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):
(X) $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:
( ) 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 LOGO]
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 8, 1996:
(1) To elect four directors comprising Class 2 to three year terms of
office; and
(2) To transact any other business which may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 15, 1996 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 29, 1996
<PAGE>
PROXY STATEMENT [CENTRAL FIDELITY LOGO]
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 8, 1996
GENERAL
This Proxy Statement and the accompanying form of proxy, mailed to
shareholders on or about March 29, 1996 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 8, 1996 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 15, 1996 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, 1995 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.
1
<PAGE>
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 15, 1996, there were 40,095,735 shares of the Common Stock outstanding and
entitled to vote.
On March 15, 1996 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
3,445,903 shares (8.59%) of the outstanding Common Stock. Employee participants
in each of those plans retain the power to vote their individual shares.
The following table lists the only shareholder known by the Company to be
the beneficial owner of more than five percent of the outstanding Common Stock.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
The Capital Group Companies, Inc. 3,171,350 shares (1) 7.9%
333 South Hope Street
Los Angeles, California 90071
(1) According to a Schedule 13G filed with the Securities and Exchange
Commission for the year ended December 31, 1995, The Capital Group
Companies, Inc. held sole power to vote, or to direct the voting of,
1,189,100 shares and sole power to dispose, or to direct the disposition, of
all 3,171,350 shares through two wholly owned subsidiaries. Such filing
further stated that the acquisition of such shares was in the ordinary
course of business and not in connection with or as a participant in any
transaction having the purpose or effect of changing or influencing the
control of the Company. The Capital Group Companies, Inc. has represented
that one of the subsidiaries, Capital Research and Management Company, is a
registered investment advisor that provides investment management and
related services to U.S.-based mutual funds. Capital Guardian Trust Company,
the other subsidiary, is a trust company which acts as investment manager
for large institutional accounts (primarily pension funds).
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 any proposal 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 of the
Company. Abstentions are treated as votes against a proposal, and broker
non-votes have no effect on the vote.
2
<PAGE>
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 1996 Meeting, four directors comprising Class 2 will be elected to
serve until the 1999 Annual Meeting of Shareholders and until their successors
are elected and qualified. The Board recommends that the four 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 with the
exception of T. Justin Moore, III. T. Justin Moore, III is the son of T. Justin
Moore, Jr., a director whose term of office expires at the 1996 Meeting. 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, 1996, 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.
NOMINEES FOR ELECTION
CLASS 2 DIRECTORS -- NOMINEES FOR ELECTION TO SERVE UNTIL THE 1999 MEETING
ALVIN R. CLEMENTS, 68, a director since 1974. Mr. Clements, a consultant from
Charlottesville, Virginia, was Chairman of the Board of the Company prior to
1982. Mr. Clements is a member of the Executive Committee.
THOMAS R. GLASS, 67, 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.
GEORGE R. LEWIS, 55, 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.
T. JUSTIN MOORE, III, 40, a new nominee for director. Mr. Moore is a partner in
the law firm of Hunton & Williams, Richmond, Virginia. Mr. Moore has served as
a director of Central Fidelity National Bank since January, 1993.
3
<PAGE>
DIRECTORS CONTINUING TO SERVE
CLASS 3 DIRECTORS -- ELECTED TO SERVE UNTIL THE 1997 ANNUAL MEETING
JAMES F. BETTS, 63, a director since 1973. Mr. Betts is a retired independent
management consultant and former Chairman of the Board of The Life Insurance
Company of Virginia. Mr. Betts is a member of the Executive and Nominating
Committees.
PHYLLIS L. COTHRAN, 49, a director since 1994. Ms. Cothran is President and
Chief Operating Officer of Trigon Blue Cross Blue Shield, Richmond, Virginia
and is also a director of Tredegar Industries, Inc. and Ethyl Corporation. Ms.
Cothran is a member of the Audit Committee.
ROBERT L. FREEMAN, 69, 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, 60, 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, 56, 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.
CLASS 1 DIRECTORS -- ELECTED TO SERVE UNTIL THE 1998 MEETING
JACK H. FERGUSON, 64, 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. Mr. Ferguson is also a
former President and Chief Executive Officer of Virginia Electric and Power
Company, Richmond, Virginia. Mr. Ferguson is a member of the Public Policy
Committee.
LEWIS N. MILLER, JR., 52, 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, 56, 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, 52, 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., 57, 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.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of January 31, 1996,
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 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.......................................... 2,226 *
Rodger W. Fauber............................................ 91,152(1) *
Jack H. Ferguson............................................ 5,012 *
Robert L. Freeman........................................... 32,785 *
Thomas R. Glass............................................. 19,750 *
Philip G. Hug............................................... 77,918(1) *
Minnie Bassett Lane......................................... 10,448 *
George R. Lewis............................................. 3,390 *
Jay O. Livingston........................................... 106,163(1) *
G. Bruce Miller............................................. 14,830 *
Lewis N. Miller, Jr......................................... 199,840(1) *
T. Justin Moore, Jr......................................... 49,512 *
T. Justin Moore, III........................................ 2,515
Richard L. Morrill.......................................... 1,670 *
Lloyd U. Noland, III........................................ 93,387 *
John T. Percy, Jr........................................... 76,981(1) *
William G. Reynolds, Jr..................................... 10,394 *
Kenneth S. White............................................ 13,262 *
All directors and executive officers as a group............. 1,364,329 3.23%
</TABLE>
(1) Includes beneficial ownership of the following shares which may be acquired
within 60 days of January 31, 1996 pursuant to stock options by: Mr. Fauber,
53,125 shares; Mr. Hug, 28,237 shares; Mr. Livingston 71,225 shares; Mr.
Lewis N. Miller Jr., 103,425 shares; Mr. Percy, 32,600 shares; and all
directors and executive officers as a group, 638,616 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 six meetings in 1995. 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.
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
5
<PAGE>
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 1995.
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 two meetings during 1995.
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 1995.
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 one meeting during 1995.
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 oversee the Company's involvement in
community programs and its compliance with the Community Reinvestment Act and
civil rights acts. The Public Policy Committee held one meeting during 1995.
During 1995, each of the Company's incumbent directors attended at least
75% of the meetings of the Board and the committees on which they serve with the
exception of Mr. Glass, who attended 70% of such 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 the 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.
DIRECTOR COMPENSATION
A Stock Compensation Plan for Non-Employee Directors (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
6
<PAGE>
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 1995, directors who were not officers received a $15,000 retainer in the
form of cash or Common Stock equivalents for services as a director. They also
received $1,200 in cash or Common Stock equivalents per Board or committee
meeting ($600 in 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 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 executive compensation policies developed by the 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 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.
BASE SALARY
In recent years prior to 1996, the base salary compensation of executive
management was reviewed every eighteen months by the Committee and the Board of
Directors. Since base salaries were reviewed in July 1994, the Committee did not
perform a specific review of executive management's base compensation in 1995.
Therefore, no adjustments were made to the base salary of the Chief Executive
Officer ("CEO") or the executive officers listed on the Summary Compensation
Table. Beginning in January 1996, the base salary compensation of executive
management will be evaluated on an annual basis. Salaries of executive officers
will be compared with those of other individuals holding similar positions in
comparably sized banking institutions.
Following the determination of a median base salary derived from the
comparison group, each individual executive officer's salary will be 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 the individual's experience and potential for
advancement. No specific weighting will be applied to these factors. The
Committee will review salaries with the Chief Executive Officer and may make
judgmental and discretionary determinations as part of its assessment process.
7
<PAGE>
ANNUAL INCENTIVES
The Compensation Committee did not consider or approve any incentive
compensation program for calendar year 1995. In January of 1996, the Committee
authorized a cash incentive bonus program for certain executive officers
conditioned upon the Company achieving specific financial performance goals for
1996 relating to increased earnings over designated levels.
Any cash incentive bonus payments which may be made in 1996 under this
program will be limited to no more than 25% of an executive's base salary.
Rewards to individual executive officers will be based on the recommendations of
the CEO and a subjective evaluation of each officer's individual performance.
The maximum bonus pool under this program for 1996 will be $1 million or
approximately 21% of aggregate executive officers' base salaries.
LONG-TERM INCENTIVES
The 1995 Stock Incentive Plan which was approved by shareholders is
intended to provide incentives to executive officers and other eligible
employees to promote the long-term financial success of the Company. The 1995
Stock Incentive Plan permits the granting of stock options, restricted stock,
stock appreciation rights and performance awards. In 1995, no awards or stock
option grants were made under the 1995 Stock Incentive Plan.
In 1995, stock options were awarded under a program available to all
employees which provides for the grant of 100 shares of Common Stock to
employees on each of their successive five (5) year anniversary dates of
employment with the Company. Awards of stock options covering 39,400 shares were
made under this program to 394 employees, including certain executive officers.
TAX CONSIDERATIONS
A $1 million limitation is imposed 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 for 1996. 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 Company believes that awards of stock options and stock appreciation
rights 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. Under the recently
finalized Internal Revenue Service Regulations, grants of restricted stock under
the 1995 Stock Incentive Plan may only qualify as performance-based compensation
if made contingent on the attainment of appropriate preestablished and objective
performance goals.
COMPENSATION COMMITTEE
T. Justin Moore, Jr.
George R. Lewis
Kenneth S. White
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid or accrued by the
Company and its subsidiaries to the Chief Executive Officer and four 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>
Lewis N. Miller, Jr.......................... 1995 650,000 -- 0 22,092
Chairman, Chief Executive 1994 614,176 -- 20,000 21,153
Officer and President 1993 541,742 -- 20,000 35,175
Jay O. Livingston............................ 1995 365,000 -- 0 12,527
Corporate Executive 1994 348,233 -- 5,100 12,047
Vice President and Chief 1993 294,039 -- 5,000 19,124
Administrative Officer
Philip G. Hug................................ 1995 365,000 -- 0 12,527
Corporate Executive 1994 351,927 -- 5,000 12,177
Vice President 1993 324,633 -- 5,000 21,114
Rodger W. Fauber............................. 1995 306,000 -- 0 10,502
President, Western 1994 298,144 -- 5,000 10,307
Region of the Bank 1993 278,433 -- 5,000 18,109
John T. Percy, Jr............................ 1995 305,000 -- 0 10,468
Corporate Executive 1994 293,124 -- 5,000 10,095
Vice President 1993 268,029 -- 5,100 17,433
</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 1995 (a) Company contributions to the Stock and Thrift Plan and
a companion non-qualified plan (Mr. Miller, $19,500; Mr. Livingston,
$10,950; Mr. Hug, $10,950; Mr. Fauber, $9,180; and Mr. Percy, $9,150) and
(b) Company group insurance payments for individual employees (Mr. Miller,
$2,727; Mr. Livingston, $1,577; Mr. Hug, $1,577; Mr. Fauber, $1,322; and Mr.
Percy, $1,318).
STOCK AND THRIFT PLAN
Under the Stock and Thrift Plan, a qualified plan, and a companion
non-qualified plan (collectively 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 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 1995, no additional contributions were made on behalf of any
participant.
9
<PAGE>
RETIREMENT PLAN
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$125,000....................................... $ 58,820 68,010 77,200 86,390 95,580
200,000....................................... 95,570 110,760 125,950 141,140 156,330
300,000....................................... 144,570 167,760 190,950 214,140 237,330
400,000....................................... 193,570 224,760 255,950 287,140 318,330
500,000....................................... 242,570 281,760 320,950 360,140 399,330
600,000....................................... 291,570 338,760 385,950 433,140 480,330
700,000....................................... 340,570 395,760 450,950 506,140 561,330
800,000....................................... 389,570 452,760 515,950 579,140 642,330
900,000....................................... 438,570 509,760 580,950 652,140 723,330
</TABLE>
The Company has a non-contributory, tax qualified retirement plan and a
companion non-contributory, non-qualified plan (collectively, 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 years of 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, 1995. 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, 1995: Mr. Miller, 23 years;
Mr. Hug, 22 years; Mr. Livingston, 21 years; Mr. Fauber, 29 years and Mr. Percy,
22 years.
Benefits payable under the Company's Executive Supplemental Retirement
Plan, described below, have been added to the pension amounts in the table. The
IRS limit on annual benefits payable from qualified defined benefit plans will
be $120,000 for 1996. 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.
10
<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 the individuals named in the Summary Compensation
Table above as well as thirteen 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 disability or death,
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, Livingston, Hug, Fauber and Percy 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 or its successor, 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 the officer's base
salary, annual bonus and performance award rights, if any, for the balance of
the three year term.
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 1995 for
the ESRP was approximately $1,843,000.
Lump-sum payments under the employment agreements described above may
subject an officer to excise taxes under Section 280G of the Internal Revenue
Code. The agreements were amended in 1990 to hold an officer harmless from any
and all excise taxes levied on any payment caused by a change in control. Such
payments may be determined to be non-deductible by the Company for federal
income tax purposes under said section.
11
<PAGE>
STOCK OPTIONS
The Company has stock option plans which expire in various years to 2005.
These plans provide for the granting of options to eligible employees of the
Company and its subsidiaries to purchase shares of the Company's Common Stock.
No stock options were granted during the year ended December 31, 1995 to
any of the executive officers listed in the Summary Compensation Table.
The following table shows, for each of the executive officers listed in the
Summary Compensation Table, the number of shares acquired upon exercise of
existing options during 1995 and the value realized, plus the number and value
at December 31, 1995 of unexercised options.
AGGREGATED OPTION/SAR (1) EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR (1) VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS IN-THE-MONEY
SHARES AT FISCAL OPTIONS AT FISCAL
ACQUIRED ON VALUE YEAR END (#) YEAR END ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE (2)
<S> <C> <C> <C> <C>
Lewis N. Miller, Jr. 0 0 99,854 / 12,858 1,393,584 / 49,825
Jay O. Livingston 3,275 70,782 71,225 / 0 1,165,108 / 0
Philip G. Hug 25,000 490,527 28,237 / 0 334,426 / 0
Rodger W. Fauber 7,725 148,275 53,125 / 0 835,241 / 0
John T. Percy, Jr. 0 0 46,100 / 0 719,913 / 0
</TABLE>
(1) The Company has no SARs outstanding.
(2) The value is the excess of the market value of Common Stock on December 29,
1995 ($31.875) over the option exercise price.
12
<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,
1990 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 APPEARS HERE]
CUMULATIVE TOTAL RETURN
12/90 12/91 12/92 12/93 12/94 12/95
Central Fidelity Banks, Inc. 100 229 257 264 239 329
S & P 500 Index 100 130 140 155 157 215
KBW 50 Index 100 158 202 213 202 324
* 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, 1990 IN STOCK OR INDEX AND THAT
DIVIDENDS WERE REINVESTED.
13
<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 ordinary 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
the normal risk of collectibility or present other unfavorable features.
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 1995 and for prior years,
with the exception of the untimely filing of a Form 4 for Monty W. Plymale, an
executive officer, disclosing a sale of 6,750 shares of Common Stock following
option exercises. 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 1996. 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, 1997 (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 28, 1997 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 29, 1996
14
<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 15, 1996, 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 8,
1996, 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 2 DIRECTOR: ALVIN R. CLEMENTS, THOMAS R. GLASS, GEORGE
R. LEWIS, T. JUSTIN MOORE, III
(Instruction: to withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
2. 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.
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 _______________ , 1996
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.
