INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
HIGH POINT FINANCIAL CORP.
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(Name of Registrant as Specified in its Charter)
HIGH POINT FINANCIAL CORP.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of security to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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March 29, 1996
Dear Shareholder:
On behalf of the Board of Directors and management, I cordially
invite you to attend the Annual Meeting of Shareholders of High Point
Financial Corp., which is to be held at 4:00 p.m. on Tuesday, April 30, 1996
at Perona Farms, 350 Andover-Sparta Road (Route 517), Andover, New Jersey. A
Notice of Meeting, Proxy Statement and form of proxy are enclosed.
At the meeting, in addition to electing directors, shareholders are
being asked to approve the 1996 Non-Employee Director Stock Option Plan and
the 1996 Employee Incentive Stock Option Plan.
I urge you to read the enclosed material and to complete, date,
sign and mail the form of proxy promptly to have your vote counted.
Our thanks for your continued support of High Point Financial Corp.
Very truly yours,
Michael A. Dickerson
President and Chief Executive Officer
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held April 30, 1996
The Annual Meeting of Shareholders of High Point Financial Corp., a
New Jersey corporation, will be held at Perona Farms, 350 Andover-Sparta Road
(Route 517), Andover, New Jersey, on Tuesday, April 30, 1996 at 4:00 p.m.
local time for the following purposes:
1. To elect two directors;
2. To approve the 1996 Non-Employee Director Stock Option Plan;
3. To approve the 1996 Employee Incentive Stock Option Plan; and
4. To transact such other business as may properly come before
the meeting and any adjournments thereof.
Only shareholders of record at the close of business on March 15,
1996 are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
Gregory W.A. Meehan
Vice President & Treasurer
Branchville, New Jersey
March 29, 1996
A proxy statement and proxy are enclosed herewith. Even if you
expect to attend the meeting in person, please sign, date and return the
enclosed proxy card promptly in the enclosed addressed envelope, which
requires no postage if mailed within the United States.
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<PAGE>
HIGH POINT FINANCIAL CORP.
PROXY STATEMENT
This Proxy Statement is furnished for use at the Annual Meeting of
Shareholders of High Point Financial Corp. ("High Point") to be held on
Tuesday, April 30, 1996 and at any adjournments thereof (the "Annual
Meeting"). The accompanying proxy is solicited by the Board of Directors of
High Point. The principal executive offices of High Point are located at 3
Broad Street, Branchville, New Jersey 07826. This Proxy Statement and the
accompanying form of proxy are first being sent to shareholders on or about
March 29, 1996.
The expense of soliciting proxies will be borne by High Point.
Proxies may be solicited by mail, in person or by telephone or facsimile by
directors, officers or employees of High Point and its subsidiary. High
Point will, upon request, reimburse custodians, nominees and fiduciaries for
reasonable expenses in forwarding soliciting materials to the proper
shareholders.
A form of proxy is enclosed. Each properly completed and returned
proxy will be voted at the Annual Meeting. Any shareholder giving a proxy
may revoke it at any time before it is exercised by giving written notice of
such revocation to the Secretary of High Point or by submitting a duly
executed proxy bearing a later date. The presence at the meeting of any
shareholder who has given a proxy does not revoke the proxy unless the
shareholder files written notice of revocation with the secretary of the
Annual Meeting prior to the voting of the proxy.
Only shareholders of record at the close of business on March 15,
1996 are entitled to receive notice of and to vote at the Annual Meeting. As
of March 15, 1996 the only class of High Point stock outstanding was Common
Stock, of which 3,786,480 shares were outstanding. Each share is entitled to
one vote on all matters. There are no cumulative voting rights. The
presence in person or by proxy of the holders of 1,893,241 shares of Common
Stock is required for a quorum. In the election of directors, individuals
receiving a plurality of the votes cast are elected. The 1996 Non-Employee
Director Stock Option Plan (the "1996 Director Plan") and the 1996 Employee
Incentive Stock Option Plan (the "1996 Incentive Plan") may each be approved
by a majority of the votes cast. Votes to which shares are entitled are not
considered as having been cast at the meeting if, for any reason, the shares
are not voted, including an abstention, directions in a written proxy to
withhold votes, or votes withheld by a broker, even though shares not voted
may be counted for purposes of determining whether a quorum is present at the
meeting and even though such shares may be considered as shares entitled to
vote.
As of March 15, 1996, the High Point Financial Corp. and Affiliated
Subsidiaries Employee Stock Ownership Plan (the "ESOP") held 173,735 shares
of Common Stock, 166,406 of which were credited to the accounts of the
participants in the ESOP. Under the terms of the Trust Agreement for the
ESOP, the participants furnish instructions to the Trustees to vote the
shares of Common Stock credited to their respective accounts. As of March
15, 1996, there were 7,329 unallocated shares held by the ESOP to be voted by
the Trustees of the ESOP. Proxies will be provided to all participants in
the ESOP in order that they may vote their shares.
ELECTION OF DIRECTORS
The Board of Directors has established the number of directors at
eight, effective at the conclusion of the Annual Meeting, approximately one-
third of whom, under High Point's Restated Certificate of Incorporation, are
to be elected each year. At the Annual Meeting, two directors are to be
elected to the class whose term will expire in 1999. Both nominees are
currently directors of High Point and were selected by the Board of
Directors, which has no nominating committee. All directors elected at the
Annual Meeting and all directors continuing in office are to hold office
until the annual meeting of shareholders in the year in which their
respective terms expire and until successors have been elected and qualified.
The persons named as proxies in the accompanying proxy card intend
to vote the shares represented by the proxy cards received by them for the
election of those nominees listed below unless you instruct otherwise on the
proxy card. In the event that a nominee becomes unavailable for election for
any reason, an event that management does not anticipate, shares of Common
Stock represented by proxies will be voted for a substitute nominee
designated by the Board of Directors. There is no relationship by blood,
marriage or adoption between any director, executive officer, or person
nominated or chosen to become a director or executive officer of High Point.
The following table sets forth as of March 15, 1996, with respect
to each nominee for director and each current director continuing in office:
age; principal occupation during the last five years, including positions
held with High Point or its direct subsidiary, The National Bank of Sussex
County ("NBSC"), or a former subsidiary, The Pocono Bank ("Pocono"), if any;
other directorships held, if any; the year of first becoming a director of
High Point; and the year of the annual meeting when each director's term will
expire. All of High Point's directors, other than Mr. Dolan and Mr. Guptill,
are also directors of NBSC.
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<TABLE>
<CAPTION>
Principal Occupation During the Last High Point
Five Years and Other Directorships Director Since Age
------------------------------------------- -------------- ---
<S> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS EXPIRING IN 1999
William A. Dolan, II Chairman of the Board of Directors, High 1982 64
Point (since 1988); Attorney, Kelly, Gaus
and Holub (since January 1, 1994);
Attorney, Dolan and Dolan, P.A. (prior to
1994); Director, Selective Insurance
Group, Inc.
Charles L. Tice Retired, previously Senior Vice President 1995 62
of Selective Insurance Group, Inc.
DIRECTORS CONTINUING IN OFFICE WITH TERMS EXPIRING IN 1998
George G. Guptill, Jr. President (since 1990) and Director, and 1988 56
Executive Vice President (prior to 1990),
Franklin Mutual Insurance Co.
Charles L. Lain President, Pine Island Turf Nursery, Inc. 1986 65
Harold E. Pellow President, Harold E. Pellow Associates, 1986 59
Inc. (civil engineering)
DIRECTORS CONTINUING IN OFFICE WITH TERMS EXPIRING IN 1997
Michael A. Dickerson President and Chief Executive Office, 1988 59
High Point (since 1988); Director,
President and Chief Executive Officer
(from 1988 through April 1992 except
from May 9 through December 26, 1990),
Vice Chairman (May 9, 1990 through
April 1992), Pocono; Vice Chairman
(since October 22, 1991) and Chief
Executive Officer (since November 25,
1991), NBSC.
Larry R. Condit Vice Chairman of the Board of Directors 1982 46
of High Point (since 1988); President,
Condit Ford, Inc.; President, Condit Auto
Lease Corp.
Richard M. Roy Chairman of NBSC (since May, 1990); 1982 63
Treasurer, The Roy Company, Inc. (farm
equipment sales).
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
- -------------------------------------------------------------------------
The following table sets forth, as of March 15, 1996, the
number and percentage of shares of Common Stock held by each person who, to
the knowledge of High Point, is the beneficial owner of 5% or more of the
outstanding shares of Common Stock, by each nominee and each continuing
director, and by all of High Point's officers and directors as a group.
Name of Beneficial Owner Number of Shares
and Address of Beneficial of Common Stock Percent
Owner of 5% or More Beneficially Owned <fa> of Class
- ----------------------- ---------------------- --------
Lakeland Bancorp. 351,152 9.3%
250 Oak Ridge Road
Oak Ridge, NJ 07438
Franklin Mutual Insurance Co. 250,976 6.6%
P.O. Box 400
Branchville, NJ 07826
Larry R. Condit 35,781 <fd> <f*>
Michael A. Dickerson 55,982 <fe> 1.5%
William A. Dolan, II 27,655 <ff> <f*>
George H. Guptill, Jr. 279,339 <fb><fc><fg> 7.4%
P.O. Box 400
Branchville, NJ 07826
Charles L. Lain 26,361 <f*>
C. Edward McCracken 44,011 <fh> 1.2%
Harold Pellow 25,184 <fi> <f*>
Richard M. Roy 91,666 <fj> 2.4%
Charles L. Tice 13,832 <fb><fc><fk> <f*>
Gregory W. A. Meehan 77,784 <fb><fc><fl> 2.0%
All executive officers and directors 661,437 <fm>[FN] 17.2%
as a group (9 persons)
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[FN]
<f*> Indicates less than 1%
<fa> Unless otherwise indicated, each person effectively exercises
sole voting and dispositive power as to the shares reported.
<fb> Includes 750 shares held by High Point's defined benefit
pension plan, with respect to which Messrs. Guptill, Meehan
and Tice, as trustees, have shared voting and investment
power.
<fc> Includes 7,329 shares held by the ESOP which are not allocated
to the accounts of employees of High Point or NBSC and with
respect to which Messrs. Guptill, Meehan and Tice, as
trustees, have shared voting and investment power.
<fd> Includes 19,798 shares held by Condit Auto Lease Corp. over
which Mr. Condit has sole voting and investment power. Also
includes 495 shares held by Mr. Condit's wife as to which Mr.
Condit disclaims beneficial ownership.
<fe> Includes 8,960 shares of common stock in Mr. Dickerson's
account in the ESOP as of December 31, 1995, under which Mr.
Dickerson has voting power, but not investment power. Also
includes 25,000 shares issuable pursuant to stock options
presently exercisable by Mr. Dickerson.
<ff> Includes 7,270 shares held by Mr. Dolan's wife as to which Mr.
Dolan disclaims beneficial ownership. Also includes 358
shares held by a trust of which Mr. Dolan is a trustee.
<fg> Includes 250,976 shares held by Franklin Mutual Insurance Co.
All voting and investment decisions made by Franklin Mutual
Insurance Co. with respect to such shares are made by a board
of directors committee of which Mr. Guptill is not a member.
<fh> Includes 2,191 shares held by Mr. McCracken's wife as to which
Mr. McCracken disclaims beneficial ownership. Also includes
14,640 shares held in a family trust of which Mr. McCracken is
a trustee.
<fi> Includes 830 shares held by Mr. Pellow's wife as to which Mr.
Pellow disclaims beneficial ownership.
<fj> Includes 330 shares held by Mr. Roy's wife as to which Mr. Roy
disclaims beneficial ownership.
<fk> Includes 1,158 shares held in a trust of which Mr. Tice is a
trustee.
<fl> Includes 1,323 shares held by Mr. Meehan's wife and 160 shares
held by Mr. Meehan's son as to which Mr. Meehan disclaims
beneficial ownership. Also includes 10,289 shares of common
stock in Mr. Meehan's account in the ESOP as of December 31,
1995, under which Mr. Meehan has voting power, but not
investment power. Also includes 25,000 shares issuable
pursuant to stock options presently exercisable by Mr. Meehan.
<fm> See all footnotes above.
[FN] Each of Messrs. Guptill, Meehan and Tice is a beneficial owner
of 8,079 shares in the ESOP and the defined benefit pension
plan. See notes <fb> and <fc> above. This total only counts
such shares once.
COMMITTEES AND MEETINGS
- -----------------------
High Point and NBSC have a joint Audit and Loan Review
Committee consisting of six members: Mr. Guptill (director of High Point),
Messrs. Lain and McCracken (directors of both High Point and NBSC), and three
other directors of NBSC. The Audit and Loan Review Committee oversees the
Company's audit function and loan review function. The Audit and Loan Review
Committee met five times in 1995. High Point has no Nominating Committee.
High Point has a Compensation Committee, whose members during 1995 were
Messrs. Condit, Pellow and Roy. The Compensation Committee did not meet in
1995. The primary function of the Compensation Committee is to administer
some of the High Point Stock Option Plans. (See "Executive Compensation and
Other Information.") Compensation for senior management of NBSC, which includes
executive management of High Point, is reviewed by the Compensation Committee
of NBSC and recommended to the Board of NBSC. The Compensation Committee of
NBSC, whose members are Messrs. Condit, Pellow and Roy, met once during 1995.
During the year ended December 31, 1995, the Board of
Directors met 12 times. All directors attended 75% or more of the meetings
of the Board of High Point and the committees on which they served during
1995, with the exception of William A. Dolan, who attended 71% of the
meetings of the Board of High Point and the committees on which he served.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
- --------------------------------------------
The following table shows for the years ending December 31,
1995, 1994 and 1993 the aggregate cash compensation paid by High Point, NBSC
and Pocono, as well as certain other compensation paid or accrued for those
years, to High Point's President and Chief Executive Officer and to its Vice
President and Treasurer. No other executive officer of High Point earned
aggregate cash compensation in excess of $100,000. High Point does not have
employment agreements with any of its officers.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-term
Compensation All Other
Annual Compensation Awards Compensation<F2>
------------------------------------------------------------------ -------------- -------------------
Name and Principal Salary Bonus Other Annual
Position Year ($) ($) Compensation Options Cash Stock
($)
----------------------- ---- -------- ----- ------------ -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael A. Dickerson, 1995 $155,204 -- -- 25,000 $27,297 1,574
President and Chief 1994 $151,859 -- -- -- $27,440 1,334
Executive Officer 1993 $145,320 -- -- -- $15,578 1,708
Gregory W.A. Meehan, 1995 $107,452 -- -- 25,000 $18,476 1,169
Vice President and 1994 $104,359 -- -- -- $12,064 968
Treasurer 1993 $100,227 -- -- -- $4,338 1,057
</TABLE>
[FN]
<F1> All options outstanding were canceled in 1992. No options were
granted in 1994 or 1993.
<F2> "All other compensation" includes the following: (i) director fees
paid by NBSC: for Mr. Dickerson, $8,250, $8,750 and $8,500 for 1995, 1994 and
1993, respectively; for Mr. Meehan, $8,000 and $4,875 for 1995 and 1994,
respectively; Mr. Meehan was not director of NBSC prior to 1994; (ii)
contributions to the Company's 401 (k) Plan to match elective deferral
contributions (included under salary): for Mr. Dickerson, $4,050, $4,050 and
$388 for 1995, 1994 and 1993, respectively; for Mr. Meehan, $2,380, $2,314
and $263 for 1995, 1994 and 1993, respectively; (iii) a company paid group
term insurance that does not have to be weighted based on age: for Mr.
Dickerson, $3,600, $4,219 and $2,214 for 1995, 1994 and 1993, respectively;
for Mr. Meehan, $940, $1,142 and $1,658 for 1995, 1994 and 1993,
respectively; (iv) the value of the annual premium for death benefit in the
event the insured dies before retirement and while the insured is still
employed by High Point: for Mr. Dickerson, $11,397, $10,421 and $4,476 for
1995, 1994 and 1993, respectively; for Mr. Meehan, $7,156, $3,733 and $2,417
for 1995, 1994 and 1993, respectively; (v) Common Stock allocated under the
ESOP: for Mr. Dickerson 1,574 shares, 1,334 shares and 1,708 shares for 1995,
1994 and 1993, respectively; for Mr. Meehan 1,169 shares, 968 shares and
1,057 shares for 1995, 1994 and 1993, respectively.
RETIREMENT PLAN
- ---------------
Effective December 31, 1993, High Point's Board of Directors
froze its defined benefit pension plan, the High Point Financial Corp. &
Affiliated Subsidiaries Retirement Income Plan (the "Retirement Plan").
Years of service and compensation earned after December 31, 1993 are not
taken into account in calculating a participant's accrued benefit. No
employees hired after that date will ever become eligible to participate in
the Retirement Plan. Effective May 31, 1995, High Point's Board of Directors
terminated the Retirement Plan. It is anticipated that all accrued benefits
will be distributed to participants as either deferred annuities or immediate
lump sum distributions in 1996.
The Retirement Plan provides an annual benefit based upon the
sum of the participant's accrual prior to January 1, 1989, and the
participant's accruals between January 1, 1989 and December 31, 1993. With
respect to service prior to January 1, 1989, a participant's annual normal
retirement benefit was calculated by multiplying the participant's years of
credited service as of December 31, 1988 by the sum of (i) .75% of the
participant's average compensation, plus (ii) .75% of the participant's
average compensation in excess of covered compensation. Covered compensation
is derived from a table published by the Internal Revenue Service based upon
historical wage bases for social security tax purposes and the individual's
year of birth. In general, a participant's credited service is equal to the
total period of the participant's employment with High Point and NBSC prior
to December 31, 1988. Average compensation is generally the arithmetic
average of the participant's wages reported to the Internal Revenue Service
(including amounts deferred under High Point's profit sharing plan) for each
year of credited service through 1988; provided, however, in calculating the
average, the participant's wages reported to the Internal Revenue Service for
1985 are applied for all years prior to 1986.
With respect to accruals after December 31, 1988 but prior to
December 31, 1993, the benefit formula equals .794% of a participant's
compensation for that year, plus .65% of the participant's compensation for
that year in excess of covered compensation. Benefits accrued after 1988 are
added to the participant's accrued benefit determined as of January 1, 1989.
As of the termination date, the annual accrued benefit under
the Retirement Plan payable monthly upon attainment of age 65 in a straight
life annuity for Mr. Dickerson and Mr. Meehan, respectively, were $835.77 and
$892.06. The present values of such benefits if paid as lump sums to Mr.
Dickerson and Mr. Meehan, respectively, were $52,346.10 and $23,482.40. The
lump sum figures are subject to fluctuation depending upon the interest rates
in effect when the benefits are actually distributed.
STOCK OPTION PLANS
- ------------------
High Point maintains an Incentive Stock Option Plan and an
Employee Stock Option Incentive Plan pursuant to which the High Point is
authorized to grant key employees of High Point or NBSC options to purchase
Common Stock. The purpose of the plans is to promote the long-term success
of High Point by providing incentives to key employees who are in positions
to make significant contributions to such success. The 1987 Incentive Stock
Option Plan and the 1990 Employee Stock Option Incentive Plan authorize High
Point to grant options to purchase an aggregate of 50,054 and 50,000 shares
of Common Stock, respectively.
On November 21, 1995, the High Point Board of Directors
granted options to purchase 95,000 shares of stock to key employees of the
Company at a price of $6.75 per share, which was the market value of the
stock at that time. The following table contains information concerning the
grant of stock options during 1995 to the named executive officers.
OPTIONS GRANTED IN 1995
Individual Grants
--------------------------------------------------------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employee in Price Expiration
Name granted (#) Fiscal Year ($/Share) Date
------------- ----------- ----------- --------- ----------
Michael A. 25,000 26.3% $6.75 11/21/05
Dickerson
Gregory W.A. 25,000 26.3% $6.75 11/21/05
Meehan
CHANGE OF CONTROL AGREEMENTS
- ----------------------------
During 1989, High Point entered into Change of Control
Agreements ("Control Agreements") with Mr. Dickerson and Mr. Meehan. The
Control Agreements have been amended and clarified as of January 1, 1993 to
reduce the rates payable thereunder.
Each of the Control Agreements provides that the executive
will continue to perform his regular duties and services for High Point in
the event any person or entity, or group of persons acting in concert, takes
certain steps designed to effect a change of control of High Point. Each
executive has agreed to continue to perform those duties and services until
the person, entity or group abandons or terminates its efforts to effect a
change of control, or until a change of control has actually occurred. The
Control Agreements define a "change of control" as (a) the acquisition
(including by merger, consolidation, sale of all or substantially all of the
assets of High Point, or other similar event, or a "significant stock
acquisition") by any person, entity or group of persons acting in concert of
beneficial ownership of 25% or more of the combined voting power of High
Point's outstanding securities; (b) a change in the composition of majority
membership of the Board of Directors of High Point over any two-year period;
(c) a change in ownership of High Point such that High Point becomes subject
to the delisting of its common stock from the National Association of
Securities Dealers or the over-the-counter market system; (d) the approval by
the Board of Directors of High Point of the sale of all or substantially all
of the assets of High Point; or (e) the approval by the Board of Directors of
any merger, consolidation, issuance of securities, or purchase of assets, the
result of which would be the occurrence of any event described in clauses a,
b or c above.
Each of the Control Agreements provides for the payment or
provision of certain compensation and other benefits to the executive in the
event the executive's employment is terminated pursuant to a change of
control. The Control Agreements provide that the executive's employment is
deemed to be terminated pursuant to a change of control if (a) High Point
terminates the executive's employment without cause within the six month
period prior to, or within three years subsequent to, a change of control; or
(b) the executive resigns within three years following a change of control
due to (i) a significant change in the nature or scope of his authority or
duties, (ii) a reduction in his base salary, (iii) a more than minimal
reduction in his total benefits, (iv) a reasonable determination by the
executive that as a result of the change of control and consequent change in
circumstances he is unable to exercise the authority, powers, functions or
duties attached to his position, or (v) breach by High Point of any provision
of the Control Agreement. The terms "cause", "willfulness", and "reasonable
determination" are defined on the Control Agreements.
Each of the Control Agreements provides that, after the date
the executive's employment with High Point is terminated under circumstances
described in the preceding paragraph, High Point shall pay annual
compensation to the executive for a period of not less than one year nor more
than three years beginning on the termination date and ending three years
from the change of control date, at an annual rate equal to 100% of the
greater of the executive's base salary on the termination date and the
executive's base salary on the date six months prior to the termination date.
These payments shall be reduced under the terms of the Control Agreements to
the one year minimum only if the executive obtains employment with a new
employer during the payment period at the same or better terms than existed
between the executive and High Point on the change of control date. The
Control Agreements provide for payment by High Point of certain job placement
agency fees for a one year period following the termination date, and the
payment by High Point of certain relocation expenses. The Control Agreements
obligate High Point to provide to the executive all group insurance coverage
(including health, life and disability) for a period beginning on the
termination date and ending three years from the change of control date. The
Control Agreements provide that the executive will become 100% vested in all
deferred compensation and retirement plans of High Point, and entitle the
executive to retirement income as if the final payment date of salary from
High Point is the date of the final salary payment made by High Point to the
executive under the Control Agreement. The Control Agreements provide that
the executive will receive, for a period beginning on the termination date
and ending three years from the change of control date, all incentive
compensation, bonuses, stock options, stock purchase rights, pension
benefits, and other similar benefits which are in effect on termination date
and are granted annually to other executives of High Point and its successor.
The Control Agreements provide for personal use of the executive's High Point
automobile for a one year period after his termination date. Finally, each
Control Agreement provides that any payments made to the executive under the
Control Agreement which are subject to an excise tax shall be increased to
the extent necessary to enable the executive to receive the full payment of
the amount to which he would have been entitled had the excise tax not been
imposed.
All payments provided for under the Control Agreements are to
be paid in cash from the general funds of High Point and High Point is not
required to establish a special or separate fund for their payment.
The Control Agreements obligate the executive never to
disclose any confidential information (as defined in the Control Agreement)
to any person following the executive's termination. The Control Agreements
further restrict the executive from engaging after termination in the
business of banking or any banking-related business within 20 miles of High
Point's main office or within ten miles of any branch of High Point or any of
its subsidiaries.
Each of the Control Agreements provides that High Point will
pay to the executive the amount of the executive's attorney's fees incurred
in enforcing his rights under the Control Agreement in the event the
executive prevails in any action arising in connection with the Control
Agreement. The Control Agreements further provide that High Point, to the
extent permitted by law, will continue to indemnify and hold harmless the
executive after a change of control to the same extent that High Point was
required to indemnify such executive prior to the change of control with
respect to actions in which the executive is involved by reason of any
alleged act or omission of the executive in his capacity as an officer,
director or employee of High Point, regardless of whether the action is
brought by or in the right of High Point.
Each Control Agreement will terminate on (a) the date the
executive dies or becomes permanently disabled (as defined in the Control
Agreement); (b) the termination of the executive's employment for cause; (c)
the termination of the executive's employment without cause, provided a
change of control does not take place within six months; (d) the mutual
agreement of High Point and the executive; (e) the retirement of the
executive on or after the normal retirement age; or (f) the resignation of
the executive for a reason other than a change of control. Each Control
Agreement also provides that it will expire on a date three years after its
original date of execution and delivery, provided that, unless either High
Point or the executive provides notice to the contrary, on the first
anniversary of the agreement and on each year thereafter the agreement will
automatically renew for an additional three year period.
COMPENSATION OF DIRECTORS
- -------------------------
The Chairman of the Board of High Point and the Chairman of
the Audit Committee each receive $3,500 per year from High Point for their
services. In 1986, certain directors of High Point entered into Deferred
Income Agreements with High Point with respect to the fees or a portion
thereof that they were to receive during a period of five years commencing in
1986 to defer payment until the earlier of such director's attainment of the
age of 65 or death. The payments to each such director are or will be paid
over a period of ten years and are subject to an interest rate of 8% per
annum in accordance with the Deferred Income Agreements. High Point's
obligation to make the deferred payments is unfunded and unsecured.
CERTAIN FILINGS
- ---------------
High Point is required to identify any director or officer who
failed to timely file with the Securities and Exchange Commission a required
report relating to ownership and changes in ownership in High Point's equity
securities. Based on material provided by High Point, four such reports
covering transactions by Gregory Meehan and one such report covering a
transaction by William A. Dolan, II were not filed in the months when the
transactions occurred. When these oversights were discovered the appropriate
reports were filed.
TRANSACTIONS WITH DIRECTORS AND MANAGEMENT
- ------------------------------------------
Certain of High Point's directors and officers and certain
nominees for director, and their respective associates (including members of
their families and corporations or other organizations of which they are or
have been directors, officers or principal security holders), are and have
been customers of, and are indebted to, NBSC in the ordinary course of
business. This indebtedness arises out of loans made to such persons by
NBSC, all of which loans were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time the loans were
made for comparable loans to other persons, were made in the ordinary course
of NBSC's business, and did not involve more than a normal risk of
collectability or present other unfavorable features.
During 1995, Kelly, Gaus and Holub, a law firm with which Mr.
Dolan is affiliated, represented High Point and NBSC as legal counsel and
received payments totaling $19,000 from High Point and NBSC for such
services. High Point anticipates that High Point and NBSC may make payments
to such firm in 1996 for similar services.
In 1995, Lucas Interiors (owned by Mr. Dolan's spouse)
provided services for NBSC in connection with the renovation of some of
NBSC's offices. In all cases, Lucas Interiors bid against providers of
similar services and was the low bidder. Lucas Interiors received $49,000 in
1995 for such services, which included payments to various subcontractors and
suppliers of furniture and equipment.
During 1995, Harold E. Pellow Associates, Inc., of which Mr.
Pellow is President, performed civil engineering services for High Point and
NBSC, and received $4,000 for such services.
Mr. Guptill is President and a Director of FMI, Inc., a wholly
owned subsidiary of Franklin Mutual Insurance Co. (the owner of approximately
6.7% of High Point's outstanding Common Stock). NBSC leases certain
properties from FMI, Inc. for branch offices, and during 1995 paid $ 31,000
per month in rent. NBSC anticipates making similar rent payments in 1996.
During 1995, NBSC purchased three automobiles from Condit
Ford, Inc., of which Mr. Condit is President. NBSC accepted bids from area
car dealerships for the purchase of these vehicles. Condit Ford, Inc. was
the low bidder.
PROPOSAL TO APPROVE THE 1996 DIRECTOR PLAN
------------------------------------------
The 1996 Director Plan was adopted, subject to shareholder
approval, by the Board of Directors on March 19, 1996. The purpose of the
1996 Director Plan is to attract and retain highly qualified non-employee
directors for High Point and NBSC by providing those non-employee directors
with opportunities to receive equity in High Point. The 1996 Director Plan
grants, as of February 20, 1996 (subject to shareholder approval), an option
to each current non-employee director to purchase 7,500 shares of Common
Stock (the "Initial Options"). Grants of options under the 1996 Director
Plan ("Grants") are not intended to qualify as "incentive stock options"
("Nonqualified Stock Options") within the meaning of Section 422 of the
Internal Revenue Code (the "Code").
The following is a summary of the proposed features of the
1996 Director Plan, which is qualified in its entirety by reference to the
1996 Director Plan, a copy of which is annexed hereto as Exhibit A. As
indicated in the text of the 1996 Director Plan, any provision of the 1996
Director Plan that is determined to be inconsistent with applicable laws and
regulations will be deemed void.
ADMINISTRATION
- --------------
The 1996 Director Plan will be administered by a committee
appointed by the Board of Directors of High Point (the "Director Plan
Committee"). The initial members of the Director Plan Committee will be the
President, the Treasurer and the Secretary of High Point. Under the terms of
the 1996 Director Plan, the Director Plan Committee has authority to
determine the applicable terms and conditions of Grants. The Director Plan
Committee also will have the power and authority to interpret the 1996
Director Plan, to prescribe, amend and rescind rules and regulations relating
to the 1996 Director Plan, and to make all other determinations deemed
necessary or advisable in administering the 1996 Director Plan.
SHARES RESERVED
- ---------------
Subject to adjustments for certain changes in the number of
issued shares of Common Stock, a total of 105,000 shares of Common Stock
shall be available for issuance under the 1996 Director Plan, which may be
shares of authorized but unissued Common Stock or treasury shares.
ELIGIBILITY
- -----------
Grants under the 1996 Director Plan may be made only to non-
employee directors of High Point and NBSC. As of February 20, 1996, thirteen
individuals were eligible to participate in the 1996 Director Plan.
TERMS OF OPTIONS
- ----------------
The Initial Options have an exercise price of $6.75 per share,
which was the Fair Market Value (as such term is defined in the 1996 Director
Plan) of the Common Stock on February 20, 1996, the date the Initial Options
were granted. The exercise price of any Nonqualified Stock Options granted
in the future will be the Fair Market Value on the date of the Grant.
The Initial Options will vest over a period of five years,
with vesting to occur at a rate of twenty percent (20%) each year, subject to
acceleration in the event of a Change in Control (as defined in the 1996
Director Plan). Unvested Nonqualified Stock Options will be deemed forfeited
when a participant ceases to be a member of the Board of Directors of High
Point or NBSC. The vesting schedule for any Nonqualified Stock Options
granted in the future will be determined by the Board of Directors when such
Grants are approved.
Each Nonqualified Stock Option will generally be exercisable
during the ten year period immediately following the date that the
Nonqualified Stock Option became vested so long as the holder of the option
remains a member of the Board of Directors of High Point or NBSC. However, a
participant (or the participant's estate) will be permitted to exercise
vested Nonqualified Stock Options within one year of the date on which he or
she ceased to be a member of the Board of Directors of High Point or NBSC if
he or she ceased to be such a member as a result of resignation after
attaining the age of at least 70, disability (as determined under Section 22
of the Code), or death.
To exercise a Nonqualified Stock Option, the participant shall
give written notice to High Point specifying the number of shares of Common
Stock to be purchased, accompanied by full payment for the shares so
purchased. The 1996 Director Plan permits payment to be made (i) in cash,
(ii) at the Director Plan Committee's discretion, in shares of Common Stock
owned by the participant, or (iii) at the Director Plan Committee's
discretion, in a combination of cash and Common Stock. The notice must also
be accompanied by required withholding taxes, as determined by High Point.
NON-TRANSFERABILITY
- -------------------
No Nonqualified Stock Option will be assignable or
transferable by the recipient other than by will or the laws of descent and
distribution. During a recipient's lifetime, all rights under Nonqualified
Stock Options may be exercised only by the recipient or his or her guardian
or legal representative.
ADJUSTMENTS OF AWARDS
- ---------------------
In the event of a recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation, rights
offering, reorganization or liquidation, or any other change in the corporate
structure or shares of High Point, the Director Plan Committee shall make
such equitable adjustments, as it may deem appropriate, designed to protect
against dilution or enlargement of rights of participants in the 1996
Director Plan, including the adjustment of the aggregate number and kind of
shares of stock or other property (including cash) which may be awarded or
optioned under the 1996 Director Plan, the number and kind of shares or other
property subject to outstanding Nonqualified Stock Options, and the exercise
prices for outstanding Nonqualified Stock Options.
AMENDMENT OR TERMINATION
- ------------------------
The Board of Directors of High Point may at any time and from
time to time terminate, modify or amend the Plan in any respect, except that
(a) no such termination, amendment or modification will be effected without
shareholder approval or ratification if such approval or ratification is
required to facilitate certain exemptions under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended ("Rule 16b-3"), and (b) no such
termination, modification or amendment shall be made which would otherwise
cause the 1996 Director Plan to fail to satisfy any other conditions that it
must satisfy in order to qualify for an exemption under Rule 16b-3. No
termination, modification or amendment shall affect the rights of any
recipient under an outstanding Nonqualified Stock Option without the consent
of such recipient. The Plan may not be amended more than once every six
months unless necessary to comport with changes in the Code.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
- ---------------------------------------
The following summary generally describes the principal
federal (and not state and local) income tax consequences of options granted
under the 1996 Director Plan. It is general in nature and is not intended to
cover all tax consequences that may apply to a particular participant in the
1996 Director Plan or to High Point. The provisions of the Code and the
regulations thereunder relating to these matters are complicated and their
impact in any one case may depend upon the particular circumstances. This
discussion is based on the Code as currently in effect.
If a Grant is awarded to a participant in accordance with the
terms of the 1996 Director Plan, no income will be recognized by such
participant at the time the Grant is awarded.
Generally, on exercise of a Nonqualified Stock Option, the
amount by which the Fair Market Value of the Common Stock on the date of
exercise exceeds the purchase price of such shares will be taxable to the
participant as ordinary income, and will be deductible for tax purposes by
High Point in the year in which the participant recognizes the ordinary
income. The disposition of shares acquired upon exercise of a Nonqualified
Stock Option ordinarily will result in long-term or short-term capital gain
or loss (depending on the applicable holding period) in an amount equal to
the difference between (i) the amount realized on such disposition and (ii)
the sum of (x) the purchase price and (y) the amount of ordinary income
recognized in connection with the exercise of the Nonqualified Stock Option.
Section 16(b) of the Securities Exchange Act of 1934, as
amended ("Section 16(b)"), generally requires officers, directors and ten
percent shareholders of High Point to disgorge profits from buying and
selling the Common Stock within a six month period. Generally, unless the
participants in the 1996 Director Plan elect otherwise, the relevant date for
measuring the amount of ordinary income to be recognized upon the exercise of
a Nonqualified Stock Option will be the later of (x) the date the six month
period following the date of the Grant lapses and (y) the date of exercise of
the Nonqualified Stock Option.
If a Nonqualified Stock Option is exercised through the use of
Common Stock previously owned by the participant, such exercise generally
will not be considered a taxable disposition of the previously owned shares
and, thus, no gain or loss will be recognized with respect to the shares used
to exercise the option.
High Point may be required to withhold tax on the amount of
income recognized by an optionee upon exercise of a Nonqualified Stock
Option.
SHAREHOLDER APPROVAL REQUIRED
- -----------------------------
Approval of the 1996 Director Plan by the shareholders is
required in order for Grants to persons potentially liable under Section
16(b) to be exempt from such liability under Rule 16b-3.
NEW PLAN BENEFITS TABLE
- -----------------------
High Point has not included a benefits table because each non-
employee director holds an Initial Option equivalent to the Initial Option
held by each other non-employee director, and as of March 13, 1996 the Initial
Options have exercise prices in excess of the Fair Market Value of the Common
Stock. Thus, the Initial Options have no value at the present time. High
Point does not anticipate making any additional Grants in the foreseeable
future.
The Board of Directors believes the adoption of the 1996
Director Plan is in the best interests of the shareholders. Among other
things, the 1996 Director Plan will tend to encourage the retention of equity
ownership in High Point by outside directors, which will tend to align the
interests of such directors with the interests of shareholders. THE BOARD OF
DIRECTORS THEREFORE RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL OF THE
1996 DIRECTOR PLAN.
PROPOSAL TO APPROVE THE 1996 INCENTIVE PLAN
The 1996 Incentive Plan was adopted, subject to shareholder
approval, by the Board of Directors on March 19, 1996. The purpose of the
1996 Incentive Plan is to attract and retain highly qualified officers and
employees for High Point and NBSC by providing those officers and key
employees with opportunities to receive equity in High Point. The 1996
Incentive Plan provides, in general, for grants of options ("Incentive Stock
Options") to key employees. The 1996 Incentive Plan is intended to replace
the 1987 Incentive Stock Option Plan and the 1990 Employee Stock Option
Incentive Plan because the number of shares available under those plans to
support option awards is almost depleted.
The following is a summary of the proposed features of the
1996 Incentive Plan, which is qualified in its entirety by reference to the
1996 Incentive Plan, a copy of which is annexed hereto as Exhibit B. As
indicated in the text of the 1996 Incentive Plan, any provision of the 1996
Incentive Plan that is determined to be inconsistent with applicable laws and
regulations will be deemed void.
ADMINISTRATION
- --------------
The 1996 Incentive Plan will be administered by a committee
appointed by the Board of Directors of High Point (the "Incentive Plan
Committee"), none of the members of which shall be eligible to receive a
grant of an Incentive Stock Option and none of whom shall have been eligible,
during the one year period prior to appointment or election to the Incentive
Plan Committee, for selection, through the exercise of discretion, as a
person to whom stock, stock options or stock appreciation rights of High
Point may be allocated or granted pursuant to any plan of High Point or any
of its affiliates entitling the participants therein to acquire stock, stock
options or stock appreciation rights of High Point or any of its affiliates.
Under the terms of the 1996 Incentive Plan, the Incentive Plan Committee has
authority to determine (i) the officers and key employees who shall receive a
grant of an Incentive Stock Option, (ii) the number of shares of Common Stock
subject to a grant of an Incentive Stock Option, and (iii) the applicable
terms and conditions of grants of Incentive Stock Options. The Incentive
Plan Committee also will have the power and authority to interpret the 1996
Incentive Plan, to prescribe, amend and rescind rules and regulations
relating to the 1996 Incentive Plan, and to make all other determinations
deemed necessary or advisable in administering the 1996 Incentive Plan.
SHARES RESERVED
- ---------------
Subject to adjustments for certain changes in the number of
issued shares of Common Stock, a total of 135,000 shares of Common Stock
shall be available for issuance under the 1996 Incentive Plan, which may be
shares of authorized but unissued Common Stock or treasury shares. Incentive
Stock Options may be granted to eligible persons in such number and at such
times during the duration of the Plan as the Incentive Plan Committee may
determine. However, no participant may hold Incentive Stock Options and
options under any other plan of High Point that (i) are exercisable for the
first time by the participant during any particular calendar year, and (ii)
that have an aggregate Fair Market Value (determined as of the date of the
grant) in excess of $100,000.
ELIGIBILITY
- -----------
Options under the 1996 Incentive Plan may be granted only to
key employees of High Point and NBSC, including officers (but excluding
members of the respective Boards of Directors who are not salaried
employees). The key employees who shall be entitled to receive grants of
Incentive Stock Options under the Plan shall be determined from time to time
by the Incentive Plan Committee.
TERMS OF OPTIONS
- ----------------
The exercise price of Incentive Stock Options will be no less
than the Fair Market Value (as defined in the 1996 Incentive Plan) of a share
of Common Stock on the date of the grant.
Each Incentive Stock Option will generally be exercisable
during the ten year period (or such shorter time as the Incentive Plan
Committee may determine) immediately following the date that the Incentive
Stock Option was granted. Generally, a participant may only exercise his or
her options while he or she remains an employee of High Point or NBSC or for
three months after termination of employment. However, a participant (or the
participant's estate) will be permitted to exercise Incentive Stock Options
that were immediately exercisable at the termination of such participant's
employment within one year of such termination date if the participant ceased
to be an employee as a result of disability (as determined under Section 22
of the Code), or death. A participant whose employment is terminated for
cause will immediately lose all rights in connection with Incentive Stock
Options.
To exercise an Incentive Stock Option, the participant shall
give written notice to High Point specifying the number of shares of Common
Stock to be purchased, accompanied by full payment for the shares so
purchased. The 1996 Incentive Plan permits payment to be made (i) in cash,
(ii) at the Incentive Plan Committee's discretion, in shares of Common Stock
owned by the participant, or (iii) at the Incentive Plan Committee's
discretion, in a combination of cash and Common Stock.
NON-TRANSFERABILITY
- -------------------
No Incentive Stock Option will be assignable or transferable
by the recipient other than by will or the laws of descent and distribution.
During a recipient's lifetime, all rights under Incentive Stock Options may
be exercised only by the recipient or his or her guardian or legal
representative.
ADJUSTMENTS OF AWARDS
- ---------------------
In the event of a recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation, rights
offering, reorganization or liquidation, or any other change in the corporate
structure or shares of High Point, the Incentive Plan Committee shall make
such equitable adjustments, as it may deem appropriate, designed to protect
against dilution or enlargement of rights of participants in the 1996
Incentive Plan, including the adjustment of the aggregate number and kind of
shares of stock or other property (including cash) which may be awarded or
optioned under the 1996 Incentive Plan, the number and kind of shares or
other property subject to outstanding Incentive Stock Options, and the
exercise prices for outstanding Incentive Stock Options. However, no such
adjustments shall be made which would cause any Incentive Stock Option
outstanding at the time of such event to fail to qualify as an "incentive
stock option" under Section 422 of the Code.
AMENDMENT OR TERMINATION
- ------------------------
The Board of Directors of High Point may at any time and from
time to time terminate, modify or amend the Plan in any respect, except that
(a) no such termination, amendment or modification will be effected without
shareholder approval or ratification if such approval or ratification is
required to facilitate certain exemptions under Rule 16b-3 and or to ensure
that Incentive Stock Options will qualify as "incentive stock options" under
Section 422 of the Code, and (b) no such termination, modification or
amendment shall be made which would otherwise cause the 1996 Incentive Plan
to fail to satisfy any other conditions that it must satisfy in order to
qualify for an exemption under Rule 16b-3 or in order for Incentive Stock
Options to qualify as "incentive stock options" under Section 422 of the
Code. No termination, modification or amendment shall affect the rights of
any recipient under an outstanding Incentive Stock Option without the consent
of such recipient.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
- ---------------------------------------
The following summary generally describes the principal
federal (and not state and local) income tax consequences of options granted
under the 1996 Incentive Plan. It is general in nature and is not intended
to cover all tax consequences that may apply to a particular participant in
the 1996 Incentive Plan or to High Point. The provisions of the Code and the
regulations thereunder relating to these matters are complicated and their
impact in any one case may depend upon the particular circumstances. This
discussion is based on the Code as currently in effect.
If an Incentive Stock Option is awarded to a participant in
accordance with the terms of the 1996 Incentive Plan, no income will be
recognized by such participant at the time of the grant.
Generally, on exercise of an Incentive Stock Option, the
participant will not recognize any income and neither High Point nor NBSC
will be entitled to a deduction for tax purposes. However, the difference
between the purchase price and the Fair Market Value of the shares of Common
Stock received on the date of exercise will be treated as a positive
adjustment in determining alternative minimum taxable income, which may
subject the participant to the alternative minimum tax. Upon the disposition
of shares acquired upon exercise of an Incentive Stock Option under the 1996
Incentive Plan, the participant will ordinarily recognize long-term or short-
term capital gain or loss (depending on the applicable holding period).
Generally, however, if the participant disposes of shares of Common Stock
acquired upon exercise of an Incentive Stock Option within two years after
the date of grant or within one year after the date of exercise (a
"disqualifying disposition"), the optionee will recognize ordinary income,
and High Point (or NBSC) will be entitled to a deduction for tax purposes, in
the amount of the excess of the Fair Market Value of the shares on the date
of exercise over the purchase price (or the gain on sale, if less). Any
excess of the amount realized by the optionee on the disqualifying
disposition over the Fair Market Value of the shares on the date of exercise
of the Incentive Stock Option will ordinarily constitute capital gain. In
the case of an optionee subject to the restrictions of Section 16(b), the
relevant date in measuring the optionee's ordinary income and High Point's
tax deduction in connection with any such disqualifying disposition will
normally be the later of (i) the date the six-month period after the date of
grant lapses and (ii) the date of exercise of the Incentive Stock Option.
If an Incentive Stock Option is exercised through the use of
Common Stock previously owned by the participant, such exercise generally
will not be considered a taxable disposition of the previously owned shares
and, thus, no gain or loss will be recognized with respect to the shares used
to exercise the option.
SHAREHOLDER APPROVAL REQUIRED
- -----------------------------
Approval of the 1996 Incentive Plan by the shareholders is
required in order for Incentive Stock Options to qualify as "performance-
based" compensation under Section 162(m) of the Code, for Incentive Stock
Options to meet the requirements of Section 422 of the Code, and for grants
of Incentive Stock Options to persons potentially liable under Section 16(b)
to be exempt from such liability under Rule 16b-3.
NEW PLAN BENEFITS TABLE
- -----------------------
High Point has not included a benefits table because the
number of Incentive Stock Options that will be awarded to key employees in
the future pursuant to the 1996 Incentive Plan cannot be determined at this
time. In addition, because no Incentive Stock Option will have an exercise
price of less than the Fair Market Value of the Common Stock at the date of
the grant, it is not possible to determine the value of any particular
Incentive Stock Option until that option is exercised.
The Board of Directors believes that the adoption of the 1996
Incentive Plan is in the best interests of the shareholders. Among other
things, the 1996 Incentive Plan will tend to encourage the retention of
equity ownership in High Point by key employees, which will tend to align the
interest of such employees with the interests of shareholders. THE BOARD OF
DIRECTORS THEREFORE RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL OF THE
1996 INCENTIVE PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
For the year ended December 31, 1995, High Point engaged
Arthur Andersen LLP, independent certified public accountants, to examine its
consolidated financial statements. Representatives of Arthur Andersen LLP
are expected to be present at the Annual Meeting with an opportunity to
comment on their examination and to respond to appropriate questions from
shareholders.
PROPOSALS BY SECURITY HOLDERS
Proposals by security holders intended to be presented at the
1997 Annual Meeting of Shareholders must be received by the Secretary of High
Point by December 1, 1996 for inclusion in High Point's Proxy Statement and
form of Proxy relating to that meeting. All such proposals should be
directed to the attention of the Secretary, High Point Financial Corp., P.O.
Box 460, Branchville, New Jersey 07826.
OTHER BUSINESS
Management knows of no other business that is intended to be
brought before the meeting by or on behalf of High Point or its management.
If, however, any other business is properly brought before the meeting, the
accompanying proxies will be voted in accordance with the recommendation of
management.
By Order to the Board of
Directors,
Gregory W. A. Meehan
Vice President & Treasurer
March 29, 1996
<PAGE>
EXHIBIT A
HIGH POINT FINANCIAL CORP.
1996 Non-Employee Director Stock Option Plan
1. Purpose
The purpose of this 1996 Non-Employee Director Stock Option
Plan is to attract and retain highly qualified non-employee directors for
High Point Financial Corp. and The National Bank of Sussex County by
providing those non-employee directors with opportunities to receive equity
in High Point Financial Corp.
2. Definitions
As used in this Plan
2.1 "High Point" means High Point Financial Corp., a New
Jersey corporation.
2.2 "Board" means the Board of Directors of High Point.
2.3 "Change in Control" means the first to occur of any of
the following events:
(a) Any person or entity or group of affiliated persons or
entities (other than High Point) becomes a beneficial owner, directly or
indirectly, of 25% or more of High Point's voting securities or all or
substantially all of the assets of High Point.
(b) High Point enters into a definitive agreement which
contemplates the merger, consolidation or combination of High Point with an
unaffiliated entity in which either or both of the following is to occur: (i)
the directors of High Point immediately prior to such merger, consolidation
or combination will constitute less than a majority of the board of directors
of the surviving, new or combined entity; or (ii) less than 51% of the
outstanding voting securities of the surviving, new or combined entity will
be beneficially owned by the stockholders of High Point immediately prior to
such merger, consolidation or combination; provided, however, that if any
definitive agreement to merge, consolidate or combine is terminated without
consummation of the transaction, then no Change in Control shall be deemed to
have occurred pursuant to this paragraph (b).
(c) High Point enters into a definitive agreement which
contemplates the transfer of all or substantially all of High Point's assets,
other than to a wholly-owned subsidiary of High Point; provided, however,
that if any definitive agreement to transfer assets is terminated without
consummation of the transfer, then no Change in Control shall be deemed to
have occurred pursuant to this paragraph (c).
(d) A majority of the members of the Board shall be persons
who: (i) were not members of such Board on the date this Plan is approved by
the stockholders of High Point ("current members"); and (ii) were not
nominated by a vote of such Board which included the affirmative vote of a
majority of the current members on such Board at the time of their nomination
("future designees") and (iii) were not nominated by a vote of such Board
which included the affirmative vote of a majority of the current members and
future designees, taken as a group, on such Board at the time of their
nomination.
2.4 "Code" means the Internal Revenue Code of 1986, as
amended, and the Treasury regulations adopted thereunder.
2.5 "Committee" means the Committee appointed by the Board
to administer the Plan, as provided in Section 3.
2.6 "Common Stock" means the Common Stock of High Point, no
par value.
2.7 "Corporation" means High Point and its subsidiaries,
considered as a whole.
2.8 "Fair Market Value," when used with reference to a share
of Common Stock, means (i) the mean between the high and low sales prices of
the Common Stock as reported on the National Market of the National
Association of Securities Dealers, Inc., Automated Quotation System, or any
similar system of automated dissemination of quotations of securities prices
then in common use, if so quoted, or (ii) if not quoted as described in
clause (i), the mean between the high bid and low asked quotations for the
Common Stock as reported by the National Quotation Bureau Incorporated or
such other source as the Committee shall determine, or (iii) if the Common
Stock is listed or admitted for trading on any national securities exchange,
the mean between the high and low sales price, or the closing bid price if no
sale occurred, of the Common Stock on the principal securities exchange on
which the Common Stock is listed. In the event that the method for
determining the Fair Market Value of a share of Common Stock provided for
above shall not be practical in the opinion of the Committee, then such Fair
Market Value shall be determined by such other reasonable method as the
Committee shall, in its discretion, select and apply.
2.9 "Grant" means a grant of a Nonqualified Stock Option.
2.10 "NBSC Board" means the Board of Directors of The
National Bank of Sussex County.
2.11 "Nonqualified Stock Option" means an option to
purchase Common Stock not intended to qualify as an "incentive stock option"
(within the meaning of Section 422 of the Code).
2.12 "Participant" has the meaning set forth in Section 6 of
this Plan.
2.13 "Plan" means this 1996 Non-Employee Director Stock
Option Plan, as it may be amended from time to time.
3. Administration of the Plan
3.1 The Plan shall be administered by those individuals
who are appointed by the Board, which individuals shall not be Participants
in the Plan (the "Committee"). The Committee shall have the power to
determine the applicable terms and conditions of Grants. The Committee shall
also have the power and authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan and to make all other
determinations deemed necessary or advisable in administering the Plan. The
determination of the Committee concerning any matter arising under or with
respect to the Plan or Grants shall be final, binding and conclusive on all
interested persons.
3.2 The Committee shall also have such other powers and
authority as are otherwise granted to it under the Plan.
3.3 The Committee may consult with counsel, who may be
counsel to the Corporation, and shall not incur any liability for any action
taken in good faith in reliance upon the advise of counsel.
3.4 The Committee initially shall be comprised of the
President, the Treasurer and the Secretary of High Point.
4. Effective Date Of The Plan
The effective date of the plan is January 1, 1996.
5. Plan Limitations: Stock Subject To The Plan
5.1 The aggregate number of shares of Common Stock for
which Nonqualified Stock Options may be granted under the Plan is 105,000,
which may be shares of authorized but unissued Common Stock or reacquired
shares of Common Stock, as such number may be adjusted in the manner
described in Section 9.
5.2 Any shares for which Stock Options are granted that
are not purchased due to termination or expiration of a Nonqualified Stock
Option may again be subject to a Grant under the Plan.
6. Eligibility
Non-employee directors of High Point and The National Bank
of Sussex County determined as of February 26, 1996, all of whom are listed
on Exhibit A hereto, are the "Participants" in the Plan.
7. Terms and Conditions Relating to Stock Options
7.1 Each Participant is hereby provided with a Grant of
Nonqualified Stock Options to purchase up to 7,500 shares of Common Stock, as
of February 20, 1996. The exercise price per share of Common Stock with
respect to each Nonqualified Stock Option shall be the Fair Market Value of
the Common Stock on the date of Grant.
7.2 All Grants shall be made without payment by the
recipient to the Corporation (subject to Sections 7.3 and 13) and shall be
evidenced by a written agreement executed by High Point and the recipient
which shall include the following and such other terms and conditions not
inconsistent with the Plan as the Committee shall determine:
(a) Each Participant's right to purchase Common Stock pursuant
to the Nonqualified Stock Options will vest according to the following
schedule:
February 20, 1996 1,500 Shares of Common Stock
February 20, 1997 1,500 Shares of Common Stock
February 20, 1998 1,500 Shares of Common Stock
February 20, 1999 1,500 Shares of Common Stock
February 20, 2000 1,500 Shares of Common Stock
Upon the occurrence of a Change in Control, all unvested Nonqualified Stock
Options will immediately become fully vested. Notwithstanding anything else
herein to the contrary, a Participant will forfeit nonvested Nonqualified
Stock Options when he or she ceases to be a member of the Board or a member
of the Board of Directors of The National Bank of Sussex County. Subject to
the other rules set forth in this Plan, a Participant (or, if deceased, his
or her executor) will be permitted to exercise vested Nonqualified Stock
Options within one year of the date on which he or she ceases to be a member
of the Board or of the Board of Directors of The National Bank of Sussex
County, but only if he or she ceased to be such a member as a result of
resignation after attaining the age of at least 70, disability (as determined
under Section 22 of the Code) or death; otherwise, Nonqualified Stock
Options must be exercised while the Participant is a member of the Board or a
member of the NBSC Board.
(b) The expiration date of each Nonqualified Stock Option, which
shall be ten years from the date on which each such Nonqualified Stock Option
becomes vested.
(c) Any restrictions on the exercise of Nonqualified Stock
Options.
(d) An agreement that no Nonqualified Stock Option shall be
transferable by the Participant other than by will or the laws of descent and
distribution, and that each Nonqualified Stock Option shall be exercisable,
during the lifetime of a Participant, only by the Participant or his or her
guardian or legal representative.
(e) Such restrictions on the resale or other disposition of
Common Stock received upon exercise of Nonqualified Stock Options as the
Committee shall determine is necessary to cause the Plan to satisfy any
conditions that it must satisfy in order for transactions in the Nonqualified
Stock Options and the underlying Common Stock to qualify for an exemption
under Rule 16b-3 under the Securities Exchange Act of 1934, as amended ("Rule
16b-3").
(f) An agreement that all terms and conditions of the Plan
applicable to the Nonqualified Stock Options as granted are incorporated by
reference.
7.3 To exercise a Nonqualified Stock Option, the
Participant shall give written notice to High Point specifying the number of
shares of Common Stock to be purchased, accompanied by full payment for the
shares so purchased in cash or, at the Committee's discretion, either by the
transfer and delivery to High Point of shares of Common Stock, valued at
their Fair Market Value as of the date of such payment, or through a
contribution of cash and shares of Common Stock as so valued. The notice
must also be accompanied by required withholding taxes, as determined by High
Point.
7.4 A Participant shall have no rights as a shareholder
with respect to any shares subject to a Nonqualified Stock Option (including
without limitation the right to vote or to receive dividends and other
distributions) until such shares shall have been paid for in full and
certificates representing such shares have been issued.
8. Employment Rights
Nothing in the Plan shall in any way confer on any person
any right to continue in the service of the Corporation in any form.
9. Adjustment in the Event of Changes in Capitalization
In the event of a recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation, rights
offering, reorganization or liquidation, or any other change in the corporate
structure or shares of High Point, the Committee shall make such equitable
adjustments, as it may deem appropriate, designed to protect against dilution
or enlargement of rights, including the adjustment of the aggregate number
and kind of shares of stock or other property (including cash) which may be
awarded or optioned under the Plan, the number and kind of shares or other
property subject to outstanding Nonqualified Stock Options, and the exercise
prices for outstanding Nonqualified Stock Options.
10. Duration of the Plan
No Grants shall be made after ten years after the effective
date of the Plan, but Nonqualified Stock Options theretofore granted may
extend beyond such date and the terms and conditions of the Plan shall
continue to apply to such options.
11. Termination and Amendment of the Plan
The Board may at any time and from time to time terminate,
modify or amend the Plan in any respect; provided that (a) no such
termination, amendment or modification which would cause the Plan to fail to
satisfy conditions that it must satisfy in order for transactions in the
Nonqualified Stock Options and the underlying Common Stock qualify for an
exemption under Rule 16b-3, if any, because any requisite shareholder
approval had not been obtained, shall be made unless also duly approved or
ratified by the shareholders of High Point, as required under Rule 16b-3 or
the Code, as the case may be, and (b) no such termination, modification or
amendment shall be made which would otherwise cause the Plan to fail to
satisfy any other conditions that it must satisfy in order for transactions
in the Nonqualified Stock Options and the underlying Common Stock to qualify
for an exemption under Rule 16b-3. No termination, modification or amendment
shall affect the rights of any recipient under an outstanding Stock Option
without the consent of such recipient. Notwithstanding anything else herein
to the contrary, the Plan may not be amended more than once every six months,
unless necessary to comport with changes in the Code.
12. Notices
All notices, requests and other documents to be given
hereunder by any party hereto shall be in writing and shall be either
delivered personally or mailed by first-class registered mail or certified
mail, return receipt requested, to the appropriate party.
13. Withholding of Taxes
The Corporation may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding of any taxes
which the Corporation is required to withhold by law or regulation of any
governmental authority.
14. Application of Funds
The proceeds received by High Point from the sales of Common
Stock pursuant to the Nonqualified Stock Options will be used for general
corporate purposes.
15. Other Compensation Plans
The adoption of the Plan shall not affect any other stock
option or incentive or other compensation plans in effect for the
Corporation, nor shall the Plan preclude the Corporation from establishing
any other forms of incentive or other compensation for employees or directors
of the Corporation.
16. Compliance with Laws
Any and all provisions contained herein shall be consistent
and comply with applicable laws and regulations enacted or promulgated both
before and after the adoption of the Plan. To the extent that any such
provision in the Plan is inconsistent, or not in compliance, with applicable
laws and regulations, that part which is inconsistent or not in compliance
shall be deemed void, but the balance of the Plan shall remain in full force
and effect.
17. Miscellaneous
Notwithstanding anything herein to the contrary, no shares
of Common Stock or certificates therefor shall be delivered until the
requirements of all laws and regulations as may be applicable thereto are
satisfied. The Committee may in its discretion require any recipient of a
Grant to represent to High Point in writing, prior to any delivery of shares
or certificates therefor, that the shares are so acquired for investment and
not with a view to, or for sale in connection with, the distribution of all
or any part hereof. The certificates for shares of Common Stock may include
any legend which the Committee, upon the advice of counsel, deems appropriate
to reflect any required or appropriate restrictions on transfer or other
disposition of such shares.
EXHIBIT A
to
High Point Financial Corp.
1996 Non-Employee Director Stock Option Plan
Participants as of February 20, 1996
Daniel J. Campbell
Larry R. Condit
William A. Dolan, II
Rhea C. Fountain, III
George H. Guptill, Jr.
Ronald C. Howell
Stanley A. Koza
Charles L. Lain
C. Edward McCracken
Steven W. Okeson
Harold E. Pellow
Richard M. Roy
Charles L. Tice
<PAGE>
EXHIBIT B
HIGH POINT FINANCIAL CORP.
1996 Employee Incentive Stock Option Plan
1. Purpose
The purpose of this 1996 Employee Incentive Stock Option
Plan is to attract and retain highly qualified officers and employees for
High Point Financial Corp. and its subsidiaries by providing officers and key
employees with opportunities to receive equity in High Point Financial Corp.
2. Definitions
As used in this Plan:
2.1 "High Point" means High Point Financial Corp., a New
Jersey corporation.
2.2 "Board" means the Board of Directors of High Point.
2.3 "Code" means the Internal Revenue Code of 1986, as
amended, and the Treasury regulations adopted thereunder.
2.4 "Committee" means the Committee appointed by the Board
to administer the Plan, as provided in Section 3.
2.5 "Common Stock" means the Common Stock of High Point, no
par value.
2.6 "Corporation" means High Point and its subsidiaries,
considered as a whole.
2.7 "Disposition" means a sale, assignment, transfer,
pledge, hypothecation or other disposition.
2.8 "Fair Market Value," when used with reference to a share
of Common Stock, means (i) the mean between the high and low sales prices of
the Common Stock as reported on the National Market of the National
Association of Securities Dealers, Inc., Automated Quotation System, or any
similar system of automated dissemination of quotations of securities prices
then in common use, if so quoted, or (ii) if not quoted as described in
clause (i), the mean between the high bid and low asked quotations for the
Common Stock as reported by the National Quotation Bureau Incorporated or
such other source as the Committee shall determine, or (iii) if the Common
Stock is listed or admitted for trading on any national securities exchange,
the mean between the high and low sales price, or the closing bid price if no
sale occurred, of the Common Stock on the principal securities exchange on
which the Common Stock is listed. In the event that the method for
determining the Fair Market Value of a share of Common Stock provided for
above shall not be practical in the opinion of the Committee, then such Fair
Market Value shall be determined by such other reasonable method as the
Committee shall, in its discretion, select and apply.
2.9 "Grant" means a grant of an Incentive Stock Option.
2.10 "Incentive Stock Option" means an option to purchase
Common Stock intended to qualify as an "incentive stock option" within the
meaning of Section 422 of the Code.
2.11 "Plan" means this 1996 Employee Incentive Stock Option
Plan, as it may be amended from time to time.
3. Administration of the Plan
3.1 The Plan shall be administered by the Committee which
shall consist of not less than three members of the Board, none of whom shall
be eligible to receive a Grant and none of whom shall have been eligible,
during the one year period prior to appointment or election to the Committee,
for selection, through the exercise of discretion, as a person to whom stock,
stock options or stock appreciation rights of High Point may be allocated or
granted pursuant to the Plan or any other plan of High Point or any of its
affiliates entitling the participants therein to acquire stock, stock options
or stock appreciation rights of High Point or any of its affiliates, PROVIDED
that participation in the High Point Financial Corp. 1996 Non-Employee
Director Stock Option Plan shall not cause a member of the Board to be
ineligible to serve as a member of the Committee. For the purposes of this
Section 3.1, the terms "stock," "plan" and "affiliates" shall have the
meanings given to them by Rule 16b-3 of the Securities and Exchange
Commission, under the Securities Exchange Act of 1934, as amended, as such
rule may from time to time be amended ("Rule 16b-3").
3.2 The Committee shall have full power and authority,
subject to the provisions of the Plan, to determine:
(a) The officers and key employees of the Corporation who shall
receive a Grant.
(b) The number of shares subject to a Grant.
(c) The applicable terms and conditions of Grants.
The Committee shall also have the power and authority to interpret the Plan,
to prescribe, amend and rescind rules and regulations relating to the Plan
and to make all other determinations deemed necessary or advisable in
administering the Plan. The determination of the Committee concerning any
matter arising under or with respect to the Plan or Grants shall be final,
binding and conclusive on all interested persons.
3.3 The Committee shall also have such other powers and
authority as are otherwise granted to it under the Plan.
3.4 The Committee may consult with counsel, who may be
counsel to the Corporation, and shall not incur any liability for any action
taken in good faith in reliance upon the advise of counsel.
4. Effective Date Of The Plan
The effective date of the plan is January 1, 1996.
5. Plan Limitations: Stock Subject To The Plan
5.1 The aggregate number of shares of Common Stock for
which Incentive Stock Options may be granted under the Plan is 135,000, which
may be shares of authorized but unissued Common Stock or reacquired shares of
Common Stock, as such number may be adjusted in the manner described in
Section 9.
5.2 Any shares for which Incentive Stock Options are
granted that are not purchased due to termination or expiration of the option
may again be subject to a Grant under the Plan.
6. Eligibility
Subject to Section 7.1, key employees of the Corporation,
including officers (but excluding members of the Board who are not salaried
employees of the Corporation), shall be eligible to receive Grants under the
Plan. The key employees who shall be entitled to receive Grants under the
Plan shall be determined from time to time by the Committee. More than one
Incentive Stock Option may be granted or made to the same employee.
7. Terms and Conditions Relating to Incentive Stock Options
7.1 Incentive Stock Options may be granted to eligible
persons in such number and at such times during the duration of the Plan as
the Committee may determine; PROVIDED that the aggregate Fair Market Value of
all shares of Common Stock (determined as of the date of the Grant) with
respect to which Incentive Stock Options granted under this Plan, together
with incentive stock options granted after December 31, 1986 under any other
plan of the Corporation, which are exercisable for the first time by the
recipient during any calendar year, may not exceed $100,000. Subject to
Section 7.2, the Committee shall also determine the exercise price per share
of Common Stock with respect to each Incentive Stock Option.
7.2 All grants shall be made without payment by the
recipient to the Corporation (subject to Sections 7.3 and 13) and shall be
evidenced by a written agreement executed by High Point and the recipient
which shall include the following and such other terms and conditions not
inconsistent with the Plan as the Committee shall determine:
(a) The expiration date of each Incentive Stock Option, which
shall be ten years from the date of Grant or such shorter
term as may be provided in the written agreement; PROVIDED
that (i) in the case of an Incentive Stock Option granted to
a recipient who, at the time of the Grant, owns stock
possessing more than 10% of the total combined voting power
of all classes of stock of High Point, or any parent or
subsidiary thereof, the expiration date of the Incentive
Stock Option shall be five years from the date of Grant or
such shorter time as may be provided in the written option
agreement.
(b) The exercise price per share for the shares of Common Stock
to be issued pursuant to exercise of an Incentive Stock
Option; PROVIDED that (i) in the case of an Incentive Stock
Option granted to a recipient who, at the time of the Grant,
owns stock possessing more than 10% of the total combined
voting power of all classes of stock of High Point or any
parent or subsidiary thereof, the exercise price per share
of Common Stock shall be no less than 110% of the Fair
Market Value of a share of the Common Stock on the date of
the Grant, and (ii) in the case of an Incentive Stock Option
granted to any other recipient, the exercise price per share
of Common Stock shall be no less than 100% of the Fair
Market Value of a share of Common Stock on the date of
Grant.
(c) Any restrictions on the exercise of Incentive Stock Options.
(d) An agreement that no Incentive Stock Option shall be
transferable by the recipient other than by will or the laws
of descent and distribution and that each Incentive Stock
Option shall be exercisable, during the lifetime of a
recipient, only by the recipient or his or her guardian or
legal representative.
(e) Such other additional terms as the Committee may in its
discretion deem necessary or desirable for an Incentive
Stock Option to qualify as an "incentive stock option" as
defined in Section 422 of the Code.
(f) Such restriction on the resale or other disposition of
Common Stock received upon exercise of Incentive Stock
Options as the Committee shall determine is necessary to
cause the Plan to satisfy any conditions that it must
satisfy in order for transactions in the Incentive Stock
Options and the underlying Common Stock to qualify for an
exemption under Rule 16b-3.
(g) An agreement that all terms and conditions of the Plan
applicable to the Incentive Stock Options as granted are
incorporated by reference.
For purposes of this Section 7.2, the terms "parent" and "subsidiary" shall
have the meanings given to them by Sections 424(e) and 424(f) of the Code,
respectively.
7.3 To exercise an Incentive Stock Option, the optionee
shall give written notice to High Point specifying the number of shares of
Common Stock to be purchased, accompanied by full payment for the shares so
purchased in cash or, at the Committee's discretion, either by the transfer
and delivery to High Point of shares of Common Stock, valued at their Fair
Market Value as of the date of such payment, or through a contribution of
cash and shares of Common Stock as so valued.
7.4 In connection with restrictions on exercise of an
Incentive Stock Option in the Plan or in the Grant, the following provisions
shall apply:
(a) Upon termination of a recipients's employment for any
reason other than death, disability or termination for cause
(such as termination by reason of retirement) Incentive
Stock Options of such employee may be exercised to the
extent that they were immediately exercisable at the date of
such termination and then only for a period of three months
after the date of such termination. Incentive Stock Option
privileges shall expire at the end of such three month
period.
(b) If a recipient's employment is terminated for cause, all
rights under such recipient's Incentive Stock Options shall
expire immediately upon such termination.
(c) The Committee shall determine when a termination (which
may include a leave of absence) exists and the reason for
termination of the recipient's employment and the
Committee's determination shall be binding and conclusive.
(d) In the event of termination of employment due to
disability (within the meaning of Section 22(e)(3) of the
Code), a recipient may, within twelve months after the date
of such termination, exercise those Incentive Stock Options
immediately exercisable at date of termination. Incentive
Stock Option privileges shall expire at the end of such
twelve month period.
(e) Upon the death of a recipient, whether during his
employment or during the three-month period referred to in
paragraph (a) of this Section 7.4, Incentive Stock Options
of such recipient may be exercised by his or her legal
representatives or beneficiaries only to the extent
exercisable at the time of his or her death and only for a
period of twelve months after the date of death. Incentive
Stock Option privileges shall expire at the end of such
twelve month period.
No Incentive Stock Option shall be exercisable after its expiration date.
7.5 A recipient shall have no rights as a shareholder with
respect to any shares subject to an Incentive Stock Option (including without
limitation the right to vote or to receive dividends and other distributions)
until such shares shall have been paid for in full and certificates
representing such shares have been issued.
8. Employment Rights
Nothing in the Plan shall (a) confer on any person any right
to continue in the employ of the Corporation or to continue to perform
services for the Corporation, or (b) interfere in any way with the right of
the Corporation to terminate at any time such person as an officer or
employee or to change such person's responsibilities.
9. Adjustment in the Event of Changes in Capitalization
In the event of a recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation, rights
offering, reorganization or liquidation, or any other change in the corporate
structure or shares of High Point, the Committee shall make such equitable
adjustments, as it may deem appropriate, designed to protect against dilution
or enlargement of rights, including the adjustment of the aggregate number
and kind of shares of stock or other property (including cash) which may be
awarded or optioned under the Plan, the number and kind of shares or other
property subject to outstanding Incentive Stock Options and the exercise
prices for outstanding Incentive Stock Options; PROVIDED that no such
adjustments shall be made which would cause any Incentive Stock Option
outstanding at the time of such event to fail to qualify as an "incentive
stock option" under Section 422 of the Code.
10. Duration of the Plan
No Grants shall be made after ten years after the effective
date of the Plan, but Incentive Stock Options theretofore granted may extend
beyond such date and the terms and conditions of the Plan shall continue to
apply to such Incentive Stock Options.
11. Termination and Amendment of the Plan
The Board may at any time and from time to time terminate,
modify or amend the Plan in any respect; provided that (a) no such
termination, amendment or modification (i) which would cause the Plan to fail
to satisfy conditions that it must satisfy in order for transactions in the
Incentive Stock Options and the underlying Common Stock to qualify for an
exemption under Rule 16b-3, if any, or (ii) which would cause any Incentive
Stock Option outstanding at the time of such termination, modification or
amendment to fail to qualify as an "incentive stock option" under Section 422
of the Code, in either case because any requisite shareholder approval had
not been obtained, shall be made unless also duly approved or ratified by the
shareholders of High Point, as required under Rule 16b-3 or the Code, as the
case may be, and (b) no such termination, modification or amendment shall be
made (i) which would otherwise cause the Plan to fail to satisfy any other
conditions that it must satisfy in order for transactions in the Incentive
Stock Options and the underlying Common Stock to qualify for an exemption
under Rule 16b-3 or (ii) which would cause any Incentive Stock Option
outstanding at the time of such termination, modification or amendment to
fail to qualify as an "incentive stock option" under Section 422 of the Code.
No termination, modification or amendment shall affect the rights of any
recipient under an outstanding Incentive Stock Option without the consent of
such recipient.
12. Notices
All notices, requests and other documents to be given
hereunder by any party hereto shall be in writing and shall be either
delivered personally or mailed by first-class registered mail or certified
mail, return receipt requested, to the appropriate party.
13. Withholding of Taxes
The Corporation may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding of any taxes
which the Corporation is required to withhold by law or regulation of any
governmental authority.
14. Application of Funds
The proceeds received by High Point from the sales of Common
Stock pursuant to the Incentive Stock Options will be used for general
corporate purposes.
15. Other Compensation Plans
The adoption of the Plan shall not affect any other stock
option or incentive or other compensation plans in effect for the Corporation
nor shall the Plan preclude the Corporation from establishing any other forms
of incentive or other compensation for employees of the Corporation.
16. Compliance with Laws
Any and all provisions contained herein shall be consistent
and comply with applicable laws and regulations enacted or promulgated both
before and after the adoption of the Plan. To the extent that any such
provision in the Plan is inconsistent, or not in compliance, with applicable
laws and regulations, that part which is inconsistent or not in compliance
shall be deemed void, but the balance of the Plan shall remain in full force
and effect.
17. Miscellaneous
Notwithstanding anything herein to the contrary, no shares
of Common Stock or certificates therefor shall be delivered until the
requirements of all laws and regulations as may be applicable thereto are
satisfied. The Committee may in its discretion require any recipient of a
Grant to represent to High Point in writing, prior to any delivery of shares
or certificates therefor, that the shares are so acquired for investment and
not with a view to, or for sale in connection with, the distribution of all
or any part hereof. The certificates for shares of Common Stock may include
any legend which the Committee, upon the advice of counsel, deems appropriate
to reflect any required or appropriate restrictions on transfer or other
disposition of such shares.
<PAGE>
HIGH POINT FINANCIAL CORP.
Proxy Solicited on Behalf of the Board of Directors
for Annual Meeting April 30, 1996
The undersigned hereby constitutes and appoints Robert E. Derse and J. Martin
Couse, and each of them, his true and lawful agents and proxies with full power
of substitution in each, to represent the undersigned at the Annual Meeting of
Stockholders of High Point Financial Corp. to be held at Perona Farms, Route
517, Andover, New Jersey on Tuesday, April 30, 1996 at 4:00 p.m., and at any
adjournments thereof, on all matters coming before said meeting, including the
election of any person to the directorship for which a nominee named on the
reverse side is unable to serve.
(change of address)
------------------------------------------
------------------------------------------
------------------------------------------
(If you have written in the above space,
please mark the address change box on the
reverse side of this card)
SEE REVERSE SIDE
This proxy when properly executed will be voted (1) FOR the election of the
nominees of the Board of Directors; (2) FOR the proposal to approve the 1996
Non-Employee Director Stock Option Plan; and (3) FOR the proposal to approve
the 1996 Employee Incentive Stock Option Plan, if no instructions to the
contrary are indicated in items (1), (2) and (3).
FOR WITHHELD ABSTAIN
1. Election of Directors. / / / /
Nominees for Term Expiring in 1999;
William A. Dolan, II, Charles L. Tice
For, except vote withheld from the following nominee(s):
--------------------------------------------------------
2. Proposal to approve the 1996 Non-Employee / / / / / /
Director Stock Option Plan.
3. Proposal to approve / / / / / /
the 1996 Employee
Incentive Stock Option Plan.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope. Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
------------------------------------------------------------
------------------------------------------------------, 1996
SIGNATURE(S) DATE
Will Attend Address
Annual Meeting Change
/ / / /
