March 28, 1997
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 Thursday, April 24, 1997 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, shareholders are being asked to vote for the election
of three directors.
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
<PAGE>
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<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held April 24, 1997
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 Thursday, April 24, 1997 at 4:00 p.m. local time
for the following purposes:
1. To elect three directors;
2. 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 14, 1997
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 28, 1997
A proxy statement and proxy are enclosed herewith. Whether or not 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.
<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 at Perona
Farms, 350 Andover-Sparta Road (Route 517), Andover, New Jersey on Thursday,
April 24, 1997 at 4:00 p.m. 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 Branchville
Square, Branchville, New Jersey 07826. This Proxy Statement and the accompanying
form of proxy are first being sent to shareholders on or about March 28, 1997.
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 14, 1997
are entitled to receive notice of and to vote at the Annual Meeting. As of March
14, 1997 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. 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 14, 1997, the High Point Financial Corp. and Affiliated
Subsidiaries Employee Stock Ownership Plan (the "ESOP") held 194,172 shares of
Common Stock, 185,758 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 14, 1997, there were
8,414 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 credited shares.
ELECTION OF DIRECTORS
The Board of Directors has established the number of directors at
seven, 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, three directors are to be
elected to the class whose term will expire in 2000. All 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 14, 1997, 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, except
that Harold E. Pellow, who was a director on March 14, 1997, has since resigned
because of business commitments and is no longer a director of High Point or
NBSC. All of High Point's directors, other than Mr. Dolan and Mr. Guptill, are
also directors of NBSC. Although there is a signature block for Mr. Pellow on
the Annual Report on Form 10-K, he resigned before the Form 10-K was executed by
the directors.
<TABLE>
<CAPTION>
Nominees for Election as Principal Occupation During the Last Five
Directors for Terms Expiring years and Other Directorships High Point Director
in 2000 Since Age
<S> <C> <C> <C>
Michael A. Dickerson President and Chief Executive Officer, 1988 60
High Point (since 1988); Vice Chairman
(from 1991 to 1996) and Chief Executive
Officer (since November 25, 1991), NBSC;
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.
Larry R. Condit President, Condit Ford, Inc.; 1986 47
President, Condit Auto Lease Corp.
Richard M. Roy Vice Chairman of the Board of Directors 1982 64
of High Point (since May 1996);
Treasurer, The Roy Company, Inc. (farm
equipment sales).
Directors Continuing in Office
with Terms Expiring in 1999
William A. Dolan, II Attorney, Kelly, Gaus and Holub (since 1982 65
January 1, 1994); Attorney, Dolan and
Dolan, P.A. (prior to 1994); Director,
Selective Insurance Group, Inc.
Charles L. Tice Chairman of the Board of Directors, 1995 63
High Point (since May 1996); Retired
since 1993, previously Senior Vice
President of Selective Insurance Group,
Inc.
Directors Continuing in Office
with Terms Expiring in 1998
George G. Guptill, Jr. President (since 1990) and Director, 1988 57
and Executive Vice President (prior to
1990), Franklin Mutual Insurance Co.
Charles L. Lain Chairman of NBSC (since May, 1996); 1986 66
President, Pine Island Turf Nursery,
Inc.
</TABLE>
<PAGE>
Security Ownership of Certain Beneficial Owners, Directors and Management
The following table sets forth, as of March 14, 1997, the number and
percentage of shares of Common Stock held by each person who is known by High
Point to be 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 executive officers and directors as a group.
<TABLE>
<CAPTION>
Name of Beneficial Owner Number of Shares
and Address of Beneficial Owner of Common Stock Percent
of 5% or More Beneficially Owned (a) of Class
<S> <C> <C>
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
High Point Financial Corp and 194,172 5.1%
affiliated Subsidiaries
Employee Stock Ownership Plan
P.O. Box 460
Branchville, NJ 07826
Larry R. Condit 35,781(c) 1.0%
Michael A. Dickerson 57,339(d) 1.5%
William A. Dolan, II 29,230(e) *
George H. Guptill, Jr. 282,674(b)(f) 7.5%
P.O. Box 400
Branchville, NJ 07826
Charles L. Lain 29,361(g) *
Harold E. Pellow 28,184(h) *
Richard M. Roy 86,333(i) 2.3%
Charles L. Tice 17,167(b)(j) *
Gregory W.A. Meehan 75,584(b)(k) 2.0%
All executive officers and directors 627,825(l)(m) 16.3%
as a group (11 persons)
- --------------------
*Indicates less than 1%.
</TABLE>
<PAGE>
(a) Unless otherwise indicated, each person effectively exercises sole
voting and dispositive power as to the shares reported.
(b) Includes 8,414 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.
(c) 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. Also includes 3,000 shares issuable pursuant to stock
options presently exercisable by Mr. Condit.
(d) Includes 10,308 shares of common stock in Mr. Dickerson's account in
the ESOP as of December 31, 1996, under which Mr. Dickerson has voting
power, but not investment power. Includes 2,000 shares held by trusts
of which Mr. Dickerson is a trustee. Also includes 25,000 shares
issuable pursuant to stock options presently exercisable by Mr.
Dickerson.
(e) 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. Also includes 3,000 shares
issuable pursuant to stock options presently exercisable by Mr. Dolan.
(f) 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. Also includes 3,000 shares
issuable pursuant to stock options presently exercisable by Mr.
Guptill.
(g) Includes 3,000 shares issuable pursuant to stock options presently
exercisable by Mr. Lain.
(h) Includes 830 shares held by Mr. Pellow's wife as to which Mr. Pellow
disclaims beneficial ownership. Also includes 3,000 shares issuable
pursuant to stock options presently exercisable by Mr. Pellow.
(i) Includes 330 shares held by Mr. Roy's wife as to which Mr. Roy
disclaims beneficial ownership. Also includes 3,000 shares issuable
pursuant to stock options presently exercisable by Mr. Roy.
(j) Includes 1,158 shares held in a trust of which Mr. Tice is a trustee.
Also includes 3,000 shares issuable pursuant to stock options presently
exercisable by Mr. Tice.
(k) Includes 1,323 shares held by Mr. Meehan's wife as to which Mr. Meehan
disclaims beneficial ownership. Also includes 11,334 shares of common
stock in Mr. Meehan's account in the ESOP as of December 31, 1996,
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.
(l) See all footnotes above.
(m) Each of Messrs. Guptill, Meehan and Tice is a beneficial owner of 8,414
shares in the ESOP. See note (b) above. This total only counts such
shares once.
<PAGE>
Committees And Meetings
High Point has an Audit Committee consisting of three members: Messrs.
Guptill, Dolan and Roy. The Audit Committee met five times in 1996. High Point
has no Nominating Committee. High Point and NBSC have a joint Human Resources
Committee, whose members during 1996 were Messrs. Lain, Pellow, Roy and Tice.
The Human Resources Committee met once in 1996. The primary function of the
Human Resource Committee is to administer the High Point Stock Option Plans (See
"Executive Compensation and Other Information") and review compensation for
senior management of NBSC, which includes executive management of High Point.
During the year ended December 31, 1996, 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 1996.
<PAGE>
Executive Compensation and Other Information
Summary of cash and certain other compensation
The following table shows for the years ending December 31, 1996, 1995
and 1994 the aggregate cash compensation paid by High Point and NBSC, 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 $100,000. High Point does not have employment agreements with any of
its officers.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-term
Compensation
Annual Compensation Awards All Other Compensation*
- --------------------------- ----------- ---------------- ------------- -------------------- ---------------- --------------- -------
Name and Principal Other Annual
Position Year Salary ($) Bonus ($) Compensation($) Options Cash Stock
- --------------------------- ----------- ---------------- ------------- -------------------- ---------------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael A. Dickerson, 1996 $161,892 -- -- -- $26,532 1,275
President and Chief
Executive Officer
1995 $155,204 -- -- 25,000 $27,297 1,574
1994 $151,859 -- -- -- $27,440 1,334
Gregory W.A. Meehan, 1996 $112,222 -- -- -- $17,778 992
Vice President and
Treasurer
1995 $107,452 -- -- 25,000 $18,476 1,169
1994 $104,359 -- -- -- $12,064 968
</TABLE>
* "All other compensation" includes the following: (i) director fees paid
by NBSC: for Mr. Dickerson, $8,750, $8,250 and $8,750 for 1996, 1995 and 1994,
respectively; for Mr. Meehan, $8,500, $8,000 and $4,875 for 1996, 1995 and 1994,
respectively; (ii) contributions to the Company's 401(k) Plan to match elective
deferral contributions (included under salary): for Mr. Dickerson, $4,050 for
each of the years 1996, 1995 and 1994; for Mr. Meehan, $3,089, $2,380 and $2,314
for 1996, 1995 and 1994, respectively; (iii) a company paid group term insurance
that does not have to be weighted based on age: for Mr. Dickerson, $5,616,
$3,600 and $4,219 for 1996, 1995 and 1994, respectively; for Mr. Meehan, $985,
$940 and $1,142 for 1996, 1995 and 1994, 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,
$8,116, $11,397 and $10,421 for 1996, 1995 and 1994, respectively; for Mr.
Meehan, $5,654, $7,156 and $3,733 for 1996, 1995 and 1994, respectively; (v)
Common Stock allocated under the ESOP: for Mr. Dickerson 1,275 shares, 1,574
shares and 1,334 shares for 1996, 1995 and 1994, respectively; for Mr. Meehan
992 shares, 1,169 shares and 968 shares for 1996, 1995 and 1994, respectively.
<PAGE>
Retirement Plan
Effective December 31, 1993, High Point's Board of Directors froze its
defined benefit pension plan, the High Point Financial Corporation & Affiliated
Subsidiaries Retirement Income Plan (the "Retirement Plan"). Years of service
and compensation earned after December 31, 1993 were not taken into account in
calculating a participant's accrued benefit. Employees hired after that date did
not become eligible to participate in the Retirement Plan. Effective May 31,
1995, High Point's Board of Directors terminated the Retirement Plan. All
accrued benefits were distributed to participants as either deferred annuities
or immediate lump sum distributions in 1996.
The amounts payable under the Retirement Plan for Mr. Dickerson and Mr.
Meehan were $78,532.16 and $48,440.34, respectively, all of which was paid to
them in 1996.
Stock Option Plans
Employee Stock Option Plans
High Point maintains stock option and incentive plans pursuant to which
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, the 1990 Employee Stock Option Incentive Plan and the 1996
Employee Incentive Stock Option Plan authorize High Point to grant options to
purchase an aggregate of 50,054, 50,000 and 135,000 shares of Common Stock,
respectively.
In November 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. No options were granted to employees under the above mentioned
three plans in 1996. No options were exercised in 1996.
Director Stock Option Plan
High Point maintains a director stock option plan pursuant to which
High Point is authorized to grant non-employee directors of High Point and NBSC
options to purchase common stock. The purpose of the 1996 non-employee director
stock option plan is to attract and retain highly qualified non-employee
directors of High Point and NBSC by providing those directors with an
opportunity to receive equity in High Point.
On February 20, 1996, 13 non-employee directors of High Point and NBSC were each
granted options to purchase 7,500 shares of stock at an exercise price of $6.75
per share, the market value of High Point stock at the date of the grant. These
options will vest at a rate of 20% a year for 5 years; the first two 20%
vestings were on February 20, 1996 and 1997, respectively. The options have an
expiration date of ten years from the date of vesting.
Change of Control Agreements
On October 1, 1996, High Point entered into Change of Control
Agreements ("Control Agreements") with Mr. Dickerson, Mr. Meehan and one other
officer of High Point.
The Control Agreements define a "change of control" as (a) a
reorganization, merger, consolidation, sale of all or substantially all of the
assets of High Point or NBSC, or a similar transaction in which NBSC or High
Point is not the resulting entity; (b) individuals who constitute the incumbent
board (as defined) of the Bank or High Point cease for any reason to constitute
a majority thereof; (c) a person other than High Point is or becomes a
"beneficial owner" directly or indirectly of securities of High Point (excluding
ownership of benefit plans established by NBSC or High Point); (d) a proxy
statement soliciting proxies from stockholders of High Point is distributed by
someone other than the current management of High Point, seeking stockholder
approval of a plan of reorganization, merger or consolidation of High Point or
similar transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the plan or
transaction are exchanged or converted into cash or property or securities not
issued by the Company; or (e) a tender offer is made for 25% or more of the
voting securities of High Point and the shareholders owning beneficially or of
record 25% or more of the outstanding securities of High Point have tendered or
offered to sell their shares pursuant to such tender offer and such tendered
shares have been accepted by the tender offeror.
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 upon a change of control. The Control
Agreements provide that the Executive's employment is deemed to be terminated
upon a change of control if (a) the Executive's employment is terminated without
cause within the six month period prior to, or at any time within the term of
the change of control agreement subsequent to, a change of control; or (b) the
Executive resigns within six months following a change of control after (i) the
Executive is reassigned to a position of lesser rank or status than that held
prior to the Change in Control, (ii) a reduction in his base salary or if there
is a material reduction in his total benefits from what they were before the
change in control, or (iii) the Executive's principal place of employment is
relocated by more than thirty miles from its location prior to the Change in
Control.
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, or in the case of his subsequent death to his beneficiary or
his estate, a sum equal to 2.99 times the Executive's preceding year's annual
salary including bonuses and any other cash compensation paid or accrued by the
Executive during such year and the amount of any benefits received pursuant to
any employee benefit plans on behalf of the Executive maintained by High Point
and NBSC. The Control Agreements provide for payment by High Point of certain
job placement agency fees for an eighteen month period following the termination
date. 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 for personal use of the Executive's
High Point automobile for a one year period after his termination date. The
agreements provide that the amounts payable upon a change of control will be
reduced if they would otherwise be excess parachute payments under the Internal
Revenue Code.
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 shall provide the executive with
coverage under a standard directors' and officers' liability insurance policy at
its expense, or in lieu thereof, shall indemnify the Executive to the fullest
extent permitted by law and, as provided in High Point's Certificate of
Incorporation and Bylaws, against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been an officer
or director of High Point and/or NBSC (whether or not he continues to be a
director or officer at the time of incurring such expenses or liabilities), such
expenses and liabilities to include, but not be limited to, judgments, court
costs, attorney's fees and the cost of reasonable settlements.
The Control Agreement will not apply if the Executive is terminated for
cause (as defined). The term of the Control Agreement shall continue until five
years from the date of commencement. The term shall be automatically extended
for one additional year on each anniversary date of the commencement date of the
Control Agreement, unless 60 days prior to the anniversary date, the Boards of
Directors of High Point and NBSC pass a resolution clearly stating their
intention not to extend the term of the Control Agreement.
Salary Continuation Agreement
During 1996, NBSC entered into a Salary Continuation Agreement with Mr.
Dickerson, Mr. Meehan, and one other executive. The purpose of the Salary
Continuation Agreement is to encourage continued employment of NBSC's executive
management by providng retirement benefits to the Executive after retirement or
other termination of employment and by providing death benefits to his
beneficiary after death.
Each of the Salary Continuation Agreements provides that if the
Executive terminates his employment on or after his normal retirement date
(defined as age 65 and the completion of 12 years of service), NBSC shall pay to
the Executive a monthly benefit consisting of 72% of one twelfth of the
Executive's final pay reduced by: a) one half of the monthly unreduced primary
retirement benefit under the United States Social Security Act that the
Executive would be eligible for if an application for such benefits were made as
of the Executive's 65th birthday; b) the monthly straight life annuity benefit
the Executive would be entitled to receive under High Point's qualified ESOP
determined by the number of shares due to the Executive multiplied by the
average market bid price of the shares during the last ten trading days prior to
the Executive's termination of employment assuming a life expectancy based on
the Executive's then current age using the chart published in the US Treasury
Regulations and assuming an interest rate of 7.0%; and c) the monthly straight
life annuity benefit the Executive would be entitled to receive under High
Point's qualified 401(k) entitlement accumulated as of the Executive's
termination of employment relating to the matching funds only and assuming a
life expectancy based on the Executive's then current age using the chart
published in the US Treasury Regulations. Commencing on the first anniversary of
the first benefit payment and continuing on each subsequent anniversary, the
benefit shall be increased by the percentage increase in the Consumer Price
Index for the calendar year ending immediately prior to said anniversary date
for the same period with a minimum annual increase of 3% and a maximum annual
increase of 5%. NBSC shall make these monthly payments to the Executive on the
first day of the month following the Executive's termination of employment
continuing until the later of the Executive's death or the date on which NBSC
has made 179 additional monthly payments as provided in the agreement.
If the Executive terminates employment after the early retirement date
(defined in the Salary Continuation Agreement as age 62 and the completion of 12
years of service) but before the normal retirement date, or if the Executive
terminates employment for disability prior to the normal retirement date, the
benefit payable is the benefit calculated as if the date of the Executive's
retirement date were the Executive's normal retirement date multiplied by a
fraction, the numerator of which is the Executive's actual years of service and
the denominator is the Executive's years of service determined as if the
Executive had continued to the normal retirement date. NBSC shall make these
monthly payments to the Executive on the first day of the month following the
Executive's termination of employment continuing until the later of the
Executive's death or the date on which NBSC has made 179 additional monthly
payments as provided in the agreement.
If the Executive is in the active service of NBSC, and terminates
employment, voluntarily or involuntarily, other than on account of death,
disability or retirement within the six month period immediately preceding a
change of control or at any time after a change of control NBSC shall pay to the
Executive a benefit calculated as if the date of the Executive's termination
date were the Executive's normal retirement date multiplied by a fraction, the
numerator of which is the Executive's actual years of service and the
denominator is the Executive's years of service determined as if the Executive
had continued to the normal retirement date. A change of control and termination
pursuant to change of control are further defined in the section "Change of
Control Agreements" on page 6 of this Proxy Statement. NBSC shall make these
monthly payments to the Executive on the first day of the month following the
Executive's termination of employment continuing until the later of the
Executive's death or the date on which NBSC has made 179 additional monthly
payments as provided in the agreement.
If the Executive terminates employment before his Early Retirement Date
for reasons other than death, disability or change of control, NBSC shall pay
the benefits as if the date of the Executive's termination date were the
Executive's normal retirement date multiplied by a fraction, the numerator of
which is the Executive's actual years of service and the denominator is the
Executive's years of service determined as if the Executive had continued to the
normal retirement date. These payments shall commence the month after the
Executive attains age 65 and shall continue until 179 additional monthly
payments have been made. If the Executive terminates employment before his early
Retirement Date for reasons other than disability or Change of Control and dies
prior to attaining age 65, NBSC shall pay the benefit to the Executive's named
beneficiary commencing with the month after the Executive's death and continuing
until 179 additional monthly payments have been made.
If the Executive dies while in the active service of NBSC, NBSC shall
pay to the Executive's beneficiary or beneficiaries, or his estate, as the case
may be, the benefit that would have been paid to the Executive calculated as if
the Executive's death were the normal retirement date. NBSC shall pay the
benefit to the Beneficiary on the first day of each month commencing with the
month following the Executive's death and continuing until NBSC has made 179
additional monthly payments. Benefit payments shall be increased in the same
manner as Normal Retirement Benefits would be increased.
NBSC will not pay any benefits under the Salary Continuation Agreement
if NBSC terminates the Executive's employment "for Cause" as defined in the
Salary Continuation agreement. No benefits are payable if the Executive commits
suicide within two years of this agreement.
Assuming current salary levels, anticipated social security benefits
and the current value of their respective 401(k) and ESOP assets, were Mr.
Dickerson and Mr. Meehan to terminate their employment prior to their early
retirement date, their annual levels of benefits would be $72,265 and $20,950,
respectively. Should they work until their normal retirement, their annual
benefits payable to them would be determined by the formula described above.
Compensation of Directors
Directors of High Point and NBSC each receive a single annual fee of
$5,500. They also receive fees paid per meeting. The Chairman of the Board of
High Point receives an additional $3,000. 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 together with interest 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, one such report covering
transactions by Gregory Meehan was not filed in the month when the transactions
occurred. When this oversight was discovered the appropriate report was 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.
Mr. Guptill is President and a Director of FMI, Inc., a wholly owned
subsidiary of Franklin Mutual Insurance Co. (the owner of approximately 6.6% of
High Point's outstanding Common Stock). NBSC leases certain properties from FMI,
Inc. for branch offices and during 1996 paid $31,000 per month in rent. NBSC
anticipates making similar rent payments in 1997.
During 1996, NBSC purchased two 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.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
For the year ended December 31, 1996, High Point engaged Arthur
Andersen LLP, independent certified public accountants, to examine its
consolidated financial statements. It is anticipated that Arthur Andersen LLP
will be engaged to perform similar services in 1997. 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 1998
Annual Meeting of Shareholders must be received by the Secretary of High Point
by November 28, 1997 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 of the Board of Directors,
Gregory W. A. Meehan
Vice President & Treasurer
March 28, 1997
<PAGE>
HIGH POINT FINANCIAL CORP.
Proxy Solicited on Behalf of the Board of Directors
for Annual Meeting April 24,1997
P The undersigned hereby constitutes and appoints Bruce L. Earlin and
J. Martin Couse, and each of them, his true and lawful agents and
R proxies with full power of substitution in each, to represent the
undersigned at the Annual Meeting of Stockholders of High Point
O Financial Corp. to be held at Perona Farms, Route 517, Andover, New
Jersey on Thursday, April 24,1997 at 4:00 p.m., and at any
X adjournments thereof, on all matters coming before said meeting,
including the election of any person to the directorship for which a
Y 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)
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SEE REVERSE
SIDE
------------
<PAGE>
This proxy when properly executed will be voted FOR the election of the nominees
of the Board of Directors:
Election of FOR WITHHELD
Directors, _____ _____
Nominees for
Term Expiring _____ _____
in 2000:
Michael A. Dickerson, Larry R. Condit, Richard M. Roy
For, except vote withheld from the following nominee(s):
-----------------------------------
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.
---------------------------------------------
1997
Signature(s) Date
Will Attend Address
Annual Meeting Change
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