to which this proxy relates will be voted as specified. If
no specification is made, such shares will be voted in favor of the
proposals set forth on this proxy.
PROPOSAL ONE ELECTION OF DIRECTORS
_ FOR all nominees listed below _ WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed below
Lawrence H. Hoover, Jr., Richard S. Myers and Ronald E. Wampler for
three-year terms to expire in 2000.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space below.)
PROPOSAL TWO
APPOINTMENT OF S. B. HOOVER & COMPANY, L.L.P.
AS INDEPENDENT PUBLIC ACCOUNTANTS
_ FOR _ AGAINST _ ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
Please complete, date and sign the proxy and return it as soon as
possible in the enclosed postage prepaid envelope. The proxy must be signed
exactly as the name or names appear on the label attached to this proxy
with the exception of any stock listed in the name of the owner TOD to
another individual. If signing as a trustee, executor, etc., please so
indicate.
Date Signed:
Signature(s)
Page 3
F & M BANK CORP.
Timberville, Virginia
Notice of Annual Meeting of Shareholders
To the Shareholders of F & M Bank Corp.
The annual meeting of shareholders of F & M Bank Corp. (the Company)
will be held on Saturday, April 12, 1997, at 5:30 P.M. at McGaheysville
Fire Department Activity Building, McGaheysville, Virginia, for the
following purposes:
1. Election of three directors to be elected for three-year terms
expiring in 2000.
2. Ratification of the appointment of S. B. Hoover & Company, L.L.P.
as independent auditors for 1997.
3. Transaction of such other business as may properly come before
the meeting. Management is not aware of any other business, other
than procedural matters incident to the conduct of the Annual
Meeting.
Only shareholders of record at the close of business on March 4, 1997
are entitled to notice of and to vote at the annual meeting or any
adjournments thereof.
To assure that your shares are represented at the annual meeting,
please complete, date and sign the enclosed proxy, and return it as soon as
possible in the enclosed postage prepaid envelope. You may revoke your
proxy at any time prior to its exercise.
By Order of the Board of Directors
Larry A. Caplinger, Secretary
March 18, 1997
Page 4
F & M BANK CORP.
P. O. Box F
Timberville, Virginia 22853
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies for use at the annual meeting of shareholders of F & M Bank
Corp. (the Company) to be held Saturday, April 12, 1997 at 5:30 P.M. at the
McGaheysville Fire Department Activity Building, McGaheysville, Virginia,
and at any adjournments thereof (Annual Meeting). The principal executive
offices of the Company are located on Main Street, Timberville, Virginia
22853. The approximate mailing date of the Proxy Statement and the
accompanying proxy is March 18, 1997.
The accompanying proxy is solicited by the Board of Directors of the
Company (the Board). The cost of the solicitation of proxies will be borne
by the Company. Solicitations will be made only by the use of the mail,
except that, if necessary, officers, directors and regular employees of the
Company, or its affiliates, may make solicitations of proxies by telephone,
telegraph or by personal calls. Brokerage houses and nominees may be
requested to forward the proxy solicitation material to the beneficial
owners of the stock held of record by such persons, and the Company may
reimburse them for their charges and expenses in this regard.
All properly executed proxies delivered pursuant to this solicitation
will be voted at the Annual Meeting in accordance with any instructions
thereon. Any person signing and mailing the enclosed proxy may,
nevertheless, revoke the proxy at any time prior to the actual voting
thereof by (i) filing written notice thereof with the Secretary of the
Company (Larry A. Caplinger, Secretary, F & M Bank Corp., P. O. Box F,
Timberville, Virginia 22853); (ii) submitting a duly executed proxy bearing
a later date; or (iii) appearing at the Annual Meeting or any adjournment
thereof and giving the Secretary notice of his or her intention to vote in
person.
An Annual Report to shareholders, including current financial
statements, is being mailed to the Company's shareholders concurrently with
this Proxy Statement, but is not part of the proxy solicitation materials.
Interested shareholders may obtain, without charge, a copy of the
Company's Form 10-KSB for the fiscal year ended December 31, 1996, as filed
with the Securities and Exchange Commission, upon written request to Larry
A. Caplinger, Secretary, F & M Bank Corp., P. O. Box F, Timberville,
Virginia 22853.
OUTSTANDING SHARES AND VOTING RIGHTS
Only shareholders of record at the close of business on March 4, 1997
will be entitled to vote at the Annual Meeting. As of March 4, the Company
had outstanding 818,654 shares of its common stock, $5 par value (Common
Stock), each of which is entitled to one vote at the Annual Meeting. A
majority of votes entitled to be cast on matters considered at the Annual
Meeting constitutes a quorum. If a share is represented for any purpose at
the Annual Meeting, it is deemed to be present for purposes of establishing
a quorum. Abstentions and shares held of record by a broker or its nominees
(Broker Shares) which are voted on any matter are included in determining
the number of votes present or represented at the Annual Meeting.
Conversely, Broker Shares that are not voted on any matter will not be
included in determining whether a quorum is present. If a quorum is
established, directors will be elected by a plurality of the votes cast by
shareholders at the Annual Meeting. Votes that are withheld and Broker
Shares that are not voted in the election of directors will not be included
in determining the number of votes cast.
Page 5
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number and percentage of shares of
common stock beneficially owned, as of March 4, 1997 by each of the
Company's directors and nominees and all of the Company's directors and
executive officers as a group. For the purposes of this table, beneficial
ownership has been determined in accordance with the provisions of Rule
13d-3 under the Securities and Exchange Act of 1934, as amended, under
which, in general, a person is deemed to be a beneficial owner of a
security if he has or shares the power to vote or direct the voting of the
security or the power to dispose of or direct the disposition of the
security, or if he has the right to acquire beneficial ownership of the
security within 60 days.
Amount Beneficially Percent of
Name of Owner Owned Class
Thomas L. Cline 2,140 1 .261%
Julian D. Fisher 22,328 2 2.727%
Robert L. Halterman 9,616 1.175%
Lawrence H. Hoover, Jr. 12,526 3 1.530%
Wayne L. Long 5,080 4 .621%
Richard S. Myers 3,740 5 .457%
Michael W. Pugh 200 .024%
Dan B. Todd 11,842 6 1.447%
Ronald E. Wampler 2,500 .305%
Directors and executive officers
as a group (9 persons) 69,972 8.547%
__________________________
1 Includes 1,241 shares owned directly, 843 shares owned jointly with
another member of his household and 56 shares owned by another member
of his household.
2 Includes 3,130 shares owned directly, 2,730 shares owned by another
member of his household and 16,468 shares owned by the Company's stock
bonus plan over which Mr. Fisher has voting power.
3 Includes 10,280 shares owned directly, 46 shares owned by another
member of his household and 2,200 shares owned by a Unitrust in which
he is one of the trustees.
4 Includes 1,284 shares owned directly and 3,796 shares owned by a
member of his household.
5 Includes 1,600 shares owned directly and 2,140 shares held in Mr.
Myers' IRA Account.
6 Includes 1,280 shares owned directly, 8,554 shares owned by a member
of his household and 2,008 shares held in Mr. Todd's IRA Account.
Page 6
SECURITY OWNERSHIP OF BENEFICIAL OWNERS
Management of the Company knows of no person who has beneficial
ownership of 5% or more of the Company's outstanding common stock as of
March 4, 1997.
PROPOSAL ONE ELECTION OF DIRECTORS
The term of office for the current Class A directors expires at the
Annual Meeting. The Board of Directors has nominated such directors, namely
Lawrence H. Hoover, Jr., Richard S. Myers and Ronald E. Wampler for
reelection, for a three-year term, by the shareholders at the Annual
Meeting. The persons named as proxies in the accompanying form of proxy,
unless instructed otherwise, intend to vote for the election of each of
these nominees for directors. If any nominee should become unavailable to
serve, the proxy may be voted for the election of a substitute nominee
designated by the Board. The Board has no reason to believe any of the
nominees will be unable to serve if elected.
The Board recommends election of the Class A
director nominees set forth in this statement.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following information, including the principal occupation during
the past five years, is given with respect to the nominees, all of whom are
current directors, for election to the Board at the Annual Meeting, as well
as all directors continuing in office.
Name and Position Director Principal Occupation
with the Company Age Since During the Last Five Years
Director Nominees
CLASS A DIRECTORS
(to serve until the 2000 annual meeting of shareholders)
Lawrence H. Hoover, Jr. 62 1981 Attorney, Partner in Hoover,
Vice Chairman of the Penrod, Davenport & Crist and
Board its predecessor since 1971
Richard S. Myers 49 1988 President of Dick Myers
Chevrolet-GEO since February
1991
Ronald E. Wampler 49 1991 Farmer & partner in Dove
Farms, Inc. and its affiliates
Page 7
Directors Continuing in Office
CLASS B DIRECTORS
(to serve until the 1998 annual meeting of shareholders)
Thomas L. Cline 50 1991 Secretary/Treasurer of Truck &
Equipment Corp. and related
companies since 1974
Robert L. Halterman 61 1980 President of Virginia Classic
Mustang, Inc., an auto parts
company
Wayne L. Long 67 1985 Real estate and retired farmer
Michael W. Pugh 42 1994 President of Old Dominion
Realty, Inc.; Partner in Tri-
City Development Co.; President
of Colonial Appraisal Service,
Inc. and Treasurer of Old Mill
Enterprises, Inc.
CLASS C DIRECTORS
(to serve until the 1999 annual meeting of shareholders)
Julian D. Fisher 56 1990 CEO of Farmers & Merchants
President Bank since May 1996; President
of Bank since Oct. 1991
Dan B. Todd 65 1969 CEO of Farmers & Merchants
Bank from 1969 to May 1996;
Chairman of the Board of the
Bank since Oct. 1991
Compensation of Directors
All directors of the Company who are also Directors of the Bank each
received $150 for attending each Bank Board meeting in 1996. They receive
no additional compensation as Directors for Board meetings of F & M Bank
Corp. In addition, each Director received a bonus of $4,000 for the year
ended 1996 and $50 for each committee meeting.
Board Meetings and Committees
The Board of F & M Bank Corp. met 14 times during 1996. All incumbent
members of the Board attended at least 75% of the total number of meetings
of the Board. The Board of Farmers & Merchants Bank meets twice each month
and primarily manages all matters for the Bank. All directors of F & M Bank
Corp. are also directors of Farmers & Merchants Bank.
The Company has an Audit Committee which reviews the audit and
examination reports of the internal auditor, independent public accountants
and bank examiners as they relate to the Company and its subsidiaries. The
Audit Committee held four meetings during 1996. Directors received $50 for
each committee meeting. The present committee members are Directors Cline,
Halterman, Long and Myers. For the year 1996, the Company did not have a
standing nominating or compensation committee.
Page 8
SUMMARY COMPENSATION
The Summary Compensation Table below sets forth the compensation of
the Company's Chief Executive Officer for all services rendered to the
Company and its subsidiary, Farmers & Merchants Bank, for the last three
fiscal years.
SUMMARY COMPENSATION TABLE
Name and Annual Compensation 1 Other
Principal Position Year Salary ($) Bonus ($) Compensation ($)2
Julian D. Fisher 1996 $ 84,912 $ 30,000 $ 20,813
Chief Executive Officer 1995 72,800 25,000 17,213
& President 1994 70,300 20,000 16,616
1 The value of perquisites and other personal benefits did not exceed
the lessor of $50,000 or 10% of the total of annual salary and bonus.
2 The amounts presented include the Company's contribution for the
benefit of Mr. Fisher under the Company's Stock Bonus Plan ($12,151, $9,280
and $8,871 in 1996, 1995 and 1994 respectively), the gross value of life
insurance premiums paid by the Company on behalf of Mr. Fisher ($7,334,
$7,386 and $7,428 in 1996, 1995 and 1994 respectively) and the lease value
of personal mileage on a company vehicle that has been provided for Mr.
Fisher's use ($1,328, $547 and $317 in 1996, 1995 and 1994 respectively).
Pursuant to a split-dollar insurance agreement between the Company and Mr.
Fisher, the Company will be repaid such premium payments from the proceeds
of the insurance policies. Thus, the gross premium payment amounts shown
overstate the actual economic benefit to Mr. Fisher.
Severance Plan
In 1996, the Company and its subsidiary, Farmers & Merchants Bank,
adopted a change in control severance plan which became effective July 1,
1996. The Plan covers employees designated by the Company's Board of
Directors, including Mr. Fisher.
Under the plan, a covered termination is a cessation of employment
with the Company or its then affiliates within 36 months after a change in
control (as defined in the plan) on account of either (i) termination of
employment by the covered employee for good reason (defined to mean the
occurrence after a change in control of any of the following: the
assignment of duties inconsistent with prior duties, the diminution of
responsibilities, a reduction in base salary, a transfer of job location of
more than 50 miles, a failure to pay compensation or deferred compensation
within 7 days after due, a failure to continue participation and benefits
under any compensation or benefits plan (or any successor or replacement
plan) at as favorable a level, or a failure of the Company to require any
successor to the Company to comply with the plan) or (ii) termination
initiated by the Company or any of its affiliates for any reason other than
death, disability, mandatory retirement or cause (as defined in the plan).
In the event of a "covered termination," a covered employee will be
entitled to the following severance benefits: (i) continuation of the
employee's base pay (as defined) through the earlier of his or her death or
the third anniversary of the date of the change in control (the severance
pay period); (ii) continuation of the availability of coverage, and the
employer's regular contribution towards that coverage, under the employer's
health care plan during the severance pay period for the employee and his
or her eligible dependents; (iii) the right to buy any car the employee is
assigned by the employer at its then fair market value; and (iv) a lump sum
payment equal to the value of any qualified or nonqualified retirement
benefits forfeited by the employee on account of his or her covered
termination.
Page 9
Indebtedness and Other Transactions
The Company's directors and officers and other corporations, business
organizations, and persons with whom some of the Company's directors and
officers are associated, had loan transactions at 12/31/96 with the
Company's banks totaling approximately $1,043,002, or about 5.8% of average
shareholders' equity for the year. All 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 in
comparable transactions with others and did not involve more than the
normal risk of collectibility or present other unfavorable features.
PROPOSAL TWO APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
S. B. Hoover & Company, L.L.P. of Harrisonburg, Virginia, was the
auditor for the Company for 1996 and is being recommended to the Company's
shareholders for appointment as auditor for 1997. A representative of S. B.
Hoover & Company is expected to attend the Annual Meeting with the
opportunity to make a statement and/or respond to appropriate questions
from shareholders.
The Board recommends a vote for Proposal Two.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's
1998 Annual Meeting must be received by the Secretary of the Company, at
its principal executive offices, P. O. Box F, Timberville, Virginia 22853
for inclusion in its proxy statement relating to that meeting by November
20, 1997.
By Order of the Board of Directors
Larry A. Caplinger, Secretary
March 18, 1997