<PAGE>
SCHEDULE 14A
Information Required in Proxy Statement
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [SECTION] 240.14a-11(c) or [SECTION]
240.14a-12
First Virginia Banks, Inc.
(Name of Registrant as Specified in Its Charter)
Christopher M. Cole, Vice President and Assistant General Counsel
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box)
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14-a6(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:(1)
(4) Proposed maximum aggregate value of transaction:
(1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] 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>
FIRST VIRGINIA BANKS, INC.
6400 Arlington Boulevard
Falls Church, Virginia 22042-2336
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1995
The Annual Meeting of Stockholders of First Virginia Banks, Inc. will be
held at the main office of First Virginia Banks, Inc., One First Virginia Plaza,
6400 Arlington Boulevard, Falls Church, Virginia in the 5th Floor Auditorium at
10:00 a.m. on Friday, April 28, 1995, for the following purposes:
(1) To elect Class B directors for a term of three
years and one Class A director for a term of two
years.
(2) To ratify the appointment by the Board of
Directors of Ernst & Young LLP as independent
auditors of First Virginia Banks, Inc. for the
year ending December 31, 1995.
(3) To transact such other business as may properly
come before the meeting or any adjournments
thereof.
Stockholders of record at the close of business on February 28, 1995, are
entitled to notice of and to vote at the meeting or any adjournments thereof.
STOCKHOLDERS ARE URGED TO COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND MAIL
IT PROMPTLY IN THE ENCLOSED ADDRESSED AND POSTAGE-PAID ENVELOPE REGARDLESS OF
WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING.
By Order of the Board of Directors,
Thomas P. Jennings
Secretary
Falls Church, Virginia
March 10, 1995
<PAGE>
FIRST VIRGINIA BANKS, INC.
6400 Arlington Boulevard
Falls Church, Virginia 22042-2336
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of First Virginia Banks, Inc. (hereinafter referred to as
"First Virginia") of proxies to be voted at the Annual Meeting of Stockholders
of First Virginia to be held at 10:00 a.m. on Friday, April 28, 1995 or any
adjournments thereof. The approximate mailing date of this Proxy Statement and
the accompanying proxy is March 10, 1995.
All properly executed proxies in the accompanying form received by First
Virginia prior to the meeting will be voted at the meeting in accordance with
any direction noted thereon. Proxies on which no specification has been made
will be voted for the nominees listed herein as directors and for Item 2 on the
proxy. Any stockholder who has executed and delivered a proxy may revoke it at
any time before it is voted by attending the Annual Meeting and voting in person
or by giving written notice of revocation of the proxy to the Secretary or by
submitting to First Virginia a signed proxy bearing a later date.
Both Common and Preferred stockholders of First Virginia are entitled to
vote at the meeting. Each share of Common and Preferred Stock is entitled to
one vote on all matters which may come before the meeting. As of February 28,
1995, the record date for the determination of stockholders entitled to notice
of and to vote at the meeting, there were 34,058,880 shares of Common Stock
and 73,921 shares of Preferred Stock of First Virginia issued and outstanding.
Each share is entitled to one vote. Except for the election of directors,
action submitted to a vote of the stockholders will be approved if a quorum is
present and the votes cast in favor of the matter constitute a majority of the
shares represented at the meeting and entitled to vote on the matter. With
respect to the election of directors, the five Class B nominees and the Class A
nominee receiving the greatest number of votes cast for the election of
directors will be elected, assuming a quorum is present at the meeting. The
presence in person or by proxy of a majority of the outstanding shares of Common
and Preferred Stock entitled to vote at the meeting will constitute a quorum.
Shares for which the holder has elected to abstain or withhold the proxy's
authority to vote (but not including broker non-votes) on a matter will count
toward a quorum. No person is known by management of First Virginia to own
beneficially, directly or indirectly, more than 5% of the outstanding stock of
First Virginia.
I. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes (A, B and C) and was
recently expanded from fifteen to sixteen members when Barry J. Fitzpatrick was
appointed Chairman and Chief Executive Officer of First Virginia effective
January 1, 1995. The term of office for Class B directors will expire at this
Annual Meeting. Five persons, four of whom are presently on the Board, have
been nominated to serve as Class B directors. The nominee for the Class B
director who presently is not on the Board, John B. Melvin, was a director of
Farmers National Bancorp ("Farmers") when it merged into First Virginia on
December 28, 1994. Under the merger agreement with Farmers, the Director
Nominating Committee of First Virginia's Board of Directors is obligated to
recommend for nomination and election to First Virginia's Board a member of
Farmers' Board designated by Farmers. Farmers designated John B. Melvin and the
Director Nominating Committee recommended him for nomination and election. If
elected, John B. Melvin will be a Class B director and will replace Richard T.
Selden who is no longer eligible for reelection. If elected, the five nominees
for Class B directors will serve for a term of three years.
In addition to the five nominees for Class B directors, Barry J.
Fitzpatrick, who became First Virginia's Chairman and Chief Executive Officer on
January 1, 1995, has been nominated to serve as a Class A director. If elected,
he will serve for a term of two years.
It is the intention of the persons named in the accompanying form of proxy,
unless stockholders specify otherwise by their proxies, to vote for the election
of the six nominees named on the next two pages. Although the Board of Directors
does not expect that any of the persons named will be unable to serve as a
director, should any of them be unable to accept nomination or election, it is
intended that shares represented by the accompanying form of proxy will be voted
by the proxy holders for such other person or persons as may be designated by
the present Board of Directors.
Certain information concerning the nominees for election at this meeting
and the Class C and Class A directors who will continue in office after the
meeting is set forth below and on the following pages, as furnished by them.
NOMINEES
FOR CLASS B DIRECTORS
Picture EDWARD L. BREEDEN, III, 60, is a partner in
the law firm of Breeden, MacMillan & Green in
Norfolk, Virginia, and has been a director of
First Virginia since 1982. He is a director
of First Virginia Bank of Tidewater, Norfolk,
Virginia and of First Virginia Life Insurance
Company. He serves on both the Executive
Committee and the Public Policy Committee and
chairs the Audit Committee. He beneficially
owns 65,876 shares of Common Stock. (1)
Picture GILBERT R. GIORDANO, 66, is a partner in the
law firm of Giordano, Bush, Villareale &
Vaughan, P.A. in Upper Marlboro, Maryland and
has been a director of First Virginia since
1989. He is Chairman of the Board of First
Virginia Bank-Maryland, Upper Marlboro,
Maryland. He serves on the Audit Committee
and the Director Nominating Committee and
beneficially owns 199,172 shares of Common
Stock. (2)
NOMINEES
(continued)
Picture ERIC C. KENDRICK, 48, is President of Mereck
Associates, Inc., a real estate management
and development firm in Arlington, Virginia
and has been a director of First Virginia
since 1986. He serves on the Management
Compensation and Benefits Committee and the
Public Policy Committee. He beneficially
owns 48,100 shares of Common Stock. (3)
Picture JOHN B. MELVIN, 70, is Trustee of the Stanley
Family Bottling Company Trust. In 1991, he
retired as Chairman of the Board, Coca-Cola
Bottling Co. of Annapolis, Maryland. He
formerly was on the Board of Directors of
Farmers National Bancorp (which merged into
First Virginia on December 28, 1994) and now
is on the Board of Directors of Farmers Bank
of Maryland, a subsidiary bank of First
Virginia located in Annapolis, Maryland. He
beneficially owns 19,620 shares of Common
Stock. (4)
Picture ROBERT H. ZALOKAR, 67, retired as Chairman of
the Board and Chief Executive Officer of
First Virginia on December 31, 1994. He has
been a director of First Virginia since 1959.
He serves as Chairman of the Executive
Committee and is a member of the Public
Policy Committee and the Director Nominating
Committee. He beneficially owns 124,267
shares of Common Stock.
NOMINEE
FOR CLASS A DIRECTOR
Picture BARRY J. FITZPATRICK, 55, was appointed Chairman and
Chief Executive Officer of First Virginia effective
January 1, 1995. He is Chairman of First Virginia Bank
in Falls Church and a chairman and/or director of a
number of nonbank affiliated companies including First
Virginia Services, Inc., First General Mortgage Company
and First Virginia Credit Services, Inc. Until his
appointment as Chairman and Chief Executive Officer of
First Virginia, he was Executive Vice President of
First Virginia from May, 1992. He was Senior Vice
President and Regional Executive Officer from June,
1982, to May, 1992. He serves on the Executive
Committee, the Public Policy Committee and the Director
Nominating Committee. He beneficially owns 46,472
shares of First Virginia Common Stock. (5)
CLASS C DIRECTORS
(Serving until the 1996 Annual Meeting)
Picture PAUL H. GEITHNER, Jr., 64, is President and Chief
Administrative Officer of First Virginia and has been a
director of First Virginia since 1984. He also is a
director of First Virginia Bank in Falls Church and a
director of a number of nonbank affiliates including
First Virginia Life Insurance Company, First Virginia
Insurance Services, Inc. and First Virginia Mortgage
Company. He is a member of the Public Policy Committee
and the Executive Committee. He beneficially owns
56,777 shares of Common Stock. (6)
Picture L. H. GINN, III, 61, is President of Lighting
Affiliates, Inc., a distributor of electrical fixtures
located in Richmond, Virginia and has been a director
of First Virginia since 1978. Mr. Ginn is a retired U.
S. Army Reserve Major General. He is Chairman of the
Board of First Virginia Bank-Colonial, Richmond,
Virginia. He is a member of the Executive Committee and
the Director Nominating Committee and beneficially owns
11,686 shares of Common Stock. (7)
CLASS C DIRECTORS
(continued)
Picture T. KEISTER GREER, 73, is principal of T. Keister Greer,
P.C. in Rocky Mount, Virginia and has been a director
of First Virginia since 1976. He is Chairman of the
Board of First Virginia Bank-Franklin County, Rocky
Mount, Virginia. Mr. Greer is a member of the Public
Policy Committee and the Director Nominating Committee
and beneficially owns 17,400 shares of Common Stock.
(8)
Picture EDWARD M. HOLLAND, 55, is an attorney in Arlington,
Virginia and a member of the Virginia General Assembly
(Senate). He has been a director of First Virginia
since 1974. He also is a director of First Virginia
Bank, Falls Church, Virginia. He serves on the
Executive Committee and the Management Compensation and
Benefits Committee and beneficially owns 60,979 shares
of Common Stock. (9)
Picture THOMAS K. MALONE, Jr., 75, is retired Chairman and
Chief Executive Officer of First Virginia and has been
a director of First Virginia since 1957. He is a
director of First Virginia Bank in Falls Church, First
Virginia Life Insurance Company and First Virginia
Mortgage Company. Mr. Malone is Chairman of the
Director Nominating Committee and a member of the
Executive Committee and the Public Policy Committee. He
beneficially owns 44,632 shares of Common Stock. (10)
CLASS A DIRECTORS
(Serving until the 1997 Annual Meeting)
Picture E. CABELL BRAND, 71, is President of Recovery and
Development Systems, Inc., a company in Salem, Virginia
that engages in business and environmental consulting
and international development projects. He is a
director and Vice Chairman of the Board of First
Virginia Bank-Southwest, Roanoke, Virginia and has been
a director of First Virginia since 1976. He serves on
the Management Compensation and Benefits Committee and
the Director Nominating Committee and beneficially owns
5,538 shares of Common Stock. (11)
Picture ELSIE C. GRUVER, 68, is a community and civic leader in
Arlington, Virginia and has been a director of First
Virginia since 1973. She is Chairman of the Public
Policy Committee and a member of the Audit Committee
and beneficially owns 5,936 shares of Common Stock.
(12)
Picture W. LEE PHILLIPS, JR., 59, is a professional engineer
and is currently involved in real estate management and
home building in Falls Church, Virginia and southern
Maryland. He has been a director of First Virginia
since 1985 and is a director of First Virginia Bank,
Falls Church, Virginia. He serves on the Audit
Committee as well as the Management Compensation and
Benefits Committee and beneficially owns 8,255 shares
of Common Stock. (13)
CLASS A DIRECTORS
(continued)
Picture JOSIAH P. ROWE, III, 67, is Co-Publisher and General
Manager of The Free Lance-Star Publishing Co. of
Fredericksburg, Virginia and has been a director of
First Virginia since 1991. He is a director of First
Virginia Bank, Falls Church, Virginia. He serves on the
Public Policy Committee and the Director Nominating
Committee and beneficially owns 1,500 shares of Common
Stock and 100 shares of Preferred Stock.
Picture ALBERT F. ZETTLEMOYER, 60, is President of the
Government Systems Group of UNISYS Corporation in
McLean, Virginia and is Executive Vice President of
UNISYS Corporation and has been a director of First
Virginia since 1978. He serves on the Audit Committee
and chairs the Management Compensation and Benefits
Committee. He beneficially owns 6,000 shares of Common
Stock. (14)
(1) Includes 7,500 shares held by a corporation of which Mr. Breeden is
President, 16,325 shares held by two foundations of which Mr. Breeden is
Chairman, 16,275 shares held by two trusts of which Mr. Breeden is trustee,
and 21,900 shares held by an estate of which Mr. Breeden is the executor.
(2) Includes 4,438 shares held in a trust for his son, 108 shares held by his
spouse and daughter, 533 shares held by his spouse and son, 10,188 shares
held by the Giordano Family Foundation and 387 shares held by his daughter.
(3) Includes 4,855 shares held by his spouse and 1,729 shares held by a
corporation of which Mr. Kendrick is a director and president.
(4) All of the shares are held in a trust.
(5) Includes options to purchase 28,250 shares of Common Stock which are
currently exercisable but does not include options to purchase 8,000 shares
of Common Stock which are not currently exercisable.
(6) Includes 29,000 shares held in a revocable trust, 3,974 shares held
indirectly through his spouse and options to purchase 21,250 shares of
Common Stock which are currently exercisable. It does not include 6,250
stock appreciation rights which are currently exercisable.
(7) Includes 229 shares held indirectly through his spouse and 1,237 shares
held by a trust of which Mr. Ginn is trustee.
(8) Includes 5,400 shares of Common Stock held by a trust in which Mr. Greer
has a beneficial interest.
(9) Includes 34,479 shares held by a corporation of which Mr. Holland is an
officer, director, and owner.
(10) Includes 10,125 shares of Common Stock held jointly with his spouse
(shared voting and investment power).
(11) Includes 264 shares of Common Stock held indirectly through his spouse.
(12) Includes 1,782 shares of Common Stock held in a Keogh Plan, 900
shares held in an Individual Retirement Account and 900 shares
held in her spouse's Individual Retirement Account.
(13) Includes 3,000 shares held by a trust of which Mr. Phillips is a trustee.
(14) All of the shares held jointly with spouse.
As of February 28, 1995, executive officers and directors as a group
beneficially owned 937,597 shares of Common Stock representing approximately
2.7% of those shares outstanding, of which 175,575 shares represent shares
covered by currently exercisable options (or options exercisable within 60 days)
and 200 shares of Preferred Stock representing approximately .27% of those
shares outstanding. No officer or director owned as much as 1.0% of First
Virginia Common Stock. Messrs. Breeden, Greer and Giordano are members of or are
associated with law firms which have been in the last two years, and are
proposed in the future to be, retained by First Virginia and its subsidiaries.
Messrs. Brand, Breeden, Fitzpatrick, Geithner, Ginn, Giordano, Greer, Holland,
Malone, Melvin, Phillips, Rowe and Zalokar have been directors of various
subsidiaries of First Virginia during the past five years. Ages of the directors
are stated as of February 28, 1995.
BENEFICIAL OWNERSHIP OF NAMED EXECUTIVE OFFICERS
The following table sets forth certain information regarding the named
executives' beneficial ownership of First Virginia Common Stock as of February
28, 1995.
Shares of Common Stock of First Virginia
Beneficially Owned
Name of Officer Number * Percent of Class
Robert H. Zalokar 124,267 .3630
Paul H. Geithner, Jr. 56,777 .1658
Barry J. Fitzpatrick 46,472 .1357
Shirley C. Beavers, Jr. 36,964 .1080
Justin C. O'Donnell 18,655 .0545
* The amounts shown represent the total shares owned outright by such
individuals together with shares which are issuable upon the exercise of all
stock options that are currently exercisable. Specifically, the following
individuals have the right to acquire the shares indicated after their names,
upon the exercise of stock options: Mr. Zalokar, 0; Mr. Geithner, 21,250; Mr.
Fitzpatrick, 28,250; Mr. Beavers, 28,250; and Mr. O'Donnell, 4,150.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
First Virginia's Board of Directors has a standing Audit Committee,
Director Nominating Committee, Management Compensation and Benefits Committee,
Public Policy Committee, and Executive Committee.
The Audit Committee, comprised of Directors Breeden, Giordano, Gruver,
Phillips, Selden, and Zettlemoyer, held five meetings during 1994. Functions of
the Committee include (1) reviewing with the independent public accountants and
management such matters as: the financial statements and the scope of First
Virginia's audit, compliance with laws and regulations, and the adequacy of
First Virginia's system of internal procedures and controls and resolution of
material weaknesses; (2) reviewing with First Virginia's internal auditors the
activities and performance of the internal auditors; (3) reviewing with
management the selection and termination of the independent public accountants
and any significant disagreements between the independent public accountants and
management; and (4) reviewing the nonaudit services of the independent public
accountant. Under Section 36 of the Federal Deposit Insurance Act, the Audit
Committee also performs similar functions for some of the First Virginia member
banks.
The Director Nominating Committee, comprised of Directors Malone, Brand,
Ginn, Giordano, Greer, Rowe, and Zalokar, held one meeting in 1994. The
functions of the Committee include annually recommending to the Board the names
of persons to be considered for nomination and election by First Virginia's
stockholders and, as necessary, recommending to the Board the names of persons
to be elected to the Board between annual meetings.
The Management Compensation and Benefits Committee, comprised of Directors
Zettlemoyer, Brand, Holland, Kendrick, and Phillips, held two meetings in 1994.
The Committee has the authority to establish the level of compensation
(including bonuses) and benefits of management of First Virginia. In addition,
the Committee has authority to award long-term incentive compensation, e.g.,
stock options and stock appreciation rights, to First Virginia's management
based on such factors as individual and corporate performance.
The Public Policy Committee, comprised of Directors Gruver, Breeden,
Geithner, Greer, Kendrick, Malone, Rowe, and Zalokar, met four times during
1994. This Committee supervises First Virginia's contribution and matching
gifts programs. The Committee also monitors the programs developed for
affirmative action and compliance with the Community Reinvestment Act and Title
VII of the Civil Rights Act of 1964.
The Executive Committee, comprised of Directors Zalokar, Breeden, Geithner,
Ginn, Holland, and Malone, held 11 meetings in 1994. The Committee exercises all
of the powers of the Board of Directors when the Board is not in session, except
for those powers reserved for the Board under state law and by First Virginia's
Articles of Incorporation and Bylaws and those powers delegated to other
committees.
During 1994, there were 12 meetings of the Board of Directors. All
directors attended more than 75% of the aggregate total number of meetings of
the Board and committees of the Board on which they served.
SECTION 16 TRANSACTIONS
Section 16(a) of the Securities Exchange Act of 1934 requires First
Virginia's executive officers and directors to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Executive officers and directors are required by SEC
regulation to furnish First Virginia with copies of all Section 16(a) forms they
file.
Based on a review of the forms that were filed and written representations
from the executive officers and directors, First Virginia believes that during
the year 1994 all filing requirements applicable to its officers and directors
were met with the exception of Justin C. O'Donnell who reported eight days late
to the SEC the sale of 1,800 shares.
EXECUTIVE COMPENSATION
The Summary Compensation Table on the following page shows the annual
compensation for the last three fiscal years for First Virginia's Chief
Executive Officer and for the four most highly compensated executive officers
other than First Virginia's Chief Executive Officer:
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long Term Compensation
(a) (b) (c) (d) (e) (f) (g)
Other
Name Annual Options/ All Other
and Compen- SARs Compen-
Principal sation Awarded sation
Position Year Salary ($) (1) Bonus ($) (2) ($) (3) (#) ($) (4)
<S> <C> <C> <C> <C> <C> <C>
Robert H. Zalokar 1994 530,000 297,933 9,429 0 98,214
Chairman and Chief Executive 1993 500,000 306,388 8,509 0 108,901
Officer of First Virginia until 1992 490,000 270,714 10,608 0 93,979
his retirement on 12/31/94.
Paul H. Geithner, Jr. 1994 335,000 114,495 5,814 0 57,152
President of First Virginia 1993 315,000 131,679 5,583 10,000 60,347
1992 300,000 113,050 3,987 0 52,513
Barry J. Fitzpatrick 1994 209,000 125,144 6,135 0 24,691
Executive Vice President 1993 189,000 90,406 69,099 10,000 25,203
of First Virginia. Appointed 1992 169,310 72,830 29,236 0 18,723
Chairman and Chief Executive
Officer of First Virginia
effective 1/1/95
Shirley C. Beavers, Jr. 1994 209,000 94,952 6,919 0 25,963
Executive Vice President 1993 189,000 90,406 6,045 10,000 31,385
of First Virginia and 1992 175,769 72,830 5,160 0 26,112
President, First Virginia
Services, Inc.
Justin C. O'Donnell 1994 208,830 19,286 5,725 0 31,590
Senior Vice President of 1993 202,600 45,386 5,437 2,000 33,604
First Virginia and President 1992 192,950 43,394 4,089 0 30,549
and Chief Executive
Officer of First Virginia Bank
</TABLE>
(1) The Salary Column (Column (c)) includes the base salary earned by the
executive officer, which includes amounts that are deferred under the First
Virginia Banks, Inc. Employees Thrift Plan and the First Virginia Pre-Tax
Health Benefit Plan.
(2) The Bonus Column (Column (d)) includes the amount earned as a bonus
for that year even if paid in the following year. It also includes amounts
earned for that year under the First Virginia Banks, Inc. Profit Sharing Plan.
(3) The Other Annual Compensation Column (Column (e)) includes the amount
of taxes paid by First Virginia for certain benefits.
(4) The All Other Compensation Column (Column (g)) includes the amount
paid by the employer under the First Virginia Banks, Inc. Employees Thrift Plan
which, for each of the named officers, was $6,750. It also includes the amounts
paid by the employer under the First Virginia Supplemental Benefits Plan. This
plan provides supplemental retirement benefits for those key officers who are
restricted from receiving further benefits under the Thrift Plan as a result of
the $9,000 limitation on pretax contributions imposed by the Internal Revenue
Code for 1994. For 1994, these amounts were: for Mr. Zalokar, $30,673; Mr.
Geithner, $13,586; Mr. Fitzpatrick, $8,073; Mr. Beavers, $3,134; and Mr.
O'Donnell, $3,125. It also includes the premium amounts paid by the employer
under the First Virginia Split Dollar Life Insurance Plan. For 1994, these
amounts were: for Mr. Zalokar, $41,410; Mr. Geithner, $27,916; Mr. Fitzpatrick,
$8,524; Mr. Beavers, $14,720; and Mr. O'Donnell, $15,194. It also includes the
"above-market" earnings on deferred compensation earned during 1994. These
amounts were: for Mr. Zalokar, $19,381; Mr. Geithner, $8,900; Mr. Fitzpatrick,
$1,344; Mr. Beavers, $1,359; and Mr. O'Donnell, $6,521.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table shows for each of the named executive officers the
number of shares of First Virginia Common Stock acquired upon the exercise of
stock options and stock appreciation rights during 1994, the value realized upon
their exercise, the number of unexercised stock options and SARs at the end of
1994 and the value of unexercised "in-the-money" stock options and SAR rights at
the end of 1994. Stock options or freestanding SARs are considered
"in-the-money" if the fair market value of the underlying securities exceeds the
exercise price of the option or SAR. No stock options were granted during 1994.
Some of the stock options which were granted to First Virginia's executive
officers include a provision that would accelerate the vesting of the options
upon a "change in control" of First Virginia. A "change in control" is defined
to mean a change of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended, or a similar reporting requirement. The table
includes Mr. Geithner's ownership of 8,750 exercisable freestanding SARs at
yearend whose value was $112,291. There were no other exercisable freestanding
SARs owned by any of the named executive officers at yearend.
AGGREGATED OPTIONS/SAR EXERCISES IN 1994 AND
YEAREND OPTIONS/SAR VALUES
<TABLE>
Value of
Number of Unexercised In-the-
Unexercised Money Options/
Options/SARs SARs at
Shares Yearend (#) Yearend ($)
Name Acquired on Exercisable/ Exercisable/
Exercise(#) Value Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Robert H. Zalokar 5,213 $ 99,529 0 0
Paul H. Geithner, Jr. 5,104 $197,552 20,000/10,000 $212,604/0
Barry J. Fitzpatrick 3,000 $ 38,875 26,250/10,000 $319,563/0
Shirley C. Beavers, Jr. 0 0 26,250/10,000 $322,188/0
Justin C. O'Donnell 3,781 $ 143,625 9,000/2,000 $139,000/0
</TABLE>
PENSION AND THRIFT PLANS AND SUPPLEMENTAL COMPENSATION ARRANGEMENTS
The following table shows the estimated annual benefit payable upon
retirement under the First Virginia Pension Trust Plan based on specified
remuneration and years of credited service classifications, assuming a
participant retired on December 31, 1994 at age 65. The table ends at an average
annual pay of $150,000 since effective January 1, 1994, compensation in excess
of that amount is not taken into account under the Plan because of IRS
regulations. Credited service in excess of thirty years is also not taken into
account in determining benefits under the Plan.
ANNUAL BENEFITS UNDER FIRST VIRGINIA'S PENSION TRUST PLAN
Average
Annual Pay 10 Years 15 Years 20 Years 25 Years 30 Years
for Past of of of of of
60 Months Service Service Service Service Service
$125,000 $18,784 $28,177 $37,569 $46,961 $56,353
$150,000 $22,784 $34,177 $45,569 $56,961 $68,353
Under the First Virginia Pension Trust Plan, a participant retiring at age
65 with 30 years of credited service under the Plan will receive a maximum
annual pension benefit equal to 1.1% of his average annual pay multiplied by 30
years of credited service plus 0.5% of his average annual pay in excess of his
covered compensation multiplied by 30 years of credited service. The
calculation of "average annual pay" is based on annual compensation for the
highest five consecutive years out of the participant's final 10 years of
service. "Covered compensation" is calculated by multiplying the annual average
of Social Security taxable wage bases in effect for the 35 years ending with the
last day of the year in which the participant attains Social Security retirement
age.
Remuneration on earnings determining pension benefits under the Plan
includes salaries and bonuses (which are listed in the Summary Compensation
Table) but it also includes any other taxable compensation including
compensation resulting from the exercise of nonqualified options and SARs.
Credited service as of December 31, 1994 for each of the named executives was as
follows: Mr. Zalokar, 32 years; Mr. Geithner, 26.3 years; Mr. Fitzpatrick, 25.4
years; Mr. Beavers, 25.3 years and Mr. O'Donnell, 12.3 years. If a participant
retired on December 31, 1994 under the Plan, the participant would receive the
greater of (1) that participant's accrued benefits as determined by using the
Summary Compensation Table and the pension table in conjunction with the formula
described above or (2) that participant's accrued benefits as of December 31,
1993, which for the named executive officers, was as follows: Mr. Zalokar
$102,060, Mr. Geithner $85,524, Mr. Fitzpatrick $69,988, Mr. Beavers $75,610,
and Mr. O'Donnell $38,013. Except for individual supplemental compensation
agreements which are described below, First Virginia does not have a
supplemental pension plan which would provide supplemental pension benefits to
executive officers in excess of IRS prescribed limits.
Messrs. Zalokar, Geithner and Fitzpatrick have supplemental compensation
agreements with First Virginia which will provide them with supplemental
retirement benefits in addition to those pension benefits described above. Mr.
Zalokar retired effective December 31, 1994 and will be receiving a benefit of
$521,316 per year for his life under his supplemental compensation agreement in
addition to his pension benefit of $102,060 per year from the First Virginia
Pension Trust Plan. When requested, Mr. Zalokar is required to provide
consulting services under his supplemental compensation agreement.
Under Mr. Geithner's agreement, if he retires, resigns or leaves First
Virginia for any reason, he is entitled to receive for the rest of his life
supplemental compensation equal to 60% of the average of his highest five years
of annual salary. Highest annual salary includes wages, bonuses and any other
compensation that is included in his IRS Form W-2 (including compensation
arising from the exercise of SARs and nonqualified options) plus any amounts
deferred under First Virginia's key employee salary reduction deferred
compensation plans. The amount of benefit Mr. Geithner would receive under his
agreement would be reduced by the amount Mr. Geithner would receive under the
First Virginia Pension Trust Plan. After receiving benefits, should Mr.
Geithner die, his wife
would be entitled to one-half of his total annual benefit for the rest of her
life. Under his agreement, once benefits begin to be paid, Mr. Geithner is to
remain available to provide consulting and advisory services if he is
physically and mentally capable of doing so. Furthermore, his benefits are
forfeitable under certain circumstances.
Under Mr. Fitzpatrick's agreement, if he resigns, retires or leaves First
Virginia for any reason after reaching the age of 62, he is entitled to receive
for the rest of his life supplemental compensation equal to sixty percent of the
average of his highest five years of annual salary and bonus. Highest annual
salary includes salary and bonus and any profit sharing payments received under
the First Virginia Profit Sharing Plan but does not include any other form of
compensation that is not salary or bonuses, such as compensation arising from
the exercise of SARs and nonqualified options. Mr. Fitzpatrick can also receive
his benefits under his agreement prior to age 62 if there is a "change in
control," if he becomes totally and permanently disabled, or if he is dismissed
or requested to leave his employment without "just cause." A "change in
control" is defined to mean a change of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934; provided, however, that a change in
control shall be deemed to occur if any person (other than First Virginia or any
present director or officer of First Virginia) becomes the beneficial owner of
25% or more of the voting stock of First Virginia or if, during any two
consecutive years, the individuals who constitute First Virginia's Board at the
beginning of such period should cease to constitute a majority of the Board,
unless the election of each subsequent director has been approved in advance by
directors representing at least two thirds of the directors then in office who
were directors at the beginning of the two-year period. The amount of benefit
Mr. Fitzpatrick would receive under his agreement would be reduced by the amount
he would receive under the First Virginia Pension Trust Plan. After receiving
benefits, should Mr. Fitzpatrick die, his wife would be entitled to one-half
of his total annual benefit for the rest of her life. Under his agreement, once
benefits begin to be paid, Mr. Fitzpatrick is to remain available to provide
consulting and advisory services if he is physically and mentally capable of
doing so. Furthermore, his benefits are forfeitable under certain
circumstances.
Executive officers, like other employees of First Virginia, are eligible to
participate in the First Virginia Banks, Inc. Employees' Thrift Plan ("Thrift
Plan"). Under the Thrift Plan, employees of First Virginia and its
subsidiaries who have completed one year of service can contribute up to six
percent of their compensation and receive matching employer contributions equal
to 50% of their employee contributions. For years when First Virginia meets an
earnings test under the Thrift Plan, First Virginia contributes 75% of employee
contributions. The Thrift Plan complies with Section 401(k) of the Internal
Revenue Code so that employee contributions can be made on a pretax basis.
Employees can direct the investment of their contributions and the matching
employer contributions into one or more of three funds that are administered by
the Trust Department of First Virginia Bank. Reference is made to footnote 4 of
the Summary Compensation Table for the amount of contributions made on behalf of
the named executive officers under the Thrift Plan.
First Virginia also maintains a First Virginia Supplemental Benefits Plan
which provides supplemental retirement benefits for those key officers who are
restricted from receiving further benefits under the Thrift Plan as a result of
the $9,000 limitation on pretax contributions imposed by the Internal Revenue
Code for 1994. Under the First Virginia Supplemental Benefits Plan, executive
officers can continue to make pretax contributions in excess of the IRS limits
imposed on the Thrift Plan and receive matching contributions from First
Virginia identical to what they would have received if they were in the Thrift
Plan and there were no limitations on contributions. Reference is made to
Footnote 4 of the Summary Compensation Table for the amount of the employer and
employee contributions made on behalf of the named executive officers under the
First Virginia Supplemental Benefits Plan.
DIRECTORS' COMPENSATION, CONSULTING ARRANGEMENTS
AND PLANS WHICH INCLUDE CHANGE IN CONTROL ARRANGEMENTS
For 1995, directors of First Virginia who are not salaried officers will be
paid an annual retainer of $14,000 per year, a fee of $850 for each meeting of
the Board of Directors attended, and a fee of $700 for each meeting of a
Committee of the Board of Directors attended. Committee chairmen will receive
$850 for each committee meeting they chair. Directors are reimbursed for
out-of-town expenses incurred in connection with Board and Committee meetings.
Directors can participate in First Virginia's deferred compensation plans which
allow them to defer their retainers and fees.
During 1994, Edwin T. Holland, the founder and former Chairman and Chief
Executive Officer of First Virginia, and Thomas K. Malone, Jr., former Chairman
and Chief Executive Officer of First Virginia, were paid $144,108 and $109,896
respectively under their supplemental compensation agreements, in addition to
the amounts they received from the First Virginia Pension Trust Plan. When
requested, both Holland and Malone are required to provide consulting services
under their supplemental compensation agreements.
During 1994, Virginia H. Brown, formerly Virginia H. Beeton,
received $71,000 pursuant to her former husband's Supplemental
Retirement Agreement with First Virginia in addition to what she
received from the First Virginia Pension Trust Plan. Her former
husband, Ralph A. Beeton, was Chairman and Chief Executive Officer of
First Virginia.
First Virginia also has two key employee salary reduction deferred
compensation plans, one of which began in 1983 and the other in 1986, and two
directors' deferred compensation plans, one of which also began in 1983 and the
other in 1986, ("Deferred Compensation Plans") for key employees of First
Virginia and its subsidiaries and for directors of First Virginia. Under the
Deferred Compensation Plans, participants elect to defer some or all of their
compensation from First Virginia, and First Virginia agrees to pay at normal
retirement age or earlier (or to participant's beneficiary or estate on
participant's death) a sum substantially in excess of what each participant has
deferred. To fund the benefits under the Deferred Compensation Plans, First
Virginia has purchased life insurance contracts on the lives of the
participants, with First Virginia as the beneficiary. For the period ending
December 31, 1994, none of the executive officers of First Virginia deferred any
compensation under the Deferred Compensation Plans. However, one of the named
executive officers, Mr. Zalokar, did receive a payment of $84,630 during 1994
under his deferred compensation agreement.
The 1983 deferred compensation plans include a provision regarding "change
in control," which is defined to include, among other things, an acquisition by
one person or group of 25% of the voting power of First Virginia's outstanding
securities. Generally, the 1983 Key Employee Salary Reduction Deferred
Compensation Plan requires that an employee continue his/her position with First
Virginia and/or its subsidiaries until retirement in order to receive his/her
benefits. If there is a "change in control" of First Virginia, and a director
is terminated under the directors' plan, or in the case of the employee plan, an
employee is terminated "without cause" or the employee terminates his/her
employment for "good reason," as those terms are defined under the employee
plan, then the director or employee, as the case may be, becomes entitled to
his/her benefits under the 1983 Deferred Compensation Plans at retirement,
notwithstanding the fact that his/her affiliation with First Virginia has
terminated.
First Virginia has a Split Dollar Life Insurance Plan ("Split Dollar
Plan") which currently includes 19 executive employees (three of whom have
retired) including those named in the Summary Compensa- tion Table. Under the
Split Dollar Plan, an executive can purchase ordinary life insurance policies
with coverage of at least two times what is projected to be the executive's base
salary at retirement, up to a limit of $1,000,000. A portion of the premiums
will be loaned to the executives by First Virginia up to the later of ten years
or the executive's retirement date. At the end of this period, if assumptions
about mortality, dividends and other factors are realized, First Virginia will
recover all of its loans for premiums from the cash value of the policy. The
policy will then be transferred to the executive, who will pay all further
premiums, if any, under the policy. Executives who participate in the Split
Dollar Plan forego any insurance coverage over $50,000 under the First Virginia
Group Life Insurance Plan. During 1989, the Split Dollar Plan was amended so
that in the event of a "change in control," which term is defined in the same
manner as the 1983 deferred compensation plans, only the executive would have
the right to terminate the policy.
First Virginia's Board of Directors approved in 1992 the establishment of a
trust with Chemical Bank as the trustee to partially secure the benefits of some
of First Virginia's nonqualified compensation plans, including the Deferred
Compensation Plans and the First Virginia Supplemental Benefits Plan, in case of
a change in control. Under the trust agreement establishing the trust, if a
"change in control" takes place, the trustee would pay the benefits under the
covered compensation plans out of the trust assets that have been contributed to
the trust by First Virginia, if First Virginia refused to pay the benefits. The
trust is considered a "grantor trust" subject to the claims of First Virginia's
general creditors. For accounting purposes, the trust assets are considered
corporate assets and, therefore, no balance sheet impact to First Virginia will
result from the establishment of the trust. The trust agreement does not
include a provision which would accelerate the vesting or payment of any of the
benefits under the covered compensation plans in case of a change in control.
During 1994, First Virginia contributed approximately $1,462,377 to the Trust.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of First Virginia's Management Compensation and
Benefits Committee are E. Cabell Brand, Edward M. Holland, Eric C. Kendrick, W.
Lee Phillips, Jr. and Albert F. Zettlemoyer. Edward M. Holland is the son of
Edwin T. Holland, the founder and former Chairman and Chief Executive Officer of
First Virginia. As noted above, Edwin T. Holland receives a fee from First
Virginia pursuant to a Supplemental Compensation Agreement. Also, as noted
above, Edward M. Holland's sister, Virginia H. Brown, receives a benefit
pursuant to her former husband's Supplemental Retirement Agreement with First
Virginia. Albert F. Zettlemoyer's daughter is an officer of First Virginia
Bank. None of the members of the Management Compensation and Benefits Committee
served as members of the compensation committees of another entity. No
executive officer of First Virginia served as a director of another entity that
had an executive officer serving on First Virginia's compensation committee. No
executive officer of First Virginia served as a member of the compensation
committee of another entity which had an executive officer who served as a
director of First Virginia.
MANAGEMENT COMPENSATION AND BENEFITS COMMITTEE
REPORT CONCERNING FIRST VIRGINIA'S
EXECUTIVE COMPENSATION POLICY
The Management Compensation and Benefits Committee (the "Committee") of the
Board of Directors establishes the policy for the compensation of the executive
officers of First Virginia. It is also responsible for administering most of
First Virginia's executive compensation programs. The Committee is composed
entirely of outside directors who are not eligible, with the exception of the
directors' deferred compensation plans, to participate in the plans over which
it has authority.
The overall goal of First Virginia's compensation policy is to motivate,
reward and retain its key executive officers. The Committee believes this should
be accomplished through an appropriate combination of competitive base salaries
and, at times, both short term and long term incentives.
The primary components of First Virginia's executive compensation program
are base salaries, bonuses, (e.g. short term compensation), and equity
compensation (e.g. long term compensation). Executive officers also participate
in other broad based employee compensation and benefit programs. Since no First
Virginia executive had compensation in 1994 which in total exceeded one million
dollars and since no executive is expected to be compensated in excess of that
amount in 1995, the Committee did not consider the effect of the one million
dollar deduction limitation under Section 162(m) of the Internal Revenue Code in
determining executive compensation nor did they establish any specific policy
regarding the deductibility of executive compensation.
BASE SALARY
The Compensation Committee's policy for determining base salaries is to
consider two primary factors:
(1) the degree of responsibility the executive officer has; and
(2) the compensation levels of corresponding positions at other banking
companies of comparable size that compete with and serve the same
markets as First Virginia. This "Local Peer Group" of companies
consists of Central Fidelity Banks, Inc., Crestar Financial
Corporation and Signet Banking Corporation based in Virginia, First
Maryland Bancorp and Mercantile Bankshares Corporation based in
Maryland, and First Tennessee National Corporation and First American
Corporation of Tennessee. Base salaries are targeted to be the median
salaries of corresponding positions in the "Local Peer Group." For
1994, Mr. Zalokar's base salary was $530,000, which was approximately
the median for salaries paid to his counterparts in the "Local Peer
Group."
SHORT TERM INCENTIVES/BONUSES
The Committee grants bonuses to the executive officers and CEO based on the
extent to which First Virginia achieves or exceeds annual performance
objectives. The Compensation Committee may award bonuses to the CEO and to the
executive officers if First Virginia achieves a return on total average assets
(ROA) of at least 1% (the same basis for determining payments of profit sharing
to all employees). ROA generally is considered by the Committee to be the most
important single factor in measuring the performance of a banking company, and
achievement of a 1% ROA generally is considered by the Committee to be the mark
of a good performing banking company.
Bonus awards are based on the following:
(a) The Committee establishes target amounts each year for return on
average assets ("ROA"), return on total stockholders' equity ("ROE"),
asset quality and capital strength consistent with First Virginia's
Profit Plan target amounts. Up to 50% of an executive's salary may be
awarded if the corporation achieves an ROA equivalent to 80% or more
of ROA target amount for the year. For the chief executive officer,
First Virginia would also have to achieve 80% of targeted amounts for
ROE, asset quality (as determined by the ratio of nonperforming assets
to total loans (NPA ratio) and net loan charge-offs (CO ratio)) and
capital strength (based on the average equity to asset ratio
(Equity/asset ratio) and the Tier I risk based capital ratio); or
(b) Up to 30% of an executive's salary may be awarded based on the degree
to which First Virginia's earnings, asset quality and capital ratios
exceed the average for the other major banking companies based in the
Southeast, the "Southeastern Regional Peer Group," as compiled by
Keefe, Bruyette and Woods, the New York securities firm which
specializes exclusively in the banking and thrift industry; or
(c) Up to 20% of an executive's salary may be awarded at the discretion of
the Committee based on an individual executive's performance.
Within the above parameters, at the beginning of each year the Committee
establishes a base target bonus at an arithmetic base return on assets for each
executive officer and the CEO. At the end of the year, the Committee considers
a preliminary bonus after taking into account the base target bonus, First
Virginia's return on assets for the year and a set relationship between that
return on assets and the arithmetic base return on assets.
The Committee then exercises its judgment in light of the foregoing
parameters and other considerations, including the Committee's view of
individual performance and potential and the recommendations of the CEO for the
executive officers (other than himself), to reach a bonus decision for each
executive officer and for the CEO. The Committee does not use a formula to
determine a final bonus decision. In 1994, the final bonus decision for each of
the named executive officers was at variance to the preliminary target bonus
amounts. Among other things, Mr. Zalokar's bonus reflected First Virginia's
success in achieving a 1.59% return on assets and the other above described
results. Consistent with the Committee's avoidance of a strict formula
approach, no specific weighting among the above 50%, 30% and 20% factors was
specified. The Committee believes that the use of the above approach provides
a clearly defined and effective method of motivating First Virginia's
management.
Listed below are the annualized ratios for First Virginia and the
Southeastern Regional Peer Group based on results for the first nine months of
1994, the latest data available to the Committee at the time the incentive
awards were considered.
First Virginia
Profit Plan
or Target KBW Southeastern
Amount Actual Regional Peer Group
Earnings
ROA 1.56% 1.59% 1.26%
ROE 15.27% 15.89% 15.38%
Asset Quality
NPA .60% .54% .88%
CO .15% .11% .13%
Capital
Equity/Asset Ratio 8.5 % 10.02% 8.01%
Tier I Risk Based 10.0 % 15.86% 11.25%
Capital
Based on First Virginia's results, the Committee awarded Mr. Zalokar a
bonus of $275,000.
LONG TERM COMPENSATION/STOCK OPTIONS
The Committee believes that the granting of stock options is the most
appropriate form of long term compensation for executives and that such awards
of equity encourage the executive to achieve a significant ownership stake in
the success of First Virginia.
Equity compensation awards may be made only if First Virginia performs
competitively with the weighted average of the returns reported by the major
competitors in its banking markets (Central Fidelity, Signet, Crestar,
Mercantile Bancshares, First Tennessee and First American of Tennessee) and of
the KBW Southeastern Regional Peer Group. The performance ratios are weighted
as follows: ROA 35%, ROE 25%, five year cumulative total return to shareholder
("Five Year Return") 15%, Nonperforming Asset Ratio 15% and Charge-off Ratio
10%. The following table shows the performance ratios of First Virginia and
average for its major market area competitors of comparable size for the first
nine months of 1994:
Market Area
First Virginia Major Competitors
ROA 1.59% 1.31%
ROE 15.89% 14.99%
Five Year Return 211.48% 211.34%
NPA .54% 1.18%
CO .11% .33%
As of September 30, 1994 (the latest date information is available for the
peer group), the weighted average of the performance factors for First Virginia
was 146.77% of the peer group.
The Committee decided this year not to grant any stock options to
executives even though the above-described results for the Corporation were
competitive with the results of the major competitors in its market area. The
Committee did not consider an executive officer's current stock-based holdings,
or the relationship of the above results of First Virginia to those of its
market area major competitors, in reaching this decision.
E. Cabell Brand
Edward M. Holland
Eric C. Kendrick
W. Lee Phillips
Albert F. Zettlemoyer
PERFORMANCE GRAPH
The following performance graph compares the yearly percentage change in
First Virginia's cumulative total shareholder return on its Common Stock with
(1) the cumulative total return of a broad market index that includes companies
whose equity securities are traded on the same exchange or are of comparable
market capitalization and (2) the cumulative total return of a published
industry or line-of-business index.
FIRST VIRGINIA BANKS, INC.
CALCULATION OF FIVE YEAR CUMULATIVE TOTAL RETURN
YEAR ENDED DECEMBER 31, 1994
(GRAPH AS DEFINED BY THE FOLLOWING DATA POINTS)
Cumulative total shareholder return
First S&P
Virginia 400
Banks MidCap KBW 50
1990 80.01 94.88 71.81
1991 130.38 142.41 113.67
1992 208.55 159.38 144.84
1993 192.35 182.00 152.86
1994 194.69 175.00 144.76
<PAGE>
First Virginia believes the most appropriate equity market indices to be
used to measure the price performance of First Virginia's Common Stock are the
"S&P MidCap 400" and the "KBW 50." First Virginia is included as a component of
the S&P MidCap 400.
The Standard & Poor MidCap 400 is comprised of 400 securities with market
value between approximately $200 million and $4 billion. First Virginia
considers it more representative of companies its size (yearend 1994 market
capitalization of approximately $1.090 billion) than the S&P 500 index which is
heavily dominated by large capitalization stocks (the 50 largest stocks account
for 50% of the total value of the S&P 500). Also, financial stocks represent
approximately 15% of the S&P MidCap 400 index.
The KBW 50 is an index comprised of 50 banking companies, including all the
money center banks and most large regional banks. It was developed by Keefe,
Bruyette & Woods, a New York securities firm which specializes exclusively in
the banking and thrift industry. The KBW 50 is considered more representative of
price performance of the major banking companies in America. As is the case with
the S&P MidCap 400 index, the KBW 50 is a market capitalization weighted index
and assumes quarterly reinvestment of dividends.
As indicated in the Management Compensation and Benefits Committee Report
above, return on average assets (ROA) is an important factor for determining
First Virginia's performance and for determining short term and long term
compensation for First Virginia's executive officers. The following chart
compares First Virginia's ROA during the period 1990-1994 with the KBW
Southeastern Regional Peer Group and with a local peer group consisting of
Central Fidelity Banks, Inc., Crestar Financial Corporation, Signet Banking
Corporation, Mercantile Bankshares Corporation, First Tennessee National
Corporation and First American Corporation of Tennessee. As noted in the
Management Compensation and Benefits Committee Report, the Compensation
Committee compared First Virginia's ROA with both these groups as part of their
evaluation of executive compensation.
FIRST VIRGINIA BANKS, INC.
CALCULATION OF FIVE YEAR RETURN ON AVERAGE ASSETS
YEAR ENDED DECEMBER 31, 1994
(GRAPH AS DEFINED BY THE FOLLOWING DATA POINTS)
First Peer Group
Virginia Southern Local Central
Banks, Inc. Regional Peer Crestar Fidelity
1990 1.25 0.64 0.55 0.50 1.02
1991 1.22 0.76 0.61 0.27 0.99
1992 1.50 1.03 0.98 0.65 1.06
1993 1.68 1.21 1.36 1.10 1.16
1994 1.58 1.26 1.34 1.24 1.23
<PAGE>
TRANSACTIONS WITH MANAGEMENT
During the past year, certain of the directors and officers of First
Virginia and their associates had loans outstanding from First Virginia's
banking subsidiaries. Each of these loans was made in the ordinary course of
the lending bank's business. In some cases, where officers of First Virginia or
its subsidiaries had to be relocated, residential mortgage loans were made by
First Virginia at favorable interest rates. However, none of the named
executive officers has any residential mortgage loan from any of First
Virginia's banking subsidiaries at favorable interest rates. All other loans
have been made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and did not involve more than the normal risk of collectibility
or present other unfavorable features. As of December 31, 1994, the aggregate
amount of loans outstanding to all directors and executive officers of First
Virginia and associates and members of their immediate families was
approximately $7,729,815.
First Virginia Bank and First Virginia Card Services, Inc. extend VISA and
MasterCard privileges to directors, officers and employees of First Virginia and
its subsidiaries. Except as noted below, interest is charged on VISA and
MasterCard credit balances of employees and officers at a rate of 1% per month
on sales transactions. Directors and executive officers of First Virginia and
its subsidiaries are subject to generally prevailing rates.
II. APPOINTMENT OF INDEPENDENT AUDITORS
At the meeting a vote will be taken on a proposal to ratify the appointment
by the Board of Directors of Ernst & Young LLP as independent auditors for the
year ending December 31, 1995. Ernst & Young LLP has served as independent
auditors for First Virginia since 1974. Representatives of the firm are expected
to be present at the stockholders' meeting and will be available to respond to
appropriate questions and to make a statement if they desire to do so.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 1996 Annual
Meeting and included in First Virginia's 1996 Proxy Statement must be received
by First Virginia no later than November 11, 1995. Upon receipt of any such
proposal, First Virginia will determine whether or not to include such proposal
in the Proxy Statement and proxy in accordance with regulations governing the
solicitation of proxies.
Under First Virginia's Bylaws, in order for a stockholder to nominate a
candidate for director, written notice of the nomination must be given to First
Virginia in advance of the meeting. Ordinarily, such notice must be given not
less than 60 nor more than 90 days before the meeting. However, if First
Virginia gives less than 70 days notice or prior public disclosure of the
meeting, then the stockholder must give such notice within 10 days after notice
of the meeting is mailed or other public disclosure of the meeting is made. The
notice must include, among other things, (1) the name and record address of, and
the class and amount of voting securities of First Virginia owned by, the
stockholder proponent, (ii) the name, age, address and occupation of, and the
class and amount of voting securities of First Virginia owned by, the nominee,
and (iii) all information that would be required under Securities and Exchange
Commission rules in a proxy statement soliciting proxies for such nominee. In
order for a stockholder to bring other business before an annual meeting of
stockholders, written notice must be given to First Virginia within the same
time limits described above for the nomination of a candidate for director. The
notice must include, among other things, (i) the name and record address of,
and the class and amount of voting securities of First Virginia owned by, the
stockholder proponent and any other stockholder known to be supporting such
proposal, (ii) a brief description of the proposed business, the reasons for
conducting such business at the annual meeting, and (iii) any financial or other
interest of the stockholder in such proposal. These advance notice requirements
are separate from and in addition to the requirements a stockholder must meet
to have a proposal included in First Virginia's Proxy Statement. In each case,
the notice must be given to the Secretary of First Virginia at its principal
executive offices, 6400 Arlington Boulevard, Falls Church, Virginia 22042-2336.
The foregoing summary of certain provisions of First Virginia's Bylaws is
not intended to be complete and is qualified in its entirety by reference to the
Bylaws of First Virginia, copies of which will be furnished without charge to
any stockholder upon written request to the Secretary.
OTHER MATTERS
Management does not know of any other business to be presented to the
meeting except for matters incident to the conduct of the meeting. The persons
named in the accompanying proxy will vote in accordance with the specifications
on the proxy form and will vote in accordance with their best judgment on any
other matters which properly come before the meeting.
The cost of soliciting proxies will be borne by First Virginia. In addition
to solicitation by mail, proxies may be solicited in person, by telephone or
telegraph, or by directors, officers and employees of First Virginia. In
addition, First Virginia has engaged D. F. King & Co., Inc. to aid in the
distribution of proxy materials and to solicit proxies from brokers, nominees
and security-holding companies for a fee of $6,500 plus out-of-pocket expenses.
First Virginia does not expect to pay any other compensation for the
solicitation of proxies, but will pay brokers, nominees, fiduciaries and other
custodians their reasonable expenses for sending proxy material to principals
and obtaining their instructions.
A copy of First Virginia's Annual Report for 1994, including financial
statements, is being mailed with this Proxy Statement to all stockholders of
record. The Annual Report is not to be regarded as proxy soliciting material.
FIRST VIRGINIA WILL PROVIDE WITHOUT CHARGE, UPON THE WRITTEN REQUEST OF ANY
STOCKHOLDER ENTITLED TO VOTE AT THE ANNUAL MEETING, A COPY OF ITS ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 ON FORM 10-K, WHICH REPORT WILL BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OR BEFORE MARCH 31, 1995.
STOCKHOLDERS OF RECORD ON FEBRUARY 28, 1995 AND BENEFICIAL OWNERS OF SUCH
SECURITIES SHOULD SUBMIT REQUESTS FOR SUCH REPORT TO THOMAS P. JENNINGS,
SECRETARY, 6400 ARLINGTON BOULEVARD, FALLS CHURCH, VIRGINIA 22042-2336.
REVOCABLE PROXY
FIRST VIRGINIA BANKS, INC.
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
Proxy for Annual Meeting of Stockholders
Friday, April 28, 1995
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas K.
Malone, Jr., E. Cabell Brand and W. Lee
Phillips, Jr. and each of them, proxies with
full power to vote all of the stock of FIRST
VIRGINIA BANKS, INC., which the undersigned
has the power to vote at the Annual Meeting of
Stockholders to be held Friday, April 28, 1995,
at 6400 Arlington Boulevard, Falls Church,
Virginia in the Fifth Floor Auditorium at
10 a.m., local time, and any adjournment
thereof, in accordance with instructions
noted below and at their discretion upon any
other business not now known which properly
may come before the said meeting, all as more
fully set forth in the accompanying proxy
statement, receipt of which is acknowledged.
With- For All
1. ELECTION OF DIRECTORS For hold Except
( ) ( ) ( )
C Class B (for a term of 3 years):
O Edward L. Breeden, III
M Gilbert R. Giordano
M Eric C. Kendrick
O John B. Melvin
N Robert H. Zalokar
Class A (for a term of 2 years):
Barry J. Fitzpatrick
(INSTRUCTION: To withhold authority to
vote for any individual nominee, write
that nominee's name in the space
provided below.)
____________________________________
For Against Abstain
2. PROPOSAL TO RATIFY ( ) ( ) ( )
THE APPOINTMENT OF
ERNST & YOUNG as
independent auditors
for the year 1995
If no choice is indicated above, this proxy shall be deemed to grant
authority to vote FOR the election of director nominees and to vote FOR
the proposal. The stockholder's signature should be exactly as the name
appears below. When shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please be sure to sign and date
this Proxy in the box below Date
Stockholder sign above. Co-holder (if any)
sign above
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Detach above card, sign, date and mail in postage paid envelope provided
FIRST VIRGINIA BANKS, INC.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL
YOUR PROXY CARD TODAY
