SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Crestar Financial Corporation
(Name of Registrant as Specified in its Charter)
Crestar Financial Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
CRESTAR FINANCIAL CORPORATION
919 East Main Street
P. O. Box 26665
Richmond, Virginia 23261-6665
(CRESTAR LOGO)
Dear Crestar Shareholder:
You are cordially invited to attend Crestar's 1994 Annual Meeting of
Shareholders, which will be held on Friday, April 22, at 10:00 a.m., in the
fourth floor Auditorium at Crestar Center in Richmond. Please indicate on the
accompanying proxy card if you plan to attend the meeting in person. Parking
will be provided in the Crestar parking deck at 9th and Cary Streets (entrance
on Cary Street).
The business of this year's meeting will be to elect six Class I directors for a
term of three years and one Class II director for a one-year term, and to ratify
the Board's appointment of KPMG Peat Marwick as Crestar's independent auditors
for 1994. As in past years, the meeting will include a report on the state of
the Corporation, and there will be an opportunity for comments and questions
from shareholders.
Whether or not you plan to attend the meeting in person, it is important that
your Crestar shares be represented and voted. Accordingly, after reviewing the
enclosed proxy material, we ask that you complete, sign and date the proxy card,
and return it as soon as possible in the postage-paid envelope provided. You are
free to revoke or change your proxy later, or vote in person at the meeting.
1993 was a year of record earnings for Crestar, and we hope that you are pleased
with the Corporation's performance. Our objective is to build on this momentum
for the future and to continue to merit your confidence and investment.
Sincerely,
(signature)
Richard G. Tilghman
Chairman and
Chief Executive Officer
March 21, 1994
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1994
To the Shareholders of Crestar Financial Corporation:
The Annual Meeting of Shareholders of Crestar Financial Corporation (the
Corporation) will be held on Friday, April 22, 1994, at 10:00 a.m. in the fourth
floor Auditorium at Crestar Center, 919 East Main Street, Richmond, Virginia,
for the following purposes:
1. To elect six Class I directors for a three-year term and one Class II
director for a one-year term;
2. To ratify the appointment of KPMG Peat Marwick as the Corporation's
independent auditors for 1994.
3. To transact such other business as may properly come before the meeting.
Your attention is directed to the accompanying Proxy Statement for further
information with respect to the matters to be acted upon at the meeting.
The record date for determining shareholders entitled to notice of, and to vote
at, the Annual Meeting has been fixed by the Board of Directors as the close of
business on March 4, 1994.
This notice, the accompanying Proxy Statement and the enclosed proxy card are
sent to you by order of the Board of Directors.
John C. Clark, III
Corporate Senior Vice President,
General Counsel and Secretary
March 21, 1994
It is important that your shares be represented at the meeting. Whether or not
you plan to attend the meeting, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD
AS SOON AS POSSIBLE. You may still vote in person if you attend the meeting.
<PAGE>
PROXY STATEMENT
Crestar Financial Corporation
919 East Main Street
P. O. Box 26665
Richmond, Virginia 23261-6665
Annual Meeting of Shareholders
April 22, 1994
GENERAL INFORMATION
The following information is being furnished in connection with the Annual
Meeting of Shareholders of Crestar Financial Corporation (the Corporation) to be
held on Friday, April 22, 1994, at 10:00 a.m. in the fourth floor Auditorium at
Crestar Center, 919 East Main Street, Richmond, Virginia. It is contemplated
that this Proxy Statement and the enclosed form of proxy will be first sent to
shareholders on March 21, 1994.
Only holders of Common Stock of record at the close of business on March 4,
1994 are entitled to notice of and to vote at the meeting or any adjournment
thereof. On such date, there were 37,504,206 shares outstanding. Each share is
entitled to one vote on all matters to come before the meeting. The presence at
the meeting, either in person or by proxy, of a majority of the shares
outstanding will constitute a quorum.
The enclosed proxy for the Annual Meeting is being solicited by the Board of
Directors of the Corporation and is revocable at any time before it is
exercised. All properly executed proxies delivered pursuant to this solicitation
will be voted at the meeting in accordance with directions given in the proxies.
The cost of this solicitation will be borne by the Corporation. In addition to
the use of the mail, employees may solicit proxies by telephone, by fax, or in
person. Banks, brokerage houses and other institutions, nominees and fiduciaries
will be requested to forward the soliciting material to beneficial owners and to
obtain authorization for the execution of proxies. The Corporation will, upon
request, reimburse such parties for their reasonable expenses in forwarding
proxy material to beneficial owners. The Corporation has engaged D. F. King &
Co., Inc. to assist in proxy solicitation for a fee of $11,000, plus
out-of-pocket expenses.
The Corporation is not aware of any person who, as of the record date for the
Annual Meeting of Shareholders, was the beneficial owner of 5% or more of the
Corporation's outstanding Common Stock except that Crestar Bank as Trustee for
the Crestar Employees' Thrift and Profit-Sharing Plan, 919 East Main Street,
Richmond, Virginia 23219, held 3,357,445 shares, or 9.0% of the shares
outstanding. The shares are held on behalf of Plan participants, and Crestar
Bank has no voting rights nor any investment or dispositive power with respect
to the shares other than as directed by Plan participants.
Virginia law prohibits Crestar Bank from voting shares as to which it has sole
voting power, but shares as to which it has shared voting power can be voted by
the person with whom it shares such power. Pursuant to Virginia law, a
co-fiduciary has been appointed for all of the shares held by Crestar Bank with
sole power to vote, in order that such shares may be voted at the Annual
Meeting.
STOCK OWNERSHIP OF MANAGEMENT
The table below sets forth the beneficial ownership of Common Stock by all
directors (including nominees), the Chief Executive Officer and the four next
most highly compensated executive officers, and all directors and executive
officers of the Corporation as a group. Unless otherwise indicated, all persons
listed below have sole voting and investment power over all shares beneficially
owned. Share ownership has been computed in accordance with Securities and
Exchange Commission rules and does not necessarily indicate beneficial ownership
for any other purpose. In determining beneficial ownership, shares owned by a
spouse and minor children with respect to which an individual has disclaimed
beneficial ownership have been excluded. As of the record date for the Annual
Meeting, no director or executive officer owned as much as 1% of the
Corporation's Common Stock, the only voting security outstanding, and all of the
Corporation's directors and executive officers as a group beneficially owned
2.4% of the Corporation's Common Stock, inclusive of currently exercisable
options.
1
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<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER NO. OF SHARES WITH NO. OF SHARES WITH
AND NO. OF PERSONS SOLE VOTING & SHARED VOTING OR TOTAL NO.
IN GROUP INVESTMENT POWER INVESTMENT POWER OF SHARES
<S> <C> <C> <C>
Richard M. Bagley 1,343 -- 1,343
William R. Battle 1,314 -- 1,314
J. Carter Fox 3,443 -- 3,443
Patrick D. Giblin 133,795(1) -- 133,795
William C. Harris 82,002(2) -- 82,002
Bonnie Guiton Hill 200 -- 200
Gene A. James 1,176 -- 1,176
H. Gordon Leggett, Jr. 1,762 -- 1,762
Charles R. Longsworth 1,096 -- 1,096
Patrick J. Maher 343 2,872 3,215
Frank E. McCarthy 1,395 2,285 3,680
G. Gilmer Minor III 2,669 -- 2,669
O. H. Parrish, Jr. 61,545(3) -- 61,545
Gordon F. Rainey, Jr. 8,000 4,800 12,800
Frank S. Royal 1,608 -- 1,608
Richard G. Tilghman 209,749(4) -- 209,749
Eugene P. Trani 344 -- 344
William F. Vosbeck 7,143 -- 7,143
L. Dudley Walker 24,179 -- 24,179
Karen Hastie Williams 553 -- 553
James M. Wells III 108,843(5) -- 108,843
All directors and executive
officers (27)
including the above 885,208(6) 9,957 895,165
</TABLE>
(1)Includes currently exercisable options for 53,645 shares
(2)Includes currently exercisable options for 46,000 shares
(3)Includes currently exercisable options for 36,421 shares
(4)Includes currently exercisable options for 148,000 shares
(5)Includes currently exercisable options for 88,000 shares
(6)Includes currently exercisable options for 506,366 shares
1. ELECTION OF DIRECTORS
DIRECTOR NOMINEES
The Board of Directors is divided into three classes (Class I, Class II and
Class III), with each class elected at successive Annual Meetings. The term of
office for Class I directors will expire at the Annual Meeting. Six persons, all
of whom are presently on the Board and were previously elected by the
shareholders, have been nominated to serve as Class I directors. If elected, the
six nominees will serve for a term of three years.
The Board of Directors has also nominated
Bonnie Guiton Hill, Dean of the McIntire School of Commerce at the University of
Virginia, to stand for election as a Class II director. Ms. Hill has been
nominated as a Class II director because two directors in that class will be
retiring at the 1995 Annual Meeting, when the pre-
sent term of that class ends. The Corporation's charter requires that any newly
created directorships be apportioned among the classes so as to make all classes
as nearly equal in number as possible. As of the Annual Meeting, the size of the
Board will be increased to 19 in number to provide for the additional Class II
director.
It is the intention of the persons named as proxies in the accompanying form
of proxy to vote for the election of each of the seven named nominees unless
authorization is withheld. Each nominee has agreed to serve if elected. In the
event any nominee shall unexpectedly be unable to serve, the Board may reduce
its size or nominate an alternative candidate for whom the proxies will be
voted. The election of each nominee requires the affirmative vote of the holders
of a plurality of the shares of Common Stock cast in the election of directors.
Votes that are withheld and shares held in street name that are not voted
2
<PAGE>
in the election of directors (broker non-votes) will not be included in
determining the number of votes cast, although such shares will be counted for
purposes of determining a quorum.
The name, age, principal occupation and recent business experience of each
nominee and director are set forth below. Also indicated are the length of
service as a director of the Corporation, service on committees of the Board,
and any other public company directorships. All directors also serve as
directors of Crestar Bank, the Corporation's principal banking subsidiary.
NOMINEES -- CLASS I DIRECTORS
(Term Expiring in 1997)
<TABLE>
<CAPTION>
<S> <C>
J. CARTER FOX, 54, is President and Chief Executive Officer of Chesapeake Corporation
(PHOTO HERE) (paper, packaging and forest products manufacturer), Richmond, Virginia, and is a
director of Chesapeake Corporation. Mr. Fox was elected a director of the Corporation in
1985 and serves on the Executive Committee.
(PHOTO HERE) PATRICK D. GIBLIN, 61, is Vice Chairman of the Board and Chief Financial Officer of the
Corporation. Mr. Giblin also serves as Vice Chairman and Chief Financial Officer of
Crestar Bank and as a director of Crestar Bank N.A. He has been a director of the
Corporation since 1985.
(PHOTO HERE) GENE A. JAMES, 62, is President and Chief Executive Officer of Southern States
Cooperative, Inc. (farm supply cooperative), Richmond, Virginia. Mr. James became a
director of the Corporation in 1987 and serves on the Human Resources and Compensation
Committee.
(PHOTO HERE) H. GORDON LEGGETT, JR., 61, is Executive Vice President and Secretary of Leggett Stores
(department store chain), Lynchburg, Virginia. From 1986 to 1990, Mr. Leggett served as
Vice President-Human Resources Division of Leggett Stores, and for a three-year period
ending in 1986, he also served as President, a position that is rotated among the
company's senior officers. A director of the Corporation since 1984, Mr. Leggett serves
on the Human Resources and Compensation Committee.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
PATRICK J. MAHER, 57, is Chairman and Chief Executive Officer of Washington Gas Light
(PHOTO HERE) Company (natural gas distributor), Washington, D.C. Mr. Maher is also a director of
Washington Gas Light Company. Mr. Maher was elected a director of the Corporation in 1991
and serves on the Audit Committee.
(PHOTO HERE) GORDON F. RAINEY, JR., 53, is a partner in the law firm of Hunton & Williams, Richmond,
Virginia. Mr. Rainey was elected a director of the Corporation in 1991 and is a member of
the Audit Committee.
</TABLE>
NOMINEE -- CLASS II DIRECTOR
(Term Expiring in 1995)
<TABLE>
<CAPTION>
<S> <C>
(PHOTO HERE) BONNIE GUITON HILL, 52, Dean of the McIntire School of Commerce at the University of
Virginia, a position held since July, 1992. From April, 1991 to June, 1992, Ms. Hill was
Secretary of the State and Consumer Services Agency for the State of California, and from
September, 1990, to March, 1991, Ms. Hill was President and Chief Executive Officer of
the Earth Conservation Corps, a privately funded not-for-profit corporation committed to
youth conservation work. From 1989 to 1991, Ms. Hill was a Special Advisor to President
George Bush for Consumer Affairs and Director of the U.S. Office of Consumer Affairs. Ms.
Hill is also a director of Niagara Mohawk Power Corporation, Louisiana-Pacific, Inc. and
Hershey Foods Corporation.
</TABLE>
CLASS II DIRECTORS
(Term Expiring in 1995)
<TABLE>
<CAPTION>
<S> <C>
(PHOTO HERE) WILLIAM R. BATTLE, 69, is Chairman of the Executive Committee and a director of
Shenandoah Life Insurance Company, Roanoke, Virginia. Mr. Battle was Chairman of
Shenandoah Life Insurance Company from August, 1989 until February, 1993, and previously
served as President and Chief Executive Officer. He also served as Interim President and
Chief Executive Officer from June 18, 1993 until January 1, 1994. Mr. Battle also is a
director of Bell Atlantic-Virginia, Inc. and serves on Crestar's Audit Committee.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
(PHOTO HERE) FRANK E. MCCARTHY, 59, is Executive Vice President of the National Automobile Dealers
Association, McLean, Virginia. Mr. McCarthy has been a director of the Corporation since
1987 and is a member of the Executive Committee.
(PHOTO HERE) G. GILMER MINOR III, 53, is President and Chief Executive Officer of Owens & Minor, Inc.
(hospital and medical supply distributor), Richmond, Virginia. Mr. Minor is a director of
Owens & Minor, Inc. and Richfood Holdings, Inc. He has been a director of the Corporation
since 1987 and serves on the Human Resources and Compensation Committee.
(PHOTO HERE) EUGENE P. TRANI, 54, President of Virginia Commonwealth University, Richmond, Virginia.
Dr. Trani has served in that position since July, 1990. Previously, Dr. Trani was Vice
President for Academic Affairs for the University of Wisconsin System, as well as
Professor of History at the University of Wisconsin-Madison. Dr. Trani was elected as a
director of the Corporation in 1993 and also serves as a director of Lawyers Title
Corporation. Dr. Trani is a member of the Corporation's Audit Committee.
(PHOTO HERE) WILLIAM F. VOSBECK, 69, is President of Vosbeck Associates, Inc. (an architectural
planning and development firm), Alexandria, Virginia. Prior to 1988, Mr. Vosbeck was
Chairman of the Board and Principal of VVKR Incorporated, an architectural and
engineering firm. Mr. Vosbeck has been a director of the Corporation since 1973, is
Chairman of the Audit Committee and serves on the Executive Committee.
(PHOTO HERE) JAMES M. WELLS III, 47, is President of the Corporation and Crestar Bank. Mr. Wells was
elected a director of the Corporation in December, 1988. In October, 1988, he was elected
President of the Corporation and President and a director of Crestar Bank. Prior to
becoming President, Mr. Wells served as Executive Vice President of the Corporation and
Crestar Bank. Mr. Wells is a director of Brenco, Inc. and VISA U.S.A., Inc. and is also a
director of Crestar Bank N.A., Crestar Mortgage Corporation, and Capitoline Investment
Services Incorporated, an investment advisory subsidiary of Crestar Bank.
</TABLE>
5
<PAGE>
CLASS III DIRECTORS
(Term Expiring in 1996)
<TABLE>
<CAPTION>
<S> <C>
(PHOTO HERE) RICHARD M. BAGLEY, 66, is President of Bagley Investment Company (commercial real estate
investors), Hampton, Virginia. Mr. Bagley served as a director of the Corporation from
1978 until he resigned in January, 1986 to accept the position of Secretary of Commerce
and Resources for the Commonwealth of Virginia. In July, 1986, Mr. Bagley became
Secretary of Economic Development for Virginia, a position that he held until July, 1988.
Mr. Bagley was re-elected to the Board as of August, 1988 and serves on the Audit
Committee.
(PHOTO HERE) CHARLES R. LONGSWORTH, 64, is Chairman of The Colonial Williamsburg Foundation
(educational museum, hotels, restaurants), Williamsburg, Virginia. Mr. Longsworth was
President and Chief Executive Officer of the Foundation until November, 1992, and assumed
the post of Chairman in November, 1991. Mr. Longsworth is a director of Houghton Mifflin,
Inc., Flight Safety International, Inc., Roadway Services, Inc. and Saul Centers, Inc.
Elected a director of the Corporation in 1986, Mr. Longsworth is Chairman of the Human
Resources and Compensation Committee and serves on the Executive Committee.
(PHOTO HERE) FRANK S. ROYAL, 54, is President and Member of Frank S. Royal, M.D., P.C. (family
medicine). He has been a practicing physician in Richmond, Virginia since 1969. Dr. Royal
is a director of Best Products Company, Inc., Chesapeake Corporation, Columbia/HCA
Healthcare Corporation and CSX Corporation. He has been a director of the Corporation
since 1979. Dr. Royal is a member of the Executive Committee.
(PHOTO HERE) RICHARD G. TILGHMAN, 53, is Chairman and Chief Executive Officer of the Corporation and
Crestar Bank. Mr. Tilghman has been Chairman since April, 1986 and Chief Executive
Officer since September, 1985. Mr. Tilghman was also President of the Corporation and
Crestar Bank from September, 1985 until October, 1988. He is a director of Chesapeake
Corporation. Mr. Tilghman has been a director of the Corporation since 1984 and serves as
Chairman of the Executive Committee.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(PHOTO HERE) L. DUDLEY WALKER, 63, is Chairman of Bassett-Walker, Inc. (textile and apparel
manufacturer), Martinsville, Virginia. Prior to July, 1987, Mr. Walker was also President
and Chief Executive Officer of Bassett-Walker, Inc. Mr. Walker is a director of VF
Corporation. A director of the Corporation since 1982, he serves on the Audit Committee.
(PHOTO HERE) KAREN HASTIE WILLIAMS, 49, is a partner in the Crowell & Moring law firm, Washington,
D.C. Ms. Williams is a director of Federal National Mortgage Association and Washington
Gas Light Company. Elected a director of the Corporation in 1987, she serves on the Human
Resources and Compensation Committee.
</TABLE>
7
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
During 1993 the Board of Directors held 13 meetings. The Board has three
standing committees to perform assigned functions: Executive, Audit, and Human
Resources and Compensation. During the past year, these committees met 14, five
and five times, respectively. All directors attended at least 75% of all
meetings of the Board and committees on which they served.
The Executive Committee exercises all of the powers of the Board of Directors
between Board meetings except for certain matters reserved to the Board by law.
The Committee also serves as the Board's steering committee on capital,
liquidity, asset/liability and credit issues, as well as the Board's advisor on
mergers and acquisitions and corporate structure matters. In addition, the
Committee functions as a nominating committee by recommending nominees for
election as directors of the Corporation. The Committee will consider nominees
recommended by shareholders, as provided in the last section of this Proxy
Statement. Committee members are Messrs. Tilghman (Chairman), Fox, Longsworth,
McCarthy, Royal,
Vosbeck and Wells.
The Audit Committee, composed of directors who are not officers of the
Corporation, recommends the selection of independent auditors to be appointed by
the Board and ratified by the shareholders; approves the internal audit plan and
reviews reports of examination by the independent auditors and by regulatory
agencies having jurisdiction over the Corporation and its subsidiaries; reviews
compliance with the Corporation's Standards of Conduct; assists the Board in
fulfilling its responsibilities for financial reporting to the public; serves as
the Board's Community Reinvestment Act committee; and reviews the basis for
management's reports required by the Federal Deposit Insurance Corporation
Improvement Act of 1991. Committee members are Messrs. Vosbeck (Chairman),
Bagley, Battle, Maher, Rainey, Trani and Walker.
The Human Resources and Compensation Committee, composed of directors who are
not officers of the Corporation, reviews and approves major compensation
policies and recommends to the Board the salaries to be paid to the five most
highly paid officers of the Cor-
poration. The Committee also approves performance targets for the Corporation's
benefits plans, and determines management incentive awards, stock option and
other grants to eligible officers. The Committee further reviews and recommends
for Board approval new qualified and non-qualified benefit plans, as well as
significant changes to existing plans, and recommends for Board approval
appropriate changes in director compensation. Members of the Committee are
Messrs. Longsworth (Chairman), James, Leggett, Minor and Ms. Williams.
DIRECTOR COMPENSATION
Directors who are not officers of the Corporation or its subsidiaries are paid
$1,000 for attendance at each meeting of the Board or Board committees. In
addition, directors receive an annual retainer of $18,000 a year, $6,000 of
which is paid in the form of Corporation stock under the terms of the Directors'
Stock Compensation Plan, approved by shareholders at the 1993 Annual Meeting.
The Chairmen of the Audit and Human Resources and Compensation Committees are
also paid $3,500 for service in that capacity; the Chairman of the Executive
Committee is not paid a fee since he is an officer of the Corporation. Directors
may defer all or part of their cash fees. Amounts deferred are credited either
to a variable rate, interest-bearing deferred cash account or, for directors 65
or younger, to a deferred income benefit account. Directors choosing the
deferred income benefit receive supplemental retirement or survivors' benefits
over a 5-to 20-year period. Under the deferral plan for directors, accelerated
payment of deferred benefits occurs under certain conditions, including upon a
change in control. If accelerated payment occurs, the amount paid is calculated
according to a present-value formula that considers the directors' accelerated
taxation and adjusts to provide the same after-tax benefit that each director
would have received if the payments had been made according to the original
payment schedule; that calculation might result in a larger payment by the
Corporation than would have occurred absent acceleration. Deferred benefits are
funded through a trust whose assets remain available to the Corporation's
general creditors in the event of the Corporation's insolvency.
8
<PAGE>
INDEBTEDNESS AND OTHER TRANSACTIONS
The Corporation's directors and officers and other corporations, business
organizations, and persons with whom some of the Corporation's directors and
officers are associated, had loan transactions in 1993 with the Corporation's
banks totalling approximately $15,000,000, or nearly 1 1/2% of average
shareholders' equity for the year. All such transactions were made in the
ordinary course of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time in comparable transactions
with others and did not involve more than the normal risk of collectibility or
present other unfavorable features.
During 1993 the Corporation and its subsidiaries utilized the legal services
of the law firms of Hunton & Williams and Crowell & Moring, of which directors
Gordon F. Rainey, Jr. and Karen Hastie Williams are, respectively, partners. The
amount of fees paid to Hunton & Williams and Crowell & Moring did not exceed 5%
of either firm's gross revenues.
Hunton & Williams leased 15,708 square feet of office space in Crestar Bank's
Norfolk headquarters building for a term of 12 years, commencing December 1,
1991. Over the term of the lease, Crestar Bank expects to realize rental income
of $2,985,000, plus some additional money from tenant parking. Because of the
high vacancy factor for office space in the Norfolk market at the time, and the
intense competition for tenants, Crestar Bank made various at market concessions
to induce Hunton & Williams to enter into the lease, but in the judgment of
management, these concessions and other lease terms were similar in nature and
amount to arms-length financial inducements offered to Hunton & Williams by
owners of other Norfolk buildings. The lease is expected to increase the future
sale value of the building, although there is no present plan to sell the
building.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Corporation's directors and executive officers, and persons who own more than
10% of a registered class of the Corporation's equity securities, file with the
Securities and Exchange Commission initial reports of ownership and reports of
change in ownership of Common Stock and other equity securities of the
Corporation. The same persons are also required by SEC regulation to furnish the
Corporation with copies of all Section 16(a) forms that they file.
To the Corporation's knowledge, based solely on review of the copies of such
reports furnished to the Company, and written representations that no other
reports were required, during the fiscal year ended December 31, 1993, all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial owners were complied with, except that
William K. Butler, II, President of the Corporation's Eastern Region, recently
filed an amended Form 4 for November, 1993, regarding the transfer of shares
within the Corporation's Thrift and Profit-Sharing Plan, and Mr. Longsworth, a
director, filed a Form 4 approximately two weeks late regarding the purchase of
300 shares of Corporation stock in May, 1993. Mr. Longsworth's late filing was
due to the Secretary not receiving timely information from the broker handling
the trade. The Corporation's Secretary usually prepares Section 16(a) filings
for directors and executive officers.
9
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COMPENSATION OF EXECUTIVE OFFICERS
The following table contains information regarding individual compensation of
the Chief Executive Officer and the four other most highly compensated executive
officers for services in all capacities to the Corporation and its subsidiaries
in 1993, 1992, and 1991.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
(A) (B) (C) (D) (E) (F) (G)
LONG-TERM
COMPENSATION(3)
ANNUAL COMPENSATION
OTHER AWARDS
NAME & ANNUAL SECURITIES ALL OTHER
PRINCIPAL SALARY BONUS(1) COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR ($) ($) ($)(2) OPTIONS ($)(4)
<S> <C> <C> <C> <C> <C> <C>
Richard G. Tilghman 1993 535,000 280,000 0 20,000 65,067
Chairman & CEO 1992 500,000 200,000 0 40,000 41,192
1991 500,000 0 -- 40,000 --
James M. Wells III 1993 353,000 167,000 0 12,000 38,610
President 1992 330,000 119,000 0 24,000 29,138
1991 330,000 0 -- 24,000 --
Patrick D. Giblin 1993 321,000 135,000 0 10,000 58,523
Vice Chairman 1992 300,000 96,000 0 20,000 46,598
& CFO 1991 300,000 0 -- 20,000 --
William C. Harris 1993 289,000 107,000 0 6,000 47,021
President -- 1992 270,000 76,000 0 12,000 32,401
Greater Washington 1991 270,000 0 -- 12,000 --
Oscar H. Parrish, Jr. 1993 230,000 100,000 0 6,000 29,640
Executive VP and 1992 215,000 60,000 0 12,000 22,856
Sr. Credit Officer 1991 215,000 0 -- 12,000 --
(1) The bonus award reported includes amounts deferred under the Corporation's nonqualified deferred
compensation plan. Although Crestar does not anticipate any shares to be earned or paid out for 1993 performance
under the Performance Equity Plan, data is not yet available to make a final determination. Any shares earned or
paid out for 1993 performance will be reported in the 1995 Proxy Statement as 1993 bonus.
(2) None of the named individuals received perquisites or other personal benefits in excess of the lesser of
$50,000 or 10% of the total of his salary and bonus as reported in columns (c) and (d) of this table. Amounts of
Other Annual Compensation are not required for 1991 and will be phased in over the next fiscal year.
(3) Based on a clarification of the 1993 proxy rules with respect to long term incentive compensation, the
Corporation has deleted the Long Term Incentive Plan Table and the Payout column from this table, both of which
appeared in the Corporation's 1993 Proxy Statement. For purposes of reporting awards earned under the
Corporation's Performance Equity Plan (see description of the performance share plan in the Compensation
Committee Report), compensation earned under this Plan will be reported in the Summary Compensation Table in the
year earned as Bonus.
(4) Includes Corporate contributions made under the Corporation's 401(k) plan and amounts accrued but not
contributed under the Corporation's nonqualified plans which allow payment of benefits otherwise entitled under
the 401(k) plan except for limitations imposed by the Internal Revenue Code, in the amounts of $45,475 Tilghman;
$30,005 Wells; $27,285 Giblin; $24,565 Harris; $19,550 Parrish. Also includes interest earned on deferred
compensation in excess of 120% of the long term applicable federal rate (AFR) in the amounts of $2,525 Tilghman;
$262 Wells; $4,049 Giblin; $2,003 Harris; and $1,352 Parrish. Further includes actuarial equivalent of benefit
to employee from payment of annual premiums by the Corporation under a split dollar life insurance program in
the amounts of $17,067 Tilghman; $8,343 Wells; $27,189 Giblin; $20,453 Harris; and $8,738 Parrish. Amounts of
All Other Compensation are not required for 1991 and will be phased in over the next fiscal year.
</TABLE>
10
<PAGE>
The following table shows all grants of options to the named executive
officers of the Corporation during 1993.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE
VALUE
AT ASSUMED
ANNUAL RATES
OF STOCK
PRICE APPRECIATION
FOR OPTION TERM(3)
INDIVIDUAL GRANTS
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION 5% 10%
NAME GRANTED (POUND)(1) IN FISCAL YEAR ($/SH)(2) DATE ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Richard G. Tilghman 20,000 10% 40.375 1/21/03 507,832 1,286,947
James M. Wells III 12,000 6% 40.375 1/21/03 304,699 772,168
Patrick D. Giblin 10,000 5% 40.375 1/21/03 253,916 643,474
William C. Harris 6,000 3% 40.375 1/21/03 152,350 386,084
Oscar H. Parrish, Jr. 6,000 3% 40.375 1/21/03 152,350 386,084
(1) Options became exercisable on January 21, 1994, 12 months from the date of grant.
(2) Exercise Price is the average of the high and low trading prices of Crestar Common Stock on the date of grant.
(3) In order to realize the potential values set forth in columns (f) and (g), the price per share of Crestar
Common Stock would be approximately $65 3/4 and $104 3/4, respectively, at the end of the ten year option term.
</TABLE>
The following table provides information concerning stock options exercised by
each of the five named executive officers during 1993, and the value of options
held by each on December 31, 1993.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
(A) (B) (C) (D) (E)
NUMBER OF VALUE OF
SECURITIES UNEXERCISED IN-THE-
UNDERLYING MONEY
UNEXERCISED OPTIONS OPTIONS AT DECEMBER
AT DECEMBER 31, 1993 31,1993
SHARES ACQUIRED (POUND) ($)(1)
ON EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (POUND) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Richard G. Tilghman 30,100 418,760 128,000/20,000 2,700,500/31,250
James M. Wells III 9,800 140,193 76,000/12,000 1,594,750/18,750
Patrick D. Giblin 37,355 642,294 43,645/10,000 892,983/15,625
William C. Harris 2,500 36,975 45,300/ 6,000 912,381/ 9,375
Oscar H. Parrish, Jr. 13,779 283,383 33,421/ 6,000 662,408/ 9,375
(1) The average of the high and low trading prices on December 31, 1993 for Crestar Common Stock was $41.9375
and is used in calculating the value of unexercised options.
</TABLE>
11
<PAGE>
The following table shows for the remuneration level and years of credited
service indicated, the annual pension benefit (not subject to Social Security or
other reductions), that would be payable in the form of a straight life annuity
commencing at age 65 under the present benefit formula of the Corporation's
Retirement Plan.
<TABLE>
<CAPTION>
PENSION PLAN TABLE(1)
HIGHEST CONSECUTIVE
FIVE-YEAR AVERAGE YEARS OF CREDITED SERVICE
COMPENSATION 20 25 30 35 40 45 50
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 32,880 $ 41,100 $ 43,600 $ 46,100 $ 48,600 $ 51,100 $ 53,600
150,000 50,880 63,600 67,350 71,100 74,850 78,600 82,350
200,000 68,880 86,100 91,100 96,100 101,100 106,100 111,100
250,000 86,880 108,600 114,850 121,100 127,350 133,600 139,850
300,000 104,880 131,100 138,600 146,100 153,600 161,100 168,600
350,000 122,880 153,600 162,350 171,100 179,850 188,600 197,350
400,000 140,880 176,100 186,100 196,100 206,100 216,100 226,100
450,000 158,880 198,600 209,850 221,100 232,350 243,600 254,850
500,000 176,880 221,100 233,600 246,100 258,600 271,100 283,600
550,000 194,880 243,600 257,350 271,100 284,850 298,600 312,350
600,000 212,880 266,100 281,100 296,100 311,100 326,100 341,100
650,000 230,880 288,600 304,850 321,100 337,350 353,600 369,850
700,000 248,880 311,100 328,600 346,100 363,600 381,100 398,600
750,000 266,880 333,600 352,350 371,100 389,850 408,600 427,350
(1) The amounts shown exceed statutory benefit limits and compensation caps under the Plan in some
instances. To the extent an amount cannot be earned under the Retirement Plan, it will be earned under
the Corporation's Excess Benefit and Additional Nonqualified Executive Plans.
Compensation covered by the Corporation's tax-qualified defined benefit Retirement Plan consists of
basic remuneration or salary paid to the employee, including salary-reduction contributions under the
401(k) Plan and sick and overtime pay, but excluding certain commissions, bonuses, incentive
compensation, severance pay and other employee benefits. Covered compensation is displayed in the
Summary Compensation Table, column (c), labeled Salary. Under the Plan formula, a participant's monthly
retirement plan benefit at normal retirement age (65 years) is equal to the sum of (i) 1.15% of his
highest average compensation during a consecutive five-year period multiplied by his years of credited
service at normal retirement date up to 25 years and (ii) 0.5% of his highest average compensation
during a consecutive five-year period multiplied by his years of credited service at normal retirement
date over 25 years and (iii) 0.65% of his highest average compensation in excess of his covered
compensation (an amount related to Social Security, tax and benefits laws) multiplied by his years of
credited service at normal retirement date up to 25 years. Reduced early retirement benefits are
available as early as age 55 for participants with five years of service. The estimated number of
credited years of service at normal retirement age for Messrs. Tilghman, Wells, Giblin, Harris, and
Parrish is 38, 42, 24, 39, and 42, respectively.
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
SEVERANCE AGREEMENTS. The Corporation has entered into severance agreements with
Messrs. Tilghman, Wells, Giblin, Harris, and Parrish. The agreements are
identical except for the period for which benefits will be paid. Each of the
severance agreements is subject to the Corporation's Executive Severance Plan.
The agreements and the Plan provide for certain benefits in the event of a
change-in-control of the Corporation followed by termination of employment
without cause, demotion, or disproportionate reduction of compensation within 3
years of the change-in-control. If a change-in-control occurs, the principal
benefits an employee receives under the agreements and the Plan are: (i) salary
payments continue for 36 months in the case of Messrs. Tilghman, Wells, Giblin,
and Parrish, and 24 months in the case of
12
<PAGE>
Mr. Harris (an employee will be paid 125% of his adjusted monthly compensation
prior to termination; paying the employee more than 100% of his compensation is
intended to compensate him for loss of continuing qualified benefits during the
severance period); (ii) the Corporation's profit sharing contribution that would
have been allocated to his account for the full calendar year in which his
employment is terminated will be paid in a lump sum; (iii) the nonvested portion
of his benefits under the Retirement Plan will be paid in a lump sum; and (iv)
in the event of a tender offer or exchange offer, consideration for his shares
equivalent to the economic value paid to the Corporation's public shareholders.
The Corporation has promised to pay all legal fees and expenses, if any,
incurred by the employee in seeking to obtain these benefits.
The Internal Revenue Code prescribes a threshold for payments contingent on a
change-in-control (300% of an employee's average annual compensation during the
five years prior to the change in control) and also imposes significant
penalties on payments that exceed the threshold. Any or all of an affected
employee's severance benefits will be reduced so that the payments do not exceed
the Internal Revenue Code's threshold if that reduced amount would yield to the
employee a greater after-tax benefit. If receipt by an employee of his severance
benefits without regard to the statutory threshold would result in a greater
after-tax benefit to that employee, then his benefits will not be reduced. The
Corporation's independent auditors determine whether an employee's severance
benefits will be reduced under his severance agreement. No benefits will be
payable under the agreements in the event of certain actual changes in control
or a disposition of 50% or more of the Corporation's assets in which assurance
exists that benefits at least equal to the benefits provided such individuals
under the agreements will be continued and benefits are actually continued. In
addition, the salary continuation payments described above will be reduced by
certain amounts earned from other employment during the period.
All agreements provide for initial terms of three years, with annual reviews
thereafter by the Human Resources and Compensation Committee to consider
extending the terms for an additional year.
HUMAN RESOURCES AND
COMPENSATION COMMITTEE REPORT
FOR CALENDAR/FISCAL YEAR 1993
The Human Resources and Compensation Committee of the Board of Directors of
Crestar Financial Corporation is comprised of five outside directors, none of
whom is an officer or employee or former officer or employee of Crestar or any
of its subsidiaries and none of whom serves on the board of any other Committee
member's company or organization. Similarly, none of the Corporation's executive
officers serves on the board of any Committee member's organization. The
Committee utilizes both outside legal counsel and consultants in fulfilling its
responsibilities.
The Committee maintains a pay for performance executive compensation
philosophy. Crestar's compensation programs are a key element in achieving
continued financial and operational success. They are designed to recruit,
reward, retain, and motivate all executives to work as a team to achieve the
Corporation's goals of: (1) A keen determination to keep abreast of the
financial services needs of the communities, businesses and individuals served,
and to aggressively market the products and services that meet those needs; (2)
A commitment to deliver customer service that is consistently and clearly
superior to that provided by the Corporation's competitors; (3) An emphasis on
maintaining strong credit quality; (4) A determination to manage productivity,
including controlling costs as well as working as efficiently as possible to
generate fee income; (5) The maintenance of a skilled and highly motivated
workforce; and (6) A focus on expansion and growth within the markets currently
served -- Virginia, Washington, DC and Maryland. By following these principles,
Crestar has provided value for both its customers and its shareholders.
Compensation programs for executive employees are based on two fundamental
principles: (1) Pay for Performance: Every executive's long and short-term
incentive compensation will be related to performance against specific
corporate, business unit or staff and individual goals; and (2) External
Competitiveness: It is the Corporation's intention that when target performance
is achieved, our executives' total compensation will be competitive with an
appropriate industry peer group.
13
<PAGE>
The results sought by implementing these principles are: (1) Accountability:
tying an executive's incentive compensation to the achievement of performance
goals; (2) Variability: preventing entitlement (a portion of compensation for
every executive is variable and must be re-earned every year); and (3) Internal
Equity: assuring compensation equity among jobs of similar content,
responsibility and contribution to total company performance.
Executives are compensated for creating shareholder value which maximizes the
Corporation's market value over its invested equity. Compensation programs are
clearly and understandably linked to performance goals which are aligned with
the objectives developed in the annual planning process. These goals may include
corporate, group, business unit, staff, and individual objectives. A portion of
each executive's compensation is linked to shareholder value and corporate
performance. This proportion is larger for those executives who have greater
responsibility for overall performance. Where appropriate, some portion is
linked to the performance of the unit for which the executive has the most
direct responsibility. An executive's total compensation is composed of fixed
and variable, at-risk components. Executives with greater responsibility have a
larger share of their total compensation at risk. The mix of compensation
programs is designed to reward achievement of a proper balance of short and long
term performance. Executives are encouraged to own Crestar stock. This
proportion should be higher for executives with greater responsibilities to
reflect their long term investment in the future of the Corporation. The
compensation programs are designed to encourage appropriate risk taking by
aligning executives' risk position with those of the shareholders. A key
criterion in selecting performance measures are their correlation with
shareholder value creation. Performance assessment considers accomplishments
relative to those of an appropriate industry peer group and changing internal
and external conditions. Eligibility varies between programs and includes key
management employees and individual contributors whose inclusion is appropriate
to reflect level of responsibility and industry practice. Programs are flexible
to allow changes in response to legal, regulatory, and/or business requirements.
With respect to the Corporation's policy regarding qualifying compensation
paid to exec-
utive officers for deductibility under the $1 million cap of section 162(m) of
the Internal Revenue Code, Crestar intends to make changes in its compensation
programs to allow deductibility to the extent those changes continue to support
the Corporation's ability to achieve the results, maintain the principles, and
achieve the corporate goals outlined above.
The components of Crestar's total executive compensation package include the
following:
BASE SALARY -- Base salary is the foundation of Crestar's executive
compensation program. It takes into account the competitive value, both
externally and internally, of jobs; and it provides the base relationship for
short and long term incentive programs. Base salary is targeted at the
competitive median for similarly sized national financial services companies.
For purposes of establishing competitive base salary levels, Crestar compares
itself to a group of financial services organizations of similar asset size as
published in national executive compensation surveys and recommended by the
Committee's independent outside consultant. For 1993, Mr. Tilghman, Chairman and
CEO of the Corporation, received a base salary of $535,000, competitively set
against national median survey data. When combined with annual incentives, the
Corporation's goal is to provide total annual compensation that is competitive
within the industry when Crestar's target performance is achieved relative to
the industry.
The Human Resources and Compensation Committee believes that the companies
included in the national survey data used for setting base salary and other
compensation levels are more representative of the Corporation's most direct
competitors for executive talent than the companies used in the index for
shareholder return comparisons, which are regional competitors of varying asset
size that compete with Crestar for investors. Thus, while there is some overlap
in the companies contained in national survey data used in the establishment of
executive compensation and the index used in the graph comparing five year
cumulative shareholder return, the groups are not identical.
ANNUAL INCENTIVE -- Crestar's annual incentive program is designed to motivate
executives by recognizing and rewarding performance against pre-determined
annual financial objectives. A minimum corporate performance threshold must be
achieved before any incentive may be earned. The objectives include corporate
and individual components which are weighted according to the executive's sphere
of responsibility. These range from 75% corporate weighting
14
<PAGE>
for senior executives, including the five named executive officers, to a 25%
corporate weighting for less senior management participants. Approximately 200
officers, or 3% of the total employee population, participate in the annual
management incentive program. Each participant has a competitive target award
expressed as a percent of salary, which varies according to level of
responsibility. Target awards are set periodically based on the same median
competitive standards used to establish base salary levels. Mr. Tilghman's
target for 1993 was 50% of base salary.
Crestar uses the annual incentive program to compensate executives based on
the Corporation's return on equity (ROE) and achievement of goals based on each
employee's individual performance. The individual element of each participant's
award may be adjusted upward or down to zero at the Committee's discretion,
based on individual achievement. The Committee establishes an ROE payout
schedule annually during April based on the earnings environment and the
Corporation's annual financial objectives. For 1993, incentive targets were set
to be earned based on the achievement of a 14% ROE, maximum awards at 150% of
target earned at a 16.5% ROE, with no incentive earned for a ROE of less than
10%.
During 1993, the Corporation achieved a ROE of 13.5%, and based on the
Committee's pre-established ROE schedule, this provided for an incentive payout
of 95% of targets for eligible participants, adjusted for individual performance
factors. Mr. Tilghman received a 1993 annual incentive of $280,000 or 52% of
1993 base salary. The Committee, at its discretion as provided in the annual
incentive plan, chose to adjust Mr. Tilghman's target achievement of 47.5% of
salary upward to reflect his leadership and contributions to the Corporation's
continued improvement in credit quality, an 11% increase in total shareholder
return during 1993, substantial growth in EPS, the successful consummation of
acquisition agreements representing over $1 billion in assets, increase in
non-certificate core deposits, growth in fundamental earnings, and Crestar's
overall strong 1993 performance.
LONG TERM INCENTIVE PROGRAM -- Crestar's long term compensation programs are
designed to reward the creation of shareholder value. A stock incentive plan,
under which the Committee may grant stock options (both incentive and
non-qualified), financial performance-related stock awards, and outright shares
of stock, is the overall vehicle. This concept affords the Commit-
tee the needed flexibility to respond to changing business and regulatory
conditions.
Stock options link the executive's rewards directly to shareholder return. The
option exercise price may not be less than the fair market value of the shares
on the date the options are granted. Options may be granted to key management
employees or individual contributors who have a significant effect on the long
term strategic success of the Corporation. Grants are made to top management to
provide incentive for future performance rather than to reward for prior
performance and, therefore, prior grants and the number of outstanding options
are not factored into the grant formula. The number of shares underlying each
executive's annual stock option grant is determined by taking a percentage of
salary, competitively determined, and dividing that amount by the fair market
value on the date of grant. The competitive percent of salary is determined
through use of the same median national survey data as used in setting base
salary and potential incentive levels, combined with the advice of the
Committee's independent, outside consultant.
For 1993, Mr. Tilghman received a grant of 20,000 stock options with an
exercise price of $40.375 (the average of the high and low in trading on the
grant date) for a total grant date market value of $807,500. The grant value, or
cost to purchase the shares underlying these options, represented 151% of Mr.
Tilghman's 1993 salary, a level based on a competitive median range of 150% to
170% of base salary for similarly sized financial institutions in the national
survey data.
The Corporation's financial performance-related stock program consists of a
performance share plan which pays out shares of Crestar Common Stock upon the
achievement of certain performance goals over a four-year period. Participation
in the performance share portion of the long term performance program is limited
to a group of twenty senior management employees who currently have
responsibility for the long-term strategic success of the Corporation.
Performance shares are granted each year and are set at 50% of the stock option
grant, which combined with the stock option program, provides an appropriate mix
of long-term incentive opportunity as recommended by the Committee's independent
consultant. The Committee establishes an award schedule, which determines
performance targets and the level of shares to be paid out when the Corporation
achieves certain return on asset (ROA) goals compared to the nation's Top 100
bank holding companies,
15
<PAGE>
ranked by asset size on December 31 of each year. The Top 100 as published
annually by the AMERICAN BANKER differs from the index used for the graph
comparing total shareholder return. The Top 100 was chosen as being fully
representative of the spectrum of national ROA performance, whereas those
companies in the performance graph represent a publicly available index chosen
as representative for shareholder return comparison purposes.
During 1993, Mr. Tilghman received a grant of 10,000 performance shares,
one-half the number of stock options granted to him during the year. One fourth
of these shares is available to be earned in each of the four years in the
performance cycle (1993-1996), based on the Corporation's ROA performance for
that year. Shares earned are set aside for payout at the end of the four-year
period. In order for a portion of these shares to be earned for 1993, Crestar
must achieve a minimum ROA rank at the 50th percentile of the Top 100, at which
point 25% of the year's shares are earned. An ROA rank in the 85th percentile
produces the maximum award of 150% of the year's pro rata shares. The
Corporation does not expect any shares to be earned, or paid out for prior
grants, for 1993 performance. Data is not yet available to make a final
determination regarding actual earning or payout under the plan for 1993.
Although the performance share plan was established in 1987, no shares have been
earned or paid out under the Plan to any participant, including the five named
executive officers, since ROA performance goals have not been achieved during
any measurement period.
Crestar's total compensation package offers executives rewards commensurate
with the Corporation's performance and seeks to promote a focus on long-term
goals and shareholder return. The Committee affirms its strategy of pay for
performance as evidenced by the following graph relating Crestar's five-year
shareholder return values (as defined in the Performance Graph) to Crestar's CEO
cash compensation (salary plus bonus as reported in the Summary Compensation
Table):
(Graph showing Cumulative Percentage Change in CEO Cash Compensation vs.
Cumulative Percentage Change in Total Shareholder Return appears here-see
appendix)
HUMAN RESOURCES AND COMPENSATION
COMMITTEE
Charles R. Longsworth, Chairman
Gene A. James
H. Gordon Leggett, Jr.
G. Gilmer Minor III
Karen Hastie Williams
16
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph comparing the total returns (assuming reinvestment
of dividends) of Crestar Financial Corporation Common Stock, the S&P 500 Index,
and the Dow Jones Regional Banks Index. The graph assumes $100 invested on
December 31, 1988, in Crestar Financial Corporation Common Stock and each of the
indices. The shareholder return shown on the graph below is not necessarily
indicative of future performance.
(Graph as defined by the following data points)
Cumulative Total Return
1988 1989 1990 1991 1992 1993
Crestar Fini Corp 100 125 63 88 199 220
S&P 500 100 132 128 166 179 197
DJ Regional Banks 100 117 82 144 192 202
17
<PAGE>
2. RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors has
reappointed KPMG Peat Marwick as independent auditors to audit the consolidated
financial statements of the Corporation and its subsidiaries for 1994. This
appointment is subject to ratification by the shareholders. KPMG Peat Marwick
has served in such capacity continuously since 1963.
Representatives of KPMG Peat Marwick are expected to be present at the Annual
Meeting, where they will have the opportunity to make a statement, if they
desire to do so, and be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF KPMG PEAT MARWICK AS INDEPENDENT AUDITORS FOR 1994.
3. OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for action
at the meeting other than those listed in the Notice of Meeting and referred to
in this Proxy Statement. The enclosed proxy confers discretionary authority,
however, with respect to the transaction of any other matters that may properly
come before the meeting, and it is the intention of the persons named in the
proxy to vote in accordance with their judgment on any such matter.
In accordance with the Corporation's Bylaws and to permit the meeting to be
conducted in an orderly fashion, shareholders wishing to bring business before
the meeting must give written notice to the Secretary of the Corporation not
less than 15 days prior to the meeting (that is, by April 7, 1994). A
shareholder's notice to the Secretary shall set forth as to each matter a brief
description of the business to be brought before the meeting and the reasons for
conducting such business at the meeting. Any nomination for director made by a
shareholder must also be made in writing to the Secretary of the Corporation not
less than 15 days prior to the meeting of shareholders. A shareholder's
nomination for director shall state the name and business address of the
shareholder's nominee and the fact that the nominee has consented to his name
being placed in nomination.
A shareholder's notice to the Secretary with respect to business to be brought
before the meeting or any nomination for director shall also set forth: (a) the
name and address of the shareholder making the nomination as it appears on the
Corporation's books, (b) the class and number of shares of the Corporation's
stock beneficially owned by the shareholder, and (c) any material interest of
the shareholder in the proposed nomination.
The notice provision in the Corporation's Bylaws is not intended to limit the
right of shareholders to speak at the Corporation's shareholders' meetings on
matters germane to the Corporation's business, subject to any rules established
for the orderly conduct of the meeting.
1995 DIRECTOR NOMINEES AND
SHAREHOLDER PROPOSALS
Recommendations for director-nominees and proposals of shareholders intended to
be presented at the 1995 Annual Meeting and included in the Corporation's 1995
Notice of Meeting and Proxy Statement must be received by the Corporation no
later than November 21, 1994. Director-nominees and shareholder proposals should
be directed to the Secretary at the Corporation's principal office in Richmond,
Virginia. Recommendations for director nominees should include information that
will enable the Executive Committee to evaluate the qualifications of the
proposed candidate. Shareholder proposals must comply with SEC proxy rules in
order to be included in the Proxy Statement.
By Order of the Board of Directors
John C. Clark, III
Corporate Senior Vice President,
General Counsel and Secretary
March 21, 1994
18
<PAGE>
PROXY
CRESTAR FINANCIAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 22, 1994
The undersigned hereby appoints G. Gilmer Minor, III, William F. Vosbeck and
L. Dudley Walker as Proxies, each with the power to appoint his substitute, and
authorizes them to represent and to vote all shares of Common Stock held of
record by the undersigned on March 4, 1994, at the Annual Meeting of
Shareholders to be held on April 22, 1994, or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. ELECTION OF SIX CLASS I DIRECTORS FOR A TERM OF THREE YEARS AND ONE CLASS II
DIRECTOR FOR A TERM OF ONE YEAR. CLASS I NOMINEES: J. CARTER FOX; PATRICK D.
GIBLIN; GENE A. JAMES; H. GORDON LEGGETT, JR.; PATRICK J. MAHER; AND GORDON
F. RAINEY, JR. CLASS II NOMINEE: BONNIE GUITON HILL.
<TABLE>
<S> <C>
( ) FOR all nominees listed ( ) WITHHOLD AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW:
2. RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK AS INDEPENDENT AUDITORS
FOR 1994.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
(CONTINUED ON REVERSE)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
I plan to attend the meeting. ( )
Signature
Signature if held jointly
Dated , 1994
PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS. When shares are held by
joint tenants, both should sign.
When signing as attorney,
executor, administrator, trustee
or guardian, please give full
title. If a corporation, please
sign with full corporate name by
president or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
APPENDIX
On page 3 the first photograph is J. Carter Fox
On page 3 the second photograph is Patrick D. Giblin
On page 3 the third photograph is Gene A. James
On page 3 the fourth photograph is H. Gordon Leggett, Jr.
On page 4 the first photograph is Patrick J. Maher
On page 4 the second photograph is Gordon F. Rainey, Jr.
On page 4 the third photograph is Bonnie Guiton Hill
On page 4 the fourth photograph is William R. Battle
On page 5 the first photograph is Frank E. McCarthy
On page 5 the second photograph is G. Gilmer Minor, III
On page 5 the third photograph is Eugene P. Trani
On page 5 the fourth photograph is William F. Vosbeck
On page 5 the fifth photograph is James M. Wells, III
On page 6 the first photograph is Richard M. Bagley
On page 6 the second photograph is Charles R. Longsworth
On page 6 the third photograph is Frank S. Royal
On page 6 the fourth photograph is Richard G. Tilghman
On page 7 the first photograph is L. Dudley Walker
On page 7 the second photograph is Karen Hastie Williams
The graph on page 16 is described in the paragraph that preceeds it.
