SCHEDULE 14A INFORMATION
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 [ ]
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):
[X] 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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
CENTURY BANCSHARES, INC.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1999
TO THE HOLDERS OF COMMON STOCK
OF CENTURY BANCSHARES, INC.:
Notice is hereby given that the 1999 Annual Meeting of the Stockholders
("Annual Meeting") of Century Bancshares, Inc. ("Company") will be held at the
Willard Inter-Continental Hotel, 1401 Pennsylvania Avenue, N.W., Washington,
D.C. 20004 at 11:00 a.m. (local time) on Friday, May 21, 1999, for the following
purposes:
1. to elect a Board of seven directors to serve until the 2000
Annual Meeting of Stockholders of the Company, and until their
respective successors have been elected and qualified; and
2. 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 March
31, 1999 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
-----------------------------
William C. Oldaker
Secretary
Washington, D.C.
April 14, 1999
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>
CENTURY BANCSHARES, INC.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
PROXY STATEMENT
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1999
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 1999 Annual Meeting of Stockholders of the
Company to be held on Friday, May 21, 1999 at 11:00 a.m. (local time), at the
Willard Inter-Continental Hotel, 1401 Pennsylvania Avenue, N.W., Washington,
D.C. 20004, 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 14, 1999.
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 and which are not revoked 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 2000 Annual Meeting of
Stockholders and until their successors are duly elected and qualified. 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. The proxy also confers on the persons named therein discretionary
authority to vote with respect to any matter presented at the Annual Meeting for
which advance notice was not received by the Company prior to February 27, 1999.
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 (or at the Meeting) at or before the taking of the vote at the Annual
Meeting.
<PAGE>
Voting Securities
The Board of Directors of the Company has fixed the close of business
on March 31, 1999 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 2,583,462 shares of its
common stock, $1.00 par value ("Common Stock"), the only class of 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.
Directors are elected by a plurality of the shares present in person or
by proxy at a meeting at which a quorum is present. As a result, the seven
nominees for director receiving the greatest number of votes of shares of Common
Stock present in person or represented by proxy at the meeting, although not
necessarily a majority of such shares, will be elected to serve as directors
until the Company's 2000 Annual Meeting of Stockholders. An abstention, a
non-vote or a withholding of authority to vote with respect to one or more
nominees for director will not have the effect of a vote against such nominee or
nominees. 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
common stock of the Company, require the approval of a majority of outstanding
shares of Common Stock of the Company 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.
<PAGE>
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
<S> <C> <C>
Joseph S. Bracewell 174,662 (1) 6.74%
George Contis, M.D. 125,816 (2) 4.86%
John R. Cope 37,784 (3) 1.46%
Bernard J. Cravath 64,742 (4) 2.50%
Neal R. Gross 156,555 (5) 6.03%
Charles V. Joyce III 1,438 (6) *
William S. McKee 75,830 (7) 2.93%
William C. Oldaker 74,629 (8) 2.87%
All directors, and executive 711,456 26.89%
officers as a group (8 persons)
Robert Fleming Inc. 272,385 (9) 10.54%
320 Park Avenue, 11th Floor
New York, NY 10022
Salem Investment Counselors,Inc. 176,614 (9) 6.84%
Post Office Box 25427
Winston-Salem, NC 27114-5427
Tontine Group 162,435 (10) 6.29%
200 Park Avenue, Suite 3900
New York, NY 10166
</TABLE>
* Less than one percent.
1 Principal address is 1275 Pennsylvania Avenue, N.W., Washington, D.C.
Includes 4,064 shares held by minor children, 46,209 shares held as
Trustee, 50,768 shares held for the benefit of Mr. Bracewell in the
Company's 401(k) plan, and 7,095 shares held in individual retirement
accounts. Also includes 9,064 shares issuable upon exercise of options
which are currently exercisable.
2 Includes 97,438 shares held by Medical Services Corporation International
Profit Sharing Plan and Trust of which Dr. Contis is Trustee, and 5,575
shares issuable upon exercise of currently exercisable options.
3 Includes 14,677 shares held in the John R. Cope Rollover IRA, and 12,980
shares issuable upon exercise of currently exercisable options. Also
includes 922 shares held by Mr. Cope's spouse, 8,048 shares in trust for
Mr. Cope's minor child for which Mr. Cope is trustee.
4 Includes 1,362 shares held by Mr. Cravath's wife, and 4,000 shares
issuable upon exercise of currently exercisable options.
5 Principal address is 1323 Rhode Island Avenue, N.W., Washington, D.C.
20005. Includes 12,980 shares issuable upon exercise of currently
exercisable options.
6 Includes 938 shares issuable upon exercise of currently exercisable
options.
7 Includes 4,000 shares issuable upon exercise of currently exercisable
options.
8 Includes 12,980 shares issuable upon exercise of currently exercisable
options. Also includes 17,542 shares held in individual retirement
accounts, and 2,434 shares held by Mr. Oldaker's spouse.
9 Based solely on information filed with the Securities and Exchange
Commission (the "Commission").
10 A Schedule 13D was jointly filed with the Commission in December 1997 by
the following persons, who affirmed the existence of a "group" within the
meaning of Section 13(d) under the Securities Exchange Act of 1934, as
amended: Tontine Financial Partners, L.P., a Delaware limited partnership
("TFP"); TFP's general partner, Tontine Management, L.L.C., a Delaware
limited liability company ("TM"); Tontine Overseas Associates, Ltd., a
Delaware limited liability company ("TOA") serving as investment manager
to TFP Overseas Fund, Ltd., a Cayman Islands Company ("TFPO"); and Mr.
Jeffrey L. Gendell, as the managing member of TOA. In the Schedule 13D,
TFP and TM each reported shared beneficial ownership of 127,700 shares of
Common Stock owned directly by TFP, TOA reported shared beneficial
ownership of 22,000 shares of Common Stock owned directly by TFPO, and Mr.
Gendell reported shared beneficial ownership of 149,700 shares of Common
Stock owned directly by each of TFP and TFPO.
ELECTION OF DIRECTORS
Each of the seven 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 2000 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.
Name Age Principal Occupation and Business Experience
Joseph S. Bracewell 52 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 1996.
George Contis, M.D. 65 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.
John R. Cope 56 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 67 Director of the Company since 1987; 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 55 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.
William S. McKee 55 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 57 Director of the Company since 1985 and Secretary
since 1992; Director of the Bank since 1984. Partner
in the law firm of Oldaker, Ryan, Phillips and
Utrecht, Washington, D.C. from 1993 to November
1998, and Oldaker & Harris, L.L.P.from November 1998
to the present.
.
The Board of Directors met 13 times in 1998. Each of the directors
attended at least 75% of the meetings of the Board of Directors of the Company
except Dr. Contis, who attended 73% of the meetings. Messrs. Bracewell, Contis,
Cope, Gross, and Oldaker also serve on the Board of Directors of the Bank, which
met ten times during 1998.
The Company has standing Audit and Executive Compensation committees of
its Board of Directors. The Audit Committee, which met four times during 1998,
consists of Company directors Cravath (Chair) and Gross, who attended all four
of the meetings, respectively. The Executive Compensation Committee, which met
twice during 1998, is composed of directors Oldaker (Chair), Cope, and Cravath,
with each attending both of the meetings. Messrs. Cope, Cravath, 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.
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.
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Awards
Securities
Name and Principal Annual Compensation Underlying All Other
<S> <C> <C> <C> <C> <C> <C>
Positions Year Salary Bonus(1) Other (2) Options (#) Compensation (3)
- ---------------------- ----- ----- ------ ---------- ---------- ----------------
Joseph S. Bracewell 1998 $199,325 $ -0- $11,000 4,250 $1,517
Chairman of the Board, 1997 182,300 5,000 10,750 4,000 2,824
President, and CEO of 1996 182,300 -0- 10,750 2,735 1,592
the Company and the
Bank
</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) matching 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 were $5,000,
$4,750 and $4,750 during 1998, 1997 and 1996, respectively. Mr. Bracewell
deferred $6,000 during each of 1998, 1997, and 1996 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 1998,
1997 and 1996, the Company held three split dollar policies covering Mr.
Bracewell. Mr. Bracewell is provided the use of a Company car, and certain
club dues are paid by the Company on his behalf. Since the aggregate value
thereof does not exceed the lesser of $50,000 or 10% of Mr. Bracewell's
annual cash compensation, such amounts are not included in the table.
Board Compensation
Each director of the Company, and each director of the Bank, may elect
to enter into a Compensation Agreement in lieu of receiving the annual retainer
in cash. All directors of the Company, and all but one of the directors of the
Bank, have elected to enter into Deferred Compensation Agreements (the
"Compensation Agreements"). The Compensation Agreements generally provide for
the payment of a fixed monthly retirement benefit for 180 months payable to the
director or his designated beneficiary commencing on the first day of the month
following the director's retirement on his 65th birthday. In the event of the
director's death prior to retirement, a reduced sum is payable to a beneficiary
designated by the director for 144 months. The retirement benefit attributable
to each annual deferral vests ratably over a five year period, and in the event
that a director does not serve for five years after any benefit is accrued for
any reason other than a change of control, the director receives a benefit
proportional to his time of serve. In the event of a change of control of the
Company, all benefits are fully vested.
The Company previously has administered the program informally and has
satisfied its potential future obligations under these agreements by using the
amount of the deferred payments to purchase life insurance on the participating
directors. During 1998, an aggregate of $20,400 and $26,200 in premiums was paid
on life insurance policies for directors of the Company and the Bank,
respectively, participating in the deferred compensation program. During 1998,
the Company and the Bank established the Century Director's Trust (the "Trust")
to facilitate the efficient payment, administration and record keeping
requirements of the Company and the Bank under the program. The Trust is an
irrevocable grantor trust within the meaning of the federal income tax laws
administered by an affiliate of First National Bank of Maryland and two
individual trustees. The Trust permits contributions of cash and other property
to fund the obligations of the Company and the Bank under the Compensation
Agreements, and obligates the Company and the Bank to fully fund the benefits
due under the agreements upon demand of the trustees of the Trust. The Company
and the Bank have transferred to the Trust all life insurance policies purchased
to fund the retirement program, which have a face amount of $1,670,000, and cash
in the amount of $874,000. As of December 31, 1998, the Company and the Bank had
accrued an aggregate of $674,000 in deferred compensation expense related to
this program.
Executive Compensation Committee Report
To the Board of Directors:
As members of the Executive 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
Executive Compensation Committee by the CEO. In assessing the CEO's compensation
relative to the Company's performance, no specific criteria are applied. Factors
considered by the Compensation Committee are typically subjective, such as the
committee's perception of the individual's performance and any planned changes
in functional responsibility, and also include such factors as prior year
compensation levels, such information as is available about the salary level at
comparable institutions, 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
reviewed the base compensation for Mr. Joseph S. Bracewell and increased same to
$205,000 per year effective April 1, 1998.
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 Executive Compensation Committee is a former or
current paid officer or employee of the Company or any subsidiary.
Executive 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.
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 of the Company's Common Stock on the date of the grant.
The percentages are recommended annually by the CEO (subject to the approval of
the Committee). The percentage recommended and utilized for Mr. Joseph S.
Bracewell for 1998 was 20 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, Jr.
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 initially 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 Stock Option 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. At its 1998 Annual Meeting, stockholders approved an
amendment to the 1994 Stock Option Plan whereby an additional 200,000 shares of
Common Stock were allocated to the 1994 Plan. The number of shares of Common
Stock reserved for issuance pursuant to options granted under the Company's
plans also has been increased from time to time as a result of Common Stock
dividends.
During fiscal 1998, options to purchase 1,500 shares of the Common
Stock were granted to each of the fourteen non-employee directors of the Company
and the Bank under the 1994 Plan at a purchase price of $9.31 per share.
As of December 31, 1998, options to purchase an aggregate of 214,911
shares of Common Stock at exercise prices ranging from $1.46 to $10.36 were
outstanding (including 12,364 options issued pursuant to the 1986 Plans), and
there were 126,771 shares of Common Stock available for future grants under the
1994 Plan.
During the fiscal year ended December 31, 1998, the Company granted the
following options to purchase Common Stock to the executive officer of the
Company listed in the Summary Compensation Table.
<PAGE>
<TABLE>
<CAPTION>
OPTIONS GRANTED TO EXECUTIVE OFFICERS
IN FISCAL YEAR 1998
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rate of
Underlying Granted to Per Share Stock Price
Options Employees Exercise Expiration Appreciation for
Name Granted in 1998 Price Date Option Term
- ---------------- ---------- ----------- --------- --------= -----------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Joseph S. Bracewell 1,000 5.3% $10.88 4/01/2008 $ 6,842 $ 17,340
3,250 9.31 6/16/2008 19,029 48,223
</TABLE>
During the fiscal year ended December 31, 1998, the following options
were exercised by the executive officer of the Company listed in the Summary
Compensation Table.
<TABLE>
<CAPTION>
OPTIONS EXERCISED IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<S> <C> <C> <C> <C> <C> <C>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Value Options at Year End at Year End
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ------------ ---------- ----------- ------------- ----------- -------------
Joseph S. Bracewell 4,523 $ 42,800.62 9,064 6,079 $12,118.28 $ 1,410.88
14,752 115,256.56
</TABLE>
<TABLE>
<CAPTION>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return to stockholders for the period from September
23, 1997 (the date trading in the Common Stock commenced on The NASDAQ Stock
Market's SmallCap Market) through
December 31, 1998, for a holder of Common Stock against the cumulative total
return of both The NASDAQ Stock Market and the NASDAQ Bank Stock Index.
[OBJECT OMITTED]
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sept. 23, 1997 Dec. 31, 1997 Mar. 31, 1998 Jun. 30, 1998 Sep. 30, 1998 Dec. 31, 1998
------------------------------------------------------------------------------------------
Century Bancshares, Inc. 100.00 126.87 129.85 119.11 106.57 84.63
Nasdaq Stock Market 100.00 92.87 108.67 111.81 101.22 130.55
Nasdaq Bank Stocks 100.00 114.14 120.66 118.36 99.82 113.05
------------------------------------------------------------------------------------------
</TABLE>
Assumes $100 invested at September 23, 1997. Dividends reinvested through year
ended December 31, 1998.
- -----------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company and Mr. Bracewell are parties to an Employment Agreement
which will terminate on August 31, 1999, unless renewed by the parties on
written notice. Under the Employment Agreement, Mr. Bracewell receives an annual
salary of $205,000, 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
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.
The Company and each of its directors are parties to deferred
compensation agreements pursuant to which the directors have deferred their
annual retainer fees in exchange for a retirement benefit. During 1998, the
Company established a trust for the administration of its obligations under
these agreements. See "Compensation - Board Compensation: for a description of
the Company's obligations under these arrangements.
During 1998, the Bank made loans in the ordinary course of business to
certain of the directors and executive officers of the Company and the Bank,
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
December 31, 1998, loans outstanding to the directors and executive officers and
their immediate families totaled $3,390,254 (net of participations sold to other
banks on a non-recourse basis), which represented approximately 2.9% of total
loans outstanding as of that date.
With respect to banking transactions other than loans, during 1998 the
Company and the Bank 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 1998.
EXECUTIVE OFFICERS
The executive officers of the Company are Joseph S.Bracewell and
Charles V. Joyce III. 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 Mr. Bracewell. Mr.Joyce is Senior Vice President and
Chief Financial Officer of the Company and the Bank. Mr. Joyce joined the
Company in November 1998, and he is 57 years old with 22 years of financial
services industry experience. From 1995 until 1997, Mr.Joyce was Senior Vice
President and Chief Financial Officer for F&M Bank - Allegiance. The Company's
executive officers are elected annually and serve at the discretion of the
Board of Directors subject, in the case of Mr. Bracewell, to an employment
contract. See "Certain Relationships and Transactions."
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. Officers, directors and greater than ten percent stockholders are
required by regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on a review of the copies of such reports furnished to the
Company and certain written representations provided to the Company by such
persons, the Company believes that during the year ended December 31, 1998, all
Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than ten percent stockholders were satisfied.
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
In order for proposals submitted by stockholders of the Company
pursuant to Rule 14a-8 of the General Rules and Regulations under the Exchange
Act to be included in the Company's proxy statement and form of proxy relating
to the 2000 Annual Meeting of Stockholders, such proposals must be received at
the Company's principal executive offices no later than December 28, 1999. A
stockholder choosing not to use the procedures established in Rule 14a-8 must
deliver the proposal at the Company's principal executive offices not later than
February 27, 2000.
INDEPENDENT AUDITORS
The firm of KPMG LLP served as the Company's independent public
auditors for the year ended December 31, 1998. A member of the firm of KPMG LLP
is expected to be present at the Annual Meeting with the opportunity to make a
statement if so desired and will be available to respond to appropriate
questions.
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, including all exhibits, has
been filed with the Securities and Exchange Commission and a copy thereof,
excluding exhibits, accompanies this Proxy Statement. Upon payment of the
Company's reasonable expenses, the Company will furnish a copy of any exhibit to
the Form 10-K to any stockholder who makes a written request therefor to the
Corporate Secretary, Century Bancshares, Inc., 1275 Pennsylvania Avenue, N.W.,
Washington, D.C. 20004.
By Order of the Board of Directors
----------------------------
William C. Oldaker
Secretary
April 14, 1999
