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Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ X ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
================================================================================
HIGH POINT FINANCIAL CORP.
(Name of Registrant as Specified in its Charter
and
Name of Person Filing Proxy Statement)
================================================================================
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction
applies:
______________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
______________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________
5) Total fee paid:
______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing with 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.
Amount Previously Paid: _____________________________________
Form, Schedule or Registration Statement No.: _________________
Filing Party: ________________________________________________
Date Filed: __________________________________________________
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<PAGE>
April 9, 1998
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, May 12, 1998 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 four directors.
In addition to electing directors, shareholders are being asked to
consider the following proposals:
(i) to amend the Restated Certificate of Incorporation to increase
the number of authorized shares of common stock, no par value,
from 5 million shares to 10 million shares;
(ii) to amend the Restated Certificate of Incorporation to
eliminate a provision that limits the presence on the Board of
Directors of ex-officers of High Point Financial Corp. or any
subsidiary under certain circumstances, by deleting Subsection
(ii) from Article SIXTH, Paragraph B.
Full descriptions of these proposals are set forth in the accompanying
Proxy Statement. The Board of Directors believes that the two proposals will
serve the best interests of High Point and its shareholders and unanimously
recommends that you vote FOR the proposals.
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 May 12, 1998
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, May 12, 1998 at 4:00 p.m. local time for
the following purposes:
1. To elect four directors;
2. To approve the amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of
Common Stock from 5 million shares to 10 million shares.
3. To approve the amendment of the Restated Certificate of
Incorporation to eliminate a provision that limits the presence on
the Board of Directors of ex-officers of High Point Financial Corp.
or any subsidiary under certain circumstances, by deleting
subsection (ii) from Article SIXTH, Paragraph B.
Only shareholders of record at the close of business on March 16, 1998
are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
Gregory W.A. Meehan
Vice President and Treasurer
Branchville, New Jersey
April 9, 1998
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>
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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 at Perona
Farms, 350 Andover-Sparta Road (Route 517), Andover, New Jersey on Tuesday, May
12, 1998 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 April 9, 1998.
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, The National Bank of
Sussex County ("NBSC"). 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 Annual 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 16, 1998
are entitled to receive notice of and to vote at the Annual Meeting. As of March
16, 1998 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 Annual 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 Annual Meeting and
even though such shares may be considered as shares entitled to vote.
As of March 16, 1998, the High Point Financial Corp. and Affiliated
Subsidiaries Employee Stock Ownership Plan (the "ESOP") held 205,612 shares of
Common Stock, 201,288 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 16, 1998, there were
4,324 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 direct the vote for their credited shares.
ELECTION OF DIRECTORS
The Board of Directors has established the number of directors at nine,
approximately one-third of whom, under High Point's Restated Certificate of
Incorporation, are to be elected each year. At the Annual Meeting, one director
is to be elected whose term will expire in 1999 and three directors are to be
elected to the class whose term will expire in 2001. Following last year's
annual meeting, the Board of Directors increased the number of directors from
seven to nine (three in each class). The Board of Directors subsequently elected
Rhea C. Fountain, III and Stanley A. Koza to fill the vacancies created by the
increase in the number of directors. The other directors were elected by the
Board of Directors in 1995. 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 16, 1998, 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 NBSC, 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.
<TABLE>
<CAPTION>
High Point
Principal Occupation During the Last Five years and Other Directorships Director Since Age
- ------------------------------------------------------------------------- -------------- ---
Nominee for Election as Director for Term Expiring in 1999
- -----------------------------------------------------------
<S> <C> <C> <C>
Rhea C. Fountain, III President, van den Heuvel and Fountain 1997 56
Insurance Agency
</TABLE>
<TABLE>
<CAPTION>
Nominees for Election as Directors for Terms Expiring in 2001
- -------------------------------------------------------------
<S> <C> <C> <C>
George H. Guptill, Jr. President (since 1990) and Director, and 1988 58
Executive Vice President (prior to 1990),
Franklin Mutual Insurance Co.
Stanley A. Koza Vice President of Finance, Newton 1997 59
Memorial Hospital
Charles L. Lain Chairman of NBSC (since May, 1996); 1986 67
President, Pine Island Turf Nursery, Inc.
</TABLE>
<TABLE>
<CAPTION>
Directors Continuing in Office with Terms Expiring in 2000
- ----------------------------------------------------------
<S> <C> <C> <C>
Michael A. Dickerson President and Chief Executive Officer, 1988 61
High Point (since 1988); Vice Chairman
(from 1991 to 1996) and Chief Executive
Officer (since November 25, 1991), NBSC.
Larry R. Condit President, Condit Ford, Inc.; President, 1986 48
Condit Auto Lease Corp.
Richard M. Roy Vice Chairman of the Board of Directors 1982 65
of High Point (since May 1996);
Treasurer, The Roy Company, Inc. (farm
equipment sales).
</TABLE>
<TABLE>
<CAPTION>
Directors Continuing in Office with Terms Expiring in 1999
- ----------------------------------------------------------
<S> <C> <C> <C>
William A. Dolan, II Attorney, Kelly, Gaus and Holub (since 1982 66
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, High
Point (since May 1996); Retired since 1995 64
1993, previously Senior Vice President of
Selective Insurance Group, Inc.
</TABLE>
It is intended that the ballots solicited by the Board Of Directors
will be voted for the elections of the four nominees named (unless the
shareholder otherwise directs).
<PAGE>
Security Ownership of Certain Beneficial Owners, Directors and Management
- -------------------------------------------------------------------------
The following table sets forth, as of March 16, 1998, 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, by each Named
executive officer (as listed in the Summary Compensation Table), 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 of Common Stock Percent of
Owner of 5% or More Beneficially Owned (a) 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 Affiliated Subsidiaries 205,612 5.4%
Employee Stock Ownership Plan
P.O. Box 460
Branchville, NJ 07826
Larry R. Condit 40,281(c) 1.1%
Michael A. Dickerson 51,169(d) 1.3%
William A. Dolan, II 30,973(e) *
Rhea C. Fountain, III 28,938(f) *
George H. Guptill, Jr. 280,084(b)(g) 7.4%
P.O. Box 400
Branchville, NJ 07826
Stanley A. Koza 27,500(h) *
Charles L. Lain 30,861(i) *
Richard M. Roy 77,224(j) 2.0%
Charles L. Tice 13,877(b)(k) *
Gregory W. A. Meehan 67,714(b)(l) 1.8%
Robert A. Vandenbergh 32,767(m) *
All executive officers and directors 685,950(n)(o) 17.6%
As a group (12 persons)
</TABLE>
*Indicates less than 1%
<PAGE>
(a) Unless otherwise indicated, each person effectively exercises sole
voting and dispositive power as to the shares reported.
(b) Includes 4,324 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 4,500 shares issuable pursuant
to stock options presently exercisable by Mr. Condit.
(d) Includes 11,889 shares of common stock in Mr. Dickerson's account
in the ESOP as of December 31, 1997, 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.
(e) Includes 7,270 shares held by Mr. Dolan's wife as to which Mr.
Dolan disclaims beneficial ownership. Also includes 601 shares held
by a trust of which Mr. Dolan is a trustee. Also includes 4,500
shares issuable pursuant to stock options presently exercisable by
Mr. Dolan.
(f) Includes 4,500 shares issuable pursuant to stock options presently
exercisable by Mr. Fountain. Also includes 10,000 shares held by
van den Heuvel & Fountain, Inc. Employee Profit Sharing Plan over
which Mr. Fountain has sole voting and investment power.
(g) 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 4,500
shares issuable pursuant to stock options presently exercisable by
Mr. Guptill.
(h) Includes 4,500 shares issuable pursuant to stock options presently
exercisable by Mr. Koza.
(i) Includes 4,500 shares issuable pursuant to stock options presently
exercisable by Mr. Lain.
(j) Includes 330 shares held by Mr. Roy's wife as to which Mr. Roy
disclaims beneficial ownership. Also includes 4,500 shares issuable
pursuant to stock options presently exercisable by Mr. Roy.
(k) Includes 1,458 shares held in a trust of which Mr. Tice is a
trustee. Also includes 4,500 shares issuable pursuant to stock
options presently exercisable by Mr. Tice.
(l) Includes 1,323 shares held by Mr. Meehan's wife as to which Mr.
Meehan disclaims beneficial ownership. Also includes 12,444 shares
in Mr. Meehan's account in the ESOP as of December 31, 1997, 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.
(m) Includes 4,946 shares of common stock in Mr. Vandenbergh's account
in the ESOP as of December 31, 1997, under which Mr. Vandenbergh
has voting power, but not investment power. Also includes 25,000
shares issuable pursuant to stock options presently exercisable by
Mr. Vandenbergh.
(n) See all footnotes above.
(o) Each of Messrs. Guptill, Meehan and Tice is a beneficial owner of
4,324 shares in the ESOP. See note (b) above. This calculation 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 1997. High Point
does not have a Nominating Committee. High Point and NBSC have a joint Human
Resources Committee, whose members during 1997 were Messrs. Lain, Roy and Tice.
The Human Resources Committee met once in 1997. The primary function of the
Human Resources 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, 1997, 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 1997.
Executive Compensation and Other Information
- --------------------------------------------
Summary of cash and certain other compensation
The following table shows for the years ending December 31, 1997, 1996
and 1995 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, to its Vice President and Treasurer and
to its Vice President and Secretary (the "Named Executive Officers"). No other
executive officer of High Point earned aggregate cash compensation in excess of
$100,000. High Point does not have employment agreements with any of its
officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-term
Compensation
Awards All Other Compensation*
Annual Compensation ------------- -----------------------
-------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Other Annual
Name and Principal Position Year Salary($) Bonus($) Compensation($) Options Cash Stock
- --------------------------- ---- --------- -------- --------------- ------- --------- -----
Michael A. Dickerson, 1997 $169,678 -- -- -- $16,661 1,161
President, Chief Executive 1996 $161,892 -- -- -- $26,532 1,649
Officer 1995 $155,204 -- -- 25,000 $27,297 1,703
Gregory W. A. Meehan, Vice 1997 $117,809 -- -- -- $15,485 1,051
President, Treasurer 1996 $112,222 -- -- -- $17,778 1,282
1995 $107,452 -- -- 25,000 $18,476 1,265
Robert A. Vandenbergh, 1997 $108,458 -- -- -- $11,834 894
Vice President, Secretary 1996 $98,609 -- -- -- $11,838 1,158
1995 $94,355 -- -- 25,000 $11,089 1,142
</TABLE>
* "All other compensation" includes the following: (i) director fees paid by
NBSC: for Mr. Dickerson, $8,250, $8,750 and $8,250 for 1997, 1996 and 1995,
respectively; for Mr. Meehan, $8,250, $8,500 and $8,000 for 1997, 1996 and 1995,
respectively; for Mr. Vandenbergh, $8,250, $8,500 and $8,000 for 1997, 1996 and
1995, respectively; (ii) contributions to the NBSC 401(k) Plan to match elective
deferral contributions (included under salary): for Mr. Dickerson, $2,050,
$4,050 and $4,050 for 1997, 1996 and 1995, respectively; for Mr. Meehan, $3,129,
$3,089 and $2,380 for 1997, 1996 and 1995, respectively; for Mr. Vandenbergh,
$3,428, $2,843 and $2,618 for 1997, 1996 and 1995, respectively; (iii) a company
paid group term insurance that does not have to be weighted based on age: for
Mr. Dickerson, $905, $5,616 and $3,600 for 1997, 1996 and 1995, respectively;
for Mr. Meehan, $252, $985 and $940 for 1997, 1996 and 1995, respectively; for
Mr. Vandenbergh, $156, $495 and $471 for 1997, 1996 and 1995, 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, $5,456, $8,116 and $11,397 for 1997, 1996 and 1995, respectively; for
Mr. Meehan, $3,854, $5,654 and $7,156 for 1997, 1996 and 1995, respectively; (v)
Common Stock allocated under the ESOP: for Mr. Dickerson 1,151 shares, 1,649
shares and 1,703 shares for 1997, 1996 and 1995, respectively; for Mr. Meehan
891 shares, 1,282 shares and 1,265 shares for 1997, 1996 and 1995, respectively;
for Mr. Vandenbergh, 834 shares, 1,158 shares and 1,142 shares for 1997, 1996
and 1995, respectively; (vi) Common Stock issued to all employees based upon
objective criteria; for each of Messrs. Dickerson, Meehan and Vandenbergh for
1997, 10 shares for service as full-time employee in 1997; for Messrs. Meehan
and Vandenbergh in 1997, 50 shares for completion of an educational course; for
Mr. Meehan in 1997, 50 shares for 15 years of service as an employee.
Report of the Human Resources Committee on Executive Compensation
- -----------------------------------------------------------------
The following is the joint Human Resources Committee's report to the
shareholders on the executive compensation for the officers of High Point and
NBSC.
--------------------------
Executive compensation for the officers of High Point and NBSC are
determined by the joint Human Resources Committee of High Point and NBSC. The
recommendations determined at the Human Resources Committee with respect to
executive compensation are presented to all members of the Board of Directors
for their approval. Salaries and bonuses for the executive officers are reviewed
annually. All executive compensation is paid by NBSC to the applicable
executive.
Michael A. Dickerson, in his role of President and Chief Executive
Officer of High Point and NBSC reviews the salaries, bonuses and other
compensation of the executive officers of High Point and NBSC with the Human
Resources Committee. Mr. Dickerson was not present when the Human Resources
Committee discussed his performance and compensation levels.
The following guidelines are used by the Human Resources Committee in
setting compensation:
- Compensation should be meaningfully related to the value
created for shareholders.
- Compensation should support the strategic goals and objectives
of High Point.
- Compensation should reflect and promote High Point's value,
and reward an individual for an outstanding
contribution to High Point's success.
- Compensation should be fair and competitive within the banking
industry based on High Point's size and regional location.
Submitted by the Members of the Human Resources Committee
Richard M. Roy
Charles L. Lain
Charles L. Tice
--------------------------
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
The joint Human Resources Committee of High Point and NBSC determines
the compensation for the officers of High Point and NBSC. The members of the
joint Human Resources Committee during 1997 were Messrs. Lain, Roy and Tice.
During 1997, Mr. Lain served as Chairman of NBSC, Mr. Roy served as Vice
Chairman of High Point, and Mr. Tice served as Chairman of High Point. See
"Election of Directors" above.
Stock Performance Graph and Table
- ---------------------------------
The following graph and table compare the cumulative total shareholder
return on High Point's Common Stock during the period December 31, 1992 through
and including December 31, 1997 with the (i) cumulative total return on the SNL
Securities Corporate Performance Index for 5 publicly-traded banks with less
than $500 million in total assets in the Middle Atlantic area, and (ii) the
cumulative total return for all United States stocks traded in the NASDAQ Stock
Market. The comparison assumes $100 was invested on December 31, 1992 in High
Point's Common Stock and in each of the below indices and assumes further the
reinvestment of dividends into the applicable securities. The shareholder return
shown on the graph and table below is not necessarily indicative of future
performance.
<PAGE>
High Point Financial Corp.
TOTAL RETURN PERFORMANCE
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
At Year End
Period Ending
-------------------------------------------------------------
Index 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
High Point Financial Corp. 100.00 125.00 193.75 337.50 481.25 600.00
NASDAQ - Total US 100.00 114.80 112.21 158.70 195.19 239.53
HPFC Peer Group 100.00 125.49 125.49 206.67 253.48 436.28
</TABLE>
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 $78,532.10 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 Common Stock to key employees of High Point or NBSC at
a price of $6.75 per share. No options were granted to employees under the above
mentioned three plans in 1996. In October 1997, the High Point Board of
Directors granted 5,000 shares of Common Stock to key employees at a price of
$12.625 per share. A total of 3,000 options were exercised in 1997 at a price of
$6.75 per share.
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 Common Stock at an
exercise price of $6.75 per share, the market value of Common Stock at the date
of the grant. These options will vest at a rate of 20% a year for 5 years; the
first three 20% vestings were on February 20, 1996, 1997 and 1998, respectively.
The options have an expiration date of ten years from the date of vesting.
<PAGE>
Change of Control Agreements
- ----------------------------
On October 1, 1996, High Point entered into Change of Control
Agreements ("Control Agreements") with Messrs. Dickerson, Meehan and
Vandenbergh (individually, the "Executive").
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
representing 25% or more of High Point's outstanding securities ordinarily
having the right to vote at the election of directors (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 High
Point; 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 will 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 provides 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 Restated 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 in the Control Agreement). The term of the Control
Agreement shall continue until five years from the date of commencement, but the
term is automatically extended for additional one year periods 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
Mesers. Dickerson, Meehan, and Vandenbergh (individually, the "Executive"). The
purpose of the Salary Continuation Agreement is to encourage continued
employment of NBSC's executive management by providing 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 11 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. 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 11
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 8 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 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 Messers.
Dickerson, Meehan and Vandenbergh to terminate their employment prior to their
early retirement date, their annual levels of benefits would be $76,326, $34,936
and $16,386, 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.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
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, initial filings by Rhea C.
Fountain, III and Stanley A. Koza were not made in the month they became
directors. 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 collectibility 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 1997 paid $31,000 per month in rent. NBSC
anticipates making similar rent payments in 1998.
Mr. Fountain is President of van den Heuvel and Fountain Insurance
Agency. During 1997, NBSC paid approximately $8,800 in commissions for insurance
brokerage services. NBSC accepted bids from other insurance brokers and van den
Heuvel and Fountain presented the lowest premiums.
During 1997, 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.
PROPOSAL TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Company's Restated Certificate of Incorporation currently
authorizes the issuance of a total of 5,000,000 shares of Common Stock, and
1,000,000 shares of Preferred Stock, each without par value. Although the Common
Stock has no par value, the Company has historically transferred to its capital
from surplus, $5.00 for each share of Common Stock issued. Of such currently
authorized capital stock, as of March 16, 1998, 3,786,480 shares of Common Stock
were issued and outstanding, and no shares of Preferred Stock were issued and
outstanding. In addition, as of March 16, 1998, an aggregate of 320,554 shares
of Common Stock were reserved for issuance under the 1987 Incentive Stock Option
Plan, the 1990 Employee Stock Option Incentive Plan, the 1996 Employee Incentive
Stock Option Plan and the Director Stock Option Plan. In addition, there are
60,928 shares of common stock reserved for issuance under the Company's Dividend
Reinvestment and Common Stock Purchase Plan. If all shares reserved for issuance
under the Stock Option Plans and the Dividend Reinvestment and Common Stock
Purchase Plan were issued there would remain 832,038 shares of Common Stock
authorized but unissued.
The Board of Directors has adopted a proposed amendment to the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 5,000,000 to 10,000,000.
The Board of Directors believes that the increased number of authorized
shares of Common Stock is desirable to make additional unreserved Common Stock
available for issuance or reservation without any further action by shareholders
(except as required by applicable law or regulation). The Board believes that
having such additional shares authorized and available for issuance or
reservation will allow the Company to have greater flexibility in considering
potential future actions involving the issuance of stock, including possible
stock offerings, stock distributions, stock dividends or splits, acquisitions
in exchange for Common Stock and efforts to raise additional capital, issuances
of additional options, stock awards or warrants, and other corporate purposes.
The Company currently has no plans or commitments that would involve the
issuance of additional shares of Common Stock.
The authorization of additional shares of Common Stock pursuant to this
proposal will have no dilutive effect upon the proportionate voting power of the
present shareholders of the Company. However, to the extent that shares are
subsequently issued to persons other then the the present shareholders and/or in
proportions other then the proportion that presently exists, such issuance could
have a substantial dilutive effect on present shareholders.
While the Company has no specific plans, proposals, understandings or
agreements for any acquisitions in exchange for Common Stock, the issuance of
additional shares of Common Stock for an acquisition could have a dilutive
effect on earnings per share and book value per share, as well as a dilutive
effect on the voting power of existing shareholders.
The flexibility vested in the Board to authorize the issuance and sale
of authorized but unissued shares of Common Stock and/or to issue Preferred
Stock in one or more series could enhance the Board's bargaining capability on
behalf of the Company's shareholders in a takeover situation and could, under
some circumstances, be used to render more difficult or discourage a merger,
tender offer or proxy contest, the assumption of control by a holder of a large
block of the Company's securities, or the removal of an incumbent management,
even if such a transaction were favored by the holders of the requisite number
of then outstanding shares. Accordingly, shareholders of the Company might be
deprived of an opportunity to consider a takeover proposal which a third party
might consider if the Company did not have a sufficient number of uncommitted
authorized and unissued shares of Common Stock.
This proposal is not the result of management's knowledge of any
specific effort to accumulate the Company's securities or to obtain control of
the Company by means of a merger, tender offer, proxy solicitation in opposition
to management or otherwise. The Company is not submitting this proposal to
enable it to frustrate any efforts by another party to acquire a controlling
interest or to seek Board representation.
The Company's Restated Certificate of Incorporation has certain
provisions which have an anti-takeover effect. The Company's Restated
Certificate of Incorporation currently provides for: (i) a classified board of
directors, (ii) approval of any tender or exchange offer, merger or
consolidation, or acquisition of all of substantially all of the properties and
assets of the Company, only by the affirmative vote of the holders of two-thirds
of the outstanding shares of Common Stock, (iii) approval of certain business
combinations, such as a merger, consolidation, or sale of assets valued at
$40,000,000 or more, to an "Interested Shareholder or any Affiliate of any
Interested Shareholder" (as defined in the Restated Certificate of
Incorporation), that have not been approved by either two-thirds of the
disinterested directors or approved by 80% of votes cast by holders of
outstanding shares (excluding the shares of the Interested Shareholder and any
Affiliate), only by the affirmative vote of 80% of the votes entitled to be cast
by the holders of the outstanding shares of Common Stock, (iv) the removal of
any director, or the entire Board of Directors, at any time only for cause and
only by the affirmative vote of the holders of at least 80% of the voting power
of all shares of the Company entitled to vote generally in the election of
directors, voting together as a single class, and (v) the alteration, amendment
or adaptation of any provision inconsistent with or repeal Article SIXTH or
sections 2, 3, 4, or 5 of Article III of the by-laws of the Company (all of
which relate to directors), only by the affirmative vote of the holders of at
least 80% of the voting power of all of the shares of the Company entitled to
vote generally in the election of directors, voting together as a single class.
The submission of this proposal is not part of any plan by the
Company's management to adopt a series of amendments to the Restated Certificate
of Incorporation or by-laws so as to render a takeover of the Company more
difficult. Except as indicated above, management is not aware of the existence
of any other provisions in the Restated Certificate of Incorporation or by-laws
having an anti-takeover effect.
The proposed amendment does not give rise to a shareholder's right of
appraisal under the New Jersey Business Corporation Act.
Board Recommendation and Required Vote
- --------------------------------------
The Board of Directors unanimously recommends that shareholders vote
FOR the proposed increase in the authorized Common Stock from 5,000,000 shares
to 10,000,000 shares.
The affirmative vote of a majority of the votes cast by holders of
shares of Common Stock entitled to vote on the proposed amendment at the Annual
Meeting is required to approve the proposed amendment. The persons named as
proxies in the accompanying proxy card will vote FOR this proposal, unless you
instruct otherwise on the proxy card.
PROPOSAL TO AMEND HIGH POINT'S CERTIFICATE OF INCORPORATION
TO DELETE ARTICLE SIXTH, PARAGRAPH B, SUBSECTION (ii)
Article SIXTH, Paragraph B, Subsection (ii) of the Company's Restated
Certificate of Incorporation currently provides the following:
"No person shall be eligible for election, re-election or
appointment as a director: ...(ii) if such person was an
active operating officer of the corporation or any subsidiary
of the corporation at the time of his initial election to
the Board of Directors and one annual meeting of shareholders
has been held since his retirement from all operating
positions of the corporation or any subsidiary."
The Board of Directors has adopted a proposed amendment to the
Company's Restated Certificate of Incorporation to delete Article SIXTH,
Paragraph B, Subsection (ii).
Article SIXTH, Paragraph B, Subsection (ii) was originally intended to
limit the presence on the Board of ex-officers and thus limit their interaction
with the successor president and other officers, but is no longer considered by
the Board to be in the best interest of the Company and the shareholders. A
restriction based upon retirement from prior officer positions with the Company
or any subsidiary, precludes the Board and the shareholders from exercising
their discretion in favor of a qualified candidate who has retired as an
officer.
The Board believes that the ability of an individual to contribute to
the deliberative process of the Board of Directors is dependent upon that
individual's judgment, insight, business acumen and experience. The Board
believes, therefore, that in determining whether to nominate a particular
individual as a director, both the Board and the shareholders should take into
account all the relevant factors in evaluating the individual; the fact that the
individual was an active operating officer of the Company or any subsidiary at
the time of initial election to the Board, but has retired from such position,
should not foreclose the opportunity of having that individual serve as a
director of the company.
The Board of Directors has particularly noted its desire to retain
Michael A. Dickerson as a director, following his retirement as an officer of
High Point, which is expected within the next few years. Mr. Dickerson's
eligibility to serve as a director after his retirement could be continued upon
the shareholder approval of the proposed amendment.
This proposal is not the result of management's knowledge of any
specific effort to accumulate the Company's securities or to obtain control of
the Company by means a of merger, tender offer, proxy solicitation in opposition
to management or otherwise. The Company is not submitting this proposal to
enable it to frustrate any efforts by another party to acquire a controlling
interest or to seek Board representation.
The submission of this proposal is not part of any plan by the
Company's management to adopt a series of amendments to the Restated Certificate
of Incorporation or by-laws so as to render a takeover of the Company more
difficult. Except as indicated in the discussion of the proposal included above
in this Proxy Statement to increase the number of authorized shares of Common
Stock, management is not aware of the existence of any other provisions in the
Restated Certificate of Incorporation or by-laws having an anti-takeover effect.
The proposed amendment does not give rise to a shareholder's right of
appraisal under the New Jersey Business Corporation Act.
Board Recommendation and Required Vote
- --------------------------------------
The Board of Directors unanimously recommends that shareholders vote
FOR the proposed amendment to the Restated Certificate of Incorporation to
delete Article Sixth, Paragraph B, Subsection (ii).
The affirmative vote by holders of at least 80% of the outstanding
Common Stock is required to approve the proposed amendment. The persons named as
proxies in the accompanying proxy card will vote FOR this proposal, unless you
instruct otherwise on the proxy card.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
For the year ended December 31, 1997, 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 1998. 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 1999
Annual Meeting of Shareholders must be received by the Secretary of High Point
by November 28, 1998 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.
By Order of the Board of Directors,
-----------------------------------
Gregory W. A. Meehan
Vice President and Treasurer
April 9, 1998
HIGH POINT FINANCIAL CORP.
Proxy Solicited on Behalf of the Board of Directors
for Annual Meeting May 12, 1998
P The undersigned hereby constitutes and appoints Bruce L. Earlin and
R J. Martin Couse, and each of them, his true and lawful agents and
0 proxies with full power of substitution in each, to represent the
X undersigned at the Annual Meeting of Stockholders of High Point
Y Financial Corp. to be held at Perona Farms, Route 517, Andover, New
Jersey on Tuesday, May 12, 1998 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
------------
<PAGE>
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 proposed
amendment to article THIRD of the Restated Certificate of Incorporation of High
Point to increase the authorized Common Stock from 5,000,000 shares to
10,000,000 shares and (3) FOR the proposal to approve the amendment of the
Restated Certificate of Incorporation to eliminate a provision that limits the
presence on the Board of Directors of ex-officers of High Point Financial Corp.
or any subsidiary under certain circumstances, by deleting Subsection (ii) from
Article SIXTH, Paragraph B.
1. Rhea C. Fountain, III
Election of FOR WITHHELD
Director, _____ _____
Nominee for
Term Expiring _____ _____
in 1999:
George H. Guptill, Jr., Stanley A. Koza, Charles L. Lain
Election of FOR WITHHELD
Directors, _____ _____
Nominees for
Term Expiring _____ _____
in 2001:
For, except vote withheld from the following nominee(s):
-----------------------------------
2. Proposal to approve the amendment of the Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock from
5,000,000 shares to 10,000,000 shares.
FOR _____ AGAINST _____ ABSTAIN _____
3. Proposal to approve the amendment of the Restated Certificate of
Incorporation to eliminate a provision that limits the presence on the Board of
Directors of ex-officers of High Point Financial Corp. or any subsidiary under
certain circumstances, by deleting Subsection (ii) from Article SIXTH, Paragraph
B.
FOR _____ AGAINST _____ ABSTAIN _____
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.
-------------------------------------
---------------------------------1998
(Signature(s) Date
Will Attend Address
Annual Meeting Change
------ ------
------ ------
April , 1998
VOTE TO APPROVE PROPOSAL NO. 3 AT THE
1998 ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholder:
I am writing to emphasize the importance of your voting at the 1998
Annual Meeting of Shareholders and, in particular, voting FOR Proposal No. 3 at
the 1998 Annual Meeting of Shareholders.
Proposal No. 3 involves amending the Restated Certificate of
Incorporation to eliminate a provision that prevents certain individuals from
serving as Directors. Specifically, the provision now prohibits a person from
serving as a Director: "if such person was an active operating officer of the
corporation or any subsidiary of the corporation at the time of his election to
the Board of Directors and one annual meeting of shareholders has been held
since his retirement from all operating positions of the corporation or any
subsidiary." This provision was originally intended to limit the presence on the
Board of ex-officers and thus limit their interaction with the successor
president and other officers, but is no longer considered by the Board to be in
the best interest of the Company and the Shareholders.
This provision could effect a retiring executive officer who may
contribute substantially as a director after retirement as an executive officer,
including the current Chief Executive Officer, Michael A. Dickerson. He may not
be eligible for re-election as a director after his retirement, unless Proposal
No. 3 is approved.
To approve Proposal No. 3 and eliminate this provision, the affirmative
vote by holders of at least 80% of the Common Stock is needed. This vote
requirement is a particularly high amount, which is why I am writing to
encourage you to vote.
It is important that you vote at the 1998 Annual Meeting of
Shareholders. Please send in your proxy.
Sincerely,
Charles L. Tice
