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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as permitted)
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] SOLICITING MATERIAL PURSUANT TO SECTION 240.14a-11(c) OR SECTION 240.14a-12
CENTURA BANKS, INC.
(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] No fee required
[ ] 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:
[GRAPHIC OMITTED]
March __,2000
Dear Shareholder:
The 2000 Annual Meeting of Shareholders of Centura Banks, Inc. will be held at
10:00 a.m. on Wednesday, April 19, 2000, at Nash Community College, 522 North
Old Carriage Road, Rocky Mount, North Carolina. The meeting agenda is described
in the attached Notice of Annual Meeting and Proxy Statement.
If you are a shareholder of record, we urge you to send in your proxy promptly
for the Annual Meeting, whether or not you plan to attend. Giving your proxy
will not affect your right to vote in person if you attend. If you prefer you
may vote your proxy by telephone, using the toll-free number printed on the
proxy, or over the Internet as further described in this Proxy Statement.
Whatever your method of choice, please vote your shares at your earliest
convenience. See the attached Proxy Statement for further information regarding
your rights to vote your proxy.
Centura's audited financial statements and other required disclosures are
presented in the 1999 Annual Report on Form 10-K, a copy of which accompanies
the Proxy Statement. Centura's 1999 Annual Report to shareholders will be mailed
to you under separate cover.
We would like to welcome as shareholders those persons who purchased Centura's
stock during 1999 and those who became shareholders through our recently
completed combination with Triangle Bancorp, Inc.
Sincerely,
Michael S. Patterson
Chairman of the Board
Cecil W. Sewell
Chief Executive Officer
YOUR PROXY IS IMPORTANT...PLEASE VOTE PROMPTLY
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[GRAPHIC OMITTED]
134 North Church Street
Rocky Mount, North Carolina 27804
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 19, 2000
Notice is hereby given that the annual meeting of the shareholders of Centura
Banks, Inc. will be held at Nash Community College, 522 North Old Carriage Road,
Rocky Mount, North Carolina on Wednesday, April 19, 2000, at 10:00 a.m. for the
following purposes:
1. To elect nine Class I directors for terms of three years; three Class II
directors for terms of one year; and two Class III directors for terms
of two years;
2. To approve the amended and restated articles of incorporation of
Centura; and
3. To act upon such other matters as may properly come before said meeting
and any adjournment thereof.
Only shareholders of record at the close of business on February 25, 2000, will
be entitled to notice of and to vote at the annual meeting.
Joseph A. Smith, Jr.
Corporate Secretary
March __, 2000
YOUR PROXY IS IMPORTANT TO ENSURE A QUORUM AT THE MEETING. YOU ARE REQUESTED TO
FILL IN, DATE, SIGN, AND RETURN THE PROXY SUBMITTED HEREWITH IN THE ENCLOSED
ENVELOPE OR BY TELEPHONE IN THE MANNER DESCRIBED IN THE PROXY. THE GIVING OF
SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH PROXY OR TO VOTE IN PERSON
SHOULD YOU LATER DECIDE TO ATTEND THE MEETING.
(THIS PAGE INTENTIONALLY LEFT BLANK)
CENTURA BANKS, INC.
134 NORTH CHURCH STREET
ROCKY MOUNT, NORTH CAROLINA 27804
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
APRIL 19, 2000
This Proxy Statement is furnished to all shareholders in connection with the
solicitation by the Board of Directors of Centura Banks, Inc. ("Centura") of
proxies to be used at the annual meeting of shareholders to be held at Nash
Community College, 522 North Old Carriage Road, Rocky Mount, North Carolina, at
10:00 a.m. on April 19, 2000, and at all adjournments thereof (the "Annual
Meeting").
The matters to be considered and voted upon at the Annual Meeting will be: (1)
election of nine Class I directors for terms of three years, three Class II
directors for terms of one year, and two Class III directors for terms of two
years; (2) approval of the amended and restated articles of incorporation of
Centura including an increase in Centura's authorized common stock; and (3)
action upon such other matters as may properly come before the Annual Meeting
and any adjournment thereof.
This Proxy Statement and the accompanying proxy are being mailed on or about
March __, 2000.
PROXIES
GENERAL
A proxy for use at the Annual Meeting is enclosed. Any shareholder who executes
and delivers such proxy or who votes shares by telephone or over the Internet
has the right to revoke such proxy, telephone or Internet vote at any time
before the Annual Meeting by filing with Michael S. Patterson, Chairman of the
Board of Centura, an instrument revoking it, or by executing a proxy bearing a
later date, or by telephonic or Internet notice revoking such vote or by
attending the Annual Meeting and voting in person. All shares represented by
valid proxies received pursuant to this solicitation that are not revoked before
they are exercised will be voted in the manner specified therein. If no
specification is made, the proxies will be voted in favor of the nominees for
election to the Board of Directors and the proposal to approve the amended and
restated articles of incorporation. The Board of Directors is not aware of any
other matters that may be presented for consideration at the Annual Meeting,
but, if other matters do properly come before the meeting, it is intended that
all shares represented by proxies in the accompanying form will be voted by the
persons named in the proxy in accordance with their best judgment.
Instead of submitting your proxy vote with the paper Proxy Card, you may vote
electronically via the Internet or by telephone. See "Voting Via the Internet or
by Telephone" in the Proxy Statement for further details. Please note that there
are separate Internet and telephone voting arrangements, depending upon whether
shares are registered in your name or in the name of a broker or bank.
Solicitation of proxies may be made in person or by mail, or by telephone or
facsimile transmission, by directors, officers, and regular employees of
Centura, none of whom will be specially compensated therefor. Brokerage houses,
nominees, fiduciaries, and other custodians will be requested to forward
solicitation materials to beneficial owners and secure voting instructions, if
necessary, and will be reimbursed for the reasonable out-of-pocket expenses
incurred in sending such solicitation materials to beneficial owners. Centura
has retained W. F. Doring & Company to aid in the solicitation of proxies and to
verify certain records relating to the solicitation at a fee not to exceed
$3,000 plus expenses.
The persons named on the proxy to represent shareholders at the Annual Meeting
are William H. Redding, Jr. of Asheboro, North Carolina and Charles M. Reeves
III of Raleigh, North Carolina.
The costs of preparing, assembling, and mailing this Proxy Statement and proxies
and the costs associated with the solicitation of such proxies will be borne by
Centura. Shareholders are urged to return their proxies without delay.
VOTING RIGHTS
The Board of Directors of Centura has fixed the close of business on February
25, 2000, as the record date (the "Record Date") for the determination of
shareholders of Centura entitled to receive notice of and to vote at the Annual
Meeting. As of the Record Date, there were 39,619,671 shares of the common stock
of Centura, no par value per share ("Centura Common Stock"), issued and
outstanding and held by holders of record. Each share of Centura Common Stock
issued and outstanding as of the Record Date is entitled to one vote on each
matter to be voted on at the Annual Meeting.
Of the 39,619,671 shares of Centura Common Stock outstanding on the Record Date,
1,298,461 shares (representing 3.28 percent) were held by the Asset Management
Department of Centura's wholly-owned subsidiary, Centura Bank ("Centura Bank"),
in a fiduciary capacity, which shares are included in the total outstanding
shares eligible to vote or to be counted in determining the total number of
shares entitled to vote on each matter to be voted on at the Annual Meeting.
Some of Centura's shareholders are participants in the Centura Banks, Inc.
Dividend Reinvestment Stock Purchase Plan (the "Dividend Reinvestment Plan")
and, as such, are beneficial owners of shares that are held of record by
Registrar and Transfer Company, Cranford, New Jersey ("R&T"), as agent under the
Dividend Reinvestment Plan. Such shares are eligible to vote and be counted at
the Annual Meeting and, under the terms and conditions of the Dividend
Reinvestment Plan, R&T will vote such shares in accordance with the directions
of shareholders. Shareholders participating in the Dividend Reinvestment Plan
will be mailed a copy of the notice of the Annual Meeting, a copy of this Proxy
Statement, and a proxy that will be used to direct the voting of shares of
Centura Common Stock held of record by R&T under such plan. Should the
shareholder fail to execute and deliver the proxy to R&T prior to the Annual
Meeting, R&T will not vote said shares. Rights of shareholders to direct voting
under the Dividend Reinvestment Plan arise and are created solely under said
plan.
Also included among the total number of shares entitled to vote and be counted
at the Annual Meeting are shares held by Centura Bank as trustee (the "Trustee")
under the Centura Banks, Inc. 401(k) Plan (the "401(k) Plan"). Each participant
under the 401(k) Plan is entitled to direct the Trustee as to the manner in
which the shares of Centura Common Stock allocated to such participant's Centura
Common Stock fund under the 401(k) Plan are to be voted. Each such participant
is being mailed a copy of the notice of the Annual Meeting, a copy of this Proxy
Statement, and a proxy that will be used to direct the voting of shares of
Centura Common Stock allocated to a participant's Centura Common Stock fund
under the 401(k) Plan. Upon receipt of the proxies and tabulation of the vote of
the participants under the 401(k) Plan, the Trustee will vote the Centura Common
Stock held under the 401(k) Plan as instructed. Any shares of Centura Common
Stock held under the 401(k) Plan that are eligible to vote but as to which the
Trustee receives no voting instructions will be voted by the Trustee in its
discretion. Rights of shareholders to direct voting under the 401(k) Plan arise
and are created pursuant to the Internal Revenue Code of 1986, as amended (the
"Code"), and the terms of the plan.
ITEM OF BUSINESS 1
ELECTION OF DIRECTORS
The Restated Articles of Incorporation of Centura require that the Board of
Directors be comprised of not less than 15 nor more than 30 members, as
specified in the Bylaws of Centura, divided into three classes that are equal or
nearly equal in number to each other. Centura's organizational documents
authorize the Board of Directors to amend the Bylaws from time to time to
specify the number of members of the Board within the range just mentioned. The
term of one class expires each year, with the terms of Class I directors
expiring at the Annual Meeting.
At its meeting on February 16, 2000, the Board of Directors amended the Bylaws
to provide that the number of directors of Centura would be twenty-eight,
comprised of nine Class I directors, ten Class II directors and nine Class III
directors. The Board of Directors then nominated the nine persons named below
for election as Class I directors, and the five persons named below to fill the
vacancies created by such action in Classes II and III. If elected, each of the
persons nominated to serve as a Class I director shall serve a term of three
years or until his successor is elected and qualified, each of the persons
nominated to serve as a Class II director shall serve a term of one year or
until his successor is elected and qualified and each of the persons nominated
to serve as a Class III director shall serve a term of two years or until his
successor is elected and qualified. The Bylaws of Centura provide that a vacancy
in the Board of Directors may be filled only by the Board of Directors.
Shareholders may not vote for a greater number of persons than the number of
nominees named herein.
The persons nominated below will be elected if they receive a plurality of the
votes cast for their election. Unless authority is withheld on the proxy, all
proxies received in response to this solicitation will be voted for the election
of the persons nominated below, except that if any of said persons shall become
unavailable for election, such proxies will be voted for the election of such
persons as management shall designate in substitution for the nominees so
unavailable. Management has no reason to believe that any of its nominees will
be unavailable for election.
2
The Board of Directors recommends the election of the persons named below as
directors at the Annual Meeting. With respect to the election of directors,
votes may be cast in favor of or withheld from each nominee; votes that are
withheld will be excluded entirely from the vote and will have no effect. Under
the rules of the New York Stock Exchange (the "NYSE"), brokers who hold shares
in street name have the authority to vote on certain items when they have not
received instructions from beneficial owners. Brokers that do not receive
instructions are entitled to vote on the election of directors. Under applicable
North Carolina law, a broker non-vote will have no effect on the outcome of the
election of directors.
NOMINEES
Term To
Expire
Principal Occupation And Business Director At Meeting
Name Age(1) Experience For The Past Five Years Since For The Year Class
- ---- ------ ---------------------------------- ----- ------------ -----
Richard H. Barnhardt 65 Chairman, Best of Beers, L.L.C. (beer distributor), since 1998; 1990 2003 I
prior to that, President, Properties, Inc. (real estate
development)
David T. Clancy 51 President, Clancy & Theys Construction Company 2000 2001 II
Ernest L. Evans 55 President, EYE, Inc, (agri-business management company) 1996 2003 I
Robert L. Guthrie 64 President and Chief Executive Officer, Asura Corporation 2000 2002(2) III
(insurance agency)
William H. Kincheloe(3) 62 President, Bulluck Furniture Company, Inc. and Wildwood Lamps and 1990 2003 I
Accents Inc. (furniture companies)
Charles T. Lane 68 Of counsel, Poyner & Spruill, L.L.P. (Attorneys at Law), 1990 2003 I
since December 1, 1999; prior to that, Partner, Poyner & Spruill,
L.L.P. (Attorneys at Law)
Wendell H. Murphy 61 President, Murphy Family Farms (swine production) and 2000 2001 II
Murphy Milling Co. (feed production)
O. Tracy Parks, III 56 Partner, Parks, Pate & Scarborough, L.L.P. (Attorneys at Law) 1990 2003 I
Michael S. Patterson 53 Chairman of the Board, Centura Banks, Inc. and Centura Bank 2000 2002 III
since February 18, 2000; prior to that date, Chairman of the
Board, Triangle Bancorp, Inc. and Triangle Bank from February 1997
to February 18, 2000; prior to that, President and Chief Executive
Officer, Triangle Bancorp, Inc.
Patrick H. Pope 64 Partner, Pope & Tart (Attorneys at Law) 2000 2003 I
Cecil W. Sewell, Jr. 53 Chief Executive Officer of Centura since February 18, 2000; 1990 2003 I
prior to that date, Chairman of the Board and Chief Executive
Officer, Centura from April 1998 to February 18, 2000; prior to
that date, Chairman of the Board, Chief Executive Officer and
President, Centura from February 1997 to April 1998; prior to
that, President and Chief Operating Officer, Centura
Sydnor M. White, Jr. 51 President, Graham Realty, Inc. since 1998; previously President, 2000 2003 I
CJS, Inc. (automotive parts distributor)
Charles P. Wilkins 55 Partner, Broughton, Wilkins & Sugg, P.A. (Attorneys at Law) 1996 2003 I
J. Blount Williams 45 President, Alfred Williams & Co. (office furniture and supplies) 2000 2001 II
- ---------------
(1) As of April 19, 2000.
(2) Mr. Kincheloe also serves as a director of North Carolina Railroad Company.
3
DIRECTORS CONTINUING IN OFFICE
Term To
Expire At
Principal Occupation And Business Director Meeting For
Name Age(1) Experience For The Past Five Years Since The Year Class
- ---- ------ ---------------------------------- ----- -------- -----
Thomas A. Betts, Jr. (2) 58 Since November 3, 1997, Senior Insurance Officer, Centura Insurance 1990 2001 II
Services, Inc.; prior to that date, partner, Betts & Company
(insurance broker and agent)
H. Tate Bowers 62 Chief Executive Officer, Bowers Fibers, Inc. (textile manufacturer) 1996 2002 III
Bernard W. Franklin (3) 47 President, Virginia Union University since July 1, 1999; prior to 1998 2002 III
that, President, Saint Augustine's College.
Susan E. Gravely 49 President, Vietri, Inc. (wholesale distributor of Italian dinnerware 1998 2002 III
and decorative accessories)
John H. High 63 President, John H. High & Co., Inc. (real estate development) 1990 2002 III
Robert L. Hubbard 65 President and CEO, RLH Associates since January 1, 1997 (management 1990 2002 III
consultants); prior to that, Vice Chairman, Americal Corporation
(hosiery manufacturer)
Joseph H. Nelson (4) 68 Chairman and President, Davenport Motor Company (automobile sales) 1996 2001 II
Dean E. Painter, Jr. (5) 56 Principal, Raven Capital (investment company) since October 1, 1999; 1996 2001 II
prior to that, Chairman, CLG, Inc. (technology leasing) (6)
Frank L. Pattillo 57 Vice Chairman, Centura, since April 1998; prior to that date, Group 1990 2001 II
Executive Office of Centura from February 1997 to April 1998; Group
Executive Officer and Chief Financial Officer, Centura, from April
1996 to February 1997; prior to that, Senior Executive Vice President
and Chief Financial Officer, Centura
William H. Redding, Jr. 63 President and Chief Executive Officer, Acme-McCrary Corporation 1995 2002 III
(textile manufacturer)
Charles M. (Terry) Reeves, III 56 President, Reeves Properties, Inc. (real estate development) 1990 2002 III
George T. Stronach, III 59 Real Estate Developer 1996 2001 II
Alexander P. Thorpe, III 62 President, Thorpe & Company, Inc. (investment company) 1990 2001 II
William H. Wilkerson 53 President, Centura, since April 1998; prior to that, Group Executive 1990 2001 II
Officer of Centura from April 1996; prior to that, Executive Vice
President, Centura
- ---------------
(1) As of April 19, 2000.
(2) Betts & Company was acquired by Centura on November 3, 1997. Prior to such
acquisition, Betts & Company was not affiliated with Centura or any of its
subsidiaries; however, Mr. Betts was a director of Centura prior to such
acquisition.
(3) Dr. Franklin also serves as a director of Delhaize America, Inc.
(4) Mr. Nelson also serves as a director of Commonwealth Dealers Life Insurance
Co.
(5) Mr. Painter also serves as a director of CCAir, Inc.
(6) CLG, Inc. was acquired by Centura in November 1996. CLG was sold on
September 30, 1999. Prior to such acquisition, CLG, Inc. was not affiliated
with Centura or any of its subsidiaries.
4
COMMITTEES AND DIRECTOR ATTENDANCE
During the year ended December 31, 1999, the Board of Directors of Centura held
seven meetings. During 1999, each director attended 75 percent or more of the
aggregate of Board of Directors meetings and meetings of committees of the Board
of Directors on which he served.
The Executive Committee is composed of Messrs. Sewell (Chairman), Patterson,
Evans, Kincheloe, Nelson, Parks, Redding, Reeves, Thorpe and Wilkins. The
Executive Committee reviews overall strategic plans developed by management,
deals with tactical issues relating to corporate development, and acts on behalf
of the Board of Directors between Board meetings. The Board of Directors
subsequently reviews the actions taken by the Executive Committee and either
approves, disapproves, or modifies those actions. During 1999, the Executive
Committee held eleven meetings. The independent director members of the
Executive Committee also serve as the Nominating Committee of the Board of
Directors. Centura's Bylaws provide that nominations to the Board of Directors
may be made by the Board of Directors or by a committee of the Board of
Directors to which such duty is delegated. Nominations recommended by
shareholders are not considered by the Nominating Committee. During 1999, the
Nominating Committee held four meetings.
The Compensation and Benefits Committee (the "Compensation Committee") is
composed of Messrs. Redding (Chairman), Barnhardt, Bowers and Franklin, none of
whom is a Centura officer or employee. The Compensation Committee meets on call
for the purpose of reviewing management's compensation and benefit plans and
making recommendations in connection therewith to the Board of Directors. During
1999, the Compensation Committee held four meetings.
The Audit Committee is composed of Messrs. Stronach (Chairman), Bowers, High and
Reeves, and Ms. Gravely, none of whom is a Centura officer or employee. The
Audit Committee meets on call and is charged with ensuring that sufficient
internal controls and accounting procedures are in existence and functioning
properly for Centura and its subsidiaries. The Audit Committee also recommends
the appointment of independent auditors and serves as an independent body to
review, with or without the presence of management, the reports of regulatory
agencies, external auditors, and internal auditors. The Audit Committee monitors
management's action on recommendations made by auditors or examiners to ensure
timeliness and appropriateness of response. Recommendations made by the Audit
Committee and actions taken by management on such recommendations are reported
to the Board of Directors. During 1999, the Audit Committee held four meetings.
Other regular or special committees may be appointed by the Board of Directors
to assist the Board in carrying out its duties and responsibilities.
5
SECURITIES OWNERSHIP
Except for the Centura Bank Asset Management Department, which, as of February
25, 2000, held 1,298,461 shares of Centura Common Stock in a fiduciary capacity,
or 3.28 percent of the total shares of Centura Common Stock outstanding as of
February 25, 2000, and which, therefore, may be deemed to be a beneficial owner
of such shares, Centura knows of no other persons who beneficially own more than
five percent of the outstanding Centura Common Stock.
The following table shows the number of outstanding shares of Centura Common
Stock beneficially owned on February 25, 2000, by the individual nominees and
directors of Centura, by the executive officers of Centura, and by the nominees,
directors and executive officers as a group. It is anticipated that the
directors and executive officers of Centura and their affiliates will vote their
shares in favor of the proposals presented at the Annual Meeting. Individuals
have sole voting and investment power over their shares unless otherwise
indicated in the footnotes.
Amount of and Nature of
Name of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------ -------------------- ----------------
Richard H. Barnhardt 20,030 (1) *
Thomas A. Betts, Jr. 79,479 (2) *
H. Tate Bowers 23,902 (3) *
David T. Clancy 73,428 (4) *
Ernest L. Evans 13,023 (5) *
Bernard W. Franklin 761 (6) *
Steven J. Goldstein 16,853 (7) *
Susan E. Gravely 881 (8) *
Robert L. Guthrie 21,459 (9) *
John H. High 40,884 (10) *
Robert L. Hubbard 54,635 (11) *
William H. Kincheloe 41,042 (12) *
H. Kel Landis, III 34,880 (13) *
Charles T. Lane 31,748 (14) *
Wendell H. Murphy 28,366 (15) *
Joseph H. Nelson 27,126 (16) *
Dean E. Painter, Jr. 1,121,414 (17) 2.83%
O. Tracy Parks, III 131,304 (18) *
Michael S. Patterson 153,627 (19) *
Frank L. Pattillo 64,084 (20) *
Patrick H. Pope 48,140 (21) *
William H. Redding, Jr. 22,892 (22) *
Charles M. Reeves, III 120,092 (23) *
Cecil W. Sewell, Jr. 171,355 (24) *
George T. Stronach, III 51,418 (25) *
Alexander P. Thorpe, III 69,849 (26) *
Sydnor M. White, Jr. 35,291 (27) *
William H. Wilkerson 63,472 (28) *
Charles P. Wilkins 403,578 (29) 1.02%
J. Blount Williams 37,066 (30) *
All nominees, directors and executive 3,002,079 7.58%
officers as a group (31 persons)
- ---------------
* Less than 1%.
(1) Includes 11,112 shares that Mr. Barnhardt has the right to acquire through
the exercise of stock options.
(2) Includes 13,549 shares with respect to which Mr. Betts has no voting or
investment power, 9,956 shares which he has the right to acquire through
the exercise of stock options and 464 shares held in the 401(k) Plan as to
which he is entitled to direct the Trustee as to the manner in which the
shares are voted.
6
(3) Includes 402 shares with respect to which Mr. Bowers has no voting or
investment power and 4,204 shares that he has the right to acquire through
the exercise of stock options.
(4) Includes 59,724 shares to which Mr. Clancy has shared voting and
investment power, 868 shares with respect to which Mr. Clancy has no
voting or investment power, 7,269 shares which he has the right to acquire
through the exercise of stock options.
(5) Includes 208 shares that Mr. Evans has the right to acquire through the
exercise of stock options.
(6) Includes 700 shares that Dr. Franklin has the right to acquire through the
exercise of stock options.
(7) Includes 1, 066 shares with respect to which Mr. Goldstein has no voting
or investment power, 10,622 shares which he has the right to acquire
through the exercise of stock options and 1,854 shares held in the 401(k)
Plan as to which he is entitled to direct the Trustee as to the manner in
which the shares are voted.
(8) Includes 698 shares that Ms. Gravely has the right to acquire through the
exercise of stock options.
(9) Includes 1,201 shares with respect to which Mr. Guthrie has no voting or
investment power and 6,622 shares which he has the right to acquire
through the exercise of stock options.
(10) Includes 7,920 shares with respect to which Mr. High has no voting or
investment power and 272 shares which he has the right to acquire through
the exercise of stock options.
(11) Includes 297 shares with respect to which Mr. Hubbard has no voting or
investment power, 41,182 shares with respect to which he shares voting and
investment power, and 261 shares that he has the right to acquire through
the exercise of stock options.
(12) Includes 6,390 shares to which Mr. Kincheloe has no voting or investment
power and 10,807 shares which he has the right to acquire through the
exercise of stock options.
(13) Includes 382 shares with respect to which Mr. Landis has no voting or
investment power, 1,600 shares with respect to which he shares voting and
investment power, and 19,384 shares that he has the right to acquire
through the exercise of stock options.
(14) Includes 13,330 shares that Mr. Lane has the right to acquire through the
exercise of stock options.
(15) Includes 19,230 shares with respect to which Mr. Murphy shares voting and
investment power, and 3,024 shares which he has the right to acquire
through the exercise of stock options.
(16) Includes 1,485 shares with respect to which Mr. Nelson has no voting or
investment power, 3,093 shares with respect to which he shares voting and
investment power, and 14,812 shares that he has the right to acquire
through the exercise of stock options.
(17) Includes 560,707 shares with respect to which Mr. Painter has no voting or
investment power.
(18) Includes 10,964 shares that Mr. Parks has the right to acquire through the
exercise of stock options.
(19) Includes 3,988 shares with respect to which Mr. Patterson has no voting or
investment power, and 106,042 shares that he has the right to acquire
through the exercise of stock options
(20) Includes 22,677 shares which Mr. Pattillo has the right to acquire through
the exercise of stock options, and 3,685 shares held in the 401(K) Plan to
which he is entitled to direct the Trustee as to the manner in which the
shares are voted.
(21) Includes 17,498 shares with respect to which Mr. Pope shares voting and
investment power, and 5,607 shares which he has the right to acquire
through the exercise of stock options.
(22) Includes 9,657 shares with respect to which Mr. Redding shares voting and
investment power, and 13,135 shares that he has the right to acquire
through the exercise of stock options.
(23) Includes 223 shares that Mr. Reeves has the right to acquire through the
exercise of stock options.
(24) Includes 1,688 shares with respect to which Mr. Sewell has no voting or
investment power, 20,855 shares with respect to which he shares voting and
investment power, and 66,680 shares that he has the right to acquire
through the exercise of stock options.
(25) Includes 1,485 shares with respect to which Mr. Stronach has no voting or
investment power, 15,167 shares with respect to which he shares voting and
investment power, and 5,267 shares that he has the right to acquire
through the exercise of stock options.
(26) Includes 540 shares that Mr. Thorpe has the right to acquire through the
exercise of stock options.
(27) Includes 14,154 shares with respect to which Mr. White has no voting or
investment power, 2,250 shares with respect to which he shares voting and
investment power, and 5,581 shares which he has the right to acquire
through the exercise of stock options.
(28) Includes 328 shares to which Mr. Wilkerson has no voting or investment
power, 40,221 shares that he has the right to acquire through the exercise
of stock options, and 10,233 shares held in the 401(k) Plan to which he is
entitled to direct the Trustee as to the manner in which the shares are
voted.
(29) Includes 4,617 shares that Mr. Wilkins has the right to acquire through
the exercise of stock options.
(30) Includes 20,798 shares to which Mr. Williams has no voting or investment
power, and 4,710 shares that he has the right to acquire through the
exercise of stock options.
7
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), Centura's directors, certain officers, and any
person holding more than 10 percent of Centura Common Stock are required to
report their ownership of Centura Common Stock and any changes in that ownership
to the Securities and Exchange Commission and the NYSE. Specific due dates for
these reports have been established, and Centura is required to report in this
Proxy Statement any failure to file by these dates during 1999. All of these
filing requirements were satisfied during 1999 by Centura's directors and
officers, except that Director High failed to file a Form 4 in a timely manner.
Director High is now current in his filings.
DIRECTORS' COMPENSATION
Each director, except those who are officers of Centura, receives an annual
retainer fee of $7,500 plus $750 for each meeting of the Board of Directors
attended and $750 for each committee meeting of the Board of Directors attended.
In addition, each Chairman of a Centura Board committee, who is not an employee,
receives an additional annual retainer of $1,000. Directors also are reimbursed
for their travel expenses incurred to attend meetings, including an annual
strategic planning retreat, which, in the aggregate, amounted to approximately
$82,600 in 1999.
In addition to the base compensation described above, Centura's independent
directors are eligible to receive incentive compensation based on the
achievement by Centura of its Economic Value Added ("EVA(R)(1)) target. (See
"BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION -- The Economic
Value Added Incentive Program"). The incentive component provides for a bonus of
50 percent of fees paid during the year if Centura meets its EVA target, with
adjustments (both up and down) if such target is exceeded or is not met. As more
fully discussed below, Centura did not meet its EVA target for 1999 and,
accordingly, Centura directors did not receive bonus compensation in 1999.
In addition to the Incentive Program mentioned above, the Compensation Committee
authorized directors' participation in the Equity Compensation Program,
described below in "BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION" in 1999. This action was taken as the result of a study conducted
during 1999 by the committee that highlighted the expanded utilization of equity
grants as a significant element of director compensation. The terms and
conditions of the grants are identical to those issued to employees under the
program. Grants made under the Equity Compensation Program in respect of 1999
performance were awarded in January 2000. Directors were awarded options (the
value of which was 50 percent of total compensation, with the number of shares
determined by the Black-Scholes valuation model) in respect of 23,320 shares of
Centura Common Stock.
Certain directors are eligible to participate in the Directors' Deferred
Compensation Plan (for purposes of this section, the "Plan"). The Plan provides
non-employee members of the Board of Directors of Centura and Centura Bank with
an opportunity to defer for income tax purposes the payment of directors' fees.
Under the Plan, directors may elect to receive directors' fees in the form of an
option to buy Centura Common Stock, rather than in cash. The Plan does not
provide directors any additional compensation or benefits, except for the
beneficial effect of the deferral of income. The Plan is administered by the
Compensation Committee which has full authority and sole discretion to interpret
and construe the Plan, including setting rules and regulations related thereto,
and making determinations and taking actions necessary for its implementation
and administration. Options to purchase 15,698 shares of Centura Common Stock
were granted under the Plan during 1999 (including grants relating to the
incentive component of director compensation) to all eligible directors who
chose to participate in the Plan as a group (18 persons).
- --------
(1) EVA(R)is a registered trademark of Stern, Stewart &Co.
8
EXECUTIVE OFFICERS
The following table sets forth the name, age, and position of the executive
officers of Centura. Each executive officer named below was appointed by the
Board of Directors of Centura to a term of office extending until the death,
resignation, retirement, removal, or disqualification of the officer or until
the officer's successor is appointed and qualifies. The business backgrounds of
the officers named below are included in the table of directors of Centura
above, except with respect to Messrs. Goldstein and Landis, which are provided
below.
Name Age (1) Position
- ---- ------ ---------
Michael S. Patterson 53 Chairman of the Board
Cecil W. Sewell, Jr. 53 Chief Executive Officer
Frank L. Pattillo 57 Vice Chairman
William H. Wilkerson 53 President, Centura Banks, Inc.
Steven J. Goldstein (2) 48 Chief Financial Officer
H. Kel Landis III (3) 43 Group Executive Officer and
President, Centura Bank
- ---------------
(1) As of April 19, 2000.
(2) Mr. Goldstein was elected Chief Financial Officer of Centura, effective
February 1, 1997. Prior to that, he was a principal of A.T. Kearney, Inc.;
a principal of EDS Management Consulting Services; a managing director of
BEI/Golumbe, Inc.; and a managing director of Kaplan Smith & Associates;
each of such firms being engaged in management consulting.
(3) Group Executive Officer since April 1996. From April 1995 to April 1996,
he was an Executive Vice President. Prior to that he was an Executive Vice
President of Centura Bank. Mr. Landis was elected President, Centura Bank
on April 15, 1998.
9
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report on executive
compensation in accordance with the rules of the Securities and Exchange
Commission. As noted above under "Committees and Director Attendance," the
Compensation Committee reviews management's compensation and benefit plans and
makes recommendations regarding such plans to the Board of Directors. Review of
and recommendations regarding executive compensation are a significant part of
that responsibility. Set forth below is a summary of the factors taken into
account by the Compensation Committee in assessing executive compensation
generally and the compensation of the Chief Executive Officer in particular.
COMPENSATION OF EXECUTIVE OFFICERS. In general, the performance-related
components of executive compensation at Centura are base salary and payments
under the incentive and equity compensation programs described below. Base
salary is determined on the basis of the position held by the executive and is
assessed in comparison to the salaries of similarly situated executives at two
selected financial institutions in North Carolina and a sample of twenty-five
comparable financial institutions throughout the United States with assets
between $5.2 and $24.9 billion. Adjustments to base salary are made on the basis
of the recommendations of the Chief Executive Officer based on the overall
contribution of the executive to the attainment of Centura's financial goals and
such executive's record of achievement in directing the activities for which
such executive is responsible. Such adjustments are reviewed in light of the
salaries of comparable executives in the peer groups referred to above.
Generally, such comparison is on the basis of entire compensation, including
bonus, and is targeted at the median of salaries of comparable executives in the
peer groups referred to above. No specific weighting is assigned to the various
factors analyzed in determining the base compensation of executive officers of
Centura.
THE ECONOMIC VALUE ADDED INCENTIVE PROGRAM. The Centura EVA incentive program
(the "Incentive Program") provides incentive compensation to certain key
employees, including all executive officers, in a form that relates the
financial reward to an increase in the value of Centura to its shareholders. In
general, EVA is the net operating profit of Centura after taxes, less a capital
charge. The capital charge is intended to represent the return expected by the
providers of Centura's debt and equity capital, and is determined by Centura's
financial consultant on the basis of a formula that takes into account the risk
and cost of providing such capital. Management is of the view that EVA
improvement is the financial performance measure most closely correlated with an
increase in shareholder wealth. EVA improvement can be achieved through
operations in three ways: (i) growth of after-tax operating profits on existing
capital; (ii) investment in projects or businesses that generate a positive
return after taking into account the cost of capital; and (iii) divestiture of
businesses that do not generate a positive return after capital cost.
Under the Incentive Program, the Chairman of the Board, Chief Executive Officer
and five other senior officers of Centura (including the executive officers
listed in the Summary Compensation Table below) comprise the "Strategic Group."
For each member of the Strategic Group, a Target Bonus is declared at the
commencement of each year, which Target Bonus is based on a percentage of the
executive's base salary. Bonuses earned under the Incentive Program are
determined by multiplying the Target Bonus by a Bonus Multiple derived by
comparing target and actual EVA for the year in question and adjusted for a
"leverage factor" that reflects the expected variability of Centura's
performance based on historical factors. The Incentive Program determines target
EVA for succeeding years of the program by a formula that adds the average of
target and actual EVA for the prior year to an expected improvement factor.
The average of the Target Bonuses for 1999 for all members of the Strategic
Group was set at 42.1 percent of base salary. Actual EVA for 1999 did not
achieve target EVA; as a result, members of the Strategic Group received no
bonus under the Incentive Program. As part of the Incentive Program, bonuses
earned in prior years in excess of the Target Bonus had been held in a "bonus
bank" to be paid in future years, subject to reduction or loss if actual EVA in
those years results in bonus determinations that are less than zero. Because
Centura's performance in 1999 did not result in negative EVA, payment of the
bonus bank amounts to Incentive Plan participants was authorized. Bonus bank
payments to members of the Strategic Group in 2000 aggregated $413,830 and are
reflected in the compensation tables that follow as long-term incentive plan
payouts ("LTIP Payouts").
EQUITY COMPENSATION PROGRAM. In addition to the Incentive Program mentioned
above, the Compensation Committee authorized an equity compensation program (the
"Equity Compensation Program") in 1997 to reward and retain selected officers
and employees of Centura. This action was taken as the result of a study
conducted during 1997 by the committee that highlighted the expanding
utilization of equity grants as a significant element of total direct
compensation by firms with whom Centura competes for talent in the marketplace.
The study confirmed the experience of Centura management that Centura was
operating at a distinct disadvantage because of its suboptimum use of
equity-based compensation. Under the Equity Compensation Program, non-qualified
stock options are granted to selected officers and employees at all levels of
Centura for a ten year term which options will be awarded at market price and
vest over eight years as follows: 10 percent per year at the end of each of the
first six years; 15 percent at the end of the seventh year; and 25 percent at
the end of the eighth year. Grants made under the Equity Compensation Program in
respect of 1999 performance were awarded in January 2000. Named Executive
Officers were awarded options (the value of which was a percentage of base
compensation, with the number of shares determined by use of the Black-Scholes
valuation model) in respect of 121,077 shares of Centura Common Stock, together
with cash performance units having an aggregate value of $480,975, exercisable
at the time of exercise of such options
10
pro rata with the amount of options exercised. It is the intention of the
Compensation Committee to award additional options and performance units under
the Equity Compensation Plan in respect of performance in 2000. The amount of
options awarded for such year and thereafter is discretionary with the Committee
and will be made on the basis of Centura's financial and operating performance
and the requirements of Centura to attract, retain and motivate the management
talent necessary to remain competitive.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. In setting Mr. Sewell's 1999 base
salary as Chief Executive Officer of Centura, consideration was given to
Centura's financial performance in light of its historical performance,
corporate and personal goals established at the beginning of the year in
question, and comparison against a select group of comparable financial
institutions. Return on assets and equity and earnings per share on an absolute
and comparative basis were considered, as were such other factors as loan
losses, capital investment and acquisitions. After reviewing performance data,
base salary information for chief executive officers of comparable financial
institutions was analyzed. Adjustments to base salary were then considered in
light of corporate performance and the relationship of such compensation to the
peer group. No specific weighting was assigned to these various factors analyzed
in determining Mr. Sewell's base salary. During 1999, Mr. Sewell's base salary
was $550,000. In addition, under the Incentive Program, Mr. Sewell's Target
Bonus was 50 percent of base salary. As a result of Centura's performance in
1999, Mr. Sewell did not receive a bonus under the Incentive Program; however,
as discussed above, amounts credited to Mr. Sewell's "bonus bank" account
($134,450) were paid to him in January 2000. Under the Equity Compensation Plan,
Mr. Sewell was granted options in respect of 45,690 shares of Centura Common
Stock and performance units of $181,500 in respect of such options.
OTHER COMPENSATION ISSUES. In addition to the foregoing components of executive
compensation, the Compensation Committee reviews, on an on-going basis, other
components of compensation, such as benefits and perquisites. In all cases, the
objective of the Compensation Committee is to assist senior management in
attracting, motivating, and retaining qualified executive personnel.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Congress has enacted Section 162(m) of
the Code, which disallows a tax deduction for any publicly-held corporation for
remuneration exceeding $1 million in any tax year for the Chief Executive
Officer and other executive officers named in the Summary Compensation Table.
Regulations promulgated by the Internal Revenue Service pursuant to this section
of the Code provide exceptions to non-deductibility for certain "performance
based compensation," including equity based compensation, if performance goals
are set by an independent compensation committee and the terms of the
compensation plan are approved by shareholders. In 1997, the Centura Board of
Directors adopted and the shareholders approved an amendment to the Omnibus
Equity Compensation Plan to authorize types of awards that would be eligible for
the "performance based compensation" exception to Section 162(m). While the
Omnibus Equity Compensation Plan has received shareholder approval in the past,
the Incentive Program, the Equity Compensation Program and the compensation and
benefits of the chief executive officer and other executive officers of Centura
have not been submitted to shareholders for approval.
CENTURA BANKS, INC. COMPENSATION COMMITTEE
WILLIAM H. REDDING, JR., CHAIRMAN RICHARD H. BARNHARDT
H. TATE BOWERS BERNARD W. FRANKLIN
11
EXECUTIVE COMPENSATION
The following tables set forth the annual and long-term compensation awarded to,
earned by, or paid to Centura's Chief Executive Officer during 1999, and the
four other most highly compensated officers (collectively, the "Named Executive
Officers") as of December 31, 1999, 1998 and 1997, for services rendered in any
capacities to Centura and/or its subsidiaries. Bonuses are paid in January of
the year following the year in which they are earned.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
-------------------------------------------- ---------------------------------------
Other Annual Restricted Securities LTIP All Other
Salary Bonus Compensation Stock Underlying Payouts Compensation
Name and Principal Position Year ($) ($) ($)(a) Awards ($) Options/SARS(#) ($)(b) ($)
- --------------------------- ---- --- --- ------ ---------- --------------- ------ ---
Cecil W. Sewell, Jr. 1999 550,000 0 0 0 45,690 (c) 134,450 32,577 (d)
CHIEF EXECUTIVE OFFICER 1998 450,000 166,500 0 0 67,984 (e) 67,230 27,688 (f)
1997 375,000 122,260 0 0 54,796 (g) 63,710 26,687 (h)
William H. Wilkerson 1999 310,000 0 0 0 19,314 (c) 68,260 20,273 (i)
PRESIDENT 1998 269,000 79,260 0 0 31,244 (j) 34,130 17,471 (k)
1997 230,000 61,390 0 0 26,070 (l) 33,440 15,711 (m)
H. Kel Landis, III 1999 300,000 0 0 0 18,691 (c) 60,910 22,103 (n)
GROUP EXECUTIVE OFFICER 1998 245,000 72,340 0 0 28,398 (o) 30,261 19,840 (p)
AND PRESIDENT, CENTURA BANK 1997 215,000 57,800 0 0 24,217 (q) 29,210 19,659 (r)
Frank L. Pattillo 1999 300,000 0 0 0 18,691 (c) 62,530 22,464 (s)
VICE CHAIRMAN 1998 245,000 72,140 0 0 28,470 (t) 31,270 18,922 (u)
1997 210,000 56,010 0 0 23,817 (v) 30,730 17,368 (w)
Steven J. Goldstein 1999 300,000 0 0 0 18,691 (c) 46,420 25,482 (x)
CHIEF FINANCIAL OFFICER 1998 245,000 73,760 0 0 28,287 (y) 32,210 32,577 (z)
1997 204,500 58,430 0 0 22,918 (aa) 18,650 10,778 (bb)
- ------------------
(a) Amounts reimbursed for payment of taxes on stock awards following
satisfaction of required performance goals.
(b) For 1999, comprises the amount credited for such executive in the "bonus
bank" for prior years. For prior years, comprises the sum of (i) 1/3 of the
Bonus amount in excess of the Target Bonus for the executive in question,
plus (ii) 1/3 of the amount credited for such executive in the "bonus bank"
for prior years. See "BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION -- THE ECONOMIC VALUE ADDED INCENTIVE PROGRAM."
(c) Consists of options awarded under the Equity Compensation Program.
(d) Consists of matching contributions of $4,800 made by Centura and allocated
to Mr. Sewell under the 401(k) Plan and $27,777 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(e) Consists of 20,866 leveraged options earned under the EVA Incentive Program
and 47,188 options awarded under the Equity Compensation Program.
(f) Consists of matching contributions of $5,000 made by Centura and allocated
to Mr. Sewell under the 401(k) Plan, and $22,688 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(g) Consists of 17,296 leveraged options earned under the EVA Incentive Program
and 37,500 options awarded under the Equity Compensation Program.
(h) Consists of matching contributions of $4,750 made by Centura and allocated
to Mr. Sewell under the 401(k) Plan and $21,937 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(i) Consists of matching contributions of $4,800 made by Centura and allocated
to Mr. Wilkerson under the 401(k) Plan, and $15,473 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(j) Consists of 10,120 leveraged options earned under the EVA Incentive Program
and 21,124 options awarded under the Equity Compensation Program.
(k) Consists of matching contributions of $5,000 made by Centura and allocated
to Mr. Wilkerson under the 401(k) Plan, and $12,471 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(l) Consists of 8,820 leveraged options earned under the EVA Incentive Program
and 17,250 options awarded under the Equity Compensation Program.
12
(m) Consists of matching contributions of $4,750 made by Centura and allocated
to Mr. Wilkerson under the 401(k) Plan, and $10,961 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(n) Consists of matching contributions of $4,800 made by Centura and allocated
to Mr. Landis under the 401(k) Plan and $17,303 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(o) Consists of 9,158 leveraged options earned under the EVA Incentive Program
and 19,240 options awarded under the Equity Compensation Program.
(p) Consists of matching contributions of $5,000 made by Centura and allocated
to Mr. Landis under the 401(k) Plan, and $14,840 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(q) Consists of 8,092 leveraged options earned under the EVA Incentive Program
and 16,125 options awarded under the Equity Compensation Program.
(r) Consists of matching contributions of $4,750 made by Centura and allocated
to Mr. Landis under the 401(k) Plan, and $14,909 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(s) Consists of matching contributions of $4,800 made by Centura and allocated
to Mr. Pattillo under the 401(k) Plan, $2,510 of above-market interest
credited during 1999 on compensation deferred by Mr. Pattillo under the
Deferred Compensation Plan, and $15,154 which represents present value of
the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(t) Consists of 9,230 leveraged options earned under the EVA Incentive Program
and 19,240 options awarded under the Equity Compensation Program.
(u) Consists of matching contributions of $5,000 made by Centura and allocated
to Mr. Pattillo under the 401(k) Plan, $1,742 of above-market rate interest
credited during 1998 on compensation deferred by Mr. Pattillo under the
Deferred Compensation Plan, and $12,180 which represents present value of
the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(v) Consists of 8,067 leveraged options earned under the EVA Incentive Program
and 15,750 options awarded under the Equity Compensation Program.
(w) Consists of matching contributions of $4,750 made by Centura and allocated
to Mr. Pattillo under the 401(k) Plan, $1,062 of above-market rate interest
credited during 1997 on compensation deferred by Mr. Pattillo under the
Deferred Compensation Plan, and $11,556 which represents present value of
the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(x) Consists of matching contributions of $4,800 made by Centura and allocated
to Mr. Goldstein under the 401(k) Plan and $20,682 which represents present
value of the yearly interest foregone on the non-term premium paid under a
split-dollar life insurance arrangement.
(y) Consists of 8,655 leveraged options earned under the EVA Incentive Program
and 19,632 options awarded under the Equity Compensation Program.
(z) Consists of matching contributions of $5,000 made by Centura and allocated
to Mr. Goldstein under the 401(k) Plan, $9,787 in consideration of
relocation expense, and $17,790 which represents present value of the yearly
interest foregone on the non-term premium paid under a split-dollar life
insurance arrangement.
(aa) Consists of 7,168 leveraged options earned under the EVA Incentive Program
and 15,750 options awarded under the Equity Compensation Program.
(bb) Consists of matching contributions of $1,791 made by Centura and allocated
to Mr. Goldstein under the 401(k) Plan and $8,987 in consideration of
relocation expense.
13
The following table sets forth certain information concerning stock options
granted to the Named Executive Officers under the Incentive Program in respect
of performance in 1999 (see "BOARD COMPENSATION REPORT ON EXECUTIVE COMPENSATION
- -- THE ECONOMIC VALUE ADDED INCENTIVE PROGRAM AND EQUITY COMPENSATION PROGRAM"):
OPTION GRANTS IN RESPECT OF LAST FISCAL YEAR
Potential
Realizable Value
at Assumed Annual
Rates of Stock Price
Appreciation for
Number of % of Total Option Term
Securities Options Exercise --------------------------
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted(#) Fiscal Year ($/Share) Date 5%($) 10%($)
- -------------------------- ---------------- ---------------- ------------ ------------ -------------- -----------
Cecil W. Sewell, Jr. 45,690 (a) 12% 40.75 (b) 1/18/10 93,093.38 186,168.75
William H. Wilkerson 19,314 (a) 5% 40.75 (b) 1/18/10 39,352.28 78,704.56
H. Kel Landis III 18,691 (a) 5% 40.75 (b) 1/18/10 38,082.91 76,165.82
Frank L. Pattillo 18,691 (a) 5% 40.75 (b) 1/18/10 38,082.91 76,165.82
Steven J. Goldstein 18,691 (a) 5% 40.75 (b) 1/18/10 38,082.91 76,165.82
(a) Non-qualified Stock Options granted under Equity Compensation Program. See
"BOARD COMPENSATION COMMITTEE REPORT EXECUTIVE COMPENSATION -- EQUITY
COMPENSATION PROGRAM."
(b) Closing price of the shares of Centura Common Stock in respect of which
Non-qualified Stock Options were granted on the date of grant ($40.75).
The following table summarizes the options exercised in 1999 by the Named
Executive Officers and the number and value of unexercised options at December
31, 1999.
AGGREGATED OPTIONS EXERCISED IN 1999 AND
YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options at Options at
December 31, 1999(#) December 31, 1999($)(a)
Shares Acquired Value Realized ----------------------------------- ---------------------------------
Name on Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ---------------- --------------- --------------- ---------------- ---------------- ----------------
Cecil W. Sewell, Jr. 0 0 22,592 (b) 130,358 333,024 81,590
William H. Wilkerson 0 0 8,259 62,064 68,089 46,872
Frank L. Pattillo 0 0 9,731 (b) 56,976 158,392 46,769
H. Kel Landis III 3,500 111,344 9,190 (b) 55,561 134,239 32,570
Steven J. Goldstein 0 0 3,850 (b) 56,528 (c) 25,109 3,124
(a) Value of unexercised in-the-money options is calculated by multiplying the
number of unexercised options at December 31, 1999 by the difference in the
closing price of Centura Common Stock reported on the NYSE Composite Tape on
December 31, 1999 and the exercise price of the unexercised in-the-money
options.
(b) Includes options earned through deferral of compensation.
(c) Includes a diminishing stock option grant (8,333 shares) which will be
exercisable only upon a change of control where the acquiring entity owns at
least 75 percent of the shares in the new company. The grant will reduce to
zero shares on 2/1/00.
14
PENSION PLANS
Centura maintains a noncontributory, qualified pension plan (the "Centura
Pension Plan") covering substantially all employees of Centura and its
subsidiaries that adopt the plan (collectively referred to for purposes of this
section as "Centura"), who have completed one year of service and attained the
age of 21. Centura Bank is the Trustee of the Centura Pension Plan. The Centura
Pension Plan provides a participant with retirement benefits which in 1999 were
based on average compensation during all of the participant's years of credited
service after 1992. Under Sections 401(a)(17) and 415 of the Internal Revenue
Code of 1986, as amended (the "Code"), benefits payable from the Centura Pension
Plan are limited; for 1999, annual benefits may not exceed $130,000, and the
benefit formula cannot take into account compensation in excess of $160,000
(these limits are adjusted by the Internal Revenue Service from time to time for
cost of living increases). Centura also maintains a noncontributory,
nonqualified supplemental executive retirement plan (the "SERP"), which provides
in part for the payment of additional pension benefits (the "Excess Benefits")
to certain executive employees, including the Named Executive Officers, to the
extent their benefits under the Centura Pension Plan are reduced on account of
the Code limits described above and also provides additional pension benefits
relating to deferred compensation, which is not provided in the Centura Pension
Plan. The Summary Compensation Table set forth above does not include the amount
of the pension contribution, payment or accrual with respect to the Centura
Pension Plan or the Excess Benefit for any Named Executive Officer, as such
amounts cannot readily be separately or individually calculated by Centura's
actuaries.
The following table illustrates the estimated annual benefits payable to an
employee retiring on December 31, 1999 at normal retirement age from a
combination of the Centura Pension Plan and the Excess Benefit portion of the
SERP, in the following specified compensation and years of service
classifications.
CENTURA PENSION PLAN AND EXCESS BENEFIT TABLE
Years of Service
Average --------------------------------------------------------------------------------
Compensation 15 20 25 30 35 40
- -------------- ------------- ------------ ------------ ------------- ----------- --------------
$ 125,000 30,158 40,267 50,376 60,486 60,486 60,486
$ 150,000 36,870 49,230 61,589 73,948 73,948 73,948
$ 175,000 43,583 58,192 72,801 87,411 87,411 87,411
$ 200,000 50,295 67,155 84,014 100,873 100,873 100,873
$ 225,000 57,008 76,117 95,226 114,336 114,336 114,336
$ 250,000 63,720 85,080 106,439 127,798 127,798 127,798
$ 300,000 77,145 103,005 128,864 154,723 154,723 154,723
$ 350,000 90,570 120,930 151,289 181,648 181,648 181,648
$ 400,000 103,995 138,855 173,714 208,573 208,573 208,573
$ 450,000 117,420 156,780 196,139 235,498 235,498 235,498
$ 500,000 130,845 174,705 218,564 262,423 262,423 262,423
$ 550,000 144,270 192,630 240,989 289,348 289,348 289,348
$ 600,000 157,695 210,555 263,414 316,273 316,273 316,273
$ 650,000 171,120 228,480 285,839 343,198 343,198 343,198
Covered compensation under the Centura Pension Plan and under the Excess Benefit
portion of the SERP is gross salary and wages reportable on Form W-2, including
salary reduction contributions to Centura's 401(k) and Flexible Benefits Plans,
incentive pay, overtime and bonuses, but excluding non-cash items, fringe
benefits, moving expenses, deferred compensation payments, and taxable benefits
paid under other plans, such as cash awards to pay taxes on restricted stock
distributions. Deferred compensation is also included in covered compensation
under the Excess Benefit portion of the SERP. The annual covered compensation
used in computing benefits under the Centura Pension Plan and under the Excess
Benefit portion of the SERP for the Named Executive Officers ("Covered
Compensation") is substantially equivalent to the annual Salary, Bonus,
Securities Underlying Options and LTIP Payouts disclosed in the Summary
Compensation Table.
Estimated benefit amounts shown in the table above are not subject to any
deduction for Social Security benefits or other offset amounts, and are based on
a straight life annuity.
15
As of December 31, 1999, the Named Executive Officers have completed the
following years of credited service under the Centura Pension Plan:
Cecil W. Sewell, Jr. ...... 13
William H. Wilkerson ...... 13
H. Kel Landis, III ........ 12
Frank L. Pattillo ......... 25
Steven J. Goldstein (1) ... 3
Centura also provides supplemental pension benefits (the "Supplemental
Benefits") to certain executive employees, including the Named Executive
Officers, under the SERP. The Supplemental Benefits are generally payable upon
retirement, death or disability. The Compensation Committee determines the
eligible participants and designs individualized Supplemental Benefit packages
for each participant. Supplemental Benefit retirement dates and payout periods
are set on a case-by-case basis.
The Supplemental Benefit for the five Named Executive Officers set forth below
is subject to changes in their compensation, but is not dependent on years of
service. The Supplemental Benefit formula for each of these individuals provides
for a monthly retirement payment equal to 70 percent of his final monthly
Covered Compensation, less amounts payable under the Centura Pension Plan, the
Excess Benefit portion of the SERP, and Social Security payments(2). The
Supplemental Benefit retirement age is 58(3), and payments are made for 20 years
for Messrs. Sewell, Wilkerson and Pattillo. The Supplemental Benefit retirement
age is 65 and payments are made for 15 years for Messrs. Landis and Goldstein.
The annual Supplemental Benefit payable for each of these five Named Executive
Officers is set forth below for the specified compensation classifications.
Annual Payment Annual Payment
Named Executive Officer (1999 Comp.)(3) (Maximum Comp.)(4)
------------------------- ----------------- -------------------
Cecil W. Sewell, Jr. ... $ 366,010 $ 441,427
William H. Wilkerson ... $ 192,633 $ 441,436
Frank L. Pattillo ...... $ 153,707 $ 371,895
H. Kel Landis III ...... $ 161,040 $ 376,214
Steven J. Goldstein .... $ 158,788 $ 376,214
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(1) Although the Social Security offset in the Supplemental Benefit does not
take effect until the Named Executive Officer reaches the age of 62, the
table reflects the full amount of the anticipated Social Security offset.
Prior to age 62, the Supplemental Benefit will include an additional annual
payment of approximately $15,120, $15,228, and $14,928, respectively, for
Messrs. Sewell, Wilkerson, and Pattillo. This additional payment is not
expected to vary with changes in Covered Compensation.
(2) In the event Messrs. Sewell, Wilkerson, and Pattillo do not retire at age
58, their annual Supplemental Benefits would be $31,346, $38,662, and
$40,800, respectively, paid over 15 years commencing upon retirement at age
65.
(3) This column shows the annual Supplemental Benefit assuming the participant's
final monthly Covered Compensation is equal to his 1999 Covered Compensation
as shown in the Summary Compensation Table.
(4) This column shows the annual Supplemental Benefit assuming the participant's
final monthly Covered Compensation is equal to 120 percent of the Covered
Compensation of the highest paid individual listed in the Summary
Compensation Table.
16
EXECUTIVE EMPLOYMENT AGREEMENTS
AGREEMENTS WITH THE CHAIRMAN OF THE BOARD OF DIRECTORS AND THE CHIEF EXECUTIVE
OFFICER
Centura and Centura Bank have jointly entered into employment agreements with
Messrs. Sewell and Patterson to secure their services as Chief Executive Officer
and Chairman of the Board of Directors, respectively. The term of each
employment agreement is approximately five years, with Mr. Sewell's term
expiring on March 10, 2005 and Mr. Patterson's term expiring on February 28,
2005. The agreements provide that each of the executives will receive the same
annual base salary and provide for a minimum base salary for each of $550,000.
The executives' annual base salary will be reviewed each year by the
Compensation Committee and may be increased annually with the approval of the
Board of Directors. In addition, the agreements provide that each executive will
participate in all bonus, incentive, savings, retirement, fringe benefit and
welfare benefit plans applicable generally to the most senior officers of
Centura and Centura Bank, and that each executive will receive the same level of
stock option or incentive awards as the other.
Centura and Centura Bank may terminate each executive's employment and each
executive may resign, at any time with or without cause. However, in the event
of termination by Centura or Centura Bank without cause, the executives will be
entitled to severance benefits. In general, in the event of termination without
cause, for the remaining term of the executive's employment agreement, the
executive will continue to receive the payment of his base salary and bonus and
will continue to participate in the welfare benefit and supplemental retirement
plans maintained by Centura and Centura Bank. Mr. Patterson will also be offered
a consulting arrangement for the remaining term of his employment agreement and
be entitled to continuing stock option and other incentive awards for the
remaining term at award levels provided to the Chief Executive Officer during
the same period. These same severance benefits would be payable to the executive
if the executive resigns during the term of his employment agreement for good
reason, meaning: a material reduction in the executives' position, authority
duties or responsibilities; involuntary relocation of the executive's place of
employment to a location more than 35 miles from Raleigh, North Carolina or
Rocky Mount, North Carolina; a reduction in the executives's base salary or
reduction or elimination of any benefit or compensation plan in which executive
participates without a comparable alternative plan being provided; or any
material breach of the employment agreement by Centura or Centura Bank. Mr.
Sewell would also be entitled to the same severance benefits if he resigns
following a change in control of Centura or Centura Bank.
If Centura or Centura Bank experiences a change in ownership or control as
contemplated under Section 280G of the Internal Revenue Code, a portion of the
severance benefits provided under the employment agreements might constitute an
"excess parachute payment" under current federal tax laws. Federal tax laws
impose a 20 percent excise tax, payable by the executive, on excess parachute
payments. Under the employment agreements, Centura would reimburse the executive
for the amount of the excise tax and all income and excise taxes imposed on the
reimbursement so that he will retain approximately the same net-after tax
amounts under the employment agreement that he would have retained if there was
no 20 percent excise tax. The effect of this provision is that Centura, rather
than the executive, bears the financial cost of the excise tax. Neither Centura
or Centura Bank could claim a federal income tax deduction for an excess
parachute payment, excise tax reimbursement payment or gross-up payment.
OTHER AGREEMENTS
Mr. Painter and Mr. Betts, who serve on the Centura Board of Directors, are each
a party to an employment agreement with a subsidiary of Centura entered into to
secure their services following Centura's acquisition of the subsidiary. In
connection with the acquisition of CLG, Inc. ("CLG") by Centura in November,
1996, Mr. Painter entered into an employment agreement with CLG for a term of
five years at a base salary of $360,000 and providing for additional
compensation and benefits to Mr. Painter equivalent to those enjoyed by
comparably situated officers of Centura. Such employment agreement has been
assumed by Centura Bank. In connection with the acquisition of Betts & Company
in November, 1997, Mr. Betts entered into an employment agreement with Centura
Insurance Services, Inc. ("CIS") for a term of five years at a base salary of
$240,000, with additional incentive compensation provided for based on the
performance of Mr. Betts and CIS, and providing for additional benefits to Mr.
Betts equivalent to those enjoyed by comparably situated officers of Centura.
OPTION REPRICING
No action was taken in 1999 to lower the exercise price of an option held by the
Named Executive Officers.
17
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of Centura during 1999 was composed of Messrs.
Redding (Chairman), Barnhardt, Bowers and Franklin, and C. Wood Beasley (who
reached mandatory retirement age in February 2000). None of the members of the
Compensation Committee were officers or employees of Centura or its subsidiaries
during 1999 or in prior years.
None of the executive officers of Centura served as a member of the Board of
Directors or as a member of the Compensation Committee (or other board committee
performing equivalent functions) of another entity during 1999, which entity had
an executive officer serving on the Board of Directors or as a member of the
Compensation Committee of Centura. Consequently, there are no interlocking
relationships between Centura and other entities that might affect the
determination of the compensation of executive officers of Centura.
COMPARATIVE COMPANY PERFORMANCE
The following line graph compares the monthly cumulative total shareholder
return of Centura Common Stock for the five-year period beginning December 31,
1995, and ending December 31, 1999, with the monthly cumulative total return of
each of the Standard & Poors Small Cap 600 Index, the Standard & Poors 500
Index, and the SNL NYSE Bank Index.
[LINE GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS ]
AS OF DECEMBER 31,
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
Centura Banks, Inc. ..................... $100.00 $148.42 $193.50 $305.79 $335.37 $203.64
Standard & Poors Small Cap 600 Index..... 100.00 129.96 157.01 196.89 193.96 213.27
Standard & Poors 500 Index............... 100.00 137.50 169.47 226.03 290.22 349.08
NYSE Bank Index**........................ 100.00 158.03 224.07 329.05 360.04 350.37
- ---------------
** Figures provided by SNL Securities.
(1) Assumes $100 invested at the close of trading on December 31, 1995 in
Centura Banks, Inc. Common Stock, Standard & Poors Small Cap 600, Standard &
Poors 500, and SNL NYSE Bank Index.
(2) Cumulative total return assumes reinvestment of dividends.
(3) Closing prices of Centura Common Stock reported on the NYSE Composite Tape
on December 31, 1995, 1996, 1997, 1998 and 1999 were $35.125, $44.625,
$69.000, $74.375 and $44.125, respectively.
18
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
From time to time, Centura Bank extends credit to executive officers and
directors of Centura, members of their immediate families, and companies with
which they are associated, in the ordinary course of their business. During 1999
and through January 31, 2000, the highest aggregate amount of such extensions of
credit was approximately $37.5 million (approximately 0.6 percent of Centura's
outstanding loans and leases at December 31, 1999). At December 31, 1999,
executive officers and directors, and their immediate families or related
entities, as a group, were indebted to Centura Bank in the approximate aggregate
amount of $33.7 million (approximately 0.6 percent of Centura's equity capital).
All extensions of credit to executive officers and directors were made in the
ordinary course of business and on the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable transactions
with unaffiliated parties. These loans do not involve more than the normal risk
of collectibility or present other unfavorable features. Centura Bank has had,
and expects to have in the future, similar banking transactions with directors,
executive officers, principal stockholders, and their associates.
In November 1997, Centura acquired Betts & Company, an insurance agency, of
which Thomas A. Betts, Jr., a Centura director, was a partner. The transaction
was on an arms-length basis and Mr. Betts took no part in the deliberations of
the Board of Directors regarding the transaction.
In November 1996, Centura acquired CLG, Inc., a technology leasing company
headquartered in Raleigh, North Carolina ("CLG"). Following its acquisition by
Centura, CLG entered into a lease with Painter Properties, which is 100 percent
owned by Mr. Painter, for CLG's main administrative office building in Raleigh,
North Carolina, providing for total aggregate rental payments over the remaining
term of the lease of approximately $18,125.
Centura Bank has entered into a lease with Cameron-Edenton Company for a
drive-in bank facility in Edenton, North Carolina, which provides for total
aggregate rental payments over the remaining term of the lease of approximately
$188,658. Charles M. (Terry) Reeves, III, a director of Centura, is a 50
percent partner in Cameron-Edenton Company. In connection with his election to
Centura's Audit Committee in 1999, the Centura Board of Directors reviewed the
potential impact of Mr. Reeves' business relationship with Centura on his
exercise of independent judgment as a director and found that there was no
adverse impact on his independence as a result of such relationship.
Centura Bank has entered into a lease with Wren Land Company for a drive-up
banking facility and administrative offices in Wilson, North Carolina, which
provides for total aggregate rental payments over the remaining term of the
lease of approximately $368,172. George T. Stronach III, a director of Centura,
owns one-third of Wren Land Company. In connection with his election to
Centura's Audit Committee in 1999, the Centura Board of Directors reviewed the
potential impact of Mr. Stronach's business relationship with Centura on his
exercise of independent judgment as a director and found that there was no
adverse impact on his independence as a result of such relationship.
Charles T. Lane, a director of Centura, is of counsel to the law firm of Poyner
& Spruill, L.L.P., which firm performed legal services for Centura and Centura
Bank during 1999. During 1999, fees paid to Poyner & Spruill, L.L.P. by Centura
for legal services were, in the aggregate, $1,645,796, which exceeded five
percent of Poyner & Spruill, L.L.P.'s gross revenues.
O. Tracy Parks, III, a director of Centura, is a partner in the law firm Parks,
Pate & Scarborough, L. L. P., which firm performed legal services for Centura
Bank during 1999. During 1999, fees paid to Parks, Pate & Scarborough, L.L.P. by
Centura Bank for legal services did not exceed five percent of the firm's gross
revenues.
19
ITEM OF BUSINESS 2
APPROVAL OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
At its meeting on February 16, 2000, the Centura board of directors approved the
amendment and restatement of Centura's articles of incorporation to: (i) make
technical revisions deleting extraneous provisions no longer applicable to
Centura and (ii) increase the authorized common stock of Centura from 50 million
shares to 100 million shares. The revisions described in item (i) of the
preceding sentence were done by the Board of Directors under its inherent power
under North Carolina law; the increase in the authorized common stock requires
shareholder approval under North Carolina law and are hereby submitted for such
approval.
The Board of Directors approved the amendment of the articles of incorporation
to increase Centura's authorized Centura Common Stock from 50 million shares to
100 million shares because the number of such shares outstanding after the
conclusion of the acquisition of Triangle Bancorp, Inc. ("Triangle") on February
18, 2000, was over 40 million, leaving Centura with a relatively small number of
shares available for: (i) financing the operations of Centura and its
subsidiaries; (ii) issuance as all or a portion of the price of acquisitions by
Centura; (iii) funding Centura's compensation program; (iv) stock splits; or (v)
other corporate purposes.
The Board of Directors of Centura has unanimously approved the amended and
restated articles of incorporation and recommends that you vote in favor of
approval of the amended and restated articles of incorporation. A copy of the
amended and restated articles of incorporation is attached to this Proxy
Statement as Exhibit A.
INDEPENDENT ACCOUNTANTS
KPMG LLP, Certified Public Accountants ("KPMG"), served as independent public
accountants for the purpose of auditing Centura's consolidated financial
statements for the year 1999. A representative of KPMG is expected to be present
at the Annual Meeting to answer questions concerning the financial statements
presented and will be permitted to make a statement at the meeting.
As a result of the pending merger between Centura Banks, Inc. and Triangle
Bancorp, Inc., and the corresponding appointment of Triangle's CEO, Michael S.
Patterson, as Chairman of the combined company, management has decided to retain
PricewaterhouseCoopers LLP ("PWC") as its independent public accountants. PWC
has served as the independent public accountants for Triangle since Triangle was
formed in 1988. On December 15, 1999, the Audit Committee of the Board of
Directors approved this recommendation and formally elected to (i) engage PWC as
the independent accountants for Centura and (ii) dismiss KPMG as such
independent accountants. Centura's 1999 audited financial statements will be
opined upon by KPMG. PWC will become Centura's independent accountants upon the
completion of the 1999 audit and issuance of the related financial statements.
During the two most recent fiscal years ended December 31, 1999, (i) the
financial statements of Centura did not contain an adverse opinion or a
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope, or accounting principles, and (ii) there were no disagreements with KPMG
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to its satisfaction would have caused it to make reference in connection with
its report to the subject matter of the disagreement.
SHAREHOLDER PROPOSALS
It is anticipated that Centura will hold its 2001 annual meeting of shareholders
in April 2001. Shareholders wishing to submit proposals for inclusion in the
Centura Proxy Statement for the 2000 annual meeting must submit such proposals
to the Secretary of Centura by November 20, 2000, in order to be considered for
inclusion in the proxy materials for such meeting. The Board of Directors of
Centura will review any shareholder proposal that is received by this date and
will determine whether any such proposal should be included in the proxy
solicitation materials for the 2001 annual meeting. Proposals so presented may
be excluded from the proxy solicitation materials if they fail to meet certain
criteria established under the Exchange Act. Shareholders are urged to submit
any such proposal to Centura by certified mail, return receipt requested.
20
VOTING VIA THE INTERNET OR BY TELEPHONE
Stockholders voting via the Internet should understand that there may be costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies, that must be borne by the stockholder.
SHARES REGISTERED IN THE NAME OF A BROKERAGE FIRM OR BANK
A number of brokerage firms and banks are participating in a program provided
through ADP Investor Communication Services that offers telephone and Internet
voting options. If your shares are held in an account at a brokerage firm or
bank participating in the ADP program, you may vote those shares telephonically
by calling the telephone number referenced on your voting form or you may vote
via the Internet at the following address on the World Wide Web:
www.proxyvote.com
and follow the instructions on your screen.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of Centura knows
of no matters that will be presented for consideration at the Annual Meeting
other than as described in this Proxy Statement. However, if any other matters
should properly come before the Annual Meeting or any adjournment or
postponement thereof and be voted upon, the enclosed proxy will be deemed to
confer discretionary authority upon the individuals named as proxies therein to
vote the shares represented by such proxy as to any such matters.
Michael S. Patterson
Chairman of the Board
Cecil W. Sewell
Chief Executive Officer
By order of the Board of Directors
March __, 2000
21
EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CENTURA BANKS, INC.
The undersigned does hereby submit these Amended and Restated Articles of
Incorporation (the "Articles") for the purpose of integrating into one document
its original articles of incorporation and all amendments thereto, said original
articles having been filed previously for the purpose of forming a business
corporation under the laws of the State of North Carolina:
ARTICLE I
The name of the corporation is CENTURA BANKS, INC. (the "Corporation").
ARTICLE II
The period of duration of the Corporation is perpetual.
ARTICLE III
The purpose for which the Corporation is organized is to engage in any
lawful act or activity for which corporations may be organized under Chapter 55
of the General Statutes of North Carolina (the "North Carolina Business
Corporation Act" or the "Act").
ARTICLE IV
Section 4.1. Total Number of Shares of Stock. The total number of shares of
capital stock of all classes that the Corporation shall have the authority to
issue is 125,000,000 shares. The authorized capital stock is divided into
25,000,000 shares of preferred stock, without par value (the "Preferred Stock"),
and 100,000,000 shares of common stock, without par value (the "Common Stock").
Section 4.2. Preferred Stock. (a) The shares of Preferred Stock of the
Corporation may be issued from time to time in one or more classes or series,
the shares of each class or series to have such voting powers, full or limited,
or no voting powers, and such designations, preferences and rights (or
qualifications, limitations or restrictions thereof) as are stated in the
resolution or resolutions providing for the issue of such class or series
adopted by the Board of Directors as provided in Section 4.2(b).
(b) Authority is granted to the Board of Directors of the Corporation,
subject to the provisions of this Article IV and to the limitations prescribed
by the North Carolina Business Corporation Act, to authorize the issuance of one
or more classes, or series within a class, of Preferred Stock and with respect
to each such class or series to fix by resolution or resolutions the voting
powers, full or limited, if any, of the shares of such class or series and the
designations, preferences and rights (or qualifications, limitations or
restrictions thereof).
Section 4.3. Common Stock. The shares of Common Stock of the Corporation
shall be of one and the same class. Subject to the rights of the Preferred Stock
provided for by resolution or resolutions of the Board of Directors pursuant to
this Article IV or by the Act, the holders of shares of Common Stock shall have
one vote per share on all matters on which holders of shares of Common Stock are
entitled to vote.
The holders of shares of Common Stock shall receive the net assets of the
Corporation upon dissolution.
ARTICLE V
The minimum amount of consideration to be received by the Corporation for
its shares before it shall commence business is Ten Dollars ($10.00) in cash or
property of equivalent value.
A-2
ARTICLE VI
The shareholders of the Corporation shall have no right to cumulate their
votes for the election of directors.
ARTICLE VII
The shareholders of the Corporation shall have no preemptive right to
acquire additional or treasury shares of the Corporation.
ARTICLE VIII
The address of the registered office of the Corporation in the State of
North Carolina is 131 North Church Street, Rocky Mount, Nash County, North
Carolina, and the name of its registered agent at such address is John B.
Fleming, Jr.
ARTICLE IX
Section 9.1. Number of Directors. The number of directors constituting the
Board of Directors shall be not less than 15 nor more than 30, as specified in
the Bylaws of the Corporation (the "Bylaws"), divided into three classes as
described in Section 9.2.
Section 9.2. Classified Board of Directors. The Board of Directors shall be
divided into three (3) classes, Class I, Class II, and Class III, which shall be
as nearly equal in number as possible. At the first annual meeting of
shareholders of the Corporation following the filing of the original Articles of
Incorporation of this Corporation with the North Carolina Secretary of State in
1990, each Director in Class I was elected to a term of one (1) year, each
Director in Class II was elected to a term of two (2) years, and each Director
in Class III was elected to a term of three (3) years, to serve until the
election and qualification of a successor or until their earlier resignation,
death, or removal from office. After the expiration of the term of office for
A-3
each class of Directors elected at the first annual meeting of shareholders, the
Directors of each class have been and shall be elected for a term of three (3)
years, to serve until the election and qualification of their successors or
until their earlier resignation, death, or removal from office.
Section 9.3. Removal of Directors. Any Director, or the entire Board of
Directors, may be removed from office at any time, with or without cause, but
only by the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the voting power of all of the shares of capital stock of
the Corporation then entitled to vote generally in the election of Directors. If
a Director was elected by the holders of one class or series of capital stock,
or of a group of such classes or series, only members of that voting group may
participate in the vote to remove him.
Section 9.4. Vacancies. Any vacancy occurring in the Board of Directors,
including, without limitation, a vacancy resulting from an increase in the
number of Directors or from the failure by the shareholders to elect the full
authorized number of Directors, shall be filled only by the Board of Directors
or, if the Directors remaining in office constitute fewer than a quorum of the
Board, by the affirmative vote of a majority of the remaining Directors or by
the sole remaining Director. If the vacant office was held by a Director elected
by the holders of one class or series of capital stock, or of a group of such
classes or series, only the remaining Director or Directors elected by that
voting group are entitled to fill the vacancy.
Section 9.5. Factors to be Considered by the Directors. In connection with
the exercise of its or his judgment in determining what is in the best interests
of the Corporation and its shareholders, the Board of Directors of the
Corporation, any committee of the Board of Directors, or any individual director
may, but shall not be required to, in addition to considering the long-term and
short-term interests of the shareholders, consider any of the following factors
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and any other factors which it or he deems relevant: (i) the social and economic
effects of the matter to be considered on the Corporation and its subsidiaries,
its and their employees, depositors, customers, and creditors, and the
communities in which the Corporation and its subsidiaries operate or are
located; and (ii) when evaluating a business combination or a proposal by
another Person or Persons to make a business combination or a tender or exchange
offer or any other proposal relating to a potential change of control of the
Corporation (x) the business and financial condition and earnings prospects of
the acquiring Person or Persons, including, but not limited to, debt service and
other existing financial obligations, financial obligations to be incurred in
connection with the acquisition, and other likely financial obligations of the
acquiring Person or Persons, and the possible effect of such conditions upon the
Corporation and its subsidiaries and the communities in which the Corporation
and its subsidiaries operate or are located, (y) the competence, experience, and
integrity of the acquiring Person or Persons and its or their management, and
(z) the prospects for successful conclusion of the business combination, offer
or proposal. The provisions of this Section shall be deemed solely to grant
discretionary authority to the directors and shall not be deemed to provide to
any constituency the right to be considered. As used in this Section, the term
"Person" means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity; when two or more Persons act
as a partnership, limited partnership, syndicate, or other group acting in
concert for the purpose of acquiring, holding, voting or disposing of securities
of the Corporation, such partnership, limited partnership, syndicate or group
shall also be deemed a "Person" for purposes of this Section.
A-5
ARTICLE X
Section 10.1. Approval of Business Combinations. With regard to any
Business Combination (as defined in Section 10.5(b)) between the Corporation and
any other corporation, person, or other entity, excluding its Subsidiaries (as
defined in Section 10.5(g)) except as provided in section 10.5(b)(x), such
Business Combination must be approved only as follows unless otherwise more
restrictively required by applicable North Carolina law:
(a) The Business Combination must be approved by resolution adopted by
affirmative vote of a majority of a quorum of the Board of Directors;
(b) In addition to the Board approval specified in section 10.1(a), the
Business Combination must receive one of the following levels of shareholder
approval:
(1) At a special or annual meeting of shareholders by an affirmative
vote of the shareholders holding at least a majority of the shares of the
Corporation issued and outstanding and entitled to vote thereon if such Business
Combination has received the prior approval by resolution adopted by an
affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of the
full Board of Directors before such Business Combination is submitted for
approval to the shareholders; or
(2) At a special or annual meeting of shareholders by affirmative vote
of the shareholders holding at least sixty-six and two-thirds percent (66-2/3%)
of the shares of the Corporation issued and outstanding and entitled to vote
thereon if such Business Combination has received the prior approval by
resolution adopted by an affirmative vote of a majority of a quorum (but less
than sixty-six and two-thirds percent (66-2/3%) of the Board of Directors); and
A-6
(c) If the Business Combination is to be approved pursuant to Section
10.1(b)(2) the Business Combination as approved must grant to shareholders not
voting to approve the Business Combination the rights set forth in Section 10.2.
Section 10.2. Fair Price. When any Business Combination above is approved
pursuant to Section 10.1(b)(2), any shareholder not voting to approve the
Business Combination may elect to sell his shares for cash to the Corporation at
their "Fair Price" (as defined in Section 10.5(f)), upon so notifying the
Corporation in writing within twenty (20) days after receiving written
notification of his rights hereunder and that the Business Combination was
approved by the Corporation's shareholders. The Corporation shall have ten (10)
days after receipt of the shareholder's tender of shares to make payment in
cash. Tender of shares may be made simultaneously with, or after, the
shareholder's written notification that he is electing to be paid the Fair Price
of his shares. The Business Combination shall not be consummated until all
shareholders electing to sell their shares for cash to the Corporation at their
Fair Price pursuant to this Article X have been paid in full by the Corporation.
Section 10.3. Certain Restrictions on Business Combinations. Notwithstanding
any other provision of this Article X, prior to the consummation of any Business
Combination between the Corporation and a Control Person (as defined in Section
10.5(c)):
(a) such Control Person shall not have received the benefit, directly or
indirectly (except proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or tax credits provided by the
Corporation; and
(b) there shall have been no increase or reduction in the annual rate of
dividends paid on the Corporation's common stock after the Control Person became
such (except as necessary to
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reflect any subdivision of the common stock), unless such increase or reduction
has been approved by a majority of Disinterested Directors (as defined in
Section 10.5(e)).
Section 10.4. Amendments to Articles of Incorporation. Amendments to these
Articles of Incorporation shall be adopted only upon receiving the affirmative
vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of
all the shares of capital stock of the Corporation issued and outstanding and
entitled to vote thereon; provided, however, that if such amendment shall have
received prior approval by resolution adopted by an affirmative vote of a
majority of Disinterested Directors, then the affirmative vote of the holders of
at least a majority of all the shares of capital stock of the Corporation issued
and outstanding and entitled to vote, or such greater percentage approval as
required by North Carolina law, shall be sufficient to amend these Articles of
Incorporation.
Section 10.5. Definitions. As used in this Article X, the following terms
shall have the following meanings:
(a) "Affiliate," as used in defining "Control Person," shall mean a
corporation, person, group, or other entity that directly or indirectly
controls, is controlled by, or is under common control with the Control Person.
(b) "Business Combination" shall mean (i) any merger or consolidation of the
Corporation into any other corporation, person, group or other entity where the
Corporation is not the surviving or resulting entity; (ii) any merger or
consolidation of the Corporation with or into any Control Person or with any
corporation, person, group or other entity where the merger or consolidation is
proposed by or on behalf of a Control Person; (iii) any sale, lease, exchange,
transfer, hypothecation or other disposition of all or substantially all of the
assets of the corporation; (iv) any sale, lease, exchange, transfer,
hypothecation or other disposition of a
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Substantial Part (as defined in Section 10.5(h)) of the assets of the
Corporation to a Control Person, whether in a single transaction or in related
transactions; (v) the issuance of any securities of the Corporation to a Control
Person; (vi) the acquisition by the Corporation of any securities of a Control
Person unless such acquisition commences prior to the person becoming a Control
Person or is an attempt to prevent the Control Person from obtaining greater
control of the Corporation; (vii) the acquisition by the Corporation of all or
substantially all of the assets of any Control Person or any corporation,
person, group or other entity where the acquisition is proposed by or on behalf
of a Control Person; (viii) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation which is proposed by or on behalf
of a Control Person; (ix) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation which has the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Corporation which is beneficially owned or controlled by a Control Person; (x)
any of the transactions described in this definition of Business Combination
which are between the Corporation and any of its Subsidiaries and which are
proposed by or on behalf of any Control Person; or (xi) any agreement, plan,
contract or other arrangement providing for any of the transactions described in
this definition of Business Combination.
(c) "Control Person" shall mean and include any corporation, person, group
or other entity which, together with its Affiliates prior to a Business
Combination, beneficially owns (as the term is defined by federal securities
law) ten percent (10%) or more of the shares of any class of equity or
convertible securities of the Corporation, and any Affiliate of any such
corporation, person, group or other entity.
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(d) "Corporation" shall mean Centura Banks, Inc. and its Subsidiaries, or
any one of them, and their successors.
(e) "Disinterested Director" shall mean any member of the Board of Directors
of the Corporation who is unaffiliated with, and not a nominee of, a Control
Person and was a member of the Board of Directors prior to the time a Control
Person became such, or the successor of a Disinterested Director who is
unaffiliated with, and not a nominee of, a Control Person and who is recommended
to succeed a Disinterested Director by a majority of Disinterested Directors
then on the Board of Directors.
(f) "Fair Price" shall mean the highest of the following: (i) the highest
price per share paid for the Corporation's shares during the four years
immediately preceding the Section 10.1(b)(2) vote of shareholders by any
shareholder who, at the time of the Section 10.1(b)(2) shareholder vote,
beneficially owned five percent (5%) or more of the Corporation's common stock
and who, in whole or in part, votes in favor of the Business Combination; (ii)
the cash value of the highest price per share previously offered pursuant to a
tender offer to the shareholders of the Corporation within the four years
immediately preceding the Section 10.1(b)(2) shareholder vote; (iii) the
aggregate earnings per share of the Corporation's common stock during the four
fiscal quarters immediately preceding the Section 10.1(b)(2) shareholder vote,
multiplied by the highest price/earnings ratio of the Corporation's common stock
at any time during the four fiscal quarters or up to the date the Section
10.1(b)(2) shareholder vote occurs; (iv) the highest price per share (including
brokerage commissions, soliciting dealers' fees and dealer-management
compensation) paid by a Control Person in acquiring any of its holdings of the
Corporation's common stock; (v) the fair value per share of a share of the
Corporation's common stock as determined by an investment banking or appraisal
firm chosen by a majority of
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the members of the Board of Directors voting against the Business Combination,
if any such firm is chosen by such members of the Board of Directors acting in
their discretion (such firm, if chosen, shall be entitled to be paid by the
Corporation a reasonable fee for its services upon its rendering a determination
of the fair value of the Corporation's common stock) not taking into
consideration the fact that the shares are held by a minority of the
Corporation's shareholders.
(g) "Subsidiaries" shall mean any entity in which the Corporation owns,
directly or indirectly, a majority of voting stock.
(h) "Substantial Part" shall mean more than ten percent (10%) of the total
assets of the Corporation, as of the end of the Corporation's most recent fiscal
year prior to the time the determination is being made.
ARTICLE XI
The Board of Directors shall have the power to amend or repeal the Bylaws
except to the extent otherwise provided in the Act. In addition to any
requirements of the Bylaws and the Act as in effect from time to time (and
notwithstanding the fact that a lesser percentage may be specified by the Bylaws
or the Act), the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the voting power of all the shares of capital
stock of the Corporation then entitled to vote generally in the election of
directors, voting together as a single class, shall be required for the
shareholders of the Corporation to amend or repeal the Bylaws.
ARTICLE XII
Section 12.1. Limitation on Directors' Liability For Acts or Omissions. A
Director of the Corporation shall have no personal liability arising out of an
action whether by or in the right of the Corporation or otherwise for monetary
damages for breach of any duty as a Director. This Section 12.1 shall not be
effective, however, with respect to: (i) acts or omissions that the
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Director at the time of such breach knew or believed were clearly in conflict
with the best interests of the Corporation, (ii) any liability under Section
55-8-33 of the North Carolina General Statutes; (iii) any transaction from which
the Director derived an improper personal benefit; or (iv) acts or omissions
occurring prior to 12:01 a.m. on July 1, 1990. This Section 12.2 shall apply to
acts or omissions occurring at or after 12:01 a.m. on July 1, 1990.
Section 12.2. Repeal or Modification. Any repeal or modification of Section
12.2 shall not adversely affect any right or protection of a Director of the
Corporation existing at the time of such repeal or modification.
ARTICLE XIII
Section 13.1. Opt-Out of North Carolina Shareholder Protection Act. The
provisions of the North Carolina Shareholder Protection Act, whether as
previously codified in Article 7 of Chapter 55 of the North Carolina General
Statutes or as codified, effective July 1, 1990, in Article 9 of Chapter 55 of
the North Carolina General Statutes, and as amended from time to time, shall not
be applicable to the Corporation.
Section 13.2. Opt-Out of North Carolina Control Share Acquisition Act. The
provisions of the North Carolina Control Share Acquisition Act, whether as
previously codified in Article 7A of Chapter 55 of the North Carolina General
Statutes or as codified, effective July 1, 1990, in Article 9A of Chapter 55 of
the North Carolina General Statutes, and as amended from time to time, shall not
be applicable to the Corporation.
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IN WITNESS WHEREOF, the undersigned has executed these Articles this ______
day of ___________________, _________.
CENTURA BANKS, INC.
By: _________________________ (SEAL)
Name: Joseph A. Smith, Jr.
Title: Secretary
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