<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Ambanc Holding Co., Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
AMBANC HOLDING CO., INC.
[LOGO] ----------------------------------------------------------------------
11 Division Street / Amsterdam, NY 12010-4312
Telephone: (518) 842-7200/ Fax: (518) 842-7500
April 23, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Ambanc Holding Co.,
Inc. (the "Company"), we cordially invite you to attend the Annual Meeting of
Stockholders of the Company. The meeting will be held at 10:00 a.m., New York
time, on May 23, 1997 at the Best Western (formerly the Holiday Inn) located at
10 Market Street, Amsterdam, New York. At the meeting we will report on the
Company's operations and outlook for the year ahead.
An important aspect of the annual meeting process is the annual stockholder
vote on corporate business items. I urge you to exercise your rights as a
stockholder to vote and participate in this process. In addition to the election
of four directors and the ratification of the appointment of auditors,
stockholders are being asked to consider and vote on proposals to ratify the
adoption of the 1997 Stock Option and Incentive Plan and the Recognition and
Retention Plan. The Board has carefully considered each of these proposals and
believes that their approval will enhance the ability of the Company to recruit
and retain quality management. Accordingly, your Board of Directors unanimously
recommends that you vote FOR each of the proposals.
We encourage you to attend the meeting in person. Whether or not you plan
to attend, however, PLEASE READ THE ENCLOSED PROXY STATEMENT AND THEN COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTPAID
RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This will save the Company additional
expense in soliciting proxies and will ensure that your shares are represented
at the meeting.
Your Board of Directors and management are committed to the success of
Ambanc Holding Co., Inc., and the enhancement of your investment. As President
and Chief Executive Officer, I want to express my appreciation for your
confidence and support.
Very truly yours,
/s/ Robert J. Brittain
ROBERT J. BRITTAIN
President and Chief Executive Officer
<PAGE>
AMBANC HOLDING CO., INC.
11 Division Street
Amsterdam, New York 12010-4303
(518) 842-7200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 23, 1997
Notice is hereby given that the Annual Meeting of Stockholders of Ambanc
Holding Co., Inc. (the "Company") will be held at the Best Western (formerly the
Holiday Inn) located at 10 Market Street, Amsterdam, New York, on May 23, 1997,
at 10:00 a.m., New York time.
A proxy card and a proxy statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of four directors of the Company;
2. The ratification of the adoption of the 1997 Stock Option and
Incentive Plan;
3. The ratification of the adoption of the Recognition and Retention
Plan;
4. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year ending
December 31, 1997; and
such other matters as may properly come before the Meeting or any adjournments
thereof. The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on April 15, 1997
are the stockholders entitled to vote at the Meeting and any adjournments
thereof. A complete list of stockholders entitled to vote at the Meeting will
be available for inspection by stockholders at the offices of the Company during
the ten days prior to the Meeting, as well as at the Meeting.
You are requested to complete, sign and date the enclosed form of proxy
which is solicited on behalf of the Board of Directors and to mail it promptly
in the enclosed envelope. The proxy will not be used if you attend and vote at
the Meeting in person or otherwise properly revoke such proxy.
By Order of the Board of Directors
/s/ Robert J. Brittain
Robert J. Brittain
President and Chief Executive Officer
Amsterdam, New York
April 23, 1997
________________________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES .
________________________________________________________________________________
<PAGE>
AMBANC HOLDING CO., INC.
11 Division Street
Amsterdam, New York 12010-4303
(518) 842-7200
____________________
PROXY STATEMENT
____________________
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 1997
____________________
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Ambanc Holding Co., Inc. (the "Company") of
proxies to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting"), to be held at the Best Western (formerly the Holiday Inn) located at
10 Market Street, Amsterdam, New York, on May 23, 1997, at 10:00 a.m., New York
time, and all adjournments of the Meeting. The accompanying Notice of Meeting
and this Proxy Statement are first being mailed to stockholders on or about
April 23, 1997. Certain of the information provided herein relates to Amsterdam
Savings Bank, FSB (the "Bank"), a wholly owned subsidiary and predecessor of the
Company.
At the Meeting, stockholders of the Company are being asked to consider and
vote upon the election of four directors of the Company and proposals to ratify
the adoption of the Company's 1997 Stock Option and Incentive Plan (the "Stock
Option Plan"), the adoption of the Company's Recognition and Retention Plan
("RRP") and the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
VOTING RIGHTS AND PROXY INFORMATION
All shares of Company common stock, par value $.01 per share (the "Common
Stock"), represented at the Meeting by properly executed proxies received prior
to or at the Meeting, and not revoked, will be voted at the Meeting in
accordance with the instructions thereon. If no instructions are indicated,
properly executed proxies will be voted FOR the nominees and the adoption of the
proposals set forth in this Proxy Statement. The Company does not know of any
matters, other than as described in the Notice of Annual Meeting of
Stockholders, that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named in the enclosed
form of proxy and acting thereunder will have the discretion to vote on such
matters in accordance with their best judgment.
Directors shall be elected by a plurality of the votes present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
Meeting and entitled to vote on the matter shall be the act of the stockholders.
Proxies marked to abstain and broker non-votes have the same effect as
votes against the ratification of the Stock Option Plan and the RRP. In all
other matters, proxies marked to abstain have the same effect as votes against
the proposal, while broker non-votes have no effect on the vote. One-third of
the shares of the Common Stock present, in person or represented by proxy, shall
constitute a quorum for purposes of the Meeting. Abstentions and broker non-
votes are counted for purposes of determining a quorum.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by (i) duly executing and delivering
to the Secretary of the Company a later proxy relating to the same shares prior
to the exercise of such proxy, (ii) duly executing and delivering to the
Secretary of the Company a written notice of revocation bearing a later date
than the proxy or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Robert
Kelly, Vice President and Corporate Secretary of the Company, 11 Division
Street, Amsterdam, New York 12010-4303.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on April 15, 1997 (the
"Voting Record Date") will be entitled to one vote for each share then held. As
of that date, the Company had 4,392,023 shares of Common Stock issued and
outstanding. The following table sets forth, as of the Voting Record Date,
information regarding share ownership of: (i) those persons or entities known by
management to beneficially own more than five percent of the Company's Common
Stock and (ii) all directors and officers as a group. See "Proposal I -
Election of Directors" for information regarding share ownership of the
Company's Directors and Chief Executive Officer.
Shares Beneficially Percent of
Beneficial Owners Owned Class
- ----------------- ------------------- ----------
Ambanc Holding Co., Inc./(1)/ 433,780 9.9%
Employee Stock Ownership Plan
11 Division Street
Amsterdam, New York 12010
First Financial Fund, Inc./(2)/ 256,700 5.8%
Gateway Center Three
100 Mulberry Street, 9/th/ Floor
Newark, New Jersey 07102
Wellington Management Company, LLP /(2)/ /(2)/
75 State Street
Boston, Massachusetts 02109
John Hancock Advisers, Inc./(3)/ 250,000 5.7%
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02199
Directors and executive officers/(4)/ 49,404 1.1%
of the Company and the Bank
as a group (16 persons)
- ----------------------
(1) The amount reported represents shares of Common Stock held by the Ambanc
Holding Co., Inc. Employee Stock Ownership Plan (the "ESOP"). As of the
Voting Record Date, 52,964 shares of Common Stock under the ESOP have been
allocated to accounts of participants. First Bankers Trust Company, N.A.,
Quincy, Illinois, as the trustee of the ESOP, may be deemed to beneficially
own the shares held by the ESOP which have not been allocated to the
accounts of participants or which have been allocated but not voted by the
participants. Pursuant to the terms of the ESOP, participants in the ESOP
have the right to direct the voting of shares allocated to participant
accounts.
(2) As reported by First Financial Fund, Inc. ("First Financial") on a Schedule
13G filed with the Securities and Exchange Commission (the "Commission")
under the Securities Exchange Act of 1934, as amended (the Exchange Act").
First Financial reported sole voting and shared dispositive power with
respect to all shares reported in its Schedule 13G. The Wellington
Management Company, LLP filed a separate Schedule 13G, in its capacity as
investment advisor to First Financial, reporting shared dispositive power
with respect to all 256,700 shares.
(3) As reported by the John Hancock Mutual Life Insurance Company ("JHML"),
JHML's direct, wholly-owned subsidiary, John Hancock Subsidiary, Inc.
("JHSI"), JHSI's direct, wholly-owned subsidiary, John Hancock Asset
Management ("JHAM"), JHAM's wholly-owned subsidiary, The Berkely Financial
Group ("TBFG"), and TBFG's wholly-owned subsidiary, John Hancock Advisers,
Inc. ("JHA") on a Schedule 13G filed with the Commission under the Exchange
Act. JHA reported sole voting and dispositive power with respect to all
shares reported.
(4) This amount includes shares held directly, as well as shares held jointly
with family members, shares held in retirement accounts, held in a
fiduciary capacity, held by certain of the group members' families, or held
by trusts of which the group member is a trustee or substantial
beneficiary, with respect to which shares the group member may be deemed to
have sole or shared voting and/or investment powers.
2
<PAGE>
PROPOSAL I -- ELECTION OF DIRECTORS
The Company's Board of Directors is composed of ten members.
Approximately one-third of the directors are elected annually to serve for a
three-year term or until their respective successors are elected and qualified.
The following table sets forth certain information, as of the Voting
Record Date, regarding the composition of the Company's Board of Directors,
including each director's term of office. The Board of Directors acting as the
nominating committee has recommended and approved the nominees identified in the
following table. It is intended that the proxies solicited on behalf of the
Board of Directors (other than proxies in which the vote is withheld as to a
nominee) will be voted at the Meeting FOR the election of the nominees
identified below. If a nominee is unable to serve, the shares represented by
all valid proxies will be voted for the election of such substitute nominee as
the Board of Directors may recommend. At this time, the Board of Directors
knows of no reason why a nominee might be unable to serve if elected. Except as
disclosed herein, there are no arrangements or understandings between any
nominee and any other person pursuant to which the nominee was selected.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
DIRECTOR TERM TO BENEFICIALLY PERCENT
NAME AGE (1) POSITION(S) HELD IN THE COMPANY SINCE(2) EXPIRE OWNED(3) OF CLASS
- ------------------------ --------- ------------------------------- --------- ------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
John J. Daly 56 Director 1988 2000 4,001 (4)
Lionel H. Fallows 76 Director 1981 2000 3,001 (4)
Marvin R. LeRoy, Jr. 36 Director 1996 2000 985 (4)
William A. Wilde, Jr. 79 Director 1966 2000 1,001 (4)
DIRECTORS CONTINUING IN OFFICE
Paul W. Baker 79 Chairman of the Board 1963 1999 1,001 (4)
Robert J. Dunning, DDS 70 Director 1972 1999 4,001 (4)
Carl A. Schmidt, Jr. 71 Director 1974 1999 3,001 (4)
Lauren T. Barnett 71 Director 1966 1998 15,701 (4)
Robert J. Brittain 56 President, Chief Executive 1988 1998 3,927 (4)
Officer
and Director
Charles S. Pedersen 71 Director 1977 1998 2,501 (4)
- --------------------
</TABLE>
(1) At December 31, 1996.
(2) Includes service as a director of the Bank.
(3) Amounts include shares held directly and jointly with family members, as
well as shares which are held in retirement accounts, held in a fiduciary
capacity, held by certain members of the director's family, or held by
trusts of which the director is a trustee or substantial beneficiary, with
respect to which shares the respective directors may be deemed to have sole
or shared voting and/or investment powers.
(4) Less than 1.0% of total shares outstanding.
3
<PAGE>
The business experience of each director of the Company for at least
the past five years is set forth below.
JOHN J. DALY. Mr. Daly is the Vice President and was a former owner
of Alpin Haus, Inc., a retail company located in Amsterdam, New York, which
specializes in the sale of recreational vehicles. Mr. Daly has been associated
with Alpin Haus since 1963.
LIEUTENANT COLONEL LIONEL H. FALLOWS. Lieutenant Colonel Fallows is a
retired logistics manager, Stratton Air National Guard Base, Schenectady, New
York and Deputy Group Commander, 109th Military Airlift Group, New York Air
National Guard. Lieutenant Colonel Fallows retired in 1980.
MARVIN R. LEROY, JR. Mr. LeRoy is Executive Director of the
Alzheimer's Association, Northeastern New York Chapter and is also Town/County
Supervisor for Saratoga County representing the Town of Clifton Park.
Previously, he has served as Development Officer for Skidmore College in
Saratoga Springs, Executive Director of the Kenwood Child Development Center in
Albany, Executive Director of the Amsterdam City Center (YMCA) and served as
Executive Director of the Montgomery County Youth Bureau, Planning Officer for
the Montgomery County Planning Department, and Director of the Montgomery County
Veterans Services. Mr. LeRoy is a graduate, with a Bachelors degree in
Political Science, of Siena College and received a Masters degree in Public
Administration from the Sage Graduate School. Mr. LeRoy is also active in the
community having served on over 25 boards and councils throughout the Capital
District.
WILLIAM A. WILDE, JR. Mr. Wilde is a retired Vice President of
Operations for Amsterdam Printing and Litho Corp., located in Amsterdam, New
York. Mr. Wilde retired in 1983.
PAUL W. BAKER. Mr. Baker has been the Chairman of the Board of
Directors of the Bank since 1988. Mr. Baker retired as President in 1981 from
Morrison and Putnam, Inc., a musical instrument retail operation, in Amsterdam,
New York.
ROBERT J. DUNNING, DDS. Dr. Dunning is a dentist in the Amsterdam,
New York area, where he has been practicing since 1952. Dr. Dunning and Mr.
Brittain are related through the marriage of their children.
CARL A. SCHMIDT, JR. Mr. Schmidt is a retired Vice President of
Manufacturing for Sofco, Inc., a paper conversion manufacturing company, located
in Scotia, New York. Mr. Schmidt retired in 1993.
LAUREN T. BARNETT. Since 1957, Mr. Barnett has been the President of
the Barnett Agency, Inc., an insurance agency located in Amsterdam, New York.
Mr. Barnett is also a licensed real estate broker.
ROBERT J. BRITTAIN. Mr. Brittain is President and Chief Executive
Officer of the Company and the Bank. Mr. Brittain has held these positions with
the Company since its incorporation in June 1995. He has been employed by the
Bank since 1976 in numerous capacities. Mr. Brittain was named President of the
Bank in 1987 and Chief Executive Officer in 1988. Messrs. Brittain and Dunning
are related through the marriage of their children.
CHARLES S. PEDERSEN. Since 1985, Mr. Pedersen has been a
manufacturers' representative for various international fiberglass and related
product companies. Mr. Pedersen's office is located in Amsterdam, New York.
MEETINGS AND COMMITTEES OF THE BOARDS OF DIRECTORS
Meetings and Committees of the Company. Meetings of the Company's
Board of Directors are generally held on a monthly basis. For the fiscal year
ended December 31, 1996, the Board of Directors met 12 times. During 1996, no
incumbent director of the Company attended fewer than 75% of the aggregate of
the total number of Board meetings and the total number of meetings held by the
committees of the Board of Directors on which they served.
The Board of Directors of the Company has standing Audit, Compensation
and Nominating Committees.
4
<PAGE>
The Company's Audit Committee is responsible for the review of the
Company's annual audit report prepared by the Company's independent auditors.
The review includes a detailed discussion with the independent auditors and
recommendation to the full Board concerning any action to be taken regarding the
audit. Directors Pedersen (Chairman), Baker, Barnett and Daly serve on this
Committee. The Audit Committee met four times during 1996.
The Company's Compensation and Benefits Committee is currently
composed of Directors Schmidt (Chairman), Barnett, Daly and Pedersen. The
Compensation and Benefits Committee is responsible for developing and making
recommendations to the Board of Directors with respect to the Company's
executive compensation policies as well as administering, subject to stockholder
approval at the Meeting, the Company's Stock Option Plan and RRP. This committee
met nine times during 1996.
The Company's Nominating Committee, consisting of the entire Board of
Directors, reviews the terms of the directors and makes nominations for
directors to be voted on by stockholders. The Nominating Committee generally
meets once a year. Nominations of persons for election to the Board of
Directors may be made only by or at the direction of the Board of Directors or
by any stockholder entitled to vote for the election of directors who complies
with the notice procedures set forth in the Bylaws of the Company. Pursuant to
the Company's Bylaws, nominations by stockholders must be delivered in writing
to the Secretary of the Company at least 30 days prior to the date of the annual
meeting. The Nominating Committee did not meet during 1996, but did meet in
January 1997 for the purpose of making nominations for directors to be voted on
by stockholders at the Meeting. Prior to 1996, the Nominating Committee
generally met in November.
Meetings and Committees of the Bank. The Bank's Board of Directors
(the members of which are the same as the Company's board members) meets at
least monthly and held 20 meetings during the year ended December 31, 1996.
During 1996, no incumbent director of the Bank attended fewer than 75% of the
aggregate of the total number of Board meetings and the total number of meetings
held by the committees of the Board of Directors on which he served.
DIRECTOR COMPENSATION
Directors of the Company did not receive any remuneration for service
on the Company's Board of Directors or any committees of the Company's Board of
Directors during 1996. See "Proposal II - Ratification of the 1997 Stock Option
and Incentive Plan - Awards Under the Stock Option Plan" and "Proposal III -
Ratification of the Recognition and Retention Plan - Awards Under the RRP."
Each non-employee director of the Bank during 1996 (each of whom is also a
director of the Company), however, received a fee of $13,800 per year as
compensation for service on the Board of Directors of the Bank. Each non-
employee board member of the Bank was also paid an additional $200 for each
Executive, Audit, Personnel and Strategic Planning Committee meeting attended.
The Bank has established a deferred compensation program for the
benefit of its Directors. This program permits participating Directors to defer
a portion of their Board fees over a five year period. Pursuant to agreements
entered into with participating Directors, upon the later of the sixth year, or
the Director reaching 65 years of age, the Director (or in the event of death,
his designated beneficiary) receives an annual cash payment based upon the
amount of fees deferred for a period of up to 10 years. In order to balance the
expected payments under the deferred compensation plan, the Bank has purchased
whole life insurance policies on the lives of the participating Directors. While
the Bank will make the annual payments to participating Directors over the ten
year period, the lump sum death benefits payable on the insurance policies
should be sufficient to repay the Bank for the benefits paid to such
participating Directors with a modest return, provided actuarial assumptions
regarding life expectancies are accurate. Currently, all of the Directors are
participating in the deferred compensation program except for Directors
Pedersen, LeRoy and Wilde.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
paid or granted to the Company's Chief Executive Officer. No other individual
received compensation in excess of $100,000 in 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------
LONG TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER ANNUAL RESTRICTED ALL OTHER
NAME AND PRINCIPAL YEAR SALARY BONUS COMPENSATION STOCK OPTIONS COMPENSATION
POSITION ($) ($) ($) AWARD (#)(1) ($)
($)(1)
-------------------------------------------------------------------------------------------------------------
Robert J. Brittain, President 1996 $167,000 $ --- $ --- $ --- --- $34,530 (2)
and Chief Executive Officer 1995 157,000 --- --- --- --- 2,761
1994 145,000 --- --- --- --- 1,689
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) See "Proposal II - Ratification of the 1997 Stock Option and Incentive Plan
- Awards Under the Stock Option Plan" and "Proposal III -Ratification of
the Recognition and Retention Plan - Awards Under the RRP."
(2) Represents $742 of insurance premiums paid by the Bank, well as the Bank's
contributions to its 401(k) Plan of $866 and to the ESOP of $32,922 on
behalf of Mr. Brittain.
DEFINED BENEFIT PENSION PLAN
The Bank sponsors a defined benefit pension plan for its employees
(the "Pension Plan"). Full-time salaried employees are eligible to participate
in the Pension Plan following the completion of one year of service (1,000 hours
worked during a continuous 12-month period) and attainment of 21 years of age.
A participant must reach five years of service before attaining a vested
interest in his or her retirement benefits, after which such participant is 100%
vested. The Pension Plan is funded solely through contributions made by the
Bank.
The benefit provided to a participant at normal retirement age
(generally age 65) is based on the average of the participant's basic annual
compensation during the 36 consecutive months of service within the last 120
completed months of a participant's service which yields the highest average
compensation ("average annual compensation"). Compensation for this purpose is
the participant's basic annual salary, including any contributions through a
salary reduction arrangement to a cash or deferred plan under Section 401(k) of
the Internal Revenue Code of 1986, as amended, but exclusive of overtime,
bonuses, severance pay, or any special payments or other deferred compensation
arrangements. The annual benefit provided to a participant who retires at age
65 is equal to 2% of average annual compensation for each year of service
without offset of the participant's anticipated Social Security benefits. An
individual's annual benefit is limited to 70% of his or her annual average
compensation.
The annual benefit provided to participants (i) at early retirement
age (generally age 60) with five years of service who elect to defer the payment
of their benefits to normal retirement age, (ii) at early retirement age with
ten years of service who elect to receive payment of their benefits prior to
normal retirement age or (iii) who postpone annual benefits beyond normal
retirement age, are calculated basically the same as the benefits for normal
retirement age, with annual average compensation being multiplied by 2% for each
year of such individual's actual years of service. A participant eligible for
early retirement benefits who does not meet the requirements set forth above
will have his or her benefits adjusted as further described in the Pension Plan.
The Pension Plan also provides for disability and death benefits.
6
<PAGE>
The following table sets forth, as of December 31, 1996, estimated
annual pension benefits for individuals at age 65 payable in the form of a life
annuity under the most advantageous plan provisions for various levels of
compensation and years of service. The figures in this table are based upon the
assumption that the Pension Plan continues in its present form and does not
reflect offsets for Social Security benefits and does not reflect benefits
payable under the ESOP.
PENSION PLAN TABLE
- -------------------------------------------------------------
YEARS OF CREDITED SERVICE
- -------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- -------------------------------------------------------------
$ 75,000 $22,500 $30,000 $37,500 $ 45,000 $ 52,500
- -------------------------------------------------------------
100,000 30,000 40,000 50,000 60,000 70,000
- -------------------------------------------------------------
125,000 37,500 50,000 62,500 75,000 87,500
- -------------------------------------------------------------
150,000 45,000 60,000 75,000 90,000 105,000
- -------------------------------------------------------------
175,000(1) 52,500 70,000 87,500 105,000 122,500
- -------------------------------------------------------------
(1) 1996 annual earnings limited to $150,000 by IRS regulations.
For purposes of this plan, at December 31, 1996, it is estimated that
Mr. Brittain had 20 years of credited service with the Bank. The Board of
Directors may terminate this plan, or modify it to reduce the level of future
benefits in order to reduce the costs of the plan to the Bank.
EMPLOYMENT AGREEMENTS
The Bank has entered into employment agreements with President
Brittain and five other executive officers of the Bank. The employment
agreements became effective on January 1, 1996 and provide for annual base
salaries in an amount not less than such individuals' current salaries and an
initial term of three years for Mr. Brittain and two years for each of the other
executive officers of the Bank. The agreements provide that on each anniversary
of the agreement, the term of employment under the agreements shall be extended
for a period of one year in addition to the then-remaining term of employment
under the agreements, provided that the extensions are formally reviewed and
approved by the Board of Directors of the Bank and provided that the Bank has
not given a 90 day notice that it will not extend the agreements. The
agreements provide for termination upon the employee's death, for cause or in
certain events specified by OTS regulations. The employment agreements are also
terminable by the employees upon 90 days notice to the Bank. The agreements
guarantee participation in an equitable manner in employee benefits applicable
to executive personnel.
The employment agreements provide for payment to the employees of the
greater of their salaries for the remainder of the term of the agreement, or
299% of the employees' base compensation, in the event there is a "change in
control" of the Bank and employment terminates involuntarily in connection with
such change in control or within twelve months thereafter. Such payments could
have the effect of deterring an attempt to acquire control of the Holding
Company by increasing the acquiror's expenses if any acquisition occurs. The
termination payments are subject to reduction by the amount of all other
compensation to the employee deemed for purposes of the Code to be contingent on
a "change in control," and may not exceed three times the employee's average
annual compensation over the most recent five year period or be non-deductible
by the Bank for federal income tax purposes. For the purposes of the employment
agreements, a "change in control" is defined as any event which would require
the filing of an application for acquisition of control or notice of change in
control pursuant to 12 C.F.R. (S)574.3 or 4. Such filings or notices are
generally required prior to the acquisition of control of 10% of the Company's
common stock.
Based on his current salary, if Mr. Brittain had been terminated as of
December 31, 1996, under circumstances entitling him to severance pay as
described above, he would have been entitled to receive a lump sum cash payment
of approximately $430,000.
7
<PAGE>
COMPENSATION AND BENEFITS COMMITTEE REPORT
The Compensation and Benefits Committee (the "Committee") is
responsible for the establishment, oversight and administration of executive
compensation and executive and director incentive plans. The Committee is
composed entirely of outside directors. All Committee recommendations are
ratified by the Board prior to submission for stockholder approval.
Executive Compensation Philosophy
The executive compensation program is designed to achieve two
principal objectives. First, the program is intended to be fully competitive so
as to attract, motivate and retain talented executives. Secondly, the program
is intended to align executive compensation with the values and objectives,
business strategy, management initiatives, and the business and financial
performance of the Company. The Committee's philosophy is to pay competitive
annual salaries to executive officers, coupled with incentives that will result
in overall compensation for executive officers that will fluctuate depending
upon, and be commensurate with, the Company's actual performance in relation to
the financial goals established by the Committee and ratified by the Board of
Directors at the beginning of each year. These incentives consist of annual
cash incentive compensation and long-term stock compensation, consisting
primarily of stock grants and stock options.
The Committee assesses the competitiveness of its executives'
compensation by referring, at least annually, to a survey which compares and
examines a variety of compensation-related data furnished by a prominent
international consulting firm for the financial industry. The Committee also
periodically reviews the compensation policies of other similarly situated
companies, as set forth in various industry publications, to determine whether
the Company's compensation decisions are competitive within its industry. Based
upon this information, the Committee believes that it has established a program
to:
. Support a performance-oriented environment that rewards performance
not only with respect to the Company's goals but also the Company's
performance as compared to that of others in the industry;
. Attract and retain key executives critical to the long-term success
of the Company and the Bank;
. Integrate compensation programs with both the Company's annual and
long-term strategic planning and measuring processes; and
. Reward executives for long-term strategic management and the
enhancement of stockholder value.
In making compensation decisions the Committee also focuses on the
individual contributions of executives of the Company and the Bank. The
Committee uses its discretion to set executive compensation where, in its
judgment, external, internal or individual circumstances warrant it.
Annual Salaries
Salary ranges governing executives are established annually based upon
competitive data and other information pertinent to the geographic area,
especially in the banking field. Within the ranges, salaries vary based upon an
individual's level of responsibility, impact on the business, work experience,
performance, tenure and potential for advancement within the Company and the
Bank. Annual salaries for newly-hired executives are determined at the time of
hire, taking into account all of the foregoing except tenure. The chief
executive officer and other executive officers will receive salary increase
consideration at 12-15 month intervals for purposes of business performance
comparisons. Salary adjustments for the chief executive officer and other
executives are subject to approval by the full Board, based upon the
recommendations of the Committee.
8
<PAGE>
Annual Incentives/ Bonuses.
The Company historically has not paid annual bonuses to its executive
officers or employees, but is currently in the process of developing an annual
performance based bonus program.
Long-Term Incentives
The Company's Stock Option Plan and RRP, which are subject to the
approval of stockholders at the Meeting, are the Company's long-term incentive
plans for executive officers, directors and employees of the Company and the
Bank. The objectives of the program are to align executive and stockholder long-
term interests by creating a strong and direct link between executive pay and
the Company's performance, and to enable such individuals to develop and
maintain a significant, long-term stock ownership position in the Company's
Common Stock. Awards are made at a level calculated to be competitive with the
thrift industry. See "Proposal II - Ratification of the 1997 Stock Option and
Incentive Plan" and "Proposal III - Ratification of the Recognition and
Retention Plan" herein for a more detailed description of such plans and the
awards granted and awarded thereunder, which awards are subject to stockholder
approval.
In 1993, Section 162(m) was added to the Internal Revenue Code, the
effect of which is to eliminate the deductibility of compensation over $1
million, with certain exclusions, paid to each of certain highly compensated
executive officers of publicly held corporations, such as the Company. Section
162(m) applies to all remuneration (both cash and non-cash) that would otherwise
be deductible for tax years beginning on or after January 1, 1994, unless
expressly excluded. Because the current compensation of each of the Company's
executive officers is well below the $1 million threshold, the Company has not
yet considered its policy regarding this provision.
Carl A. Schmidt, Jr. (Chairman) Lauren T. Barnett John J. Daly
Charles S. Pedersen
9
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The Company's initial public offering price for its Common Stock was
$10.00 per share. The line graph below compares the cumulative total
shareholder return on the Company's Common Stock to the cumulative total return
of a broad index of the Nasdaq Stock Market and a savings and loan industry
index for the period December 27, 1995 (the date the Company became a public
company) through December 31, 1996.
<TABLE>
<CAPTION>
12/27/95 12/29/95 03/29/96 06/28/96 09/30/96 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ambanc Holding Co., Inc. ... $100.00 $101.09 $100.00 $95.00 $105.63 $112.50
Selected Thrift Index....... 100.00 100.00 101.71 103.84 113.63 129.10
Nasdag Index................ 100.00 100.00 104.62 112.37 115.47 120.90
</TABLE>
CERTAIN TRANSACTIONS
The Company has followed a policy of granting consumer loans and loans
secured by the borrower's personal residence to officers, directors and
employees. Loans to directors must be approved by a majority of the
disinterested directors. Residential loans and any loan in excess of $100,000
to an executive officer must be approved by a majority of the Board of
Directors. All loans to executive officers and directors are made in the
ordinary course of business and on the same terms and conditions as those of
comparable transactions prevailing at the time, in accordance with the Company's
underwriting guidelines, and do not involve more than the normal risk of
collectibility or present other unfavorable features.
PROPOSAL II - RATIFICATION OF THE 1997 STOCK OPTION AND INCENTIVE PLAN
GENERAL
The Stock Option Plan has been adopted by the Board of Directors of
the Company, subject to ratification by stockholders at the Meeting.
Ratification by stockholders of the adoption of the Stock Option Plan will
ratify the awards proposed thereunder and as described in "Awards Under the
Stock Option Plan" below, and will ratify the granting of additional awards
pursuant to the provisions of the Stock Option Plan. Pursuant to the Stock
Option Plan, the Company will reserve for issuance thereunder either from
authorized but unissued shares or from issued shares
10
<PAGE>
reacquired and held as treasury shares, 542,225 shares of the Common Stock
(representing 10% of the shares issued upon consummation of the Conversion).
Management currently intends, to the extent practicable and feasible, to fund
the Stock Option Plan from issued shares reacquired by the Company in the open
market. To the extent the Company utilizes authorized but unissued Common Stock
to fund the Stock Option Plan, the exercise of stock options will have the
effect of diluting the holdings of persons who own Common Stock. Assuming all
options under the Stock Option Plan are awarded and exercised through the use of
authorized but unissued Common Stock, current stockholders would be diluted by
approximately 11.0%. Upon ratification of the Stock Option Plan by
stockholders, options to purchase an aggregate of 373,974 shares of Common Stock
will be awarded, which will leave available 168,251 shares for future awards.
The Board of Directors believes that it is appropriate for the Company
to adopt a flexible and comprehensive Stock Option Plan which permits the
granting of a variety of long-term incentive awards to directors, advisory
directors, officers and employees as a means of enhancing and encouraging the
recruitment and retention of those individuals on whom the continued success of
the Company most depends. However, because the awards are granted only to
persons affiliated with the Company, the adoption of the Stock Option Plan could
make it more difficult for a third party to acquire control of the Company and
therefore could discourage offers for the Company's stock that may be viewed by
the Company's stockholders to be in their best interest. In addition, certain
provisions included in the Company's Certificate of Incorporation and Bylaws may
discourage potential takeover attempts, particularly those that have not been
negotiated directly with the Board of Directors of the Company. Included among
these provisions are provisions (i) limiting the voting power of shares held by
persons owning 10% or more of the Common Stock, (ii) requiring a super-majority
vote of stockholders for approval of certain business combinations, (iii)
establishing a staggered Board of Directors, (iv) permitting special meetings of
stockholders to be called only by the Board of Directors and (v) authorizing a
class of preferred stock with terms to be established by the Board of Directors.
These provisions could prevent the sale or merger of the Company even where a
majority of the stockholders approve of such transaction. In addition, federal
regulations prohibit the beneficial ownership of more than 10% of the stock of a
converted savings institution or its holding company without prior approval of
the OTS. Federal law and regulations also require OTS approval prior to the
acquisition of "control" (as defined in the regulations) of an insured
institution, including a holding company thereof. These regulations could have
the effect of discouraging takeover attempts of the Company.
Attached as Exhibit A to this Proxy Statement is the complete text of
the Stock Option Plan. The principal features of the Stock Option Plan are
summarized below.
PRINCIPAL FEATURES OF THE STOCK OPTION PLAN
The Stock Option Plan provides for awards in the form of stock
options, stock appreciation rights ("SARs") and limited stock appreciation
rights ("Limited SARs"). Each award shall be on such terms and conditions,
consistent with the Stock Option Plan, as the committee administering the Stock
Option Plan may determine. Subject to certain exceptions described herein,
awards made under such plan are subject to the participant maintaining
"Continuous Service" (as defined in the Stock Option Plan) with the Company or
the Bank since the date of grant.
Shares may be either authorized but unissued shares or reacquired
shares held by the Company in its treasury. Any shares subject to an award which
expires or is terminated unexercised will again be available for issuance under
the Stock Option Plan or any other plan of the Company or its subsidiaries.
Generally, no award or any right or interest therein is assignable or
transferable except under certain limited exceptions set forth in the Stock
Option Plan.
The Stock Option Plan is administered by the Compensation and Benefits
Committee of the Board of Directors of the Company (the "Committee"), which is
comprised of four non-employee directors of the Company. Directors Schmidt
(Chairman), Barnett, Daly and Pedersen have been appointed as the present
members of the Committee. Pursuant to the terms of the Stock Option Plan, any
director, advisory director, officer or employee of the Company or its
affiliates is eligible to participate in the Stock Option Plan, which currently
includes approximately 181 persons. In granting awards under the Stock Option
Plan, the Committee considers, among other things, position and years of
service, value of the participant's services to the Company and the Bank and the
added responsibilities of such individuals as employees, directors and officers
of a public company.
11
<PAGE>
STOCK OPTIONS
The term of any stock option will not exceed ten years from the date
of grant. The Committee may grant either "incentive stock options" as defined
under Section 422 of the Code or stock options not intended to qualify as such
("non-qualified stock options").
In general, stock options will not be exercisable after the expiration
of their terms. Unless otherwise determined by the Committee, in the event a
participant ceases to maintain continuous service (as defined in the Stock
Option Plan) with the Company or one of its affiliates, for any reason
(including total or partial disability, but excluding death and termination for
cause), an exercisable stock option will continue to be exercisable for three
months thereafter but in no event after the expiration date of the option. In
the event of the death of a participant during such service or within the three-
month period described above following termination, any option granted but not
fully exercisable shall become exercisable in full upon the happening of such
event and shall continue to be exercisable for one year, but in no event later
than ten years after grant. Following the death of any participant, the
Committee may, as an alternative means of settlement of an option, elect to pay
to the holder thereof an amount of cash equal to the amount by which the market
value of the shares covered by the option on the date of exercise exceeds the
exercise price. A stock option will automatically terminate and will no longer
be exercisable as of the date a participant is notified of termination for
cause.
The exercise price for the purchase of shares subject to a stock
option at the date of grant may not be less than 100% of the market value of the
shares covered by the option on that date. The exercise price must be paid in
full in cash or shares of Common Stock, or a combination of both.
STOCK APPRECIATION RIGHTS
The Committee may grant SARs at any time, whether or not the
participant then holds stock options, granting the right to receive the excess
of the market value of the shares represented by the SARs on the date exercised
over the exercise price. SARs generally will be subject to the same terms and
conditions and exercisable to the same extent as stock options, as described
above. Upon the exercise of a SAR, the participant will receive the amount due
in cash or shares, or a combination of both, as determined by the Committee.
SARs may be related to stock options ("tandem SARs"), in which case the exercise
of one will reduce to that extent the number of shares represented by the other.
SARs will require an expense accrual by the Company each year for the
appreciation on the SARs which it is anticipated will be exercised. The amount
of the accrual is dependent upon whether and the extent to which the SARs are
granted and the amount, if any, by which the market value of the SARs exceeds
the exercise price.
LIMITED STOCK APPRECIATION RIGHTS
Limited SARs will be exercisable only for a limited period in the
event of a tender or exchange offer for shares of the Company's Common Stock,
other than by the Company, where 25% or more of the outstanding shares are
acquired in that offer or any other offer which expires within 60 days of that
offer. The amount paid on exercise of a Limited SAR will be the excess of (a)
the market value of the shares on the date of exercise or (b) the highest price
paid pursuant to the offer, over the exercise price. Payment upon exercise of a
Limited SAR will be in cash.
Limited SARs may be granted at the time of, and must be related to,
the grant of a stock option or SAR. The exercise of one will reduce to that
extent the number of shares represented by the other. Subject to vesting,
Limited SARs will be exercisable only for the 45 days following the expiration
of the tender or exchange offer, during which period the related stock option or
SAR will be exercisable.
EFFECT OF MERGER; CHANGE IN CONTROL; AND OTHER ADJUSTMENTS
Shares as to which awards may be granted under the Stock Option Plan,
and shares then subject to awards, will be adjusted appropriately by the
Committee in the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure or Common Stock of the Company.
12
<PAGE>
In the event of any merger, consolidation or combination of the
Company with or into another thrift holding company or other entity, whereby
either the Company is not the continuing entity and its outstanding shares of
Common Stock are converted into or exchanged for different securities, cash or
property, or any combination thereof, pursuant to a plan or agreement the terms
of which are binding upon all stockholders, any participant to whom a stock
option, SAR or Limited SAR has been granted will have the right upon exercise of
the option, SAR or Limited SAR (subject to the terms of the Stock Option Plan
and any other applicable limitation) to an amount equal to the excess of fair
market value on the date of exercise of the consideration receivable in the
merger, consolidation or combination with respect to the shares covered or
represented by the stock option, SAR or Limited SAR over the exercise price of
the option, SAR or Limited SAR, multiplied by the number of shares with respect
to which the option, SAR or Limited SAR has been exercised.
Furthermore, in the event of a tender or exchange offer (other than an
offer made by the Company) or if a "change in control" occurs as defined below,
all outstanding stock options and SARs not fully exercisable will become
exercisable in full and shall continue to be exercisable for their remaining
terms. A change in control will be deemed to occur when (i) a person or group
becomes the beneficial owner of shares of the Company representing 25% or more
of the total number of votes which may be cast for the election of the Board of
Directors of the Company and the Bank, (ii) in connection with any tender or
exchange offer (other than an offer by the Company or the Bank), merger or other
business combination, sale of assets or contested election, or combination of
the foregoing, the persons who are Directors of the Company or the Bank cease to
be a majority of the Board of Directors of the Company or the Bank, or (iii)
stockholders of the Company approve a transaction pursuant to which the Company
will cease to be an independent publicly-owned thrift holding company or
pursuant to which substantially all of its assets of the Company or the Bank
will be sold.
AMENDMENT AND TERMINATION
The Board of Directors of the Company may at any time amend, suspend
or terminate the Stock Option Plan or any portion thereof but may not, without
the prior ratification of the stockholders, make any amendment which shall (i)
materially increase the aggregate number of shares which may be subject to
awards to participants who are not employees, (ii) materially increase the
aggregate number of securities which may be issued under the Stock Option Plan
(except for adjustments specifically set forth under the Stock Option Plan) and
(iii) change the requirements as to eligibility for participation in the Stock
Option Plan, provided, however, that no such amendment, suspension or
termination shall impair the rights of any participant, without his or her
consent, in any award made pursuant to the Stock Option Plan. Unless previously
terminated, the Stock Option Plan shall continue in effect for a term of ten
years, after which no further awards may be granted under the Stock Option Plan.
FEDERAL INCOME TAX CONSEQUENCES
Under present federal income tax laws, awards under the Stock Option
Plan will have the following consequences:
(1) The grant of an award will not, by itself, result in the
recognition of taxable income to the participant nor entitle the Company to a
deduction at the time of such grant.
(2) The exercise of a stock option which is an "Incentive Stock
Option" within the meaning of Section 422 of the Code will generally not, by
itself, result in the recognition of taxable income to the participant nor
entitle the Company to a deduction at the time of such exercise. However, the
difference between the exercise price and the fair market value of the option
shares on the date of exercise is an item of tax preference which may, in
certain situations, trigger the alternative minimum tax. This alternative
minimum tax applies a flat 26% rate to the first $175,000 of "minimum taxable
income" in excess of $33,750 (single individual) or $45,000 (married individuals
filing jointly) and a flat 28% rate for amounts over $175,000. If a taxpayer
has alternative minimum taxable income in excess of $150,000 (married, filing
jointly) or $112,500 (single), the $45,000 or $33,750 exemptions are reduced by
an amount equal to 25% of the amount by which the alternative minimum taxable
income of the taxpayer exceeds $150,000 or $112,500, respectively. The
participant will recognize long-term capital gain or loss upon resale of the
shares received upon such exercise, provided that the participant holds the
shares for more than one year following the exercise.
13
<PAGE>
(3) The exercise of a stock option which is not an Incentive Stock
Option will result in the recognition of ordinary income by the participant on
the date of exercise in an amount equal to the difference between the exercise
price and the fair market value on the date of exercise of the shares acquired
pursuant to the exercise of the stock option.
(4) The exercise of an SAR will result in the recognition of ordinary
income by the participant on the date of exercise in an amount equal to the
amount of cash and/or the fair market value on that date of the shares acquired
pursuant to the exercise.
(5) The Company will be allowed a deduction at the time, and in the
amount of, any ordinary income recognized by the participant under the various
circumstances described above, provided that the Company meets its federal
withholding tax obligations.
AWARDS UNDER THE STOCK OPTION PLAN
The following table presents information with respect to the number of
options which are intended to be granted under the Stock Option Plan, subject to
stockholder ratification of the Stock Option Plan. On April 16, 1997, the
average of the closing bid and asked prices for the Common Stock as quoted on
The Nasdaq System was $13.25 per share.
<TABLE>
<CAPTION>
1997 STOCK OPTION AND INCENTIVE PLAN
- -----------------------------------------------------------------------------------------------------
NAME AND POSITION DOLLAR VALUE NUMBER OF
($)/(1)/ UNITS/(2)/
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert J. Brittain, President and Chief Executive Officer...................... $ --- 100,312
John J. Daly, Nominee.......................................................... --- 18,056
Lionel H. Fallows, Nominee..................................................... --- 18,056
Marvin R. LeRoy, Jr., Nominee.................................................. --- 18,056
William A. Wilde, Jr., Nominee................................................. 18,056
All directors who are not executive officers as a group (9 persons)............ --- 162,504
All executive officers as a group (7 persons).................................. --- 200,625
All non-executive officers and employees who have been granted awards as
a group (1 person)............................................................ --- 10,845
</TABLE>
(1) Any value realized will be the difference between the exercise price and
the market value upon exercise. Since the options have not been granted,
there is no current value.
(2) Each unit represents an option to purchase one share of Common Stock.
Subject to the conditions of the Stock Option Plan, the proposed
awards described in the preceding table will vest in four equal annual
installments with the first installment vesting on the one-year anniversary of
the date of stockholder ratification of the Stock Option Plan and the additional
installments vesting ratably on the three subsequent anniversaries of the date
of stockholder ratification of the Stock Option Plan. All options are required
to be granted with an exercise price equal to the fair market value of the
shares on the date of grant.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE ADOPTION OF THE
1997 STOCK OPTION AND INCENTIVE PLAN.
14
<PAGE>
PROPOSAL III - RATIFICATION OF THE RECOGNITION AND RETENTION PLAN
GENERAL
The RRP has been adopted by the Board of Directors of the Company,
subject to stockholder ratification. The RRP is designed to provide directors,
advisory directors, officers and employees with a proprietary interest in the
Company in a manner designed to encourage such individuals to remain with the
Company and the Bank. Ratification by stockholders of the adoption of the RRP
will ratify the awards proposed thereunder and as described in "Awards under the
RRP" below, and will ratify the granting of additional restricted stock awards
pursuant to the provisions of the RRP. Pursuant to the RRP, 216,890 shares of
Common Stock (representing 4.0% of the shares sold in the Conversion), funded
from either authorized but unissued shares or issued shares subsequently
reacquired and held as treasury shares will be available for awards.
Management currently intends, to the extent practicable and feasible, to fund
the RRP from issued shares reacquired by the Company in the open market. To the
extent the Company utilizes authorized but unissued shares to fund the RRP the
interests of current stockholders will be diluted. Assuming all RRP Shares are
awarded through the use of authorized but unissued Common Stock, current
stockholders would be diluted by approximately 4.7%. Upon ratification of the
RRP by stockholders, an aggregate of 131,285 shares of Common Stock will be
awarded, which will leave 85,605 shares available for future awards.
Attached as Exhibit B to this Proxy Statement is the complete text of
the form of the RRP. The principal features of the RRP are summarized below.
PRINCIPLE FEATURES OF THE RRP
The RRP provides for the award of shares of Common Stock ("RRP
Shares") subject to the restrictions described below. Each award under the RRP
will be made on such terms and conditions, consistent with the RRP, as the
Compensation and Benefits Committee shall determine. The Committee will select
the recipients and terms of awards pursuant to the RRP. In determining to whom
and in what amount to grant awards, the Committee considers the position and
responsibilities of eligible individuals, the value of their services to the
Company and the Bank and other factors it deems relevant. Pursuant to the terms
of the RRP, any director, advisory director, officer or employee of the Company
or its affiliates may be selected by the Committee to participate in the RRP,
which currently includes approximately 181 persons.
Recipients earn (i.e., become vested in) awards over a period of time
as determined by the Committee at the time of the grant. RRP Shares to be
awarded in 1997 to directors, officers and employees will vest in four equal
annual installments, with the first installment vesting on the first anniversary
of the date of grant, in each case subject to the conditions described below.
RRP Shares are subject to forfeiture if the recipient fails to remain in the
continuous service (as defined in the RRP) as an employee, officer or director
(including advisory directors) of the Company or the Bank for a stipulated
period (the "restricted period"). Vested shares are distributed to recipients
as soon as practicable following the date on which they are earned. Any RRP
Shares which are forfeited will again be available for issuance under the RRP or
any other plan of the Company or its subsidiaries.
Unless the Committee shall otherwise provide, holders of RRP Shares
have the right to vote RRP Shares which have not been earned and the right to
receive dividends, if any, paid on the Common Stock. Holders of RRP Shares may
not, however, sell, assign, transfer, pledge or otherwise encumber any of the
RRP Shares during the restricted period.
The Committee may, in its discretion, accelerate the time at which any
or all restrictions will lapse, or may remove any or all of the restrictions.
In the event a recipient ceases to maintain continuous service with the Company
or the Bank by reason of death, total or partial disability, or retirement from
continuous service with the Company or the Bank at age 65 or later, RRP Shares
still subject to restrictions will be free of these restrictions and shall not
be forfeited. In the event of termination for any other reason, all RRP Shares
still subject to restrictions will be forfeited and returned to the Company.
15
<PAGE>
EFFECT OF CHANGE IN CONTROL AND OTHER ADJUSTMENTS
The restricted period with respect to a RRP Share will lapse and the
remaining RRP Shares still subject to restrictions will be earned in the event a
recipient is terminated at any time within 12 months of a "change in control" as
defined below. A change in control will be deemed to occur when (i) a person or
group becomes the beneficial owner of shares of the Company or the Bank
representing 25% or more of the total number of votes which may be cast for the
election of the Board of Directors of the Company or the Bank, (ii) in
connection with any tender or exchange offer (other than an offer by the Company
or the Bank), merger or other business combination, sale of assets or contested
election, or combination of the foregoing, the persons who are Directors of the
Company or the Bank cease to be a majority of the Board of Directors of the
Company or the Bank or (iii) stockholders of the Company approve a transaction
pursuant to which the Company will cease to be an independent publicly-owned
entity or pursuant to which substantially all of the assets of the Company or
the Bank will be sold.
RRP Shares will be appropriately adjusted by the Committee in the
event of a reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger or other change in corporate structure
or the Common Stock of the Company.
FEDERAL INCOME TAX CONSEQUENCES
Holders of RRP Shares will recognize ordinary income on the date that
the RRP Shares are no longer subject to a substantial risk of forfeiture in an
amount equal to the fair market value of the shares on that date. In certain
circumstances, a holder may elect to recognize ordinary income on the date the
RRP Shares are granted. Holders of RRP Shares will also recognize ordinary
income equal to their dividend or dividend equivalent payments when such
payments are received.
AMENDMENT OR TERMINATION
The Board of Directors of the Company may amend, suspend or terminate
the RRP or any portion thereof at any time, provided that no such amendment,
suspension or termination shall impair the rights of any participant, without
his consent, in any award made pursuant to the RRP.
16
<PAGE>
AWARDS UNDER THE RRP
The following table presents information with respect to the number of
shares of restricted stock which are intended to be granted under the RRP,
subject to stockholder ratification of the RRP.
<TABLE>
<CAPTION>
RECOGNITION AND RETENTION PLAN
- --------------------------------------------------------------------------------------------------
DOLLAR VALUE NUMBER OF
NAME AND POSITION ($)/(1)/ UNITS/(2)/
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert J. Brittain, President and Chief Executive Officer................. $ 359,221 27,111
John J. Daly, Nominee..................................................... 107,762 8,133
Lionel H. Fallows, Nominee................................................ 107,762 8,133
Marvin R. LeRoy, Jr., Nominee............................................. --- ---
William A. Wilde, Jr., Nominee............................................ 107,762 8,133
All directors who are not executive officers, as a group (9 persons)...... 862,098 65,064
All executive officers as a group (7 persons)............................. 877,428 66,221
All non-executive officers and employees who have been granted awards
as a group............................................................... --- ---
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the aggregate dollar value of the RRP Shares proposed to be
awarded, based upon the average of the closing bid and asked price of the
Common Stock of $13.25 as reported on the Nasdaq System on April 16, 1997
(the latest practicable date available prior to the mailing of this Proxy
Statement). The value of the RRP Shares proposed to be awarded may be more
or less than shown above depending upon the market value of the Common Stock
on the date of stockholder ratification of the RRP.
(2) Each unit represents one share of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE ADOPTION OF THE RECOGNITION AND RETENTION PLAN.
PROPOSAL IV - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP to be the
Company's independent auditor for the fiscal year ending December 31, 1997,
subject to ratification by the Company's stockholders. A representative of KPMG
Peat Marwick LLP is expected to attend the Meeting to respond to appropriate
questions and will have an opportunity to make a statement.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
COMPANY'S AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1997
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive office,
located at 11 Division Street, Amsterdam, New York 12010-4303, no later than
November 18, 1997. Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Exchange Act.
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OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement. Should
any other matters properly come before the Meeting, it is intended that holders
of the proxies will act in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. The Company has retained Regan &
Associates, Inc. to assist in the solicitation of proxies, for a $4,000 fee plus
reasonable out-of-pocket expenses not to exceed $2,250. In addition to
solicitation by mail, directors, officers and regular employees of the Company
may solicit proxies personally or by telegraph or telephone, without additional
compensation.
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EXHIBIT A
AMBANC HOLDING CO., INC.
1997 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
------------
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, officers and employees of the Corporation
and its Affiliates. It is intended that designated Options granted pursuant to
the provisions of this Plan to persons employed by the Corporation or its
Affiliates will qualify as Incentive Stock Options. Options granted to persons
who are not employees will be Non-Qualified Stock Options. Options granted as
Incentive Stock Options but which, for any reason, fail to qualify as such shall
automatically become Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
-----------
"Affiliate" - means any "parent corporation" or "subsidiary corporation" of
the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Award" - means the grant of an Incentive Stock Option, a Non-Qualified
Stock Option, a Stock Appreciation Right, a Limited Stock Appreciation Right, or
any combination thereof, as provided in the Plan.
"Bank" - means Amsterdam Savings Bank, FSB and any successor entity.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 3 hereof.
"Continuous Service" - means the absence of any interruption or termination
of service as a director, advisory director, officer or employee of the
Corporation or an Affiliate, except that when used with re spect to persons
granted an Incentive Option means the absence of any interruption or termination
of service as an employee of the Corporation or an Affiliate. Service shall not
be considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Corporation or in the case of transfers between
payroll locations of the Corporation or between the Corporation, its parent, its
subsidiaries or its successor. With respect to any advisory director,
continuous service shall mean availability to perform such functions as may be
required of the Bank's advisory directors.
"Corporation" - means Ambanc Holding Co., Inc. a Delaware corporation.
"Employee" - means any person, including an officer or director, who is
employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Exercise Price" - means (i) in the case of an Option, the price per Share
at which the Shares subject to such Option may be purchased upon exercise of
such Option and (ii) in the case of a Right, the price per Share (other than the
Market Value per Share on the date of exercise and the Offer Price per Share as
defined in Section 10 hereof) which, upon grant, the Committee determines shall
be utilized in calculating the aggregate value which a Participant shall be
entitled to receive pursuant to Sections 9, 10 or 12 hereof upon exercise of
such Right.
"Incentive Stock Option" - means an option to purchase Shares granted by
the Committee pursuant to Section 6 hereof which is subject to the limitations
and restrictions of Section 8 hereof and is intended to qualify under Section
422 of the Code.
"Limited Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 10 hereof.
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"Market Value" - means the average of the high and low quoted sales price
on the date in question (or, if there is no reported sale on such date, on the
last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the National Association of Securities
Dealers, Inc., Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall determine.
"Non-Employee Director" - means a director who a) is not currently an
officer or employee of the Corporation; b) is not a former employee of the
Corporation who receives compensation for prior services (other than from a tax-
qualified retirement plan); c) has not been an officer of the Corporation; d)
does not receive remuneration from the Corporation in any capacity other than as
a director; and e) does not possess an interest in any other transactions or is
not engaged in a business relationship for which disclosure would be required
under Item 404(a) or (b) of Regulation S-K.
"Non-Qualified Stock Option" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof, which option is not intended to
qualify under Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock Option.
"Participant" - means any director, advisory director, officer or employee
of the Corporation or any Affiliate who is selected by the Committee to receive
an Award.
"Plan" - means the 1997 Stock Option and Incentive Plan of the Corporation.
"Related" - means (i) in the case of a Right, a Right which is granted in
connection with, and to the extent exercisable, in whole or in part, in lieu of,
an Option or another Right and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof has been granted.
"Right" - means a Limited Stock Appreciation Right or a Stock Appreciation
Right.
"Shares" - means the shares of common stock of the Corporation.
"Stock Appreciation Right" - means a stock appreciation right with respect
to Shares granted by the Committee pursuant to Sections 6 and 9 hereof.
"Ten Percent Beneficial Owner" - means the beneficial owner of more than
ten percent of any class of the Corporation's equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
3. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members, each of whom shall be a Non-Employee
Director. The members of the Committee shall be appointed by the Board of
Directors of the Corporation. Except as limited by the express provisions of
the Plan, the Committee shall have sole and complete authority and discretion to
(i) select Participants and grant Awards; (ii) determine the number of Shares to
be subject to types of Awards generally, as well as to individual Awards granted
under the Plan; (iii) determine the terms and conditions upon which Awards shall
be granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
4. Participation in Committee Awards. The Committee may select from time
---------------------------------
to time Participants in the Plan from those directors, advisory directors,
officers and employees of the Corporation or its Affiliates who, in
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the opinion of the Committee, have the capacity for contributing to the
successful performance of the Corporation or its Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the operation of
----------------------
Section 11 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 10% of the total Shares issued in the Bank's
conversion to the capital stock form. The Shares with respect to which Awards
may be made under the Plan may be either authorized and unissued shares or
issued shares heretofore or hereafter reacquired and held as treasury shares.
Shares which are subject to Related Rights and Related Options shall be counted
only once in determining whether the maximum number of Shares with respect to
which Awards may be granted under the Plan has been exceeded. An Award shall
not be considered to have been made under the Plan with respect to any Option or
Right which terminates, and new Awards may be granted under the Plan with
respect to the number of Shares as to which such termination or forfeiture has
occurred.
6. General Terms and Conditions of Options and Rights. The Committee
--------------------------------------------------
shall have full and complete authority and discretion, except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Market Value per Share at the date of grant of such Option or Right, (ii) the
number of Shares subject to, and the expiration date of, any Option or Right,
which expiration date shall not exceed ten years from the date of grant, (iii)
the manner, time and rate (cumulative or otherwise) of exercise of such Option
or Right, and (iv) the restrictions, if any, to be placed upon such Option or
Right or upon Shares which may be issued upon exercise of such Option or Right.
The Committee may, as a condition of granting any Option or Right, require that
a Participant agree not to thereafter exercise one or more Options or Rights
previously granted to such Participant. No Participant may receive a grant of
Options or Rights covering in excess of 100,000 Shares in any one year.
7. Exercise of Options or Rights.
-----------------------------
(a) Except as provided herein, an Option or Right granted under the Plan
shall be exercisable during the lifetime of the Participant to whom such Option
or Right was granted only by such Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no such Option or Right may be
exercised unless at the time such Participant exercises such Option or Right,
such Participant has maintained Continuous Service since the date of grant of
such Option or Right.
(b) To exercise an Option or Right under the Plan, the Participant to whom
such Option or Right was granted shall give written notice to the Corporation in
form satisfactory to the Committee (and, if partial exercises have been
permitted by the Committee, by specifying the number of Shares with respect to
which such Participant elects to exercise such Option or Right) together with
full payment of the Exercise Price, if any and to the extent required. The date
of exercise shall be the date on which such notice is received by the
Corporation. Payment, if any is required, shall be made either (i) in cash
(including check, bank draft or money order) or (ii) by delivering (A) Shares
already owned by the Participant and having a fair market value equal to the
applicable exercise price, such fair market value to be determined in such
appropriate manner as may be provided by the Committee or as may be required in
order to comply with or to conform to requirements of any applicable laws or
regulations, or (B) a combination of cash and such Shares.
(c) If a Participant to whom an Option or Right was granted shall cease to
maintain Continuous Service for any reason (including total or partial
disability and retirement at age 65 or later, but excluding death and
termination of employment by the Corporation or any Affiliate for cause), such
Participant may, but only within the period of three months succeeding such
cessation of Continuous Service and in no event after the expiration date of
such Option or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the date of such
cessation, provided, however, that such right of exercise after cessation of
Continuous Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If the Continuous Service of a
Participant to whom an Option or Right was granted by the Corporation is
terminated for cause, all rights under any Option or Right of such Participant
shall expire immediately upon the giving to the Participant of notice of such
termination.
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(d) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate or within the three month period
referred to in paragraph (c) of this Section 7, the person to whom any Option or
Right held by the Participant at the time of his death is transferred by will or
the laws of descent and distribution, or in the case of an Award other than an
Incentive Stock Option, pursuant to a qualified domestic relations order, as
defined in the Code or Title 1 of ERISA or the rules thereunder, may exercise
such Option or Right at any time within a period of one year succeeding the date
of death of such Participant, but in no event later than ten years from the date
of grant of such Option or Right. Following the death of any Partici pant to
whom an Option was granted under the Plan, irrespective of whether any Related
Right shall have theretofore been granted to the Participant or whether the
person entitled to exercise such Related Right desires to do so, the Committee
may, as an alternative means of settlement of such Option, elect to pay to the
person to whom such Option is transferred by will or by the laws of descent and
distribution, or in the case of an Option other than an Incentive Stock Option,
pursuant to a qualified domestic relations order, as defined in the Code or
Title I of ERISA or the rules thereunder, the amount by which the Market Value
per Share on the date of exercise of such Option shall exceed the Exercise Price
of such Option, multiplied by the number of Shares with respect to which such
Option is properly exercised. Any such settlement of an Option shall be
considered an exercise of such Option for all purposes of the Plan.
8. Incentive Stock Options. Incentive Stock Options may be granted only
-----------------------
to Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock Option is granted other than by will or the laws of descent and
distribution, and shall be exercisable during such Participant's lifetime only
by such Participant, (iv) no Incentive Stock Option shall be granted to any
individual who, at the time such Incentive Stock Option is granted, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation or any Affiliate unless the Exercise Price
of such Incentive Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such Incentive Stock Option is not exercisable
after the expiration of five years from the date such Incentive Stock Option is
granted, and (v) the aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by a Participant in any
calendar year shall not exceed $100,000.
9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon its
-------------------------
exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which (i.e.,
the sum of the amount of cash and/or Market Value of such Shares on date of
exercise) shall equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares with
respect of which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall determine
whether and to what extent a Related Stock Appreciation Right shall be granted
with respect thereto; provided, however, and notwithstanding any other provision
of the Plan, that if the Related Option is an Incentive Stock Option, the
Related Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Stock Appreciation Right were
an Incentive Stock Option and as if other rights which are Related to Incentive
Stock Options were Incentive Stock Options. In the case of a Related Option,
such Related Option shall cease to be exercisable to the extent of the Shares
with respect to which the Related Stock Appreciation Right was exercised. Upon
the exercise or termination of a Related Option, any Related Stock Appreciation
Right shall terminate to the extent of the Shares with respect to which the
Related Option was exercised or terminated.
10. Limited Stock Appreciation Rights. At the time of grant of an Option
---------------------------------
or Stock Appreciation Right to any Participant, the Committee shall have full
and complete authority and discretion to also grant to such Participant a
Limited Stock Appreciation Right which is Related to such Option or Stock
Appreciation Right; provided, however and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive Stock Option, the Related
Limited Stock Appreciation Right shall satisfy all the restrictions and
limitations of Section 8 hereof as if such Related Limited Stock Appreciation
Right were an Incentive Stock Option and as if all other Rights which are
Related to Incentive Stock Options were Incentive Stock Options.
Notwithstanding any other provision of the Plan, a Limited
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Stock Appreciation Right shall be exercisable only during the period beginning
on the first day following the date of expiration of any "offer" (as such term
is hereinafter defined) and ending on the forty-fifth day following such date.
A Limited Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Limited Stock Appreciation Right was granted to receive
an amount of cash equal to the amount by which the "Offer Price per Share" (as
such term is hereinafter defined) or the Market Value on the date of such
exercise, as shall have been provided by the Committee in its discretion at the
time of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of Shares with respect to which
such Limited Stock Appreciation Right shall have been exercised. Upon the
exercise of a Limited Stock Appreciation Right, any Related Option and/or
Related Stock Appreciation Right shall cease to be exercisable to the extent of
the Shares with respect to which such Limited Stock Appreciation Right was
exercised. Upon the exercise or termination of a Re lated Option or Related
Stock Appreciation Right, any Related Limited Stock Appreciation Right shall
terminate to the extent of the Shares with respect to which such Related Option
or Related Stock Appreciation Right was exercised or terminated.
For the purposes of this Section 10, the term "Offer" shall mean any tender
offer or exchange offer for Shares other than one made by the Corporation,
provided that the corporation, person or other entity making the offer acquires
pursuant to such offer either (i) 25% of the Shares outstanding immediately
prior to the commencement of such offer or (ii) a number of Shares which,
together with all other Shares acquired in any tender offer or exchange offer
(other than one made by the Corporation) which expired within sixty days of the
expiration date of the offer in question, equals 25% of the Shares outstanding
immediately prior to the commencement of the offer in question. The term "Offer
Price per Share" as used in this Section 10 shall mean the highest price per
Share paid in any Offer which Offer is in effect any time during the period
beginning on the sixtieth day prior to the date on which a Limited Stock
Appreciation Right is exercised and ending on the date on which such Limited
Stock Appreciation Right is exercised. Any securities or property which are
part or all of the consideration paid for Shares in the Offer shall be valued in
determining the Offer Price per Share at the higher of (A) the valuation placed
on such securities or property by the corporation, person or other entity making
such Offer or (B) the valuation placed on such securities or property by the
Committee.
11. Adjustments Upon Changes in Capitalization. In the event of any
------------------------------------------
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
12. Effect of Merger. In the event of any merger, consolidation or
----------------
combination of the Corporation (other than a merger, consolidation or
combination in which the Corporation is the continuing entity and which does not
result in the outstanding Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof) pursuant to a
plan or agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their holdings), any
Participant to whom an Option or Right has been granted shall have the right
(subject to the pro visions of the Plan and any limitation applicable to such
Option or Right), thereafter and during the term of each such Option or Right,
to receive upon exercise of any such Option or Right an amount equal to the
excess of the fair market value on the date of such exercise of the securities,
cash or other property, or combination thereof, receivable upon such merger,
consolidation or combination in respect of a Share over the Exercise Price of
such Right or Option, multiplied by the number of Shares with respect to which
such Option or Right shall have been exercised. Such amount may be payable
fully in cash, fully in one or more of the kind or kinds of property payable in
such merger, consolidation or combination, or partly in cash and partly in one
or more of such kind or kinds of property, all in the discretion of the
Committee.
13. Effect of Change in Control. Each of the events specified in the
---------------------------
following clauses (i) through (iii) of this Section 13 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation or the Bank with respect to which 25% or more
of the total number of votes for the election of the Board of Directors of the
Corporation or the Bank may be cast, (ii) as a result of, or in connection with,
any cash tender offer, exchange offer, merger or other business combination,
sale of assets or contested election, or combination of the foregoing, the
persons who were directors of the Corporation or the Bank shall cease to
constitute a majority of the Board of Directors of the Corporation or the Bank,
or (iii) the shareholders of the Corporation shall approve an
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agreement providing either for a transaction in which the Corporation will cease
to be an independent publicly owned entity or for a sale or other disposition of
all or substantially all the assets of the Corporation or the Bank. If a tender
offer or exchange offer for Shares (other than such an offer by the Corporation)
is commenced, or if any of the events specified in clauses (i) through (iii)
above shall occur, unless the Committee shall have otherwise provided in the
instrument evidencing the grant of an Option or Stock Appreciation Right, all
Options and Stock Appreciation Rights theretofore granted and not fully
exercisable shall become exercisable in full upon the happening of such event;
provided, however, that no Option or Stock Appreciation Right which has
previously been exercised or otherwise terminated shall become exercisable.
14. Assignments and Transfers. No Award nor any right or interest of a
-------------------------
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or in the case of
Awards other than Incentive Stock Options pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the rules
thereunder.
15. Employee Rights Under the Plan. No director, advisory director,
------------------------------
officer or employee shall have a right to be selected as a Participant nor,
having been so selected, to be selected again as a Participant and no director,
advisory director, officer, employee or other person shall have any claim or
right to be granted an Award under the Plan or under any other incentive or
similar plan of the Corporation or any Affiliate. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee any right to
be retained in the employ of the Corporation or any Affiliate.
16. Delivery and Registration of Stock. The Corporation's obligation to
----------------------------------
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933 or any other Federal, state or local
securities legislation or regulation. It may be provided that any
representation requirement shall become inoperative upon a registration of the
Shares or other action eliminating the necessity of such representation under
such Securities Act or other securities legislation. The Corporation shall not
be required to deliver any Shares under the Plan prior to (i) the admission of
such shares to listing on any stock exchange on which Shares may then be listed,
and (ii) the completion of such registration or other qualification of such
Shares under any state or Federal law, rule or regulation, as the Committee
shall determine to be necessary or advisable.
17. Withholding Tax. The Corporation shall have the right to deduct from
---------------
all amounts paid in cash with respect to the exercise of a Right under the Plan
any taxes required by law to be withheld with respect to such cash payments.
Where a Participant or other person is entitled to receive Shares pursuant to
the exercise of an Op tion or Right pursuant to the Plan, the Corporation shall
have the right to require the Participant or such other person to pay the
Corporation the amount of any taxes which the Corporation is required to
withhold with respect to such Shares.
18. Amendment or Termination. The Board of Directors of the Corporation
------------------------
may amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 11 hereof) no amendment shall be made without
approval of the stockholders of the Corporation which shall (i) materially
increase the ag gregate number of Shares with respect to which Awards may be
made under the Plan, (ii) materially increase the aggregate number of Shares
which may be subject to Awards to Participants who are not Employees or (iii)
change the class of persons eligible to participate in the Plan; provided,
however, that no such amendment, suspension or termination shall impair the
rights of any Participant, without his consent, in any Award theretofore made
pursuant to the Plan.
19. Effective Date and Term of Plan. The Plan shall become effective upon
-------------------------------
approval of the Plan by stockholders of the Corporation. It shall continue in
effect for a term of ten years unless sooner terminated under Section 18 hereof.
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EXHIBIT B
AMBANC HOLDING CO., INC.
RECOGNITION AND RETENTION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
------------
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, advisory directors, executive officers and
employees of the Corporation and its Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
-----------
"Award" - means the grant by the Committee of Restricted Stock, as provided
in the Plan.
"Affiliate" - means any "parent corporation" or "subsidiary corporation" of
the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Bank" - means Amsterdam Savings Bank, FSB, a savings institution and its
predecessors and successors.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 7 hereof.
"Continuous Service" - means the absence of any interruption or termination
of service as a director, advisory director, executive officer or employee of
the Corporation or any Affiliate. Service shall not be considered interrupted
in the case of sick leave, military leave or any other leave of absence approved
by the Corporation or any Affiliate or in the case of transfers between payroll
locations of the Corporation or between the Corporation, its subsidiaries or its
successor.
"Corporation" - means Ambanc Holding Co., Inc., a Delaware corporation.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Non-Employee Director" - means a director who a) is not currently an
officer or employee of the Corporation; b) is not a former employee of the
Corporation who receives compensation for prior services (other than from a tax-
qualified retirement plan); c) has not been an officer of the Corporation; d)
does not receive remuneration from the Corporation in any capacity other than as
a director; and e) does not possess an interest in any other transactions or is
not engaged in a business relationship for which disclosure would be required
under Item 404(a) or (b) of Regulation S-K.
"Participant" - means any director, advisory director, executive officer or
employee of the Corporation or any Affiliate who is selected by the Committee to
receive an Award.
"Plan" - means the Recognition and Retention Plan of the Corporation.
"Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 3
hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently awarded to a
Participant by the Committee subject to the restrictions referred to in Section
3 hereof, so long as such restrictions are in effect.
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<PAGE>
"Shares" - means the common stock, par value $0.01 per share, of the
Corporation.
3. Terms and Conditions of Restricted Stock. The Committee shall have
----------------------------------------
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 3, to provide such other
terms and conditions (which need not be identical among Participants) in respect
of such Awards, and the vesting thereof, as the Committee shall determine.
(a) At the time of an award of Restricted Stock, the Committee shall
establish for each Participant a Restricted Period, during which or at the
expiration of which, as the Committee shall determine and provide in the
agreement referred to in paragraph (d) of this Section 3, the Shares awarded as
Restricted Stock shall vest, and subject to any such other terms and conditions
as the Committee shall provide, shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered by the Participant,
except as hereinafter provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c) and (e) of this Section 3 and
Section 4 hereof, the Participant as owner of such shares shall have all the
rights of a stockholder, including but not limited to the right to receive all
dividends paid on such shares and the right to vote such shares. The Committee
shall have the authority, in its discretion, to accelerate the time at which any
or all of the restrictions shall lapse with respect thereto, or to remove any or
all of such restrictions, whenever it may determine that such action is
appropriate by reason of changes in applicable tax or other laws or other
changes in circumstances occurring after the commencement of such Restricted
Period.
(b) Except as provided in Section 5 hereof, if a Participant ceases to
maintain Continuous Service for any reason (other than death, total or partial
disability or retirement at age 65 or later), unless the Committee shall
otherwise determine, all Shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 3 shall
upon such termination of Continuous Service be forfeited and returned to the
Corporation. If a Participant ceases to maintain Continuous Service by reason
of death, total or partial disability or retirement at age 65 or later,
Restricted Stock then still subject to restrictions imposed by paragraph (a) of
this Section 3 will be free of those restrictions.
(c) Each certificate in respect of Shares of Restricted Stock awarded
under the Plan shall be registered in the name of the Participant and deposited
by the Participant, together with a stock power endorsed in blank, with the
Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Recognition and Retention Plan of Ambanc
Holding Co., Inc. Copies of such Plan are on file in the offices of the
Secretary of Ambanc Holding Co., Inc., 11 Division Street, Amsterdam, New
York 12010-4303.
(d) At the time of any Award, the Participant shall enter into an
Agreement with the Corporation in a form specified by the Committee, agreeing to
the terms and conditions of the Award and such other matters as the Committee,
in its sole discretion, shall determine (the "Restricted Stock Agreement").
(e) At the time of an award of shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the Participant
of dividends declared or paid on such shares, or specified portions thereof, by
the Corporation shall be deferred until the lapsing of the restrictions imposed
under paragraph (a) of this Section 3 and shall be held by the Corporation for
the account of the Participant until such time. In the event of such deferral,
there shall be credited at the end of each year (or portion thereof) interest on
the amount of the account at the beginning of the year at a rate per annum as
the Committee, in its discretion, may determine. In the event of such deferral,
upon the forfeiture of such shares under paragraph (b) of this Section 3, all
deferred dividends and interest thereon shall be forfeited.
B-2
<PAGE>
(f) At the expiration of the restrictions imposed by paragraph (a) of
this Section 3, the Corporation shall redeliver to the Participant (or where the
relevant provision of paragraph (b) of this Section 3 applies in the case of a
deceased Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to paragraph (c) of
this Section 3 and the Shares represented by such certificate(s) shall be free
of the restrictions referred to in paragraph (a) of this Section 3.
4. Adjustments Upon Changes in Capitalization. In the event of any change
------------------------------------------
in the outstanding Shares subsequent to the effective date of the Plan by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Corporation in the manner
provided in Section 3 hereof.
5. Effect of Change in Control. Each of the events specified in the
---------------------------
following clauses (i) through (iii) of this Section 5 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation or the Bank with respect to which 25% or more
of the total number of votes may be cast for the election of the Board of
Directors of the Corporation or the Bank, (ii) as a result of, or in connection
with, any cash tender offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing, the persons who
were directors of the Corporation or the Bank shall cease to constitute a
majority of the Board of Directors of the Corporation or the Bank, or (iii) the
shareholders of the Corporation shall approve an agreement providing either for
a transaction in which the Corporation will cease to be an independent publicly
owned entity or for a sale or other disposition of all or substantially all the
assets of the Corporation or the Bank. If the Continuous Service of any
Participant of the Corporation is involuntarily terminated for whatever reason,
at any time within twelve months after a change in control, unless the Committee
shall have otherwise provided, any Restricted Period with respect to Restricted
Stock theretofore awarded to such Participant shall lapse upon such termination
and all Shares awarded as Restricted Stock shall become fully vested in the
Participant to whom such Shares were awarded.
6. Assignments and Transfers. No Award nor any right or interest of a
-------------------------
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code or Title I of ERISA or
the rules thereunder.
7. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members, each of whom shall be a Non-Employee
Director. The members of the Committee shall be appointed by the Board of
Directors of the Corporation. Except as limited by the express provisions of
the Plan, the Committee shall have sole and complete authority and discretion to
(i) select Participants and grant Awards; (ii) determine the number of shares to
be subject to types of Awards generally, as well as to individual Awards granted
under the Plan; (iii) determine the terms and conditions upon which Awards shall
be granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
B-3
<PAGE>
8. Shares Subject to Plan. Subject to adjustment by the operation of
----------------------
Section 4 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 4% of the total Shares issued by the Corporation in
connection with the Bank's conversion to stock form. The shares with respect to
which Awards may be made under the Plan may be either authorized and unissued
shares or issued shares heretofore or hereafter reacquired and held as treasury
shares. An Award shall not be considered to have been made under the Plan with
respect to Restricted Stock which is forfeited and new Awards may be granted
under the Plan with respect to the number of Shares as to which such forfeiture
has occurred.
9. Employee Rights Under the Plan. No director, advisory director,
------------------------------
executive officer or employee shall have a right to be selected as a Participant
nor, having been so selected, to be selected again as a Participant and no
director, advisory director, executive officer, employee or other person shall
have any claim or right to be granted an Award under the Plan or under any other
incentive or similar plan of the Corporation or any Affiliate. Neither the Plan
nor any action taken thereunder shall be construed as giving any employee any
right to be retained in the employ of the Corporation, the Bank or any
Affiliate.
10. Withholding Tax. Upon the termination of the Restricted Period with
---------------
respect to any shares of Restricted Stock, the Corporation may withhold from any
payment or distribution made under this Plan sufficient Shares to cover any
applicable withholding and employment taxes. The Corporation shall have the
right to deduct from all dividends paid with respect to shares of Restricted
Stock the amount of any taxes which the Corporation is required to withhold with
respect to such dividend payments. No discretion or choice shall be conferred
upon any Participant with respect to the form, timing or method of any such tax
withholding.
11. Amendment or Termination. The Board of Directors of the Corporation
------------------------
may amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that no such amendment, suspension or termination shall
impair the rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.
12. Term of Plan. The Plan shall become effective upon its ratification
------------
by the stockholders of the Corporation. It shall continue in effect for a term
of ten years unless sooner terminated under Section 11 hereof.
B-4
<PAGE>
REVOCABLE PROXY
AMBANC HOLDING CO., INC.
ANNUAL MEETING OF SHAREHOLDERS
May 23, 1997
The undersigned hereby appoints the Board of Directors of Ambanc Holding
Co., Inc. (the "Company"), and its survivor, with full power of substitution, to
act as attorneys and proxies for the undersigned to vote all shares of common
stock of the Company which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Meeting"), to be held on Friday, May 23, 1997, at
the Best Western (formerly the Holiday Inn), located at 10 Market Street,
Amsterdam, New York, at 10:00 A.M., New York time, and at any and all
adjournments thereof.
This proxy may be revoked at any time before it is voted by: (i) filing
with the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than the proxy; (ii) duly executing a subsequent
proxy relating to the same shares and delivering it to the Secretary of the
Company at or before the Meeting; or (iii) attending the Meeting and voting in
person (although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). If this proxy is properly revoked as described above,
then the power of such attorneys and proxies shall be deemed terminated and of
no further force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this Proxy of the Notice of Annual Meeting, a Proxy Statement and
the Company's Annual Report to Stockholders for the year ended December 31,
1996.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
[X] Please mark your
votes as in this
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSALS.
FOR WITHHELD NOMINEES: John J. Daly
1. The election of Lionel H. Fallows
the following [_] [_] Marvin R. LeRoy, Jr.
directors for William A. Wilde, Jr.
three year terms:
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE, MARK
"FOR" AND WRITE THE NOMINEE'S NAME WHOM YOU WISH TO WITHHOLD AUTHORITY TO VOTE
FOR IN THE SPACE PROVIDED BELOW.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. The ratification of the adoption of the [_] [_] [_]
1997 Stock Option and Incentive Plan
3. The ratification of the adoption of the [_] [_] [_]
Recognition and Retention Plan.
4. The ratification of the appointment of [_] [_] [_]
KPMG Peat Marwick LLP, independent
auditors for the Company for the fiscal
year ending December 31, 1997.
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment
thereof.
PLEASE PROMPTLY COMPLETE, DATE,
SIGN AND MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
____________________________ Dated: ____________ , 1997
Signature of Stockholder
____________________________ Dated: ____________ , 1997
Signature of Stockholder
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE ON THIS CARD. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE. IF SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN.
