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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 (S) 240.14a-11(c) or (S) 240.14a-12
PREMIER NATIONAL BANCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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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[PREMIER NATIONAL BANCORP, INC LOGO APPEARS HERE]
April 5, 1999
Dear Shareholder:
We are pleased to enclose your Notice of Annual Meeting of
Shareholders, Proxy Statement, and proxy for the Annual Meeting of Shareholders
of Premier National Bancorp, Inc. to be held on Thursday May 13, 1999, at 9:00
a.m. Eastern Time at the Sheraton Civic Center Hotel, 40 Civic Center Plaza,
Poughkeepsie, New York.
The matters scheduled for consideration at the meeting are described in
detail in the Notice of Annual Meeting of Shareholders and the Proxy Statement.
In order to make sure that your vote is represented, please indicate your vote
on the enclosed proxy form, date and sign it, and return it in the enclosed
envelope. If you attend the meeting in person, you may revoke your proxy at the
meeting and vote in person.
We look forward to meeting our shareholders and welcome the opportunity
to discuss the business of your company with you.
Sincerely,
/s/ T. Jefferson Cunningham III /s/ Peter Van Kleeck
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T. Jefferson Cunningham III Peter Van Kleeck
Chairman President
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289-291 MAIN MALL . POUGHKEEPSIE, NY 12601
REPLY TO: P.O. BOX 310 . LaGRANGEVILLE, NY 12540 . 914-471-1711
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[PREMIER NATIONAL BANCORP, INC LOGO APPEARS HERE]
April 5, 1999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 13, 1999
Dear Shareholder:
Notice is hereby given that the Annual Meeting of Shareholders of
Premier National Bancorp, Inc. will be held at the Sheraton Civic Center Hotel,
40 Civic Center Plaza, Poughkeepsie, New York, on Thursday, May 13, 1999 at 9:00
a.m. Eastern Time for the purpose of considering and acting upon the following
matters:
1. The election of six directors to serve a term of three years
in each case until their successors are elected and qualified;
2. The proposed amendment and restatement of the Company's 1995
Incentive Stock Plan as described in the accompanying proxy
statement; and
3. Such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
Shareholders of record of common stock at the close of business on
April 5, 1999 are entitled to receive notice of, and to vote at, the Annual
Meeting and at any adjournments or postponements thereof.
Your vote is important regardless of the number of shares you own. Even
though you may plan to attend the Annual Meeting, you are requested to sign,
date and return the enclosed proxy without delay in the enclosed postage-paid
envelope. You may revoke your proxy at any time prior to the time that it is
voted. Any shareholder present at the Annual Meeting or any adjournments or
postponements thereof may revoke his or her proxy and vote personally on each
matter brought before the Annual Meeting.
If you have any questions or require assistance, please call the
undersigned at (914) 471-1711.
By Order of the Board of Directors
/s/ Robert Apple
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Robert Apple
Corporate Secretary
<PAGE>
[PREMIER NATIONAL BANCORP, INC LOGO APPEARS HERE]
April 5, 1999
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 13, 1999
The enclosed proxy is being solicited by the Board of Directors of
Premier National Bancorp, Inc. ("Corporation" or the "Company") for use at the
Annual Meeting of shareholders to be held May 13, 1999, or at any adjournments
or postponements thereof. The Annual Meeting will be held at 9:00 a.m. Eastern
Time at the Sheraton Civic Center Hotel, 40 Civic Center Plaza, Poughkeepsie,
New York.
The proxy statement and form of proxy are being mailed to shareholders
on or about April 9, 1999.
The Board of Directors has fixed the close of business on April 5, 1999
as the record date for determining shareholders entitled to receive notice of
and to vote at the meeting. On that date, there were 15,426,482 shares of the
Corporation's common stock, $.80 par value per share ("Common Stock") issued and
outstanding. The holders of the Common Stock are entitled to one vote per share.
Shares may not be voted at the Annual Meeting unless the shareholder is present
or represented by proxy. The presence in person or by proxy of the holders of a
majority of the outstanding shares of Common Stock will constitute a quorum for
the transaction of business at the Annual Meeting.
All delivered and properly executed proxies will be voted at the Annual
Meeting in accordance with instructions, if any. Unless otherwise directed,
proxies will be voted in favor of the election as directors of the persons named
as nominees under "ELECTION OF DIRECTORS" and in favor of the proposed amendment
and restatement of the Corporation's 1995 Stock Incentive Plan. The enclosed
proxy is revocable at any time prior to the actual voting of such proxy by
giving notice of such revocation, by delivering a later dated proxy or by vote
of the shareholder in person at the Annual Meeting.
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS
Nominees for Director and Continuing Directors
On July 17, 1998, Hudson Chartered Bancorp, Inc. ("Hudson Chartered")
and Progressive Bank, Inc. ("Progressive") completed a "merger of equals" of the
two companies. Progressive was merged into Hudson Chartered, and Progressive's
bank subsidiary, Pawling Savings Bank, was merged into Hudson Chartered's bank
subsidiary, First National Bank of the Hudson Valley. The surviving companies
were renamed, respectively, Premier National Bancorp, Inc. and Premier National
Bank (the "Bank").
The Bylaws of the Corporation provide that the number of directors
shall be not fewer than five nor more than twenty-five, as from time to time
shall be determined by the Board of
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Directors. The Board has acted to fix the total number of directors at nineteen
from the date of the Annual Meeting. The Board of Directors is divided into
three classes, as nearly equal in number as possible. Each class serves for a
three-year term. Each Director shall serve until his successor shall have been
elected and shall qualify, even though his or her term of office has otherwise
expired, except in the event of his or her earlier resignation, removal or
disqualification.
At the Annual Meeting, six nominees are to be elected as Class 1
directors for a term of three years. The Board's nominees for these positions
are named in the table below. All of the nominees named below are now directors
of the Corporation whose terms of office will expire with this annual meeting,
with the exception of Archibald A. Smith III, who has agreed to stand for
reelection at this meeting in order to more nearly equalize the number of
Directors in each class. All of the nominees named below have consented to being
named in this Proxy Statement and to serve if elected. The Board of Directors
has no reason to believe that any nominee will be unavailable or unable to serve
as a director, but if for any reason any nominee should not be available or able
to serve, the proxy will be voted by the persons acting under the proxy in
accordance with the recommendations of the Board of Directors, or the size of
the Board may be reduced to eliminate such vacancy.
Under the New York Business Corporation Law, directors shall be elected
by a plurality of the votes cast at the Annual Meeting. Accordingly, the
nominees for director receiving the highest number of votes would be elected,
regardless of whether such votes constitute a majority of the shares represented
at the Annual Meeting. Broker non-votes (arising from the absence of
discretionary authority on the part of a broker-dealer to vote shares of Common
Stock held in street name for customers accounts) will be counted as present for
the purpose of determining the existence of a quorum but will not have an effect
on the outcome of the vote for the election of directors.
The Board of Directors recommends a vote "FOR" each of the Board's
nominees for election as a director of the Corporation.
The following table sets forth, for each nominee and each incumbent
director whose term will continue after the Annual Meeting, the name of such
person, his/her age on January 1, 1999, his/her principal occupation, and the
year he/she first became a director of the Corporation or a predecessor. All
nominees and continuing directors have held the position indicated or another
senior executive position with the same entity or one of its affiliates or a
predecessor corporation for at least the past five years.
Nominees for Terms to Expire in 2002
<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age the Last 5 Years Since
- ---- --- --------------------------------------- -----
<S> <C> <C>
Edward vK. 63 Chairman of the Board and President, George 1984
Cunningham, Jr./1/ Gale Foster Corporation (holding company);
Partner (until January 1, 1995) and Counsel,
Van DeWater & Van DeWater (Attorneys)
</TABLE>
/1/ Messrs. E. vK. Cunningham, Jr. and T.J. Cunningham III are brothers.
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<TABLE>
<S> <C> <C> <C>
Warren R. Marcus 61 President, Warren Marcus Associates, Inc. and 1993
WRM Equity Management, Inc. (registered
investment advisor)
John J. Page 60 President of H.G. Page and Sons (building 1986
material supplier); Owner of John Page
Development Co. (property management
development company)
Archibald A. Smith III 49 Headmaster at the Trinity Pawling School 1995
(independent boys college prepatory school)
David A. Swinden 66 Executive Vice President of Imperial Schrade 1994
Corp. (manufacturing company)
John C. VanWormer 50 Executive Vice President of the Corporation; 1985
Vice Chairman of Premier National Bank
<CAPTION>
Directors Continuing in Office
Principal Occupation During Director Term
Name Age the Last 5 Years Since Expires
- ---- --- --------------------------------------- -------- -------
<S> <C> <C> <C> <C>
Elizabeth P. Allen 56 Director of Guideposts, Inc. (not for 1986 2000
profit church corporation)
Thomas C. Aposporos 46 Principal at Aposporos and Son 1988 2000
(licensed real estate brokers)
Robert M. Bowman 67 Retired Regional Manager, H.P. Hood
Inc. (dairy products) 1985 2001
H. Todd Brinckerhoff 65 President, Brinckerhoff & Neuville, Inc. 1984 2001
(insurance agency)
T. Jefferson 56 Chairman of the Board of the Corporation 1984 2001
Cunningham III/1/ and Premier National Bank
Tyler Dann 56 President, Wesfair Agency Inc. (insurance 1984 2000
agency)
Thomas C. 57 Partner, Vanacore, DeBenedictus, DiGiovanni 1998 2000
DeBenedictus & Weddell, LLP (accounting firm)
R. Abel Garraghan 56 President, R.W. Garraghan, Inc. (real estate 1991 2001
holding company); Chairman of the Board,
Heritagenergy (home heating oil distributor)
Richard T. Hazzard 55 President of Lyman A. Beecher, Inc. d/b/a 1986 2001
Beecher Funeral Home and Dwyer Funeral
Home
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Richard Novik 58 President of Clear Channel Communications, 1986 2001
International (telecommunications company);
Owner and President of WKIP Broadcasting
and Dutchess Communications from 1987 to
March 1997
Lewis J. Ruge 60 Chairman and President, Ruge's Oldsmobile 1985 2000
Inc. (automobile dealer)
Roger W. Smith 58 President of Pawling Corporation 1992 2001
(manufacturer of rubber and plastic
products)
Peter Van Kleeck 64 President and Chief Executive Officer of 1990 2000
the Corporation and Premier National Bank
</TABLE>
Board and Committees
Committees of the Corporation's Board of Directors include an Audit
Committee, a Personnel and Compensation Committee, an Executive Committee and a
Nominating Committee. Each committee is a joint committee with the Board of
Directors of the Bank.
The Audit Committee is responsible for monitoring and reviewing the
systems of internal control and the internal and external audit functions. The
Audit Committee reviews with the Corporation's independent auditor significant
accounting policies, the Corporation's compliance with laws and regulations and
assessments of the adequacy of internal controls. The Audit Committee also
monitors the audit department and loan review department, and oversees
management's policies with respect to internal controls. The Committee also
reviews all regulatory financial filings. The committee is presently comprised
of David A. Swinden (Chairman), Thomas C. DeBenedictus, R. Abel Garraghan, Lewis
J. Ruge, Archibald A. Smith III and Roger W. Smith. Since the merger date, the
Audit Committee met four times in 1998.
The Personnel and Compensation Committee is responsible for setting and
maintaining the Company's employment policies and procedures, a performance
appraisal system, and the Company's compensation policies. See "COMPENSATION OF
EXECUTIVE OFFICERS - Personnel and Compensation Committee Report on Executive
Compensation." The committee is presently comprised of Thomas C. Aposporos
(Chairman), Robert M. Bowman, H. Todd Brinckerhoff, Richard T. Hazzard, Lewis J.
Ruge and Roger W. Smith. Since the merger date, the Personnel and Compensation
Committee met five times in 1998.
The Executive Committee has the authority of the Board of Directors in
the management of the business of the Corporation between the dates of regular
meetings of the Board. The committee is presently comprised of T. Jefferson
Cunningham III (Chairman), Thomas C. Aposporos, Elizabeth P. Allen, H. Todd
Brinckerhoff, George M. Coulter (who is not standing for reelection), Edward vK.
Cunningham, Jr., Lewis J. Ruge, Roger W. Smith, Peter Van Kleeck and John C.
VanWormer. Since the merger date, the Executive Committee met six times in 1998.
The Nominating Committee is responsible for recommending candidates to
the Board for all directorships to be filled by the shareholders or between
annual meetings by the Board. In
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making its recommendations, they consider candidates for directorships proposed
by its members and, by any other director or any shareholder. The Nominating
Committee may also recommend to the Board nominees to fill seats on board
committees. The committee is presently comprised of Richard Novik (Chairman), H.
Todd Brinckerhoff, Edward vK. Cunningham, Jr., T. Jefferson Cunningham III,
Tyler Dann, John J. Page, David A. Swinden and Peter Van Kleeck. The Nominating
Committee met early in 1999 to consider nominees for election at the Annual
Meeting.
The Board of Directors of the Corporation met six times in 1998. In
1998, each director attended at least 75% of the combined total meetings of the
Board of Directors and meetings of each committee on which such director served.
Compensation of Directors
Each director of the Corporation serves on the Board of Directors of
the Bank. Directors receive an annual retainer fee of $15,000 for their service
on the Board of the Bank and do not receive any additional compensation for
their service on the Board of the Corporation. Members of committees of the
Board of Directors of the Bank, except directors who are employees, receive fees
of $500 for each meeting attended and the Chairman of each committee receives
fees of $750 for each such meeting attended.
Under a Deferred Compensation Plan that covers directors and selected
executives, a director may elect to defer all or part of the director's board
and committee fees until termination of service as a director. Such deferred
amounts may be hypothetically invested in a group of mutual funds or in a
phantom stock investment that appreciates or depreciates in the identical manner
as does the Corporation's Common Stock. Officers with a title of Senior Vice
President or above are also permitted to participate in the Plan and may elect
to defer a specified percentage of their base salaries and cash bonuses.
Benefits under the Deferred Compensation Plan are partially funded by
contributions to a trust.
Former directors (who are not officers) of Progressive are entitled to
receive upon retirement, a sum currently equal to $5,000 for every year of
credited service since 1986, subject to a maximum of $75,000. The accrued
benefits under this plan were frozen in connection with the merger, except that
two directors will continue to be credited with service for purposes of
determining whether they complete the five year service requirement for becoming
vested. Former First Hudson Valley directors are entitled to receive a severance
benefit, in the event of loss of office in connection with a change in control,
equal to one twelfth of the then current annual Board retainer fee, per year of
prior service, subject to a minimum of one year's fee.
PROPOSAL NUMBER 2:
AMENDMENT OF THE 1995 INCENTIVE STOCK PLAN
The purpose of the 1995 Incentive Stock Plan is to assist the
Corporation and its subsidiaries in attracting, retaining, and providing
incentives to key individuals who serve the Corporation and its subsidiaries by
offering them the opportunity to acquire or increase their proprietary interest
in the Corporation and to promote the identification of their interests with
those of the shareholders of the Corporation.
The Corporation is asking the shareholders to approve the Corporation's
1995 Incentive Stock Plan, as amended and restated, as described below. The
Board of Directors approved the amended and restated 1995 Incentive Stock Plan
("Amended Plan") on March 25, 1999, subject to
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the shareholder approval solicited by this proxy statement. The Amended Plan
will amend, restate and continue the Corporation's current 1995 Incentive Stock
Plan. The amendments made to the 1995 Incentive Stock Plan pursuant to adoption
of the Amended Plan are herein referred to as the "1999 Amendments." If the
Amended Plan is not approved, the 1995 Incentive Stock Plan will continue in
effect in its present form.
Description of and Reasons for the 1999 Amendments
Hudson Chartered adopted the 1995 Incentive Stock Plan prior to the
"merger of equals" that created the Corporation. The 1995 Incentive Stock Plan
replaced stock-based compensation plans of a predecessor corporation to Hudson
Chartered. The principal purposes of the 1999 Amendments is to respond to
changes in circumstances occasioned by the merger and to increase the Board's
flexibility in administering the Plan. Some of the Corporation's predecessors
permitted the granting of options to non-employee directors, while others did
not.
Plan Eligibility. The 1995 Incentive Stock Plan permits grants and
awards of stock options, stock appreciation rights, restricted stock and
incentive shares (collectively, "Awards") to officers or key employees of the
Corporation or a subsidiary. The Board of Directors believes that the ability to
make Awards under the plan has enhanced the Corporation's ability to attract and
retain such qualified officers and key employees. The Board of Directors further
believes that is in the best interests of the Corporation and its shareholders
to recognize, through appropriate stock incentives, the contributions of a wider
group of individuals in the success of the Corporation. Accordingly, the 1999
Amendments will revise the plan to also allow the grant of nonqualified stock
options to non-employee directors. It also allows the grant of all types of
Awards to persons hired to be employees of the Corporation or a subsidiary and
who the Personnel and Compensation Committee determines will be officers or key
employees upon commencement of employment, and consultants or independent
contractors to the Corporation or a subsidiary who are determined to render key
services. The Amended Plan provides that the Board of Directors, rather than a
committee of the Board of Directors, would administer the plan and the grant of
options thereunder with respect to grants of nonqualified stock options to
non-employee directors.
In determining to include non-employee directors among the persons
eligible to receive nonqualified stock options, the Board of Directors wished to
equalize the treatment among non-employee directors of the various predecessor
corporations and encourage non-employee directors to exercise outstanding
options and thereby reduce the number of outstanding stock options. The Board of
Directors plans to grant nonqualified stock options to eligible non-employee
directors on an annual basis. However, it is currently contemplated that a
non-employee director would not receive an annual stock option grant if, at the
time of the grant, the non-employee director holds a stock option granted before
1999 that has not been exercised in full. With respect to non-employee directors
who are eligible to receive a stock option grant for a particular year, it is
currently planned that the number of shares covered by each option granted to an
eligible director would be equal to the product of (a) the total number of
non-employee directors, and (b) 1,000, divided by (c) the total number of
non-employee directors to receive option grants for that year, rounded to the
one hundred shares.
If the Amended Plan is approved by shareholders (and assuming that each
of the nominees for election as a director is elected), the Corporation
anticipates that the following non-employee directors, and all non-employee
directors, as a group, will be granted stock options for a term, a vesting
schedule and other terms established by the Board of Directors, covering the
number of shares indicated at an exercise price equal to the fair market value
of the Common Stock at the date of grant.
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New Plan Benefits
Amended and Restated 1995 Incentive Stock Plan
<TABLE>
<CAPTION>
- ------------------------------------------- -----------------------------
Name Shares Subject to Options
- ------------------------------------------- -----------------------------
<S> <C>
Thomas C. Aposporos 2,300
- ------------------------------------------- -----------------------------
H. Todd Brinckerhoff 2,300
- ------------------------------------------- -----------------------------
Edward K. Cunningham, Jr. 2,300
- ------------------------------------------- -----------------------------
Tyler Dann 2,300
- ------------------------------------------- -----------------------------
Thomas C. DeBenedictus 2,300
- ------------------------------------------- -----------------------------
R. Abel Garraghan 2,300
- ------------------------------------------- -----------------------------
Warren R. Marcus 2,300
- ------------------------------------------- -----------------------------
Non-employee directors as a group 16,100
- ------------------------------------------- -----------------------------
</TABLE>
Number of Authorized Shares. At the time the 1995 Stock Incentive Plan
was adopted, Hudson Chartered was less than half the size of the Corporation by
virtually every measure. In order to reflect the increased size of the
Corporation and to provide authorized shares for future grants, the 1999
Amendments will increase the number of shares of stock of the Corporation that
are authorized for issuance under the Amended Plan from 1,429,170 shares (as
adjusted for stock splits and stock dividends) to 2,000,000 shares. The Amended
Plan provides for grants and awards of stock options, stock appreciation rights,
restricted stock and incentive shares covering 2,000,000 shares of Common Stock,
1,105,984 of which are subject to outstanding Awards or have already been issued
pursuant to the terms of prior Awards, leaving 894,016 shares available for
Awards under the Amended Plan.
Term of Plan. The 1999 Amendments will extend the term of the 1995
Incentive Stock Plan from March 31, 2005 until May 13, 2009 (that is, ten years
from the date of the Annual Meeting).
Award Limit. The 1999 Amendments will increase the aggregate
unexercised award limit per participant from 142,917 shares (as adjusted for
stock splits and stock dividends) to 200,000 shares (representing 10% of the
total number of shares of Common Stock available for awards under the Amended
Plan).
Other Changes. In addition to the changes described above, the 1999
Amendments reflect the change of the Corporation's name from Hudson Chartered to
Premier National Bancorp, Inc., the listing of the Corporation's stock on the
American Stock Exchange, and the elimination of certain requirements under
former rules of the Securities and Exchange Commission.
Description of the Amended Plan
The following summary of the material terms of the Amended Plan is
qualified in its entirety by reference to the full text of the Amended Plan, a
copy of which is available by writing Robert Apple, Corporate Secretary, Premier
National Bancorp, Inc., 240 Route 55, P.O. Box 310, LaGrangeville, New York
12540-0310. Unless otherwise specified, capitalized terms used herein have the
meaning assigned to them in the Amended Plan.
Eligibility; Shares Available for Grants and Awards. The Amended Plan
provides for grants and awards of nonqualified stock options, incentive stock
options, stock appreciation rights, restricted stock and incentive shares
(collectively, "Awards") to officers, key employees, directors, persons hired to
be employees of the Corporation or a subsidiary and who the Personnel and
Compensation Committee determines will be officers or key employees upon
commencement of
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employment, and consultants or independent contractors to the Corporation or a
subsidiary who are determined to render key services. Non-employee directors are
only eligible to receive grants of nonqualified stock options.
Subject to the terms of the Amended Plan, if an option or right expires
or terminates without having been fully exercised, or if shares of restricted
stock or incentive shares are forfeited, the unissued or forfeited shares of
Common Stock which had been covered thereby will become available for the grant
of additional Awards under the Amended Plan. Upon the exercise of a right
(regardless of whether such right is settled in cash or shares of Common Stock),
the number of shares of Common Stock with respect to which the right is
exercised will be charged against the number of shares available for Awards
under the Amended Plan.
Administration. Except with respect to non-employee directors, the
Amended Plan is administered by the Personnel and Compensation Committee, which
currently is comprised of six non-employee directors. With respect to
non-employee directors, the Amended Plan is administered by the Board of
Directors. The Report of the Personnel and Compensation Committee contains
information pertaining to the current composition of the Personnel and
Compensation Committee. Subject to the terms of the Amended Plan, the Personnel
and Compensation Committee, and, with respect to non-employee directors, the
Board, is authorized to determine eligibility, to make Awards, and to otherwise
administer the Amended Plan.
The Corporation's Board of Directors may terminate the Plan at any time
and may amend it in any respect, except that no amendment, alteration or
termination of the Amended Plan may be made by the Board of Directors without
approval of (a) the Corporation's shareholders to the extent shareholder
approval of an amendment is required to comply with the requirements of
applicable law, regulation or American Stock Exchange policy; and (b) each
affected Participant if such amendment, alteration or termination would impair
the rights of a Participant under any prior Award. The Amended Plan will
terminate on May 13, 2009. The Amended Plan will remain in effect after its
termination for the purpose of administering outstanding Awards.
Except as otherwise provided by the Committee, Awards under the Amended
Plan are not transferable other than by will, or by the laws of descent and
distribution. Awards under the Amended Plan generally may be exercised only by
the Participant during his lifetime or, in the event of legal disability, by his
legal representative.
Limits on Aggregate Awards. The Amended Plan limits the number of
shares of Common Stock with respect to which any employee may receive Awards
(which remain unexercised) during the term of the Amended Plan to 200,000
shares, subject to adjustment for stock dividends, recapitalizations,
combinations, or the like, reduced by the number of shares of Common Stock
covered by options granted to the employee under certain stock option plans
previously maintained by the Corporation or entities acquired by the Corporation
that are outstanding as of the date of the Award. Under current tax law
requirements, to the extent that the aggregate fair market value of stock with
respect to which incentive stock options granted under the Amended Plan are
exercisable for the first time by an employee during any calendar year exceeds
$100,000 (determined at the time of the grant of the option), the option will
not be treated as an incentive stock option for federal income tax purposes.
Stock Options. The Amended Plan authorizes the grant of nonqualified
stock options and incentive stock options. The exercise of an option permits the
optionee to purchase shares of Common Stock from the Corporation at a specified
exercise price per share. Options granted under the Amended Plan are exercisable
upon such terms and conditions as the Personnel and
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Compensation Committee, or in the case of non-employee directors, the Board of
Directors, shall determine.
The exercise price per share and manner of payment for shares purchased
pursuant to options are determined by the Personnel and Compensation Committee
or the Board, subject to the terms of the Amended Plan. The per share exercise
price of all options granted under the Amended Plan may not be less than the
fair market value per share of the Common Stock at the time of the grant, except
that incentive stock options granted to an employee who is a 10% shareholder
(after applying certain stock ownership attribution rules) may not have an
exercise price less than 110% of such fair market value.
The Amended Plan provides that the term during which options granted
may be exercised shall be determined by the Personnel and Compensation Committee
or the Board, except that no option may be exercised after ten years (five years
in the case of incentive stock options granted to an employee who is a 10%
shareholder after applying certain stock ownership attribution rules) following
its date of grant.
Stock Appreciation Rights. The Amended Plan authorizes the Personnel
and Compensation Committee to grant stock appreciation rights in connection
with, and at the same time as, the grant of an option under the Amended Plan or
by amendment of an outstanding option granted under the Amended Plan ("related
rights"). Stock appreciation rights may also be granted independently of any
option granted under the Amended Plan ("nonrelated rights"). Subject to the
terms of a particular grant, a stock appreciation right entitles the grantee
upon exercise to elect to receive in cash, Common Stock or a combination
thereof, the excess of the fair market value of a specified number of shares of
Common Stock at the time of exercise over the fair market value of such number
of shares of Common Stock at the date of grant, or, in the case of a related
right, the exercise price provided in the related option. The period during
which a right may be exercised is determined by the Personnel and Compensation
Committee, but a right may not be exercised after ten years from the date of
grant or, in the case of a related right, the expiration of the related option.
Restricted Stock. Restricted stock awards consist of shares of Common
Stock awarded without payment of cash consideration by the grantee, unless
otherwise specified in the agreement relating thereto, that are restricted
against transfer, subject to forfeiture and subject to such other terms,
conditions and restrictions, for such period or periods as shall be determined
by the Personnel and Compensation Committee. Such terms may provide, in the
discretion of the Personnel and Compensation Committee, for the vesting of
restricted stock awards to be contingent upon the achievement of one or more
Performance Goals established by the Personnel and Compensation Committee and
specified in the agreement. The Performance Goals may be based on earnings or
earnings growth, sales, return on assets, equity or investment, regulatory
compliance, satisfactory internal or external audits, improvement of financial
ratings, achievement of balance sheet, income statement or other financial
statement objectives, or any other objective goals established by the Personnel
and Compensation Committee and specified in the agreement. The goals may be
absolute in their terms or measured against or in relationship to other
companies similarly or otherwise situated.
Restricted stock awarded under the Amended Plan and the right to vote
shares of such restricted stock and to receive dividends thereon may not be
sold, assigned, transferred, exchanged, pledged, hypothecated or encumbered
during the restriction period. With the exception of these restrictions upon
transfer, the recipient of a restricted stock award has all other rights of a
shareholder including, but not limited to, the right to receive dividends and
the right to vote shares awarded.
-11-
<PAGE>
Incentive Shares. Incentive shares awarded under the Amended Plan are
contingent awards of shares of Common Stock that may be issued subject to
achievement of such Performance Goals (as described above with respect to
restricted stock awards) or other goals and on such other terms and conditions
as the Personnel and Compensation Committee deems appropriate and specifies in
the agreement relating thereto. Unlike in the case of restricted stock, shares
of Common Stock would not be issued immediately pursuant to incentive share
awards, but instead would be issued upon the achievement or satisfaction of such
Performance Goals or other goals or terms and conditions. Accordingly, a person
who has received an award of incentive shares may not vote or receive dividends
with respect to the shares of Common Stock subject to the award until such
shares are issued upon the achievement or satisfaction of such Performance Goals
or other goals or terms and conditions. The grantee would not have to pay any
cash consideration to the Corporation upon the award of incentive shares or upon
the issuance of the shares of Common Stock pursuant to the award.
Summary of Certain Federal Income Tax Consequences.
The following discussion briefly summarizes certain federal income tax
aspects of stock options, stock appreciation rights, restricted stock and
incentive shares granted or awarded under the Amended Plan. State and local tax
consequences may differ.
Incentive Stock Options. In general, an optionee is not required to
recognize income on the grant or exercise of an incentive stock option. However,
the difference between the exercise price and the fair market value of the stock
on the exercise date is an adjustment item for purposes of the alternative
minimum tax. Further, if an optionee does not exercise an incentive stock option
within certain specified periods of time after termination of employment, the
option is treated for federal income tax purposes in the same manner as a
nonqualified stock option, as described below.
Nonqualified Stock Options, Stock Appreciation Rights and Incentive
Shares. An optionee or grantee generally is not required to recognize income on
the grant of a nonqualified stock option or a stock appreciation right, or on
the award of incentive shares. Instead, ordinary income generally is required to
be recognized on the date the nonqualified stock option or stock appreciation
right is exercised, or in the case of an award of incentive shares, on the date
such shares are issued. In general, the amount of ordinary income required to be
recognized, (a) in the case of a nonqualified stock option, is an amount equal
to the excess, if any, of the fair market value of the shares on the exercise
date over the exercise price, (b) in the case of a stock appreciation right, the
amount of cash and the fair market value of any shares received on the exercise
date, and (c) in the case of an award of incentive shares, the fair market value
of the shares on the date of issue.
Restricted Stock. Shares of restricted stock awarded under the Amended
Plan will be subject to a substantial risk of forfeiture for the period of time
specified in the award. Unless a grantee of shares of restricted stock makes an
election under Section 83(b) of the Code as described below, the grantee
generally is not required to recognize ordinary income on the award of
restricted stock. Instead, on the date the substantial risk of forfeiture
lapses, the grantee will be required to recognize ordinary income in an amount
equal to the fair market value of the shares on such date. If a grantee makes a
Section 83(b) election to recognize ordinary income on the date the shares are
awarded, the amount of ordinary income required to be recognized is an amount
equal to the fair market value of the shares on the date of award. In such case,
the grantee will not be required to recognize additional ordinary income when
the substantial risk of forfeiture lapses.
-12-
<PAGE>
Gain or Loss on Sale or Exchange of Amended Plan Shares. In general,
gain or loss from the sale or exchange of shares granted or awarded under the
Amended Plan will be treated as capital gain or loss, provided that the shares
are held as capital assets at the time of the sale or exchange. However, if
certain holding period requirements are not satisfied at the time of a sale or
exchange of shares acquired upon exercise of an incentive stock option (a
"disqualifying disposition"), an optionee may be required to recognize ordinary
income upon such disposition.
Deductibility by Corporation. The Corporation generally is not allowed
a deduction in connection with the grant or exercise of an incentive stock
option. However, if an optionee is required to recognize income as a result of a
disqualifying disposition, the Corporation will be entitled to a deduction equal
to the amount of ordinary income so recognized. In the case of a nonqualified
stock option (including an incentive stock option that is treated as a
nonqualified stock option, as described above), a stock appreciation right, an
award of incentive shares, or a grant of restricted stock, at the same time the
optionee or grantee is required to recognize ordinary income, the Corporation
generally will be allowed a deduction in an amount equal to the amount of
ordinary income so recognized, provided certain federal income tax reporting
requirements are satisfied.
Subject to certain exceptions, Section 162(m) of the Code disallows
federal income tax deductions for compensation paid by a publicly-held
corporation to certain executives to the extent it exceeds $1 million for the
taxable year. The Amended Plan has been designed to allow the Personnel and
Compensation Committee to make awards under the plan that qualify under an
exception to the deduction limit for "performance-based compensation."
Accounting Treatment
Under current accounting principles, neither the grant nor the exercise
of an incentive stock option or a nonqualified stock option under the Amended
Plan with an exercise price not less than the fair market value of Common Stock
at the date of grant requires any charge against earnings. The Corporation is
required to disclose in a footnote to its financial statements the pro forma
effects of stock-based compensation arrangements on net income and earnings per
share, based on the estimated grant date fair value of stock options that are
expected to vest.
On March 31, 1999, the Financial Accounting Standards Board issued an
exposure draft of a proposed interpretation of Accounting Principles Board
Opinion ("APBO") No. 25, Accounting for Stock Issued to Employees. The proposed
interpretation of APBO No. 25, entitled "Accounting for Certain Transactions
Involving Stock Compensation, is expected to become effective in September 1999.
One of the issues addressed by the proposed interpretation is whether APBO No.
25 applies to stock-based compensation granted to independent members of an
entity's board of directors. If APBO No. 25 does not apply to these directors,
then issuances of equity securities to them would be accounted for under the
provisions of Statement of Financial Accounting Standards No. 123, Accounting
for Stock-Based Compensation, which for public companies, for example, requires
the fair value (and associated cost of compensation) of a stock option to be
estimated using an appropriate option-pricing model. To the extent options
granted to independent directors after December 15, 1998 are not fully vested at
the effective date of the interpretation, a pro rata portion of the fair value
of the options would be charged to compensation expense at the date the
interpretation becomes effective. Under APBO No. 25, grants of stock options to
directors generally have not required recognition of compensation expenses in
cases where the exercise price of the option equaled or exceeded the fair value
of the underlying securities at the date of grant.
Stock appreciation rights require a charge against the earnings of the
Corporation each accounting period to reflect appreciation in the value of such
rights. The charge related to stock
-13-
<PAGE>
appreciation rights will vary depending upon, among other factors, the amount of
stock appreciation rights granted, stock price changes above the grant price,
and the length of time that stock appreciation rights have been outstanding.
Such charge is based, generally speaking, on the difference between the exercise
price specified in the related right, or the market value of Common Stock on the
date of grant, and the current market price of Common Stock. In the event of a
decline in the market price of Common Stock subsequent to a charge against
earnings related to the estimated costs of stock appreciation rights, a reversal
of prior charges is made (but not to exceed aggregate prior charges).
Restricted stock and incentive shares require a charge to earnings
representing the value of the benefit conferred, which, in the case of
restricted stock, may be spread over the restrictive period. Such charge is
based on the market value of the shares transferred at the time of issuance.
Approval of the Amended Plan
Approval of the Amended Plan requires the affirmative vote of the
holders of a majority of the votes cast at the meeting. An abstention or a
broker non-vote with respect to approving the Amended Plan will not constitute a
vote cast and therefore will not affect the outcome of the vote.
The Board of Directors recommends a vote "FOR" approval of the Amended
Plan.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE PERSONNEL AND COMPENSATION COMMITTEE
OF PREMIER NATIONAL BANCORP, INC.
The Personnel and Compensation Committee (the "Committee") is elected
by the Board of Directors of the Company and serves both the Company and the
Bank. It is comprised of six Directors, all of whom are Directors of both the
Company and the Bank. No member of the Committee is an officer of the Company or
the Bank. The Chairman of the Board, the President and Chief Executive Officer
and the Senior Vice President for Human Resources attend meetings as staff to
the Committee, but are excused when discussions occur and decisions are made
which may concern their performance evaluation, or the terms and conditions of
their employment and their compensation.
The Committee met five times in 1998 (subsequent to the merger) and
also in January and February of 1999. The Company is charged by the Board of
Directors with responsibility for developing and monitoring a comprehensive
compensation program for the Company, reviewing the Company's Human Resources
policies and procedures and approving the compensation of all members of the
Management Committee (or equivalent) (which consists of senior officers) of the
Company and the Bank.
General guidelines exist for compensation policy within the Company and
the Bank. The policy is designed to attract quality management and employees by
providing competitive levels of compensation which relate pay to performance, to
recognize significant individual contributions to the Company's profitability,
and to link the interests of management and shareholders.
-14-
<PAGE>
Executive Compensation Policies
The following general principles guide the implementation of
compensation policy with regard to executive officers:
. Executive officer base salary ranges for each position are and will be
based upon regular analysis of salary practices of peer banks for
positions of a similar scope of responsibility and job complexity,
considering financial institutions of similar size, geographic market
and business makeup to the Company. Competitive ranges are targeted to
be at or above the mean of peer group ranges. The peer group banks
chosen for purposes of researching comparative compensation is entirely
separate and distinct from the peer group established for stock price
performance comparison (as set forth in the Performance Graph appearing
in this proxy statement). Peer group banks used for compensation
comparison tend to be greater in number and geographic diversity than
the banks used to compare stock performance, although some banks may be
in both peer groups.
. Executive officer base salary levels within specific ranges are based
upon the individual's performance rating and the compensation practices
of the peer group. Formal salary reviews are conducted not more
frequently than every twelve months.
. Executive officer annual bonus payments of up to 30% of the officer's
annual base salary may be awarded by the Committee based upon an annual
subjective assessment of the individual's performance against both
qualitative and quantitative position specific goals as well as the
overall performance of the Company and the Bank.
. Stock options may be granted by the Committee to senior officers under
the Company's 1995 Incentive Stock Plan. Stock option grants are
generally considered for those officers who hold positions of
significant responsibility (level of vice president or higher) and the
number of shares covered by such grants take into account title,
individual responsibilities and the compensation practices of the
Company's peers. The Committee, in its discretion, determines the type
and amount of such stock option grants. It is currently expected that
such grants will continue to be comprised principally of incentive
stock options granted annually and based upon both an assessment of the
individual's performance and the amount of previously awarded and
unexercised options the individual holds.
. Executive officer long term incentive awards (granted in cash or
options, restricted stock, stock appreciation rights or incentive stock
under the Company's 1995 Incentive Stock Plan) will be based upon the
individual's performance against agreed goals over a selected strategic
planning period. Awards to the Chairman of the Board and the President
are expected to be principally based on the Company's achievement of
return on equity goals as approved by the Board of Directors.
1998 Compensation Matters
The executive officers of the Company served as executive officers of
the constituent corporations prior to the merger. Coincident with the merger,
the Company entered into employment agreements with Mr. Cunningham and Mr. Van
Kleeck, substantially in the form set out in the merger proxy. Each of the
agreements has a three-year term, subject to annual one-year extensions.
-15-
<PAGE>
The Committee approved wage and salary guidelines for all employees in
accordance with the recommendations of the compensation study it commissioned
from a nationally recognized compensation consulting firm. This comprehensive
study includes a salary compensation structure for twenty-one grades and
provides a performance appraisal program as well as guidelines for merit
increases and promotional increases.
Salary Administration. At various meetings of the Committee post
merger, the Committee approved salary increases for members of the Bank's
Management Committee (or equivalent rank) in conjunction with the officers'
regularly scheduled annual performance appraisals. Such increases were based
upon written performance evaluations against position requirements and/or
budgeted goals and specific recommendations for salary increases within the
Company's approved performance-based salary increase matrix. Certain officers
also benefited from repositioning increases to reflect the new salary ranges set
in conjunction with the compensation study. Messrs. Cunningham and Van Kleeck's
salaries for 1998 were as set out in their employment contracts executed in
connection with the merger at the same level in effect prior to the merger. In
January 1999, Mr. Van Kleeck's salary was increased by ten percent from $272,000
to $300,000 in connection with a written performance appraisal which took into
consideration his performance at Pawling Savings Bank relative to its budget for
1998 up to the merger date, his performance in achieving the negotiation and
implementation of the merger, his performance since the merger in achieving
merger objectives, his position within his approved salary range, and that he
had voluntarily foregone an increase of 8% awarded by the Progressive
Compensation Committee in 1997.
Mr. Cunningham's salary for 1999 has not yet been reviewed by the Committee.
Bonus Payments. In December 1998, executive management recommended, and
the Committee approved, year end bonuses to management (other than Management
Committee members) totaling $277,700 in respect of their 1998 performance. In
selected cases, such bonuses included a special merger bonus which represented
either 5% or 10% of their salary, depending on their degree of involvement in
and contribution to the merger. The performance element was determined based
upon their supervisor's rating of the individual's performance in their position
during 1998. Performance awards, as a percentage of salary, ranged from 0% for
standard performance, 5-15% for above standard performance and 10-30% for
outstanding performance. In January 1999, applying the same concepts, the
Committee also approved individual merger and performance bonuses totaling
$196,000 to members of the Bank's Management Committee. In February 1999, the
Committee awarded Mr. Cunningham and Mr. Van Kleeck bonuses of $25,000 and
$27,200, respectively, for their work in connection with the merger,
representing 10% of their salaries. The Committee also approved a performance
bonus for Mr. Van Kleeck of 15% of the mid point of his approved salary range
(or $43,000), based upon the evaluation used in establishing his 1999 salary
level. In the case of Mr. Cunningham, the Committee made its own determination
of his performance during 1998, considering such factors as the performance of
Hudson Chartered pre merger, the performance of the Board of Directors post
merger, the performance of the merged Company post merger relative to both their
combined historic budgets and the merger budget, the performance of the
divisions under his supervision post merger, the results of regulatory and
external audits and the relative performance of the share price post merger. The
Committee did not formally weigh any of these factors, but determined that his
overall performance during 1998 warranted a bonus of approximately 16% of salary
(or $40,000).
Stock Options. In August 1998, the Committee approved both stock option
grants (144,000) and stock appreciation rights (90,000) based upon a strike
price of $21.275 for certain executive and senior officers of the Company.
Although the market price of the Company's stock
-16-
<PAGE>
on the date of the grants was $17.375 per share, it was deemed appropriate by
the Committee to grant the options and stock appreciation rights with an
exercise price (or base price in the case of stock appreciation rights) of
$21.275, which is the price as calculated under the Company's dividend
reinvestment plan for shareholders investing their July 1998 dividends in
additional shares of common stock in the Company. Individual stock options were
granted under the administrative policies of the former Hudson Chartered Bancorp
1995-2000 Option Plan. The Hudson Chartered Bancorp 1995-2000 Option Plan is a
policy administered by the Compensation Committee of the Board with respect to
the grant of stock options to officers. It established option target levels for
each level of officer from Vice President (or equivalent) and above. The range
of such targets is from 10,000 to 25,000 depending on title level. Initial
grants may only be received by incumbents with at least one year's experience in
their position and a performance rating of "satisfactory" or better and can be
up to 40% of targeted levels. Subsequent grants are considered annually and only
those officers rated "above standard" or higher are eligible for further awards.
Options granted under this plan are generally incentive stock options with five
year expiration dates. Stock appreciation rights were also granted to certain
executive officers in order to balance the equity incentive position of the
continuing officers in the ongoing Company. In this connection, the Committee
awarded Mr. Cunningham 4,700 five year options and 40,000 ten year SARs.
Employment Contracts. The Committee approved a standardized employment
contract to be utilized for executive vice presidents (or equivalents). These
agreements provide specific terms of employment, including a non compete
provision and certain benefits in the event of termination without cause (as
defined in the agreement) before or following a change in control. Such
agreements have been executed by four officers, effective April 1, 1999
(replacing their prior contracts of employment in the case of two of them). A
Change in Control Severance Pay Plan was also approved for all employees of the
Company. Under this plan, which is activated by a change in control only, all
employees are essentially provided with certain minimum and maximum periods of
salary and benefit continuation depending on title level and years of experience
with the Company.
The Personnel and Compensation Committee of the Board of Directors as
constituted on March 9, 1999 prepared this report.
Thomas C. Aposporos, Chairman
Robert M. Bowman
H. Todd Brinckerhoff
Richard T. Hazzard
Lewis J. Ruge
Roger W. Smith
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee, other directors, executive
officers, and their associates are, as they have been in the past, customers of,
and have had transactions with, the Bank and its predecessors. Additional
transactions may be expected to take place in the future between such persons
and the Bank. Any loans from the Bank to such persons and their associates
outstanding at any time were made in the ordinary course of business of the Bank
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons, and
did not involve more than the normal risk of collectibility and did not present
other unfavorable features to the Corporation or the Bank.
-17-
<PAGE>
During 1998, the Bank paid gross insurance premiums in the amount of
$389,763 to Brinckerhoff & Neuville, Inc., a company owned by H. Todd
Brinckerhoff, a director of the Corporation and member of the Personnel and
Compensation Committee.
During 1998, the Corporation and its subsidiaries retained the law firm
of Van DeWater & Van DeWater. Mr. E. vK. Cunningham, Jr., a director of the
Corporation, is "of counsel" to such firm and not a partner. The Corporation
paid the law firm of Van DeWater & Van DeWater an aggregate of $265,330 during
1998 for legal services rendered. The Corporation plans to continue to retain
Van DeWater & Van DeWater during 1999.
During 1998, the Bank paid North Front Street Realty, Inc., a company
owned by R. Abel Garraghan, a director of the Corporation, $112,327 for lease
and related payments on a branch office and its parking lot.
SUMMARY COMPENSATION TABLE
The Summary Compensation Table shows, for 1996 through 1998, the
compensation paid or awarded to T. Jefferson Cunningham III, the Corporation's
Chairman and its Chief Executive Officer prior to the merger, Peter Van Kleeck,
its current Chief Executive Officer, and the Corporation's other three most
highly compensated executive officers, of either the Corporation or its
predecessors prior to the merger. The inclusion of the five executive officers
in this group was based on salary and bonus earned during 1998. The five
executive officers are referred to collectively as the Corporation's "named
executive officers." Each named executive officer has held the position
indicated, or a similar position with the Corporation or one of its
predecessors, for the past five years, unless otherwise indicated.
<TABLE>
<CAPTION>
Annual Long-Term
Compensation/1/ Compensation
----------------------- ---------------------
Securities Underlying All Other
Name & Principal Position Year Salary ($) Bonus ($) Options/SARs (#)/2/ Compensation ($)/3/
- ------------------------- ---- ---------- --------- --------------------- -------------------
<S> <C> <C> <C> <C> <C>
T. JEFFERSON CUNNINGHAM III/4/ 1998 254,807 65,000 49,170 52,152
Chairman, Premier National Bancorp, Inc. 1997 232,180 75,000 19,800 41,305
and Premier National Bank 1996 218,000 35,000 59,895 35,722
PETER VAN KLEECK/4/ 1998 277,744 70,200 30,0305 50,628
President and Chief Executive Officer, 1997 273,355 87,801 30,030 28,518
Premier National Bancorp, Inc. and Premier 1996 262,073 80,942 30,030 28,704
National Bank
JOHN C. VANWORMER 1998 224,230 36,000 18,700 48,201
Executive Vice President 1997 209,000 55,000 17,325 39,607
Premier National Bancorp, Inc.; Vice 1996 198,000 28,000 -0- 37,478
Chairman, Premier National Bank
ROBERT A. GABRIELSEN 1998 164,819 28,000 17,0175 11,903
Vice President 1997 148,221 40,391 15,015 9,047
Premier National Bancorp, Inc.; 1996 134,934 37,299 12,012 6,960
Executive Vice President
Premier National Bank
</TABLE>
-18-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
PAUL A. MAISCH 1998 123,240 31,500 44,000 14,946
Treasurer, Chief Financial Officer and 1997 115,217 25,000 8,250 12,969
Chief Accounting Officer, 1996 105,000 13,000 13,068 22,071
Premier National Bancorp, Inc.;
Executive Vice President
Premier National Bank
</TABLE>
- ---------------------------------
/1/ None of the named executive officers received perquisites or other
personal benefits, securities, or property which, in the aggregate, cost the
Corporation the lesser of $50,000 or 10% of the named executive officer's salary
and bonus earned during that year.
/2/ Amounts are adjusted for the 10% stock dividend paid in January 1999 and
as to Messrs. Van Kleeck and Gabrielsen are adjusted to give effect to the
merger conversion ratio of 1.82 shares of Common Stock for each share of
Progressive common stock.
/3/ The amount shown includes director fees in 1998 of $13,750 for Mr.
Cunningham, $6,250 for Mr. Van Kleeck and $13,750 for Mr. VanWormer. The amount
also includes contributions in 1998 to the Company's 401(k) retirement plan in
the following amounts: $6,022 for Mr. Cunningham; $1,945 for Mr. Van Kleeck;
$5,475 for Mr. VanWormer; $1,903 for Mr. Gabrielsen; and $6,000 for Mr. Maisch.
The amount also includes premiums for life insurance to fund the Executive
Supplemental Income Plan in 1998 for Mr. VanWormer of $4,831. The amount also
includes amounts credited under the Company's supplemental employee retirement
plan ("SRP" and "SERP") in 1998 in the following amounts: $23,130 for Mr.
Cunningham; $26,433 for Mr. Van Kleeck; and $14,145 for Mr. VanWormer. Finally,
the amount shown also includes allocations during 1998 under the Company's
tax-qualified defined benefit pension plan of: $10,000 for Mr. Cunningham;
$16,000 for Mr. Van Kleeck; $10,000 for Mr. VanWormer; $10,000 for Mr.
Gabrielsen; and $8,946 for Mr. Maisch.
/4/ See "COMPENSATION OF EXECUTIVE OFFICERS -- Personnel and Compensation
Committee Report on Executive Compensation -- Stock Options."
/5/ Options granted by Progressive in January 1998 with respect to 1997
performance.
OPTION/SAR GRANTS IN 1998
The following table sets forth the grants of options and Stock
Appreciation Rights (SARs) in 1998 to the named executive officers.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------
Percent of Potential Realizable
Total Value at Assumed
Number of Options/ Annual Rates of Stock
Securities SARs Exercise Price Appreciation
Underlying Granted to or Base for Option Term
Options/SARs Employees Price Expiration --------------------------------
Name Granted* in 1998 ($/Sh)* Date 5% ($) 10% ($)
- ---- ------------ ----------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
T. Jefferson 5,170 $19.34 09/30/2003 $4,232 $31,526
Cunningham III/2/ 44,000/1/ 19.34 09/30/2008 281,082 951,651
----------
Total 49,170 13.2%
17.61
Peter Van Kleeck 30,030 8.1% 04/24/2008 332,528 842,691
</TABLE>
-19-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
John C. VanWormer/2/ 7,700 19.34 09/30/2003 6,303 46,953
11,000/1/ 19.34 09/30/2008 70,270 237,913
-----------
Total 18,700 5.07%
Robert Gabrielsen 17,017 4.6% 17.61 04/24/2008 188,433 477,525
Paul A. Maisch/2/ 7,700 19.34 09/30/2003 6,303 46,953
36,3001 19.34 09/30/2008 231,892 785,112
-----------
Total 44,000 11.9%
</TABLE>
- ---------------------------------
/*/Adjusted for the 10% stock dividend paid in January 1999.
/1/Stock Appreciation Rights.
/2/Options to the noted individuals were granted at $19.34 per share, adjusted
for the 10% stock dividend paid in January 1999. At that time, the market value
of the Company's Common Stock was $15.80 per share, adjusted for the 10% stock
dividend paid in January 1999. The options vest six months after the date of
grant.
See "COMPENSATION OF EXECUTIVE OFFICERS -- Personnel and Compensation
Committee Report on Executive Compensation" and Footnote 5 to the Summary
Compensation Table for further information on option grants in 1998.
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND
1998 YEAR-END OPTION/SAR VALUES
The following table sets forth the aggregated option and SAR exercises
in 1998, and 1998 year-end values for options and SARs.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs at
Options/SARs at 1998 1998
Year End/1/ Year End/2/
------------------------------- -----------------------------
Shares
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. Jefferson Cunningham
III 3,354 $29,292 79,695 49,170 $337,528 -0-
Peter Van Kleeck -0- -0- 176,577 -0- 1,124,321 -0-
John C. Van Wormer 48,734 733,908 76,781 18,700 591,142 -0-
Robert Gabrielsen 10,877 153,622 84,084 -0- 514,580 -0-
Paul A. Maisch 7,301 109,039 21,318 44,000 36,465 -0-
</TABLE>
- ---------------------------------
/1/ Options have been adjusted for the 10% stock dividends paid in January 1996,
1997 and 1999 and the 50% stock dividend paid in October, 1997.
/2/ The value of the options was based upon the closing price of $16.875 of the
Corporation's Common Stock on the American Stock Exchange on December 31, 1998,
adjusted for the 10% stock dividend paid in January 1999.
-20-
<PAGE>
Retirement Benefits
The Corporation maintains a non-contributory pension plan ("Pension
Plan" or "Plan") for employees. The Plan is a defined benefit pension plan under
the Employee Retirement Income Security Act of 1974, as amended and is qualified
under Section 401(a) of the Code. The Corporation and certain of its
subsidiaries contribute an actuarially determined amount necessary to fund the
total benefits payable to participants employed by them.
Effective as of October 1, 1997, the Pension Plan was amended from
being a "final average pay" defined benefit plan to become a "cash balance"
defined benefit plan. As a result, benefits under the Plan are determined as
follows: Effective October 1, 1997, a recordkeeping "account" was established
for each participant. The initial account balance was determined as the present
value of each participant's accrued benefit as of September 30, 1997, using the
Plan provisions in effect on September 30, 1997. For each year after September
30, 1997, eligible participants receive contribution credits, expressed
currently as five percent of Covered Earnings. In addition, employees who were
at least age 55 and had at least 10 years of service as of October 1, 1997 will
receive additional contribution credits equal to three percent of Covered
Earnings. "Covered Earnings" is defined as an employee's total earnings
(including paid bonuses).
Participants also receive annual interest credits at the prevailing
30-year U.S. Treasury Bond rate. The accrued account balance available to
participants in the Pension Plan can be no less than the actuarial present value
of the benefit they had accrued as of September 30, 1997, under the Plan rules
in effect as of that date.
The Corporation also maintains a supplemental non-qualified pension
plan (the "Supplemental Pension Plan") for Mr. Van Kleeck. The Supplemental
Pension Plan provides retirement benefits equal to the difference, if any,
between the maximum benefit allowed under the Code and the amount that would be
provided by the Pension Plan if no limits were applied. The Supplemental Pension
Plan also recognizes deferred bonuses that were not included in the Pension Plan
as Covered Earnings.
The total retirement account balances accumulated at December 31, 1998
under the Pension Plan and the Supplemental Pension Plan payable for each of the
named executive officers are as follows: Messrs. Cunningham $10,104; Van Kleeck
$530,381, VanWormer $10,104, Gabrielsen $35,069, and Maisch $9,038.
The Bank also maintains an Executive Supplemental Income Plan (the "ESI
Plan") which is similar to a deferred compensation plan. The ESI Plan is no
longer offered by the Corporation to new participants, but five officers are
currently covered. The purpose of the ESI Plan is to provide certain officers of
the Bank with supplemental retirement benefits which are payable in monthly
installments over a 15 year period. Retirement age under the ESI Plan is 65,
although employees with at least 15 years of service may retire at age 55 with
the approval of the Board of Directors. The ESI Plan also provides for benefits
to be paid in the event of death or disability. In the event of a change in
control, as defined in the ESI Plan, employees who have attained age 55 may
retire and receive actuarially reduced benefits under the ESI Plan without prior
Board approval. Employees under age 55 who are terminated without just cause
after a change in control may also receive actuarially reduced benefits under
the ESI Plan. The ESI Plan utilizes specifically designed life insurance
contracts for the payment of pre-retirement benefits and
-21-
<PAGE>
accrues for potential liability for the post-retirement benefits payable under
the plan. Under the ESI Plan, Mr. VanWormer will be entitled to annual
post-retirement benefits of $27,500.
Employment Agreements
The Corporation has entered into employment agreements with Messrs.
Cunningham and Van Kleeck. The agreements have three year terms and
automatically extend at the end of each year for an additional year unless the
Corporation notifies Messrs. Cunningham or Van Kleeck otherwise. Under the
agreements, Mr. Cunningham's current annual base salary is $250,000, and Mr. Van
Kleeck's annual base salary is $300,000. Their agreements also entitle them to
participate in all employee plans, including participation in bonus awards and
supplemental retirement plans. In the event that their employment terminates as
the result of or within 90 days after a "Triggering Event" (defined to include
the Corporation's termination of the executive without cause, a change in
control, certain adverse changes in the executive's duties, certain adverse
changes to the executive's compensation; and, solely in the case of Mr.
Cunningham, the non-renewal of the terms of his agreement), the agreements
require a termination payment of 299% of their base annual salary plus the
amount of any discretionary bonuses paid within the previous 12 months, plus a
"gross-up" payment to reimburse the executive for any golden parachute excise
taxes incurred under Federal tax laws on payments and benefits that are treated
as "excess parachute payments." In addition, the executive will be entitled to
continued coverage under health , dental, and life insurance plans for up to
three years; the immediate lapse of any restrictions on restricted shares issued
to the executive; the immediate vesting of any performance shares issued to the
executive; and any stock options granted to the executive will become
immediately vested and exercisable. The agreements also provide that the Company
will maintain a deferred compensation plan or arrangement that will allow
Messrs. Van Kleeck and Cunningham to elect to defer a portion of their base
salary and cash bonuses. In the case of Mr. Van Kleeck, his agreement further
provides for deferred amounts to be contributed to a trust that funds the
payment of benefits.
Mr. Van Kleeck's employment agreement also provides that upon
termination of his service as President and Chief Executive Officer of the
Company (unless the termination occurs for certain reasons specified in his
employment agreement), he will be entitled to serve as a consultant to the
Company for five years, in consideration for which the Company will pay an
annual consulting fee of $100,000, inclusive of the board retainer should Mr.
Van Kleeck remain as a director. Mr. Van Kleeck (or his spouse or estate, as
applicable) will be entitled to receive the annual consulting fee for the
remaining term of the consulting period in the event that Mr. Van Kleeck is
unable to perform the consulting services by reason of death or disability. The
agreement provides for a lump sum cash payment to Mr. Van Kleeck in the amount
of $300,000 if, after a change in control of the Company, Mr. Van Kleeck's
consulting services are involuntarily terminated prior to the expiration of the
five year consulting period.
The Corporation has an employment agreement with John C. VanWormer
which on July 1, 1998 was automatically renewed for another year. His annual
base salary is $220,000. Mr. VanWormer's agreement entitles him to participate
in all employee plans relating to pension, profit-sharing or other retirement
benefits; medical insurance or other customary fringe benefits; and other group
benefits. In the event of termination other than for cause, the agreement
requires a termination payment of his salary for a one year period plus the
unexpired amount of his contract compensation. In the event of a change in
control, the agreement provides for a termination payment of the difference
between (i) 2.99 times Mr. VanWormer's "base amount," as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended ("Code"),
-22-
<PAGE>
and (ii) the sum of any other parachute payments, as defined under Section
280G(b)(2) of the Code.
As described in the Report of the Personnel and Compensation Committee,
the Corporation and the Bank approved a standardized employment contract for
Executive Vice Presidents (or equivalents). These agreements provide for
specific terms of employment with one year automatic renewal periods. The
contracts also contain a non-compete provision as well as providing for certain
severance payments in the event the Company terminates the employee for reasons,
other than cause, of one year's pay or two year's pay if such termination occurs
within two years following a change in control. The Bank has entered into such
an agreement with Paul A. Maisch, Chief Financial Officer, Treasurer & Chief
Accounting Officer of the Corporation and Executive Vice President of the Bank.
His annual base salary is $136,000.
The Bank also entered into a Separation and Consulting Agreement with
Robert Gabrielsen dated March 1, 1999 whereby his Executive Severance Agreement
dated March 31, 1993 was terminated. In consideration of this new agreement, Mr.
Gabrielsen has agreed that his last day of employment with the Bank will be July
23, 1999, and that he will continue acting in his capacity as the Bank's
Director of Retail Banking until such time. During the employment period, the
Bank will continue to provide Mr. Gabrielsen with compensation and employee
benefits at the same level as was in effect immediately prior to the date of the
Agreement. At the end of the employment period, the Bank will pay Mr. Gabrielsen
(unless his employment is terminated by reason of his death, total disability or
for cause) $421,211 in a lump sum within 10 business days after his last day of
employment plus a portion of the cost of COBRA continuation coverage of group
health benefits in an amount equal to the employer contribution for medical
benefits coverage in effect immediately prior to Mr. Gabrielsens date of
resignation. The Agreement further provides that the Bank will appoint Mr.
Gabrielsen as a consultant commencing August 1, 1999 and continuing through July
31, 2000, for which the Bank will compensate him the total amount of $66,494,
payable in equal monthly installments following the close of each month in which
services are performed.
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<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative shareholder return (i.e.,
price change plus reinvestment of dividends) on the Corporation's Common Stock
during the five year period ended December 31, 1998 as compared to: (i) the S &
P 500; and (ii) a peer group index (consisting of the following eight other New
York bank holding companies with total assets of between $500 million and $1
billion: Arrow Financial Corporation, CNB Financial Corporation, FNB Rochester
Corporation, Evergreen Bancorp, Inc., State Bancorp, Inc., Sterling Bancorp,
Suffolk Bancorp, and Tompkins County Trustco, Inc. (the "1997 Peer Group") and
(iii) peer group of bank holding companies between $1 billion and $3 billion:
NBT Bancorp, Inc., Community Bank System, Inc., U.S.B. Holding Co. Inc., TrustCo
Bank Corp. of NY, BSB Bancorp, Inc., JSB Financial Inc. and Flushing Financial
(the "1998 Peer Group"). This latter peer group was created to reflect the
increase asset size of the Company as a result of the July 1998 merger.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Period Ending
-------------------------------------------------------------------------
Index 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Premier National Bancorp Inc. 100.00 115.25 126.29 223.75 299.00 248.11
S&P 500 100.00 101.32 139.39 171.26 228.42 293.69
Premier National Bancorp 1998 Peer Group 100.00 105.29 139.30 167.93 277.26 301.55
Premier National Bancorp 1997 Peer Group 100.00 113.36 154.88 191.82 314.15 339.29
</TABLE>
-24-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Directors and Executive Officers
The following table sets forth as of March 1, 1999 information
concerning beneficial ownership of the Corporation's Common Stock by each
director, by each of the named executive officers, and by all directors and
executive officers of the Corporation, as a group. The number of shares shown as
beneficially owned by each director and executive officer is determined under
the rules of the SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under the SEC's rules, beneficial
ownership includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares which the individual had
the right to acquire within 60 days of March 1, 1999 through the exercise of any
option, warrant or right. Unless otherwise indicated, each person has sole
investment and voting power with respect to the shares set forth in the table.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name Beneficial Ownership/1/ Class
---- ----------------------- ----------
<S> <C> <C>
Elizabeth P. Allen 36,504 *
Thomas C. Aposporos/15/ 31,182 *
Robert M. Bowman/2/ 55,743 *
H. Todd Brinckerhoff/3/ 87,741 *
George M. Coulter 58,458 *
Edward vK. Cunningham, Jr./4/ 923,423 5.64%
T. Jefferson Cunningham III/5/ 1,166,308 7.12%
Tyler Dann/6/ 405,346 2.47%
Thomas C. DeBenedictus/7/ 2,850 *
Robert Gabrielsen 106,971 *
R. Abel Garraghan/8/ 23,400 *
Richard Hazzard 37,860 *
Paul A. Maisch/9/ 47,398 *
Warren R. Marcus/10/ 328,234 2.00%
Richard Novik 34,047 *
John J. Page/11/ 60,019 *
Lewis J. Ruge/12/ 90,637 *
Archibald A. Smith III 23,123 *
Roger W. Smith/13/ 27,794 *
David Swinden 22,486 *
Peter Van Kleeck 245,367 1.49%
John Charles VanWormer/14/ 214,125 1.30%
Directors and executive officers as a group (26 3,201,246 19.49%
persons):
</TABLE>
* Less than 1% of the class. At the close of business on March 1, 1999, there
were 15,756,332 shares of Common Stock outstanding. Where necessary, percentages
were calculated by adding shares subject to exercisable stock options to the
shares of Common Stock outstanding.
-25-
<PAGE>
/1/ Includes shares of Common Stock that could be acquired within 60 days
pursuant to the exercise of stock options in the following amounts: Mrs. Allen,
21,621 shares; Mr. Bowman, 12,278 shares; Mr. T. J. Cunningham III, 84,865
shares; Mr. Gabrielsen, 84,084 shares; Mr. Hazzard, 21,621 shares; Mr. Maisch,
29,018 shares; Mr. Novik, 21,621 shares; Mr. Page, 21,621 shares; Mr. Ruge,
12,278 shares; Mr. Archibald A. Smith III, 21,621 shares; Mr. Roger W. Smith,
21,621 shares; Mr. Swinden, 20,120 shares; Mr. Van Kleeck, 176,577 shares; Mr.
VanWormer, 84,481 shares; and all directors and executive officers as a group,
668,347 shares.
/2/ Includes 7,102 shares of Common Stock owned by Mr. Bowman's spouse and 6,422
shares of Common Stock owned by his daughter, as to which beneficial ownership
is disclaimed. Also includes 1,679 shares of Common Stock held by a company
owned by Mr. Bowman and 5,102 shares for which he is custodian for his
grandchildren.
/3/ Includes 57,640 shares of Common Stock held by companies owned by Mr.
Brinckerhoff.
/4/ Includes 28,535 shares of Common Stock held in family trusts of which Mr. E.
vK. Cunningham, Jr. is trustee (which shares are also reflected as being
beneficially owned by T. J. Cunningham III -- see note 5), 856,347 shares held
by the George Gale Foster Corporation ("GGF"), a personal holding company of
which Mr. E. vK. Cunningham, Jr. is chairman of the board of directors and
president (which shares are also reflected as being beneficially owned by T. J.
Cunningham III, Jr. -- see note 5), 35,787 shares held in retirement accounts,
and 2,753 shares held by Mr. E. vK. Cunningham, Jr.'s spouse as to which
beneficial ownership is disclaimed.
/5/ Includes 28,535 shares of Common Stock held in family trusts of which Mr. T.
J. Cunningham III has the right to qualify as trustee (which shares are also
reflected as being beneficially owned by Mr. E. vK. Cunningham, Jr. -- see note
4), 856,347 shares held by GGF (which shares are also reflected as being
beneficially owned by Mr. E. vK. Cunningham, Jr. -- see note 4), 20,814 shares
held in the names of Mr. T. J. Cunningham III's spouse and children, 54,939
shares held in retirement accounts, and 1,075 shares of Common Stock allocated
to Mr. T. J. Cunningham III under the Corporation's ESOP.
/6/ Includes 375,106 shares of Common Stock held in the names of several
businesses with which Mr. Dann is associated, and 1,679 shares held by Mr.
Dann's spouse.
/7/ Includes 275 shares of Common Stock held by Mr. DeBenedictus' spouse.
/8/ Includes 1,400 shares of Common Stock owned by Mr. Garraghan's spouse as
custodian for a child, 2,801 shares owned by Mr. Garraghan's spouse, 2,800
shares owned by two children, and 2,801 shares held in a profit sharing plan
trust.
/9/ Includes 4,380 shares of Common Stock held jointly with Mr. Maisch's mother,
and 863 shares of Common Stock allocated to Mr. Maisch under the Corporation's
ESOP.
/10/ Mr. Marcus is President of WRM Equity Management, Inc., a registered
investment advisor, and reports sole voting and investment power as to 206,494
shares of Common Stock held on behalf of Mellon Trust Company as Trustee for a
pension fund as to which Warren Marcus Associates, Inc. is a registered
investment adviser. Also includes 5,603 shares of Common Stock owned by Warren
Marcus Associates, Inc. Pension Trust, and 4,202 shares of Common Stock owned by
Mr. Marcus' spouse as to which beneficial ownership is disclaimed.
-26-
<PAGE>
/11/ Includes 19,012 shares of Common Stock held by Mr. Page's spouse and
children.
/12/ Includes 15,217 shares of Common Stock owned by Mr. Ruge's spouse.
/13/ Includes 3,170 shares of Common Stock held in the name of Mr. Smith's
children.
/14/ Includes 548 shares of Common Stock held in trust for the benefit of Mr.
VanWormer, and 13,019 shares of Common Stock allocated to Mr. VanWormer under
the Corporation's ESOP.
/15/ Includes 605 shares of common stock held by Mr. Aposporos' wife in an IRA
account.
Security Ownership of Certain Beneficial Owners
As of March 1, 1999, the following persons are known to the Corporation
to be beneficial owners of more than five percent of the Corporation's Common
Stock. The information set forth in the table is as reported in Schedules 13D as
filed with the SEC, and other information provided to the Corporation.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class
------------------- -------------------- ----------
<S> <C> <C>
George Gale Foster Corporation/1/ 856,347 5.43%
c/o Van DeWater & Van DeWater
Mill & Garden Streets
P.O. Box 112
Poughkeepsie, New York 12602
</TABLE>
- ---------------------------------
/1/ GGF is a registered bank holding company under the Bank Holding Company Act
of 1956, as amended, of which Mr. Edward vK. Cunningham, Jr. is Chairman of the
Board and President, and Mr. T. Jefferson Cunningham III is a director and Vice
President. See also the notes applicable to Mr. E. vK. Cunningham, Jr. and Mr.
T. J. Cunningham III in the table set forth under "Security Ownership of
Directors and Executive Officers."
Certain Reports
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, certain of its executive officers, and persons who own
more than ten percent of a registered class of the Corporation's equity
securities, to file with the Corporation and the SEC initial reports of
ownership and reports of changes in ownership of any equity securities of the
Corporation. During 1998, to the best of the Corporation's knowledge, all
required reports were filed on a timely basis. In making this statement, the
Corporation has relied on the written representations of its directors and
executive officers and copies of the reports provided to the Corporation.
-27-
<PAGE>
INDEPENDENT AUDITORS
Deloitte & Touche LLP has been selected as the principal accountant to
audit the financial statements of the Corporation for 1999.
Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting with the opportunity to make a statement if they desire to do
so and to be available to respond to appropriate questions.
ANNUAL REPORT
A copy of the Corporation's Annual Report on Form 10-K filed with the
SEC for the year ended December 31, 1998 (without exhibits) accompanies this
proxy statement. Copies of the exhibits to such report may be obtained upon
request to Paul A. Maisch, Chief Financial Officer, Premier National Bancorp,
Inc., Route 55, LaGrangeville, New York 12540. A reasonable expense may be
charged for the furnishing of exhibits to the Form 10-K. The Annual Report on
Form 10-K is not part of the proxy solicitation materials.
SOLICITATION OF PROXIES
Solicitation of proxies may be made by mail, personal interviews,
telephone and facsimile by officers and employees of the Corporation and its
subsidiaries. Brokerage houses and other custodians, nominees and fiduciaries
will be requested to forward soliciting material to the beneficial owners of the
common stock held of record by such persons. Expenses for such solicitation will
be borne by the Corporation.
SUBMISSION OF SHAREHOLDER PROPOSALS AND NOMINATIONS
Under the Corporation's by-laws, shareholders may submit proposals to
be considered for shareholder action at the 2000 annual meeting of shareholders
or nominations for directors to be elected at the annual meeting of shareholders
if they do so in accordance with the applicable time limits under SEC Rule
14a-8. Any such proposals must be in writing, contain the information specified
by the by-laws, and be received by the Corporate Secretary of the Corporation no
later than December 11, 1999. Any shareholder proposals or nominations for
directors not submitted in accordance with these procedures will not be
considered a proper subject for shareholder action.
OTHER MATTERS
The Board of Directors knows of no other business to be presented at
the Annual Meeting. If, however, any other business should properly come before
the Annual Meeting, or any adjournment thereof, it is intended that the proxy
will be voted with respect thereto in accordance with the best judgment of the
persons named in the proxy.
By Order of the Board of Directors
/s/ Robert Apple
-----------------------------------
Robert Apple
Corporate Secretary
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<PAGE>
PROXY
PREMIER NATIONAL BANCORP, INC.
Annual Meeting of Shareholders - May 13, 1999
This Proxy Solicited on Behalf of the Board of Directors
of Premier National Bancorp, Inc.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder of Premier
National Bancorp, Inc. (the "Corporation"), LaGrangeville, New York, does hereby
nominate, constitute and appoint Robert Apple and Gerardina Mirtuono, and each
of them, as true and lawful attorneys-in-fact (each of whom shall have full
power of substitution) to vote all shares of Common Stock of the Corporation
standing in the name on its books as of the close of business on April 5, 1999
at the Annual Meeting of Shareholders to be held on May 13, 1999, at 9:00 a.m.,
or at any adjournments or postponements thereof, with all powers the undersigned
would possess if personally present, as follows on the reverse.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE>
[X] Please mark
votes as in
this example.
This proxy, when properly executed, will be voted in the manner directed
herein by the shareholder. If no direction is given, this proxy will be voted
FOR the nominees referred to in Item 1 (including any substitute nominee in
the case of unavailability) and FOR Item 2.
<TABLE>
<S> <C>
1. With respect to election as directors. FOR AGAINST ABSTAIN
Nominees: Edward vK. Cunningham, Jr., Warren Marcus, 2. With respect to the proposal to [_] [_] [_]
John Charles Van Wormer, John J. Page, David A. Swinden amend the Company's 1995 Stock
and Archibald A. Smith III, or any substitution nominee Option Plan as described in the
should any of the above become unavailable for any accompanying Proxy Statement.
reason.
FOR WITHHELD
ALL [_] [_] FROM ALL
NOMINEES NOMINEES
[_] _______________________________________________________ 3. In their discretion on any other matters which may be
To withhold authority to vote for any individual nominee(s), brought before the Annual Meeting or any adjournments or
write the name(s) on the line above. postponements thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
When signing as Attorney, Executor, Administrator, Trustee or
Guardian, please give full title. If more than one Trustee, all
should sign. All joint owners must sign. PLEASE MARK, SIGN,
DATE, AND PROMPTLY RETURN THIS PROXY TO: EQUISERVE, P.O. BOX
8040, BOSTON, MA 02266-8040 USING THE ENCLOSED ENVELOPE.
</TABLE>
