[PROXY STATEMENT]
September 23, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Mystic Financial, Inc. (the "Company"), the holding company for
Medford Co-operative Bank (the "Bank"), Medford, Massachusetts, which will be
held on October 21, 1998 at The Museum of Our National Heritage in Lexington,
Massachusetts, at 10:00 a.m. Eastern Time (the "Annual Meeting").
The attached Notice of the 1998 Annual Meeting of Stockholders and Proxy
Statement describe the formal business to be transacted at the Annual Meeting.
Directors and officers of the Company, as well as a representative of Wolf &
Company, P.C., the accounting firm appointed by the Board of Directors to be
the Company's independent auditors for the fiscal year ending June 30, 1999,
will be present at the Annual Meeting to respond to appropriate questions.
The Board of Directors of the Company has determined that an affirmative
vote on each matter to be considered at the Annual Meeting is in the best
interests of the Company and its stockholders and unanimously recommends a vote
"FOR" each of these matters.
Please complete, sign and return the enclosed proxy card promptly whether
or not you plan to attend the Annual Meeting. Your vote is important regardless
of the number of shares you own. Voting by proxy will not prevent you from
voting in person at the Annual Meeting but will assure that your vote is
counted if you are unable to attend.
On behalf of the Board of Directors and the employees of Mystic
Financial, Inc. and Medford Co-operative Bank, we thank you for your continued
support.
Sincerely yours,
/s/ JOHN J. MCGLYNN
John J. McGlynn
Chairman of the Board
Mystic Financial, Inc.
60 High Street
Medford, Massachusetts 02155
(781) 395-2800
NOTICE OF THE 1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on October 21, 1998
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of Mystic Financial, Inc. (the "Company") will be held on
October 21, 1998 at The Museum of Our National Heritage in Lexington,
Massachusetts, at 10:00 a.m., Eastern Time, to consider and vote upon:
1. The election of four directors, three directors to serve for a
term of three years and one director to serve a term of one year;
2. The ratification of the appointment of Wolf & Company, P.C. as
independent auditors for the fiscal year ending June 30, 1999; and
3. Such other matters as may properly come before the Annual Meeting
or any adjournment or postponement thereof. The Company is not
aware of any other business that may properly come before the
Annual Meeting.
The Board of Directors has fixed August 28, 1998 as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any adjournment or postponement thereof. Only stockholders
of record at the close of business on that date will be entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ LORRAINE P. SILVA
Lorraine P. Silva
Secretary
Medford, Massachusetts
September 23, 1998
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| YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT |
| THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU |
| OWN. THE BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND MARK THE ENCLOSED |
| PROXY CARD PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE. RETURNING THE |
| PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE |
| ANNUAL MEETING. |
-----------------------------------------------------------------------------
MYSTIC FINANCIAL, INC.
PROXY STATEMENT FOR THE
1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on October 21, 1998
GENERAL INFORMATION
General
This Proxy Statement and accompanying proxy card are being furnished to
the stockholders of Mystic Financial, Inc. (the "Company") in connection with
the solicitation of proxies by the Board of Directors of the Company from
holders of the shares of the Company's issued and outstanding common stock, par
value $.01 per share (the "Common Stock"), as of the close of business on
August 28, 1998 (the Record Date"), for use at the 1998 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held on October 21,
1998 at The Museum of Our National Heritage in Lexington, Massachusetts, at
10:00 a.m., Eastern Time, and at any adjournment or postponement thereof. This
Proxy Statement, together with the enclosed proxy card, is first being mailed
to stockholders on or about September 23, 1998.
On January 8, 1998, the Company became the holding company for Medford
Co-operative Bank (the "Bank") upon completion of the conversion of the Bank
from the mutual form of organization into the stock form of organization (the
"Conversion"). The Company, a Delaware corporation, operates as a bank holding
company for its wholly-owned subsidiary, the Bank.
Record Date and Voting Rights
The Board of Directors of the Company has fixed the close of business on
August 28, 1998 as the Record Date for the determination of the Company's
stockholders entitled to notice of and to vote at the Annual Meeting.
Accordingly, only holders of record of shares of Common Stock at the close of
business on such date will be entitled to vote at the Annual Meeting. On the
Record Date, there were 2,573,555 shares of Common Stock issued and
outstanding. The presence of the holders of at least a majority of the total
number of the outstanding shares of Common Stock of the Company entitled to
vote, represented in person or by proxy, is necessary to constitute a quorum.
Each holder of shares of Common Stock outstanding on the Record Date will
be entitled to one vote for each share of capital stock registered in his or
her name on the transfer books or records of the Company at the Annual Meeting
and at any adjournment or postponement thereof.
All properly executed proxies received by the Company will be voted in
accordance with the instructions indicated thereon. If no instructions are
given, executed proxies will be voted FOR election of each of the four nominees
for director and FOR each other proposal identified in the Notice of the 1998
Annual Meeting of Stockholders. Management is not aware of any matters other
than those set forth in the Notice of the 1998 Annual Meeting of Stockholders
that may be brought before the Annual Meeting. If any other matters properly
come before the Annual Meeting, the persons named in the accompanying proxy
card will vote the shares represented by all properly executed proxies on such
matters in such manner as shall be determined by a majority of the Board of
Directors of the Company.
Vote Required
The vote required for each proposal is set forth in the discussion of the
proposal under the caption "--Vote Required."
Revocability of Proxies
A proxy may be revoked at any time before it is voted by filing with the
Company a duly executed instrument revoking the proxy or by submitting a duly
executed proxy bearing a later date. A proxy may also be revoked by attending
and voting at the Annual Meeting or any adjournment or postponement thereof, if
a written revocation is filed with the secretary of the Annual Meeting prior to
the voting of such proxy.
If you are a stockholder whose shares are not registered in your own
name, you will need appropriate documentation from your stockholder of record
to vote personally at the Annual Meeting. Examples of such documentation would
include a broker's statement, letter or other document that will confirm your
ownership of shares of the Company.
Solicitation of Proxies
The Company will bear the costs of soliciting proxies from its
stockholders. In addition to the use of mail, proxies may be solicited by
officers, directors or employees of the Company and the Bank, by telephone or
through other forms of communication. The Company will also request persons,
firms and corporations holding shares in their names or in the name of their
nominees, which are beneficially owned by others, to send proxy materials to
and obtain proxies from such beneficial owners, and will reimburse such holders
for reasonable expenses incurred in connection therewith. In addition, the
Company has retained MacKenzie Partners, Inc. to assist in the solicitation of
proxies, which firm will be paid a fee of $2,500, plus out-of-pocket expenses.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Stockholders of the Company
The following table sets forth, as of July 1, 1998, certain information
as to Common Stock beneficially owned by persons owning in excess of 5% of the
outstanding shares of Common Stock. Management knows of no person, except as
listed below, who beneficially owned more than 5% of the Company's outstanding
shares of Common Stock as of July 1, 1998. The information provided in the
following table was obtained from filings with the Securities and Exchange
Commission (the "SEC") and with the Company pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Addresses provided are
those listed in the filings as the address of the person authorized to receive
notices and communications. For purposes of the table below and the table set
forth under "Security Ownership of Management," in accordance with Rule 13d-3
under the Exchange Act, a person is deemed to be the beneficial owner of any
shares of Common Stock (1) over which such person has or shares, directly or
indirectly, voting or investment power, or (2) of which such person has the
right to acquire beneficial ownership at any time within 60 days after
July 1, 1998. As used herein, "voting power" is the power to vote or direct
the voting of shares, and "investment power" includes the power to dispose or
direct the disposition of such shares.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent
-------------- ------------------------------- -------------------- -------
<S> <C> <C> <C>
Common Stock, $.01 par value Mystic Financial, Inc. Employee 216,890(1) 8.0%
Stock Ownership Plan Trust
Marine Midland Bank
140 Broadway
New York, NY 10005
<FN>
- -------------------
<F1> The Mystic Financial, Inc. Employee Stock Ownership Plan ("ESOP") is
administered by the compensation committee of the Company's Board of
Directors (the "Compensation Committee"). The ESOP's assets are held in a
trust (the "ESOP Trust"), for which Marine Midland Bank, serves as
trustee (the "ESOP Trustee"). The ESOP Trust purchased these shares with
funds borrowed from the Company, initially placed these shares in a
suspense account for future allocation and intends to allocate them to
employees participating in the ESOP over a period of years as its
acquisition debt is retired. The ESOP Trustee is the beneficial owner of
the shares held in the ESOP Trust. The terms of the ESOP Trust Agreement
provide that, subject to the ESOP Trustee's fiduciary responsibilities
under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the ESOP Trustee will vote, tender or exchange shares of
Common Stock held in the ESOP Trust in accordance with the following
rules. The ESOP Trustee will vote, tender or exchange shares of Common
Stock allocated to participants' accounts in accordance with instructions
received from the participants. However, since annual allocations under
the ESOP will occur on an annual basis as of December 31, as of July 1,
1998, no shares of Common Stock held by the ESOP Trust have been
allocated to eligible participants. Because no shares have been allocated
to the ESOP participants as of August 28, 1998, the Record Date, the ESOP
Trustee will vote the shares of Common Stock held in the ESOP Trust in
the best interests of its participants and beneficiaries and consistent
with its fiduciary duties in accordance with ERISA. In the future, the
ESOP Trustee will generally vote allocated shares in accordance with
participants' instructions, and will vote allocated shares as to which no
instructions are received, and any shares that have not been allocated to
participants' accounts, in the same proportion as the allocated shares
with respect to which the ESOP Trustee receives instructions and voted.
The Compensation Committee has sole investment power, except in limited
circumstances, but no voting power over, the Common Stock held in the
ESOP Trust.
</FN>
</TABLE>
Security Ownership of Management
The following table sets forth information with respect to the shares of
Common Stock beneficially owned by each director of the Company, by each named
executive officer of the Company identified in the Summary Compensation Table
included elsewhere herein, and all directors and executive officers of the
Company as a group, as of July 1, 1998. Except as otherwise indicated, each
person and each group shown in the table has sole voting and investment power
with respect to the shares of Common Stock indicated.
<TABLE>
<CAPTION>
Amount and
Nature of Percent of
Position with Beneficial Common Stock
Name the Company(1) Ownership(2) Outstanding
- -------------------------------- ------------------------------- ------------ ------------
<S> <C> <C> <C>
Julie Bernardin Director 2,200(3) 0.08%
Ralph W. Dunham Executive Vice President, Chief 6,000(4) 0.22%
Financial Officer and Treasurer
John A. Hackett Director 5,000(5) 0.18%
Richard M. Kazanjian Director 18,000(6) 0.66%
John W. Maloney Director 100(7) 0.01%
John J. McGlynn Chairman of the Board 10,800(8) 0.40%
Lorraine P. Silva Director 20,000(9) 0.74%
Robert H. Surabian President, Chief Executive 60,000(10) 2.21%
Officer and Director
Robert B. Risman Director Emeritus 10,000 0.37%
-------
All directors and executive 348,990(11) 12.87%
officers as a group (7 persons)
<FN>
- -------------------
<F1> Titles are for both the Company and the Bank.
<F2> See "Principal Stockholders of the Company" for a definition of
"beneficial ownership." All persons shown in the above table have sole
voting and investment power, except as otherwise indicated.
<F3> Includes 1,700 shares held in Ms. Bernardin's individual retirement
account ("IRA").
<F4> Includes 1,584 shares held in Mr. Dunham's IRA and 200 shares held by
Mr. Dunham as custodian for his two children.
<F5> Includes 2,500 shares held in Mr. Hackett's IRA and 2,500 shares held in
his spouse's IRA.
<F6> Includes 14,600 shares jointly owned by Mr. Kazanjian and his spouse,
2,400 shares held in Mr. Kazanjian's IRA and 1,000 shares held in his
spouse's IRA.
<F7> Mr. Maloney joined the board of directors on August 26, 1998. Mr.
Maloney's stock ownership is disclosed as of this date.
<F8> Includes 9,000 shares jointly owned by Mr. McGlynn and his spouse and
1,800 shares owned by Mr. McGlynn's spouse.
<F9> Includes 20,000 shares jointly owned by Ms. Silva and her spouse.
<F10> Includes 30,000 shares owned by Mr. Surabian's spouse.
<F11> The amount of shares for all directors and executive officers as a group
includes 216,890 shares held by the ESOP Trust that have not been
allocated to eligible participants as of July 1, 1998, over which the
Compensation Committee (consisting of Mr. Hackett, Mr. McGlynn and Ms.
Silva) may be deemed to have sole "investment power," except in limited
circumstances, thereby causing each such committee member to be deemed a
beneficial owner. Each such person disclaims beneficial ownership of
these shares. The individual participants in the ESOP have shared voting
power with the ESOP Trustee with respect to the unallocated shares held
in the ESOP Trust.
</FN>
</TABLE>
-------------------
PROPOSAL 1
ELECTION OF DIRECTORS
-------------------
General
The Certificate of Incorporation and Bylaws of the Company provide for
the election of directors by the stockholders. For this purpose, the Board of
Directors of the Company is divided into three classes with respect to term of
office, each class to contain, as near as may be possible, one-third of the
entire number of the Board, with the terms of office of one class expiring at
each annual meeting of stockholders. At each annual meeting of stockholders,
the successors to the class of directors (other than directors elected by
holders of shares of one or more series of preferred stock, of which there
currently are none) whose term expires at that time shall be elected by the
stockholders to serve for a term of three years. There are currently seven
directors of the Company.
The terms of three directors expire at the Annual Meeting. Each of the
three incumbent directors, Lorraine P. Silva, John A. Hackett and Julie
Bernardin, has been nominated by the Board of Directors to be re-elected at the
Annual Meeting for a three-year term expiring at the annual meeting of
stockholders to be held in 2001, or when their successors are otherwise duly
elected and qualified. Mr. Frederick N. Dello Russo has been nominated by the
Board of Directors to be elected to a one year term expiring at the annual
meeting of stockholders to be held in 1999, or when his successor is otherwise
duly elected and qualified. Each nominee has consented to being named in this
Proxy Statement and to serve if elected. The terms of the remaining two classes
of directors expire at the annual meetings of stockholders to be held in 1999
and the year 2000, or when their successors are otherwise duly elected and
qualified.
In the event that any nominee for election as a director at the Annual
Meeting is unable or declines to serve, which the Board of Directors has no
reason to expect, the persons named in the Proxy Card will vote with respect to
a substitute nominee. Such substitute shall be designated by the incumbent
Board of Directors by delivery to the Secretary, not fewer than five (5) days
prior to the date of the Annual Meeting, of a written notice of substitution.
Vote Required
Directors are elected by a plurality of the votes cast by each class of
shares entitled to vote at a meeting of stockholders which are present and
entitled to vote in the election at the Annual Meeting. The holders of Common
Stock may not cumulate their shares for the election of directors. Shares
underlying broker non-votes will not be counted as having been voted in person
or by proxy and will have no effect on the election of directors.
Information as to Nominees and Continuing Directors
The following table sets forth certain information with respect to each
nominee for election as a director and each director whose term does not expire
at the Annual Meeting ("Continuing Director"). There are no arrangements or
understandings between the Company and any director or nominee pursuant to
which such person was elected or nominated to be a director of the Company. For
information with respect to security ownership of directors, see "Security
Ownership of Certain Beneficial Owners and Management -- Security Ownership of
Management."
<TABLE>
<CAPTION>
Director Term Position(s) Held with the
Nominees Age(1) Since(2) Expires Company and the Bank
- --------------------------- ------ -------- ------- ----------------------------------
<S> <C> <C> <C> <C>
Lorraine P. Silva(3) 67 1983 2001 Director and Secretary
John A. Hackett(3) 58 1983 2001 Director
Julie Bernardin(3) 56 1994 2001 Director
Frederick N. Dello Russo(4) 54 ---- 1999 Director
Continuing Directors
- ---------------------------
Richard M. Kazanjian 62 1984 1999 Director
John J. McGlynn 76 1966 2000 Director and Chairman of the Board
Robert H. Surabian 62 1967 2000 Director
John W. Maloney 58 1998 1999 Director
<FN>
- -------------------
<F1> As of June 30, 1998.
<F2> Includes service as a Director with the Bank prior to the Company's
incorporation in 1997.
<F3> Nominees for a three-year term expiring in 2001.
<F4> Nominee for a one-year term expiring in 1999.
</FN>
</TABLE>
The principal occupation and business experience of each nominee for
election as director and each Continuing Director is set forth below. Unless
otherwise indicated, each of the following persons has held his present
position for the last five years.
Nominees for Election as Director
Lorraine P. Silva is the current Secretary of the Company. Ms. Silva was
employed by the Bank for 28 years and has been retired since 1988. Ms. Silva
has been a director of the Bank since 1983.
John A. Hackett is the President and owner of J.J. Ruddy Insurance
Agency, Inc., Medford, Massachusetts, which he has owned for 36 years. He has
served on the Board of Directors of the Bank since 1983.
Julie Bernardin is a Principal at J.B. Consulting, Medford,
Massachusetts, a sole proprietorship, which provides management and
organizational consulting services, including career counseling and small
business consulting. Ms. Bernardin was appointed to the Board of Directors in
1994.
Frederick N. Dello Russo has been the owner and operator of Dello Russo
Funeral Services, Inc., Medford, Massachusetts since 1978 and the owner and
operator of McLaughlin Funeral Home, Woburn, Massachusetts since 1995. Mr.
Dello Russo is being nominated to serve a one year term ending in 1999.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH NOMINEE AS DIRECTOR.
Continuing Directors
John J. McGlynn is the Chairman of the Board of Directors. Mr. McGlynn
was elected Chairman of the Board in 1992. Mr. McGlynn is the retired
Commissioner of the Public Employee Retirement Administration for the
Commonwealth of Massachusetts in which he was responsible for the regulation of
all the retirement systems in the Commonwealth, municipal, state, teachers,
counties and authorities. Mr. McGlynn is also a former member of the Pension
Reserves Investment Management Board, an eight member board which oversaw the
investments of $7.7 billion in reserve pension funds.
Robert H. Surabian is the President and Chief Executive Officer. He has
been President since 1979 and was named Chief Executive Officer in 1991.
Richard M. Kazanjian is a Principal of Consolidated Realty Trust,
Medford, Massachusetts, and a General Partner in Wellington Realty, Medford,
Massachusetts.
John W. Maloney is the owner and treasurer of Arlex Oil Corporation,
Lexington, Massachusetts, which has been in the business of heating homes and
businesses for over 50 years.
Robert B. Risman, Director Emeritus of the Bank, has been owner of Risman
Real Estate, Medford, Massachusetts, since 1959, which provides residential
sales and property management services. As Director Emeritus, Mr. Risman is a
non-voting member of the Board of Directors.
Meetings and Committees of the Board of Directors of the Company and the Bank
The Board of Directors of each of the Company and Bank meet on a monthly
basis and may have additional special meetings from time to time. During the
fiscal year ended June 30, 1998, the Board of Directors of the Bank met 18
times, and the Company's Board of Directors met 7 times. No current director
attended fewer than 75% of the total number of board meetings and committee
meetings of which such director was a member.
The Company has established the following committees of its Board of
Directors:
The Compensation Committee consists of Directors Hackett, McGlynn and
Silva. This Committee provides advice and recommendations to the Board in areas
of employee salaries and directors' compensation. Mr. Hackett serves as
Chairperson. This Committee met three times in fiscal 1998.
The Audit Committee consists of Directors Silva, Bernardin and Kazanjian.
This Committee did not meet in fiscal 1998. Ms. Silva serves as Chairperson.
The Finance Committee of the Bank consists of Directors Silva, Bernardin
and Kazanjian. This Committee met on a monthly basis in fiscal 1998. Ms. Silva
serves as Chairperson.
Executive Officers
The following individuals are executive officers of the Company and hold
the offices set forth below opposite their names.
<TABLE>
<CAPTION>
Name Position Held with the Company
------------------ -------------------------------------------------
<S> <C>
Robert H. Surabian President and Chief Executive Officer
Ralph W. Dunham Executive Vice President, Chief Financial Officer
and Treasurer
Lorraine P. Silva Secretary
</TABLE>
The executive officers of the Company are elected annually and hold
office until their respective successors have been elected and qualified, or
until death, resignation or removal by the Board of Directors. The Company has
entered into Employment Agreements with certain of its executive officers which
set forth the terms of their employment. See "--Employment Agreements."
Biographical information of executive officers of the Company or the Bank
who are not directors is set forth below.
Thomas G. Burke, age 51, has served as Senior Vice President and
Commercial Loan Officer of the Bank since 1995. He is responsible for all
commercial lending and supervision of the commercial loan department. Mr. Burke
was employed at Medford Savings Bank from 1990 to 1995, where he was a Vice
President and a Commercial Loan Officer.
Ralph W. Dunham, age 42, has served as Executive Vice President since
1997 and the Chief Financial Officer of the Bank since 1988. He has also served
as the Executive Vice President, Chief Financial Officer and Treasurer of the
Company since 1997. As Chief Financial Officer, he is responsible for the
overall financial management of the Company and its subsidiary. Mr. Dunham is
an attorney and a certified public accountant.
Deborah A. McNeill, age 43, has served as Senior Vice President since
1996 and Treasurer of the Bank since 1993. She has been an employee of the Bank
for 25 years. Her present duties include directing and coordinating the
operation of the accounting and operations department.
Henry T. Sampson, age 50, has served as Senior Vice President of the Bank
since 1992 and the Chief Residential Loan Officer of the Bank since 1993. Mr.
Sampson is responsible for all non-commercial lending and supervision of the
lending department and has been an employee of the Bank for 18 years.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Report of Compensation Committee
The following Report of the Company's Compensation Committee is provided
in accordance with the rules and regulations of the SEC. Pursuant to such rules
and regulations, this Report shall not be deemed "soliciting material," filed
with the SEC subject to Regulation 14A or 14C of the SEC or subject to the
liabilities of Section 18 of the Exchange Act.
Mystic Financial, Inc. (the "Company") was formed in 1997 for the purpose
of becoming the holding company for Medford Co-operative Bank (the "Bank") in a
stock conversion that took effect in January 1998. For the fiscal year ended
June 30, 1998, substantially all of the business of the Company was conducted
through the Bank. During such fiscal year, the Company's Chief Executive
Officer and other executive officers served as the Chief Executive Officer and
executive officers, respectively, of the Bank and performed substantially all
of their services in connection with the management and operation of the Bank.
As a result, all compensation of the Chief Executive Officer and all other
executive officers for such period was paid by the Bank and determined by the
Board of Directors of the Bank on the recommendation of its Compensation
Committee (the "Compensation Committee").
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Company annually reviews and recommends
changes to the compensation levels of the executive officers to the Board of
Directors. The Compensation Committee continues to review the compensation
program to better reflect the Company's public company status. It is intended
that the executive compensation program will enable the Company and the Bank to
attract, develop and retain strong executive officers who are capable of
maximizing the Company's performance for the benefit of its stockholders.
It is the Company's policy to cause its executive officers to be
compensated, either directly or through its affiliates, using a combination of
cash compensation, consisting of a base salary and discretionary bonus
payments, participation in the Bank's fringe benefit plans and participation in
the Company's ESOP. These elements are intended to provide an overall
compensation package that is commensurate with the Company's financial
resources, that aligns the executives' financial interests with those of the
Company's stockholders and that is responsive to the immediate and long-term
needs of the executive officers and their families. The compensation practices
of other community banks in the Boston and New England area are considered in
establishing the overall level of compensation and the components of the
compensation package; however, it has not been a goal or policy to set
compensation at levels designed to achieve a predetermined percentile ranking
among an identified group of peer institutions.
The Board of Directors of the Company accepted without modification all
of the Compensation Committee's recommendations on executive compensation. The
Compensation Committee reviews salary and bonus levels annually in December.
The composition of the Bank's Compensation Committee is the same as that of the
Company's Compensation Committee.
Base Salary and Bonus
For the year ended June 30, 1998, base salaries of all executive officers
were set at levels determined, in the subjective judgment of the Compensation
Committee, to be commensurate with the executive officers' customary respective
duties and responsibilities and to enable them to maintain appropriate
standards of living within their communities. The Compensation Committee has
also utilized discretionary bonus payments to ensure that compensation levels
remain competitive with those of similar institutions in the Bank's market area
and to reflect cost of living increases. Fringe benefit programs, consisting of
life, disability and group health insurance coverages, are designed to provide
for the health and welfare of the executives and their families as well as for
their long-term financial needs. The Company also pays its CEO a stipend to
cover premiums on an insurance policy owned by the CEO. The determination of
the Chief Executive Officer's compensation for the fiscal year ended June 30,
1998 was based on the same general principles applied to other executive
officers.
The Company currently uses stock based compensation so that management's
interests are aligned with shareholders' interests in the enhancement of
shareholder value. All executive officers participated in the Company's
ESOP for the fiscal year ended June 30, 1998. Each executive officer has an
individual account within the ESOP Trust, which is invested primarily in
employer securities, with the result that a portion of each executive
officer's long-term retirement savings is tied to the performance of the Bank
and the Company. The Company currently expects to propose a stock option and
restricted stock plan to be used, among other things, to increase the
proprietary interest of management in the Company.
In addition to the compensation paid to executive officers as described
above, executive officers received certain benefits pursuant to the 401(k) Plan
and the Pension Plan. In addition, the Chief Executive Officer will receive
certain benefits under the Company's nonqualified benefit restoration plan that
are otherwise limited by Internal Revenue Service caps on qualified plans.
COMPENSATION COMMITTEE OF
MYSTIC FINANCIAL, INC.
John A. Hackett
John J. McGlynn
Lorraine P. Silva
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Messrs. Hackett, McGlynn and Ms.
Silva. There are no other interlocks, as defined under the rules and
regulations of the SEC, between members of the Compensation Committee or
executive officers of the Company and corporations with respect to which such
persons are affiliated, or otherwise.
Performance Graph
The following graph compares the Company's total cumulative stockholder
return from January 8, 1998, the date of the Company's initial public offering,
to June 30, 1998, to the total return for the Nasdaq National Market Composite
Index and the total return for the Nasdaq Bank Stock Index, which is an index
for publicly traded institutions that trade on Nasdaq.
<TABLE>
<CAPTION>
1/8/98 2/28/98 3/31/98 4/30/98 5/31/98 6/30/98
------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Mystic Financial, Inc. 100.00 170.00 176.87 170.00 152.50 146.26
Nasdaq Market Composite Index 100.00 114.28 118.53 120.55 114.15 121.83
Nasdaq Bank Stock Index 100.00 107.21 112.35 113.88 111.17 107.61
</TABLE>
Assumes $100 Invested on January 8, 1998
There can be no assurance that stock performance will continue into the future
with the same or similar trends depicted in the graph above.
Directors' Compensation
Fee Arrangements. Currently, each director of the Bank receives an annual
retainer of $7,200, fees of $200 per Board meeting attended, and fees ranging
from $650 to $950 monthly for committee meetings. The Chairman of the Board
also receives an additional $6,000 annual retainer. Total directors fees for
fiscal 1998 were $68,200 and total committee fees were $62,870. Directors of
the Company do not receive compensation for their services as such but will
participate in a stock option plan and a restricted stock plan expected to be
implemented by the Company.
Executive Compensation
Cash Compensation. The following table sets forth the cash compensation
paid by the Bank for services rendered in all capacities during the fiscal
years ended June 30, 1997, and 1998, to the President and Chief Executive
Officer and all executive officers of the Bank who received aggregate salary
and bonus in excess of $100,000 (each a "Named Executive Officer").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation(1)(2)
------------------------------------------------------------------------
Other
Annual LTIP All Other
Compensation Payouts Compensation
Name and Principal Positions Year Salary($) Bonus($) ($)(3) ($)(4) ($)(5)
- ---------------------------------- ---- --------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Surabian, 1998 153,360 47,000 -- -- 8,112
President and Chief Executive 1997 148,896 37,000 -- -- 7,500
Officer
Ralph W. Dunham 1998 98,633 10,000 -- -- 5,367
Chief Financial Officer, Executive 1997 93,600 9,400 -- -- 4,750
Vice President and Treasurer
<FN>
- -------------------
<F1> Under Annual Compensation, the column titled "Salary" includes base
salary and payroll deductions for health insurance under the Bank's
health insurance plan and pre-tax contributions to the Bank's 401(k)
Plan. The amounts under "Bonus" include a stipend of $17,500 to be paid
annually for a ten year period by the Bank to the Chief Executive Officer
to cover premiums due on a life insurance policy owned by the Chief
Executive Officer. The Chief Executive Officer pays all taxes required on
these payments which are reported on the IRS Form W-2 issued to the
Officer. Directors' fees are not paid to the Chief Executive Officer who
is a member of the Board of Directors.
<F2> Compensation received in 1997 by each Named Executive Officer was only
for services provided to the Bank. In 1998, the compensation of each
Named Executive Officer was for services provided to both the Bank and
the Company.
<F3> For 1998 and 1997, there were no: (a) perquisites with an aggregate value
for each Named Executive Officer in excess of the lesser of $50,000 or
10% of the total of the Officer's salary and bonus for the year; (b)
payments of above-market preferential earnings on deferred compensation;
(c) payments of earnings with respect to long-term incentive plans prior
to settlement or maturation; or (d) preferential discounts on stock.
<F4> During 1998 and 1997, the Bank did not maintain any restricted stock,
stock option or other long-term incentive compensation plans.
<F5> Includes matching contributions made by the Bank to the 401(k) Plan on
each Named Executive Officer's behalf.
</FN>
</TABLE>
Employment Agreements
Employment Agreements with the Company and Two Senior Executives.
Effective as of January 8, 1998, the Company entered into Employment Agreements
with each of Messrs. Surabian and Dunham (the "Senior Executives"), on behalf
of both the Company and the Bank. These Employment Agreements establish the
respective duties and compensation of the Senior Executives and are intended to
ensure that the Company and the Bank will be able to maintain a stable and
competent senior executive management team. The continued success of the
Company and the Bank depends to a significant degree on the skills and
competence of these Senior Executives.
The Employment Agreements provide for a three-year term for Messrs.
Surabian and Dunham. The term of the Employment Agreement between the Company
and Mr. Surabian will be automatically extended on a daily basis so that the
remaining term of this Agreement will always be three years unless written
notice of non-renewal is given by the Board or the Senior Executive. The
Company's Employment Agreement with Mr. Dunham provides that, commencing on the
Agreement's first anniversary date and continuing each anniversary date
thereafter, the Board may, with the Senior Executive's concurrence, extend the
Employment Agreement for an additional year, so that the remaining term will be
three years, after conducting a performance evaluation of the Senior Executive.
Both Employment Agreements provide that the Senior Executive's base salary will
be reviewed annually. The base salaries for Messrs. Surabian and Dunham as of
July 1, 1998 were $153,360 and $101,288, respectively. In addition to the base
salary, the Employment Agreements provide for, among other things, entitlement
to participation in pension, savings, incentive and welfare benefit plans and
eligibility for fringe benefits applicable to executive personnel such as fees
for club and organization memberships deemed appropriate by the Company and the
Senior Executive. The Employment Agreements provide for termination by the
Company at any time for cause as defined in the Employment Agreements.
In the event of the termination of the Senior Executive's employment with
the Company and the Bank for reasons other than for cause, death or disability,
or in the event of the Senior Executive's resignation from the Company and the
Bank for certain reasons specified in the Employment Agreements, the Senior
Executive would be entitled to a lump sum cash payment in an amount equal to
the present value of the remaining base salary payments due to the Senior
Executive for the remaining term of the Agreement. However, in the event a
Senior Executive's employment terminates following a change in control of the
Company, for purposes of computing the lump sum severance amount payable, the
remaining term of each Executive's Employment Agreement will be deemed to be
three years. The Agreements also provide for the Company (or the Bank, if
applicable) to continue the Senior Executive's life, health and disability
insurance coverage for the remaining term of the Employment Agreement. In
addition to the foregoing severance benefits, the Company's Employment
Agreement with Mr. Surabian provides for him to receive the bonus payments and
additional contributions or benefits he would have earned under any employee
benefit plan of the Company or the Bank during the remaining term of his
Employment Agreement as well as the payments that would have been made under
any incentive compensation plan during the remaining term of his Employment
Agreement. In general, for purposes of the Employment Agreements, the ESOP and
any plans to be maintained by the Company or the Bank, a "change of control"
will generally be deemed to occur when a person or group of persons acting in
concert acquires beneficial ownership of 25% or more of any class of equity
security of the Company or the Bank, upon stockholder approval of a merger or
consolidation or a change of the majority of the Board of Directors of the
Company or the Bank, or liquidation or sale of substantially all the assets of
the Company or the Bank.
Payments to the Senior Executives under the Company's Employment
Agreements may be paid by either the Bank or the Company and thus are not
duplicative; the Employment Agreements provide that the Company will guarantee
that all payments to the Senior Executives will be made as provided under the
Employment Agreements. The Senior Executives would be entitled to reimbursement
of certain costs incurred in interpreting or enforcing the Employment
Agreements.
Cash and benefits paid to a Senior Executive under the Employment
Agreements together with payments under other benefit plans following a "change
of control" of the Company or the Bank may constitute an "excess parachute"
payment under Section 280G of the Code, resulting in the imposition of a 20%
excise tax on the recipient and the denial of the deduction for such excess
amounts to the Company and the Bank. The Company's Employment Agreements
include a provision indemnifying each Senior Executive on an after-tax basis
for any "golden parachute" excise taxes.
Effective as of June 6, 1998, the Company amended Mr. Surabian's
Employment Agreement to provide him with a special benefit in the event of his
retirement from the service of the Company during the term of his Agreement.
Prior to this amendment (hereinafter, the "Amendatory Agreement"), Mr.
Surabian's Employment Agreement did not provide him with retirement benefits in
addition to those available through participation in the savings and pension
plans of the Company and the Bank (described below). Pursuant to the Amendatory
Agreement, if Mr. Surabian retires during the term of his Employment Agreement,
he would be entitled to receive a lump sum retirement benefit payable by the
Company equal to the dollar value of the total number of shares of Common Stock
expected to be allocated to Mr. Surabian under the ESOP during the full term of
the ESOP's ten-year loan. The retirement benefit payable to Mr. Surabian under
the Amendatory Agreement would be calculated by: (i) projecting the total
number of shares of Common Stock to be allocated to Mr. Surabian's ESOP account
balance during the ten-year term of the ESOP's loan, (ii) reducing such
projection by the number of shares actually allocated to Mr. Surabian's account
in the ESOP, and then by (iii) multiplying the remaining number of shares by
the average price ("Average Price") of a share of the Company's Common Stock
determined over the twelve calendar quarters immediately preceding Mr.
Surabian's retirement. The supplemental benefit would be payable from the
Company's general assets.
Benefits
Employee Stock Ownership Plan and Trust. The Company has established, and
the Bank has adopted, an ESOP and related trust, effective as of January 1,
1998. Substantially all employees of the Bank or the Company who have attained
age 21 and have completed one year of service may be eligible to become
participants in the ESOP. The ESOP purchased eight percent (8%) (216,890
shares) of the Common Stock issued by the Company in the Conversion with funds
borrowed from the Company. Although contributions to the ESOP are
discretionary, the Company or the Bank intends to make annual contributions to
the ESOP in an aggregate amount at least equal to the principal and interest
requirement on the debt. This loan is for a term of 10 years, bears interest at
the rate of 8% per annum and calls for level annual payments of principal and
interest designed to amortize the loan over its term. The loan also permits
optional pre-payment. The Company and the Bank may make additional annual
contributions to the ESOP to the maximum extent deductible for federal income
tax purposes.
Shares purchased by the ESOP have been pledged as collateral for the
loan, and will be held in a suspense account until released for allocation
among participants in the ESOP as the loan is repaid. The pledged shares will
be released annually from the suspense account in an amount proportional to the
repayment of the ESOP loan for each plan year. The released shares will be
allocated among the accounts of participants on the basis of the participant's
compensation for the year of allocation. Benefits generally become vested at
the rate of 20% per year with vesting beginning after an employee's completion
of three years of service and full vesting to occur after seven years of
service. Participants also become immediately vested upon termination of
employment due to death, retirement at age 65 or older, permanent disability or
upon the occurrence of a change of control. Forfeitures will be reallocated
among remaining participating employees, in the same proportion as
contributions. Vested benefits may be paid in a single sum or installment
payments and are payable upon death, retirement at age 65 or older, disability
or separation from service. As of June 30, 1998, no allocations were made to
participants' accounts since the ESOP operates on a calendar plan year. The
first allocations to participants under the ESOP will be made effective as of
December 31, 1998.
In connection with the establishment of the ESOP, the Compensation
Committee was appointed to administer the ESOP and Marine Midland Bank was
appointed as the ESOP's trustee. The Compensation Committee may instruct the
trustee regarding investment of funds contributed to the ESOP. The ESOP
trustee, subject to its fiduciary duty, must vote all allocated shares held in
the ESOP in accordance with the instructions of the participating employees.
Under the ESOP, unallocated shares will be voted in a manner calculated to
most accurately reflect the instructions it has received from participants
regarding the allocated stock as long as such vote is in accordance with the
provisions of ERISA.
The ESOP may purchase additional shares of Common Stock in the future, in
the open market or otherwise, and may do so either on a leveraged basis with
borrowed funds or with cash dividends, periodic employer contributions or other
cash flow. Whether such purchases will be made and the terms and conditions of
any such purchases will be determined by the ESOP's fiduciaries taking into
account such factors as they consider relevant at the time, including their
judgment as to the attractiveness of the Common Stock as an investment, the
price at which Common Stock may be purchased and, in the case of leveraged
purchases, the terms and conditions on which borrowed funds are available and
the willingness of the Company or the Bank to offer purchase money financing or
guarantee purchase money financing offered by third parties.
Pension Plan. The Pension Plan provides a benefit for all eligible Bank
employees, including the Named Executive Officers listed in the Summary
Compensation Table above. The benefit is equal to an amount (A) the
participant's accrued benefit under the applicable Prior Plan determined as of
December 31, 1988 plus (B) one percent (1%) of the participant's "Final Average
Compensation" (defined to mean a participant's highest compensation averaged
over three years) plus (C) one-half of one percent (.5%) of the participant's
Final Average Compensation in excess of covered compensation multiplied by the
participant's benefit service after December 31, 1988. A participant will
become incrementally vested in their accrued benefit under the Pension Plan at
a rate of 20% each year beginning after two years of service with the Bank,
with full vesting to occur after six years of service or earlier termination of
employment due to disability, death or attainment of normal retirement age. The
Pension Plan is funded by the Bank on an actuarial basis and all assets are
held in trust by the trustee.
The following table illustrates the annual benefit payable upon normal
retirement at age 65 in the form of a single life annuity, with no offset for
Social Security benefits, under the Pension Plan at various levels of
compensation and years of service under the Plan:
<TABLE>
<CAPTION>
Years of Service at Retirement
Final Average ----------------------------------------
Compensation 10 15 20 25
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 50,000 $ 7,500 $11,250 $15,000 $18,750
75,000 11,250 16,875 22,500 28,125
100,000 15,000 22,500 30,000 37,500
125,000 18,750 28,125 37,500 46,875
150,000(1) 22,500 33,750 45,000 56,250
175,000(1) 26,250 39,375 52,500 65,625
200,000(1) 30,000 45,000 60,000 75,000
<FN>
- -------------------
<F1> These are hypothetical benefits based on the Pension Plan's normal
retirement benefit formula. The benefits shown above do not reflect an
offset for Social Security benefits and there are no other offsets. For
the Pension Plan year ended December 31, 1997, the annual compensation
for calculating benefits may not exceed $160,000 (as adjusted for
subsequent years pursuant to Code provisions).
</FN>
</TABLE>
The following table sets forth the years of credited service determined
as of December 31, 1997, the end of the 1997 plan year, for each Named
Executive Officer listed in the Summary Compensation Table. The accrued benefit
of each Named Executive Officer under the Pension Plan is determined on the
basis of each Officer's "Years of Credited Service" shown below, and his "Final
Average Compensation," as defined above. Each Named Executive Officer's "Final
Average Compensation" includes the amounts listed under the "Salary" and
"Bonus" columns of the Summary Compensation Table.
<TABLE>
<CAPTION>
Years of
Credited Service
----------------
Years Months
----- ------
<S> <C> <C>
Mr. Surabian ........ 19 1
Mr. Dunham .......... 9 10
</TABLE>
401(k) Plan. The 401(k) Plan permits eligible employees to save for
retirement by making pre-tax and post-tax contributions to the Plan of up to
twelve percent (12%) of the annual salary paid to them by the Bank. Pre-tax
and post-tax contributions made by participants are eligible to be "matched"
by employer contributions made by the Bank on each participating employee's
behalf. Under the 401(k) Plan, the Bank will make a 50% "matching"
contribution for each pre-tax contribution made by a participant up to 5%
of the participant's total annual salary. An employee will always be 100%
vested in any pre-tax or post-tax contributions he makes to the 401(k) Plan
and will become incrementally vested in any matching contributions made on
his behalf at a rate of 20% for each year of service with the Bank, with
initial vesting to begin after two years of service and full vesting to occur
after six years of service or upon earlier disability, death or attainment
of normal retirement age. Distributions may be made at the election of a
participant in either a single lump sum payment or installments, as provided
in the Plan.
Benefit Restoration Plan. During the fiscal year ended June 30, 1998, the
Company adopted the Benefit Restoration Plan of Mystic Financial, Inc. ("BRP")
in order to provide the chief executive officer of the Company selected by the
Board with the benefits that would be due to such executive under the Pension
Plan, the 401(k) Plan and the ESOP if such benefits had not been limited by
certain statutory restrictions under the Code.
The Company intends to establish an irrevocable "grantor trust" for use
in connection with the BRP. The assets of such "grantor trust" would be
considered part of the general assets of the Company and subject to the claims
of its general creditors. Earnings on the trust's assets would be taxable to
the Company.
Transactions with Certain Related Persons
The Bank has made loans or extended credit to executive officers and
directors and also to certain persons related to executive officers and
directors. All such loans were made by the Bank in the ordinary course of
business, on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
the general public, nor did they involve more than the normal risk of
collectibility or present other unfavorable features. The outstanding principal
balance of such loans to directors, executive officers and their associates
totaled $931,000 or 3.8% of the Bank's total equity at June 30, 1998.
The Company intends that all transactions in the future between the
Company and its executive officers, directors, holders of 10% or more of the
shares of any class of its common stock and affiliates thereof, will contain
terms no less favorable to the Company than could have been obtained by it in
arm's-length negotiations with unaffiliated persons and will be approved by a
majority of independent outside directors of the Company not having any
interest in the transaction.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of the Common Stock
to file with the SEC reports of ownership and changes of ownership. Officers,
directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that all
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial owners for the fiscal year ended June 30, 1998 were
complied with.
-------------------
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
-------------------
General
The Board of Directors has appointed the firm of Wolf & Company, P.C. to
act as independent auditors for the Company for the fiscal year ending June 30,
1999, subject to ratification of such appointment by the Company's
stockholders. A representative of Wolf & Company, P.C. is expected to be
present at the Annual Meeting and will be given an opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions. No determination has been made as to what action the
Board of Directors would take if the stockholders do not ratify Wolf &
Company's appointment.
Vote Required
The ratification of the appointment by the Board of Directors of Wolf &
Company, P.C. as the Company's independent auditors requires the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock
represented, in person or by proxy, at the Annual Meeting and entitled to vote
thereon. Accordingly, shares as to which the "ABSTAIN" box has been selected on
the Proxy Card will be counted as present and entitled to vote and will have
the effect of a vote against Proposal 2. Shares underlying broker non-votes
will not be counted as present and entitled to vote and will have no effect on
the vote for Proposal 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.
ADDITIONAL INFORMATION
Notice of Business to be Conducted at Annual Meeting
The Bylaws of the Company provide an advance notice procedure for a
stockholder to properly bring business before an annual meeting or to nominate
any person for election to the Board of Directors. The stockholder must be a
stockholder of record and have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a stockholder's notice must be
delivered to or received by the Secretary not later than the following dates:
(i) with respect to an annual meeting of stockholders, sixty (60) days in
advance of such meeting if such meeting is to be held on a day which is within
thirty (30) days preceding the anniversary of the previous year's annual
meeting, or ninety (90) days in advance of such meeting if such meeting is to
be held on or after the anniversary of the previous year's annual meeting; and
(ii) with respect to an annual meeting of stockholders held at a time other
than within the time periods set forth in the immediately preceding clause (i),
the close of business on the tenth (10th) day following the date on which
notice of such meeting is first given to stockholders. Notice shall be deemed
to first be given to stockholders when disclosure of such date of the meeting
of stockholders is first made in a press release reported to Dow Jones News
Services, Associated Press or comparable national news service, or in a
document publicly filed by the Company with the SEC pursuant to Section 13, 14
or 15(d) of the Exchange Act. A stockholder's notice to the Secretary shall set
forth such information as required by the Bylaws of the Company. Nothing in
this paragraph shall be deemed to require the Company to include in its proxy
statement and proxy card relating to an annual meeting any stockholder proposal
or nomination which does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal or nomination is
received. See "--Date For Submission of Stockholder Proposals."
Date for Submission of Stockholder Proposals
Any stockholder proposal intended for inclusion in the Company's proxy
statement and proxy card relating to the Company's 1999 Annual Meeting of
Stockholders must be received by the Company by May 19, 1999, pursuant to the
proxy soliciting regulations of the SEC. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and proxy card
for such meeting any stockholder proposal which does not meet the requirements
of the SEC in effect at the time. Any such proposal will be subject to 17
C.F.R. ss.240.14a-8 of the Rules and Regulations promulgated by the SEC under
the Exchange Act.
Other Matters
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be brought before the
stockholders at the 1998 Annual Meeting. If any other matters properly come
before the Annual Meeting, the persons named in the accompanying proxy card
will vote the shares represented by all properly executed proxies on such
matters in such manner as shall be determined by a majority of the Board of
Directors of the Company.
By Order of the Board of Directors,
/s/ LORRAINE P. SILVA
Lorraine P. Silva
Secretary
Medford, Massachusetts
September 23, 1998
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
[PROXY CARD]
Mystic Financial, Inc. REVOCABLE PROXY
This Proxy is solicited on behalf of
the Board of Directors of Mystic Financial, Inc.
for the Annual Meeting of Stockholders to be held on October 21, 1998.
The undersigned stockholder of Mystic Financial, Inc. hereby appoints
Richard M. Kazanjian, John J. McGlynn and Robert H. Surabian, each of them,
with full powers of substitution, to represent and to vote as proxy, as
designated, all shares of common stock of Mystic Financial, Inc. held of record
by the undersigned on August 28, 1998, at the 1998 Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 10:00 a.m., Eastern Time, on
October 21, 1998, or at any adjournment or postponement thereof, upon the
matters described in the accompanying Notice of the 1998 Annual Meeting of
Stockholders and Proxy Statement, dated September 23, 1998, and upon such other
matters as may properly come before the Annual Meeting. The undersigned hereby
revokes all prior proxies.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is given, this Proxy
will be voted FOR the election of all nominees listed in Item 1 and FOR the
proposal listed in Item 2.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
---------------------------------------------------------------------------
| The Board of Directors unanimously recommends a vote "FOR" all of the |
| nominees named in Item 1 and a vote "FOR" the proposal in Item 2. |
---------------------------------------------------------------------------
Please mark your vote as [X]
indicated in this example
I will attend the Annual Meeting [ ]
1. Election of four Directors.
Nominees: Lorraine P. Silva, John A. Hackett and Julie Bernardin for terms of
three years each; Frederick N. Dello Russo for a term of one year.
FOR WITHHOLD
All nominees (except for all nominees
as otherwise indicated)
[ ] [ ]
Instruction: TO WITHHOLD AUTHORITY to vote for any individual nominee, write
that nominee's name in the space provided:
2. Ratification of the appointment of Wolf & Company, P.C. as independent
auditors for the fiscal year ending June 30, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned hereby acknowledges receipt of the Notice of the 1998 Annual
Meeting of Stockholders and the Proxy Statement, dated September 23, 1998 for
the 1998 Annual Meeting.
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Signature(s))
Dated: -----------------------------------, 1998
Please sign exactly as your name appears on this proxy. Joint owners should
each sign personally. If signing as attorney, executor, administrator, trustee
or guardian, please include your full title. Corporate or partnership proxies
should be signed by an authorized officer.
