<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
PEEKSKILL FINANCIAL CORPORATION
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
[PEEKSKILL FINANCIAL CORPORATION LETTERHEAD]
September 23, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Peekskill
Financial Corporation (the "Company"), we cordially invite you to attend the
Company's Annual Meeting of Stockholders. The meeting will be held at 3:30 p.m.,
Peekskill, New York time, on October 22, 1997 at the Main office of the Company
located at 1019 Park Street, Peekskill, New York 10566.
An important aspect of the meeting process is the stockholder vote on
corporate business items. We urge you to exercise your rights as a stockholder
to vote and participate in this process. Stockholders are being asked to
consider and vote upon the election of two directors of the Company and the
ratification of KPMG Peat Marwick LLP as auditors of the Company for the fiscal
year ending June 30, 1998. The Board has carefully considered both of these
proposals and unanimously recommends that you vote "For" the director nominees
and the ratification of KPMG Peat Marwick LLP.
We encourage you to attend the meeting in person. Whether or not you
plan to attend, please read the enclosed Proxy Statement and then complete, sign
and date the enclosed proxy card and return it in the accompanying postage
prepaid 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.
Sincerely,
Eldorus Maynard
Chairman of the Board and
Chief Executive Officer
<PAGE>
Peekskill Financial Corporation
1019 Park Street
Peekskill, New York 10566
(914) 737-2777
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 22, 1997
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Peekskill Financial Corporation (the "Company") will be held at
the Main office of the Company located at 1019 Park Street, Peekskill, New York
10566, at 3:30 p.m., Peekskill, New York time, on October 22, 1997.
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 two directors of the Company; and
2. The ratification of the appointment of KPMG Peat Marwick LLP
as the auditors of the Company for the fiscal year ending June
30, 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 or postponed. Stockholders of record at the close of business on
September 11, 1997 are the stockholders entitled to vote at the Meeting and any
adjournments thereof.
You are requested to complete and sign 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.
BY ORDER OF THE BOARD OF DIRECTORS
Eldorus Maynard
Chairman of the Board and
Chief Executive Officer
Peekskill, New York
September 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 SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
Peekskill Financial Corporation
1019 Park Street
Peekskill, New York 10566
(914) 737-2777
ANNUAL MEETING OF STOCKHOLDERS
October 22, 1997
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of Peekskill Financial Corporation (the
"Company"), the parent company of First Federal Savings Bank ("First Federal" or
the "Bank"), of proxies to be used at the Annual Meeting of Stockholders of the
Company (the "Meeting") which will be held at the Main office of the Company
located at 1019 Park Street, Peekskill, New York 10566 on October 22, 1997, at
3:30 p.m., Peekskill, New York time, and all adjournments or postponements of
the Meeting. The accompanying Notice of Annual Meeting and this Proxy Statement
are first being mailed to stockholders on or about September 23, 1997. Certain
of the information provided herein relates to First Federal Savings Bank (the
"Bank"), a wholly owned subsidiary and the predecessor of the Company.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon the election of two directors of the Company and the ratification
of the appointment of KPMG Peat Marwick as the auditors of the Company for the
fiscal year ending June 30, 1998.
Vote Required and Proxy Information
All shares of the Company's 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 proposals set forth
in this Proxy Statement. The Company does not know of any matters, other than
those described in the Notice of Annual Meeting, 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. Approval of the ratification of the appointment of KPMG
Peat Marwick LLP requires the affirmative vote of a majority of shares present
in person or represented by proxy at the meeting and entitled to vote on the
matter. Proxies marked to abstain with respect to a proposal have the same
effect as votes against the proposal. Broker non-votes have no effect on the
vote. A majority 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 the solicitation may be revoked at any time
before it is voted. Proxies may be revoked 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). Any written notice revoking a proxy should be delivered to William
LaCalamito, Corporate Secretary, Peekskill Financial Corporation, 1019 Park
Street, Peekskill, New York 10566.
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on September 11,
1997 will be entitled to one vote for each share of Common Stock then held. As
of that date, the Company had 3,193,121 shares of Common Stock issued and
outstanding.
<PAGE>
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 Common Stock, (ii) each member of the Company's board of
directors, (iii) each officer of the Company and the Bank who made in excess of
$100,000 (salary and bonus) during the fiscal period ended June 30, 1997 (the
"Named Officers"); and (iv) all directors and executive officers of the Company
and the Bank as a group.
<TABLE>
<CAPTION>
Shares Beneficially
Owned at Percent
Beneficial Owner September 11, 1997 of Class
- ------------------------------------------------------------------------------ ------------------ --------
Principal Owners
- ----------------
<S> <C> <C>
Peekskill Financial Corporation Employee Stock Ownership Plan(1) 303,381 9.5%
1019 Park Street
Peekskill, New York 10566
Brandes Investment Partners, L.P.(2) 311,910 9.8
12750 High Bluff Drive, Suite 420
San Diego, California 92130
First Manhattan Co.(3) 191,415 6.0
437 Madison Avenue
New York, New York 10022
Directors and Named Officers(4)
- -------------------------------
Eldorus Maynard, Chairman of the Board and 43,854 1.4
Chief Executive Officer
William LaCalamito, President,
Chief Operating Officer and Director 44,093 1.4
Dominick Bertoline, Director 17,076 .5
Edward H. Dwyer, Director 31,516 1.0
John Patrick Fay, Director 20,917 .7
Robert E. Flower, Director 28,240 .9
Directors and executive officers of the Company and the Bank, as a group
(6 persons)(5) 185,696 5.7
</TABLE>
- ----------------
(1) The amount reported represents shares held by the Employee Stock Ownership
Plan ("ESOP"), 24,599 of which have been allocated to accounts of
participants and are therefore excluded from the total. First Bankers Trust,
Quincy, Illinois, the trustee of the ESOP, may be deemed to beneficially own
the shares held by the ESOP which have not been allocated to accounts of
participants. Participants in the ESOP are entitled to instruct the trustee
as to the voting of shares allocated to their accounts under the ESOP.
Unallocated shares held in the ESOP's suspense account or allocated shares
for which no voting instructions are received are voted by the trustee in
the same proportion as allocated shares voted by participants.
(2) As reported on Schedule 13-G dated February 12, 1997 filed by Brandes
Investment Partners, L.P. ("Brandes") in which Brandes claimed sole voting
power and shared dispositive power in regards to 311,910 shares.
(3) As reported on Schedule 13-G dated January 30, 1997 filed by First Manhattan
Co. ("First Manhattan") in which First Manhattan claimed sole voting and
dispositive power in regards to 139,514 shares, shared voting power in
regards to 22,101 shares and shared dispositive power in regards to 51,901
shares.
(4) The address of each Director and Named Officer is the same as that of the
Company.
(5) Amount includes shares held directly, as well as shares allocated to such
individuals under the ESOP, shares held jointly with family members, shares
held in retirement accounts, shares held in a fiduciary capacity or by
certain family members, with respect to which shares the group members may
be deemed to have sole voting and/or investment power. The amounts reported
include 57,397 shares which are the subject of options exercisable within 60
days of September 1, 1997 and exclude 229,584 shares awarded to such
individuals pursuant to the Stock Option Plan which shares are not
exercisable within 60 days of September 11, 1997. In addition, the amounts
include 5,125, 5,125 and 1,640 vested shares which have been awarded to
Chairman Maynard, President LaCalamito and each outside director,
respectively pursuant to the Company's Recognition and Retention Plan
("RRP").
2
<PAGE>
The following table sets forth the beneficial ownership of the
Directors and Named Officers above using the same assumptions as the table set
forth on page 2 except that the amounts include unvested shares issued under the
RRP.
<TABLE>
<CAPTION>
Percent
Beneficial Owner September 11, 1997 of Class
- -------------------------------------------------------------------------- ------------------ --------
Directors and Named Officers
- ----------------------------
<S> <C> <C>
Eldorus Maynard, Chairman of the Board and 79,726 2.5%
Chief Executive Officer
William LaCalamito, President,
Chief Operating Officer and Director 79,965 2.5
Dominick Bertoline, Director 23,635 .7
Edward H. Dwyer, Director 38,075 1.2
John Patrick Fay, Director 27,476 .9
Robert E. Flower, Director 34,799 1.1
Directors and executive officers of the Company and the Bank, as a group
(6 persons) 283,676 8.7
</TABLE>
PROPOSAL I. ELECTION OF DIRECTORS
General
The Company's Board of Directors currently consists of six members,
each of whom is also a director of the Bank. The Board is divided into three
classes, each of which contains approximately one-third of the Board, and
approximately one-third of the directors are elected annually. Directors of the
Company are generally elected 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 September 11,
1997, regarding 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 one or more 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 the
nominees may be unable to serve, if elected. There are no arrangements or
understandings between any director or nominee and any other person pursuant to
which such director or nominee was selected.
3
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common Stock Percent
Position(s) Held Director Term to Beneficially of
Name Age in the Company Since(1) Expire Owned(2) Class
- ------------------------------- ----- ---------------- -------- -------- ---------- ------
NOMINEES
<S> <C> <C> <C> <C> <C>
William J. LaCalamito 38 President, Chief 1995 2000 44,093(3) 1.4%
Operating Officer and
Director
Dominick Bertoline 51 Director 1986 2000 17,076 .5
DIRECTORS CONTINUING IN OFFICE
Eldorus Maynard 62 Chairman of the Board 1993 1998 43,854(3) 1.4
and Chief Executive
Officer
Robert E. Flower 60 Director 1987 1998 28,240 .9
Edward H. Dwyer 71 Director 1973 1999 31,516 1.0
John Patrick Fay 71 Director 1981 1999 20,917 .7
</TABLE>
- ----------------
(1) Includes service as a director of the Bank prior to the formation of
the Company.
(2) Includes shares held directly, in retirement accounts, in a fiduciary
capacity or by certain affiliated entities or members of the named
individuals' families, with respect to which shares the named
individuals may be deemed to have sole or shared voting and/or
dispositive powers. Also includes 5,125, 5,125 and 1,640 vested shares
granted to Chairman Maynard, President LaCalamito and each outside
director, respectively pursuant to the RRP and 20,499, 20,499 and 4,100
shares subject to option awarded pursuant to the stock option plan
which are exercisable within 60 days of September 11, 1997.
(3) Includes 3,815 and 3,678 shares allocated to Chairman Maynard and
President LaCalamito, respectively pursuant to the ESOP.
The business experience of each nominee and Director for at least the
past five years is set forth below.
William J. LaCalamito is President, Chief Operating Officer, Chief
Financial Officer and Secretary of the Company and the Bank. Mr. LaCalamito
joined the Bank in 1988 as Vice President. In 1993, Mr. LaCalamito was named
Secretary of the Bank and in 1995 he was also named Chief Financial Officer. In
his capacity as President and Chief Operating Officer, Mr. LaCalamito is
responsible for overseeing all the primary business functions of the Bank.
Dominick Bertoline is President and Chief Executive Officer of D.
Bertoline & Sons, Inc., an Anheuser- Busch product distributor. Mr. Bertoline
has been a member of the Board of Directors since 1986.
Eldorus Maynard is Chairman of the Board and Chief Executive Officer of
the Bank. Mr. Maynard first joined the Bank as a teller and bookkeeper in 1958.
Mr. Maynard served as Secretary of the Bank beginning in 1964, Assistant Vice
President and Secretary beginning in 1977, and Vice President and Secretary
beginning in 1985. Mr. Maynard was named Chairman and Chief Executive Officer in
1995 following the death of the Bank's longtime Chairman and Chief Executive
Officer, Raymond Doehler.
Robert E. Flower is the owner of Bliss Manufacturing, Inc., a
manufacturer of women's clothing. Mr. Flower has been a member of the Board of
Directors since 1987.
Edward H. Dwyer is the owner of Dwyer Agency, a Real Estate and
Insurance Agency. Mr. Dwyer has been a member of the Board of Directors since
1973.
4
<PAGE>
John Patrick Fay is the President of Mechtrol, a manufacturer of
industrial lubricants. Mr. Fay has been a member of the Board of Directors since
1981.
Meetings and Committees of the Board of Directors
The Company. The Company's Board of Directors has standing Audit and
Compensation Committees which meet and act in conjunction with the like
committees of the Bank's Board of Directors. The Board of Directors met 16 times
in fiscal 1997. During fiscal 1997, no incumbent director of the Company
attended fewer than 75% of the total number of meetings held by the Board of
Directors.
The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. While the Board of Directors will
consider nominees recommended by stockholders, the Board has not actively
solicited such nominations. Pursuant to the Company's Bylaws, nominations by
stockholders generally must be delivered in writing to the Secretary of the
Company at least 30 days prior to the date of the Meeting. The Board of
Directors met once during fiscal 1997 in its capacity as a nominating committee.
The Bank. The Bank's Board of Directors met 14 times during the fiscal
year ended June 30, 1997. During fiscal 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.
The Bank has standing Executive, Audit and Compensation Committees.
The Bank's Executive Committee meets on a monthly basis and exercises
the powers of the full Board of Directors between Board meetings. The Executive
Committee is composed of Directors Maynard, Dwyer and Flower. The Executive
Committee met 12 times during the fiscal year ended June 30, 1997.
The Audit Committee is responsible for recommending the selection of
the independent auditors of the Company and the Bank and meeting with the
independent auditors to outline the scope and review the results of the annual
audit. The current members of this committee are Directors Bertoline, Dwyer, Fay
and Flower. This committee held one meeting during the fiscal year ended June
30, 1997.
The Bank's Compensation Committee is responsible for the design and
administration of the Bank's overall compensation program. In addition, the
committee reviews and approves all executive officers' compensation plans,
evaluates executive performance, and considers other related matters. The
current members of this committee are Directors Bertoline, Dwyer, Fay and
Flower. The Compensation Committee held one meeting during the fiscal year ended
June 30, 1997.
Director Compensation
Each director on the Board of Directors of the Company is paid a fee of
$500 for each Board meeting attended. Each director on the Board of Directors is
also paid a fee of $500 for each regular meeting of the Bank's Board attended.
Executive Committee Members also receive $150 per month for attendance at
Executive Committee Meetings.
Executive Compensation
The Company has not paid any compensation to its executive officers
since its formation. The Company does not presently anticipate paying any
compensation to such persons until it becomes actively involved in the operation
or acquisition of businesses other than the Bank.
5
<PAGE>
The following table sets forth information concerning the compensation
paid to the Named Officers for services in all capacities to the Company for the
fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
- -----------------------------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
Awards
- -----------------------------------------------------------------------------------------------------------------------------------
Options/
Stock
Restricted Appreciation
Other Annual Stock Rights All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($)(1) Award($) ("SARs")(#) Compensation($)(4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Eldorus Maynard, Chairman of 1997 $134,800(5) $9,308 $--- $486,839(2) 102,494(3) $58,126
the Board and Chief Executive 1996 126,175(5) 9,308 --- --- --- 39,573
Officer 1995 108,875(5) 7,807 --- --- --- 6,641
William LaCalamito, 1997 $129,500(5) $9,038 $--- $486,839(2) 102,494(3) $46,983
President and Chief 1996 118,500(5) 9,038 --- --- --- 27,099
Operating Officer 1995 98,798 7,500 --- --- --- 6,379
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Neither Mr. Maynard nor Mr. LaCalamito received additional benefits or
perquisites which, in the aggregate, exceeded 10% of their salary and bonus.
(2) Amount reflects dollar value of award of 40,997 shares of restricted stock
granted to Messrs. Maynard and LaCalamito each pursuant to the RRP on July
3, 1996. The dollar value per share of such award on the date of grant was
$11.875.
(3) On July 3, 1996, pursuant to the 1996 Stock Option and Incentive Plan, the
Company granted to Mr. Maynard and Mr. LaCalamito options to purchase
102,494 shares of common stock each at an exercise price equal to the market
value per share on the date of the grant.
(4) Amounts include contributions by the Company on behalf of the employee to
the ESOP, 401(k) Plan and SERA as follows:
<TABLE>
<CAPTION>
ESOP 401(k) Plan SERA
-------------------------------- ------------------------------ ------------------------------
1997 1996 1995 1997 1996 1995 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Eldorus Maynard $36,900 $15,921 $ --- --- $3,338 $6,641 $21,226 $20,314 $ ---
William LaCalamito 35,475 15,428 --- --- 3,225 6,379 11,508 8,446 ---
</TABLE>
(5) Amounts include directors fees paid to Mr. Maynard of $13,800, $10,050 and
$6,000, respectively for fiscal years 1997, 1996 and 1995 and $12,000 and
$6,000 paid to Mr. LaCalamito for fiscal year 1997 and 1996, respectively.
6
<PAGE>
The following table sets forth certain information concerning stock
options granted pursuant to the Stock Option Plan to the Named Officers in
fiscal 1997. No stock appreciation rights have been granted pursuant to the
Stock Option Plan.
<TABLE>
<CAPTION>
==============================================================================================================================
OPTION GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of Stock
Price Appreciation
for Option Term
- ------------------------------------------------------------------------------------------------------------------------------
Number of
Securities
Underlying % of Total Exercise
Options Options or Base
Granted Granted in Fiscal Price Expiration
Name (#)(1) Year ($/Sh) Date 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Eldorus Maynard 102,494 34.5% $11.875 7/3/2006 $766,143 $1,939,699
William LaCalamito 102,494 34.5 11.875 7/3/2006 766,143 1,939,699
=============================================================================================================================
</TABLE>
- -----------------
(1) Messrs. Maynard and LaCalamitos' options become exercisable in equal
installments over a five-year period with the first installment becoming
exercisable on July 3, 1997.
The following table sets forth certain information concerning the
number and value of stock options at June 30, 1997 held by the Named Officers,
none of which have been exercised.
<TABLE>
<CAPTION>
=================================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
- ---------------------------------------------------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#)(1) FY-End ($)(2)
Shares Acquired -------------------------------------------------------------
Name on Exercise (#) Value Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Eldorus Maynard N/A N/A 20,499 81,995 $65,289 $261,154
William LaCalamito N/A N/A 20,499 81,995 65,289 261,154
================================================================================================================================
</TABLE>
- ----------------
(1) Represents an option to purchase Common Stock awarded to Messrs. Maynard and
LaCalamito, respectively. The options vest in five equal annual
installments. The first installment vested on July 3, 1997, with the
remaining installments to vest equally on July 3, 1998, 1999, 2000 and 2001.
(2) Represents the aggregate market value (market price of the Common Stock less
the exercise price) of the option granted based upon the average of the
closing bid and ask price of $15.06 per share of Common Stock as reported on
the NASDAQ National Market system on June 30, 1997.
7
<PAGE>
Employment Agreements
The Bank has entered into employment agreements with Eldorus Maynard and
William LaCalamito. The agreements have been filed with and approved by the OTS
as part of the application of the Company to become a savings and loan holding
company. The agreements have initial terms of three years and provide for annual
extensions, subject to a performance evaluation by disinterested members of the
Board of Directors of the Company. The employment agreements require the payment
of the employees' annual salaries, bonuses and benefits from the Company and the
Bank for the remaining term of the contract unless the employee dies,
voluntarily resigns or is terminated for cause.
The employment agreements provide for payment to the employee (in addition
to, if applicable, his salary, bonus and benefits for the remainder of the term
of the contract) of an amount equal to 299% of the employee's compensation in
the event that his employment terminates (whether voluntarily or otherwise) in
connection with a "change in control" of the Bank or the Company or within
eighteen months thereafter. For the purposes of the employment agreements, a
"change in control" is defined to include, among other things, 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. ss. 574.3 or 4. Such events are
generally triggered upon the acquisition or control of 10% of the Company's
common stock. Based on their current salaries, if the employment of Messrs.
Maynard and LaCalamito had been involuntarily terminated as of June 30, 1997
under circumstances entitling them to severance pay as described above, they
would have been entitled to receive cash payments of up to $890,000 and
$829,000, respectively, depending on the remaining term of the agreements.
Supplemental Executive Retirement Agreements. The Bank has entered into a
non-qualified Supplemental Executive Retirement Agreement (a "SERA") with
Chairman and Chief Executive Officer Maynard to provide him with a supplemental
retirement benefit equal to what would have been provided to him under the
Retirement Income Plan but for the limitations contained in Sections 401, 414
and 415 of the Internal Revenue Code of 1986, as amended. In addition, the Bank
has entered into a SERA with President LaCalamito. Under this SERA, the Bank
will provide for payment of a monthly supplemental retirement benefit equal to
up to 24% of his average monthly compensation during the three highest 12-month
periods prior to retirement. Such benefit shall be payable upon normal
retirement at age 65 or, under certain circumstances, age 55 if his termination
is without cause. Upon the employee's death, 50% of the amount payable under the
Agreement shall be payable to his spouse until her death.
The Bank plans to establish an irrevocable grantor trust in connection with
the SERAs. This trust will be funded with contributions from the Bank for the
purpose of providing the benefits promised under the terms of the SERAs. Under
such circumstances, the SERA participants will have only the rights of unsecured
creditors with respect to the trust's assets, and do not recognize income with
respect to benefits provided by the SERA until such benefits are received by the
participants. The assets of the grantor trust will be considered part of the
general assets of the Bank and will be subject to the claims of the Bank's
creditors in the event of the Bank's insolvency. Earnings on the trust's assets
will be taxable to the Bank. The trustee of the trust may invest the trust's
assets in the Company's stock.
The Agreements described above are unfunded and all obligations arising
thereunder are payable from the general assets of the Bank.
Benefit Plans
General. The Bank currently provides insurance benefits to its employees,
including health, life, dental, short and long term disability and major
medical, subject to certain deductibles and copayments by employees.
Savings and Investment Plan. The Bank maintains a Savings and Investment
Plan for the benefit of its employees (the "401(k) Plan"). The Plan and its
related Trust comply with the applicable provisions of Sections 401(a), 401(k)
and 501(a) of the Internal Revenue Code of 1986. An employee is eligible to
participate in the Plan after completing three months of service.
8
<PAGE>
Participants are permitted to make salary reduction contributions to the
401(k) Plan of between 2% and 16% of the participant's annual salary. Each
participant's salary reduction contribution is matched by the Bank in an amount
equal to 100% of the participant's salary reduction contribution up to a maximum
of 6% of the participant's compensation for the payroll period.
The Bank's contributions to the 401(k) plan on behalf of an employee vest to
that employee in the amount of 20% for each succeeding year up to five years,
after which the employee is fully vested. Participants' contributions to the
401(k) Plan are fully and immediately vested. Withdrawals are not permitted
before age 59 and six months except in the event of death, disability,
termination of employment or reasons of proven financial hardship. Upon
termination of employment, the participant's account will be distributed, unless
he or she elects to defer the payment.
The funds included in the 401(k) Plan are invested at the direction of the
participant into one of the investment options available under the 401(k) Plan.
Changes in investment directions among the funds are permitted on a quarterly
basis pursuant to procedures established by the Plan Administrator. Each
participant receives a quarterly statement which provides information regarding,
among other things, the market value of his investments and contributions made
to the 401(k) Plan on his behalf. Upon the implementation of the Company's ESOP,
the 401(k) Plan was frozen and all contributions to the Plan ceased. Management
is considering reactivation of the 401(k) Plan, however, without matching
contributions.
Retirement Income Plan. The Bank sponsors a Retirement Income Plan for its
employees (the "Retirement Plan"). This non-contributory defined benefit
retirement plan covers all employees who have completed one year and 1,000 hours
of service and have attained age 18.
The Retirement Plan is funded solely by contributions made by the Bank. The
Bank's contribution to the Pension Plan for the plan year ended December 31,
1996 was $77,086. Employees become fully vested after 5 years of service or
after attaining age 65.
A participant may receive upon normal retirement either a lump sum payment
or a level monthly benefit payment. The normal retirement age is 65 and the
early retirement age is under most circumstances after age 55. Employees who
terminate employment after becoming vested will be eligible to receive a pension
benefit.
Normal retirement benefits are equal to 50% of: (i) average earnings (not to
exceed $150,000 adjusted annually for the cost of living) for any three
consecutive calendar years during the ten years prior to termination,
retirement, or death multiplied by (ii) the ratio of number of years credited
service (up to a maximum of 15 years) to 15 or (iii) the ratio which the number
of years of credited service bears to the greater of 15 years or the number of
years of credited service an employee would have had at normal retirement date
had his service not ceased.
The following table illustrates annual pension benefits payable upon normal
retirement, which are not subject to offset for Social Security payments, based
on various levels of compensation and years of service and assuming payment in
the form of a straight-line annuity.
<TABLE>
<CAPTION>
Years of Service
Average Annual ---------------------------------------------------------------------
Compensation 10 15 20 25 30 35 40
------------ -- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
$ 40,000.............................. $13,333 20,000 20,000 20,000 20,000 20,000 20,000
60,000.............................. 20,000 30,000 30,000 30,000 30,000 30,000 30,000
80,000.............................. 26,667 40,000 40,000 40,000 40,000 40,000 40,000
100,000.............................. 33,333 50,000 50,000 50,000 50,000 50,000 50,000
120,000.............................. 40,000 60,000 60,000 60,000 60,000 60,000 60,000
140,000.............................. 46,667 70,000 70,000 70,000 70,000 70,000 70,000
160,000.............................. 53,333 80,000 80,000 80,000 80,000 80,000 80,000
</TABLE>
At June 30, 1997, Messrs. Maynard and LaCalamito had 39.2, and 8.7 years of
credited service under the Plan, respectively.
9
<PAGE>
Compensation Committee Report on Executive Compensation
Under rules established by the Securities and Exchange Commission ("SEC"),
the Company is required to provide certain data and information in regard to the
compensation and benefits provided to the Company's Chief Executive Officer and
other executive officers of the Company. The disclosure requirements for the
Chief Executive Officer and other executive officers include the use of tables
and a report explaining the rationale for and considerations that led to
fundamental executive compensation decisions affecting those individuals. In
fulfillment of this requirement, the Compensation Committee of the Bank, at the
direction of the Board of Directors, has prepared the following report for
inclusion in this proxy statement.
General. The Board of Directors of the Bank has delegated to the
Compensation Committee the responsibility and authority to oversee the general
compensation policies of the Bank, to establish compensation plans and specific
compensation levels for executive officers, and to review the recommendations of
management for compensation and benefits for other officers and employees of the
Bank. The Compensation Committee is composed solely of independent outside
directors.
In light of the Conversion of the Bank from a mutually owned to a publicly
owned financial services company, the Compensation Committee developed an
executive compensation policy designed to: (i) offer competitive compensation
packages in order to attract, motivate, retain and reward those key executive
officers who are crucial to the long-term success of the Bank; and (ii)
encourage decision making that maximizes long-term stockholder value. The
Compensation Committee's primary compensation objective is to ensure that such
compensation be tied to the achievement of both short term and longer term
objectives established in conjunction with the Company's annual planning
process.
Executive Compensation Policy. The compensation package provided to the
executive officers of the Bank is composed principally of base salary and annual
incentive bonus awards. Executive officers also participate in other benefit
plans available to all eligible employees including the ESOP. The Compensation
Committee periodically reviews the various elements of the compensation package
available to executive officers in consideration of the policies described
above. The Compensation Committee met one time in fiscal 1997 to review employee
related compensation/benefit issues in general and to review and recommend the
base salary and bonuses of the Chief Executive Officer and the President.
Base Salary. It is the policy of the Compensation Committee to annually
review executive compensation packages, including base salaries paid or proposed
to be paid, with compensation packages and base salaries offered by other
financial institutions with total assets and performance results comparable to
those of the Bank, as well as to compare the complexities of the positions under
consideration with similar jobs in other financial institutions regardless of
asset size. This information is primarily derived from third party sources that
provide compensation data and analysis from publicly held companies in the
Bank's market area. Specific factors considered include the level of
responsibility delegated to a particular officer, the complexity of the job
being evaluated, the position's impact on both short term and long term
corporate objectives, the expertise and skill level of the individual under
consideration, the degree to which the officer has achieved his management
objectives for the plan year, and the officer's overall performance in managing
his area of responsibility. The Compensation Committee's decisions are
discretionary and no quantifiable formula is utilized in the decision making
process.
Benefit Plans. The Compensation Committee's policy with respect to
employee benefit plans is to provide competitive benefits to employees of the
Bank, including executive officers. Additionally, the ESOP will provide
employees, including executive officers, with an additional equity-based
incentive to maximize long-term shareholder value. The Compensation Committee
believes that a competitive employee benefit package is essential to achieving
the goals of attracting and retaining highly qualified employees.
Chief Executive Officer. Total compensation paid to the Chief Executive
Officer for fiscal 1997 (including directors' fees) was $144,108 and reflects a
six percent increase from fiscal 1996. In determining total compensation paid to
the Chief Executive Officer, the Compensation Committee considered factors
relating to the performance of the Bank including (i) the successful completion
of the Bank's conversion to stock form, (ii) the level of operating
10
<PAGE>
profit and (iii) goals relating to efficiency ratios, fee income, loan volume,
asset quality, Community Reinvestment Act compliance and the Bank's
infrastructure.
Dominick Bertoline
Edward Dwyer
John Patrick Fay
Robert E. Flower
Comparative Stock Performance Presentation
Set forth below is a line graph comparing the cumulative total return on the
Company's Common Stock to the cumulative total return of the Nasdaq Market Index
and the Media General Savings and Loan Index for each annual period beginning on
December 29, 1995 (the date the Company's Common Stock first reported on the
Nasdaq Stock Market) through June 30, 1997. The presentation assumes $100 was
invested on December 29, 1995.
170 |------------------------------------------------------------------#
| |
| |
| |
150 |------------------------------------------------------------------*
| |
| |
| @
D 130 |------------------------------------------------------------------|
O | |
L | |
L | * |
A 110 |--------------------------------@---------------------------------|
R | # |
S *#@ |
| |
90 |------------------------------------------------------------------|
| |
| |
| |
70 |------------------------------------------------------------------|
| |
| |
| |
50 |------------------------------------------------------------------|
12/29/95 8/30/96 8/30/97
* = PEEKSKILL FIN CP # = INDUSTRY INDEX @ = BROAD MARKET
1995 1996 1997
PEEKSKILL FIN CP 100.00 117.50 150.00
INDUSTRY INDEX 100.00 103.84 168.03
BROAD MARKET 100.00 112.37 135.37
Certain Transactions
The Bank follows a policy of granting loans to eligible directors, officers,
employees and members of their immediate families for the financing of their
personal residences and for consumer purposes. Under current policy, all loans
to directors and executive officers are required to be made in the ordinary
course of business and on the same terms, including collateral and interest
rates, as those prevailing at the time for comparable transactions and do not
involve more than the normal risk of collectibility at the time of origination.
At June 30, 1997, the Bank's loans to directors, officers, employees and members
of their immediate families totaled approximately $338,000 or .6% of
stockholders' equity. All of these loans were current at June 30, 1997.
11
<PAGE>
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed KPMG Peat Marwick LLP,
independent accountants, to be the Company's auditors for the fiscal year ending
June 30, 1998. Representatives of KPMG Peat Marwick LLP are expected to attend
the Meeting to respond to appropriate questions and to make a statement if they
so desire.
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 FISCAL YEAR ENDING JUNE 30, 1998.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
the next annual meeting of stockholders, any stockholder proposal to take action
at such meeting must be received at the Company's office located at 1019 Park
Street, Peekskill, New York 10566 by May 28, 1998. Any such proposal shall be
subject to the requirements of the proxy rules adopted under the Exchange Act.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should 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. In addition, directors, officers and
regular employees of the Company and/or the Bank may solicit proxies personally
or by telegraph or telephone without additional compensation.
Peekskill, New York
September 23, 1997
12
<PAGE>
PEEKSKILL FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 22, 1997
The undersigned hereby appoints the Board of Directors of Peekskill
Financial Corporation (the "Company"), with full powers of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of capital stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting") to be held at the main office of the Company,
located at 1019 Park Street, Peekskill, New York on October 22, 1997 at 3:30
p.m. and at any and all adjournments and postponements thereof.
1. The election as directors of all nominees listed below (except as marked to
the contrary):
|_| FOR |_| VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee, strike a
line in that nominee's name below.
WILLIAM J. LACALAMITO DOMINICK BERTOLINE
2 The ratification of the appointment of KPMG Peat Marwick LLP, as auditors
for the Company for the fiscal year ending June 30, 1998.
|_| FOR |_| AGAINST |_| VOTE WITHHELD
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE PROPOSAL AND EACH OF THE NOMINEES
LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE 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.
The Board of Directors recommends a vote "FOR" the proposal
and the election of the nominees listed above.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and choose to vote at the Meeting or at
any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this proxy, then the power of such attorneys or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of notice of the Meeting, a Proxy Statement and an
Annual Report to Stockholders.
Dated: , 1997
------------------- -----------------------------------
Signature of Stockholder Please sign
exactly as your name(s) appear(s) to
the left. When signing as attorney,
executor, administrator, trustee or
guardian, please give your full title.
If shares are held jointly, each
holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
