PROGRESSIVE BANK, INC.
1301 Route 52, P. O. Box 7000
Fishkill, New York 12524
Telephone: (914) 897-7400
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
April 25, 1996
Notice is hereby given that the annual meeting of shareholders ("Annual
Meeting") of Progressive Bank, Inc. ("Progressive") will be held at the main
office of its subsidiary, Pawling Savings Bank, on Route 22, Pawling, New
York, on Thursday, April 25, 1996 at 6:30 p.m. The purposes of the Annual
Meeting are:
1. To elect four members of the Board of Directors of Progressive for three
year terms;
2. To approve the selection of KPMG Peat Marwick LLP, independent certified
public accountants, as Progressive's independent auditors for the forthcoming
year; and
3. To transact any other business which may properly come before the meeting,
or any adjournment thereof.
Only shareholders of record at the close of business on March 15, 1996, are
entitled to notice of, and to vote at, the meeting.
By order of the Board of Directors,
(Signature)
Beatrice D. Parent
Corporate Secretary
WE URGE YOU TO SIGN AND RETURN THE PROXY IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN REVOKE YOUR
PROXY AND VOTE IN PERSON.
March 28, 1996
PROGRESSIVE BANK, INC.
1301 Route 52, P.O. Box 7000
Fishkill, New York 12524
Telephone: (914) 897-7400
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
April 25, 1995
GENERAL INFORMATION
This proxy statement ("Proxy Statement") is furnished in connection with the
solicitation of Proxies by the Board of Directors of Progressive Bank, Inc.
("Progressive") for the annual meeting of shareholders ("Annual Meeting") of
Progressive to be held on April 25, 1996 and at any adjournment thereof. The
approximate date on which this Proxy Statement and the enclosed proxy card
are first being sent or given to shareholders is March 28, 1996.
Any shareholder submitting a Proxy may revoke it at any time before its
exercise, and any shareholder who attends the Annual Meeting in person may
withdraw the Proxy at any time before it is voted and vote his or her shares
in person. A Proxy may be revoked by giving prior notice in writing to such
effect to the Secretary of Progressive or by due execution of a Proxy bearing
a later date.
Shares represented by properly executed Proxies will be voted in accordance
with directions indicated thereon. Proxies that contain no directions to the
contrary will be voted FOR the election of the directors nominated by the
Board of Directors and FOR the approval of the selection of KPMG Peat Marwick
LLP as Progressive's independent auditors for the fiscal year ending December
31, 1996.
Progressive is organized under the New York Business Corporation Law. Its
only subsidiary is Pawling Savings Bank ("Pawling") which is a New York
Savings Bank. Pawling is wholly owned by Progressive.
In addition to solicitation by mail, directors, officers and employees of
Progressive and Pawling may solicit Proxies from the shareholders of
Progressive personally or by telephone or telegram without additional
remuneration. Arrangements will be made with banks, brokerage firms and
others to forward proxy materials to their principals and Progressive expects
to reimburse them for their reasonable out of pocket expenses in handling
proxy materials or beneficial owners of Progressive's common stock.
Progressive may retain the services of Registrar and Transfer Company to aid
in the solicitation of Proxies. Progressive will bear its own expenses and
all other expenses in connection with the solicitation of Proxies for the
Annual Meeting.
VOTING SECURITIES
The record date for determining shareholders entitled to vote at the Annual
Meeting and any adjournment thereof has been set as March 15, 1996. As of the
record date, there were 2,630,601 shares of common stock of Progressive, par
value $1.00 ("Progressive Common Stock"), outstanding and entitled to vote at
the Annual Meeting. Each share of Progressive Common Stock is entitled to one
vote. There are no other classes of capital stock of Progressive outstanding.
ELECTION OF DIRECTORS
Progressive's Certificate of Incorporation and By-laws provide for a Board of
Directors of such number of directors as may be fixed by the Board within the
By-law proscription of not less than 10 nor more than 15. The Certificate of
Incorporation provides that the Board of Directors shall be divided into
three classes and each class shall have a three-year term. At the Annual
Meeting one class of four directors will be elected to serve until the annual
meeting held in 1999 and until their respective successors shall be elected
and shall qualify. The name of each of the four director-nominees who are
proposed to be elected at the Annual Meeting, is set forth below. None of the
persons named below has any family relationship to any executive officer or to
any other director of Progressive.
In the event that any director-nominee should become unable or declines to
serve, the persons named in the Proxy will vote for a substitute designated
by the Board of Directors.
<TABLE>
NOMINEES FOR ELECTION
TO THE BOARD OF DIRECTORS
FOR THREE YEAR TERMS
EXPIRING IN 1999
<CAPTION>
Year First Elected
Name of Nominee Age Principal Occupation, Other Directorships a Director of
and Position with Progressive Progressive
<S> <C> <C> <C>
Elizabeth P. Allen 53 Chairman of the Board of Directors of Pawling Savings Bank. 1986
Trustee and Vice Chairman of the Peale Center for Christian
Living, a not-for-profit church corporation. Director of
Pawling since 1985.
George M. Coulter 67 Private practice of dentistry. Director of Pawling 1986
since 1971.
Archibald A. Smith, III 47 Headmaster, Trinity Pawling School, Pawling, New York, a 1995
boys college preparatory independent school. Director of
Pawling since 1995.
Peter Van Kleeck 61 President and Chief Executive Officer of Progressive 1990
since 1991. From 1987 to 1990, Mr. Van Kleeck was President
and Chief Operating Officer of Pawling and became Chief
Executive Officer of Pawling in January 1991. Director of
Pawling since 1987.
</TABLE>
<TABLE>
DIRECTORS WHOSE TERMS DO NOT
EXPIRE UNTIL 1997 AND 1998
<CAPTION>
Year First Elected
Name of Director Age Principal Occupation, Other Directorships a Director of
and Position with Progressive Progressive
<S> <C> <C> <C>
Thomas C. Aposporos 43 Chairman of the Board of Progressive. Principal, Aposporos 1988
and Son, licensed real estate brokers. Director of Pawling
since 1989.
Donald B. Dedrick 74 Vice President of Donald B. Dedrick Agency, Inc., a 1986
general insurance agency. Retired Director of Pawling.
Richard T. Hazzard 52 President, Lyman A. Beecher, Inc., d/b/a Beecher Funeral 1986
Home and Dwyer Funeral Home. Director of Pawling since
1978.
Richard Novik 55 Owner and President of WKIP Broadcasting Corp. of 1986
Poughkeepsie, New York and Dutchess Communications Corp.
Director of Pawling since 1985.
John J. Page 57 President of H. G. Page & Sons, Inc., a building material 1986
supplier and owner of John Page Development Company.
Director of Pawling since 1981.
Roger W. Smith 56 President of Pawling Corporation, a manufacturer of rubber 1992
and plastic products. Director of Pawling since 1991.
David A. Swinden 64 Executive Vice President of Imperial Schrade Corp., 1994
Ellenville, New York. Director of Pawling since 1994.
</TABLE>
STOCK OWNERSHIP OF DIRECTORS AND OTHERS
The following tables set forth the number of shares of Common Stock held by
persons owning 5% or more of Progressive's Common Stock, by directors and
nominees for director, and by directors and executive officers, as a group.
<TABLE>
<CAPTION>
Shares of Common Stock
Owned Beneficially and
Name and Address of 5% Shareholders of Record Percent of Class<F1>
<S> <C> <C>
Builtland Partners 253,626 9.64%
1271 Avenue of the Americas
New York, New York 10020
Peter B. Cannell & Co., Inc.<F2> 248,900 9.46%
919 Third Avenue
New York, New York 10022
The Guardian Life Insurance 187,162 7.11%
Company of America<F3>
201 Park Avenue South
New York, New York 10003
Dimensional Fund Advisors, Inc.<F4> 167,500 6.37%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</TABLE>
<TABLE>
Options
Directors and Nominees Exercisable<F5>
<S> <C> <C> <C>
Elizabeth P. Allen 12,156 -- 7,200
Thomas C. Aposporos 9,800 -- 7,200
George M. Coulter 28,035 1.07% 7,200
Donald B. Dedrick 11,665 -- 6,000
Harold Harris<F6> 22,058 -- 7,200
Richard T. Hazzard 12,608 -- 7,200
Armando Mostachetti<F6> 9,616 -- 7,200
Richard Novik 11,338 -- 7,200
John J. Page 26,708<F7> 1.02% 7,200
Archibald A. Smith, III 7,700 -- 7,200
Roger W. Smith 9,256 -- 7,200
David A. Swinden 7,488 -- 6,700
Peter Van Kleeck 35,107 1.33% 16,232
All directors, nominees for director
and executive officers as a group (16 persons) 239,818 9.12% 124,406
<FN>
<F1> Unless a percentage is specified, the amount of shares for each director
does not exceed one percent of the class.
<F2> A registered investment advisor. It has sole investments and voting power
over 221,900 shares. An additional 27,000 shares are owned by individuals for
which it has investment decision and voting power with a bank. Of said 27,000
shares, 16,000 are owned by the wife of Peter B. Cannell. Beneficial ownership
is disclaimed by it.
<F3> Includes affiliates Guardian Investors Services Corporation, The Guardian
Park Avenue Fund, Inc., The Guardian Stock Fund, Inc. and The Guardian
Employees' Incentive Savings Plan.
<F4> Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 167,500 shares of
Progressive Bank, Inc. stock as of December 31, 1995, all of which shares are
held in portfolios of DFA Investment Dimensions Group, Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employees benefit
plans, all of which Dimensional Fund Advisors, Inc. serves as investment
manager. Dimensional disclaims beneficial ownership of all such shares.
<F5> Shares issuable pursuant to options exercisable on or before May 24,
1996, are included in the shares shown in column headed "Shares of Common
Stock Owned Beneficially and of Record".
<F6> Retiring as Director prior to Annual Meeting.
<F7> Includes 13,062 shares held by minor children living at home.
</TABLE>
COMPARISON OF FIVE YEAR PERFORMANCE
The following chart compares the yearly percentage change in Progressive's
cumulative total shareholder return on its Common Stock during the five
fiscal years ended December 31, 1995 with (1) the total cumulative return of
all companies whose equity securities are traded on the NASDAQ market and (2)
the total cumulative return of banking companies traded on the NASDAQ market.
The comparison assumes $100 was invested on January 1, 1991 in the Company's
Common Stock and in each of the foregoing indices and assumes reinvestment of
dividends.
<TABLE>
GRAPH DATA PROVIDED BELOW
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Progressive Bank, Inc. 100 123.97 363.64 550.41 780.99 996.69
NASDAQ 100 160.56 186.87 214.51 209.69 296.30
NASDAQ Banks 100 164.09 238.85 272.39 271.41 404.35
</TABLE>
OTHER INFORMATION ABOUT THE BOARD AND CERTAIN COMMITTEES
Progressive's Board of Directors has standing Audit, Nominating, and Human
Resources Committees.
The Audit Committee reviews examinations of Progressive and Pawling that are
conducted by regulatory agencies and reviews audits of Progressive and
Pawling by internal audit staff and independent auditors. It met five (5)
times during 1995. In addition, audit matters were discussed at meetings of
the Committee at which, on one occasion KPMG Peat Marwick LLP, Progressive's
independent auditors, participated in the discussion. Its present members are
George M. Coulter, Richard T. Hazzard, Archibald A. Smith, III, Roger W.
Smith and David A. Swinden.
The Human Resources Committee determines the personnel, salary, employee
benefits policies and related matters for the officers and employees of
Progressive and Pawling. It had five (5) meetings during 1995. The present
members of the Committee are Thomas C. Aposporos, Harold Harris, Roger W.
Smith, David A. Swinden and Peter Van Kleeck.
The Nominating Committee reviews persons suggested as nominees for election
as members of the Board and persons suggested as executive officers of
Progressive and Pawling. It had two (2) meetings during 1995. In addition,
the members carried out their duties as they met from time to time and
discussed various persons proposed for corporate office. Its present members
are Donald B. Dedrick, Richard T. Hazzard, Richard Novik, John J. Page and
Roger W. Smith. The slate of directors of Progressive for election by
shareholders at the Annual Meeting was recommended by the Nominating
Committee and approved by the Board of Directors of Progressive.
Any shareholder wishing to suggest nominees to the Board of Directors may
forward their suggestions along with nominating information to: Beatrice D.
Parent, Secretary, Progressive Bank, Inc., 1301 Route 52, P.O. Box 7000,
Fishkill, New York 12524-7000. To be eligible for election to the Board of
Directors the following information concerning a proposed nominee must be
submitted in writing to Progressive's Secretary on a date not earlier than
one hundred eighty days prior to and not later than the date set forth below:
(i) name; (ii) business address; (iii) residence address; (iv) present
occupation or employment and the name, principal business and address of any
corporation or other organization in which said employment is carried on; (v)
information as to all occupations, positions, offices or employments during
the last ten years, giving starting and ending dates of each and the name,
principal business and address of any business corporation or other business
organization in which each said occupation, position, office or employment
was carried on; (vi) a statement as to whether such person has been a
participant in any proxy contest involving Progressive or any other
corporation within the past ten years and the principals, subject matter, the
relationship of such person to the principals and outcome of such contest;
(vii) a statement as to whether or not during the past ten years such person
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) and if so the dates, nature of conviction, name and
location of court, and penalty imposed or other disposition of the case; and
(viii) the amount of Progressive's Common Stock held by such person
beneficially, directly or indirectly, or of record but not beneficially. The
final date for submission of proposed nominees for election at the 1997
annual meeting of shareholders is November 25, 1996.
On August 11, 1992, Progressive and the members of the Board of Directors
were named as defendants in a stockholders' derivative suit commenced by
David Freer, Jr., a shareholder seeking to declare the March 8, 1991
retirement agreement entered into among Progressive, Pawling and E. Hale
Mayer, former Chairman of the Board, President and Chief Executive Officer of
Progressive, null and void. The plaintiff demands that payments made to Mr.
Mayer under said Agreement be returned and that the individual members of the
Board provide an accounting. The Agreement provided for termination of Mr.
Mayer's Employment Contract and for payment to him of $300,000 in a lump sum,
monthly payment of his salary for the balance of 1991 and monthly payments to
him in 1992, 1993 and 1994 of $80,000, per annum. This action is still
pending as of the date hereof. Subject to the limitations specified by
statute, each Director is the beneficiary of an indemnification agreement
with Progressive pursuant to which Progressive has undertaken their defense
and will, subject to statutory limitations, reimburse individual Directors
for losses and costs incurred by them arising out of their activities as
members of the Board. In 1994 the Court granted Progressive and its Directors
summary judgment dismissing the complaint. Mr. Freer has appealed that
decision. In February 1996 his appeal was denied.
During 1995 all Directors and Officers made timely filings with respect to
Form 4 Reports. In making this statement Progressive has relied on the
written representations of its incumbent Directors and Officers.
During 1995, there were 13 meetings of the Board of Directors of Progressive.
The only absences were 3 directors, one meeting each. No Director attended
fewer than 75% of the meetings of the Board of Directors and the Committees
of which they were a member, in the aggregate, in 1995.
HUMAN RESOURCES COMMITTEE REPORT
The Committee performs, in addition to other duties, the process of
determining the compensation to be paid to the President and Chief Executive
Officer and to other officers. Mr. Van Kleeck's compensation is based upon an
employment contract entered into in 1994. At that time, the then constituted
Committee approved a base salary amount which it deemed to be consistent with
the base salary paid to executives of similar rank and expertise at banking
institutions which the Committee considered to be comparable.
The Committee, in hiring new officers, applies the same compensation approach
as in the case of Mr. Van Kleeck.
Raises and bonuses for officers are based on the Committee's overall review
of the performance of the individual officer viewed in the circumstances of
the profits of the business for the year in question. In 1993 the Board
approved an executive incentive plan pursuant to which performance goals are
set annually and incentive compensation is paid on the basis of the degree of
achievement of such goals.
In 1993, the Company adopted a formal Stock Option Grant Program linked to
the attainment of the goals set for the above referenced Incentive Plan.
Submitted by the Committee as constituted in 1995: Chairman Roger W. Smith,
Thomas Aposporos, Harold Harris, David A. Swinden and Peter Van Kleeck.
EXECUTIVE OFFICERS
Each executive officer is appointed by the respective Directors of each
company and serves until his or her successor is duly chosen and qualified.
<TABLE>
<CAPTION>
Offices Held with Executive
Name (Age) Progressive and Pawling Officer Since
<S> <C> <C>
Peter Van Kleeck (61) President, Chief Executive Officer and a Director of both 1987
Progressive and Pawling
J. Donald Weand, Jr. (49) Senior Vice President, Chief Lending Officer of Pawling 1991
Robert A. Gabrielsen (37) Senior Vice President, Chief Financial Officer of Pawling 1991
and Treasurer of Progressive
Robert Apple (40) Vice President of Progressive 1990
</TABLE>
All of the executive officers have been employed by Progressive or Pawling
for more than 5 years except for Messrs. Weand and Gabrielsen. Mr. Weand
joined Pawling in 1991. Prior thereto from 1989 to 1991 he was President,
Director and CEO of a Stamford, Connecticut bank. Mr. Gabrielsen also joined
Pawling in 1991. From 1986 to 1991 he was Senior Vice President of the
Administrative Division and Chief Financial Officer of an Albany, New York
bank.
The following table sets forth information as to compensation paid to each
Executive Officer whose annual salary and bonus exceeded $100,000:
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation Awards<F1>
Annual All Other
Name and Principal Position Year Salary<F2> Incentive<F3> Options Compensation<F4>
<S> <C> <C> <C> <C> <C>
Peter Van Kleeck, 1995 $232,179 $45,000 31,000<F6> $13,457
President and CEO 1994 212,306 6,750<F5> 4,732 11,001
1993 200,414 69,900<F5> -0- 12,225
J. Donald Weand, Jr., 1995 $133,920 $20,000 13,333<F6> $7,690
Senior Vice President, 1994 113,153 27,000 3,756 5,793
Chief Lending Officer 1993 99,616 10,000 -0- 6,438
Robert A. Gabrielsen, 1995 $114,503 $20,000 13,333<F6> $6,835
Senior Vice President, 1994 96,624 27,000 3,622 5,347
Chief Financial Officer 1993 92,222 10,000 -0- 5,942
<FN>
<F1> Neither Progressive nor Pawling has a Restricted Stock Plan, Stock
Appreciation Rights Plan or a Long Term Incentive Plan.
<F2> Non-cash remuneration and personal benefits paid by Progressive and
Pawling are not disclosed as they do not exceed the lesser of $50,000 or 10%
of the compensation reported in the above chart for any person named.
<F3> In 1993, Pawling established a formal incentive plan, in lieu of the
prior discretionary bonus arrangement, pursuant to which the Board annually
sets performance targets, the attainment of which entitles eligible
executives to incentive compensation based on levels of achievement in
respect to the targets.
<F4> Company contribution to Retirement Plan for benefit of named officer.
<F5> In 1993, Peter Van Kleeck elected to take payment in that year of
$54,000, which ordinarily would have been paid to him in 1994.
<F6> See 1995 Stock Option Grants to Executive Officers.
</TABLE>
The following table sets forth information as to options exercised by the
officers named in the Summary Compensation Table and the December 31, 1995
value of unexercised options:
<TABLE>
AGGREGATED OPTION EXERCISES IN 1995 AND
DECEMBER 31, 1995 OPTIONS VALUES
<CAPTION>
Value of Unexercised in
Number of Unexercised The Money Options at
Shares Acquired Value Options at 12/31/95 12/31/95<F1>
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Peter Van Kleeck, 2,500 $21,688 16,232 17,000 $ 91,476 $63,750
President and CEO
J. Donald Weand, Jr., -- -- 12,089 7,000 125,464 26,250
Sr Vice President and
Chief Lending Oficer
Robert A. Gabrielsen, 2,000 44,000 9,955 7,000 71,390 26,250
Sr. Vice President
Chief Financial Officer
<FN>
<F1> Shareholders should be aware that the above Executives continue to hold
the shares received by them upon exercise of their options and therefore the
"value realized" and "value of unexercised options" are paper profits and
they have the same risk of profit or loss as any other shareholder.
</TABLE>
<TABLE>
1995 STOCK OPTION GRANTS TO EXECUTIVE OFFICERS
<CAPTION>
Potential Realized Value at
Date of # of Shares Exercise Expiration Assumed Rates of Stock Price Growth<F1>
Name Grant Granted Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Peter Van Kleeck 01/18/95 6,000 $23.625 01/18/05 $ 89,146 $ 225,913
08/08/95 25,000<F2> 25.75 08/08/05 404,851 1,025,972
J. Donald Weand, Jr. 01/18/95 3,333 23.625 01/18/05 49,520 125,495
08/08/95 10,000<F3> 25.75 08/08/05 161,940 410,389
Robert A. Gabrielsen 01/18/95 3,333 23.625 01/18/05 49,520 125,495
08/08/95 10,000<F3> 25.75 08/08/05 161,940 410,389
Robert Apple 01/18/95 1,000 23.625 01/18/05 14,858 37,652
<FN>
<F1> Gains, if any, will depend on actual market performance of the Common
Stock. To the extent gains occur, all shareholders will benefit
commensurately.
<F2> Of such amount, 8,000 shares vested immediately, 8,000 shares will vest
August 1996 and 9,000 shares will vest August 1997.
<F3> Of such amount, 3,000 shares vested immediately, 3,000 shares will vest
August 1996 and 4,000 shares will vest August 1997.
</TABLE>
Directors Compensation
In 1995 Progressive and Pawling Board members received meeting attendance
fees of $400 each. In addition, Board members also receive an annual retainer
fee of $5,000 per annum for each Board member and payment of a stipend of
$2,500 per month to the Chairman of the Board of Progressive and $1,500 per
month to the Chairman of Pawling. In 1995, Mr. Aposporos and Ms. Allen were
paid stipends of $30,000 and $18,000, respectively. Mr. Van Kleeck does not
receive any such payments. Board members also receive non-qualified stock
options (See Heading "Directors Non-Qualified Stock Option Plan"). Directors
of Progressive, but not Pawling, who have been a director at least five
years, are entitled to retirement or severance benefits upon leaving the
Board in an amount equal to the amount of the annual Progressive retainer fee
multiplied by the number of years of service as a Director, but not more than
fifteen years.
Employment Agreements
Mr. Van Kleeck has an Employment Agreement which expires on December 31,
1999. This Agreement provides that Mr. Van Kleeck will receive a base salary
of $231,000 subject to increases and bonuses as may be granted by the Board
of Directors from year to year. Under the Agreement, Mr. Van Kleeck may defer
a portion of his salary. In the event of a change of control, he would, upon
termination, as defined, receive his salary for the remainder of the term
plus if such termination occurs during the last three years of the term, an
amount equal to thirty-six months salary less the salary for the number of
months to the end of the term net of excise tax if applicable.
In 1993 Pawling entered into severance agreements with Messrs. Weand and
Gabrielsen which provided for each of them that in the event of a change in
control of Progressive or Pawling and his termination within two years
thereafter that he would be entitled to a severance payment equal to
approximately three times his average annual compensation for his employment
period but not averaged over more than five years.
Pension Plan Benefits
Progressive maintains a non-contributory defined benefit pension plan through
the RSI Retirement Trust (the "Plan"). The Plan covers full-time employees
who have attained the age of 21 years and completed at least one year of
service with Progressive or Pawling. The annual normal retirement benefit is
equal to a percentage of the employee's average annual compensation during
the 60 consecutive calendar months within the final 120 consecutive calendar
months of the employee's credited service affording the highest such average,
multiplied by the number of years of credited service with a maximum annual
benefit of 60%. Retirement benefit payments are comprised of three
components: for service prior to October 1, 1990, 2% times years of credited
service times average annual earnings; for service subsequent to September
30, 1990 and prior to July 1, 1993, 1.667% times years of credited service
times average annual earnings; and for service subsequent to June 30, 1993,
1.5% times years of credited service times average annual earnings. Under the
pension plan, Progressive makes an annual contribution for the benefit of
eligible employees, computed on an actuarial basis.
The following table indicates annual benefits payable upon retirement for
various levels of compensation and periods of service under the Plan. The
benefit amounts listed in the table are not subject to any deduction for
Social Security or other offsets.
<TABLE>
<CAPTION>
Years of Benefit Service
Final Average Salary 10 15 20 25 30
<S> <C> <C> <C> <C> <C>
$ 75,000 11,250 16,875 22,500 28,125 33,750
95,000 14,250 21,375 28,500 35,625 42,750
115,000 17,250 25,875 34,500 43,125 51,750
135,000 20,250 30,375 40,500 50,625 60,750
150,000 22,500 33,750 45,000 56,250 67,500
</TABLE>
Total Retirement Benefit is limited to 60% of Average Annual Earnings
For 1995 Maximum Compensation as per IRC Section 401(a)(17) is limited to
$150,000. Maximum Benefit payable under the qualified plan for 1995 is
$120,000.
At December 31, 1995, both Peter Van Kleeck and Robert Apple had
approximately 8 years of service credited in the Plan. Messrs. Weand and
Gabrielsen both had less than 5 years of credited service.
401(k) Plan
Progressive maintains a 401(k) Plan under which it matches 50% of the first
5% of non-highly compensated employee contributions to the Plan with highly
compensated employees matched at the rate of 50% of the first 3%. In 1995 its
contributions to the Plan for Executive Officers were as follows: Peter Van
Kleeck $1,738, J. Donald Weand, Jr. $2,063, Robert A. Gabrielsen $1,846 and
Robert Apple $1,396.
Employee Stock Option Plan
Progressive has an Amended and Restated Incentive Stock Option Plan (the
"Employees Plan") for key employees of Progressive and Pawling. The Employees
Plan was approved by the Shareholders at the annual meeting of shareholders
held on March 30, 1988. The Employees Plan is administered by a committee
composed of three members of the Board of Directors, none of whom may be
eligible to participate in the Plan. 250,000 shares of Progressive Common
Stock (less any issued upon the exercise of options) are reserved for
issuance under the Employees Plan. Such amount is subject to adjustment to
prevent dilution. Options may be granted for the purchase of shares at not
less than 100 percent of the fair market value of a share of Progressive
Common Stock on the date the option is granted. Options granted under the
Employees Plan are Incentive Stock Options intended to meet the requirements
of Section 422A of the Code. No option may be exercised after the expiration
of ten years from the date it was granted, and no option may be granted under
the Employees Plan after January 12, 1998.
Directors Non-Qualified Stock Option Plan
In 1992 the Board of Directors adopted a Non-Qualified Stock Option Plan
pursuant to which each director in office at the date of the adoption of the
Plan received, and based upon certain criteria directors elected in the
future will receive, an option for 3,200 shares of Progressive Common stock
at market value. A total of 3,200 options were granted under the Plan in
1995.
In 1993, the Board of Directors adopted a 1993 Non-Qualified Stock Option
Plan for Directors (the "Plan"). Under the Plan a committee of disinterested
persons may grant options to the individual directors. Each grant when made
may not be made at a price per share less than the current market value of
Progressive stock. A total of 75,000 shares may be granted under the Plan
which has a term of ten years.
Transactions With Management
Some of the executive officers and directors of Progressive and Pawling, as
well as firms and companies with which they are associated, are and have been
customers of Pawling. As a stock savings bank, Pawling is authorized under
the New York Banking Law and regulations to make loans to its executive
officers and directors and to the executive officers and directors of
Progressive and Pawling in any amount, but such loans must be approved by the
Board of Directors of Pawling or an authorized committee. If such loan is
secured by a first lien on a residence of such executive officer or director,
or if the principal amount of the loan, when aggregated with the unpaid
principal amount of all other loans by Pawling to the executive officer or
director, exceeds $25,000 or 5% of its capital stock, surplus funds and
undivided profits, whichever is higher, the approval of Pawling's Board of
Directors is required. Also, loans to an executive officer or director in
excess of $500,000 in the aggregate may only be made if the approval of the
Board of Directors of Pawling has been obtained. Loans to executive officers
and directors are made on substantially the same terms, including interest
rates, as those of comparable transactions prevailing at the time and do not
involve more than the normal risk of collectability or present other
unfavorable features.
Mr. Archibald A. Smith, III is Headmaster of Trinity Pawling School which has
a $1.0 million line of credit from Pawling. Its current borrowing under the
line of credit is $400,000. It maintains accounts with Pawling in excess of
$200,000 from time to time. Mr. Thomas C. Aposporos is currently acting as a
real estate broker involving Pawling in two transactions, which if
consumated, could result in the payment to his firm of up to $17,000 in fees.
INDEPENDENT AUDITORS
At the meeting a vote of the shareholders will be taken for the ratification
of the selection of the firm of KPMG Peat Marwick LLP, independent public
accountants, as auditors for the fiscal year ending December 31, 1996. It is
expected that representatives from KPMG Peat Marwick LLP will be present at
the Annual Meeting and will be afforded an opportunity to make a statement if
they desire. They are expected to be available to respond to appropriate
questions from shareholders.
SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal at Progressive's 1997
annual meeting of shareholders is advised that, in order for such proposal to
be considered for inclusion in management's proxy material for such meeting,
the proposal must be directed to the Secretary of Progressive and received by
Progressive at its principal executive office not later than November 25,
1996.
GENERAL
Unless contrary instructions are indicated on the Proxy, all shares of Common
Stock represented by valid Proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted FOR the election of the
nominees for Directors named herein and in favor of the proposals discussed
above.
The Board of Directors knows of no business other than that set forth above
to be transacted at the Annual Meeting, but if other matters requiring a vote
of shareholders arise, the persons designated as Proxies will vote the shares
of Common Stock represented by the Proxies in accordance with their judgment
on such matters. If a shareholder specifies a different choice on the Proxy,
his or her shares of Common Stock will be voted in accordance with the
specification so made.
By order of the Board of Directors,
(Signature)
Beatrice D. Parent, Secretary
Pawling, New York
March 28, 1996
PROXY CARD
Proxy
PROGRESSIVE BANK, INC.
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Robert Apple and Beatrice D. Parent or either
of them, Proxies, with full power of substitution to each, to represent and
vote all stock that the undersigned is entitled to vote at the Annual Meeting
of Shareholders of Progressive Bank, Inc., to be held on April 25, 1996 at
6:30 p.m. at Pawling Savings Bank, Route 22, Pawling, New York, or at any
adjournments thereof upon the matters described in the accompanying Proxy
Statement and upon other business that may properly come before the meeting
or any adjournment thereof. Said Proxies are directed to or refrain from
voting as checked below upon the matters listed below, and otherwise in their
discretion.
[ ] For [ ] Against [ ] Abstain
1. Election of Directors for all nominees listed below (except as indicated
to the contrary below).
Elizabeth P. Allen
George M. Coulter
Archibald A. Smith, III
Peter Van Kleeck
INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.
[ ] For [ ] Against [ ] Abstain
2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG PEAT MARWICK LLP as the
independent auditors for the current fiscal year.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ABOVE
PROPOSALS. PLEASE SIGN, DATE AND RETURN THIS PROXY.
This proxy may be revoked at any time before it is voted. Please Date, sign
and return in the enclosed postage-paid envelope.
Date
Signature
Signature if held jointly
Detach above card, sign, date and mail in postage paid envelope provided.
PROGRESSIVE BANK, INC.
Please sign exactly as the name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, 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 authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
