SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities 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
[ ] 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)
JOHN F. TRENTACOSTA
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
BNH BANCSHARES, INC.
209 CHURCH STREET
NEW HAVEN, CONNECTICUT 06510
(203) 498-3500
March 22, 1996
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 23, 1996, 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,
By: /s/ GEORGE M. DERMER
-----------------------------------
Chairman of the Board of Directors
By: /s/ 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 23, 1996, at 10:00 a.m., for the purpose of considering
and voting upon the following matters:
1. To elect the sixteen nominees for directors listed in the Proxy
Statement dated March 22, 1996 accompanying the notice of the meeting;
and
2. To approve a one-for-four reverse stock split of the Company's issued
Common Stock; and
3. To approve certain amendments to the BNH Bancshares, Inc. 1992 Stock
Incentive Plan; and
4. To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants for the current fiscal year; and
5. 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 February 28,
1996 shall be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
/s/ 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 22, 1996
---------------
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 23, 1996.
At such meeting, the Company's shareholders will be asked to: (1) elect
directors; (2) approve a one-for-four reverse stock split of the Company's
issued Common Stock; (3) approve certain amendments to the BNH Bancshares, Inc.
1992 Stock Incentive Plan; (4) ratify the selection of Coopers & Lybrand L.L.P.
as independent accountants for the Company for the current fiscal year; and (5)
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 February 28, 1996 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 23, 1996 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
1
<PAGE>
solicitation material to beneficial owners of shares held of record by such
persons. Proxy Services, Inc. will receive a fee of approximately $500, plus
expenses, for such services.
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 sixteen (16) effective as of the 1996 Annual
Meeting of Shareholders. Accordingly, there are sixteen (16) nominees for
election as directors of the Company at the 1996 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, with the exception of Messrs. Crowley and Cullen and Ms. Lamont, is
currently serving as a director of the Company. Richard L. Ades and Albert M.
D'Onofrio, who have served as Directors of the Company and the Bank, will not
stand for re-election to those positions at the 1996 Annual Meeting of
Shareholders. The Company wishes to thank Mr. Ades and Dr. D'Onofrio for their
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 Cheever Tyler. 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 or her
principal occupation for the previous five years, his or her other positions
with the Bank and the Company, and his or her age and period of service as a
director of the Company are set forth below.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES FOR DIRECTOR LISTED BELOW.
<TABLE>
<CAPTION>
Name, Principal Served as a
Occupation and Director of
Position with the the Company
Company and the Bank Age Since
-------------------- --- -----------
<S> <C> <C>
Stephen P. Ahern ..................................................................... 65 1989
Director of the Company and the Bank; Vice President of Ogden Allied Security
Services, a private security service company. Mr. Ahern also is a director of
Birmingham Utilities, Inc.
Martin R. Anastasio .................................................................. 54 1985
Director of the Company and the Bank; Principal and Vice President, Weinstein &
Anastasio, P.C., Certified Public Accountants
Edward M. Crowley .................................................................... 39
President, Dichello Distributors, Inc., 1994 to present; General Sales Manager,
Central Distributors of Beer, Inc., 1978 to 1993
James J. Cullen ...................................................................... 48
President & Chief Executive Officer, Hospital of Saint Raphael, August, 1991 to
present; Executive Vice President of the Hospital, January, 1989 to August, 1991
2
<PAGE>
Name, Principal Served as a
Occupation and Director of
Position with the the Company
Company and the Bank Age Since
-------------------- --- -----------
<S> <C> <C>
George M. Dermer ..................................................................... 78 1985
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. .............................................................. 54 1985
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,
Capital Delta Partners, Inc. (distributor of aircraft parts), from May 1, 1994 to
present
Victor B. Hallberg ................................................................... 66 1985
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. ............................................................... 63 1985
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 ...................................................................... 69 1989
Director of the Company and the Bank; President of Connecticut Equities Group and
Jalco Properties (investment companies)
Jean G. Lamont ....................................................................... 51
Head of School, The Foote School, New Haven, July 1, 1992 to present; Head of
the Upper School, The Allen-Stevenson School, New York, NY, September 1,
1981 to June 30, 1992
Lawrence M. Liebman .................................................................. 65 1985
Director of the Company and the Bank; Former Attorney-at-Law (retired August,
1995); Private Investor; Chairman, U.S. Reduction Company (secondary aluminum
smelting company); former trustee of various Blanchard mutual funds
F. Patrick McFadden, Jr. ............................................................. 58 1989
President, Chief Executive Officer and director of the Company and the Bank. Mr.
McFadden also is a director of The United Illuminating Company.
Carl M. Porto ........................................................................ 53 1988
Director of the Company and the Bank; Attorney-at-Law, Principal, Parrett,
Porto, Parese & Colwell, P.C.
Vincent A. Romei ..................................................................... 62 1985
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
3
<PAGE>
Name, Principal Served as a
Occupation and Director of
Position with the the Company
Company and the Bank Age Since
-------------------- --- -----------
<S> <C> <C>
Stanley Scholsohn .................................................................... 65 1985
Director of the Company and the Bank; former Secretary-Treasurer, Star Services,
Inc. (health and beauty aid distributors)
Cheever Tyler ........................................................................ 58 1989
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>
SECURITY OWNERSHIP
The following table sets forth information as of February 28, 1996 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)
------------------- ------------------------ ----------
Cumberland Associates 1,260,000 (c) 8.56%
1114 Avenue of the Americas
New York, NY 10036
Heine Securities Corporation 1,323,000 (d) 8.98%
51 John F. Kennedy Parkway
Short Hills, NJ 07078
Kennedy Capital Management, Inc. 800,000 (e) 5.43%
425 N. New Ballas Road
St. Louis, MO 63141
- ------------
(a) Unless otherwise indicated, each person has sole voting and sole
dispositive power with respect to the shares shown.
(b) The percentages shown are calculated on the basis of the number of
outstanding shares of the Company's Common Stock on February 28, 1996.
(c) Cumberland Associates is a limited partnership engaged in the business of
managing, on a discretionary basis, ten securities accounts. According to
information provided to the Company, Cumberland Associates exercises sole
dispositive and voting power with respect to 1,075,000 shares and shared
dispositive and voting power with respect to 185,000 shares.
(d) Heine Securities Corporation ("HSC") is an investment advisor registered
under the Investment Advisors Act of 1940. One or more of HSC's advisory
clients is the legal owner of the shares shown. HSC has sole dispositive
and voting power with respect to shares pursuant to investment advisory
agreements with its clients.
(e) Kennedy Capital Management, Inc. is an investment advisor with
discretionary accounts for investment purposes. According to its Schedule
13G filed with the Securities and Exchange Commission ("SEC") on February
8, 1996, Kennedy Capital Management, Inc. exercises shared dispositive and
voting power with respect to the shares shown.
4
<PAGE>
The following table sets forth for each director, nominee for director and
for each Named Executive Officer (see page 8) information pertaining to his or
her beneficial ownership of the Company's Common Stock as of February 28, 1996.
Each such person has sole investment power and voting power over shares
beneficially owned except where shared ownership is indicated below.
Amount and Nature of
Beneficial Ownership Percent of
Name of Common Stock Common Stock
---- -------------------- ------------
Richard L. Ades ............. 32,027(a)* **
Stephen P. Ahern ............ 30,127(b)* **
Martin R. Anastasio ......... 81,449(c)* **
Edward M. Crowley ........... 1,000 **
James J. Cullen ............. --
George M. Dermer ............ 64,139(d)* **
Thomas M. Donegan, P.E. ..... 8,843(e)* **
Albert M. D'Onofrio ......... 40,913(f)* **
Victor B. Hallberg .......... 164,000(g)* 1.11%
Theodore F. Hogan, Jr. ...... 28,097(h)* **
Karl J. Jalbert ............. 206,777* 1.40%
Jean G. Lamont .............. --
Lawrence M. Liebman ......... 66,494(i)* **
F. Patrick McFadden, Jr. .... 31,017(j) **
Carl M. Porto ............... 78,820(k)* **
Vincent A. Romei ............ 166,801(l)* 1.13%
Stanley Scholsohn ........... 66,158(m)* **
Cheever Tyler ............... 10,800* **
John F. Trentacosta ......... 7,270(n) **
- ------------
* Includes 4,000 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.
(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.
5
<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 an aggregate of 35 shares owned by Mr. Liebman as custodian for
his son and 1,409 shares in an IRA for Mr. Liebman's benefit.
(j) Includes 26,381 shares under stock options that are exercisable within
sixty days, 3,551 shares held in various retirement funds for Mr.
McFadden's benefit, 211 shares allocated to Mr. McFadden through his
contributions and the Company's matching contributions to the Company's
401(k) Profit Sharing Plan, and 110 shares owned by Mr. McFadden's son,
over which Mr. McFadden has no voting or investment power.
(k) 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,
and 261 shares in an IRA for the benefit of Mr. Porto and his wife.
(l) 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.
(m) 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.
(n) Includes 6,770 shares under stock options that are exercisable within sixty
days and 500 shares allocated to Mr. Trentacosta through his contributions
and the Company's matching contributions to the Company's 401(k) Profit
Sharing Plan.
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 (23 persons) owned beneficially as of February 28, 1996, 1,121,542 shares
of the Company's Common Stock, including 113,835 shares under options that are
exercisable within sixty days of February 28, 1996, representing 7.56% of the
Company's Common Stock then outstanding.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company met 9 times during 1995 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. Ades,
Hallberg, Scholsohn and Tyler, 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 1995. Members of all Committees are elected annually.
During 1995, the Company's and the Bank's Boards of Directors maintained 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 Committees generally act on behalf of the
Boards of Directors. Members of the Executive Committees are ex officio members
of all committees of the Boards of Directors, except the Salary and Benefits
Committee. The Executive Committee met 13 times during 1995.
The Company's Audit Committee presently consists of Messrs. Porto, Ades,
Hogan, Romei 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 five
times during 1995.
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 and
6
<PAGE>
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 seven times in 1995.
The Nominating Committees of the Company and the Bank presently consist of
Messrs. Dermer, Jalbert and Porto. The Nominating Committees consider candidates
for nominees as directors of the Company and the Bank. The Nominating Committee
met once during 1995. The Nominating Committee will consider nominees
recommended by shareholders but has no formal procedure for considering nominees
recommended by shareholders.
COMPENSATION OF DIRECTORS
During the period January 1 through August 14, 1995, 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 for the months of January through May. 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 the Loan, Audit and Compliance
Committees received $150 for each meeting chaired in addition to a $100
attendance fee. Effective August 15, 1995, directors' fees were increased to
$350 for each Bank Board meeting attended and $150 for each committee meeting
attended.
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 is 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 is 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 are 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, 1996, 57,000 shares of Common Stock were reserved for
issuance upon the exercise of outstanding Annual Options at exercise prices
ranging from $1.25 to $1.50 per share and 311,644 shares remain available for
grants of awards under the Director Option Plan in 1996, subject to adjustment
for stock splits or 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
7
<PAGE>
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.
THE 1985 WARRANT PLAN FOR DIRECTORS
In 1985, the Company adopted the 1985 Warrant Plan for Directors of the
Company (the "Warrant Plan"), which has expired. On October 16, 1995 warrants
for 183,219 shares of Common Stock authorized for issuance under the Warrant
Plan which had a per share exercise price of $9.81 after adjustments for stock
splits and stock dividends also expired. No warrants have been granted or
exercised under the Warrant Plan during the last three fiscal years.
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
and the Chief Financial Officer, who were the only two executive officers whose
total annual salary and bonus for 1995 exceeded $100,000 (the "Named Executive
Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compensation
Annual Compensation Awards (1)
--------------------- -----------------------
(a) (b) (c) (d) (e) (f)
All Other
Name and Salary Bonus Compensation
Principal Position Year ($) ($) Options (#) ($)
------------------ ------ ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
F. Patrick McFadden, Jr. ................. 1995 177,028 34,200(2) 62,182(3) 6,365(6)
President and Chief 1994 160,903 -- -- 5,460(6)
Executive Officer 1993 160,900 61,463(4) 32,821(5) 4,880(6)
John F. Trentacosta ...................... 1995 102,217 12,750(2) 29,673(3) 2,044(7)
Executive Vice 1994 96,704 -- -- --
President and Chief 1993 87,404 -- 7,155(5) --
Financial Officer
- ----------
</TABLE>
(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) Annual bonuses received under the Company's Annual Incentive Bonus Plan are
reported in the year earned, although paid in the subsequent year.
(3) Non-qualified stock options were granted pursuant to the Company's 1992
Stock Incentive Plan on August 15, 1995 with an exercise price equal to
$1.375 during the first year of the option, $1.49 during the second year of
the option, $1.62 during the third year of the option, $1.75 during the
fourth year of the option, and $1.90 during the fifth year of the option.
The options expire on August 14, 2000 and are exercisable to the extent of
one-half of the number of shares on and after August 15, 1996 with the
remaining one-half exercisable on or after August 15, 1997, subject to
acceleration in the event of a change in control of the Company as defined
in such option agreements.
8
<PAGE>
(4) The $25,000 bonus paid in 1993 was subject to forfeiture if during 1994 Mr.
McFadden 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, which expired in 1991 and which entitled Mr. McFadden to receive
$145,850, payable in installments of 25% per year commencing February 15,
1990.
(5) 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.
(6) Premiums paid by the Company for term life insurance, of which Mr.
McFadden's estate is the beneficiary and the Company's matching
contribution to the BNH Bancshares, Inc. 401(k) Profit Sharing Plan
("401(k) Plan") for 1995.
(7) Consists of the Company's matching contribution to the 401(k) Plan for
1995.
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, Messrs. McFadden and Trentacosta and four 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 or Mr. Trentacosta's employment (as
defined in the Severance Agreements to include such officer'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, such officer 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 on grants of stock options
pursuant to the Company's 1992 Stock Incentive Plan during the fiscal year ended
December 31, 1995 to the Named Executive Officers. Such grants are reflected in
the Summary Compensation Table above. No stock appreciation rights have been
granted under the 1992 Stock Incentive Plan and no options or stock appreciation
rights have been granted under the BNH Bancshares, Inc. Stock Option Plan
(the "1986 Option Plan") during 1995.
9
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants(1) Potential Realizable
Value at Assumed
Annual Rates
Number of Percent of of Stock Price
Securities Total Options Appreciation for
Underlying Granted to 5 Year Option
Options Employees Exercise Price Expiration Terms (2)
Name Granted in 1995 ($/sh) Date 5% 10%
---- ------- ------- ------ ---- ----------
<S> <C> <C> <C> <C> <C>
F. Patrick McFadden, Jr. ...... 62,182 40% (1) 8/14/2000 23,318.25-51,921.97
John F. Trentacosta ........... 29,673 19% (2) 8/14/2000 11,127.37-24,776.95
- ----------
</TABLE>
(1) Non-qualified stock options were granted pursuant to the Company's 1992
Stock Incentive Plan on August 15, 1995. The options expire on August 14,
2000 and are exercisable to the extent of one-half of the number of shares
on and after August 15, 1996 with the remaining one-half exercisable on or
after August 15, 1997, subject to acceleration in the event of a change in
control of the Company as defined in such option agreements. The options
have an exercise price equal to $1.375 during the first year of the option
(the fair market value of the Common Stock on the grant date), $1.49 during
the second year of the option, $1.62 during the third year of the option,
$1.75 during the fourth year of the option, and $1.90 during the fifth year
of the option. The 1992 Stock Incentive Plan contains a provision which
permits withholding taxes to be paid in cash, with previously owned shares
or by withholding cash or shares from distributions of cash or stock
awards, as the case may be.
(2) Potential realizable values are computed based upon the difference between
the assumed annual rates of stock price appreciation and the exercise price
in effect during the first year of the option of $1.375 (such options were
not exercisable except in the event of a change in control). In future
years, as the option exercise price increases, realizable gains will
decrease accordingly. See Note 1 above.
The following table sets forth information concerning the fiscal year-end
value of unexercised options to purchase the Company's Common Stock granted to
the Named Executive Officers under the 1986 Option Plan and the 1992 Stock
Incentive Plan. The Named Executive Officers did not exercise any stock options
during 1995.
<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION VALUES
(b) (c)
Number of Value of
Shares Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1995 December 31, 1995
(a) (#) Exercisable/ ($) Exercisable/
Name Unexercisable Unexercisable (1)
---- ------------- -----------------
<S> <C> <C>
F. Patrick McFadden, Jr. ............... 26,381/73,122 0/$31,091
John F. Trentacosta .................... 6,770/32,058 0/$14,837
(1) The option exercise prices for exercisable options were greater than the
average of the high and low prices of the Company's Common Stock as quoted
on the Nasdaq National Market tier of The Nasdaq Stock Market on December
29, 1995. For unexercisable options (which were not exercisable except in
the event of a change in control) value is based upon the difference
between the exercise price in effect during 1995 and the last sales price
of $1.875 for the Company's Common Stock as quoted on the Nasdaq National
Market tier of the Nasdaq Stock Market on December 29,1995. The exercise
price of such options increases on each anniversary of their grant date.
- ----------
</TABLE>
10
<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 1995 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 1995, and the Company intends to retain Mr. Porto
and his firm during 1996. Mr. Liebman retired from the practice of law during
1995.
SALARY AND BENEFITS COMMITTEE
REPORT ON EXECUTIVE COMPENSATION FOR 1995
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, 1995.
The Committee was solely responsible for approving the total compensation of the
Bank's executive officers during 1995 and is composed entirely of outside
directors.
The objective of the Company's executive compensation program is to
attract, motivate 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 result in increases in shareholder value.
Total executive compensation generally consists of three components: base
salary, annual incentives in the form of cash bonuses and equity participation
in the form of stock options. The Committee makes ongoing reviews of each of
these components in light of the specific criteria described below and approves
the amount and specific terms of each component in a manner designed to meet the
overall objectives of the Company.
BASE SALARY. The base salaries of the Bank's executive officers are
determined by two factors: the salaries for similar positions in financial
institutions in the Northeast with comparable asset size and by the executive's
performance and contribution to the Company relative to specific goals that have
been set by the President and CEO and approved by the Committee at the onset of
the fiscal year. In determining competitive salaries in the marketplace, the
Committee examines survey information that compares each executive's base salary
to executives who perform similar duties at other financial institutions,
primarily banks, located in the Northeast with assets between $250 million and
$500 million (the "peer group"). The Committee's philosophy is to pay salaries
to high performing executives that are equivalent to the average base
compensation of executives who have similar employment responsibilities within
the peer group. Performance adjustments to base salaries, if any, are
recommended by the President and CEO and presented to the Committee for review
and approval. Each executive's performance for the year is evaluated by the
President and CEO on the basis of three strategic initiatives of the Bank,
namely (1) continued reduction in classified assets and Other Real Estate Owned,
(2) growth in loan originations, and (3) continued development of the retail
deposit business. At the end of 1995, the Committee approved increases averaging
4.4% in executive base salaries (excluding the President and CEO) for 1996,
funded through a Bank-wide merit pool. The size of the merit pool was
established on the basis of an estimate of the extent to which base salaries,
including the base salaries of executive officers other than the CEO, are
expected to change, on average, during 1996, based on surveys of national
consulting firms of base salaries paid primarily to Connecticut companies. These
merit increases allow executives to be compensated at their respective average
comparative base salary, as adjusted for their individual accomplishments and
unique contributions to the Bank in the strategic areas described above.
11
<PAGE>
ANNUAL INCENTIVES. The BNH Bancshares, Inc. Annual Incentive Bonus Plan
(the "Bonus Plan") is designed to promote the short-term and long-term success
of the Company by providing for the payment of annual cash bonuses to selected
key employees (6 in 1995) upon the achievement of performance goals established
by the Committee at the beginning of the Bonus Plan year. The target awards,
expressed as percentages of base salaries payable if target performance levels
are reached, were determined by an outside compensation consultant and reflect
the amount of annual bonuses paid to executives with similar responsibilities in
the peer group.
Subject to adjustment by the Committee, actual awards may range from zero
to 143 percent of the target award based upon performance levels. The Committee
determined that for 1995 the Company's Return on Average Equity (before taxes
and extraordinary items such as tax credits) ("ROAE") was the sole performance
criteria to measure executive officer performance under the Bonus Plan. For the
Named Executive Officers, the annual bonuses paid under the Bonus Plan are set
forth in the Summary Compensation Table on page 8 and reflect a payment of 100%
of the target award amount. It is the Committee's belief that target awards
should be paid only when (1) rigorous performance goals have been met and (2)
the awards can be funded through achievement of the goals set under the Bonus
Plan.
EQUITY PARTICIPATION. Equity participation is designed to align the
interests of management and investors, to encourage the proper balance in the
pursuit of short- and long-term objectives, and to reward management only when
shareholders benefit. Thus, stock options, which tie the executives'
compensation to the price of the Company's Common Stock, are granted in such
frequency and size so as to remain at the average level of option awards to
executives with similar responsibilities at other institutions as determined by
national surveys of company practices. The Committee approved the stock option
grants to executives in 1995. The option awards made to the Named Executive
Officers are shown in the Table on page 8. The options have a five-year life,
with one-half of the options exercisable on the first anniversary of the grant
date and one-half exercisable on the second anniversary. In keeping with the
Committee's philosophy that executives be compensated only for performance that
can be reasonably attributed to their efforts, the options' exercise price
increases from the initial exercise price of $1.375 (the fair market value of
the Company's Common Stock on the grant date) 8.4% on each anniversary of the
option grant date over the five-year term of the option (which is equivalent to
a 50% shareholder return over the five-year period). Thus, executives derive
value from the options only when they outperform these standards.
CEO COMPENSATION
Mr. McFadden's base salary, annual bonus and stock option award in 1995 are
set forth in Tables on pages 8 and 10. The criteria governing the amounts of the
compensation components paid to Mr. McFadden for 1995 are the same as those
governing other executive officers of the Bank for 1995 which are described
above. The bonus award was specifically contingent upon the Bank's level of
achievement on ROAE, and the potential value of the stock option award depends
upon the ability of management to enhance the value of the Company's Common
Stock over time. The size of the target bonus awards and stock option grants are
determined by reference to compensation surveys prepared by an independent
consultant as described above. The Committee approved a 5.8% increase to Mr.
McFadden's base salary for 1996. In making its decision, the Committee
considered two factors: (1) Mr. McFadden's base salary in relation to the base
salaries of CEOs within the peer group, and (2) his 1995 performance in the
three strategic areas described above. Again, it is the Committee's philosophy
to keep salaries at average levels while recognizing special contributions and
accomplishments. In recommending an increase in Mr. McFadden's base salary, the
Committee specifically cited a number of key Bank achievements, including, but
not limited to, the following: increased earnings and stock price; decreased
classified assets and Other Real Estate Owned; improved bank regulatory ratings,
including replacement of an Order to Cease and Desist with a less stringent
Memorandum of Understanding as stipulated among the Bank, the Federal Deposit
Insurance Corporation and the Banking Commissioner of the State of
12
<PAGE>
Connecticut, and managerial adroitness in retaining critical talent throughout
the Bank. Mr. McFadden's base salary for 1996 falls within the average range of
base salaries for CEOs 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
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 31, 1990 and
ended December 29, 1995. The total return assumes the reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG BNH BANCSHARES, INC.,
NASDAQ STOCK MARKET AND NASDAQ BANK STOCKS
[Graphical representation of data table below.]
12/31/90 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95
-------- -------- -------- -------- -------- --------
BNH Bancshares,
Inc. .......... 100.00 45.83 32.30 45.83 33.33 62.50
NASDAQ Stock
Market ........ 100.00 164.09 186.87 214.51 209.69 296.30
NASDAQ Bank
Stocks ........ 100.00 160.56 238.85 272.39 271.41 404.35
13
<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, and
Carl M. Porto, Esquire, or law firms with which they were affiliated, during
1995. The Company and its subsidiaries intend to retain Mr. Porto or the law
firm with which he is affiliated during 1996. Mr. Liebman retired from the
practice of law during 1995. Messrs. Liebman and Porto 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, 1995, all
Section 16(a) filing requirements applicable to its officers, directors and ten
percent (10%) beneficial owners were complied with, except that Mr. Liebman
inadvertently failed to report the transfer during 1993 of certain shares held
by him as custodian for his son to his son directly, and Mr. Candido (an
executive officer of The Bank of New Haven) failed to report the purchase of
certain shares in October, 1995 for his sons. As a result, Mr. Liebman and Mr.
Candido each made a Form 4 filing to reflect these transactions.
APPROVAL OF A ONE-FOR-FOUR REVERSE STOCK SPLIT
OF THE COMPANY'S ISSUED COMMON STOCK
(PROPOSAL 2)
The Company's shareholders are being asked to approve the following
resolution adopted by the Company's Board of Directors:
RESOLVED, that, subject to receipt of the approval of the affirmative
vote of the holders of the majority of the voting power of the shares of
Common Stock represented at the Annual Meeting, effective at the close of
business on May 1, 1996 (the "Effective Time"), the Company shall
effectuate a one-for-four reverse stock split whereby each shareholder of
record on that date will be deemed to hold one share of Common Stock for
every four shares held by such shareholder immediately prior to the
Effective Time and the Company shall pay in cash the fair value of
fractional shares, as determined in accordance with a valuation formula
approved of by the Company's Chief Financial Officer.
14
<PAGE>
Under the Company's Amended Certificate of Incorporation, the Company's
authorized capitalization consists of 30,000,000 shares of Common Stock, without
par value, of which, as of February 28, 1996, there are outstanding 14,726,650
shares and 19,106 shares held in treasury. Under the Company's Amended
Certificate of Incorporation, shareholders have no preemptive rights. In
addition, as of February 28, 1996, an aggregate of 674,744 shares of Common
Stock are authorized for issuance under outstanding and future awards pursuant
to the BNH Bancshares, Inc. 1992 Stock Incentive Plan, the BNH Bancshares, Inc.
Stock Option Plan and the BNH Bancshares, Inc. Stock Option Plan for
Non-Employee Directors (the "Benefit Plans"). The Company is seeking shareholder
approval of certain amendments to the 1992 Stock Incentive Plan, including an
increase in the number of shares of Common Stock authorized for issuance under
that Plan. See Proposal 3 of this Proxy Statement.
If the proposed reverse stock split is approved by shareholders, the
reverse stock split will be effective at the close of business on May 1, 1996
(the "Effective Time") and each holder of record of Common Stock immediately
prior to the Effective Time will be deemed to hold one share of Common Stock for
every four shares held by such shareholder immediately prior to the Effective
Time. The proposed reverse stock split will not decrease the number of
authorized shares of the Company's Common Stock and will not affect the voting
or other rights of Common Stock. Shareholders will be required to exchange their
existing stock certificates for new stock certificates by surrendering their
existing stock certificates to the Company's transfer agent. In lieu of issuing
fractional shares, the Company will pay in cash the fair value of fractional
shares, as defined below.
THE PURPOSE AND ANTICIPATED EFFECT OF THE REVERSE STOCK SPLIT
In making its decision to approve and recommend the reverse stock split,
the Board of Directors believes that the relatively low per share market price
of the Company's Common Stock may impair the acceptability of the Common Stock
to certain institutional investors and other members of the investing public. As
of February 28, 1996, the last sales price of the Company's Common Stock on the
Nasdaq National Market tier of The Nasdaq Stock Market was $2.00 per share.
While the number of shares outstanding should not, by itself, affect the
marketability of a stock, the type of investor who acquires it or the company's
reputation in the financial community, the Board of Directors believes that, in
practice, this is not necessarily the case as certain investors view low price
stock as unattractive or, as a matter of policy, are precluded from purchasing
low priced shares. In addition, certain brokerage houses, as a matter of policy,
will not extend margin credit on stocks trading at low prices. Furthermore, the
Board of Directors believes that more retail investors might be interested in
the Company's Common Stock if transaction costs related to buying and selling
the stock could be lowered. At a lower per share price, the typical brokerage
commission is generally higher as a percentage of the total transaction amount
than would be the commission at a higher trading price. However, the reverse
stock split may result in a shareholder owning an odd lot of Common Stock.
Shareholders may incur higher transactional costs to trade an odd lot of Common
Stock than would be incurred to trade a round lot of 100 shares. Shareholders
should consult with their brokers concerning such transactional costs.
While the impact of the reverse stock split on the market value of the
shares of the Company's Common Stock cannot be predicted with certainty, it is
expected that the reverse stock split would initially result in the market price
of each share of Common Stock being approximately four times the price per share
prevailing immediately prior to the Effective Time, although the market price of
all shares held by a particular shareholder would remain approximately the same.
No assurance, however, can be given that the market price of the Common Stock
will rise in proportion to the reduction in the number of shares outstanding as
a result of the reverse stock split nor can assurance be given that the reverse
stock split will have the effects anticipated by the Board of Directors as noted
above.
As of February 28, 1996, there were approximately 2,000 shareholders of
record of the Company's Common Stock. Each shareholder's percentage ownership of
the Common Stock will not be altered by the proposed reverse stock split except
for the effect of the elimination of fractional shares. The Company does not
anticipate that the reverse stock split will result in a significant reduction
in the number of holders of record of the Common Stock. The
15
<PAGE>
reverse stock split will not change the Company's status as a registered company
under the Securities Exchange Act of 1934, as amended, or the qualification for
trading the Common Stock on the Nasdaq National Market tier of The Nasdaq Stock
Market. The Company estimates that it will cost less than $3,000.00 to pay for
fractional shares, which amount will be charged against the Company's Capital
Surplus Account as permitted under Connecticut law.
Following the Effective Time, the number of outstanding shares of the
Company's Common Stock would be approximately 3,681,662 shares (assuming no
additional shares of the Company's Common Stock have been issued prior to the
Effective Time since February 28, 1996), with approximately 4,776 shares held in
treasury. Shares subject to outstanding awards and reserved for issuance under
the Benefit Plans will be adjusted to account for the reverse stock split in
accordance with the terms of such plans. The Company would have approximately
26,381,338 shares of authorized but unissued shares of Common Stock. Subject to
limitations of Connecticut law and other applicable laws and regulations
(including those requiring shareholder approval for certain transactions under
the rules of the National Association of Securities Dealers, Inc.), the Board of
Directors will have authority, on behalf of the Company, to issue all or a
portion of such authorized but unissued and unreserved shares without a further
amendment to the Amended Certificate of Incorporation and without further
approval of the Company's shareholders. Under Article FIFTH of the Company's
Amended and Restated Certificate of Incorporation, shareholders do not have
preemptive rights with respect to any offering or sale by the Company of any
shares of the capital stock of the Company or any securities convertible into
any of such shares. Thus, the issuance of the increased number of authorized but
unissued and unreserved shares of Common Stock resulting from the reverse stock
split could result in significant dilution of the shareholdings of the Company's
current shareholders. Also, the additional authorized but unissued and
unreserved shares of Common Stock resulting from the reverse stock split could
be issued by the Company in circumstances which could impede changes in control
or attempts to acquire the Company, notwithstanding that such a change or
acquisition might be deemed to be beneficial by some shareholders. This may
operate to impede mergers, tender offers or other takeover activities or make
removal of present management more difficult. The Company is not aware of any
existing or planned effort by any party to accumulate material amounts of the
Company's Common Stock or to acquire control of the Company by means of a tender
offer or merger or to change the Company's management. Furthermore, the Company
presently has no intention to issue shares of Common Stock other than upon the
payment of awards under the Benefit Plans.
PAYMENT FOR FRACTIONAL SHARES
No fractional shares of Common Stock will be issued. Instead, shareholders
holding a number of shares of Common Stock not evenly divisible by four and
shareholders holding less than four shares of Common Stock, upon surrender of
such stock certificates, will receive cash in lieu of a fractional share of
Common Stock resulting from the reverse stock split. The price payable by the
Company for a fractional share of Common Stock will be determined by multiplying
the fraction of a share held following the Effective Time by four times the
average of the last sales prices of the Common Stock as reported on the National
Market tier of The Nasdaq Stock Market on the five days prior to the Effective
Time.
FEDERAL INCOME TAX CONSEQUENCES
The Company has been advised by its counsel that under federal income tax
laws, the reverse stock split will result in no gain or loss or other form of
taxable income other than for payments made for fractional shares. In addition,
the tax basis for shares in the hands of a shareholder prior to the Effective
Time of the reverse stock split would become the tax basis for the total number
of shares to be held by such shareholder immediately after such reverse stock
split, and the holding period of the shares held after the Effective Time would
be deemed the same as the holding period of the shares held prior to the
Effective Time of the reverse stock split. A shareholder who receives cash in
lieu of fractional shares of Common Stock will recognize capital gain or loss in
an amount equal to the difference between the amount of cash received and the
adjusted basis of the fractional share surrendered for cash.
16
<PAGE>
AUTHORIZATION
Although authorization of the reverse stock split does not require the
approval of shareholders under Connecticut law, the Company's Board of Directors
has determined to submit the reverse stock split proposal to a vote of the
Company's shareholders. Connecticut law permits the Board of Directors, in its
discretion, to submit significant corporate matters to the vote of the
shareholders.
The approval of the reverse stock split requires the affirmative vote of
the holders of at least a majority of the shares of the Common Stock of the
Company represented at the April 23, 1996 Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE ONE-FOR-FOUR REVERSE
STOCK SPLIT.
APPROVAL OF CERTAIN AMENDMENTS TO THE BNH BANCSHARES, INC.
1992 STOCK INCENTIVE PLAN
(PROPOSAL 3)
Summary of Proposed Amendments
At the Company's Annual Meeting of Shareholders in 1992, shareholders
approved the adoption of the BNH Bancshares, Inc. 1992 Stock Incentive Plan (the
"1992 Plan"). The shareholders are asked to consider and vote upon a proposal to
approve certain amendments to the 1992 Plan. A summary of the principal features
of the 1992 Plan, as amended, follows.
On March 19, 1996, the Board of Directors adopted certain amendments to the
Plan, subject to approval by shareholders, including an increase in the
aggregate number of shares of the Company's Common Stock authorized for issuance
under the 1992 Plan from 250,000 to 550,000, an increase of 300,000 shares (with
such 300,000 shares constituting 2% of the total shares of Common Stock
outstanding on February 28, 1996). If the reverse stock split that is the
subject of Proposal 2 is approved and given effect, the numbers of shares in the
preceding sentence will be adjusted accordingly (divided by four) so that the
number of shares authorized under the 1992 Plan will be increased by this
proposed amendment from 62,500 to 137,500, an increase of 75,000 shares (with
such 75,000 shares constituting 2% of the total shares of Common Stock
outstanding on February 28, 1996, adjusted to account for the reverse stock
split). Other amendments to the 1992 Plan adopted by the Board of Directors
include: (1) provisions to clarify the Salary and Benefits Committee's (the
"Committee") discretion to determine the terms of awards, to accelerate the
exercisability or vesting of awards and to extend the award exercise period
within limitations contained in the Plan, (2) provisions to clarify the
Committee's ability to make awards singly, in combination or in tandem with
other awards, (3) amendments to the provisions governing payment of withholding
taxes, and (4) provisions to permit the award of transferrable non-qualified
stock options under certain circumstances.
The following table sets forth the number of shares covered by
non-qualified stock options ("NSOs") granted during 1995 under the 1992 Plan to
the persons listed below. The last sales price of the Company's Common Stock on
February 28, 1996 on the Nasdaq National Market tier of The Nasdaq Stock Market
was $2.00 per share.
Number of Shares
Name and Position Underlying Options
----------------- ------------------
F. Patrick McFadden, Jr.
Executive Officer ......................................... 62,182
John F. Trentacosta
Executive Officer ......................................... 29,673
All Executive Officers as a group .......................... 156,909
All employees as a group (excluding Executive Officers) .... --
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Summary of the 1992 Plan, as Amended
The Company adopted the 1992 Plan in 1992 in order to use awards thereunder
to attract and retain key employees in the belief that employee stock ownership
and stock-related compensation encourage a community of interest between
employees and shareholders. The Company has had stock option plans for its key
employees in the past. The 1986 Option Plan expired on March 10, 1996. Options
for an aggregate of 39,043 shares of the Company's Common Stock remain
outstanding and subject to exercise under the 1986 Plan. The 1992 Plan currently
provides for the issuance of an aggregate of 250,000 shares of the Company's
Common Stock, with 247,671 shares of Common Stock currently subject to
outstanding awards of NSOs and 2,329 shares currently available for future
awards under the 1992 Plan. Accordingly, because the number of shares of Common
Stock available for the grant of future awards under the 1992 Plan is currently
limited, the Board of Directors is seeking shareholder approval to increase the
number of shares authorized for issuance under the 1992 Plan by an additional
300,000 shares of Common Stock so that incentive awards can continue to be made
thereunder. The following is a summary of the 1992 Plan, as amended.
Shares Subject to the 1992 Plan. As proposed to be amended, the 1992 Plan
provides for the issuance of or use for reference purposes of a maximum of
550,000 shares of the Company's Common Stock (subject to adjustment in the event
of stock dividends, stock splits, mergers, recapitalizations or similar
transactions). If shareholders approve the reverse stock split described in
Proposal 2, adjustments will be made to the number of shares authorized for
issuance under the 1992 Plan, the number of shares subject to outstanding awards
and the exercise price of such awards.
Awards under the 1992 Plan may be granted in the form of incentive stock
options ("ISOs"), NSOs, stock appreciation rights ("SARs"), which may, but need
not, be granted in conjunction with related stock options, dividend equivalents,
stock granted with or without restrictions (awards of Common Stock with
restrictions are referred to as "Restricted Stock") and awards entitling the
grantee to receive shares of Common Stock, cash or a combination thereof
contingent upon the attainment of certain performance criteria ("Performance
Stock"), as well as other types of awards that the Committee determines to be
consistent with the objectives and limitations of the 1992 Plan. Shares
delivered pursuant to the 1992 Plan upon the exercise of awards may be either
authorized but unissued shares of the Company's Common Stock or previously
issued shares of the Company's Common Stock reacquired by the Company. Shares
reserved for awards which terminate without having been exercised or vested
become available for new grants.
Duration. The term during which awards may be granted under the 1992 Plan
will expire March 17, 2002.
Administration and Eligibility. The 1992 Plan is to be administered by the
Committee, which consists of not less than three directors who are not employees
of the Company, or its subsidiaries, including at least two non-employee
directors who are members of the Executive Committee of the Company's Board (and
who may not be granted awards under the 1992 Plan or any other discretionary
award plan maintained by the Company or any of its affiliates). The individuals
eligible to participate in the 1992 Plan will be certain employees of the
Company or its subsidiaries (whether or not they are directors of the Company),
who serve in executive, administrative or professional capacities who are
selected for awards in the discretion of the Committee. The Committee also has
the discretion, within the guidelines and limitations expressed in the 1992
Plan, to determine the amount of each award, whether options granted under the
1992 Plan will be ISOs (qualifying under the provisions of Section 422 of the
Code) or NSOs, the time of the awards, the date(s) on which awards will be
exercisable, and the form and terms of agreements evidencing awards granted
under the 1992 Plan and the acceleration or waiver of award conditions. The
Committee has full power and authority to administer and interpret the 1992
Plan, and to adopt or amend rules, regulations, agreements and guidelines for
the conduct of its business.
Term of Awards. Awards granted under the 1992 Plan are exercisable during
the term of the award period as determined by the Committee and specified in the
agreement governing each award. The time within which an award
18
<PAGE>
must be exercised, as specified by the Committee, may not extend beyond the
tenth anniversary of the date of the grant of the award. Awards under the 1992
Plan are generally non-transferable other than by will or by the laws of descent
and distribution and may be exercised only by the grantee or his or her legal
representative during the grantee's lifetime. As amended, the 1992 Plan would
permit the Committee to grant or amend NSOs to permit their transfer, without
consideration, to immediate family members, or a trust or partnership for the
benefit of such persons to the extent such transferability is in accordance with
the transfer restrictions, if any, applicable to a grantee who is subject to
Section 16 under Rule 16b-3 under the Securities Exchange Act of 1934, as
amended. As amended, the 1992 Plan would not permit the transfer of awards
pursuant to the terms of a qualified domestic relations order. All unexercised
options and SARs terminate on the date a grantee's employment terminates,
provided that such awards may be exercised during certain periods, to be
specified by the Committee subject to certain stated limitations, following
termination of employment by reason of death, disability or retirement.
Exercise Price and Payment. The exercise price of each option granted under
the 1992 Plan will be established by the Committee and set forth in the
agreement governing the option and shall not be less than the fair market value
of the Company's Common Stock on the date of grant of such option. In general,
grants of Restricted Stock, Performance Stock and dividend equivalents will
require little or no payment upon issuance.
The exercise of an option must be accompanied by payment in full of the
purchase price in cash, by check or by delivery of shares of the Company's
Common Stock previously acquired by the grantee equal in value to the option
price, or by a combination of cash and stock. In addition, the Committee may
authorize, in accordance with rules and regulations adopted by it, payment of
the option price by delivery of a properly executed exercise notice together
with irrevocable instructions to a broker to deliver to the Company that portion
of sales or loan proceeds required to pay the option price in full. Participants
under the 1992 Plan may pay withholding taxes by means of contributing cash or
shares of the Company's Common Stock previously acquired or by deducting shares
of Common Stock from the amount to be received upon the exercise or vesting of
an award in accordance with procedures adopted by the Committee. The aggregate
number and kind of shares which are reserved for issuance under the 1992 Plan
and which are subject to awards under the 1992 Plan and the purchase price per
share of shares subject to awards will be appropriately adjusted by the
Committee in the event of stock dividends, stock splits, mergers,
recapitalizations or similar transactions that affect the Company's Common
Stock.
Award and Exercise of SARs. SARs may be granted by the Committee
independently of or in conjunction with stock options granted concurrently or
previously under the 1992 Plan. SARs entitle the grantee to receive in cash or
in shares of Common Stock (or in a combination of cash and stock) from the
Company at exercise the difference between the fair market value of a specified
number of shares of the Company's Common Stock on the date of exercise and the
fair market value per share specified in the agreement granting the SARs. SARs
shall be exercisable at such time and only to the extent provided in an SAR
agreement or related option. Upon exercise of an SAR, the number of shares
subject to exercise under a related option shall be reduced automatically by the
number of shares surrendered.
Amendment and Termination. The Board of Directors may amend, suspend or
terminate the 1992 Plan at any time prior to its specified date of termination.
Any amendment (1) effecting an increase in the aggregate number of shares which
may be issued under the 1992 Plan (other than an increase merely reflecting a
stock dividend, a recapitalization or other such change), (2) extending the term
of the 1992 Plan or the maximum option periods provided thereunder, (3)
decreasing the minimum option price under the 1992 Plan, or otherwise materially
increasing the benefits accruing to grantees through awards under the 1992 Plan,
(4) abolishing the Committee, changing the qualification of its members or
withdrawing the 1992 Plan from its supervision, or (5) modifying the eligibility
requirements for participation in the 1992 Plan, must be approved by the
shareholders of the Company.
19
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
NSOs and SARs. Under current law, there will generally be no Federal income
tax consequences to either the employee or the Company on the grant of NSOs or
SARs. Upon exercise of NSOs or SARs, the difference between the fair market
value of the Company's Common Stock at the date of exercise and the exercise
price is taxed at ordinary income rates, and is subject to withholding tax by
the Company. The exercise of NSOs or SARs will result in a tax deduction to the
Company, measured by such difference. However, grantees who are subject to the
six-month restrictions on resale of Common Stock under Federal securities laws
will, unless they elect otherwise, generally not recognize ordinary income until
such restrictions lapse. The fair market value of the Company's Common Stock at
the date of exercise becomes the tax basis in the hands of the grantee of shares
acquired upon such exercise.
ISOs. Under the Internal Revenue Code, there are generally no Federal
income tax consequences to the employee or the Company upon the grant or
exercise of an ISO, except that the difference between the option price and the
fair market value of the Common Stock at the exercise of the option will be an
item of adjustment for purposes of the alternative minimum tax. If the employee
does not dispose of the stock within two years from the grant date of the ISO,
and holds the stock after exercise for at least one year, the employee will be
taxed at long-term capital gain rates upon the sale of the stock and the Company
will not be entitled to a tax deduction in connection with the exercise of the
ISO. If the employee does not meet these holding period requirements, the
employee's gain upon disposing of the stock will usually be taxed as ordinary
income to the extent of the excess of the fair market value of the shares on the
date of exercise over the option price. The balance of the amount received, if
any, will be short-term or long-term capital gain depending on how long the
shares were held by the employee. The Company will be allowed a tax deduction in
the amount of the grantee's ordinary income as a result of the disposition.
Restricted Stock, Performance Stock and Dividend Equivalents. If Common
Stock is transferred to an employee under the 1992 Plan, the employee must
include in gross income the excess of the then fair market value of the stock
over the amount, if any, paid for it in the first taxable year in which such
employee's beneficial interest in such Common Stock is either transferable or
not subject to a substantial risk of forfeiture, unless the employee elects to
be taxed upon the grant of such an award. Generally, the employer is entitled to
a deduction at the time of and equal to the amount of the inclusion in the
employee's gross income. Dividends paid on Restricted Stock are treated as
compensation deductible by the employer and includable in the income of the
employee when paid, unless the employee elects to be taxed upon the grant of
such an award. Performance Stock granted under the 1992 Plan, receipt of which
is contingent on the attainment of performance goals established by the
Committee, is generally taxed to the employee upon attainment of the goals at
the end of such performance period. The employer is entitled to a deduction for
the payment of Performance Stock awards, whether paid in stock, cash or in
combination thereof, in an amount equal to the amount included in the employee's
gross income. Dividend equivalents are taxed to the employee and are deductible
by the employer when paid.
Approval of amendments to the 1992 Plan requires the affirmative vote of
the holders of at least a majority of the Common Stock of the Company
represented at the April 23, 1996 Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
AMENDMENTS TO THE 1992 PLAN.
20
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(PROPOSAL 4)
The Company's Board of Directors is submitting for shareholder approval its
proposal to engage Coopers & Lybrand L.L.P., independent accountants, as
auditors of the Company for the fiscal year ending December 31, 1996. On October
19, 1995, the Audit Committee of the Board of Directors of the Company
recommended and the Board of Directors of the Company approved the dismissal of
Price Waterhouse LLP, effective October 19, 1995, as the independent accountants
engaged to perform the audit examination of the Company's financial statements
for the year ending December 31, 1995. On October 19, 1995, the Company notified
Price Waterhouse LLP of the Board of Directors' decision to replace Price
Waterhouse LLP as independent accountants of the Company. Price Waterhouse LLP
acted as the auditors of the Company from the fiscal year ending December 31,
1987.
The reports of Price Waterhouse LLP on the financial statements of the
Company for the past two years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle, except that their report on the Company's financial
statements for the year ended December 31, 1993 included an explanatory
paragraph regarding the uncertainty that the Company could continue as a going
concern.
During the Company's two most recent fiscal years and the subsequent
interim period ending October 19, 1995, there were no disagreements with Price
Waterhouse LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Price Waterhouse LLP, would have caused Price
Waterhouse LLP to make reference thereto in their report on the financial
statements for such years.
On October 19, 1995, the Audit Committee of the Board of Directors
recommended and the Company's Board of Directors approved the engagement of
Coopers & Lybrand L.L.P., effective October 19, 1995, to perform the audit
examination of the Company's financial statements for the year ending December
31, 1995. During the Company's two most recent fiscal years and through October
19, 1995, the Company has not consulted with Coopers & Lybrand L.L.P. on items
which (1) were or should have been subject to SAS 50 or (2) concerned with
subject matter of a disagreement or reportable event with the former auditor.
The Company has furnished Price Waterhouse LLP and Coopers & Lybrand L.L.P.
with copies of the above statements and requested that they inform the Company
if any of the statements is incorrect or incomplete. Neither Coopers & Lybrand
L.L.P. nor Price Waterhouse LLP has indicated that any of the above statements
is incorrect or incomplete.
Representatives from Coopers & Lybrand L.L.P. 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.
Audit services performed by Coopers & Lybrand L.L.P. 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 COOPERS & LYBRAND L.L.P. 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.
21
<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS
FOR INCLUSION IN 1997 PROXY MATERIAL
Any shareholder who intends to present a proposal at the Company's 1997
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, 1996, 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 22, 1996
22
<PAGE>
APPENDIX
(Pursuant to Rule 304 of Regulation S-T)
1. Page 13 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 and the NASDAQ Bank Stocks for the period of
five years commencing December 31, 1990 and ending December 29, 1995, 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 23, 1996
The undersigned hereby appoints THEODORE F. HOGAN, JR., CARL M. PORTO and
CHEEVER TYLER, 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 06511 on Tuesday, April 23, 1996, at
10:00 a.m. and at any adjournment thereof, all shares of common stock of the
Company which the undersigned would be entitled to vote if personally present
for the following matters.
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 STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark your votes as indicated in this example [X]
1. ELECTION OF DIRECTORS
Nominees:
STEPHEN P. AHERN, MARTIN R. ANASTASIO, EDWARD M. CROWLEY, JAMES J. CULLEN,
GEORGE M. DERMER, THOMAS M. DONEGAN, VICTOR B. HALLBERG, THEODORE F. HOGAN, JR.,
KARL J. JALBERT, JEAN G. LAMONT, LAWRENCE M. LIEBMAN, F. PATRICK MCFADDEN, JR.,
CARL M. PORTO, VINCENT A. ROMEI, STANLEY SCHOLSOHN AND CHEEVER TYLER
[ ] FOR [ ] WITHHELD FOR ALL
WITHHELD FOR: (Write that nominee's name in the space provided below).
2. TO APPROVE A ONE-FOR-FOUR REVERSE STOCK SPLIT OF THE COMPANY'S ISSUED
COMMON STOCK.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO APPROVE CERTAIN AMENDMENTS TO THE BNH BANCSHARES, INC. 1992 STOCK
INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. as the independent
accountants to audit the consolidated financial statements of the Company
for the calendar year 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To transact such other business as may properly come before the meeting or
an adjournment thereof.
Please mark this box if you plan to attend the Annual Meeting in person [ ]
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.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and the related Proxy Statement.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Signature(s)____________________________________ Date _______________
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FOLD AND DETACH HERE
