def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to § 240.14a-12 |
ACCESS NATIONAL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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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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Proposed maximum aggregate value of transaction: |
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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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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
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Access National Corporation
1800 Robert Fulton Drive, Suite 300
Reston, Virginia 20191
Dear Fellow Shareholders:
You are cordially invited to attend the 2006 Annual Meeting of Shareholders of Access National
Corporation. The meeting will be held on Tuesday, May 23, 2006, at 4:00 p.m. at the Corporations
office located at 1800 Robert Fulton Drive, Reston, Virginia. The accompanying Notice and Proxy
Statement describe the matters to be presented at the meeting. Enclosed is our annual report on
Form 10-K for the year ended December 31, 2005, which will be reviewed at the Annual Meeting.
Please complete, sign, date, and return the REVOCABLE PROXY in the enclosed postage-paid
envelope as soon as possible, regardless of whether or not you plan to attend the Annual
Meeting. It is important that your shares be represented and your vote recorded. If you
decide to attend the Annual Meeting in person, you can revoke your proxy at any time before it is
voted at the meeting if you so desire.
We appreciate your continuing loyalty and support of Access National Corporation and its
subsidiaries, Access National Bank, Access National Mortgage Corporation and Access National
Leasing Corporation.
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Sincerely, |
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Michael W. Clarke |
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President & Chief Executive Officer |
Reston, Virginia
April 17, 2006
ACCESS NATIONAL CORPORATION
1800 Robert Fulton Drive, Suite 300
Reston, Virginia 20191
NOTICE OF 2006 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 2006
The 2006 Annual Meeting of Shareholders of Access National Corporation (the Corporation)
will be held at the Corporations office located at 1800 Robert Fulton Drive, Reston, Virginia on
Tuesday, May 23, 2006, at 4:00 p.m. for the following purposes:
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To elect two (2) Class I directors to the Board of Directors of the
Corporation to serve until the 2009 Annual Meeting of Shareholders, as described in
the Proxy Statement accompanying this notice; and |
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To transact such other business as may properly come before the meeting
or any adjournment thereof. |
Shareholders of record at the close of business on April 1, 2006, are entitled to notice of
and to vote at the Annual Meeting or any adjournment thereof.
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By Order of the Board of Directors, |
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Sheila M. Linton |
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Vice President & Corporate Secretary |
April 17, 2006
IMPORTANT NOTICE
Please complete, sign, date, and return the REVOCABLE PROXY in the enclosed postage-paid
envelope as soon as possible, regardless of whether or not you plan to attend the Annual
Meeting. Shareholders attending the meeting may personally vote on all matters that are
considered, in which event their signed proxies are revoked.
ACCESS NATIONAL CORPORATION
1800 Robert Fulton Drive, Suite 300
Reston, Virginia 20191
PROXY STATEMENT
2006 ANNUAL MEETING OF SHAREHOLDERS
MAY 23, 2006
GENERAL
The following information is furnished in connection with the solicitation by and on behalf of
the Board of Directors of the enclosed proxy to be used at the 2006 Annual Meeting of the
Shareholders (the Annual Meeting) of Access National Corporation to be held on Tuesday, May 23,
2006, at 4:00 p.m. at the Corporations office located at 1800 Robert Fulton Drive, Reston,
Virginia. The approximate mailing date of this Proxy Statement is April 17, 2006.
Revocation and Voting of Proxies
Execution of a proxy will not affect a shareholders right to attend the Annual Meeting and to
vote in person. Any shareholder who has executed and returned a proxy may revoke it by attending
the Annual Meeting and requesting to vote in person. A shareholder may also revoke his proxy at
any time before it is exercised by filing a written notice with the Corporation or by submitting a
proxy bearing a later date. Proxies will extend to, and will be voted at, any properly adjourned
session of the Annual Meeting. If a shareholder specifies how the proxy is to be voted with
respect to any proposal for which a choice is provided, the proxy will be voted in accordance with
such specifications. If a shareholder fails to specify with respect to a proposal, the proxy will
be voted FOR the director nominees named in proposal 1, as set forth in the accompanying notice,
and all other matters will be voted by the named individuals to whom the proxy has been granted in
accordance with their best judgment.
Voting Rights of Shareholders
Only those shareholders of record at the close of business on April 1, 2006, are entitled to
notice of and to vote at the Annual Meeting, or any adjournment thereof. The number of shares of
common stock of the Corporation outstanding and entitled to vote at the Annual Meeting is
8,100,724. The Corporation has no other class of stock outstanding. A majority of the votes
entitled to be cast, represented in person or by proxy, will constitute a quorum for the
transaction of business. Each share of the Corporations common stock entitles the record holder
thereof to one vote upon each matter to be voted upon at the Annual Meeting. Shares for which the
holder has elected to abstain or to withhold the proxies authority to vote (including broker
non-votes) on a matter will count toward a quorum, but will not be included in determining the
number of votes cast with respect to such matter.
With regard to the election of directors, votes may be cast in favor or withheld. If a quorum
is present, the nominees receiving the greatest number of affirmative votes cast at the Annual
Meeting will be elected directors; therefore, votes withheld will have no effect. Approval of any
other matter requires an affirmative vote of a majority of the shares cast on the matter. Thus,
although abstentions and broker non-votes (shares held by customers which may not be voted on
certain matters because the broker has not received specific instructions from the customers) are
counted for purposes of determining the presence or absence of a quorum, they are generally not
counted for purposes of determining whether such matter has been approved, and therefore have no
effect.
Solicitation of Proxies
The cost of solicitation of proxies will be borne by the Corporation. Solicitations will be
made only by the use of the mail, except that officers and regular employees of the Corporation and
its subsidiaries may make solicitations of proxies by telephone or mail, acting without
compensation other than their regular
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compensation. We anticipate that brokerage houses and other nominees, custodians, and fiduciaries
will be requested to forward the proxy soliciting material to the beneficial owners of the stock
held of record by such persons, and the Corporation will reimburse them for their charges and
expenses in this connection if so requested.
Security Ownership of Certain Beneficial Owners
The person listed below is known by the Corporation to be an owner of more than 5% of the
Corporations common stock.
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Common Stock |
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Number of Shares |
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Number of Shares |
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Beneficially |
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under Exercisable |
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under Exercisable |
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Percent of |
Name |
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Owned |
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Options |
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Warrants (1) |
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Class |
Michael Rebibo |
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545,944 |
(6)(7) |
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0 |
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319,098 |
(6) |
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10.27 |
% |
Oakton, Virginia |
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All other persons known by the Corporation to be the owners of more than 5% of the
Corporations common stock are or were also directors and/or named executive officers of the
Corporation during 2005 and are listed in the table below under Security Ownership of Management.
Security Ownership of Management
The following table shows as of March 31, 2006, the beneficial ownership of the Corporations
common stock of each director, director nominee, certain executive officers and of all directors,
director nominees, and executive officers of the Corporation as a group.
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Common Stock |
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Number of Shares |
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Number of Shares |
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Beneficially |
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under Exercisable |
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under Exercisable |
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Percent of |
Name |
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Owned |
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Options |
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Warrants (1) |
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J. Randolph Babbitt |
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123,664 |
(2) |
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84,274 |
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6,720 |
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2.62 |
% |
Oakton, Virginia |
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Michael W. Clarke |
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344,508 |
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274,566 |
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11,220 |
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7.52 |
% |
Vienna, Virginia |
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John W. Edgemond |
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406,514 |
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91,234 |
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11,220 |
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6.20 |
% |
Reston, Virginia |
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Dean F. Hackemer |
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170,594 |
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6,150 |
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0 |
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2.18 |
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Fairfax, Virginia |
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James L. Jadlos |
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177,800 |
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78,242 |
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0 |
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3.13 |
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Denver, Colorado |
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Thomas M. Kody |
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247,766 |
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87,748 |
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11,220 |
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4.23 |
% |
Great Falls, Virginia |
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Jacques Rebibo |
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407,136 |
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91,234 |
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205,176 |
(6) |
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8.38 |
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McLean, Virginia |
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Robert C. Shoemaker |
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177,636 |
(8) |
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201,258 |
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6,720 |
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4.64 |
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Fairfax, Virginia |
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Charles Wimer |
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51,608 |
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54,814 |
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0 |
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1.30 |
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Virginia Beach, Virginia |
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All Directors & Executive |
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Officers as a group (9 persons) |
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2,107,226 |
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969,520 |
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252,276 |
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35.71 |
% |
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For purposes of these tables above, beneficial ownership has been determined in accordance
with the provisions of Rule 13d-3 of the Securities Exchange Act of 1934 under which, in general, a
person is deemed to be the beneficial owner of a security if he or she 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 or she has the right to acquire beneficial ownership of the security within
sixty days. All shares of common stock indicated in the above tables are subject to the sole
investment and voting power of the identified director or officer, except as otherwise set forth in
the footnotes below. |
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Includes warrants issued (i) to the organizing shareholders of the Access National Bank (the
Bank) for their early investment commitment and funding of the Banks organizational phase
(these warrants vested immediately), and (ii) to the former shareholders of MIC as part of the
merger agreement discussed in note 6 below (these warrants vested annually pursuant to
earn-out provisions based on Access National Mortgage Corporations annual financial
performance through the fiscal year 2004). |
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Includes 53,314 shares held in trust and with respect to which Mr. Babbitt shares the power
to vote and dispose of the shares. |
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Includes 83,245 shares held by spouse. |
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Includes 5,486 shares held by spouse, 14,246 shares held by minor children, and 9,600 shares
held by GreenWorks Landscaping, Inc., of which Mr. Edgemond is President/Owner. |
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Includes 12,600 shares held by spouse. |
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Includes shares acquired pursuant to the merger agreement between the Bank and Mortgage
Investment Corporation (MIC), now known as Access National Mortgage Corporation (the
Mortgage Corporation). |
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Based on information provided by Mr. Rebibo as of March 8, 2006. Includes 121,744 shares
held as conservator for Mr. Rebibos mother. |
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Includes 36,330 shares held by spouse and 700 shares held for minor children. |
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the Exchange Act) requires directors,
executive officers and 10% beneficial owners of companies whose securities are registered under
Section 12 of the Exchange Act to file reports with the Securities and Exchange Commission (the
SEC) concerning their ownership of the companies securities. Based solely upon the
Corporations review of such reports, the Corporation believes that all executive officers,
directors or greater than 10% beneficial owners filed these required reports on a timely basis with
respect to 2005 with the following exceptions: Mr. Clarke filed a late Form 4 in March 2005 for
one transaction, Mr. Shoemaker filed a late Form 4 in September 2005 for one transaction, and Mr.
(Michael) Rebibo filed a late Form 4 in June 2005 for one transaction.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board is divided into three classes (I, II, and III) of directors. The term of office for
Class I directors will expire at the Annual Meeting. The two persons named below, each of whom
currently serves as a director of the Corporation, will be nominated to serve as Class I directors.
If elected, the Class I nominees will serve until the 2009 Annual Meeting of Shareholders. The
persons named in the proxy will vote for the election of the nominees named below unless authority
is withheld. The Board believes that the nominees will be available and able to serve as
directors, but if any of these persons should not be available or able to serve, the proxies may
exercise discretionary authority to vote for a substitute proposed by the Board.
Certain information concerning the nominees for election at the Annual Meeting as Class I
directors is set forth below, as well as certain information about the Class II and III directors,
who will continue in office until the 2007 and 2008 Annual Meetings of Shareholders, respectively.
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Served |
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Name (Age) |
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Since (1) |
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Principal Occupation During Past Five Years |
Class I Nominees (To Serve Until the 2009 Annual Meeting) |
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Michael W. Clarke (44)
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1999 |
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President, Chief Executive Officer and
Director of Access National Corporation
and Access National Bank since inception.
Prior to joining Access National Bank, Mr.
Clarke was Chief Credit Officer of Patriot
National Bank/United Bank, Vienna,
Virginia. |
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James L. Jadlos (40)
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2000 |
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Director of Access National Bank since May
23, 2000; Director of Access National
Corporation since inception; President of
Griffin Capital Partners, Inc., Denver,
Colorado, since 2002. |
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Class II Directors (Serving Until the 2007 Annual Meeting) |
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Robert C. Shoemaker (45)
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1999 |
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Executive Vice President and Director of
Access National Corporation and Access
National Bank since inception. Prior to
joining Access National Bank, Mr.
Shoemaker was Senior Vice President of
Construction and Real Estate Lending for
Patriot National Bank/United Bank, Vienna,
Virginia. |
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Thomas M. Kody (44)
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1999 |
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Director of Access National Corporation
and Access National Bank since inception;
Owner of multiple automobile dealerships
in Maryland and Virginia. |
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Served |
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Name (Age) |
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Since (1) |
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Principal Occupation During Past Five Years |
Class III Directors (Serving Until the 2008 Annual Meeting) |
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Jacques Rebibo (66)
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1999 |
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Chairman of the Board of Directors and
Director of Access National Corporation
since inception; Chairman of the Board of
Directors of Access National Bank since
February 22, 2000 and Director since
inception. Chairman of akaSMART, Inc., an
online educational corporation, since
January 2006. Also currently serves as a
consultant to several private and public
concerns. Over the last 30 years, he has
held executive level positions with
numerous private and publicly owned
technology and finance related companies. |
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John W. Edgemond (44)
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1999 |
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Director of Access National Corporation
and Access National Bank since inception;
Owner and President of GreenWorks
Landscaping, Chantilly, Virginia since
1984. |
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J. Randolph Babbitt (59)
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1999 |
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Director of Access National Corporation
and Access National Bank since inception;
President and Chief Executive Officer of
ECLAT Consulting, Inc. since February
2002. Previously served as President of
Airline Pilots Association International. |
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(1) |
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Includes term as a director of the Bank prior to the reorganization in which the
Corporation became the holding company for the Bank. |
Unless authority for the nominees is withheld, the shares represented by the enclosed proxy
card, if executed and returned, will be voted FOR the election of the nominees recommended by the
Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE DIRECTORS NOMINATED TO SERVE AS CLASS I
DIRECTORS.
CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS
The current Board of Directors is comprised of seven members, a majority of whom are
independent, as defined by the listing standards of the NASDAQ Stock Market, Inc. (Nasdaq).
The Board of Directors has determined in accordance with the Nasdaq listing standards that these
independent directors have no relationships with the Corporation that would interfere with the
exercise of their independent judgment in carrying out the responsibilities of a director. The
independent directors are Messrs. Babbitt, Edgemond, Jadlos and Kody.
During 2005, there were 12 meetings of the Board of Directors of the Corporation. All of the
directors attended at least 75% of all meetings of the Board and Board committees on which he
served. When directors are unable to attend a meeting, it is the Corporations practice to provide
all meeting materials to the director, and the Chief Executive Officer consults and apprises the
director of the meetings subject matter.
The Corporation has not adopted a formal policy on board members attendance at our annual
meetings of shareholders, although all board members are invited and encouraged to attend and,
historically, most have done so. All of the board members attended the 2005 Annual Meeting of
Shareholders.
The Board of Directors has standing Audit, Nominating and Governance, Compensation, and Loan
Committees.
5
Nominating and Governance Committee. Members of the Nominating and Governance Committee are
Messrs. Edgemond (Chair), Babbitt, Jadlos and Kody, each of whom is independent under the Nasdaq
listing standards. The committee met twice in 2005. The committee is responsible for making
recommendations to the full Board regarding nominations of individuals for election to the Board of
Directors and for evaluating the Boards structure, personnel, committee composition and general
governance processes. The committee operates pursuant to a written charter adopted by the Board of
Directors, a copy of which was attached as Appendix A to the Corporations 2004 Proxy Statement.
The Board of Directors reviews and reassesses the adequacy of this charter annually.
Qualifications for consideration as a director nominee may vary according to the particular
areas of expertise being sought as a complement to the existing Board composition. However,
minimum qualifications include high level leadership experience in business activities, breadth of
knowledge about issues affecting the Corporation and time available for meetings and consultation
on company matters. The committee seeks a diverse group of candidates who possess the background,
skills and expertise to make a significant contribution to the Board of Directors, to the
Corporation and to its shareholders. The committee evaluates potential nominees, whether proposed
by shareholders or otherwise, by reviewing their qualifications, reviewing results of personal and
business reference interviews and reviewing other relevant information. Candidates whose
evaluations are favorable are then recommended by the committee for selection by the full Board.
The full Board then selects and recommends candidates for nomination as directors for shareholders
to consider and vote upon at the annual meeting.
While there are no formal procedures for shareholders to submit director candidate
recommendations, the Nominating and Governance Committee will consider candidates recommended by
shareholders in writing. Such written submissions should include the name, address, and telephone
number of the recommended candidate, along with a brief statement of the candidates qualifications
to serve as a director. All such shareholder recommendations should be submitted to the attention
of the Corporations Secretary at the Corporations principal office in Reston, Virginia and must
be received within a reasonable time prior to the printing and mailing of the 2007 Annual Meeting
proxy statement in order to be considered by the Nominating and Governance Committee for the next
annual election of directors. Any candidates recommended by a shareholder will be reviewed and
considered in the same manner as all other director candidates considered by the Nominating and
Governance Committee.
In addition, in accordance with the Corporations bylaws, any shareholder entitled to vote in
the election of directors generally may nominate one or more persons for election as director(s) at
an annual meeting if the nomination is made in writing. Any such shareholder nominations for the
next annual election of directors must be received by the Corporations Secretary at the
Corporations principal office in Reston, Virginia, no later than March 18, 2007.
In order to be valid, a shareholder nomination must set forth (1) the name and address of the
shareholder who intends to make the nomination; (2) the name and address of the person or persons
to be nominated; (3) a representation that the shareholder is a record holder of stock of the
Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (4) a description of all
arrangements or understandings between the shareholder and each nominee and any other person or
persons (naming such persons) pursuant to which the shareholder is making the nomination; (5) such
other information regarding each nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the SEC, had the nominee been
nominated, or intended to be nominated, by the Board of Directors, including the amount and nature
of the nominees beneficial ownership of the Corporation, the nominees principal occupation for
the past five years and his or her age; and (6) the written consent of each nominee to serve as a
director if elected.
Compensation Committee. Members of the Compensation Committee are Messrs. Jadlos (Chair),
Babbitt, Edgemond and Kody, each of whom is independent under the Nasdaq listing standards. The
committee met two (2) times in 2005. The committee is responsible for recommending the level of
compensation of each executive officer of the Corporation and its subsidiaries, the granting of
equity based compensation, employment agreements and other employee compensation plans for approval
by the full
6
Board of Directors, except that the Chief Executive Officer is not present during deliberations or
voting with respect to his compensation. The committee operates pursuant to a written charter
adopted by the Board of Directors, which the Board reviews and reassesses annually.
Audit Committee. Members of the Audit Committee are Messrs. Babbitt (Chair), Edgemond, Jadlos
and Kody, each of whom satisfies the independence requirements and financial literacy requirements
of the Nasdaq listing standards and SEC regulations applicable to audit committee members.
While the Board of Directors believes that all of its Audit Committee members have the
necessary experience and level of financial sophistication to serve effectively on the Audit
Committee, the Board has determined that the Corporation does not currently have an audit
committee financial expert, as defined by the SECs rules and regulations, serving on the Audit
Committee. Nevertheless, the Board of Directors believes that the cumulative experience of the
directors serving on the Audit Committee is adequate to provide appropriate oversight of the
Corporations and the Banks audit functions. The members of the Audit Committee have significant
management and financial oversight experience in businesses of various size and complexity across a
variety of industries. In addition, all members of the Audit Committee have past employment
experience in finance or accounting or comparable experience which results in each individuals
financial sophistication.
The Audit Committee assists the Board in its oversight duties with respect to financial
reporting, internal controls and other matters relating to corporate governance. The Audit
Committee reviews and approves various audit functions including the year-end audit performed by
the Corporations independent public accountants. The Audit Committee met seven (7) times during
2005. The committee operates pursuant to a written charter adopted by the Board of Directors, a
copy of which was attached to the Corporations 2005 Proxy Statement. See Report of the Audit
Committee on page 14
Code of Ethics. The Corporation has adopted a Code of Ethics that applies to its directors,
executives and employees. The Corporations Code of Ethics was filed as Exhibit 14 to the
Corporations 2003 Form 10-K.
Shareholder Communications with the Board of Directors
Shareholders who wish to contact the Board of Directors or any of its members may do so by
addressing their written correspondence to Board of Directors/Individual Director, c/o Corporate
Secretary, Access National Corporation, 1800 Robert Fulton Drive, Suite 300, Reston, Virginia
20191. All shareholder communications must be written and should contain the address, telephone
number and email address, if any, of the person submitting the communication. All shareholder
communications will be delivered to their addressees. Correspondence directed to an individual
Board member will be referred, unopened, to that member. Correspondence not directed to a
particular Board member will be referred, unopened, to the Chairman of the Board.
Director Compensation
The compensation of non-employee members of the Board of Directors for 2005 and 2006 is
summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
2005 |
|
2005 Cash |
Name/Position |
|
Retainer |
|
Retainer |
|
Incentive |
Jacques Rebibo, Non-Executive Chairman |
|
$ |
38,875 |
|
|
$ |
37,000 |
|
|
$ |
25,000 |
|
J. Randolph Babbitt, Non-Employee Director |
|
$ |
26,875 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
Thomas M. Kody, Non-Employee Director |
|
$ |
26,875 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
John W. Edgemond IV, Non-Employee Director |
|
$ |
26,875 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
James L. Jadlos, Non-Employee Director |
|
$ |
26,875 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
For the non-executive chairman, $1,000 of the indicated 2005 and 2006 retainer amounts are
paid monthly, totaling $12,000 per year. The balances of the 2005 retainer and cash incentive for
all non-employee
7
directors, including the chairman, were paid in February 2006. The 2006 retainer will be paid by
quarterly installments in the month following the end of each fiscal quarter for 2006.
Non-employee directors are also eligible to receive cash incentives and stock options each
year, which are designed to encourage attendance and participation at meetings, regulatory
compliance, budget performance, maintenance of financial controls and referral of business to the
Corporation. Each non-employee director received 1,000 stock options in connection with service
during the fiscal year ended December 31, 2005.
Executive Officers Who Are Not Directors
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
|
|
|
|
Officer |
|
|
|
Principal Occupation |
Name (Age) |
|
Since |
|
Current Position |
|
During Past Five Years |
Charles Wimer (61)
|
|
|
2000 |
|
|
Executive Vice
President and Chief
Financial Officer,
Access National
Corporation and
Access National
Bank.
|
|
Executive Vice
President and Chief
Financial Officer of
Access National
Corporation since
April 2002, and
Access National Bank
since January 2000;
Executive Vice
President and Chief
Financial Officer,
Monarch Bank,
1999-2001; Executive
Vice President and
Chief Financial
Officer, Potomac
Bank, 1998-1999. |
|
|
|
|
|
|
|
|
|
Dean F. Hackemer (41)
|
|
|
2004 |
|
|
Senior Vice
President, Access
National Bank;
President and Chief
Executive Officer,
Access National
Mortgage
Corporation.
|
|
Senior Vice President
of Access National
Bank and President of
Access National
Mortgage since
September 2004;
Previously Executive
Vice President of
Access National
Mortgage since 2002;
Loan Officer, Vice
President and Senior
Vice President of
Mortgage Investment
Corporation from 1992
- 2002. |
8
EXECUTIVE COMPENSATION AND RELATED PARTY TRANSACTIONS
Summary of Cash and Certain Other Compensation. The following table shows the cash and
non-cash compensation earned by the Chief Executive Officer and the other three most highly
compensated executive officers of the Corporation (together, the named executive officers) during
the years 2005, 2004 and 2003.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term |
|
|
|
|
|
|
|
|
Annual Compensation |
|
Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
All |
Name and |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Annual |
|
Underlying |
|
Other |
Principal Position |
|
Year |
|
Salary(1) |
|
Bonus(2) |
|
Compensation(3) |
|
Options(#) (4) |
|
Compensation(5) |
Michael W. Clarke
President and Chief |
|
|
2005 |
|
|
$ |
239,583 |
|
|
$ |
81,700 |
|
|
|
|
|
|
|
15,000 |
|
|
$ |
10,250 |
|
Executive Officer |
|
|
2004 |
|
|
$ |
192,509 |
|
|
$ |
85,167 |
|
|
|
|
|
|
|
|
|
|
$ |
3,250 |
|
|
|
|
2003 |
|
|
$ |
167,896 |
|
|
$ |
80,000 |
|
|
|
|
|
|
|
|
|
|
$ |
2,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert C.
Shoemaker
Executive Vice |
|
|
2005 |
|
|
$ |
186,875 |
|
|
$ |
47,906 |
|
|
|
|
|
|
|
10,500 |
|
|
$ |
10,250 |
|
President |
|
|
2004 |
|
|
$ |
161,258 |
|
|
$ |
51,100 |
|
|
|
|
|
|
|
|
|
|
$ |
3,250 |
|
|
|
|
2003 |
|
|
$ |
123,167 |
|
|
$ |
50,000 |
|
|
|
|
|
|
|
|
|
|
$ |
2,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles Wimer
Executive Vice |
|
|
2005 |
|
|
$ |
143,750 |
|
|
$ |
32,265 |
|
|
|
|
|
|
|
2,500 |
|
|
$ |
4,530 |
|
President and Chief |
|
|
2004 |
|
|
$ |
134,382 |
|
|
$ |
35,117 |
|
|
|
|
|
|
|
1,500 |
|
|
$ |
1,595 |
|
Financial Officer |
|
|
2003 |
|
|
$ |
105,915 |
|
|
$ |
28,350 |
|
|
|
|
|
|
|
|
|
|
$ |
1,452 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dean Hackemer
Senior Vice |
|
|
2005 |
|
|
$ |
239,583 |
|
|
$ |
145,000 |
|
|
|
|
|
|
|
3,250 |
|
|
$ |
10,250 |
|
President, Access
National Bank; |
|
|
2004 |
|
|
$ |
163,342 |
|
|
$ |
338,108 |
|
|
$ |
6,306 |
|
|
|
9,000 |
|
|
$ |
3,250 |
|
President and Chief
Executive Officer of |
|
|
2003 |
|
|
$ |
126,659 |
|
|
$ |
335,346 |
|
|
$ |
63,270 |
|
|
|
|
|
|
$ |
2,990 |
|
Access National
Mortgage
Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Salaries are paid by Access National Bank or Access National Mortgage Corporation. Access
National Corporation has not paid any compensation to the executive officers to date. |
|
(2) |
|
Reflects amounts received as bonus compensation during each year based on an evaluation by
the Compensation Committee of performance during the previous year. |
|
(3) |
|
The amount of compensation in the form of perquisites or other personal benefits properly
categorized in this column according to the disclosure rules adopted by the SEC did not exceed
the lesser of either $50,000, or 10% of the total annual salary and bonus reported for the
named executive officers in any of the three years reported. All amounts listed in Other
Annual Compensation are mortgage loan commissions paid to Mr. Hackemer. |
|
(4) |
|
All securities underlying options have been adjusted for a 2-for-1 stock dividend distributed
to shareholders of record on December 12, 2005. |
|
(5) |
|
All amounts represent the Corporations 401(k) profit sharing match to participating
employees. |
9
Option Grants. The following table shows stock options granted to Messrs. Clarke,
Shoemaker, Wimer and Hackemer in 2005.
Option Grants in Last Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total |
|
|
|
|
|
|
|
|
|
Potential Realizable Value |
|
|
Number of |
|
Options |
|
|
|
|
|
|
|
|
|
at Assumed Annual Rates |
|
|
Securities |
|
Granted to |
|
Exercise |
|
|
|
|
|
of Stock Price Appreciation |
|
|
Underlying |
|
Employees |
|
Price |
|
Expiration |
|
for Option Term |
Name |
|
Options Granted(1) |
|
in Fiscal Year |
|
($/Share) |
|
Date |
|
5% / 10% |
|
|
|
|
|
Michael W. Clarke |
|
|
15,000 |
|
|
|
14.57 |
% |
|
$ |
14.05 |
|
|
|
12/30/08 |
|
|
$ |
33,150 / $69,750 |
|
Dean F. Hackemer |
|
|
1,000 |
|
|
|
.97 |
% |
|
$ |
6.55 |
|
|
|
03/15/10 |
|
|
$ |
1,810 / $4,000 |
|
|
|
|
2,250 |
|
|
|
2.19 |
% |
|
$ |
14.05 |
|
|
|
12/30/08 |
|
|
$ |
4,973 / $10,463 |
|
Robert C. Shoemaker |
|
|
10,500 |
|
|
|
10.20 |
% |
|
$ |
14.05 |
|
|
|
12/30/08 |
|
|
$ |
23,205 / $48,825 |
|
Charles Wimer |
|
|
2,500 |
|
|
|
2.43 |
% |
|
$ |
14.05 |
|
|
|
12/30/08 |
|
|
$ |
5,525 / $11,625 |
|
|
|
|
(1) |
|
All options listed were 100% vested upon grant except the 1,000 options granted to Mr.
Hackemer, which will be 100% vested on 03/15/08. |
|
(2) |
|
Potential realizable value at the assumed annual rates of stock price appreciation
indicated, based on actual
term and annual compounding, less cost of shares at exercise price. |
Option Exercises and Holdings. The following table shows certain information with
respect to the number of shares acquired on exercise during 2005 and the number and value of
unexercised options at December 31, 2005 for Messrs. Clarke, Shoemaker, Wimer and Hackemer.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Unexercised |
|
Value of Unexercised |
|
|
Shares |
|
Value |
|
Options at |
|
In-the-Money Options |
|
|
Acquired on |
|
Realized ($) |
|
December 31, 2005 (#) |
|
at December 31, 2005 ($) (1) |
Name |
|
Exercise (#) |
|
(1) |
|
Exercisable/Unexercisable |
|
Exercisable/Unexercisable |
Michael W. Clarke |
|
|
|
|
|
|
|
|
|
|
261,366 / 19,800 |
|
|
$ |
3,039,778 / $249,084 |
|
|
Robert C. Shoemaker |
|
|
|
|
|
|
|
|
|
|
192,456 / 13,206 |
|
|
$ |
2,245,273 / $166,131 |
|
|
Charles Wimer |
|
|
|
|
|
|
|
|
|
|
54,814 / 3,000 |
|
|
$ |
646,323 / $21,615 |
|
|
Dean F. Hackemer |
|
|
10,812 |
|
|
$ |
124,023.30 |
|
|
|
6,150 / 10,000 |
|
|
$ |
42,120 / $74,650 |
|
|
|
|
(1) |
|
Based on the closing price ($14.25) of the Corporations common stock as reported on
the Nasdaq Global Market for December 30, 2005. |
10
Equity Compensation Plan
The following table sets forth information as of December 31, 2005 with respect to compensation
plans under which equity securities of the Corporation are authorized for issuance:
Equity Compensation Plan Information(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
|
(b) |
|
|
(c) |
|
|
|
|
|
|
|
|
|
|
|
Number of securities |
|
|
|
|
|
|
|
|
|
|
|
remaining available for |
|
|
|
Number of securities |
|
|
|
|
|
|
future issuance under |
|
|
|
to be issued upon |
|
|
Weighted-average |
|
|
equity compensation |
|
|
|
exercise of |
|
|
exercise price of |
|
|
plans (excluding |
|
|
|
outstanding options, |
|
|
outstanding options, |
|
|
securities reflected |
|
Plan category |
|
warrants and rights |
|
|
warrants and rights |
|
|
in column (a)) |
|
Equity compensation
plans approved by
security holders
(2) |
|
|
1,277,408 |
|
|
$ |
3.77 |
|
|
|
606,638 |
|
Equity compensation
plans not approved
by security holders |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,277,408 |
|
|
$ |
3.77 |
|
|
|
606,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All share and dollar per share amounts have been adjusted to give effect to the 10-for-1
stock dividend distributed by the Corporation in April 2001, the 3-for-1 stock dividend
distributed June 2003, and the 2-for-1 stock dividend distributed December 2005. |
|
(2) |
|
All shares relate to the Corporations 1999 Stock Option Plan, as amended in 2003. |
Compensation Committee Interlocks and Insider Participation
No director serving on the Compensation Committee was an officer or employee of the
Corporation during 2005 or in prior years. Furthermore, none of the Corporations executive
officers has served on the board of directors of any company of which any of the independent
directors is an employee.
Certain Relationships and Related Transactions
The Corporation has had, and may be expected to have in the future, banking transactions in
the ordinary course of business with directors, principal officers, their immediate families and
affiliated companies in which they are principal shareholders (commonly referred to as related
parties), on the same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with others. These persons and firms were indebted to the
Corporation for loans totaling $4,215,000 and $1,064,000 at December 31, 2005 and 2004,
respectively. During 2005, total principal additions were $3,959,000 and total principal payments
were $808,000. The aggregate amount of deposits at December 31, 2005 and 2004 from directors and
officers was $6,556,000 and $3,855,000, respectively.
Employment Agreements
The Corporation does not have any employment agreements with its executives. All executive
officers are presently serving under employment agreements with the Bank or its subsidiaries as
outlined below.
Effective March 29, 2005, the Bank and Mr. Clarke entered into an employment agreement under
which Mr. Clarke serves as President of Access National Bank for a current annual base salary of
$270,000, subject
11
to discretionary annual increases. In addition, the agreement provides for an annual performance
bonus, stock option awards, and other benefits including term life insurance and health and
disability insurance coverage.
The agreement is for a term of five years, with automatic two year renewals. Mr. Clarke
serves at the pleasure of Access National Banks Board of Directors. If, during the term of the
agreement, the Bank terminates Mr. Clarkes employment without cause or Mr. Clarke terminates his
employment for good reason (as defined in the agreement), Mr. Clarke will be entitled to a lump sum
payment equal to 1.99 times his trailing base and cash bonus compensation as paid over the 12
months preceding the termination date. Additionally, bonus and medical, life and liability
insurance will be paid until the expiration date of the employment agreement. If Mr. Clarkes
employment is terminated as a result of a change in control (as defined in the agreement), he is
entitled to the same benefits, so long as he terminates his employment within 180 days after the
occurrence. The agreement contains non-competition covenants for a period of one (1) year
following termination of his employment. The agreement also contains a covenant requiring Mr.
Clarke to maintain ownership in the Corporations common stock in an amount no less than $1,250,000
(five times his initial base salary under the agreement).
Effective March 29, 2005, the Bank and Mr. Shoemaker entered into an employment agreement
under which Mr. Shoemaker serves as Executive Vice President of the Bank. The terms of Mr.
Shoemakers agreement are similar to Mr. Clarkes agreement, except that Mr. Shoemakers current
annual salary is $208,650 and the lump sum payment for termination by the Bank without cause or Mr.
Shoemakers termination for good reason or change in control (as defined in the agreement) is equal
to 1.25 times his trailing base and cash bonus compensation as paid over the 12 months preceding
the termination date. The agreement also contains a covenant requiring Mr. Shoemaker to maintain
ownership in the Corporations common stock in an amount no less than $487,500 (two and one half
times his initial base salary under the agreement).
Effective January 1, 2000, the Bank and Mr. Wimer entered into an employment agreement under
which Mr. Wimer serves as Executive Vice President and Chief Financial Officer of the Bank. The
contract was automatically renewed for two (2) years on January 1, 2005. Mr. Wimers current
annual salary is $165,000. If, during the term of the agreement, Mr. Wimers employment is
terminated without cause or Mr. Wimer terminates his employment for good reason or change in
control (as defined in the agreement), Mr. Wimer will be entitled to continue receiving his base
salary, medical, life and liability insurance until the earlier of the expiration date of the
employment agreement or one year from the termination date.
Effective March 29, 2005, the Bank and Mr. Hackemer entered into an employment agreement under
which Mr. Hackemer serves as President and Chief Executive Officer of the Mortgage Corporation and
Senior Vice President of the Bank. The terms of Mr. Hackemers agreement are similar to Mr.
Clarkes agreement, except that the term is for three years, with automatic one (1) year renewals.
Mr. Hackemers annual salary is currently $266,875. If, during the term of the agreement, Mr.
Hackemers employment is terminated without cause or Mr. Hackemer terminates his employment for
good reason or change in control (as defined in the agreement), Mr. Hackemer will be entitled to
continue receiving his base salary until the expiration date of the employment agreement or if the
employer chooses, a lump sum severance payment in an equivalent amount and will be entitled to
bonus and medical, life and liability insurance until the expiration date of the employment
agreement. The agreement also contains non-competition covenants for a period of six (6) months
following termination of his employment.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Corporations Board of Directors is responsible for
establishing and administering compensation of the Corporations executive officers, including the
named executive officers. The Committee is comprised of all of the non-employee independent
directors, as such terms are defined by the SEC and the Nasdaq listing standards applicable to
audit committee members. The Committee operates pursuant to a written charter adopted by the Board
of Directors. The Committee reviews and reassesses this charter annually and recommends any
changes to the Board of Directors for approval.
12
Prior to 2004, the Board of Directors had no separate committee to address compensation
matters. Compensation for all executive officers for 2004 was determined by the non-employee
Directors. This report describes the current policies of the Committee with respect to
compensation for 2005, and all such references also refer to the full Boards approach to executive
compensation for 2005.
Compensation Philosophy
The Board of Directors believes the Corporations management and personnel are its greatest
resource. The attraction and retention of skilled personnel has been the single most important
contributing factor to the Corporations success since its inception. The Corporation recruits for
and places high performance expectations upon its personnel. In order to attract highly skilled
personnel, the Corporation aims to make available attractive compensation plans that allow top
performing personnel to be well compensated when compared to peers. The Corporations philosophy
also fosters, and in some instances requires, ownership in the Corporation by personnel at all
levels.
Executive Officer Compensation
Compensation of executive officers is established based upon the Committees review of the
performance and qualifications of each executive in the context of the business environment,
defined job responsibilities, goals and objectives, as established no less than annually.
With respect to both base salary and performance based compensation, the CEO and executive
officers of the Bank and Corporation are evaluated based upon the following corporate performance
factors:
o Regulatory relations and exam results;
o Internal and external audit results;
o Asset quality measures;
o Return on equity relative to budget and peer comparisons; and
o Key metrics of financial performance compared to budget.
These factors are equally weighted in determining annual cash bonuses for Messrs. Clarke,
Shoemaker and Wimer, as discussed below. With respect to base salary increases, which are granted
at the discretion of the Board subject to certain minimum salary increases described below, the
Committee subjectively evaluates the above-described factors in their totality and does not employ
a formula which predetermines the relative weighting of the factors.
The performance of each individual executive is also evaluated subjectively on qualitative
factors addressing leadership, governance and relationships.
The President of the Mortgage Corporation, which position is currently held by Mr. Hackemer,
is evaluated based upon the following performance factors of the business unit:
o Origination volume compared to budget;
o Profit margins compared to budget;
o Net income compared to budget;
o Business plan adherence and execution; and
o Maintenance of an effective quality control program.
The President of the Mortgage Company is also evaluated subjectively on qualitative factors
addressing leadership, governance and relationships.
Total compensation of each executive is comprised of a base salary and performance based
compensation consisting of annual cash bonuses and stock option awards. In addition, each
executive is entitled to participate in all other company provided benefits such as health and life
insurance coverage and the retirement savings plan. The basic compensation arrangement as well as
other covenants and terms
13
designed to protect and benefit the interest of both parties are set forth in employment contracts.
These employment contracts have been filed as exhibits to the Corporations SEC filings and are
publicly available.
The employment contracts of Messrs. Shoemaker and Wimer in effect for the fiscal year ended
December 31, 2005 provided that they were eligible to receive an annual cash bonus in an amount up
to 60% and 30%, respectively, of their base salaries, based on an evaluation of the corporate
performance factors listed above on a scale from 0-5, with 0 meaning failure to perform and 5
meaning excellent performance. Other incentive adjustments could be awarded or subtracted at the
Compensation Committees discretion. Mr. Shoemaker received a composite evaluation of 4.75 and was
awarded a cash bonus for 2005 performance of $120,000, which represented 61.5% of his base salary
for 2005. Mr. Wimer received a composite evaluation of 4.58 and was awarded a cash bonus for 2005
of $55,000, which represented 33.3% of his base salary for 2005. The cash bonus awards for each
performance period are paid in the first quarter of the subsequent year.
The compensation for other named executive officers varies from that of Messrs. Shoemaker and
Wimer depending upon the nature of the position. The compensation is administered in a manner
deemed appropriate by management for the nature of each officers responsibility, business
conditions, skills, and performance. Generally all executives receive a competitive base salary
commensurate with their skills, experience and responsibilities. The performance and compensation
of the other officers are evaluated by the officers supervisor and the recommendation is reviewed
and approved by the CEO.
Chief Executive Officer Compensation
The Committee evaluates the performance of the CEO in the same manner as described above under
Executive Officer Compensation.
The employment contract of Mr. Clarke in effect for the fiscal year ended December 31, 2005
provided that increases in base salary were at the discretion of the Board, subject to his and the
Corporations performance. The contract also provided that he was eligible to receive an annual
cash bonus in an amount up to 100% of his base salary, based on an evaluation of the corporate
performance factors listed above on a scale from 0-5, with 0 meaning failure to perform and 5
meaning excellent performance. Mr. Clarke received a composite evaluation of 4.44 and was awarded
a cash bonus of $250,000 for 2005, which represented 100% of his base salary for 2005. The bonus
was paid in the first quarter of 2006.
This report is hereby submitted by the Compensation Committee comprised of the following
individuals:
James L. Jadlos, Chair
J. Randolph Babbitt
John W. Edgemond IV
Thomas M. Kody
Report of the Audit Committee
The Audit Committee of the Board of Directors of the Corporation, which consists of the
directors who meet the independence requirements of the Nasdaq listing standards and applicable SEC
regulations, has furnished the following report:
The Audit Committee assists the Board in overseeing and monitoring the integrity of the
Corporations financial reporting process, its compliance with legal and regulatory requirements
and the quality of its internal and external audit processes. The role and responsibilities of the
Audit Committee are set forth in a written charter adopted by the Board, a copy of which was
attached to the Corporations 2004 Proxy Statement as Appendix B. The Audit Committee reviews and
reassesses the charter annually and recommends any changes to the Board for approval.
14
The Audit Committee is responsible for overseeing the Corporations overall financial
reporting process. In fulfilling its oversight responsibilities for the financial statements for
fiscal year 2005, the Audit Committee:
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Reviewed and discussed the annual audit process and the audited financial statements
for the fiscal year ended December 31, 2005 with management and BDO Seidman, LLP, the
Corporations independent accountants; |
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Discussed with management, BDO Seidman, LLP and the Corporations internal auditors
the adequacy of the Corporations system of internal controls; |
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Discussed with BDO Seidman, LLP the matters required to be discussed by Statement on
Auditing Standards No. 61 relating to the conduct of the audit; and |
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Received written disclosures and the letter from BDO Seidman, LLP regarding its
independence as required by Independence Standards Board Standard No. 1. The Audit
Committee also discussed with BDO Seidman, LLP its independence. |
The Audit Committee also considered the status of pending litigation, taxation matters and
other areas of oversight relating to the financial reporting and audit process that the Audit
Committee deemed appropriate.
As described more fully in its charter, the purpose of the Audit Committee is to assist the
Board in its general oversight of the Corporations financial reporting, internal controls and
audit functions. Management is responsible for the preparation, presentation and integrity of the
Corporations financial statements, accounting and financial reporting principles, internal
controls and procedures designed to ensure compliance with accounting standards, applicable laws
and regulations. The Audit Committee serves in a board-level oversight role, in which it provides
advice, counsel and direction to management and the auditors on the basis of the information it
receives, discussions with management and auditors, and the experience of the Audit Committees
members in business, financial and accounting matters.
Based on the Audit Committees review of the audited financial statements and discussions with
management and BDO Seidman, LLP, the Audit Committee recommended to the Board that the audited
financial statements be included in the Corporations Annual Report on Form 10-K for the fiscal
year ended December 31, 2005 for filing with the Securities and Exchange Commission.
Audit Committee
J. Randolph Babbitt, Chairman
John W. Edgemond, IV
James L. Jadlos
Thomas M. Kody
Change in Independent Registered Public Accounting Firm
On January 18, 2005, based upon the determination of its Audit Committee, the Corporation
terminated its engagement with Yount Hyde & Barbour, P.C. (YHB) as its independent registered
public accounting firm and engaged BDO Seidman, LLP (BDO) as its independent registered public
accounting firm for the fiscal year ending December 31, 2004.
During the Corporations two fiscal years ended December 31, 2003 and December 31, 2004, and
during the subsequent interim period through January 18, 2005, (i) there was no disagreement
between the Corporation and YHB on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to YHBs satisfaction,
would have caused YHB to make reference to the subject matter of the disagreement in connection
with its reports on the Corporations consolidated financial statements for such fiscal years
(however, YHBs engagement was terminated prior to the issuance of an audit report for the year
ended December 31, 2004 and prior to YHBs initiation of related fieldwork). The audit reports of
YHB on the Corporations consolidated financial statements as of and for the
15
two fiscal years ended December 31, 2002 and December 31, 2003 did not contain any adverse opinion
or disclaimer of opinion, nor were these opinions qualified or modified as to uncertainty, audit
scope or accounting principles.
The Corporation provided YHB with a copy of the above disclosures, also set forth in the
Corporations current report on Form 8-K filed with the SEC on January 21, 2005, and requested that
they furnish the Corporation with a letter addressed to the SEC stating whether they agreed with
the above statements and, if not, stating the respects in which they did not agree. YHBs letter
stating its agreement with the above statements was filed as an exhibit to the Form 8-K.
During the Corporations two fiscal years ended December 31, 2003 and December 31, 2004, and
during the subsequent interim period through January 18, 2005, the Corporation did not consult with
BDO regarding the application of accounting principles to a specified transaction, either completed
or proposed, or the type of audit opinion that might be rendered on the Corporations consolidated
financial statements, or any other matters or reportable events, as set forth in Items 304(a)(2)(i)
and (ii) of Regulation S-K.
Independent Registered Public Accountants
BDO Seidman, LLP served as the Corporations independent accountants for the fiscal year ended
December 31, 2005, and has been selected by the Audit Committee as independent public accountants
for the Corporation for the fiscal year ending December 31, 2006. Representatives of BDO Seidman,
LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement
if they so desire, and are expected to be available to respond to appropriate questions.
Audit and Non-Audit Fees
The following table presents the fees for professional audit services rendered by BDO Seidman,
LLP (BDO) for the audit of the Corporations consolidated financial statements for the fiscal
years ended December 31, 2005 and 2004 and the fees billed for other services rendered to the
Corporation and its subsidiaries by BDO during those periods. All services reflected in the
following fee table for 2005 and 2004 were pre-approved in accordance with the policy of the Audit
Committee of the Board of Directors.
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2005 |
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2004 |
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Audit fees |
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$ |
84,750 |
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$ |
70,985 |
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Audit-related fees |
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Tax fees |
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$ |
3,640 |
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$ |
31,240 |
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All other fees |
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$ |
88,390 |
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$ |
102,225 |
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Audit fees: Includes the audit of the Corporations annual financial statements
and review of the financial statements included in the quarterly reports on Form 10-Q and
services that are normally provided in connection with statutory and regulatory filings. |
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Audit-related fees: Includes fees for the FHLB collateral verification audit,
and consultation concerning financial accounting and reporting standards and other related
issues. |
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Tax fees: Includes fees for preparation of federal and state tax returns. |
The Audit Committee considers the provision of all of the above services to be compatible with
maintaining the independence of BDO Seidman, LLP, the Corporations independent registered public
accounting firm.
16
Audit Committee Pre-Approval Policies
The Audit Committee is responsible for the appointment, compensation and oversight of the work
performed by the Corporations independent accountants. The Audit Committee, or a designated
member of the Audit Committee, must pre-approve all audit (including audit-related) and non-audit
services performed by the independent accountants in order to assure that the provisions of such
services does not impair the accountants independence. The Audit Committee has delegated interim
pre-approval authority to J. Randolph Babbitt, Chairman of the Audit Committee. Any interim
pre-approval of permitted non-audit services is required to be reported to the Audit Committee at
its next scheduled meeting. The Audit Committee does not delegate its responsibilities to
pre-approve services performed by the independent accountants to management.
Stock Performance
The following graph compares the Corporations cumulative total shareholder return on its
common stock for the five year period ending December 31, 2005 with the cumulative return of a
broad equity market index, the Standard & Poors 500 Index, and a peer group constructed by the
Corporation (the Peer Group). This presentation assumes $100 was invested in shares of the
Corporation and each of the indices on December 31, 2000, and that dividends, if any, were
immediately reinvested in additional shares. The graph plots the value of the initial $100
investment at one-year intervals from December 31, 2000 through December 31, 2005.
The Peer Group consists of five companies that, in the opinion of management, are similar to
the Corporation in ways relevant to a comparison of stock performance. Specifically, each company
in the Peer Group provides commercial banking services in the Mid-Atlantic Region, has existed for
10-years or less; and is considered by management to be in an expansion mode. In calculating the
relative index, the stock values of the Peer Group are re-balanced at the beginning each year by
the weighted market capitalization. The Peer Group consists of:
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Company, Headquarters |
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Exchange |
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Trading Symbol |
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Established |
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Cardinal Financial Corporation
Fairfax, Virginia
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NASDAQ-NM
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CFNL
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1998 |
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Eagle Bancorp. Inc.
Bethesda, Maryland
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NASDAQSC
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EGBN
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1998 |
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Towne Bank
Portsmouth, Virginia
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OTC-BB
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TOWN
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1999 |
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Valley Financial Corp of VA
Roanoke, Virginia
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OTC-BB
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VYFC
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1995 |
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Virginia National Bank
Charlottesville, Virginia
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OTC-BB
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VABK
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1998 |
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There can be no assurance the Corporations future stock performance will continue with the
same or similar trend as illustrated in the graph below.
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Period Ending |
Index |
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12/31/00 |
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12/31/01 |
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12/31/02 |
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12/31/03 |
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12/31/04 |
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12/31/05 |
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Access National Corporation (ANCX) |
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100.00 |
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182.43 |
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186.21 |
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407.28 |
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382.14 |
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770.24 |
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Peer Group Index* |
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100.00 |
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120.93 |
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145.82 |
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210.11 |
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249.94 |
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287.35 |
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SNL NASDAQ Bank Index |
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100.00 |
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108.85 |
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111.95 |
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144.51 |
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165.62 |
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160.57 |
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17
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Corporation has no knowledge of any
matters to be presented for consideration at the Annual Meeting other than those referred to above.
If any other matters properly come before the Annual Meeting, the persons named in the
accompanying proxy intend to vote such proxy, to the extent entitled, in accordance with their
best judgment.
SHAREHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
If any shareholder intends to present a proposal to be considered for inclusion in the
Corporations proxy materials in connection with the 2007 Annual Meeting, the proposal must be in
proper form and must be received by the Corporations Secretary at the Corporations principal
office located at 1800 Robert Fulton Drive, Suite 300, Reston, Virginia 20191, on or before
December 18, 2006.
In addition, if a shareholder intends to present a proposal for action at the 2007 Annual
Meeting, the shareholder must provide the Corporation with written notice thereof on or before
March 3, 2007. The proxy solicited by the Board of Directors for the 2007 Annual Meeting will
confer discretionary authority to vote on any shareholder proposal presented at the meeting if the
Corporation has not received notice of such proposal by March 3, 2007, in writing delivered to the
Corporations Secretary.
By Order of the Board of Directors,
Sheila M. Linton
Vice President & Corporate Secretary
18
A copy of the Corporations Annual Report on Form 10-K (including exhibits) as filed with the
Securities and Exchange Commission for the year ended December 31, 2005 will be furnished without
charge to shareholders upon written request directed to the Corporations Secretary at 1800 Robert
Fulton Drive, Suite 300, Reston, Virginia 20191.
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PLEASE MARK VOTES AS IN THIS
EXAMPLE |
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REVOCABLE PROXY ACCESS NATIONAL CORPORATION |
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2006 ANNUAL MEETING ON
MAY 23, 2006
OR ANY ADJOURNMENT THEREOF
This Revocable Proxy is solicited on behalf of the Board of Directors.
The undersigned shareholder of Access National Corporation
(the Corporation) hereby appoints John W. Edgemond, IV and Thomas M.
Kody, jointly and severally as proxies, with full
power to act alone, and with full power of substitution to
represent the undersigned, and to vote all shares of the
Corporation standing in the name of the undersigned as of April
1, 2006, at the Annual Meeting of Shareholders to be held
Tuesday, May 23, 2006, at 4:00 p.m. at the Corporations office
located at 1800 Robert Fulton Drive, Reston, Virginia, or any
adjournment thereof, on each of the following matters:
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Please be sure to sign and date
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this Proxy in the box below.
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Shareholder sign above Co-holder (if any) sign above
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For All |
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Except |
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To elect two (2) Class I
directors to serve until the 2009
Annual Meeting of Shareholders
and until their successors are
elected and qualified, as
instructed below.
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Class I Nominees: Michael W. Clarke, James L. Jadlos |
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INSTRUCTION: To withhold authority to vote for any individual
nominee, mark For All Except and write that nominees name
in the space provided below. |
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To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof. |
This proxy, when properly executed, will be voted in
the manner directed herein by the undersigned shareholder.
If no direction is made, this proxy will be voted FOR the
election of all director nominees in Item 1. If any other matter shall be brought before the
meeting, the shares represented by this proxy will be
voted in the discretion of the proxy agents.
The undersigned acknowledges receipt from the
Corporation prior to the execution of this Revocable Proxy
of a Notice of Meeting and of a Proxy Statement dated
April 17, 2006.
NOTE: When shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a
corporation, please sign full corporate name by president
or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
5 Detach above card, sign, date and mail in postage paid envelope provided. 5
ACCESS NATIONAL CORPORATION
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.