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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
F & M BANK CORP.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided in 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.
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(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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March 9, 2001
Dear F & M Bank Corp. Shareholder:
You are cordially invited to attend our annual meeting of shareholders on
Saturday, April 14, 2001 at 5:30 P.M. at BROADWAY High School, BROADWAY,
Virginia. Please note the location. This will be a dinner meeting and we are
enclosing a reservation card for your convenience in letting us know whether or
not you can be with us. We must receive this card on or before April 4, 2001 to
make proper preparations for the meal.
We have streamlined our voting process for this meeting and urge you to mail
your completed proxy card back to us as soon as possible prior to the meeting.
We are enclosing a formal notice of the meeting, a proxy and a Proxy Statement
detailing the matters upon which the shareholders will act at the annual
meeting. Our Company's Annual Report for 2000 is also enclosed.
We urge you to complete, date and sign the proxy, and return it as soon as
possible in the enclosed postage prepaid envelope.
Sincerely,
F & M BANK CORP.
/s/ Julian D. Fisher
Julian D. Fisher
President
F & M BANK CORP.
Timberville, Virginia
Notice of Annual Meeting of Shareholders
To the Shareholders of F & M Bank Corp.
The annual meeting of shareholders of F & M Bank Corp. (the Company)
will be held on Saturday, April 14, 2001, at 5:30 P.M. at Broadway High School,
Broadway, Virginia, for the following purposes:
1. Election of three directors for three-year terms expiring in 2004.
2. Ratification of the appointment of S. B. Hoover & Company, L.L.P.
as independent auditors for 2001.
3. Transaction of such other business as may properly come before the
meeting. Management is not aware of any other business, other than
procedural matters incident to the conduct of the Annual Meeting.
Only shareholders of record at the close of business on February 23,
2001 are entitled to notice of and to vote at the annual meeting or any
adjournments thereof.
To assure that your shares are represented at the annual meeting,
please complete, date and sign the enclosed proxy, and return it as soon as
possible in the enclosed postage prepaid envelope. You may amend your proxy at
any time prior to the closing of the polls at the meeting.
By Order of the Board of Directors
/s/ Larry A. Caplinger
Larry A. Caplinger, Secretary
March 9, 2001
F & M BANK CORP.
P. O. Box 1111
Timberville, Virginia 22853
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies for use at the annual meeting of shareholders of F & M Bank Corp.
(the Company) to be held Saturday, April 14, 2001 at 5:30 P.M. at Broadway High
School, Broadway, Virginia, and at any adjournments thereof (the Annual
Meeting). The principal executive offices of the Company are located on Main
Street, Timberville, Virginia 22853. The approximate mailing date of this Proxy
Statement and the accompanying proxy is March 9, 2001.
The accompanying proxy is solicited by the Board of Directors of the
Company (the Board). The cost of the solicitation of proxies will be borne by
the Company. Solicitations will be made only by the use of the mail, except
that, if necessary, officers, directors and regular employees of the Company, or
its affiliates, may make solicitations of proxies by telephone, telegraph or by
personal calls. Brokerage houses and nominees may be requested to forward the
proxy solicitation material to the beneficial owners of the stock held of record
by such persons, and the Company may reimburse them for their charges and
expenses in this regard.
All properly executed proxies delivered pursuant to this solicitation
will be voted at the Annual Meeting in accordance with any instructions thereon.
Any person signing and mailing the enclosed proxy may, nevertheless, revoke the
proxy at any time prior to the actual voting thereof by (i) filing written
notice thereof with the Secretary of the Company (Larry A. Caplinger, Secretary,
F & M Bank Corp., P. O. Box 1111, Timberville, Virginia 22853); (ii) submitting
a duly executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting or any adjournment thereof and giving the Secretary notice of his or her
intention to vote in person.
An Annual Report to shareholders, including current financial
statements, is being mailed to the Company's shareholders concurrently with this
Proxy Statement, but is not part of the proxy solicitation materials.
Interested shareholders may obtain, without charge, a copy of the
Company's Form 10-K for the fiscal year ended December 31, 2000, as filed with
the Securities and Exchange Commission, upon written request to Larry A.
Caplinger, Secretary, F & M Bank Corp., P. O. Box 1111, Timberville, Virginia
22853.
OUTSTANDING SHARES AND VOTING RIGHTS
Only shareholders of record at the close of business on February 23,
2001 will be entitled to vote at the Annual Meeting. As of February 23, 2001,
the Company had outstanding 2,432,481 shares of its common stock, $5 par value
(Common Stock), each of which is entitled to one vote at the Annual Meeting. A
majority of votes entitled to be cast on matters considered at the Annual
Meeting constitutes a quorum. If a share is represented for any purpose at the
Annual Meeting, it is deemed to be present for purposes of establishing a
quorum. Abstentions and shares held of record by a broker or its nominees
(Broker Shares) that are voted on any matter are included in determining the
number of votes present or represented at the Annual Meeting. Conversely, Broker
Shares that are not voted on any matter will not be included in determining
whether a quorum is present. If a quorum is established, directors will be
elected by a plurality of the votes cast by shareholders at the Annual Meeting.
Votes that are withheld and Broker Shares that are not voted in the election of
directors or in the ratification of auditors will not be included in determining
the number of votes cast.
1
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number and percentage of shares of
Common Stock beneficially owned, as of February 23, 2001, by each of the
Company's directors and nominees and all of the Company's directors and
executive officers as a group. For the purposes of this table, beneficial
ownership has been determined in accordance with the provisions of Rule 13d-3
under the Securities Exchange Act of 1934, as amended, under which, in general,
a person is deemed to be a beneficial owner of a security if he has or shares
the power to vote or direct the voting of the security or the power to dispose
of or direct the disposition of the security, or if he has the right to acquire
beneficial ownership of the security within 60 days.
Amount Beneficially Percent of
Name of Owner Owned Class
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Thomas L. Cline 7,051 1 .290%
Julian D. Fisher 105,087 2 4.320%
Ellen R. Fitzwater 3,582 3 .147%
Robert L. Halterman 29,348 1.207%
Lawrence H. Hoover, Jr. 54,095 4 2.224%
Richard S. Myers 13,769 5 .566%
Michael W. Pugh 784 6 .032%
Dan B. Todd 33,504 7 1.377%
Ronald E. Wampler 7,500 .308%
Directors and executive officers
as a group (9 persons) 254,720 10.472%
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1 Includes 3,823 shares owned directly, 3,060 shares owned jointly with
his spouse and 168 shares owned by his spouse.
2 Includes 9,427 shares owned directly, 8,199 shares owned by his
spouse and 87,461 shares owned by the Company's stock bonus plan over
which Mr. Fisher has voting power.
3 Includes 2,604 shares owned directly and 978 shares owned jointly
with other persons.
4 Includes 33,536 shares owned directly, 138 shares owned by his spouse
and 20,421 shares owned by unitrusts in which he is one of the
trustees.
5 Includes 4,800 shares owned directly and 8,969 shares held in Mr.
Myers' IRA Account.
6 Includes 600 shares owned directly, 84 shares owned jointly with his
spouse and 100 shares in a simplified employee plan for Mr. Pugh's
benefit.
7 Includes 18,488 shares owned directly, 8,992 shares owned by his
spouse and 6,024 shares held in Mr. Todd's IRA Account.
2
SECURITY OWNERSHIP OF BENEFICIAL OWNERS
Management of the Company knows of no person who has beneficial
ownership of 5% or more of the outstanding Common Stock as of February 23, 2001.
PROPOSAL ONE ELECTION OF DIRECTORS
The term of office for the current Class B directors expires at the
Annual Meeting. The Board of Directors has nominated such directors, namely
Thomas L. Cline, Robert L. Halterman and Michael W. Pugh, for reelection, for a
three-year term, by the shareholders at the Annual Meeting. The persons named as
proxies in the accompanying form of proxy, unless instructed otherwise, intend
to vote for the election of each of these nominees for directors. If any nominee
should become unavailable to serve, the proxy may be voted for the election of a
substitute nominee designated by the Board. The Board has no reason to believe
that any of the nominees will be unable to serve if elected.
The Board recommends election of the Class B
director nominees set forth in this Proxy Statement.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following information, including the principal occupation during
the past five years, is given with respect to the nominees, all of whom are
current directors, for election to the Board at the Annual Meeting, as well as
all directors continuing in office.
Name, Age and Position Director Principal Occupation During
with the Company Since the Last Five Years
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Director Nominees
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CLASS B DIRECTORS
(to serve until the 2004 annual meeting of shareholders)
Thomas L. Cline(54) 1991 President of Truck & Equipment Corp. &
Mac Lease, Inc. since May 1997;
Secretary of North and South Lines, Inc.
since May 1997; Secretary of Truck
Thermo King, Inc. and Transport Repairs,
Inc.
Robert L. Halterman(65) 1980 President of Virginia Classic Mustang,
Inc.; Partner, H & H Properties
Michael W. Pugh(46) 1994 President of Old Dominion Realty, Inc.,
Partner in Tri-City Development Co.;
President of Colonial Appraisal Service
Inc.; Treasurer of Old Mill Enterprises,
Inc.; Manager of Pugh Investments L.L.C.
and Secretary of Oak Tree Enterprises,
Inc.
3
Directors Continuing in Office
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CLASS A DIRECTORS
(to serve until the 2003 annual meeting of shareholders)
Ellen R. Fitzwater(54) 1999 Corporate accountant, Rocco, Inc.;
Partner, Financial Manager, Fitzwater
Trucking; Member-manager, F&R Leasing
L.L.C. since June 2000; Member, Blue
Ridge Transportation Service, L.L.C.
since June 2000
Lawrence H. Hoover, Jr.(66) 1981 Attorney, Partner in Hoover, Penrod,
Vice Chairman of the Board Davenport & Crist
Richard S. Myers(53) 1988 President of Dick Myers Chevrolet-GEO;
Owner, TrAndy Apartments, L.L.C. and
TrAndy Real Estate Holdings, L.L.C.
Ronald E. Wampler(53) 1991 Farmer & partner in Dove Ohio Farms,
L.L.C., WWTD Ohio Farms, L.L.C. and Dove
Farms, Inc.
CLASS C DIRECTORS
(to serve until the 2002 annual meeting of shareholders)
Julian D. Fisher(60) 1990 CEO of Farmers & Merchants Bank (the
Bank) since President & CEO May 1996;
President of the Bank since Oct. 1991
Dan B. Todd(69) 1969 CEO of the Bank from 1969 to May 1996;
Chairman of Chairman of the Board the
Board of the Company and the Bank since
Oct. 1991
Board Meetings and Committees
The Board of the Company met 12 times during 2000. Each member of the
Board attended at least 75% of the total number of meetings of the Board and
meetings of committees on which he or she served. The Board of the Bank, which
met 12 times in 2000, primarily manages all matters for the Bank. All the
directors of the Company are also directors of the Bank.
The Company has an Audit Committee that reviews the audit and
examination reports of the independent public accountants and bank examiners as
they relate to the Company and the Bank. The Audit Committee held five meetings
during 2000. The present committee members are Directors Cline, Fitzwater,
Halterman and Myers. The Company does not have a standing compensation
committee, but the Bank has a Salary Committee that reviews salaries, bonuses
and contributions to the Company's ownership and compensation plans. The Salary
Committee held one meeting during 2000. The present committee members are
Directors Fisher, Halterman, Pugh, Todd and Wampler. The Company does not have a
standing nomination committee.
Additional information on the Audit Committee and the Salary Committee
is presented elsewhere in this Proxy Statement.
Compensation of Directors
All directors of the Company, who are also directors of the Bank, each
received $400 for attending each board meeting of the Bank in 2000. They
received no additional compensation as directors for Board meetings of the
Company. In addition, each director received a bonus of $5,500 for the year
ended 2000 and $100 for each committee meeting attended.
4
SUMMARY COMPENSATION
The Summary Compensation Table below sets forth the compensation of the
Company's Chief Executive Officer for all services rendered to the Company and
the Bank for the last three fiscal years.
Summary Compensation Table
Annual Compensation
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Name and Other Annual All Other
Principal Position Year Salary($) Bonus($) Compensation($) Compensation($) 2
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Julian D. Fisher 2000 $130,000 $47,500 1 * $44,853
President & CEO 1999 120,000 45,000 1 * 42,157
1998 110,000 40,000 * 42,742
*The value of perquisites and other personal benefits did not exceed
the lesser of $50,000 or 10% of the total of annual salary and bonus.
1 The amount presented includes compensation that was deferred at Mr.
Fisher's election.
2 The amounts presented include the Company's contribution for the
benefit of Mr. Fisher under the Company's Stock Bonus Plan ($12,297,$15,322 and
$16,116 in 2000, 1999 and 1998, respectively), the gross value of life insurance
premiums paid by the Company on behalf of Mr. Fisher ($15,995, $16,106 and
$16,210 in 2000, 1999 and 1998, respectively) and the Company's contribution for
the benefit of Mr. Fisher under the Executive Deferred Compensation Plan for
Farmers & Merchants Bank ($16,561, $10,729 and $10,416 in 2000, 1999 and 1998
respectively). Pursuant to a split-dollar insurance agreement between the
Company and Mr. Fisher, the Company will be repaid the life insurance premium
payments from the proceeds of the insurance policies. Thus, the gross premium
payment amounts shown overstate the actual economic benefit to Mr. Fisher.
Severance Plan
In 1996, the Company and the Bank adopted a change in control severance
plan which became effective July 1, 1996. The plan covers employees designated
by the Company's Board of Directors, including Mr. Fisher.
Under the plan, a "covered termination" is a cessation of employment
with the Company or its then affiliates within 36 months after a change in
control (as defined in the plan) on account of either (i) termination of
employment by the covered employee for good reason (defined to mean the
occurrence after a change in control of any of the following: the assignment of
duties inconsistent with prior duties, the diminution of responsibilities, a
reduction in base salary, a transfer of job location of more than 50 miles, a
failure to pay compensation or deferred compensation within seven days after
due, a failure to continue participation and benefits under any compensation or
benefits plan (or any successor or replacement plan) at as favorable a level, or
a failure of the Company to require any successor to the Company to comply with
the plan) or (ii) termination initiated by the Company or any of its affiliates
for any reason other than death, disability, mandatory retirement or cause (as
defined in the plan).
In the event of such a covered termination, a covered employee will be
entitled to the following severance benefits: (i) continuation of the employee's
base pay (as defined in the plan) through the earlier of his or her death or the
third anniversary of the date of the change in control (the severance pay
period); (ii) continuation of the availability of coverage, and the employer's
regular contribution towards that coverage, under the employer's health care
plan during the severance pay period for the employee and his or her eligible
dependents; (iii) the right to buy any car that the employee is assigned by the
employer at its then fair market value; and (iv) a lump sum payment equal to the
value of any qualified or nonqualified retirement benefits forfeited by the
employee on account of his or her covered termination.
Salary Committee Report on Executive Compensation
The Salary Committee of the Bank has furnished the following report on
executive compensation. All executive compensation for the Company and the Bank
is determined and paid on the Bank level.
5
The Salary Committee meets annually to review salaries, bonuses and the
contributions to the Employee Stock Ownership Plan (ESOP) and the Executive
Deferred Compensation Plan. The Salary Committee recommends to the Board of
Directors the annual salary and bonuses of the Senior Management group. This
group includes the Bank's one designated Executive Officer, Mr. Fisher.
The committee also recommends the annual contribution to the ESOP,
which is shared on a pro-rated basis by all eligible employees; and the
contribution to the Executive Deferred Compensation Plan, which was established
for the benefit of the Senior Management group. Finally, the committee
recommends a range of percentage increases in salary for the remaining staff.
Increases within the range established by the committee and board are then
recommended by department supervisors and approved by Mr. Fisher.
In establishing salaries and bonuses for the Senior Management group,
the committee attempts to provide competitive levels of compensation, which will
attract and retain corporate officers and key employees with outstanding
abilities and to motivate them through a combination of base salary, annual
incentives and deferred compensation. The committee uses the Virginia Bankers
Association Salary Survey of Virginia Banks for comparison of salaries paid for
similar positions and responsibilities. The Board, on at least an annual basis,
also reviews qualitative factors, such as Return on Average Assets (ROAA) and
Return on Average Equity (ROAE) relative to peer banks. A subjective approach is
used in this evaluation and therefore does not rely on a formula or weights of
specific factors.
Salary Committee
Julian D. Fisher
Robert L. Halterman
Michael W. Pugh
Dan B. Todd
Ronald E. Wampler
Compensation Committee Interlocks and Insider Participation
During 2000, Julian D. Fisher served on the Salary Committee. Mr.
Fisher is President and CEO of the Company and CEO of the Bank.
Indebtedness and Other Transactions
The Company's directors and officers and other corporations, business
organizations, and persons with whom some of the Company's directors and
officers are associated, had loan transactions at December 31, 2000 with the
Bank totaling approximately $1,403,599, or about 5.36% of average shareholders'
equity for the year. All such transactions were made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time in comparable transactions with
others and did not involve more than the normal risk of collectibility or
present other unfavorable features.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and any persons who own more than
10% of the common stock of the Company, to file with the Securities and Exchange
Commission reports of ownership and changes in ownership of common stock.
Officers and directors are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on review of the
copies of such reports furnished to the Company or written representation that
no other reports were required, the Company believes that, during 2000, all
filing requirements applicable to its officers and directors were complied with
except that Richard S. Myers, Director, inadvertently failed to file reports for
March and June of 2000 covering 1,700 shares of common stock of the Company that
were acquired for his IRA accounts. A corrective filing has been made.
6
Stock Performance
The following graph compares the cumulative total return to the
shareholders of the Company for the last five fiscal years with the total return
on the Russell 2000 Index and the Pink Banks ($100M to $500M) Index, as reported
by SNL Securities LC, assuming an investment of $100 in the Company's common
stock on December 31, 1995, and the reinvestment of dividends.
F & M Bank Corp.
[PERFORMANCE GRAPH]
Period Ending
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Index 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
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F & M Bank Corp. 100.00 107.73 125.60 230.12 272.25 272.27
Russell 2000 100.00 116.49 142.55 138.92 168.45 163.36
Pink Banks ($100M to $500M) 100.00 125.96 175.22 206.49 188.05 158.96
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
S. B. Hoover & Company, L.L.P. of Harrisonburg, Virginia, was the
auditor for the Company for 2000 and is being recommended to the Company's
shareholders for the ratification of its appointment as auditor for 2001. A
representative of S. B. Hoover & Company, L.L.P. is expected to be present at
the Annual Meeting, will have the opportunity to make a statement if he desires
to do so, and is expected to be available to respond to appropriate questions
from shareholders.
The Board recommends a vote for Proposal Two.
7
AUDIT INFORMATION
Audit Committee
The Board of Directors has adopted a written charter for the Audit
Committee that is set forth in Exhibit A to this Proxy Statement. The four
members of the Audit Committee are independent as that term is defined in the
listing standards of the National Association of Securities Dealers.
Fees of Independent Public Accountants
Audit Fees. The aggregate amount of fees billed by S. B. Hoover &
Company, L.L.P. for professional services rendered for the audit of the
Company's annual financial statements for the fiscal year ended December 31,
2000, and the review of the financial statements included in the Company's
Quarterly Reports on Form 10-Q for that fiscal year was $19,390.
Financial Information System Design and Implementation Fees. There were
no fees billed by S. B. Hoover & Company, L.L.P. for professional services
rendered to the Company for the fiscal year ended December 31, 2000, for the
design and implementation of financial information systems.
All Other Fees. The aggregate amount of fees billed by S. B. Hoover &
Company, L.L.P. for all other non-audit services, including internal audit
services, rendered to the Company for the fiscal year ended December 31, 2000
was $34,766.
Leased Employees
S. B. Hoover & Company, L.L.P. has informed the Company that none of
the hours expended on its engagement to audit the Company's financial statements
for the fiscal year ended December 31, 2000, was attributed to work performed by
persons other than full time, permanent employees.
Audit Committee Report
Management is responsible for the Company's internal controls,
financial reporting process and compliance with laws and regulations and ethical
business standards. The independent auditor is responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes on behalf of the Board of Directors.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the 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 (Communication with
Audit Committees). In addition, the Audit Committee has received from the
independent auditors the written disclosures required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees) and
discussed with them their independence from the Company and its management.
Moreover, the Audit Committee has considered whether the independent auditor's
provision of other non-audit services to the Company is compatible with the
auditor's independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, for filing with the Securities and Exchange
Commission. By recommending to the Board of Directors that the audited financial
statements be so included, the Audit Committee is not opining on the accuracy,
completeness or fairness of the audited financial statements.
February 15, 2001 Audit Committee
Thomas L. Cline
Ellen R. Fitzwater
Robert L. Halterman
Richard S. Myers
8
SHAREHOLDER PROPOSALS
Under the regulations of the Securities and Exchange Commission,
proposals of shareholders intended to be presented at the Company's 2002 Annual
Meeting must be received by the Secretary of the Company, at its principal
executive offices, P. O. Box 1111, Timberville, Virginia 22853 no later than
November 9, 2001 in order for the proposal to be considered for inclusion in the
Company's Proxy Statement. Any proposal that is received by the Company after
January 23, 2002 will be considered untimely for consideration at the 2002
Annual Meeting.
By Order of the Board of Directors
/s/ Larry A. Caplinger
Larry A. Caplinger, Secretary
March 9, 2001
9
EXHIBIT A
F & M Bank Corp.
Audit Committee Charter
I. Purpose
-------
The primary purpose of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibility by: reviewing the financial
reports and other financial information provided by the organization; assessing
the systems of internal controls; and monitoring the organization's auditing,
accounting, and financial reporting practices. Consistent with this function,
the Audit Committee should encourage continuous improvement in and should foster
adherence to, the organization's policies, procedures, and practices at all
levels. The Audit Committee's primary duties and responsibilities are to:
Serve as an independent and objective party to monitor the
organization's financial reporting process and internal control system.
Review and appraise the audit efforts of the organization's independent
accountants and internal auditing firm.
Provide an open avenue of communication among the independent
accountants, senior management, the internal auditing firm, and the
Board of Directors.
II. Composition
-----------
The Audit Committee shall be composed of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Committee. A
Director will be considered independent if, he or she:
Has not been employed by the Corporation or its affiliates in the
current or past three years;
Has not accepted any compensation from the Corporation or its
affiliates in excess of $60,000 during the previous fiscal year (except
for board service, retirement plan benefits, or non-discretionary
compensation);
Does not have an immediate family member who is, or has been in the
past three years, employed by the Corporation or its affiliates as an
executive officer;
Has not been a partner, controlling shareholder or an executive officer
of any for-profit business to which the Corporation made, or from which
it received, payments (other than those which arise solely from
investments in the Corporation's securities) that exceed five percent
of the organization's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years; or
Has not been employed as an executive of another entity where any of
the Corporation's executives serve on that entity's compensation
committee.
All members of the Committee shall have a working familiarity with
basic finance and accounting practices, and at least one member of the Committee
shall have accounting or related financial management expertise. Committee
members may enhance their familiarity with finance and accounting by
participating in educational programs conducted by the Corporation or an outside
consultant.
The members of the Committee shall be elected by the Board at the
annual organizational meeting of the Board or until their successors shall be
duly elected and qualified. Unless a Chair is elected by the full Board, the
members of the Committee may designate a Chair by majority vote of the full
Committee membership.
III. Meetings
--------
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the Committee should meet at least annually with the independent
accountants to discuss any matters that the Committee believes should be
discussed privately.
IV. Responsibilities and Duties
---------------------------
To fulfill its responsibilities and duties the Audit Committee shall:
Review and update this Charter periodically, at least annually, as
conditions dictate.
Review the organization's audited financial statements with Management
and the independent auditors.
Recommend to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K.
Review the regular internal audit reports to Management prepared by the
internal auditing firm as well as Management's responses.
Recommend to the Board the selection of the independent accountants and
the internal audit firm, considering independence and effectiveness,
and approve the fees and other compensation to be paid to these
firm(s).
On an annual basis, the Committee should review and discuss with the
accountants all significant relationships the accountants have with the
organization to determine the accountants' independence.
Review the performance of the independent accounting firm(s) and
approve any proposed discharge of the independent accountants when
circumstances warrant.
Periodically consult with the independent accounting firm(s) out of the
presence of Management about internal controls and the fairness and
accuracy of the organization's financial statements.
Consider and approve, if appropriate, major changes to the
organization's auditing and accounting principles and practices as
suggested by the independent accounting firm(s), Management, or the
internal auditing department.
Discuss with the independent auditors the "Matters Required To Be
Discussed" by the Statement of Auditing Standards No. 61 relating to
the conduct of the audit.
Review activities, organizational structure, and qualifications of the
internal audit firm.
Perform any other activities consistent with this Charter, the
organization's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate.
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 Company'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 auditors. 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.
This Audit Committee Charter has been reviewed and approved by the
Audit Committee and Board of Directors of F & M Bank Corp. December 21, 2000.
PROXY
F & M BANK CORP.
Annual Meeting of Shareholders, April 14, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence H. Hoover, Jr., Richard S.
Myers and Ronald E. Wampler, any or all of whom may act, with full power of
substitution, as proxies to vote, as designated below, at the Annual Meeting of
Shareholders to be held April 14, 2001 at 5:30 P.M. and at any adjournment
thereof, the shares of F & M Bank Corp. common stock held of record by the
undersigned as of February 23, 2001.
The shares to which this proxy relates will be voted as specified. If
no specification is made, such shares will be voted in favor of the proposals
set forth on this proxy.
PROPOSAL ONE
ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary below) nominees listed below
Thomas L. Cline, Robert L. Halterman and Michael W. Pugh
for three-year terms to expire in 2004.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
________________________________________________________________________________
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF S. B. HOOVER & COMPANY, L.L.P.
AS INDEPENDENT PUBLIC ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
Please complete, date and sign the proxy and return it as soon as
possible in the enclosed postage prepaid envelope. The proxy must be signed
exactly as the name or names appear on the label attached to this proxy with the
exception of any stock listed in the name of the owner TOD to another
individual. If signing as a trustee, executor, etc., please so indicate.
Date Signed:___________________________
_________________________________ _______________________________________
Print Name Signature
_________________________________ _______________________________________
Print Name Signature