SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant (x)
Filed by party other than the registrant ( )
Check appropriate box:
( ) Preliminary proxy statement
(x) Definitive proxy statement
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14-11(c)
or Rule 14a-12
CBC BANCORP, INC.
(Name of Registrant as Specified in Its Charter)
CBC BANCORP, INC.
Name of Person(s) Filing Proxy Statement
Payment of filing fee (Check the appropriate box):
(X) $125 per Exchange Act Rule 0-11(c)(1)(ii),
14a-6(i)(1), or 14a-6(i)(2).
( ) Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which
transaction applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11;*
(4) Proposed maximum aggregate value of
transaction:
( ) 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 number,
or the form or schedule and the date of its
filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
* Set forth the amount on which the filing fee is calculated
and state how it was determined.
DEFINITIVE PROXY STATEMENT
DATED MAY 26, 1995
CBC BANCORP, INC.
128 Amity Road
Woodbridge, Connecticut 06525
(203) 389-2800
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1995
To the Shareholders of CBC Bancorp, Inc.:
Notice is hereby given that the 1995 Annual Meeting of
Shareholders (the "Annual Meeting") of CBC Bancorp, Inc. (the
"Company") will be held at the offices of the Company's
subsidiary, Connecticut Bank of Commerce, 128 Amity Road,
Woodbridge, Connecticut, at 4:00 p.m., on Thursday, June 29,
1995, for the following purposes:
1. To consider and vote upon a proposal
authorizing and approving the 1994 CBC
Bancorp, Inc. Long- Term Incentive Plan
(Proposal 1);
2. To elect directors to serve until the 1996
Annual Meeting of Shareholders or until their
successors have been elected and qualified
(Proposal 2);
3. To consider and vote upon a proposal to
ratify the selection of BDO Seidman as
independent auditors for the fiscal year
ending December 31, 1995 (Proposal 3); and
4. To transact such other business as may
properly come before the Annual Meeting.
Pursuant to the Company's Bylaws, the Board of Directors
has fixed the close of business on May 16, 1995 as the record
date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting. Only holders of common
stock of record at the close of business on that date will be
entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. In the event that there are
insufficient votes to approve any one or more of the foregoing
proposals at the time of the Annual Meeting, the Annual
Meeting may be adjourned to permit further solicitation of
proxies by the Company.
By Order of the Board of Directors
Woodbridge, Connecticut Randolph W. Lenz
Chairman of the Board
June 7, 1995
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY CARD 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 BY BALLOT.
CBC BANCORP, INC.
128 Amity Road
Woodbridge, Connecticut 06525
(203) 389-2800
PROXY STATEMENT
1995 ANNUAL MEETING OF SHAREHOLDERS - JUNE 29, 1995
INTRODUCTION
OVERVIEW
This Proxy Statement is being furnished to the holders of
common stock, par value $0.01 per share ("Common Stock") of
CBC Bancorp, Inc., a Connecticut corporation (the
"Company"), in connection with the solicitation of proxies
by the Board of Directors of the Company for use at the 1995
Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held at the offices of the Company's
subsidiary, Connecticut Bank of Commerce, 128 Amity Road,
Woodbridge, Connecticut, at 4:00 p.m. on Thursday, June 29,
1995. This Proxy Statement and the enclosed proxy card are
first being given or sent to shareholders on or about June 7,
1995.
The Company is a bank holding company incorporated under
the laws of the State of Connecticut. The Company conducts
its operations principally through its subsidiary,
Connecticut Bank of Commerce (the "Bank"). The Bank is a
Connecticut-chartered FDIC insured commercial bank.
PURPOSE OF ANNUAL MEETING
At the Annual Meeting, shareholders will be asked to:
(i) consider and vote upon a proposal to authorize and
approve the 1994 CBC Bancorp, Inc. Long-Term Incentive Plan
(the "Incentive Plan"); (ii) elect directors to serve until
the next Annual Meeting of Shareholders or until their
successors are elected and qualified; and (iii) ratify the
selection of BDO Seidman as independent auditors for the
Company for the year ending December 31, 1995. In addition,
the shareholders may act upon such other matters as may
properly come before the Annual Meeting.
VOTING RIGHTS AND PROXY INFORMATION
RECORD DATE; VOTING RIGHTS
The Board of Directors of the Company has fixed the close
of business on May 16, 1995, as the record date (the "Record
Date") for determining holders of outstanding shares of
Common Stock entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof. Only holders of
shares of Common Stock of record on the books of the Company
at the close of business on May 16, 1995, will be entitled
to vote at the Annual Meeting and any adjournments thereof.
As of the Record Date, there were 2,012,514 shares of
Common Stock issued and outstanding. Votes may be cast in
person or by proxy, and each share of Common Stock entitles
its holder to one vote. Pursuant to the Company's Bylaws,
the holders of a majority of the outstanding shares of
Common Stock present in person or by proxy will constitute a
quorum for transacting business at the Annual Meeting.
USE OF PROXIES, REVOCATION AND SOLICITATION
Proxies in the accompanying form which are properly
executed and returned to the Company will be voted at the
Annual Meeting in accordance with the shareholders'
instructions contained in such proxies and, at the
discretion of the proxy holders, on such other matters as
may properly come before the Annual Meeting. Where no
instructions are given, the shares represented by executed
proxies received by the Company will be voted as follows:
(i) FOR Proposal 1 to authorize and approve the Company's
Incentive Plan; (ii) FOR Proposal 2 to elect the proposed
nominees as directors; and (iii) FOR Proposal 3 to ratify
the selection of BDO Seidman as independent auditors of the
Company for the year ending December 31, 1995. The Board of
Directors does not know of any matters to be acted upon at
the Annual Meeting other than the items specifically
described in this Proxy Statement. If any other matters are
properly brought before the Annual Meeting, the persons
named in the accompanying proxy will vote the shares of
Common Stock represented by the proxies on such matters at
their discretion. None of the proposals scheduled to be
voted upon at the Annual Meeting will create appraisal or
similar rights under Connecticut law.
A shareholder who executes and returns the enclosed proxy
card has the power to revoke such proxy at any time before
it is voted at the Annual Meeting by filing with the
Secretary of the Company an instrument revoking it, by
filing a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting by ballot in person.
Attendance at the Annual Meeting will not in and of itself
constitute the revocation of a proxy.
The Company will bear the costs of soliciting proxies
from its shareholders. In addition to this solicitation by
mail, proxies may be solicited by the directors, officers
and employees of the Company and the Bank by personal
interview, telephone or telegram for no compensation other
than their regular salaries. Arrangements may also be made
with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to
the beneficial owners of Common Stock held of record by such
persons, and the Company may reimburse such custodians,
nominees and fiduciaries for reasonable out-of-pocket
expenses incurred in connection therewith.
CORPORATE GOVERNANCE
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors of the Company. The Board of
Directors of the Company has responsibility for the
management of the business and affairs of the Company. The
Board of Directors of the Company met 12 times during 1994
and currently consists of four members: Messrs. Lenz
(Chairman), Dunlap, Cuevas and Pignatelli. All of the
current members have been nominated for reelection at the
Annual Meeting. Dr. Steven Levine has been nominated to
serve as the fifth director of the Company. Biographies of
all nominees are provided under "Proposal 2 - Election of
Directors."
Committees of the Company. The Compensation Committee of
the Company consists of Mr. Pignatelli and three non-officer
directors: Messrs. Lenz (Chairman), Cuevas and Dunlap. The
Compensation Committee met once during the year. The Compensation
Committee determines compensation for the Company's
executives and administers the Company's benefit programs,
including review of recommendations made by the Bank's Board
of Directors regarding stock option grants to executive
officers and employees of the Bank. During 1994, no officer
of the Company received any compensation for his or her
performance of duties as an officer of the Company.
The Board of Directors of the Bank. The Board of
Directors of the Bank met 12 times during 1994. The Board
of Directors has primary responsibility for the general
management of the business of the Bank. The Bank Board of
Directors presently consists of five members: Messrs. Lenz
(Chairman), Cuevas, Dunlap, Pignatelli and Nives.
Committees of the Bank. The Bank currently has five
committees: the Compensation Committee, the Audit Committee,
the Loan Committee, the Compliance Committee and the
Investment Committee.
The Compensation Committee consists of the following four
members, with Mr. Pignatelli being the only officer or employee of
the Bank: Messrs. Dunlap (Chairman), Cuevas, Lenz and Pignatelli.
The Bank Compensation Committee met once during 1994. The
Compensation Committee reviews the compensation and benefits of
Bank officers and employees and makes recommendations to the full
Board regarding the granting of stock options and bonuses to all
Bank officers and employees. Mr. Pignatelli does not participate or
vote in connection with the Committee's recommendation on his
compensation or benefits.
The Audit Committee is composed of three members: Messrs.
Nives (Chairman), Cuevas and Dunlap. The Audit Committee met
four times during the 1994 fiscal year. The Audit Committee
reviews the annual report of the independent auditors, the
audit program, audit plan and audit reports of the Bank's
internal auditor, and reviews the adequacy of the
accounting, financial and operating controls.
The Loan Committee has five members and met 12 times
during 1994. The members of the Bank's Loan Committee are
Messrs. Lenz (Chairman), Cuevas, Dunlap, Nives and
Pignatelli. The Loan Committee reviews new loan requests and
loan delinquencies and is responsible for all matters
pertaining to non-performing loans, insider loans, non-
accruing loans and charge-offs.
The Compliance Committee consists of three members:
Messrs. Cuevas (Chairman), Dunlap and Pignatelli. The
Compliance Committee of the Bank met three times in 1994.
The Compliance Committee reviews the Bank's adherence to
federal and state laws and regulations, including, but not
limited to, the Community Reinvestment Act ("CRA"). The
Compliance Committee also reviews the Bank's internal
compliance program and status reports on such compliance.
The Bank's CRA Committee, which is also chaired by Mr.
Cuevas, is a subcommittee of the Bank's Compliance Committee
and met three times in 1994.
The Investment Committee of the Bank consists of five
members: Messrs. Lenz (Chairman), Cuevas, Dunlap, Nives and
Pignatelli. The Investment Committee met once during 1994.
The Investment Committee reviews the Bank's investment
portfolio and investment strategies, and analyzes and
proposes changes to the Bank's investment policy.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The average attendance at Board of Director meetings of
the Company and the Bank during 1994 was approximately 95
percent. During 1994, each incumbent director of the Company
and the Bank attended at least 75 percent of the aggregate
of (i) the total number of Board meetings of the Company and
the Bank and (ii) the total numbers of meetings held by all
Committees of the Company and the Bank on which he or she
served.
BOARD COMPENSATION
Members of the Board of Directors of the Company and the
Bank, other than those directors who are executive officers
of the Company or the Bank or directors with business
affiliations with the Company's principal shareholder,
receive $50 for attendance at each regular or special Board
of Directors' meeting and $50 for attendance at each Loan
Committee meeting.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") requires the Company's directors, executive
officers and ten percent shareholders to file with the
Securities and Exchange Commission certain reports regarding
such persons' ownership of Company securities. The Company
is obligated to disclose any failure to file such reports on
a timely basis. To the Company's knowledge, based solely on
review of the copies of reports furnished to the Company and
written representations that no other reports were required,
all filings required pursuant to Section 16(a) of the
Exchange Act applicable to the Company's executive officers,
directors and ten percent beneficial owners were complied
with during 1994.
THE PRINCIPAL SHAREHOLDERS OF THE COMPANY
AND STOCK OWNED BY MANAGEMENT
The Company has only one class of Common Stock. The
following table shows, as of April 1, 1995, those persons
known to the Company to be the beneficial owner of more than
five percent of the Common Stock. In preparing the
following table, the Company has assumed exercise of stock
options and conversion of securities of the Company or of
the Bank convertible into the Company's Common Stock held by
such persons and by no other such holders. The table does
not reflect Mr. Lenz's exercise of the warrant granted to
him in connection with the recent recapitalization
transaction or conversion of shares of Series III Preferred
Stock which is convertible into shares of common, preferred
or other capital instrument of the Company or the Bank.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
Randolph W. Lenz 1,894,851 90%
128 Amity Road
Woodbridge, CT 06525
As of the close of business on March 31, 1995, directors and
executive officers of the Company and the Bank as a group (five
persons) owned beneficially, directly or indirectly, 1,968,512
shares of Company Common Stock, representing 93% of the total
outstanding shares of such series. Of the total, 20,123 shares of
Company Common Stock are represented by shares that could be
acquired through the exercise of stock options.
PROPOSAL 1
AUTHORIZATION AND APPROVAL
OF
COMPANY'S INCENTIVE PLAN
Description of the Incentive Plan
In December 1994, the Directors of the Company adopted,
subject to the approval of the Company's shareholders at the 1995
Annual Meeting of Shareholders, the Company's Incentive Plan. The
purpose of the Company's Incentive Plan is to attract, retain and
motivate highly qualified employees and to provide a means to
encourage stock ownership and proprietary interest in the Company
by officers or other persons who serve in a managerial capacity
with the Company or the Bank and to make the Company's and the
Bank's compensation program competitive with those of
other financial services companies.
The Incentive Plan provides that the total number of shares
with respect to which options may be granted thereunder is 250,000
shares of Company Common Stock. The total number of shares of
Common Stock which may be optioned under the Incentive Plan is
subject to adjustment in the event of a stock split, stock
dividend, recapitalization, merger, consolidation, combination
or exchange of shares or other similar corporate change
(including the exercise of warrants and the conversion of any
equity or debt security of the Company convertible into shares of
Company Common Stock). The number of shares and the prices per share
applicable to the options then outstanding and in the number of
shares which are issuable under the Incentive Plan shall be
proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock.
The complete text of the Incentive Plan, as approved by the
Company's Board of Directors and submitted for shareholder
approval, is set forth in Exhibit A to this Proxy Statement. The
following summary of material features of the Incentive Plan does
not purport to be complete and is qualified in its entirety by
reference to Exhibit A.
The Incentive Plan is administered and interpreted by a
committee of two or more members of the Company's Board of
directors who are outside directors (hereinafter, the "Committee")
appointed by the Board. If the Board has appointed a Compensation
Committee, the Committee shall be comprised of the members of the
Compensation Committee who are outside directors. The Committee
shall determine, among other things, the number and types of awards
to be made under the Incentive Plan (i.e., stock option
awards or performance awards), the recipients of the awards,
whether an award will consist of an incentive stock option ("ISO")
or a non-qualified stock option. The participants in the Incentive
Plan are limited to employees of the Company or the Bank who serve
in an executive or managerial position selected by the Committee.
In determining the eligibility of an individual to be granted
an option or a performance award as well as determining the number
of shares to be optioned or the amount of a performance award, the
Committee or the President of the Company or the Bank, acting under
delegated authority from the Committee, shall take into account the
position and responsibilities of the individual being considered,
the nature and the value to the Company and the Bank of his or her
service and accomplishments, his or her present and potential
contribution to the success of the Company and the Bank and
such other factors as the Committee may deem relevant.
The Incentive plan provides for the granting of options to
purchase the Company's Common Stock at not less than the market
price of a share of Common Stock on the trading day immediately
preceding the date of grant. If the participant in the Incentive
Plan to whom an ISO is granted owns at the time of the grant more
than 10% of the issued and outstanding shares of Common Stock, the
option price shall not be less than 110% of the market price on the
trading date immediately preceding the date of grant and the
term of the ISO shall not exceed five years from the date of grant.
No option may be granted under the Incentive Plan may be
outstanding for more than ten years after its grant.
Upon exercise of an option, the holder must make payment in
full of the exercise price on or within ten business days after the
date of exercise. Such payment may be made in cash, by certified
check or money order, in whole shares of Common Stock owned by the
participant prior to exercising the option, or in a combination of
cash and such shares of Common Stock or on such terms and
conditions as the Committee determines. The value of the
Common Stock is the market price of the Common Stock on the date
the option is exercised.
An option is only exercisable by a participant while the
participant is in active employment with the Company or the Bank,
except (i) in the case of the participant's death or disability, at
any time during the 36 month period following the participant's
death or disability; (ii) during a six month period commencing on
the date of a participant's termination of employment for other
than cause; (iii) during the three year period commencing on the
date of the participant's termination of employment by the
participant or the Company or Bank, as the case may be, after a
change in control of the Company unless such termination is for
cause; or (iv) if the Committee decides that it is in the best
interest of the Company or the Bank to permit individual
exceptions. An option may not be exercised after it has expired. In
the event a participant is terminated for cause, the option will
terminate on the date the holder ceases to be employed by the
Company or the Bank.
The Board of Directors of the Company may suspend, terminate
or amend the Incentive Plan at any time, except that without
shareholder approval it may not increase the number of shares of
Common Stock that may be optioned under the Incentive Plan or amend
any provision, with respect to officers of the Company or the Bank,
which materially modifies the eligibility requirements, materially
increases the benefits or materially increases the number of shares
issuable. No suspension, termination or amendment of the Plan shall
affect the rights of participants under options granted prior to
any such event.
Incentive Plan Benefits
As of the date of this Proxy Statement, no options or
performance awards have been awarded under the Incentive Plan. The
future specific benefits or amounts to be received by executive
officers of the company or the Bank under the Incentive Plan are
not determinable.
Federal Income Tax Consequences
Neither the receipt nor the exercise of an ISO is a taxable
event, and if the optionee does not dispose of the Common Stock
acquired under the ISO prior to the expiration of the requisite
holding periods, any gain resulting from the sale of the Common
Stock is long term capital gain. In such case, the Company is not
entitled to any tax deduction with respect to the grant or exercise
of the option. However, the amount by which the fair market value
of the shares of Common Stock at the time of the exercise
exceeds the option price will constitute an item of tax preference
for purposes of the alternative minimum tax. The statutory holding
period is at least two years from the date the ISO is granted and
one year from the date the optionee receives his shares of Common
Stock pursuant to the exercise. If the Common Stock is disposed of
before the end of the statutory holding period, the lesser of the
difference between the exercise price and the fair market value of
the Common Stock on the date of exercise or the total amount of
gain realized on the sale must be reported by the optionee as
ordinary income and the Company is entitled to a tax deduction in
that amount. The remaining gain, if any, is taxed to the optionee
as long or short term capital gains.
The receipt of a non-qualified stock option issued under the
Incentive Plan will not result in any taxable income or a tax
deduction to the Company at the time the option is granted.
Generally, the optionee will recognize ordinary income at the time
the nonqualified option is exercised in an amount equal to the
excess of the fair market value on the date of exercise of the
Common Stock received over the exercise price, and the
Company will be entitled to a tax deduction of an equal amount in
the year the optionee recognizes such income. the optionee will
have a tax basis for his shares of Common Stock equal to their fair
market value at the time the optionee recognizes ordinary income
and any additional gain or loss recognized by the optionee on
disposition of the shares of Common Stock will generally be a short
or long term capital gain or loss and will not result in any
additional tax deduction to the Company.
The recipient of a performance award will recognize ordinary
income in the amount of the cash or the fair market value of the
other property received and the Company or the Bank, as the case
may be, will be entitled to a tax deduction in the amount of the
award for an equal amount.
A MAJORITY VOTE OF ALL ISSUED AND OUTSTANDING SHARES OF THE
COMPANY'S COMMON STOCK IS REQUIRED TO AUTHORIZE AND APPROVE THE
INCENTIVE PLAN. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" THE PROPOSAL TO AUTHORIZE AND APPROVE THE
INCENTIVE PLAN.
PROPOSAL 2
ELECTION OF DIRECTORS
Directors of the Company are elected for one-year terms and
thereafter until their successors are duly elected and qualified.
The five nominees nominated by the Company's Board of Directors for
election to the Company Board at the Annual Meeting are identified
in the table below. Unless a shareholder either indicates
"authority withheld" on such shareholder's proxy or indicates on
such shareholder's proxy that such shareholder's shares should not
be voted for certain nominees, it is the intention of the
persons named in the proxy to vote the shares represented by each
properly executed proxy for the election as director all of the
persons named in the table below as nominees. All persons named
herein as nominees for the Board of Directors have consented to
serve, and it is not contemplated that any nominee will be unable
to serve as a director. However, if a nominee is unable to serve
as a director, a substitute will be selected by the Company's Board
of Directors and all proxies eligible to be voted for the
nominees will be voted for such other person.
The table below sets forth the names and ages (as of April 1, 1995)
of the nominees for the Company's Board of Directors, the other
positions and offices presently held by each such person with the
Company and the Bank, the period during which each such person has
served on the Company Board, the expiration of their respective
terms, the principal occupation or employment and certain
directorships of each such person during the past five years, and
the number of shares of Company Common Stock, Series I, II
and III Preferred Stock and Company Capital Notes that they
beneficially owned as of April 1, 1995. All such shares are
directly owned by the individuals listed unless otherwise stated in
the footnotes following the table.
ELECTION AS DIRECTORS
Expiration of
Term If
Name and Age Director Since Elected
Randolph W. Lenz, 48 1992 1996
Charles Pignatelli, 42 1994 1996
Marcial Cuevas, 51 1994 1996
Steven Levine, M.D., 37 - 1996
Jack Wm. Dunlap, 71 1994 1996
Business Experience(1)
Mr. Lenz - Chairman of the Board of
the Company and the Bank
(August 1992 - Present);
Chairman of the Board of
Terex Corporation, a New
York Stock Exchange
manufacturing company.
Mr. Pignatelli - President, Chief
Executive Officer and
Director of the Company
(April 1994 - Present);
President and Chief
Executive Officer of the
Bank (November 1993 -
Present); Vice President
and Retail Banking
Executive, Chase
Manhattan Bank of
Connecticut, N.A.
(August 1991 - May
1993); Vice President,
Chase Manhattan Bank,
N.A. (1983 - August
1991).
Mr. Cuevas - Executive Director,
Community Action Agency
of New Haven, Inc.,
federally-funded anti-
poverty agency; Director
of the Bank (1990 -
Present).
Dr. Levine - Physician; Principal in
Eye, Nose, Throat &
Facial Plastic Surgery
Associates, P.C.
Mr. Dunlap - Chairman, President and
Chief Executive Officer
of Dunlap & Associates,
Inc. (Retired), human
factors research, system
analysis and management
consulting company.
Shares
Beneficially Owned
As of April 1, 1995(2)
Number of Shares Percent of Class
Mr. Lenz 1,813,507(3) 95.2%
Other Directors 160 -
1 In each instance in which dates are not provided in
connection with a director's experience, such director has held the
positions indicated for at least the past five years.
2 There were 2,012,514 shares of Common Stock, 23,000
shares of Series I Preferred Stock, 50,000 shares of Series II
Preferred Stock, 396 shares of Series III Preferred Stock,
$1,090,000 in principal amount of mandatory convertible Capital
Notes outstanding as of April 1, 1995.
3 Mr. Lenz owns 18,450 shares of Series I Preferred
Stock, representing 80.2% of the outstanding shares of such series,
50,000 shares of Series II Preferred Stock, representing 100% of
such series, and 376 shares of Series III Preferred Stock,
representing 94.9% of such series. Mr. Lenz also owns $50,000 of
principal amount of Company Capital Notes, representing 4.6% of the
outstanding Company Capital Notes. The 1,813,507 shares of Common
Stock shown as being beneficially owned by Mr. Lenz do not include
the 36,900 shares of Common Stock issuable upon conversion of the
Series I Preferred Stock, the 44,444 shares of Common Stock
issuable upon conversion of the $50,000 principal amount of Company
Capital Notes (utilizing the average of the closing bid and ask price
of the Common Stock on April 1, 1995 of $1.125 per share as reported
on the NASDAQ Small-Cap Market), the 3,342,222 shares of Common Stock
issuable to Mr. Lenz upon conversion of his 376 shares of Series
III Preferred Stock into Common stock (utilizing the average of the
closing bid and ask price of the Common Stock on April 1, 1995 of $1
per share as reported on the NASDAQ Small-Cap Market) or shares of
Common Stock issuable upon exercise of the Warrant.
EXECUTIVE OFFICERS
OF THE COMPANY AND THE BANK
The following table sets forth as of April 1, 1995, the names
of executive officers of the Company or the Bank with major
policymaking functions (other than those persons named
hereinabove who are currently or are nominated to be directors of
the Company), their ages, all positions held with the Company or
the Bank and their principal occupations for the last five years.
Name Age Position with Principal Occupation
the Bank or the For Past Five Years
Company
David Munzer 43 Senior Vice Senior Vice President
President and and Chief Financial
Chief Financial Officer of the Bank
Officer of the (December 1993 -
Bank Present); New Canaan
Bank and Trust (1989 -
1993)
Thomas
Marron 58 Senior Vice President Senior Vice President
- Loan Workout of the of the Bank
Bank (August 1993 -
Present); Vice
President,
Great Country Bank
(1992 - 1993); Senior
Executive Vice
President, Whitney
Bank and Trust (1990
- 1991); Vice
President, First
Constitution Bank
(1988 - 1990)
Susan
Kornberg 38 Senior Vice President- Senior Vice President
Commercial Loan Officer of the Bank (Jan. 1994
of the Bank - Present); Vice
President, Bank of
Boston (1991 - 1993);
Vice President, Bank
of Leumi Trust Company
(1989 - 1991)
Barbara
Van Bergen 34 Chief Accounting Chief Accounting
Officer of the Company Officer of the
and Vice President - Company and Vice
Finance of the Bank President - Finance
of the Bank (Oct.
1994 - Present);
Audit Manager, BDO
Seidman (1994); Vice
President, Reliance
Bank (1992 - 1993);
Audit Manager, Landry
& Toole, CPA (1989 -
1992); Senior
Accountant, Arthur
Andersen & Co. (1983
- 1989)
Donald
Broadbent 43 Senior Vice President Senior Vice President
- Operations of the - Operations of the
Bank Bank (Sept. 1993 -
Present); Vice
President, First
Federal (First
Constitution Bank)
(1991 - 1993); Senior
Vice President,
Westport Bank and
Trust Co. (1971 -
1991)
There are no family relationships between the executive
officers of the Company or the Bank. The terms of office of the
executive officers of the Company and the Bank extend until the
respective annual organizational meeting of the Board of
Directors.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The Summary Compensation Table below sets forth for the past
three fiscal years of the Company's or the Bank's Chief Executive
Officer and its executive officers with 1994 earned qualifying
compensation in excess of $100,000 (the "Named Officers"):
SUMMARY COMPENSATION TABLE
Name and Annual Compensation (1)
Principal
Position Year Salary Bonus
($) ($)
Randolph W.
Lenz
Chairman of the 1994 0 0
Board of the 1993 0 0
Company and the 1992 0 0
Bank(3)
Charles
Pignatelli 1994 138,462 0(8)
President and 1993 12,500 0
Chief Executive
Officer of the
Company and the
Bank(4)
Steven 1993 9,218 0
Hotchkiss(5)
David A.
Lentini 1993 53,660 0
Chief Operating 1992 34,616 0
Officer of the
Company;
President and
Chief Executive
Officer of the
Bank(6)
Joseph V.
Ciaburri 1994 27,210 0
President and 1993 94,704 0
Chief Executive 1992 174,404 0
Officer of the
Company and the
Bank(7)
Name and Long-Term
Principal Compensation All Other
Position Year Options Granted Compensation(2)
(#) ($)
Randolph W.
Lenz
Chairman of the 1994 0 0
Board of the 1993 0 0
Company and the 1992 0 0
Bank(3)
Charles
Pignatelli 1994 100,615 0
President and 1993 0 0
Chief Executive
Officer of the
Company and the
Bank(4)
Stephen M. 1993 0 0
Hotchkiss(5)
David A.
Lentini 1993 0 3,468
Chief Operating 1992 0 70,420
Officer of the
Company;
President and
Chief Executive
Officer of the
Bank(6)
Joseph V.
Ciaburri 1994 0 46,654
President and 1993 0 94,470
Chief Executive 1992 0 84,042
Officer of the
Company and the
Bank(7)
1 During the periods covered, no Named Officer received
perquisites (i.e., personal benefits) in excess of the lesser of
$50,000 or 10% of such individual's reported salary and bonus.
2 A specific description and breakdown of the amounts
shown in this column are described in the accompanying narrative.
3 Mr. Lenz became Chairman of the Board of the Company
and the Bank in August of 1992. He also served as interim President
of the Company from August 1992 until August 1993.
4 Mr. Pignatelli became President and Chief Executive
Officer of the Bank in November 1993 and assumed the position of
President and Chief Executive Officer of the Company in April 1994.
5 Mr. Hotchkiss served as Chief Executive Officer of the
Company and the Bank from August 1993 until October 1993.
6 Mr. Lentini served as Chief Operating Officer of the
Company and President and Chief Executive Officer of the Bank from
September 1992 until June 1993.
7 Mr. Ciaburri served as Chief Executive Officer of the
Company and the Bank from January 1989 until August 1992, and as
President Emeritus of the Bank from August 1992 until May 1993.
8 Under the terms of Mr. Pignatelli's employment
agreement with the Bank, Mr. Pignatelli received in 1995 additional
incentive compensation of $65,000 based, in part, on the Bank's
achievement of specified operating results during 1994.
The amounts set forth in the "All Other Compensation" column
of the Summary Compensation Table for the Named Officers are
described in detail below. Of the $3,468 paid to Mr. Lentini
in 1993, $2,665 represents the Bank's matching contributions
to the Bank 401(k) Savings Plan to match pre-tax elective
deferral contributions (included under "Salary") made by Mr.
Lentini to that plan and $803 represents insurance premiums
paid by the Bank. A description of the Bank 401(k) Savings Plan
is set forth in the Proxy Statement under the caption
"Description of Other Employee Benefit Plans." Of the $70,420
paid to Mr. Lentini in 1992, $60,000 represents a condition-of-
hire payment to compensate him for amounts foregone by joining
the Company and the Bank prior to year-end 1992, $7,724
represents insurance premiums paid by the Bank and $2,696
represents the Bank's matching contributions to the Bank 401(k)
Savings Plan. Of the 46,654 paid to Mr. Ciaburri in 1994, $779
represents the Bank's matching contributions to the Bank 401(k)
Savings Plan to match pre-tax elective deferral contributions,
$24,000 represents deferred compensation expense and $21,875
represents the value of the automobile transferred to Mr. Ciaburri
after deduction of amounts attributable to the cancellation of Mr.
Ciaburri's stock options. Of the $94,470 paid to Mr. Ciaburri in
1993, $4,239 represents the Bank's matching contributions to the
Bank 401(k) Savings Plan, $1,527 represents dues, $86,000
represents deferred compensation expense and $2,704
represents insurance premiums. Of the $84,042 paid to Mr.
Ciaburri in 1992, $2,230 represents insurance premiums,
$3,812 represents matching contributions to the Bank 401(k)
Savings Plan and $78,000 represents deferred compensation
expenses incurred by the Bank. In February 1990, the Company
entered into a deferred compensation agreement with Mr. Ciaburri
to provide for the payment of $520,000 over a ten-year period to
him or his estate commencing on the earlier of his retirement or
death. The Company has purchased a life insurance policy to fund
the deferred compensation obligation. At December 31, 1994, the
cash surrender value of the life insurance policy was $311,000
with an accrued deferred compensation liability of $299,000. For
the years ended December 31, 1994, 1993 and 1992, respectively,
deferred compensation expense, including interest, was
approximately $24,000, $86,000 and $78,000, respectively.
OPTION GRANTS IN 1994
Under the terms of an Option Agreement, by and between the
Company and Charles Pignatelli, the Company granted Mr. Pignatelli
options to acquire shares of the Company Common Stock, which
options vest over a five year period. Mr. Pignatelli is the only
Named Officer granted stock options in 1994. The table below
summarizes information pertaining to stock options granted to the
Named Executive Officers listed in the Summary Compensation Table.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
Name Number of % of Total Exercise Expiration Date 5% 10%
Securities Options Price
Underlying Granted to ($/share)
Options Employees<F1>
Granted(#)
<S> <C> <C> <C> <C> <C> <C>
Randolph W. Lenz - - - - - -
Charles Pignatelli 20,123 20 1.25 11/22/04 15,819 40,089
20,123 20 1.25 11/22/05 17,868 46,613
20,123 20 1.25 11/22/06 20,019 53,789
20,123 20 1.25 11/22/07 22,277 61,684
20,123 20 1.25 11/22/08 24,649 70,368
Steven Hotchkiss - - - - - -
David A. Lentini - - - - - -
Joseph V. Ciaburri - - - - - -
<FN>
<F1> Mr. Pignatelli received, in the aggregate, 100% of the total options
granted to employees in 1994.
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES IN 1994 AND YEAR-END OPTION VALUES
<TABLE>
The table below summarizes options exercised during 1994 and
year-end option values of the Named Officers listed in the
Summary compensation Table.
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year-end (#) at Year-end ($)
Shares Acquired Value Realized
Name on Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Randolph W. Lenz - - - -
Charles Pignatelli - - 20,125 / 80,500 -
Steven Hotchkiss - - - -
David A. Lentini - - - -
Joseph V. Ciaburri - - - -
</TABLE>
PERFORMANCE PRESENTATION
PERFORMANCE GRAPH
The following graph and table depict the performance of the
Company's Common Stock compared with the NASDAQ Stock Market (U.S.)
and NASDAQ Bank Stocks over the preceding five-year period. The
graph was prepared by the Company and the data was provided to the
Company by The NASDAQ Stock Market and are believed by the Company
to be reliable. The graph and data assume reinvestment of all
dividends.
The stock price performance shown on the graph is not
necessarily an indication of future price performance.
(DESCRIPTION OF GRAPHICAL MATERIAL)
Located herein in the Company's paper format copy of this document
is a line graph titled:
COMPARATIVE FIVE-YEAR TOTAL RETURNS
CBC Bancorp, Inc., NASDAQ Stock Market, NASDAQ Bank Stocks
(Performance results through 12/31/94)
The vertical axis of the line graph is scaled from $0.00 at
the origin extending upwards to $250.00, marked in increments of
$50.00. The horizontal axis begins with the year 1989 at the
origin extending to the right through the year 1994, marked in
one year increments. The value of an assumed initial investment
of $100 in the Company's Common Stock, in the NASDAQ Stock
Market, and in the Peer Group (i.e., NASDAQ Banking Index) is
plotted for each year of the horizontal axis using the data
listed below:
1989 1990 1991 1992 1993 1994
CBC 100 23.93 8.57 11.43 4.29 1.71
NASDAQ 100 84.92 136.28 158.58 180.93 176.92
Stock
Market
NASDAQ 100 73.23 120.17 174.87 199.33 198.69
Banking
Index
Assumes $100 invested at the close of trading on the last
trading day preceding the first day of the fifth fiscal year in
Common Stock, NASDAQ Stock Market and the NASDAQ Bank Stocks.
* Cumulative total return assumes reinvestment of dividends.
Source: The NASDAQ Stock Market
STOCK OPTIONS
Options to acquire Company Common Stock are outstanding
under two incentive stock option plans: the Bank Stock Option
Plan ("Bank Stock Plan") and the Company Incentive Stock Option
Plan ("Old Company Stock Plan"). In addition, during 1994, pursuant
to the terms of a stock option agreement by and between the Company
and Mr. Charles Pignatelli, the President and Chief Executive
Officer of the Company and the Bank, the Company granted Mr.
Pignatelli options to acquire Company Common Stock (the "Stock
Option Agreement"). The Bank Stock Plan, the Old Company Stock Plan
and the Stock Option Agreement are each discussed separately below.
Bank Stock Plan. No stock options have been awarded under the
Bank Stock Option Plan since November 13, 1986, the date of the
formation of the Company as a holding company for the Bank.
Options were granted under the Bank's Option Plan to certain
employees to purchase Bank Common Stock at prices equal to the then
market value of the shares, except that options granted to 10
percent or greater shareholders were granted at 110 percent of such
market value. At the time of issuance of the options to Mr. Nives,
he held more than 10 percent of the Bank's Common Stock. In
connection with the organization of the Company as the Bank's
holding company, outstanding options theretofore issued by the Bank
pursuant to its Bank Option Plan became exercisable for equivalent
numbers of shares of Company Common Stock. Options granted by the
Bank are exercisable immediately and expire ten years after the
date of the grant (except for the options granted to Mr. Nives,
which would have expired five years after the date of the grant if
he had not exercised such options), or three months after
employment is terminated, whichever occurs first. With respect to
employees who hold unexpired Bank options, any options issued after
1986 by the Company may not be exercised until the pre-1987 options
from the Bank are exercised or expire according to their original
term.
Company's Old Stock Plan. Under the Company's Old Stock Plan
options may be granted to purchase the Company's Common Stock.
One hundred ten thousand shares of such Common Stock are
allocated to the Company's Old Stock Plan. Employees of the
Company and employees of any present or future subsidiary of the
Company are eligible to be granted options. As of December 31,
1994, the Bank had 50 full and part-time employees. The
selection of employees to be granted options and the quantity of
options granted is in the discretion of the Company's
Compensation Committee. The option price must be 100 percent of
fair market value of the Company's Common Stock at the time of
grant of an option, except that for a holder of more than ten
percent of the Company's Common Stock the option price must be
110 percent of the fair market value of the Company's Common
Stock at the time of the grant of an option. Payment in cash is
required for exercise of an option. As determined by the
Compensation Committee, options may be exercisable for up to ten
years from the date of the grant, or up to five years for holders
of more than ten percent of the Common Stock of the Company who
receive the options. The Compensation Committee may include
other conditions on exercise of an option, such as a minimum
period of service with the Company before the option may be
exercised or a percentage or dollar limit on how much of an
option may be used in any period. The Company Stock Plan expires
on April 15, 1997.
In November 1990, the Board of Directors approved a program
to cancel all outstanding options (the "Original Options") and to
issue in exchange, on a one-for-one ratio, new options (the "New
Options") at an exercise price of $2.50 per share, which was the
fair market value of the Company's Common Stock on the date of
issuance. The New Options expire in November of 2000. The
Original Options were exercisable at various prices, all
exceeding $2.50 per share. As a consequence of the one-for-five
reverse stock split of the Company in 1994, the exercise price of
the New Options is now $12.50 per share. No stock options were
been granted under the Company's Old Stock Plan during 1994. The
Company does not intend to issue any further stock options under
the Old Stock Plan. All future stock options will be granted
pursuant to the Company's Incentive Plan, provided that the
Incentive Plan is approved by the Company's shareholders at the
1995 Annual Meeting of Shareholders. As of March 31, 1995, no
stock options have been granted under the Company's Incentive
Plan. See Proposal 1 -- Authorization and Approval of the
Company's Incentive Plan.
Under current law, there will be no federal income tax
consequences to either the grantee or the Company on the grant of
non-incentive options or stock appreciation rights ("SARs").
Upon exercise of non-incentive options or SARs, the difference
between the fair market value of the Company's Common Stock at
the date of exercise and the exercise price is taxed at ordinary
income rates. The exercise of non-incentive options or SARs will
result in a tax deduction to the Company, measured by such
difference. However, grantees who are subject to certain federal
securities laws restrictions will, unless they elect otherwise,
generally not recognize ordinary income until such restrictions
lapse. The fair market value of the Company's Common Stock on
the date of exercise becomes the tax basis in the hands of the
grantee of shares acquired upon such exercise.
Under the Internal Revenue Code of 1986, as amended
("Internal Revenue Code"), there are no federal income tax
consequences to the employee or the Company upon a grant or
exercise of an incentive stock option, except that the difference
between the option price and the fair market value of the common
stock at the exercise of the option will be included in the
employee's alternative minimum taxable income. If the employee
does not dispose of the stock within two years from the grant date
of the incentive stock option and holds the stock after exercise
for at least one year, the employee will be taxed at long-term
capital gain rates upon the sale of the stock and the Company will
be entitled to a tax deduction in connection with the sale. If the
employee does not meet these holding period requirements, the
employee's gain upon disposing of the stock will be taxed as
ordinary income to the extent of the excess of the fair market
value of the shares on the date of exercise over the option
price. The balance of the amount received, if any, will be
short-term or long-term capital gain depending on how long the
shares were held by the employee. The Company will be allowed a
tax deduction in the amount of the grantee's ordinary income as a
result of the disposition. No further stock options will be
granted under the Company or Bank Stock Plan. Any future stock
options will be granted to the Company's and the Bank's executive
officers under the Incentive Plan, provided that the Company's
Common Stock holders approve Proposal 1.
As of December 31, 1994, there were 1,338 options outstanding
under the Bank Option Plan and the Company's Old Stock Plan
(adjusted to reflect the one-for-five reverse stock split). No
options were granted under either the Bank Stock Plan or the
Company's Old Stock Plan during 1994. All future options will be
granted pursuant to the Company's Incentive Plan. A description
of the Company's proposed Incentive Plan is contained in Proposal
1 -- Authorization and Approval of the Company's Incentive Plan,
and the complete text of the Company's Incentive Plan is appended
to this Proxy Statement as Exhibit A. Except for the compensatory
stock options granted to the Company's and the Bank's President and
Chief Executive Officer, no stock options were granted to Named
Officers or to any other executive officer of the Company or the
Bank during the year ended December 31, 1994. In addition, none
of the Named Officers exercised any stock options during 1994.
The stock options held by Mr. Nives expired during 1992 as a result
of his resignation as an executive officer of the Company. Similarly,
the stock options held by Mr. Michael M. Ciaburri expired during
1992 as a result of his resignation as Senior Vice President of
the Bank. The stock options held by Mr. Joseph Ciaburri were
canceled as provided in Mr. Ciaburri's 1992 renegotiated
employment agreement. Other than the shares exercisable by Mr.
Pignatelli under the terms of the Stock Option Agreement, no
stock options held by Named Officers of the Company or the Bank
at December 31, 1994 are exercisable.
The Stock Option Agreement. On December 13, 1994, the
Company entered into a stock option agreement with Mr. Charles
Pignatelli, President and Chief Executive Officer of the Company
and the Bank. Under the agreement, the Company granted to Mr.
Pignatelli an option to purchase in the aggregate such number of
shares of Company Common Stock as shall represent 5 percent of
the issued and outstanding shares of Common Stock at the time of
exercise at a price of $1.25 per share (the market price of the
company Common Stock on the date of grant). The number of shares of
Common Stock that may be received upon exercise of the option is
subject to further adjustment in the event of a recapitalization,
stock dividend or split, or any similar transaction effecting the
number of issued and outstanding shares of Company Common Stock.
The option vests and is exercisable by Mr. Pignatelli at the rate
of one percent of the issued and outstanding shares of Common
stock for each year of employment. Mr. Pignatelli's option will
be fully vested on the fifth anniversary of his employment. the
options expire ten (10) years after the date of vesting. As of
March 31, 1995, 20,125 shares of Common Stock had fully vested.
None of these option shares were in the money as of March 31,
1995; as of that date, the closing price of the Company's Common
Stock was $0.75 per share.
DESCRIPTION OF OTHER EMPLOYEE BENEFIT PLANS
401(k) Savings Plan. The Bank has a savings plan ("Savings
Plan") for eligible employees that is intended to meet the
applicable qualification requirements for a cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code.
The Savings Plan became effective June 9, 1988 for the officers
and employees of the Company and the Bank. Due to the absence of
paid employees at the Company, the Savings Plan does not
currently include the Company or its officers and employees.
Employees and officers of the Bank who attain the age of 21 and
complete a specified period of employment with the Bank are
eligible to participate in the Savings Plan. During 1992, the
Savings Plan was amended to allow Bank officers and employees to
participate commencing 30 days after the date of employment. In
February 1993, the Savings Plan was amended whereby new
participants vest over a two year period. In November 1994, the
Savings Plan was again amended this time to provide for vesting
over a six year period. Prior to one year's employment,
contributions are not matched by the Bank but employees may
contribute to the Savings Plan after 90 days of employment.
During 1994, 1993 and 1992, the Bank contributed approximately
$22,500, $58,100 and $52,800, respectively, to the Savings Plan.
Participants in the Savings Plan prior to March 1, 1993 are
fully vested in all contributions and earnings thereon.
Commencing March 1, 1993, matching contributions of new
participants became fully vested after six years of employment
with the Bank. Upon termination of employment, a participant in
the Savings Plan will be entitled to all the pre-tax
contributions and any rollover contributions made by the
participant and matching contributions made by the Bank on the
behalf of the participant (to the extent that the matching
contributions have vested), all as adjusted for earnings and
losses. If a participant dies before receiving benefits from the
Savings Plan, the benefits will be distributed to the
participant's beneficiary. Participants may also elect to
withdraw amounts from the Savings Plan attributable to pre-tax or
rollover contributions upon attainment of age 59 1/2 or due to
certain hardship events.
Eligible employees may elect to contribute to the Savings
Plan on a pre-tax basis up to 6% of their compensation (as
defined in the Savings Plan) subject to certain dollar
limitations set by the Internal Revenue Service each calendar
year. The Bank made matching contributions equal to 50% of the
amount an employee elected to contribute on an annual basis to
the Savings Plan, subject to various limits set forth in the
Savings Plan.
Bonus Plan. The Company and the Bank each has a Bonus Plan
for their respective full and part-time employees which may
provide them with additional compensation based upon performance.
Pursuant thereto, each year the Compensation Committee of the
Company and the Bank each decides whether to authorize bonuses.
As indicated in the Summary Compensation Table, no bonuses were
paid to Named Officers or to any other executive officer of the
Company or the Bank for 1994. The Bank did not pay any
performance awards to the Bank's executive officers during 1994. In
the first quarter of 1995, the Bank did pay discretionary
performance awards to selected executive officers.
EMPLOYMENT AGREEMENTS
Commencing January 1, 1989, Joseph V. Ciaburri entered into
an employment agreement with the Bank. On October 30, 1992, Mr.
Ciaburri entered into a new employment agreement with the Bank
(the "1992 Agreement"). Pursuant to the 1992 Agreement, Mr.
Ciaburri was employed as President Emeritus of the Bank until May
1993. Between May 1993 and May 1994, the 1992 Agreement provided
for Mr. Ciaburri's employment by the Bank as a consultant. Under
the terms of the 1992 Agreement, Mr. Ciaburri agreed to the
cancellation of his outstanding stock options in exchange for
title to the automobile furnished him under his earlier
employment agreement with the Bank. Under the 1992 Agreement, Mr.
Ciaburri was also provided with group life and medical coverage
comparable to such coverage provided to officers of the Bank
generally. In addition, he was eligible to participate in the
Bank's 401(k) Plan until May 1993.
In July 1994, the Bank entered into an employment agreement
with Charles Pignatelli, the President and Chief Executive Officer
of the Company and the Bank. The agreement provides for periodic
increases in salary. The agreement also provides for the payment to
Mr. Pignatelli, on an annual basis, additional compensation based
on the Bank's achievement of certain operational benchmarks set
forth in the agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors during
fiscal year 1994 consisted of Randolph W. Lenz, Marcial Cuevas,
Jack Dunlap and Charles Pignatelli. Except for Mr. Pignatelli, who
is the President and Chief Executive Officer of the Company and the
Bank, there are no compensation interlocks or insider participation
with respect to such individuals. Mr. Pignatelli does not
participate in any Compensation Committee discussions concerning
his compensation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
To the Board of Directors of the Company:
Decisions on compensation of the Company's executive
officers generally are made by the Company's Compensation
Committee (the "Committee"). Each member of the Committee (other
than Mr. Pignatelli) is a non-employee director. All substantive
decisions by the Committee relating to the compensation of the
Company's executive officers are reviewed by the full Board of
Directors, except for certain stock option decisions which must be
made solely by the Committee in order to satisfy certain
regulations of the Securities and Exchange Commission. Pursuant to
recently adopted rules designed to enhance disclosure of corporate
policies regarding executive compensation, the Company has set
forth below a report submitted by the Committee addressing the
Company's compensation policies for 1994 as they affected senior
executive officers of the Company and the Bank. The compensation
policies set forth herein have been followed by the Compensation
Committee and the Board of Directors of the Bank during 1994.
The goals of the Company's compensation policies for senior
executive officers are threefold:
(i) to provide a competitive compensation structure vis-a-
vis other Connecticut based community banks so as to
assure that the Company attracts and retains qualified
personnel while at the same time contributing to
shareholder value;
(ii) to provide an equitable compensation structure among
the Company's senior executive officers so as to assure
that personnel are treated fairly and that morale is
maintained at a high level; and
(iii) to provide appropriate incentives to encourage senior
management to exceed established business objectives.
In establishing compensation policies for the Company
against a backdrop of significant losses, staff reductions and
efforts to limit costs, the Committee is required to balance
competing concerns. On the one hand, it is essential that
executive compensation not become a source of friction or
resentment among the employees of the Company and the Bank. On
the other hand, the Company must provide economic incentives
necessary to attract experienced senior executives who have the
proven ability to meet the Company's business objectives of
renewed financial vigor and consistent profitability. The need
to balance these competing factors was the principal factor in
establishing the compensation package for the Company's senior
executives during 1994.
There are three principal elements of the Company's
executive compensation, each of which is related to employee and
corporate performance. These elements are the executive's base
salary, the bonus or additional performance based compensation
achievable pursuant to the Bank's performance award program or the
Company's Bonus Plan, and stock options under 1994 CBC Bancorp,
Inc. Long-Term Incentive Plan (the "Incentive Plan") (subject to
approval of the Incentive Plan by the Company's shareholders at the
1995 Annual Meeting of Shareholders).
Mr. Pignatelli, the President and Chief Executive Officer of
the Company and the Bank, joined the Bank in November 1993. Prior
to his employment with the Company, Mr. Pignatelli served as a
Vice President and Retail Banking Executive for nearly three
years at the Chase Manhattan Bank of Connecticut, N.A. and he
served as a Vice President of Chase Manhattan Bank, N.A. for
eight years. The base salary and other compensation for Mr.
Pignatelli was determined in light of the person's existing
salary and the amount deemed necessary to attract the individual
to the Company and the Bank.
Mr. Pignatelli received, and it is anticipated that he will
continue to receive, an increase in base salary each year of
employment provided that the financial performance of the Company
and the Bank continues to improve. The Compensation Committee
believes that Mr. Pignatelli is the linchpin of the Company's and
the Bank's financial recovery. His salary and other compensation
were determined based on the Compensation Committee's desire to
remain competitive with the compensation packages of other
financial institutions and to encourage a long-term commitment on
Mr. Pignatelli's part to the Bank and the Company. In this regard,
in July 1994, the Bank and Mr. Pignatelli entered into a formal
employment agreement setting forth the terms and conditions of Mr.
Pignatelli's employment by the Bank. Under the terms of the
employment agreement, Mr. Pignatelli will receive in future years
additional annual compensation based on the Bank's achievement of
certain defined operational results. The Compensation Committee
believes that the operational benchmarks set forth in the
employment agreement provide Mr. Pignatelli and the Committee with
objective criteria against which to measure future performance.
In light of the improved financial results, the Company and
the Bank awarded in the first quarter of 1995 individual
achievement awards to selected executive officers. Except for Mr.
Pignatelli, no stock options were awarded to any executive officer
of the Company or the Bank during 1994. It is expected that stock
options will be awarded to executive officers in the future under
the Incentive Plan.
In summary, given the performance of the Company and the
Bank during 1994, the Committee believes that the compensation
paid to the senior executive officers of the Company and the Bank
under the Company's various plans reached the appropriate balance
between preservation of shareholders' equity and the
establishment of proper performance incentives.
March 27, 1995 Respectfully submitted,
Randolph W. Lenz (Chairman)
Marcial Cuevas
Jack Wm. Dunlap
CERTAIN TRANSACTIONS
Directors and officers of the Company and their associates
(including related business entities) were customers of and had
transactions with the Bank in the ordinary course of business
during the three years ended December 31, 1994. These
transactions were made on substantially the same terms as those
prevailing for comparable transactions with other Bank customers.
Similar transactions may be expected to take place with the Bank
in the future, except with respect to Bank loans. In October
1992, the Bank's Board of Directors instituted a formal policy
prohibiting Bank loans to the Bank's directors, officers and
their associates, unless, in the case of a mortgage loan, the
Bank has a binding takeout commitment by a third party lender
prior to funding, or the loan or extension of credit is fully
secured by cash on deposit at the Bank or other acceptable
marketable collateral. This policy was formally extended to
include the Company's directors, officers and their associates in
March of 1993. Outstanding loans and commitments made by the
Bank in transactions with the Company's and the Bank's directors,
officers and their associates were made 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 a normal risk of
collectibility or present other unfavorable features.
A MAJORITY OF THE VOTES CAST BY SHAREHOLDERS OF THE COMPANY
AT THE ANNUAL MEETING IS REQUIRED TO ELECT THE NOMINEES FOR
DIRECTOR. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THE
SHAREHOLDERS VOTE "FOR" THE ELECTION OF THE NOMINEES FOR
DIRECTOR.
PROPOSAL 3
RATIFICATION OF THE APPOINTMENT OF
BDO SEIDMAN AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1995
The Board of Directors of the Company has selected BDO
Seidman, independent certified public accountants, to be the
Company's auditors for the fiscal year ending December 31, 1995,
subject to ratification by the Company's shareholders. BDO
Seidman performed the audit of the books and records of the
Company and the Bank for the fiscal years ending December 31,
1993 and 1994. A representative of BDO Seidman is expected to be
present at the Annual Meeting and will have an opportunity to
make a statement if he or she so desires. The representative is
expected to be available to respond to appropriate questions from
shareholders.
A MAJORITY OF THE VOTES CAST BY SHAREHOLDERS OF THE COMPANY
AT THE ANNUAL MEETING IS REQUIRED TO RATIFY THE APPOINTMENT OF
THE ACCOUNTANTS. THE BOARD OF DIRECTORS OF THE COMPANY
UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN AS INDEPENDENT
ACCOUNTANTS.
CHANGE IN THE COMPANY'S AUDITORS
PREVIOUS INDEPENDENT ACCOUNTANTS
(i) By letter dated December 15, 1993, Coopers & Lybrand,
the independent auditors for the Company and its subsidiaries for
the fiscal year ended December 31, 1992, notified the Company in
writing that the client-auditor relationship had ceased. The
Company is not aware of any disagreements, disputes or other
matters pertaining to the Company or its financial statements
which would have prompted or caused the cessation of Coopers &
Lybrand's relationship as the Company's independent accountant.
(See (iv) and (v) below.) Information pertaining to the
resignation of Coopers & Lybrand and other matters required by
Item 304(a) of Registration S-K has previously been filed on Form
8-K and Form 8, dated December 21, 1993 and January 11, 1994,
respectively.
(ii) The report of Coopers & Lybrand on the financial
statements of the Company and its subsidiaries for the fiscal
year ended December 31, 1992 contained an explanatory paragraph
pertaining to the uncertainty involving the ability of the
Company and its principal subsidiary, the Bank, to comply with
regulatory capital requirements imposed by federal banking law
and by the terms of the Order issued by the FDIC and effective as
of July 19, 1991. See Form 8-K and Form 8, dated December 21,
1993 and January 11, 1994, respectively.
(iii) The Company's Audit Committee and Board of Directors
accepted the resignation of Coopers & Lybrand as the Company's
independent auditors.
(iv) In connection with Coopers & Lybrand's audit of the
Company for the 1992 fiscal year up through December 15, 1993,
there were no disagreements with Coopers & Lybrand on any matters
of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements
if not resolved to the satisfaction of Coopers & Lybrand would
have caused them to make reference thereto in their report on the
financial statements for such year. See Form 8-K and Form 8,
dated December 21, 1993 and January 11, 1994, respectively.
(v) During the two most recent fiscal years and through
March 31, 1995, there have been no reportable events (as defined
in Regulation S-K Item 304(a)(1)(v)).
(vi) The Company requested that Coopers & Lybrand furnish
it with a letter addressed to the Securities and Exchange
Commission stating whether it agrees with the above statements
and, if not, stating the respects in which it does not agree. A
copy of such letter was filed by the Company on Form 8 on January
11, 1994. See Exhibit 16(c) and 16(d) to the Company's Annual
Report and Form 10-K for the fiscal year ended December 31, 1993.
NEW INDEPENDENT ACCOUNTANTS
(i) The Company engaged BDO Seidman as its new independent
accountants as of January 12, 1994. During the 1992 and 1993
fiscal years and through January 12, 1994, the Company has not
consulted with BDO Seidman on items which (1) were or should have
been subject to SAS 50 or (2) concerned the subject matter of a
disagreement or a reportable event with the former accountants
(as described in Regulation S-K Item 304(a)(2), with respect to
items (1) and (2)).
SHAREHOLDER PROPOSALS
Any proposal intended to be presented by any shareholder of
the Company for action at the 1996 Annual Meeting of Shareholders
of the Company must be received by the Secretary of the Company
at 128 Amity Road, Woodbridge, Connecticut 06525, not later than
December 15, 1995, in order for the proposal to be considered for
inclusion in the Company's proxy statement and form of proxy
relating to the 1996 Annual Meeting. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy
statement and proxy relating to the 1996 Annual Meeting any
shareholder proposal which does not meet all of the requirements
for inclusion established by the Securities and Exchange
Commission in effect at the time such proposal is received.
OTHER MATTERS
At the time of preparation of this Proxy Statement, the
Board of Directors of the Company knew of no matter to be
presented for action at the Annual Meeting other than as set
forth in the Notice of Annual Meeting of Shareholders and
described in this Proxy Statement. If any other matters properly
come before the Annual Meeting, the proxies have discretionary
authority to vote their shares according to their best judgment.
ANNUAL REPORT TO SHAREHOLDERS
The Company is required to file an Annual Report for its
fiscal year ended December 31, 1994 on Form 10-K with the
Securities and Exchange Commission, and information required by
Form 10-K (excluding exhibits) is included as part of the
Company's Annual Report to Shareholders for the year ended
December 31, 1994. A copy of the Annual Report to Shareholders
accompanies this Proxy Statement. Any beneficial owner of the
Company's securities who does not receive a copy of the Annual
Report to Shareholders will be furnished one upon written request
directed to the Company at its main office.
By order of the Board of Directors
Randolph W. Lenz
Chairman of the Board
Woodbridge, Connecticut
__________________, 1995
EXHIBIT A TO THE PROXY STATEMENT
1994 CBC BANCORP, INC.
LONG-TERM INCENTIVE PLAN
ARTICLE I
Purpose
The purpose of the 1994 CBC Bancorp, Inc. Long-Term
Incentive Plan (hereinafter referred to as the "Plan") is to
advance the interests of CBC Bancorp, Inc. (the "Corporation")
and its subsidiary, Connecticut Bank of Commerce (the "Bank"), as
well as the Corporation's shareholders by providing incentives
and rewards to the Corporation's employees who are in a position
to contribute to the long-term growth and profitability of the
Corporation and the Bank, assist the Corporation and the Bank in
attracting, retaining and motivating highly qualified employees
for the successful conduct of their business and make the
Corporation's and the Bank's compensation program competitive
with those of other financial services companies.
ARTICLE II
Definitions
2.1 "Change in Control of the Corporation" shall be deemed
to occur in the event that any "person" or "group", within the
meaning of Section 13(d) and 14(d)(2) of the Exchange Act,
acquires, directly or indirectly, beneficial ownership of 51
percent or more of the then outstanding voting securities of the
Corporation and such person on the effective date of this Plan
did not own or control 51 percent or more of the voting
securities of the Corporation.
2.2 "Code" means the Internal Revenue Code of 1986, as now
or hereafter amended.
2.3 "Committee" means the committee established pursuant to
Article IV.
2.4 "Disability" means a Participant's inability to engage
in any substantial gainful activity because of any medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted, or can be expected to
last, for a continuous period of six (6) months of longer.
2.5 "Employee" shall mean all officers of the Corporation
and of the Bank or other persons serving in a managerial capacity
with the Corporation and the Bank, including officers who are
also directors of the Corporation or of the Bank.
2.6 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
2.7 "Incentive Stock Option" means any stock option
granted pursuant to this Plan which is designated as such by the
Committee and which complies with Section 422 of the Code.
2.8 "Market Price" shall mean the closing sale price of a
share of Stock as reported on the NASDAQ Small-Cap Market on the
particular day in question or, if no trading occurred on that
day, then, on the last trading day immediately prior to such
date.
2.9 "Non-Qualified Stock Option" means any stock option
granted pursuant to this Plan which is not an Incentive Stock
Option.
2.10 "Outside Director" means a member of the Board of
Directors of the Corporation who is not an Employee.
2.11 "Participant" means a Participant as defined in
Article III.
2.12 "Stock" means the common stock, par value $0.01 per
share, of the Corporation.
ARTICLE III
Participation
The participants ("Participants") in the Plan shall be the
Corporation's or the Bank's Employees serving in an executive or
managerial position who are selected to participate in the Plan
by the Committee of the Board of Directors of the Corporation
named to administer the Plan pursuant to Article IV or the
President of the Corporation or of the Bank acting under
delegated authority pursuant to Article IV hereof.
ARTICLE IV
Administration
The Plan shall be administered and interpreted by a
committee of two or more members of the Board of Directors who
are outside directors (hereinafter referred to as the
"Committee") appointed by the Board. If the Board has appointed a
Compensation Committee, the Committee shall be comprised of the
members of the Compensation Committee that are Outside Directors.
All decisions and acts of the Committee shall be final and
binding upon all Participants. The Committee shall: (i) determine
the number and types of awards to be made under the Plan; (ii)
select the awards to be made to the Participants; (iii) set the
number of options to be awarded and the number of shares to be
awarded out of the total number of shares available for award;
(iv) delegate to the President of the Corporation or the
President of the Bank the right to select the Participants, to
determine the number and types of awards to be made under the
Plan and the allocation of the awards among Employees (other than
the President), such delegation to be subject to such terms and
conditions as the Committee shall provide in such delegation; (v)
establish administrative regulations to further the purpose of
the Plan; and (vi) take any other action desirable or necessary
to interpret, construe or implement properly the provisions of
the Plan.
ARTICLE V
Awards
5.1 Form of Awards. Awards under this Plan may be in any
of the following forms (or a combination thereof): (i) stock
option awards in accordance with Article VI; or (ii) Performance
Awards in accordance with Article VII. All awards (other than
Performance Awards) shall be made pursuant to award agreements
between the Participant and the Corporation substantially in the
form of Exhibit A hereto or in such form as the Participant and
the Corporation may otherwise mutually agree.
5.2 Maximum Amount Available. The total number of shares
of Stock optioned under this Plan during the term of the Plan
shall not exceed 250,000 shares except as increased or otherwise
adjusted in accordance with Section 5.3. No Participant may be
granted option awards which would result in the Participant
receiving, in the aggregate, more than 50% of the maximum number
of shares available for award under the Plan. Solely for purpose
of computing the total number of shares of Stock optioned under
this Plan, there shall not be counted any shares which have been
forfeited if the Participant received no benefits of ownership
from the Stock and any shares covered by an option which, prior
to such computation, has been terminated in accordance with its
terms or has been canceled by the Participant or the Corporation.
5.3 Adjustment in the Event of Recapitalization, Etc. In
the event of any change in the capital structure of the
Corporation by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, combination or exchange
of shares or other similar corporate change (including the
exercise of warrants and the conversion of any equity or debt
securities of the Corporation convertible into shares of Stock)
or in the event of any special distribution to stockholders, the
number of shares and prices per share applicable to options then
outstanding and in the number of shares which are available
thereafter for Stock Option Awards (as defined in Section 6.1) or
other awards, both under the Plan as a whole and with respect to
individuals, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Stock; provided,
however, that any fractional shares resulting from any such
adjustment shall be eliminated.
ARTICLE VI
Stock Options
6.1 Grant of Award. The Corporation may award options to
purchase Stock (hereinafter referred to as "Stock Option Awards")
to such Participants (other than Outside Directors) as the
Committee or the President of the Corporation or of the Bank,
acting under delegated authority pursuant to Article IV,
authorizes and under such terms as the Committee establishes. The
Committee shall determine with respect to each Stock Option Award
and designate in the grant whether a Participant is to receive an
Incentive Stock Option or a Non-Qualified Option.
6.2 Option Price. Except as otherwise provided in this
Section 6.2, the option price of each share of Stock subject to a
Stock Option Award shall be (i) the Market Price of a share of
Stock on the trading date immediately preceding the date of grant
and (ii) specified in the grant. Notwithstanding the preceding
sentence to the contrary, if the Participant to whom an Incentive
Stock Option is granted owns, at the time of the grant, more than
ten percent (10%) of the combined voting power of the
Corporation, the option price shall not be less than one hundred
ten percent (110%) of the Market Price described in the preceding
sentence.
6.3 Terms of Option. A stock option by its terms shall not
be transferable by the Participant other than by will or the laws
of descent and distribution, and, during the Participant's
lifetime, shall be exercisable only by the Participant. In
addition, a stock option by its terms shall be of ten years'
duration, except that an Incentive Stock Option granted to a
Participant who, at the time of the grant, owns Stock
representing more than ten percent (10%) of the combined voting
power of the Corporation shall by its terms be of no more than
five years' duration. A stock option by its terms shall be
exercisable only after the earliest of: (i) such period of time
as the Committee (or its delegatee) shall determine and specify
in the grant, but in no event more than one year following the
date of grant of such award; (ii) the Participant's death or
Disability; or (iii) a Change in Control of the Corporation.
An option is only exercisable by a Participant while the
Participant is in active employment with the Corporation or the
Bank, except (i) in the case of the Participant's death or
Disability, at any time during the thirty-six month period
following the Participant's death or Disability; (ii) during a
six-month period commencing on the date of a Participant's
termination of employment by the Corporation or the Bank other
than for cause; (iii) during the three-year period commencing on
the date of the Participant's termination of employment, by the
Participant or the Corporation or Bank, as the case may be, after
a Change in Control of the Corporation, unless such termination
of employment is for cause; or (iv) if the Committee decides that
it is in the best interest of the Corporation or the Bank to
permit individual exceptions. An option may not be exercised
pursuant to this Section 6.3 after the expiration date of the
option.
6.4 Exercise of the Option. An option may be exercised
with respect to part or all of the shares subject to the option
by giving written notice to the Corporation of the exercise of
the option. The option price for the shares for which an option
is exercised shall be paid on or within ten (10) business days
after the date of exercise in cash, by certified check or money
order, in whole shares of Stock owned by the Participant prior to
exercising the option, or in a combination of cash and such
shares of Stock or on such terms and conditions as the Committee
determines. The value of any share of Stock delivered in payment
of the option price shall be its Market Price on the date the
option is exercised.
6.5 Dividends on Shares Covered By Options. The Committee
may, in its discretion, grant to Participants holding stock
options the right to receive, with respect to each share covered
by an option, payments of amounts equal to the regular cash
dividends paid to holders of Stock during the period that the
option is outstanding.
ARTICLE VII
Performance Awards
Subject to compliance with applicable provisions of law, the
Committee or the President of the Corporation or of the Bank
acting under delegated authority pursuant to Article IV hereof,
may grant, either alone or in addition to other awards granted
under the Plan, cash awards based on a Participant's job
performance ("Performance Awards") to such Participants as the
Committee or the President of the Corporation or of the Bank (as
to Employees other than the President), acting under delegated
authority pursuant to Article IV hereof, authorizes and under
such terms as the Committee or the President of the Corporation
or of the Bank, as the case may be, establishes. Performance
Awards may be paid in cash or any other form of property as the
Committee (or its delegatee) shall determine. Performance Awards
shall entitle the Participant to receive an award if the measures
of performance or other criteria established by the Committee or
the President of the Corporation or the Bank, acting under
delegated authority, are met. The measures of performance or
other criteria shall be established by the Committee or by the
President of the Corporation or of the Bank, acting pursuant to
delegated authority. The Committee or the President of the
Corporation or of the Bank, acting pursuant to delegated
authority, shall determine the times at which Performance Awards
are to be made and all conditions of such awards. Performance
Awards shall be subject to any applicable federal, state or local
withholding tax requirements.
ARTICLE VIII
Withholding
In order to enable the Corporation to meet any applicable
federal, state or local withholding tax requirements arising as a
result of the exercise of a stock option, a Participant shall pay
to the Corporation the amount of tax to be withheld. In the
alternative, the Participant may elect to satisfy such obligation
(i) by having the Corporation withhold shares that otherwise
would be delivered to the Participant pursuant to the exercise of
the Option for which the tax is being withheld, (ii) by
delivering to the Corporation other shares of Stock owned by the
Participant prior to exercising the option or (iii) by making a
payment to the Corporation consisting of a combination of cash
and such shares of Stock. Such election shall be subject to the
following: (a) the election shall be made in such manner as may
be prescribed by the Committee; (b) the election shall be made
prior to the date to be used to determine the tax to be withheld;
and (c) if the Participant is a person subject to Section 16 of
the Exchange Act, the election shall be irrevocable and shall be
made within six months after the grant of the option, except that
this six-month limitation shall not apply in the event the
Participant delivers to the Corporation previously owned shares
of Stock, and shall be made either at least six months prior to
the date to be used to determine the tax to be withheld or during
a ten-day period beginning on the third business day following
the date of release of the quarterly or annual consolidated
balance sheets and statements of operations and ending on the
12th business day following such date.
ARTICLE IX
General Provisions
9.1 Any assignment or transfer of any awards without the
written consent of the Corporation shall be null and void.
9.2 Nothing contained herein shall require the Corporation
or the Bank to segregate any monies from its general funds, or to
create any trusts or to make any special deposits for any
immediate or deferred amounts payable to a Participant for any
year.
9.3 Participation in this Plan shall not affect the
Corporation's right to discharge a Participant or constitute an
agreement of employment between a Participant and the Corporation
or the Bank, as the case may be.
ARTICLE X
Amendment, Suspension or Termination of the Plan
10.1 General Rule. The Board of Directors may suspend,
terminate or amend the Plan, including but not limited to such
amendments as may be necessary or desirable resulting from
changes in the federal income tax laws and other applicable laws,
but may not, without the approval by the holders of a majority of
all outstanding shares entitled to vote on the subject at a
meeting of the stockholders of the Corporation, (i) increase the
total number of shares of Stock that may be optioned under the
Plan or (ii) amend any provision of the Plan which, with respect
to officers (as defined in Rule 16a-1(f) of the Exchange Act) of
the Corporation or of the Bank, materially modifies the
eligibility requirements, materially increases the benefits or
materially increases the number of shares issuable. No
suspension, termination or amendment of the Plan shall affect the
rights of Participants under options granted prior to any such
event.
10.2 Compliance with Rule 16b-3. With respect to persons
subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with the requirements of Rule 16b-3
under the Exchange Act, as applicable during the term of the
Plan. To the extent that any provision of the Plan or action by
the Committee or its delegees fail to so comply, it shall be
deemed null and void, to the extent permitted by law. Should the
requirements of Rule 16b-3 change, the Board of Directors may
amend this Plan to comply with the requirements of that rule or
its successor provision or provisions.
ARTICLE XI
Effective Date and Duration of the Plan
This Plan shall be effective on the date of the approval of
the Plan by the holders of a majority of the shares of Stock;
provided, however, that the adoption of the Plan is subject to
such stockholder approval within twelve (12) months before or
after the date of adoption of the Plan by the Board of Directors.
The Plan shall be null and void and of no effect if the foregoing
condition is not fulfilled, and in such event each Stock Option
Award hereunder shall, notwithstanding any of the preceding
provisions of the Plan, be null and void and of no effect.
EXHIBIT A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), dated as of ,
, by and between (the "Optionee")
and CBC Bancorp, Inc. ("CBC"), a Connecticut corporation and
parent company of the Connecticut Bank of Commerce (the "Bank").
WHEREAS, the Optionee is regarded as a key employee of CBC
and the Bank, and the respective Board of Directors of CBC and of
the Bank has each determined that it would be to the advantage
and in the interest of CBC and the Bank and the shareholders of
CBC to grant the option provided for herein to the Optionee as an
inducement to remain in the service of CBC and the Bank as an
incentive for increased effort during such service; and
WHEREAS, CBC and the Optionee wish to set forth the terms
and conditions of the option granted to Optionee hereunder.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties
hereto hereby agree as follows:
1. Grant of Option. On the terms and conditions contained
in this Agreement, CBC hereby grants to Optionee an option (the
"Option") to purchase shares of CBC common stock,
par value $0.01 per share (the "Common Stock") at a purchase
price of $ per share (the "Option Price") representing the
Market Price (as hereinafter defined) of a share of Common Stock
on the trading day immediately preceding the date of grant. If
the Optionee to whom an Option is granted owns, at the time of
the grant, more than ten percent (10%) of the combined voting
power of CBC, the Option Price shall not be less than one hundred
ten percent (110%) of the Market Price described in the preceding
sentence. For purposes of this Agreement, "Market Price" shall
mean the closing sale price of a share of CBC Common Stock as
reported on the NASDAQ Small-Cap Market on the particular day in
question, or, if no trading occurred on that day, then, on the
last trading day immediately prior to such day. Any shares of
Common Stock issued upon exercise of all or part of the Option
are referred to herein as the "Option Shares". The number of
shares of Common Stock that may be received upon exercise of the
Option is subject to further adjustment from time to time as
provided for herein.
2. Terms of Option. The Option shall not be transferable
by the Optionee other than by will or the laws of descent and
distribution, and, during the Optionee's lifetime, shall be
exercisable only by the Optionee. In addition, the Option shall
be of ten years' duration, except that an Option granted to an
Optionee who, at the time of the grant, owns Common Stock
representing more than ten percent (10%) of the combined voting
power of CBC shall by its terms be of no more than five years'
duration. The Option shall be exercisable only after the earliest
of: (i) (a date no more than one year following the date of
grant of the Option), (ii) the Optionee's death or Disability (as
hereinafter defined); or (iii) a Change in Control of CBC (as
hereinafter defined). For purposes of this Agreement the term
"Disability" shall mean an Optionee's inability to engage in any
substantial gainful activity because of any medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted, or can be expected to
last, for a continuous period of six (6) months or longer. For
purposes of this Agreement, a "Change in Control of CBC" shall be
deemed to have occurred in the event that any "person" or
"group", within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
acquires, directly or indirectly, beneficial ownership of 51
percent or more of the then outstanding voting securities of CBC
and such person on the effective date of CBC's Long-Term
Incentive Plan (the "Plan") did not own or control 51 percent or
more of the voting securities of CBC.
3. Exercise and Termination of the Option. (a) The
Option is only exercisable by the Optionee while the Optionee is
in active employment with CBC or the Bank, except (i) in the case
of the Optionee's death or Disability, at any time during the
thirty-six month period following the Optionee's death or
Disability; (ii) during a six-month period commencing on the date
of the Optionee's termination of employment by CBC or the Bank
other than for cause; (iii) during the three-year period
commencing on the date of the Optionee's termination of
employment, by the Optionee or CBC or Bank, as the case may be,
after a Change in Control of CBC, unless such termination of
employment is for cause; or (iv) if the members of CBC's
Compensation Committee who are outside directors or, if no such
Committee has been established, the Committee of two or more
members of CBC's Board of Directors who are outside directors
appointed by the Board of Directors to administer the Plan (the
"Committee"), decide that it is in the best interest of CBC or
the Bank to permit individual exceptions. The Option may not be
exercised pursuant to this Section 3 after the expiration date of
the Option.
(b) The Option may be exercised by the Optionee with
respect to part or all of the Option Shares subject to the Option
by giving written notice to CBC of the exercise of the Option.
The Option Price for the shares of Common Stock for which the
Option is exercised shall be paid on or within ten (10) business
days after the date of exercise in cash, by certified check or
money order, in whole shares of Common Stock owned by the
Optionee prior to exercising the Option, or in a combination of
cash and such shares of Common Stock or on such terms and
conditions as the Committee determines. The value of any share of
Stock delivered in payment of the option price shall be its
Market Price on the date the option is exercised.
(c) In order to enable CBC to meet any applicable federal,
state or local withholding tax requirements arising as a result
of the exercise of the Option, the Optionee shall pay to CBC the
amount of tax to be withheld. In the alternative, the Optionee
may elect to satisfy such obligation (i) by having CBC withhold
shares of Common Stock that otherwise would be delivered to the
Optionee pursuant to the exercise of the Option for which the tax
is being withheld, (ii) by delivering to CBC other shares of
Common Stock owned by the Optionee prior to exercising the Option
or (iii) by making a payment to CBC consisting of a combination
of cash and such shares of Common Stock. Such election shall be
subject to the following: (a) the election shall be made in such
manner as may be prescribed by the Committee; (b) the election
shall be made prior to the date to be used to determine the tax
to be withheld; and (c) if the Optionee is a person subject to
Section 16 of the Exchange Act, the election shall be irrevocable
and shall be made within six months after the grant of the
Option, except that this six-month limitation shall not apply in
the event the Optionee delivers to CBC previously owned shares of
Common Stock, and shall be made either at least six months prior
to the date to be used to determine the tax to be withheld or
during a ten-day period beginning on the third business day
following the date of release of the quarterly or annual
consolidated balance sheets and statements of operations and
ending on the 12th business day following such date.
4. Adjustment Upon Changes in Capitalization. In the
event of any change in the capital structure of CBC by reason of
any stock split, stock dividend, recapitalization, merger,
consolidation, combination or exchange of shares or other similar
corporate change (including the exercise of warrants and the
conversion of any equity or debt securities of CBC convertible
into shares of Common Stock) or in the event of any special
distribution to stockholders, the number of Option Shares and the
Option Price per share applicable to the Option granted
hereunder, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock;
provided, however, that any fractional shares resulting from any
such adjustment shall be eliminated.
5. Specific Performance. The parties hereto acknowledge
that damages would constitute an inadequate remedy for a breach
of this Agreement and that the obligations of the parties hereto
shall be specifically enforceable.
6. Assignability. This Option is not assignable or
transferable by the Optionee otherwise than by will or the laws
of descent and distribution and is exercisable during Optionee's
lifetime only by the Optionee.
7. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not effect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Connecticut, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
9. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
IN WITNESS WHEREOF, CBC has caused this Agreement to be duly
executed by its duly authorized officer, and the Optionee has
hereunto set his hand, all as of the day and year first above
written.
OPTIONEE
BY:___________________________
CBC BANCORP, INC.
BY:___________________________
PROXY CBC BANCORP, INC. PROXY
1995 ANNUAL MEETING OF SHAREHOLDERS - JUNE 29, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of CBC BANCORP, INC. (the
"Company") hereby appoint Kellie Laezzo and Julie A. Dauria and
each of them the proxies of the undersigned with full power of
substitution to vote at the Annual Meeting (the "Annual Meeting")
of Shareholders of the Company to be held at the office of the
Company's subsidiary, Connecticut Bank of Commerce, 128 Amity
Road, Woodbridge, Connecticut, at 4:00 p.m. on Tuesday, June 29,
1995, and at any adjournment or adjournments thereof, with all
the power that the undersigned would have if personally present,
hereby revoking any proxy heretofore given. A majority of said
proxies or their substitutes who attend the Annual Meeting (or if
only one shall be present, then that one) may exercise all of the
powers hereby granted. The undersigned hereby acknowledges
receipt of the proxy statement for the Annual Meeting and
instructs the proxies to vote.
The Board of Directors recommends a vote "FOR" Proposals 1,
2 and 3.
1. Authorization and approval of the 1994 CBC Bancorp, Inc.
Long-Term Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
2. Election of the nominees for directors: Randolph W. Lenz,
Marcial Cuevas, Jack Wm. Dunlap, Charles Pignatelli and Steven
Levine.
/ / FOR All Nominees
/ / WITHHOLD AUTHORITY to
vote for all nominees
listed above
/ / WITHHOLD AUTHORITY
to vote for
the following only:
(INSTRUCTION: To withhold authority for any individual, write the
individual's name on the space provided below.)
- Turn Over -
(Please date and sign on reverse side)
3. Ratification of the appointment of BDO Seidman a independent
auditors for the fiscal year ending December 31, 1995.
FOR / / AGAINST / / ABSTAIN / /
4. With discretionary authority upon such other matters as may
properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY SIGNED WILL BE VOTED IN THE MANNER
DIRECTED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSALS SET FORTH ABOVE AND FOR THE ELECTION OF ALL
NOMINEES LISTED ABOVE.
The undersigned plans to attend the Annual Meeting of the
Company:
/ / YES / / NO
Dated: , 1995
Signature
Signature, if held jointly
Please sign exactly as your name appears on this proxy card.
When signing as attorney, executor, trustee or guardian, please
give your full title.
