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
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
(Name of Registrant as Specified In Its Charter)
Evergreen Bancorp, Inc.
Commission file no.: 0-10275
(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
(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:
[logo]
TO THE STOCKHOLDERS OF
EVERGREEN BANCORP, INC.:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders of
Evergreen Bancorp, Inc. ("Evergreen") which will be held in the Adirondack
Room of the Queensbury Hotel, located at 88 Ridge Street, in Glens Falls, NY,
12801, on May 8, 1997, at 10:00 a.m., local time.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE, EVEN IF YOU CURRENTLY PLAN TO ATTEND
THE 1997 ANNUAL MEETING. Your vote is important, regardless of the number of
shares you own. This will not prevent you from voting in person but will
assure that your vote is counted if you are unable to attend.
If you have any questions about the enclosed Proxy Statement or the 1996
Annual Report, please let us hear from you.
Sincerely,
/s/ George W. Dougan
George W. Dougan
Chairman, President and
Chief Executive Officer
[LOGO]
EVERGREEN BANCORP, INC.
237 Glen Street
Glens Falls, New York 12801
(518) 792-1151
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 8, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of
Evergreen Bancorp, Inc. ("Evergreen") will be held in the Adirondack Room of
the Queensbury Hotel, located at 88 Ridge Street, in Glens Falls, New York
12801, on May 8, 1997, at 10:00 a.m., local time (the "1997 Annual Meeting"),
for the following purposes:
1. Elect Directors. To consider and vote upon the election of two directors
to serve until the Year 2000 Annual Meeting of Stockholders and until their
successors are duly elected and qualified; and
2. Plan Adoption. The adoption of the Amended and Restated 1995 Stock
Incentive Plan; and
3. Plan Adoption. The adoption of amendments to the 1995 Directors Stock
Option Plan; and
4. Other Business. To transact such other business as may come properly
before the 1997 Annual Meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 1, 1997, are
entitled to receive notice of and to vote at the 1997 Annual Meeting or any
adjournment thereof. All stockholders, whether or not they expect to attend
the 1997 Annual Meeting in person, are requested to complete, date, sign, and
return the enclosed form of Proxy in the accompanying envelope. The Proxy may
be revoked by the person who executed it by filing with the Secretary of
Evergreen an instrument of revocation or a duly executed Proxy bearing a later
date, or by voting in person at the 1997 Annual Meeting.
By Order of the Board of Directors
/s/ Kathleen Martinez
Kathleen Martinez
Secretary
April 4, 1997
PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE 1997 ANNUAL
MEETING. IF YOU ATTEND THE 1997 ANNUAL MEETING, YOU MAY VOTE YOUR SHARES IN
PERSON IF YOU WISH, EVEN IF YOU PREVIOUSLY HAVE RETURNED YOUR PROXY
EVERGREEN BANCORP, INC.
237 Glen Street
Glens Falls, New York 12801
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
MAY 8, 1997
INTRODUCTION
General
This Proxy Statement is being furnished to the stockholders of Evergreen
Bancorp, Inc. a Delaware corporation (the "Company" or "Evergreen"), in
connection with the solicitation of Proxies by the Board of Directors of
Evergreen from holders of the outstanding shares of the common stock, par
value $3.33 per share ("Evergreen Common Stock"), of Evergreen, for use at the
Annual Meeting of Stockholders of Evergreen to be held on May 8, 1997, or any
adjournment thereof (the "1997 Annual Meeting"). The 1997 Annual Meeting is
being held to consider and vote:
1. For the election of two (2) directors to serve until the Year 2000 Annual
Meeting of Stockholders and until their successors are duly elected and
qualified; and
2. To consider and vote upon the approval of the Amended and Restated 1995
Stock Incentive Plan; and
3. To consider and vote upon the approval of Amendments to the 1995 Directors
Stock Option Plan; and
4. Such other business as may come properly before the 1997 Annual Meeting.
The principal executive offices of Evergreen are located at 237 Glen Street,
Glens Falls, New York 12801. The telephone number of Evergreen at such
offices is (518) 792-1151.
This Proxy Statement is dated April 4, 1997, and is first being mailed to the
stockholders of Evergreen on or about April 4, 1997.
Record Date, Solicitation, and Revocability of Proxies
The Board of Directors of Evergreen has fixed the close of business on April
1, 1997, as the record date for the determination of the Evergreen
stockholders entitled to receive notice of and to vote at the 1997 Annual
Meeting. Accordingly, only holders of record of shares of Evergreen Common
Stock at the close of business on such date will be entitled to vote at the
1997 Annual Meeting. At the close of business on the record date, there were
9,044,690 shares of Evergreen Common Stock issued and outstanding and held by
approximately 1,661 stockholders of record. For information with respect to
any stockholders who own or are deemed to own more than 5% of the outstanding
Evergreen Common Stock, see "Background and Equity Ownership of Directors and
Officers". Shares of Evergreen Common Stock represented by a properly
executed Proxy, if such Proxy is received in time and not revoked, will be
voted at the 1997 Annual Meeting in accordance with the instructions indicated
in such Proxy.
Holders of Evergreen Common Stock are entitled to one vote on each matter
considered and voted upon at the 1997 Annual Meeting for each share of
Evergreen Common Stock held of record at the close of business on April 1,
1997. To hold a vote on any proposal or other matter, a quorum must be
assembled, which is a majority of the Evergreen Common Stock issued and
outstanding, present in person or represented by Proxy. In determining
whether a quorum exists at the 1997 Annual Meeting for purposes of all matters
to be voted on, all votes "for" or "against," as well as all abstentions
(including those to withhold authority to vote in certain cases), with respect
to the proposal receiving the most such votes will be counted. Provided that
a quorum is present, the vote required for the election of directors is a
plurality of the votes of the shares of Evergreen Common Stock present in
person or represented by Proxy at the 1997 Annual Meeting and entitled to
vote. Consequently, with respect to the proposal for the election of
directors, abstentions and broker non-votes will not be counted as part of the
base number of votes to be used in determining if a nominee has received the
requisite number of votes. Thus, for the election of directors, an abstention
or broker non-vote will have no effect. With respect to any other matter that
might be, but is not expected to be, voted on at the 1997 Annual Meeting, the
required vote for approval is a majority of the shares of Evergreen Common
Stock represented and entitled to vote at the 1997 Annual Meeting.
Consequently, with respect to any such matters, abstentions will be counted as
part of the base number of votes to be used in determining if such matter has
received the requisite number of base votes for approval, but broker non-votes
will not be counted in such base for such matters. Thus, an abstention will
have the same effect as a vote "against" such matter, while a broker non-vote
will have no effect.
A stockholder who has given a Proxy may revoke it at any time prior to its
exercise at the 1997 Annual Meeting by either: (i) giving written notice of
revocation to the Secretary of Evergreen, (ii) properly submitting to
Evergreen a duly executed Proxy bearing a later date; or (iii) voting in
person at the 1997 Annual Meeting. All written notices of revocation or other
communications with respect to revocation of Proxies should be addressed as
follows: Evergreen Bancorp, Inc., 237 Glen Street, Glens Falls, New York
12801, Attention: Kathleen Martinez, Secretary.
The 1996 Annual Report to Stockholders, including consolidated financial
statements for the fiscal year ended December 31, 1996, either has been mailed
to stockholders previously or accompanies this Proxy Statement.
PROPOSAL ONE
ELECTION OF DIRECTORS
General
The Bylaws of Evergreen currently provide that the Board of Directors will
consist of at least five and no more than 25 members, and that the total
number of directors may be fixed by resolution of the Board of Directors.
However, the total number of directors may not be increased by more than two
between any two successive annual meetings of stockholders. The Board has
currently established the number of directors at 13. Further, the Certificate
of Incorporation provides that the Board of Directors will be divided into
three classes, as nearly equal as possible, with each class serving a three-
year term, and one class elected annually.
The term of two of the members of the Board expires at the 1997 Annual
Meeting. The 1997 Annual Meeting is being held to elect two directors of
Evergreen to serve three-year terms of office. Accordingly, the members are
standing for reelection to serve a three-year term expiring at the 2000 Annual
Meeting of Stockholders and until their successors have been elected and
qualified.
All shares represented by valid Proxies received pursuant to this
solicitation, and not revoked before they are exercised, will be voted in the
manner specified therein. In the event that any nominee is unable to serve
(which is not anticipated), the persons designated as Proxies will cast votes
for the remaining nominees and for such other persons as they may select.
The affirmative vote of the holders of a plurality of the shares of Evergreen
Common Stock represented and entitled to vote at the 1997 Annual Meeting, at
which a quorum is present, is required for the election of the directors
listed below.
THE NOMINEES LISTED BELOW HAVE BEEN RECOMMENDED TO THE EVERGREEN BOARD OF
DIRECTORS BY THE HUMAN RESOURCES AND NOMINATING COMMITTEE THEREOF. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES TO
SERVE AS DIRECTORS.
The following table sets forth certain information with respect to each
nominee or director continuing in office of Evergreen, and for executive
officers of Evergreen or its principal bank subsidiary, Evergreen Bank, N.A.,
including the number of shares of Evergreen Common Stock beneficially owned by
each such person on December 31, 1996.
Based on all available information as of December 31, 1996, no holder of
record of Evergreen Common Stock has filed with Evergreen a copy of a Schedule
13D or Schedule 13G indicating beneficial ownership of 5% or more of the
outstanding of Evergreen Common Stock.
<TABLE>
NOMINEES FOR ELECTIONS AS A DIRECTOR
For Term Expiring at Year 2000 Annual Meeting
Background and Equity Ownership of
Directors and Executive Officers
<CAPTION>
Name, Age, and Year Number and Percentage of Shares
First Elected a Director or of Evergreen Common Stock
Executive Officer Background Information Beneficially Owned <F1> <F6>
<S> <C> <C>
Phillip H. Morse Retired; Chairman of NAMIC U.S.A. Corp. and 29,390
Age: 54 NAMIC International, Inc., specialty medical <F0>
Elected to Board: 1982 devices manufacturing companies, from 1969 to 1995.
Carl R. DeSantis Vice Chairman of the Board of Evergreen since 1993; 25,302 <F2>
Age: 70 Vice Chairman and director of Franchise Associates, <F0>
Elected to Board: 1980 Inc., a privately-held restaurant operation,
since 1986.
</TABLE>
<TABLE>
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
Term Expiring at Year 1998 Annual Meeting
<CAPTION>
Name, Age, and Year Number and Percentage of Shares
First Elected a Director or of Evergreen Common Stock
Executive Officer Background Information Beneficially Owned <F1> <F6>
<S> <C> <C>
George W. Dougan President and Chief Executive Officer of Evergreen 163,469
Age: 57 since March 7, 1994, and Chairman of the Board (1.8%)
Elected to Board: 1994 since May 19, 1994; Chairman of the Board, Bank
of Boston, Florida Division, from 1992 to 1994;
and Senior Vice President, Bank of Boston from 1988
to 1992.
William E. Philion Retired; President and Chief Executive Officer 13,348
Age: 70 of Glens Falls Hospital from 1971 to 1989. <F0>
Elected to Board: 1980
Alan R. Rhodes Attorney with Bartlett, Pontiff, Stewart & Rhodes, 43,100 <F2>
Age: 59 P.C., a law firm, and its predecessors, since 1963. <F0>
Elected to Board: 1980
Floyd H. Rourke Retired; Chairman of the Board and President of 143,889
Age: 68 Sandy Hill Corp., a privately-held paper machinery (1.6%)
Elected to Board: 1980 manufacturing company, from 1979 to 1992.
Walter Urda Steel Systems Technology Limited, construction 3,225
Age: 69 consultant since 1996; President of Irontech <F0>
Elected to Board: 1989 Industries, Inc., a construction company, from
1990 to 1995.
</TABLE>
<TABLE>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
For Term Expiring at Year 1999 Annual Meeting
<CAPTION>
Name, Age, and Year Number and Percentage of Shares
First Elected a Director or of Evergreen Common Stock
Executive Officer Background Information Beneficially Owned <F1> <F6>
<S> <C> <C>
John W. Bishop Retired; self-employed construction consultant 28,948
Age: 69 from 1991 to present. <F0>
Elected to Board: 1980
Joan M. Mannix Real Estate Developer; former President and Owner 35,200 <F3>
Age: 58 of Kubricky Construction Corporation, heavy <F0>
Elected to Board: 1980 construction, from 1980 to 1983; and Ridge
Enterprises, Inc., a real estate company, from
1985 to 1995.
Michael D. Ginsburg Partner, M & R Ginsburg Partners. 235,139 <F4>
Age: 59 (2.6%)
Elected to Board: 1980 and 1994
Robert F. Flacke President of Fort William Henry Corporation, 11,829 <F5>
Age: 64 a hotel operation, since 1960. <F0>
Elected to Board: 1980
Anthony J. Mashuta President, Cool Insuring Agency, Inc., Insurance 7,990
Age: 40 Services, since 1992; Senior Vice President <F0>
Elected to Board: 1995 from 1986 to 1992.
Paul W. Tomlinson Retired; President of Salem Farm Supply, Inc., 134,848
Age: 64 a privately-held farm equipment and sales (1.5%)
Elected to Board: 1982 company, from 1954 to 1988.
</TABLE>
<TABLE>
Other Executive Officers
<CAPTION>
Name, Age, and Year Number and Percentage of Shares
First Elected a Director or of Evergreen Common Stock
Executive Officer Background Information Beneficially Owned <F1> <F6>
<S> <C> <C>
Paul A. Cardinal Executive Vice President, General Counsel, 31,918
Age: 40 Evergreen Bancorp, Inc. and Evergreen Bank, N.A. <F0>
Appointed Executive Officer: 1995
Thomas C. Crowley Executive Vice President, Chief Credit Officer of 24,821
Age: 50 Evergreen Bancorp, Inc. and Evergreen Bank, N.A. <F0>
Appointed Executive Officer: 1994
Anthony J. Koenig Executive Vice President, Chief Administrative 47,313
Age: 58 Officer of Evergreen Bancorp, Inc. and <F0>
Appointed Executive Officer: 1986 Evergreen Bank, N.A.
Michael P. Brassel Regional President, Evergreen Bank, N.A. 51,532
Age: 55 <F0>
Appointed Executive Officer: 1987
All Executive Officers and 1,103,475 <F6>
Directors as a group (20 persons) (12.1%)
<FN>
Footnotes to Information as to Directors and Officers
<F0> Represents less than 1%.
<F1> Information relating to beneficial ownership of Evergreen Common Stock by directors is based upon information furnished
by each person using "beneficial ownership" concepts set forth in rules of the Securities and Exchange Commission under
Section 13 of the Securities Exchange Act of 1934, as amended. Except as indicated in other notes to this table describing
special relationships with other persons and specifying shared voting or investment power, directors possessed sole voting and
investment power with respect to all shares of Evergreen Common Stock set forth opposite their names.
<F2> Includes 165 shares held by Mr. DeSantis' wife.
<F3> Includes 5,088 shares held by Ms. Mannix' husband.
<F4> Includes 17,698 shares held by Mr. Ginsburg as custodian for his daughter and grandchildren, and 91,818 shares for which
he has Power of Attorney.
<F5> Includes 1,069 shares held by Mr. Flacke's wife.
<F6> Included in the shares listed as "beneficially owned" are the following shares which the persons listed have the right
to acquire within sixty days pursuant to stock options: (a) under the 1995 Directors Stock Option Plan -- Mr. Bishop (400),
Mr. Ginsburg (800), Mr. Flacke (800), Mrs. Mannix (800), Mr. Mashuta (800), Mr. Tomlinson (800), Mr. Morse (800), Mr. Rhodes
(800), Mr. Rourke (400), and Mr. Urda (800); (b) under the employee stock option plans -- Mr. Dougan (100,000), Mr. Crowley
(17,500), Mr. Brassel (28,200), Mr. Koenig (37,900) and Mr. Cardinal (29,000); and (c) under all stock option plans -- All
directors and executive officers as a group (219,800).
</TABLE>
Information About the Board of Directors and Its Committees
The Board of Directors of Evergreen held 12 meetings during 1996. All of the
directors attended at least 75% of the aggregate total number of meetings of
the Board of Directors and all committees of the Board on which they served
during 1996.
Evergreen's Board of Directors presently has three principal committees: the
Human Resources and Nominating Committee; the Executive Committee; and the
Audit Committee. Information regarding the functions of those committees,
their membership, and the number of meetings held during 1996 follows.
The Human Resources and Nominating Committee reviews all of Evergreen's
benefit plans on a regular basis and makes recommendations and regular reports
thereon to the Board of Directors. Additionally, the Committee recommends
nominees for election as directors. The Human Resources and Nominating
Committee must deliver written nominations to the Secretary, and each
nomination must include a statement of the experience and the background of
the nominee. Any nominations for directors by stockholders will be taken
under advisement by the Board. The Human Resources and Nominating Committee
met 6 times during 1996. Its current members are Messrs. Flacke (Chairman),
Mashuta, Philion, and Urda.
The Executive Committee acts on behalf of the full board between Board
meetings, within legal limitations, advises management on significant
strategic, regulatory or policy matters, oversees asset, liability, and
investment management, and advises on issues not in the purview of other Board
Committees. During 1996 the Executive Committee held 9 meetings. The members
of the Executive Committee are Messrs. Philion (Chairman), DeSantis, Dougan,
Flacke, Morse, Rhodes, and Ms. Mannix.
The Audit Committee annually recommends to the Board of Directors the firm to
be engaged as independent accountants of Evergreen for the next year; reviews
the plan for the audit engagement, results of internal auditing, and reports
of regulatory authorities; generally reviews financial reporting procedures;
and periodically reports to the Board. During 1996 the Audit Committee held 5
meetings. The members of the Audit Committee are Ms. Mannix (Chairperson) and
Messrs. Mashuta, Rourke and Urda.
Director Compensation
Cash Remuneration. The non-employee directors of Evergreen receive for their
services as directors an annual retainer fee of $5,000. In addition, non-
employee directors of Evergreen receive $500 for attendance at each Board
meeting and $300 for attendance at each committee meeting with the exception
of the Executive Committee, for which they are paid $400. Non-employee
directors are also compensated for committee meetings of the subsidiary bank.
No additional remuneration is received by any director for special assignment.
A total of $202,700 was paid during 1996 to the non-employee directors of
Evergreen for all services rendered.
Directors Stock Option Plan. Each outside Director is entitled to participate
in the Company's 1995 Directors Stock Option Plan (the "Directors Stock Option
Plan"). A total of 60,000 shares of the Common Stock are reserved for
issuance pursuant to non-qualified stock options (the "Director Options")
issued under such plan, and Director Options covering 6,000 shares and 4,800
shares of Common Stock were granted in 1995 and 1996, respectively. Stock
options issuable under the Directors Stock Option Plan are granted at an
exercise price equal to the fair market value of the Common Stock on the date
of grant. An annual grant of 400 Director Options is made to each eligible
non-employee director following the Annual Meeting of Stockholders, on the
next NASDAQ National Market System trading day. All Director Options vest one
year from the date of grant.
The Directors Stock Option Plan is being amended to increase the number of
shares that are authorized for issuance under the plan, to increase the number
of shares that are granted annually to non-employee directors and to otherwise
conform to 1996 amendments to Rule 16b-3 under the Securities Exchange Act of
1934, as amended. See "Proposal Three -- Amendments To The 1995 Directors
Stock Option Plan".
Executive Compensation And Benefits
The Summary Compensation Table set forth below contains certain information
concerning compensation for the named executive officers of Evergreen for the
periods indicated. Certain columns have been omitted because there are no
amounts reportable under the captions called for under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder. No information is provided in the following Summary Compensation
Table for 1996 with respect to any named officer who did not serve as an
executive officer at any time of the year.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
Annual Compensation <F1> Awards
(a) (b) (c) (d) (e) (f) (g)
Restricted Securities All other
Stock Underlying Compen-
Salary Bonus Awards <F2> Options/ sation <F4>
Name Year ($) ($) ($) SARS <F3> (#) ($)
<S> <C> <C> <C> <C> <C> <C>
George W. Dougan 1996 313,915 148,688 111,200 10,000 5,819
CEO 1995 296,923 114,375 0 0 8,429
1994 222,115 55,000 80,600 90,000 79,482
Paul A. Cardinal<F5> 1996 123,508 48,750 0 8,000 3,913
EVP 1995 66,923 18,750 0 21,000 0
1994 -- -- -- -- --
Thomas C. Crowley 1996 140,490 55,453 66,720 8,000 5,819
EVP 1995 134,750 42,656 0 0 4,450
1994 87,500 19,500 0 21,500 25,167
Anthony J. Koenig 1996 124,280 49,055 0 8,000 5,819
EVP 1995 119,202 37,734 0 0 7,979
1994 115,000 23,000 0 21,000 28,768
Michael P. Brassel 1996 120,500 37,656 0 0 5,234
Regional President 1995 120,500 30,125 0 0 7,294
1994 120,500 19,280 0 12,000 22,787
<FN>
<F1> The named executive officers did not receive any perquisites nor other personal benefits in which the aggregate amount
of such compensation exceeded $50,000 or 10% of the total of his annual salary and bonus.
<F2> The amount in this column represents the dollar value at the date of award of restricted stock awards calculated using
the closing sale price of Evergreen Common Stock on the date of grant. The restricted stock vests in three equal
installments annually. Dividends will be paid on the shares of restricted stock if, and to the extent, dividends are paid on
Common Stock generally. If a change in control were to occur, the restricted stock would immediately vest in full.
<F3> All of the stock option grants have been adjusted for a two-for-one stock split, effective September 16, 1996, effected
in the form of a 100% stock dividend. The original stock option grants were one-half of the share numbers presented.
<F4> The compensation reported in this column is composed of the following amounts allocated to accounts in the 401(k) Plan,
as an employer matching contribution, Mr. Dougan $2,375, Mr. Crowley $2,375, Mr. Koenig $2,375, Mr. Cardinal $1,014, and Mr.
Brassel $2,375; amounts allocated to accounts in the Stock Purchase Plan, as an employer matching contribution, Mr. Dougan
$900, Mr. Crowley $900, Mr. Koenig $900, and Mr. Brassel $315; amounts allocated to accounts in the Employee Stock Ownership
Plan (ESOP), as an employer contribution, Mr. Dougan $2,544, Mr. Crowley $2,544, Mr. Koenig $2,544, Mr. Cardinal $2,465 and
Mr. Brassel $2,544.
<F5> Mr. Cardinal commenced employment with Evergreen on June 5, 1995, as Executive Vice President and General Counsel.
</TABLE>
Option/SAR Grants in Last Fiscal Year
The following table provides details regarding stock options granted to the
individuals named in the Summary Compensation Table. In addition, in
accordance with SEC rules, there are shown the hypothetical gains or "option
spreads" that would exist for the respective options. These gains are based
on assumed rates of annual compound stock price appreciation of 5% and 10%
from the date the options were granted over the full option term.
<TABLE>
<CAPTION>
Potential Realizable Value at Assumed Annual Rates
Individual Grants of Stock Price Appreciation for Option Term <F2>
Number of % of Total Exercise or Expiration or 5% 10%
Securities Options/SARs Base Price Base Price
Underlying Granted to
Options/SARs Employees in
Name Granted Fiscal Year
(#) <F1> (%) ($/Sh) ($/Sh) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
George W. Dougan 10,000 4.10 11.25 2006 70,700 179,300
Paul A. Cardinal 8,000 3.28 11.25 2006 56,560 143,440
Thomas C. Crowley 8,000 3.28 11.25 2006 56,560 143,440
Anthony J. Koenig 8,000 3.28 11.25 2006 56,560 143,440
Michael P. Brassel 0 -- -- -- -- --
All Executive Officers as a group (8) 46,000 18.84 11.25 2006 -- --
Non-Executive Officer employee group 198,132 81.16 11.25; 15.75 2006 -- --
<FN>
<F1> The stock option grants have been adjusted for a two-for-one stock split, effective September 16, 1996, effected in the
form of a 100% stock dividend. The original stock option grants were one-half of the share numbers presented except for a
special grant of 145,632 non-qualified stock options to the Non-Executive Officer employee group that was made after the
effective date of the Evergreen Common Stock split.
<F2> Potential Realizable Value is based on an assumed annual growth rate for each of the grants shown over their ten-year
term. The potential values are not calculated for the groups. The potential values are set forth to comply with applicable
regulations of the Securities and Exchange Commission, and Evergreen cannot predict whether these values can be achieved.
Actual gains, if any, on stock option exercises are dependent on the future performance of the Evergreen Common Stock.
</TABLE>
Aggregate Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Options/SAR Values
The following table shows stock option exercises by the individuals named in
the Summary Compensation Table. In addition, this table includes the number
of shares covered by both exercisable and unexercisable options as of December
31, 1996. Also reported are the values for "in-the-money" options, which
represent the positive spread between the exercise price of any such existing
options and the year-end price of Evergreen Common Stock.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
George W. Dougan 0 0 90,000/10,000 747,900/51,200
Paul A. Cardinal 0 0 21,000/8,000 160,650/40,960
Thomas C. Crowley 6,000 53,250 9,500/8,000 87,780/40,960
Anthony J. Koenig 3,000 44,250 29,900/8,000 280,728/40,960
Michael P. Brassel 0 0 28,200/0 269,679/0
</TABLE>
Employment Agreement. In connection with the employment of George W. Dougan
as Evergreen's Chairman, President, and Chief Executive Officer, Evergreen and
Mr. Dougan entered into an employment agreement, effective as of March 7, 1994
(the "Employment Agreement"), providing for the employment of Mr. Dougan as
President and Chief Executive Officer of Evergreen for a term commencing on
March 7, 1994, and continuing until February 28, 1997, unless earlier
terminated in accordance with the terms of the Employment Agreement.
Under the Employment Agreement in effect in 1996, Mr. Dougan is paid an annual
base salary of not less than $317,500, to be reviewed from year-to-year by the
Board of Directors of Evergreen. In addition, Mr. Dougan is entitled to
participate in an incentive plan that would provide an annual incentive bonus
equal to 30% of his annual base compensation, provided all performance
criteria established by the Human Resources and Nominating Committee are
satisfied. The Agreement provides for certain other benefits, including
participation in all executive benefit plans and arrangements and an
automobile allowance. In the event of Mr. Dougan's death or disability, the
Agreement terminates immediately and Evergreen is obligated only to pay
compensation or benefits actually earned or accrued through such date. If Mr.
Dougan's employment is terminated by Evergreen "without cause", he will be
entitled to continuation of base salary for the remainder of the Agreement and
an annual incentive bonus, prorated through the date of termination, with a
minimum of 12 months continuation of base salary and benefits. If Mr. Dougan
resigns for "good reason," unresolved to his satisfaction, all matters would
be determined through binding arbitration. In the event of the termination of
Mr. Dougan's employment following a change in control, Mr. Dougan will be
entitled to base compensation for a period of 36 months, in a single lump sum,
discounted to present value, bonus payments for the 36 months equal to the
average of bonuses paid during the two preceding calendar years; health and
life insurance for 36 months at the current level and participation in
employee benefits plans, to the extent permitted by law for the 36-month
period. For these purposes, a change in control is similar to that described
below. See "Severance Agreements".
The Employment Agreement in effect in 1996 was modified and extended on
December 15, 1996 (the "New Employment Agreement"), effective March 7, 1997,
to provide for an additional term of three years, on similar terms as the
Employment Agreement. Mr. Dougan may extend the term of his employment under
the New Employment Agreement for up to an additional four years, through March
7, 2004.
Severance Agreements. Evergreen has entered into separate Change of Control
Agreements, with each of the named Executive Officers other than Mr. Dougan,
which Agreements are for an initial term of three years, and renewable
periodically annually thereafter at the sole discretion of the Human Resources
and Nominating Committee of the Board. See -- "Information about the Board of
Directors and its Committees." The Agreements generally provide that the
executive shall be entitled to benefits as described in this paragraph if a
change in control, as defined in the Agreements, occurs during the term of the
respective Agreement and the executive's employment is terminated within two
years following the change in control. Benefits under the Agreements include
payment of the executive's current salary, for periods ranging from six months
to one year. During the same twelve months, the executive is entitled to
receive payments equal to the average bonuses paid the executive during the
two calendar years preceding termination, health insurance benefits, and
participate in employee benefits plans for one year to the extent permitted by
applicable law, and is entitled to certain executive recruiting services. In
addition, Mr. Cardinal has a severance agreement providing for payment of
salary continuation for twelve months in the event of termination without
cause, as defined in his severance agreement. For purposes of the Change of
Control Agreements, a change in control is: (i) the acquisition by any
"person", (as defined by the Exchange Act) in any twelve month period of the
aggregate of twenty-five percent of the combined voting power of the company's
outstanding securities, (ii) in a period of two consecutive years, a majority
change in the composition of the Board of Directors, unless such changes shall
have been approved in advance by a vote of the directors then still in office
who were directors at the beginning of the period, (iii) the consummation of a
merger, consolidation or business combination other than one in which the
holders of Common Stock of Evergreen immediately prior to the combination hold
securities of the surviving entity representing at least sixty percent of the
common stock of the surviving entity, (iv) complete plan of liquidation under
a business combination or sale of all or of substantially all of the assets of
the Company, or (v) such other situation as the Board of Directors determines
constitutes a change in control for purposes of the Agreements.
Pension Plan. Evergreen maintains a noncontributory defined benefit pension
plan (the "Pension Plan") covering all full-time, salaried employees who have
attained age 18 and have completed at least one year of service and one
thousand hours of service during such year. Benefits under the Pension Plan
are determined primarily by years of service and the average of the salary
during the three highest paid years of an employee's ten final years of
employment. The following table sets forth the estimated annual benefits
payable upon retirement to persons in the specified salary and years-of-
service classifications.
<TABLE>
PENSION PLAN TABLE
Years of Service
<CAPTION>
Final Year Compensation
Salary Base 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C>
$125,000 $125,000 $34,365 $45,820 $57,275 $68,729 $68,729
150,000 150,000 41,677 55,570 69,462 83,354 83,354
175,000 153,333 42,652 56,870 71,087 85,304 85,304
200,000 153,333 42,652 56,870 71,087 85,304 85,304
225,000 153,333 42,652 56,870 71,087 85,304 85,304
250,000 153,333 42,652 56,870 71,087 85,304 85,304
300,000 153,333 42,652 56,870 71,087 85,304 85,304
400,000 153,333 42,652 56,870 71,087 85,304 85,304
450,000 153,333 42,652 56,870 71,087 85,304 85,304
500,000 153,333 42,652 56,870 71,087 85,304 85,304
</TABLE>
The benefits payable under the Pension Plan are based on an employee's base
salary and the amount of any bonus paid to such employee. Non-cash
compensation is not considered. Credited years of service through 1996 under
the Pension Plan for Mr. Dougan -- 2, Mr. Cardinal -- 1, Mr. Crowley -- 2, Mr.
Koenig -- 11, and Mr. Brassel -- 16, respectively. The estimated annual
benefits reflected in the preceding table have been computed in straight-life
annuity amounts and are not subject to any deduction for Social Security or
other offset amounts.
Evergreen established in 1995 a Supplemental Executive Retirement Plan (the
"Supplemental Plan"), an unfunded, non-qualified benefit plan, which plan had
one participant, Mr. Dougan, at its inception. The Supplemental Plan provides
for the payment of 40% of his eligible compensation as a retirement benefit to
Mr. Dougan, reduced by any benefits payable to him under Evergreen's qualified
retirement plan. The supplemental benefits are earned by Mr. Dougan upon
normal retirement at age 65 or upon a change in control of Evergreen, and they
vest on a pro-rata basis beginning after five years of service. The combined
effect of the Pension Plan and the Supplemental Plan is that the years of
credited service at normal retirement for Mr. Dougan would be approximately
23. The other executive officers are eligible for supplemental retirement
benefits relating to compensation in excess of $150,000 annually, which vest
on a pro-rata basis beginning after five years of service.
Report of the
Human Resources and Nominating Committee
The Human Resources and Nominating Committee of Evergreen (the "Committee") is
pleased to present its report on Executive Compensation, describing the
components of the compensation program and the basis on which 1996
compensation determinations were made by the Committee.
The Committee's purpose is to hire, develop and retain the highest quality of
managers possible. The Committee is principally responsible for establishing
and administering the executive compensation program of the Company. These
duties include approving salary increases for the Company's key executives and
administering both the annual incentive plan and the stock option plans.
Compensation Philosophy and Overall Objectives -- It is the philosophy of the
Company that executive Compensation be directly linked to continuous
improvements in the financial performance and soundness of the Company,
including the principal bank subsidiary. The components of the executive
compensation program are salary, annual incentive awards, stock options,
restricted stock grants and saving and retirement benefits. The program is
designed to: (1) attract and retain competent people with competitive
salaries; (2) provide incentives for increased profitability and improvements
in credit quality and financial soundness; and (3) align the long-term
interests of management with the interests of stockholders by encouraging
executive ownership of common stock of the Company.
Compensation Program Components in 1996
The Committee regularly reviews the Company's compensation program to ensure
that salary levels and incentive opportunities are competitive and reflect the
performance goals of the Company. In determining competitive levels, the
Committee used information from five banking industry compensation surveys and
other data compiled by the Company's outside compensation consultant, Sibson
and Company. The target levels in the Company's incentive plans are linked
directly to financial and credit quality performance. The specific elements
of the compensation program are set forth below.
Base Salary -- The base salary was generally established in a range between
the 50th percentile (median) and the 75th percentile of a selected group of
similarly sized and situated regional banks in the compensation surveys.
There is no employment agreement in effect for a minimum base salary for any
named executive officer other than the Chief Executive. See "Employment
Agreement". Increases in base salaries for the parent company executive
officers are approved annually by the Committee. Increases for the executive
officers at the bank subsidiary level are approved annually by the Chief
Executive, within guidelines established by the Committee.
The Committee completed a review of base salaries in early 1994, and assessed
the competitiveness of current salary levels based on an analysis of relevant,
independent, market information and, as a result, developed a process for
establishing grade levels. The Committee has generally maintained salary
increases averaging 4% annually for the named executive officers in the past
three fiscal years, including 1996. The Committee intends to provide
recommendations for the ongoing evaluation of base salary levels as
appropriate.
Annual Incentive Compensation -- Key executives, including the named executive
officers, were eligible for annual incentive (bonus) awards based on the
performance of Evergreen against predetermined targets. The annual incentive
program provides for payment shortly after the fiscal year being measured. The
annual incentive awards are weighted principally on financial performance
using a matrix that measures Evergreen actual financial results for net income
and return on equity against the goals established at the beginning of each
fiscal year. The matrix provides for awards ranging from 30% of a target
bonus to 150% of a target bonus, depending on the level of net income and
return on equity achieved in the year. At the budget level, the award would be
100% of the target bonus. The Committee may also consider certain qualitative
factors in assessing whether to increase the award (as determined by financial
performance component) by up to 25% or decrease the award to zero, including
the following: the financial soundness of the principal bank subsidiary; the
credit quality of the principal bank subsidiary; and non-interest income and
non-interest expenses. The resultant award percentage is applied to the target
bonus for each key executive. The target bonus for the named executive
officers, other than the Chief Executive, ranges from 20% to 25% of their base
salaries.
In 1996, Evergreen exceeded the targets for net income and return on equity,
entitling each of the named executive officers to 125% of their target bonus.
In addition, the Committee considered the substantial improvements in the
financial soundness and credit quality of the principal bank subsidiary. In
particular, nonperforming assets declined from approximately $10 million in
1995 to $7 million in 1996, a nearly 30% decrease, and the reserve for loan
losses improved to a coverage ratio of over 232% of non-performing loans, an
increase from approximately 205% coverage of nonperforming loans in 1995. Net
income goals were exceeded by approximately $1 million, totaling $10.3 million
in 1996, the highest earnings ever reported by the Company. The Company
generated a strong 7% growth in deposits and 11% increase in loans, while
significantly reducing the Company's operating expenses approximately $2.5
million from prior year levels. Consequently, the Committee, with the support
of the full Board of Directors, awarded a subjective bonus that, combined with
the financial performance bonus awarded to all of the named executive
officers, resulted in an incentive for each of the named executive officers
ranging from 25% to 37.5% of base salary.
Long-Term Incentives -- The Committee sets the standards for eligibility to
participate in the long-term incentives and defines the performance guidelines
and goals that executives must satisfy and reach to receive certain additional
compensation as long-term incentives. The Committee has determined that long-
term incentives, such as stock options and restricted stock grants, are the
most significant means of providing a competitive, long-term income to key
employees. The Committee also believes that Evergreen's long-term goals are
best achieved through long-term stock ownership.
The Committee awards the grant of stock options under the Long-Term Incentive
Program based on established guidelines for each salary grade level. The
exercise price of all options granted under the Stock Incentive Plan is set at
100% of fair market value on the date the option was granted, with a term of
ten years, and generally vesting one year from the date of grant.
In 1996, a total of 34,000 stock options were awarded to the named executive
officers. In addition, the Committee awarded a grant of restricted stock
totaling 6,000 shares to Mr. Crowley, the Company's Chief Credit Officer, in
recognition of his role in the substantial improvement in the credit quality
of the loan assets of the Company's principal bank subsidiary. The restricted
stock award vests in three equal installments over a period of three years.
The stock option grants and the restricted stock grant described above have
been adjusted for a subsequent two-for-one stock split, effective September
16, 1996, effected in the form of a 100% stock dividend, of Evergreen Common
Stock.
Chief Executive Officer's Compensation
The Chief Executive was compensated in 1996 according to a three year
employment agreement, approved by the Board of Directors, effective March 7,
1994. The agreement originally provided for a base salary of $275,000, which
was increased by the Board of Directors to an annual rate of $317,500 in 1996.
The Committee believed that the base salary increase was warranted to bring it
in line with the median of other comparable financial institutions surveyed by
the Company's outside compensation consultant. See "Employment Agreement".
The Chief Executive participates generally in all other benefit programs
available to executive officers.
The Chief Executive's employment agreement also provided for an incentive
payment for each fiscal year of the term of the employment agreement at a
target level equal to 30% of his base salary. He is measured against the same
performance targets of the other named executive officers. As described above,
in 1996 the Company exceeded the financial targets established by the
Committee. In addition, the Committee also considered that the Chief
Executive's tenure at the Company in 1994, 1995, and 1996 led to substantial
improvement in the credit quality and financial soundness at the principal
bank subsidiary, which was released from a formal agreement with the Office of
the Controller of the Currency, and the reinstatement of the common stock
dividend at both the bank and the parent company. Consequently, the Committee
awarded a subjective bonus that, combined with the financial performance bonus
awarded to all of the named executive officers, resulted in an incentive award
of 125% of the Chief Executive's target bonus, equal to 37.5% of his base
salary.
The Chief Executive participates in the Stock Incentive Plan, and was granted
10,000 stock options in 1996. In addition, the Committee awarded a grant of
restricted stock totaling 10,000 shares to Mr. Dougan, in recognition of his
role in the substantial improvement in the credit quality of the loan assets
of the Company's principal bank subsidiary. The restricted stock award vests
in three equal installments over a period of three years. The stock option and
restricted stock grants described above have been adjusted for a subsequent
two-for-one stock split, effective September 16, 1996, effected in the form of
a 100% stock dividend, of Evergreen Common Stock.
In December 1996, the Company adopted the New Employment Agreement for the
Chief Executive, which included an extension of the term, effective March 7,
1997, for an additional three years, and which may be extended by the Chief
Executive for up to four additional years, through March 7, 2004. The New
Employment Agreement provides for a base salary of not less than $317,500, and
for future grants of 20,000 non-qualified stock options in each of 1997 and
1998, exercisable one year from the date of grant.
Deductibility of Compensation Expenses
Regulations under Section 162(m) of the Internal Revenue Code generally
disallow a tax deduction to a public corporation for tax years after 1993 for
compensation over $1 million for its chief executive officer or any of its
four other highest-paid officers. Qualifying performance-based compensation
will not be subject to the deduction limit if certain requirements are met.
The 1995 Stock Incentive Plan was designed to meet the regulations so that
stock options made under such plan will be excluded from the deduction limit,
but existing stock option grants do not comply with the applicable
regulations. No named executive of the Company earned more than $1 million in
1996, and there is no indication that any named executive will earn such
amount in 1997. Consequently, Evergreen has not established a formal policy
regarding such limit.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
The Human Resources and Nominating Committee acts as the Compensation
Committee for Evergreen. During the past fiscal year there have been no
Compensation Committee interlocks in compensation decisions except for Mr.
Mashuta, who has an ownership interest in Evergreen's principal outside
insurance broker. See "Certain Transactions" below.
Robert F. Flacke, Chairman
Anthony J. Mashuta
William E. Philion
Walter Urda
PROPOSAL TWO
APPROVAL OF THE AMENDED AND RESTATED
1995 STOCK INCENTIVE PLAN
Amendments. The Human Resources and Nominating Committee (the "Committee") has
recommended to the Board of Directors that the existing stock option program
be continued. The Board of Directors has adopted, and is seeking stockholder
approval of, amendments to the 1995 Stock Incentive Plan (the "1995 Stock
Incentive Plan"), to increase the number of shares authorized for issuance
thereunder and the other amendments set forth below. The following is
qualified in its entirety by reference to the terms of the Amended and
Restated 1995 Stock Incentive Plan as it is proposed to be amended, a copy of
which is attached hereto as Annex A.
Number of shares authorized for Issuance -- The 1995 Stock Incentive Plan is
being amended to increase the number of shares authorized for issuance under
such plan from 600,000 to 900,000. As of March 1, 1997, there were 350,382
conditional shares or shares issued or issuable upon the exercise of stock
options outstanding under the 1995 Stock Incentive Plan, leaving only 249,618
shares reserved for the future issuance of stock options. The principal
reason for the request for an increased authorization is the 1996 Special
Grant from Evergreen's Board of Directors to substantially all employees who
had not previously participated in the 1995 Stock Incentive Plan, described in
more detail below.
Maximum Award -- The 1995 Stock Incentive Plan provided that no more than
50,000 stock options or conditional shares, or any combination thereof, could
be issued to any single participant in any plan year, but the provision was
not adjusted in the event of stock dividend, split, or distribution that would
change the number of shares of Common Stock outstanding. In 1996, Evergreen's
Common Stock was split two for one in the form of a 100% stock dividend. The
amendments would increase the Maximum Award in any plan year to 100,000, and
provide that such maximum is adjusted in the future in the same manner as the
total number of shares authorized for issuance under the plan.
Committee -- The 1995 Stock Incentive Plan required that the Committee be
comprised of at least three "disinterested" directors, consistent with Rule
16b-3 in effect at the time. As a result of the 1996 amendments to Rule 16b-
3, the 1995 Stock Incentive Plan is being amended to provide that the
Committee be comprised of at least two "non-employee" directors.
Special 1996 Grant. In 1996, Evergreen's Board of Directors awarded
"Evergreen Opportunity Shares" to nearly all employees who had not previously
participated in the 1995 Stock Incentive Plan, comprised of a grant of 145,632
non-qualified stock options. This special grant was designed to broaden the
stock participation among nearly all employees and create a direct incentive
to building the Common Stock's value. Each grant was equal to the
participant's base salary divided by the closing stock price on the date of
grant, $15.75 per share on November 26, 1996, but stock options were awarded
at a minimum level of 100 stock options for eligible part-time employees and
200 stock options for full-time employees. The stock options under this
special grant do not become exercisable until Evergreen's stock price trades
at or above $20.75 for three consecutive trading days, or five years,
whichever occurs first.
Description of the 1995 Stock Incentive Plan. The purpose of Evergreen's
employee stock option program is to provide a flexible mechanism to permit
employees to obtain significant equity ownership in Evergreen, giving them a
permanent stake in Evergreen's growth and success, and encouraging the
continuation of their involvement with Evergreen.
The 1995 Stock Incentive Plan is administered by the Committee or such other
committee appointed by the Board of Directors, consisting of two or more non-
employee directors. Grants under the plan will be approved by either a
Committee that meets the requirements set forth in Rule 16b-3 promulgated
under the Exchange Act of 1934, or the full Board of Directors. No member of
the Committee will be eligible to participate in the 1995 Stock Incentive Plan
or shall have been eligible to participate in the 1995 Stock Incentive Plan
during a one-year period prior to appointment.
Substantially all of the employees (including officers and employees who may
be directors) of Evergreen and of any subsidiary shall be eligible to
participate in the 1995 Stock Incentive Plan. Selection of employees eligible
to participate in the 1995 Stock Incentive Plan is within the discretion of
the Committee. Approximately 400 employees currently participate in the 1995
Stock Incentive Plan, comprising nearly all of the employees of the Company.
Under the 1995 Stock Incentive Plan, up to 900,000 shares of Evergreen Common
Stock may be optioned or granted to eligible employees, and no more than
100,000 stock options or conditional shares may be granted to any one
participant during any plan year. Shares of Evergreen's Common Stock that are
optioned or awarded under the 1995 Stock Incentive Plan may be either treasury
shares or authorized but unissued shares. Shares reserved for issuance
pursuant to expired or terminated options under the 1995 Stock Incentive Plan
will be made available for future option grants under the 1995 Stock Incentive
Plan. Any shares of Evergreen Common Stock that are delivered to or withheld
by the Company to satisfy the tax withholding consequences of an option
exercise or the grant or vesting of a conditional share award shall again be
available for purposes of the 1995 Stock Incentive Plan.
The 1995 Stock Incentive Plan provides for appropriate adjustments in the
aggregate number of shares of Common Stock subject to such plan and in the
number of shares and the price per share, or either, of outstanding options in
the case of changes in the capital stock of Evergreen resulting from any
recapitalization, stock or unusual cash dividend, stock split or any other
increase or decrease effected without receipt of consideration by Evergreen,
or merger or consolidation in which Evergreen is the surviving company. The
1995 Stock Incentive Plan also provides that in any merger or consolidation,
or other Change in Control, all stock options and awards shall become fully
vested and all other restrictions on such grants shall lapse.
Under the 1995 Stock Incentive Plan, the Committee may grant to eligible
employees either qualified or non-qualified stock options to purchase shares
of Evergreen's Common Stock. The Committee may also provide that options may
not be exercised in whole or in part for any period or periods of time;
provided, however, that no option shall be exercisable by a participant who is
subject to the provisions of Section 16 of the Exchange Act, until the lapse
of at least six months from the date of grant. All options shall expire not
more than ten years from the date of grant. The Committee may provide that in
the event the employment of an employee is terminated, the right to exercise
options held under the 1995 Stock Incentive Plan may continue through its
original expiration date or for such shorter period of time after such event
as the Committee may determine appropriate. Options are generally not
assignable or transferable other than by will or the laws of descent and
distribution, or by a qualified domestic relations order, except as permitted
by the Committee and, during the optionee's lifetime, the stock option may
only be exercised by such optionee.
The price at which shares of Common Stock may be purchased pursuant to stock
options granted by Committee will be determined by the Committee, but in no
event will such price be less than the fair market value of the shares at the
time that the option is granted. "Fair market value" is defined as the
closing price of the Common Stock on the NASDAQ National Market System or
principal stock exchange that the shares may be traded on as of the date of
grant, or if such day is not a trading day, the next succeeding trading day.
Generally, each stock option will become exercisable on the one year
anniversary of the date of grant. The Committee may, in its discretion,
provide at the date of grant for another time or times of exercisability of
any such option subject to the terms and conditions of the 1995 Stock
Incentive Plan. The Committee may, at any time prior to the expiration or
termination of a stock option previously granted, extend the term of such
option for such additional period (up to a total exercise period of not more
than ten years) as it shall, in its discretion, deem necessary or appropriate.
The option price must be paid to Evergreen by the optionee in full prior to
delivery of the Common Stock. If the optionee intends to obtain a permissible
broker loan or simultaneously sell the exercised shares, the exercise shall
not be deemed to have occurred until Evergreen receives the proceeds. The
optionee may pay the option price in cash or with shares of Evergreen's Common
Stock owned by him. The optionee has no rights as a stockholder with respect
to the shares subject to option until shares of Common Stock are issued upon
exercise of the option.
The 1995 Stock Incentive Plan has a term of ten years and no shares may be
optioned and no rights to receive shares may be granted after the expiration
of the plan. The Board of Directors is authorized to terminate or amend the
1995 Stock Incentive Plan, except that it may not be amended in contravention
of Rule 16b-3 under the Exchange Act without stockholder approval, and no
amendment or termination may materially and adversely affect any participant
or an award theretofore granted under the Plan.
Benefits under the 1995 Stock Incentive Plan. There are no benefits to be
received that depend on the approval of the Amended and Restated 1995 Stock
Incentive Plan as described above. The stock option grants made in 1996 are
set forth above in tabular form under "Option/SAR Grants in Last Fiscal Year".
To be adopted, this proposal requires the affirmative vote of the majority of
the shares present in person or represented by proxy at the 1997 Annual
Meeting of Stockholders.
The Board of Directors unanimously recommends that stockholders vote FOR the
approval of the amendment to the 1995 Stock Incentive Plan.
PROPOSAL THREE
AMENDMENTS TO
THE 1995 DIRECTORS STOCK OPTION PLAN
Amendments. The Board of Directors has adopted, and is seeking stockholder
approval of, the following amendments to the 1995 Directors Stock Option (the
"Directors Stock Option Plan"):
Number of shares authorized for Issuance -- The Directors Stock Option Plan is
being amended to increase the number of shares authorized for issuance under
such plan from 60,000 to 90,000. As of March 1, 1997, there were 10,800 shares
issuable upon the exercise of stock options outstanding or issued under the
Directors Stock Option Plan, leaving 49,200 shares reserved for the future
issuance of stock options. The principal reason for the request for an
increased authorization is the increase in the formula provision, described in
more detail below.
Number of shares granted annually under the Formula Provision -- The Directors
Stock Option Plan is being amended to increase the number of stock options
that are granted annually under the formula procedures under the Plan from 400
annually to 1,600 annually.
Administrator -- The Directors Stock Option Plan was previously administered
by the Executive Vice President and Chief Administrative Officer of Evergreen.
The amendments to Section 16b-3 under the Exchange Act require that the full
Board of Directors administer the Plan, and the Directors Stock Option Plan is
being amended to reflect this change.
Granting of Additional Stock Options -- As permitted under recent amendments
to Section 16b-3 under the Exchange Act, the full Board of Directors may act
to grant non-qualified stock options, in addition to the stock options
provided under the existing formula method, to directors without impairing
their status as "non-employee directors" for purposes of approving the grant
of stock options to key employees in the Company's employee stock option
plans. The Directors Stock Option Plan is being amended to add the
flexibility for the Board of Directors to grant additional non-qualified stock
options to directors, besides the annual grant provided under the formula
under the plan, to the extent permitted under the Exchange Act and the rules
and regulations thereunder.
Description of Directors Stock Option Plan. The principal purpose of the
Directors Stock Option Plan is to provide a mechanism to align the interests
of directors with Evergreen's growth and success, and encouraging the
continuation of their involvement with Evergreen. The Directors Stock Option
Plan terminates on, and no further options or awards will be made or granted
thereunder after, May 1, 2005. The following summary describes the principal
features of the Directors Stock Option Plan, taking into account the
amendments set forth above that are being presented for stockholder approval.
A total of 90,000 shares of the Common Stock are reserved for issuance
pursuant to non-qualified stock options (the "Director Options") issued under
such plan. Stock options issuable under the Directors Stock Option Plan are
granted at an exercise price equal to 100% of the Fair Market Value of the
Common Stock on the date of grant. "Fair Market Value" is defined as the
closing price of the Common Stock on the NASDAQ National Market System or
principal stock exchange that the shares may be traded. Options are
generally not assignable or transferable other than by will or the laws of
descent and distribution, or as otherwise permitted by the Administrator, or
by a qualified domestic relations order and, during the optionee's lifetime,
the stock option may only be exercised by such optionee.
Under the proposed amendment, Director Options to purchase 1,600 shares of
Evergreen's Common Stock will be granted annually following the Annual Meeting
of Stockholders, to any eligible director. Director Options generally vest
one year from the date of grant.
The Directors Stock Option Plan provides for appropriate adjustments in the
aggregate number of shares of Common Stock subject to such plan, and in the
corresponding number of shares and the price per share, or either, of
outstanding options in the case of changes in the capital stock of Evergreen
resulting from any recapitalization, stock or unusual cash dividend, stock
split or any other increase or decrease effected without receipt of
consideration by Evergreen, or merger or consolidation in which Evergreen is
the surviving company. The Directors Stock Option Plan also provides that in
any merger or consolidation, or other Change in Control, all Director Options
shall become fully vested and any other restrictions shall lapse.
The Directors Stock Option Plan has a term of ten years and no shares may be
optioned and no rights to receive shares may be granted after the expiration
of the plan. The Board of Directors is authorized to terminate or amend the
Directors Stock Option Plan, except that it may not increase the number of
shares available thereunder, decrease the minimum price at which options may
initially be granted, or extend the term of the Plan, without stockholder
approval.
Benefits under the Directors Stock Option Plan. The benefits that depend on
the approval of the amendments to the Directors Stock Option Plan as described
above consist of an annual grant of 1,600 non-qualified stock options to each
of the eleven outside directors listed above under "Nominees For Elections As
A Director -- Background and Equity Ownership of Directors and Executive
Officers," for a total of 19,600 stock options following the 1997 Annual
Meeting.
To be adopted, this proposal requires the affirmative vote of the majority of
the shares present in person or represented by proxy at the 1997 Annual
Meeting of Stockholders.
The Board of Directors unanimously recommends that stockholders vote FOR the
approval of the amendments to the Directors Stock Option Plan.
Five-Year Performance Graph
The following graph compares the cumulative, five-year, stockholder return on
Evergreen Common Stock for the years ended December 31, 1992, through December
31, 1996, assuming a $100 investment in Evergreen on December 31, 1991, and
the reinvestment of dividends for the years indicated, to that of the S&P 500
Index and the NASDAQ Bank Stock Index, an average of all bank and thrift
institutions that are not owned by holding companies and whose stock is traded
on the NASDAQ National Market. Cumulative, five-year, stockholder return
represents the change in stock price and the amount of dividends received over
the indicated period, assuming the reinvestment of dividends.
[line graph]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C>
S&P $104 $112 $110 $148 $178
NASDAQ Bank Stock 152 197 199 288 363
Evergreen 106 101 127 198 284
</TABLE>
Compliance With Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, generally
requires Evergreen's officers and directors, and persons who own more than ten
percent of a registered class of Evergreen's equity securities, to file
reports of beneficial ownership and changes in beneficial ownership with the
Securities and Exchange Commission. Based solely upon its review of the
copies of such reports received by it, or upon written representations
obtained from certain reporting persons, Evergreen believes that, during 1996,
all Section 16(a) filing requirements applicable to its officers, directors,
and greater-than-ten-percent stockholders were complied with, except that Mr.
Ginsburg inadvertently filed his Report on Form 5 for the fiscal year ended
December 31, 1995, approximately one month late.
Certain Transactions
Directors and executive officers of Evergreen, and certain business
organizations and individuals associated with them, have been customers of,
and have had banking transactions with, Evergreen in the ordinary course of
business. Those transactions may include loans, commitments, lines of credit,
and letters of credit. Evergreen uses Cool Insuring Agency, Inc. as the
Company's insurance broker for substantially all of its business insurance.
Mr. Mashuta, a director of Evergreen, is President and a substantial
shareholder in privately-held Cool Insuring Agency, Inc. In 1996, Evergreen
expended approximately $400,000 for insurance premiums that were processed
through the insurance agency through a competitive bidding process that was
designed and monitored by an independent consultant.
All transactions with interested parties were believed to have been made on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons
and did not and do not involve more than the normal risk of collectibility or
present other unfavorable features. Additional transactions with such persons
and businesses are anticipated.
INFORMATION CONCERNING
EVERGREEN'S INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed KPMG Peat Marwick LLP, independent certified public accountants, as
independent accountants for Evergreen and its subsidiary for the current
fiscal year ending December 31, 1997. KPMG Peat Marwick has served as
independent accountants for Evergreen since 1981. KPMG Peat Marwick has
advised Evergreen that neither the firm nor any of its partners has any direct
or material indirect interest in Evergreen.
A representative of KPMG Peat Marwick is expected to attend the 1997 Annual
Meeting and will be given the opportunity to make a statement on behalf of the
firm if he or she desires to do so. A representative of KPMG Peat Marwick
also is expected to be available to respond to appropriate questions from
stockholders.
STOCKHOLDERS' PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of Evergreen stockholders intended to be presented at the 1998
Annual Meeting of Stockholders must be received by Evergreen at its principal
executive offices on or before December 5, 1997, in order to be included in
Evergreen's Proxy Statement and Form of Proxy relating to the 1998 Annual
Meeting of Stockholders.
OTHER INFORMATION
Proxy Solicitation
This Proxy solicitation is being undertaken by Evergreen. The cost of
soliciting Proxies for the 1997 Annual Meeting will be paid by Evergreen. In
addition to the solicitation of stockholders of record by mail, regular
employees of Evergreen (none of whom will be specifically compensated for such
services) may solicit proxies by telephone or otherwise. Evergreen will also
be contacting brokers, dealers, banks, or voting trustees or their nominees,
who can be identified as record holders of Evergreen Common Stock. Such
nominee or other record holders will provide information concerning quantities
of proxy materials and Annual Reports needed to supply such materials to the
beneficial owners, and Evergreen will reimburse them for the expense of
mailing proxy materials and 1996 Annual Reports to such persons.
Miscellaneous
The management of Evergreen knows of no other matters that are to be brought
before the 1997 Annual Meeting. If any other matters come properly before the
1997 Annual Meeting, the persons designated as Proxies will vote on such
matters in accordance with their best judgment.
Upon the written request of any person whose Proxy is solicited by this Proxy
Statement, Evergreen will furnish to such person without charge (other than
for exhibits) a copy of Evergreen's Annual Report on Form 10-K for its fiscal
year ended December 31, 1996, including financial statements and schedules
thereto, as filed with the Securities and Exchange Commission. Requests may be
made to Evergreen Bancorp, Inc., 237 Glen Street, Glens Falls, New York 12801,
Attention: Kathleen Martinez, Secretary.
By order of the Board of Directors,
Kathleen Martinez
Secretary
April 4, 1997
ANNEX A
EVERGREEN BANCORP, Inc.
AMENDED AND RESTATED
1995 STOCK INCENTIVE PLAN
1. Purpose. The purpose of the Evergreen Bancorp, Inc. (the "Company")
1995 Stock Incentive Plan (henceforth the "Plan") is to advance the interests
of the Company and its stockholders by aiding the Company in attracting,
retaining and motivating employees of the Company and its Affiliates.
2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Affiliate" means:
(i) A member of a controlled group of corporations of which the Company is
a member; or
(ii) Any majority-owned subsidiary of either the Company or its principal
banking subsidiary, Evergreen Company, N.A.; or
(iii) An unincorporated trade or business which is under common control
with the Company as determined in accordance with Section 414(c) of the
Internal Revenue Code of 1986, as amended (henceforth the "Code") and
regulations issued thereunder. For purposes hereof, a "controlled group of
corporations" shall mean a controlled group of corporations as defined in
Section 1563(a) of the Code determined without regard to Section 1563(a)(4)
and (e)(3)(C) of the Code.
(b) "Award" means the grant of any Stock Option, Limited Alternate Right
or Conditional Share granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Change in Control" means, for purposes of the Plan, an event of the
nature that:
(i) Would be required to be reported in response to Item 1(a) of the current
report on Form F-3, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Exchange Act; or
(ii) Results in a Change in Control of the Company within the meaning of the
Change in Bank Control Act of 1978, as amended, and the Rules and Regulations
promulgated by the Federal Deposit Insurance Company at 12 C.F.R. Section
303.4(a), as in effect on the date hereof; or
(iii) Without limiting the above conditions, such a Change in Control shall be
deemed to have occurred at such time as:
(A) Any "person" (as the term is used in Section 13(d) and 14(d) of the
Exchange Act), or group of persons acting in concert, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) directly
or indirectly, of any class of equity securities of the Company representing
25% or more of a class of equity securities, except that a securities purchase
or purchases by the Company's employee stock ownership plan and trust that
exceeds, in the aggregate, 25% or more of a class of equity securities shall
not be deemed to be a Change in Control under this Plan; or
(B) Individuals who constitute the Board on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
the Company's shareholders was approved by the same Committee serving under an
Incumbent Board, shall be, for purposes of this clause (B) considered as
though he were a member of the Incumbent Board; or
(C) A plan of reorganization, merger, consolidation, sale of all or
substantially all the assets of the Company or any similar transaction occurs
in which the Company is not or will not be the resulting entity; or
(D) A proxy statement shall be distributed soliciting proxies from
stockholders of the Company, by someone other than the current management of
the Company, seeking stockholder approval of a plan or similar transaction
with one or more corporations as a result of which the outstanding shares of
the class of securities then subject to such plan or transaction are exchanged
for or converted into cash or property or securities not issued by the
Company; or
(E) A tender offer is made for 25% or more of the voting securities of the
Company then outstanding.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the Human Resources and Nominating Committee of the
Board. Such committee, or a subcommittee thereof formed for the purposes of
making discretionary awards under this Plan, shall be comprised at all times
solely of at least two "non-employee directors", as that term is defined under
Rule 16b-3 of the Exchange Act promulgated by the Securities and Exchange
Commission, or any successor regulation.
(g) "Common Stock" means the common stock, par value $3.33-1/3 per share,
of the Company.
(h) "Conditional Share" means a share of the Common Stock of the Company,
such share becoming the sole property of a Participant upon the fulfillment of
performance and/or tenure requirements as set forth by the Committee pursuant
to Section 7 of the Plan.
(i) "Date of Grant" means the date an Award is made to a Participant.
(j) "Disability" means any physical or mental condition which may
reasonably be expected to be permanent and which renders the Member incapable
of continuing as an employee for his customary Hours of Employment, provided,
however, that such disability originated while the Member was in the active
service of the Employer, and (1) did not arise while engaged in or as a result
of having engaged in an illegal or criminal act or an act contrary to the best
interests of the Employer, or (2) did not result from habitual drunkenness or
addiction to narcotics or a self-inflicted injury while sane or insane. To
aid the Committee and determining whether such disability exists, the
Committee may require, as a condition precedent to the receipt of any benefits
hereunder, that the Employee submit to examinations by one or more duly
licensed and practicing physicians selected by the Committee.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.
(l) "Fair Market Value" means with respect to shares of Common Stock or
other property, the fair market value of such shares or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. If the shares are listed on any established stock
exchange or a national market system then, unless otherwise determined by the
Committee in good faith, the Fair Market Value of Shares shall mean the mean
between the closing price per share on the immediately preceding date (or, if
the shares were not traded on that day, the next preceding day that the shares
were traded) on the national market system or principal exchange on which the
Common Stock is traded, as such prices are officially quoted.
(m) "Normal Retirement" means retirement at the normal or early retirement
date as set forth in any tax-qualified retirement/pension plan of the Company.
If no such plan is in place, it shall mean termination of employment at or
after age 65.
(n) "Participant" means any employee of the Company or its Affiliates
selected by the Committee to participate in the Plan for the current Plan
year.
(o) "Plan Year" means a calendar year commencing on or after January 1,
1995.
(p) "Stock Option" shall mean a right granted to a Participant to purchase
Common Stock of the Company at a specified price (the "Strike Price") for a
specified period. Such Stock Options may be granted by the Committee as
either:
(i) Incentive Stock Options -- Those Stock Options so specified by the
Committee at the Date of Grant as being intended to comply with the provisions
of Section 422 of the Internal Revenue Code of 1986 as from time to time
amended; or
(ii) Non-Qualified Stock Options -- Those Stock Options so specified by
the Committee at the Date of Grant as not being intended to qualify as
Incentive Stock Options.
(q) "Stock Agreement" shall mean the agreement entered into between the
Company and the Participant pursuant to the terms of the Company's 1995 Stock
Incentive Plan.
(r) "Termination for Cause" means the Company's termination of any
Participant's employment for the following:
(i) the commission of any
intentional acts or conduct by the Participant involving moral turpitude;
(ii) the gross negligence by the Participant in complying or otherwise in
performing his required duties for the Company;
(iii) the commission of any intentional act of dishonesty in the performance
of the Participant's duties for the Company; or
(iv) the deliberate and intentional refusal by Participant during the term of
his employment, other than by reason of incapacity due to illness or accident,
to obey lawful directives from the chief executive officer or the Board of
Directors of the Company.
3. Administration. (a) Authority of the Committee. Except as expressly
provided in this Plan, the Plan shall be administered by the Committee, and
the Committee shall have full and final authority to take the following
actions, in each case subject to and consistent with the provisions of the
Plan:
(i) to select participants to whom Awards may be granted;
(ii) to designate Affiliates;
(iii) to determine the type or types of Awards to be granted to each
Participant;
(iv) to determine the type and number of Awards to be granted, the number of
shares of Common Stock to which an Award may relate, the terms and conditions
of any Award granted under the Plan (including, but not limited to, any
exercise price, grant price, or purchase price, and any bases for adjusting
such exercise, grant or purchase price, any restriction or condition, any
schedule for lapse of restrictions or conditions relating to transferability
or forfeiture, exercisability, or settlement of an Award, and waiver or
accelerations thereof, and waivers of performance conditions relating to an
Award, based in each case on such considerations as the Committee shall
determine), and all other matters to be determined in connection with an
Award;
(v) to determine whether, to what extent, and under what circumstances an
Award may be settled, or the exercise price of an Award may be paid, in cash,
shares of Common Stock, other Awards, or other property, or an Award may be
canceled, forfeited, exchanged, or surrendered;
(vi) to determine whether, to what extent, and under what circumstances cash,
Shares, other Awards, or other property payable with respect to an Award will
be deferred either automatically, at the election of the Committee, or at the
election of the Participant;
(vii) to prescribe the form of each Stock Agreement, which need not be
identical for each Participant;
(viii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Stock Agreement, or other instrument hereunder;
(x) to accelerate the exercisability or vesting of all or any portion of any
Award or to extend the period during which an Award is exercisable; and
(xi) to make all other decisions and determinations as may be required under
the terms of the Plan or as the Committee may deem necessary or advisable for
the administration of the Plan.
(b) Manner of Exercise of Committee Authority. The Committee shall have sole
discretion in exercising its authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, Affiliates, Participants, any person
claiming any rights under the Plan from or through any Participant, and
stockholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. The Committee may delegate to
officers or managers of the Company or any Affiliate the authority, subject to
such terms as the Committee shall determine, to perform administrative
functions and, with respect to Awards granted to persons not subject to
Section 16 of the Exchange Act, to perform such other functions as the
Committee may determine, to the extent permitted under Rule 16b-3 (if
applicable) and applicable law.
(c) Limitation of Liability. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished
to him or her by any officer or other employee of the Company or any
Affiliate, the Company's independent certified public accountants, or other
professional retained by the Company to assist in the administration of the
Plan. No member of the Committee, nor any officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to
the Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.
4. Participation. (a) Each Plan Year, the Committee shall, in its
sole discretion, determine which employees of the Company and its Affiliates
shall participate in the Plan. Participation in the Plan for one Plan Year is
neither a guarantee of participation in future Plan Years nor a guarantee of
future employment.
(b) At the time an employee is named as a Participant in the Plan, the
Committee shall notify such Participant of the Award. Such notification shall
identify:
(i) The number of Stock Options granted (if any) and their terms and
conditions, including whether such stock options carry Limited Alternate
Rights; and
(ii) The number of Conditional Shares granted (if any) and their terms and
conditions.
5. Stock Options. (a) The Committee shall have the right to grant Stock
Options to a Participant pursuant to this Section 5, and establish the terms
and provisions, including but not limited to the exercise price, option term
and methods of exercise. A Stock Option Award shall not be considered an
Incentive Stock Option unless it is specifically designated as such in the
Stock Option Agreement. All Stock Option Awards shall be presumed to be Non-
Qualified Stock Options unless it is specifically stated to the contrary in a
Stock Agreement.
(b) Stock Options shall be granted at the Fair Market Value of the Common
Stock on the Date of Grant except as provided for Incentive Stock Options in
Section 5(g) below.
(c) Unless otherwise determined by the Committee, Non-Qualified Stock
Options shall be exercisable for their remaining term following death or
Disability or Normal Retirement, for three years following termination of
employment by the Company for reasons other than Cause, and shall be
immediately forfeited if an employee terminates employment for an other
reason, or following Termination for Cause. Incentive Stock Options shall be
exercisable for one year following death or disability; for three months
following Normal Retirement or termination of employment by the Company for
reasons other than Cause. Incentive Stock Options shall be immediately
forfeited if an employee terminates employment for any other reason, or
following Termination for Cause. Notwithstanding the foregoing, Stock Options
shall in no event be exercisable after the date specified in the Stock Option
Agreement relating thereto.
(d) No Stock Options shall be exercisable for more than 10 years following
the Date of Grant. No Incentive Stock Option may be exercisable earlier than
at least one year following the Date of Grant.
(e) Unless otherwise determined by the Committee, Stock Options may be
exercised by tendering cash, a certified check, Common Stock then owned by the
Participant or any combination thereof, to the Office of the Secretary of the
Company, provided that any shares of Common Stock tendered which were acquired
through a previous Stock Option exercise were held by the Participant for at
least six months from the Date the Grant pursuant to which they were acquired
was granted. If the optionee intends to obtain a permissible broker loan or a
simultaneous order to sell the shares issuable upon exercise of any Options,
upon the giving of at least 48 hours prior written notice to the Company,
exercise thereof shall not be deemed to occur until the Company receives the
proceeds of the recipient's broker loan or other permitted transaction.
(f) To the extent that the aggregate Fair Market Value of Common Stock
with respect to which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year under the Plan and any other
plan of the Company or an Affiliate of the Company exceeds $100,000, such
Stock Options shall be treated as Non-Qualified Stock Options.
(g) No Incentive Stock Option shall be granted to a Participant who, at
the time of the grant, owns stock representing more than ten percent (10%) of
the total combined voting power of all classes of stock either of the Company
or any Affiliate of the Company, unless the Strike Price of the shares or
Common Stock issuable upon exercise of such Incentive Stock Option is at least
one hundred ten percent (110%) of the Fair Market Value (at the time the
Incentive Stock Option is granted), and the Incentive Stock Option is not
exercisable more than five (5) years from the date it is granted.
6. Limited Alternate Rights. (a) The Committee may, in its sole
discretion, grant Limited Alternate Rights in tandem with any Stock Option
Award.
(b) Limited Alternate Rights shall entitle the holder to receive, in lieu
of exercising the Stock Option to which such Limited Alternate Rights relate
(in which event such Stock Option shall terminate), an amount in cash equal to
100 percent of the excess of the Fair Market Value of the Common Stock on the
date of exercise times the number of rights tendered, over the aggregate
Strike Price of the Stock Options to which the Limited Alternate Rights
relate.
(c) Limited Alternate Rights shall only become vested and exercisable:
(i) If there is a Change in Control of the Company; and,
(ii) The Stock Option to which the Limited Alternate Right is attached has
been held by the Participant for a period of at least six months at the time
the Change in Control has occurred.
7. Conditional Shares. (a) The Committee shall have the right to
grant Conditional Shares to a Participant pursuant to this Section 7, and
establish the terms and provisions, including but not limited to vesting
provisions and conditions of forfeiture.
(b) Conditional Shares represent the right to receive free of any
restrictions, shares of Common Stock on the completion of specified
performance and/or tenure requirements as set forth in a Participant's
Conditional Share agreement by the Committee. At the discretion of the
Committee, such shares may be issued to the Participant at the time of the
grant, provided such shares bear a restrictive legend specifying that such
shares cannot be sold or otherwise transferred by the Participant.
(c) Conditional Shares shall be vested in full following death, Disability
or Normal Retirement. If a Participant terminates employment with the Company
for any other reason, all unvested Conditional Shares shall be forfeited,
except as may be determined in the judgment of the Committee.
(d) A Participant holding Conditional Shares shall, unless otherwise
determined by the Committee, be entitled to receive dividends and exercise
voting rights with respect to such Conditional Shares even though such
Conditional Shares have not vested.
8. Designation Of Beneficiary. A Participant may, with the consent of
the Committee, designate a person or persons to receive or exercise, in the
event of the Participant's death, any Award to which the Participant would
have been entitled. Such designation will be made upon forms supplied by and
delivered to the Company and may be revoked in writing. If a Participant
fails to effectively designate a beneficiary, then the Participant's estate,
or legal representative, will be deemed to be the beneficiary. Except as
provided in this Section 8 and except for transfers by will or laws of descent
and distribution, or except as permitted by the Committee, all awards granted
pursuant to the Plan shall be nontransferable.
9. Change in Control Provisions. In the event of a Change in Control, the
following acceleration and cash-out provisions shall apply unless otherwise
provided by the Committee at the time of the Award grant. All outstanding
Awards pursuant to which the Participant may have rights the exercise of which
is restricted or limited, shall become fully exercisable at the time of the
Change in Control. Unless the right to lapse of restrictions or limitations
is waived or deferred by a Participant prior to such lapse, all restrictions
or limitations (including risks of forfeiture and deferrals) on outstanding
Awards subject to restrictions or limitations under the Plan shall lapse, and
all performance criteria and other conditions to payment of Awards under which
payments of cash, shares of Common Stock or other property are subject to
conditions shall be deemed to be achieved or fulfilled and shall be waived by
the Company at the time of the Change in Control.
10. Miscellaneous Provisions. (a) Tax Withholding. The Company's
obligations under the Plan shall be subject to applicable federal, state, and
local tax withholding requirements. Federal, state, and local withholding tax
due at the time of a grant or upon the exercise of any Award may, in the
discretion of the Committee, be paid in shares of Common Stock already owned
by the Participant upon such terms and condition as the Committee shall
determine. If the Participant shall fail to pay, or make arrangements
satisfactory to the Committee for the payment, to the Company of all such
federal, state and local taxes required to be withheld by the Company, then
the Company shall, to the extent permitted by law, have the right to refuse to
issue the shares of Common Stock relating to the Award and/or to deduct from
any payment of any kind otherwise due to such Participant an amount equal to
any federal, state, or local taxes of any kind required to be withheld by the
Company.
(b) Amendment. The Board may amend, alter, suspend, discontinue, or
terminate the Plan or the Committee's authority to grant Awards under the Plan
without the consent of stockholders of the Company or Participants, except
that any such amendment, alteration, suspension, discontinuation, or
termination shall be subject to the approval of the Company's stockholders to
the extent such stockholder approval is required under Section 422 of the
Code; provided, however, that, without the consent of an affected Participant,
no amendment, alteration, suspension, discontinuation, or termination of the
Plan may materially and adversely affect the rights of such Participant under
any Award theretofore granted to him or her. The Committee may waive any
conditions or rights under, amend any terms of, or amend, alter, suspend,
discontinue or terminate, any Award theretofore granted, prospectively or
retrospectively; provided, however, that, without the consent of a
Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of
such Participant under any Award theretofore granted to him or her.
(c) Applicable Law. The Plan will be administered in accordance with the
laws of the State of New York, without regard to its principles of conflict of
laws, to the extent not governed by relevant provisions of the Exchange Act
and other federal law.
(d) Shares Authorized. The Committee shall be authorized to make Awards
of Stock Options, Conditional Shares or any combination thereof representing
up to 900,000 shares of Common Stock, subject to adjustment as provided below.
Any shares of Evergreen Common Stock that are delivered to or withheld by the
Company to satisfy the tax withholding consequences of an option exercise or
the grant or vesting of a conditional share award shall again be available for
purposes of the 1995 Stock Incentive Plan.
(e) Maximum Award. No Participant may receive an Award of Stock Options,
Conditional Shares or any combination thereof, representing more than 100,000
shares in any Plan Year, subject to adjustment as provided below.
(f) Adjustments in Common Stock for Recapitalizations, Splits, etc. In the
event that the Committee shall determine that any dividend in Common Stock,
recapitalization, Common Stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the shares of Common Stock
such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Participants under the Plan, then the Committee
shall make such equitable changes or adjustments as it deems appropriate and,
in such manner as it may deem equitable, adjust any or all of:
(i) the number and kind of shares which may thereafter be issued under the
Plan,
(ii) the number and kind of shares, other securities or other consideration
issued or issuable in respect of outstanding Awards,
(iii) the exercise price, grant price, or purchase price relating to any
Award, and
(iv) the Maximum Award; provided, however, in each case that, with respect to
Incentive Stock Options, such adjustment shall be made in accordance with
Section 424(a) of the Code, unless the Committee determines otherwise.
In addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria and performance objectives included in,
Awards in recognition of unusual or nonrecurring events (including, without
limitation, events described in the preceding sentence) affecting the Company
or any Affiliate or the financial statements of the Company or any Affiliate,
or in response to changes in applicable laws, regulations, or accounting
principles.
(g) Compliance with Legal and Trading Requirements. The Plan, the granting
and exercising of Awards thereunder, and the other obligations of the Company
under the Plan and any Stock Agreement, shall be subject to all applicable
federal and state laws, rules and regulations, and to such approvals by any
regulatory or governmental agency as may be required. The Company, in its
discretion, may postpone the issuance or delivery of shares of Common Stock
under any Award until completion of such stock exchange or market system
listing or registration or qualification of such shares of Common Stock or
other required action under any state or federal law, rule or regulation as
the Company may consider appropriate, and may require any Participant to make
such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of shares of Common
Stock in compliance with applicable laws, rules and regulations. No
provisions of the Plan shall be interpreted or construed to obligate the
Company to register any shares Common Stock under federal or state law.
(h) Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than
those of a general creditor of the Company; provided, however, that the
Committee may authorize the creation of trusts or make other arrangements to
meet the Company's obligations under the Plan to deliver cash, shares of
Common Stock, other Awards, or other property pursuant to any Award, which
trusts or other arrangements shall be consistent with the "unfunded" status of
the Plan unless the Committee otherwise determines with the consent of each
affected Participant.
(i) Non-exclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of options and other awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.
11. Effective Date Of The Plan. The Plan, as amended and restated, shall
become effective January 16, 1997, subject to approval by a majority vote of
the shareholders of record of the Company at the 1997 annual meeting. The
Plan shall terminate on April 1, 2005, or such earlier date as determined by
the Board.
Effective Date: April 20, 1995; amended and restated
effective January 16, 1997.
