February 19, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Schedule 14A of Smithtown Bancorp, Inc.
(THE "BANCORP")
Dear Sirs:
Pursuant to Rule 14a-6(a) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), we enclose a preliminary Schedule 14A of the
Bancorp (the "Schedule 14A"), including the preliminary proxy materials to be
used in connection with the upcoming annual meeting of the shareholders of the
Bancorp. At the annual meeting, the Bancorp shareholders will be asked to
approve, in addition to the election of directors and the appointment of
accountants, an amendment to the Bancorp's Certificate of Incorporation to
effect a two-for-one stock split by changing the number of authorized common
shares, par value $5.00, from 1,500,000 shares to 3,000,000 shares, par value
$2.50 per share.
The Bancorp desires to mail the definitive proxy statement to its
shareholders early in the week of March 2, 1998 in order to hold its annual
meeting on its scheduled date of April 7, 1998.
If you have any questions concerning the foregoing or the enclosed,
please call me at (516) 360-9304.
Sincerely yours,
Bradley E. Rock
(Enclosures)
<PAGE>
SMITHTOWN BANCORP
ONE EAST MAIN STREET
SMITHTOWN, NEW YORK 11787-2801
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held
TUESDAY, APRIL 7, 1998
The Annual Meeting of Shareholders of Smithtown Bancorp (the "Bancorp"), will be
held at the Smithtown Landing Country Club, 495 Landing Avenue, Smithtown, New
York, on April 7, 1998, at 10:30 AM, for the following purposes:
1. The election of three directors to serve a term of three years.
2. To consider and vote upon a proposal to amend Bancorp's Certificate of
Incorporation to effect a two-for-one stock split by changing the number of
authorized Common Shares, par value $5.00, from 1,500,000 shares to 3,000,000
shares, par value $2.50; and
3. To approve the appointment of Albrecht, Viggiano, Zureck & Company, P.C. as
independent auditors for the year ending December 31, 1998.
4. To transact such other business as may properly come before the meeting for
any adjournment thereof.
Pursuant to a resolution of the Board of Directors adopted at the Board of
Directors meeting on January 27, 1998, only shareholders of record at the close
of business on February 23, 1998, shall be entitled to notice of and to vote at
this meeting.
Dated: March 2, 1998
Smithtown, New York
BY ORDER OF THE BOARD OF DIRECTORS
BRADLEY E. ROCK
Chairman of the Board, President
<PAGE>
SMITHTOWN BANCORP
ONE EAST MAIN STREET
SMITHTOWN, NEW YORK 11787-2801
PROXY STATEMENT
GENERAL PROXY INFORMATION
This Proxy Statement (this "Proxy Statement") is furnished in connection with
the solicitation by and on behalf of the Board of Directors of Smithtown
Bancorp, (the "Bancorp") of proxies to be used at the Annual Meeting of
Shareholders of the Bancorp to be held at the Smithtown Landing Country Club,
495 Landing Avenue, Smithtown, New York, on April 7, 1998, and at any
adjournment thereof. The costs of the proxy solicitation are to be paid by the
Bancorp. Bank of Smithtown (the "Bank" or "Bank of Smithtown" ) is a
wholly-owned subsidiary of the Bancorp. This Proxy Statement is being mailed on
or about March 2, 1998, to holders of the Common Shares.
AUTHORIZED SHARES AND VOTING RIGHTS
Holders of record of Common Shares as of the close of business on February 23,
1998 (the "Record Date"), will be entitled to vote at the meeting. Each
shareholder is entitled to one vote for each share of stock held by him or her.
There were 433,268 Common Shares outstanding on the Record Date.
REVOCABILITY OF PROXY
If the accompanying form of Proxy is executed and returned, it nevertheless may
be revoked by the shareholder at any time before it is exercised. But if it is
not revoked, the shares represented thereby will be voted by the persons
designated in each such Proxy.
FINANCIAL STATEMENTS
A copy of the Bancorp's Annual Report to Shareholders, including financial
statements for the fiscal year ended December 31, 1997, has been mailed herewith
to the shareholders.
MATTERS TO BE VOTED ON AT THE MEETING
There are three matters that are scheduled to be voted on at the Annual Meeting.
Shareholders are being asked to vote on (1) the election of three directors, (2)
an amendment to the Bancorp's Certificate of Incorporation to effect a
two-for-one stock split by changing the number of authorized Common Shares, par
value $5.00, from 1,500,000 shares to 3,000,000 shares, par value $2.50, and (3)
the approval of Albrecht, Viggiano, Zureck & Co., P.C., as the Bancorp's
independent auditors for the year ending December 31, 1998.
It is intended that the shares of stock represented by the accompanying form of
Proxy will be voted for the election of the director nominees listed in Table I
and in favor of the other proposals, unless a contrary direction is indicated on
the form of Proxy. With respect to the director nominees, if any of such
nominees should become unavailable for any reason, which the directors do not
now contemplate, it is intended that, pursuant to the accompanying form of
Proxy, votes will be cast for a substitute nominee designated by the Board of
Directors.
<PAGE>
Directors are elected by a plurality of the votes cast at the Annual Meeting,
either in person or by proxy. The approval referred to above will be authorized
if a majority of the votes cast at the Annual Meeting, either in person or by
proxy, are voted in favor of such approval.
With respect to the proposals referred to above, abstentions and broker
non-votes will be counted as not having voted and will not be counted in
determining if the plurality, with respect to (1), or the majority, with respect
to (3), was obtained. With respect to proposal (2), abstentions and broker
non-votes have the effect of a "No' vote.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Certificate of Incorporation of the Bancorp provides that the Board of
Directors shall consist of 9 members and that the directors shall be classified
into three classes, each of which shall serve for a term of three years, with
the term of office of one class expiring each year.
NOMINEES FOR ELECTION OF DIRECTORS
All nominees who are presently serving as directors were elected to their
present term of office by the shareholders. The following directors whose terms
are expiring this year, are proposed for re-election for terms expiring in 2001:
Patrick A. Given, Edith Hodgkinson and Robert Scherdel.
TABLE I
<TABLE>
<CAPTION>
Date Experience and Shares of Stock
Directorship Director Principal Occupation Beneficially Owned (2)
Name and Age Term Expires Since (1) During Past 5 Years # %
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NOMINEES
Patrick A. Given, 53 2001 1989 Real Estate Appraiser and
Consultant; Given Associates,
located at 550 Route 111,
Hauppauge, New York. 2,050 .47
Edith Hodgkinson, 75 2001 1979 Retired Restaurateur, active in community
non-profit organizations. 28,203 6.50
Robert W. Scherdel, 43 2001 1996 President & CEO
Sunrest Health Facilities, Inc. 5,351 1.23
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Date Experience and Shares of Stock
Directorship Director Principal Occupation Beneficially Owned (2)
Name and Age Term Expires Since (1) During Past 5 Years # %
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIRECTORS CONTINUING IN OFFICE
James H. Glamore, 78 1999 1979 President, Glamore Motor Sales, Inc.
(automobile sales), until retirement
in 1996 4,752 1.09
Barry M. Seigerman, 57 1999 1993 Chairman & Chief Executive
Officer Seigerman-Mulvey, Co., Inc.,
Insurance Brokers, located at
31 Research Way, East Setauket,
New York. Active in business
and community non-profit
organizations. 917 .21
Augusta Kemper, 75 1999 1992 Horticulturist and Owner of Kemper
Nurseries until retirement in 1985. 24,933 5.75
Attmore Robinson, Jr., 86 2000 1948 Partner, Elzon & Robinson,
Real Estate Brokers, until
retirement in 1993. 9,263 2.13
Bradley E. Rock, 45 2000 1988 Chairman of the Board, President
& Chief Executive Officer of the
Bancorp and the Bank. 2,492 .57
Charles E. Rockwell, 81 2000 1984 Retired in 1976. Formerly a
commercial airline captain. Active
in community non-profit
organizations. 4,418 1.01
</TABLE>
1) Each director of the Bancorp is also a director of Bank of Smithtown. The
dates given are the dates on which the director first served as a director of
Bank of Smithtown.
2) These figures include Common Shares owned by family members of directors as
to which each of the directors disclaim any beneficial ownership. Mrs.
Hodgkinson's shares include shares held by Bank of Smithtown as Trustee under
the Last Will and Testament of Carlyle Hodgkinson. The amount of Common Shares
beneficially owned and listed in the table above is provided as of February 23,
1998.
<PAGE>
BOARD OF DIRECTORS
The Board of Directors holds regular monthly meetings. The Board held twelve
meetings during 1997 in addition to one special meeting of Bank of Smithtown and
one special meeting of Smithtown Bancorp. Each director attended 75% or more of
the aggregate number of meetings of the Board of Directors and the committee or
committees thereof on which such director served during 1997.
COMMITTEES OF THE BOARD
The Board of Directors has established a number of committees to assist it in
the discharge of its responsibilities.
The Audit Committee, consisting of eight directors, had four meetings in 1997.
The chairman of the committee is Attmore Robinson, Jr. The committee reviews
results of regulatory examinations, internal audits and audits of the
independent auditor in conformance with regulations of the New York State
Banking Department and the laws of the State of New York. Current members of
this committee are James H. Glamore, Edith Hodgkinson, Augusta Kemper, Attmore
Robinson, Jr., Charles E. Rockwell, Patrick A. Given, Barry M. Seigerman and
Robert Scherdel.
The Compensation Committee consists of four members. The chairman of the
committee is Attmore Robinson, Jr. This committee makes recommendations to the
Board of Directors with respect to the compensation of elected officers. Current
members of this committee are Augusta Kemper, Edith Hodgkinson, Attmore
Robinson, Jr. and Charles E. Rockwell.
The Board of Directors does not have a standing nominating committee.
DIRECTOR COMPENSATION
Directors of the Bank received a fee of $600 per month from January 1997 through
April 1997. Effective May 1, 1997, the Director's fees were increased to $750
per month. The members of the Directors Loan Committee who are not officers of
the Bank and who were appointed to the committee prior to May 1, 1996, also
received a monthly fee of $300 for committee membership. The total amount of
directors' fees paid during 1997 was $86,400.00.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES .
(PROPOSAL NO. 1 ON THE PROXY).
AMENDMENT TO THE BANCORP'S CERTIFICATE OF INCORPORATION
TO EFFECT STOCK SPLIT
(PROPOSAL NO. 2)
The Board of Directors recommends that Article FOURTH of the Bancorp's
Certificate of Incorporation be amended in order to effect a two-for-one stock
split (the "Stock Split") by changing the number of shares of authorized capital
stock, par value $5.00 (the "Old Common Shares"), from 1,500,000 to 3,000,000
shares, par value $2.50 (the "New Common Shares").
The following description of this proposal is qualified in its entirety by
reference to the proposed amendments to Article FOURTH of the Bancorp's
Certificate of Incorporation, set forth below.
<PAGE>
At its regularly held meeting on February 24, 1998, the Board of Directors
adopted a resolution recommending to the shareholders an amendment to the
Bancorp's Certificate of Incorporation to effect the Stock Split (the "Stock
Split Amendment").
As of February 23, 1998 the Bancorp's authorized capital stock consisted of
1,500,000 Old Common Shares, of which 433,268 Old Common Shares were issued and
outstanding on February 23, 1998 and 100,000 Preferred Shares, par value $0.01
per share, none of which was issued and outstanding on February 23, 1998.
The Stock Split Amendment will not have any material impact on the aggregate
capital represented by the shares of capital stock for financial statement
purposes. Adoption of the Stock Split will have the effect of increasing the
current amount of authorized and outstanding shares of capital stock as
indicated in the table below.
In connection with the Stock Split, Old Common Shareholders would receive two
New Common Shares in exchange for one Old Common Share.
<TABLE>
<CAPTION>
Before Split After Split
Class of
STOCK AUTHORIZED PAR VALUE OUTSTANDING AUTHORIZED PAR VALUE OUTSTANDING
- ----- ----------- --------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Common 1,500,000 $5.00 433,268 3,000,000 $2.50 866,536
</TABLE>
The number of issued shares after the Stock Split is approximate. Except for
changes resulting from the Stock Split, the rights and privileges of holders of
Old Common Shares will remain the same, both before and after the filing of the
Stock Split Amendment.
REASONS FOR THE STOCK SPLIT
The Board of Directors believes that it is desirable to effect the Stock Split
to increase the authorized capital stock of the Bancorp in order to have such
stock available for future use in connection with acquisitions, financing,
employee benefit plans, stock dividends or other corporate purposes including
the possible issuance in reaction to an unsolicited acquisition proposal (as set
forth more fully below).
Although the Bancorp has no current plans, has made no arrangements and has not
entered into any understandings whereby it would be required to issue any of the
New Common Shares created by the Stock Split for any specific purpose, the Board
of Directors believes that it is in the best interests of the Bancorp to effect
the Stock Split with the corresponding increase in the capital stock as stated
above in order to meet possible contingencies and opportunities for which the
issuance of shares may be deemed advisable. From time to time the Bancorp has
given, and in the future is likely to give, consideration to the feasibility of
obtaining funds for appropriate corporate objectives through the public sale of
equity securities. Because questions of timing are always central to whether or
on what basis public financing is to be undertaken, the Bancorp wishes to obtain
maximum flexibility in this regard by increasing its authorized capital stock at
this time, thereby avoiding the need for, and the expense and delay occasioned
by, a special shareholders' meeting to take similar actions at a later time.
Other purposes for which such additional shares could be issued include: (a) the
acquisition of the shares or assets of other corporations;(b) share
distributions to shareholders of the Bancorp; (c) employee benefit plans; and
(d) in reaction to unsolicited acquisition proposals. In the Board of Directors'
view the New Common Shares will provide greater flexibility in achieving these
purposes. It is intended that the additional shares of capital stock created by
the Stock Split would be subject to issuance at the discretion of the Board of
Directors from time to time for any proper corporate purpose without further
action by the shareholders, except as may be required by law or regulation or by
the rules of any stock exchange on which the Bancorp's securities may then be
listed (or by the by-laws of the National Association of Securities Dealers,
Inc., if applicable at such time).
<PAGE>
Although the Board of Directors is not aware of any effort by any person to
acquire control of the Bancorp and effect a change of control of the Bancorp,
the authorized but unissued shares of capital stock of the Bancorp could be used
to make it more difficult to effect a change in control of the Bancorp and
thereby make it more difficult for shareholders to obtain an acquisition premium
for their shares. Such shares could be used to create impediments for persons
seeking to gain control of the Bancorp by means of a merger, tender offer, proxy
contest or other means. Such shares could be privately placed with purchasers
who might cooperate with the Board of Directors in opposing such an attempt by a
third party to gain control of the Bancorp. The issuance of new shares of the
Bancorp could be used to dilute the stock ownership of a person or entity
seeking to obtain control of the Bancorp.
The Bancorp's Certificate of Incorporation currently contains several provisions
that may be deemed to have the effect of discouraging and defeating certain
forms of acquisition proposals. Article SEVENTH of the Certificate of
Incorporation provides for a classified board of directors comprised of three
classes, each of which is elected to a three-year term. Article EIGHTH provides
that certain business combinations involving the Bancorp and holders of more
than 5% of the Bancorp's outstanding shares must be approved by the affirmative
vote of 80% of the outstanding shares unless the Board of Directors approves the
transaction prior to the time the acquiror became a 5% owner or the Board of
Directors unanimously approves the transaction. Each of these provisions has
previously been adopted by the shareholders. In addition, in 1997, the Bancorp
adopted a shareholder rights plan, which could have the effect of discouraging
unsolicited acquisition proposals.
The Board of Directors also believes that the current per share price level of
the Old Common Shares has reduced the effective marketability of the shares.
Many investors prefer to purchase shares in "round-lot" transactions of 100
shares or multiples thereof. A high per share price level discourages such type
of transactions, thus discouraging investment in the Bancorp.
The increase in the number of common shares outstanding as a consequence of the
Stock Split should decrease the per share price of the common shares, which may
encourage greater interest in the New Common Shares and possibly promote greater
liquidity for the Bancorp's shareholders. However, the decrease in the per share
price of the Common Shares as a consequence of the Stock Split may be
proportionately less than the increase in the number of shares outstanding. In
addition, any increased liquidity due to any decreased per share price could be
partially or entirely off-set by the increased numbered of shares outstanding
after the Stock Split. Nevertheless, the Stock Split could result in per share
prices that adequately compensate for the adverse impact of the market factors
noted above. There can, however, be no assurance that the favorable effects
described about will occur, or that any decrease in per share price of the New
Common Shares resulting from the Stock Split will be maintained for any period
of time.
The affirmative vote of the holders of a majority of the outstanding Common
Shares is required to adopt the proposed amendments to the Certificate of
Incorporation. If the amendments to Article FOURTH of the Bancorp's Certificate
of Incorporation are authorized, the first sentence of Article FOURTH will read
as follows:
<PAGE>
"FOURTH: NUMBER OF SHARES. The aggregate number of shares which the corporation
shall have authority to issue shall be 3,100,000, of which 3,000,000 shall be
designated as Common Shares with a par value of $2.50 each and 100,000 shall be
designated as Preferred Shares with a par value of one cent ($0.01) each.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL
TO AMEND THE BANCORP'S CERTIFICATE OF INCORPORATION
TO EFFECT A TWO-FOR-ONE STOCK SPLIT BY CHANGING
THE NUMBER OF AUTHORIZED COMMON SHARES, PAR VALUE
$5.00, FROM 1,500,000 TO 3,000,000, PAR VALUE
$2.50 (PROPOSAL NO. 2 ON THE PROXY).
APPROVAL OF INDEPENDENT AUDITORS
(PROPOSAL NO. 3)
The Audit Committee has recommended that Albrecht, Viggiano, Zureck & Co., P.C.,
Certified Public Accountants, continue as the independent auditors for the Bank
and the Bancorp for 1998. The firm has served as the independent auditors for
the Bank and the Bancorp since 1992. Representatives of the firm will be present
at the annual meeting to answer questions and are free to make statements during
the course of the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL
TO APPROVE THE INDEPENDENT AUDITORS (PROPOSAL NO. 3 ON THE PROXY).
EXECUTIVE OFFICERS AND
PRINCIPAL SHAREHOLDERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The persons listed below are beneficial owners of more than 5% of the
outstanding Common Shares of the Bancorp as of February 23, 1998.
Name and Address Common Shares Percent
of Beneficial Owner Beneficially Owned of Class
Elizabeth Radau 30,296 6.99%
43 Edgewood Avenue
Smithtown, New York 11787-2723
Edith Hodgkinson 28,203 6.50%
P.O. Box 756
Bayport, New York 11705-0756
Augusta Kemper 24,933 5.75%
51 Mills Pond Road
St. James, New York 11780-2111
The following table shows stock ownership as of February 23, 1998, of all
directors and officers of the Bancorp and the Bank as a group:
<PAGE>
TABLE II
NUMBER OF COMMON PERCENTAGE
SHARES BENEFICIALLY OF OUTSTANDING
OWNED (NOTE 1) COMMON SHARES
Patrick A. Given 2,050 .47
Anita M. Florek 792 .18
Edith 28,203 6.50
Hodgkinson 5,351 1.23
Robert W. Scherdel 4,752 1.09
James H. Glamore 917 .21
Barry M. Seigerman 24,933 5.75
Augusta Kemper 9,263 2.13
Attmore Robinson, Jr. 3,354 .77
Bradley E. Rock 4,418 1.01
Charles E. Rockwell 693 .16
Thomas J. Stevens
Eleven directors and executive officers 84,726 19.56
of the Bancorp and the Bank as a group
Note 1 - Includes Common Shares owned by family members of directors as to which
the directors disclaim any interest.
MATERIAL PROCEEDINGS
There are no material proceedings to the best of management's knowledge to which
any director, officer or affiliate of the Bancorp or any record holder or
beneficial owner of more than five percent of the Bancorp's stock, or any
associate of any such director, officer, affiliate of the Bancorp, or security
holder is a party adverse to the Bancorp or any of its subsidiaries or has a
material interest adverse to the Bancorp.
EXECUTIVE OFFICERS
The following table sets forth information as to executive officers of the
Bancorp and the Bank as of February, 1998.
TABLE III
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AGE POSITION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bradley E. Rock 45 Chairman of the Board, President & Chief Executive Officer of the Bancorp since
January 1992. President of the Bancorp and the Bank October 1990 to January
1992. Director of the Bancorp and the Bank since 1988.
- ------------------------------------------------------------------------------------------------------------------------------------
Anita M. Florek 47 Executive Vice President & Chief Financial Officer of the Bank since January
1993. Executive Vice President & Treasurer of the Bancorp since January 1993.
Senior Vice President & Comptroller of the Bank March 1989 to January 1993.
Treasurer of the Bancorp January 1991 to January 1992.
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Stevens 39 Executive Vice President & Chief Lending Officer of the Bank since July 1997.
Senior Vice President & Commercial Loan Officer of the Bank February 1997 to
July 1997. Vice President & Commercial Loan Officer May 1994 to February 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
EXECUTIVE COMPENSATION
The table appearing below sets forth all compensation paid in 1997 to
each executive officer whose total compensation exceeded $100,000 for such year.
All remuneration was paid by Bank of Smithtown.
TABLE IV
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY INCENTIVE OTHER COMPENSATION
COMPENSATION (1) (2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bradley E. Rock 1995 $185,325.00 $20,021.30 $19,077.76
Chairman, President & CEO 1996 $200,000.00 $17,372.54 $21,045.96
of the Bancorp and the Bank 1997 $212,000.00 $38,000.00 $25,373.42
- ------------------------------------------------------------------------------------------------------------------------------------
Anita M. Florek 1995 $ 95,000.00 $10,615.79 $ 6,042.98
Executive Vice President 1996 $102,000.00 $ 9,673.23 $ 8,505.85
of the Bancorp and the Bank 1997 $108,120.00 $14,000.00 $12,687.42
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Stevens 1995 $ 68,000.00 $20,277.88 $ 3,392.16
Executive Vice President 1996 $ 74,000.00 $18,799.10 $ 6,822.08
of the Bank 1997 $ 88,538.34 $13,332.11 $ 9,525.43
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These amounts include a monthly director's fee of $750 for Mr. Rock as
Chairman of the Board of Directors. Mr. Rock does not receive any additional
compensation for participation on any of the board's committees. These amounts
also include employer matching contributions paid in connection with the Bank's
401(k) plan, amounts accrued during 1997 under the ESOP and premiums paid on
behalf of the officers for a group term life insurance policy.
(2) Amounts reported do not include any amount expended by the Bank which may
have provided an incidental benefit to the persons listed in the table above,
but which were made by the Bank in connection with its business. While the
specific amounts of such incidental benefits cannot be precisely determined,
after due inquiry, management does not believe that such value would exceed
$5,000 in the aggregate for any of such persons.
CERTAIN TRANSACTIONS
Some of the directors and officers of the Bancorp, and some of the corporations
and firms with which these individuals are associated, are also customers of
Bank of Smithtown in the ordinary course of business, or are indebted to the
Bank in respect of loans of $60,000.00 or more. It is anticipated that some of
these individuals, corporations and firms will continue to be customers of and
indebted to the Bank on a similar basis in the future. All loans extended to
such individuals, corporations and firms were made in the ordinary course of
business, did not involve more than the normal risk of collectability or present
other unfavorable features, and were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the same time
for comparable Bank transactions with unaffiliated persons.
No director of the Bank or the Bancorp had an aggregate amount of unsecured
indebtedness to the Bank in excess of 15 percent of the Bank's equity capital
account during the period of January 1, 1997, through December 31, 1997.
Outside of normal customer relationships, none of the directors or officers of
the Bank or the Bancorp, or the corporations or firms with which such
individuals are associated, currently maintains or has maintained within the
last fiscal year any significant business or personal relationship with the Bank
or the Bancorp other than such as arises by virtue of such individual's or
entity's position with and/or ownership interest in the Bank or the Bancorp.
PENSION PLAN
The Employee Stock Ownership Plan ( the "ESOP") and the 401(k) plans cover
full-time employees who have attained the age of 21 years and who have completed
1,000 hours of employment during the year.
Benefits under the ESOP are based solely on the amount contributed to the ESOP
which is used to purchase Common Shares. A participant's allocation is the total
employer contribution multiplied by the ratio of that participant's applicable
compensation over the amount of such compensation for all participants for that
year. Benefits are not subject to deduction of social security or other offset
amounts.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the 1999 Annual Meeting must be
received by the Secretary of the Board of Directors by November 2, 1998, to be
included in the proxy statement.
OTHER BUSINESS
So far as the Board of Directors of the Bancorp now knows, no business other
than that referred to above will be transacted at the Annual Meeting. The
persons named in the Board of Directors' Proxies may, in the absence of
instructions to the contrary, vote upon all matters presented for action at the
Meeting according to their best judgment.
Dated: March 2, 1998
SMITHTOWN BANCORP
Bradley E. Rock
Chairman of the Board, President
& Chief Executive Officer
<PAGE>
THIS PROXY IS SOLICITED BY
BOARD OF DIRECTORS OF SMITHTOWN BANCORP, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
TUESDAY, APRIL 7, 1998
The undersigned shareholder of Smithtown Bancorp, Inc., revoking all proxies
heretofore given with respect to the shares represented herewith, hereby
constitutes and appoints David Long, Doris Masters and Albert Brayson II or any
of them, the true and lawful attorneys, agents and proxies of the undersigned,
with full power of substitution for and in the name, place and stead of the
undersigned, with all the powers which the undersigned would possess if
personally present, to vote all common shares of Smithtown Bancorp, Inc., held
of record by the undersigned on February 23, 1998, at the Annual Meeting of
Shareholders of Smithtown Bancorp, Inc., to be held at the Smithtown Landing
Country Club, 495 Landing Avenue, Smithtown, New York, on April 7, 1998, at
10:30 AM, or any adjournment thereof.
1. ELECTION OF Patrick A. Given, Edith Hodgkinson,Robert W. Scherdel, as
Directors
For ALL NOMINEES. The Board recommends a vote FOR All Nominees
Against ALL NOMINEES.
For ALL NOMINEES EXCEPT ________________________________________
(i.e. authority is withheld from) ________________________________________
2. EFFECT STOCK SPLIT
For Proposal The Board recommends a vote FOR Proposal No. 2.
Against Proposal
Abstain
3. APPROVAL OF INDEPENDENT AUDITORS
For Proposal The Board recommends a vote FOR Proposal No 3.
Against Proposal
Abstain
4 TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND
ANY ADJOURNMENT THEREOF.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINATED DIRECTORS, IN FAVOR OF THE OTHER PROPOSALS AND IN THE DISCRETION OF
THE PERSONS IN WHOSE FAVOR THIS PROXY IS GRANTED, UPON MATTERS THAT MAY PROPERLY
COME BEFORE THE MEETING.
Dated:_____________, 1998
(Please insert date)
____________________L.S.
Signature of Shareholder
_____________________L.S.
Signature if Held Jointly
Please check if you plan to attend the meeting on April 7, 1998, at Smithtown
Landing. ________
THIS PROXY SHOULD BE RETURNED IN THE ENCLOSED ENVELOPE.
