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x
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No fee
required.
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¨
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Fee computed on table below per
Exchange Act Rules14a-6(i)(1) and
0-11.
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(1)
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Title of each class of securities
to which transaction
applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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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)
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Proposed maximum aggregate value
of transaction:
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(5)
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Total fee
paid:
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¨
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Fee
paid previously with preliminary
materials:
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¨
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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.
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(1)
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Amount Previously
Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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·
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vote
FOR our nominees,
David M. van Roijen and C. Hunton Tiffany;
and
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·
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vote
AGAINST the
company’s proposal to authorize blank check preferred
stock.
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·
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FACT: From
the end of 2005 to the end of 2008, the market capitalization of our
company has declined over $40
million .1 During
the same period, the Board saw fit to increase the CEO's total
compensation from $368,707 to $637,330 – an increase of
73%.
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·
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FACT: From
the end of 2005 to the end of 2008, our company’s market capitalization
declined over 47
%, and earnings per share declined
34%. Yet in this period, the company’s Board rewarded
itself by raising meeting fees
50% and increasing its annual
retainer 60%.
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·
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FACT: The
average total compensation per non-employee director was $37,466 in
2008. Compare this with the $12,620 average total 2008
compensation per director at Middleburg Bank, a prime local
competitor. 2
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·
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FACT: For 2008, the top
three executive officers and the Board received aggregate total
compensation of $1,540,677, while the company generated $3,652,715 in net
income. In other words, for every $1 of company earnings in
2008, executive officers and directors received $0.42 in
compensation.
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·
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FACT: Since
the beginning of 2004, the CEO and the Board have been net sellers of
company stock on the open market. In this period, the current
Board has collectively purchased 12,669 shares and sold 62,240 shares on
the open market. The CEO alone during this time has purchased
only 1,500 shares while selling 36,836 shares on the open
market.
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·
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FACT: Despite
management’s own net selling in the marketplace, the company’s 2008
investor presentation claimed that FBSS stock was “a compelling
buy.”
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·
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FACT: Since
the beginning of 2004, approximately 91%
of the stock acquired by the current Board has been self-generated through
exercise of stock options and stock awards granted by the Board
itself.
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·
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FACT: Director
and executive officer ownership of Fauquier Bankshares is only 6.7%,
compared to the Virginia state public bank median of 16.1% and the
national public bank median of 16.6%.3
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·
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FACT: The
company announced in its recent proxy statement new minimum requirements
for executive officer and director ownership of stock. Meeting
these minimum requirements would still put directors and executives far
below the above industry average ownership
levels.
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·
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FACT: Both
total assets and deposits declined from the end of 2006 to the end of
2008. In this same period, Virginia state public bank median
total assets have increased 33.5% and Virginia state public bank median
deposits have increased 20.6%.4
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·
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FACT: In 2008
– for the first time in four decades – shareholder equity
declined.
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·
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FACT: From 2006 to 2008,
the rate of decline of earnings per share was greater than both the
Virginia state public bank and national public bank medians.4
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·
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FACT: During
2006 to 2008, five out of eight branches, including the main office, lost
deposits.4 Yet
the Company has been focused on increasing the number of branches – and is
currently spending shareholder money trying to develop three new branches
in 2009.
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·
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FACT: The
company is “well capitalized”as defined by regulators. However, as of the
end of 2008, the company's three capital measures (Capital Ratio, Equity
to Assets, and Total Risk-Adjusted Capital Ratio) were all below both
Virginia state public bank and national public bank medians.4
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1.
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Evaluation
of effectiveness of current corporate strategy to increase shareholder
returns
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2.
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Evaluation
of management and director compensation structure to align pay with
shareholderinterests
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3.
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Reassessment
of appropriate Board share ownership to align with shareholder
interests
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4.
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Ensure
politics, both inside the Board room and out, are not part of the Board
decision makingprocess
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5.
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Invite
selected shareholders and customers to speak with the Board about their
experiences andconcerns
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6.
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Assess
customer satisfaction through a comprehensive market
survey
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7.
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Assess
employee satisfaction through a corporate culture
survey
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