[FFVA FINANCIAL CORPORATION LETTERHEAD]
March 25, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of FFVA Financial
Corporation, I cordially invite you to attend the Annual Meeting of Stockholders
to be held at the Holiday Inn-Select, 601 Main Street, Lynchburg, Virginia, on
Tuesday, April 22, 1997, at 10:00 a.m. The attached Notice of Annual Meeting and
Proxy Statement describe the formal business to be transacted at the Annual
Meeting. During the Annual Meeting, I will also report on the operations of the
Company. Directors and officers of the Company, as well as representatives of
Cherry, Bekaert & Holland, L.L.P., independent accountants, will be present to
respond to any questions stockholders may have.
Whether or not you plan to attend the Annual Meeting, please sign and date
the enclosed Proxy Card and return it in the accompanying postage-paid return
envelope as promptly as possible. This will not prevent you from voting in
person at the Annual Meeting, but will assure that your vote is counted if you
are unable to attend the Annual Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/James L. Davidson, Jr.
James L. Davidson, Jr.
President and Chief Executive Officer
FFVA Financial Corporation
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FFVA FINANCIAL CORPORATION
925 MAIN STREET
LYNCHBURG, VIRGINIA 24505
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 1997
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of FFVA Financial Corporation ("the Company"), will be held at the
Holiday Inn-Select, 601 Main Street, Lynchburg, Virginia, on Tuesday, April 22,
1997, 10:00 a.m.
A proxy card and a proxy statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the
following matters:
1. The election of three directors of the Company; and
2. The ratification of the appointment of Cherry, Bekaert & Holland,
L.L.P. as independent auditors of the Company for the year ending
December 31, 1997.
The transaction of such other matters as may properly come before the Meeting or
any adjournments thereof may also be acted upon. The Board of Directors is not
aware of any other business to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Stockholders of record at the close
of business on March 1, 1997 are the stockholders entitled to vote at the
Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed proxy which is
solicited by the Board of Directors and to return it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Margaret C. Burnette
Margaret C. Burnette
Secretary
Lynchburg, Virginia
March 25, 1997
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
FFVA FINANCIAL CORPORATION
925 MAIN STREET
LYNCHBURG, VIRGINIA 24505
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ANNUAL MEETING OF STOCKHOLDERS
April 22, 1997
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of FFVA Financial Corporation ("Company") to
be used at the Annual Meeting of Stockholders of the Company which will be held
at the Holiday Inn-Select, 601 Main Street, Lynchburg, Virginia, on Tuesday,
April 22, 1997, 10:00 a.m. local time. The accompanying Notice of Meeting and
this Proxy Statement are being first mailed to stockholders on or about March
25, 1997.
At the Meeting, stockholders will consider and vote upon (i) the election
of three directors, and (ii) the ratification of the appointment of Cherry,
Bekaert & Holland, L.L.P. as independent auditors of the Company for the year
ending December 31, 1997. The Board of Directors of the Company ("Board" or
"Board of Directors") knows of no additional matters that will be presented for
consideration at the Meeting. Execution of a proxy, however, confers on the
designated proxy holder discretionary authority to vote the shares represented
by such proxy in accordance with their best judgment on such other business, if
any, that may properly come before the Meeting or any adjournment thereof.
Effective June 5, 1996, the Company issued a 100% stock dividend. For ease
of presentation, all references to (i) the Company's common stock ("Common
Stock"), (ii) the options reserved and granted under the FFVA Financial
Corporation 1994 Stock Option Plan ("1994 Stock Option Plan"), and (iii) the
restricted stock held and granted by the First Federal Savings Bank of Lynchburg
Management Stock Bonus Plan ("Management Stock Plan") take into account the 100%
stock dividend, unless otherwise noted.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares of the Common Stock represented by such
proxies will be voted at the Meeting and all adjournments thereof. Proxies may
be revoked by written notice to the Secretary of the Company at the address
above or by the filing of a later dated proxy prior to a vote being taken on a
particular proposal at the Meeting. A proxy will not be voted if a stockholder
attends the Meeting and votes in person. Proxies solicited by the Board of
Directors will be voted in accordance with the directions given therein. Where
no instructions are indicated, proxies will be voted "FOR" the nominees for
directors set forth below and "FOR" the other listed proposal. The proxy confers
discretionary authority on the persons named therein to vote with respect to the
election of any person as a director where the nominee is unable to serve, or
for good cause will not serve, and matters incident to the conduct of the
Meeting.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on March 1, 1997
("Record Date"), are entitled to one vote for each share of Common Stock then
held. As of the Record Date, the Company had 4,642,552 shares of Common Stock
issued and outstanding.
The articles of incorporation of the Company ("Articles of Incorporation")
provide that in no event shall any record owner of any outstanding Common Stock
which is beneficially owned, directly or indirectly, by a person who
beneficially owns in excess of 10% of the then outstanding shares of Common
Stock (the "Limit") be entitled or permitted to any vote with respect to the
shares held in excess of the Limit. Beneficial ownership is determined pursuant
to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates or associates
(as such terms are defined in the Articles of Incorporation), shares which such
person or his or her affiliates or associates have the right to acquire upon the
exercise of conversion rights or options and shares as to which such person and
his or her affiliates or associates have or share investment or voting power.
Shares entitled to vote may take action on a matter at a meeting only if a
quorum exists. The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. Under the laws of the Commonwealth of Virginia, once a share is
represented for any purpose at a meeting, it is deemed present for quorum
purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record date is or shall be set for that adjourned meeting.
Under the Company's Bylaws, directors are elected by a plurality of votes cast
by the shares entitled to vote in the election at a meeting of stockholders at
which a quorum is present. Further, the ratification of independent auditors
requires a majority of the votes cast at the Meeting. Accordingly, neither
"Broker Non-Votes" (shares for which a broker indicates on the proxy that it
does not have discretionary authority as to such shares to vote on such matter)
nor abstentions will have any effect on either of the proposals described in
this Proxy Statement.
As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees proposed by the
Board, or to withhold authority to vote for one or more of the nominees being
proposed. As to the ratification of independent auditors, by checking the
appropriate box, a stockholder may: (i) vote "FOR" the item, (ii) vote "AGAINST"
the item or (iii) vote to "ABSTAIN" on such item.
Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended ("1934 Act"). The following table sets forth,
as of the Record Date, persons or groups who own more than 5% of the Common
Stock, and the ownership of all executive officers and directors of the Company
as a group. Other than as noted below, management knows of no person or group
who owns more than 5% of the outstanding shares of Common Stock at the Record
Date.
-2-
Percent of Shares of
Amount and Nature of Common Stock
Name of Beneficial Owner Beneficial Ownership Outstanding
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First Manhattan Co. 314,000(1) 6.76%
437 Madison Avenue
New York, New York 10022
First Federal Savings Bank of Lynchburg 314,348(2) 6.77%
Employee Stock Ownership Plan
925 Main Street
Lynchburg, VA 24505
All Directors and Executive Officers as a Group 376,688(3) 7.73%
(12 persons)
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(1) Based upon a Schedule 13G, dated February 13, 1997, received by the Company.
(2) Based upon a Schedule 13G, dated February 14, 1997, received by the Company.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which shares
the individuals effectively exercise sole voting and investment power,
unless otherwise indicated. Includes 190,064 shares of Common stock that
may be acquired under options that are exercisable within 60 days of the
Voting Record Date. Includes 38,406 shares of Common Stock which will
vest, within 60 days of the Voting Record Date, to certain officers and
directors of the Company under the First Federal Savings Bank of Lynchburg
Management Stock Bonus Plan ("Management Stock Bonus Plan"). The amount
provided excludes 314,348 shares of Common Stock over which Messrs.
Davidson, Belcher, Doyle, Hunt, Ferguson, and McCausland exercise shared
voting and dispositive power while serving as trustee ("ESOP Trustee") to
the First Federal Savings Bank of Lynchburg Employee Stock Ownership Plan
(the "ESOP") or as a member of the ESOP administrative committee ("ESOP
Committee"). Individuals serving as ESOP Trustee or as a member of the
ESOP Committee disclaim beneficial ownership with respect to such shares
held in a fiduciary capacity.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the 1934 Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership of the Common Stock, on Forms
3, 4, and 5, with the Securities and Exchange Commission and to provide copies
of those Forms 3, 4, and 5 to the Company. The Company is not aware of any
beneficial owner, as defined under Section 16(a), of more than ten percent of
the Common Stock.
Based upon a review of the copies of the forms furnished to the Company,
or written representations from certain reporting persons that no Forms 5 were
required, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers and directors, except as otherwise noted,
were complied with during the year ended December 31, 1996. Mr. McCausland
failed to file a Form 4 on a timely basis with regard to one reportable
transaction.
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INFORMATION WITH RESPECT TO NOMINEES FOR
DIRECTOR AND DIRECTORS CONTINUING IN OFFICE
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The Board of Directors consists of three classes, each of which contains
approximately one-third of the members of the Board. Directors hold office for
staggered terms of three years and until their successors are elected and
qualified. The Board of Directors currently consists of nine members.
Stockholders will elect three directors, constituting one class, at the Meeting.
Thomas O. Doyle, Edward A. Hunt, Jr., and Thomas P. Whitten have been
nominated by the Board of Directors to serve as directors with three-year terms
to expire in 2000. Messrs. Doyle, Hunt, and Whitten are all currently members of
the Board. It is intended that the persons named in the proxies solicited by the
Board will vote for the election of the named nominees. If any nominee is unable
to serve, the Common Stock represented by all valid proxies will be voted for
the election of such substitute as the Board of Directors may recommend or the
size of the Board may be reduced to eliminate the vacancy. At this time, the
Board knows of no reason why any nominee might be unavailable to serve.
The following table sets forth the nominees and the directors continuing
in office, their name, age, the year they first became a director of the Company
or First Federal Savings Bank of Lynchburg (the "Savings Bank"), the expiration
date of their current term as a director, and the number and percentage of
shares of the Common Stock beneficially owned. Each director of the Company is
also a member of the Board of Directors of the Savings Bank. The following table
also sets forth the number and percentage of shares of Common Stock beneficially
owned by any executive officer named in the summary compensation table.
Shares of
Year First Current Common Stock Percent
Elected or Term to Beneficially Owned of
Name Age(1) Appointed(2) Expire (3)(4) Class (5)
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BOARD NOMINEES FOR TERM TO EXPIRE IN 2000
Thomas O. Doyle 62 1987 1997 21,248 (6)(9) --%(10)
Edward A. Hunt, Jr. 62 1988 1997 8,060 (6)(9) --%(10)
Thomas P. Whitten 53 1978 1997 11,144 (6) --%(10)
DIRECTORS CONTINUING IN OFFICE
John W. Ferguson, Jr. 77 1961 1998 21,555 (7)(9) --%(10)
James E. McCausland 75 1967 1998 12,873 (6)(9) --%(10)
Charles R.W. Schoew 74 1955 1998 7,805 (6) --%(10)
James L. Davidson, Jr. 63 1965 1999 117,120 (8)(9) 2.5%
V. Howard Belcher 80 1965 1999 17,060 (6)(9) --%(10)
James K. Candler 61 1994 1999 12,156 (6) --%(10)
OTHER NAMED EXECUTIVE OFFICER
Ronald W. Neblett 49 N/A N/A 58,142 (11) 1.2%
(footnotes appear on next page)
-4-
(footnotes from previous page)
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(1) At December 31, 1996.
(2) Refers to the year the individual first became a director of the Company
or the Savings Bank. All directors of the Savings Bank during May 1994
became directors of the Company when it was incorporated in May 1994.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which shares
the individuals effectively exercise sole voting and investment power,
unless otherwise indicated.
(4) Beneficial ownership as of the Record Date.
(5) Individual percentages are calculated on the basis of the amount of
outstanding Common Stock, excluding Common Stock held by or for the
account of the Company or its subsidiaries, plus Common Stock deemed
outstanding pursuant to the rules under the 1934 Act. The amount of Common
Stock that an individual has a right to acquire (e.g., pursuant to the
exercise of options or through the vesting of restricted stock) within 60
days from the Record Date is included when calculating that individual's
percentage of Common Stock beneficially owned.
(6) Includes 5,043 shares of Common Stock that the individual has a right to
acquire pursuant to the exercise of options and 1,009 shares of Common
Stock that will vest under the Management Stock Bonus Plan within 60 days
from the Record Date.
(7) Includes 8,086 shares of Common Stock that the individual has a right to
acquire pursuant to the exercise of options and 2,017 shares of Common
Stock that will vest under the Management Stock Bonus Plan within 60 days
from the Record Date.
(8) Includes 63,037 shares of Common Stock that the individual has a right to
acquire pursuant to the exercise of options and 12,607 shares of Common
Stock that will vest under the Management Stock Bonus Plan within 60 days
from the Record Date.
(9) The Board of Directors has appointed Directors Ferguson, Hunt and Davidson
to serve on the ESOP Committee and Directors Doyle, Belcher and McCausland
have been appointed to serve collectively as the ESOP Trustee. The amount
provided excludes unallocated shares of Common Stock held under the ESOP
for which such individual serves as a member of the ESOP Committee or as
ESOP Trustee. Such individual disclaims beneficial ownership with respect
to such shares held in a fiduciary capacity. The ESOP purchased such
shares for the exclusive benefit of plan participants with funds borrowed
from the Company. These shares are held in a suspense account and will be
allocated among ESOP participants annually on the basis of compensation as
the ESOP debt is repaid. The ESOP Committee or the Board instructs the
ESOP Trustee regarding investment of ESOP plan assets. The ESOP Trustee
must vote all shares allocated to participant accounts under the ESOP as
directed by participants. Unallocated shares and shares for which no
timely voting direction is received will be voted by the ESOP Trustee as
directed by the ESOP Committee. As of the Record Date, 114,348 shares have
been allocated under the ESOP to active participant accounts.
(10) Less than 1.0%.
(11) Includes 31,518 shares of Common Stock that may be acquired under options
that are exercisable within 60 days of the Voting Record Date and 6,304
shares of Common Stock that will vest under the Management Stock Bonus
Plan within 60 days from the Record Date.
The principal occupation of each director and each nominee for director of
the Company for the last five years is set forth below.
Thomas O. Doyle has served as a director of the Savings Bank since 1987.
Mr. Doyle is a 50% owner of Doyle's Florist, Inc., a retail florist in
Lynchburg, Virginia. Mr. Doyle has also been a director of the Company since its
formation in 1994.
Edward A. Hunt, Jr. has served as a director of the Savings Bank since
1987. Mr. Hunt is a Senior Vice President with First Colony Life Insurance
Company, Lynchburg, Virginia. Mr. Hunt has also been a director of the Company
since its formation in 1994.
-5-
Thomas P. Whitten has served as a director of the Savings Bank since 1978.
Mr. Whitten is employed with Service Corporation International, a funeral
service company in Lynchburg, Virginia. Mr. Whitten has also been a director of
the Company since its formation in 1994.
John W. Ferguson, Jr. is Chairman of the Board and has served as a director
since 1961. Mr. Ferguson served as the President of the Savings Bank until 1975.
Mr. Ferguson has also been a director of the Company since its formation in
1994.
James E. McCausland has served as a director of the Savings Bank since
1967. Mr. McCausland is employed as an associate broker at Marks Realty Co.,
Inc., Lynchburg, Virginia, a position he has held since February 1992. Prior to
that time, Mr. McCausland was a 50% owner and principal broker of Snead, Payne
and McCausland, Inc., a real estate firm in Lynchburg, Virginia. Mr. McCausland
has also been a director of the Company since its formation in 1994.
Charles R. W. Schoew has served as a director of the Savings Bank since
1955. Mr. Schoew is a self-employed real estate broker in Lynchburg, Virginia.
Mr. Schoew has also been a director of the Company since its formation in 1994.
James L. Davidson, Jr. has served as a director of the Savings Bank since
1965 and was appointed President in 1975. Mr. Davidson's employment with the
Savings Bank commenced in 1961. Mr. Davidson has also been a director of the
Company since its formation in 1994.
V. Howard Belcher has served as a director of the Savings Bank since 1965.
Prior to his retirement in 1986, Mr. Belcher was Treasurer of the Virginia
Episcopal School, Lynchburg, Virginia. Mr. Belcher has also been a director of
the Company since its formation in 1994.
James K. Candler was elected to the Board in January 1994. Mr. Candler is
the owner of Candler Oil Company, Inc., an oil distributorship in Lynchburg,
Virginia. Mr. Candler has also been a director of the Company since its
formation in 1994.
Nominations for Directors
Nominations for the election of directors may be made by the Company's
Nominating Committee or by any stockholder entitled to vote for the election of
directors; however the nomination by such stockholder must comply with all the
requirements set forth in the Articles of Incorporation. A nominating
stockholder must provide advance written notice of such proposed nomination to
the appropriate party within the required time period, which must contain all
the information required by the Articles of Incorporation. In addition, the
stockholder making such nomination shall promptly provide any other information
reasonably requested by the Company.
A nomination made by a stockholder may be made only at a meeting of the
stockholders of the Company called for the election of directors at which such
stockholder is present in person or by proxy, and can only be made by a
stockholder who has theretofore complied with the notice provisions of the
Articles of Incorporation. The Chairman of the meeting may in his discretion
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedures, and if he should so determine, he
shall so declare to the meeting and the defective nomination shall be
disregarded.
-6-
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the Board and through activities of its committees. All committees
act for both the Company and the Savings Bank. During the year ended December
31, 1996, the Board of Directors held 12 regular meetings and one special
meeting. No director attended fewer than 75% of the total meetings of the Board
of Directors of the Savings Bank and committees during the time such director
served during the fiscal year ended December 31, 1996.
The Nominating Committee, which recommends candidates for the Board of
Directors of the Company and the Savings Bank, is comprised of Messrs. Davidson,
Belcher, and Candler. In its deliberations, the Nominating Committee, a standing
committee, considers the candidate's knowledge of the banking business and
involvement in community, business and civic affairs, and also considers whether
the candidate would allow the Board to continue its geographic diversity that
provides for adequate representation of each of its market areas. While the
Nominating Committee will consider nominees recommended by stockholders, it has
not actively solicited recommendations from the Company's stockholders for
nominees. During 1996, the Nominating Committee met once.
The Executive Committee of the Company and the Savings Bank is comprised
of Messrs. Ferguson, Candler, McCausland, Davidson, Doyle, and Hunt. The
Executive Committee recommends the annual budget and salaries. This standing
committee has authority to act for the Board between regular meetings and meets
as needed. The Executive Committee met once in 1996.
The Audit Committee of the Company is comprised of Messrs. Hunt, Belcher,
and McCausland. This standing committee annually selects the independent
auditors and meets with the accountants to discuss and review the annual audit.
The Audit Committee is further responsible for internal controls for financial
reporting. The Audit Committee met three times during 1996.
The Loan Committee of the Savings Bank is comprised of Messrs. Ferguson,
Davidson, Whitten, Belcher, Candler and Schoew. The Loan Committee meets as
necessary and at least quarterly. It recommends loan underwriting policies,
reviews and approves the Savings Bank's Loan Classification Report and the
establishment of credit loss reserves and approves all loans in excess of
$500,000. The Loan Committee met six times in 1996.
See " -- Compensation Committee Interlocks and Insider Participation" and
" -- Report of the Compensation Committee on Executive Compensation" below for a
description of the Compensation Committee.
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
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Directors' Compensation
Chairman Ferguson was paid an annual retainer of $15,000 in 1996. All other
non-employee directors receive an annual retainer of $3,000. All directors are
also paid $650 per meeting attended. In addition, non-salaried committee members
were paid $200 per committee meeting attended in 1996.
Directors received awards of stock options and restricted stock under the
1994 Stock Option Plan and the Management Stock Plan, respectively. Awards of
stock options and restricted stock were granted as of the date of stockholder
approval of these stock benefit plans (April 27, 1995).
During the year ended December 31, 1995, Mr. Ferguson, the Chairman of the
Board, received options to purchase 25,214 shares of Common Stock under the 1994
Stock Option Plan. The remaining
-7-
non-employee directors received options to purchase 12,608 shares of Common
Stock. Generally, the options received by non-employee directors vest 20%
annually over a five year period that began on April 27, 1995 and have a term of
10 years.
During the year ended December 31, 1995, Mr. Ferguson, the Chairman of the
Board, received 10,086 shares of restricted stock under the Management Stock
Bonus Plan. The remaining non-employee directors received 5,042 shares of
restricted stock. Generally, the shares of restricted stock received by
non-employee directors are to vest 20% annually over a five year period that
began on April 27, 1995.
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the Chief Executive Officer and
the Chief Financial Officer of the Company for the years indicated. Except as
set forth below, no other executive officer of the Company had a salary and
bonus during the year ended December 31, 1996 that exceeded $100,000 for
services rendered in all capacities to the Company.
Long Term Compensation
Annual Compensation Awards
----------------------------------- ------------------------
Options/
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary Bonus Compensation(1) Awards($)(2) SARs(#) Compensation
- - ------------------ ---- ------ ----- --------------- ------------ ------- ------------
James L. Davidson, Jr. 1996 $165,000 $16,500 $8,450 $ 0 0 $28,932(5)
President and Chief 1995 $150,000 $15,100 $8,450 $787,950(3) 157,592(4) $23,678(5)
Executive Officer 1994 $138,000 $ 6,900 $9,750 $ 0 0 $26,238(5)
Ronald W. Neblett (6) 1996 $97,000 $ 9,700 $ 0 $ 0 0 $25,143(7)
Senior Vice President, 1995 $92,000 $ 9,275 $ 0 $393,975(3) 78,796(4) $16,060(7)
Treasurer, and Chief
Financial Officer
- - ------------------------
(1) Includes fees for service on the board of directors of the Savings Bank.
Does not include the value of certain other benefits, which do not exceed
10% of the total salary and bonus of the individual. Personal use of the
Savings Bank's auto by Mr. Davidson is reimbursed monthly to the Savings
Bank.
(2) As of the last day in 1996, Mr. Davidson had 50,429 shares of restricted
stock in the aggregate which have a total value of $1,033,795 and Mr.
Neblett has 25,214 shares of restricted stock in the aggregate which have
a total value of $516,887 (calculated by multiplying the aggregate number
of restricted stock by the Common Stock's closing market price as of the
last day of 1996). Dividends are paid on the restricted stock awarded.
(3) The value of restricted stock granted is calculated by multiplying (i) the
number of restricted stock granted by (ii) the Common Stock's closing
market price as of the date of grant.
(4) The number of options shown reflects the 100% stock dividend paid on June
5, 1996.
(5) Consists of allocations of 1,420, 1,722, and 2,726 shares of Common Stock
under the ESOP (based on the Common Stock's value on the date of
allocation) for the years ended December 31, 1996, 1995 and 1994,
respectively.
(6) Mr. Neblett's total annual salary and bonus for 1994 did not exceed
$100,000.
(7) Consists of allocations of 1,234 and 1,168 shares of Common Stock under
the ESOP for years ended December 31, 1996 and 1995 (based on the Common
Stock's value on the date of allocation), respectively.
Compensation Committee Interlocks and Insider Participation
The Executive Committee, which acts as the Compensation Committee,
consists of six members of the Board of Directors. The Compensation Committee
meets annually and reviews individual job performance, industry salary surveys
and the recommendations of management concerning compensation prior to the time
such matters are considered by the Board of Directors. While Mr. Davidson is a
member of the Executive Committee, he does not serve as a member when the
Executive Committee meets in its capacity as the Compensation Committee.
-8-
Report of the Compensation Committee on Executive Compensation
The executive officers of the Company consist of James L. Davidson, Jr.
(President and Chief Executive Officer), Ronald W. Neblett (Senior Vice
President and Treasurer), Margaret C. Burnette (Senior Vice President and
Secretary), and E. L. Rash, Jr. (Executive Vice President).
The Compensation Committee meets annually to review compensation paid to
executive officers and to determine the compensation levels for all employees.
The Compensation Committee reviews various published surveys of compensation
paid to employees performing similar duties for depository institutions and
their holding companies, with a particular focus on the level of compensation
paid by comparable institutions in and around the Company's market area,
including institutions with total assets of between $500 million and one billion
dollars. Although the Compensation Committee does not specifically set
compensation levels for executive officers based on whether particular financial
goals have been achieved by the Company, the Compensation Committee does
consider the overall profitability of the Company when making these decisions.
With respect to each particular employee, his or her particular contributions to
the Company over the past year are also evaluated.
During the year ended December 31, 1996, James L. Davidson, Jr., President
and CEO received an increase in salary from $165,000 to $180,000, effective
January 1, 1997. The Compensation Committee will consider the annual
compensation paid to chief executive officers of financial institutions in the
Commonwealth of Virginia and surrounding states with assets of between $500
million and one billion dollars and the individual job performance of such
individual in consideration of its specific salary increase decision with
respect to compensation to be paid to the Company's President in the future.
Compensation Committee:
John W. Ferguson, Jr.
James K. Candler
James E. McCausland
Thomas O. Doyle
Edward A. Hunt, Jr.
Performance Graph
Set forth on the next page is a performance graph comparing the cumulative
total shareholder return on the Common Stock with (a) the total return index for
domestic companies listed on The Nasdaq Stock Market and (b) the total return
index for banks listed on The Nasdaq Stock Market. These total return indices of
The Nasdaq Stock Market are computed by the Center for Research in Securities
Prices ("CRSP") at the University of Chicago. All three investment comparisons
assume the investment of $100 as of the close of trading on October 12, 1994
(the date of initial issuance of the Common Stock) and the reinvestment of
dividends when paid. In the performance graph below, the periods compared were
October 12, 1994 and the Company's year ends of December 31, 1994, 1995, and
1996.
There can be no assurance that the Company's future stock performance will
be the same or similar to the historical stock performance shown in the
performance graph below. The Company neither makes nor endorses any predictions
as to the Common Stock's performance.
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[GRAPHIC OMITTED]
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10/12/94 12/31/94 12/31/95 12/31/96
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CRSP Nasdaq U.S. Index $100.00 $98.45 $139.23 $171.27
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CRSP Nasdaq Bank Index $100.00 $93.88 $139.82 $184.82
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FFVA Financial $100.00 $91.46 $138.21 $210.99
Corporation
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Other Benefits
Pension Plan. The Savings Bank sponsors a tax-qualified defined benefit
pension plan (the "Pension Plan"). All full-time employees of the Savings Bank
are eligible to participate after one year of service and attainment of age 21.
A qualifying employee becomes fully vested in the Pension Plan upon completion
of five years of service. The Pension Plan is intended to comply with the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The Pension Plan provides for monthly payments to each participating
employee at normal retirement age (age 65). The annual benefit payable as a
joint and survivor annuity under the Pension Plan is equal to 1.75% of average
compensation at normal retirement date plus sixty-five hundredths of 1% of such
average compensation which is in excess of the greater of $10,000 or one-half of
the covered compensation for a person attaining Social Security normal
retirement age in the current year. The sum of both is multiplied by years of
participation at the participant's normal retirement date (not to exceed 30
years). For purposes of benefit calculations, "Average Compensation" is defined
as the average of
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total compensation for the five highest years. A participant may elect an early
retirement at age 55 with five years of service and may elect to receive a
reduced monthly benefit. The Savings Bank's pension expense for 1994, 1995, and
1996 amounted to approximately $337,000, $328,000, and $351,000, respectively.
The following table sets forth the estimated annual benefits payable under the
Pension Plan described above, upon retirement at age 65 as of December 31, 1996,
expressed in the form of a joint and survivor annuity, for the average annual
earnings and years of service classifications specified.
Years of credited service
5 10 15 20 25 30
--------------------------------------------------------------
$50,000 5,605 11,210 16,815 22,420 28,025 33,630
Average $75,000 8,605 17,210 25,815 34,420 43,025 51,630
Compensation $100,000 11,605 23,210 34,815 46,420 58,025 69,630
$125,000 14,605 29,210 43,815 58,420 73,025 87,630
$150,000 17,605 35,210 52,815 70,420 88,025 105,630
Generally, the compensation covered under the Pension Plan is the
remuneration for services rendered to the Savings Bank as reported or reportable
on IRS Form W-2, including overtime and bonuses but excluding director's fees,
amounts allocated or benefits paid under the Pension Plan or any other benefit
plan of the Savings Bank and reimbursed or advanced expenses or contributions.
Further, the compensation covered by the Pension Plan is substantially that
described under the "salary" and "bonus" columns of the Summary Compensation
Table. However, effective January 1, 1994, a participant's compensation in
excess of $150,000 shall not be considered for purposes of determining benefits
under the Pension Plan. In addition, the maximum pension payable under the
Internal Revenue Code for the year ended December 31, 1996 is $120,000.
At December 31, 1996, Mr. Davidson had the maximum amount of 30 years of
credited service under the Pension Plan, and Mr. Neblett had 24 years of
credited service as of the same date. The amounts payable under the Pension Plan
are in addition to any benefits payable under Social Security.
Employee Stock Ownership Plan. The Savings Bank maintains an employee
stock ownership plan ("ESOP"), for the exclusive benefit of participating
employees. Participating employees are employees who have completed one year of
service with the Company or its subsidiary and attained age 21. The Board of
Directors has appointed Directors Ferguson, Hunt and Davidson to a committee
(the "ESOP Committee") to administer the ESOP. Directors Doyle, Belcher and
McCausland collectively serve as the ESOP Trustee (the "ESOP Trustee"). The
Board of Directors or the ESOP Committee may instruct the ESOP Trustee regarding
investments of funds contributed to the ESOP. The ESOP Trustee must vote all
allocated shares held in the ESOP in accordance with the instructions of the
participating employees. Unallocated shares and allocated shares for which no
timely direction is received will be voted by the ESOP Trustee as directed by
the Board of Directors or the ESOP Committee, subject to the ESOP Trustee's
fiduciary duties.
1994 Stock Option Plan. The Board of Directors adopted the 1994 Stock
Option Plan which was subsequently approved by stockholders at the annual
meeting of stockholders held on April 27, 1995. The 1994 Stock Option Plan,
which became effective upon stockholder approval, provides for a term of ten
years (unless earlier terminated by the Board of Directors), after which date no
options may be granted.
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AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- - -------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End(1)
Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- - ------------------------------------------------------------------------- --------------------------
James L. Davidson, Jr. 0 $0 31,518 / 126,074 $252,144 / $1,008,592
Ronald W. Neblett 0 $0 15,760 / 63,036 $126,080 / $ 504,288
- - -----------------
(1) Based on an exercise price of $12.50 and a closing market price of $20.50
on December 31, 1996.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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The Savings Bank, like many financial institutions, has followed a policy
of granting various types of loans to officers, directors, and employees. The
loans have been made in the ordinary course of business and on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with the Savings Bank's other customers, and do
not involve more than the normal risk of collectibility, nor present other
unfavorable features. All loans by the Savings Bank to its directors and
executive officers are subject to OTS regulations restricting loans and other
transactions with affiliated persons of the Savings Bank. All such loans must be
made on terms and conditions comparable to those for similar transactions with
non-affiliates. Furthermore, loans to an affiliate must be approved in advance
by a disinterested majority of the Board of Directors or be within other
guidelines established as a result of OTS regulations.
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RATIFICATION OF APPOINTMENT OF AUDITORS
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Cherry, Bekaert & Holland, L.L.P. served as the Company's auditors for
1996. The Board of Directors has approved the selection of Cherry, Bekaert &
Holland, L.L.P. as its auditors for 1997, subject to ratification by the
Company's stockholders. A representative of Cherry, Bekaert & Holland, L.L.P. is
expected to be present at the Meeting to respond to stockholders' questions and
will have the opportunity to make a statement if he or she so desires.
Ratification of the appointment of the auditors requires the affirmative
vote of a majority of the votes cast by the stockholders of the Company at the
Meeting. The Board of Directors recommends that stockholders vote "FOR" the
ratification of the appointment of Cherry, Bekaert & Holland, L.L.P. as the
Company's auditors for 1997.
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OTHER MATTERS
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The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons voting such proxies.
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MISCELLANEOUS
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The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
The Company's Annual Report to Stockholders for the year ended December
31, 1996, including financial statements, will be mailed on or about March 25,
1997 to all stockholders of record as of the Record Date. Any stockholder who
has not received a copy of the Company's Annual Report may obtain a copy by
writing to the Secretary of the Company. The Company's Annual Report is not to
be treated as a part of the proxy solicitation material or as having been
incorporated herein by reference.
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STOCKHOLDER PROPOSALS
- - --------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive offices at
925 Main Street, Lynchburg, Virginia 24505, no later than November 26, 1997. Any
such proposals shall be subject to the requirements of the proxy rules adopted
under the 1934 Act.
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FORM 10-K
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A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1996 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE
UPON WRITTEN REQUEST TO THE SECRETARY, FFVA FINANCIAL CORPORATION, 925 MAIN
STREET, LYNCHBURG, VIRGINIA 24505.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Margaret C. Burnette
Margaret C. Burnette
Secretary
Lynchburg, Virginia
March 25, 1997
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FFVA FINANCIAL CORPORATION
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 22, 1997
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The undersigned hereby appoints the Board of Directors of FFVA Financial
Corporation ("Corporation"), or its designee, with full powers of substitution,
to act as attorneys and proxies for the undersigned, to vote all shares of
Common Stock of the Corporation which the undersigned is entitled to vote at the
1995 Annual Meeting of Stockholders ("Meeting"), to be held at the Holiday
Inn-Select, 601 Main Street, Lynchburg, Virginia, on April 22, 1997, at 10:00
a.m. and at any and all adjournments thereof, in the following manner:
FOR WITHHELD
1. The election as director of all nominees
listed below, (except as marked to the contrary): |_| |_|
Thomas O. Doyle - 3 year term
Edward A. Hunt, Jr. - 3 year term
Thomas P. Whitten - 3 year term
INSTRUCTIONS: To withhold your vote for any individual nominee, insert the
nominee's name on the line provided below.
FOR AGAINST ABSTAIN
2. The ratification of Cherry, Bekaert & Holland,
L.L.P. as independent auditors of FFVA
Financial Corporation for the year ending
December 31, 1997. |_| |_| |_|
In their discretion, such attorneys and proxies are authorized to vote
upon such other business as may properly come before the Meeting or any
adjournments thereof.
The Board of Directors recommends a vote "FOR" all of the above listed
propositions.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or at
any adjournments thereof, and after notification to the Secretary of the
Corporation at the Meeting of the stockholder's decision to terminate this
proxy, the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. The undersigned may also revoke this proxy by
filing a subsequently dated proxy or by notifying the Secretary of the
Corporation of his or her decision to terminate this proxy.
The undersigned acknowledges receipt from the Corporation prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders and a
proxy statement dated March 25, 1997.
Please check here if you
Dated: , 1997 |_| plan to attend the Meeting.
----------------
- - ------------------------------------ --------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- - ------------------------------------ --------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
- - --------------------------------------------------------------------------------
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FFVA Financial Corporation
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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