SIGNET BANKING CORP, DEF 14A, 1996-04-25

SIGNET BANKING CORP
DEF 14A, 1996-04-25
STATE COMMERCIAL BANKS

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )

Check the appropriate box:

( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

SIGNET BANKING CORPORATION
(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

( ) Fee paid previously with preliminary materials.

( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule, or Registration Statement No.:

3) Filing Party:

4) Date Filed:

[LOGO]

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE HEREBY IS GIVEN that the annual meeting of shareholders of Signet Banking
Corporation (the "Corporation") will be held at The Jefferson Hotel, Franklin
and Adams Streets, Richmond, Virginia, on Tuesday, May 28, 1996, at 2:00 p.m.,
Eastern Time, for the following purposes:

(a) to elect twelve Directors to serve for the ensuing year;

(b) to approve the 1996 Non-Employee Directors Stock Option
Plan;

(c) to ratify the selection by the Board of Directors of Ernst
& Young LLP as independent auditors to audit the financial
statements of the Corporation for 1996; and

(d) to transact such other business as properly may come
before the meeting or any adjournment thereof.

Only shareholders of the Corporation's Common Stock of record at the
close of business on April 15, 1996, will be entitled to vote at the meeting and
any adjournment thereof.

The Board of Directors believes that the above proposals are in the
best interests of the Corporation and its shareholders and therefore recommends
that you vote "FOR" each proposal.

It is important that your shares be represented and voted. Please mark,
date and sign the enclosed proxy and return it promptly in the enclosed
envelope, regardless of whether you expect to attend the meeting. If for any
reason you desire to revoke your proxy, you may do so at any time before it is
voted. You are cordially invited to attend the meeting.

By Order of the Board of Directors

/s/ SARA REDDING WILSON
SARA REDDING WILSON

Corporate Secretary

April 25, 1996

PROXY STATEMENT

Proxies in the form enclosed are solicited by the Corporation to be
voted at the annual meeting of shareholders to be held on May 28, 1996, and any
adjournment thereof. Proxies may be revoked at any time before they are voted by
delivery of notice of revocation to the Corporation's Corporate Secretary.
Unrevoked proxies will be voted as designated thereon. The cost of this
solicitation will be borne by the Corporation. Proxies may be solicited by
regular employees at nominal cost by telephone or visit and brokers and nominees
will be reimbursed for their expenses in soliciting proxies from beneficial
owners. In addition, the Corporation has retained Georgeson & Co., Inc., to
assist in the solicitation of proxies for an aggregate fee of not more than
$8,000 plus reasonable out-of-pocket expenses. It is contemplated that this
proxy statement and the enclosed proxy will be sent to shareholders on or about
April 25, 1996. The mailing address of the principal office of the Corporation
is 7 North Eighth Street, P. O. Box 25970, Richmond, Virginia 23260.

Only shareholders of the Corporation's Common Stock of record at the
close of business on April 15, 1996, are entitled to vote at the meeting. On
that date, there were outstanding 59,398,418 shares of Common Stock of the
Corporation entitling the holders thereof to one vote per share on all matters
brought before the meeting.

Except for the election of Directors, action on matters submitted to a
vote of the shareholders at the meeting will be approved if a quorum is present
and the votes cast in favor of the matter constitute a majority of the votes
cast for or against the matter. With respect to the election of Directors, the
twelve nominees receiving the greatest number of votes cast for the election of
Directors will be elected, assuming a quorum is present at the meeting. Presence
in person or by proxy of a majority of the outstanding shares of Common Stock
entitled to vote at the meeting will constitute a quorum. Shares for which the
holder has elected to abstain or withhold the proxies' authority to vote
(including broker non-votes) on a matter will count toward a quorum but will
have no effect on the action taken with respect to such matter.

ELECTION OF DIRECTORS

The persons named below have been nominated to serve as Directors of
the Corporation until the next annual meeting of shareholders and until their
successors duly have been elected. Each nominee has agreed to serve if elected.

The persons named on the enclosed proxy will vote "FOR" the election of
the nominees named below unless authority is withheld. If for any reason any of
the persons named below should become unavailable to serve, proxies will be
voted for the remaining nominees and such other person or persons as the Board
of Directors may designate.

THE NOMINEES ARE:

PRINCIPAL OCCUPATION OR DIRECTOR OF
EMPLOYMENT DURING THE CORPORATION
NAME LAST FIVE YEARS SINCE AGE
<S> <C> <C> <C>
Retired on September 1, 1991, from the office 1985 67
of President and Chief Executive Officer,
Chesapeake and Potomac Telephone Company of
[Photo] Maryland (Telecommunications), Baltimore,
Maryland. Prior to January, 1990, he was
President of Chesapeake and Potomac Telephone
Company of Maryland. He also is a Director
of Signet Bank.

J. Henry Butta

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Chairman of the Board and Chief Executive 1984 56
Officer, Trigon Blue Cross Blue Shield
[Photo] (Health Plans), Richmond, Virginia. He also
is a Director of Signet Bank.

Norwood H. Davis, Jr.

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Chairman of the Board and Chief Executive 1993 46
Officer, Heilig-Meyers Company (Retail Home
[Photo] Furnishings), Richmond, Virginia. He also is
a Director of Signet Bank.

William C. DeRusha

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</TABLE>

PRINCIPAL OCCUPATION OR DIRECTOR OF
EMPLOYMENT DURING THE CORPORATION
NAME LAST FIVE YEARS SINCE AGE
<S> <C> <C> <C>
Chairman of the Board and Chief Executive 1978 54
Officer of the Corporation and Chairman of
Signet Bank and Signet Bank N.A. Prior to
[Photo] April, 1990, he was President and Chief
Executive Officer of the Corporation and
Signet Bank/Virginia. Prior to April, 1989,
he was President and Chief Operating Officer
of the Corporation and President and Chief
Robert M. Freeman Executive Officer of Signet Bank/Virginia. He
also is a Director of Signet Bank.

- -------------------------------------------------------------------------------------------------------------------

Chairman, President and Chief Executive 1995 53
Officer, Cadmus Communications Corporation
(Printing and Publishing), Richmond,
Virginia. Prior to February, 1995, he was
President and Chief Executive Officer of
[Photo] Cadmus Communications Corporation. From
August, 1990 to August, 1992, he was
President and Chief Operating Officer of
Cadmus. From 1987 to 1992, he served as
President and Chief Executive Officer of
William Byrd Press, Inc., a Cadmus
C. Stephenson Gillispie, Jr. subsidiary. He also is a Director of Signet
Bank.

- -------------------------------------------------------------------------------------------------------------------

Chairman of the Board and Chief Executive 1995 38
Officer of First Colony Corporation
(Insurance), Richmond, Virginia. Prior to
February, 1992, he was President of First
[Photo] Colony Investment Company and Vice President
and Treasurer of Ethyl Corporation. Prior to
August, 1991, he was Treasurer of Ethyl
Corporation. He also is a Director of Signet
Bank.
Bruce C. Gottwald, Jr.

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President, Hampton University (Educational 1989 55
Institution), Hampton, Virginia, and Owner,
[Photo] Pepsi-Cola Bottling Company, Houghton,
Michigan. He also is a Director of Signet
Bank.

William R. Harvey

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</TABLE>

PRINCIPAL OCCUPATION OR DIRECTOR OF
EMPLOYMENT DURING THE CORPORATION
NAME LAST FIVE YEARS SINCE AGE
<S> <C> <C> <C>
President, Glaize Developments, Inc. (Land 1977 64
Development), Winchester, Virginia. From July
[Photo] 1, 1988 to June 30, 1992, she was Mayor, City
of Winchester, Virginia. She also is a Director
of Signet Bank.

Elizabeth G. Helm

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President Emeritus, The Johns Hopkins Health 1985 67
System and Consultant. Prior to July 1, 1992
he was President, Chief Executive Officer and
[Photo] Trustee, Johns Hopkins Health System and
Johns Hopkins Hospital (Medical Care
Services), Baltimore, Maryland. He also is a
Director of Signet Bank.

Robert M. Heyssel

- -------------------------------------------------------------------------------------------------------------------

President and Chief Operating Officer of the 1986 57
Corporation and President and Chief Executive
Officer of Signet Bank. Prior to April,
[Photo] 1990, he was Vice Chairman of the
Corporation, Signet Bank/Maryland and Signet
Bank/Virginia. He also is a Director of
Signet Bank and Signet Bank N.A.

Malcolm S. McDonald

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Chairman of the Board and Chief Executive 1985 66
Officer, Crown Central Petroleum Corporation
[Photo] (Independent Refiners/Marketers), Baltimore,
Maryland. He also is a Director of Signet
Bank.

Henry A. Rosenberg, Jr.

- -------------------------------------------------------------------------------------------------------------------

</TABLE>

PRINCIPAL OCCUPATION OR DIRECTOR OF
EMPLOYMENT DURING THE CORPORATION
NAME LAST FIVE YEARS SINCE AGE
<S> <C> <C> <C>
Chairman of the Board and Chief Executive 1992 52
Officer of American Trading and Production
Corporation (Diversified Manufacturing, Real
Estate and Oil and Gas Operations),
Baltimore, Maryland. Prior to June, 1992, he
[Photo] was President and Chief Executive Officer of
American Trading and Production Corporation.
Prior to January, 1991, he was President and
Chief Operating Officer of American Trading
and Production Corporation. He also is a
Director of Signet Bank.
Louis B. Thalheimer

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</TABLE>
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Executive Officers and Directors and persons who own more than ten
percent of the Corporation's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange, Inc. Executive Officers, Directors and greater than ten
percent shareholders are required to furnish the Corporation with copies of all
Section 16(a) reports that they file.

Based solely on its review of the copies of Section 16(a) reports
received by it, or written representations from certain reporting persons that
no such reports were required for those persons, the Corporation believes that,
during the period from January 1, 1995, to December 31, 1995, all filing
requirements applicable to its Directors, Executive Officers and greater than
ten percent shareholders were complied with, except that Messrs. Freeman and
McDonald inadvertently filed late one report covering one transaction.

On April 1, 1996, an individual claiming to be a shareholder of the
Corporation filed in the Circuit Court of Fairfax County, Virginia, a
shareholder's derivative action against the directors of the Corporation (and
the Corporation itself, as nominal defendant). The action alleges that the
directors breached their fiduciary duties in connection with
fraudulently-obtained computer lease financing made by subsidiaries of the
Corporation in which the purported lessee is a Fortune 100 Corporation. The
individual defendants in the action believe that the suit is totally without
merit and intend to defend it vigorously.

OTHER DIRECTORSHIPS

The nominees are directors of the following companies in addition to
those mentioned in the table:

Mr. Davis: Hilb, Rogal and Hamilton Company

Mr. DeRusha: Best Products Co., Inc.; Peebles Inc.

Mr. Freeman: Crown Central Petroleum Corporation; Trigon Blue Cross Blue
Shield

Mr. Gottwald: Ethyl Corporation; Albemarle Corporation

Dr. Harvey: Trigon Blue Cross Blue Shield; International Guaranty
Insurance Company

Mrs. Helm: Shenandoah Life Insurance Company; Trigon Blue Cross Blue
Shield

Dr. Heyssel: Monsanto Company

Mr. McDonald: Peebles Inc.; American Trading and Production Corporation

Mr. Rosenberg: USF&G Corporation; American Trading and Production
Corporation

STOCK OWNERSHIP

The following table provides information as of March 31, 1996, as to
the shares of the Corporation's Common Stock beneficially owned, as that term is
defined by the Securities and Exchange Commission, by each nominee for Director,
by each of the five Executive Officers named in the Summary Compensation Table
on page 9, by all Directors and Executive Officers of the Corporation as a group
and by those persons or entities known by the Board of Directors to be the
beneficial owners of 5% or more of the Corporation's Common Stock:

NUMBER OF SHARES
NAME BENEFICIALLY OWNED (1)(2)(3) % OF CLASS
---- ---------------------------- ----------
<S> <C> <C>
DIRECTORS
J. Henry Butta 2,020 *
Norwood H. Davis, Jr. 97,799 (4)(5) *
William C. DeRusha 2,000 *
C. Stephenson Gillispie, Jr. 1,000 *
Bruce C. Gottwald, Jr. 1,001 (4) *
William R. Harvey 8,280 *
Elizabeth G. Helm 24,801 (4)(5) *
Robert M. Heyssel 4,335 (5) *
Henry A. Rosenberg, Jr. 2,516,287 (4)(6) 4.2
Louis B. Thalheimer 2,516,287 (6) 4.2

NAMED EXECUTIVE OFFICERS
Robert M. Freeman** 501,941 (7) *
Malcolm S. McDonald** 332,812 (8) *
Wallace B. Millner, III 222,602 (9) *
T. Gaylon Layfield, III 145,847 (10) *
Kenneth H. Trout 95,689 (11) *

DIRECTORS & EXECUTIVE OFFICERS AS A GROUP (20) 4,390,367 (12) 7.4

5% BENEFICIAL OWNERS
Neuberger & Berman L.P. 3,249,564 (13) 5.5
Dietche & Field Advisers, Inc. 4,628,800 (14) 7.9
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</TABLE>
*Less than 1% of Class
**Messrs. Freeman and McDonald also are Directors of the Corporation.

(1) Under a policy adopted by the Board of Directors, each Director
must own 1,000 shares of Common Stock within twelve months of his or her
election.

(2) Each person individually has sole voting and investment power over
all of the shares listed except as set forth below.

(3) On February 28, 1995, the Corporation distributed to eligible
shareholders 58,477,850 shares of common stock of Capital One Financial
Corporation in a tax-free spin-off. On March 15, 1995, the exercise price and
aggregate number of all options outstanding on February 28, 1995 were adjusted
pursuant to a formula that maintained the aggregate value of the options
existing prior to the spin-off.

(4) Includes shares held in the Amended Investor Stock Purchase
Plan as follows: Mr. Davis, 12,804 shares, Mrs. Helm, 3,992 shares, Mr.
Gottwald, 38 shares, Mr. Rosenberg, 1,609 shares.

(5) Includes shares for which there is shared voting and/or
investment power as follows: Mr. Davis, 512 shares, Mrs. Helm, 5,105 shares,
and Dr. Heyssel, 1,200 shares.

(6) Mr. Rosenberg and Mr. Thalheimer, Directors of the Corporation,
and their affiliates, had voting and investment power with respect to
2,516,287 shares of Common Stock of the Corporation. Mr. Rosenberg and Mr.
Thalheimer each are deemed to be the beneficial owner of all the shares held by
the group. Mr. Rosenberg has sole voting and investment power as to 1,871
shares and shared voting and/or investment power as to 1,252,158 shares. Mr.
Thalheimer has sole voting and investment power as to 35,100 shares and
shared voting and/or investment power as to 1,252,702 shares.

(7) Includes 345,092 shares that may be acquired within 60 days by the
exercise of stock options, 36,152 shares held in the Employee Savings Plan and
27,085 shares for which there is shared voting and/or investment power.

(8) Includes 231,157 shares that may be acquired within 60 days by the
exercise of stock options, 12,671 shares held in the Employee Savings Plan and
5,729 shares for which there is shared voting and/or investment power.

(9) Includes 156,675 shares that may be acquired within 60 days by the
exercise of stock options, 4,048 shares held in the Employee Savings Plan and
185 shares for which there is shared voting and/or investment power.

(10) Includes 104,626 shares that may be acquired within 60 days by the
exercise of stock options, 751 shares held in the Employee Stock Purchase Plan,
1,605 shares held in the Employee Savings Plan and 1,100 shares for which there
is shared voting and/or investment power.

(11) Includes 69,091 shares that may be acquired within 60 days by the
exercise of stock options and 8 shares for which there is shared voting and/or
investment power.

(12) Includes 1,127,833 shares that may be acquired within 60 days by
the exercise of stock options, 16,110 shares held in the Employee Stock Purchase
Plan, 21,933 shares held in the Amended Investor Stock Purchase Plan, 75,516
shares held in the Employee Savings Plan and 1,305,046 shares for which there is
shared voting and/or investment power.

(13) The Corporation has been advised by Neuberger & Berman L.P.
("NBLP"), 605 Third Ave., New York, NY 10158-3698, that, as of February 12,
1996, NBLP had sole voting power with respect to 938,800 shares of the
Corporation's Common Stock, shared voting power with respect to 1,480,000 shares
of the Corporation's Common Stock, and shared power to dispose or direct the
disposition of 3,249,564 shares of the Corporation's Common Stock or 5.5% of the
outstanding shares of Common Stock. NBLP further has advised the Corporation
that NBLP is deemed to be a beneficial owner for purpose of Rule 13(d) since it
has shared power to make decisions whether to retain or dispose of the
securities of many unrelated clients. NBLP does not, however have any economic
interest in the securities of those clients. The clients are the actual owners
of the securities and have the sole right to receive and the power to direct the
receipt of dividends from or proceeds from the sale of such securities.

(14) The Corporation has been advised by Dietche & Field Advisers, Inc.
("DFA"), 437 Madison Ave., New York, NY 10022, that, as of January 12, 1996, DFA
had sole voting power with respect to 4,628,800 shares of the Corporation's
Common Stock or 7.9% of the outstanding shares of Common Stock.

TRANSACTIONS

A subsidiary of American Trading and Production Corporation, of which
Mr. Thalheimer is Chairman of the Board and Chief Executive Officer and of which
Messrs. Rosenberg and McDonald are members of the Board of Directors, during
1995 leased to a subsidiary of the Corporation a total of 4,039 square feet in
the Blaustein Building, Baltimore, Maryland. Rent for this space, including
escalation, totaled $48,558 in 1995.

Crown Central Petroleum Corporation, of which Mr. Rosenberg is Chairman
of the Board and Chief Executive Officer and Mr. Freeman is a member of the
Board of Directors, leased space totaling 2,463 square feet to subsidiaries of
the Corporation during 1995 for automatic teller machines located at various
Crown stations. The cost for such space totaled $38,400.

Healthkeepers and Health Management Corporation, affiliates of Trigon
Blue Cross Blue Shield, of which Mr. Davis is Chairman of the Board and Chief
Executive Officer and of which Messrs. Freeman and Harvey and Mrs. Helm are
members of the Board of Directors, provided hospitalization and medical coverage
for eligible employees of the Corporation and its subsidiaries during 1995. The
cost for such coverage totaled $1,837,871.

Most of the Directors, partnerships of which they are general partners
and corporations of which they are directors or officers maintain normal banking
relationships with the Corporation's banking subsidiaries, Signet Bank and
Signet Bank N.A. Loans made by these banking subsidiaries to such persons and
other entities are made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, general partnerships and
corporations and do not involve more than normal risk of collectibility or
present other unfavorable features.

BOARD AND COMMITTEE MEETINGS

During 1995, the Board of Directors of the Corporation held eleven
meetings and the Executive Committee met four times. The Audit Committee of the
Corporation met four times, the Finance Committee met five times, the
Nominating, Governance and Corporate Responsibility Committee met three times,
the Organization and Compensation Committee met five times and the Stock Option
Committee met three times. All Directors of the Corporation, except Mr.
Gottwald, attended at least 75% of the aggregate of all meetings of the Board
and Committees on which they served.

COMMITTEES OF THE BOARD

The Executive Committee, during the interim between Board meetings, has
and may exercise all of the authority of the Board of Directors, except to
approve certain extraordinary transactions. During 1995, the Executive Committee
of the Corporation consisted of permanent members Messrs. Freeman (Chairman) and
McDonald. The other members of the Committee who served for the first six months
were Messrs. Butta, Davis, Heyssel and Thalheimer; and for the last six months,
Mrs. Helm and Messrs. DeRusha and Rosenberg.

The Audit Committee is composed entirely of outside Directors who are
independent of the management of the Corporation and are free from any
relationship that in the opinion of the Board of Directors would interfere with
their exercise of independent judgment. It recommends the engagement of
independent auditors and reviews the scope of their services; reviews the
Corporation's consolidated financial statements and all audits related to them;
reviews the internal audit function including the scope and extent of internal
audits and credit reviews; reviews the annual management report and investigates
any matter brought to its attention within its purview. Also, the Committee
reviews all reports of examination and management's responses and annually
reviews transactions involving the Corporation and any Director, Executive
Officer or their affiliates. During 1995, the Audit Committee consisted of
Messrs. Butta (Chairman), Davis, Gillispie, Gottwald, Rosenberg and Thalheimer.

The Finance Committee reviews the Corporation's financial condition
and finance plans designed to assure capital adequacy and liquidity and is
responsible for recommendations concerning any dividend change. The
Finance Committee also reviews the investment performance of the Corporation
and its Trust subsidiary. During 1995, the Finance Committee consisted of
Messrs. Thalheimer (Chairman) and Davis, Mrs. Helm and Dr. Heyssel.

The Nominating, Governance and Corporate Responsibility Committee
considers candidates for election as Directors and is responsible for keeping
abreast of developments with regard to corporate governance in general and
Directors' duties and responsibilities in particular and corporate
contributions. It also considers nominees recommended by shareholders whose
recommendations should be submitted to it through the Corporate Secretary of the
Corporation. During 1995, the Nominating, Governance and Corporate
Responsibility Committee consisted of Mrs. Helm (Chairman), and Messrs. DeRusha,
Gillispie, Gottwald and Harvey.

The Organization and Compensation Committee recommends to the Board the
election and reelection of officers, considers changes in compensation,
promotions and reviews matters related to management succession. The
Organization and Compensation Committee also serves as the Employee Stock
Purchase Committee and the Stock Option Committee. During 1995, the Organization
and Compensation Committee consisted of Messrs. Harvey (Chairman), Butta,
DeRusha, Heyssel and Rosenberg.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1995, the Organization and Compensation Committee consisted of
Messrs. Harvey (Chairman), Butta, DeRusha, Heyssel and Rosenberg.

Mr. Rosenberg, who serves on the Organization and Compensation
Committee, is Chairman of the Board and Chief Executive Officer of Crown
Central Petroleum Corporation. Mr. Freeman, Chairman of the Board and Chief
Executive Officer of the Corporation, is a Director of Crown Central Petroleum
Corporation, but does not serve on its Compensation Committee.

COMPENSATION OF THE BOARD

Non-employee Directors of the Corporation are paid an annual retainer
of $14,000 plus $850 for attendance at each meeting of the Board, Executive,
Audit and Organization and Compensation Committees, and $650 for each Finance
and Nominating, Governance and Corporate Responsibility Committee meeting
attended in the first six months of 1995 and $850 in the last six months of
1995. Directors also are reimbursed for reasonable expenses incurred to attend
Board and Committee meetings. Chairmen of Committees receive an additional $875
per quarter. Directors who also are officers receive no retainer or Committee
Chairman fee and no compensation for meetings attended.

The Corporation maintains a plan pursuant to which Directors
voluntarily may defer all of their fees for services performed for the
Corporation (in their capacity as Directors) and receive deferred income
benefits. Directors who participate will begin to receive their deferred income
benefits when they cease to be Directors. Deferred income benefits also are
payable to the beneficiaries or estates of Directors who die before the receipt
of their benefits. Benefits generally are payable in monthly installments
beginning within 90 days after retirement and extending no later than the date
the individual attains age 80. The Corporation also maintains a plan pursuant to
which Directors previously were permitted to defer all or a portion of their
fees in order to receive income benefits. Directors who deferred fees will
receive income benefits over a fifteen year period beginning when they cease to
serve as Directors. No deferrals have been made under this plan since December,
1987 and no additional deferrals will be made under this plan.

With respect to these deferred plans, upon a change of control and
unless a Director made and filed with the Corporation before January 1, 1994 an
irrevocable election to defer receipt of payments to his retirement or earlier
termination of employment, the Corporation shall pay to each Director within
thirty days of the change of control, a lump sum equal to such Director's
account balance, the present value of the accrued benefit or, for those former
Directors currently receiving benefits, the present value of the remaining
benefits as of the date of the change of control. A change of control is defined
as the acquisition of 20% or more of the Corporation's Common Stock or voting
securities by a person or group, a change in the majority of the Board of
Directors, a merger, liquidation, dissolution or sale of all or substantially
all of the assets of the Corporation or other changes of control as determined
by regulatory authorities.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table provides certain information concerning annual and
long term compensation paid to or accrued on behalf of the Chairman and Chief
Executive Officer and the four other most highly compensated Executive Officers
(the "Named Executive Officers") for the years 1993, 1994 and 1995.

<TABLE>
<CAPTION>
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SUMMARY COMPENSATION TABLE

Long Term Compensation
--------------------------
Annual Compensation Awards Payouts

- ---------------------------------------------------------------------------------------------

Name and Options(1)(2) LTIP(3) All Other(4)
Principal Position Year Salary Bonus /SARs Payouts Compensation
$ $ # $ $
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

Robert M. Freeman 1995 576,500 0 205,173 321,675 29,525
Chairman of the Board and 1994 555,000 439,850 58,348 326,350 42,978
Chief Executive Officer 1993 530,200 488,500 134,325 334,975 39,221

Malcolm S. McDonald 1995 408,000 0 120,860 189,725 29,246
President and Chief 1994 395,000 281,725 36,418 193,550 57,247
Operating Officer 1993 380,000 316,100 84,804 200,700 49,763

Wallace B. Millner, III 1995 284,000 54,525 76,033 105,650 21,908
Senior Executive Vice President 1994 278,000 200,000 20,559 108,975 45,332
and Chief Financial Officer 1993 266,200 127,075 27,658 102,475 44,058

T. Gaylon Layfield, III 1995 250,000 30,000 66,791 93,000 18,935
Senior Executive Vice President 1994 240,000 155,625 29,036 94,075 21,693
and Consumer Banking Executive 1993 217,650 163,975 21,091 102,475 17,238

Kenneth H. Trout 1995 227,250 36,350 50,888 84,525 20,413
Senior Executive Vice President 1994 207,000 107,300 15,272 81,150 22,978
and Commercial Banking Executive 1993 197,800 96,000 27,956 43,400 20,367

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</TABLE>

(1) Reflects two for one stock split in the form of a 100 percent stock
dividend distributed on July 27, 1993.

(2) On February 28, 1995, the Corporation distributed to eligible shareholders
58,477,850 shares of common stock of Capital One Financial Corporation in a
tax-free spin-off. On March 15, 1995, the exercise price and aggregate
number of all options outstanding on February 28, 1995 were adjusted
pursuant to a formula that maintained the aggregate value of the options
existing prior to the spin-off.

(3) Payout of long term cash award for three-year performance periods ending on
December 31, 1993, 1994 and 1995.

(4) All Other Compensation includes the following:

(i) Matching contributions under the Corporation's Employee Savings and
unfunded Excess Savings plans. Employee pretax contributions are
matched at a rate of $0.50 for each $1.00 deferred under the plans
except that no matching contributions are made with respect to
deferrals on compensation which exceeds $250,000. During 1995, each
Named Executive Officer received a matching contribution of $4,500
under the Employee Savings Plan. During 1995, Messrs. Freeman and
McDonald elected not to receive a profit-based match under the Employee
Savings Plan. Messrs. Millner, Layfield and Trout received a
profit-based match of $4,500 under the Employee Savings Plan. Messrs.
Freeman, McDonald, Layfield and Trout received a matching contribution
of $3,000, and Mr. Millner received a matching contribution of $2,272,
under the unfunded Excess Savings plan.

(ii) Under the Corporation's Split Dollar Life Insurance Plan, individual
whole life insurance is available to certain executive and management
level employees. The participant pays an assumed term cost of the
coverage and the Corporation pays the remainder of the premium. If all
assumptions as to life expectancy and other factors occur in accordance
with projections, the Corporation expects to recover the cost of the
program. The amounts listed below reflect the current value of the
benefits ascribed to life insurance policies purchased on the lives of
the Named Executive Officers.

Name Benefit Value

Robert M. Freeman $ 22,025
Malcolm S. McDonald 21,746
Wallace B. Millner, III 10,636
T. Gaylon Layfield, III 6,935
Kenneth H. Trout 8,413

STOCK OPTIONS

The following table provides information concerning the granting of
stock options during 1995 under the Corporation's 1992 Stock Option Plan to the
Named Executive Officers.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------

OPTION/SAR GRANTS IN LAST FISCAL YEAR

Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (1)
- ------------------------------------------------------------------------------------ ---------------------

% of Total
Options/SAR's
Options/ Granted to Exercise or
SAR's Employees in Base Price Expiration
Name Granted (2) Fiscal Year ($/Sh)(2) Date 5%($) 10%($)
- -------------------- --------- --------------- ------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Freeman 55,998 (3) 6.081% 15.73638 1/22/05 1,929,351 3,594,137
4,188 (4) .455% 23.87500 1/24/04 48,592 116,766
4,187 (4) .455% 23.87500 1/22/05 55,966 138,284
140,800 (5) 15.290% 18.06250 2/28/05 1,598,851 4,051,484

Malcolm S. McDonald 34,460 (3) 3.742% 15.73638 1/22/05 1,187,283 2,211,757
86,400 (5) 9.383% 18.06250 2/28/05 981,113 2,486,138

Wallace B. Millner, III 21,733 (3) 2.360% 15.73638 1/22/05 748,787 1,394,896
54,300 (5) 5.897% 18.06250 2/28/05 616,602 1,562,468

T. Gaylon Layfield, III 18,991 (3) 2.062% 15.73638 1/22/05 654,315 1,218,905
47,800 (5) 5.191% 18.06250 2/28/05 542,792 1,375,433

Kenneth H. Trout 14,488 (3) 1.573% 15.73638 1/22/05 499,169 929,888
36,400 (5) 3.953% 18.06250 2/28/05 413,339 1,047,401

- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of the Corporation's stock price. The Corporation did not use an
alternative formula for a grant date valuation, as it is not aware of any
formula which will determine with reasonable accuracy a present value based
on future unknown or volatile factors.

(3) Granted as part of the Corporation's annual option grant. The options are
exercisable during the period beginning six months following the grant date
and ending ten years after the grant date so long as the optionee continues
employment with the Corporation or one of its subsidiaries. All options are
granted at the fair market value of the Corporation's Common Stock on the
date of grant. There were no Stock Appreciation Rights (SARs) granted to
plan participants.

(4) Granted as reload options. Reload options are granted when an executive
surrenders currently owned shares to satisfy payment for the exercise of an
option. One reload option is granted for each such share surrendered.
Reload options are exercisable beginning six months after the grant date
and remain exercisable for the remainder of the term of the option for
which shares were surrendered. They are granted at the fair market value of
the Corporation's Common Stock on the date of grant. The reload options do
not have a reload feature.

(5) Granted as part of a special one time stock option grant. Sixty percent of
the options vest if the Corporation achieves certain market to book
performance goals relative to the 100 largest U.S. banks based on asset
size. An additional 20% of the options vest when, prior to February 28,
2000 and at least 12 months after attaining prior vesting milestones, the
market to book performance goals are again achieved. If the Corporation
fails to achieve all of the market to book performance goals, the unvested
options become exerciseable on March 1, 2002. The options expire ten years
from the grant date. Upon a change of control, the options vest provided
the market to book performance goals are achieved in the quarter in which
the change of control occurs. All options were granted at the fair market
value of the Corporation's Common Stock on the date of grant. The options
do not have a reload feature.

STOCK OPTION EXERCISES AND HOLDINGS

The following table provides information concerning the exercise of
stock options during 1995 and unexercised stock options held as of December 31,
1995 for the Named Executive Officers.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

Value of
Number of Unexercised
Unexercised In-the-Money
Options/SAR's at Options/SAR's at
FY-End (#) FY-End ($)(2)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) (1) Unexercisable Unexercisable
----------------- ---------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Robert M. Freeman 32,854 429,318 336,717/ 3,701,281/
149,175 800,800
Malcolm S. McDonald 27,914 510,605 231,157/ 2,571,940/
86,400 491,400
Wallace B. Millner, III 13,015 217,147 156,675/ 2,004,955/
54,300 308,831
T. Gaylon Layfield, III 10,800 196,075 104,626/ 1,121,346/
47,800 271,863
Kenneth H. Trout 0 0 69,091/ 662,889/
36,400 207,025
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fair market value of the acquired shares of the Corporation's Common
Stock minus the price of the options exercised.

(2) Based on the December 29, 1995 market price of $23.750 per share for the
Corporation's Common Stock minus the exercise prices of the unexercised
stock options held at that time.

LONG TERM CASH INCENTIVE PLAN

The following table provides information concerning awards made during
1995 under the Corporation's Long Term Cash Incentive Plan to the Named
Executive Officers. Cash payments are reported in the Summary Compensation Table
when made.

- --------------------------------------------------------------------------------------------------------------------

LONG TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

Estimated Future Payouts
under Non-Stock Price Based Plans(1)

Number of Performance or
Shares, Units Other Period
or Other Until Maturation Threshold Target Maximum
Name Rights (#)(2) or Payout ($) ($) ($)
- ----------------- ------------ --------------- --------- --------- ------
<S> <C> <C> <C> <C> <C>
Robert M. Freeman 176,400 1/1/95 to 12/31/97 44,100 176,400 352,800
Malcolm S. McDonald 104,000 1/1/95 to 12/31/97 26,000 104,000 208,000
Wallace B. Millner, III 58,000 1/1/95 to 12/31/97 14,500 58,000 116,000
T. Gaylon Layfield, III 60,000 1/1/95 to 12/31/97 15,000 60,000 120,000
Kenneth H. Trout 47,800 1/1/95 to 12/31/97 11,950 47,800 95,600
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Corporation's total shareholder return (TSR) ranking relative to the
100 largest U.S. banks based on asset size determines award levels. The
target award will be paid if the TSR ranking objective is met. The
threshold amount will be earned by the achievement of 50% of the TSR
ranking objective and the maximum award will be earned when the
Corporation's TSR ranking is double the targeted objective. No awards are
paid for performance below the threshold level. Awards are based on a
percentage of the Named Executive Officer's base salary.

(2) Each unit represents one dollar, based on 1996 base salaries. Actual awards
may be greater if base salaries increase. The awards shown may be
decreased, but not increased at the discretion of the Organization and
Compensation Committee.

PENSION PLANS

The following table shows the estimated total annual pension benefits
payable at normal retirement age (age 65) to individuals covered under both the
Corporation's qualified Employee Retirement and nonqualified Executive Employee
Supplemental Retirement Plans.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------

PENSION PLAN TABLE

Years of Service

Remuneration 15 20 25 (1) 30 or More (1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$250,000 $103,125 $137,500 $137,500 $137,500
300,000 123,750 165,000 165,000 165,000
350,000 144,375 192,500 192,500 192,500
400,000 165,000 220,000 220,000 220,000
450,000 185,625 247,500 247,500 247,500
500,000 206,250 275,000 275,000 275,000
550,000 226,875 302,500 302,500 302,500
600,000 247,500 330,000 330,000 330,000
650,000 268,125 357,500 357,500 357,500
700,000 288,750 385,000 385,000 385,000
750,000 309,375 412,500 412,500 412,500
800,000 330,000 440,000 440,000 440,000
850,000 350,625 467,500 467,500 467,500
900,000 371,250 495,000 495,000 495,000
950,000 391,875 522,500 522,500 522,500
1,000,000 412,500 550,000 550,000 550,000
1,050,000 433,125 577,500 577,500 577,500
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The maximum service recognized is 20 years. Service beyond 20
years does not increase the pension benefit.

Executive Employee Supplemental Retirement Plan (the "Plan")
participants will receive upon retirement at age 65 with 20 years of service an
annual retirement income for life equal to 55% of their final average annual
compensation (as reported in the Summary Compensation Table as salary and bonus)
during the highest three of their last five calendar years of employment.
Amounts payable under the Plan will be reduced by payments determined under the
Employee Retirement, the unfunded Excess Retirement and Long Term Disability
plans, if applicable, and 50% of the primary Social Security benefit. Projected
annual retirement benefits are $317,075 for Mr. Freeman, who currently is
credited with 24 years of service; $224,400 for Mr. McDonald, who currently is
credited with 25 years of service; $186,189 for Mr. Millner, who currently is
credited with 25 years of service; $154,000 for Mr. Layfield, who currently is
credited with 20 years of service; and $144,980 for Mr. Trout, who currently is
credited with 25 years of service.

EMPLOYMENT AGREEMENTS

The Corporation maintains employment agreements for fourteen Executive
Officers including the Named Executive Officers. The purpose of these agreements
is to assure shareholders that the business of the Corporation will continue
with a minimum of disruption in the event a change of control of the Corporation
occurs. A change of control is defined as the acquisition of 20% or more of the
Corporation's Common Stock or voting securities by a person or group, a change
in the majority of the Board of Directors, a merger, liquidation, dissolution or
sale of all or substantially all of the assets of the Corporation or other
changes of control as determined by regulatory authorities. The agreements also
are intended to provide greater employment security to key operational and
management executives if such a change of control occurs. If, within three years
of a change of control, such officers are assigned to positions of lesser
responsibilities or authority or receive lesser compensation, benefits or
perquisites and as a result they terminate employment, or if their employment is
terminated for reasons other than for cause, each such executive will be
entitled to a lump sum payment within 30 days equal to the executive's base
salary through the date of termination, a proportionate bonus based upon the
executive's annual bonus for the last fiscal year and three times the sum of the
executive's annual base salary, annual bonus and profit sharing awards. The
executive also will be entitled to a lump sum payment equal to the accrued value
of the benefit the executive would have received under the Corporation's
qualified and supplemental retirement plans had the executive remained employed
for the remainder of the three-year period. The Corporation will pay all income
and excise taxes and any interest or penalties with respect to such taxes that
may be imposed pursuant to Section 4999 of the Internal Revenue Code on such
lump sum payment or other benefits under such agreements. The agreements also
provide for the payment of severance benefits after voluntary termination of
employment provided that such voluntary termination occurs during the 30-day
window period beginning one year after the change of control.

SEVERANCE PAY PLAN

The Corporation maintains a Severance Pay Plan (the "Plan") for its
employees including the Named Executive Officers. The purpose of the Plan is to
provide income to displaced employees while they seek new employment resulting
from the elimination of their jobs in connection with the Corporation's
restructuring, reorganization or down-sizing. Benefits under the plan are not
payments for past services, nor is the Plan intended to provide benefits for
employees who leave employment with the Corporation but whose employment is not
in fact interrupted, even though the employment is with a different employer.
All rules and decisions dealing with the administration of the Plan by the
Corporation are uniformly and consistently applied to all participants under
similar circumstances.

ORGANIZATION AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Organization and Compensation Committee (the "Committee") of the
Board of Directors is responsible for recommending to the Board of Directors for
final action the implementation, amendment or termination of executive and
certain broad based employee compensation programs. The Committee is composed
entirely of outside Directors who are not eligible, with the exception of the
deferred compensation plans, to participate in the plans it recommends or
administers.

The Corporation's executive compensation philosophy calls for executive
compensation programs which motivate executives to take actions directed toward
the creation of premium shareholder value. To these ends, the Committee has
adopted the following strategies:

(bullet) Total compensation is performance-based.

(bullet) Success measures in performance plans are linked to
shareholder interests.

(bullet) A significant portion of the executives' total compensation
is subject to performance risk.

(bullet) A significant portion of performance-based compensation is
tied to long-term performance.

(bullet) Core compensation (salary and benefits) is maintained at
competitive levels.

(bullet) Corporate performance, as opposed to that of specific lines
of business within the Corporation, carries the predominant
weight in performance-based plans.

(bullet) Total compensation is at market level when the Corporation's
performance is competitive and falls below or exceeds market
levels when performance varies from the market's
performance.

The primary components of the executive compensation program are base
salary, the Annual Executive Incentive Compensation Plan, the Executive Long
Term Incentive Plan, and the 1992 Stock Option Plan. Executive Officers also
participate in a full array of broad based employee compensation and benefit
programs except for the Employee Profit Sharing and group life insurance plans.
In lieu of participation in the group life insurance plan, Executive Officers
participate in the Split Dollar Life Insurance Plan. In years in which return on
equity performance does not reach the level required to make payments under the
broad based Employee Profit Sharing Plan, no awards are paid under the Annual
Executive Incentive Compensation and Executive Long Term Incentive Plans.

The Committee approves the selection of companies against which the
Corporation's performance is measured for purposes of determining awards under
the Annual Executive Incentive, Executive Long Term Incentive and Stock Option
Plans. These companies are the largest 100 U.S. banks based on asset size.

BASE SALARY - A base salary grade and market range has been established
for the job of each Executive Officer. Base salary grades and market ranges are
established based on results obtained from published compensation surveys of
executive pay practices within the financial services industry. Positions are
assigned to ranges based primarily on competitive pay practices and secondarily
on internal assessment of the importance of the position. Market ranges are
annually reviewed to assure continued competitiveness and, when necessary,
adjusted on January 1. Market ranges for 1995 are the same as those established
in 1993.

Salary adjustments are considered at the beginning of each calendar
year for non-director Executive Officers. Messrs. Freeman's and McDonald's
salary adjustments are considered annually each July. Salary adjustments are
based on the individual's base salary relative to the market range for positions
of similar scope and responsibility.

Mr. Freeman's base salary was adjusted to $588,000 on July 1, 1995,
consistent with the above criteria and within the same guidelines
established by the Committee with respect to all other executives of the
Corporation. Mr. Freeman's salary positions him in the upper third of his
assigned salary range.

ANNUAL EXECUTIVE INCENTIVE COMPENSATION PLAN - This program provides
for annual cash bonuses for Executive Officers based on annual performance
objectives. The performance objectives are recommended by the Committee to the
Board for final approval in January of the performance year. As is true in the
case of all matters pertaining to plans in which they participate, Messrs.
Freeman and McDonald are required to abstain from voting on the performance
objective. For 1995, the performance objective was established as the attainment
of a targeted return on equity ratio.

Awards for Messrs. Freeman and McDonald are based solely on corporate
performance. Award opportunity for other Executive Officers is based 60% on
corporate performance and 40% on the performance of their organizational units.

The Plan calls for the payment of target awards when objectives are
met. Target percentages for each Executive Officer are established based on
results obtained from published compensation surveys of executive pay practices
within the financial services industry. Targets are set at the median target
percentage for positions of similar scope and responsibilities. Awards are
increased or decreased when objectives are exceeded or not attained. No award is
paid unless a minimum level of performance is attained. With respect to 1995,
the minimum corporate performance target was not attained and Messrs. Freeman
and McDonald did not receive an award. The same corporate performance results
were employed in determining the awards of all other plan participants.
Organizational unit objectives were also assessed in determining other plan
participants' awards.

EXECUTIVE LONG TERM CASH INCENTIVE PLAN - This program provides for
annual cash bonuses based on rolling three-year performance periods. The ongoing
performance objective under this plan is a targeted ranking of the Corporation's
Total Shareholder Return (TSR) to those of the 100 largest U.S. banks based on
asset size. TSR is the annualized rate of return resulting from stock price
appreciation and dividend payments.

Consistent with the Annual Executive Incentive Compensation Plan,
performance at the level approved by the Board will result in a target award
payment. Target awards are set by the Committee on a discretionary basis. Target
levels have remained constant since plan inception. Awards are increased or
decreased when objectives are exceeded or not attained. No award is paid unless
a minimum level of performance is attained. Mr. Freeman's bonus of $321,675 with
respect to the performance period ending on December 31, 1995, resulted from the
Corporation exceeding its targeted ranking objective.

STOCK OPTION PLANS - Stock options are granted to executives under the
1992 Stock Option Plan. The number of shares is determined as a percentage of
salary divided by the fair market value (FMV) per share the Wednesday prior to
the date of grant. The face value of the grant and corresponding number of
options granted is adjusted upward or downward based on a formula that compares
the Corporation's market to book (MTB) ratio to the average MTB ratio of the 100
largest U.S. Banks based on asset size. Specifically, the option derivation
formula is as follows:

<S> <C> <C> <C> <C>
Salary x Guideline Percentage Corporation's MTB Ratio
- ----------------------------- X --------------------------------- = Number Shares Granted
Prior Wednesday FMV Mean MTB Ratio of 100 Largest Banks

</TABLE>

All options are granted at the market value of the Corporation's Common
Stock on the date of grant. Reload options are granted to an executive when
shares of Common Stock owned by the executive are tendered in payment of the
exercise price of the stock option. Reload options are not granted for shares
surrendered in the payment of tax withholding. The reload options do not have a
reload feature.

Mr. Freeman received a grant of 55,998 options determined by applying
the criteria and methodology described above. Based on the Corporation's market
to book position, Mr. Freeman's option grant, as well as the other plan
participants' grants, was adjusted upward. The exercise price and aggregate
number of options granted to Mr. Freeman were adjusted pursuant to a formula
that maintained the aggregate value of the options existing prior to the
spin-off of Capital One Financial Corporation. Mr. Freeman's reload grant of
8,375 options resulted from his tendering 8,375 shares of Common Stock for
payment of an option exercise.

ONE TIME SPECIAL STOCK OPTION GRANT - Stock Options were granted to
executives under the 1992 Stock Option Plan, following the spin-off of Capital
One Financial Corporation. The grant was designed to motivate executive
management toward the successful reinvention of the Corporation. The number of
shares granted was determined as a percentage of each participant's salary
divided by the fair market value of the Corporation's Common Stock on March 1,
1995.

All options were granted at the market value of the Corporation's
Common Stock on March 1, 1995. The options under this grant do not have a reload
feature. Sixty percent of the options vest if the Corporation achieves certain
market to book performance goals relative to the 100 largest U.S. Banks based on
asset size. An additional 20% of the options vest when, prior to February 28,
2000 and at least 12 months after attaining prior vesting milestones, the market
to book performance goals are again achieved. If the Corporation fails to
achieve all of the market to book performance goals, the unvested options become
exerciseable on March 1, 2002. The options expire ten years from the grant date.
Upon a change of control, the options vest provided the market to book
performance goals are achieved in the quarter in which the change of control
occurs.

Mr. Freeman received a grant of 140,800 options determined by the
methodology described above.

INTERNAL REVENUE CODE SECTION 162(M) COMPLIANCE - The Corporation's pay
philosophy is performance focused. The Corporation believes it is important to
recognize and reward those who contribute to the creation of premium shareholder
value. Within this compensation foundation, executives are rewarded at above
market levels when they perform above market expectations, regardless of
arbitrarily imposed limits, such as that created by IRC section 162(m). To avoid
losing the tax deduction on executive pay when performance incentives bring
individual compensation above $1 million, the Corporation has obtained
shareholder approval of its performance-based cash incentive and stock option
plans.

This report is submitted by the Organization and Compensation Committee
of the Corporation's Board of Directors.

William R. Harvey, Chairman
J. Henry Butta
William C. DeRusha
Robert M. Heyssel
Henry A. Rosenberg, Jr.

PERFORMANCE GRAPH

The graph below compares the cumulative annual total shareholder return
on the Corporation's Common Stock against the cumulative total return of the S&P
Composite 500 Stock Index and the Keefe, Bruyette & Woods, Inc. 50 Index (a
published market capitalization weighted bank stock index) for the five-year
period commencing December 31, 1990 and ending December 31, 1995. The graph
assumes an investment of $100 in the Corporation's Common Stock and each of the
indices at the market close on December 31, 1990 and the reinvestment of all
dividends, including the Corporation's spin-off of Capital One Financial
Corporation on February 28, 1995, which is treated as a reinvested special
dividend.

[GRAPH]

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------

1990 1991 1992 1993 1994 1995
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Signet $100 $228.84 $458.31 $725.71 $615.02 $966.87
S&P 500 $100 $130.48 $140.41 $154.56 $156.60 $215.45
KBW 50 $100 $158.28 $201.68 $212.86 $202.00 $323.53

---------------------------------------------------------------------------------------------
</TABLE>

SIGNET BANKING CORPORATION
APPROVAL OF 1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

INTRODUCTION

On December 19, 1995, the Board of Directors adopted, subject to
shareholder approval, the 1996 Non-Employee Directors Stock Option Plan (the
"1996 Directors Plan" or the "Plan"). The 1996 Directors Plan became effective
January 15, 1996 but if not approved by the shareholders of the Company the Plan
will terminate. The Plan also will terminate upon the earlier of (a) the
adoption of a resolution of the Board terminating the Plan, (b) the date shares
are no longer available for issuance under the Plan, or (c) January 14, 2006.

The 1996 Directors Plan authorizes an aggregate maximum of 300,000
shares of the Company's Common Stock for the automatic grant of stock options to
eligible members of the Company's Board of Directors. The principal features of
the 1996 Directors Plan are summarized below. The summary is qualified by
reference to the complete text of the Plan, which is attached as Exhibit I.

ELIGIBILITY

A director is eligible to receive an option under the 1996 Directors
Plan if the director is not otherwise an employee of the Company or any
subsidiary and was not an employee of the Company or subsidiary for a period of
at least one year before the date of grant of an option under the Plan. Ten
members of the Board and nominees, therefore, presently qualify to receive
options under the 1996 Directors Plan.

ADMINISTRATION

The 1996 Directors Plan will be administered by the Board. Grants of
stock options to eligible directors under the Plan are automatic. However, the
Board has certain powers vested in it by the terms of the Plan, including,
without limitation, the authority (within the limitations described therein) to
prescribe the form of the agreement embodying awards of stock options under the
Plan, to construe the Plan, to determine all questions arising under the Plan,
and to adopt and amend rules and regulations for the administration of the Plan
as it may deem desirable. Any decision of the Board in the administration of the
1996 Directors Plan will be final and conclusive. The Board may act only by a
majority of its members in office, except members thereof may authorize any one
or more of their number or any officer of the Company to execute and deliver
documents on behalf of the Board. Options are nonstatutory and do not receive
favorable tax treatment. The exercise price of each option granted under the
Plan will be the fair market value (as defined in the Plan) of the shares on the
date the option is granted.

AUTOMATIC GRANT OF OPTIONS

On the effective date of the 1996 Directors Plan (i.e., January 15,
1996), and after the effective date of the Plan, as of each anniversary date of
the effective date, each eligible director of the Company will automatically
receive an option to purchase 1,000 shares of the Company's Common Stock which
will become exercisable on the six-month anniversary of the date of grant. No
option will be exercisable until the Plan is approved by the shareholders of the
Company and all federal and state securities laws have been complied with.

If at any time under the Plan there are not sufficient shares available
to fully permit the automatic option grants, the option grants will be reduced
pro rata (to zero if necessary) so as not to exceed the number of shares
available.

EXERCISE OF OPTIONS

When the option becomes exercisable, the optionee may exercise and
purchase shares of the Company's Common Stock by the payment of the purchase
price for the number of shares being purchased in cash or by the transfer of
shares of the Company's Common Stock owned by the optionee for six months or
more (the fair market value of which is equal to the purchase price on the date
of exercise) or by a combination of the foregoing.

TRANSFERABILITY OF OPTIONS

The rights of an optionee under the 1996 Directors Plan may not be
assigned or transferred other than by will or the laws of descent and
distribution. Each option will be exercisable on the six-month anniversary of
the date of grant, provided, however, that no option may be exercised (i) before
the 1996 Directors Plan is approved by the shareholders of the Company and all
applicable federal and state securities laws have been complied with; (ii) after
the expiration of ten years from the date the option is granted; and (iii) later
than twenty-four months after the optionee ceases to be a director. In the event
of death, the optionee's personal representative can exercise the options within
twelve months from the date of death of the optionee to the extent and in the
manner the optionee could have exercised the options on the date of death.

AMENDMENT OF THE 1996 DIRECTORS PLAN

The Board may suspend or discontinue the 1996 Directors Plan or revise
or amend the Plan in any respect; provided, however, that to the extent required
by Rule 16b-3, promulgated pursuant to section 16(b) of the Securities Exchange
Act of 1934, no revision or amendment may increase the number of shares subject
to the Plan or materially increase the benefits accruing under the Plan without
approval of the Company's shareholders.

FEDERAL INCOME TAX CONSEQUENCES OF THE 1996 NON-EMPLOYEE DIRECTORS STOCK OPTION
PLAN

The 1996 Directors Plan provides for the granting of non-statutory
options which do not qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended. A director who receives an option
under the 1996 Directors Plan will not be deemed to have received any income at
the time the option is granted; however, the director will recognize ordinary
income in the year any part of the option is exercised in an amount equal to the
difference between the exercise price of the shares purchased and the fair
market value of such shares on the exercise date. The Company will be entitled
to a tax deduction in an amount equal to the amount of ordinary income
recognized by the director. Special rules may apply if the director pays all or
part of the exercise price of a non-statutory option by tendering shares of the
Company's Common Stock.

The foregoing discussion of federal income tax aspects is only a
summary and is based upon interpretations of the existing laws, regulations and
rulings which could be materially altered with enactment of any new tax
legislation.

VOTE REQUIRED

Approval of the 1996 Non-Employee Directors Stock Option Plan requires
the affirmative vote of the holders of a majority of the shares of Common Stock
represented and voting at the annual meeting.

THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE 1996 NON-EMPLOYEE
DIRECTORS STOCK OPTION PLAN IS IN THE BEST INTEREST OF ALL SHAREHOLDERS AND,
ACCORDINGLY, RECOMMENDS A VOTE "FOR" THE PROPOSED 1996 STOCK OPTION PLAN (ITEM
NO. 2 ON YOUR PROXY CARD).

RATIFICATION OF SELECTION OF AUDITORS

The Board of Directors has selected Ernst & Young LLP as independent
auditors to audit the financial statements of the Corporation for 1996, and the
shareholders are requested to ratify their selection by the vote of a majority
of the shares represented and voting at the meeting. Ernst & Young LLP, which
has no financial interest in the Corporation or its subsidiaries, has audited
the financial statements of the Corporation for each year since its
incorporation. A representative of Ernst & Young LLP will be in attendance at
the meeting to respond to appropriate questions and to make a statement if he so
desires.

SHAREHOLDER PROPOSALS FOR

1997 ANNUAL MEETING

Shareholder proposals for presentation to the 1997 Annual Meeting of
the Shareholders must be received by the Corporation no later than November 22,
1996.

OTHER MATTERS

Management is not aware of any matters to be presented for action at
the meeting other than as set forth herein. If any other matters properly come
before the meeting, or any adjournment thereof, the person or persons voting the
proxies will vote them in accordance with his or their best judgment.

EXHIBIT I

SIGNET BANKING CORPORATION

1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

1. PURPOSE. The purpose of the Signet Banking Corporation 1996
Non-Employee Directors Stock Option Plan (the "Plan") is to encourage ownership
in the Company by non-employee members of the Board of Directors, in order to
promote long-term shareholder value and to provide non-employee members of the
Board with an incentive to continue as directors of the Company.

2. DEFINITIONS. As used in the Plan, the following terms
have the meanings indicated:

A. "Board" means the Board of Directors of the Company.

B. "Company" means Signet Banking Corporation, a Virginia
corporation.

C. "Company Stock" means the Common Stock of the Company
(including, but not limited to, rights, options or warrants for the
purchase of common or preferred stock of the Company issued to
shareholders generally). If the par value of the Company Stock is
changed, or in the event of a change in the capital structure of the
Company (as provided in Section 11), the shares resulting from such a
change shall be deemed to be the Company Stock within the meaning of
the Plan.

D. "Date of Grant" means the date as of which a
director is automatically awarded an Option pursuant to Section 7.

E. "Disability" means the inability to perform the
services to the Company as a director as determined by the Board, and
such determination shall be conclusive.

F. "Effective Date" means January 15, 1996, subject
to approval by shareholders of the Company.

G. "Eligible Director" means a director described in
Section 4.

H. "Exchange Act" means the Securities Exchange Act of
1934, as amended.

I. "Fair Market Value" means as of the date for which a
value determination is being made (or, if there were no trades on such
date, the next succeeding day on which Company Stock is traded) (i) if
the Company Stock is traded on an exchange, the average of the highest
and lowest registered sales prices of the Company Stock at which it is
traded on such day on the exchange on which it generally has the
greatest trading volume, or (ii) if the Company Stock is traded on the
over-the-counter market, the average between the lowest bid and highest
asked prices as reported by NASDAQ.

J. "IRC" means the Internal Revenue Code of 1986, as
amended.

K. "Option" or "Options" means the right to purchase
Company Stock subject to the terms and conditions set forth in
Section 7.

L. "Rule 16b-3" means Rule 16b-3 of the Securities
Exchange Act of 1934. A reference in the Plan to Rule 16b-3 shall
include a reference to any corresponding rule (or number redesignation)
of any amendments to Rule 16b-3 enacted after the effective date of the
Plan's adoption.

M. "Subsidiary" means, with respect to any
corporation, a corporation more than 50% of whose voting shares are
owned directly or indirectly by the Company.

3. ADMINISTRATION. The Plan shall be administered by the Board. The
award of Options under the Plan shall be automatic as described in Section 7.
However, the Board shall have all powers vested in it by the terms of the Plan,
including, without limitation, the authority (within the limitations described
herein) to prescribe the form of the agreement applicable to evidence the award
of Options under the Plan, to construe the Plan, to determine all questions
arising under the Plan, and to adopt and amend rules and regulations for the
administration of the Plan as it may deem desirable. Any decision of the Board
in the administration of the Plan, as described herein, shall be final and
conclusive. The Board may act only by a majority of its members in office,
except that members thereof may authorize any one or more of their number or any
officer of the Company to execute and deliver documents on behalf of the Board.
No member of the Board shall be liable for anything done or omitted to be done
by him or any other member of the Board in connection with the Plan, except for
his own willful misconduct or as expressly provided by statute.

4. PARTICIPATION IN THE PLAN. Each director of the Company who is not
otherwise an employee of the Company or any Subsidiary and, if and to the extent
required by Rule 16b-3, was not an employee of the Company or Subsidiary for a
period of at least one year before the date of the grant of an Option under the
Plan, shall be eligible to participate in the Plan.

5. STOCK SUBJECT TO THE PLAN. The maximum number of shares of Company
Stock that may be issued pursuant to the exercise of Options granted pursuant to
the Plan shall be 300,000, subject to adjustment as provided in Section 11.
Shares that have not been issued under the Plan allocable to Options and
portions of Options that expire or terminate unexercised may again be subject to
the award of a new Option. For purposes of determining the number of shares that
are available under the Plan, such number shall include the number of shares
surrendered by an optionee in connection with the exercise of an Option.

6. NON-STATUTORY STOCK OPTIONS. All Options granted under
the Plan shall be non-statutory in nature and shall not be entitled to special
tax treatment under Code Section 422.

7. TERMS, CONDITIONS AND AWARD OF OPTIONS. Each award of an Option
shall be evidenced by a written agreement in such form as the Board shall from
time to time approve, which agreement shall comply with and be subject to the
following terms and conditions:

(a) Automatic Award of Options. Options for the
purchase of shares of Company Stock shall be awarded at the times and
for the number of shares as follows:

(i) Each Eligible Director on the Effective Date of
the Plan shall automatically receive an Option to purchase
1,000 shares of Company Stock.

(ii) After the Effective Date as of January 15 and
each succeeding anniversary of such date, each director who is
then an Eligible Director shall automatically receive an
Option to purchase 1,000 shares of Company Stock.

(b) Option Exercise Price. The Option exercise price
shall be the Fair Market Value of the shares of Company Stock subject
to such Option on the Date of Grant.

(c) Options Not Transferable. An Option shall not be
transferable by the optionee otherwise than by will, or by the laws of
descent and distribution, and shall be exercised during the lifetime of
the optionee only by him. An Option transferred by will or by the laws
of descent and distribution may be exercised by the optionee's personal
representative as provided in Section 7(e). No Option or interest
therein may be transferred, assigned, pledged or hypothecated by the
optionee during his lifetime, whether by operation of law or otherwise,
or be made subject to execution, attachment or similar process.

(d) Exercise of Options. An Option shall be exercisable
on the six-month anniversary of the Date of Grant; provided, however,
that no Option may be exercised:

(i) before the Plan is approved by shareholders
of the Company and all applicable federal and state securities
laws have been complied with;

(ii) if the optionee is not an Eligible Director
or later than twenty-four months after the date he or she
ceases to be an Eligible Director and only to the extent the
Option was exercisable on the date he or she ceases to be an
Eligible Director;

(iii) if sooner terminated in accordance with the
terms of the Plan or the Option, or later than ten (10) years
from the Date of Grant; and

(iv) except by written notice to the Company (as
provided in the Option) at its principal office, stating the
number of shares of Company Stock the optionee has elected to
purchase, accompanied by payment in cash and/or by delivery to
the Company of shares of Company common stock owned by the
optionee at least six months (valued at Fair Market Value on
the date of exercise) in the amount of the full Option
exercise price for the shares of Company Stock being acquired
thereunder.

(e) Death of the Optionee. In the event of the optionee's
death within the period the optionee could have exercised the Option,
the Option may be exercised by the optionee's personal representative
within one year from the date of death to the extent and in the manner
the optionee could have exercised the Option on the date of death.

8. REDUCTION IN AWARDS. If at any time under the Plan there are not
sufficient shares available to fully permit the automatic awards of Options
described in paragraph 7(a), the awards shall be reduced pro rata (to zero if
necessary) so as not to exceed the number of shares available.

9. TERMINATION. The Plan shall terminate upon the earlier of:

(a) the adoption of a resolution of the Board terminating
the Plan;

(b) the date shares of Company Stock are no longer
available under the Plan for the automatic award of Option shares; or

No termination of the Plan shall without his or her consent materially and
adversely affect any of the rights or obligations of any person under any Option
previously awarded under the Plan.

10. LIMITATION OF RIGHTS.

(a) No Right to Continue as a Director. Neither the Plan nor
the grant of an Option, nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain any person as a director for any period of time.

(b) No Shareholders Rights Under Options. An optionee shall
have no rights as a shareholder with respect to shares of Company Stock covered
by his or her Options until the date of exercise of the Option, and, except as
provided in Section 11, no adjustment will be made for dividends or other rights
for which the record date is prior to the date of such exercise.

11. CHANGES IN CAPITAL STRUCTURE

(a) If the number of outstanding shares of Company Stock is
increased or decreased as a result of a subdivision or consolidation of shares,
the payment of a stock dividend, stock split, spin-off, or any other change in
capitalization effected without receipt of consideration by the Company
(including, but not limited to, the creation or issuance to shareholders
generally of rights, options or warrants for the purchase of common or preferred
stock of the Company), the number and kind of shares of stock or securities of
the Company to be subject to the Plan, the maximum number of shares or
securities which may be delivered under the Plan, and other relevant provisions
shall be appropriately adjusted by the Board, whose determination shall be
binding and conclusive on all persons, provided that in no event shall the
rights or value of the Option be enhanced as a result of such adjustment.

(b) Notwithstanding anything in the Plan to the contrary, the
Board may take the foregoing actions without the consent of any Optionee, and
the Board's determination shall be conclusive and binding on all persons for all
purposes.

12. AMENDMENT OF THE PLAN. The Board (except as provided below) may
suspend or discontinue the Plan or revise or amend the Plan in any respect;
provided, however, that without approval of the shareholders no revision or
amendment shall increase the number of shares of Company Stock subject to the
Plan (except as provided in Section 11) or materially increase the benefits
accruing to participants under the Plan. The Plan shall not be amended more than
once every six months other than an amendment required to comply with changes in
the Internal Revenue Code or regulations thereunder.

13. NOTICE. All notices and other communications required or permitted
to be given under this Plan shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed first class, postage prepaid, as
follows: (a) if to the Company - at its principal business address to the
attention of the Secretary; (b) if to any Optionee - at the last address of the
Optionee known to the sender at the time the notice or other communication is
sent.

14. CONSTRUCTION. The terms of this Plan shall be governed by the
laws of the Commonwealth of Virginia.

PROXY

SIGNET (R) BANKING CORPORATION

1996 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The shareholder(s) whose signature(s) appear(s) on the reverse side of this
proxy hereby appoint(s) Robert M. Freeman, Malcolm S. McDonald and Sara R.
Wilson, or any one of them, proxies, with full power of substitution in each,
to vote all shares of Common Stock of Signet Banking Corporation owned by the
Shareholder(s) at the Annual Meeting of Shareholders of Signet Banking
Corporation to be held on May 28, 1996 and any adjournment thereof.

This proxy shall be voted FOR each of the matters listed on the reverse
side, if no specification is made. Receipt of the Proxy Statement dated
April 25, 1996, is acknowledged.

(continued on reverse side)

Admission Ticket

ANNUAL MEETING
OF
SIGNET BANKING CORPORATION SHAREHOLDERS
TUESDAY, MAY 28, 1996
2:00 P.M.
THE JEFFERSON HOTEL
FRANKLIN AND ADAMS STREETS
RICHMOND, VIRGINIA

1. ELECTION OF DIRECTORS

FOR all nominees WITHHOLD J. Henry Butta, Norwood H. Davis, Jr.,
listed to the right AUTHORITY Wiliam C. DeRusha, Robert M. Freeman,
(except as marked to vote for all C. Stephenson Gillispie, Jr.,
to the contrary) nominees listed Bruce C. Gottwald, Jr., William R. Harvey,
( ) ( ) Elizabeth G. Helm, Robert M. Heyssel,
Malcolm S. McDonald, Henry A. Rosenberg,
Jr., Louis B. Thalheimer

(Instruction: To withhold authority to vote for any nominee write that
nominee's name on the line below.)

_______________________________________________________________________

2. Proposal to approve the adoption of the Corporation's 1996 Non-Employee
Directors Stock Option Plan.

( ) FOR ( ) AGAINST ( ) ABSTAIN

3. Proposal to ratify the selection by the Board of Directors of Ernst &
Young LLP as independent auditors to audit the financial statements of the
Corporation for 1996, and to transact such other business as properly may come
before the meeting or any adjournment thereof.

( ) FOR ( ) AGAINST ( ) ABSTAIN

Signature(s) __________________ Signature(s) __________________ Date___________
NOTE: Please sign exactly as name appears hereon. Only one joint owner need
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.

SIGNET BANKING CORPORATION