<PAGE>
[AMBANC HOLDING CO., INC. LETTERHEAD]
April 23, 1998
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 Friday, May 22, 1998 at the Best Western 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.
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,
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 22, 1998
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Ambanc Holding Co., Inc. (the "Company") will be held at the Best
Western located at 10 Market Street, Amsterdam, New York, on Friday, May 22,
1998, 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:
I. The election of three directors of the Company;
II. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year ending
December 31, 1998; 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, 1998
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
Robert J. Brittain
President and Chief Executive Officer
Amsterdam, New York
April 23, 1998
- -------------------------------------------------------------------------------
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 22, 1998
____________________
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 located at 10 Market Street,
Amsterdam, New York, on Friday, May 22, 1998, 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,
1998. Certain of the information provided herein relates to Amsterdam Savings
Bank, FSB (the "Bank"), a wholly owned subsidiary of the Company.
At the Meeting, stockholders of the Company are being asked to consider and
vote upon the election of three directors of the Company and the appointment of
KPMG Peat Marwick LLP as the Company's independent auditors for the fiscal year
ending December 31, 1998.
PROXIES AND PROXY SOLICITATION
If a stockholder properly executes the enclosed proxy distributed by the
Company, the proxies named will vote the shares represented by that proxy at the
Meeting. Where a stockholder specifies a choice, the proxy will be voted in
accordance with the stockholder's instructions. Where no specific direction is
given, the proxies will vote the shares "FOR" the election of management's
nominees for directors of the Company and "FOR" the appointment of KPMG Peat
Marwick LLP as the Company's independent auditors for the fiscal year ending
December 31, 1998. As to any other matters presented at the Meeting, the shares
for which proxies have been received will be voted in accordance with the
discretion of the proxies.
Any proxy given pursuant to this solicitation or otherwise may be revoked
by the stockholder giving it at any time before it is voted by delivering to the
Secretary of the Company at the above address, on or before the taking of the
vote at the Meeting, a written notice of revocation bearing a later date than
the proxy or a later dated proxy relating to the same shares of common stock,
par value $.01 per share, of the Company (the "Common Stock"), or by attending
the Meeting and voting in person. Attendance at the Meeting will not in itself
constitute the revocation of a proxy.
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. In addition to solicitation by mail,
directors, officers and employees of the Company and the Bank may solicit
proxies personally or by facsimile, telegraph or telephone, without additional
compensation.
VOTING RIGHTS; VOTE REQUIRED
Stockholders of record as of the close of business on April 15, 1998 (the
"Voting Record Date"), will be entitled to one vote on each matter presented for
a vote at the Meeting for each share of Common Stock then held. Such vote may be
exercised in person or by a properly executed proxy as discussed above.
Directors shall be elected by a plurality of the shares present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. Approval of the appointment of KPMG Peat Marwick LLP as the
Company's independent auditors for the
<PAGE>
fiscal year ending December 31, 1998 requires 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.
With regard to the election of directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on all
proposals except the election of directors and will be counted as present for
purposes of the item on which the abstention is noted. Abstentions on the
proposal to ratify KPMG Peat Marwick LLP as the Company's independent auditors
will have the effect of a negative vote since that proposal requires the
affirmative vote of a majority of the shares present in person or by proxy and
entitled to vote at the Meeting. A broker non-vote (i.e., proxies from brokers
or nominees indicating that such persons have not received instructions from the
beneficial owners or other persons as to certain proposals on which such
beneficial owners or persons are entitled to vote their shares but with respect
to which the brokers or nominees have no discretionary power to vote without
such instructions) will have no effect on the outcome of the election of
directors or ratification of auditors. Brokers who do not receive instructions
are entitled to vote on the election of directors and the ratification of the
Company's auditors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of the Voting Record Date, the Company had 4,258,418 shares of Common
Stock issued and outstanding. The following table sets forth 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 Chief
Executive Officer and its Directors.
<TABLE>
<CAPTION>
Shares Beneficially Percent of
Beneficial Owners Owned Class
- ----------------- ------------------- -----------
<S> <C> <C>
Ambanc Holding Co., Inc./(1)/ 433,780 10.19%
Employee Stock Ownership Plan
11 Division Street
Amsterdam, New York 12010
Janus Capital Corp. /(2)/ 310,650 7.29%
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4923
Directors and executive officers/(3)/ 277,933 6.39%
of the Company and the Bank
as a group (15 persons)
- -------------------------------------
</TABLE>
(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, 103,525 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 may not be 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 Janus Capital Corp. ("Janus"), 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"). Janus
reported shared voting and dispositive power with respect to all shares
reported in its Schedule 13G.
(3) 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. This amount also includes options to
purchase 88,071 shares of Common Stock granted to directors and executive
officers which are currently exercisable or exercisable within 60 days of
the Voting Record Date.
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. An asterisk (*) in the
table indicates that an individual beneficially owns less than one percent of
the outstanding Common Stock of the Company.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
DIRECTOR TERM TO BENEFICIALLY PERCENT
NAME AGE POSITION(S) HELD IN THE COMPANY SINCE/(1)/ EXPIRE OWNED/(2)/ OF CLASS
- ----------------------------- --- ---------------------------------- ---------- ------- -------------- ---------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
Lauren T. Barnett 72 Director 1966 2001 28,348/(3)/ *
Robert J. Brittain/(4)/ 57 President, Chief Executive 1988 2001 59,017/(5)/ 1.38%
Officer
and Director
Charles S. Pedersen 72 Director 1977 2001 15,148/(3)/ *
DIRECTORS CONTINUING IN OFFICE
John J. Daly 57 Director 1988 2000 16,648/(3)/ *
Lionel H. Fallows 77 Director 1981 2000 15,648/(3)(6)/ *
Marvin R. LeRoy, Jr. 37 Director 1996 2000 5,534/(7)/ *
William A. Wilde, Jr. 80 Director 1966 2000 13,648/(3)/ *
Paul W. Baker 80 Chairman of the Board 1963 1999 13,648/(3)/ *
Robert J. Dunning, DDS/(4)/ 71 Director 1972 1999 17,748/(3)/ *
Carl A. Schmidt, Jr. 72 Director 1974 1999 15,648/(3)/ *
</TABLE>
______________________
(1) Includes service as a director of the Bank.
(2) The nature of beneficial ownership for shares reported in this column is
sole voting and dispositive power, except as otherwise noted in these
footnotes. Included in the shares beneficially owned by the named
individuals are options to purchase shares of Common Stock, which are
currently exercisable or exercisable within 60 days of the Voting Record
Date, as follows: Mr. Brittain - 25,078 shares and each other director -
4,514 shares.
(3) Includes 8,134 shares of restricted Common Stock over which such individual
has no dispositive power.
(4) Mr. Brittain and Dr. Dunning are related through the marriage of their
children.
(5) Includes 27,111 shares of restricted Common Stock over which Mr. Brittain
has no dispositive power.
(6) Reported shared voting and investment power with respect to 1,000 shares of
Common Stock owned by his spouse.
(7) Reported shared voting and dispositive power with respect to 20 shares of
Common Stock owned by his children who reside with him.
3
<PAGE>
The business experience of each director of the Company for at least the
past five years is set forth below.
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.
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.
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 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.
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.
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 year ended December
31, 1997, the Board of Directors met 12 times. During 1997, 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.
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 three times during 1997.
4
<PAGE>
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 the Company's 1997 Stock Option and Incentive
Plan (the "Stock Option Plan") and its Recognition and Retention Plan (the
"RRP"). This committee met eight times during 1997.
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 met once in January 1998 for the purpose of
making nominations for directors to be voted on by stockholders at the Meeting.
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 13 meetings during the year ended December 31, 1997. During
1997, 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 1997. Each non-employee director of the Bank during 1997 (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.
Non-employee board members of the Bank's Executive, Audit, Personnel and
Strategic Planning Committees also received $200 for each committee meeting
attended. In addition to the foregoing, each non-employee director of the Bank
was granted an option to purchase 18,056 shares of Common Stock at an exercise
price equal to $13.75 (the fair market value of the Common Stock on the date of
the grant) and each non-employee director, except for Mr. LeRoy, was granted
8,133 shares of restricted Common Stock. The options and restricted stock are
scheduled to vest in four equal annual installments with the first installment
vesting on May 23, 1998.
The Bank has established a deferred compensation program for the benefit of
its non-employee 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 non-
employee 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 salary and bonus in excess of $100,000 in 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
Awards
<S> <C> <C> <C> <C> <C> <C> <C>
Other Annual Restricted All Other
Name and Principal Position Year Salary Bonus Compensation Stock Options Compensation
($) ($) ($)/(1)/ Award ($) (#) ($)
Robert J. Brittain, President 1997 $167,000 --- --- $372,776/(2)/ 100,312/(3)/ $54,378/(4)/
and Chief Executive Officer 1996 167,000 --- --- --- --- 33,788
1995 157,000 --- --- --- --- 1,873
</TABLE>
(1) Mr. Brittain did not receive any additional benefits or perquisites which,
in the aggregate, exceeded the lesser of 10% of his salary and bonus, or
$50,000.
(2) Represents the dollar value, based on the $13.75 closing price per share of
the Common Stock on May 23, 1997, the date of grant. The shares of
restricted stock vest in four equal annual installments (with the first
installment scheduled to vest on May 23, 1998), provided the individual
maintains "Continuous Service" (as defined in the RRP) with the Company
and/or the Bank. Holders of restricted stock granted under the RRP are
entitled to receive any dividends paid by the Company on the Common Stock.
At December 31, 1997, Mr. Brittain owned 27,111 shares of restricted Common
Stock with a market value of $508,331 at such date (based on the $18.75
closing price per share of the Common Stock on December 31, 1997).
(3) See the tables captioned "OPTION GRANTS IN LAST FISCAL YEAR" and "AGGREGATE
OPTIONS EXERCISED IN LAST FISCAL YEAR AND FY-END OPTION VALUES" for
information on stock options.
(4) Represents the market value of the Bank's contribution to the ESOP on behalf
of Mr. Brittain.
The following table sets forth certain information concerning stock options
granted by the Company to Mr. Brittain during fiscal 1997. No stock
appreciation rights were granted during fiscal 1997.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
Number of % of Total
Securities Options Exercise or
Underlying Granted to Base
Options Employees Price Expiration
Name Granted in Fiscal Year ($/Sh) Date
(#)/(1)/
<S> <C> <C> <C> <C>
Robert J. Brittain 100,312 26.8% $13.75 05-23-07
</TABLE>
(1) The options reported in the table is scheduled to vest in four equal annual
installments with the first installment scheduled to vest on May 23, 1998,
and each subsequent installment to vest equally on the next three
anniversary dates thereafter.
6
<PAGE>
The following table sets forth certain information concerning the aggregate
number and value of the stock options held by Mr. Brittain at December 31, 1997.
No stock appreciation rights have been granted by the Company to date.
<TABLE>
<CAPTION>
Aggregate Options Exercised in Last Fiscal Year and Fiscal Year End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at FY-End (#) FY-End ($)/(1)/
Acquired
on Value
Exercise Realized
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Robert J. Brittain --- --- --- 100,312 --- $501,560
</TABLE>
(1) Represents the aggregate market value of the stock options as of December
31, 1997. The market value per share of the stock options is the
difference between the market price per share of the Common Stock ($18.75
per share based on the closing price per share of the Common Stock as
reported on the Nasdaq Stock Market on December 31, 1997, less the exercise
price ($13.75 per share) of the stock options.
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.
7
<PAGE>
The following table sets forth, as of December 31, 1997, 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.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF CREDITED SERVICE
<S> <C> <C> <C> <C> <C>
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
</TABLE>
/(1)/ 1997 annual earnings limited to $160,000 by Internal Revenue
Service regulations.
For purposes of this plan, at December 31, 1997, it is estimated that Mr.
Brittain had 21 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
President Brittain and five other executive officers have employment
agreements with 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 guarantee participation in an equitable manner in employee
benefits applicable to executive personnel. 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.
As of December 31, 1997, President Brittain has two years remaining on his
employment agreement and each of the other executive officers has one year
remaining on his or her respective agreement.
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 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.
If Mr. Brittain had been terminated as of December 31, 1997, under
circumstances entitling him to severance pay as described above, he would have
been entitled to receive a lump sum cash payment of approximately $499,000.
8
<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.
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.
9
<PAGE>
Annual Incentives/Bonuses.
The Committee established a cash bonus program based on the Company meeting
pre-established performance criteria measured by return on equity, earnings per
share and efficiency ratio. Goals are set based both on peer group and industry
wide performance. In order for cash bonuses to be paid, the Company must meet
its goals in two of the three categories. No cash bonuses were paid in 1997 as
the Company met its goals in only one of the categories.
Long-Term Incentives
The Company's Stock Option Plan and RRP, which were approved by
stockholders in 1997, 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.
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.
Submitted by the Compensation and Benefits Committee of the Company
Carl A. Schmidt, Jr. (Chairman)
Lauren T. Barnett
John J. Daly
Charles S. Pedersen
10
<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, 1997.
<TABLE>
<CAPTION>
12/27/95 12/31/95 12/31/96 12/31/97
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Ambanc Holding Co., Inc $ 100.00 $ 101.09 $ 112.50 $ 188.65
Selected Thrift Index 100.00 100.00 130.51 219.43
Nasdaq Market Index 100.00 100.00 124.27 152.00
</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.
11
<PAGE>
PROPOSAL II - 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, 1998,
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, 1998
OTHER MATTERS
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
December 24, 1998. Any such proposal shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
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.
12
<PAGE>
REVOCABLE PROXY
AMBANC HOLDING CO., INC.
AMSTERDAM, NEW YORK
ANNUAL MEETING OF STOCKHOLDERS--MAY 22, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the members of the Board of Directors of Ambanc
Holding Co., Inc. (the "Company") with full powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of common stock,
par value $.01 per share (the "Common Stock"), of Ambanc Holding Co., Inc. which
the undersigned is entitled to vote at the Annual Meeting (the "Meeting") of
Stockholders to be held at the Best Western located at 10 Market Street,
Amsterdam, New York, at the date and time set forth in the Notice of Annual
Meeting and at any and all adjournments and postponements thereof, as indicated
on the reverse side hereof.
The Board of Directors Recommends a Vote "For" Each of the
Listed Proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF 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.
This proxy may be revoked at any time before it is voted by delivering to the
Secretary of the Company, on or before the taking of the vote at the Meeting, a
written notice of revocation bearing a later date than the proxy or a later
dated proxy relating to the same shares of Company common stock, or by attending
the Meeting and voting in person. Attendance at the Meeting will not in itself
constitute the 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
<PAGE>
[X] Please mark your
votes as in this
example
I. The election of LAUREN T. BARNETT, ROBERT J. BRITTAIN and CHARLES S.
PEDERSEN for terms of three years.
FOR WITHHOLD FOR ALL
EXCEPT
[_] [_] [_]
INSTRUCTION: To vote for all nominees mark the box "FOR" with an "X". To
withhold your vote for all nominees mark the box "WITHHOLD" with an "X". To
withhold your vote for an individual nominee mark the box "FOR ALL EXCEPT" with
-------------
an "X" and write the name or names of the nominee(s) on the line provided below
for whom you wish to withhold your vote.
________________________________________________________________________________
II. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the year ending December 31,
1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The undersigned acknowledges receipt from the Company, prior to the execution of
this Proxy, of the Notice of Annual Meeting, the related Proxy Statement and the
Company's Annual Report to Stockholders for the year ended December 31, 1997.
Date:____________________, 1998
Please sign exactly as your name
appears on this card. When
signing as attorney, executor,
administrator, officer, trustee
or guardian, please give your
full title. If shares are being
held jointly, each holder
should sign.
________________________________
Signature of Stockholder
________________________________
Signature of Stockholder
PLEASE PROMPTLY COMPLETE, DATE,
SIGN AND MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
