<PAGE> 1
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
Century Bancshares, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- - --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- - --------------------------------------------------------------------------------
(3) Filing party:
- - --------------------------------------------------------------------------------
(4) Date filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
CENTURY BANCSHARES, INC.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 1997
TO THE HOLDERS OF COMMON STOCK
OF CENTURY BANCSHARES, INC.:
Notice is hereby given that the 1997 Annual Meeting of the Stockholders
("Annual Meeting") of Century Bancshares, Inc. ("Company") will be held at The
Club at Franklin Square, 1300 I ("Eye") Street, N.W., Lobby Level, Washington,
D.C. 20005 at 11:00 a.m. (local time) on Friday, June 6, 1997, for the following
purposes:
1. to elect a Board of eight directors to serve until the 1998 Annual
Meeting of Stockholders of the Company, and until their respective successors
have been elected and qualified;
2. to consider and act upon a proposed amendment to the Company's
Certificate of Incorporation, as amended, to increase the number of authorized
shares of common stock from two million to five million shares; and
3. to transact such other business as may properly come before the
meeting or any adjournment thereof.
All holders of common stock of record at the close of business on April
15, 1997 are entitled to vote at the Annual Meeting and any adjournment thereof.
A list of such stockholders will be available at the time and place of the
meeting and during the ten days prior to the meeting, at the Company's principal
office, at 1275 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Stockholders are cordially invited to attend the meeting in person.
By Order of the Board of Directors
/s/ William C. Oldaker
----------------------------------
William C. Oldaker
Secretary
Washington, D.C.
April 28, 1997
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, IT IS IMPORTANT THAT YOUR SHARES
ARE REPRESENTED; THEREFORE, YOU ARE URGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES ON THE ENCLOSED PROXY. IF YOU WISH TO VOTE IN ACCORDANCE WITH
THE BOARD OF DIRECTORS' RECOMMENDATIONS, MERELY SIGN, DATE AND RETURN THE PROXY
IN THE ENCLOSED ENVELOPE.
<PAGE> 3
CENTURY BANCSHARES, INC.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
PROXY STATEMENT
FOR
1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
by, and on behalf of, the Board of Directors of Century Bancshares, Inc.
("Company") of proxies for use at the 1997 Annual Meeting of Stockholders of the
Company to be held on Friday, June 6, 1997 at 11:00 a.m. (local time), at The
Club at Franklin Square, 1300 I ("Eye") Street, N.W., Lobby Level, Washington,
D.C. 20005, and any adjournment thereof ("Annual Meeting"), for the purposes set
forth in this Proxy Statement and the accompanying Notice. It is anticipated
that this Proxy Statement, the Notice, and the enclosed form of proxy will be
mailed to stockholders on or about April 28, 1997.
PROXIES
For the proxy solicited hereby to be voted, the enclosed form of proxy
must be signed (as registered), dated, and returned to the Company in a timely
manner. Proxies in the enclosed form that are properly executed and received by
the Company prior to or at the Annual Meeting will be voted in accordance with
the directions set forth therein. If no direction is made, a proxy that is
properly executed and received by the Company and which is not revoked will be
voted FOR the election of all nominees for director named herein to serve on the
Board of Directors until the 1998 Annual Meeting of Stockholders and until their
successors are duly elected and qualified, and FOR approval of the proposal to
amend the Company's Certificate of Incorporation, as amended, to increase the
number of authorized shares of common stock from two million to five million
shares. The Board of Directors knows of no other matters to be presented at the
Annual Meeting. If any other matter, not known or determined at the time of the
solicitation of proxies, properly comes before the Annual Meeting, the proxies
will be voted in accordance with the discretion of the person or persons voting
the proxies.
Please ensure that your shares will be voted by signing (as
registered), dating and returning the enclosed form of proxy in the enclosed
postage-paid envelope. A stockholder may revoke a proxy at any time prior to its
use by delivering to the Secretary of the Company a signed notice of revocation
or a later dated signed proxy, by attending the Annual Meeting and voting in
person, or by giving notice of revocation of the proxy at the Annual Meeting.
Attendance at the Annual Meeting will not in itself constitute the revocation of
a proxy. Prior to the Annual Meeting, any written notice of revocation or
subsequent proxy should be sent so as to be delivered to the Corporate
Secretary, Century Bancshares, Inc., 1275 Pennsylvania Avenue, N.W., Washington,
D.C. 20004, or hand delivered to the Corporate Secretary at the aforementioned
address at or before the taking of the vote at the Annual Meeting.
VOTING SECURITIES
The Board of Directors of the Company has fixed the close of business
on April 15, 1997 as the record date ("Record Date") for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting. On the
Record Date, the Company had issued and outstanding 1,158,267 shares of its
common stock, $1.00 par value ("Common Stock"), the only class of
<PAGE> 4
voting securities outstanding. Only the record owners of the Common Stock are
entitled to notice of, and to vote at, the Annual Meeting.
QUORUM AND OTHER MATTERS
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of Common Stock outstanding on the Record
Date is necessary to constitute a quorum at the Annual Meeting. Shares of Common
Stock represented by a properly executed and returned proxy will be counted as
present at the Annual Meeting for purposes of determining a quorum, without
regard to whether the proxy is marked as authorizing the casting of a vote or
abstaining. Shares of Common Stock held by nominees that are voted on at least
one matter coming before the Annual Meeting will also be counted as present for
purposes of determining a quorum, even if the beneficial owner's discretion has
been withheld (a "non-vote") for voting on some or all other matters. In
deciding all questions, each share of Common Stock is entitled to one vote, in
person or by proxy. Votes at the Annual Meeting will be tabulated by an
Inspector of Election appointed by the Company.
The Company's Certificate of Incorporation, as amended, provides that
amendments thereto must be approved by the affirmative vote of the holders of at
least two-thirds of the outstanding shares of capital stock of the Company
entitled to vote thereon. Accordingly, an abstention or a non-vote with respect
to the proposed amendment to the Company's Certificate of Incorporation, as
amended, will have the effect of a vote against the proposal. Directors are
elected by a plurality of the shares present in person or by proxy at a meeting
at which a quorum is present. All other matters properly to come before the
Annual Meeting for which the Company's Certificate of Incorporation, as amended,
does not require the affirmative vote of the holders of two-thirds of the
outstanding shares of capital stock of the Company, require the approval of a
majority of outstanding shares of capital stock of the Company entitled to vote
and present, in person or by proxy, at the Annual Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth the name, address and number of shares
of Common Stock owned beneficially at the Record Date by (a) each person known
to the Company to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock; (b) each nominee to serve as director of the
Company; (c) each of the Company's executive officers named in the Summary
Compensation Table; and (d) all executive officers and directors of the Company
as a group. No executive officer or director of the Company has any family
relationship with any other officer or director. Unless otherwise indicated, all
shares are owned directly and the owner has sole voting and investment power
with respect thereto.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- - ------------------- --------------------- --------
<S> <C> <C>
Joseph S. Bracewell 143,230 (1) 11.86%
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
George Contis, M.D. 90,014 (2) 7.73%
1716 Wilson Boulevard
Arlington, VA 22209
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C> <C>
John R. Cope 29,107(3) 2.50%
2000 K Street, N.W.
Suite 500
Washington, D.C. 20006
Bernard J. Cravath 65,437 (4) 5.57%
9812 Falls Road
Suite 201
Potomac MD 20854
Neal R. Gross 122,660 (5) 10.39%
1323 Rhode Island Avenue, NW
Washington, DC 20005
Thomas B. Hoppin 27,310 (6) 2.35%
1716 Wilson Boulevard
Arlington, VA 22209
Joseph H. Koonz, Jr. 67,761 (7) 5.81%
2020 K Street, N.W
Suite 500
Washington, D.C. 20006
William S. McKee 60,632 (8) 5.18%
1730 Penn. Ave., NW
12th Floor
Washington, D.C. 20006
William C. Oldaker 66,781 (9) 5.66%
818 Connecticut Avenue, N.W.
Suite 1100
Washington, DC 20006
All directors, and executive 672,932 51.48%
officers as a group (9 persons)
</TABLE>
- - -------------------------------
(1) Includes 3,288 shares held by minor children, 20,957 shares held as
Trustee, 34,377 shares held for the benefit of Mr. Bracewell in the
Company's 401(k) plan, and 6,439 shares held in individual retirement
accounts. Also includes 26,481 shares issuable upon exercise of options
which are exercisable within the next 60 days, 2,247 shares held by minor
children issuable upon exercise of currently exercisable warrants, and
20,957 shares held as Trustee issuable upon exercise of currently
exercisable warrants.
(2) Includes 35,780 shares held by Medical Services Corporation International
Profit Sharing Plan and Trust of which Dr. Contis is Trustee, 6,718 shares
issuable upon exercise of currently exercisable options, and 34,248 shares
issuable upon the exercise of currently exercisable warrants.
(3) Includes 13,314 shares held in the John R. Cope Rollover IRA, 7,523 shares
issuable upon exercise of currently exercisable options, and 279 shares
issuable upon exercise currently exercisable warrants. Also includes 838
shares held by Mr. Cope's spouse, 3,073 shares in a family trust of which
Mr. Cope is Trustee, and 2,977 shares held in trust for a minor child.
3
<PAGE> 6
(4) Includes 1,237 shares held by Mr. Cravath's wife, 7,523 shares issuable
upon exercise of currently exercisable options, and 8,694 shares issuable
upon exercise of currently exercisable warrants.
(5) Includes 6,718 shares issuable upon exercise of currently exercisable
options and 16,038 shares issuable upon exercise of currently exercisable
warrants.
(6) Includes 1,500 shares issuable upon exercise of currently exercisable
options and 3,375 shares issuable upon exercise of currently exercisable
warrants.
(7) Includes 7,523 shares issuable upon exercise of currently exercisable
options and 60,238 shares held jointly with Mr. Koonz's spouse.
(8) Includes 7,194 shares issuable upon exercise of currently exercisable
options and 4,194 shares issuable upon exercise of currently exercisable
warrants.
(9) Includes 7,523 shares issuable upon exercise of currently exercisable
options and 14,469 shares issuable upon exercise of currently exercisable
warrants. Also includes 10,586 shares held in individual retirement
accounts.
ELECTION OF DIRECTORS
Each of the eight persons identified in the table below is a nominee
for election as a director of the Company and is currently an incumbent
director. The term of office for which the following persons are nominated will
expire at the time of the 1998 Annual Meeting of Stockholders of the Company and
when their respective successors shall have been elected and qualified. Should
any nominee for the office of director named herein become unable or unwilling
to accept nomination or election, the person or persons acting under the proxies
will vote for the election in his stead of such other person as the Board of
Directors may recommend. The Board of Directors has no reason to believe that
any of the nominees will be unable to serve if elected to office, and to the
knowledge of the Board of Directors, the nominees intend to serve the entire
term for which election is sought.
Directors will be elected by a plurality vote of the shares of Common
Stock present, in person or by proxy, at the Annual Meeting. The Board of
Directors recommends a vote FOR each of the nominees listed and, unless marked
to the contrary, proxies received from a stockholder will be voted for the
election of such nominees.
The following table sets forth certain information regarding the
nominees for election to the Board of Directors of the Company.
<TABLE>
<CAPTION>
Positions with Company,
Name Age Bank and Business Experience
- - ------------------- --- ------------------------------------
<S> <C> <C>
Joseph S. Bracewell 50 Chairman of the Board, President
and Chief Executive Officer of the
Company since 1985; Director and
Chief Executive Officer of Century
National Bank ("the Bank") since
1982 and Chairman thereof since
1985; President of the Bank from
1982 to 1988 and since August, 1996.
George Contis, M.D. 63 Director of the Company since
1995; Director of the Bank since
1989. Physician and the President
of Medical Services Corporation
International, an international
contract provider of medical
services, for more than the past
five years.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C> <C>
John R. Cope 54 Director and Vice President of the
Company since 1985; Director of the
Bank since 1982; Vice Chairman of
the Bank since 1985 and General
Counsel thereof since 1986. Partner
in the law firm of Bracewell &
Patterson, L.L.P., Washington, D.C.
for more than the past five years.
Bernard J. Cravath 65 Director of the Company since 1987
and Assistant Secretary since 1991;
Director of the Bank from 1984 to
1986. President of Reality
Properties Inc., a real estate
investment corporation, since 1984.
Attorney in private practice for
more than the past five years.
Neal R. Gross 53 Director of the Company since 1995;
Director of the Bank since 1992.
Chairman and Chief Executive Officer
of Neal R. Gross and Co., Inc., a
corporation providing court
reporting services to attorneys,
the federal government, and other
private organizations and
individuals, for more than the past
five years.
Joseph H. Koonz 62 Director of the Company since 1985;
Director of the Bank from 1982 to
1987. Partner in the law firm of
Koonz, McKenney, Johnson, DePaolis &
Lightfoot, Washington, D.C., and its
predecessors for more than the past
five years.
William S. McKee 53 Director of the Company since 1992;
Director of the Bank from 1986 to
1992. Partner in the law firm of
King and Spalding, Washington, D.C.,
for more than the past five years.
William C. Oldaker 55 Director of the Company since 1985
and Secretary since 1992; Director
of the Bank since 1984. Attorney in
the law firm of Manatt, Phelps,
Phillips & Kantor, Washington, D.C.,
from 1987 to 1993. Partner in the
law firm of Oldaker, Ryan, Phillips
and Utrecht, Washington, D.C. since
1993.
</TABLE>
The Board of Directors met 14 times in 1996. All members other than Dr.
Contis attended more than 75% of the meetings of the Board of Directors during
1996. Messrs. Bracewell, Contis, Cope, Gross, and Oldaker also serve on the
Board of Directors of the Bank, which met 12 times during 1996. Each of such
members attended more than 75% of such meetings.
The Company has committees for Audit and Executive Compensation. For
the sake of convenience, these committees have overlapping memberships and meet
at the same time as committees of the Bank performing similar functions. The
Audit Committee, which met four times during 1996, consists of Company Directors
Cravath (Chair) and Gross. The Executive Compensation Committee, which met four
times during 1996, consists of Company Directors Oldaker (Chair), Cope, and
Cravath. Messrs. Cope, Koonz, and Oldaker serve as the Stock Option Committee
designated by the Board of Directors to administer the Company's stock option
plan. The Company does not have a standing nominating committee or other
committee serving a similar function. Members of the Board of Directors of the
Company also serve on other committees, formal and informal, with directors and
members of senior management of the Bank.
5
<PAGE> 8
COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth the compensation for each of the last
three years awarded to, earned by, or paid to the Chief Executive Officer of the
Company and the other executive officers of the Company whose salaries and
bonuses exceeded $100,000 for the last completed fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Options
Name and Principal ------------------------------------------------ No. Of All Other
Position Year Salary Bonus(1) Other (2) Shares Compensation (3)
- - ---------------------- ---- -------- -------- --------- ------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Joseph S. Bracewell 1996 $182,300 $ -0- $10,750 2,735 $1,592
Chairman of the Board 1995 182,300 7,000 9,420 1,500 1,800
President, and CEO of 1994 182,300 11,841 9,420 1,500 1,705
Company; Chairman of
the Board, President,
and CEO of the Bank
Thomas B. Hoppin (4) 1996 $ 88,760 $ -0- $ 6,336 1,763
President of the Bank 1995 117,288 5,000 8,100 1,500
1994 111,124 7,220 8,100 1,500
</TABLE>
- - -----------------------
(1) These payments are listed in the year accrued and earned, but each was paid
in the following year.
(2) Amounts in this column represent (a) contributions to the executive's 401(k)
plan account and (b) director fees deferred by the executive pursuant to the
deferred compensation program for directors. Contributions to the 401(k)
plan on behalf of Mr. Bracewell and Mr. Hoppin, respectively, were $4,750
and $2,136 during 1996; $4,620 and $4,500 during 1995; and $4,620 and $4,500
during 1994. During 1996, 1995, and 1994, Mr. Bracewell deferred $6,000,
$4,800, and $4,800, respectively, pursuant to the deferred compensation
program for directors. During 1996, 1995, and 1994, Mr. Hoppin deferred
$4,200, $3,600, and $3,600, respectively pursuant to the deferred
compensation program for directors.
(3) Includes the dollar value of insurance premiums paid by the Company with
respect to the term life insurance portion of split dollar policies in which
the Company has the full interest in the cash surrender value. During 1996,
1995, and 1994, the Company held three split dollar policies covering Mr.
Bracewell.
(4) Mr. Hoppin resigned as President of the Bank effective August 14, 1996;
however, he remains a director of the bank.
BOARD COMPENSATION
Each member of the Board of Directors of the Company and/or the Bank
receives a retainer of $4,200 annually ($6,000 for those director serving on the
Boards of both the Company and the Bank) provided the director attends at least
two-thirds of the meetings of the Board of Directors. The payment of the cash
retainer may be deferred at the Director's option in return for a deferred
compensation agreement pursuant to which the director receives future retirement
6
<PAGE> 9
benefits and/or the director's beneficiary receives certain benefits upon the
director's death. To provide funding for these future retirement and death
benefits, the Company uses the deferred retainer fees to pay premiums on life
insurance policies for participating directors. Directors who do not elect the
deferred compensation option receive cash fees of $350 per meeting attended.
Effective January 1, 1996, additional compensation of $50 per meeting is paid
to those directors serving on the Executive Loan Committee ("ELC") which meets
on a weekly basis. During 1996, $16,000 in cash fees were paid to the directors
for attending Board and ELC meetings, and $15,000 in premiums were paid on life
insurance policies for directors participating in the deferred compensation
program. As of December 31, 1996, the Company had $442,000 in deferred
compensation liability accrued on its books with respect to payments due to
directors under this program.
COMPENSATION COMMITTEE REPORT
To the Board of Directors
As members of the Compensation Committee, it is our duty to establish
the compensation level of the executive officers, to award bonuses to the
executive officers and to approve the Company's benefit plan arrangements.
The base salary level of the executive officers is recommended to the
Compensation Committee by the CEO. Factors considered by the CEO are typically
subjective, such as his perception of the individual's performance and any
planned changes in functional responsibility, and also include such factors as
prior year compensation levels and general inflationary considerations. The
profitability of the Company and the market value of its stock are not primary
considerations in setting executive officer base compensation, although
significant changes in these items are subjectively considered. The Committee
has reviewed the base compensation for Mr. Joseph S. Bracewell and does not
recommend any change for 1997.
The Committee considers bonuses for the executive officers, including
Mr. Bracewell, after subjectively considering the profitability of the Company
and individual performance. In making such determination, the Committee does not
apply any specific criteria. The perquisites and other benefits received by Mr.
Bracewell that are reported in the Summary Compensation Table are provided
primarily pursuant to existing employee benefit programs.
No member of the Compensation Committee is a former or current paid
officer or employee of the Company or any of its subsidiaries.
Compensation Committee
William C. Oldaker
John R. Cope
Bernard J. Cravath
STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report by the Stock Option Committee to the Board of
Directors discusses the factors the Stock Option Committee considers when
determining the number of shares which will be made subject to stock options
granted to the executive officers of the Company.
7
<PAGE> 10
To the Board of Directors:
As members of the Stock Option Committee it is our duty to administer
the Company's 1994 Stock Option Plan. Administering the plan includes awarding
stock options to the executive officers.
Stock options are a component of compensation that is intended to
retain executives and to motivate executives to improve stock market
performance. The number of options granted to each executive officer was
determined by taking a percentage of salary and dividing that amount by the fair
market value per share on the first business day of the year. The percentages
are recommended annually by the CEO (subject to the approval of the Committee).
The percentage recommended for Mr. Joseph S. Bracewell for 1996 was 9 percent.
The option price was the fair market value of the Company's common stock on the
date of the grant.
Stock Option Committee
John R. Cope
Joseph H. Koonz
William C. Oldaker
STOCK OPTIONS PLANS
In 1986, the Company adopted an Incentive Stock Option Plan for Key
Employees, a Nonqualified Stock Option Plan for Key Employees, and a
Non-Qualified Stock Option Plan for Directors (collectively, the "1986 Plans")
in order to encourage ownership of Common Stock by key employees and directors
of the Company and its subsidiaries. The 1986 Plans expired during 1992 and
1993; however, certain options granted under the 1986 Plans are still
exercisable by the optionees.
The Company has reserved 150,000 shares of its Common Stock for the
issuance of incentive stock options and nonqualified stock options to directors
and key employees under the Century Bancshares, Inc. 1994 Stock Option Plan (the
"1994 Plan"). The Board of Directors approved the 1994 Plan in April 1994, and
it was approved by the Company's stockholders in May 1994. The 1994 Plan is
administered by the Company's Compensation Committee and provides that the
options granted under the 1994 Plan may be either incentive stock options
pursuant to Section 422A of the Internal Revenue Code of 1986, as amended, or
nonqualified options.
During fiscal 1996, options to purchase 1,500 shares of the Common
Stock were granted to each non-employee director of the Company and the Bank
under the 1994 Plan at a purchase price of $6.00 per share.
As of March 31, 1997, options to purchase 136,012 shares of Common
Stock at exercise prices ranging from $1.61 to $6.00 were outstanding (including
33,095 options issued pursuant to the 1986 Plans). There are 56,020 shares of
Common Stock available for future grants under the 1994 Plan.
During the fiscal year ended December 31, 1996, the Company granted the
following options to purchase Common Stock to the executive officers of the
Company listed in the Summary Compensation Table.
8
<PAGE> 11
OPTIONS GRANTED TO EXECUTIVE OFFICERS
IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rate of
Underlying Granted to Per Share Stock Price
Options Employees in Exercise Expiration Appreciation for
Name Granted 1996 Price Date Option Term
- - -------------------- ------------ ------------------ --------- ---------- --------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Joseph S. Bracewell 2,735 1.88% $6.00 5/21/2006 $10,320 $26,153
Thomas B. Hoppin (1) 1,763 1.21% $6.00 8/14/1996 N/A N/A
1,500 N/A 6.00 5/21/2006 5,660 14,344
</TABLE>
- - -----------------
(1) Granted on May 21, 1996 and subsequently forfeited upon Mr. Hoppin's
resignation as president of the Bank. Mr. Hoppin, as a director of the
Bank, was granted an option to purchase 1,500 shares on August 15, 1996
("August Option"). The calculations in the table relate to the August
Option.
During the fiscal year ended December 31, 1996, the following options were
exercised by the executive officers of the Company listed in the Summary
Compensation Table.
OPTIONS EXERCISED IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at Year End at Year End
Acquired On Value ---------------------------- ----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- - ----------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph S. 3,067 $ 5,092 $26,456 3,275 $108,399 $ 5,829
Bracewell 25 67
Thomas B. 2,478 $ 4,246 1,500 -0- 1,500 -0-
Hoppin 15,221 43,405
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1996, the Company and Mr. Bracewell entered into an Employment
Agreement which became effective on September 1, 1996 and will terminate on
August 31, 1998 unless renewed by the parties on written notice. Under the
Employment Agreement, Mr. Bracewell receives an annual salary of $182,300, the
use of a Company car, the payment by the Company of life insurance premiums, and
certain membership dues. Upon termination of Mr. Bracewell's employment during
the term of the Employment Agreement (except by the reason of his death or upon
termination by the Company for cause), or if the Company elects not to renew the
Employment Agreement, Mr. Bracewell would be entitled to receive a payment in an
amount equal to twice his annual salary, maintenance of certain health care and
life insurance benefits for a period of one year subject to extension after such
time at Mr. Bracewell's expense, and all his stock options would automatically
vest. If Mr. Bracewell elects not the renew the Employment Agreement upon its
expiration, the Employment Agreement provides for a severance payment in the
amount of his annual salary. In the event of a change of control, Mr. Bracewell
may terminate the Employment Agreement within sixty (60) days after such change
of control. Under
9
<PAGE> 12
the Employment Agreement, a "change of control" means (i) the acquisition by any
person or group of persons of beneficial ownership of securities representing
more than 50% of the Company or the Bank, (ii) a reorganization with respect to
which those persons who had been beneficial owners do not, following such
reorganization, beneficially own shares representing more than 50% of the
combined voting power of the voting securities of the resulting corporation,
(iii) a sale of substantially all the assets of the Company or the Bank, (iv)
the cessation for any reason of the individuals who constituted the Board of
Directors of the Company on the date of the Employment Agreement (the "Incumbent
Board") to constitute at least a majority of the Board of Directors, provided
that any person becoming a director subsequent to the date of the Employment
Agreement whose election or whose nomination for election by the Company's
stockholders was approved by a majority vote of the directors comprising the
Incumbent Board is, for purposes of the agreement, considered to be a member of
the Incumbent Board, or (v) a change in the Company's status requiring prior
notice to the Board of Governors of the Federal Reserve System and/or the Office
of the Comptroller of the Currency pursuant to the Change in Bank Control Act of
1978 and regulations promulgated thereunder. Mr. Bracewell has agreed not to
compete with the Company during the term of Employment Agreement and for 12
months thereafter.
During 1996, the Bank made loans in the ordinary course of business to
certain of the directors and executive officers of the Company and its
subsidiaries, their associates, and members of their immediate families. These
loans were made on substantially the same terms, including interest rates and
collateral, as those prevailing for comparable transactions with others and do
not involve more than normal risk of collectibility or present other unfavorable
features. Loans to directors, executives officers and principal stockholders of
the Company and to directors and officers of its subsidiaries are subject to
limitations contained in the Federal Reserve Act, the principal effect of which
is to require that extensions of such credits satisfy the foregoing standards.
As of March 31, 1997, loans outstanding to the directors and executive officers
and their immediate families totaled $3,556,027 (net of participations sold to
other banks on a non-recourse basis), which represented approximately 5% of
total loans outstanding as of that date.
With respect to banking transactions other than loans, during 1996 the
Company and its subsidiaries had such transactions in the ordinary course of
business with many of their directors, executive officers, principal
stockholders and other affiliates; however, transactions with such persons were
on substantially the same terms as those that could be obtained from
unaffiliated third parties and those prevailing for comparable transactions with
others.
Mr. Cope, a director of the Company and the Bank, is a member of
Bracewell & Patterson, L.L.P., a law firm that was retained by the Company and
its subsidiaries during 1996.
EXECUTIVE OFFICERS
The only executive officer of the Company is Joseph S. Bracewell. See
"Election of Directors" for certain information with respect to the age,
positions and length of service with the Company, and the business experience,
of such executive officer. During his tenure as President of the Bank, Thomas B.
Hoppin was also deemed to be an "executive officer" of the Company because he
performed a policy making function for the Company.
10
<PAGE> 13
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION,
AS AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
The Board of Directors has proposed an amendment to the Company's
Articles of Incorporation, as amended (the "Articles"), to increase the number
of authorized shares of Common Stock from two million to five million shares.
The Board of Directors recommends a vote FOR such proposal.
The initial authorized capitalization of the Company was established at
the time of the Company's incorporation in 1985. Since that time, the Company
has from time to time financed the growth of its business through the issuance
of additional shares of Common Stock, and has used options to purchase Common
Stock as a means to obtain and retain qualified employees. In addition, in
recent years the Company has declared a number of stock dividends. As a result
of these activities and other activities over a twelve year period, as of April
15, 1997 the Company has 1,158,267 shares of Common Stock issued and
outstanding, an aggregate of 320,875 shares of Common Stock reserved for
issuance upon the exercise of options and warrants to purchase Common Stock, and
56,020 shares of Common Stock reserved for issuance upon exercise of future
stock options granted under the 1994 Plan. Consequently, only 464,838 shares of
Common Stock remain available for unrestricted issuance by the Company from time
to time.
The Board of Directors believes that it would be desirable to have
additional authorized shares available for use by the Company. The availability
of additional authorized shares will enhance the Company's ability to meet
advantageous market conditions for the sale of additional Common Stock, for the
acquisition of desirable assets or companies and for other corporate purposes,
including attracting and retaining qualified employees.
Although the Company monitors the financial markets and other business
opportunities available to it in an effort to be prepared to take advantage of
relatively attractive market conditions and other opportunities, the Company
currently has no understandings or agreements for the issuance of securities. No
stockholder of the Company has, or will have, any preemptive or other right to
acquire additional authorized and unissued shares of Common Stock. Depending on
the amount of or purpose for which additional shares are issued, approval of the
Company's stockholders may or may not be required. Issuance of additional shares
might, under certain circumstances, dilute either stockholder's equity or voting
rights, or both.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), and the rules promulgated thereunder require every person who
is the beneficial owner of more than ten percent of any class of any equity
security (other than an exempted security) which is registered pursuant to
Section 12 of the Exchange Act, or who is a director or executive officer of an
issuer of such security, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of such
securities. During the year ended December 31, 1996, the Company did not have
any class of equity security registered pursuant to Section 12 of the Exchange
Act. Accordingly, during 1996, the Company directors, executive officers and
greater than ten percent stockholders were not subject to the reporting
requirements of Section 16(a) of the Exchange Act.
11
<PAGE> 14
EXPENSES OF SOLICITATION
The cost of soliciting proxies on behalf of the Board of Directors will
be borne by the Company. Solicitations of proxies are being made by the Company
through the mail and may also be made in person or by telephone. Directors and
employees of the Company may be utilized in connection with such solicitations.
The Company also will request brokers and nominees to forward soliciting
materials to the beneficial owners of the Common Stock held of record by such
persons and will reimburse them for their reasonable forwarding expenses in
connection therewith.
DATE OF SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting must be received by the Company for inclusion in the Company's proxy
statement and form of proxy relating to that meeting on or before January 29,
1998.
OTHER MATTERS
The Company is not aware of any business to be acted on at the Annual
Meeting other than that which is explained in this Proxy Statement. In the event
that any other business calling for a vote of the stockholders is properly
presented at the meeting, the proxies will be voted in accordance with the
discretion of the persons named therein.
FORM 10-K AVAILABLE WITHOUT CHARGE
The Company's Annual Report on Form 10-K has been filed with the
Securities and Exchange Commission and may be obtained without exhibits at no
charge by writing to: Corporate Secretary, Century Bancshares, Inc., 1275
Pennsylvania Avenue, N.W., Washington, D.C. 20004.
By Order of the Board of Directors
/s/ William C. Oldaker
----------------------------------
William C. Oldaker
Secretary
April 28, 1997
12
<PAGE> 15
P R O X Y
CENTURY BANCSHARES, INC.
1875 Eye Street, N.W.
Washington, D.C. 20006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John R. Cope and Bernard J. Cravath, and each of
them, as Proxies with full power of substitution, and hereby authorizes them to
represent and to vote, as designated below, all of the shares of common stock of
Century Bancshares, Inc. held of record by the undersigned as of April 15, 1997
at the 1997 Annual Meeting of Stockholders to be held on Friday, June 6, 1997 at
11:00 a.m. (local time) at The Club at Franklin Square, 1300 I ("Eye") Street,
N.W., Lobby Level, Washington, D.C. 20005 or any adjournment thereof.
1) ELECTION OF DIRECTORS to serve until the 1998 Annual Meeting of
Stockholders and until their successors are duly elected and qualified.
FOR all nominees listed WITHHOLD AUTHORITY
----- below (except as listed ----- to vote for all nominees
to the contrary below) listed below
Joseph S. Bracewell, George Contis, John R. Cope, Bernard J. Cravath, Neal R.
Gross, Joseph H. Koonz, Jr., William S. McKee, and William C. Oldaker
INSTRUCTION: To withhold authority to vote for any individual nominee write that
nominee's name in the space provided below.
2) APPROVAL OF THE AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION,
AS AMENDED, to increase the number of authorized shares of the
Company's Common Stock from two million to five million shares.
FOR AGAINST ABSTAIN
----- ----- -----
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting and any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL PROPOSALS
DESCRIBED ABOVE AND OTHERWISE IN
THE DISCRETION OF THE PROXIES.
(Please sign and date this proxy on the reverse side.)
<PAGE> 16
Please sign exactly as 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.
Dated: , 1997
------------
---------------------------------------
(Print Name)
[address label]
---------------------------------------
(Stockholder's Signature)
---------------------------------------
(Print Name)
---------------------------------------
(Stockholder's Signature)
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
I plan to attend the Annual Meeting.
-----
