SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
(Amendment No. )
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
BNH BANCSHARES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BNH BANCSHARES, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Item 22(a)(2) of Schedule 14A.
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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:
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11:*
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[ ] Check box if any part of the fee is offset as provided by Exchange
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statement number, or the Form or Schedule and the date of its filing.
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<PAGE>
BNH BANCSHARES, INC.
209 Church Street
New Haven, Connecticut 06510
(203) 498-3500
March 27, 1995
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of Shareholders
of BNH BANCSHARES, INC., which will be held at The New Haven Lawn Club, 193
Whitney Avenue, New Haven, Connecticut 06511 on Tuesday, April 25, 1995 at
10:00 a.m.
It is extremely important that your shares be represented at this
meeting. Therefore, even if you expect to attend the meeting, we hope that you
will sign the enclosed Form of Proxy and return it promptly in the enclosed
postage paid envelope. You may revoke the Proxy later and vote personally if
you are able to attend the meeting.
Sincerely,
[Insert Signature]
GEORGE M. DERMER
Chairman of the Board of Directors
[Insert Signature]
F. PATRICK MCFADDEN, JR.
President and Chief Executive Officer
<PAGE>
BNH BANCSHARES, INC.
209 Church Street
New Haven, Connecticut 06510
(203) 498-3500
--------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Holders of
Shares of Common Stock:
NOTICE IS HEREBY GIVEN that pursuant to the call of its directors, the
Annual Meeting of Shareholders of BNH BANCSHARES, INC. (the "Company") will be
held at The New Haven Lawn Club, 193 Whitney Avenue, New Haven, Connecticut
06511 on Tuesday, April 25, 1995 at 10:00 a.m., for the purpose of considering
and voting upon the following matters:
1. To elect the fifteen nominees for directors listed in the Proxy
Statement dated March 27, 1995 accompanying the notice of the meeting;
2. To ratify the selection of Price Waterhouse LLP as independent
accountants for the current fiscal year; and
3. To transact such other business as may properly come before the
meeting or an adjournment thereof.
Only those shareholders of record at the close of business on March 1, 1995
shall be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
[Insert Signature]
EVELYN R. MILLER,
Secretary
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE
MEETING, YOU MAY THEN WITHDRAW YOUR PROXY.
<PAGE>
BNH BANCSHARES, INC.
209 Church Street
New Haven, Connecticut 06510
(203) 498-3500
PROXY STATEMENT
Approximate date of mailing to shareholders: March 27, 1995
Introduction
The following is a proxy statement by the Board of Directors of BNH
BANCSHARES, INC. (the "Company") in connection with the solicitation of proxies
for use at its Annual Meeting of Shareholders scheduled for April 25, 1995.
At such meeting, the Company's shareholders will be asked to: (1) elect
directors; (2) ratify the selection of Price Waterhouse LLP as independent
accountants for the Company for the current fiscal year; and (3) transact such
other business as may properly come before the Annual Meeting.
The Company has 14,726,650 shares of Common Stock outstanding and entitled
to vote at its Annual Meeting. In certain circumstances, a shareholder will be
considered to be present at the Annual Meeting for quorum purposes, but will not
be deemed to have voted in the election of directors or in connection with other
matters presented for approval at the Annual Meeting. Such circumstances will
exist where a shareholder is present but specifically abstains from voting, or
where shares are represented at a meeting by a proxy conferring authority to
vote on certain matters but not on the election of directors. Under Connecticut
law, such abstentions and non-votes have the effect of a vote against the
election of management's nominees.
The Board of Directors of the Company has fixed March 1, 1995 as the record
date for the determination of the shareholders entitled to vote at that Meeting.
The proxies of shareholders are being solicited by the Board of Directors. A
shareholder giving a proxy pursuant to this solicitation may revoke it at any
time prior to its exercise by giving written notice to the Company, by appearing
at the Annual Meeting on April 25, 1995 and requesting withdrawal of the proxy,
or by giving a proxy bearing a later date. If a proxy is properly signed and is
not revoked by the shareholder, it will be voted at the Annual Meeting and such
vote will be cast in accordance with such shareholder's direction.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitations by mail, some directors, officers and regular employees of the
Company's subsidiary, The Bank of New Haven (the "Bank"), without extra
remuneration, may conduct solicitations by telephone and personal interview. The
Company may also request brokers, custodians, nominees and fiduciaries to
forward proxy solicitation material to the beneficial owners of shares held of
record by such persons, and will reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
The Company has engaged Proxy Services, Inc. to assist it in the
distribution of proxies. Pursuant to this engagement, Proxy Services, Inc. will
request brokers, custodians, nominees and fiduciaries to forward proxy
solicitation material to beneficial owners of shares held of record by such
person. Proxy Services, Inc. will receive a fee of approximately $300, plus
expenses, for such services.
1
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
Nominees
Pursuant to the terms of the Company's Bylaws, the Board of Directors has
set the size of the Board at fifteen (15) effective as of the 1995 Annual
Meeting of Shareholders. Accordingly, there are fifteen (15) nominees for
election as directors of the Company at the 1995 Annual Meeting of Shareholders
to serve until the next Annual Meeting of Shareholders of the Company and until
their successors shall have been elected and shall have qualified. Each of the
nominees is currently serving as a director of the Company. Joshua H. Sandman
resigned as a director of the Company and the Bank effective January 18, 1995,
and will not stand for reelection to those positions at the 1995 Annual Meeting
of Shareholders. The Company wishes to thank Mr. Sandman for his years of
service to the Company and the Bank.
The persons named in the form of proxy to represent shareholders at the
Annual Meeting are Theodore F. Hogan, Jr., Carl M. Porto and Albert M.
D'Onofrio. In the event that any nominee for director should become unavailable
for election for any reason, the persons named in the form of proxy will consult
with management of the Company and use their discretion in voting the shares
represented by such proxies. The affirmative vote of the holders of at least a
majority of the outstanding shares of Common Stock present in person or by proxy
at the Annual Meeting of Shareholders at which a quorum is present is required
for the election of directors. The name of each nominee for director, his
principal occupation for the previous five years, his other positions with the
Bank and the Company, and his age and period of service as a director of the
Company are set forth below, together with the number of shares and percentage
of the Company's Common Stock which such nominee beneficially owned, either
directly or indirectly, as of February 28, 1995. Each nominee has sole
investment power and voting power over shares beneficially owned except where
shared ownership is indicated below.
The Board of Directors recommends that the shareholders vote FOR the
election of the nominees for director listed below.
<TABLE>
<CAPTION>
Amount and
Name, Principal Served as a Nature of
Occupation and Director of Beneficial
Position with the the Company Ownership of Percent of
Company and the Bank Age Since Common Stock Common Stock
-------------------- --- --------- ------------ ------------
<S> <C> <C> <C> <C>
Richard L. Ades ......................................... 57 1985 51,120(a)* **
Director of the Company and the Bank; Owner, Richard
L. Ades d/b/a Susan Richard (wholesaler of women's
sportswear) from October, 1992 to present; Chairman,
Susan Richard, Inc. from January 1, 1990 to October,
1992
Stephen P. Ahern ........................................ 64 1989 29,127(b) **
Director of the Company and the Bank; Vice
President of Ogden Allied Security Services, a
private security service company
Martin R. Anastasio .................................... 53 1985 94,542(c)* **
Director of the Company and the Bank; Principal and
Vice President, Weinstein & Anastasio, P.C., Certified
Public Accountants
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Amount and
Name, Principal Served as a Nature of
Occupation and Director of Beneficial
Position with the the Company Ownership of Percent of
Company and the Bank Age Since Common Stock Common Stock
-------------------- --- --------- ------------ ------------
<S> <C> <C> <C> <C>
George M. Dermer ....................................... 77 1985 77,232(d)* **
Chairman of the Board of Directors of the Company and
the Bank; Retired President, Kramer Fur Co., Inc.,
Kramer Apparel Inc. and Peerless Fur Mfg. Co., Inc.
Thomas M. Donegan, P.E. ................................ 53 1985 21,936(e)* **
Director of the Company and the Bank; President,
Donegan and Company, Inc. (management consulting);
President and Chief Executive Officer, Advanced
Executive Aircraft, Inc.; Executive Vice President and
Chief Operating Officer, Avatar Alliance L.P.
(distributor of aircraft parts), from May 1, 1994 to
present.
Albert M. D'Onofrio .................................... 63 1985 54,006(f)* **
Director of the Company and the Bank; Orthodontist,
President, Orthodontic Associates of Connecticut, P.C.
Victor B. Hallberg. .................................... 65 1985 177,093(g)* 1.2%
Director of the Company and the Bank; President, L.G.
Defelice, Inc., Bernhard Contracting Corp., Francis P.
Ryan Corp. and related companies (construction-related
companies)
Theodore F. Hogan, Jr. ................................. 62 1985 41,190(h)* **
Director of the Company and the Bank; Retired;
Executive Assistant to the Mayor, City of New Haven,
1992 to January, 1994; Retired Director, Office of
Urban Affairs, Southern New England Telephone Co.
Karl J. Jalbert ........................................ 68 1989 205,777(i) 1.4%
Director of the Company and the Bank; President of
Connecticut Equities Group and Jalco Properties
(investment companies).
Lawrence M. Liebman .................................... 64 1985 110,023(j)* **
Director of the Company and the Bank; Corporate
Counsel of the Company and the Bank; Attorney-at-Law;
Private Investor; Chairman, U.S. Reduction Company
(secondary aluminum smelting company); trustee of
various Blanchard mutual funds.
F. Patrick McFadden, Jr. ............................... 57 1989 23,293(k) **
President, Chief Executive Officer and director of the
Company and the Bank; former Chairman of the Board and
Chief Executive Officer of New Haven Merchants' Bank
from May 1987 to August 21, 1989. Mr. McFadden also is
a director of The United Illuminating Company.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Amount and
Name, Principal Served as a Nature of
Occupation and Director of Beneficial
Position with the the Company Ownership of Percent of
Company and the Bank Age Since Common Stock Common Stock
-------------------- --- --------- ------------ ------------
<S> <C> <C> <C> <C>
Carl M. Porto .......................................... 52 1988 77,820(l) **
Director of the Company and the Bank; Attorney-at-Law,
Principal, Parrett, Porto, Parese & Colwell, P.C.
Vincent A. Romei ....................................... 61 1985 179,894(m)* 1.2%
Director of the Company and the Bank; General Partner,
Colony Inn Hotel; Partner, Bernhard Associates (real
estate); formerly Executive Vice President of the
Bernhard Group (construction related companies),
1965 to 1991
Stanley Scholsohn ...................................... 64 1985 79,251(n)* **
Director of the Company and the Bank; former
Secretary-Treasurer, Star Services, Inc. (health and
beauty aid distributors)
Cheever Tyler .......................................... 57 1989 9,800(o) **
Director of the Company and the Bank; President,
Partnership for Connecticut Cities and The Nonprofit
Strategies Group, 1994 to present; Attorney-at-law,
former Partner, Wiggin & Dana
</TABLE>
----------
* Includes 14,093 shares which are subject to outstanding warrants under the
Company's 1985 Warrant Plan for Directors, and 3,000 shares under stock
options that are exercisable within sixty days.
** Beneficially owns less than one percent (1%) of the Company's Common Stock
then outstanding.
(a) Includes 7,802 shares owned by Mr. Ades' wife and 6,978 shares in the
aggregate held in trust for members of Mr. Ades' family in which Mr. Ades
shares voting and investment power.
(b) Includes 1,127 shares owned by Ahern Family Limited Partnership, of which
Mr. Ahern is a general partner, and 3,000 shares under stock options that
are exercisable within sixty days.
(c) Includes 15,277 shares owned by Weinstein & Anastasio, P.C. Pension Plan
and 25,500 shares owned by Weinstein & Anastasio, P.C. Profit Sharing Plan,
for both of which Mr. Anastasio is a Trustee for which he shares voting and
investment power, 3,686 shares owned in the aggregate by members of Mr.
Anastasio's family and 32,986 shares owned by Mr. Anastasio's wife in which
Mr. Anastasio does not have voting and investment power.
(d) Includes 33,312 shares owned by Mr. Dermer's wife in which Mr. Dermer
shares voting and investment power.
(e) Includes 336 shares owned jointly by Mr. Donegan with his wife, 4,171
shares held in a retirement fund, 168 shares in an individual retirement
account ("IRA") for Mr. Donegan's benefit and 168 shares in an IRA for Mrs.
Donegan's benefit.
(f) Includes 23,377 shares in an IRA for Dr. D'Onofrio's benefit.
(g) Includes 126,334 shares in an IRA for Mr. Hallberg's benefit and 7,666
shares owned by Mr. Hallberg's wife.
4
<PAGE>
(h) Includes 17,473 shares owned jointly by Mr. Hogan and his wife and 3,135
shares owned by his wife in which Mr. Hogan shares voting and investment
power.
(i) Includes 3,000 shares under stock options that are exercisable within sixty
days.
(j) Includes an aggregate of 385 shares owned by Mr. Liebman as custodian for
his son and 1,409 shares in an IRA for Mr. Liebman's benefit.
(k) Includes 15,439 shares under stock options that are exercisable within
sixty days, 3,551 shares held in various retirement funds for Mr.
McFadden's benefit, 3,429 shares allocated to Mr. McFadden through his
contributions to the Company's 401(k) Profit Sharing Plan, 110 shares owned
by Mr. McFadden's son, over which he has no voting or investment power, and
764 shares in an IRA for his wife's benefit, over which he has no voting or
investment power.
(l) Includes 6,574 shares owned by the Porto Tire and Auto Pension Plan of
which Mr. Porto is Trustee and 25,642 shares owned by the Parrett, Porto,
Parese & Colwell Pension Profit Sharing Plan, 33,269 shares owned by the
Carl Porto, Grantor, Retained Income Trust, of which Mr. Porto is Trustee,
261 shares in an IRA for the benefit of Mr. Porto and his wife and 3,000
shares under stock options that are exercisable within sixty days.
(m) Includes 57,000 shares owned jointly by Mr. Romei and his wife and 84,426
shares in an IRA for the benefit of Mr. Romei.
(n) Includes 48,810 shares in the aggregate owned by Mr. Scholsohn's family,
and 13,348 shares in the aggregate held in trust for members of Mr.
Scholsohn's family.
(o) Includes 3,000 shares under stock options that are exercisable within sixty
days.
Including the shares beneficially owned by the nominees as shown in the
preceding table, all of the executive officers and directors of the Company as a
group (20 persons) owned beneficially as of February 28, 1995, 1,264,724 shares
of the Company's Common Stock, including 79,001 shares under options and 140,093
shares under warrants that are exercisable within sixty days of February 28,
1995, representing 8.5% of the Company's Common Stock then outstanding.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of February 28, 1995 with
respect to those persons known to the Company to be the beneficial owners of
more than 5% of the Company's Common Stock:
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership (a) Class (b)
------------------- ------------------------ ----------
Lawrence R. Burtschy ................. 845,000 5.74%
L.R. Burtschy & Company
14 Fulton Street P.O. Box 933
Charleston, SC 29402
Cumberland Associates ................ 1,260,000(c) 8.76%
1114 Avenue of the Americas
New York, NY 10036
----------------------
(a) Unless otherwise indicated, each person has sole voting and sole
dispositive power with respect to the shares shown.
5
<PAGE>
(b) The percentages shown are calculated on the basis of the number of
outstanding shares of the Company's Common Stock on February 28, 1995.
(c) Cumberland Associates is a limited partnership engaged in the business of
managing, on a discretionary basis, ten securities accounts. According to
its report on Schedule 13D filed with the Securities and Exchange
Commission (the "SEC") on July 29, 1993, Cumberland Associates exercises
sole dispositive power with respect to 1,000,000 shares, shared dispositive
power with respect to 290,000 shares, and no voting power with respect to
any of the shares.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company met 7 times during 1994 and, together
with three additional individuals, served as members of the Board of Directors
of the Bank. The Bank Board met 12 times during the year. Each incumbent
director of the Company or the Bank, with the exception of Messrs. Hallberg,
Sandman and Scholsohn, attended 75% or more of the total of meetings of the
Boards of Directors and meetings of all Committees of the Boards on which he or
she served during 1994. Members of all Committees are elected annually. The
Company and the Bank's Boards of Directors maintain the Committees referred to
below in addition to the Compliance Committee and Loan Committee of the Bank's
Board of Directors.
The Company's Executive Committee presently consists of Messrs. Dermer,
Jalbert, Liebman, McFadden, Porto, Romei and Scholsohn. In addition to the
foregoing individuals, the Bank's Executive Committee includes Thomas J. Cahill
and John F. Trentacosta. The Executive Committee generally acts on behalf of the
Board of Directors. Members of the Executive Committee are ex officio members of
all committees of the Board of Directors, except the Salary and Benefits
Committee. The Executive Committee met 14 times during 1994.
The Company's Audit Committee presently consists of Messrs. Romei, Ades,
Hogan and Tyler. The Bank's Audit Committee is comprised of the same
individuals. The Audit Committee is responsible for reviewing the operations and
financial position of the Company and the Bank. The Audit Committee met three
times during 1994.
The Company's Salary and Benefits Committee presently consists of Messrs.
Jalbert, Dermer, Hallberg, Hogan, Liebman, Porto, Romei and Dr. D'Onofrio. The
same individuals serve as the members of the Bank's Salary & Benefits Committee.
The Salary and Benefits Committee is responsible for approving compensation for
the Bank's executive officers and administering the employee and director stock
compensation plans. The Salary and Benefits Committee met once in 1994.
The Nominating Committee of the Company and the Bank presently consists of
Messrs. Dermer, Jalbert and Porto. The Nominating Committee considers candidates
for nominees as directors of the Company and the Bank. The Nominating Committee
did not meet during 1994. The Nominating Committee will consider nominees
recommended by shareholders but has no formal procedure for considering nominees
recommended by shareholders.
COMPENSATION OF DIRECTORS
In December 1993, the Bank's Board of Directors approved the reinstatement
of fees to its non-employee directors commencing January 1994. For each Bank
Board meeting attended, non-employee directors received $250. The Chairman of
the Board and the Chairman of the Audit and Loan Committees each received a $150
per month retainer. The Chairman of the Compliance Committee received a monthly
retainer of $500. Each non-employee director received $100 for each committee
meeting of the Board attended, with the exception of Executive Committee
meetings. All six non-employee members of the Executive Committee received a
monthly retainer of $450. In addition, Chairmen of the various committees other
than Loan, Audit and Compliance Committees received $150 for each meeting
chaired in addition to a $100 attendance fee.
6
<PAGE>
The 1985 Warrant Plan for Directors
In 1985, the Company adopted the 1985 Warrant Plan for Directors of the
Company (the "Warrant Plan"), which is administered by the Salary and Benefits
Committee who are not eligible to receive future awards under the Warrant Plan.
Subject to the provisions of the Warrant Plan, the Committee has complete
authority to interpret the Plan and to determine the individuals to whom
warrants may be granted, the number of shares to be covered by warrants, the
times at which warrants may be granted, the per share warrant exercise price for
each warrant and the terms and conditions of the respective warrant agreements
memorializing the granting of warrants.
The initial per share price to be paid by participants in the Warrant Plan
upon the exercise of a warrant shall be equal to the greater of (a) the par
value of a share of the Company's Common Stock or (b) the fair market value of a
share of the Company's Common Stock on the date of the grant of the warrant.
A warrant may be granted for a period not in excess of ten years from the
date it is granted. No warrant may be granted under the Warrant Plan after April
23, 1995, the date of termination of the Warrant Plan.
A warrant may be exercised in whole or in part at any time after one year
from the date it is granted. The Committee may, however, in its discretion,
permit any warrant to be exercised in whole or in part prior to the time when it
would otherwise be exercisable.
At the present time, 183,219 shares of Common Stock are authorized for
issuance under the Warrant Plan and subject to outstanding warrants at a per
share exercise price of $9.81, after adjustments for stock splits and stock
dividends, which will expire in 1995. No warrants have been granted or exercised
under the Warrant Plan during the last three fiscal years.
Stock Option Plan for Non-Employee Directors
At the 1992 Annual Meeting of Shareholders, the shareholders of the Company
approved the adoption of the BNH Bancshares, Inc. Stock Option Plan for
Non-Employee Directors (the "Director Option Plan"). The Director Option Plan is
administered by the Salary and Benefits Committee of the Board of Directors.
Commencing on June 30, 1992 and on each June 30th thereafter during the
10-year term of the Director Option Plan, each non-employee director of the
Company will be granted a non-qualified stock option to purchase 1,000 shares of
the Company's Common Stock (the "Annual Options"). The exercise price for each
Annual Option will be the greater of the fair market value of the Company's
Common Stock on the date of grant or the par value of the Common Stock on the
date of exercise. Annual Options will be exercisable in full following six
months from their grant date and expire ten years from the grant date. However,
Annual Options become immediately exercisable in full upon the director's
withdrawal from the Board of Directors due to death, disability or retirement as
defined in the Director Option Plan. Payment of the exercise price may be made
in cash, previously acquired shares of Common Stock equal in value to the
exercise price or a combination of cash and Common Stock.
The Director Option Plan also provides that each non-employee director of
the Company may elect to receive non-qualified stock options (the "Deferred
Compensation Options") in lieu of all or part of the retainers and fees payable
to the director for service on the Board of Directors and the Board of Directors
of any subsidiary of the Company and their respective committees
("Compensation").
As of February 28, 1995, 16,000 shares of Common Stock were reserved for
issuance upon the exercise of outstanding Annual Options at an exercise price of
$1.50 per share, 16,000 shares were reserved for issuance upon the exercise of
outstanding Annual Options at an exercise price of $1.31 per share, 16,000
shares were reserved for issuance upon the exercise of outstanding Annual
Options at an exercise price of $1.25 per share and 320,644 shares remain
available for grants of awards under the Director Option Plan in 1995, subject
to adjustment for stock splits or
7
<PAGE>
similar capitalization changes. None of the directors have elected to receive
Deferred Compensation Options in lieu of Compensation. Shares subject to options
which lapse without having been exercised become available for new grants.
The Board of Directors may discontinue or amend the Director Option Plan at
any time. However, without shareholder approval, the Board of Directors may not
amend the Director Option Plan to increase the number of shares of Common Stock
as to which options may be granted annually under the Plan, modify the
requirements for participation in the Plan, extend the term of the Plan or the
option periods provided therein, or decrease the option price or otherwise
materially increase the benefits under the Plan. The Director Option Plan may
not be amended more often than once every six months except to comply with
changes in tax laws.
COMPENSATION OF EXECUTIVE OFFICERS
All of the executive officers of the Company are currently officers of the Bank.
The Company has no existing plan or arrangement to pay any remuneration to such
officers in addition to the compensation that they will receive from the Bank in
their respective capacities as officers of the Bank. The table below sets forth
a summary for the last three (3) fiscal years of the cash and non-cash
compensation paid or awarded by the Bank to the Chief Executive Officer, who was
the only executive officer whose total annual salary for 1994 exceeded $100,000
(the "Named Executive Officer").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards (1)
--------------------- ------------ ------------
(a) (b) (c) (d) (e) (f)
All Other
Name and Salary Bonus Compensation
Principal Position Year ($) ($) Options (#) ($)
------------------ ------ ----- ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
F. Patrick McFadden, Jr. .................... 1994 160,903 -- -- 5,460(5)
President and Chief ...................... 1993 160,900 61,463(2) 32,821(4) 4,880(5)
Executive Officer ........................ 1992 186,923 36,463(3) -- 4,354(5)
<FN>
-----------
(1) Although the BNH Bancshares, Inc. 1992 Stock Incentive Plan (the "1992
Stock Incentive Plan") permits grants of restricted stock, freestanding
stock appreciation rights and shares of Common Stock, cash or a combination
thereof contingent upon the attainment of certain performance criteria, no
grants of these incentives have been made.
(2) The $25,000 bonus paid in 1993 was subject to forfeiture if during 1994 the
Named Executive Officer resigned or was dismissed for reasons related to
his performance. The remaining portion of the bonus paid in 1993 ($36,463)
represents the last installment of the bonus payable under Mr. McFadden's
prior employment agreement. See Note (3) below.
(3) Paid pursuant to Mr. McFadden's employment agreement, which expired in 1991
and which entitled Mr. McFadden to receive $145,850, payable in
installments of 25% per year commencing February 15, 1990.
(4) Non-qualified stock options were granted pursuant to the Company's 1992
Stock Incentive Plan on December 15, 1993 with an exercise price equal to
50% above the fair market value on the date of grant. These options expire
on December 14, 1998 and are exercisable to the extent of one-third of the
number of shares on or after December 15, 1994 and an additional one-third
of such shares on or after each successive anniversary of the grant date.
(5) Premiums paid by the Company for term life insurance, of which Mrs.
McFadden is the beneficiary.
</FN>
</TABLE>
No grants of stock options or stock appreciation rights were made under the
Company benefit plans during 1994.
8
<PAGE>
Employment and Change in Control Agreements.
Mr. McFadden has entered into an employment agreement with the Bank as of
May 1, 1993 which provides that he will serve as President and Chief Executive
Officer of the Company and the Bank for a base salary of $160,000 per year (a
reduction of $20,000 from his 1992 base salary of $180,000). Unless earlier
terminated by Mr. McFadden or the Bank in accordance with the provisions of that
agreement, the term of the agreement will be for a period of one year and on the
first day of each month such term will automatically be extended for a period of
one year unless either party gives written notice that the agreement will not be
automatically so extended. In the event the Bank terminates the agreement for
cause (which is defined as gross malfeasance or gross neglect of duty), or if
Mr. McFadden terminates the agreement for any reason other than those
specifically described below, Mr. McFadden will be entitled to any unpaid base
salary through the date of termination. If the Bank terminates the agreement for
any reason other than for cause, Mr. McFadden will be entitled to all unpaid
base salary through the remaining term of the agreement and any unpaid bonuses.
If Mr. McFadden terminates the agreement as a result of not being re-elected a
director of the Bank or the Company or for good reason (which is defined to
include an adverse change in his duties, failure by the Bank to provide salary
or other benefit payments on a timely basis, relocation of the principal office
of the Bank outside Connecticut or action by the Bank under certain
circumstances to diminish substantially the value of Mr. McFadden's awards or
benefits under the Bank's benefit plans or policies), Mr. McFadden will be
entitled to all unpaid base salary through the remaining term of the agreement
and any unpaid bonuses.
In addition, Mr. McFadden and five other executive officers of the Bank
have entered into Severance Agreements with the Bank which provide for the
payment of termination benefits in the event of a change in control (as defined
in the Severance Agreements). In the event that there is an involuntary
termination of Mr. McFadden's employment (as defined in the Severance Agreement
to include Mr. McFadden's election to terminate his employment under certain
circumstances and to exclude termination due to death, disability or retirement
or termination for cause as defined therein) within one year prior to the change
in control or within the two year period following a change in control, Mr.
McFadden will receive a lump sum payment equal to three times his annual salary
during the 12 months preceding the date of termination or the 12 months
preceding the date of the change in control, whichever is greater, in addition
to a continuation of certain employee benefits for a period of one year
following termination of employment.
The following table sets forth information concerning the fiscal year-end
value of unexercised options to purchase the Company's Common Stock granted to
the Named Executive Officer under the BNH Bancshares, Inc. Stock Option Plan and
the 1992 Stock Incentive Plan. The Named Executive Officer did not exercise any
stock options during 1994.
FISCAL YEAR-END OPTION VALUES
(b) (c)
Number of Value of
Shares Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1994 December 31, 1994
(a) (#) Exercisable/ ($) Exercisable/
Name Unexercisable Unexercisable (1)
---- ------------- ----------------
F. Patrick McFadden, Jr. .... 15,439/21,882 0
------------
(1) The option exercise prices were greater than the average of the high and
low price of the Company's Common Stock as quoted on the Nasdaq National
Market on December 30, 1994.
9
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Salary and Benefits Committee of the Bank approved base salaries for
executive officers of the Bank for 1994, and administers and grants awards under
the Company's stock compensation plans. The following non-employee directors
served on the Salary and Benefits Committee during the last fiscal year: Messrs.
Dermer, Hallberg, Hogan, Jalbert, Liebman, Porto and Romei and Dr. D'Onofrio.
The Company has retained Mr. Porto and Mr. Liebman or the law firms with which
they were affiliated during 1994 and the Company intends to retain them during
1995.
SALARY AND BENEFITS COMMITTEE
REPORT ON EXECUTIVE COMPENSATION FOR 1994
Notwithstanding anything to the contrary contained in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate by reference future
filings in whole or in part, including this Proxy Statement, the following
report and the Performance Graph immediately following the report shall not be
incorporated by reference into any such filings.
The Salary and Benefits Committee of the Bank (the "Committee") makes this
report on executive compensation for the fiscal year ended December 31, 1994.
The Committee was solely responsible for approving the total compensation of the
Bank's executive officers during 1994. The Committee is composed entirely of
outside directors.
The objective of the Company's executive compensation program is to attract
and retain key executives and to reward them based on Company and individual
performance. In particular, the compensation program is designed to reward
executive initiatives that enhance the strategic position of the Company and
that increase shareholder value.
Total executive compensation generally consists of three components: base
salary, short-term incentives in the form of cash bonuses and long-term
incentives in the form of stock options. Stock options, which tie the
executives' compensation to the price of the Company's Common Stock, are awarded
by the Committee in such frequency and size so as to remain competitive with the
level of compensation tied to stock options awards to executives with similar
responsibilities in companies reflected in a survey of option awards prepared by
a national consulting firm. During 1994, no stock options were granted to the
Bank's employees. In addition, during 1994, no annual bonuses were awarded to
the Bank's employees because the threshold level of net income for 1994 set by
the Committee as a condition for the payment of bonuses was not achieved.
Compensation of Executive Officers (other than the CEO)
The base salaries of the Bank's executive officers are determined by the
Bank's Chief Executive Officer in consultation with a benefits consultant
retained by the Bank and reviewed by Committee. The determination of base
salaries is based upon the specific responsibilities of each executive and
consideration of survey information of the base salaries paid to executive
officers performing similar duties for financial institutions and their holding
companies, primarily banks, located in the Northeast with assets of between $250
million and $500 million (the "peer group"). Salary levels for executive
officers are also based on the Chief Executive Officer's assessment of the
executive's performance of goals set for the year under the Bank's strategic
plan, although such assessment does not determine salary levels based upon
specific financial or other quantifiable performance criteria. As a method of
retaining and attracting talented executives, the Committee's goal is to
establish base salaries for high performing executives at the market averages
paid to executives with similar responsibilities by the peer group. During 1994,
the base salaries of the Bank's executive officers remained at the levels set in
1993. In making this determination, the Committee confirmed that the level of
base salaries paid to the Bank's executive officers remained at the average
level paid for comparable positions by the peer group and the Committee also was
mindful of the Company's continuing operating losses during the first half of
1994.
10
<PAGE>
At the end of 1994, the Committee approved a merit pool of 4.32% of the
base salaries of all officers of the Bank, including the Bank's executive
officers other than the CEO, with which to adjust base salaries to be paid to
such officers during 1995. The size of the merit pool was established based on
an estimate of the extent to which officer base salaries paid, including
executive officer base salaries other than the CEO's salary, are expected to
change, on average, during 1995 as determined by survey information of national
consulting firms of base salaries paid to similar employees by financial
institutions, primarily banks, located in the Northeast. Base salary increases
for executive officers, other than the CEO, were allocated upon consideration of
the level of the executive's salary as compared to the market average range of
base salaries for executives with similar responsibilities set forth in the
survey information and their 1994 performance as assessed by the Chief Executive
Officer and reviewed and approved by the Committee. Executive officers were
assessed on the basis of three areas of strategic performance for 1994: (1)
reduction of classified assets and other real estate owned ("OREO"), (2) growth
in loan originations, and (3) development of retail deposit business. Base
salary increases allocated to executive officers of the Bank, other than the
CEO, for 1995 exceeded slightly the 4.32% rate used to establish the merit pool.
The Committee determined that such salary increases were appropriate in order to
maintain the base salary level of those executives at the market averages
expected to be paid to executive officers with similar responsibilities in the
peer group.
CEO Compensation
Mr. McFadden's base salary remained at its 1993 level and no other
compensation awards were made to him during 1994. The Committee confirmed that
Mr. McFadden's base salary remained at the average level paid to chief executive
officers by the peer group during 1994. In the beginning of 1995, the Committee
reviewed Mr. McFadden's base salary for 1995. The Committee reviewed survey
information of national consulting firms of the estimated base salary levels to
be paid in the peer group to chief executive officers during 1995 and Mr.
McFadden's accomplishments as measured against the Bank's strategic plan during
1994. In particular, the Committee noted Mr. McFadden's lead role in the bulk
sale of problem loans and other efforts to reduce the Bank's classified assets
and OREO, the substantial increase in loan originations during 1994 and the
achievement of a net profit in the third and fourth quarters of 1994. The
Committee also noted Mr. McFadden's diligence in overseeing regulatory and
compliance requirements. Although Mr. McFadden's base salary is not determined
by reference to specific financial criteria or other performance formulas, in
light of the above factors, the Committee approved a seven percent increase in
Mr. McFadden's base salary for 1995 over the 1994 level. Based upon the survey
information of estimated Chief Executive Officers' salaries for 1995, the
Committee determined that Mr. McFadden's salary increase was appropriate in
order to maintain his base salary level within the market average range paid to
Chief Executive Officers in the peer group.
The Committee does not believe that the provisions of Section 162(m) of the
Internal Revenue Code of 1986, as amended, which limits the deductibility of
compensation in excess of $1 million in any year paid to the executive officers
named in the Company's proxy statement, will have any impact upon the Company.
The Salary and Benefits Committee
Karl J. Jalbert Theodore F. Hogan, Jr.
George M. Dermer Lawrence M. Liebman
Albert M. D'Onofrio Carl M. Porto
Victor B. Hallberg Vincent A. Romei
11
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock with the
cumulative total return of the Nasdaq National Market (U.S.) and Nasdaq Bank
Stocks for the period of five fiscal years commencing December 29, 1989 and
ended December 30, 1994. The total return assumes the reinvestment of dividends.
--GRAPHICAL REPRESENTATION OF DATA TABLE BELOW--
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31
-----------------------------------------------------------------
12/29/89 12/31/90 12/31/91 12/31/92 12/31/93 12/30/94
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BNH Bancshares ........ 100.00 56.74 32.67 26.65 32.67 27.11
NASDAQ Stock Market ... 100.00 84.918 136.277 158.579 180.933 176.916
NASDAQ Bank Stocks .... 100.00 73.32 120.168 174.869 199.334 198.692
</TABLE>
12
<PAGE>
RELATED PARTY TRANSACTIONS
The Bank has made loans to and had other transactions in the ordinary
course of business with directors and officers and members of the immediate
family of, and business entities associated with, such persons. The Board of
Directors of the Bank believes that the terms of all such loans and other
transactions, including interest rates, collateral and repayment terms, were
fair and equitable and were substantially the same as terms prevailing at the
time for comparable transactions with others, and that such loans and other
transactions did not involve more than normal risks of collectibility or present
other unfavorable features.
The Bank expects to have in the future banking transactions in the ordinary
course of its business with directors, officers, principal shareholders and
their associates, on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with persons not affiliated with the Bank.
The Company and its subsidiaries retained Lawrence M. Liebman, Esquire,
Carl M. Porto, Esquire and Cheever Tyler, Esquire, or law firms with which they
were affiliated, during 1994. The Company and its subsidiaries intend to retain
Messrs. Liebman and Porto or law firms with which they are affiliated during
1995. Messrs. Liebman, Porto and Tyler currently are directors of the Company
and the Bank.
Mr. Liebman is also the owner of Kramer's Inc., a women's apparel store,
which in 1991 filed a petition seeking protection under Chapter 11 of the United
States Bankruptcy Code, which proceeding has now been concluded.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent (10%) of the Company's Common Stock, to file with the SEC initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company on Forms 3, 4 and 5. Officers, directors
and ten percent (10%) shareholders are required by SEC regulations to furnish
the Company with copies of all Forms 3, 4 and 5 they file.
To the Company's knowledge, based solely on the review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, directors and ten
percent (10%) beneficial owners were complied with, except that Martin R.
Anastasio inadvertently failed to report (1) the transfer during 1992 of certain
shares held by him jointly with his wife to his wife directly, and (2) the
transfer during 1993 of certain shares held in IRA accounts in his name and that
of his wife to his wife directly. As a result, Mr. Anastasio recently amended a
Form 4 filing made by him in July of 1993 and a Form 5 filing for the year ended
December 31, 1992 and made a Form 5 filing for the year ended December 31, 1993
to reflect the above changes in the nature of his beneficial ownership of the
Company's Common Stock.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Proposal 2)
The Company's Board of Directors is submitting for shareholder approval its
proposal to engage Price Waterhouse LLP, independent accountants, as auditors of
the Company for the fiscal year ending December 31, 1995. The accounting firm of
Price Waterhouse LLP has acted as the auditors of the Company since 1987.
Representatives from Price Waterhouse LLP will be present at the Annual
Meeting. They will be afforded an opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions
from shareholders.
13
<PAGE>
Audit services performed by Price Waterhouse LLP during the past fiscal
year include audits of the financial statements of the Company, services related
to filings with the SEC and federal and state taxation authorities and
consultations on matters related to accounting and financial reporting.
The Board of Directors recommends that shareholders vote FOR the
appointment of Price Waterhouse LLP as described above.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other matters which may come before the Annual Meeting. If
any matters other than those referred to in this Proxy Statement should properly
come before the Annual Meeting, it is the intention of the persons named in the
enclosed form of proxy to vote each proxy with respect to such matters in
accordance with their best judgment.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR INCLUSION IN 1996
PROXY MATERIAL
Any shareholder who intends to present a proposal at the Company's 1996
Annual Meeting of Shareholders is advised that, in order for such proposal to be
included in the Board of Directors' proxy material for such meeting, the
proposal must be received by the Company at its principal executive office on or
before November 27, 1995, directed to the Secretary of the Company.
Any such shareholder would need to meet the requirements specified in Rule
14a-8 under the Securities Exchange Act of 1934.
The Board of Directors would like you to attend the meeting in person.
However, whether or not you plan to attend the meeting, please complete, date
and sign the enclosed proxy card and return it in the enclosed postage prepaid
envelope as soon as possible. If you attend the meeting, you may vote in person
if you desire.
By Order of the Board of Directors
[Paste-Up]
EVELYN R. MILLER, Secretary
New Haven, Connecticut
March 27, 1995
14
<PAGE>
APPENDIX
(Pursuant to Rule 304 of Regulation S-T)
1. Page 12 contains a description in tabular form of a graph entitled
"Performance Graph" which represents the comparison of the cumulative total
stockholder return on the Company's Common Stock against the cumulative total
return of the NASDAQ Stock Market Index and the NASDAQ Bank Stocks Index for the
period of five years commencing December 29, 1989 and ending December 30, 1994,
which graph is contained in the paper format of this Proxy Statement being sent
to Stockholders.
<PAGE>
BNH BANCSHARES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
APRIL 25, 1995
The undersigned hereby appoints THEODORE F. HOGAN, JR., CARL M. PORTO and
ALBERT M. D'ONOFRIO, and each of them, with power of substitution, proxies and
agents of the undersigned to vote at the Annual Meeting of Shareholders of BNH
Bancshares, Inc. (the "Company"), to be held at The New Haven Lawn Club, 193
Whitney Avenue, New Haven, Connecticut on Tuesday, April 25, 1995 at 10:00 a.m.
and at any adjournments thereof, all shares of common stock of the Company which
the undersigned would be entitled to vote if personally present for the
following matters.
The Board of Directors unanimously recommends a vote for the following:
1. ELECTION OF DIRECTORS
FOR: Check box to vote in favor of all nominees listed below (except as marked
to the contrary below) [ ]
WITHHOLD AUTHORITY: Check box to vote against all nominees listed below [ ]
Richard L. Ades, Stephen P. Ahern, Martin R. Anastasio, George M. Dermer, Thomas
M. Donegan, Albert M. D'Onofrio, Victor B. Hallberg, Theodore F. Hogan, Jr.,
Karl J. Jalbert, Lawrence M. Liebman, F. Patrick McFadden, Jr., Carl M. Porto,
Vincent A. Romei, Stanley Scholsohn and Cheever Tyler
(INSTRUCTION: To withhold authority and to vote against any individual nominee
while approving the other nominee(s) listed above, write the name of such
nominee being voted against in one of the spaces provided below.)
-------------------- ------------------- --------------------
-------------------- ------------------- --------------------
-------------------- ------------------- --------------------
-------------------- ------------------- --------------------
-------------------- ------------------- --------------------
2. TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE LLP as the independent
accountants to audit the consolidated financial statements of the Company
for the calendar year 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the meeting.
PLEASE SIGN ON THE REVERSE SIDE
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR Proposals 1 and 2.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and the related Proxy Statement.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by an authorized person.
---------------------------
Signature
----------------------------
Signature if held jointly
Dated: , 1995
Please mark, sign, date and return
the proxy card promptly using the
enclosed envelope.
