SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CENTRAL FIDELITY BANKS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
( ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(X) Fee paid previously with preliminary materials.
( ) 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>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
CENTRAL FIDELITY BANKS, INC.
Executive Offices
1021 E. Cary Street
Post Office Box 27602
Richmond, Virginia 23261
To the Shareholders:
The Annual Meeting of Shareholders of Central Fidelity Banks, Inc. will be
held in the banking hall of Central Fidelity National Bank, Broad at Third
Street, Richmond, Virginia, at 4:30 p.m. on May 10, 1995:
(1) To elect five directors comprising Class 1 to three year terms of
office;
(2) To approve the 1995 Stock Incentive Plan; and
(3) To transact any other business which may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 17, 1995 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the meeting.
Shareholders are cordially invited to attend the meeting in person.
REGARDLESS OF YOUR ATTENDANCE PLANS, PLEASE FILL IN, DATE AND SIGN THE ENCLOSED
PROXY CARD AND MAIL IT IN THE ACCOMPANYING ADDRESSED AND POSTPAID ENVELOPE. The
proxy may be revoked at any time before it is voted.
Your attention is directed to the accompanying Proxy Statement.
By Order of the Board of
Directors,
WILLIAM N. STOYKO
SECRETARY
March 30, 1995
<PAGE>
PROXY STATEMENT
CENTRAL FIDELITY BANKS, INC.
Executive Offices
1021 E. Cary Street
Post Office Box 27602
Richmond, Virginia 23261
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 10, 1995
GENERAL
This Proxy Statement and the accompanying form of proxy, mailed to
shareholders on or about March 30, 1995 are furnished in connection with the
solicitation of proxies on behalf of the Board of Directors (the "Board") of
Central Fidelity Banks, Inc. (the "Company") for use at the Annual Meeting of
Shareholders (the "Meeting") to be held at 4:30 p.m. on May 10, 1995 in the
banking hall of Central Fidelity National Bank, Broad at Third Street, Richmond,
Virginia and at any adjournment thereof. The cost of soliciting proxies will be
borne by the Company. In addition to solicitation by mail, the Company will
request banks, brokers and other custodians, nominees and fiduciaries to send
proxy material to the beneficial owners and to secure their voting instructions,
if necessary. The Company, upon request, will reimburse them for their expenses
in so doing. Officers and regular employees of the Company may solicit proxies
personally, by telephone or telegram, from some shareholders if proxies are not
received promptly. In addition, the Company has retained Morrow & Company, Inc.
to aid in the solicitation of proxies at an estimated cost of $4,500, plus
out-of-pocket expenses.
The Board has fixed the close of business on March 17, 1995 as the record
date for the determination of shareholders entitled to notice of, and to vote
at, the Meeting.
A proxy in the accompanying form which is properly signed and returned and
not revoked will be voted in accordance with instructions contained therein.
Any shareholder giving a proxy may revoke it at any time before it is
exercised by executing another proxy or by appearing at the Meeting and voting
in person.
The Company's Annual Report to Shareholders and Form 10-K for the year
ended December 31, 1994 is being sent to all shareholders concurrently with this
Proxy Statement. Said Annual Report and Form 10-K is not to be considered a part
of the proxy soliciting material.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
At the Meeting, each outstanding share of the Company's $5.00 par
value common stock ("Common Stock") will be entitled to one vote on all
matters submitted to the shareholders. There are no cumulative voting
rights. As of March 17, 1995, there were 39,542,010 shares of the Common
Stock outstanding and entitled to vote.
1
<PAGE>
On March 17, 1995 the trust department of the Company's
wholly-owned banking subsidiary, Central Fidelity National Bank (the
"Bank"), in its capacity as the trustee for the Company's Employee Stock
and Thrift Plan and the Employee Stock Incentive Plan, held on behalf of
officers and employees an aggregate of 3,291,080 shares (8.3%) of the
outstanding Common Stock. Employee participants in each of those plans
retain the power to vote their individual shares. The Bank also held on
March 17, 1995 an aggregate of 2,055,532 shares (5.2%) of the
outstanding Common Stock in various fiduciary and representative
capacities with either full or shared voting and dispositive powers.
QUORUM AND VOTE REQUIRED
Under the Company's By-Laws, a majority of the shares of Common
Stock, present in person or represented by proxy, shall constitute a
quorum for purposes of the Meeting. If a quorum is present, the
affirmative vote of the majority of the shares present in person or
represented by proxy at the Meeting and entitled to vote on the subject
matter shall be the act of the shareholders with respect to all
proposals contained in this proxy statement other than the election of
directors. In the election of directors, those receiving the greatest
number of votes shall be deemed elected even though not receiving a
majority. The tabulation of votes for all proposals and the election of
directors shall be managed by three judges appointed by the Board who
shall certify the results to the Secretary. Abstentions are treated as
votes against a proposal, and broker non-votes have no effect on the
vote.
ELECTION OF DIRECTORS
The Company's Restated Articles of Incorporation provide for the
Board of Directors to be divided into three classes, as nearly equal in
number as possible, each of which will serve for three years, with one
class being elected each year.
At the 1995 Meeting, five directors comprising Class 1 will be
elected to serve until the 1998 Annual Meeting of Shareholders and until
their successors are elected and qualified. The Board recommends that
the five nominees named below be elected. Proxies received will be voted
for the election of such nominees unless marked to the contrary. A
shareholder who desires to withhold voting of the proxy for all or one
or more of the nominees may so indicate on the proxy. All of said
nominees are currently members of the Board. All have consented to be
named and have indicated their intent to serve if elected. However, in
the event any such nominee is not available for election, the proxies
will be voted for such person as shall be designated by the Board as a
replacement.
There is set forth hereafter as to each of the nominees, and
the remaining directors who will continue to serve as indicated below,
certain information including age, principal occupation and, as of
January 31, 1995, information respecting beneficial ownership of Common
Stock. The dates shown for first election as a director in the
information below represents the year in which the nominee or continuing
director was first elected to the Board of the Company or one of its
predecessor corporations. Unless otherwise indicated, the business
experience and principal occupations shown for each nominee or
continuing director has extended five or more years.
2
<PAGE>
NOMINEES FOR ELECTION
CLASS 1 DIRECTORS -- NOMINEES FOR ELECTION TO SERVE UNTIL THE 1998 MEETING
JACK H. FERGUSON, 63, a director since 1986. Mr. Ferguson, retired,
was President and Chief Executive Officer of So-Deep, Inc., Manassas,
Virginia, a subsurface utility engineering firm until March 1992. From
January 1990 to March 1991, he was Chairman of the Flanagan Group,
Alexandria, Virginia, a legislative consulting firm. On March 31,
1989, Mr. Ferguson retired as President and Chief Executive Officer of
Virginia Electric and Power Company, Richmond, Virginia, and
thereafter he served as a consultant to that company through March
1990. Mr. Ferguson is a member of the Public Policy Committee.
LEWIS N. MILLER, JR., 51, a director since 1984. Mr. Miller is Chairman,
President and Chief Executive Officer of the Company and of Central
Fidelity National Bank, the principal subsidiary of the Company. Mr.
Miller is a member of the Executive, Nominating and Public Policy
Committees.
RICHARD L. MORRILL, 55, a director since 1989. Dr. Morrill is President
of the University of Richmond, Richmond, Virginia. Dr. Morrill is a
member of the Public Policy Committee.
LLOYD U. NOLAND, III, 51, a director since 1987. Mr. Noland is Chairman
of the Board, President and a director of the Noland Company, Newport
News, Virginia, a supplier of industrial products. Mr. Noland is
chairman of the Audit Committee.
WILLIAM G. REYNOLDS, JR., 56, a director since 1977. Mr. Reynolds is
Vice President, Government Relations and Public Affairs of Reynolds
Metals Company, Richmond, Virginia, producers of aluminum and aluminum
products. Mr. Reynolds is a member of the Audit Committee.
DIRECTORS CONTINUING TO SERVE
CLASS 2 DIRECTORS -- ELECTED TO SERVE UNTIL THE 1996 MEETING
ALVIN R. CLEMENTS, 67, a director since 1974. Mr. Clements, a
Charlottesville, Virginia consultant, was Chairman of the Board of the
Company prior to 1982. Mr. Clements is a member of the Executive
Committee.
THOMAS R. GLASS, 66, a director since 1978. Mr. Glass is Publisher
Emeritus of The News and The Daily Advance and former President and
Chief Executive Officer of Carter Glass Newspaper Group, Lynchburg,
Virginia. Mr. Glass is a member of the Audit Committee.
MINNIE BASSETT LANE, 64, a director since 1984. Mrs. Lane, a civic
leader in Lynchburg, Virginia, was a director of Central Fidelity
Bank, N.A., Lynchburg, a former subsidiary of the Company. Mrs. Lane
is a member of the Public Policy Committee.
GEORGE R. LEWIS, 54, a director since 1985. Mr. Lewis is Vice
President and Treasurer of Philip Morris Companies, Inc., New York,
New York, producers of cigarettes, beverages and food products, and
is a director of Ceridian Corporation. Mr. Lewis is a member of the
Executive and Compensation Committees.
3
<PAGE>
T. JUSTIN MOORE, JR., 69, a director since 1968. Mr. Moore is Counsel to
the law firm of Hunton & Williams, Richmond, Virginia. Mr. Moore is a
member of the Executive, Nominating and Compensation Committees.
CLASS 3 DIRECTORS -- ELECTED TO SERVE UNTIL THE 1997 ANNUAL MEETING
JAMES F. BETTS, 62, a director since 1973. Mr. Betts is an independent
management consultant in Richmond, Virginia. Mr. Betts is a member of
the Executive and Nominating Committees.
PHYLLIS L. COTHRAN, 48, a director since 1994. Ms. Cothran is
President and Chief Executive Officer of Trigon Blue Cross Blue
Shield, Richmond, Virginia. Prior to November 1990 she held the
following positions at Blue Cross Blue Shield: Executive Vice
President and Chief Operating Officer, May 1990 to November 1990;
and Executive Vice President, Operations, November 1989 to May 1990.
She is also a director of Tredegar Industries, Inc. and Ethyl
Corporation. Ms. Cothran is a member of the Audit Committee.
ROBERT L. FREEMAN, 68, a director since 1970. Mr. Freeman of Newport
News, Virginia is a retired certified public accountant. He is
presently a private investor. Mr. Freeman is a member of the Executive
Committee.
G. BRUCE MILLER, 59, a director since 1982. Mr. Miller is President and
Chief Executive Officer of International Home Furnishings Center, High
Point, North Carolina. Mr. Miller is a member of the Executive and
Nominating Committees.
KENNETH S. WHITE, 55, a director since 1976. Mr. White is an attorney at
law and a principal in the law firm of Edmunds & Williams, P.C.,
Lynchburg, Virginia. Mr. White is a member of the Executive,
Nominating and Compensation Committees.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of January 31, 1995,
regarding the number of shares of Common Stock beneficially owned by all
directors and nominees, by each of the executive officers named in the "Summary
Compensation Table" herein (other than Carroll L. Saine) and by all directors
and executive officers as a group. Beneficial ownership includes shares, if any,
held in the name of the spouse, minor children or other relatives of the
director or executive officer living in such person's home, as well as shares,
if any, held in the name of another person under an arrangement whereby the
director or executive officer can vest title in himself or herself at once or at
some future time.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
<S> <C> <C>
James F. Betts.............................................. 26,245 *
Alvin R. Clements........................................... 38,131 *
Phyllis L. Cothran.......................................... 1,271 *
Pauline Allen Ellison....................................... 17,807 *
Rodger W. Fauber............................................ 96,419(1) *
Jack H. Ferguson............................................ 4,470 *
Robert L. Freeman........................................... 32,137 *
Thomas R. Glass............................................. 19,750 *
Philip G. Hug............................................... 100,577(1) *
Minnie Bassett Lane......................................... 10,538 *
George R. Lewis............................................. 3,353 *
Jay O. Livingston........................................... 101,507(1) *
G. Bruce Miller............................................. 14,232 *
Lewis N. Miller, Jr......................................... 195,710(1) *
T. Justin Moore, Jr......................................... 49,512 *
Richard L. Morrill.......................................... 1,670 *
Lloyd U. Noland, III........................................ 93,387 *
J. Carson Quarles........................................... 67,540(1) *
William G. Reynolds, Jr..................................... 10,394 *
Kenneth S. White............................................ 13,262 *
All directors and executive officers as a group............. 1,560,348 3.9%
</TABLE>
(1) Includes beneficial ownership of the following shares which may be
acquired within 60 days of January 31, 1995 pursuant to stock
options by: Mr. Fauber, 60,850 shares; Mr. Hug, 53,237 shares; Mr.
Livingston 74,500 shares; Mr. Lewis N. Miller Jr., 99,854 shares;
Mr. Quarles, 59,449 shares; and all directors and executive officers
as a group, 789,014 shares.
* No individual director, nominee for director or named officer beneficially
owns 1% or more of Common Stock.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board held eight meetings in 1994. The Board has five standing
committees to assist it in the discharge of its responsibilities: the Executive
Committee, Audit Committee, Nominating Committee, Compensation Committee and
Public Policy Committee. Respective memberships on these committees are
identified in the information on pages 3 and 4 hereof.
5
<PAGE>
The Executive Committee consists of eight members, including Lewis N.
Miller, Jr. Except to increase the number of directors, to fill vacancies on the
Board, or to approve an amendment to the Restated Articles of Incorporation,
plan of merger or consolidation or other matters which cannot by law be
delegated by the Board, the Executive Committee has all the powers of the Board
in the management and the conduct of the business and affairs of the Company in
the intervals between meetings of the full Board. The Executive Committee held
two meetings during 1994.
The Compensation Committee consists of three non-employee directors who
establish and control compensation and other benefits for the Company's
executive officers. The Compensation Committee held three meetings during 1994.
The Audit Committee consists of four members, all non-employee directors.
In general, this Committee is charged with ascertaining that the affairs and
operations of the Company and its subsidiaries are subject to proper audit and
control procedures, with monitoring the Company's business ethics policies and
activities and with assuring that the Company's auditors are free to exercise
their function independently of management. The Audit Committee held four
meetings during 1994.
The Nominating Committee consists of Mr. Miller and four
non-employee directors. This Committee was established by the Board to
review qualifications of possible candidates and to recommend candidates
to the Board as nominees for election by the shareholders or by the
Board to fill such vacancies as may occur during the year. The
Nominating Committee held two meetings during 1994.
The Public Policy Committee consists of Mr. Miller and four
non-employee directors. This Committee was established by the Board to
review charitable contributions of the Company and to foster Company
involvement in community programs including compliance with the
Community Reinvestment Act and the civil rights acts. The Public Policy
Committee held two meetings during 1994.
During 1994, each of the Company's directors attended at least 75%
of the meetings of the Board and the committees on which they serve with
the exception of Mrs. Lane, who did, however, attend more than 75% of
the regularly scheduled meetings.
Section 2.13 of the Company's By-Laws provides that nominations of
persons for election as directors may be made only by or at the
direction of the Board or by any shareholder entitled to vote for the
election of directors at a meeting of the shareholders upon compliance
with provisions of said By-Laws. Shareholders intending to nominate
candidates for election as director at a shareholders' meeting shall do
so by notice in writing delivered to the Secretary of the Company or
mailed and received by the Company not less than 60 days nor more than
90 days prior to the meeting (except that, if public disclosure of the
meeting date is made less than 70 days prior to the meeting, the notice
need only be received within 10 days following such public disclosure).
In addition, such notice must set forth the following information: the
name and address and the class and number of shares of the Common Stock
which are beneficially owned by the nominating shareholder; the name,
age, principal occupation or employment, and business and residence
addresses of each nominee; as well as any other information relating to
each nominee as is required to be disclosed in solicitations of proxies
for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended, including such person's written consent to be named in the
proxy statement as a nominee and to serve as a director, if elected.
6
<PAGE>
DIRECTOR COMPENSATION
A Stock Compensation Plan for Non-Employee Directors (the "Directors'
Plan") was approved by shareholders in 1993. The Directors' Plan provides that
director retainer fees and meeting fees may, at the election of the individual
director, be paid in cash or deferred in the form of equivalents of Common Stock
for distribution at a determined future date. The number of shares of Common
Stock equivalents deferred for the account of any director for any calendar
quarter shall be determined by dividing the amount of director's fees deferred
by the non-employee director for such calendar quarter by the fair market value
of the Common Stock on the last business day of the calendar quarter in which
such director's fees were earned.
In 1994, directors who were not officers received a $15,000 retainer
in the form of cash, Common Stock or Common Stock equivalents for
services as a director. They also received $1,200 cash or Common Stock
equivalents per Board or committee meeting ($600 cash or Common Stock
equivalents per committee meeting if on a Board meeting date) attended.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee (the "Committee") is comprised
of three outside directors. The Committee's principal objective is to
develop comprehensive compensation policies designed to attract,
motivate and retain the executive management necessary to enhance the
profitability of the Company and increase shareholder value. Total
compensation opportunities are intended to be competitive with those
offered by employers of comparable size, represented by asset level, and
performance in the banking industry.
The Committee and senior management initiated a comprehensive review of
management compensation in early 1994 with the assistance of a nationally
recognized consulting firm on executive compensation. The study included an
evaluation of management compensation policies, interviews with a substantial
number of employees to solicit their views on the Company's compensation
policies, a review of compensation plans and practices at other financial
institutions of comparable size and performance, and an analytical review of the
costs and benefits of certain proposed incentive programs.
This review was completed in July, 1994 and recommendations from the
study were used to determine base salary increases for executive
officers effective in July, 1994. The Company engaged another nationally
recognized consulting firm on executive compensation to evaluate the
benefits portion of total compensation in addition to base salary paid
by the Company to its employees, including its executive officers.
The executive compensation policies developed by the Compensation
Committee are based upon a philosophy of "pay for performance" as the
best means to promote shareholders' interests. Individual performance is
also linked to the Company's financial performance and shareholder
interests. The key components of executive compensation are:
(Bullet) Base salary compensation payable in cash;
(Bullet) Incentive cash bonuses or additional base salary compensation
payable only in the event that the Company achieves certain
financial performance goals; and
(Bullet) Stock option and other stock incentive awards as an incentive to
promoting the Company's long-term growth.
7
<PAGE>
BASE SALARY
The base salary compensation of executive management was most
recently reviewed by the Compensation Committee and the Board of
Directors in July, 1994 in conjunction with the findings and
recommendations of the consultant study. Salaries of executive officers
were compared with those of other individuals holding similar positions
in comparably sized banking institutions. The median base salary
determined from this comparison was used as a guideline for establishing
1994 salary levels. The average base salary paid to the executive
officers as a group in the past fiscal year was at or above the
comparison group median.
A majority of the financial institutions of comparable size and
performance that constitute the base salary survey group used by the
Committee in establishing salary levels are included in the KBW 50 Index
shown in the performance graph on page 16. Other banking institutions
with asset size similar to the Company's and with comparable performance
were added to those banking institutions in the KBW 50 Index to form the
comparison group. The Committee believes this process resulted in more
accurate compensation comparisons.
Following the determination of a median base salary derived from
the comparison group, each individual executive officer's salary was
analyzed using several factors, including: the Company's attainment of
financial performance goals; the individual's contribution to that
performance; the individual's position within the Company and the duties
and responsibilities assigned to such individual; and their experience
and potential for advancement. No specific weighting was applied to
these factors. The Committee reviewed salaries with the Chief Executive
Officer and made judgmental and discretionary determinations as part of
its assessment process.
ANNUAL INCENTIVES
The Compensation Committee also has approved annual incentive compensation
grants in each of the last three calendar years based on the Company achieving
certain specific financial goals.
In 1993, the Compensation Committee recommended to the full Board a program
of incentive compensation for all employees based on the Company's efficiency
ratio. The efficiency ratio was calculated by dividing the Company's
non-interest expense by the sum of non-interest income and net interest income
on a full tax-equivalent basis. The efficiency ratio for program purposes did
not include nonrecurring expenses which the Committee retained discretion to
adjust. This program provided for a salary increase of 4% to all employees if
the Company's efficiency ratio did not exceed 50% at the end of calendar year
1993. The incentive goal for 1993 was achieved and all employees, including
executive officers, received a 4% salary increase in January, 1994.
The incentive program for calendar year 1994 provided for each employee to
receive a cash bonus of $1,300 if the Company achieved earnings per share of
$3.06 for the year. This goal was not achieved, and no incentive compensation
was paid to employees in 1994.
STOCK INCENTIVES
The Compensation Committee also administers the granting of stock options
to executive officers and employees to encourage their ownership and retention
of the Company's Common Stock. All Options are granted under stock option plans
which have been approved by the shareholders. Under the existing plans, no stock
option can be granted at an exercise price less than 100% of fair market value
of the underlying stock on the date of grant, and all options have a maximum
life of 10 years.
8
<PAGE>
In 1994, stock options were awarded under two programs. One program is
designed for all employees and provides for the grant of options for 100 shares
of Common Stock to employees on each of their successive five year anniversary
dates of employment with the Company. In 1994, Awards of stock options covering
57,000 shares were made under this program to 570 employees, including executive
officers.
In addition, options for 412,000 shares of Common Stock were
awarded in November 1994 to 236 key employees, including 19 executive
officers. The size of option grants ranged from 1,000 to 10,000 shares
with 20,000 shares having been awarded to Mr. Miller, as Chief Executive
Officer. The number of option shares granted to non-executive officers
was determined from recommendations made by the recipient's supervisor
and based on the supervisor's judgment of the employee's job
performance. Awards to executive officers were made in amounts of 5,000
or 10,000 shares with the larger awards having been granted to the nine
executives who had received fewer option shares from previous grants.
CEO COMPENSATION
After the untimely death of Carroll L. Saine on August 18, 1994, Lewis N.
Miller, Jr. was appointed by the Board of Directors to the position of Chairman,
President and CEO of the Company. Mr. Miller received an increase in base salary
in July 1994 of 13%, raising his year end 1994 salary to $650,000. No additional
cash compensation was paid to Mr. Miller in 1994 for assuming the position of
Chairman and sole CEO.
The Committee approved the 1994 increase in Mr. Miller's salary
after reviewing the peer group comparison information provided in the
consultant studies which disclosed that Mr. Miller, in his position as
President of the Company, received base salary above the median of the
comparison group. However, the peer group information also revealed that
Mr. Miller received total cash compensation slightly below median of the
comparison group and total compensation significantly below the median
of the comparison group. In the comparison studies, total cash
compensation information included base salary and cash bonuses, and
total compensation included total cash compensation and long-term
incentives, such as stock options. Although Mr. Miller's 1994 salary
increase and option grant in 1994 were not measured upon the attainment
of any specific goals by the Company, the Committee, in its discretion
and judgment in making these determinations, took into consideration Mr.
Miller's assumption of greater responsibilities during the illness of
Mr. Saine and his individual contributions to Company performance for
the prior fiscal year reflected by: (i) a 31.l% increase in net income
(ii) a 13.0% increase in shareholders' equity; and (iii) a 2.6% increase
in return on shareholders' equity.
EMPLOYMENT AGREEMENT AND TAX CONSIDERATIONS
Mr. Quarles, one of the individuals listed in the Summary Compensation
Table, received his 1994 salary pursuant to an agreement for his active
employment until December 31, 1994 and thereafter until December 31, 1996 as a
consultant to Central Fidelity National Bank at his year-end 1994 salary.
Recent tax legislation generally imposes a $1 million limitation on the
amount of annual compensation deduction allowable to a publicly held company in
respect of its chief executive officer and its other four most highly paid
executive officers. An exception is provided for "performance based"
compensation if certain shareholder approval and outside director administration
requirements are met. The Committee does not currently anticipate that any
executive officer's compensation will exceed $1 million.
9
<PAGE>
However, the Committee and the Board of Directors retain the discretion to grant
non-deductible compensation if the Committee and the Board determine that such a
grant would be in the best interests of the Company and the shareholders under
the circumstances.
The Board of Directors is submitting the Company's 1995 Stock Incentive
Plan to the shareholders for approval. Upon approval, the Company believes that
awards under the 1995 Stock Incentive Plan will not otherwise limit the
deductibility by the Company of certain executive compensation for federal
income tax purposes under Section 162(m) of the Code. Because of certain
interpretational issues under the Code, however, and in the absence of final
Internal Revenue Service regulations, there can be no assurance that awards
under the Plan will, in fact, be excepted from "applicable employee
remuneration." Proposed regulations would include stock options and stock
appreciation rights, but exclude restricted stock, from the exception.
COMPENSATION COMMITTEE
T. Justin Moore, Jr.
George R. Lewis
Kenneth S. White
10
<PAGE>
REMUNERATION
The following table sets forth all cash compensation paid or accrued by the
Company and its subsidiaries to the Chief Executive Officer and other most
highly compensated executive officers of the Company during the past three
fiscal years for all services rendered:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
NUMBER
ANNUAL COMPENSATION OF
OTHER SECURITIES ALL
NAME AND ANNUAL UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY(1) COMPENSATION(2) OPTIONS COMPENSATION(3)
<S> <C> <C> <C> <C> <C>
Carroll L. Saine............................. 1994 $554,174 $ -- 0 $18,215
Former Chairman and Co-Chief 1993 795,540 -- 25,000 50,253
Executive Officer 1992 732,250 -- 0 46,594
Lewis N. Miller, Jr.......................... 1994 614,176 -- 20,000 21,153
Chairman, Chief Executive 1993 541,742 -- 20,000 35,175
Officer and President 1992 454,500 -- 0 29,679
Philip G. Hug................................ 1994 351,927 -- 5,000 12,177
Corporate Executive 1993 324,633 -- 5,000 21,114
Vice President 1992 292,900 -- 0 19,127
Jay O. Livingston............................ 1994 348,233 -- 5,100 12,047
Corporate Executive 1993 294,039 -- 5,000 19,124
Vice President 1992 267,650 -- 0 17,408
J. Carson Quarles............................ 1994 322,687 -- 0 676,553
Former President, Southwestern 1993 305,681 -- 5,000 19,882
Region of the Bank 1992 287,850 -- 0 18,797
Rodger W. Fauber............................. 1994 298,144 -- 5,000 10,307
President, Western 1993 278,433 -- 5,000 18,109
Region of the Bank 1992 252,500 -- 0 16,423
</TABLE>
(1) No cash bonus payments.
(2) All benefits which might be considered of a personal nature did not exceed
the lesser of $50,000 or 10% of total annual salary for the named executive
officer in the table.
(3) Includes for 1994 (a) Company contributions to (i) the Stock and Thrift Plan
and (ii) a companion non-qualified plan (Mr. Saine, $16,625; Mr. Miller,
$18,426; Mr. Hug, $10,558; Mr. Livingston, $10,447; Mr. Quarles, $9,681; and
Mr. Fauber, $8,945), (b) Company group insurance payments for individual
employees (Mr. Saine, $1,590; Mr. Miller, $2,727; Mr. Hug, $1,619; Mr.
Livingston, $1,600; Mr. Quarles, $1,498; and Mr. Fauber, $1,362), and (c)
$665,374 accrued for Mr. Quarles under an arrangement that continues his
current salary for a two year period following his leaving active employment
on December 31, 1994.
STOCK AND THRIFT PLAN
Under the Stock and Thrift Plan, a qualified plan, and a companion
non-qualified plan (the "Thrift Plan"), employees of the Company and its
subsidiaries (the "Employer") who have completed six months of
employment may participate. Participants may contribute up to 16% of
annual compensation, and the Employer contributes an amount at least
equal to 50% of the participant's contribution, but not
11
<PAGE>
to exceed 3% of annual compensation. The Thrift Plan provides that upon
achieving certain defined return on equity ratios, an amount up to an
additional 50% of the participant's contribution may be made by the
Employer, but not to exceed an additional 3% of annual compensation. For
1994, no additional contributions were made on behalf of any
participant.
RETIREMENT PLAN
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$125,000....................................... $ 59,198 $ 68,514 $ 77,830 $ 87,146 $ 96,462
200,000....................................... 95,948 111,264 126,580 141,896 157,212
300,000....................................... 144,948 168,264 191,580 214,896 238,212
400,000....................................... 193,948 225,264 256,580 287,896 319,212
500,000....................................... 242,948 282,264 321,580 360,896 400,212
600,000....................................... 291,948 339,264 386,580 433,896 481,212
700,000....................................... 340,948 396,264 451,580 506,896 562,212
800,000....................................... 389,948 453,264 516,580 579,896 643,212
900,000....................................... 438,948 510,264 581,580 652,896 724,212
</TABLE>
The Company has a non-contributory, tax qualified retirement
plan and a companion non-contributory, non-qualified plan (the
"Retirement Plan") for full-time and regular part-time employees of the
Company and its subsidiaries. Benefits are based on an employee's salary
for the highest sixty consecutive months and usually are distributable
at age 65. The benefits are computed on a straight-line annuity basis
and are not reduced for Social Security benefits or any other offset
amounts. The Retirement Plan provides for 100% vesting after 5 years,
for early retirement at age 55 after 10 years of vested service and for
the payment of benefits to the surviving spouse of an employee.
Depending on the deceased participant's service, payments to a surviving
spouse equal either 100% or 50% of the employee's benefits. Because the
Retirement Plan is a defined benefit plan under which benefits vary with
years of service, average annual salary during a specified period, and
age at retirement, the costs under the Retirement Plan are not included
in the foregoing Summary Compensation Table. The Pension Plan Table
shows the estimated annual benefit payable upon retirement based on
specified remuneration and years of credited service classifications,
assuming a participant retired on December 31, 1994. The Pension Plan
Table and Summary Compensation Table may be used to estimate pension
benefits for each of the named executive officers based on their
credited years of service as of December 31, 1994: Mr. Miller, 22 years;
Mr. Hug, 21 years; Mr. Livingston, 20 years; Mr. Quarles, 8 years and
Mr. Fauber, 29 years. Pension benefits for Mr. Saine, with 35 credited
years of service prior to his death in August, 1994, are payable to his
surviving spouse.
Benefits payable under the Company's ESRP, described below, have been added
to the pension amounts in the table. The IRS limit on annual benefits payable
from defined benefit plans will be $120,000 for 1995. This amount is tied to
changes in the Consumer Price Index and may increase in the future. The Tax
Reform Act of 1986 imposes additional limits on the maximum benefits under
defined benefit plans.
12
<PAGE>
ESRP
The Company maintains an Executive Supplemental Retirement Plan (the
"ESRP"), a non-qualified, unfunded defined benefit plan for executives
designated by the Benefits Committee appointed by the Board. Current executives
covered by the ESRP include certain persons named in the Summary Compensation
Table above as well as sixteen other executives. The annual benefit equals 25%
of the executive's salary at age 62 even though the executive may retire at a
later age. If early retirement is elected, pursuant to the provisions of the
Company's Retirement Plan, the benefit is 25% of the executive's salary at that
time. Should the executive's employment terminate due to death or disability,
the benefit to the executive or such deceased executive's beneficiary is 25% of
the executive's salary at that time. The ESRP benefit is payable for twenty
years certain when payout begins. All participating executives accumulate
unfunded, unvested benefits while actively employed; however, benefits are
forfeited if the executive's employment is terminated for any reason other than
retirement, death, disability or a change in control of the Company.
EMPLOYMENT ARRANGEMENTS
The Company has employment agreements with certain executive officers,
including Messrs. Miller, Hug, Livingston and Fauber that become effective upon
a change in control of the Company. The Company or its successor agrees to
continue these officers in its employ for a term of three years after the date
of a change in control. During the contract term these officers will retain
commensurate authority and responsibilities and compensation benefits. They will
receive base salaries at least equal to the highest monthly salary paid within
one year and bonuses at least equal to the highest annual bonus paid within
three years prior to the change in control. If the officer's employment during
the three-year term is terminated other than for cause or disability as defined
in the agreements or if the officer should terminate employment because a
material term of the contract is breached by the Company, the officer will be
entitled to a lump sum payment, in cash, within fifteen days after the date of
termination. This lump sum will be equal to three times the sum of the officer's
base salary, annual bonus and performance award rights, if any, at the date of
termination.
The Company's agreement with Mr. Quarles, who retired from active
employment as the President of the Bank's Southwestern Region on December 31,
1994, provides for his acting as a consultant to the Bank until December 31,
1996 at his year-end 1994 salary.
If there is a change in the control of the Company, in order to
ensure that accrued benefits will be paid as required by the ESRP, the
Company immediately will make a lump-sum contribution to a trustee, or
under certain circumstances to participants, in an amount sufficient to
pay anticipated benefits under the ESRP. The Company is the owner of
insurance policies on the lives of the participating executives under
which it will recover certain benefit costs incurred upon the death of a
participant. Total cost to the Company for 1994 for the ESRP was
approximately $1,180,182.
As stated above, certain officers, including the individuals listed in the
Summary Compensation Table, have employment agreements that become effective
upon a change in control of the Company. Because of Section 280G of the Internal
Revenue Code lump-sum payments under such agreements may subject an officer to
excise taxes. The agreements were amended in 1990 to hold an officer harmless
from any and all excise taxes levied on any payment caused by a change in
control. Such payments may be determined to be non-deductible by the Company for
federal income tax purposes under said section.
13
<PAGE>
STOCK OPTIONS
The Company has stock options plans which expire in various years to 2004.
These plans provide for the granting of options to eligible employees of the
Company and its subsidiaries to purchase shares of the Company's Common Stock.
The following table reflects grants of stock options made during the year
ended December 31, 1994 for each of the executive officers listed in the Summary
Compensation Table.
OPTIONS GRANTED IN 1994
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
% OF TOTAL FOR OPTION TERM (2)
NUMBER OF OPTIONS 5% ($) 10% ($)
SECURITIES GRANTED (ASSUMES (ASSUMES
UNDERLYING TO EMPLOYEES EXERCISE A COMMON A COMMON
OPTIONS IN FISCAL PRICE PER EXPIRATION PRICE OF PRICE OF
NAME GRANTED (1) YEAR SHARE ($) DATE $45.61) $72.62)
<S> <C> <C> <C> <C> <C> <C>
Carroll L. Saine 0 .00% N/A N/A N/A N/A
Lewis N. Miller, Jr. 20,000 4.26% $28.00 11/08/04 $352,181 $ 892,496
Philip G. Hug 5,000 1.07% 28.00 11/08/04 88,045 223,124
Jay O. Livingston 5,000 1.07% 28.00 11/08/04 88,045 223,124
100 .02% 24.50 12/30/04 1,541 3,905
J. Carson Quarles 0 .00% N/A N/A N/A N/A
Rodger W. Fauber 5,000 1.07% 28.00 11/08/04 88,045 223,124
</TABLE>
(1) The exercise price for each option is equal to the fair market value
per share of the Common Stock on the grant date. All options are
currently exercisable during the ten year term of the options except
for 12,858 shares of Mr. Miller's options, which are exercisable as
follows: 3,571 shares become first exercisable on January 1 in each
of 1996, 1997 and 1998, and the balance of 2,145 shares become first
exercisable on January 1, 1999.
(2) The amounts shown are the result of calculations at 5% and 10%
assumed rates of appreciation as suggested by the Securities and
Exchange Commission rules. No assurance can be given that the actual
value, if any, realized by an executive upon the exercise of these
options will approximate the values shown. To put these hypothetical
values into perspective, the following is provided:
<TABLE>
<CAPTION>
ANNUAL RATE OF STOCK PRICE
APPRECIATION
5% 10%
<S> <C> <C>
Resulting stock price based on $28.00 grant price $ 45.61 $ 72.62
Gain per share 17.61 44.62
Aggregate gain that would be realized by all shareholders (based
on 39,267,854 outstanding on the grant date November 9, 1994) 691,506,909 1,752,131,645
Aggregate hypothetical gain on all 1994 options granted to the
named executive officers if the resulting prices are achieved 617,857 1,565,773
Aggregate hypothetical gain on all 1994 options granted to
the named executive officers as a percentage of all shareholders'
gains 0.09% 0.09%
</TABLE>
14
<PAGE>
The following table shows, for each of the executive officers listed in the
Summary Compensation Table, the number of shares acquired upon exercise of
existing options during 1994 and the value realized, plus the number and value
at December 31, 1994 of unexercised options.
AGGREGATED OPTION/SAR (1) EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR (1) VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS IN-THE-MONEY
SHARES AT FISCAL OPTIONS AT FISCAL
ACQUIRED ON VALUE YEAR END (#) YEAR END ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE (2)
<S> <C> <C> <C> <C>
Carroll L. Saine (3) 26,000 $470,298 N/A N/A
Lewis N. Miller, Jr. 27,925 541,244 99,854 / 12,858 $ 763,980 / 0
Philip G. Hug 23,338 496,722 53,237 / 0 455,021 / 0
Jay O. Livingston 2,500 33,712 74,500 / 0 709,159 / 0
J. Carson Quarles 9,450 174,562 59,449 / 0 588,732 / 0
Rodger W. Fauber 9,150 156,587 60,850 / 0 555,812 / 0
</TABLE>
(1) The Company has no SARs.
(2) The value is the excess of the market value of Common Stock at
December 31, 1994 ($24.25) over the option exercise price.
(3) Information on Mr. Saine is provided only through the date of his
death in August, 1994.
15
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholder
returns for the Company as compared with the S&P 500 Index and the KBW 50* Index
for the Company's last five years. The graph assumes that the value of the
investment in the Company's Common Stock and each index was $100 at December 31,
1989 and that all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN**
AMONG CENTRAL FIDELITY BANKS, INC., THE S & P 500 INDEX AND THE KBW 50 INDEX
(GRAPH)
Cumulative Total Return
1990 1991 1992 1993 1994
CENTRAL FID BKS INC CFBS 100 91 208 234 240 217
S & P 500 Index I500 100 97 126 136 150 152
KBW 50 Index IKBW 100 72 114 145 153 145
* THE KBW 50 IS AN INDEX COMPRISED OF 50 BANKING COMPANIES,
INCLUDING ALL THE MONEY CENTER BANKS AND MOST LARGE REGIONAL
BANKS. IT HAS BEEN DEVELOPED BY KEEFE, BRUYETTE & WOODS, A NEW
YORK SECURITIES FIRM WHICH SPECIALIZES EXCLUSIVELY IN THE BANKING
AND THRIFT INDUSTRY. THE KBW 50 IS CONSIDERED MORE REPRESENTATIVE
OF PRICE PERFORMANCE OF THE MAJOR BANKING COMPANIES IN AMERICA.
** ASSUMES $100 INVESTED ON DECEMBER 31, 1989 IN STOCK OR INDEX AND
THAT DIVIDENDS WERE REINVESTED.
16
<PAGE>
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS WITH MANAGEMENT
During the past year some nominees, directors and executive officers
of the Company, their affiliates and members of their immediate families
were customers of, and had borrowing transactions with, the Company's
principal banking subsidiary in the normal course of business. All
outstanding loans and commitments included in such transactions were
made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions
with other persons, and did not involve more than normal risk of
collectibility or present other unfavorable features.
PROPOSAL TO ADOPT 1995 STOCK INCENTIVE PLAN
BACKGROUND
During 1994, the Company undertook an extensive review of its
compensation programs and practices including its existing stock option
plans. The Company has historically awarded stock options to employees
at all levels to encourage their ownership and retention of the
Company's Common Stock. These option plans are consistent with the
Board's and management's philosophy that ownership of Company stock by
all employees significantly contributes to the long-term success of the
Company and the total return to shareholders. More than 65% of all stock
options granted under the plans since 1988 were awarded to employees of
the Company who were not executive officers.
The Board at its January, 1995 meeting approved the adoption of the
Company's 1995 Stock Incentive Plan (the "Plan") subject to its approval
at the 1995 Annual Meeting of Shareholders. Management believes that the
Plan will foster the long term success of the Company by authorizing the
grant of Awards, as described below, to attract, motivate and retain the
services of skilled and dedicated employees. The Plan is designed to
provide, among other things, more flexibility in the use of stock
options and stock related performance based awards that will
appropriately compensate employees who contribute to the Company
achieving specific financial goals. Although the Plan is similar in form
to plans adopted by other major financial institutions, the Company
authorizes incentives to a broader base of employees than is common for
plans of this kind. The Committee believes that this type of incentive
compensation will focus all employees' attention on the long-term
financial performance and growth of the Company.
The Plan will become effective May 10, 1995, subject to shareholder
approval. The Plan will terminate on May 9, 2005, unless terminated
earlier by the Board. Awards granted under the Plan prior to termination
will continue in effect after such termination until they expire or
terminate pursuant to their terms.
The principal features of the Plan are summarized below.
Capitalized terms not otherwise defined in the following description
shall have the same meaning as ascribed to them in the Plan unless the
context otherwise requires. The summary is qualified by reference to the
complete text of the Plan, which is attached to this Proxy Statement as
Exhibit A.
ELIGIBILITY
All present and future employees of the Company or its subsidiaries
are eligible to receive Awards under the Plan. At March 1, 1995, there
were approximately 3,640 employees eligible for Awards under the Plan.
17
<PAGE>
PLAN ADMINISTRATION
The Plan will be administered by the Compensation Committee (the
"Committee") of the Board which shall have the sole and complete
authority to determine the terms and conditions of Awards; to construe
and interpret Agreements and the Plan; to establish, amend, or waive
rules and regulations for Plan administration; to accelerate the
exercisability of any Award, the end of a Performance Period or the
termination of any Period of Restriction; and to take any other action
necessary or advisable for Plan administration. No Committee member will
be eligible to participate in the Plan.
DESCRIPTION OF THE PLAN
A maximum of 1,750,000 shares of Common Stock is authorized for
issuance pursuant to Awards made under the Plan, subject to adjustment
in the event of a stock split, stock dividend or other change in the
Common Stock as set forth in the Plan. An Award under the Plan may
consist of a grant of Incentive Stock Options ("ISOs"), Nonqualified
Stock Options ("NQSOs"), Stock Appreciation Rights ("SARs"), Restricted
Stock, Performance Units, Performance Shares or Other Stock Unit Awards.
No more than one-third of the total number of shares authorized under
the Plan may be issued in connection with Restricted Stock Awards,
Performance Awards or Other Stock Unit Awards. Awards relating to no
more than 50,000 shares of Common Stock may be granted to any single
employee in any twelve month period while the Plan is in effect. If an
Award terminates, expires or lapses unexercised, any unissued shares
allocated to such Award may be subjected again to an Award.
The Common Stock is quoted on The Nasdaq National Market, and on
March 17, 1995, the closing price per share was $26.50. No Awards had
been granted under the Plan as of March 30, 1995.
Awards under the Plan may be made in one or more of the following forms:
1. STOCK OPTIONS
Options to purchase shares of the Company's Common Stock
granted under the Plan may be ISOs or NQSOs. The Option Price of
Common Stock covered by an ISO may not be less than 100 percent
(110 percent in the case of a shareholder possessing more than 10
percent of the total combined voting power of all classes of stock)
of the fair market value of the Common Stock on the date of the
Option grant. The Option Price of Common Stock covered by an NQSO
also may not be less than 100 percent of the fair market value of
the Common Stock on the date of grant.
The number of shares of Common Stock subject to ISOs that will
be granted by the Committee to any employee is in the sole
discretion of the Committee; provided, however, that Common Stock
(determined at the time of the Award) subject to an employee's
first exercise of ISOs under the Plan during any calendar year may
not exceed $100,000 or the amount specified in Section 422 of the
Internal Revenue Code and rules and regulations thereunder.
Options may only be exercised at such times as may be
specified by the Committee, provided, however, that ISOs may not be
exercised after ten years from the date on which the ISO was
granted. No Option granted under the Plan shall be exercisable
within the first six months from the date it is granted, except in
the case of a Participant who becomes disabled or dies or, under
certain circumstances, in the case of an Option which becomes
exercisable as a result of a change of control as defined in the
Plan.
2. STOCK APPRECIATION RIGHTS
The Committee may award SARs under the Plan either with or
without related Options and, if related to an Option, either in
tandem with, or in addition to, the Option. Further, the
Committee
18
<PAGE>
may impose such conditions upon the exercise of SARs as the
Committee deems appropriate. When the SAR is exercised, the holder
may elect to receive an amount equal to the difference between (i)
the fair market value on the date of exercise of the Common Stock
covered by the exercised portion of the SAR and (ii) the exercise
price of the Common Stock under the Related Option, or if not
related to an Option, the fair market value of Common Stock on the
date the SAR was awarded. The Committee may limit the amount which
can be received when a SAR is exercised. When a SAR related to and
in tandem with an Option is exercised, the underlying Option will
no longer be exercisable for the number of shares of Common Stock
covered by the exercised portion of the SAR. Similarly, when an
Option is exercised, any SAR related to, and in tandem with, the
Option will no longer be exercisable. If, however, the SAR is in
addition to a Related Option, the exercise of the SAR will not
reduce the number of shares for which the Option may be exercised
and vice versa. The Company's obligation arising upon exercise of a
SAR may be paid in Common Stock or in cash, or in any combination
of the two, as the Committee may determine.
SARs may be exercised only when the underlying Option is
exercisable or, if there is no underlying Option, at such times as
may be specified by the Committee. No SAR may be exercised within
the first six months from the date it is granted, except in the
case of a Participant who becomes disabled or dies or, under
certain circumstances, in the case of a Change in Control.
3. RESTRICTED STOCK
The Committee may award Restricted Stock under the Plan in such
amounts as the Committee may determine in accordance with the Plan. Each
Restricted Stock grant shall be subject to an Agreement that shall specify
the Period of Restriction and other terms and conditions, restrictions, and
performance criteria specified by the Committee in accordance with the
Plan. No shares of Restricted Stock granted to a Participant may be sold,
transferred, pledged, assigned or otherwise alienated until the
restrictions on such shares shall have lapsed or been removed under the
provisions of the Plan. If a holder of Restricted Stock ceases to be
employed by the Company, he will forfeit any shares of Restricted Stock on
which the restrictions have not lapsed or otherwise been removed.
The Period of Restriction for shares of Restricted Stock must be at
least twelve months from the date of grant, except in the case of a
Participant who dies or becomes disabled or, under certain circumstances,
in the case of a change in control.
4. PERFORMANCE AWARDS AND OTHER STOCK UNIT AWARDS
In addition to Options, SARs and Restricted Stock, the
Committee may grant to Participants Performance Awards, the value
of which is determined by the fair market value of the Company's
Common Stock ("Performance Shares") or the attainment of
preestablished goals relating to the Company's financial or
operating performance ("Performance Units"). The Committee may also
grant to Participants other stock awards that are valued by
reference to the Company's Common Stock or other securities ("Other
Stock Unit Awards"). The Committee has discretion in determining
the Performance Units, Performance Shares and Other Stock Unit
Awards granted to a Participant, the goals to be achieved
(including whether the goals are absolute or measured against the
performance of other companies), the time period during which the
goals must be met, and the other terms and conditions applicable to
the grant of the Award. The Performance Period for Performance
Units and Performance Shares may not be less than twelve months
from the date of the Award. The Company's obligation arising upon
the attainment of the goals underlying Performance
19
<PAGE>
Units or Performance Shares may be paid in cash or shares of Common
Stock, or in any combination of the two, as the Committee may
determine.
No Performance Units or Performance Shares granted under the Plan may
be sold, transferred, pledged, assigned or otherwise alienated, except by
will or by the laws of descent and distribution. No Performance Units or
Performance Shares granted to a Participant under the Plan shall be
exercisable within the first twelve months from the date it is granted
except, under certain circumstances, in the case of a change in control.
Until Awards as described above are granted by the Committee, the
actual benefits or amounts that will be received by or allocated to
Eligible Employees are not determinable.
TRANSFERABILITY OF AWARDS
The Committee may permit the transferability of NQSOs, free standing SARs
and tandem and additive SARs that are related to NQSOs. This authority is
intended primarily to facilitate transfers to family members for estate planning
purposes. Otherwise, no Options, SARs, Performance Units or Performance Shares
granted under the Plan, and during the applicable period of restrictions, no
shares of Restricted Stock or any Other Stock Unit Awards may be sold,
transferred, pledged, or otherwise disposed of, other than by will or by the
laws of descent and distribution. All rights granted to a Participant under the
Plan will be exercisable during his lifetime only by such Participant, or his
guardian or legal representative. Upon the death of a Participant, his personal
representative or beneficiary may exercise his rights under the Plan.
CHANGE IN CONTROL
In the event of a Change in Control, the Committee, may cause (i) each
Option then outstanding under the Plan to become fully exercisable, (ii) all
restrictions and conditions related to grants of Restricted Stock to be
satisfied or released, and (iii) the acceleration or release of any or all
restrictions or conditions related to an Award, as specified in the Plan.
AMENDMENT OF THE PLAN AND INCENTIVE AWARDS
The Board may terminate, amend or modify the Plan as it deems advisable;
provided that the shareholders of the Company must approve any amendment as
required under the Internal Revenue Code, Section 16 of the Securities Exchange
Act of 1934, or as stipulated by any other regulatory agency having authority
with respect to such matters. Awards granted under the Plan may be amended with
the consent of the Participant so long as the amended Award is consistent with
the terms of the Plan.
FEDERAL INCOME TAX CONSEQUENCES
An employee will not incur federal income tax when he is granted an NQSO,
ISO, SAR, Restricted Stock, Performance Shares, Performance Unit or Other Stock
Unit Award. Upon exercise of an NQSO or a SAR, an employee generally will
recognize ordinary income, which is subject to income tax withholding by the
Company, equal to the difference between the fair market value of the Common
Stock on the date of the exercise and the exercise price of the option. When an
employee exercises an ISO, he generally will not recognize income, unless he is
subject to the alternative minimum tax.
An employee may deliver shares of Common Stock instead of cash in payment
of the exercise price of an ISO or NQSO without having to recognize taxable gain
(except in some cases with respect to "statutory option stock" described below)
on any appreciation in value of the shares delivered. However,
20
<PAGE>
if an employee delivers shares of "statutory option stock" in satisfaction of
all, or any part, of the exercise price under an ISO, and if the applicable
holding periods of the "statutory option stock" have not been met, he will be
considered to have made a taxable disposition of the "statutory option stock."
"Statutory option stock" is stock acquired upon the exercise of incentive stock
options or under a stock purchase plan qualified under Section 423 of the
Internal Revenue Code.
In general, a Participant who has received shares of Restricted
Stock, Performance Shares, Performance Units or Other Stock Unit Awards
under the Plan will include in his gross income as compensation an
amount equal to the fair market value of the shares, or cash amount in
the event of nonstock awards, at the time the restrictions lapse or are
removed or performance requirements are met. Such amount will be
included in income in the tax year in which such event occurs. The
income recognized will be subject to income tax withholding by the
Company. The Plan permits a Participant to deliver already owned Common
Stock or to have a portion of the shares the Participant would otherwise
acquire under an Award withheld to cover the Participant's tax
liability.
The Company usually will be entitled to a business expense deduction
at the time and in the amount that the recipient of an Award recognizes
ordinary compensation income associated with the Award. As stated above,
this usually occurs upon exercise of NQSOs and SARs and, with respect to
Restricted Stock, Performance Shares, Performance Units or Other Stock
Unit Awards, when the restrictions lapse or are removed or other
performance requirements are met. In some cases, such as with the
exercise of an NQSO, the Company's deduction may be contingent upon the
Company's meeting withholding tax requirements. No deduction is allowed
in connection with an ISO, unless the employee disposes of Common Stock
received upon exercise in violation of the holding period requirements.
There also can be circumstances when the Company may not be entitled to
a deduction for certain transfers of Common Stock or payments to an
employee upon the exercise of an incentive award that has been
accelerated as a result of a Change of Control.
In addition to the limitations described above on the Company's
right to a corresponding business expense deduction, Section 162(m) of
the Code generally imposes a $1 million limitation on the amount of
annual compensation deduction allowable to a publicly held company in
respect of its chief executive officer and its other four most highly
paid executive officers. An exception is provided for "performance
based" compensation if certain shareholder approval and outside director
administration requirements are satisfied. Because of certain
interpretational issues under the Code, and in the absence of final
Internal Revenue Service regulations, there can be no assurance that
Awards under the Plan will qualify for this exception. Proposed
regulations would include stock options and stock appreciation rights,
but exclude restricted stock, from the exception.
VOTE REQUIRED FOR APPROVAL OF THE 1995 STOCK INCENTIVE PLAN
The affirmative vote of a majority of the shares of Common Stock
which are present in person or by proxy at the Meeting is required for
approval of the 1995 Stock Incentive Plan.
THE BOARD OF DIRECTORS BELIEVES THAT ADOPTION OF THE 1995 STOCK
INCENTIVE PLAN IS IN THE BEST INTERESTS OF THE SHAREHOLDERS AND THE
COMPANY AND RECOMMENDS A VOTE "FOR" THE PLAN.
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SECTION 16 TRANSACTIONS
Under Section 16(a) of the Securities Exchange Act of 1934,
directors and executive officers of the Company are required to file
reports with the Securities and Exchange Commission and with the Company
of their beneficial ownership and changes in ownership of Common Stock.
Based solely on a review of the forms that were filed with it
and representations of the directors and executive officers, the Company
believes that all required forms were timely filed for the year 1994 and
for prior years with the exception of the untimely filing of a Form 4
report by William J. Foster, III, an executive officer, disclosing a
sale of 1,200 shares of Common Stock following an option exercise. The
sale was timely reported on a Form 144.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of KPMG Peat Marwick has been selected to audit
the consolidated financial statements of the Company for 1995.
Representatives of such accounting firm are expected to be present at
the Annual Meeting of Shareholders, will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
INFORMATION RELATING TO SHAREHOLDER PROPOSALS
In the event shareholders of the Company intend to make any
proposals to be presented at the next annual meeting of shareholders of
the Company to be held in May, 1996 (or such date as shall be designated
by the Board), such proposals must be received at the Company's
principal executive offices at 1021 E. Cary Street, Richmond, Virginia,
23219, Attn: William N. Stoyko, not less than 120 days prior to March
30, 1996 in order for such proposals to be included in the Company's
proxy statement and form of proxy relating to such meeting.
OTHER MATTERS
Management has no knowledge of any other matters which may come
before the Meeting and does not itself intend to present any such other
matters. However, if any such matters shall properly come before the
Meeting or any adjournment thereof, the persons named as proxies will
have discretionary authority to vote those shares represented by the
accompanying proxy in accordance with their own best judgment.
By Order of the Board of Directors,
WILLIAM N. STOYKO
SECRETARY
March 30, 1995
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EXHIBIT A
1995 STOCK INCENTIVE PLAN
ARTICLE I.
ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Central Fidelity Banks, Inc.
(hereinafter referred to as the "Company"), a Commonwealth of Virginia
corporation, hereby establishes an incentive compensation plan to be
known as the "1995 Stock Incentive Plan" (hereinafter referred to as the
"Plan"), as set forth in this document. Unless otherwise defined herein,
all capitalized terms shall have the meanings set forth in Section 2.1
herein. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Awards in the form of Performance Units and Performance
Shares, and Other Stock Unit Awards.
The Plan was adopted by the Board of Directors on January 11, 1995,
and shall become effective as of May 10, 1995 (the "Effective Date"),
subject to the approval by vote of shareholders of the Company in
accordance with applicable laws. Awards may be granted prior to
shareholder approval of the Plan, but each such Award shall be subject
to the approval of the Plan by the shareholders.
1.2 PURPOSE OF THE PLAN. The Plan is intended to foster the
success of the Company and its subsidiaries by providing incentives to
Eligible Employees to promote the long-term financial success of the
Company. The Plan is designed to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Eligible
Employees upon whose judgment, interest, and special effort the
successful conduct of the Company's operation is largely dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective
Date, as described in Section 1.1 herein, and shall remain in effect,
subject to the right of the Board of Directors to terminate the Plan at
any time pursuant to Article XII herein, until May 9, 2005, at which
time it shall terminate except with respect to Awards made prior to, and
outstanding on, that date, which shall remain valid in accordance with
their terms.
ARTICLE II. DEFINITIONS
2.1 DEFINITIONS. Except as otherwise defined in the Plan, the
following terms shall have the meanings set forth below:
(a) "AFFILIATE" shall have the meaning ascribed to such term
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
(the "Exhange Act").
(b) "AGREEMENT" means a written agreement implementing the
grant of each Award signed by an authorized officer of the Company
and by the Participant.
(c) "AWARD" means individually or collectively, a grant under
this Plan of Nonqualified Stock Options, Incentive Stock Options,
Stock Appreciation Rights, Restricted Stock, Performance Units,
Performance Shares, or Other Stock Unit Awards.
(d) "AWARD DATE" or "GRANT DATE" means the date on which an
Award is made by the Committee under this Plan.
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(e) "BENEFICIAL OWNER" shall have the meaning ascribed to such
term in Rule 13d-3 under the Exchange Act.
(f) "BOARD" or "BOARD OF DIRECTORS" means the Board of
Directors of the Company.
(g) "CHANGE IN CONTROL" shall be deemed to have occurred if
the conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) Any person, corporation or other entity or group,
including any "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, other than (A) those persons in
control of the Company on the Effective Date, (B) any person or
group acquiring securities of the Company directly from the
Company, or (C) a trustee or other fiduciary holding securities
of the Company under an employee benefit plan sponsored or
maintained by the Company or its Subsidiaries, becomes the
beneficial owner of shares of the Company having 10% or more of
the total number of votes that may be cast for the election of
directors of the Company; or
(ii) As the result of, or in connection with, any tender or
exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the
foregoing (a "Transaction"), the persons who were directors of
the Company before the Transaction shall, following the
Transaction, cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company or its
assets; or
(iii) If at any time, (w) the Company shall consolidate
with, or merge with, any other Person and the Company shall not
be the continuing or surviving corporation, (x) any Person shall
consolidate with, or merge with, the Company, and the Company
shall be the continuing or surviving corporation and in
connection therewith, all or part of the outstanding Stock shall
be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, (y) the Company
shall be a party to a statutory share exchange with any other
Person after which the Company is a Subsidiary of any other
Person, or (z) the Company shall sell or otherwise transfer 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons.
(h) "CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
(i) "COMMITTEE" means the Compensation Committee of the Board
or such other committee as the Board may from time to time appoint
to administer the Plan.
(j) "COMPANY" means Central Fidelity Banks, Inc. including
all Affiliates and Subsidiaries, or any successor thereto as
provided in Article XIV herein.
(k) "ELIGIBLE EMPLOYEE" means any officer or other employee
of the Company or its Subsidiaries (including any entity that
becomes a Subsidiary after the adoption of this Plan). Eligible
Employee does not include directors of the Company who are not also
employees of the Company or its Subsidiaries.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(m) "FAIR MARKET VALUE" on a particular date means as
follows:
(i) If the Stock is approved for trading on NASDAQ, the
mean between the high and low sales prices of a share of Common
Stock as reported for such date in the WALL STREET JOURNAL with
regard to NASDAQ issues; or
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(ii) If the Stock is not approved for trading on NASDAQ but
is listed or admitted to trading on a national securities
exchange, the mean between the high and low sales prices of a
share of Stock in consolidated trading as reported for such date
in the WALL STREET JOURNAL with regard to securities listed or
admitted to trading on such national securities exchange; or
(iii) If in (i) or (ii) above, as applicable, there were no
sales on such date reported as provided above, the respective
prices on the most recent prior day on which sales were so
reported.
In the case of an Incentive Stock Option, if the foregoing method
of determining fair market value should be inconsistent with
section 422 of the Code, "Fair Market Value" shall be determined by
the Committee in a manner consistent with such section of the Code
and shall mean the value as so determined.
(n) "INCENTIVE STOCK OPTION" or "ISO" means an option to
purchase Stock, granted under Article VI herein, which is
designated as an incentive stock option and is intended to meet the
requirements of Section 422 of the Code.
(o) "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to
purchase Stock, granted under Article VI herein, which is not
intended to be an Incentive Stock Option.
(p) "OPTION" means an Incentive Stock Option or a
Nonqualified Stock Option.
(q) "OTHER STOCK UNIT AWARD" means awards of Stock or other
awards that are valued in whole or in part by reference to, or are
otherwise based on, Shares or other securities of the Company and
granted pursuant to Article X hereof.
(r) "PARTICIPANT" means an Eligible Employee who has been
granted an Award under the Plan.
(s) "PERFORMANCE AWARD" means a performance-based Award,
which may be in the form of either Performance Shares or
Performance Units.
(t) "PERFORMANCE SHARE" means an Award, designated as a
performance share, granted to a Participant pursuant to Article IX
herein, the value of which is determined by the Fair Market Value
of Company Stock in a manner deemed appropriate by the Committee
and described in the Agreement.
(u) "PERFORMANCE UNIT" means an Award, designated as a
performance unit, granted to a Participant pursuant to Article IX
herein, the value of which is determined, in whole or in part, by
the attainment of preestablished goals relating to Company
financial or operating performance as deemed appropriate by the
Committee and described in the Agreement but which is not
determined by reference to the Fair Market Value of Common Stock.
(v) "PERIOD OF RESTRICTION" means the period during which the
transfer of Shares of Restricted Stock is restricted, pursuant to
Article VIII herein.
(w) "PERSON" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a "group" as defined in Section 13(d).
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(x) "PLAN" means the Central Fidelity Banks, Inc. 1995 Stock
Incentive Plan as herein described and as hereafter from time to
time amended.
(y) "RELATED OPTION" means an Incentive Stock Option or a
Non-qualified Stock Option granted in conjunction with the grant of
a Stock Appreciation Right.
(z) "RESTRICTED STOCK" means an Award of Stock granted to a
Participant pursuant to Article VIII herein.
(aa) "SECRETARY" means the officer designated as the
Secretary of the Company.
(bb) "STOCK" or "SHARES" means the common stock of the
Company.
(cc) "STOCK APPRECIATION RIGHT" or "SAR" means an Award,
designated as Stock Appreciation Right, granted to a participant
pursuant to Article VII herein.
(dd) "SUBSIDIARY" shall mean, with respect to any
corporation, a subsidiary of that corporation within the meaning of
Code section 424(f).
ARTICLE III. ADMINISTRATION
3.1 GENERAL. The Plan shall be administered by a committee of the
Board consisting of two or more directors appointed from time to time by
the Board. No person shall be appointed to or shall serve as a member of
such committee unless at the time of such appointment and service he
shall be a "disinterested person," as defined in SEC Rule 16b-3 and an
"outside director," within the meaning of Section 162(m)(4)(C)(i) of the
Internal Revenue Code of 1986 as amended by the Omnibus Budget
Reconciliation Act of 1993. Notwithstanding the foregoing, the Board
may, in its discretion, delegate to another committee of the Board any
or all of the authority and responsibility of the Committee with respect
to awards to employees who are not subject to Section 16 of the Exchange
Act at the time any such delegated authority or responsibility is
exercised. Such other committee may consist of two or more directors who
may, but need not, be officers or employees of the Company or of any of
its Subsidiaries. To the extent that the Board has delegated to such
other committee the authority and responsibility of the Committee
pursuant to the foregoing, all references to the Committee in the Plan
shall be to such other committee.
3.2 COMMITTEE POWERS. The Committee shall have all powers
necessary or desirable to administer the Plan. The express grant in this
Plan of any specific power to the Committee shall not be construed as
limiting any power or authority of the Committee. In addition to any
other powers and, subject to the provisions of the Plan, the Committee
shall have the following specific powers: (i) to determine the terms and
conditions upon which the Awards may be made and exercised; (ii) to
determine all terms and provisions of each Agreement, which need not be
identical; (iii) to construe and interpret the Agreements and the Plan;
(iv) to establish, amend, or waive rules or regulations for the Plan's
administration; (v) to accelerate the exercisability of any Award, the
end of a Performance Period or termination of any Period of Restriction;
and (vi) to make all other determinations and take all other actions
necessary or advisable for the administration of the Plan.
3.3 SELECTION OF PARTICIPANTS. The Committee shall have the
authority to grant Awards under the Plan, from time to time, to such
Eligible Employees as may be selected by it. Each Award shall be
evidenced by an Agreement.
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3.4 DECISIONS BINDING. All determinations and decisions made by
the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding.
3.5 RULE 16B-3 REQUIREMENTS; CODE SECTION 162(M). Notwithstanding
any other provision of the Plan, the Committee may impose such
conditions on any Award, and the Board may amend the Plan in any such
respects, as they may determine, on the advice of counsel, are necessary
or desirable to satisfy the provisions of Rule 16b-3, as amended (or any
successor or similar rule), under the Exchange Act. Any provision of the
Plan to the contrary notwithstanding, and except to the extent that the
Committee determines otherwise: (a) transactions by and with respect to
officers and directors of the Company who are subject to Section 16(b)
of the Exchange Act (hereafter, "Section 16 Persons") shall comply with
any applicable conditions of SEC Rule 16b-3; (b) transactions with
respect to persons whose remuneration is subject to the provisions of
Section 162(m) of the Code shall conform to the requirements of Section
162(m)(4)(C) of the Code; and (c) every provision of the Plan shall be
administered, interpreted and construed to carry out the foregoing
provisions of this sentence. Notwithstanding any provision of the Plan
to the contrary, the Plan is intended to give the Committee the
authority to grant Awards that qualify as performance-based compensation
under Code Section 162(m)(4)(C) as well as Awards that do not so
qualify. Every provision of the Plan shall be administered, interpreted
and construed to carry out such intention and any provision that cannot
be so administered, interpreted and construed shall to that extent be
disregarded; and any provision of the Plan that would prevent an Award
that the Committee intends to qualify as performance-based compensation
under Code Section 162(m)(4)(C) from so qualifying shall be
administered, interpreted and construed to carry out such intention and
any provision that cannot be so administered, interpreted and construed
shall to that extent be disregarded.
ARTICLE IV. STOCK SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section
4.4 herein, the maximum aggregate number of Shares that may be issued
pursuant to Awards made under the Plan shall not exceed 1,750,000. No
more than one-third of the aggregate number of such Shares shall be
issued in connection with Restricted Stock Awards, Performance Awards,
or Other Stock Unit Awards. Further, subject to Section 4.4, the maximum
Award that may be made under the Plan to any Participant in a
consecutive twelve month period shall not exceed 50,000 shares. Except
as provided in Sections 4.2 and 4.3 herein, the issuance of Shares in
connection with the exercise of, or as other payment for, Awards under
the Plan shall reduce the number of Shares available for future Awards
under the Plan.
4.2 LAPSED AWARDS OR FORFEITED SHARES. If any Award granted under
this Plan terminates, expires, or lapses for any reason other than by
virtue of exercise of the Award, or if Shares issued pursuant to Awards
are forfeited, any Stock subject to such Award again shall be available
for the grant of an Award under the Plan; provided that any such Stock
shall be available for the grant of an Award to a Section 16 Person only
if the forfeiting employee received no benefits of ownership such as
dividends (but excluding voting rights) from the Stock and SEC Rule
16b-3 would in the opinion of the Committee otherwise be satisfied.
4.3 DELIVERY OF SHARES AS PAYMENT. In the event a Participant pays
the Option Price for Shares pursuant to the exercise of an Option with
previously acquired Shares, the number of Shares available for future
Awards under the Plan shall be reduced only by the net number of new
Shares issued upon
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the exercise of the Option; provided that the number of Shares available
for future Awards to Section 16 Persons under the Plan shall be reduced
only by the net number of new Shares issued upon the exercise of the
Option only if Rule 16b-3 would in the opinion of the Committee be
satisfied.
4.4 CAPITAL ADJUSTMENTS. If the outstanding Shares of the Company
are increased, decreased or exchanged, through merger, consolidation,
sale of all or substantially all of the property of the Company,
reorganization, recapitalization, reclassification, stock dividend,
stock split or other distribution in respect of such Shares, for a
different number or kind of Shares, or if additional Shares or new or
different Shares are distributed in respect of such Shares, an
appropriate and proportionate adjustment shall be made by the Committee,
whose determination shall be binding on all persons. The number and
class of Shares subject to each outstanding Award, the Option Price and
the aggregate number and class of Shares for which Awards thereafter may
be made shall be subject to such adjustment. If the adjustment would
produce fractional Shares with respect to any then outstanding Awards,
the Committee may adjust appropriately the number of Shares covered by
the outstanding Awards so as to eliminate the fractional shares. Any
adjustments to be made with respect to Incentive Stock Options shall
comply with sections 422 and 424 of the Code.
ARTICLE V. ELIGIBILITY
All Eligible Employees of the Company and its Subsidiaries may
participate in the Plan. Directors of the Company who are not employees
of the Company or its Subsidiaries are not eligible to participate.
ARTICLE VI. STOCK OPTIONS
6.1 GRANT OF OPTIONS TO ELIGIBLE EMPLOYEES. Subject to the terms
and provisions of the Plan, Options may be granted to Eligible Employees
at any time and from time to time as shall be determined by the
Committee. Subject to Section 4.1 above, the Committee shall have
complete discretion in determining the number of Shares subject to
Options granted to each Eligible Employee, provided, however, that the
aggregate Fair Market Value (determined at the time the Award is made)
of Shares with respect to which an Eligible Employee may first exercise
ISOs granted under the Plan during any calendar year may not exceed
$100,000 or such amount as shall be specified in Section 422 of the Code
and rules and regulations thereunder.
6.2 OPTION AGREEMENT. Each Option grant shall be evidenced by an
Agreement that shall specify the type of Option granted, the Option
Price (as hereinafter defined), the duration of the Option, the number
of Shares to which the Option pertains, any conditions imposed upon the
exercisability of Options in the event of retirement, death, disability,
or other termination of employment, and such other provisions as the
Committee shall determine. The Agreement shall specify whether the
Option is intended to be an Incentive Stock Option within the meaning of
Section 422 of the Code, or a Nonqualified Stock Option not intended to
be within the provisions of Section 422 of the Code.
6.3 OPTION PRICE. The exercise price per share of Stock covered by
an Option ("Option Price") shall be determined by the Committee subject
to the following limitations. In the case of an ISO, the Option Price
shall not be less than 100% of the Fair Market Value of such Stock on
the Grant Date or in
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the case of any optionee who, at the time such Incentive Stock Option is
granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of his employer corporation or of
its parent or subsidiary corporation, not less than 110% of the Fair
Market Value of such Stock on the date the Incentive Stock Option is
granted. In the case of a NQSO, the Option Price shall not be less than
100% of the Fair Market Value of the Stock on the Grant Date. In no
event shall the Option Price of any option be less than the par value of
the Stock.
6.4 DURATION OF OPTIONS. Each Option shall expire on the earliest
of (a) ten years from the date it is granted, (b) such date as the
Company's Board of Directors shall determine, (c) after the third month
following the optionee's ceasing to be employed continuously by the
Company or its Subsidiaries for any reason except (i) optionee's
retirement at or after the then normal retirement age or earlier if
approved by the Committee or (ii) optionee's disability, or (d) twelve
months after the optionee dies; provided, however, that no ISO shall be
exercisable later than the tenth (10th) anniversary date of its Award
Date and no Incentive Stock Option which is granted to any optionee who,
at the time such Option is granted, owns Stock possessing more than 10%
of the total combined voting power of all classes of stock of his
employer corporation or of its parent or subsidiary corporation, shall
be exercisable after the expiration of five years from the date such
Option is granted.
6.5 EXERCISABILITY. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and
conditions as the Committee shall determine, which need not be the same
for all Participants. No Option, however, shall be exercisable until the
expiration of at least six months after the Award Date, except that such
limitation shall not apply in the case of death or disability of the
Participant, or as set forth in Article XI of this Plan.
6.6 METHOD OF EXERCISE. Options may be exercised by the delivery
of a written notice to the Company in the form prescribed by the
Committee setting forth the number of Shares with respect to which the
Option is to be exercised. The Option Price shall be payable to the
Company in full by the Participant who, if so provided in the Option
Agreement, may: (i) deliver cash in satisfaction of all or any part of
the Option Price; (ii) deliver, or cause to be withheld from the Option,
Shares of Stock, valued at Fair Market Value on the date of exercise, in
satisfaction of all or any part of the Option Price; or (iii) deliver a
properly executed exercise notice together with irrevocable instructions
to a broker to sell immediately some or all of the Shares acquired by
exercise of the Option and to promptly deliver to the Company an amount
of the sale proceeds (and in lieu of or pending a sale, loan proceeds)
sufficient to pay the Option Price. For purposes of payment described in
(iii) above, the exercise shall be deemed to have occurred on the date
the Company receives the exercise notice, accompanied by the broker
instructions.
6.7 NONTRANSFERABILITY OF OPTIONS.
(a) Except as specifically provided in an Agreement pursuant to
subsection (b) of this Section or Section 15.2 below, no Options granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution. During the lifetime of a Participant to whom
an Incentive Stock Option is granted, the Incentive Stock Option may be
exercised only by the Participant.
(b) In addition to nontransferable Options, the Committee may grant
Nonqualified Stock Options (with or without tandem SARs) that are
transferable during the lifetime of the Participant, provided that (i)
no consideration is paid for the transfer and (ii) no Options granted to
persons subject to Section 16 of the Exchange Act may be transferable
unless and except to the extent such transferability would not
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result in the loss of any Rule 16b-3 exemptions for nontransferable
Options granted or to be granted under the Plan. The transferee of an
Option shall be subject to all restrictions applicable to the Option
prior to its transfer. The Agreement granting the Option shall set forth
the transfer conditions and restrictions. The Committee may impose on
any transferable Option and on Stock issued upon the exercise of an
Option such limitations and conditions as the Committee deems
appropriate.
6.8 CONTRIBUTION LIMITATIONS. No Participant shall make any
elective contribution or employee contribution to the Plan (within the
meaning of Treasury Regulation section 1.401(k)-1(d)(2)(iv)(B)(4))
during the balance of the calendar year after the Participant's receipt
of a hardship distribution from a plan of the Company or a related party
within the provisions of Code sections 414(b), (c), (m) or (o)
containing a cash or deferred arrangement under section 401(k) of the
Code, or during the following calendar year. The preceding sentence
shall not apply if and to the extent that the Committee determines it is
not necessary to qualify any such plan as a cash or deferred arrangement
under section 401(k) of the Code.
6.9 No optionee shall have any rights as a shareholder with
respect to Shares subject to an Option until the date of exercise of
such Option.
ARTICLE VII. STOCK APPRECIATION RIGHTS
7.1 GRANT OF STOCK APPRECIATION RIGHTS. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to
Participants, at the discretion of the Committee, in any of the
following forms:
(a) In connection with the grant, and exercisable in lieu of
Options ("Tandem SARs");
(b) In connection with and exercisable in addition to the
grant of Options ("Additive SARs");
(c) Independent of the grant of Options ("Freestanding SARs");
or
(d) In any combination of the foregoing.
7.2 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised with
respect to all or part of the Shares subject to the Related Option. The
exercise of Tandem SARs shall cause a reduction in the number of Shares
subject to the Related Option equal to the number of Shares with respect
to which the Tandem SAR is exercised. Conversely, the exercise, in whole
or part, of a Related Option, shall cause a reduction in the number of
Shares subject to the Tandem Option equal to the number of Shares with
respect to which the Related Option is exercised. Shares with respect to
which the Tandem SAR shall have been exercised may not be subject again
to an Award under the Plan.
Notwithstanding any other provision of the Plan to the contrary, a
Tandem SAR shall expire no later than the expiration of the Related
Option, shall be transferable only when and under the same conditions as
the Related Option and shall be exercisable only when the Related Option
is eligible to be exercised. In addition, if the Related Option is an
ISO, a Tandem SAR shall be exercised for no more than 100% of the
difference between the Fair Market Value of Shares subject to the
Related Option at the time the Tandem SAR is exercised and the Option
Price of the Related Option.
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7.3 EXERCISE OF ADDITIVE SARS. Additive SARs shall be deemed to be
exercised upon, and in addition to, the exercise of the Related Option.
The deemed exercise of Additive SARs shall not reduce the number of
Shares with respect to which the Related Option remains unexercised.
7.4 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes upon such SARs.
7.5 OTHER CONDITIONS APPLICABLE TO SARS. No SAR granted under the
Plan shall be exercisable until the expiration of at least six months
after the Grant Date, except that such limitation shall not apply in the
case of the death or disability of the Participant, or as set forth in
Article XI of this Plan. In no event shall the term of any SAR granted
under the Plan exceed ten years from the Grant Date. A SAR may be
exercised only when the Fair Market Value of a Share exceeds either (a)
the Fair Market Value per Share on the Grant Date in the case of a
Freestanding SAR or (b) the Option Price of the Related Option in the
case of either a Tandem or Additive SAR. A SAR shall be exercised by
delivery to the Committee of a notice of exercise in the form prescribed
by the Committee.
7.6 PAYMENT UPON EXERCISE OF SARS. Subject to the provisions of
the Agreement, upon the exercise of a SAR, the Participant is entitled
to receive, without any payment to the Company (other than required tax
withholding amounts), an amount equal to the product of multiplying (i)
the number of shares with respect to which the SAR is exercised by (ii)
an amount equal to the excess of (A) the Fair Market Value per Share on
the date of exercise of the SAR over (B) either (x) the Fair Market
Value per Share on the Award Date in the case of a Freestanding SAR or
(y) the Option Price of the Related Option in the case of either a
Tandem or Additive SAR. Payment to the Participant shall be made in
Shares, valued at the Fair Market Value on the date of exercise, in cash
if the Participant has so elected in his written notice of exercise, or
a combination thereof. To the extent required to satisfy the conditions
of Rule 16b-3(e) under the Exchange Act, or any successor or similar
rule, or as otherwise provided in the Agreement, the Committee shall
have the sole discretion to consent to or disapprove the election of any
Participant to receive cash in full or partial settlement of an SAR. In
cases where an election of settlement in cash must be consented to by
the Committee, the Committee may consent to, or disapprove, such
election at any time after such election, or within such period for
taking action as is specified in the election, and failure to give
consent shall be disapproval. Consent may be given in whole or as to a
portion of the SAR surrendered by the Participant. If the election to
receive cash is disapproved in whole or in part, the SAR shall be deemed
to have been exercised for Shares, or, if so specified in the notice of
exercise and election, not to have been exercised to the extent the
election to receive cash is disapproved.
7.7 NONTRANSFERABILITY OF SARS. Unless the Committee provides
otherwise pursuant to Section 6.7(b) above or 15.2 below, no SAR granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution. Further, all SARs granted to a Participant
under the Plan shall be exercisable during his lifetime only by such
Participant or his guardian or legal representative.
ARTICLE VIII. RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant
shares of Restricted Stock under the Plan to such Participants and in
such amounts as it shall determine. Participants receiving Restricted
Stock Awards shall
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not be required to pay the Company therefor (except for applicable tax
withholding) other than the rendering of services and/or until other
conditions are satisfied as determined by the Committee in its sole
discretion, unless required by applicable law.
8.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall
be evidenced by an Agreement that shall specify the Period of
Restriction; the conditions which must be satisfied prior to removal of
the restriction; the number of Restricted Stock shares granted; and such
other provisions as the Committee shall determine.
8.3 TRANSFERABILITY. Except as provided in this Article VIII and
subject to the limitation in the next sentence, the shares of Restricted
Stock granted hereunder may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until satisfaction of performance
criteria as specified by the Committee in its sole discretion and set
forth in the Agreement, or upon termination of the applicable Period of
Restriction. No restriction shall be removed until the expiration of at
least twelve months after the Award Date, except that such limitation
shall not apply in the case of death or disability of the Participant,
or as set forth in Article XI of this Plan. All rights with respect to
the Restricted Stock granted to a Participant under the Plan shall be
exercisable during his lifetime only by such Participant or his guardian
or legal representative.
8.4 OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation,
restrictions under applicable Federal or state securities laws, and may
legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions. Alternatively, the Committee,
in its sole discretion, may have shares of Restricted Stock issued
without legend and held by the Secretary until such time all
restrictions are satisfied.
8.5 CERTIFICATE LEGEND. In the event the Committee elects to
legend the certificates representing Restricted Stock, and in addition
to any legends placed on certificates pursuant to Section 8.4 herein,
each certificate representing shares of Restricted Stock granted
pursuant to the Plan shall bear the following legend:
The sale or other transfer of the shares of Stock represented by
this certificate, whether voluntary, involuntary, or by operation of
law, is subject to certain restrictions on transfer set forth in the
1995 Incentive Stock Plan of Central Fidelity Banks, Inc., in the
rules and administrative procedures adopted pursuant to such Plan,
and in an Agreement dated . A copy of the Plan, such rules and
procedures, and such Restricted Stock Agreement may be obtained from
the Secretary of Central Fidelity Banks, Inc.
8.6 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Article VIII, Shares of Restricted Stock covered by each Restricted
Stock Award made under the Plan shall become freely transferable by the
Participant after the last day of the Period of Restriction and/or upon
the satisfaction of other conditions as determined by the Committee in
its sole discretion. Once the Shares are released from the restrictions,
the Participant shall be entitled to have removed any legend that may
have been placed on certificates pursuant to Sections 8.4 and 8.5
herein.
8.7 VOTING RIGHTS. During the Period of Restriction, Participants
in whose name shares of Restricted Stock are granted hereunder may
exercise full voting rights with respect to those Shares.
8.8 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants in whose name shares of Restricted Stock are
granted hereunder shall be entitled to receive all dividends and
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other distributions paid with respect to those Shares. If any such
dividends or distributions are paid in Shares, the Shares shall be
subject to the same restrictions on transferability as the shares of
Restricted Stock with respect to which they were distributed.
8.9 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. Unless otherwise
provided in the Agreement, in the event that a Participant terminates
his employment with the Company or one of its Subsidiaries due to
retirement defined as the earlier of attaining age 65, or age 55 plus at
least 10 years of service with the Company and with the consent of the
Company, any remaining Period of Restriction applicable to the
Restricted Stock shares pursuant to Section 8.3 herein shall
automatically terminate and, except as otherwise provided in Section 8.4
herein, the shares of Restricted Stock shall thereby be delivered to
such Participant free of restrictions.
8.10 TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. In the
event a Participant's employment is terminated because of death or
disability during the Period of Restriction, any remaining Period of
Restriction applicable to the Restricted Stock pursuant to Section 8.3
herein shall automatically terminate and, except as otherwise provided
in Section 8.4 herein, the shares of Restricted Stock shall thereby be
released and free of restrictions.
8.11 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. Unless otherwise
provided in the Agreement, in the event that a Participant terminates
his employment with the Company for any reason other than for death,
disability, or retirement, as set forth in Section 8.9 and 8.10 herein,
during the Period of Restriction, then any shares of Restricted Stock
still subject to restrictions as of the date of such termination shall
automatically be forfeited and, if held by the Participant, returned to
the Company.
ARTICLE IX. PERFORMANCE AWARDS
9.1 GRANT OF PERFORMANCE AWARDS. Subject to the terms and
provisions of the Plan, Performance Awards in the form of either
Performance Units or Performance Shares may be granted to Participants
at any time and from time to time as shall be determined by the
Committee. Subject to Section 4.1 above, the Committee shall have
complete discretion in determining the number of Performance Units or
Performance Shares granted to each Participant; provided that on each
date that any cash is paid to any Participant pursuant to Performance
Units, the amount of cash shall be divided by the Fair Market Value of a
share of the Common Stock, and the result shall be deducted from the
number of shares that may be issued to such Participant under Section
4.1 above pursuant to Awards made to such Participant in the 12-month
period in which such Performance Units were granted. Participants
receiving Performance Awards shall not be required to pay the Company
therefor (except for applicable tax withholding) unless required by
applicable law.
9.2 VALUE OF PERFORMANCE AWARDS. The Committee shall determine the
number of Performance Units or Performance Shares granted to each
Participant as a Performance Award. The Committee shall set performance
goals in its discretion for each Participant who is granted a
Performance Award. The extent to which such performance goals are met
will determine the value of the Performance Unit or Performance Share to
the Participant. Such performance goals may be particular to a
Participant, may relate to the performance of the Subsidiary which
employs him, may be based on the performance of the Company generally,
or a combination of the foregoing. The performance goals may be based on
achievement of balance sheet or income statement objectives, or any
other objectives established by
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the Committee. The performance goals may be absolute in their terms or
measured against or in relationship to other companies comparably,
similarly or otherwise situated. The Committee shall determine the time
period during which the performance goals must be met ("Performance
Period"), provided, however, that the Performance Period may not be less
than twelve months from the Award Date. The terms and conditions of each
Performance Award shall be set forth in an Agreement.
9.3 SETTLEMENT OF PERFORMANCE AWARDS. After a Performance Period
has ended, the holder of a Performance Unit or Performance Share shall
be entitled to receive the value thereof based on the degree to which
the performance goals established by the Committee and set forth in the
Agreement have been satisfied.
9.4 FORM OF PAYMENT. Payment of the amount to which a Participant
shall be entitled upon the settlement of Performance Award shall be made
in cash, Stock, or a combination thereof as determined by the Committee.
Payment may be made in a lump sum or installments as prescribed by the
Committee.
9.5 NONTRANSFERABILITY. Unless the Committee provides otherwise
pursuant to Section 15.2 below, no Performance Units or Performance
Shares granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, otherwise than by will
or by the laws of descent and distribution. Subject to Section XI, all
rights with respect to Performance Units and Performance Shares granted
to a Participant under the Plan shall not be exercisable until the
expiration of twelve months after the Award Date and thereafter during
his lifetime only by such Participant or his guardian or personal
representative.
ARTICLE X. OTHER STOCK UNIT AWARDS
10.1 GRANT. The Committee is authorized to grant to Participants,
either alone or in addition to other Awards made under the Plan, Other
Stock Unit Awards to be issued at such times, subject to or based upon
achievement of such performance or other goals and on such other terms
and conditions as the Committee shall deem appropriate and specify in
the Agreement relating thereto, which need not be the same with respect
to each Participant. Stock or other securities granted pursuant to Other
Stock Unit Awards may be issued for no cash consideration or for such
minimum consideration as may be required by applicable law.
10.2 SALE AND TRANSFERABILITY. Stock or other securities issued
pursuant to Other Stock Unit Awards may not be sold by a Participant
until the expiration of at least twelve months from the Award Date,
except that such limitation shall not apply in the case of death or
disability of a Participant, or as set forth in Article XI of this Plan.
To the extent Other Stock Unit Awards are deemed to be derivative
securities within the meaning of Rule 16b-3 under the Exchange Act, a
Participant's rights with respect to such Awards shall not vest or be
exercisable until the expiration of at least twelve months from the
Award Date. To the extent an Other Stock Unit Award granted under the
Plan is deemed to be a derivative security within the meaning of Rule
16b-3 of the Exchange Act, it may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, otherwise than by will
or by the laws of descent and distribution, unless the Committee
provides otherwise pursuant to Section 15.2 below. All rights with
respect to such Other Stock Unit Awards granted to a Participant under
the Plan shall be exercisable during his lifetime only by such
Participant or his guardian or personal representative.
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<PAGE>
ARTICLE XI. CHANGE IN CONTROL
In the event of a Change in Control of the Company, the Committee
may, in its complete discretion, cause: (i) each Option then outstanding
under the Plan to become fully exercisable and remain so for the
duration of the Option as specified in the Agreement; (ii) all
restrictions or conditions related to grants of Restricted Stock to be
deemed immediately and fully satisfied and all certificates representing
such Shares of Restricted Stock to be released or have any legend
removed by the Secretary, and thereby become freely transferable; and
(iii) the acceleration or release of any or all restrictions or
conditions related to an Award, in such a manner, in the case of Section
16 Persons, as to conform to the provisions of Rule 16b-3.
ARTICLE XII. AMENDMENT, MODIFICATION,
AND TERMINATION OF THE PLAN
12.1 AMENDMENT, MODIFICATION, AND TERMINATION. At any time and
from time to time, the Board may terminate, amend, or modify the Plan.
The Board is specifically authorized to amend the Plan and take such
other action as it deems necessary or appropriate to comply with Code
Section 162(m) and regulations issued thereunder. Such amendment or
modification may be without shareholder approval except to the extent
that such approval is required by the Code, pursuant to the rules under
Section 16 of the Exchange Act, by any national securities exchange or
system on which the Stock is then listed or reported, by any regulatory
body having jurisdiction with respect thereto or under any other
applicable laws, rules, or regulations.
12.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan, other than pursuant to Section 4.4 herein,
shall in any manner adversely affect any Award theretofore granted under
the Plan, without the written consent of the Participant.
ARTICLE XIII. WITHHOLDING
13.1 TAX WITHHOLDING. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, State, and local taxes
(including the Participant's FICA obligation) required by law to be
withheld with respect to any grant, exercise, or payment under or as a
result of this Plan.
13.2 STOCK WITHHOLDING. To the extent the Code requires
withholding upon the exercise of Nonqualified Stock Options, or upon the
lapse of restrictions on Restricted Stock, or upon the occurrence of any
other similar taxable event, the Committee may permit or require,
subject to any rules it deems appropriate, the withholding requirement,
to be satisfied, in whole or in part, with or without the consent of the
Participant, by having the Company withhold Shares of Stock having a
Fair Market Value equal to the amount required to be withheld. The value
of the Shares to be withheld shall be based on Fair Market Value of the
Shares on the date that the amount of tax to be withheld is to be
determined.
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ARTICLE XIV. SUCCESSORS
All obligations of the Company under the Plan, with respect to
Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business and/or assets of the Company.
ARTICLE XV. GENERAL
15.1 REQUIREMENTS OF LAW. The granting of Awards and the issuance
of shares of Stock under this Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental
agencies as may be required. No shares of Stock shall be issued or
transferred pursuant to this Plan unless and until all legal
requirements applicable to such issuance or transfer have, in the
opinion of counsel to the Company, been complied with. In connection
with any such issuance or transfer, the person acquiring the Shares
shall, if requested by the Company, give assurances satisfactory to
counsel to the Company in respect to such matters as the Company may
deem desirable to assure compliance with all applicable legal
requirements.
15.2 EFFECT OF PLAN. The establishment of the Plan shall not
confer upon any Participant any legal or equitable right against the
Company, a Subsidiary, or the Committee, except as expressly provided in
the Plan. The Plan does not constitute an inducement or consideration
for the employment of any Participant, nor is it a contract between the
Company or any of its Subsidiaries and any Participant. Participation in
the Plan shall not give any Participant any right to be retained in the
service of the Company or any of its Subsidiaries. No Award and no right
under the Plan, contingent or otherwise, shall be assign- able or
subject to any encumbrance, pledge or charge of any nature except that,
under such rules and regulations as the Committee may establish pursuant
to the terms of the Plan, a beneficiary may be designated in respect to
the Award in the event of the death of the holder of the Award and
except, also, that if the beneficiary shall be the executor or
administrator of the estate of the holder of the Award, any rights in
respect to such Award may be transferred to the person or persons or
entity (including a trust) entitled thereto under the will of the holder
of such Award or under the laws relating to descent and distribution.
15.3 CREDITORS. The interests of any Participant under the Plan or
any Agreement are not subject to the claims of creditors and may not, in
any way, be assigned, alienated, or encumbered.
15.4 GOVERNING LAW. The Plan, and all Agreements hereunder, shall
be governed by, and construed and administered in accordance with, the
laws of the Commonwealth of Virginia. It is the intention of the Company
that ISOs granted under the Plan qualify as such under Section 422 of
the Code.
15.5 SEVERABILITY. In the event any provision of the Plan or any
Agreement shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of the
Plan or Agreement, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
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**********************************APPENDIX*************************************
<PAGE>
CENTRAL FIDELITY BANKS, INC. 1021 E. CARY
STREET, RICHMOND, VIRGINIA 23219
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking any proxy heretofore given, hereby
appoints Lewis N. Miller, Jr., Jay O. Livingston and William H.
Schwarzschild, III, or any of them (with full power to act in the
absence of the others, the act of a majority of those present to be
controlling, each with full power of substitution) as Proxies to vote
all the shares of Common Stock of Central Fidelity Banks, Inc. held of
record on March 17, 1995, by the undersigned at the Annual Meeting of
Shareholders of said Company to be held in the banking hall of Central
Fidelity National Bank, Broad at Third Street, Richmond, Virginia, at
4:30 p.m. on May 10, 1995, and at any and all adjournments thereof as
follows:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS ( ) FOR all nominees listed (except as ( ) WITHHOLD AUTHORITY to vote for all
indicated to nominees listed below
the contrary below)
</TABLE>
THREE YEAR TERM AS CLASS 1 DIRECTOR: JACK H. FERGUSON, LEWIS N. MILLER, JR.,
RICHARD L. MORRILL, LLOYD U. NOLAND, III, WILLIAM G. REYNOLDS, JR.
(Instruction: to withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
____________________________________________________________________________
2. PROPOSAL TO APPROVE THE 1995 STOCK INCENTIVE PLAN
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
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 directors listed under Proposal 1 and for
approval of the 1995 Stock Incentive Plan under Proposal 2.
Please sign below exactly as
name appears hereon. When shares
are held by joint tenants, both
should sign. When signing as
attorney-in-fact, 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.
_________________________________
Signature
_________________________________
Signature if held jointly
Dated , 1995
I plan to attend the Annual
Meeting YES ( ) NO ( )
Number in Party _____
The number of shares shown above and covered by this proxy include,
where applicable, shares held in the Stock Purchase Program (formerly
the Dividend Reinvestment Plan).
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
