<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE
ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Meridian Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
Meridian Bancorp, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of 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:*
(4) Proposed maximum aggregate value of transaction:
--------
*Set forth the amount on which the filing is calculated and state how
it was determined.
[_] 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:
Notes:
<PAGE>
[LETTERHEAD AND LOGO OF MERIDIAN BANCORP, INC. APPEARS HERE]
March 24, 1994
Dear Shareholder:
Meridian Bancorp's Annual Meeting of Shareholders will be held on Tuesday,
April 26, 1994, at 4:00 p.m. The Meeting will be held in the Regency Ballroom
of the Sheraton Berkshire, Route 422 and Paper Mill Road, Wyomissing,
Pennsylvania.
The matters to be acted on at the Meeting are the election of eight Class II
directors, consideration of a proposal to increase the number of authorized
shares of Meridian's common stock and ratification of Meridian's independent
auditors for 1994. A shareholder proposal will also be considered at the
Meeting. All of these matters are described in the enclosed Notice of Annual
Meeting of Shareholders and Proxy Statement, which you should review carefully.
Please sign and date your proxy card and return it in the enclosed envelope
as soon as possible. If you plan to attend the Meeting, please be sure to
complete and return the enclosed reservation form with your proxy.
Thank you for your interest in Meridian. I look forward to seeing you at the
Meeting.
Sincerely,
[SIGNATURE APPEARS HERE]
<PAGE>
[LOGO OF MERIDIAN APPEARS HERE]
MERIDIAN BANCORP, INC.
35 North Sixth Street
P.O. Box 1102
Reading, Pennsylvania 19603
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1994
To the Shareholders of Meridian Bancorp, Inc.:
Notice is hereby given that the Annual Meeting (the "Meeting") of the
holders of Common Stock (the "Common Stock") of Meridian Bancorp, Inc.
("Meridian") will be held at the Sheraton Berkshire, Regency Ballroom, Route
422 West and Paper Mill Road, Wyomissing, Pennsylvania on Tuesday, April 26,
1994, at 4:00 P.M., local time:
1. To elect eight Class II directors to hold office for three years from
the date of election and until their successors shall have been elected and
qualified (Matter No. 1).
2. To consider and act upon a proposal to amend Meridian's Articles of
Incorporation to increase the number of authorized shares of Common Stock
from 100,000,000 shares to 200,000,000 shares (Matter No. 2).
3. To ratify the appointment by Meridian's Board of Directors of KPMG
Peat Marwick as Meridian's independent auditors for the fiscal year ending
December 31, 1994 (Matter No. 3).
4. To consider and act upon a shareholder proposal to provide for
cumulative voting in the election of Meridian's directors (Matter No. 4).
5. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
Holders of record of issued and outstanding shares of Common Stock at the
close of business on February 15, 1994 are entitled to notice of, and to vote
at, the Meeting. Such shareholders may vote in person or by proxy. The stock
transfer books of Meridian will not be closed.
<PAGE>
The Board of Directors of Meridian cordially invites you to attend the
Meeting. Whether or not you are personally present, it is important that your
shares be represented at the Meeting. Accordingly, please sign and return your
proxy in the enclosed envelope.
By Order of the Board of Directors,
/s/ William L. Gaunt,
William L. Gaunt,
Secretary
Dated: Reading, Pennsylvania
March 24, 1994
SHAREHOLDERS ARE URGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY IN
---- ---- ---- --------
THE ACCOMPANYING ENVELOPE. THE PROXY IS REVOCABLE AT ANY TIME BY A WRITTEN
INSTRUMENT, INCLUDING A LATER DATED PROXY, SIGNED IN THE SAME MANNER AS THE
PROXY AND RECEIVED BY THE SECRETARY OF MERIDIAN AT OR BEFORE THE MEETING. IF
YOU ATTEND THE MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR PROXY BY VOTING IN
PERSON.
<PAGE>
[LOGO OF MERIDIAN APPEARS HERE]
MERIDIAN BANCORP, INC.
35 North Sixth Street
P.O. Box 1102
Reading, Pennsylvania 19603
----------------
PROXY STATEMENT
FOR ANNUAL MEETING
APRIL 26, 1994
GENERAL
INTRODUCTION
Meridian Bancorp, Inc. ("Meridian") is a Pennsylvania business corporation
and multibank holding company headquartered at 35 North Sixth Street, Reading,
Pennsylvania 19601. Meridian owns all of the outstanding common stock of
Meridian Bank, Meridian Bank, New Jersey and Delaware Trust Company. Meridian
also owns a number of nonbanking subsidiaries engaged in various aspects of the
financial services industry.
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Meridian to be used at the Annual Meeting
(the "Meeting") of holders of Common Stock (the "Common Stock") of Meridian to
be held at the Sheraton Berkshire, Regency Ballroom, Route 422 West and Paper
Mill Road, Wyomissing, Pennsylvania, at 4:00 P.M., local time, on Tuesday,
April 26, 1994, and at any adjournment or adjournments thereof. The approximate
date upon which this Proxy Statement and the accompanying proxy were first
sent, given or otherwise made available to shareholders was March 25, 1994. In
addition to the use of the mails, proxies may be solicited by personal
interview and telephone by directors, officers and employees of Meridian and
its subsidiaries. Meridian will pay all costs of soliciting proxies. In
addition, Meridian has retained Georgeson & Co., Inc. to assist with the
solicitation of proxies at an estimated cost of $6,000 plus reasonable out-of-
pocket expenses.
VOTING SECURITIES
Holders of record of Meridian's Common Stock at the close of business on
February 15, 1994 are entitled to notice of, and to vote at, the Meeting.
At the Meeting, each shareholder is entitled to one vote for each share of
Common Stock registered in the shareholder's name at the close of business on
February 15, 1994. On February 15, 1994, there were 57,662,198 shares of Common
Stock outstanding and, accordingly, holders of Common Stock are entitled to
cast a total of 57,662,198 votes at the Meeting. Holders of Common Stock are
not entitled to cumulate votes in elections of directors.
<PAGE>
If a shareholder participates in Meridian's Shareholder Automatic Dividend
Reinvestment and Stock Purchase Plan, the proxy card sent to such shareholder
will represent the number of shares registered in the shareholder's name and
the number of shares, including fractional shares, credited to the
shareholder's Dividend Reinvestment Plan account.
If the enclosed form of proxy is appropriately marked, signed and returned in
time to be voted at the Meeting, the shares represented by the proxy will be
voted in accordance with the instructions marked thereon. Signed proxies not
marked to the contrary will be voted "FOR" the election of the nominees of
Meridian's Board of Directors, "FOR" the amendment to Meridian's Articles of
Incorporation to increase the number of authorized shares of Common Stock from
100,000,000 to 200,000,000, "FOR" the ratification of KPMG Peat Marwick as
Meridian's independent auditors for 1994, and "AGAINST" the shareholder
proposal to provide for cumulative voting in the election of Meridian's
directors. Signed proxies will be voted "FOR" or "AGAINST" each other matter
which properly comes before the Meeting or any adjournment or adjournments
thereof, at the discretion of the persons named as proxyholders.
RIGHT OF REVOCATION
Any shareholder giving a proxy has the power to revoke it by a written
instrument, including a later dated proxy, signed in the same manner as the
proxy and received by the Secretary of Meridian prior to its exercise. Any
shareholder attending the Meeting may also revoke his proxy by voting in person
at the Meeting.
QUORUM
Under Meridian's Articles of Incorporation, the presence, in person or by
proxy, of shareholders entitled to cast at least 66 2/3% of the votes which all
shareholders are entitled to cast will constitute a quorum for the transaction
of business at the Meeting.
PRINCIPAL SHAREHOLDERS
The following table sets forth information, as of February 15, 1994, as to
beneficial owners, either directly or indirectly, of 5% or more of the
outstanding shares of Common Stock and as to the right and power of Meridian,
directly or indirectly, to vote shares of Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS
------------------- ----------------- -------
<S> <C> <C>
George Strawbridge, Jr., Nina S. Strawbridge and
Barton J. Winokur, as co-trustees under a Deed of
Trust of Mr. Strawbridge, dated
January 21, 1991..................................... 4,200,310(/1/) 7.28%
Building B, Suite 100
3801 Kennett Pike
Wilmington, DE 19807
Meridian Asset Management, Inc., Meridian Trust
Company and
Delaware Trust Capital Management, Inc.(/2/)(/3/).... 2,609,785(/4/) 4.53%
c/o Meridian Bancorp, Inc.
35 North Sixth Street
Reading, PA 19601
</TABLE>
2
<PAGE>
- --------
(/1/) As reported in a Schedule 13D, dated March 28, 1991 (as amended May 15,
1991), filed by such persons with the Securities and Exchange Commission.
As reported, Mr. Strawbridge may be deemed to have sole voting and
dispositive power over all of such shares by virtue of his power to revoke
the trust, and Mrs. Strawbridge and Mr. Winokur may be deemed to share
voting and dispositive power over such shares by virtue of their positions
as trustees of such trust. Mrs. Strawbridge and Mr. Winokur each disclaims
beneficial ownership of all of the shares owned by the trust. Mrs.
Strawbridge may also be deemed to have sole voting and dispositive power
over an additional 5,000 shares held by a revocable trust and to share
voting and dispositive power over 5,076 shares held in a fiduciary account
for the benefit of her son; Mrs. Strawbridge disclaims beneficial
ownership of such 5,076 shares. Mr. Strawbridge may be deemed to share
voting and dispositive power over an additional 228,120 shares held by
various trusts or fiduciary accounts for the benefit of members of his
family; Mr. Strawbridge disclaims beneficial ownership of such 228,120
shares. Mr. Strawbridge also owns an additional 263 shares jointly with
his son for which he shares voting and dispositive power. (See "Matter
No. 1--Election of Directors," herein.)
(/2/) These shares were held of record by nominees for certain trust, estate and
agency accounts administered by Meridian Asset Management, Inc., Meridian
Trust Company and Delaware Trust Capital Management, Inc.
(/3/) As of February 15, 1994, 1,869,328 shares of Common Stock (approximately
3.24% of outstanding shares of Common Stock) were held of record by a
nominee for Meridian Trust Company, trustee for the Meridian Bancorp, Inc.
Savings Plan and the Commonwealth Bancshares Corporation 401(k) Plan.
Under the terms of the Plans, these shares are voted in the manner
directed by Plan participants. The trustee is required to vote shares
held under the Plans for which no direction is given for or against all
matters in the same proportion as shares held under the Plans are
directed and voted for and against such matters.
(/4/) Pursuant to the provisions of the applicable governing instruments and/or
in accordance with the applicable principles of fiduciary law, Meridian
Asset Management, Inc., Meridian Trust Company or Delaware Trust Capital
Management, Inc. has the right and power, exercisable either alone
(2,199,026 shares or approximately 3.81% of outstanding shares of Common
Stock) or in conjunction with a co-fiduciary (334,759 shares or
approximately .58% of outstanding shares of Common Stock) to vote these
shares, either in person or by proxy, "FOR" the election, as directors, of
nominees proposed by the Board of Directors (Matter No. 1), "FOR" the
amendment to Meridian's Articles of Incorporation to increase the number
of authorized shares of Common Stock from 100,000,000 to 200,000,000
(Matter No. 2), "FOR" the ratification of KPMG Peat Marwick as
Meridian's independent auditors for 1994 (Matter No. 3), and "AGAINST"
the shareholder proposal to provide for cumulative voting in the
election of Meridian's directors (Matter No. 4), provided such vote is
in the best interests of any such trust, estate or agency account and
the beneficiaries or principals thereof. Meridian Asset Management,
Inc., Meridian Trust Company and Delaware Trust Capital Management, Inc.
each intend to vote shares, over which it alone has voting power, "FOR"
the nominees listed below (Matter No. 1), "FOR" Matter No. 2, "FOR"
Matter No. 3 and "AGAINST" Matter No. 4, and each expects that
substantially all shares over which it has shared voting power will be
voted in the same manner.
3
<PAGE>
MATTER NO. 1
ELECTION OF DIRECTORS
GENERAL
The Articles of Incorporation of Meridian provide that Meridian's business
shall be managed by a Board of Directors of not less than 12 and not more than
24 persons. Meridian's Board, as provided in its Articles of Incorporation, is
divided into three classes: Class I, Class II and Class III, each class being
as nearly equal in number as possible. Under Meridian's Bylaws, a person
elected to fill a vacancy on the Board of Directors serves as a director for
the remaining term of office of the Class to which he or she was elected. The
directors in each class serve terms of three years each and until their
successors are elected and qualified.
The Board of Directors fixed the number of directors in Class II at eight
and has nominated the eight nominees listed below for election as Class II
directors. Each of the Board nominees for election as director is presently a
director of Meridian. Directors Burke, Davis, Leighow, and Wootton were
elected to the Board of Directors on August 31, 1993 to fill vacancies created
in accordance with the merger agreement dated March 30, 1993 between Meridian
and Commonwealth Bancshares Corporation. Director Joseph H. Jones, a nominee
for election as a Class II director at the Meeting will retire at Meridian's
1995 Annual Meeting of Shareholders in accordance with Meridian's mandatory
director retirement policy.
The Bylaws of Meridian permit nominations for election to the Board of
Directors to be made by the Board of Directors or by any shareholder entitled
to vote for the election of directors. All nominations are referred to the
Nominating Committee of the Board of Directors for consideration. Nominations
for director to be made at the Meeting by shareholders entitled to vote for
the election of directors must be preceded by notice in writing, delivered or
mailed by first class United States mail, postage prepaid, to the Secretary of
Meridian not less than 30 days nor more than 50 days prior to the Meeting,
which notice must contain certain information specified in the Bylaws. No
notice of nomination for election as a director has been received from any
shareholder as of the date of this Proxy Statement. If a nomination is
attempted at the Meeting which does not comply with the procedures required by
the Bylaws or if any votes are cast at the Meeting for any candidate not duly
nominated, then such nomination and/or such votes may be disregarded.
The eight nominees who receive the highest number of votes cast at the
Meeting will be elected as Class II directors. Abstentions and broker non-
votes will not constitute or be counted as "votes" cast for purposes of the
Meeting. Shares represented by properly executed proxies will be voted for the
eight Class II nominees listed below unless otherwise specified on a
shareholder's proxy card. Any shareholder who wishes to withhold authority
from the proxyholders to vote for the election of directors, or to withhold
authority to vote for any individual nominee, may do so by marking the proxy
to that effect. No proxy may be voted for a greater number of persons than the
number of nominees named.
If any of the nominees listed below become unable to accept nomination or
election, the proxyholders may exercise their voting power in favor of such
other person or persons as the Board of Directors may recommend. Meridian,
however, at present has no reason to believe that any nominee listed below
will be unable to serve as a director, if elected.
4
<PAGE>
The principal occupation for the last five years for each nominee for
director and each continuing director, together with certain other relevant
information, is set forth below.
NOMINEES AS CLASS II DIRECTORS TO SERVE UNTIL 1997
THOMAS F. BURKE, JR., 47. Director since August 31, 1993.
(PHOTO OF Attorney. Director of Commonwealth Bancshares Corporation
THOMAS F. until August 31, 1993. President, The First Bank of Greater
BURKE, JR. Pittson until December 31, 1991.
APPEARS HERE)
JULIUS W. ERVING, 44. Director since September 24, 1987.
(PHOTO OF President, The Erving Group and Dr. J. Enterprises; part-
JULIUS W. owner, Philadelphia Coca-Cola Bottling Company and Television
ERVING Station WKBW, Buffalo, New York. Member, Philadelphia 76'ers
APPEARS HERE) basketball team until April 1987.
FRED D. HAFER, 53. Director since October 27, 1988. President,
(PHOTO OF Chief Operating Officer and Director, Metropolitan Edison
FRED D. Company (electric utility). Also a director of GPU Service
HAFER Corporation and GPU Nuclear Corporation.
APPEARS HERE)
JOSEPH H. JONES, 69. Director since June 30, 1983. Partner,
(PHOTO OF Williamson, Friedberg & Jones (law firm). See footnote 1.
JOSEPH H.
JONES
APPEARS HERE)
5
<PAGE>
EZEKIEL S. KETCHUM, 58. Director since September 11, 1984.
(PHOTO OF President and Chief Operating Officer, Meridian since February
EZEKIEL S. 1988; prior thereto, Vice Chairman, Meridian from September
KETCHUM 1984; President and Chief Executive Officer, Meridian Bank
APPEARS HERE) since April 1991; prior thereto, President, Meridian Bank (and
its predecessor) since April 1982.
DANIEL H. POLETT, 58. Director since November 13, 1984.
(PHOTO OF Chairman, Wilkie Chevrolet Buick Subaru (automobile
DANIEL H. dealership) and owner operator of various other automobile
POLETT dealerships and related businesses.
APPEARS HERE)
WILMER R. SCHULTZ, 67. Director since November 13, 1984.
(PHOTO OF President, Wilmer R. Schultz, Inc. (general contractors).
WILMER R.
SCHULTZ
APPEARS HERE)
ROBERT B. SEIDEL, 67. Director since June 30, 1983. Retired
(PHOTO OF Chairman, American Manufacturing Corporation (private holding
ROBERT B. company) since April 1991; prior thereto, Chairman, American
SEIDEL Manufacturing Corporation from March 1983. Also a director of
APPEARS HERE) United National Insurance Company.
6
<PAGE>
CONTINUING CLASS III DIRECTORS SERVING UNTIL 1995
DELIGHT E. BREIDEGAM, JR., 67. Director since November 13,
(PHOTO OF 1984. President, East Penn Mfg. Co., Inc. (battery
DELIGHT E. manufacturer).
BREIDEGAM, JR.
APPEARS HERE)
HARRY CORLESS, 65. Director since April 25, 1989. Retired
(PHOTO OF Chairman, ICI Americas Inc. (chemical manufacturer) since
HARRY August 1989; prior thereto, Chairman and Chief Executive, ICI
CORLESS Americas Inc. from April 1986. Also a director of Nalco
APPEARS HERE) Chemical Company, Uniroyal Chemical Corporation and Delaware
Trust Company.
LAWRENCE C. KARLSON, 51. Director since September 23, 1991.
(PHOTO OF Chairman, President and Chief Executive Officer, Karlson
LAWRENCE C. Corporation (private holding company) since 1986. Also a
KARLSON director of ABB Kent Holdings PLC, Berwind Industries, Inc.
APPEARS HERE) and CDI Corp. Also, Retired Chairman, Spectra Physics AB
(Stockholm) (group of high technology companies) from 1990 to
1993.
GEORGE W. LEIGHOW, 58. Director since August 31, 1993.
(PHOTO OF Veterinarian and owner of Leighow Veterinary Hospital.
GEORGE W. Director of Commonwealth Bancshares Corporation until August
LEIGHOW 31, 1993.
APPEARS HERE)
7
<PAGE>
SAMUEL A. MCCULLOUGH, 55. Director since June 30, 1983.
(PHOTO OF Chairman and Chief Executive Officer, Meridian since February
SAMUEL A. 1988; prior thereto, President and Chief Executive Officer,
MCCULLOUGH Meridian from June 1983; Chairman of Meridian Bank (and its
APPEARS HERE) predecessor American Bank and Trust Co. of Pa.) since April
1982. Also a director of Fidelity National Financial, Inc.
LAWRENCE R. PUGH, 61. Director since January 23, 1986.
(PHOTO OF Chairman, Chief Executive Officer and Director, VF Corp.
LAWRENCE R. (apparel manufacturer). Also a director of Black & Decker,
PUGH Inc. and Unum Corporation.
APPEARS HERE)
GEORGE STRAWBRIDGE, JR., 56. Director since January 1, 1988.
(PHOTO OF Private investor; owner and President, Augustin Stables (sole
GEORGE proprietorship); adjunct professor of Latin American History
STRAWBRIDGE, and Political Science, Widener University. Also a director of
JR. Delaware Trust Company and Campbell Soup Company.
APPEARS HERE)
ANITA A. SUMMERS, 68. Director since February 27, 1987.
(PHOTO OF Professor Emerita, Senior Research Fellow, Wharton Real Estate
ANITA A. Center, University of Pennsylvania, since June 1991. Prior
SUMMERS thereto, Professor, Department of Public Policy and
APPEARS HERE) Management, Wharton School, University of Pennsylvania. Also,
Chairman of the Board of Directors of Mathematica Policy
Research, Inc.
8
<PAGE>
CONTINUING CLASS I DIRECTORS TO SERVE UNTIL 1996
ROBERT W. CARDY, 57. Director since April 20, 1993. Chairman,
(PHOTO OF President, Chief Executive Officer and Director, Carpenter
ROBERT W. Technology Corp. (specialty steel and alloys manufacturer)
CARDY since July 1, 1992; prior thereto, President, Chief Operating
APPEARS HERE) Officer and Director, Carpenter Technology Corp. from November
1, 1990; prior thereto, Executive Vice President, Carpenter
Technology Corp. from October 12, 1989; prior thereto, Vice
President Sales & Marketing, Carpenter Technology Corp. from
January 11, 1979.
WILLIAM D. DAVIS, 62. Director since August 31, 1993. Vice
(PHOTO OF Chairman of Pennsylvania Enterprises, Inc. (utility holding
WILLIAM D. company) since June 1991; Director of Pennsylvania
DAVIS Enterprises, Inc. since 1981. Chairman, Chief Executive
APPEARS HERE) Officer and Director, Commonwealth Bancshares Corporation
until August 31, 1993. Chairman, Commonwealth Bank until
August 31, 1993.
SIDNEY D. KLINE, JR., 62. Director since June 30, 1983.
(PHOTO OF Principal, Stevens & Lee (law firm). Also, a director of
SIDNEY D. Horrigan American, Inc. (financial services company). See
KLINE, JR. footnote 1.
APPEARS HERE)
JOSEPH F. PAQUETTE, JR., 59. Director since April 24, 1990.
(PHOTO OF Chairman, Chief Executive Officer and Director, PECO Energy
JOSEPH F. (electric and gas utility) since April 1988.
PAQUETTE, JR.
APPEARS HERE)
9
<PAGE>
PAUL R. ROEDEL, 66. Director since June 30, 1983. Retired
(PHOTO OF Chairman and Chief Executive Officer, Carpenter Technology
PAUL R. Corp. (specialty steel and alloys manufacturer) since June 30,
ROEDEL 1992; prior thereto, Chairman and Chief Executive Officer,
APPEARS HERE) Carpenter Technology Corp. from July 1987; Director, Carpenter
Technology Corp. since 1973. Also a director of General Public
Utilities Corporation and P. H. Glatfelter Co.
JUDITH M. VON SELDENECK, 53. Director since June 30, 1983.
(PHOTO OF Chief Executive Officer, The Diversified Search Companies
JUDITH M. (executive search firm). Also a director of Keystone
VON SELDENECK Corporation, Tasty Baking Company and Phillips and Jacobs,
APPEARS HERE) Inc.
DAVID E. SPARKS, 49. Director since April 20, 1993. Vice
(PHOTO OF Chairman and Chief Financial Officer of Meridian and Meridian
DAVID E. Bank since February 1991. Prior thereto, Vice Chairman,
SPARKS Treasurer and Chief Financial Officer of Meridian and Meridian
APPEARS HERE) Bank from February 1990; prior thereto, Executive Vice
President, Midlantic Corporation from March 1985. Also a
director of Fidelity National Title Insurance Company of
Pennsylvania.
EARLE A. WOOTTON, 49. Director since August 31, 1993.
(PHOTO OF President, Montrose Publishing Company, Inc. since 1974.
EARLE A. Director, County National Bank from 1979 to 1991. Director,
WOOTTON Commonwealth Bancshares Corporation until August 31, 1993.
APPEARS HERE)
- --------
(1) Meridian has engaged and expects that it will continue to engage as
counsel, from time to time, the law firm of Stevens & Lee, Reading,
Pennsylvania, and the law firm of Williamson, Friedberg & Jones,
Pottsville, Pennsylvania.
10
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information concerning the number of shares of
Common Stock held as of February 15, 1994 by each nominee for director, each
present director and each named executive officer set forth in the compensation
tables beginning on page 18.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
----------------------------------------------------------
TOTAL SOLE VOTING SHARED VOTING
NAME OF BENEFICIAL OR DISPOSITIVE OR DISPOSITIVE PERCENT
BENEFICIAL OWNER OWNERSHIP POWER POWER OF CLASS(/1/)
---------------- ---------- -------------- -------------- -------------
DIRECTORS
---------
<S> <C> <C> <C> <C>
DeLight E. Breidegam,
Jr........................ 8,128 300 7,828 --
Thomas F. Burke, Jr.(/2/).. 13,431 6,356 7,075 --
Robert W. Cardy............ 400 400 -- --
Harry Corless.............. 1,040 40 1,000 --
William D. Davis........... 57,865 55,333 2,532 --
Julius W. Erving(/2/)...... 1,100 1,100 -- --
Fred D. Hafer(/2/)......... 2,852 -- 2,852 --
Joseph H. Jones(/2/)....... 8,303 -- 8,303 --
Lawrence C. Karlson........ 1,000 -- 1,000 --
Ezekiel S. Ketchum(/2/).... 174,706(/3/) 172,729 1,977 --
Sidney D. Kline, Jr........ 11,699 10,683 1,016 --
George W. Leighow.......... 50,276 50,276 -- --
Samuel A. McCullough....... 265,004(/3/) 264,794 210 --
Joseph F. Paquette......... 2,000 -- 2,000 --
Daniel H. Polett(/2/)...... 5,975 5,975 -- --
Lawrence R. Pugh........... 1,000 1,000 -- --
Paul R. Roedel............. 998 998 -- --
Wilmer R. Schultz(/2/)..... 117,774 95,587 22,187 --
Robert B. Seidel(/2/)...... 9,382 8,666 716 --
David E. Sparks............ 71,801(/3/) 71,489 312 --
George Strawbridge,
Jr.(/4/).................. 4,200,310 4,200,310 -- 7.28%
Anita A. Summers........... 742 742 -- --
Judith A. von Seldeneck.... 1,574 264 1,310 --
Earle A. Wootton........... 162,077 161,520 557 --
<CAPTION>
OTHER NAMED
EXECUTIVE OFFICERS
------------------
<S> <C> <C> <C> <C>
Russell J. Kunkel.......... 91,363(/3/) 91,363 -- --
John F. Porter, III........ 125,500(/3/) 125,500 -- --
All directors and named
executive officers as a
group (26 persons)........ 5,386,300 5,325,425 60,875 9.27%
</TABLE>
- --------
(/1/) Unless otherwise indicated, amount owned does not exceed 1% of the total
number of shares of Common Stock outstanding as of February 15, 1994.
(/2/) Indicates a nominee for election as a Class II director at the Meeting.
(/3/) Includes shares allocated to the accounts of Messrs. McCullough, Ketchum,
Sparks and Kunkel, respectively, under the Meridian Savings Plan. Includes
the following number of shares which may be acquired in connection with
the exercise of vested options to purchase Common Stock granted under the
Meridian Stock Option Plan: Mr. McCullough--178,653; Mr. Ketchum--134,653;
Mr. Sparks--61,000; Mr. Kunkel--60,405; and Mr. Porter--25,500. Does not
include shares which may be acquired in the future in connection with
options granted under the Meridian Stock Option Plan which are not
presently exercisable.
(/4/) See "General--Principal Shareholders," herein.
11
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
Pursuant to Meridian's Bylaws, the Board of Directors is authorized to create
an Executive Committee, a Nominating Committee, an Audit Committee, a
Compensation Committee and such other permanent or temporary committees as it
deems necessary. As of December 31, 1993, the Board of Directors had
established a Nominating Committee, an Audit Committee and a Compensation
Committee.
The Nominating Committee makes recommendations to the Board of Directors with
respect to qualifications and nominations of directors. The present members of
the Nominating Committee are Messrs. Ketchum, Kline, McCullough, Paquette,
Polett (Chairman), Schultz and Strawbridge. The Nominating Committee met three
times during 1993. In determining its recommendations to Meridian's Board, the
Nominating Committee will consider nominees recommended by shareholders. Such
shareholder recommendations should be made in writing no later than January 1,
1995, addressed to Corporate Secretary, Meridian Bancorp, Inc., 35 North Sixth
Street, Reading, Pennsylvania 19601, Attention: Nominating Committee.
The Audit Committee serves as the principal liaison among the Board of
Directors, Meridian's independent certified public accountants and Meridian's
internal audit staff in connection with the audit function. In addition, the
Audit Committee makes recommendations to the Board of Directors concerning the
designation of Meridian's independent certified public accountants to audit the
books and accounts of Meridian and the performance of nonaudit services. The
present members of the Audit Committee are Messrs. Hafer (Chairman), Jones,
Karlson, Kline, Roedel and Ms. Summers. The Audit Committee met five times
during 1993.
The Compensation Committee makes recommendations to the Board of Directors
with respect to compensation of members of Meridian's executive staff, makes
awards under the Meridian Stock Option Plan and administers the Meridian
Executive Annual Incentive Plan. The members of the Compensation Committee are
Messrs. Breidegam, Corless, McCullough (ex officio), Pugh, Seidel and Ms. von
Seldeneck (Chairperson). The Compensation Committee met two times during 1993.
Mr. McCullough, as an ex officio member of the Compensation Committee, does not
participate in or vote on matters concerning his own compensation or awards.
BOARD MEETINGS
During 1993, the Meridian Board of Directors held thirteen regular meetings.
Each member of the Board attended at least 75% of the aggregate number of
meetings of the Board and of committees of which he or she is a member, except
Directors Corless, Paquette and Roedel each of whom attended fewer than 75% of
such meetings due to scheduling conflicts.
COMPENSATION PAID TO DIRECTORS
All directors of Meridian are also directors of Meridian Bank. Directors of
Meridian who are not Meridian executive officers are paid an annual retainer of
$18,000 (including retainers paid by Meridian Bank). The Boards of Directors of
Meridian and Meridian Bank meet concurrently and directors receive an
additional $1,000 for each such concurrent meeting and for each Meridian or
12
<PAGE>
Meridian Bank committee meeting which they attend. Also, the Chairman of each
of the Audit, Compensation and Directors' Nominating Committees of Meridian
receives an additional annual retainer of $5,000, $3,000 and $2,000,
respectively. Under a deferred compensation plan, directors of Meridian who are
not employees of Meridian may elect to defer, with interest, all or part of
their compensation for future distribution. In addition to fees paid by
Meridian, Messrs. Corless and Strawbridge received during 1993 fees for
services as directors of Delaware Trust Company, a subsidiary of Meridian, in
the amounts of $5,100 and $7,152, respectively.
Meridian maintains a directors and officers liability insurance policy with
CNA Insurance Companies and Great American Insurance Co. The policy covers all
directors, officers and employees of Meridian and its subsidiaries for certain
liability, loss, damage and expense which they may incur in their capacities as
such, at a premium cost to Meridian, as of the date of the Meeting, of
approximately $538,000 per year.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
ROLE OF THE COMPENSATION COMMITTEE
The role of the Compensation Committee of the Board of Directors of Meridian
is to establish the compensation philosophy of Meridian and monitor
compensation plans and amounts for conformity with the philosophy.
The Committee's role includes establishing company-wide compensation and
benefits plans, reviewing and adopting the Chief Executive Officer's (the
"CEO") recommendations for compensation for executive and other senior
officers, and reviewing and determining the compensation for the CEO. An
essential component of this role is the establishment of performance standards
for Meridian's incentive plans and monitoring performance against these
standards. From time to time the Committee also reviews other human resource
areas including staffing, training, succession planning, and other employment
programs and practices.
The Committee generally meets two or three times per year in conducting its
business. All actions of the Committee are reported to the full Board of
Directors for ratification. The CEO is an ex officio member of the Committee
and does not vote on any matters impacting the CEO's compensation or employment
status.
EXECUTIVE COMPENSATION PHILOSOPHY
Meridian's executive officer compensation program is predicated on a pay for
performance philosophy. Meridian's basic tenet is that executive officer
rewards should vary with business results. Within this framework, the total
compensation program must enable Meridian to attract, retain, motivate and
reward executive officers who are critical to the success of Meridian.
Total compensation for executive officers at Meridian is a mixture of non-
variable elements such as salary and benefits and variable elements such as
short- and long-term incentives. Total compensation can vary from year to year
given Meridian's considerable emphasis on the incentive
13
<PAGE>
compensation programs. Actual payments under these incentive plans can range
from zero to amounts in excess of salary. Therefore, total compensation for
executive officers at Meridian is highly leveraged based on incentive plans
which are themselves tied to Meridian's financial performance and the
accomplishment of specific business strategies and initiatives.
Meridian has historically set its salary range midpoints for executive
officer positions at the average or the median of salaries for comparable
positions at peer companies. However, the salaries actually paid executive
officers can range from 25% below to 25% above the midpoint and reflect the
Committee's assessment of individual performance. Target awards under Meridian
incentive plans have similarly approximated competitive norms. Payment of these
target incentive awards has historically required performance by Meridian that
equals or exceeds the financial performance experienced in comparator
organizations.
The Revenue Reconciliation Act of 1993 imposes a limit of $1,000,000 on
annual compensation to certain executives or the corporation loses the ability
to deduct compensation in excess of such amount, subject to certain exceptions.
The Committee did not specifically design Meridian's compensation program for
1994 to meet the requirements of the Act because the Committee does not believe
that compensation payable to any executive officer during 1994 will result in
any significant loss of deduction to Meridian.
SPECIFIC EXECUTIVE COMPENSATION PROGRAMS
In connection with setting executive compensation, the Compensation Committee
reviews compensation and financial performance information from certain peer
companies which the Committee believes exhibit characteristics comparable to
Meridian. The Committee does not rely on one static set of peer group
companies, but considers a mix of information derived from a number of
commercially available and internally prepared studies. These comparable
companies include a national peer group of bank holding companies that is
similar in size to Meridian, as well as a sample of Mid-Atlantic-based bank
holding companies to reflect local practice. This group of comparators changes
from time to time as the industry continues to change. For 1993, these groups
of comparator organizations ranged generally in asset size from $6 billion to
$25 billion and the number of companies in the applicable peer group ranged
from 16 to 100, depending on the particular study being reviewed. The peer
group examined by the Committee is different from and broader than the list of
financial institutions included in the KBW 50 index illustrated in the
Performance Graph on page 24 because Meridian, at approximately $14 billion in
asset size, is not as large as most of the institutions included in the KBW 50
index.
As was the case in 1992, in 1993 the Committee engaged an independent
compensation consultant to review Meridian's executive compensation policies
and to make recommendations relating thereto, which recommendations were
considered by the Committee in establishing compensation for 1994.
Total compensation for executive officers at Meridian is targeted at the
middle of the competitive practice for comparable positions in similar
companies in the financial services industry. The components of total
compensation at Meridian include salary, short-term annual incentives, long-
term incentives, benefits, and perquisites. The following commentary identifies
the practices for each of these components.
14
<PAGE>
SALARY
Salary serves as the foundation for the Meridian total compensation program.
Salary ranges, which are related to competitive practice, have been established
for all positions (including executive officers). The midpoint of each salary
range is set at the average of competitive salary practice. The range minimums
and maximums are 25% below and above the midpoint. This salary range is then
broken down into five equal increments of 20% ("quintiles").
Positions are assigned to ranges based primarily on competitive pay practices
and secondarily on Meridian's assessment of the importance of the position. The
midpoints are annually reviewed to assure continued competitiveness and, when
necessary, they are adjusted on January 1.
Once an individual position is assigned to a salary range, the incumbent's
performance determines where in the range that person is paid. The Committee
does not consider any objective financial performance criteria for this
purpose, but considers generally such items as the Committee's assessment of
the individual's management of the organization, strategic planning
capabilities and overall company performance. No specific weights are assigned
to any criteria considered by the Committee. New incumbents who are gaining
experience in the position tend to be paid in the lower portion of the range
(1st and 2nd quintiles). Individuals meeting job performance criteria tend to
be paid in the middle of the range (3rd quintile). Individuals with a history
of superior performance tend to be paid in the upper portion of the range (4th
and 5th quintile).
Salary adjustments are considered at the beginning of each calendar year and
are based on an assessment of the individual's performance and their position
in the range. The intent of this process is to manage the incumbent's pay to
the appropriate position in the range over time.
For 1993, the CEO's salary was increased from $546,000 to $600,000, which
placed him in the third quintile of his assigned salary range for that year.
The Committee viewed the CEO's performance in the areas described above
relating to all executive officers, including overall company performance. In
1994, the Committee determined that the salary of the CEO should remain at
$600,000. The Committee views his performance as meeting the job requirements
in certain performance areas and exceeding requirements in other areas. This
salary continues his position in the third quintile portion of his assigned
salary range for 1994.
SHORT-TERM ANNUAL INCENTIVE PLAN
The Meridian annual incentive plan for executive officers is designed to
reward the accomplishment of specific annual financial objectives. Plan
participants are assigned target incentive awards which, if paid, would produce
incentive payments approximating those in comparator organizations. The
Meridian performance required for payment of these target awards has
historically been set generally equal to or up to 15% above the levels of
historical financial performance, analyzed in terms of return on assets and
return on equity, achieved by the comparator organizations.
Performance that is below a minimum acceptable level results in no incentive
payment. Exceptional performance results in payments that are one and a half
the target award (for the CEO).
15
<PAGE>
The specific measures of performance used in the annual incentive plan may
vary from year to year depending on Meridian's strategic plan. For 1993, the
measure of corporate performance was Earnings Per Share (EPS). The EPS goal for
the incentive plan was approved by the Compensation Committee at the start of
1993. The Committee has the authority to recognize exceptional circumstances
and adjust targets and awards as necessary for business purposes, which
historically has not been done and was not done for 1993. Additional measures
of performance are established for executives with business unit responsibility
as well as corporate responsibility.
The 1993 annual incentive award for the CEO (and two of the other named
executive officers) was based entirely on corporate EPS. The awards for the
other named executive officers were based on a combination of EPS and goals
specific to business unit and individual performance. In reviewing 1993
performance, the Committee determined that the incentive award for the CEO
should be $305,580. This award is reflective of adjusted corporate EPS of $2.84
which was above the EPS target of $2.82. The adjusted EPS of $2.84 reflects the
inclusion of the financial performance of Commonwealth Bancshares Corporation,
which Meridian acquired on August 31, 1993 in a transaction accounted for as a
pooling of interests, from the date of acquisition through the end of the year,
rather than from January 1, 1993 as reflected in Meridian's audited financial
statements, because the Committee believed it inappropriate to include
Commonwealth's operating results for plan purposes prior to the time Meridian
had the right to exert any substantial influence on such operating results.
Calculation of the actual amount of the award is made strictly on the basis of
mathematical interpolation; no discretion is vested in the Committee.
LONG-TERM INCENTIVE PLANS
Meridian uses two long-term incentive plans--a stock option plan under which
grants may run for up to ten years, and a return on equity performance plan
that uses overlapping three-year performance cycles. The purpose of these plans
is to motivate and reward long-term performance defined as the creation of
shareholder value and the achievement of consistent, long-term return on equity
goals.
The stock option plan relates a significant portion of executive compensation
to increases in shareholder value. The plan promotes increased ownership of
Meridian stock by executives, as well as providing a meaningful compensation
opportunity when shares are sold at a price in excess of the exercise price.
Option grants are made on an annual basis, usually in December or January.
All grants are made at fair market value as of the date of grant, and vest one
year after the date of grant. The number of options granted to each executive
officer is based on comparator organization practice, with the objective being
that the awards should be at the average of comparator organization practice.
Comparator organization practice is assessed by reviewing prior three-year
grant information for such organizations. The Committee does not consider any
specific company performance factors or criteria in determining the size of
option grants to plan participants, but does consider various analyses of the
potential long-term value of options granted. The Committee also does not
specifically consider the amounts of options outstanding or the aggregate size
of current awards in making award determinations, although it does analyze the
total number of options to be granted in any year as a percentage of total
shares outstanding.
16
<PAGE>
Meridian has never canceled options and reissued options at a lower exercise
price.
The return on equity plan provides an incentive opportunity for plan
participants based on Meridian performance over a three-year performance cycle.
A new cycle begins each year, and therefore, the plan is composed of a series
of overlapping three-year performance periods. Payment of awards under this
plan is based on Meridian's attainment of a specified return on equity
performance during the three-year period. The applicable target return on
equity (ROE) is determined after review of historical return on equity data of
the comparator organizations. The target ROE since the inception of the plan
has been a 16% return on equity for Meridian with a threshold of 15%, which the
Committee believes is a realistic yet aggressive financial goal. Actual awards
under the plan are stated in terms of predetermined percentages of base salary
and are based strictly on mathematical interpolation based on the actual amount
of ROE. The performance period ending in 1993 (1991-1993) will result in no
payment since the ROE performance threshold of 15% was not attained.
The CEO (and other named executive officers) all received awards under the
stock option program in 1993. The CEO's awards were 40,000 shares as shown in
the Option Grants Table. The 1993 grant to the CEO was made substantially on
the basis of the Committee's review of comparator organization practice, with
the goal being that the grant be consistent with market practice. The Committee
believes that this award was made at the average of competitive practice.
Additionally, this grant is the same number of shares as granted in the
December 1992 grant.
BENEFITS AND PERQUISITES
Meridian's executives participate in the same benefit program as applies to
all employees of Meridian. There are no additional insurance programs or
welfare benefits for executives. Any perquisites for executives are business
related and are intended to allow the executive to operate in as efficient
manner as possible. These programs could include company provided memberships
in luncheon clubs and country clubs. Other programs could include company
provided automobiles.
SUMMARY
The Compensation Committee believes that Meridian's overall executive
compensation program has performed well in attracting, retaining and rewarding
executives. Rewards have increased when Meridian's financial performance and
shareholder value have increased, and have decreased when financial performance
and shareholder value decreased.
COMPENSATION COMMITTEE,
Judith M. von Seldeneck, Chairperson
DeLight E. Breidegam, Jr.
Harry Corless
Samuel A. McCullough
Lawrence R. Pugh
Robert B. Seidel
17
<PAGE>
COMPENSATION PAID TO EXECUTIVE OFFICERS
The following table sets forth information for each of the three years ended
December 31, 1993 concerning the annual and long-term compensation for services
in all capacities to Meridian of those persons who were (i) the chief executive
officer of Meridian during the fiscal year ended December 31, 1993, or (ii) the
other four most highly compensated executive officers of Meridian serving at
December 31, 1993. There were no other executive officers for whom disclosure
would have been provided but for the fact that such individuals were not
serving at the end of the 1993 fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------ --------------------- -------
SECURITIES
NAME OTHER RESTRICTED UNDERLYING LTIP ALL OTHER
AND ANNUAL STOCK OPTIONS/ PAYOUTS COMPENSA-
PRINCIPAL SALARY(/1/) BONUS COMPENSATION AWARD(S) SARS(/3/) (/4/) TION(/5/)
POSITION YEAR ($) ($) ($) (/2/)($) (#) ($) ($)
--------- ---- --------- -------- ------------ ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Samuel A. McCullough.... 1993 $600,000 $308,500 $0 $0 40,000 $0 $36,000
Chairman and Chief 1992 567,000 376,375 0 0 75,000 0 34,020
Executive Officer 1991 520,000 314,704 0 0 0 0
Ezekiel S. Ketchum...... 1993 400,000 164,560 0 0 25,000 0 24,000
President and Chief 1992 370,731 196,858 0 0 42,000 0 22,244
Operating Officer 1991 340,017 176,905 0 0 0 0
David E. Sparks......... 1993 300,000 115,500 0 0 20,000 0 18,000
Vice Chairman and 1992 275,192 134,762 0 0 32,000 0 15,334
Chief Financial Officer 1991 222,012 116,652 0 0 0 0
Russel J. Kunkel........ 1993 254,000 113,640 0 0 9,000 0 15,240
Vice Chairman 1992 254,423 132,478 0 0 18,000 0 15,265
1991 220,012 117,931 0 0 0 0
John F. Porter, III..... 1993 233,022 76,128 0 0 6,500 0 8,728
Chairman, Delaware 1992 246,985 85,136 0 0 13,000 0 8,475
Trust Company 1991 233,015 78,759 0 0 0 0
</TABLE>
- --------
(/1/) Base salaries for Meridian employees are earned and paid biweekly. Salary
information for 1992 includes 27 pay periods (as opposed to the normal
26); this occurs approximately once in seven years.
(/2/) Meridian does not have a restricted stock award program.
(/3/) Indicates number of shares for which options were granted during the
applicable period. Meridian's Stock Option Plan is designed to grant
options on an annual basis. Grants of options are normally made at the end
of each year, and therefore occur in December or January. Grant
information for 1993 represents 1993 grants made in December 1993. Grant
information for 1992 includes 1991 grants made in January 1992 and 1992
grants made in December 1992. No SARs or SARs granted in tandem with stock
options were awarded during any of the periods indicated.
18
<PAGE>
(/4/) Meridian's only long-term incentive plan, other than the Stock Option
Plan, is the three-year Executive Intermediate Performance Plan. There
were no Plan cycles concluding in 1991. The first completed three-year
cycle was the 1990 to 1992 cycle, which did not meet threshold financial
performance for 1992, and therefore there was no award under the Plan in
1992. The second completed three-year cycle was the 1991 to 1993 cycle,
which also did not meet threshold performance.
(/5/) Amounts include (i) contributions to Meridian's "thrift type" 401(k)
Savings Plan on behalf of each of the named executive officers to match
pre-tax elective deferral contributions (which are included under Salary)
made by each such officer to the Savings Plan (Mr. McCullough--$8,727.94;
Mr. Ketchum--$8,727.94; Mr. Sparks--$8,727.94; Mr. Kunkel--$8,727.94; and
Mr. Porter--$8,727.94) and (ii) matching contributions credited under
Meridian's Supplemental Salary Reduction Plan (Mr. McCullough--
$27,271.92; Mr. Ketchum--$15,271.88; Mr. Sparks--$9,271.86; and Mr.
Kunkel--$6,511.96), which is an unfunded plan which allows participants
who are adversely affected by salary reduction limitations imposed for
401(k) plans to reduce their salaries by the additional pre-tax amounts
that would be permitted in the absence of such limitations. Mr. Porter
does not participate in the Supplemental Salary Reduction Plan.
The following table sets forth information concerning grants of stock
options during the fiscal year ended December 31, 1993 to the named executive
officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------
NUMBER
OF % OF TOTAL POTENTIAL REALIZABLE
SECURITIES OPTIONS/ VALUE AT ASSUMED
UNDERLYING SARS ANNUAL RATES OF
OPTIONS/ GRANTED TO EXERCISE PRICE APPRECIATION
SARS EMPLOYEES OR BASE FOR OPTION TERM
GRANTED(/1/) IN FISCAL PRICE(/2/) EXPIRATION -----------------------------
NAME (#) YEAR ($/SH) DATE 5%($)(/3/) 10%($)(/3/)
---- ------------ ----------- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Samuel A. McCullough.... 40,000 7.30% $28.50 1/21/04 $ 716,940 $ 1,816,868
Ezekiel S. Ketchum...... 25,000 4.56 28.50 1/21/04 448,088 1,135,543
David E. Sparks......... 20,000 3.65 28.50 1/21/04 358,470 908,434
Russell J. Kunkel....... 9,000 1.64 28.50 1/21/04 161,312 408,795
John F. Porter, III..... 6,500 1.19 28.50 1/21/04 116,503 295,241
All optionees........... 548,400 100.00 28.50 1/21/04 9,829,247 24,909,260
All shareholders(4)..... N/A N/A N/A N/A 1,042,471,192 2,641,826,678
</TABLE>
- --------
(/1/) All amounts represent nonqualified stock options; no SARs or SARs granted
in tandem with options were granted during 1993. Terms of outstanding
options are for a period of ten years and one month from the date the
option is granted. An option may only be exercised after the holder has
been an employee of Meridian or one of its subsidiaries for one full year
from the date the option is granted or one full year from the date the
employee's employment is terminated "at the convenience of the employer."
Options are not exercisable following an optionee's voluntary termination
of employment other than by reason of retirement or disability.
19
<PAGE>
(/2/) Underthe terms of the Plan, the exercise price per share must equal the
fair market value on the date the option is granted. The exercise price
may be paid in cash, in shares of Common Stock valued at fair market
value on the date of exercise or pursuant to a cashless exercise
procedure under which the optionee provides irrevocable instructions to
a brokerage firm to sell the purchased shares and to remit to Meridian,
out of the sale proceeds, an amount equal to the exercise price plus all
applicable withholding taxes.
(/3/) The dollar amounts set forth under these columns are the result of
calculations made at the 5% and 10% appreciation rates set forth in
Securities and Exchange Commission regulations and are not intended to
indicate future price appreciation, if any, of Meridian's Common Stock.
(/4/) The potential realizable gain to all shareholders (57,662,198 shares at
$28.50) at the 5% and 10% assumed annual rates of appreciation over the
option terms is provided as a comparison to the potential gain realizable
by the named executive officers and by all optionees as a group. All
optionee gain as a percentage of all shareholder gain based on these 5%
and 10% stock price appreciation assumptions would be .9% and .9%,
respectively.
The following table sets forth information concerning the exercise of
options to purchase Meridian's Common Stock by the named executive officers
during the fiscal year ended December 31, 1993 as well as the number of
securities underlying unexercised options and potential value of unexercised
options (both options which are presently exercisable and options granted in
1993 which are not presently exercisable) as of December 31, 1993.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUE(/1/)
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END
(#) ($)(/3/)
SHARES ACQUIRED ON VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($)(/2/) UNEXERCISABLE UNEXERCISABLE
---- ------------------ -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Samuel A. McCullough.... 108,028 $1,374,226 178,653/40,000 $747,467/0
Ezekiel S. Ketchum...... 3,230 36,299 134,653/25,000 750,271/0
David E. Sparks......... 8,000 149,375 61,000/20,000 454,750/0
Russell J. Kunkel....... 0 0 60,405/9,000 370,103/0
John F. Porter, III..... 0 0 25,500/6,500 136,063/0
</TABLE>
- --------
(/1/) All amounts represent stock options. No SARs or SARs granted in tandem
with stock options were either exercised during 1993 or outstanding at
fiscal year-end 1993.
(/2/) Represents the aggregate market value of the underlying shares of Common
Stock at the date of exercise minus the aggregate exercise prices for
options exercised.
(/3/) "In-the-money options" are stock options with respect to which the market
value of the underlying shares of Common Stock exceeded the exercise price
at December 31, 1993. The value of such options is determined by
subtracting the aggregate exercise price for such options from the
aggregate fair market value of the underlying shares of Common Stock on
December 31, 1993.
20
<PAGE>
The following table sets forth information concerning awards to the named
executed officers pursuant to the Meridian Executive Intermediate Performance
Plan:
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR(/1/)
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS
NUMBER OF OR OTHER UNDER NON-STOCK PRICE BASED PLANS
SHARES, UNITS PERIOD UNTIL -----------------------------------
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#) PAYOUT ($ OR #) ($ OR #) ($ OR #)
---- ------------- ------------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Samuel A. McCullough.... (/1/) 12/31/96 $ 60,000 $ 120,000 $ 240,000
Ezekiel S. Ketchum...... (/1/) 12/31/96 30,000 60,000 120,000
David E. Sparks......... (/1/) 12/31/96 15,000 30,000 60,000
Russell J. Kunkel(/2/).. -- -- -- -- --
John F. Porter,
III(/2/)............... -- -- -- -- --
</TABLE>
- --------
(/1/) Meridian maintains a non-stock based Executive Intermediate Performance
Plan for its executives. The Plan provides for cash payouts stated in
terms of a percentage of base salary (Mr. McCullough: 10%-40%; Mr.
Ketchum: 7 1/2%-30%; Mr. Sparks: 5%-20%) based upon Meridian achieving a
pre-determined rate of return on equity over a three-year period. The
threshold, target, and maximum for return on equity and corresponding
award payments are shown in the chart above. If return on equity is below
the required "threshold," Plan participants receive no award. Meridian did
not meet a 15% ROE threshold performance target for the three-year cycle
ending in 1993, and therefore, no amounts were paid under this Plan for
the three-year cycle ending in 1993.
(/2/) Does not participate in the Plan.
PENSION PLAN
The following table indicates, for purposes of illustration, the approximate
amounts of annual retirement income which would be payable under the terms of
the Meridian Retirement Plan, in the form of a straight life annuity, to a
participant who retired as of December 31, 1993, at age 65, under various
assumptions as to compensation and years of credited service. The benefit
amounts set forth below are not subject to further reduction for Social
Security or other offset amounts.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
AVERAGE --------------------------------------------
COMPENSATION 15 20 25 30 35
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$150,000........................... $ 40,939 $ 54,586 $ 68,232 $ 75,732 $ 83,232
200,000........................... 55,940 74,587 93,234 103,234 113,234
250,000........................... 70,938 94,584 118,230 130,730 143,230
300,000........................... 85,939 114,586 143,232 158,232 173,232
350,000........................... 100,940 134,587 168,234 185,734 203,234
400,000........................... 115,938 154,584 193,230 213,230 233,230
450,000........................... 130,939 174,586 218,234 240,723 263,232
500,000........................... 145,940 194,587 243,234 268,234 293,234
550,000........................... 160,938 214,584 268,230 295,730 323,230
600,000........................... 175,939 234,586 293,232 323,232 353,232
650,000........................... 190,940 254,587 318,234 350,734 383,234
</TABLE>
21
<PAGE>
The 1993 compensation covered by the Meridian Retirement Plan for Messrs.
McCullough, Ketchum, Sparks, Kunkel and Porter was $650,000, $450,000,
$350,000, $304,000 and $283,022, respectively. Such covered compensation
consists of (i) base salary and (ii) variable compensation (which includes
bonuses and any other incentive compensation) not to exceed $50,000 (the Salary
and Bonus columns included in the Summary Compensation Table). As of December
31, 1993, Messrs. McCullough, Ketchum, Sparks, Kunkel and Porter had accrued
18.25, 16, 9, 26.75 and 35.92 years of credited service, respectively, under
the Retirement Plan for benefit accrual purposes.
The Internal Revenue Code of 1986, as amended (the "Code"), limits the annual
benefits which may be paid from a tax-qualified retirement plan. As permitted
by the Employee Retirement Income Security Act of 1974, as amended, Meridian
has supplemental plans which authorize the payment out of general funds of
Meridian of any benefits calculated under provisions of the applicable
retirement plan which may be above the limits or otherwise prohibited under
these sections. Amounts payable pursuant to these plans in excess of such Code
limitations are included in the table set forth above.
EXECUTIVE EMPLOYMENT AND OTHER AGREEMENTS
In July 1986, Meridian entered into agreements with Samuel A. McCullough,
Ezekiel S. Ketchum, and Russell J. Kunkel. In January 1990, Meridian entered
into a similar agreement with David E. Sparks. The agreements provide that, in
the event of a "change in control" of Meridian, an individual whose employment
is terminated or who resigns as a result of diminution in position,
compensation or benefits, reassignment to a location beyond 100 miles from
Meridian's headquarters or significantly increased travel requirements will be
entitled generally to continuation of base salary, incentive compensation,
continued participation in employee benefit plans (or, if ineligible, a dollar
amount equal to the benefit forfeited as a result of such ineligibility) and
continued insurance benefits. Each of these agreements for executives other
than Mr. McCullough is a three-year agreement which provides for an automatic
annual renewal for a period of three years unless either party gives notice of
nonrenewal in which case the agreement continues for two years. Each agreement
provides for a maximum two-year payout. Mr. McCullough's agreement is a four-
year agreement which provides for an automatic annual renewal for a period of
four years, unless notice of nonrenewal is given in which case the agreement
continues for three years. Mr. McCullough's agreement provides for a maximum
three-year payout. Compensation and benefits payable in the event of a "change
in control" under these agreements will not be reduced by compensation and
benefits payable by a subsequent employer, but will be reduced by any amount
actually received by the executive under a Meridian severance policy then in
effect.
In December 1993, the Board of Directors, upon recommendation of the
Compensation Committee, approved forms of grantor trusts to be utilized, upon
execution, as a funding alternative for certain of the Company's non-qualified
unfunded plans of deferred compensation, including the Meridian Bancorp, Inc.
Supplemental Salary Reduction Plan, the Meridian Bancorp, Inc. Supplemental
Executive Retirement Plan and the Meridian Bancorp, Inc. Retirement Restoration
Plan. These grantor trusts, commonly known as "rabbi trusts" provide protection
to plan participants against non-payment of plan benefits due to the Company's
refusal to pay following, among other things, a change in corporate control.
The trusts will not provide protection against non-payment due
22
<PAGE>
to an inability to pay (e.g., insolvency or bankruptcy). The trust assets will
be subject to the claims of Meridian's creditors. The trusts may be funded by
Meridian concurrently with their establishment or over a period of time, but
also contain a provision which requires Meridian to fund the trusts immediately
upon certain events, including principally a change in control. The trust
assets will be held by a trustee independent of Meridian and are invested in
accordance with an investment policy established by the Compensation Committee.
As of the date of this Proxy Statement, no contributions have been made to any
of these trusts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Samuel A. McCullough, Chairman and Chief Executive Officer of Meridian,
serves as a member of Meridian's Compensation Committee, although he does not
participate in or vote on matters concerning his own benefits or awards. The
Board of Directors believes that Mr. McCullough's position with Meridian
provides him with perspective valuable to the Committee in connection with
performance of its duties.
23
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph comparing the yearly percentage change in the
cumulative total shareholder return on Meridian's Common Stock against the
cumulative total return on the S&P Composite-500 Stock Index and the Keefe,
Bruyette & Woods, Inc. 50 Index (a market capitalization-weighted bank stock
index comprised of all money-center and most regional banking institutions) for
the periods indicated. The graph assumes an initial investment of $100.00 with
dividends reinvested over the periods indicated.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG
MERIDIAN COMMON STOCK, S&P 500 INDEX AND KEEFE, BRUYETTE & WOODS INC. 50 INDEX
<CAPTION>
MERIDIAN S&P KBW
Measurement period COMMON 500 50
(Fiscal year Covered) STOCK INDEX INDEX
- --------------------- -------- -------- --------
<S> <C> <C> <C>
Measurement PT -
12/31/88 $ 100.00 $ 100.00 $ 100.00
FYE 12/31/89 $ 105.00 $ 132.00 $ 119.00
FYE 12/31/90 $ 63.00 $ 128.00 $ 85.00
FYE 12/31/91 $ 152.00 $ 166.00 $ 135.00
FYE 12/31/92 $ 212.00 $ 179.00 $ 172.00
FYE 12/31/93 $ 198.00 $ 197.00 $ 182.00
</TABLE>
CERTAIN TRANSACTIONS
Certain directors and executive officers of Meridian, and their associates
(including corporations of which such persons are officers or 10% beneficial
owners), were customers of and had transactions with Meridian Bank or its
predecessors in the ordinary course of business during Meridian's fiscal year
ended December 31, 1993. Similar transactions may be expected to take place in
the future. Such
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<PAGE>
transactions included the purchase of certificates of deposit and extensions of
credit in the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than the
normal risks of collectability or present other unfavorable features. It is
expected that any other transactions with directors and officers and their
associates in the future will be conducted on the same basis. At December 31,
1993, the aggregate amount of loans by Meridian to Directors and executive
officers of Meridian and their associates was $37.1 million, which represented
approximately 3.1% of Meridian's total consolidated shareholders' equity as of
such date.
During 1993, the law firm in which Meridian director Kline is a partner
received fees from Meridian and its subsidiaries of approximately $3.01
million. Such sum does not include fees received from borrowers who engage bank
counsel principally in commercial and real estate lending transactions with
Meridian Bank or its predecessors or any other subsidiaries of Meridian.
During 1993, the construction firms of which Meridian director Schultz is
President and Chief Executive Officer received payments of approximately
$192,000 in connection with various construction projects performed on behalf
of Meridian and its subsidiaries. Such payments were in amounts and on
substantially the same other terms and conditions as would have been available
to Meridian from an unaffiliated party.
MATTER NO. 2
AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE
AUTHORIZED SHARES OF COMMON STOCK FROM 100,000,000 SHARES
TO 200,000,000 SHARES
The Board of Directors of Meridian has approved an amendment to Article Fifth
of the Articles of Incorporation which, if adopted, would increase the number
of authorized shares of Meridian's Common Stock from 100,000,000 to 200,000,000
shares. The Board of Directors recommends that shareholders approve this
amendment.
At February 15, 1994, there were 57,662,198 shares of Meridian's Common Stock
issued and outstanding. Of the remaining 42,337,802 shares of authorized Common
Stock on such date, 654,173 shares were reserved for issuance under Meridian's
Dividend Reinvestment and Stock Purchase Plan and 3,145,579 shares were
reserved for issuance under Meridian's Stock Option Plan, leaving 38,037,982
shares of Common Stock available for issuance.
Matter No. 2 is being proposed because the Board of Directors believes that
it is advisable to have a greater number of authorized but unissued shares of
Common Stock available for various corporate programs and purposes. Meridian
may from time to time consider acquisitions, stock dividends or stock splits,
and public or private financings to provide Meridian with capital, which may
involve the issuance of additional shares of Common Stock or securities
convertible into Common Stock. Also, additional shares of Common Stock may be
necessary to meet anticipated future obligations under Meridian's Dividend
Reinvestment and Stock Purchase Plan and under Meridian's employee benefit
plans. The Board of Directors believes that having authority to issue
additional shares of Common Stock will avoid the possible delay and significant
expense of calling and holding a special meeting of shareholders to increase
authorized capital. Meridian's shareholders last approved an increase in the
number of shares of Common Stock on April 22, 1988, at the 1988 Annual Meeting
of Shareholders, from 50,000,000 to 100,000,000 shares.
25
<PAGE>
Meridian has no present plan, agreement or understanding involving the
issuance of its Common Stock except for shares required or permitted to be
issued under employee benefit plans, upon exercise of outstanding stock
options, under Meridian's shareholder rights plan, in connection with
outstanding warrants to purchase 500,000 shares, and in connection with
Meridian's pending acquisition of The Grange National Bank of Susquehanna
County. It is possible, however, that additional merger and acquisition
opportunities involving the issuance of shares of Meridian's Common Stock will
develop. It is also possible that an increase in the market price for
Meridian's Common Stock, and conditions in the capital markets generally, may
make a stock dividend, a stock split or a public offering of Meridian's stock
desirable. Meridian believes that an increase in the number of authorized
shares of Meridian's Common Stock will enhance its ability to respond promptly
to any such opportunities.
If Matter No. 2 is approved, the Board of Directors will not solicit
shareholder approval to issue additional authorized shares of Common Stock,
except to the extent that such approval may be required by law, and such shares
may be issued for such consideration, cash or otherwise, at such times and in
such amounts as the Board of Directors may determine. Under the rules of the
National Association of Securities Dealers, Inc. applicable to Meridian,
shareholder approval must be obtained prior to the issuance of shares for
certain purposes, including the issuance of greater than 25% of Meridian's then
outstanding shares in connection with an acquisition by Meridian.
Although the Board of Directors presently intends to employ the additional
shares of Common Stock solely for the purposes set forth above, such shares
could be used by the Board of Directors to dilute the stock ownership of
persons seeking to obtain control of Meridian, thereby possibly discouraging or
deterring a nonnegotiated attempt to obtain control of Meridian and making
removal of incumbent management more difficult. The proposal, however, is not a
result of, nor does the Board of Directors have knowledge of, any effort to
accumulate Meridian capital stock or to obtain control of Meridian by means of
a merger, tender offer, solicitation in opposition to the Board of Directors or
otherwise.
Article Fifth of Meridian's Articles of Incorporation also authorizes the
issuance of 25,000,000 shares of preferred stock, $25 par value per share,
which the Board of Directors has the power to issue as a class or in series and
to determine the voting power, if any, dividend rates, conversion or redemption
prices, designations, rights, preferences and limitations of the shares in the
class or in each series. The proposed amendment to Article Fifth of Meridian's
Articles of Incorporation will not increase or otherwise affect Meridian's
authorized preferred stock. As of March 1, 1994, there were no shares of
Meridian's Preferred Stock outstanding.
The amendment of the Articles of Incorporation to increase the number of
authorized shares of Common Stock from 100,000,000 to 200,000,000 will consist
of a revision of Article Fifth of the Articles of Incorporation to provide as
follows:
"FIFTH. The aggregate number of shares of capital stock which the
Corporation shall have authority to issue is 225,000,000 shares, divided
into two classes consisting of 25,000,000 shares of preferred stock of the
par value of $25.00 each ("Preferred Stock") and 200,000,000 shares of
common stock of the par value of $5.00 each ("Common Stock")."
26
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS AMENDMENT. The affirmative
---
vote of a majority of all votes cast at the Meeting is required to approve this
amendment. Abstentions and broker non-votes will not constitute or be counted
as "votes" cast for purposes of the Meeting. All proxies will be voted "FOR"
approval of the amendment unless a shareholder specifies to the contrary on
such shareholder's proxy card.
MATTER NO. 3
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors of Meridian, in accordance with the recommendation
made by Meridian's Audit Committee, has appointed the firm of KPMG Peat
Marwick, independent auditors, to provide certain accounting services for
Meridian and its subsidiaries during fiscal year 1994. Such appointment is
being submitted to shareholders for ratification.
KPMG Peat Marwick has audited the books of account and financial statements
of Meridian or certain of its predecessors continuously since 1973. Meridian
has been advised that neither the firm nor any of its partners possesses any
other material direct or indirect relationship with Meridian, its subsidiaries
or its officers or directors, in their capacities as such. Representatives of
KPMG Peat Marwick are expected to attend the Meeting, will be afforded an
opportunity to make a statement if they desire to do so and will be available
to respond to questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION OF
---
THE APPOINTMENT OF KPMG PEAT MARWICK AS MERIDIAN'S INDEPENDENT AUDITORS FOR THE
1994 FISCAL YEAR. The affirmative vote of a majority of all votes cast at the
Meeting is required to ratify the appointment. Abstentions and broker non-votes
will not constitute or be counted as "votes" cast for purposes of the Meeting.
All proxies will be voted "FOR" ratification of the appointment unless a
shareholder specifies to the contrary on such shareholder's proxy card.
MATTER NO. 4
SHAREHOLDER PROPOSAL TO PROVIDE FOR
CUMULATIVE VOTING
George R. Yake and Samuel J. Yake, 45 Chestnut Road, Paoli, Pennsylvania
19301, who, at February 15, 1994, were, collectively, the holders of record or
beneficially of 77 shares of Meridian's Common Stock, have given notice to
Meridian that they will cause a resolution to be introduced from the floor at
the Meeting. In accordance with the rules and regulations of the Securities and
Exchange Commission, the proposed resolution and the supporting statement with
respect thereto submitted by Messrs. Yake are set forth below:
"RESOLVED, that the stockholders of Meridian Bancorp, Inc., assembled in
annual meeting in person and by proxy, hereby request that the Board of
Directors take the steps necessary to provide for cumulative voting in the
election of directors, which means each stockholder shall be entitled to as
many votes as shall equal the number of shares he or she owns multiplied by
the number of directors to be elected, and he or she may cast all of such
votes for a single candidate, or any two or more of them as he or she may
see fit.
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<PAGE>
REASONS
"In 1993, 4,633,956 shares were cast in favor of our similar resolution.
"Until 1986 Meridian stockholders enjoyed this important right.
"It should also be remembered that cumulative voting is mandatory in all
national banks and in many states.
"Lewis D. Gilbert, dean of corporate shareholder activists, says: 'We
believe cumulative voting crucial because its institution in a corporation
gives the minority a voice in proportion to its actual strength . . .
because it changes a corporation from a monolith in which no opposition is
brooked to a democracy in which criticism acts as a dynamic motive power.'
"If you agree, please mark your proxy FOR this resolution; otherwise it
is automatically cast against it, unless you have marked to abstain."
POSITION OF BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS
-------
PROPOSAL. Proxies solicited by the Board of Directors will be so voted unless a
shareholder specifies to the contrary on such shareholder's proxy card.
The same resolution, accompanied by a similar statement, was presented by
Messrs. Yake to Meridian's shareholders at the prior four annual meetings of
Shareholders and was disapproved at each of those meetings. The Board of
Directors of Meridian continues to oppose this proposal for the following
reasons.
As indicated above, Meridian's shareholders voted at the 1986 Annual Meeting
to amend Meridian's Articles of Incorporation to eliminate cumulative voting in
elections of directors. The Board of Directors of Meridian continues to
believe, as it believed in 1986 when it proposed the elimination of cumulative
voting, that the function of the Board is to administer the affairs of Meridian
for the benefit of all shareholders. The Board believes a director elected by a
minority through cumulative voting may feel bound to act in a manner which he
determines to be in the interests of the shareholders who elected him even
though such action may not be in the best interests of Meridian and its
shareholders as a whole.
The Board of Directors also believes that cumulative voting could encourage
factionalism and partisanship and introduce an element of discord on the Board,
thus impairing the ability of directors to effectively work together for the
best interests of Meridian and its shareholders. The present method, by which
the holders of the majority of the shares of the Meridian's Common Stock can
elect the Board, is guided by the principle of majority rule and, in the
judgment of the Board, should be retained.
For the foregoing reasons, the Board recommends a vote AGAINST the proposal.
-------
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<PAGE>
The affirmative vote of a majority of all votes cast at the Meeting is
required for approval of this proposal. Abstentions and broker non-votes will
not constitute or be counted as "votes" cast for purposes of the Meeting.
SHAREHOLDER PROPOSALS FOR 1995
In accordance with the Bylaws of Meridian, shareholders may propose matters
for consideration at annual meetings of shareholders by notice in writing,
delivered or mailed by first class United States mail, postage prepaid, to the
Secretary of Meridian not less than 30 days nor more than 50 days prior to such
annual meeting (i.e., February 27, 1995 through March 19, 1995 if the 1995
Annual Meeting of Shareholders is held on April 25, 1995 as presently
expected).
Meridian's Annual Meeting of Shareholders for 1995 will be held on or about
April 25, 1995. Any shareholder desiring to submit a proposal to be considered
for inclusion in Meridian's 1995 proxy materials must submit such proposal or
proposals in writing, addressed to Meridian at 35 North Sixth Street, Reading,
Pennsylvania 19601, Attention--Secretary, on or before November 24, 1994.
OTHER MATTERS
The Board of Directors does not intend to bring any other matter before the
Meeting and is not presently informed of any other business which others may
bring before the Meeting. If any other matters should properly come before the
Meeting, or any adjournment or adjournments thereof, however, it is the
intention of the persons named in the accompanying proxy to vote on such
matters as they, in their discretion, may determine.
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, A COPY OF MERIDIAN'S ANNUAL REPORT
ON FORM 10-K FOR ITS FISCAL YEAR ENDED DECEMBER 31, 1993, INCLUDING THE
FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES
EXCHANGE ACT OF 1934 MAY BE OBTAINED, WITHOUT CHARGE, FROM W. STURGIS CORBETT,
SENIOR VICE PRESIDENT--INVESTOR RELATIONS, MERIDIAN BANCORP, INC.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ William L. Gaunt,
William L. Gaunt,
Secretary
March 24, 1994
PLEASE SIGN, DATE AND MAIL YOUR PROXY NOW.
29
<PAGE>
[LOGO OF MERIDIAN APPEARS HERE]
NOTICE OF 1994 ANNUAL MEETING
AND PROXY STATEMENT
<PAGE>
[LOGO OF MERIDIAN APPEARS HERE]
MERIDIAN BANCORP, INC.
I/we hereby appoint Russell J. Kunkel, Paul W. McGloin and Wayne R. Huey,
Jr., or any one of them acting in the absence of others, as proxyholders, each
with the power to appoint his substitute, and hereby authorize them to
represent and to vote, as designated on the reverse side, all the shares of
common stock of Meridian Bancorp, Inc. held of record by me/us on February 15,
1994, at the Annual Meeting of Shareholders to be held on April 26, 1994, or
any adjournment thereof.
This proxy when properly executed will be voted in the manner directed on the
reverse side. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
---
ELECTION OF DIRECTORS, FOR MATTER NO. 2, FOR MATTER NO. 3 AND AGAINST MATTER
--- --- -------
NO. 4. This proxy will be voted, in the discretion of the proxyholders, upon
such other business as may properly come before the Annual Meeting of
Shareholders or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
P
R
O
X
Y
<PAGE>
PLEASE MARK YOUR
[X] VOTES AS IN THIS
EXAMPLE.
- --------------------------------------------------------------------------------
THE BOARD RECOMMENDS A VOTE "FOR" MATTERS 1, 2 AND 3
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Class II Directors [_] [_]
T. F. Burke, Jr., J. W. Erving, F. D. Hafer,
J. H. Jones, E. S. Ketchum, D. H. Polett,
W. R. Schultz and R. B. Seidel
(INSTRUCTION: TO WITHHOLD AUTHORITY
FOR ANY INDIVIDUAL STRIKE OUT NAME.)
FOR AGAINST ABSTAIN
2. Amendment to Articles of
Incorporation to Increase [_] [_] [_]
Authorized Common Stock
3. Ratification of Auditors [_] [_] [_]
- --------------------------------------------------------------------------------
THE BOARD RECOMMENDS A VOTE "AGAINST" MATTER 4
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
4. Cumulative Voting [_] [_] [_]
Dated: __________________________________________________, 1994
_______________________________________________________________
Signature
_______________________________________________________________
Signature if held jointly.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.
