SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement [X] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Village Bancorp, Inc.
...............................................................................
(Name of Registrant as Specified In Its Charter)
...............................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of 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 for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
.............................................
2) Form, Schedule or Registration Statement No.:
.............................................
3) Filing Party:
.............................................
4) Date Filed:
.............................................
(1)
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
The annual meeting of Stockholders of Village Bancorp, Inc., ("Bancorp")
will be held at The Village Bank & Trust Company, 25 Prospect Street,
Ridgefield, Connecticut, 06877, on Monday, April 28, 1997, at 8:00 p.m., for the
following purposes:
1. To elect four (4) members of the Board of Directors to serve for a
period of three (3) years, one (1) member of the Board of Directors to serve for
a period of two (2) years and one (1) member of the Board of Directors to serve
for a period of one (1) year, until the next meeting of the Stockholders in the
year the members' respective terms expire, or until their successors are duly
elected and qualified.
2. To increase the authorized number of common shares of Bancorp from
2,000,000 to 10,000,000 shares.
3. To ratify the appointment of Deloitte & Touche as its Independent Public
Accountants for 1997.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Pursuant to provisions of the Bylaws, the Board of Directors has fixed the
close of business on March 28, 1997, as the record date for the determination of
Stockholders entitled to notice of and to vote at the annual meeting, and
accordingly only Stockholders of record at the close of business on that date
are entitled to notice of and to vote at said meeting.
Stockholders unable to attend the meeting in person are urged by the Board
of Directors to sign, date and mail the enclosed proxy as promptly as possible
in the envelope enclosed for that purpose.
A stockholder giving a proxy has the power to revoke it at any time before
its exercise by filing with the Secretary of the Board of Directors of Bancorp,
Enrico J. Addessi, a written revocation, or a duly executed proxy bearing a
later date, at 25 Prospect Street, P.O. Box 366, Ridgefield, Connecticut 06877.
The proxy will be suspended if the stockholder who executed it is present at the
meeting and elects to vote in person.
BY ORDER OF THE BOARD OF DIRECTORS:
---------------------------
Enrico J. Addessi
Secretary
April 7, 1997
(2)
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April 7, 1997
Revocable Proxy
Proxy for Annual Meeting of Stockholders
VILLAGE BANCORP, INC.
The undersigned, having received notice of the Annual Meeting of Stockholders
for date of April 28, 1997, appoints and authorizes Enrico J. Addessi and Joseph
L. Knapp and each of them (with power to act without the other and with power of
substitution) as proxy to vote all stock of Village Bancorp, Inc., which the
undersigned is entitled to vote if personally present at the Corporation's
Annual Meeting of Stockholders to be held at The Village Bank & Trust Company,
25 Prospect Street, Ridgefield, Connecticut, 06877, on Monday, April 28, 1997,
at 8:00 p.m., and at all adjournments thereof, for the election of Directors (if
authority is withheld, indicate below), to increase the authorized number of
common shares, and ratification of Independent Public Accountants.
(1) Election of Directors:
FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary) (to vote for all nominees
listed below)
Three Year Term
Jose P. Boa Robert V. Macklin
Antonio M. Resendes James R. Umbarger Jr.
Two Year Term
Edward J. Hannafin
One Year Term
Nicholas R. DiNapoli
YOU AS A SECURITY HOLDER MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY
LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE:
(2) Increase the authorized number of common shares to 10,000,000 shares.
For [ ] Against [ ] Abstain [ ]
(3)
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(3) Ratification of Deloitte & Touche as Independent Public Accountants for
1997
For [ ] Against [ ] Abstain [ ]
The proxy holder shall have the discretionary authority to vote on all matters
incidental to the conduct of the meeting, approval of minutes of prior meetings,
the election of any person to any office of which a bona fide nominee is named
in the proxy statement and such nominee is subsequently unable to serve or for
good cause will not serve, proposals omitted from the proxy statement and form
of proxy pursuant to Rule 14a-8 or Rule 14a-9 of the Securities and Exchange
Commission and matters which management does not know as of date may be
presented at the meeting. This proxy when properly executed will be voted in the
manner specified herein by the undersigned stockholder. EXECUTION OF THIS PROXY
IN SUCH A MANNER AS NOT TO WITHHOLD AUTHORITY SHALL BE DEEMED A GRANT OF
AUTHORITY FOR APPROVAL OF DIRECTORS AND EXECUTION IN SUCH A MANNER AS NOT TO
VOTE AGAINST OR ABSTAIN SHALL BE DEEMED APPROVAL OF AN INCREASE OF THE
AUTHORIZED NUMBER OF COMMON SHARES TO 10,000,000 SHARES AND A RATIFICATION OF
INDEPENDENT PUBLIC ACCOUNTANTS;
Dated......................................................1997
...........................................................(L.S.)
...........................................................(L.S.)
IMPORTANT: Please sign exactly as your name or names appear on the stock
certificate or certificates, and when signing as attorney, executor,
administrator, trustee or guardian, give your full title as such. If the
signatory is a corporation, sign the full corporate name by a duly authorized
officer. If stock is held in joint tenancy, with rights of survivorship, either
joint tenant may sign. If stock is held as tenants in common, both joint tenants
must sign.
Please sign and return this proxy promptly
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(4)
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VILLAGE BANCORP, INC.
25 Prospect Street
P. O. Box 366
Ridgefield, Connecticut 06877
Telephone No. (203) 438-9551
PROXY STATEMENT
Mailed April 7, 1997
ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD APRIL 28, 1997
PROPOSALS FOR NEXT ANNUAL MEETING
Security holders who intend to present proposals for inclusion in the
Corporation's Proxy Statement or form of proxy at the Corporation's next annual
meeting must have such proposals delivered to the Corporation on or before
December 22, 1997.
SOLICITATION AND REVOCATION OF PROXIES
This statement is furnished in connection with the solicitation by the
Board of Directors of Village Bancorp, Inc., ("Bancorp" or "Corporation") of
proxies to be used at the annual meeting of Bancorp stockholders to be held at
The Village Bank & Trust Company, 25 Prospect Street, Ridgefield, Connecticut,
06877, on Monday, April 28, 1997, at 8:00 p.m., and at any and all adjournments
thereof. The shares represented by the proxy when properly executed shall be
voted in accordance with the specification made by the stockholder and where the
stockholder specified a choice on the proxy, the shares will be voted in
accordance with the specifications so made. IF NO SPECIFICATION AS TO VOTING IS
MADE, THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 and 3. The accompanying proxy
is solicited by the Board of Directors of Bancorp, and a stockholder giving a
proxy has the power to revoke it at any time before its exercise. A proxy may be
revoked by filing with the Secretary of the Board of Directors of Bancorp,
Enrico J. Addessi, a written revocation or a duly executed proxy bearing a later
date at 25 Prospect Street, P. O. Box 366, Ridgefield, Connecticut, 06877. The
proxy will be suspended if the stockholder who executed it is present at the
meeting and elects to vote in person.
This solicitation is not a securities registration statement. The
solicitation is made by Bancorp's Board of Directors who are Enrico J. Addessi,
Jose P. Boa, Richard O. Carey, Madeline F. Contegni, Jeanne M. Cook, Nicholas R.
DiNapoli, Edward J. Hannafin, Joseph L. Knapp, Carl Lecher, Robert V. Macklin,
Antonio M. Resendes, Thomas F. Reynolds, and Robert Scala.
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PROXY AUTHORITY AND EXECUTION
The proxy holder shall have the discretionary authority to vote on all
matters incidental to the conduct of the meeting, approval of minutes of prior
meetings if such approval does not amount to ratification of such action taken
at those meetings; the election of any person to any office of which a bona fide
nominee is named in the proxy statement and such nominee is subsequently unable
to serve or for good cause refuses to serve, proposals omitted from the proxy
statement and form of proxy pursuant to Rule 14a-8 or Rule 14a-9 of the
Securities and Exchange Commission, and matters which management does not know
as of date may be presented at the meeting and matters which do not expressly
require the vote of stockholders. The proxy, when properly executed, will be
voted in the manner specified therein by the stockholder. Execution of the proxy
in such a manner as not to withhold authority shall be deemed a grant of
authority for approval of Directors and execution in such a manner as not to
vote against or abstain shall be deemed a grant of authority to vote for an
increase in the authorized number of common shares to 10,000,000 shares and the
Independent Public Accountants. Proxies may not be voted for a greater number of
persons named as nominees for Director, which is four (4) for a three year term,
one (1) for two year term, and one (1) for a one year term.
This solicitation is by mail. The cost of this solicitation will be borne
by Bancorp. THE PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PURPOSE OF MEETING
The purpose of the annual meeting is to elect four (4) members of the Board
of Directors for a period of three (3) years, one (1) member of the Board of
Directors for a period of two (2) years, and one (1) member of the Board of
Directors for a period of one (1) year to serve until the next annual meeting of
stockholders in the year their respective terms expire or until their successors
are duly elected and qualified, to vote on increasing the authorized number of
common shares of Bancorp to 10,000,000 shares and to ratify the appointment of
Deloitte & Touche as the Corporation's Independent Public Accountants for 1997.
SUBSIDIARY AND ADDRESS
The Village Bank & Trust Company ("VBT") is the Corporation's sole
subsidiary. The principal office of Bancorp and VBT is 25 Prospect Street, P. O.
Box 366, Ridgefield, Connecticut, 06877. Their telephone number is (203)
438-9551.
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VOTING RIGHTS
Bancorp has 952,317 shares of common stock, as of March 28, 1997, issued
and outstanding. Each outstanding share shall be entitled to one (1) vote. There
are no cumulative voting rights. There are no other shares of stock issued,
outstanding or entitled to vote. Action on a matter, other than election of
directors, at a meeting duly held and at which a quorum is present, is approved
if the votes cast favoring the action exceed the votes cast opposing the action.
Directors are elected by a plurality of the votes cast by the shares entitled to
vote at a meeting at which a quorum is present. A plurality voting for a nominee
or nominees for director shall constitute election of the director voted for. An
abstention shall not be considered as a vote against the matter voted on.
A quorum shall constitute a number present in person or by proxy
representing the majority (476,159) of the shares of stock issued and
outstanding (952,317).
DISSENTERS RIGHTS OF APPRAISAL
There is no matter to be acted upon which would give an objecting
stockholder a right of appraisal or similar right of dissenters pursuant to the
General Statutes of the State of Connecticut.
RECORD DATE
The Board of Directors of Bancorp has fixed the close of business on March
28, 1997, as the record date for the determination of stockholders entitled to
notice and to vote at the annual meeting. Only stockholders of record at the
close of business on that date are entitled to notice of and to vote at said
meeting.
ANNUAL REPORT
Bancorp is mailing simultaneously herewith to its stockholders copies of
its Annual Report for the fiscal year ended December 31, 1996, containing
financial statements reflecting the financial position and operations of the
Corporation for such fiscal year. The Annual Report is not to be regarded as
proxy soliciting material or as a communication by means of which any
solicitation is made.
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<PAGE>
AVAILABILITY OF ANNUAL REPORT ON
SECURITIES EXCHANGE COMMISSION
FORM 10-K
BANCORP, UPON WRITTEN REQUEST OF A STOCKHOLDER, WILL PROVIDE WITHOUT
CHARGE, A COPY OF THE CORPORATION'S ANNUAL REPORT ON SECURITIES EXCHANGE
COMMISSION FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL
STATEMENT SCHEDULES FOR THE CORPORATION'S MOST RECENT FISCAL YEAR. WRITTEN
REQUESTS MUST BE DIRECTED TO ENRICO J. ADDESSI, SECRETARY OF THE BOARD OF
DIRECTORS, VILLAGE BANCORP, INC., 25 PROSPECT STREET, P. O. BOX 366, RIDGEFIELD,
CONNECTICUT 06877.
INCREASE OF AUTHORIZED SHARES
Bancorp presently has 2,000,000 shares of common stock authorized under its
Articles of Incorporation. There are no other shares or class of shares of stock
authorized, issued or outstanding. There are presently 952,317 shares issued and
outstanding, 50,800 shares subject to option and 100,312 subject to Stockholder
Rights. The Board of Directors proposes to increase the number of outstanding
shares to 10,000,000 by amendment to Bancorp Articles of Incorporation. Approval
of the proposed increases would give the Corporation 8,896,571 shares of common
stock available for future issuance in the event Bancorp has need of additional
shares for stock dividends, stock split, acquisition, options, or capital
offering.
The Board of Directors has adopted a resolution for the increase of
outstanding shares. The resolution is as follows:
RESOLVED: The Articles of Incorporation be amended as follows:
"3. The designation of each share, the authorized number of shares of
each such class, and the par value (if any) of each share thereof
are as follows:
Common stock
Ten Million (10,000,000) shares
$3.33 par value"
The proposed additional shares of Common Stock could be issued for any
proper corporate purpose, including the acquisition of other businesses, the
raising of additional capital for use in the Corporation's business, stock
splits, the payment of stock dividends or other distributions in shares of
stock, or in connection with employee stock incentive programs. While the
Corporation currently has no plans, arrangements, understandings or
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<PAGE>
commitments with respect to the issuance of the additional shares of Common
Stocks, it is considered advisable to have the authorization to issue such
shares in order to enable the Corporation as the need may arise to move promptly
to take advantage of market conditions and the availability of other favorable
opportunities without the delay and expense involved in calling a special
shareholders meeting for such purpose.
The authorization of additional shares of Common Stock will not, by itself,
have any effect on the rights of holders of existing Common Stock. Depending on
the circumstances, any issuance of additional shares of Common Stock may dilute
the present equity ownership of current shareholders. Holders of Common Stock
have no preemptive rights to participate in any such issuance.
If the proposed amendment to the Articles of Incorporation is approved, the
Board of Directors will have the authority to issue the additional authorized
shares or any part thereof to such persons and for such consideration as it may
determine without further action by the shareholders except as required by law,
its Articles of Incorporation, or the rules of any stock exchange on which the
Corporation's securities may then be listed.
Although the proposed amendment is not intended to be an anti-takeover
measure, shareholders should note that under certain circumstances, the
additional shares of Common Stock could be used to make any attempt to gain
control of the Corporation or the Board of Directors more difficult or
time-consuming. Any of the additional shares of Common Stock could be privately
placed with purchasers who might side with the Board in opposing a hostile
takeover bid. It is possible that such shares could be sold with or without an
option, on the part of the Corporation, to repurchase such shares, or on the
part of the purchaser, to put such shares to the Corporation.
The amendment to increase the authorized Common Stock might be considered
to have the effect of discouraging an attempt by another person or entity,
through the acquisition of a substantial number of shares of the Corporation's
stock, to acquire control of the Corporation, since the issuance of the
additional shares of Common Stock could be used to dilute the stock ownership of
a person or entity seeking to obtain control and to increase the cost to a
person or entity seeking to acquire a majority of the voting power of the
Corporation. If so used, the effect of the additional authorized shares of
Common Stock might be (i) to deprive shareholders of an opportunity to sell
their stock at a temporarily higher price as a result of a tender offer or the
purchase of shares by a person seeking to obtain control of the Corporation or
(ii) to assist incumbent management in retaining its present position.
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<PAGE>
The Board of Directors believes that adoption of the proposed Amendment to
its Corporation's is in the best interests of the Corporation and its
shareholders. Approval of this proposal requires a vote favoring the action
exceed the votes cast opposing the action. The Connecticut Business Corporation
Law provides that an abstention is not a vote cast. Therefore, in a case like
this where a favorable vote of a holders of a majority of the votes cast at the
annual meeting is required, an abstention will not have the effect of a vote for
or against the proposal and will not be counted in determining the number of
votes required for approval; though it will be counted in determining the
presence of a quorum.
WITH RESPECT TO PROXY ITEM 3, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE PROPOSED AMENDMENT TO ARTICLE 3 OF THE CORPORATION'S
ARTICLES OF INCORPORATION TO INCREASE THE TOTAL AUTHORIZED NUMBER OF COMMON
SHARES FROM 2,000,000 TO 10,000,000.
INTERESTS OF CERTAIN PERSONS IN
MATTERS TO BE ACTED ON
No member of the Board of Directors has any interest, direct or indirect,
in any matter being acted on other than the election of directors.
COMMON STOCK OUTSTANDING
BANCORP
As of March 28, 1997, there were outstanding and entitled to vote 952,317
shares of common stock of Bancorp which is its only class of stock. To the best
knowledge and belief of the Officers and Directors of Bancorp, no person
(including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934 is beneficially owner of more than five (5%)
percent of the outstanding voting securities of the Corporation; except as
stated below in the following table. The following table represents the percent
of class based on number of shares outstanding (952,317) and the number of
shares subject to options within 60 days (50,800).
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- --------------------------------------------------------------------------------
(1) (2) (3) (4)
Title of Name & Address of Amount & Nature % of Class
Class Beneficial Owner of Beneficial
Ownership
- --------------------------------------------------------------------------------
Common Lewis J. Finch 71,585 7.1%
71 South Salem Road ------
Ridgefield, CT 06877 (A= 43,238)(3)
(B= 28,347)
Common Austin, Rosow and 94,725(3) 9.44%
Rueckert ---------
167 Old Post Road (A= 47,400)
Southport, CT 06490 (B= 47,325)
- --------------------------------------------------------------------------------
The members of the Board of Directors, nominees to the Board of Directors,
and Directors and Executive Officers of Bancorp as a group beneficially own
securities of Bancorp as follows:
- --------------------------------------------------------------------------------
(1) (2) (3) (4)
Title of Name of Amount & Nature % of Class
Class Beneficial Owner of Beneficial
Ownership 1, 2
- --------------------------------------------------------------------------------
Common Directors and Executive
Officers (as a group) 161,290 16.1%
-------
(A= 66,094)
(B= 49,278)
(C= 2,492)
(D= 17,126)
(E= 26,300)
Directors:
Common Enrico J. Addessi 13,852 1.4%
(Director and -------
Secretary) (A= 13,820)(3)
(D= 32)(3)
Common Jose P. Boa 12,888 1.3%
(Director) -------
(A= 12,315)
(B= 459)
(C= 114)
Common Richard O. Carey 18,593 1.9%
(Director) -------
(A= 2,043)(3)
(B= 12,800)(3)
(D= 3,750)(3)
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Common Madeline F. Contegni 17,666 1.8%
(Director) -------
(A= 10,025)
(B= 7,641)
Common Jeanne M. Cook 2,420 .2%
(Director) -------
(A= 2,420)
Common Nicholas R. DiNapoli 24,641 2.5%
(Director & Vice -------
Chairman) (A= 11,647)
(B= 11,610)(3)
(C= 1,384)
Common Edward J. Hannafin 18,970 1.9%
(Director and -------
Chairman) (A= 6,537)
(B= 1,030)
(D= 11,403)(3)
Common Joseph L. Knapp 6,861 .7%
(Director) -------
(A= 5,223)
(B= 900)(3)
(C= 738)
Common Carl Lecher 4,780 .5%
(Director) -------
(A= 1,361)
(B= 3,419)(3)
Common Robert V. Macklin 15,803 1.6%
(Director and Chief -------
Executive Officer) (B= 903)(3)
(E= 14,900)(3)
Common Antonio Resendes 4,914 .5%
(Director) -------
(B= 4,800)
(C= 114)
Common Thomas F. Reynolds 140 .0%
(Director) -------
(B= 140)
Common Robert Scala 6,766 .7%
(Director and -------
Assistant Secretary) (A= 703)
(B= 3,980)(3)
(C= 142)
(D= 1,941)
Common James R. Umbarger, Jr. 12,996 1.3%
(Executive Officer and -------
Director Nominee) (B= 1,596)
(E= 11,400)(3)
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- --------------------------------------------------------------------------------
(A) equals number of shares with sole voting power.
(B) equals number of shares with shared voting power.
(C) equals number of shares with sole investment power.
(D) equals number of shares with shared investment power.
(E) equals number of shares exercisable by option within sixty (60) days (See
"Options").
1. To the best knowledge and belief of management, there are no shares to
which such persons have the right to acquire beneficial ownership within 60 days
except the President, Robert V. Macklin (14,900); Executive Vice President,
James R. Umbarger, Jr. (11,400) and other employee option shares aggregating
24,500. (See "Options")
2. Includes option to purchase 26,300 shares within sixty (60) days. (see
"Options").
3. The following Directors, Executive Officers, and owners of more than 5%
of voting securities have bought or sold Bancorp securities within the past two
fiscal years:
(a) Lewis J. Finch disposed of 5,732 shares in December, 1995, 1157 shares
in June 1995, 843 shares in July 1995 and 5000 shares in May 1996 and acquired
103 shares in December 1995, all of which transaction was in his name.
(b) Joshia T. Austin, Valer C. Austin, David A. Rosow and William D.
Rueckert filed a Schedule 13D dated December 20, 1996. ("Austin, Rosow and
Rueckert") reporting that 94,725 shares of Bancorp common stock are beneficially
owned. Joshia T. Austin and Valer C. Austin each report they have shared voting
power of 47,235 shares; David A. Rosow reports he has sole voting power of
32,750 shares; and William D. Rueckert reports he has sole voting power of
14,650 shares.
(c) Enrico J. Addessi acquired ownership of 570 shares in his name and 32
shares in his wife' name on February 28, 1995 through a disposal of 2,135 shares
held with shared investment persons.
(d) Richard O. Carey acquired beneficial ownership of 300 shares in June
1996, by 58 shares with title in his name, 43 shares by title in Trust, 49
shares by title in his wife's name and 150 shares by title in his daughter's
name.
(e) Nicholas R. DiNapoli acquired beneficial ownership of 2000 shares in
March, 1995, 1,393 shares in March 1995, 800 shares in June, 1996, 500 shares in
August, 1996, and 200 shares in February, 1997, all by title in his name and his
wife's.
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(f) Edward J. Hannafin acquired beneficial ownership of 24 shares through a
related party, Francis J. Collins, in 1996.
(g) Joseph L. Knapp disposed of 5 shares on March 7, 1995, and 220 shares
in February, 1995.
(h) Carl Lecher acquired beneficial ownership of 1000 shares in August 1996
by title in his name and his wife's.
(i) Robert V. Macklin acquired beneficial ownership of 1,793 shares in
December 26, 1995 by title in his name and his wife's, through a stock option
exercise; sold 1,100 shares by title in his name and his Wife's in June, 1996;
and received an option to purchase 10,000 shares by the 1996 Stock Option Plan
for Key Employees.
(j) Robert Scala acquired beneficial ownership of 400 shares in May, 1996,
by title in his name and his wife's.
(k) James R. Umbarger, Jr., acquired beneficial ownership of 1896 shares in
December, 1995, through a stock option exercise, disposed of 1000 shares in
August, 1995, and 350 shares in October, 1995, both by title in his name and his
wife's; and received an option to purchase 7,500 shares by the 1996 Stock Option
Plan for the Key Employees.
ELECTION OF DIRECTORS
The Bylaws of Bancorp provide for not less than nine (9) and not more than
twenty-five (25) members of the Board of Directors who are elected at the annual
meeting for staggered three (3) year terms. The Bylaws further provide for nine
(9) directors and such additional number not to exceed twenty-five (25) (in
accordance with the staggered terms), which additional number must have been
approved by a two-thirds (2/3) vote of the Board of Directors. The Board of
Directors of the Corporation has, in accordance with its Bylaws, fixed the
number of directors of the Corporation at Fourteen (14). The Directors elected
at each annual or special meeting for the purpose of election of Directors shall
be for that number of Directors for the respective staggered term.
There are four (4) members of the Board of Directors whose terms are
expiring. As the bylaws provide for staggered terms, and the number of members
whose term are expiring is four (4), the Board of Directors, in order to balance
the staggered terms, have proposed four (4) nominees to be elected for a three
(3) year term and one (1) nominee to be elected to a two (2) year term and one
(1) nominee for a one (1) year term to serve until the next annual meeting in
the year their respective term expires or until their successors are sooner
elected and qualified. It is intended that shares represented by proxies
solicited by the Board of Directors will, unless contrary instructions are
given, be voted in favor of the election of the nominees listed below as
directors. The Board
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of Directors does not contemplate that any nominee will be unable to serve or
for good cause will not serve; however, should such a situation arise prior to
the meeting, the Proxy Committee will vote in accordance with the recommendation
of the Board of Directors.
All of the nominees are currently Directors of the Corporation and/or for
its principal and sole subsidiary, The Village Bank & Trust Company. They have
all been principally employed by their respective employers and occupations for
more than five (5) years.
The proxies solicited by this statement cannot be voted for a greater
number of persons than the number of nominees, which is four (4) for a three (3)
year term, one (1) for a two (2) year term and one (1) for a one (1) year term.
The following table sets forth, with respect to each nominee for director,
his or her name, age, principal occupation and other business affiliations, the
date each became a director of the Corporation and VBT, the proposed term of
office and the office with the Corporation and VBT, if any, of each nominee.
Each nominee has furnished the information set forth below, with respect to his
or her age, other business affiliates, direct or indirect beneficial ownership
of the common stock of the Corporation and principal occupation.
INFORMATION AS TO NOMINEES
DIRECTORS
- --------------------------------------------------------------------------------
Bancorp VBT Proposed
Director Director Term
Name Age Since Since Expires
- --------------------------------------------------------------------------------
THREE YEAR TERM
JOSE P. BOA 43 1994 1995 2000
ROBERT V. MACKLIN 49 1990 1990 2000
ANTONIO RESENDES 45 1994 1995 2000
JAMES R. UMBARGER, JR. 46 -- 1996 2000
TWO YEAR TERM
EDWARD J. HANNAFIN 61 1982 1974 1999
ONE YEAR TERM
NICHOLAS R. DINAPOLI 68 1982 1974 1998
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<PAGE>
BUSINESS EXPERIENCE
JOSE P. BOA: Age 43. Mr. Boa was appointed a Director of Bancorp in 1994 to
a term expiring in 1996 and a Director of VBT in 1995. Mr. Boa served as a
Director, Chairman and Vice Chairman of the Board of Directors of Liberty
National Bank ("LNB") from 1989 to 1995. Mr. Boa is President and owner of
Diversified Maintenance Corporation of Danbury, Connecticut.
NICHOLAS R. DiNAPOLI: Age 68. Mr. DiNapoli has been a Director of Bancorp
since 1982 and VBT since 1974. He has been Vice Chairman of the Board of
Directors of Bancorp and VBT since 1988. His term of office expires in 1997. He
is President of DiNapoli Development Co., Inc., a building contracting and real
estate development firm with an office in Ridgefield, Connecticut.
EDWARD J. HANNAFIN: Age 61. Mr. Hannafin has been a Director of Bancorp
since 1982 and VBT since 1974. He has been Chairman of the Board of Directors of
Bancorp and VBT since 1988. His term of office expires in 1997. He was a
Director of LNB from 1994 to 1995. He was formerly Vice Chairman of the Board of
Directors of Bancorp and VBT from 1982 to 1988. He is an attorney at law and a
principal of the Law Firm of Cutsumpas, Collins, Hannafin, Garamella, Jaber &
Tuozzolo, P.C. of Danbury, Connecticut.
ROBERT V. MACKLIN: Age 49. Mr. Macklin has been a Director, President and
Chief Executive Officer of Bancorp and VBT since 1990. His present term as a
Director expires in 1997. He was formerly Executive Vice President of Bancorp
(1984 to 1990) and VBT (1979 to 1990). He was a Director of LNB from 1994 to
1995.
ANTONIO M. RESENDES: Age 45. Mr. Resendes was appointed a Director of
Bancorp in 1994 to a term expiring in 1998. He was appointed a Director of VBT
in 1995. Mr. Resendes served as a Director and Chairman of the Board of
Directors of LNB from 1989 to 1995. Mr. Resendes has been a Department Head of
Henry Abbott Technical School in Danbury, Connecticut, since 1987. He was a Vice
President of DaSilva Fuel Company, Inc. of Danbury, Connecticut from 1979 to
1987.
JAMES R. UMBARGER, JR.: Age 46. Mr. Umbarger is the Executive
Vice-President of Bancorp since 1994 and VBT since 1995. Prior to that he was
the Senior Vice-President and Treasurer of Bancorp and VBT. He was President,
Chief Executive Officer and a Director of Liberty National Bank in 1994-1995.
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<PAGE>
INFORMATION AS TO DIRECTORS
CONTINUING IN OFFICE
- --------------------------------------------------------------------------------
Bancorp VBT
Director Director Term
Name Age Since Since Expires
- --------------------------------------------------------------------------------
ENRICO J. ADDESSI 67 1982 1975 1999
RICHARD O. CAREY 65 1982 1974 1998
MADELINE F. CONTEGNI 68 1982 1974 1998
JEANNE M. COOK 63 1989 1989 1999
JOSEPH L. KNAPP 67 1982 1974 1999
CARL LECHER 60 1984 1984 1998
THOMAS F. REYNOLDS 48 1993 1993 1999
ROBERT SCALA 60 1982 1974 1998
BUSINESS EXPERIENCE
ENRICO J. ADDESSI: Age 67. Mr. Addessi has been a Director of Bancorp since
1982 and of VBT since 1975. His present term expires in 1999. Mr. Addessi is
Secretary of the Board of Directors of Bancorp and VBT. He is the President of
Addessi Jewelers of Ridgefield, Inc. located in Ridgefield, Connecticut.
RICHARD O. CAREY: Age 65. Mr. Carey has been a Director of Bancorp since
1982 and of VBT since 1974. His present term of office expires in 1998. Mr.
Carey is owner of The Connecticut Land Company, a real estate brokerage company,
and is a licensed real estate broker, located in Washington, Connecticut.
MADELINE F. CONTEGNI: Age 68. Mrs. Contegni has been a Director of Bancorp
since 1982 and of VBT since 1974. Her present term of office expires in 1998.
Mrs. Contegni is a principal owner of Prudential Prime Properties Real Estate,
and a licensed real estate broker, located in Ridgefield, Connecticut.
JEANNE M. COOK: Age 63. Mrs. Cook has been a Director of Bancorp and VBT
since 1989. Her present term of office expires in 1999. Mrs. Cook is the owner
of Jeanne Cook Travel Service, a travel agency in Ridgefield, Connecticut.
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<PAGE>
JOSEPH L. KNAPP: Age 67. Mr. Knapp has been a member of the Board of
Directors of Bancorp since 1982 and of VBT since 1974. His present term of
office expires in 1999. Mr. Knapp is Vice President and Treasurer of Knapp
Brothers, Inc., arborist, having an office in Ridgefield, Connecticut.
CARL LECHER: Age 61. Mr. Lecher has been a Director of Bancorp and VBT
since 1984. His present term of office expires in 1998. He is President of Carl
Lecher, Incorporated, a real estate contracting and development firm, having an
office in Ridgefield, Connecticut.
THOMAS F. REYNOLDS: Age 48. Mr. Reynolds has been a Director of Bancorp and
VBT since 1993. His present term expires in 1999. He is a certified public
accountant who is a partner in the accounting firm of Reynolds & Rowella, CPA,
having its principal office in Ridgefield, Connecticut.
ROBERT SCALA: Age 61. Mr. Scala has been a Director of Bancorp since 1982
and of VBT since 1974. He is Assistant Secretary of Bancorp and VBT. His present
term expires in 1998. He was formerly Vice President of the Elms Inn, Inc., a
restaurant and hotel company, with a place of business in Ridgefield,
Connecticut.
No nominee for election as a Director is proposed to be elected pursuant to
any arrangement or understanding between the nominee and other person or
persons; except the Directors and Officers acting solely in that capacity. There
is no family relationship between any Director, Executive Officer or person
nominated by the Corporation to become a Director or Executive Officer of either
Bancorp or VBT.
DIRECTORS' COMMITTEES AND MEETINGS
In 1996, the Board of Directors of VBT and Bancorp had a six (6) member
standing Audit Committee consisting of Jose Boa, Madeline Contegni, Edward J.
Hannafin, Carl Lecher, Thomas Reynolds and Robert Scala who are Directors
independent of management. The Committee meets on call. In 1997, the Audit
Committee will consist of the same six (6) Directors. The function of the
Committee is to determine through external and internal audit and investigation
programs that the interests of depositors and stockholders are properly advanced
and safeguarded. The Committee reviews and supervises an internal audit program;
reviews the engagement and actions of the independent auditor and makes
recommendations to the Board of Directors; reviews the services, qualifications,
engagement and results of the independent audit; reviews the audit and non-audit
fees and meets on matters relative to the annual
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<PAGE>
examination by Bancorp's accounting firm including a discussion of the
accounting firm's memorandum on accounting procedures and internal control. The
Committee and the Board of Directors also consider the independence of the
accounting firm for non-audit functions. It met three (3) times in 1996.
The Executive Committee of Bancorp and VBT each consists of five (5)
members of the Board of Directors; Enrico Addessi, Richard O. Carey, Nicholas R.
DiNapoli, Edward J. Hannafin, and Robert V. Macklin. The Committee acts on
behalf of the Board of Directors in the implementation of its policies and
directives. It also acts as its Nominating Committee with the function of
seeking qualified candidates (including consideration of the performance of the
incumbent Directors) for the Board of Directors of Bancorp and VBT and Advisory
Board of Directors of VBT and recommending nominees to the respective Board of
Directors. The Committee will consider nominees recommended by stockholders
provided stockholders submit the name or names of new nominees, in writing, to
the Secretary of the Board of Directors by December 22, 1997. Nominees for
election as a director at an annual meeting are reviewed by the Committee on or
before February 1st preceding the annual meeting. As a nominating committee, it
met one (1) time during 1996.
Neither Bancorp nor VBT has a compensation committee. This function is
performed by their respective Boards of Directors. The Board of Directors sets
the compensation for the members of the Board of Directors and the
President/Chief Executive Officer and Executive Vice President. See
"Compensation Committee Report of Executive Compensation".
The Board of Directors of Bancorp and VBT held fourteen (14) regular or
special meetings in 1996. All Directors attended more than 75% of the aggregate
of the Board of Directors meetings and their Committee meetings.
REMUNERATION OF DIRECTORS
AND CERTAIN BUSINESS RELATIONSHIPS
Members of the Board of Directors of Bancorp, who are not employees, do not
receive any remuneration except for attendance at meetings. In 1996, members of
the Board of Directors of Bancorp and VBT received the sum of $550 each for
attendance at the joint meetings of the Board of Directors and $150 each for
attendance at committee meetings of the Board of Directors. In 1997, members of
the Board of Directors of Bancorp and VBT will receive the same compensation
each for attendance at the joint meeting of the Board of Directors of Bancorp
and VBT and for attendance at committee meetings of the Board of Directors. In
1996, each member of the Board of Directors received a bonus of $1,000.00. In
1996, the
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<PAGE>
Chairman of the Board of Directors received additional compensation of $10,000
per annum for his additional work and services provided to the Corporation and
VBT during the course of the year and will receive the same additional
compensation for the additional work and services in 1997. Mr. Macklin and Mr.
Umbarger do not receive remuneration as members of the Board of Directors for
attendance at Director and Committee meetings.
Edward J. Hannafin, who is Chairman of the Board of Directors of VBT and
Bancorp, is a principal in the Law Firm of Cutsumpas, Collins, Hannafin,
Garamella, Jaber & Tuozzolo, P. C., which is counsel to the Corporation and VBT.
The Law Firm received a total remuneration for ordinary and extraordinary fees
to the Corporation and VBT in 1994 of $78,205.00, in 1995 of $53,548.00, and in
1996 of $53,816. The Law Firm has been retained as counsel to Bancorp and VBT
for services to be rendered in the ordinary course of business in 1997 for the
sum of $600 per month (an annual aggregate amount of $7,200).
Mr. Nicholas R. DiNapoli and Mr. Carl Lecher are partners in Skylands
Associates, a Connecticut partnership, which leases real estate to VBT at 96
Danbury Road, Ridgefield, Connecticut. The premises contain approximately 7000
sq. ft. of office space with parking. VBT paid $99,298 to Skylands in 1994,
$109,562.00 in 1995, and $114,251 in 1996. VBT will pay a base rental fee of
$99,209.00 plus common charges to Skylands Associates in 1997.
Jose P. Boa is President and Owner of Diversified Maintenance Corporation
of Danbury, Connecticut, which provides cleaning and janitorial services to VBT
and received fees of $32,689.00 in 1994, $38,950.00 in 1995, and $40,035.00 in
1996. Diversified Maintenance Corporation is providing cleaning and janitorial
services in 1997 to VBT.
Carl Lecher provided construction supervision for VBT's new office building
in Danbury, Connecticut, and received $ 22,500 in compensation in 1996 for this
service.
Other Directors have minimal or no business contact with the Corporations.
DIRECTORS DEFERRED INCOME PLAN
In 1986, the Corporation adopted a voluntary deferred income plan for
Directors which permits Directors to defer receipt of a part of their director's
fees. There are presently twelve (12) Directors eligible for the plan. Robert V.
Macklin and James R. Umbarger are not eligible for the plan as he is the
President and Chief Executive Officer of the Corporation and a member of active
management. Five (5) Directors have elected to participate in the plan.
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<PAGE>
Under the program, a Director may elect to have all or a portion of their
director's fees deferred. These deferred awards are paid out in one hundred
twenty (120) monthly installments at the age selected by the participant. The
amount of the benefit varies with the amount deferred, the participant's age at
time of commencement and time of termination, and the circumstances of the
termination. The program also includes special provisions for payment to the
beneficiary of the participant who dies while participating in the Plan. The
right to the amount deferred vests immediately. The right to additional sums
will vary and vest at different times in accordance with the amount deferred,
age of participant and length of participation.
The amount deferred is used by VBT to purchase life insurance on the lives
of the deferring participants. The proceeds from the insurance will be used to
reimburse VBT for the benefit payments made under the program. The insurance is
designed so that if the assumptions made as to mortality experience, policy
dividends, and other factors are realized, the proceeds paid VBT will be at
least equal to all the premium payments.
EXECUTIVE OFFICERS
The Executive Officers of Bancorp and VBT are listed below, together with
their age, position and office, principal occupation and their term and period
during which they have served as such:
Position, Office, & Term and
Name and Age Principal Occupation Period
- --------------------------------------------------------------------------------
ROBERT V. MACKLIN President and Chief 1990 to date
Age 49 Executive Officer of
Bancorp and VBT;
formerly Executive Vice
President of Bancorp
and VBT (VBT 1979-1990;
Bancorp 1984 to 1990).
JAMES R. UMBARGER, JR. Executive Vice-President 1990 to date
Age 46 of Bancorp and VBT,
Director of VBT (1996 to
date) President of LNB
(1995); Sr. Vice-President
and Treasurer of Bancorp
and VBT (1982 to 1990) and
Executive Vice-President of
VBT (1990 to 1995).
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<PAGE>
The salaries of Bancorp officers are paid by VBT.
There are no arrangements or understandings between the Officers and any
other persons pursuant to which he is to be selected as an officer. There is no
family relationship between any Director, Executive Officer or person chosen to
be a Director or Executive Officer. There are no employment contracts,
compensation plans or arrangements with the Executive Officers other than their
respective interests in the Corporations 401-K Incentive Savings and Salary
Reduction Plan (See "Incentive Savings and Salary Reduction Plan"), Stock Option
Plan (See "Options") and insurance (See "Executive Compensation") and an
agreement regarding termination resulting from a change in control of Bancorp or
VBT (See "Termination of Employment: Change In Control Agreement").
TRANSACTIONS WITH MANAGEMENT
Bancorp and VBT have had no transactions and have no proposed transactions
with their Directors, Officers, any of their relatives, or firm, corporation or
other entity, in which they may have an interest, directly or indirectly; except
as noted below.
All Directors and Officers of Bancorp and VBT are depositors of VBT and
several have had credit extended to them in varying degrees in the ordinary
course of business.
VBT has had and expects to have in the future, banking transactions in the
ordinary course of business, with its and Bancorp's Directors, Advisory
Directors, Officers, principal stockholders, their immediate families,
corporations, organizations, and associates, on substantially the same terms,
including interest rates, collateral and repayment terms as those prevailing at
the same time for comparable transactions with others, which do not involve more
than the normal risk of collectability or present unfavorable features.
See "Remuneration of Directors and Certain Business Relationships" for further
transactions with Directors.
REMUNERATION OF DIRECTORS AND OFFICERS
EXECUTIVE COMPENSATION
There are no Directors or Officers of VBT or Bancorp (other than the
President, Robert V. Macklin and the Executive Vice President, James R.
Umbarger, Jr.), who individually received a total annual salary and bonus
remuneration from VBT or Bancorp in excess of $100,000 in 1996. There is no
compensation paid by Bancorp to its Directors or Officers. All compensation to
them is paid by VBT. See "Remuneration of Directors and Certain Business
Relationships." The following table sets forth the 1996 remuneration for VBT's
highest paid Executive Officers and Directors as a group.
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<PAGE>
VBT
- --------------------------------------------------------------------------------
(A) (B) (C)
Name of individual or Capacities in Cash Remuneration
number of persons in which served
group
- --------------------------------------------------------------------------------
(14) Directors & Executive $ 465,325 (2),(3),(4)
Officers as a group
(24) Officers as a group $1,243,656 (2),(3),(4)
- --------------------------------------------------------------------------------
1. The term "Director" does not include salaried employees who do not
receive fees as a Director. The term "Directors" does include the Chairman,
Vice-Chairman and Secretary of the Board of Directors. The term "Executive
Officers" and eligible "Officers" includes the President and Executive
Vice-President.
2. Officers of the Corporation receive life, health, hospitalization and
medical insurance as part of a group plan, which does not discriminate in scope,
term or operation in favor of officers or directors, and is generally available
to all salaried employees. The personal benefits to any officer, which are not
directly related to job performance or those provided to broad categories of
employees and which do not discriminate in their favor, of Officers or
Directors, do not exceed either $50,000 or 10% of their cash compensation as set
forth in the Summary Compensation Table. Certain of the Executive Officers of
the Corporation utilize Corporation automobiles in the ordinary course of its
business. Any personal use of Corporate automobiles is minimal.
3. Includes payments under Employee Incentive Thrift Plan. See "Incentive
Savings and Salary Reduction Plan".
4. Includes bonus payments. All the employees earned a bonus at year end in
1994, 1995, 1996. The entire bonus amount was: 1994 ($34,000.00); 1995
($41,823.00); and 1996 ($60,090.00). Executive Officers did not participate in
these bonuses.
INCENTIVE SAVINGS AND SALARY REDUCTION PLAN
VBT has a 401-K Incentive Savings and Salary Reduction Plan. The Plan is
available to all eligible employees. The Plan is designed to be a qualified
pension plan under Section 401 and 501 of the Internal Revenue Code. The Plan
provides for 50% matching contributions to be made by VBT if the employee
voluntarily agrees to contribute to the Plan by a salary reduction election. An
employee may contribute no more than the maximum I.R.S. index
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<PAGE>
amount to the Plan; however the Company only matches contributions up to 6% of
the employee's salary. The entire amount of contributions made by the employee
and VBT and credited to the account of the participating employee is fully
vested within five (5) years. Withdrawals from the Plan are only allowed upon
retirement, disability, separation from service, attainment of the age of 59 1/2
or in the event of financial hardship as defined by the Internal Revenue
Service. The employee's election to participation is revocable. Directors are
not eligible for participation in the Plan other than in their capacity as an
employee. (The President, Robert V. Macklin, and Executive Vice-President, James
R. Umbarger, Jr., who are also Directors, participate in the Plan as employees).
The total amount contributed by VBT to the Plan in the past three (3) years
is set forth in the following table.
- --------------------------------------------------------------------------------
1994 1995 1996
- --------------------------------------------------------------------------------
Robert V. Macklin, President $ 5,714 $ 4,038 $ 4,224
and Chief Executive Officer
of Bancorp and VBT.
James R. Umbarger, Jr., Executive $ 4,658 $ 2,751 $ 3,782
Vice-President of Bancorp and
VBT.
Executive Officers as a Group $10,372 $ 6,789 $ 8,006
Employees as a Group
(excluding executive officers) $40,656 $41,619 $42,979
- --------------------------------------------------------------------------------
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
----------------------------------- ---------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Name Annual Restricted All other
and Compen- Stock TIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary ($) Bonus ($) ($) ($) SARs (#) ($) ($)
- -------- ---- ---------- --------- --- --- -------- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert V.
Macklin
President Chief
Executive 1996 141,400 24,000 0 0 10,000 0 4,224
Officer: 1995 135,375 19,000 0 0 0 0 4,038
Director 1994 131,484 9,500 0 0 0 0 5,714
James R.
Umbarger, Jr. 1996 116,502 16,000 0 0 7,500 0 3,782
Executive 1995 110,040 11,000 0 0 0 0 2,751
Vice-President 1994 107,008 6,500 0 0 0 0 4,658
</TABLE>
NOTES:
SALARY: The amounts shown for Mr. Macklin and Mr. Umbarger under (i)
include amounts deferred under Section 401K of the Internal Revenue Code. See
"Incentive Savings and Salary Reduction Plan".
BONUS: Bonuses were paid to the Executive Officers as determined by The
Board of Directors after consideration of financial performance, including cash
flow, profitability, return on capital, growth, administration, compliance and
regulatory reports of the Bank. See "Compensation Committee Report of
Executives".
OTHER ANNUAL COMPENSATION: Mr. Macklin and Mr. Umbarger utilize Corporation
automobiles in the ordinary course of business. Any personal use is minimal.
They receive life, health, hospitalization and medical insurance as part of a
group plan; which does not discriminate in scope, term or operation in favor of
officers and is generally available to all salaried employees. These perquisites
and other benefits do not exceed the lesser of $50,000.00 or 10% of their
respective total annual salary and bonuses.
OPTIONS/SARs: In 1993, and 1996 Stock Options were granted. See
"Options/SAR Grants In Last Fiscal Year".
ALL OTHER COMPENSATION: Mr. Macklin and Mr. Umbarger received employer
contributions under its 401K Plan. See "Incentive Savings and Salary Reduction
Plan".
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<PAGE>
There were no options granted to executive officers in 1996.
The following table sets forth information with respect to the named
Executive Officers concerning the exercise of options during 1996 and the
unexercised options held as of December 31, 1996.
Aggregated Option/SAR Exercises in Last Year.
and FY-End Option/SAR Values
(a) (b) (c) (d) (e)
Value of
Number Unexercised
Unexercised in-the-money
Shares Options/SAR's Options/SAR's
Acquired at FY-End (#) FY-End ($)
On Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---- ------------ ------------ ------------- -------------
Robert V. Macklin -0- -0- 14,900/0 $78,313/0
James R. Umbarger, Jr. -0- -0- 11,400/0 $61,125/0
- --------------------------------------------------------------------------------
1. The options were granted under the "Stock Option Reserve Plan".
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<PAGE>
1. The President of VBT, Robert V. Macklin, was granted an option in 1993
to purchase 4,900 shares of common stock of Bancorp at a price of $11.00 per
share to be exercised on or before October 14, 1998. In 1996 he was granted an
option to purchase 10,000 shares of common stock at $19.00 per share to be
exercised on or before April 8, 2001 under the 1996 Stock Option Plan for Key
Employees. See footnotes 3, 4, and 5.
2. The Executive Vice-President of VBT, James R. Umbarger, Jr. was granted
an option in 1993 to purchase 3,900 shares of common stock of Bancorp, at a
price of $11.00 per share to be exercised on or before October 14, 1998. In 1996
he was granted an option to purchase 7,500 shares of common stock under the 1996
Stock Option Plan for Key Employees at $19.00 per share to be exercised on or
before April 8, 2001. See footnotes 3, 4, and 5.
3. In 1993, Bancorp granted options to purchase 16,300 shares of its common
stock to sixteen (16) of VBT's officers. The officers and the number shares
granted to them varied from 100 shares to 4,900 shares, including Robert V.
Macklin (4,900 shares) and James. R. Umbarger, Jr. (3,900 shares). The purchase
price is $11.00 per share and is subject to adjustment for stock dividends,
stock splits and issuance of additional shares. The expiration date is October
14, 1998; but sooner expire upon the expiration of fourteen (14) days from the
date on which the respective officers employment is terminated or three (3)
calendar months from date of death during employment to be exercised by personal
representatives. These options are granted by the Board of Directors under the
Stock Option Reserve Plan.
4. In 1996, Bancorp granted options to purchase 39,200 to Key Employees
under the 1996 Stock Option Plan for Key Employees. The Officers and member of
shares granted to them varied from 100 to 10,000 shares including Robert V.
Macklin (10,000 shares) and James R. Umbarger (7,500 shares). See "1996 Stock
Option Plan".
5. The market value of the October 14, 1993 grants were the last known
sales price of Bancorp as represented by NASDAQ, and the market value under the
1996 Stock Option Plan was the last known sales price of Bancorp as represented
by NASDAQ.
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<PAGE>
TERMINATION OF EMPLOYMENT: CHANGE IN CONTROL
In 1993, the Board of Directors of VBT entered into an agreement with
Robert V. Macklin, its President and Chief Executive Officer, and James R.
Umbarger, Jr., its Executive Vice-President (both individually referred to as
"Executives"), which provides for compensation in the event their employment is
terminated after a change in control of VBT or Bancorp. This Agreement was
amended in 1995. The agreements provide for a salary continuation for a period
of two (2) years in the event of termination within one (1) year of the change
in control or for a period of one (1) year in the event of termination within
the second (2nd) year after change in control. The agreement also provides for
salary continuation in the event of salary reduction during the first two (2)
years following a change in control. These payments may be terminated in the
event the Executives' employment is terminated for cause. The agreement
terminates January 1, 2000. In 1996 The Board of Directors of VBT entered into a
similar change of control agreement with Senior Vice-President George W. Hermann
and Senior Vice-President Gerard P. Sphundt providing for one (1) year
compensation if terminated within the first year.
In 1996, The Board of Directors adopted a change of control Severance
Policy for directors and employees of VBT and Bancorp in the event their
employment is terminated after a change of control of Bancorp or VBT. The policy
provides for a continuation of directors compensation equal to 2.99 times the
annual compensation received by the respective director for the preceding two
(2) years, payable monthly on the date directors are customarily compensated.
The compensation for any employee or director shall at no times exceed 2.99
times their annualized compensation for the most recent five (5) year taxable
years ending before the date on which the change in control or ownership occurs
of control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The Board of Directors acts as the Compensation Committee. All Directors
had and have transactions with Bancorp as noted in "Transactions With
Management". Edward J. Hannafin, Chairman of the Board of Directors, Nicholas R.
DiNapoli, Vice-Chairman of the Board of Directors, and Jose P. Boa and Carl
Lecher members of the Board of Directors, had certain business relations with
Bancorp and VBT during 1996. See "Remuneration of Directors and Certain Business
Relationships" and "Transactions With Management".
COMPENSATION COMMITTEE REPORT OF EXECUTIVE COMPENSATION
The Board of Directors acts as the Compensation Committee with respect to
compensation for Executive Officers.
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<PAGE>
Robert V. Macklin, President and Chief Executive Officer, who is also a
member of the Board of Directors, and James R. Umbarger Executive Vice
President, who is proposed as a nominee for Director, do not participate as a
board member relative to discussion, determination, policies and review of
executives and executive compensation.
The Board considers earnings, return on assets, return on equity, growth,
administration, compliance and regulatory reports, development and maintenance
of business and customers, and general economic industry conditions.
Consideration was given to profitability of the bank under economic
conditions that have existed in VBT's banking market for the past three (3)
years and recognition of an increased profit in 1996 and the amount of earnings
from ordinary operations, the development of VBT in its existing and new market
areas, the expansion project in Danbury, Connecticut, and the development of the
Trust Department. The Board reviewed the increased profit of VBT during this
period of time. Peer banks in Western Connecticut had similar performance to
VBT.
The Board also reviewed known compensation packages of executives at peer
banking institutions located in Western and Southwestern Connecticut. This is a
self selected group of comparable size and banking business. The salaries
provided to Bancorp and VBT executives are targeted at a competitive median
range of these peer groups.
In addition, the Board considered the overall performance of VBT and
Bancorp for the past three (3) years, and in particular the continued
profitability of Bancorp, the increase in earnings per share in 1996, the
continued executive efforts to improve the company and the corresponding
results, the competitive environment earnings, return on assets, return on
equity, growth, administration, compliance and regulatory reports, the
initiation of a new business development team and development of its business
and customers. The criteria are typically subjective and not specifically
specified; however certain performance measures are available.
The Board determined the executive compensation paid in 1996 to be fair and
reasonable. It believes the extension of certain stock options (See "Options"
and footnotes thereto) are an incentive to a continuing profitability and a
vehicle for retention of qualified personnel. Stock options were extended with
incentives and retention in mind and not as a form of current compensation. The
Board is proposing an Incentive Stock Option Plan for key employees which will
also extend options to the Executive Officers (see "1996 Stock Option Plan").
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The Board of Directors acting as the Compensation Committee were:
Enrico J. Addessi Jeanne M. Cook Carl Lecher
Jose P. Boa Nicholas R. DiNapoli Antonio Resendes
Richard O. Carey Edward J. Hannafin Thomas F. Reynolds
Madeline F. Contegni Joseph L. Knapp Robert Scala
COMPARISON OF TOTAL STOCKHOLDER RETURN
Set forth below is a line graph comparing the five year cumulative total return
of the Company's common stock with that of the SNL Securities Corporation
Performance New England Bank Index Value and the NASDAQ Stock Market (U.S.)
Total Return Index. The graph compares the value of $100 invested on December
31, 1991 in the Company's stock with that of the two indexes. The SNL New
England Bank Index was chosen as having a representative peer group of companies
and the NASDAQ Stock Market (U.S.) was chosen as it represents a broad market
group in which the Company paticipate. The total return includes reinvestment of
dividends.
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Village Bancorp Inc.
[CHART OMITTED]
[The following table was represented as a line chart in the printed material.]
Total Return Performance
Period Ending
----------------------------------------------------------
Index 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
----- -------- -------- -------- -------- -------- --------
Village Bancorp Inc 100.00 105.39 147.65 169.38 276.27 334.10
Nasdaq -- Total US 100.00 116.38 133.60 130.59 184.68 227.16
Banks (New England) 100.00 160.61 164.74 158.31 259.59 353.98
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STOCK OPTION RESERVE PLAN
Bancorp has two (2) present stock option reserve plans for the officers and
employees of it and VBT to be granted and issued by The Board of Directors from
time to time.
1988 PLAN
The first plan, adopted in 1988, provides for the Corporation setting aside
21,016 (adjusted to reflect stock dividends) shares of its common stock to be
granted and issued from time to time by the Board of Directors to the officers
and employees of the Corporation and VBT. The grant of options will be issued in
consideration of employment and as an incentive to advance the growth,
development and interests of Bancorp and VBT.
The price per share at the time of a grant or establishment of an option
shall be the then fair market value as of the latest practicable date to the
grant or establishment. The exercise and termination date and other material
conditions are to be set by the Board of Directors at the time of the grant. The
plan (and options granted thereunder) provide for stock adjustment for
additional shares in the event of a stock dividend, split-up, reclassification,
or subdivision, and issuance of additional shares to existing stockholders or
the general public. Options are intended to qualify as incentive stock options
under the Internal Revenue Code and expire no more than five (5) years after the
date of granting thereof or on such date prior thereto as may be fixed by the
Board of Directors subject to earlier termination if the Optionee dies or leaves
the service of the Corporation or any of its subsidiaries. Payment for shares
upon the exercise of an option shall be in cash. It is intended that there will
be no Federal Income Tax consequences upon the granting of an option for either
the Bank or the recipient. Upon the sale of the option shares exercised, there
will be taxable income to the recipient equal to the excess of sales price of
the stock at the date of the sale over the option price. The income will be
taxed to the recipient as earned income and therefore subject to the maximum
personal income rate. The Corporation will have a tax deduction in the same
amount as and at the same time as the recipient receives income.
The options when granted will be documented in writing. The Board of
Directors has a written stock option plan for the setting aside and reserve of
the shares which is on file in the office of the Corporation.
These options and option prices are subject to adjustment for stock
dividends, stock splits and issuance of additional shares.
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<PAGE>
In 1993, the Board of Directors granted options to purchase 16,300 shares
of its common stock to sixteen (16) of VBT's Officers. The Officers and the
number of shares granted to them varied from 100 shares to 4,900 shares,
including Robert V. Macklin (4,900 shares) and James R. Umbarger, Jr. (3,900
shares). The purchase price is $11.00 per share and is subject to adjustment for
stock dividends, stock splits and issuance of additional shares. Reference is
made to "Options" and its footnotes as to the number of shares, expiration dates
and other material conditions. See "Options".
1996 STOCK OPTION PLAN FOR KEY EMPLOYEES
The second plan is the "1996 Stock Option Plan" which was adopted by
Stockholders in 1996. The Plan provides for 75,000 shares of common stock to be
issued to a class of officers considered Key Employees. The purpose is to
provide long term incentives in the form of stock options to Key Employees. The
grant of options are issued in consideration of employment and as an incentive
to advance the growth, development and interest of Bancorp and VBT.
The class of officers listed in the Plan are entitled to receive the total
number of options, in the aggregate, with respect to the officers title, upon
their attainment of a designated position. The purchase price is the fair market
value of Bancorp common stock on the date of grant; as defined in the Plan. The
number of shares available for the options or optionee and the option price
thereof will be increased or decreased proportionally for any stock split, stock
dividend or other similar adjustment.
Each option may be exercised at any time, in whole or in part, within five
(5) years from the date of grant unless sooner expired, terminated or cancelled
pursuant to the plan. In order to exercise the option the officer must have
remained in the employ of the Company for at least one (1) year and in that
position for at least three (3) months. No options under the 1996 Plan may be
granted after 10 years from the effective date of the plan.
Under present Federal Income Tax laws and regulations, the holder of an
option granted under the 1996 Plan which qualifies as an Incentive Stock Option,
("ISO") will not be subject to any tax with respect to the grant of the Option.
The ISO holder will not realize income at the time the ISO is exercised
(although an item of tax preference may arise as a result) and any gain realized
upon the disposition of the stock received upon exercise will be taxed as a long
term capital gain; provided that certain holding period requirements are met. If
such holding period requirements are not
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<PAGE>
met, the gain may be characterized as ordinary income. Bancorp will not receive
an income tax deduction with respect to an ISO unless upon disposition of the
underlying stock the Employee realizes ordinary income as a result of having
failed to satisfy the holding period requirements.
The holder of an option granted under the 1996 Plan which is not an ISO but
is a non-qualified option ("NQO") will not recognize income with respect to the
grant of the option; but will recognize ordinary income at the time of exercise
of the Option to the extent the fair market value of the shares purchased exceed
the Option price. However, a holder subject to Section 16(b) of the Securities
Exchange Act of 1934 will instead, unless he or she elects otherwise, be taxed
based on the value of the shares received six months after (rather than at the
time of) exercise of the Options. Bancorp will be entitled to a deduction for
Federal Income Tax purposes in an amount equal to the income realized by the
holder upon the exercise of a NQO.
In 1996, the Board of Directors granted options to purchase 39,200 shares
of Bancorp common stock to twenty (20) of VBT's officers. The officers and the
number of shares granted to them value from 100 to 10,000 shares, including
Robert V. Macklin (10,000 shares) and James R. Umbarger (7,500 shares). The
purchase price is $19.00 per share and must be exercised on or before April
8,2001. See "Options"
RATIFICATION OF
INDEPENDENT PUBLIC ACCOUNTANTS
On recommendation of the Audit Committee, the Board of Directors has
appointed Deloitte & Touche LLP as independent auditors of the Corporation for
the year ending December 31, 1996. Deloitte & Touche LLP was formed in 1989 when
Deloitte Haskins & Sells and Touche Ross & Co. combined their practices.
Deloitte & Touche, LLP, has been Bancorp's and VBT's independent public
accountant since 1986.
The stockholders are asked to ratify the appointment pursuant to its
service arrangement. Deloitte & Touche, LLP, will audit the consolidated balance
sheet as of the end of the fiscal year and related consolidated statements of
income, and changes in stockholders' equity and cash flows for the year in
accordance with generally accepted auditing standards. The accounting firm also
is responsible for the preparation of Bancorp's consolidated state and federal
income tax returns. The services and independence of the accountants were
considered and approved by the Audit Committee of the Board of Directors of VBT
and the Board of Directors of VBT and Bancorp.
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<PAGE>
A representative of Deloitte & Touche, LLP, will be present at the annual
meeting to be held on April 28, 1997, with an opportunity to make a statement if
the representative desires to do so, and will be available to respond to
appropriate questions.
In the event stockholders vote against the appointment of Deloitte &
Touche, LLP, the Board of Directors will submit an additional independent
accountant to the stockholders for approval at a special meeting called for that
purpose.
MISCELLANEOUS
The annual meeting is called for the purposes set forth in the Notice.
Management does not know of any matter for action by stockholders other than the
matters described herein. The enclosed proxy will confer discretionary authority
to vote on all matters incidental to the conduct of the meeting, approval of
minutes of prior meetings, the election of any office for which a bona fide
nominee is named in this proxy statement and such nominee is subsequently unable
to serve or for good cause refuses to serve, and matters which management does
not know as of date may be presented at the meeting. It is the intention of the
Proxy Committee to vote in pursuance of the proxy in accordance with the
recommendation of the Board of Directors.
BY ORDER OF THE BOARD OF DIRECTORS
Enrico J. Addessi, Secretary
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