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SCHEDULE 14A INFORMATION
(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 Rule 14a-11(c) or Rule 14a-12
First Virginia Banks, Inc.
- ------------------------------------------------------------------------------
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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
2
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(5) Total fee paid:
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[ ] 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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FIRST VIRGINIA BANKS, INC.
6400 ARLINGTON BOULEVARD
FALLS CHURCH, VIRGINIA 22042-2336
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 2001
The Annual Meeting of Stockholders of First Virginia Banks, Inc. will be
held at the Ritz-Carlton Hotel, Ballroom Level, 1700 Tysons Boulevard, McLean,
Virginia, at 10:00 a.m. on Friday, April 27, 2001, for the following purposes:
(1) To elect four Class B directors for a term of three years and one
Class A director for a term of two years.
(2) To ratify the appointment of KPMG LLP as independent auditors for
the year ending December 31, 2001.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on February 16, 2001, are
entitled to notice of and to vote at the meeting or any adjournments thereof.
STOCKHOLDERS ARE URGED TO VOTE. STOCKHOLDERS MAY COMPLETE, DATE, AND SIGN THE
ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID RETURN
ENVELOPE. ALTERNATIVELY, STOCKHOLDERS MAY VOTE BY CALLING THE TOLL-FREE
TELEPHONE NUMBER SHOWN ON THEIR PROXY OR BY USING THE INTERNET WEB SITE ADDRESS
ALSO SHOWN ON THEIR PROXY. STOCKHOLDERS ARE URGED TO USE ONE OF THESE METHODS TO
VOTE REGARDLESS OF WHETHER THEY EXPECT TO ATTEND THE MEETING.
By Order of the Board of Directors,
Barbara J. Chapman
Vice President and Secretary
Falls Church, Virginia
March 9, 2001
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FIRST VIRGINIA BANKS, INC.
6400 ARLINGTON BOULEVARD
FALLS CHURCH, VIRGINIA 22042-2336
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of First Virginia Banks, Inc. (hereinafter referred to as
"First Virginia") of proxies to be voted at the Annual Meeting of Stockholders
of First Virginia to be held at 10:00 a.m. on Friday, April 27, 2001, or any
adjournment thereof at the Ritz-Carlton Hotel, Ballroom Level, 1700 Tysons
Boulevard, McLean, Virginia. The approximate mailing date of this Proxy
Statement and the accompanying proxy is March 9, 2001.
Stockholders may choose any one of three methods to submit a proxy--by
telephone, the Internet, or paper proxy. A proxy was mailed along with this
Proxy Statement, and it contains complete instructions for submitting proxies.
All properly completed proxies received by First Virginia prior to the meeting
will be voted at the meeting in accordance with any direction noted thereon.
Paper proxies on which no instructions are given will be voted FOR the nominees
for election as directors and FOR Proposal 2. Any stockholder who has submitted
a proxy may revoke it at any time before it is voted by attending the Annual
Meeting and voting in person, by giving written notice of revocation of the
proxy to the Secretary, by submitting to First Virginia a signed proxy bearing a
later date, or by submitting a later proxy by telephone or the Internet.
Holders of Common and Preferred Stock of First Virginia are entitled to
vote at the meeting. Each share of Common and Preferred Stock is entitled to one
vote on all matters which may come before the meeting. As of February 16, 2001,
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting, there were 46,149,895 shares of Common Stock and 44,856
shares of Preferred Stock of First Virginia issued and outstanding.
As of February 13, 2001, the following persons beneficially owned more
than five percent of a class of First Virginia stock:
Name and Address of Amount of Beneficial
Title of Class Beneficial Owner Ownership Percentage of Class
- -------------- ------------------- -------------------- -------------------
Common American Century 2,622,650 5.6%
Investment
Management, Inc.
("ACIM")
4500 Main Street,
Kansas City, MO 64141
According to a Schedule 13G/A filed with the Securities and Exchange
Commission, ACIM manages the investments of a number of registered investment
companies and some separate institutional investor accounts. The First Virginia
Common Stock it holds is owned by and held for such investment companies and
separate institutional investor accounts. ACIM has sole voting and dispositive
power with respect to the First Virginia stock it holds.
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I. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes (A, B and C). The
term of office for Class B directors will expire at this Annual Meeting. Four
persons, three of whom are presently on the Board, have been nominated to serve
as Class B directors, and, if elected, the four nominees will serve for a term
of three years. In addition, a new individual has been nominated to serve as a
Class A director and, if elected, will serve for a term of two years. One Class
B director, Mr. Robert M. Rosenthal, who has served as a director since 1998, is
not eligible to stand for re-election. One other Class B director, Mr. Gilbert
R. Giordano, who has served as a director since 1989, passed away on January 17,
2001.
With respect to the election of directors, the five nominees receiving
the greatest number of votes cast for the election of directors will be elected,
if a quorum is present at the meeting. The presence in person or by proxy of a
majority of the outstanding shares of Common and Preferred Stock entitled to
vote on the matter will constitute a quorum. Shares for which the holder has
elected to abstain or withhold the proxy's authority to vote (including broker
nonvotes) will count toward a quorum.
Proxies received from stockholders will be voted in favor of the five
nominees unless stockholders specify otherwise on their proxies. Although the
Board of Directors does not expect that any of the persons named will be unable
to serve as a director, should any of them be unable to accept nomination or
election, it is intended that shares represented by the accompanying proxy will
be voted by the proxy holders for such other person or persons as may be
designated by the present Board of Directors. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE ELECTION OF THE NOMINEES.
Certain information concerning the nominees for election at this meeting
and the Class A and Class C directors who will continue in office after the
meeting is set forth below and on the following pages, as furnished by them.
NOMINEES FOR CLASS B DIRECTORS
(To serve until the Annual Meeting in 2004)
Common Stock
Beneficially
Owned December
31, 2000, and
Name, Age and Year Principal Occupation, Business Experience in Last Percentage
Became a Director Five Years, Other Directorships of Class(1)
- ------------------ ----------------------------------------------------- -------------
EDWARD L. Of Counsel, Breeden, Salb, Beasley & DuVall, P.L.C., 99,390(2)
BREEDEN, III a law firm in Norfolk, Virginia, since 1968.
Age 65 Director, First Virginia Bank-Hampton Roads,
1982 Norfolk. Director, First Virginia Life Insurance
Company, Falls Church, 1982-2000. Chairman of the
Board and President, The Hunter Foundation, which
operates a Victorian museum and a home for elderly
men in Norfolk, Virginia (1970 to present), and The
Breeden-Adams Foundation, a private foundation which
provides financial support for cancer research (1988
to present). President, The Tanners Creek Company
and B&H Associates, both of which are real estate
investment companies in the Tidewater area of
Virginia (1990 to present).
- ------------------------
(1) No director or executive officer owned as much as 1.0% of First Virginia
Common Stock.
(2) Includes 11,250 shares held indirectly by a corporation, of which Mr.
Breeden is President, 57,262 shares held by two trusts, of which he is a
trustee, and 23,887 shares held by two foundations, of which Mr. Breeden is
Chairman of the Board and President.
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ERIC C. KENDRICK President, Mereck Associates, Inc., a real estate 83,661(3)
Age 54 management and development firm in Arlington,
1986 Virginia, since 1989. Director and President,
Murteck Construction Company, Inc., Upton
Corporation, and Old Dominion Warehouse Corporation,
Arlington.
JOSEPH W. Senior Partner, Richmond and Fishburne, L.L.P., a 294
RICHMOND, JR. law firm located in Charlottesville, Virginia, since
Age 56 1971. Director, Virginia Law Foundation. Director,
New Nominee Westminster-Canterbury of the Blue Ridge Foundation,
Martha Jefferson Hospital Foundation, and Jefferson
Area Board for Aging. Director, First Virginia
Bank-Blue Ridge, Staunton, Virginia.
ROBERT H. ZALOKAR Retired Chairman of the Board and Chief Executive 189,458
Age 73 Officer of First Virginia, 1984-1994. Director,
1959 First Virginia Bank, First Virginia Life Insurance
Company, 1980-2000, and First Virginia Mortgage
Company, 1973-2000, Falls Church, Virginia.
NOMINEE FOR CLASS A DIRECTOR
(To serve until the Annual Meeting in 2003)
Common Stock
Beneficially owned
December 31, 2000,
Name, Age and Year Principal Occupation, Business Experience in Last and Percentage
Became a Director Five Years, Other Directorships of Class
- --------------------- ----------------------------------------------------- ------------------
JENNIFER S. BANNER CPA, Pershing Yoakley & Associates, P.C., a public
Age 41 accounting and consulting firm headquartered in 0(4)
New Nominee Knoxville, Tennessee, since 1987. Secretary, PY
Medical Systems, Inc., a physician billing and
consulting company, since 1992. Director and
Secretary-Treasurer, Tennessee Aquatics, Inc., a
nonprofit amateur athletic organization, since 1995.
Director, First Vantage Bank-Tennessee, Knoxville.
CLASS C DIRECTORS
(Serving until the Annual Meeting in 2002)
Common Stock
Beneficially Owned
December 31, 2000,
Name, Age and Year Principal Occupation, Business Experience in Last and Percentage
Became a Director Five Years, Other Directorships of Class
- ------------------ ------------------------------------------------------- -------------------
PAUL H. GEITHNER, JR. Retired President and Chief Administrative Officer, 46,059(5)
Age 70 First Virginia, 1985-1995. Director, First Virginia
1984 Life Insurance Company, 1988-2000. Director,
Ellicott Machine Corporation, Baltimore, Maryland.
Trustee, Bridgewater College, Bridgewater, Virginia.
Trustee and Secretary-Treasurer, Fairfax Symphony
Orchestra Foundation, and Director, Fairfax Symphony.
Trustee and Secretary-Treasurer, Dorothy Farnham
Feuer Foundation.
- ------------------------
(3) Includes 63,505 shares held in a revocable trust, 17,563 shares held by his
spouse, and 2,593 shares held by a corporation of which Mr. Kendrick is a
director and President.
(4) Ms. Banner purchased 300 shares of First Virginia Common Stock on January
2, 2001.
(5) Includes 37,691 shares held in a revocable trust and 7,097 shares held
indirectly through his spouse's trust.
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L. H. GINN, III Partner, Ginn & Ginn, a real estate management 22,003(6)
Age 67 partnership in Richmond, Virginia, since 1987;
1978 President, Lighting Affiliates, Inc., Richmond,
1975-2000; retired U.S. Army Reserve Major General.
Chairman of the Board, First Virginia Bank-Colonial,
Richmond. Vice Chairman, Westminster-Canterbury
Foundation, a foundation associated with a
retirement facility in Richmond; Trustee, Episcopal
Diocesan Homes, Richmond. Chairman of the Board,
St. Margaret's School Foundation, Tappahanock,
Virginia. Trustee, Church Schools in the Diocese of
Virginia, Episcopal Diocese of Virginia, Richmond;
Member, Board of Governors, Roslyn Management
Corporation, an Episcopal Conference Center in
Richmond.
EDWARD M. HOLLAND Attorney-at-Law in Northern Virginia since 1966; 24,500(7)
Age 61 former Senator, Virginia General Assembly,
1974 1972-1996. Director, First Virginia Bank, Falls
Church. Trustee, Chesapeake Bay Foundation.
Trustee, Vice President and Manager, Tidewater
Research Foundation, a private charitable foundation
supporting marine research and aquaculture,
Arlington, Virginia. Member of Council, Virginia
Institute of Marine Science, Gloucester Point,
Virginia.
LYNDA S. Director (since 1987), President (since 1995) and 11,550(8)
VICKERS-SMITH Treasurer (1995-2000), Snell Construction Corporation,
Age 53 a privately held company headquartered in Arlington,
1999 Virginia, which owns and operates commercial and
residential properties located in the Northern
Virginia area. Director (since 1997), Virginia
Management, Inc., a real estate management company
located in Arlington. Trustee (since 1996),
Flint Hill School, an independent school for grades
JK through 12 located in Oakton, Virginia.
Corporator, Northeastern University, Boston, since
1998.
- ------------------------
(6) Includes 441 shares held indirectly through his spouse's Individual
Retirement Account and 2,382 shares held by a trust of which Mr. Ginn is
trustee.
(7) Includes 9,500 shares held in two trusts in which he is the beneficiary and
5,000 shares held in a trust in which he is a co-trustee.
(8) Includes 11,250 shares held indirectly by a corporation in which Ms.
Vickers-Smith is an officer and director (shared voting and investment
power).
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CLASS A DIRECTORS
(Serving until the Annual Meeting in 2003)
Common Stock
Beneficially Owned
December 31, 2000,
Name, Age and Year Principal Occupation, Business Experience in Last and Percentage
Became a Director Five Years, Other Directorships of Class
- ------------------ ------------------------------------------------------ ------------------
BARRY J. FITZPATRICK Chairman of the Board, President and Chief Executive 155,358(9)
Age 60 Officer of First Virginia since 1995; Executive Vice
1995 President, 1992-1995. Chairman of the Board, First
Virginia Bank in Falls Church, and a director and
principal officer of numerous First Virginia
affiliated nonbanking companies since 1995.
Trustee, Marymount University, Arlington, Virginia.
Trustee, Virginia Foundation for Independent
Colleges, Richmond, Virginia. Member, Executive
Advisory Board, Virginia Coalfield Economic
Development Authority.
LAWRENCE T. JENNINGS Director (since 1983), President (1983 to 2000), 2,300(10)
Age 58 Chairman of the Board (since 2001), and Chief
2000 Executive Officer (since 1983) of L. F. Jennings,
Inc., a regional commercial building contractor
headquartered in Falls Church, Virginia.
W. LEE PHILLIPS, JR. Professional engineer since 1959; former Chairman of 12,181(11)
Age 65 the Board, Walter L. Phillips, Inc., engineers,
1985 planners and surveyors, Falls Church, Virginia.
Partner, Talbot Investment Group. Director, First
Virginia Bank, Falls Church.
ALBERT F. ZETTLEMOYER Retired President, Government Systems Group of 8,000
Age 66 UNISYS Corporation in McLean, Virginia; retired
1978 Executive Vice President, UNISYS Corporation.
As of December 31, 2000, directors and executive officers as a group
beneficially owned 1,319,422 shares of Common Stock, representing approximately
2.8% of those shares outstanding (including shares covered by options
exercisable as of December 31, 2000 and sixty days thereafter), and 100 shares
of Preferred Stock, representing less than one percent of those shares
outstanding. Messrs. Breeden and Holland are members of or are associated with
law firms which have been in the last two years, and are proposed in the future
to be, retained by subsidiaries of First Virginia. Directors Breeden,
Fitzpatrick, Geithner, Ginn, Holland, Jennings, Phillips, Vickers-Smith and
Zalokar, as well as Jennifer S. Banner and Joseph W. Richmond, Jr., have been
directors of various subsidiaries of First Virginia during the past five years.
Ages of the directors are stated as of December 31, 2000. The total shares
outstanding for the directors and executive officers as a group includes the
shares held by one director who is not eligible for reelection this year and two
senior advisory directors: Robert M. Rosenthal, Chairman and Chief Executive
Officer, Rosenthal Automotive Organization, Elsie G. Gruver, a community and
civic leader in Arlington, and Josiah P. Rowe, III, President and Publisher, The
Free Lance-Star Publishing Co. of Fredericksburg, Va. As of December 31, 2000,
Ms. Gruver owned 9,092 shares (which includes 1,350 shares held in her spouse's
IRA) of First Virginia Common Stock, Mr. Rosenthal owned 30,816 shares of First
Virginia Common Stock, and Mr. Rowe owned 2,250 shares of First Virginia Common
Stock and 100 shares of First Virginia Preferred Stock.
- ------------------------
(9) Includes options to purchase 57,714 shares of Common Stock which are
exercisable as of December 31, 2000, and within sixty days thereafter.
(10) Includes 2,000 shares held by a trust of which Mr. Jennings is the sole
trustee.
(11) Includes 4,500 shares held by a trust of which Mr. Phillips is a trustee.
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BENEFICIAL OWNERSHIP OF NAMED EXECUTIVE OFFICERS
The following table sets forth the shares of First Virginia Common Stock
beneficially owned by the named executive officers as of December 31, 2000.
Number of Shares of Common Stock
Name of Officer of First Virginia Beneficially Owned*
-------------------------------------------------------------------
Barry J. Fitzpatrick 155,358
Shirley C. Beavers, Jr. 79,073
Richard F. Bowman 51,448
Raymond E. Brann, Jr. 71,688
Thomas P. Jennings 32,736
* The amounts shown represent the total shares owned beneficially by such
individuals as of December 31, 2000 together with shares which are issuable upon
the exercise of all stock options that are exercisable. Specifically, the
following individuals have stock options that are exercisable as of December 31,
2000 (and sixty days thereafter), which give them the right to acquire the
shares indicated after their name upon the exercise of those options: Mr.
Fitzpatrick, 57,714; Mr. Beavers, 53,413; Mr. Bowman, 24,500; Mr. Brann, 35,250;
and Mr. Jennings, 10,700. None of the named executive officers owned as much as
1.0% of First Virginia Common Stock.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
First Virginia's Board of Directors has a standing Audit Committee,
Director Nominating Committee, Management Compensation and Benefits Committee,
Public Policy Committee, and Executive Committee.
The Audit Committee, comprised of Directors Breeden, Giordano, Gruver,
Kendrick, and Phillips, held four meetings during 2000. Director Gruver was not
eligible for reappointment to the Committee on April 28, 2000, and Mr. Giordano
was not reappointed to the Committee on the same date. The members of the Audit
Committee are independent as defined by the rules of the New York Stock
Exchange. A copy of the Audit Committee Charter, which sets forth the functions
and responsibilities of the Committee, is included in this Proxy Statement as
Exhibit A. The Report of the Audit Committee appears in this Proxy Statement on
page 18.
The Director Nominating Committee, comprised of Directors Zalokar,
Fitzpatrick, Ginn, Giordano, Jennings, and Vickers-Smith, held one meeting in
2000. The functions of the Committee include annually recommending to the Board
the names of persons to be considered for nomination and election by First
Virginia's stockholders and, as necessary, recommending to the Board the names
of persons to be appointed to the Board between annual meetings.
The Management Compensation and Benefits Committee, comprised of
Directors Zettlemoyer, Holland, Kendrick, Phillips, and Rosenthal, held one
meeting in 2000. The Committee has the authority to establish the level of
compensation (including bonuses) and benefits of management of First Virginia.
In addition, the Committee has authority to award long-term incentive
compensation, e.g., stock options, to First Virginia's management based on such
factors as individual and corporate performance.
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The Public Policy Committee, comprised of Directors Vickers-Smith,
Breeden, Fitzpatrick, Geithner, Jennings, and Zalokar, met two times during
2000. This Committee oversees First Virginia's contributions and matching gifts
programs. The Committee also monitors the affirmative action and equal
employment programs.
The Executive Committee, comprised of Directors Zalokar, Breeden,
Fitzpatrick, Geithner, Ginn, Holland, and Zettlemoyer, held five meetings in
2000. The Committee exercises all of the powers of the Board of Directors when
the Board is not in session, except for those powers reserved for the Board
under state law and by First Virginia's Articles of Incorporation and Bylaws.
During 2000, there were six meetings of the Board of Directors. All
incumbent directors attended more than 75% of the aggregate total number of
meetings of the Board and committees of the Board on which they served, except
Mr. Rosenthal.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires First
Virginia's directors and executive officers to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Executive officers and directors are required by SEC
regulation to furnish First Virginia with copies of all Section 16(a) forms they
file.
Based on a review of the forms that were filed and written
representations from the directors and executive officers, First Virginia
believes that during the year 2000, all filing requirements applicable to its
directors and officers were met on time, with the exception of two transactions
by director Holland and one transaction by director Giordano. In the case of Mr.
Holland, two 1999 transactions involving the sale of stock were reported late to
the SEC on a Form 4. In the case of Mr. Giordano, one transaction during 1998
for the sale of stock was also reported late on a Form 4. Mr. Giordano passed
away on January 17, 2001.
EXECUTIVE COMPENSATION
The Summary Compensation Table on the next page shows the annual
compensation for the last three fiscal years for First Virginia's Chief
Executive Officer and for the four other most highly compensated executive
officers.
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SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
------------------- ------------
(a) (b) (c) (d) (e) (f) (g)
Other
Annual Options/ All Other
Name and Compensa- SARs Compen-
Principal Salary Bonus tion Awarded sation
Position Year ($)(1) ($)(2) ($)(3) (#)(4) ($)(5)
- --------- ---- ------ ------ --------- -------- ---------
Barry J. Fitzpatrick 2000 690,000 450,692 4,165 30,000 75,407
Chairman, President and 1999 660,000 455,265 4,286 30,000 73,519
Chief Executive Officer 1998 630,000 222,360 3,860 25,000 61,877
of First Virginia
Shirley C. Beavers, Jr. 2000 291,000 196,418 4,791 15,000 39,136
Senior Executive Vice President 1999 278,500 197,764 4,599 15,000 33,313
of First Virginia and 1998 266,000 86,435 3,924 12,500 34,688
Vice Chairman of
First Virginia Services, Inc.
Richard F. Bowman 2000 258,500 194,592 4,703 15,000 34,362
Executive Vice President, 1999 233,000 196,338 4,799 15,000 19,908
Treasurer 1998 208,000 84,894 3,724 12,500 20,935
and Chief Financial Officer
of First Virginia
Raymond E. Brann, Jr. 2000 236,500 193,831 4,189 15,000 69,417
Executive Vice President 1999 225,500 195,373 3,989 15,000 63,249
of First Virginia 1998 214,500 84,640 5,531 12,500 64,310
Thomas P. Jennings 2000 178,500 31,616 0 0 15,126
Senior Vice President and 1999 171,600 32,829 320 6,500 14,560
General Counsel 1998 164,100 30,313 787 6,500 14,602
(1) The Salary column (c) includes the base salary earned by
the executive officer, which includes amounts that are deferred under the
First Virginia Banks, Inc. Employees Thrift Plan, the First Virginia
Thrift Restoration and Deferred Compensation Plan and the First Virginia
Pre-Tax Health Benefit Plan.
(2) The Bonus column (d) includes the amounts earned as a bonus
for that year even if paid in the following year. It also includes
amounts earned for that year under the First Virginia Banks, Inc. Profit
Sharing Plan.
(3) The Other Annual Compensation column (e) includes the
amount of taxes paid by First Virginia for certain benefits.
(4) Column (f) includes the number of stock options that were
granted in 2000.
(5) The All Other Compensation column (g) includes the amount
paid by the employer under the First Virginia Banks, Inc. Employees
Thrift Plan which, for each of the named officers, was $7,650. It also
includes the amounts paid by the employer under the First Virginia Thrift
Restoration and Deferred Compensation Plan. This plan provides
supplemental retirement benefits for those key officers who are
restricted from receiving further benefits under the Thrift Plan as a
result of the limitation on pretax contributions imposed by the Internal
Revenue Code. For 2000 these amounts were: for Mr. Fitzpatrick, $43,887;
Mr. Beavers, $14,355; Mr. Bowman, $21,154; Mr. Brann, $11,795; and Mr.
Jennings, $1,905. It also includes the premium amounts paid by the
employer under the First Virginia Split Dollar Life Insurance Plan. For
2000 these amounts were: for Mr. Fitzpatrick, $20,920; Mr. Beavers,
$14,146; Mr. Bowman, $4,982; Mr. Brann, $43,435; and Mr. Jennings,
$4,215. It also includes the above-market" earnings on deferred
compensation earned during 2000. These amounts were: for Mr. Fitzpatrick,
$2,950; Mr. Beavers, $2,985; Mr. Bowman, $576; Mr. Brann, $6,537; and Mr.
Jennings, $1,356.
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STOCK INCENTIVE PROGRAM
The following table shows for each of the named executive officers (1)
the number of stock options that were granted during 2000, (2) out of the total
number of options granted to all employees, the percentage granted to the named
executive officer, (3) the exercise price, (4) the expiration date, and (5) the
potential realizable value of the options, assuming that the market price of the
underlying securities appreciates in value from the date of grant to the end of
the option term, at annualized rates of 5% and 10%. No freestanding or tandem
SARs were granted in 2000.
STOCK OPTION GRANTS IN 2000
Percent of
Number of Total Potential Realizable
Securities Options Value at Assumed
Underlying Granted to Exercise Annual Rates of Stock
Options Employees or Base Price Appreciation for
Granted in Fiscal Price Expiration Option Term
Name (# Shs.)(1) Year (2) ($/Sh.) Date 5% ($) 10% ($)
---- ----------- ---------- --------- ----------- ------ -------
Barry J. Fitzpatrick 30,000 20.62% 45.4375 12/19/2010 857,262 2,172,470
Shirley C. Beavers, Jr. 15,000 10.31% 45.4375 12/19/2010 428,631 1,086,235
Richard F. Bowman 15,000 10.31% 45.4375 12/19/2010 428,631 1,086,235
Raymond E. Brann, Jr. 15,000 10.31% 45.4375 12/19/2010 428,631 1,086,235
Thomas P. Jennings -- -- -- -- -- --
(1) Options granted to the named executive officers in 2000 vest over
a five-year period, except for Mr. Brann, whose options vest over a four-year
period since he will reach age 65 in 2004. All of the options that were granted
in 2000 include a provision that would accelerate the vesting of the options
upon a "change in control" of First Virginia. For an explanation of the "change
in control" provision, see "Directors Compensation, Consulting Arrangements and
Plans Which Include Change in Control Arrangements."
(2) Options to purchase 145,500 shares of First Virginia Common Stock
were granted to employees during 2000. No freestanding SARs were granted in 2000
to employees, and none of the options that were granted had any tandem SARs.
The following table on the next page shows for each of the named
executive officers the number of shares of First Virginia Common Stock acquired
upon the exercise of stock options and stock appreciation rights during 2000,
the value realized upon their exercise, the number of unexercised stock options
and SARs at the end of 2000, and the value of unexercised "in-the-money" stock
options at the end of 2000. Stock options are considered "in-the-money" if the
fair market value of the underlying securities exceeds the exercise price of the
option. Some of the stock options which were granted to First Virginia's
executive officers include a provision that would accelerate the vesting of the
options upon a "change in control" of First Virginia.
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AGGREGATED OPTIONS/SAR EXERCISES IN 2000 AND
YEAREND OPTIONS
Number of Value of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Yearend (#) Yearend ($)
Acquired on Exercisable/ Exercisable/
Name Exercise(#) Value Realized ($) Unexercisable Unexercisable
---- ------------- ------------------ -------------- --------------------
Barry J. Fitzpatrick 11,582 137,488 42,714/99,000 330,756/474,500
Shirley C. Beavers, Jr. 7,915 235,856 47,413/48,000 879,069/207,125
Richard F. Bowman 18,400 339,352 18,500/48,000 108,000/207,125
Raymond E. Brann, Jr. 10,950 329,307 29,250/48,000 365,319/207,125
Thomas P. Jennings 1,300 19,444 8,150/15,400 36,538/71,612
PENSION AND THRIFT PLANS AND SUPPLEMENTAL ARRANGEMENTS
The following table shows the estimated annual benefit payable upon
retirement (assuming retiree elected single life only) under the First Virginia
Pension Trust Plan and under the First Virginia Supplemental Pension Trust Plan
based on specified remuneration and years of credited service classifications,
assuming a participant retired on December 31, 2000, at age 65. Credited service
in excess of thirty years is not taken into account in determining benefits
under either plan.
ANNUAL BENEFITS UNDER FIRST VIRGINIA'S PENSION TRUST PLAN AND
THE FIRST VIRGINIA SUPPLEMENTAL PENSION TRUST PLAN
Average
Annual Pay 10 Years 15 Years 20 Years 25 Years 30 Years
for Highest of of of of of
Five Years Service Service Service Service Service
- ----------- -------- -------- ------- ------- -------
$ 200,000 $ 30,245 $ 45,368 $ 60,490 $ 75,613 $ 90,735
$ 300,000 $ 46,245 $ 69,368 $ 92,490 $115,613 $138,735
$ 400,000 $ 62,245 $ 93,368 $124,490 $155,613 $186,735
$ 500,000 $ 78,245 $117,368 $156,490 $195,613 $234,735
$ 600,000 $ 94,245 $141,368 $188,490 $235,613 $282,735
$ 700,000 $110,245 $165,368 $220,490 $275,613 $330,735
$ 800,000 $126,245 $189,368 $252,490 $315,613 $378,735
$ 900,000 $142,245 $213,368 $284,490 $355,613 $426,735
$ 1,000,000 $158,245 $237,368 $316,490 $395,613 $474,735
Under the First Virginia Pension Trust Plan, a participant retiring at
age 65 with 30 years of credited service under the Plan will receive a maximum
annual pension benefit equal to 1.1% of average annual pay multiplied by 30
years of credited service plus 0.5% of average annual pay in excess of covered
compensation multiplied by 30 years of credited service. The calculation of
"average annual pay" is based on annual compensation for the highest five
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consecutive years out of the participant's final 10 years of service. "Covered
compensation" is calculated by multiplying the annual average of Social Security
taxable wage base in effect for the 35 years ending with the last day of the
year in which the participant attains Social Security retirement age. First
Virginia also has the First Virginia Supplemental Pension Trust Plan for certain
key employees which provides for the payment of supplemental pension benefits as
a result of the IRS restrictions on benefits under the First Virginia Pension
Trust Plan. All of the named executive officers (except for Mr. Fitzpatrick who
would receive benefits at retirement under a separate Supplemental Compensation
Agreement) participate in the Supplemental Pension Trust Plan.
Remuneration or earnings determining pension benefits under both the
Pension Trust Plan and the Supplemental Pension Trust Plan includes salaries and
bonuses (which are listed in the Summary Compensation Table) and any other
taxable compensation. Compensation resulting from the exercise of nonqualified
options, SARs, and deferred compensation are excluded from the computation of
benefits under both plans. For purposes of determining benefits under the
Pension Trust Plan, each of the named executives had the following years of
service as of December 31, 2000 (30 years is the maximum): Mr. Fitzpatrick, 30
years; Mr. Beavers, 30 years; Mr. Bowman, 25.5 years; Mr. Brann, 30 years; and
Mr. Jennings, 22.8 years. If a participant retired on December 31, 2000, at age
65, the participant would receive the pension benefits as determined by using
the Summary Compensation and Pension Tables shown above in conjunction with the
formula described in the previous paragraph.
Mr. Fitzpatrick's Supplemental Compensation Agreement ("Agreement")
provides him with supplemental retirement benefits in addition to those pension
benefits he would receive from the First Virginia Pension Trust Plan. Under the
Agreement, if he resigns, retires or leaves First Virginia for any reason, he is
entitled to receive for the rest of his life, supplemental compensation equal to
sixty percent of the average of his highest five years of annual salary and
bonus, reduced by the amount he would receive under the First Virginia Pension
Trust Plan. Highest annual salary includes salary and bonus and any profit
sharing payments received under the First Virginia Profit Sharing Plan but does
not include any other form of compensation that is not salary or bonuses, such
as compensation arising from the exercise of SARs and nonqualified options. To
avoid a possible doubling up of benefits from this Agreement and a separate
Employment Agreement (see below), payments to Mr. Fitzpatrick pursuant to his
Agreement would be delayed for three years upon a change of control. Should Mr.
Fitzpatrick die, his spouse would be entitled to one-half of his total annual
benefit for the rest of her life. Under his Agreement, once benefits begin to be
paid, Mr. Fitzpatrick is to remain available to provide consulting and advisory
services if he is physically and mentally capable of doing so. Furthermore, his
benefits are forfeitable under certain circumstances.
Messrs. Fitzpatrick, Beavers, Bowman, Brann, and Jennings have entered
into employment agreements with First Virginia which provide for their continued
employment for a three-year period following the date on which a "change of
control" takes place (the "Employment Period"). These agreements require First
Virginia (or any successor corporation) to employ the executive during the
Employment Period following a change of control in a position with authority,
duties and responsibilities at least commensurate to what the executive had
prior to a change of control, and at compensation levels (including benefits) at
least equal to what the executive was making prior to the change of control. If,
during the first year of his Employment Period, the executive is terminated
other than for "cause" or "disability" or the executive terminates his
employment for "good reason" (as those terms are defined under the employment
agreements), then First Virginia (or its successor) would pay the executive a
lump sum equal to 2.99 times the sum of his annual base salary and bonus. If,
during the second or third year of his Employment Period, the executive is
terminated other than for cause or disability or terminates his employment for
good reason, then First Virginia or its successor would pay the executive a lump
sum equal to two times the sum of his annual base salary and bonus. During a
thirty-day period after the first year, the executive could terminate his
employment for any reason and receive two times the sum of his annual base
salary and bonus. Furthermore, if any payments made under the agreements subject
the executive to excise taxes under Internal Revenue Code Section 4999, such
payments would be "grossed up" to put the executive in the same after-tax
position as if no excise taxes had been imposed.
Executive officers are eligible to participate in the First Virginia
Banks, Inc. Employees' Thrift Plan ("Thrift Plan"). Under the Thrift Plan,
employees of First Virginia and its subsidiaries who have completed one year of
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service can contribute up to six percent of their compensation and receive
matching employer contributions equal to 50% of their employee contributions.
Employees also can contribute up to an additional six percent of their
compensation without receiving a matching contribution. For the years when First
Virginia meets an earnings test under the Thrift Plan, employees can receive
matching contributions equal to 75% of employee contributions. The Thrift Plan
complies with Section 401(k) of the Internal Revenue Code so that employee
contributions can be made on a pretax basis. Employees can direct the investment
of their contributions and the matching employer contributions into one or more
of three funds that are administered by the Trust and Asset Management Services
Department of First Virginia Bank. Reference is made to footnote 5 of the
Summary Compensation Table for the amount of contributions made on behalf of the
named executive officers under the Thrift Plan.
First Virginia also maintains a First Virginia Thrift Restoration and
Deferred Compensation Plan which provides supplemental retirement benefits for
those key officers who are restricted from receiving further benefits under the
Thrift Plan as a result of the limitation on pretax contributions imposed by the
Internal Revenue Code. Under the First Virginia Thrift Restoration and Deferred
Compensation Plan, executive officers can continue to make pretax contributions
in excess of the IRS limits imposed on the Thrift Plan and receive matching
contributions from First Virginia identical to what they would have received if
they were in the Thrift Plan and there were no limitations on contributions.
Reference is made to Footnote 5 of the Summary Compensation Table for the amount
of the employer contributions made on behalf of the named executive officers
under the First Virginia Thrift Restoration and Deferred Compensation Plan.
DIRECTORS COMPENSATION, CONSULTING ARRANGEMENTS
AND PLANS WHICH INCLUDE CHANGE IN CONTROL ARRANGEMENTS
In 2001 directors of First Virginia who are not salaried officers will be
paid an annual retainer of $15,000 per year and a fee of $1,000 for each meeting
of the Board of Directors attended. Committee chairmen will receive $875 for
each committee meeting they chair and other Committee members will receive $750
for each committee meeting they attend. Directors are reimbursed for out-of-town
expenses incurred in connection with attendance at Board and Committee meetings.
Under the Bylaws, the Chairman may also meet with one or more directors without
calling a meeting of the Board or any committee thereof, and the directors may
receive the established committee meeting fees for such a meeting and be
reimbursed for their expenses.
During 2000, Thomas K. Malone, Jr., former Chairman and Chief Executive
Officer of First Virginia, was paid $139,292, under a supplemental compensation
agreement, in addition to the amount he received from the First Virginia Pension
Trust Plan and the fees he received as Director Emeritus for attending Board
meetings. When requested, Mr. Malone is required to provide consulting services
under his supplemental compensation agreement. Also, during 2000, Robert H.
Zalokar, former Chairman and Chief Executive Officer of First Virginia, and Paul
H. Geithner, Jr., former President and Chief Administrative Officer of First
Virginia, were paid $521,316 and $282,527, respectively, under supplemental
compensation agreements, in addition to amounts they received from the First
Virginia Pension Trust Plan and their director fees. When requested, both
Zalokar and Geithner are required to provide consulting services under their
supplemental compensation agreements. First Virginia paid country club
membership fees for Zalokar and Malone of $1,595 and $1,749, respectively,
during 2000. During 2000, Virginia H. Brown, formerly Virginia H. Beeton,
received $71,000 pursuant to her former spouse's Supplemental Retirement
Agreement with First Virginia, in addition to what she received from the First
Virginia Pension Trust Plan. Her former spouse, Ralph A. Beeton, who is now
deceased, was Chairman and Chief Executive Officer of First Virginia.
First Virginia also has two key employee salary reduction deferred
compensation plans, one of which began in 1983 and the other in 1986, and three
directors' deferred compensation plans, two of which also began in 1983 and
1986, and the other which began in 1998 ("Deferred Compensation Plans"). Under
the 1983 and 1986 Deferred Compensation Plans, participants elect to defer some
or all of their compensation from First Virginia, and First Virginia agrees to
pay at normal retirement age or earlier (or to participant's beneficiary or
estate on participant's
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death) a sum substantially in excess of what each participant has deferred. To
fund the benefits under the 1983 and 1986 Deferred Compensation Plans, First
Virginia has purchased life insurance policies on the lives of the participants,
with First Virginia as the beneficiary. For the period ending December 31, 2000,
none of the named executive officers of First Virginia deferred any compensation
under the Deferred Compensation Plans. Under the 1998 Directors Deferred
Compensation Plan, directors may defer their fees and receive earnings on those
deferrals at the distribution date, the amount of which depends on the
investment they choose.
The 1983 Deferred Compensation Plans include a provision regarding
"change in control." If there is a "change in control" of First Virginia, and a
director is terminated under the directors' plan, or in the case of the employee
plan, an employee is terminated "without cause" or the employee terminates
his/her employment for "good reason," as those terms are defined under the
employee plan, then the director or employee, as the case may be, becomes
entitled to receive his/her benefits under the 1983 Deferred Compensation Plans
at retirement, notwithstanding the fact that his/her affiliation with First
Virginia has terminated.
First Virginia has a Split Dollar Life Insurance Plan ("Split Dollar
Plan") which currently includes all executive employees of First Virginia
including those named in the Summary Compensation Table. Under the Split Dollar
Plan, an executive can purchase ordinary life insurance policies with coverage
of at least two times what is projected to be the executive's base salary at
retirement, up to a limit of $1,000,000. A portion of the premiums will be
loaned to the executives by First Virginia up to the later of ten years or the
executive's retirement date. At the end of this period, if assumptions about
mortality, dividends and other factors are realized, First Virginia will recover
all of its loans for premiums from the cash value of the policy. The policy will
then be transferred to the executive, who will pay all further premiums, if any,
under the policy. Executives who participate in the Split Dollar Plan forego any
insurance coverage over $50,000 under the First Virginia Group Life Insurance
Plan. The Split Dollar Plan includes a "change in control" provision which
allows the executive to terminate the policy upon such an event.
First Virginia's Board of Directors approved in 1992 the establishment of
a trust with Chemical Bank (now The Chase Manhattan Bank) as the trustee to
partially secure the benefits of some of First Virginia's nonqualified
compensation plans, including the Deferred Compensation Plans and the First
Virginia Thrift Restoration and Deferred Compensation Plan, in case of a change
in control. Under the trust agreement establishing the trust, if a "change in
control" takes place, the trustee would pay the benefits under the covered
compensation plans out of the trust assets that have been contributed to the
trust by First Virginia, if First Virginia or its successor refused to pay the
benefits. The trust is considered a "grantor trust" subject to the claims of
First Virginia's general creditors. For accounting purposes, the trust assets
are considered corporate assets and, therefore, no balance sheet impact to First
Virginia resulted from the establishment of the trust. The trust agreement does
not include a provision which would accelerate the vesting or payment of any of
the benefits under the covered compensation plans in case of a change in
control.
The 1983 Deferred Compensation Plans, the Split Dollar Plan, the
above-described trust agreement with The Chase Manhattan Bank, Mr. Fitzpatrick's
Supplemental Compensation Agreement, certain stock option agreements, and the
above-described employment agreements all include change in control provisions.
Under this definition, a change in control means: (a) an acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (i) the then outstanding shares
of First Virginia Common Stock or (ii) the combined voting power of the then
outstanding voting securities of First Virginia entitled to vote generally in
the election of directors (the "Outstanding First Virginia Voting Securities");
provided, however, that any acquisition directly from or by First Virginia or
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by First Virginia or an affiliated company or any acquisition by a
company pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of (c) below would be excluded; or (b) individuals who, as of the date
when the change in control provisions were adopted, constitute the Board (the
"Incumbent Board") of First Virginia, cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a
director whose election, or nomination for election by First Virginia's
shareholders, was approved by vote of at least a majority of the directors then
comprising the Incumbent
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Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or (c) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of First Virginia (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding First Virginia Common Stock and Outstanding First Virginia Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns First Virginia or all or substantially all of First Virginia's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the outstanding First Virginia Common Stock and the outstanding
First Virginia Voting Securities, as the case may be, (ii) no Person (excluding
any corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of First Virginia or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or the
action of the Board, providing for such Business Combination; or (d) approval by
the shareholders of First Virginia of a complete liquidation or dissolution of
First Virginia.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of First Virginia's Management Compensation and
Benefits Committee are Edward M. Holland, Eric C. Kendrick, W. Lee Phillips,
Jr., Robert M. Rosenthal and Albert F. Zettlemoyer. Edward M. Holland is the son
of Edwin T. Holland, the founder and former Chairman and Chief Executive Officer
of First Virginia. As noted above, Edward M. Holland's sister, Virginia H.
Brown, receives a benefit pursuant to her former spouse's Supplemental
Retirement Agreement with First Virginia. Albert F. Zettlemoyer's daughter is an
officer of First Virginia Insurance Services, Inc., a subsidiary of First
Virginia. None of the members of the Management Compensation and Benefits
Committee served as members of the compensation committees of another entity. No
executive officer of First Virginia served as a director of another entity that
had an executive officer serving on First Virginia's compensation committee. No
executive officer of First Virginia served as a member of the compensation
committee of another entity which had an executive officer who served as a
director of First Virginia.
MANAGEMENT COMPENSATION AND BENEFITS COMMITTEE
REPORT CONCERNING FIRST VIRGINIA'S
EXECUTIVE COMPENSATION POLICY
The Management Compensation and Benefits Committee (the "Committee") of
the Board of Directors establishes the policy for the compensation of the
executive officers of First Virginia. It is also responsible for administering
most of First Virginia's executive compensation programs. The Committee is
composed entirely of outside directors who are not eligible, with the exception
of the directors' deferred compensation plans, to participate in the plans over
which it has authority.
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The overall goal of First Virginia's compensation policy is to motivate,
reward, and retain its key executive officers. The Committee believes this
should be accomplished through an appropriate combination of competitive base
salaries and, at times, both short-term and long-term incentives.
The primary components of First Virginia's executive compensation program
are base salaries, bonuses, (e.g., short-term compensation), and equity
compensation (e.g., long-term compensation). Executive officers also participate
in other broad-based employee compensation and benefit programs. In its
determination of executive compensation, the Committee noted the potential
effect of the one million dollar deduction limitation under Section 162(m) of
the Internal Revenue Code but declined to alter its policy in determining
executive compensation to meet the requirements for deductibility under Section
162(m) because the amount of compensation affected is not material.
BASE SALARY
The Committee's policy for determining base salaries is based on two
primary factors:
(1) the degree of responsibility, experience, and the number of years
the executive officer has been in office; and
(2) the compensation levels of corresponding positions at other
banking companies of comparable size as First Virginia. This
"Local Peer Group" of companies consists of Compass Bancshares
based in Alabama, Hibernia Corporation based in Louisiana,
Mercantile Bankshares Corporation and Allfirst Financial, Inc.
based in Maryland, First Tennessee National Corporation and
National Commerce Bancorp based in Tennessee, and Centura Banks,
Inc. based in North Carolina. Base salaries are targeted to be the
median salaries of corresponding positions in the "Local Peer
Group". For 2000, Mr. Fitzpatrick's base salary was $690,000 which
was 95.2% of the median for salaries paid to his counterparts in
the "Local Peer Group".
SHORT-TERM INCENTIVES/BONUSES
The Committee grants bonuses to the executive officers and CEO based on
the extent to which First Virginia achieves or exceeds annual performance
objectives. The Compensation Committee may award bonuses to the CEO and to the
executive officers if First Virginia achieves a return on total average assets
(ROA) of at least 1% (the same basis for determining payments of profit sharing
to all employees). ROA generally is considered by the Committee to be the most
important single factor in measuring the performance of a banking company, and
achievement of a 1% ROA generally is considered by the Committee to be the
minimum for a good performing banking company.
Bonus awards are based on the following:
(a) The Committee establishes target amounts each year for return on
average assets ("ROA"), return on total stockholders' equity
("ROE"), asset quality, and capital strength consistent with First
Virginia's Profit Plan target amounts. Up to 50% of an executive's
salary may be awarded if the corporation achieves an ROA
equivalent to 80% or more of the ROA target amount for the year.
For the chief executive officer, First Virginia would also have to
achieve 80% of targeted amounts for the ROE, asset quality as
determined by the ratio of nonperforming assets to total loans
(NPA ratio) and net loan charge-offs (CO ratio), and capital
strength based on the average equity-to-asset ratio (Equity/Asset
ratio) and the Tier I risk-based capital ratio; and/or
(b) Up to 30% of an executive's salary may be awarded based on the
degree to which First Virginia's earnings, asset quality, and
capital ratios exceed the average for the other major banking
companies
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based in the Southeast, the "Southern Regional Peer Group," as
compiled by Keefe, Bruyette and Woods, a New York securities firm
which specializes in the banking and thrift industry; and/or
(c) Up to 20% of an executive's salary may be awarded at the
discretion of the Committee based on an individual executive's
performance.
Within the above parameters, prior to the beginning of each year, the
Committee establishes for the CEO a target bonus which is based on a projected
return on assets for First Virginia. At the end of the year, the Committee
considers a preliminary bonus after taking into account the target bonus, First
Virginia's actual return on assets for the year, and a formula which is based on
a set relationship between the actual versus the projected return on assets.
The Committee then exercises its judgment in light of the foregoing
parameters and other considerations, including the Committee's view of
individual performance and potential and the recommendations of the CEO for the
executive officers (other than himself), to reach a bonus decision for each
executive officer and for the CEO. The Committee does not use a formula to
determine a final bonus decision. Among other things, Mr. Fitzpatrick's bonus
reflected First Virginia's success in achieving a 1.47% return on assets (for
the first nine months) and the other above-described results. Consistent with
the Committee's avoidance of a strict formula approach, no specific weighing
among the above 50%, 30% and 20% factors was specified. The Committee believes
that the use of the above approach provides a flexible yet effective method of
motivating First Virginia's management.
Listed below are the annualized ratios for First Virginia and the
Southern Regional Peer Group based on results for the first nine months of 2000,
the latest data available to the Committee at the time the incentive awards were
considered.
First Virginia
Profit Plan
or Target KBW Southern
Amount Actual Regional Peer Group
------ ------ -------------------
Earnings (Higher is better)
ROA 1.49% 1.47% 1.22%
ROE 14.00% 14.00% 15.16%
Asset Quality (Lower is
better)
NPA 40% .29% .56%
CO .20% .14% .29%
Capital (Higher is better)
Equity/Asset Ratio 10.05% 10.32% 8.19%
Tier I Risk Based 10.00% 11.95% 10.32%
Capital
First Virginia's actual results were greater than 80% of the profit plan
or target amount in every category and exceeded the Regional Peer Group in every
category except ROE. For that reason, the Committee awarded Mr. Fitzpatrick a
bonus of $425,000.
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LONG-TERM COMPENSATION/STOCK OPTIONS
The Committee believes that the granting of stock options is the most
appropriate form of long-term compensation for executives and that such awards
of equity encourage the executive to achieve a significant ownership stake in
the success of First Virginia.
At the end of 2000, the Committee granted options covering a total of
145,500 shares of First Virginia Common Stock at $45.4375 per share to the CEO
and to certain officers. Most options that were awarded by the Committee vest
over a five-year period in equal annual installments. Those optionees who are
expected to retire in the next few years were awarded options that vest over a
period that ends shortly before their anticipated retirement.
The size of each option award was not based on a formula and did not
necessarily correlate to the degree by which First Virginia's results exceeded
those of its Local Peer Group or the amount of each executive's current
stock-based holdings. Instead, the size of each award was based on a number of
factors, some of which were subjective, including the performances of the CEO
and each executive officer and the degree of responsibility each executive
officer has with First Virginia. Mr. Fitzpatrick received options covering
30,000 shares. The size of his grant was primarily based on the performance of
First Virginia as described above.
Edward M. Holland
Eric C. Kendrick
W. Lee Phillips, Jr.
Robert M. Rosenthal
Albert F. Zettlemoyer
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REPORT OF FIRST VIRGINIA'S AUDIT COMMITTEE
The First Virginia Audit Committee reviews First Virginia's financial
reporting process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the reporting process.
First Virginia's independent auditors are responsible for expressing an opinion
on the conformity of the audited financial statements with generally accepted
accounting principles. A full description of the Audit Committee's primary
responsibilities, operating principles, and relationship with the independent
auditors is contained in the Audit Committee Charter, which is attached to this
proxy statement as Exhibit A.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the 2000 audited financial statements.
The Audit Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees). In addition, the Audit Committee has
received from the independent auditors the written disclosures required by
Independence Standards Board No. 1 (Independence Discussions with Audit
Committees) and discussed with them their independence from the Company and its
management. And, the Audit Committee has determined that the nonaudit services
provided to the Company by the independent auditors are compatible with the
auditors' independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the audited financial statements be included in First Virginia's Annual
Report on Form 10-K for the year ended December 31, 2000, for filing with the
Securities and Exchange Commission.
For the year ended December 31, 2000, the Audit Committee was composed of
Messrs. Breeden, Kendrick and Phillips, each of whom is "independent" under the
New York Stock Exchange's Listing standards. During 2000, the Audit Committee
met four times.
Edward L. Breeden, III
Eric C. Kendrick
W. Lee Phillips, Jr.
AUDIT FEES
The aggregate fees billed for professional services rendered by KPMG LLP
for its audit of First Virginia's annual financial statements for the year ended
December 31, 2000 and for its reviews of unaudited quarterly financial
statements contained in the reports on Form 10-Q filed by First Virginia during
the year amounted to $305,000.
ALL OTHER FEES
The aggregate fees billed for all services rendered by KPMG LLP other
than the Audit Fees described above, during the year ended December 31, 2000
amounted to $517,372. KPMG LLP did not provide any financial systems design or
implementation services during the year.
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PERFORMANCE GRAPH
The following performance chart compares the yearly percentage change in
First Virginia's cumulative total shareholder return on its Common Stock with
(1) the cumulative total return of a broad market index that includes companies
whose equity securities are traded on the same exchange or are of comparable
market capitalization and (2) the cumulative total return of a published
industry or line-of-business index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
First Virginia Banks, Inc., S&P MidCap 400 and
KBW 50 Index (with dividends reinvested)
First Virginia S&P 400
Banks, Inc. Mid Cap KBW 50
-------------- ------- ------
1995 100 100 100
1996 119 119 141
1997 197 158 207
1998 183 188 224
1999 173 215 216
2000 200 253 260
First Virginia believes the most appropriate equity market indices to be
used to measure the price performance of First Virginia's Common Stock are the
"S&P MidCap 400" and the "KBW 50." First Virginia is included as a component of
the S&P MidCap 400.
The Standard & Poor's MidCap 400 is comprised of 400 securities with
market value between approximately $200 million and $4 billion. First Virginia
considers it more representative of companies its size (year-end 2000 market
capitalization of approximately $2.215 billion) than the S&P 500 index which is
heavily dominated by large capitalization stocks (the 50 largest stocks account
for 50% of the total value of the S&P 500). Also, financial stocks represent
approximately 15% of the S&P MidCap 400 index.
The KBW 50 is an index comprised of 50 banking companies, including all
the money center banks and most large regional banks. It was developed by Keefe,
Bruyette & Woods, a New York securities firm which specializes in the banking
and thrift industry. The KBW 50 is considered more representative of price
performance of the major banking companies in the United States. As is the case
with the S&P MidCap 400 index, the KBW 50 is a market capitalization weighted
index and assumes quarterly reinvestment of dividends.
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As indicated in the Management Compensation and Benefits Committee Report
above, return on average assets (ROA) is an important factor for determining
First Virginia's performance and for determining short-term and long-term
compensation for First Virginia's executive officers. The following chart
compares First Virginia's ROA during the period 1996-2000 with the KBW Southern
Regional Peer Group and with a local peer group consisting of Compass
Bancshares, Hibernia Corporation, Mercantile Bankshares Corporation, First
Tennessee National Corporation, Allfirst Financial Inc., National Commerce
Bancorp and Centura Banks, Inc. As noted in the Management Compensation and
Benefits Committee Report, the Compensation Committee compared First Virginia's
ROA with both these groups as part of their evaluation of executive
compensation.
COMPARISON OF RETURN ON AVERAGE ASSETS
First Virginia Banks, Inc., Southern Regional
and Local Peer Groups
Southern
First Virginia Regional Local
Banks, Inc. Peer Group Peer Group
-------------- ---------- ----------
1996 1.43 1.27 1.34
1997 1.44 1.30 1.35
1998 1.40 1.22 1.43
1999 1.59 1.24 1.42
2000 1.51 1.17 1.23
TRANSACTIONS WITH MANAGEMENT
During the past year, certain of the directors and officers of First
Virginia and their associates had loans outstanding from First Virginia's
banking subsidiaries. Each of these loans was made in the ordinary course of the
lending bank's business. In some cases, where officers of First Virginia or its
subsidiaries had to be relocated, residential mortgage loans were made by First
Virginia at favorable interest rates. None of the named executive officers had
any below-market-rate loans from First Virginia and none of them had any loans
from any of First Virginia's banking subsidiaries at favorable interest rates.
All other loans have been made 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 the normal risk of
collectibility or present other unfavorable features. As of December 31, 2000,
the aggregate amount of loans outstanding to all directors and executive
officers of First Virginia and associates and members of their immediate
families was approximately $89,717,000.
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II. APPOINTMENT OF INDEPENDENT AUDITORS
On February 28, 2001, upon recommendation of First Virginia's Audit
Committee, the Board of Directors appointed the accounting firm KPMG LLP as
independent auditors for the year ending December 31, 2001.
At the Annual Meeting, a vote will be taken on a proposal to ratify the
appointment by the Board of Directors of KPMG LLP as independent auditors for
the year ending December 31, 2001. Ratification will require the affirmative
vote of the holders of a majority of shares of Common and Preferred Stock
present or represented by properly completed proxies at the meeting, provided a
quorum is present and a majority of the outstanding shares of Common and
Preferred Stock vote on the matter. Abstentions and broker nonvotes will be
included in determining the number of votes present or represented at the
meeting with respect to determining a quorum. Broker nonvotes will not be
included among those that vote on the matter. Representatives of KPMG LLP are
expected to be present at the Annual Meeting and will be available to respond to
appropriate questions and to make a statement if they desire to do so.
On February 24, 1999, First Virginia's Audit Committee approved, and
First Virginia's Board of Directors ratified, the appointment of the accounting
firm KPMG LLP as independent auditors for the year ending December 31, 1999, to
replace Ernst & Young LLP ("E & Y"), who were dismissed as the independent
accountants effective with such appointment.
The report of E & Y on First Virginia's consolidated financial statements
for the year ended December 31, 1998, did not contain an adverse opinion or a
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles. In connection with the audit of First Virginia's
consolidated financial statements for the year ended December 31, 1998, and
through February 24, 1999, there were no disagreements between First Virginia
and E & Y on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope and procedures which, if not resolved to
the satisfaction of E & Y, would have caused them to make reference thereto in
their report on the financial statements for such year. In addition, there were
no reportable events (as defined in SEC Regulation S-K, Item 304(a)(1)(v))
during the year ended December 31, 1998, and through February 24, 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31,
2001.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the next Annual
Meeting in 2002 and included in First Virginia's Proxy Statement in 2002 must be
received by First Virginia no later than November 9, 2001. Upon receipt of any
such proposal, First Virginia will determine whether or not to include such
proposal in the Proxy Statement and proxy in accordance with regulations
governing the solicitation of proxies.
Under First Virginia's Bylaws, in order for a stockholder to nominate a
candidate for director, written notice of the nomination must be given to First
Virginia in advance of the meeting. Ordinarily, such notice must be given not
less than 90 nor more than 120 days before the meeting. However, if First
Virginia gives less than 70 days' notice or prior public disclosure of the
meeting, then the stockholder must give such notice within 10 days after notice
of the meeting is mailed or other public disclosure of the meeting is made. The
notice must include, among other things, (i) the name and record address of, and
the class and amount of voting securities of First Virginia owned by, the
stockholder proponent, (ii) the name, age, address and occupation of, and the
class and amount of voting securities of First Virginia owned by, the nominee,
and (iii) all information that would be required under Securities and Exchange
Commission rules in a proxy statement soliciting proxies for such nominee.
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In order for a stockholder to bring other business before an annual
meeting of stockholders, written notice must be given to First Virginia within
the same time limits described above for the nomination of a candidate for
director. The notice must include, among other things, (i) the name and record
address of, and the class and amount of voting securities of First Virginia
owned by, the stockholder proponent and any other stockholder known to be
supporting such proposal, (ii) a brief description of the proposed business, the
reasons for conducting such business at the annual meeting, and (iii) any
financial or other interest of the stockholder in such proposal. These advance
notice requirements are separate from and in addition to the requirements a
stockholder must meet to have a proposal included in First Virginia's Proxy
Statement. In each case, the notice must be given to the Secretary of First
Virginia at its principal executive offices, 6400 Arlington Boulevard, Falls
Church, Virginia 22042-2336.
The foregoing summary of certain provisions of First Virginia's Bylaws is
not intended to be complete and is qualified in its entirety by reference to the
Bylaws of First Virginia, copies of which will be furnished without charge to
any stockholder upon written request to the Secretary.
OTHER MATTERS
Management does not know of any other business to be presented to the
meeting except for matters incident to the conduct of the meeting. The persons
named in the accompanying proxy will vote in accordance with the specifications
on the proxy form and will vote in accordance with their best judgment on any
other matters which properly come before the meeting.
The cost of soliciting proxies will be borne by First Virginia. In
addition to solicitation by mail, proxies may be solicited in person, by
telephone or telegraph, or the Internet, by directors, officers and employees of
First Virginia and its subsidiaries. In addition, First Virginia has engaged
Morrow & Co., Inc., to aid in the distribution of proxy materials and to solicit
proxies from brokers, nominees, and security-holding companies for a fee of
$5,000, plus out-of-pocket expenses. First Virginia does not expect to pay any
other compensation for the solicitation of proxies, but will pay brokers,
nominees, fiduciaries, and other custodians their reasonable expenses for
sending proxy material to principals and obtaining their instructions.
A copy of First Virginia's Annual Report for 2000, including financial
statements, is being mailed with this Proxy Statement to all stockholders of
record. The Annual Report is not to be regarded as proxy soliciting material.
FIRST VIRGINIA WILL PROVIDE WITHOUT CHARGE, UPON THE WRITTEN REQUEST OF
ANY STOCKHOLDER ENTITLED TO VOTE AT THE ANNUAL MEETING, A COPY OF ITS ANNUAL
REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000, ON FORM 10-K, WHICH REPORT
WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OR BEFORE MARCH 30,
2001. STOCKHOLDERS OF RECORD ON FEBRUARY 16, 2001, AND BENEFICIAL OWNERS OF SUCH
SECURITIES SHOULD SUBMIT REQUESTS FOR SUCH REPORT TO BARBARA J. CHAPMAN,
SECRETARY, 6400 ARLINGTON BOULEVARD, FALLS CHURCH, VIRGINIA 22042-2336.
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Exhibit A
FIRST VIRGINIA BANKS, INC.
AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Corporation, (2) the
compliance by the Corporation with legal and regulatory requirements, and (3)
the independence and performance of the Corporation's internal and external
auditors.
The Audit Committee shall be composed of at least three, but no more than five,
directors. The members of the Audit Committee shall meet the independence and
experience requirements of the New York Stock Exchange.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. The Audit Committee may request
any officer or employee of the Corporation or the Corporation's counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
(1) Review and reassess the adequacy of this Charter annually and submit it
to the Board for approval.
(2) Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices
as well as the adequacy of internal controls that could significantly
affect the Corporation's financial statements, and recommend to the Board
their inclusion in the Annual Report on Form 10-K for filing with the
Securities and Exchange Commission.
(3) Review any analysis prepared by management or the independent auditor of
significant financial reporting issues and judgments made in connection
with the preparation of the Corporation's financial statements.
(4) Review with management and the independent auditor the Corporation's
quarterly financial statements filed with the Securities and Exchange
Commission on Form 10-Q.
(5) Review the audit plan with the General Auditor and the independent
auditor to see that it is sufficiently detailed and covers significant
areas of concern that the Audit Committee might have.
(6) Review major changes to the Corporation's auditing and accounting
principles as suggested by the independent auditor, the General Auditor
or management.
(7) Evaluate the performance of the independent auditor. If so determined by
the Audit Committee, recommend to the Board the appointment of the
independent auditor, which firm will be accountable ultimately to the
Audit Committee and the Board. If so determined by the Audit Committee,
recommend to the Board the replacement of the independent auditor.
(8) Review the fees to be paid to the independent auditor and make
recommendations with respect thereto to the Board of Directors.
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(9) Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and, if so
determined by the Audit Committee, recommend that the Board take
appropriate action to satisfy itself of the independence of the auditor.
(10) Obtain assurance from the independent auditor of its awareness that it is
obligated to assure that the Audit Committee is adequately informed of
illegal acts, other than those clearly inconsequential, that have come to
its attention in the course of an audit.
(11) Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct of the
audit.
(12) Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the Corporation's response to that letter.
(13) Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Corporation's annual proxy statement.
(14) Review the appointment and replacement of the General Auditor.
(15) Review the significant reports to management prepared by the Audit
Department and management's responses.
(16) To the extent delegated by the Corporation's subsidiary banks, exercise
the responsibilities set forth under Section 36 of the Federal Deposit
Insurance Act.
(17) Meet at least annually with the Chief Financial Officer, the General
Auditor and the independent auditor in separate executive sessions.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Corporation's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations.
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REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF FIRST VIRGINIA BANKS, INC.
ANNUAL MEETING OF STOCKHOLDERS
April 27, 2001
10:00 a.m. local time
The undersigned hereby appoints Kenneth W. Fitchett, Hope G. Langan, and
Dana D. Schalk (the Proxy Committee) as proxies, with power to act without the
other and with power of substitution, and hereby authorizes them to represent
and vote all the shares of stock of FIRST VIRGINIA BANKS, INC., standing in the
name of the undersigned at the Annual Meeting of Stockholders to be held Friday,
April 27, 2001, at the Ritz-Carlton Hotel, Ballroom Level, 1700 Tysons
Boulevard, McLean, Virginia, at 10:00 a.m., local time, and any adjournment
thereof, in accordance with instructions given in this proxy and, at their
discretion, upon any other business not now known which properly may come before
the meeting, all as more fully set forth in the accompanying proxy statement,
receipt of which is acknowledged.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR VOTE VIA THE INTERNET OR BY TELEPHONE.
(Continued, and to be marked, dated and signed, on the other side)
Fold and Detach Here
FIRST VIRGINIA BANKS, INC. - ANNUAL MEETING,
April 27, 2001
YOUR VOTE IS IMPORTANT!
You can vote in one of three ways:
1. Call toll free 1-877-210-0269 on a Touch Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
2. Via the Internet at www.proxyvoting.com/fvb and follow the instructions.
or
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
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PLEASE VOTE
The Board of Directors recommends a vote
"FOR" Proposals 1 and 2.
PLEASE MARK YOUR VOTES
AS INDICATED IN THIS EXAMPLE X
1. The election as With- For All
directors of all For hold Except
nominees listed below, ( ) ( ) ( )
except as marked to
the contrary.
(01) J. Banner (02) E. Breeden
(03) E. Kendrick (04) J. Richmond
(05) R. Zalokar
Instruction: To withhold authority to vote for any nominee(s), mark "For All
Except" and write that nominee(s') name(s) in the space provided below.
- -------------------------------------------------------------------------------
2. Ratification of KPMG LLP For Against Abstain
as Auditors. ( ) ( ) ( )
If no instructions are specified above, this proxy will be voted "FOR" each of
he proposals listed.
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS CARD. When signing as an
attorney, executor, administrator, trustee or guardian, please give full title.
If a corporation or partnership, write in the full corporate or partnership name
and have the President or other authorized officer sign. If shares are held
jointly, each holder should sign, but only one signature is required.
Please be sure to sign and date this Proxy in the box below.
Date
----------------
Stockholder sign above
- --- ---------------------
Co-holder (if any) to sign above
- --- ------------
***IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET, PLEASE READ THE INSTRUCTIONS
BELOW***
Fold and detach here if you are returning
your proxy card by mail
VOTE BY TELEPHONE/INTERNET
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QUICK * * * EASY * * * IMMEDIATE
Your telephone/internet vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed and returned your proxy card.
Please have this card handy when you call. You'll need it in front of you in
order to complete the voting process.
VOTE BY PHONE: You will be asked to enter the Control Number (look below at
right).
OPTION A: To vote as the Board of Directors recommends on ALL proposals, press
1. Your vote will be confirmed.
OPTION B: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Item 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9. To vote FOR ALL NOMINEES EXCEPT for certain of the nominees, press 0
and listen to the instructions.
Item 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0. When
asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: The web address is
www.proxyvoting.com/fvb
You will be asked to enter the Control Number (look below at right).
If you vote by telephone or internet,
DO NOT mail back your proxy.
THANK YOU FOR VOTING
Call * * * Toll Free * * * On a Touch Tone Telephone
1-877-210-0269 - ANYTIME
There is NO CHARGE to you for this call
TELEPHONE/INTERNET VOTING DEADLINE: 12 midnight -
April 26, 2001
FOR TELEPHONE/
INTERNET VOTING:
CONTROL NUMBER