<PAGE>
[LOGO OF RIGGS NATIONAL CORPORATION APPEARS HERE]
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [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 Rule 14a-11(c)or Rule 14a-12
RIGGS NATIONAL CORPORATION
(Name of Registrant as Specified in Charter)
--------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 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 the table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to
which transaction applies: _______________________
(2) Aggregate number of securities to
which transaction applies: __________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: ____________________________
(4) Proposed maximum aggregate value of transaction: _________________
(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>
[logo]
RIGGS NATIONAL CORPORATION
1503 Pennsylvania Avenue, N.W.
Washington, D.C. 20005
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 1996
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of Riggs National Corporation (the "Corporation") will be held on
Wednesday, May 15, 1996, at 9:30 a.m. local time, at the Riggs Technology
Center, 5700 RiverTech Court, Riverdale, Maryland 20737, for the following
purposes:
1. To elect a board of directors for the ensuing year;
2. To consider and act upon the Riggs National Corporation 1996 Stock Option
Plan;
3. To consider and act upon a shareholder proposal; and
4. To consider and act upon any other matters that may properly be brought
before the Meeting or any adjournment or postponement thereof.
Shareholders of record at the close of business on March 31, 1996, will be
entitled to vote at the Meeting or any adjournment or postponement thereof.
Whether or not you contemplate attending the Meeting, please execute the
enclosed proxy and return it in the enclosed postage-paid return envelope. You
may revoke your proxy at any time prior to its exercise by written notice to the
Assistant Secretary of the Corporation, by executing and delivering a proxy
bearing a later date, or by attending the Meeting and voting in person.
You are cordially invited to attend the Meeting in person.
By Order of the Board of Directors
/s/Mary B. LeMont
---------------------------------
MARY B. LeMONT
Assistant Corporate Secretary
April 15, 1996
<PAGE>
[logo]
RIGGS NATIONAL CORPORATION
1503 Pennsylvania Avenue, N.W.
Washington, D.C. 20005
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON MAY 15, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Riggs National Corporation (the "Board"), a
Delaware corporation (the "Corporation"), to be used at the Annual Meeting of
Shareholders of the Corporation (the "Meeting") to be held on Wednesday, May 15,
1996, at 9:30 a.m. local time, at the Riggs Technology Center, 5700 RiverTech
Court, Riverdale, Maryland 20737, or at any adjournment or postponement thereof.
The Corporation owns all of the outstanding stock of Riggs Bank National
Association ("Riggs Bank N.A."), formerly known as The Riggs National Bank of
Washington, D.C.
Shareholders of record at the close of business on March 31, 1996, will be
entitled to notice of, and to vote at, the Meeting. On the record date, the
Corporation had 30,293,464 shares of Common Stock, par value $2.50 per share
("Common Stock"), outstanding and entitled to vote at the Meeting. Each share of
Common Stock is entitled to one vote. Under the applicable provisions of the
Corporation's By-Laws and the Delaware General Corporation Law (the "Delaware
GCL"), the presence, in person or by proxy, of the holders of a majority of the
shares of Common Stock is necessary to constitute a quorum of the shareholders
in order to elect Directors or take action on a proposal submitted to
shareholders at a meeting of shareholders. For these purposes, Common Stock that
is present or represented by proxy at the Meeting will be counted for quorum
purposes regardless of whether the holder of the Common Stock or proxy fails to
vote to elect Directors or to vote on a proposal or whether a broker with
discretionary authority fails to exercise its discretionary voting authority
with respect to such election or proposal.
Once a quorum is established, under the applicable provisions of the Delaware
GCL, in order for a Director to be elected, the Director must receive a
plurality of the votes of the holders of the shares of Common Stock present in
person or represented by proxy at the Meeting. For voting purposes, therefore,
abstentions and "broker non-votes" will have no effect on the outcome of such
election. With regard to the proposals to be presented to shareholders at the
Meeting, such proposals must be approved by the affirmative vote of the holders
of a majority of Common Stock present in person or represented by proxy at the
Meeting and, for voting purposes, abstentions will be counted as "no" votes and
"broker non-votes" will not be counted.
This Proxy Statement and the accompanying proxy are dated and are being sent
to shareholders on or about April 15, 1996. Shares of Common Stock represented
by proxies that are properly executed and received in time for the Meeting will
be voted in accordance with the shareholders' specifications. In the absence of
specific instructions, executed proxies received in response to this
solicitation will be voted for the election of the persons listed herein as
directors, for adoption of the proposed Riggs National Corporation 1996 Stock
Option Plan and against the shareholder proposal described herein. Should any
other matters properly come before the Meeting, the persons named as Proxies
will, unless otherwise specified in the proxy, vote upon such matters according
to their discretion. A proxy may be revoked at any time prior to its exercise by
written notice to the Assistant Secretary of the Corporation, by executing and
delivering a proxy bearing a later date, or by attending the Meeting and voting
in person.
The Annual Report to Shareholders, including financial statements for the
year ended December 31, 1995, is enclosed with this Proxy Statement.
<PAGE>
ELECTION OF DIRECTORS
At the Meeting, 24 directors (which will constitute the entire Board of
Directors after the Meeting) are to be elected to hold office until the next
Annual Meeting of Shareholders and until their respective successors have been
elected and qualified. The shares of stock represented by properly executed
proxies will be voted for the nominees named below unless otherwise specified on
the proxy. It is not contemplated that any of the nominees will become
unavailable to serve, but if that should occur before the Meeting, proxies that
do not withhold authority to vote for directors may be voted for another nominee
or nominees selected by the Board of Directors unless the Board votes to reduce
the size of the Board to the actual number of nominees.
NOMINEES FOR DIRECTOR
The following table sets forth (i) the name and age of each nominee, (ii) the
year during which each nominee first became a director of the Corporation, (iii)
the principal occupation and business experience of the nominee during the past
five years, (iv) other directorships of companies and organizations held by the
nominee, and (v) the number of shares of Common Stock beneficially owned by each
nominee as of March 31, 1996. All nominees except Ms. Foley and Mr. Lex are
currently directors of the Corporation. All current directors of the Corporation
also serve as directors of Riggs Bank N.A. The table has been prepared from
information obtained from the nominees.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
MARCH 31, 1996, AND
NAME, AGE AND YEAR PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE PERCENTAGE OF
BECAME A DIRECTOR IN LAST FIVE YEARS, OTHER DIRECTORSHIPS Class(1)
----------------- --------------------------------------- ----------
<S> <C> <C>
JOE L. ALLBRITTON Chairman of the Board and Chief Executive Officer of 10,610,000(2)
Age 71 the Corporation; Chairman of the Board of Riggs Bank 34.4%
1981 N.A.; Chief Executive Officer of Riggs Bank N.A.
(1982-1993); Chairman of the Board and owner of
Perpetual Corporation which owns Allbritton
Communications Company (owner of television stations)
and ALLNEWSCO, Inc. (news programming service);
Chairman of the Board and owner of Westfield News
Advertiser, Inc. (owner of television stations and
newspapers); Chairman of the Board and owner of
University Bancshares, Inc.; Trustee, Georgetown
University; Trustee, National Geographic Society.
BARBARA B. ALLBRITTON Director and Vice Chairman of the Board, University 2,581,732
Age 58 State Bank; Director, Allbritton Communications 8.5%
1991 Company; Director and Vice President, First
Charleston Corporation; Director and Vice President,
WSET, Incorporated; Director and Vice President,
Perpetual Corporation; Director and Vice President,
Jobaro Corporation; Director and Vice President,
Perfin Corp.; Vice President, Allwin, Inc.; Director,
ALLNEWSCO, Inc.; Trustee, Baylor College of Medicine;
Director, Blair House Restoration Fund; Director,
Foundation for the National Archives.(3)
ROBERT L. ALLBRITTON Director, Executive Vice President and Chief Operating 1,250,400(4)
Age 27 Officer, Allbritton Communications Company; Director, 4.1%
1994 Perpetual Corporation; Director, ALLNEWSCO, Inc.;
Director and Vice Chairman of the Board, University
Bancshares,Inc.; Director and Vice President, The
Allbritton Foundation; Director and President, Harrisburg
Television, Inc.; Director and Vice President,
Allbritton Group, Inc.; Director and President,
Allfinco, Inc.; Director, 78 Inc.; Director,
Allbritton News Bureau, Inc.; Director and President,
Allbritton Broadcast Corporation.
FRED L. BOLLERER President and Chief Executive Officer of Riggs Bank 117,900(5)
Age 53 N.A.; Executive Vice President, General Banking
1994 Group, Riggs Bank N.A. (1993-1994); Chairman and
Chief Executive Officer, First American Metro
Corporation (1989-1993).
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
MARCH 31, 1996, AND
NAME, AGE AND YEAR PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE PERCENTAGE OF
BECAME A DIRECTOR IN LAST FIVE YEARS, OTHER DIRECTORSHIPS CLASS(1)
----------------- --------------------------------------- ----------
<S> <C> <C>
CALVIN CAFRITZ President, Calvin Cafritz Enterprises (investor in 6,120(6)
Age 65 aviation, communications, and real estate); Chairman,
1993 President and Chief Executive Officer, Morris and
Gwendolyn Cafritz Foundation; Trustee, Federal City
Council; Member, Trustees' Council of the National
Gallery of Art; Director, Metropolitan Police Boys
and Girls Club.
CHARLES A. CAMALIER, III Vice President and Shareholder, Wilkes, Artis, 12,392(9)
Age 44 Hedrick & Lane, Chartered (law firm). (7), (8)
1993
TIMOTHY C. COUGHLIN President of the Corporation; President and Chief 40,625(10)
Age 53 Operating Officer of Riggs Bank N.A. (1985-1992);
1988 Chapter member, Protestant Episcopal Cathedral
Foundation; Director, Greater Washington Boys and
Girls Clubs; Trustee, Corcoran Gallery of Art.
RONALD E. CUNEO President, Wang Federal, Inc. (federal systems 18,450(11)
Age 53 integration); Senior Vice President, Wang
1994 Laboratories, Inc. President and Chief Executive
Officer, HFS, Inc. (1990-1995); General Manager,
Honeywell Federal Systems, Inc. (1983-1990).
FLOYD E. DAVIS, III President and Chief Executive Officer, Floyd E. Davis 192,776(12)
Age 44 Company (real estate management company); Director,
1993 Robert O. Scholz Foundation; Director, Floyd E. Davis
Family Foundation.(8)
JACQUELINE C. DUCHANGE Vice President, Four Seas Group, Inc. (international 2,196(13)
Age 48 consulting and management company); Member, St.
1993 Andrew's Episcopal School Annual Giving Board and
Advisory Committee for Future Site and Long Range
Planning.
MICHELA A. ENGLISH President, Discovery Enterprises Worldwide (consumer 3,500
Age 46 products subsidiary for diversified communications
1993 company); Senior Vice President, National Geographic
Society (1991-1996); Trustee, Supreme Court Historical
Society; Director, Sweet Briar College.
JAMES E. FITZGERALD Physician; Clinical Professor of Medicine, Georgetown 92,056(14)
Age 70 University School of Medicine; Director, National
1984 Capital Reciprocal Insurance Company; Member, Medical
Society of the District of Columbia.
HEATHER S. FOLEY Attorney and member of the District of Columbia Bar; 400
Age 55 Chief of Staff to the Speaker of the U.S. House of
not presently a director Representatives (1989-1994).
DAVID J. GLADSTONE Chairman of the Board, Chief Executive Officer and 500
Age 53 Director, Allied Capital Advisers, Inc., Allied
1993 Capital Corporation, Allied Capital Corporation II,
Allied Capital Commercial Corporation, Allied Capital
Lending Corporation (small business lenders); Director,
President and Chief Executive Officer, Business
Mortgage Investments; Trustee, The George Washington
University.
LAWRENCE I. HEBERT President and Director, Perpetual Corporation; Vice 11,000
Age 49 Chairman, President and Director, Allbritton
1988 Communications Company; Director, ALLNEWSCO, Inc.;
President, Westfield News Advertiser, Inc.; Vice
President, University Bancshares, Inc.; Director,
Allied Capital Corporation II.
MICHAEL J. JACKSON Executive Vice President, Marketing, Service and 732
Age 47 Sales, Mercedes-Benz of North America, Inc.; Executive
1993 Vice President, EuroMotorcars (1979-1990).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
MARCH 31, 1996, AND
NAME, AGE AND YEAR PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE PERCENTAGE OF
BECAME A DIRECTOR IN LAST FIVE YEARS, OTHER DIRECTORSHIPS CLASS(1)
- ----------------- --------------------------------------- ----------
<S> <C> <C>
TIMOTHY A. LEX Executive Vice President and Chief Operating Officer 14,333(15)
Age 38 of Riggs Bank N.A.; Managing Director, Riggs AP Bank,
not presently a director Limited and General Manager, London Branch
(1991-1995); President and Chief Executive Officer,
The Riggs National Bank of Virginia (1988-1991);
President and Chief Operating Officer, The Riggs
National Bank of Virginia and The Riggs National Bank
of Maryland (1995-1996); Director, various subsidiaries
of the Corporation.
LEO J. O'DONOVAN, S.J. President, Georgetown University; Trustee, University 4,971
Age 61 of Detroit Mercy; Board member, Consortium on Financing
1993 Higher Education; Board member, Association of Catholic
Colleges and Universities; Board member, Association
of Jesuit Colleges and Universities.
STEVEN B. PFEIFFER Partner and Head of the International Department, 8,830
Age 49 Fulbright & Jaworski L.L.P. (law firm); Chairman
1989 Emeritus of the Board of Trustees, Wesleyan University
(Connecticut).(7)
JOHN A. SARGENT President and Chief Executive Officer, Randall H. Hagner & Co., 4,505(16)
Age 51 Inc. (full service real estate firm); President, Hagner
1993 Management Corp.; President, Capital Express Group Ltd.;
Director, Farragut Development Co.; Director, Marjorie
Merriweather Post Foundation; Trustee, St. James School;
Chairman, Decatur House Council.
ROBERT L. SLOAN Vice Chairman of the Board of Directors; Chief Executive 10,506(17)
Age 49 Officer, Sibley Memorial Hospital, Washington, D.C.;
1993 Past Chairman, District of Columbia Hospital Association;
Past Chairman, Potomac Home Health Care Agency; Director,
Community of Hope, Inc.
JAMES W. SYMINGTON Partner, O'Connor & Hannan (law firm); Director, Saul 400
Age 68 Centers, Inc.; Chairman Emeritus and Board member,
1993 National Rehabilitation Hospital; Vice President,
Atlantic Council.(7)
JACK VALENTI Chairman and Chief Executive Officer, Motion Picture 6,451(18)
Age 74 Association; Director, American Film Institute.
1986
EDDIE N. WILLIAMS President, Joint Center for Political and Economic 3,000
Age 63 Studies; Director, Harrah's Entertainment, Inc.;
1993 Director, Harrah's Jazz Finance Corporation; Director,
Blue Cross/Blue Shield of the National Capital Area.
</TABLE>
- ------------
[FN]
(1) Beneficial ownership as determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934 includes sole or shared power to vote or
direct the voting of, or to dispose or direct the disposition of, shares
as well as the right to acquire beneficial ownership within 60 days
through the exercise of an option or otherwise. Unless otherwise
indicated, the listed persons have sole voting power and sole investment
power with respect to the shares of Common Stock set forth in the table
and own less than 1% of the shares outstanding.
(2) See "Beneficial Ownership of Corporation Stock," Notes 2 and 3, page 7.
(3) Barbara B. Allbritton is the wife of Joe L. Allbritton, Chairman of the
Board and Chief Executive Officer of the Corporation. See "Beneficial
Ownership of Corporation Stock," Note 4, page 7.
(4) Under the federal securities laws, Robert L. Allbritton, the son of Joe L.
and Barbara B. Allbritton, may be deemed to share voting and investment
power with regard to 1,250,000 shares owned by a charitable foundation of
which he is a trustee, Note 2, page 7.
(5) Mr. Bollerer received options to purchase 30,000 shares of the
Corporation's Common Stock upon terms and conditions summarized herein
under "Stock Option Grants in 1995," page 9. Mr. Bollerer currently holds
exercisable options to purchase 117,900 shares of the Corporation's Common
Stock.
4
<PAGE>
(6) The Morris and Gwendolyn Cafritz Foundation, of which Mr. Cafritz is the
Chairman, also owns 10,156 shares of the Corporation's Common Stock.
(7) Mr. Camalier is a partner in the law firm of Wilkes, Artis, Hedrick &
Lane, Chartered and Mr. Pfeiffer is a partner in the law firm of Fulbright
& Jaworski L.L.P. These law firms performed legal services for the
Corporation during 1995 and are expected to perform legal services for the
Corporation in 1996. Mr. Symington is a partner in the law firm of
O'Connor & Hannan.
(8) Mr. Camalier and Mr. Davis are first cousins.
(9) Included in this total are 3,750 shares of Phantom Stock (see "Director
Compensation," page 6).
(10) Mr. Coughlin currently holds exercisable options to purchase 30,625 shares
of the Corporation's Common Stock.
(11) Included in this total are 2,600 shares of Phantom Stock (see "Director
Compensation," page 6).
(12) Mr. Davis has sole voting and investment power with regard to 114,273
shares and shared voting and investment power with regard to 78,503 shares
held in trust. He disclaims beneficial ownership of an additional 1,830
shares held by his wife.
(13) Ms. Duchange disclaims beneficial ownership of an additional 549 shares
held in trust for her daughter.
(14) Dr. Fitzgerald disclaims beneficial ownership of an additional 12,268
shares owned by his wife.
(15) Mr. Lex currently holds exercisable options to purchase 10,000 shares of
the Corporation's Common Stock. Options to purchase another 3,333 shares
will become exercisable within 60 days.
(16) Mr. Sargent disclaims beneficial ownership of an additional 99 shares held
in trust for his children.
(17) Included in this total are 3,186 shares of Phantom Stock (see "Director
Compensation," page 6).
(18) Included in this total are 3,651 shares of Phantom Stock (see "Director
Compensation," page 6).
BOARD AND COMMITTEE MEETINGS
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. It does not have a standing Nominating Committee.
Directors of the Corporation are nominated by the full Board of Directors.
The Executive Committee of the Corporation exercises the power of the Board
of Directors between meetings of the Board of Directors and such other powers as
the Board may delegate. The Executive Committee held eight meetings during 1995.
The present committee members are Directors J. Allbritton, B. Allbritton, R.
Allbritton, Bollerer, Coughlin, Cuneo, Davis, Hebert and Sloan.
The Audit Committee of the Corporation reviews the audit and examination
reports of the internal auditors, independent public accountants and federal
bank examiners as they relate to the Corporation and its subsidiaries. The Audit
Committee held seven meetings during 1995. The present committee members are
Directors Cafritz, English, Fitzgerald, Gladstone, Pfeiffer and Sloan.
The Compensation Committee of the Corporation assists the Board of Directors
in fulfilling its responsibilities related to compensation and benefits. The
Compensation Committee of the Corporation meets in joint session with the
Compensation Committee of the Board of Directors of Riggs Bank N.A. The joint
Compensation Committee met eight times in 1995. The present committee members
are Directors Cafritz, Cuneo, English, Fitzgerald, Jackson and Williams. See
page 11 for the Joint Compensation Committee Report to Shareholders on fiscal
1995 compensation programs.
The Board of Directors of the Corporation held eight meetings in 1995 and the
various Committees of the Board, including those listed above, met a total of 54
times. Of the nominees, Directors Gladstone, Jackson, O'Donovan and Valenti
attended fewer than 75% of the aggregate of the total number of meetings during
1995 of the Board of Directors and of the committees on which they served.
SECTION 16(A) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and rules promulgated
under it require that certain officers, directors and beneficial owners of the
Corporation's equity securities ("insiders") file various reports with the
Securities and Exchange Commission ("SEC"). Based solely on its review of the
copies of such forms received by it, or written representations from certain
reporting persons that all
5
<PAGE>
required forms were filed, the Corporation believes that all of the
Corporation's insiders have timely filed the required reports under Section
16(a) required to be filed in 1995 except that one report was inadvertently
filed late by Joe L. Allbritton, Chairman of the Board and Chief Executive
Officer of the Corporation.
DIRECTOR COMPENSATION
Directors of the Corporation and Riggs Bank N.A. who are not officers
currently receive a retainer fee of $24,000 per year. Directors do not receive
additional compensation for membership on committees, except for the Chairmen of
the committees, who receive an additional retainer fee of $1,500 per year, and
the Chairman of the Audit Committee, who receives an additional retainer fee of
$20,000 per year. Officers of the Corporation who are directors do not receive
compensation, in addition to their compensation as officers, for attending Board
or committee meetings. In April 1994, a Deferred Compensation Plan was adopted
to allow non-employee Directors of the Corporation to defer receipt of all or a
portion of Director's fees to a specified date or termination of service as a
Director. Under the plan, Directors may elect to defer all fees and to have such
deferred amounts treated as having been invested in cash, shares of the
Corporation's Common Stock (the deferred stock is known as "Phantom Stock"),
and/or a combination of cash and shares. Deferred fees treated as invested in
cash are credited with interest at the rate paid by Riggs Bank N.A. on
certificates of deposit with a one-year maturity. Shares of the Corporation's
Common Stock treated as acquired under the plan are priced at the closing market
price of such shares on the date on which fee payment is deferred.
6
<PAGE>
BENEFICIAL OWNERSHIP OF CORPORATION STOCK
The following table sets forth information, as of March 31, 1996, concerning
(a) each person known by the Corporation to own beneficially more than 5% of the
Common Stock, (b) each of the executive officers named in the Summary
Compensation Table, and (c) the aggregate number of shares of Common Stock
beneficially owned by all officers and directors (and nominees) of the
Corporation and executive officers of Riggs Bank N.A. as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
BENEFICIAL OWNERS OF COMMON STOCK OWNERSHIP(1) CLASS
--------------------------------- ------------ -----
<S> <C> <C>
Joe L. Allbritton..................................... 10,610,000(2)(3) 34.4%
Riggs National Corporation
1503 Pennsylvania Avenue, NW
Washington, D.C. 20005
Barbara B. Allbritton................................. 2,581,732(4) 8.5%
Riggs National Corporation
1503 Pennsylvania Avenue, NW
Washington, D.C. 20005
Frederick L. Bollerer................................. 117,900(5)
Timothy C. Coughlin................................... 40,625(6)
John L. Davis......................................... 22,333(7)
Timothy A. Lex........................................ 14,333(8)
All directors (and nominees) and officers of the
Corporation and executive officers of Riggs Bank
N.A. as a group (32 persons)....................... 11,296,008 36.3%
</TABLE>
- --------
[FN]
(1) Beneficial ownership as determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934 includes sole or shared power to vote or
direct the voting of, or to dispose or direct the disposition of, shares
as well as the right to acquire beneficial ownership within 60 days
through the exercise of an option or otherwise. Except where noted, the
listed persons have sole voting power and sole investment power with
respect to the shares of Common Stock set forth in the table and own less
than 1% of the shares outstanding.
(2) Joe L. Allbritton has sole voting and investment power with regard to
7,500,000 of these shares. Pursuant to the federal securities laws,
included among these 7,500,000 shares are 579,511 shares owned by Allwin,
Inc., which is wholly owned by him. In addition, 1,250,000 shares are
owned by a charitable foundation of which Joe L. Allbritton, his wife
Barbara B. Allbritton and his son Robert L. Allbritton are the trustees
(the "Foundation"), and 1,330,000 shares beneficially owned by Barbara B.
Allbritton as to which Joe L. Allbritton shares voting and investment
power as described in Note 4 below. He disclaims beneficial ownership of
an additional 1,732 shares owned by Barbara B. Allbritton and 31,110
shares held for the benefit of Robert L. Allbritton by a trust of which
Riggs Bank N.A. is one of three trustees (the "Trust").
(3) The shares of Common Stock owned directly by Joe L. Allbritton are pledged
to secure a loan with a commercial bank. Should an event of default set
forth in the related loan agreement (which contains standard default
provisions) occur, the lending bank may be able to sell or transfer the
shares depending on the circumstances. In the absence of such an event of
default, he retains the right to receive the dividends and the power to
vote the shares. For a more complete description of the loan, including
default provisions, see the Schedule 13D and amendments thereto filed by
Joe L. Allbritton with the Securities and Exchange Commission.
(4) Barbara B. Allbritton has sole voting and investment power with regard to
1,732 of these shares and shares voting and investment power with Joe L.
Allbritton as to 1,330,000 shares with respect to which she has granted to
him an irrevocable proxy to vote such shares and has agreed not to sell
such shares free of the proxy except in limited market transactions. Also
included, pursuant to the federal securities laws, are 1,250,000 shares
owned by the Foundation as to which she shares voting and investment
power. Mrs. Allbritton disclaims beneficial ownership of 7,500,000 shares
beneficially owned by Joe L. Allbritton, including shares owned by Allwin,
Inc., and 31,110 shares held by the Trust. See Note 2 above.
(5) See Note 5, page 4.
(6) See Note 10, page 5.
(7) Mr. John L. Davis currently holds exercisable options to purchase 12,500
shares of the Corporation's Common Stock. Options to purchase another
8,333 shares will become exercisable within 60 days.
(8) See Note 15, page 5.
7
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The annual and other compensation paid by the Corporation and Riggs Bank N.A.
for 1995, 1994 and 1993 to each of the five most highly compensated executive
officers of the Corporation, including certain officers of Riggs Bank N.A., and
the capacities in which they are currently serving, are set forth below:
SUMMARY COMPENSATION TABLE POSITION
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------- --------------
(a) (b) (c) (d) (e) (f) (g)
OTHER SECURITIES
NAME AND PRINCIPLE ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- ------------------------------- ------- ---------- ------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joe L. Allbritton 1995 $380,000 $570,000(1) $ -- 300,000 $58,255(1)
Chairman of the Board and Chief 1994 380,000 380,000(1) -- 430,000 61,700
Executive Officer of the 1993 380,000 -- -- -- 36,382
Corporation; Chairman of the
Board of Riggs Bank N.A.
Fred L. Bollerer 1995 300,000 300,000(2) -- 30,000 2,623(2)
President and Chief Executive 1994 259,039 150,000(2) -- 75,000 2,158
Officer of Riggs Bank N.A. 1993 76,923 -- -- 20,000 598
Timothy C. Coughlin 1995 300,000 150,000(3) -- 15,000 1,580(3)
President of the Corporation 1994 350,000 52,500(3) -- -- 3,207
1993 350,000 -- -- 25,000 1,378
John L. Davis 1995 164,231 38,466 -- 25,000 1,305(4)
Chief Financial Officer of the 1994 155,000 23,250 -- -- 1,174
Corporation; Executive Vice 1993 71,500 -- -- 20,000 1,104
President and Chief Financial
Officer of Riggs Bank N.A.
Timothy A. Lex 1995 164,200 31,316 129,426(5) 10,000 76,228(5)
Executive Vice President and 1994 162,000 24,300 313,444(5) -- 951
Chief Operating Officer of 1993 162,000 -- 280,812(5) 10,000 576
Riggs Bank N.A.
</TABLE>
- -------------
[FN]
(1) In recognition of his significant contributions, Joe L. Allbritton was
awarded a bonus amount of 150% of base salary based on the Corporation's
performance in 1995, and a bonus amount of 100% of base salary based on
the Corporation's performance in 1994. For a discussion of the bonus
amount and the payment of an incentive based on the Corporation's 1995
performance, see "Joint Compensation Committee Report to Shareholders, The
Chief Executive Officer of the Corporation," found under "1995
Compensation," pages 11 and 12.
The $58,255 of "Other Compensation" reported in column (g) for
1995 represents the economic benefit attributable to group term life
insurance coverage and the split dollar life insurance plan applicable to
senior vice presidents and above.
(2) Fred L. Bollerer was awarded a bonus amount of 100% of base salary based
on his performance in the Corporation's achievement of its performance
goal in 1995, and a bonus amount of 50% of base salary in 1994. For a
discussion of the bonus amount and the payment of an incentive based on
the Corporation's 1995 performance, see "Joint Compensation Committee
Report to Shareholders, The President and Chief Executive Officer of Riggs
Bank N.A.," found under "1995 Compensation," page 12.
The $2,623 of "Other Compensation" reported in column (g) for 1995
represents the economic benefit attributable to the Split Dollar Life
Insurance Plan.
(3) Timothy C. Coughlin was awarded a bonus amount of 50% of base salary based
on his performance in the Corporation's achievement of its performance
goal in 1995, and a bonus amount of 15% of base salary in 1994. For a
discussion of the bonus amount and the payment of an incentive based on
the Corporation's 1995 performance, see "Joint Compensation Committee
Report to Shareholders, Other Executive Officers," found under "1995
Compensation," page 12.
The $1,580 of "Other Compensation" reported in column (g) for 1995
represents the economic benefit attributable to the Split Dollar Life
Insurance Plan.
(4) The $1,305 of "Other Compensation" reported for John L. Davis in column
(g) for 1995 represents the economic benefit attributable to the Split
Dollar Life Insurance Plan.
(5) Of the $129,426 of "Other Annual Compensation" reported for Timothy A. Lex
in column (e) for 1995, $129,378 (99.96%) represents overseas
cost-of-living adjustments, tax-gross-ups and other payments made to Mr.
Lex to provide him with equivalent compensation and living conditions
while posted with Riggs Bank N.A.'s London operations. All (100%) of the
$313,444 and $280,812 reported in column (e) for 1994 and 1993,
respectively, represent such overseas cost-of-living adjustment payments.
Of the $76,228 of "Other Compensation" reported for Mr. Lex in column (g)
for 1995, $820 represents the economic benefit attributable to the Split
Dollar Life Insurance Plan and $75,408 represents the economic benefit
attributable to relocation expenses paid on Mr. Lex's behalf by the
Corporation.
8
<PAGE>
STOCK OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO GRANT DATE
OPTIONS EMPLOYEES EXERCISE EXPIRATION PRESENT
NAME GRANTED IN 1995 PRICE DATE VALUE($)(1)
- ------------------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Joe L. Allbritton . 300,000 57.7% $10.625 12/31/00 $993,996
Fred L.
Bollerer(2)...... 30,000 5.8% 10.00 4/12/05 146,354
Timothy C.
Coughlin(2)...... 15,000 2.9% 10.00 4/12/05 73,177
John L. Davis(2) .. 25,000 4.8% 10.00 4/12/05 121,961
Timothy A. Lex(2) . 10,000 1.9% 10.00 4/12/05 48,785
</TABLE>
- -------------
[FN]
(1) The grant date present value estimate reflected in the above table has
been developed solely for purposes of comparative disclosure in accordance
with the rules and regulations of the Securities and Exchange Commission,
and does not necessarily reflect the Corporation's view of the appropriate
value or methodology for purposes of financial reporting. This
hypothetical value, determined by the Black-Scholes model, is based on the
following assumptions:
o Exercise price is equal to the market value on the day of grant;
o There are no annual dividends;
o Price volatility is based on weekly data for the preceding one-year
period;
o The risk-free rate is 5.72% for options maturing December 31, 2000,
and 7.06% for options maturing April 12, 2005, based on the yield of
comparable maturity Treasury securities; and
o There is an 18% discount for forfeiture of unexercised shares.
These assumptions are based upon historical experience and are not a
forecast of future stock price performance or volatility or of future
dividend policy.
There is no assurance that the value received by an executive will be at
or near the value estimated by the Black-Scholes model. The actual value
of options will depend on the market value of the Corporation's Common
Stock on the dates upon which the options are exercised. No realization of
value from the options is possible without an increase in the price of the
Corporation's Common Stock, which would benefit all shareholders.
(2) On April 12, 1995 (the "Grant Date"), the Joint Compensation Committee
recommended, and the Board of Directors approved, stock option grants to
senior executive officers. Messrs. Bollerer, Coughlin, John L. Davis and
Lex were awarded options to purchase 30,000; 15,000; 25,000 and 10,000
shares, respectively, of the Corporation's Common Stock. Pursuant to the
Corporation's 1994 Stock Option Plan, as approved by shareholders, the
options were granted at a price equal to the closing price of such Stock
on the Grant Date. These options vested upon grant but are not exercisable
until the earlier of: (1) April, 2000; (2) a "change of control" of the
Corporation as defined in the Corporation's 1994 Stock Option Plan; or (3)
the date on which the reported closing price of the Common Stock has been
at least $12.00 per share on 90% of the trading days during any rolling
six-month period.
STOCK OPTION EXERCISES IN 1995/FY-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
OPTIONS AT IN-THE-MONEY
SHARES FY-END OPTIONS, FY-END
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ------------------- ------------- ---------- ----------------- --------------------
<S> <C> <C> <C> <C>
Joe L. Allbritton . -- -- 100,000/630,000 $237,500/$1,816,600
Fred L. Bollerer .. -- -- 12,500/112,500 50,000/420,000
Timothy C.
Coughlin......... -- -- 15,625/24,375 62,500/82,500
John L. Davis...... -- -- 12,500/32,500 50,000/105,000
Timothy A. Lex..... -- -- 10,000/10,000 40,000/30,000
</TABLE>
RETIREMENT BENEFITS
Senior officers of the Corporation and its subsidiaries are eligible to
receive pension benefits under the Riggs Amended Pension Plan. Effective
December 31, 1995, the benefit formula for determining the annual pension
benefit payable under the Amended Pension Plan is 1% times the officer's average
9
<PAGE>
compensation for each year of service up to a maximum of 30 years. However, if a
greater benefit would result under plan provisions in effect immediately prior
to December 31, 1995, based on average compensation and years of service through
December 31, 1995, an officer's pension benefit payable under the Amended
Pension Plan is protected at that level.
Average compensation is limited by the Amended Pension Plan to base salary.
In accordance with applicable tax code provisions, base salary has been limited
since 1989. Currently, base salary is limited to $150,000 for 1996. Applying the
formula, the estimated annual pension benefits for each of the five highest paid
executive officers, assuming each retired as of a normal retirement age (or
their current age if later), is as follows: Mr. Allbritton, $90,506; Mr.
Bollerer, $19,398; Mr. Coughlin, $50,529; Mr. Davis, $19,250; and Mr. Lex,
$43,950.
The Corporation also has a Supplemental Executive Retirement Plan which
provides supplemental retirement income to certain key employees of the
Corporation and its subsidiaries at the level of Senior Vice President and
above. The Joint Compensation Committee determines the terms and conditions
under which the employee participates in the plan, including accelerating the
vesting of benefits to any participant. Under parameters adopted by the Joint
Compensation Committee, the level of benefits is based on the participant's
functional responsibility. Upon the later of a participant's termination of
employment with vested benefits, attainment of age 62 or upon a change of
control, the participant will receive the vested portion of the supplemental
retirement benefit, payable for the life of the participant, but for no more
than 15 years. In the case of the death of a participant while employed, the
participant's beneficiary will receive the supplemental benefit for 15 years.
Based upon the parameters set by the Joint Compensation Committee, the annual
benefit payable to each of Messrs. Allbritton, Bollerer and Coughlin is $40,000.
Such benefits will vest 50% after five years and 10% per year thereafter, except
for Mr. Bollerer's which will vest 100% in 1997. Mr. Lex will be entitled to a
benefit of $25,000 in which he will be vested 50% after five years of
participation in the Plan and 10% per year thereafter. Mr. Davis's benefit is
$15,000 per year in which he will be 100% vested following 10 years of
participation in the Plan.
TRANSACTIONS WITH MANAGEMENT
INDEBTEDNESS OF DIRECTORS, NOMINEES FOR DIRECTORS, EXECUTIVE OFFICERS AND
RELATED PERSONS. The Corporation's banking subsidiaries have had, and are
expected to have in the future, banking transactions in the ordinary course of
their business with directors of Riggs Bank N.A. and Riggs AP Bank, Limited. and
their associates (primarily the businesses with which they are associated), and
directors and executive officers of the Corporation and their associates, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons. In the
opinion of management, these transactions did not, at the time they were entered
into, involve more than the normal risk of collectability or present other
unfavorable features.
OTHER. During 1995, Allbritton Communications Company ("ACC") and Perpetual
Corporation ("Perpetual"), companies indirectly wholly owned by Joe L.
Allbritton, paid Riggs Bank N.A. $212,000 to lease space in two (2) office
buildings owned by Riggs Bank N.A. In early 1992, ACC exercised its option to
extend its lease through 1996, and a new lease is being negotiated. Perpetual's
lease expired in December 1993 and is being renewed pursuant to a three year
renewal option. The Boards of Directors of the Corporation and Riggs Bank N.A.
(with Joe L. Allbritton and his business associates, Thomas W. Wren (former
director) and Lawrence I. Hebert, not participating) approved and ratified the
ACC lease arrangement, finding it to contain the same terms and conditions as
would have prevailed had it been negotiated with a nonaffiliated company. The
Board of Directors of Riggs Bank N.A. (with Joe L. Allbritton, Barbara B.
Allbritton, Robert L. Allbritton, and Lawrence I. Hebert, not participating)
approved and ratified the Perpetual lease arrangement, finding it to contain the
same terms and conditions as would have prevailed had it been negotiated with a
nonaffiliated company.
Riggs Bank N.A. has in the past sold participations in commercial real estate
loans to University State Bank ("University"), a Texas bank that is indirectly
wholly owned by Joe L. Allbritton. The participations sold to University were in
loans bearing floating rates of interest. The purchase price of each of the
participations was equal to the outstanding principal amount of the portion of
the loan
10
<PAGE>
purchased. Riggs Bank N.A. receives a servicing fee of 0.25% on each of the
loans in which participations were sold to University and, in some transactions,
shared a portion of the loan fees with University. The Board of Directors of
Riggs Bank N.A. (with Joe L. Allbritton and Lawrence I. Hebert not
participating) approved and ratified the sales, finding them to be on terms that
were substantially the same, or at least as favorable to Riggs Bank N.A., as
those prevailing for comparable transactions with or involving nonaffiliated
companies. No loan participations were sold to University during 1995. On
December 31, 1995, there were $8.3 million in loan participations outstanding to
University. As of that date, University's total assets were $217.6 million and
its total loans outstanding were $91.8 million.
JOINT COMPENSATION COMMITTEE REPORT TO SHAREHOLDERS
GENERAL
The Compensation Committee of Riggs National Corporation meets in joint
session with the Compensation Committee of Riggs Bank National Association (the
"Joint Committee"). The Joint Committee is responsible for:
o reviewing the overall salary administration program for the Corporation,
Riggs Bank N.A. and their subsidiaries (the "Riggs Group");
o reviewing and making recommendations concerning annual salary increase
programs and any bonus programs for the Riggs Group;
o reviewing and making recommendations to the Board of Directors concerning
compensation and benefits of executive officers of the Riggs Group; and
o reviewing the Riggs Group's benefit plans, considering any new benefits
that significantly modify the existing plans and recommending to the Board
of Directors any changes requiring Board approval.
To create a framework in which the compensation of executive officers
directly links their contributions to the success of the Corporation, both as a
group and as individuals, the Joint Committee established for 1995 the
Compensation Renewal Program. The goal of this new program is to set competitive
market rates of base pay while at the same time creating opportunities to
achieve substantially higher total compensation on the basis of performance
incentives, particularly for those individuals whose performances most directly
impact the success of the Riggs Group. Based on a thorough review of
compensation information from Riggs Bank N.A.'s peer group and other financial
institutions, all provided by an independent compensation consultant, the Joint
Committee established specific grades and salary ranges for all positions in
Riggs Bank N.A., including those of senior and executive level officers.
Accordingly, the 1995 plan focuses on two issues: (1) paying competitive
market rates of pay; and (2) significantly improving the Riggs Bank N.A.'s
return on average assets by establishing aggressive and specific minimum,
mid-range and high-end goals for its bonus or incentive plan. In setting both
the amount of the bonus or incentive opportunity and the measurement of success,
the Joint Committee considered the incentives offered under comparable
market-based plans, the size and composition of the senior officer group, and
the potential expense of the plans.
1995 COMPENSATION
THE CHIEF EXECUTIVE OFFICER OF THE CORPORATION. Joe L. Allbritton continued
to serve as Chairman of the Board and Chief Executive Officer of the Corporation
throughout 1995, during which year the Corporation continued to improve its
position with respect to problem assets, further reduced expenses, and increased
its return on assets ("ROA"). As a result of these efforts, the Corporation
earned a record $87.8 million in 1995, reduced nonperforming assets by $29.8
million, achieved net interest income of $151.0 million, and decreased
non-interest expenses by $7.2 million. In addition, the Corporation achieved its
high-end ROA goal.
11
<PAGE>
In 1995, Mr. Allbritton continued to voluntarily maintain his salary at the
same reduced level as in 1994, 1993, and 1992, and on January 24, 1996, the
Joint Committee again accepted Mr. Allbritton's voluntary salary freeze. In
keeping with the 1995 Bonus Plan, the Joint Committee recommended, and the Board
of Directors approved, a bonus payment to Mr. Allbritton of 150% of his 1995
base salary for his contribution to the Corporation's realization of 1995 goals.
In July 1995, Mr. Allbritton was granted options to purchase 300,000 shares
of Common Stock at $10.625 per share under the Corporation's 1993 Stock Option
Plan. These options vested upon grant, but were exercisable immediately only
with respect to 100,000 shares. The remaining options will become exercisable
based upon the Corporation's achievement of specified targets for return on
average assets for fiscal years 1996 and 1997 or if the Corporation undergoes a
"change of control" as defined in the Corporation's 1993 Stock Option Plan.
These options were granted to Mr. Allbritton in recognition of his personal role
in the significant improvement in the Corporation's performance in 1994 and the
Board's high regard for him.
In determining Mr. Allbritton's total compensation, the Joint Committee took
into account his ability to enhance corporate performance, his reputation within
the community, and his continued voluntary relinquishment of salary during the
Corporation's years of restructuring and returning to strength.
THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF RIGGS BANK N.A. Fred L. Bollerer
continued to serve as President and Chief Executive Officer of Riggs Bank N.A.
during 1995. The Corporation continued to improve its financial position and
performance, earning $87.8 million for 1995, on net interest income of $151.0
million and decreased non-interest expenses of $7.2 million, with a $29.8
million decrease in nonperforming assets.
Mr. Bollerer's 1995 base salary remained at the same level as 1994. In
recognition of his efforts and the fact that his salary did not increase, Mr.
Bollerer was made eligible to earn a bonus of up to 100% of his base salary
under the 1995 Bonus Plan. Because the Corporation achieved its high-end ROA
goal in 1995, the Joint Committee recommended, and the Board of Directors
approved, a bonus payment to Mr. Bollerer of the full amount for which he was
eligible. This ROA goal was higher than the goal set in Mr. Bollerer's
employment agreement; Mr. Bollerer voluntarily agreed to increase his goal to a
more ambitious level, which the Corporation exceeded.
In April 1995, Mr. Bollerer was granted under the Corporation's 1994 Stock
Option Plan options to purchase 30,000 shares of Common Stock at $10.00 per
share. These options vested upon grant, but are not exercisable until the
earlier of: (1) April 12, 2000; (2) the date on which the Corporation undergoes
a "change of control" as defined in the Corporation's 1994 Stock Option Plan; or
(3) the date on which the closing price of the Corporation's common stock is a
price certain per share on a significant number of the trading days in any
rolling six month period.
In setting Mr. Bollerer's incentive compensation, the Joint Committee sought
to create an overall compensation package that recognizes Mr. Bollerer's ability
to enhance the performance of the Corporation, including both its stock price
and its ROA, and establishes an appropriate incentive opportunity. The Joint
Committee believes that Mr. Bollerer has played a key role in the Corporation's
1995 profit successes and in its achievement of its ROA target.
OTHER EXECUTIVE OFFICERS. Salaries granted to other executive officers in
1995 generally remained stable. The Joint Committee established a
performance-based incentive plan for executive officers in 1995 under which
bonuses were paid to officers based on both the Corporation's achievement of
specified targets for ROA in 1995 and the executive's performance for the year.
The Corporation used a systematic evaluation approach to appraise all officer
performance, including that of its executive officers.
Moreover, stock option grants were made in 1995 based on corporate-level and
individual performance in 1995. See "Stock Option Grants in 1995," page 9, for a
description of the stock options granted to executive officers, including: Mr.
Coughlin, who received options to purchase 15,000 shares; Mr. Davis, who
received options to purchase 25,000 shares; and Mr. Lex, who received options to
purchase 10,000 shares.
12
<PAGE>
1996 COMPENSATION
The Joint Committee will develop suitable salary levels and a
performance-based incentive plan for executive officers in 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Joint Committee consists of the below-named six directors, none of whom
are present or former officers or employees of the Corporation or any of its
subsidiaries. No executive officer of the Corporation serves as an officer,
director or member of a compensation committee of any entity. During fiscal year
1995, Joint Committee members Cafritz and Fitzgerald, or their associates, had
outstanding loans with lending subsidiaries of the Corporation on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons. In the opinion of
management, these transactions did not, at the time they were entered into,
involve more than the normal risk of collectability or present other unfavorable
features.
Respectfully Submitted,
Eddie N. Williams, Chairman Michela A. English
Calvin Cafritz James E. Fitzgerald
Ronald E. Cuneo Michael J. Jackson
13
<PAGE>
STOCK PERFORMANCE CHART
The following graph shows the performance of the Corporation's Common Stock
over the past five fiscal years (assuming reinvestment of dividends) as compared
to the NASDAQ Market Value Index and the Middle Atlantic Banks Index.
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Riggs National Corporation 100.00 49.77 118.57 101.00 98.07 152.23
Middle Atlantic Banks(1) 100.00 154.64 214.64 249.35 243.14 388.87
NASDAQ National Market 100.00 160.56 186.86 214.51 209.68 296.30
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Assumes $100 invested on December 31, 1990
Assumes dividends reinvested to fiscal year ending Dec. 31, 1995
- --------------------------------------------------------------------------------
</TABLE>
[FN]
(1) A list of the banks included in the Middle Atlantic Banks Index is
available to shareholders at no charge by writing to Mary B. LeMont,
Assistant Corporate Secretary, Riggs National Corporation, 800 17th
Street, N.W., 7th Floor, Washington, D.C. 20006.
14
<PAGE>
1996 STOCK OPTION PLAN
SUMMARY
The Board of Directors has approved and recommends that shareholders approve
the adoption of the Riggs National Corporation 1996 Stock Option Plan (the
"Plan") by voting FOR the Plan.
The Board believes that the Corporation's future success and profitability
will depend in large measure on its ability to continue to attract, retain and
motivate highly qualified individuals and that an effective compensation policy
for these individuals includes not only a competitive annual salary, but also
long-term incentives linked to shareholder return and company performance. The
purpose of the Plan is to advance the best interest of the Corporation by
providing personnel who have a substantial responsibility for the
Corporation's management and growth with an additional incentive to continue
to contribute to the growth and success of the Corporation by increasing their
proprietary interest. The Plan will provide compensation based on the market
performance of the Corporation's Common Stock.
The Plan is attached as Appendix A to this Proxy Statement and is
incorporated herein by reference. The following summary is subject to, and is
qualified in its entirety by, reference to the full text of the Plan, and
defined terms not otherwise defined herein are as defined in the Plan.
STOCK AVAILABLE FOR OPTION GRANTS. The Plan provides for the issuance of
Options to purchase shares of Common Stock of the Corporation. The aggregate
number of shares of Common Stock reserved for issuance upon exercise of Options
granted under the Plan shall not exceed 2,000,000 shares, the maximum number of
shares which may be issued to a Key Employee. Pursuant to actions of the Board
of Directors, shareholders have no preferential or preemptive rights with
respect to shares issued under the Plan. Shares that by reason of expiration of
an Option or otherwise are no longer subject to purchase pursuant to an Option
may be again available for issuance pursuant to Options under the Plan. No
Options have been granted or authorized under the Plan as of the date of this
Proxy Statement, and the Corporation does not intend to grant or authorize any
such Options unless and until the Plan is approved by the Corporation's
shareholders.
EFFECTIVE DATE AND TERMINATION. Upon approval of the Plan by the shareholders
at the 1996 Annual Meeting, the Plan will become effective as of March 26, 1996,
the date the Plan was approved by the Board of Directors of the Corporation.
Unless previously terminated by the Board, the Plan will terminate on March
26, 2006 (10 years after the date the Plan was adopted by the Board), except
that Options that were granted under the Plan before its termination will
continue to be administered under the terms of the Plan until the Options
terminate or are exercised.
ELIGIBILITY. Key Employees, who are senior officers of the Corporation and/or
of a Subsidiary Corporation (including directors who are officers) may be
granted either Incentive Stock Options (i.e., Options qualifying for special tax
treatment under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code")) or Nonqualified Stock Options (i.e., Options that do not qualify
as Incentive Stock Options under Section 422 of the Code). The Corporation
estimates that the number of Key Employees eligible for participation in the
Plan is approximately 50 persons.
ADMINISTRATION AND OPERATION. The Plan is administered by the Joint
Compensation Committee of the Board of Directors of the Corporation and Riggs
Bank N.A. The Joint Compensation Committee has authority to recommend to the
Outside Directors Committee the Key Employees to be granted Options and the
terms of the Options granted. The Outside Directors Committee has the authority
to approve, reject, or modify grants of Options recommended by the Joint
Compensation Committee, and no Option may be granted unless and until the grant
is approved by the Outside Directors Committee. The Joint Compensation Committee
also has authority to approve an election to pay the exercise price of an
Option, or withholding tax in connection with the exercise of an Option, with
Common Stock owned prior to exercise of an Option or with Common Stock acquired
upon exercise of the Option (the "Option Stock"). The Joint Compensation
Committee is composed of two or more Outside Directors, each of whom is
disinterested within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 (the "Act"). The Outside Directors Committee is composed of
all the Outside Directors who are
15
<PAGE>
disinterested. A disinterested director for this purpose is a director who was
not granted during the one year immediately preceding the director's
appointment to the Committee, and is not granted while a member of the
Committee, equity securities under any plan of the Corporation (or any affiliate
of the Corporation), except as may be otherwise permitted under Rule 16b-3
promulgated under the Act. An Outside Director for this purpose is a Director
who is neither an officer nor an employee of the Corporation (or any affiliate
or subsidiary of the Corporation) and who qualifies as an outside director
within the meaning of Section 162(m)(4) of the Code, and the applicable Treasury
regulations or who is deemed to be an outside director under the applicable
Treasury regulations and authority.
TERMS AND CONDITIONS OF STOCK OPTIONS
GENERAL. An Option is exercisable only to the extent that it is vested on the
date of exercise, and no Option will be exercisable after the expiration of 10
years from the date the Option was granted. Incentive Stock Options granted to
an Option holder who owns on the date of grant more than 10% of the total
combined voting power of all classes of stock of the Corporation (or a parent or
a subsidiary) will expire five years from the date of grant.
The exercise price of Options may not be less than 100% of the Fair Market
Value of the Common Stock on the date of grant, as determined in good faith by
the Joint Compensation Committee. However, the exercise price of an Incentive
Stock Option may not be less than 110% of the Fair Market Value of the Common
Stock on the date of grant if the Option holder owns more than 10% of the total
combined voting power of all classes of stock of the Corporation (or its parent
or subsidiary). Fair Market Value of Common Stock is determined by reference to
the closing price for the day, unless the Joint Compensation Committee
determines that an alternative method more properly reflects Fair Market Value.
An Option may be exercised as to all or any number of whole shares of the
Common Stock with respect to which the Option is vested. Options may be
exercised only by written notice to the Officer of the Corporate Secretary and
only if the exercise notice is accompanied by payment in cash of the full
exercise price for the shares with respect to which the Option is exercised,
unless the Joint Compensation Committee approves, in its sole discretion,
payment other than in cash. The Joint Compensation Committee may approve payment
of the exercise price in the form of (i) Common Stock of the Corporation other
than Option Stock, (ii) a combination of cash and Common Stock other than Option
Stock, or (iii) Option Stock provided that, in the case of an Option holder who
is subject to Section 16 of the Act (an "Insider"), the requirements of Rule
16b-3 promulgated under the Act are met. The value of any Common Stock used to
pay the exercise price or any portion thereof will be the Fair Market Value of
Common Stock on the date of exercise.
Options remain qualified as Incentive Stock Options only to the extent that
the aggregate Fair Market Value of Common Stock with respect to which the
Incentive Stock Options granted to any person are exercisable for the first time
during any calendar year (under all plans of the Corporation and its parent or
subsidiary) does not exceed $100,000.
TERMINATION OF EMPLOYMENT. An Option will be exercisable only to the extent
the Option is vested on the date that an Option holder is no longer an employee
of the Corporation or a subsidiary (the "date of termination"). However, if the
Option holder is no longer an employee because of death or disability, any
Option that is not 100% vested will automatically become 100% vested on the date
of termination. If the Option holder's termination is for reason of death, the
right to exercise the Option will expire one year after the date of the holder's
death, and until expiration, the holder's heirs, legatees or legal
representative may exercise the Option. If the Option holder's termination is
for any reason other than death, the right to exercise the Option (to the extent
that it is vested) will expire three months after the date of termination,
unless the Option would expire during the period in which the Common Stock
received upon the exercise of the Option would be subject to restrictions on
transfer in compliance with certain accounting rules set forth in the Securities
and Exchange Commission Accounting Series Releases 130 and 135, and in that case
the Option will expire 10 calendar days after the expiration of the SEC transfer
restriction period. Furthermore, if the Option holder's termination is for any
reason other than death, and the Option holder dies during the period after his
or her termination but before the right to
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exercise the Option expires, the right to exercise the Option will expire one
year after the date of termination of employment, and until expiration, the
holder's heirs, legatees or legal representative may exercise the Option.
The Outside Directors Committee may also grant Options in substitution of
options held by individuals who become key employees of the Corporation and/or a
Subsidiary Corporation as a result of an acquisition of such individuals'
employer by the Corporation and/or a Subsidiary Corporation. If necessary to
conform the Options to the options for which they are granted in substitution,
the Outside Directors Committee may grant substitution Options under terms and
conditions that vary from those otherwise required by the Plan.
AMENDMENT OF THE PLAN AND OPTIONS
The Board of Directors generally may amend the Plan in any manner with
respect to future grants of Options and the Outside Directors Committee may
amend outstanding Options in any manner consistent with the Plan. However, no
Plan or Option amendment will be effective without the approval of the
shareholders of the Corporation if the amendment: (i) materially increases the
benefits accruing to Insiders, (ii) changes the maximum number of securities
that may be issued under the Plan (other than by reason of an adjustment of
shares), (iii) materially modifies the requirements as to eligibility of
Insiders for participation in the Plan, (iv) changes the class of eligible
employees, officers or directors, (v) withdraws administration of the Plan from
a committee of disinterested persons, or (vi) extends the term of the Plan or
the period during which an outstanding Incentive Stock Option may be exercised.
Further, no amendment will be effective if the amendment: (i) changes the manner
of determining the exercise price of Incentive Stock Options, (ii) makes
individuals who are not employees of the Corporation (or its parent or a
subsidiary of the Corporation) eligible to be granted Incentive Stock Options,
(iii) changes the nontransferability of the Options, or (iv) alters or impairs
any rights or obligations of any outstanding Option, without the written consent
of the Option holder.
CORPORATE CHANGES; CHANGE OF CONTROL
In the event of a subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, or other increase or reduction of
the number of outstanding shares of Common Stock, the Plan provides for
appropriate adjustments to (i) the number and class of shares subject to the
Plan and (ii) the number, class, and per-share price of shares subject to
outstanding Options. In the event of liquidation or dissolution of the
Corporation, a corporate reorganization in which the Corporation is not the
survivor, or a sale of all or substantially all of the assets of the
Corporation, all outstanding Options will be fully vested and exercisable during
the 30-day period preceding the event unless the Plan is continued and the
Options are assumed or substituted with new Options for stock of a successor
corporation (or a parent or subsidiary) with appropriate adjustments to the
number and kind of shares subject to, and exercise prices of, the substitute
Options. However, if exercise of any of the Options that otherwise would be
exercisable during the 30-day period preceding the event would not be in
conformity with all applicable federal securities laws or if the immediate
exercisability of the Options would result in an excess parachute payment as
defined in Section 280G of the Code, the Options will not become immediately
exercisable and will be canceled as of the event, unless the Joint Compensation
Committee determines otherwise.
In the event of a Change of Control of the Corporation, all then-outstanding
Options will automatically become 100% vested and exercisable. However, if the
immediate exercisability of the Options would result in an excess parachute
payment as defined in Section 280G of the Code, the Options will not become
immediately exercisable, unless the Joint Compensation Committee determines
otherwise. Change of Control means a sale of substantially all of the
Corporation's assets or a change in the ownership of securities of the
Corporation representing 25% or more in the aggregate voting power of the
Corporation's then-outstanding voting securities, provided that no Change of
Control will result from transfers of voting securities by a more than 25%
shareholder to an immediate family member, a trust for the benefit of the 25%
shareholder, or such shareholder's immediate family member, a trust revocable by
the 25% shareholder, entities over which the 25% shareholder has the direct or
indirect power to direct the management or policies or charitable organizations
funded by the 25% shareholder.
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Furthermore, no Change of Control will result from the acquisition of voting
securities by an individual who is not a 25% shareholder but who was a 25%
shareholder on the effective date of the Plan or any acquisition of voting
securities by any person, trust or other entity (described in the preceding
sentence) to which a 25% shareholder may transfer securities without causing a
Change of Control. Currently, the only 25% shareholder of the Corporation is Joe
L. Allbritton, its Chairman and Chief Executive Officer.
FEDERAL INCOME TAX CONSEQUENCES
Information regarding the federal income tax consequences to the Corporation
of Options granted under the Plan follows. This information is not intended to
be exhaustive and is intended only to briefly summarize the federal income tax
statutes, regulations and currently available agency interpretations thereof,
and is intended to apply to the Plan as normally operated.
INCENTIVE STOCK OPTIONS. An Option holder will not realize taxable income
upon the grant of an Incentive Stock Option. In addition, the Option holder
generally will not realize taxable income upon the exercise of an Incentive
Stock Option. However, an Option holder's alternative minimum taxable income
will be increased by the amount that the Fair Market Value of the Option Stock,
generally determined as of the date of exercise, exceeds the exercise price of
the Option. Furthermore, except in the case of the Option holder's death, if
an Option is exercised more than three months after the Option holder's
termination, the Option ceases to be treated as an Incentive Stock Option and is
subject to taxation under the rules applicable to Nonqualified Stock Options.
If the Option holder sells the Common Stock acquired upon exercise of an
Incentive Stock Option, the tax consequences of the sale (a "disposition")
depend upon whether the disposition is qualifying or disqualifying. The
disposition of the Option Stock is qualifying if made at least two years after
the date the Incentive Stock Option was granted and at least one year after the
date Incentive Stock Option was exercised. If the disposition of the Option
Stock is qualifying, any excess of the sale price of the Option Stock over the
exercise price of the Option would be treated as long-term capital gain taxable
to the Option holder at the time of the sale. If the disposition is not
qualifying, i.e. a disqualifying disposition, the excess of the Fair Market
Value of the Option Stock on the date the Option was exercised over the exercise
price would be compensation income taxable to the Option holder at the time of
the disposition, and any excess of the sale price of the Option Stock over the
Fair Market Value of the Option Stock on the date the Option was exercised would
be capital gain.
Unless an Option holder engages in a disqualifying disposition, the
Corporation will not be entitled to a deduction with respect to an Incentive
Stock Option. However, if an Option holder engages in a disqualifying
disposition, the Corporation will be entitled to a deduction equal to the amount
of compensation income included in taxable income by the Option holder.
NONQUALIFIED STOCK OPTIONS. An Option holder will not realize taxable income
upon the grant of a Nonqualified Stock Option. However, when the Option holder
exercises the Option, the difference between the exercise price of the Option
and the Fair Market Value of the Option Stock on the date of exercise is
compensation income taxable to the Option holder. The Corporation will be
entitled to a deduction equal to the amount of compensation income included in
taxable income by the Option holder.
VOTE REQUIRED. To be adopted, the Plan must be approved by the affirmative
vote of the holders of at least a majority of the shares of Common Stock
present, or represented and entitled to vote, at the Meeting. For purposes of
determining the number of votes present or represented and entitled to vote with
respect to the Plan, abstentions will be counted (and will therefore be
equivalent to a vote against), but broker non-votes will not be counted.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
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SHAREHOLDER PROPOSAL
GENERAL
Mrs. Evelyn Y. Davis, who is the owner of 500 shares of Common Stock, has
advised the Corporation that she intends to present the following proposal for
shareholder action at the Meeting:
RESOLVED: "That the stockholders recommend that the Board of Directors
take the necessary steps to change the Annual Meeting date to the second
Monday in May."
REASONS: "Recently the Annual Meetings were held on a date where other
major corporations met. Until a few years ago, the Company has met on a
date where more independent non-employee shareholders could meet. J.P.
Morgan, a major competitor meets on the same date the Company now has."
"The many problems the Company faces makes maximum attendance by outside
independent shareholders especially desirable."
"Last year the owners of 1,944,549 shares, representing approximately
8.62% of shares voting, voted FOR this proposal."
"If you AGREE, please mark your proxy FOR this resolution."
BOARD OF DIRECTORS RECOMMENDATION
The Board of Directors recommends a vote AGAINST this proposal. This proposal
was submitted at the 1995 Annual Meeting and was soundly defeated (over 91% of
the votes cast voted against the proposal). Your Directors have again considered
this proposal, and continue to believe that its adoption would not be in the
best interests of the Corporation.
Under the Corporation's By-Laws, the Board of Directors currently has the
discretion to set the date of the Annual Meeting to the time and date best
suited for the meeting. Therefore, the Board already has sufficient flexibility
to change the Annual Meeting date to the second Wednesday in May--which it has
done on occasion--or to another date deemed appropriate by the Board. By setting
the Annual Meeting date to the second Monday in May without regard for the
Board's determination of the best possible date, the Board of Directors would
lose such flexibility. The proposal would impose an undue limitation on the
Board of Directors, without justification.
The proponent offers no reason to support an amendment to the By-Laws, except
that she believes an Annual Meeting date of the second Monday in May will not
conflict with the annual meeting dates set by other corporations. However, the
Corporation cannot rely on or predict the dates of other corporations' annual
meetings nor can it reasonably be expected to set the schedule for its Annual
Meeting according to such dates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
SHAREHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
The Board of Directors anticipates that the next Annual Meeting of
Shareholders will be held on or about May 14, 1997. A shareholder who intends to
present a proposal at the 1997 Annual Meeting must submit the written text of
the proposal to the Corporation not later than December 9, 1996, in order for
the proposal to be considered for inclusion in the Corporation's proxy statement
and form of proxy for that meeting.
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INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP are the independent public accountants for the
Corporation and have served as the independent public accountants for Riggs Bank
N.A. since 1974. A representative of Arthur Andersen LLP is expected to be
present at the Meeting and will have the opportunity to make a statement, if he
desires to do so, and to respond to appropriate questions.
OTHER MATTERS
This proxy is solicited on behalf of the Board of Directors of the
Corporation. The cost of solicitation of proxies will be borne by the
Corporation. The Corporation may solicit proxies personally or by telephone, in
addition to the solicitations by mail. All such further solicitations will be
made by directors, officers or regular employees of the Corporation or of Riggs
Bank N.A., who will not be additionally compensated therefor, or by the
Corporation's transfer agent (Bank of New York), whose costs will be borne by
the Corporation. Arrangements will be made by the Corporation for the
forwarding, at the Corporation's expense, of soliciting materials by brokers,
nominees, fiduciaries and other custodians to their principals.
The Board of Directors is not aware of any other matters that may come before
the Meeting. If any other business properly comes before the Meeting, the
persons designated as Proxies will vote upon such matters according to their
discretion.
ANNUAL REPORT ON FORM 10-K
A copy of the Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission, is available without charge upon written request to James
T. Duke, Investor Relations, at corporate headquarters.
By Order of the Board of Directors
/s/Mary B. LeMont
---------------------------------
MARY B. LeMONT
Assistant Corporate Secretary
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[logo]
APPENDIX A
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RIGGS NATIONAL CORPORATION
1996 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
This 1996 Stock Option Plan (the "Plan") of Riggs National Corporation (the
"Corporation") for key employees of the Corporation and its subsidiaries is
designed to advance the best interest of the Corporation by providing such
employees who have a substantial responsibility for its management and growth
with an additional incentive to continue to contribute to the growth and success
of the Corporation by increasing their proprietary interest in the success of
the Corporation.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Corporation.
(b) "Common Stock" means the common shares, $2.50 par value per share, of
the Corporation.
(c) "Joint Compensation Committee" means the compensation committees of
the Board and the Board of Directors of Riggs Bank N.A. meeting in joint
session, but excluding any member of either committee who is not both a
Disinterested Director and an Outside Director.
(d) "Corporation" means the Riggs National Corporation.
(e) "Date of Grant" means the date on which an Option is approved by the
Outside Directors Committee.
(f) "Director" means a member of the Corporation's Board of Directors.
(g) "Disability" as to an Option holder has the same meaning as the term
is used in the long-term disability insurance plan contributed to by the
Corporation or its Subsidiary Corporation on behalf of the Option holder, or
if the Option holder is not covered by any such plan, disability shall have
the meaning provided for in Section 22(e)(3) of the Internal Revenue Code of
1986, as amended, or any successor statute thereto (the "Code").
(h) "Disinterested Person" means a Director who was not granted during the
one (1) year immediately preceding the Director's appointment to the
committee, and is not granted while a member of the committee, equity
securities under the Plan or any other plan of the Corporation or an
affiliate of the Corporation, except as may be otherwise permitted by Rule
16b-3(c)(2) promulgated under the Securities Exchange Act of 1934.
(i) "Fair Market Value" shall mean, with respect to a share of Common
Stock, (i) if the Common Stock is traded on the National Market System or a
national securities exchange, the closing price of the Common Stock on the
determination date, or, if there are no sales on such date, then on the next
preceding date on which there were sales of Common Stock, all as published in
the NASDAQ National Market Issues report in the Eastern Edition of The Wall
Street Journal, (ii) if the Common Stock is not traded on the National Market
System or listed on a national securities exchange, the closing price last
reported by the National Association of Securities Dealers, Inc. for the
over-the-counter market on the determination date, or, if no sales are
reported on such date, then on the next preceding date on which there were
such quotations, or (iii) if the Common Stock is not traded on the National
Market System or listed on a national securities exchange and quotations for
the Common Stock are not reported by the National Association of Securities
Dealers, Inc., the Fair Market Value determined by the Joint Compensation
Committee on the basis of available prices for the Common Stock, or in such
manner as the Joint Compensation Committee shall agree. Notwithstanding the
preceding, the Fair Market Value on a given determination date of Common
Stock subject to Incentive Stock Options or Common Stock valued in connection
with the
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exercise of Incentive Stock Options shall be an amount that is equal to the
Joint Compensation Committee's good-faith determination of the Common Stock's
value on the given determination date, and the Joint Compensation Committee
shall for all purposes of this Plan have the authority to determine Fair
Market Value using methods other than those described in this Section if the
Joint Compensation Committee determines that such alternative methods more
properly reflect the Fair Market Value of the Common Stock. Furthermore, in
all cases, Fair Market Value shall not be less than the Par Value of the
Common Stock.
(j) "Incentive Stock Option" means an Option qualifying for special tax
treatment under Section 422 of the Code.
(k) "Insider" means any person subject to the provisions of Section 16 of
the Act, including an "officer" of the Corporation within the meaning of
Section 16 of the Act, a "director" within the meaning of section 3(a)(7) of
the Act, and a "beneficial owner" of more than ten percent (10%) of any class
of the equity securities of the Corporation within the meaning of Section 16
of the Act.
(l) "Key Employee" means any employee who is a senior officer (including
employees who are also directors, but not including directors who are not
also employees) of the Corporation and/or of a Subsidiary Corporation who has
substantial responsibility in the direction and management of the Corporation
or a Subsidiary Corporation, as determined by the Joint Compensation
Committee.
(m) "Nonqualified Stock Option" means an Option that is not an Incentive
Stock Option.
(n) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option granted under this Plan.
(o) "Outside Director" means a Director who is neither an employee nor an
officer of the Corporation or its subsidiaries and qualifies as an outside
director within the meaning of Section 162(m)(4) of the Code, and applicable
regulations thereunder or who is deemed to be an outside director under the
applicable regulations and authority.
(p) "Outside Directors Committee" means a committee composed of all
Outside Directors who are Disinterested Persons.
(q) "Parent Corporation" has the same meaning used in Section 424(e) of
the Code.
(r) "Plan" means the Riggs National Corporation 1996 Stock Option Plan as
set forth herein, which may be amended from time to time.
(s) "Subsidiary Corporation" has the same meaning used in Section 424(f)
of the Code.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 8 of the Plan, the aggregate number of
authorized but unissued shares of Common Stock that may be issued pursuant to
Options granted under the Plan will not exceed two million (2,000,000) shares,
the maximum number of shares which may be issued to a Key Employee. Shares that
by reason of expiration of an Option or otherwise are no longer subject to
purchase pursuant to an Option granted under the Plan may again be available for
issuance pursuant to Options under the Plan.
4. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Joint Compensation Committee. The Joint
Compensation Committee has the authority to recommend to the Outside Directors
Committee the Key Employees to be granted Options, the times when Options will
be granted, the number of shares subject to each Option, the exercise price of
each Option, the vesting schedule (if any) of each Option, the conditions
precedent (if any) to acceleration of the vesting schedule of each Option, the
method of payment for shares acquired upon the exercise of Options, the
expiration date of each Option, the Fair Market Value of Common Stock subject to
Options, and any other terms and conditions of the Options it deems appropriate.
The Outside Directors Committee shall have the authority to approve, reject or
modify recommended grants
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of Options by the Joint Compensation Committee. A majority of the Outside
Directors Committee shall constitute a quorum. All actions by the Outside
Directors Committee shall require a majority of the members of such committee
present at such meeting. Any action by the Outside Directors Committee may be
taken by a unanimous written consent of all members of the committee, and action
so taken shall be fully effective as if it had been taken by a vote of the
members at a meeting duly called and held. No Option shall be granted unless and
until such grant is approved by the Outside Directors Committee.
All questions of interpretation of the Plan or of any Option will be
determined solely by the Joint Compensation Committee, and any such
determination will be final and binding upon all persons having an interest in
the Plan.
5. ELIGIBILITY.
Key Employees of the Corporation and any Subsidiary Corporation will be
eligible to participate in the Plan, as approved by the Joint Compensation
Committee.
6. TERMS AND CONDITIONS OF STOCK OPTIONS.
Each Option granted under this Plan will be evidenced by an Option agreement
between the Corporation and the recipient that states whether it is intended to
be an Incentive Option or a Nonqualified Option and that it is to be subject to
the applicable rules in the Plan and in the Code which apply to that form of
option and that sets forth the exercise price of the Option, the vesting
schedule (if any) of the Option, the expiration date of the Option, and any
other terms or conditions approved by the Outside Directors Committee subject to
the following terms and conditions:
(a) OPTION PRICE.
(i) NONQUALIFIED OPTIONS. The exercise price per share for the
shares subject to a Nonqualified Stock Option will be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock on the
Date of Grant.
(ii) INCENTIVE OPTIONS. The exercise price per share for the shares
subject to an Incentive Stock Option will be not less than one hundred
percent (100%) of the Fair Market Value of the Common Stock on the Date of
Grant. However, the exercise price per share for shares subject to an
Incentive Stock Option granted to an individual who on the Date of Grant
owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation (or of a Parent Corporation or a
Subsidiary Corporation) will not be less than one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock on the Date of Grant.
(b) TERM OF OPTIONS. Notwithstanding any other provisions of the Plan or
any Option agreement, no Option will be exercisable after the expiration of
ten (10) years from the Date of Grant. Furthermore, no Incentive Stock Option
granted to an individual who on the Date of Grant owns more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation (or of a Parent Corporation or a Subsidiary Corporation) will be
exercisable after the expiration of five (5) years from the Date of Grant.
(c) MAXIMUM VALUE OF OPTIONS WHICH ARE INCENTIVE OPTIONS. To the extent
that the aggregate Fair Market Value of the Common Stock with respect to
which Incentive Stock Options granted to any person are exercisable for the
first time during any calendar year (under all stock option plans of the
Corporation, a Parent Corporation and any Subsidiary Corporation) exceeds
$100,000, the options are not Incentive Stock Options. For purposes of this
paragraph, the Fair Market Value of the Common Stock will be determined as of
the time the Incentive Stock Option with respect to the Common Stock is
granted. This paragraph will be applied by taking Incentive Stock Options
into account in the order in which they are granted.
(d) VESTING OF OPTIONS AND TERMINATION OF EMPLOYMENT. An Option will be
exercisable only to the extent that it is vested on the date of exercise.
Vesting of an Option will cease on the date that an Option holder is no
longer an employee of the Corporation or a Parent Corporation or Subsidiary
Corporation (the "date of termination"), and the Option will be exercisable
only to the extent the
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Option is vested on the date of termination. However, if the Option holder is no
longer an employee because of death or Disability, any Option that is not one
hundred percent (100%) vested will automatically become one hundred percent
(100%) vested on the date of termination. If the Option holder's termination is
for reason of death, the right to exercise the Option will expire one (1) year
after the date of the holder's death, and until expiration, the holder's heirs,
legatees or legal representative may exercise the Option. If the Option holder's
termination is for any reason other than death, the right to exercise the Option
(to the extent that it is vested) will expire three (3) months after the date of
termination. If termination is for a reason other than the holder's death and
the Option holder dies after his or her termination but before the right to
exercise the Option has expired, the right to exercise the Option shall expire
one (1) year after the date of the holder's termination of employment, and until
expiration, the holder's heirs, legatees or legal representative may exercise
the Option.
(e) EXERCISE.
(i) CASH PAYMENT. An Option may be exercised as to all or any number of
whole shares of the Common Stock with respect to which the Option is vested.
Options may be exercised only by the Option holder's written notice to the
Office of the Corporate Secretary (the "exercise notice") and only if the
exercise notice is accompanied by payment in cash of the full exercise price
for the shares with respect to which the Option is exercised, except as
otherwise provided herein.
(ii) NONCASH PAYMENT. The Joint Compensation Committee may approve payment
of the exercise price in the form of: (i) Common Stock of the Corporation
other than stock acquired upon exercise of the Option, (ii) a combination of
cash and such Common Stock, or (iii) Common Stock acquired upon exercise of
the Option, provided that the requirements of Rule 16b-3 promulgated under
the Act are met. The value of any Common Stock used to pay the exercise price
or any portion thereof will be the Fair Market Value of Common Stock on the
date of exercise.
(iii) BROKER-DEALER PAYMENT. The Joint Compensation Committee may approve
payment of the unpaid exercise price by a broker-dealer or by the Option
holder with cash advanced by the broker-dealer, if the exercise notice is
accompanied by the Option holder's written irrevocable instructions to
deliver the Common Stock acquired upon exercise of the Option to the
broker-dealer.
(f) NONTRANSFERABILITY. No Incentive Option granted under the Plan,
contingent or otherwise, and no Nonqualified Option granted under this Plan,
unless the Outside Directors Committee directs otherwise, will be
transferable, assignable or subject to any encumbrance, pledge, or charge of
any nature, except by will or the laws of descent and distribution. During
the lifetime of an Option holder, an Option will be exercisable only by the
Option holder. The executor or administrator of the estate of the Option
holder may transfer any rights with respect to such Option to the person or
persons or entity (including a trust) entitled thereto under the will of the
holder of such Option or under the laws of intestacy.
(g) STOCK LEGEND. The Corporation may require that certificates evidencing
shares of Common Stock purchased upon the exercise of Incentive Stock Options
issued under the Plan be endorsed with a legend in substantially the
following form:
The shares evidenced by this certificate may not be sold or transferred
prior to _________, 19___, in the absence of a written statement from
Riggs National Corporation (the "Corporation") to the effect that the
Corporation is aware of the fact of such sale or transfer.
The blank contained in such legend shall be filled in with the date that is
the later of: (i) one year and one day after the date of exercise of such
Incentive Stock Option or (ii) two years and one day after the date of grant of
such Incentive Stock Option. Upon delivery to the Corporation, at its principal
executive office, of a written statement to the effect that such shares have
been sold or
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transferred prior to such date, the Corporation does hereby agree to promptly
deliver to the transfer agent for such shares a written statement to the effect
that the Corporation is aware of the fact of such sale or transfer. The
Corporation may also require the inclusion of any additional legend that may be
necessary or appropriate.
(h) CHANGE OF CONTROL. In the event of a Change of Control (as hereinafter
defined), all then-outstanding Options will become one hundred percent (100%)
vested and exercisable as of the Change of Control. However, if in the
opinion of counsel to the Corporation the immediate exercisability of such
Options, when taken into consideration with all other "parachute payments" as
defined in Section 280G of the Code, would result in an "excess parachute
payment" as defined in such section, such Option shall not become immediately
exercisable, except and to the extent the Joint Compensation Committee in its
discretion shall otherwise determine. For purposes of the Plan, "Change of
Control" means the sale of substantially all of the Corporation's assets or
the acquisition, whether directly, indirectly, beneficially (within the
meaning of Rule 13d-3 of the Act), or of record, of securities of the
Corporation representing twenty-five (25%) or more in the aggregate voting
power of the Corporation's then-outstanding Common Stock by any "person"
(within the meaning of Sections 13(d) and 14(d) of the Act), including any
corporation or group of associated persons acting in concert, other than (i)
the Corporation or its subsidiaries and/or (ii) any employee pension benefit
plan (within the meaning of Section 3(2) of the Employee Retirement Income
Security Act of 1974) of the Corporation or its subsidiaries, including a
trust established pursuant to any such plan; provided, that a Change of
Control will not result from: (A) a transfer of the Corporation's voting
securities by a person who is the beneficial owner, directly or indirectly,
of twenty-five percent (25%) or more of the voting securities of the
Corporation (a "25 Percent Owner") to (i) a member of such 25 Percent Owner's
immediate family (within the meaning of Rule 16a-1(e) of the Act) either
during such 25 Percent Owner's lifetime or by will or the laws of descent and
distribution; (ii) any trust as to which the 25 Percent Owner or a member (or
members) of his immediate family (within the meaning of Rule 16a-1(e) of the
Act) is the beneficiary; (iii) any trust as to which the 25 Percent Owner is
the settlor with sole power to revoke; (iv) any entity over which such 25
Percent Owner has the power, directly or indirectly, to direct or cause the
direction of the management and policies of the entity, whether through the
ownership of voting securities, by contract or otherwise; or (v) any
charitable trust, foundation or corporation under Section 501(c)(3) of the
Code that is funded by the 25 Percent Owner; or (B) the acquisition of voting
securities of the Corporation by either (i) a person who was a 25 Percent
Owner on the effective date of the Plan or (ii) a person, trust or other
entity described in the foregoing clauses (A)(I)-(v) of this subsection.
7. TERMINATION AND AMENDMENT OF THE PLAN AND OPTIONS.
The Board may terminate the Plan at any time except with respect to any
outstanding Options. The Board may amend the Plan in any manner with respect to
future grants of Options and the Outside Directors Committee may amend
outstanding Options in any manner consistent with the Plan subject to the
following limitations:
(a) Except as provided in Section 8 of the Plan, no amendment will be
effective without the approval of the shareholders of the Corporation if that
amendment (i) materially increases the benefits accruing to Insiders under
the Plan, (ii) changes the aggregate number of shares which may be issued
under this Plan, (iii) materially modifies the requirements as to eligibility
of Insiders for participation in the Plan, within the meaning of Rule 16b-3
promulgated under the Act, (iv) changes the class of eligible employees,
officers or directors, (v) withdraws administration of the Plan from a
committee of Disinterested Persons, or (vi) extends the term of the Plan or
the period during which any outstanding Incentive Stock Option may be
exercised.
(b) No amendment will be effective if the amendment changes the manner of
determining the exercise price of Incentive Stock Options, makes individuals
who are not employees of the Corporation or of any Parent or Subsidiary
Corporation eligible to be granted Incentive Stock Options, changes the
nontransferability of the Options, or alters or impairs any rights or
obligations of any outstanding Option, without the written consent of the
Option holder.
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8. CHANGE IN CAPITAL STRUCTURE.
(a) The existence of outstanding Options shall not affect in any way the
right or power of the Corporation or its stockholders to make or authorize any
or all adjustments, recapitalization, reorganizations or other changes in the
Corporation's capital structure or its business, or any merger or consolidation
of the Corporation, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or the dissolution or liquidation of the Corporation, or any sale or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) If the Corporation shall effect a subdivision or consolidation of shares
or capital readjustment, the payment of a stock dividend, or other increase or
reduction of the number of shares of the Common Stock outstanding, without
receiving compensation therefore in money, services or property, then (i) the
number, class, and per-share price of shares of Common Stock subject to
outstanding Options hereunder shall be appropriately adjusted in such a manner
as to entitle an optionee to receive upon exercise of an Option, for the same
aggregate cash consideration, the same total number and class of shares as he
would have received had the optionee exercised his or her Option in full
immediately prior to the event requiring the adjustment; and (ii) the number and
class of shares then reserved for issuance under the Plan shall be adjusted by
substituting for the total number and class of shares of Common Stock then
reserved that number and class of shares of Common Stock that would have been
received by the owner of an equal number of outstanding shares of each class of
Common Stock as the result of the event requiring the adjustment.
(c) After a merger of one or more corporations into the Corporation or after
a consolidation of the Corporation and one or more corporations in which the
Corporation shall be the surviving corporation, each holder of an outstanding
Option shall, at no additional cost, be entitled upon exercise of such Option to
receive (subject to any required action by stockholders) in lieu of the number
and class of shares as to which such Option shall then be so exercisable, the
number of and class of shares of stock or other securities to which such holder
would have been entitled pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or consolidation, such holder
had been the holder of record of the number and class of shares of Common Stock
equal to the number and class of shares as to which such Option shall be so
exercised.
(d) If the Corporation is merged into or consolidated with another
corporation under circumstances where the Corporation is not the surviving
corporation, or if the Corporation is liquidated, or sells or otherwise disposes
of substantially all its assets to another corporation while unexercised Options
remain outstanding under the Plan, unless provisions are made in connection with
such transaction for the continuance of the Plan and/or the assumption or
substitution of such Options with new options covering the stock of the
successor corporation, or parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, then all outstanding
Options shall be canceled as of the effective date of any such merger,
consolidation or sale provided that (i) notice of such cancellation shall be
given to each holder of an Option and (ii) each holder of an Option shall have
the right to exercise such Option in full (without regard to any vesting or
other limitations on exercise imposed on such Option) during the 30-day period
preceding the effective date of such merger, consolidation, liquidation, or sale
(the "corporate event"). Notwithstanding the preceding provisions, if no
provisions are made for the continuance, assumption or substitution of Options
and if exercise of any then-outstanding Options during the 30-day period
preceding the effective date of such corporate event would not be in conformity
with all applicable federal securities laws, or if in the opinion of counsel to
the Corporation the immediate exercisability of such Options, when taken into
consideration with all other "parachute payments" as defined in Section 280G of
the Code, would result in an "excess parachute payment" as defined in such
section, such Option shall not become immediately exercisable and shall be
canceled as of the effective date of the corporate event, except and to the
extent the Joint Compensation Committee in its discretion shall otherwise
determine.
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(e) Except as hereinbefore expressly provided, the issue by the
Corporation of shares of stock of any class, or securities convertible into
shares of stock by any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the
Corporation convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
the number, class or price of shares of Common Stock then subject to
outstanding Options.
(f) Adjustment under the preceding provisions of this section will be made
by the Joint Compensation Committee, whose determination as to what
adjustment will be made and the extent thereof will be final, binding, and
conclusive. No fractional interest will be issued under the Plan on account
of any such adjustment. No adjustment will be made in a manner that causes an
Incentive Stock Option to fail to continue to qualify as an Incentive Stock
Option under the Code.
9. HOLDING PERIOD.
Notwithstanding anything to the contrary in the Plan, Common Stock acquired
through exercise of an Option granted to an Insider may not be disposed of by an
Insider during the six-month period beginning on the Date of Grant.
10. GENERAL PROVISIONS.
(a) The Corporation shall not be required to sell or issue any shares under
any Option if the issuance of such shares shall constitute a violation by the
Option holder or the Corporation of any provision of any law, statute, or
regulation of any stock exchange upon which the Common Stock may be listed or
any governmental authority whether it be Federal or State. Unless a registration
statement is in effect under the Securities Act of 1933, as amended (the "Act")
with respect to the shares of Common Stock covered by an Option, the Corporation
shall not be required to issue shares upon exercise of any Option (i) unless the
Joint Compensation Committee has received evidence satisfactory to it to the
effect that the holder of such Option is acquiring such shares for investment
and not with a view to the distribution thereof or (ii) unless an opinion of
counsel to the Corporation has been received by the Corporation, in a form and
substance that is deemed acceptable by the Joint Compensation Committee, to the
effect that a registration statement is not required. Any determination in this
connection by the Joint Compensation Committee shall be final, binding and
conclusive. In the event the shares issuable on exercise of an Option are not
registered under the Act, the Corporation may imprint the following legend or
any other legend that counsel for the Corporation considers necessary or
advisable to comply with the Act:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws
of any State and may not be sold or transferred except pursuant to an
effective registration statement or upon receipt by the Corporation of any
opinion of counsel, in form and substance satisfactory to the Corporation,
that registration is not required for such sale or transfer."
The Corporation may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act and, in the event any shares
are so registered, the Corporation may remove any legend on certificates
representing such shares. The Corporation shall not be obligated to take any
affirmative action in order to cause the exercise of an Option or the
issuance of shares pursuant thereto to comply with any law or regulation of
any governmental authority.
(b) No Option holder and no beneficiary or other person claiming under or
through an Option holder will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Option except as to such shares of Common Stock, if any, that have been
issued or transferred to such Option holder or beneficiary.
(c) The Plan and all determinations made and actions taken pursuant
thereto will be governed by the laws of the State of Delaware and construed
in accordance therewith.
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(d) The Plan is intended to comply in all respects with Rule 16b-3
promulgated under the Act (the "exemption"). If the Plan is found not to
qualify for the exemption, any disqualifying Plan provision will be deemed
replaced by a provision that most nearly accomplishes the intent of the Board
at the time the Plan was adopted and that results in the Plan's qualification
for the exemption. If the Board's intent cannot be accomplished through a
substitute provision that results in the Plan's qualification for the
exemption, the Plan will continue in full force and effect in the form
adopted by the Board notwithstanding the Plan's failure to qualify for the
exemption.
(e) Options may be granted under this Plan from time to time in
substitution for stock options held by employees of other corporations who
become employees of the Corporation or a Subsidiary Corporation as a result
of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation of the employing corporation. The
terms and conditions of the substitute options so granted may vary from the
terms and conditions set forth in this Plan to such extent as the Joint
Compensation Committee at the time of grant may deem appropriate to conform,
in whole or in part, to the provisions of the stock options in substitution
for which they are granted, but with respect to stock options that are
Incentive Stock Options, no such variation shall be such as to affect the
status of any such substitute option as an "incentive stock option" under
Section 422 of the Code.
11. TAXES.
(a) WITHHOLDING.
(i) CASH PAYMENT. The Corporation may make such provisions as it deems
appropriate to withhold any taxes the Corporation determines it is
required to withhold in connection with any Option or require the Option
holder to pay the amount of the withholding taxes in cash to the
Corporation as a condition precedent to the issuance of shares pursuant to
the exercise of an Option.
(ii) BROKER-DEALER PAYMENT. If the exercise price of an Option is paid
by a broker-dealer, as provided herein, payment of withholding taxes in
connection with the exercise of the Option, up to an amount calculated by
assuming the maximum federal, state, and local marginal tax rates, may be
made by the broker-dealer.
(b) TAX QUALIFICATION. Incentive Stock Options granted under the Plan are
intended to qualify as Incentive Stock Options within the meaning of Section
422 of the Code, and the terms of the Plan and Options granted hereunder
shall be so construed. Notwithstanding the foregoing, nothing in the Plan
shall be interpreted as a representation, guarantee or other undertaking on
the part of the Corporation that any Options are, or will be, determined to
qualify as incentive stock options within the meaning of the Code.
12. INDEMNIFICATION OF BOARD AND COMMITTEES.
The members of the Board of Directors, the Joint Compensation Committee and
the Outside Directors Committee will be indemnified by the Corporation against
the reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or Option agreements, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it is adjudged in
such action, suit or proceeding, that the member is liable for negligence or
misconduct in the performance of the member's duties; provided that within sixty
(60) days after institution of any such action, suit or proceeding a member will
in writing offer the Corporation the opportunity, at its own expense, to defend
the same. The foregoing right of indemnification shall inure to the benefit of
the heirs, executors or administrators of each such member of the Board of
Directors, the Joint Compensation Committee and the Outside Directors Committee
and shall be in addition to any and all other rights of indemnification to which
such members may be entitled as a matter of law, contract, or otherwise.
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13. LIMITATION OF RIGHTS.
Neither the adoption and maintenance of the Plan nor the grant of Options
will:
(a) limit the right of the Corporation, Parent Corporation or Subsidiary
Corporation to discharge or discipline any employee, or otherwise terminate
or modify the terms of any employment agreement, or
(b) confer upon any Option holder any contract or other right or interest
other than as specifically provided in the Plan and the Option agreement.
14. EFFECTIVE DATE OF THE PLAN, DURATION OF THE PLAN.
(a) The Plan became effective as of March 26, 1996, upon adoption by the
Board, subject to approval by the holders of a majority of the shares of
Common Stock which are represented in person or by proxy and entitled to vote
on the subject at the 1996 Annual Meeting of the Shareholders of the
Corporation.
(b) Unless previously terminated, the Plan will terminate ten (10) years
after the earlier of (i) the date the Plan is adopted by the Board, or (ii)
the date the Plan is approved by the shareholders, except that Options that
are granted under the Plan before its termination will continue to be
administered under the terms of the Plan until the Options terminate or are
exercised.
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