defa14a
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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o
Preliminary Proxy Statement
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o Confidential, for Use of the Commission Only (as |
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permitted by Rule 14a-6(e)(2)) |
o Definitive Proxy Statement |
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þ Definitive Additional Materials |
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o Soliciting Material Pursuant to §240.14a-12 |
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Fauquier
Bankshares, 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):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(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
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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 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) 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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MAY 11, 2009
WHAT DO WE THINK MATTERS IN RUNNING A BANK AND A PUBLIC COMPANY?
AMONG OTHER THINGS, ACCURACY, TRANSPARENCY, AND PERHAPS AN OLD FASHIONED WORD, FORTHRIGHTNESS.
Lets look at what Mr. Tiffany has said in his proxy materials, and then the facts.
He said We do not want to sell the bank! Our last letter to you set out his numerous attempts to
do that very thing.
He said the Board saw fit to increase the CEOs total compensation by 73% from 2005 to 2008. This
data is wrong. When compared on the same basis, if you do not include retirement valuation
compensation for 2008, which was not included in the SEC reporting requirements of 2005, the 2008
CEO compensation declined by 1%.
He said company management has presided over extraordinary misalignment of pay and performance
and we are fed up with bloated pay. In fact, when you apply todays reporting rules to Mr.
Tiffanys own compensation, he was better compensated, or in his words, more bloated, over his last
five years as CEO than our current CEO has been compensated for his last five years, despite the
fact that during Mr. Tiffanys tenure bank assets averaged only 2/3 of the banks current size, the
stock price was a little over one-half the current average, and the total net income was
substantially lower.
He compared non-employee director compensation to that of one competitor, Middleburg Bank. What he
didnt tell you is he chose a bank where one-third of the board had only served for part of the
year, and been paid for only part of the year. He also didnt tell you The Fauquier Bank paid its
directors about the same as these Northern Virginia banks: Access, Alliance, First National of
Strasburg, Eagle Bank Corp (Bank of Clark County). Total director compensation for those banks
ranges from $25,000-$43,000, with The Fauquier Bank landing right in the middle.
He said the companys Board rewarded itself by raising meeting fees 50% and increasing its annual
retainer 60%, In fact, aggregate Board compensation increased from 2005 to 2008 by a little over
14%, during a period when Sarbanes-Oxley and economic challenges substantially increased the time
spent by boards of directors.
He said, Since the beginning of 2004, the CEO and the Board have been net sellers of company
stock. What he didnt say is he bought no shares of the bank during this period, and as a sitting
director, sold 20,000 shares. Accuracy matters.
He compared your banks growth with that of other banks. What he didnt explain was that those
figures include mergers and acquisitions. During the period he cites, eleven Virginia banks were
bought, adding $6.5 billion to the assets of other Virginia banks. This is not organic growth
this is buying assets and deposits, and we believe it makes this comparison useless for any
analysis of a bank such as ours.
Ten Courthouse Square 20186 Post Office Box 561 Warrenton, Virginia 20188
phone: 540-347-2700 metro: 703-366-1600 fauquierbank.com
He said In 2008 for the first time in four decades shareholder equity declined. Yes it
didby less than 1%. He seems to have forgotten that it declined in 1993 by 3%, when he was CEO
and President.
He said 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. In fact, the median earnings for all
Virginia banks traded on the NYSE, NASDAQ, AMEX, OTC Bulletin Board and the Pink Sheets were down
by 70%, and those Virginia banks on only the NYSE, NASDAQ, and AMEX the medians earnings were
down60%. Our earnings were, on the other hand, down by only 34%.
He said the companys three capital measures...were all below both Virginia state public bank and
national public bank medians. In fact, the chart below includes the total Federal Reserve Bank
Holding Company Peer Group for banks of $500 million to $1 billion in asset size. Our ratios are
clearly above our true peers, contrary to the selective disclosure the dissidents chose to share
with you.
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Percentile |
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Fauquier |
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Peer |
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Ranking as |
Capital Ratios |
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Bankshares |
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Institutions |
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Compared to Peers |
Tier 1 leverage |
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9.37 |
% |
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8.71 |
% |
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67 |
% |
Tier 1 Risk-based |
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11.38 |
% |
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11.27 |
% |
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55 |
% |
Total Risk-based |
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12.52 |
% |
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12.65 |
% |
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54 |
% |
Tangible equity/tangible assets |
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8.06 |
% |
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7.28 |
% |
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64 |
% |
Mr. Tiffanys latest proxy materials attribute the banks improved performance in the first half of
this decade to himself, and the general economic decline since 2007 that has affected virtually all
bank stocks to the banks present management. The fact he doesnt tell you is that, coincidentally,
the improvement in total return performance began during the banks management transition. Randy
Ferrell, our CEO, and Eric Graap, our CFO (and one of this years nominees), began working together
as a team in November 2000. The table below shows the facts from November 2000 to the present,
the Companys total return increased by 124.4% compared to a total for all U.S. banks over that
period of a negative 22.5%. It is also important to note that our bank declined 40% from June 2006
through May 7, 2009. It should also be noted that the average of all banks declined 56% during the
same time period, per SNL Financial LC.
We have two highly capable directors who are experienced with our Bank, the regulatory
environment in which we exist and considerable challenges that banks today are facing. Mr. Tiffany
attacks the independence of Mr. Frostickhe is simply wrong. Mr. Frostick is independent under the
NASDAQ listing standards and has not provided any legal services to the Company for a number of
years.
Please, vote your WHITE proxy card and RETURN it in the envelope provided, or simply follow the
instructions on your card to cast your votes online or over the phone. DO NOT RETURN THE BLUE
PROXY CARD, EVEN AS A PROTEST.
Yours for a strong locally owned independent community bank,
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C. H. Lawrence, Jr.
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John B. Adams, Jr.
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Brian S. Montgomery |
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Randy K. Ferrell
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Randolph D. Frostick
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John J. Norman, Jr. |
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Eric P. Graap
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Jay B. Keyser
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P. Kurtis Rodgers |
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Douglas C. Larson
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Randolph T. Minter
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Sterling T. Strange, III |
(see reverse side)
Additional Information and Where To Find It
This letter is solicitation material in respect of the matters to be considered at the 2009 Annual
Meeting of Shareholders. On April 20, 2009, Fauquier Bankshares, Inc. (the Company) filed a
definitive proxy statement with the Securities and Exchange Commission (the SEC) and has mailed
the definitive proxy statement to the Companys shareholders. WE URGE SHAREHOLDERS AND INVESTORS
TO READ THE PROXY STATEMENT ALONG WITH ANY OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED
WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION. A free copy of the proxy statement and
other related documents filed by the Company may be obtained at the SECs website at www.sec.gov.
The Companys proxy statement and other related documents may also be obtained by contacting the
Companys Secretary at Fauquier Bankshares, Inc., 10 Courthouse Square, Warrenton, Virginia 20186.
Participants in Solicitation
A listing of persons who are participants in the solicitation and certain information concerning
such persons is set forth in the Companys definitive proxy statement filed with the SEC on April
20, 2009, which may be obtained through the website maintained by the SEC at www.sec.gov.
Forward-Looking Statements
In addition to historical information, this letter contains forward-looking statements that are
based upon the Companys estimates and expectations concerning future events and are subject to
certain risks and uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. We caution that such statements are subject to a
number of uncertainties and actual results could differ materially and therefore you should not
place undue reliance on any forward-looking statements we make. We may not update any
forward-looking statements we make today for future events or developments. Information about risks
and uncertainties are described in our filings with the SEC, which are available on the SECs
website and our website and may be obtained by contacting the Secretary of the Company.