CFX CORPORATION LOGO
March _____, 1995
Dear Shareholder:
Chairman Gaffey and I are pleased to invite you to attend the Annual
Meeting of Shareholders of CFX Corporation at 10:00 a.m. on Wednesday, April
19, 1995 at the Keene Country Club, Keene, New Hampshire. Your vote is very
important, so I urge you to review the proxy materials now and complete your
proxy. As the proxy statement explains, simply signing, dating and returning
the proxy in the envelope provided instructs management to cast your vote for
all nominees and proposals. If you prefer, you may vote each proposal
individually and, of course, you can revoke your proxy and change your vote at
any time before the vote on the respective proposal is taken.
The items of business which we anticipate presenting for action at the
Annual Meeting are the election of four directors for three-year terms,
ratification of the selection of Wolf & Company, P.C. as independent auditors
of the Company, and ratification of the CFX Corporation 1995 Stock Option
Plan. Please read the enclosed proxy statement for more information on the
items presented and complete and return your proxy as soon as possible (even
if you plan to attend the meeting). Thank you for your cooperation and
support.
Sincerely,
PETER J. BAXTER
President and Chief Executive
Officer
CFX CORPORATION
102 Main Street
Keene, New Hampshire 03431
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held April 19, 1995
The Annual Meeting of Shareholders of CFX Corporation (the "Company")
will be held on Wednesday, April 19, 1995, at 10:00 a.m., Eastern Time, at
the Keene Country Club, Keene, New Hampshire for the following purposes:
1. To elect four directors for terms of three years each;
2. To ratify the appointment of Wolf & Company, P.C. as independent
auditors for calendar year 1995;
3. To ratify the adoption of the CFX Corporation 1995 Stock Option
Plan;
4. To approve an adjournment of the Annual Meeting if necessary to
permit further solicitation of proxies in the event that there are
insufficient votes to approve one or more of the foregoing nominees
or proposals at the time of the Annual Meeting; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 1, 1995 are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors and President
/s/ CHRISTOPHER V. BEAN
CHRISTOPHER V. BEAN
Secretary
March ____, 1995
IMPORTANT--Your Proxy is enclosed
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ENCLOSED STAMPED ENVELOPE WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING.
YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
CFX CORPORATION
102 Main Street
Keene, New Hampshire 03431
(603) 352-2502
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
to be held on April 19, 1995
This Proxy Statement is furnished to shareholders of CFX Corporation
(the "Company") in connection with the solicitation by the Board of Directors
of the Company of proxies to be used at the Annual Meeting of Shareholders
(the "Annual Meeting") to be held on Wednesday, April 19, 1995 at 10:00 a.m.,
Eastern Time, at the Keene Country Club, Keene, New Hampshire, and at any
adjournments thereof.
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
Executed but unmarked proxies will be voted "FOR" the nominees proposed by the
Board of Directors and "FOR" the proposals presented in the attached Notice of
Annual Meeting of Shareholders. Except for procedural matters incident to the
conduct of the Annual Meeting, the Company does not know of any matters other
than those described in the Notice of Annual Meeting that are to come before
the Annual Meeting. If any other matters are properly brought before the
Annual Meeting, the persons named in the accompanying proxy will vote the
shares represented by the proxies on such matters as determined by a majority
of the Board of Directors.
The presence of a shareholder at the Annual Meeting will not
automatically revoke such shareholder's proxy. However, shareholders may
revoke a proxy at any time prior to its exercise by filing with the Secretary
of the Company a written notice of revocation, by delivering to the Company a
duly executed proxy bearing a later date or by attending the Annual Meeting
and voting in person.
The cost of soliciting proxies in the form enclosed herewith will be
borne by the Company. In addition to the solicitation of proxies by mail, the
Company, through its directors, officers and regular employees, may also
solicit proxies personally or by telephone or telegraph. The Company will
also request persons, firms and corporations holding shares in their names or
in the name of their nominees, which are beneficially owned by others, to send
proxy material to and obtain proxies from the beneficial owners and will
reimburse the holders for their reasonable expenses in doing so. It is
anticipated that this Proxy Statement will be mailed to shareholders on or
about March 14, 1995.
The securities which can be voted at the Annual Meeting consist of
shares of the Common Stock and the Series A Preferred Stock of the Company,
with each share entitling its owner to one vote on all matters. Under the
Company's Articles of Incorporation, cumulative voting to elect directors is
not authorized. The close of business on March 1, 1995 (the "Record Date")
has been fixed by the Board of Directors as the record date for the
determination of shareholders entitled to vote at the Annual Meeting. There
were approximately 2,760 record holders of the Company's outstanding common
stock and approximately 231 record holders of the Company's Series A Preferred
Stock as of the Record Date. As of the Record Date, the Company had 3,895,152
shares of Common Stock outstanding and 192,769 shares of Series A Preferred
Stock outstanding. As of the Record Date, no persons owned of record, or were
known to own beneficially, more than five percent (5%) of the outstanding
shares of the Company's capital stock. The presence, in person or by proxy,
of at least one-half of the outstanding shares of the capital stock of the
Company entitled to vote is necessary to constitute a quorum at the Annual
Meeting.
I. ELECTION OF DIRECTORS
General
The Board of Directors of the Company presently consists of 11 persons.
Directors are elected for staggered terms of three years and hold office until
their successors are elected and qualified. The directors are divided into
three classes: two classes of four directors each and one class of three
directors. The term of office of only one class of directors expires in each
year. There are no arrangements or understandings between the Company and any
person pursuant to which any person has been elected as a director.
At the Annual Meeting four directors will be elected for three-year
terms. Unless otherwise specified on the proxy, 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 directors of the four nominees listed
below. The persons receiving a plurality of the votes cast will be elected as
directors. Although it is anticipated that each nominee will be available to
serve as a director, should any nominee be unavailable to serve, proxies will
be voted by the proxy holders in their discretion for another person
designated by the Board of Directors.
The following table sets forth certain information, some of which has
been obtained from the Company's records and some of which has been supplied
by the persons listed, regarding the nominees for election to the Board of
Directors, the directors who will continue in office for the remainder of
their terms and certain executive officers:
<TABLE>
<CAPTION>
Shares of the Company
Owned on the Record
Date (Percentage of
Positions With the Company Outstanding Stock
and Present Principal Director in Parenthesis Where
Name and Age Occupations or Employment Since(1) Over 1%)(2)
<S> <S> <C> <C>
Nominees to serve until 1998
Richard B. Baybutt Director; Chairman, Baybutt Construc- 1977 44,100(l.07%)(3)
Age 66 tion Corp.
Christopher V. Bean Director and Secretary; Attorney, 1988 13,895(4)
Age 45 Tower, Bean & Crocker
Elizabeth Sears Hager Director; New Hampshire State 1994 105
Age 50 Representative
L. William Slanetz Director; President, Cheshire Realty 1968 16,538(5)
Age 66
Directors whose terms expire in 1996
Eugene E. Gaffey Director and Chairman of the Board; 1972 16,647(6)
Age 70 Consultant, Student Insurance Services
Emerson H. O'Brien Director; President, Economy Plumbing 1974 8,430(7)
Age 61 & Heating, Inc.
Walter R. Peterson Director; President, Franklin Pierce 1988 37,350(8)
Age 72 College
Directors whose terms expire in 1997
Peter J. Baxter Director; President and Chief Executive 1988 55,770(l.34%)(9)
Age 43 Officer, CFX Corporation, President and
Chief Executive Officer, CFX Bank
Calvin L. Frink Director; Retired, Former Customer 1972 9,388(10)
Age 72 Relations Manager, Walier Chevrolet-
Oldsmobile
Douglas S. Hatfield, Jr. Director; Attorney, Hatfield, Moran & 1990 19,704
Age 59 Barry, P.A.
Philip A. Mason Director; Attorney, Mason and Martin 1988 275(11)
Age 52
Non-Director Executive Officer
Paul D. Spiess Executive Vice President, CFX _ 46,113(1.11%)(12)
Age 45 Corporation; Banking Partner, CFX Bank
All directors and executive 372,856(8.48%)(13)
officers as a group
(17 persons)
<FN>
<F1> The Company was not active until 1986. References to years directors
have served prior to 1986 relate to service on the Board of Trustees of
Cheshire County Savings Bank.
<F2> Shares of the Company beneficially owned. A beneficial owner of a
security includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or
shares the power to vote such security or the power to dispose of such
security. Included are shares owned by spouses and relatives living in
the same home as to which beneficial ownership may be disclaimed, shares
which may be obtained under the Company's Stock Option Plan and shares
of the Company's Series A Preferred Stock.
<F3> Includes 17,640 shares owned by Baybutt Construction Corp. and 9,922
shares owned by the Baybutt Construction Corp. Profit Sharing Trust.
<F4> Includes 1,213 shares owned by spouse and 1,323 shares owned by minor
children.
<F5> Includes 4,631 shares owned by spouse.
<F6> Includes 109 shares owned jointly with grandchildren.
<F7> Includes 1,814 shares owned by spouse.
<F8> Includes 3,146 shares owned by spouse.
<F9> Includes 7,220 shares owned jointly with spouse.
<F10> Includes 3,875 shares owned jointly with spouse.
<F11> Includes 275 shares owned jointly with spouse.
<F12> Includes 735 shares owned jointly with spouse and 400 shares owned by
Northern Heritage Realty, Inc.
<F13> Includes 104,652 shares owned by executives who are not named in the
table, including 11,780 shares owned jointly with their spouses.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
NAMED HEREIN.
The executive officers of the Company and its subsidiary are elected
annually by the respective Boards of Directors or Trustees. Listed below is
information concerning the executive officers of the Company, and the
Company's banking subsidiary, CFX Bank (the "Bank").
<TABLE>
<CAPTION>
Executive
Name and Age Positions Officer Since
<S> <S> <C>
Eugene E. Gaffey Chairman of the Board of the Company and the Bank 1986
Age 70
Peter J. Baxter Director, President and Chief Executive Officer of the 1987
Age 43 Company; Trustee, Banking Partner, President and Chief
Executive Officer of the Bank
Paul D. Spiess Executive Vice President of the Company and Banking 1993
Age 45 Partner of the Bank
Mark A. Gavin, C.P.A. Chief Financial Officer of the Company and Banking 1992
Age 33 Partner of the Bank
William H. Dennison Treasurer of the Company; Trustee, Banking Partner 1986
Age 62 of the Bank
John F. Foley Senior Vice President-Human Resources of the Company and 1991
Age 58 Banking Partner of the Bank
Larry E. Babcock Vice President-Data Processing of the Company and Banking 1986
Age 50 Partner of the Bank
William J. McIver Banking Partner of the Bank 1993
Age 43
</TABLE>
Each of the foregoing directors and executive officers of the Company
except Messrs. McIver, Gavin, Spiess and Foley have been employed in the
position set forth opposite his name above for at least the past five years.
In addition to his positions with the Company, Mr. Baxter became President and
Chief Executive Officer of Cheshire County Savings Bank ("Cheshire"; now known
as CFX Bank) as of April 1, 1992. Mr. McIver became a banking partner of the
Bank following the merger of Valley Bank ("Valley") and Cheshire in 1993.
Prior to the merger, Mr. McIver had been President and Chief Executive Officer
of Valley since 1991 and Chief Executive Officer of Valley since April 1987.
Mr. Gavin became the Company's Chief Financial Officer as of March 2, 1992.
From April 1989 until March 1992, Mr. Gavin was Controller and Chief
Accounting Officer of the Company. Mr. Foley became the Company's Senior Vice
President-Human Resources as of December 30, 1991. Prior to December 1991, Mr.
Foley was employed by Nationale Nederlanden in Keene, New Hampshire as Vice
President-Human Resources. Mr. Spiess became an executive vice president of
the Company on September 1, 1993, following the Bank's purchase of the
remaining 52.4% interest in Colonial Mortgage, Inc. Prior to September 1,
1993, Mr. Spiess was Chairman and President of Colonial Mortgage, Inc. After
the purchase of Colonial Mortgage, Inc. by the Bank, the name of the mortgage
subsidiary was changed to CFX Mortgage, Inc.
The executive officers of the Company are elected annually by the Board
of Directors and, according to the Company's Bylaws, hold office until a
successor is elected and qualified or until the executive officer's death,
resignation or removal from office.
Ms. Hager is a director of Chubb America Fund, Inc. and Chubb Investment
Funds, Inc., both subsidiaries of Chubb Corp., a company with a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934.
Mr. Bean's brother Delcie D. Bean is currently a trustee of CFX Bank.
Delcie D. Bean has been a trustee of CFX Bank since 1993, when the Company
merged its three banking subsidiaries Cheshire, the Monadnock Bank, and the
Valley Bank. Previously, Delcie D. Bean was a director of the Monadnock Bank.
The Board of Directors held eight meetings in 1994. The Company has,
among other committees, an Audit Committee, a Human Resources/Compensation
Committee (the "Compensation Committee") and a Corporate Governance Committee
of its Board of Directors. The Audit Committee's responsibilities include
reviewing any audit reports and reporting to the full Board of Directors. The
Audit Committee met six times in 1994. The Audit Committee members were
Messrs. Baybutt, Bean, Gaffey, Hatfield, and Slanetz. The responsibilities of
the Compensation Committee include reviewing the Company's salary and benefit
policy and reporting its conclusions to the full Board of Directors. The
Compensation Committee met four times in 1994. The Compensation Committee
members were Mr. Baxter, Mr. Bean, Mr. Frink, Mr. Gaffey, Ms. Hager, and Mr.
O'Brien. The Company's Corporate Governance Committee performs the functions
of a nominating committee by recommending individuals to the Board for the
positions of directors and officers. The Corporate Governance Committee met
three times in 1994. The Corporate Governance Committee members were Messrs.
Baxter, Gaffey, Hatfield, Mason, O'Brien and Peterson.
In 1994, each director attended at least 75% of all meetings of the
Company's Board of Directors and meetings of any Committee of which he or she
was a member.
Executive Compensation and Other Information
Summary Compensation Table. The following table sets forth cash
compensation for the Company's chief executive officer and other executive
officers of the Company whose total compensation exceeded $100,000 for
services rendered in all capacities to the Company and its subsidiary during
the last three fiscal years:
<TABLE>
<CAPTION>
Annual Compensation All Other
Name and Principal Position Year Salary Bonus(1) Compensation(2)
<S> <C> <C> <C> <C>
PETER J. BAXTER 1994 $193,000 $ 0 $1,549
President and Chief Executive 1993 172,248 0 2,393
Officer 1992 156,045 5,832 2,445
PAUL D. SPIESS(3) 1994 145,600 11,486 1,696
Executive Vice President 1993 48,461 6,707 2,896
<FN>
<F1> Includes bonus awards earned for performance in the fiscal year noted
even though such amounts may be paid in subsequent years.
<F2> The values listed in this column include amounts for memberships in
civic, social and professional associations, and use of an automobile
furnished by the Company.
<F3> Mr. Spiess became an executive vice president of the Company on September
1, 1993, following the Bank's purchase of the remaining 52.4% interest
in Colonial Mortgage, Inc. For the eight months during 1993 while
employed at Colonial Mortgage, Inc., Mr. Spiess earned $91,274.
</TABLE>
1986 Stock Option Plan. On October 27, 1986, the Board of Directors of
the Company adopted the Cheshire Financial Corporation 1986 Stock Option Plan
(the "1986 Plan"), as a performance incentive for the directors, officers and
other employees of the Company and its subsidiaries. The 1986 Plan was
amended on June 22, 1987 to make changes required by the Tax Reform Act of
1986. The 1986 Plan became effective upon consummation of the conversion of
Cheshire from mutual to stock form (the "Conversion"), subject to the approval
of the stockholders of the Company within 12 months after its adoption by the
Board of Directors. The Company's shareholders ratified the 1986 Plan at the
Annual Meeting held on July 22, 1987. The 1986 Plan was further amended on
December 12, 1994 to provide for the issuance of non-qualified Company stock
options in substitution for predecessor company stock options held by persons
who become or are about to become key employees of the Company or a subsidiary
of the Company as a result of a merger, consolidation or acquisition
transaction ("Predecessor Company Employees").
The 1986 Plan is administered by a Stock Option Committee of at least
three directors appointed by the Board of Directors of the Company. The Stock
Option Committee recommends to the Board of Directors the persons to whom
options will be granted, the number of shares, the types of options and other
terms and conditions of the options. The 1986 Plan does not specify criteria
to be used in determining the number of options to be issued and, thus, the
number of options granted is at the discretion of the Stock Option Committee.
The Stock Option Committee appointed by the Board of Directors consists of Mr.
Baxter, Mr. Bean, Mr. Frink, Mr. Gaffey, Ms. Hager and Mr. O'Brien.
Both "incentive stock options" and "nonqualified stock options" may be
granted pursuant to the 1986 Plan. The Company intends that the "incentive
stock options" granted under the 1986 Plan will qualify under Section 422
(formerly Section 422A) of the Internal Revenue Code. A total of 248,000
shares of unissued common stock of the Company was reserved for issuance
pursuant to incentive stock options granted under the 1986 Plan and a total of
193,000 shares of unissued common stock of the Company was reserved for
issuance pursuant to nonqualified stock options granted under the plan.
Under the 1986 Plan, incentive stock options may only be granted to
employees of the Company and its subsidiaries. Thus, non-employee directors
are excluded from participation in the 1986 Plan. The market value of stock
covered by incentive stock options (determined as of the date granted) first
exercisable under incentive stock options is limited to $100,000 per
individual per calendar year. An optionee will not be deemed to receive
taxable income upon grant or exercise of an incentive stock option, and any
gain realized at the time of sale of shares acquired upon exercise of an
incentive stock option will constitute capital gain to the optionee. No gain
or loss will be recognized by the Company as a result of the grant or exercise
of incentive stock options.
In the case of nonqualified stock options, which may be granted to
employees, non-employee directors and Predecessor Company Employees, an
optionee will be deemed to receive taxable income at ordinary income rates
upon exercise of a nonqualified stock option in an amount equal to the
difference between the exercise price and the fair market value of the common
stock on the date of exercise. Any gain subsequently realized at the time of
sale of shares acquired upon exercise of a nonqualified stock option will
constitute capital gain to the optionee. The amount of such taxable income
will be a tax deductible expense to the Company.
Except for options granted to Predecessor Company Employees, options
granted under the 1986 Plan are required to have an exercise price per share
equal to at least the fair market value of the share of common stock on the
date the option is granted. No option granted will be exercisable (i) more
than three months after the date on which the optionee ceases to perform
services for the Company or a subsidiary (except that in the event of
disability, options may be exercisable for up to one year thereafter), or (ii)
10 years after the option is granted. Payment for shares purchased pursuant
to an option may be made in cash or check or, if the option agreement permits,
by delivery and assignment to the Company of shares of common stock of the
Company having a fair market value equal to the aggregate exercise price, or
by any combination of the foregoing. The terms and conditions of Options
granted to Predecessor Company Employees may vary from the terms otherwise
applicable under the 1986 Plan, including the foregoing terms, to the extent
that the Stock Option Committee deems appropriate to conform to the terms of
the predecessor company stock options for which Company options are being
substituted.
Under the 1986 Plan, the Stock Option Committee is empowered to issue
options pursuant to the 1986 Plan at such times as it determines appropriate.
Options for 294,325 shares were outstanding on December 31, 1994 under the
1986 Plan. As of December 31, 1994, 56,436 options had been exercised. All
option figures discussed above and in the tables below have been adjusted to
reflect the 5% stock dividends declared on December 12, 1994 and December 13,
1993.
The Company has entered into an agreement pursuant to which Orange
Savings Bank ("Orange"), a Massachusetts savings bank headquartered in Orange,
Massachusetts will become a subsidiary of the Company. Closing of this
transaction is contingent upon the receipt of regulatory approvals and the
satisfaction of the other conditions precedent. If the transaction is
consummated, the Company will issue options for the purchase of up to 79,785
shares of Company common stock in substitution for outstanding options for the
purchase of shares of Orange common stock. These options will be issued under
the provisions of the 1986 Plan relating to the issuance of options to
Predecessor Company Employees.
The following table sets forth certain information concerning options
granted to Mr. Baxter and Mr. Spiess during 1994:
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Individual Grants Term
Number of % of Total
Securities Options Granted Exercise or
Underlying to Employees Base Price Expiration
Name Options Granted in Fiscal Year ($/Share) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Peter J. Baxter 13,850 21.50% $14.739 06/13/04 $128,403 $325,350
Paul D. Spiess 17,411 27.03% $14.739 06/13/04 $161,417 $409,002
</TABLE>
The assumed annual rates of appreciation of five and ten percent would
result in the price of the Company's stock increasing to $24.01 and $38.23,
respectively, at the end of the option term.
The following table sets forth certain information with respect to
outstanding stock options held by Mr. Baxter and Mr. Spiess as of December 31,
1994:
<TABLE>
<CAPTION>
Number of Value of
Unexercised Options in-the-money Options
at Fiscal Year-End at Fiscal Year-End
Exercisable/ Exercisable/
Name Unexercisable Unexcercisable
<S> <C> <C>
Peter J. Baxter 46,614/0 $82,000/$0
Paul D. Spiess 33,957/0 $17,601/$0
</TABLE>
Compensation Committee Interlocks and Insider Participation. Mr.
Baxter, Mr. Bean, Mr. Frink, Mr. Gaffey, Ms. Hager and Mr. O'Brien served on
the Compensation Committee of the Board for the past fiscal year. Although
Mr. Baxter, the Company's chief executive officer, served on the Compensation
Committee, he did not participate in any decisions regarding his own
compensation as an executive officer. Each December, the Company's Board of
Directors as a whole determines the amount in which the Company's Profit
Sharing/Bonus Plan should be funded for the just concluded fiscal year.
However, the Compensation Committee alone exercises discretion in allocating
the Profit Sharing/Bonus Plan among the Company's officers. Mr. Baxter
participated in deliberations concerning the appropriate amount of funding for
the Profit Sharing/Bonus Plan in 1994.
There are no interlocks between officers of the Company and compensation
committees and boards of directors of other companies with which the directors
of the Company are affiliated.
Board Compensation Committee Report on Executive Compensation.
Decisions on compensation of the Company's executives generally are made by
the Compensation Committee of the Board. All decisions by the Compensation
Committee relating to the compensation of the Company's executive officers are
reviewed by the full Board. Pursuant to rules of the Securities and Exchange
Commission, set forth below is a report prepared by the Board's Compensation
Committee addressing the Company's compensation policies for 1994 as they
affected Mr. Baxter, the Company's chief executive officer, and the other
executive officers. All compensation paid to the Company's executive officers
to date has been tax deductible and all compensation anticipated to be paid to
such officers in the foreseeable future is expected to be tax deductible.
Compensation Policies Toward Executive Officers. The Compensation
Committee's executive compensation policies are designed to provide
competitive levels of compensation that integrate pay with the Company's
annual and long-term performance goals, reward above average corporate
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining qualified executives. Levels of executive
compensation are set at levels that the Compensation Committee believes to be
consistent with others in the Company's industry.
The Compensation Committee also endorses the position that stock
ownership by management and stock-based performance compensation arrangements
are beneficial in aligning management's and shareholders' interests in the
enhancement of shareholder value. Thus, the Committee incorporates these
elements in designing the compensation packages of the Company's executive
officers.
Relationship of Performance Under Compensation Plans. The Company's
compensation policy with respect to executive officers is administered by the
Compensation Committee of the Board of Directors. The two key elements of
this policy are base salary and the Company's Profit Sharing/Bonus Plan.
Each executive officer's annual performance review serves as the basis
for making adjustments to base salary. Individual performance evaluations are
closely tied to achievement of short as well as long term goals and
objectives, individual initiative, level of responsibility and above average
corporate performance. Achievement of targeted versus actual return on
average common shareholders' equity is the principal annual goal.
In addition to the base compensation, the Company has a Profit
Sharing/Bonus Plan (the Plan) to reward executive officers (and all other
employees) for accomplishing annual financial objectives. Specifically, the
Plan is based on achieving budgetary expectations and the total distribution
amount is dependent on the return on average shareholders' equity.
Discretionary adjustments are possible should unforeseen events occur.
Bonuses were paid out to executive officers (other than the Chief Executive
Officer in 1994 and 1993 - see the discussion of Mr. Baxter's 1994
compensation below) over the past three years.
1986 Stock Option Plan. The 1986 Stock Option Plan permits the Stock
Option Committee to grant stock options to key personnel. Options become
exercisable based upon criteria established by the Company. In 1994, the
Compensation Committee granted stock options to various executives. Some of
these executive officers who were granted options in 1994 had been granted
options previously. The Committee believes that the granting of options which
are potentially exercisable for a significant number of shares will create
incentives for the recipients of the options to generate potential gains by
working to steadily increase the common stock's price over the long term. If
the 1995 Stock Option Plan is approved by Shareholders at the 1995 Annual
Meeting, no further options are expected to be issued under the 1986 Plan,
other than options anticipated to be issued in connection with the affiliation
of Orange Savings Bank with the Company.
1995 Stock Option Plan. If approved at the Annual Meeting, the 1995
Stock Option Plan will permit the Stock Option Committee to grant stock
options to key personnel, including non-employee directors. For a further
discussion of the 1995 Stock Option Plan, See "III--RATIFICATION OF 1995
STOCK OPTION PLAN".
Other Compensation Plans. At various times in the past the Company has
adopted certain broad based employee benefit plans in which senior executives
are permitted to participate on the same terms as non-executive employees who
meet applicable eligibility criteria, subject to any legal limitations on the
amounts that may be contributed or the benefits that may be payable under the
plans.
The incremental cost to the Company for executive officers' benefits
provided under the foregoing additional plans equals approximately 26.3
percent of their salaries, which is the same for non-executive employees.
Mr. Baxter's 1994 Compensation. The Compensation Committee's general
approach in setting Mr. Baxter's target annual compensation is to seek to be
competitive with other companies in the Company's industry and to have his
compensation based upon objective long-term performance criteria. The
Committee believes that its objective provides the appropriate incentive for
achieving the Company's long-term goals, while acknowledging the importance to
Mr. Baxter of his having some certainty in the level of his compensation
through elements not directly related to performance.
The compensation of the President is based on a plan approved by the
Compensation Committee of the Board of Directors in 1992 and updated in 1993.
This plan recognizes that the compensation of the President of the Company is
currently below the industry average in similarly sized organizations. The
compensation of the President is to be brought to reasonable comparability
over a five year period, assuming acceptable corporate performance. The base
salary of Mr. Baxter increased 12.05% over 1993, reflecting a move towards the
industry average.
To the extent that the Company's return on average shareholders' equity
exceeds 10%, Mr. Baxter will participate in the Profit Sharing/Bonus Plan.
The Company did not earn such a return in 1994.
Respectfully submitted by:
Peter J. Baxter
Christopher V. Bean
Calvin L. Frink
Eugene E. Gaffey
Elizabeth Sears Hager
Emerson H. O'Brien
The Compensation Committee of the Board of Directors of the Company.
Performance Graph. The following line-graph compares cumulative five-
year shareholder returns on Company common stock on an indexed basis with the
S&P 500 Stock Index and the Keefe Bruyette & Woods New England Savings Bank
Index, based on an initial investment on December 31, 1989 of $100:
INDEX OF TOTAL RETURN (12/31/89=100)
<TABLE>
<CAPTION>
S & P 500 KBW New England CFX Price Plus
DATE INDEX Bank Index Indexed Cumulative Dividends
<C> <C> <C> <C> <C>
12/31/89 100.00 100.00 100.00 $11.109
3/31/90 96.99 91.20 95.99 $10.664
6/30/90 103.05 81.44 87.54 $ 9.726
9/30/90 88.94 57.55 70.31 $ 7.811
12/31/90 96.85 50.16 59.17 $ 6.573
3/31/91 110.83 72.92 86.32 $ 9.590
6/30/91 110.76 63.18 78.22 $ 8.690
9/30/91 116.62 74.23 78.31 $ 8.699
12/31/91 126.27 88.07 85.50 $ 9.499
3/31/92 123.04 115.26 100.19 $11.131
6/30/92 125.31 119.39 106.36 $11.816
9/30/92 129.19 118.37 106.38 $11.818
12/31/92 135.58 154.68 131.50 $14.608
3/31/93 141.40 171.57 160.89 $17.874
6/30/93 141.97 161.74 163.60 $18.175
9/30/93 145.52 209.44 187.26 $20.804
12/31/93 148.79 206.50 201.07 $22.337
3/31/94 143.07 217.21 184.85 $20.536
6/30/94 143.56 255.91 200.62 $22.287
9/30/94 150.45 244.34 212.42 $23.598
12/31/94 149.33 207.88 190.62 $21.177
</TABLE>
Retirement Plan. Employees of the Company and its subsidiaries are
entitled to participate in the CFX Corporation Retirement Plan (the
"Retirement Plan") after attaining the age of twenty-one and completing one
year of service. Under the Retirement Plan, the Company makes periodic
contributions computed on an actuarial basis for the benefit of eligible
employees.
The Retirement Plan provides for monthly benefits to, or on behalf of,
each covered employee following 100% vesting, which occurs on the earlier of
the employee's sixty-fifth birthday or completion of five years of employment
with a minimum of 1,000 hours worked in each year. The Retirement Plan
includes provisions for, among other things, disability benefits, death
benefits, early retirement benefits and deferred retirement benefits. The
amount of an employee's benefit is derived from a formula based on years of
service and regular salary.
The following table illustrates the estimated annual retirement benefits
payable upon retirement at age 65 to persons in specified compensation and
years of service classifications under the Retirement Plan:
<TABLE>
<CAPTION>
Final Years of Service
Compensation 10 15 20 25
<C> <C> <C> <C> <C>
$ 60,000 $ 9,300 $12,300 $14,600 $16,300
80,000 12,900 17,100 20,300 22,700
100,000 16,500 21,900 26,000 29,000
120,000 20,100 26,600 31,600 35,400
140,000 23,600 31,400 37,300 41,800
150,000 25,400 33,800 40,100 45,000
</TABLE>
The various amounts shown above were calculated for an employee
attaining age 65 and retiring on January 1, 1995. Salary increases were
assumed to have been 5.0% annually. Benefits are shown in the form of a life
annuity. Messrs. Baxter and Spiess have seven and eleven years of service
under the Retirement Plan, respectively.
Profit Sharing/Bonus Plan. In February 1989, the Company established
the Cheshire Financial Corporation Profit Sharing/Bonus Plan, now known as the
CFX Corporation Profit Sharing/Bonus Plan (the "Profit Sharing/Bonus Plan").
The Profit Sharing/Bonus Plan provides for a profit sharing bonus to be paid
to employees with at least one year of service contingent upon the Company's
achievement of financial objectives which are updated annually. Profit
sharing bonuses under the Profit Sharing/Bonus Plan are based upon an eligible
employee's salary, performance evaluation and level of responsibility.
Savings Plan. The Company maintains a Section 401(k) savings plan for
employees of the Company and its subsidiaries. Under the plan, the Company
makes a matching contribution of one-third of the amount contributed by each
participating employee, up to 6% of the employee's yearly salary. The
Company's contributions may be paid out of current or retained earnings. The
plan also allows for supplementary profit sharing contributions by the Company
in its discretion for the benefit of participating employees.
1992 Employee Stock Purchase Plan. On April 27, 1992, the Board of
Directors of the Company adopted the Cheshire Financial Corporation 1992
Employee Stock Purchase Plan (the "1992 Stock Purchase Plan") covering a
maximum of 110,000 shares of common stock. The 1992 Stock Purchase Plan was
approved by the shareholders at the annual meeting held on June 24, 1992.
On December 12, 1994, the 1992 Stock Purchase Plan was amended to
provide for annual offerings of common stock to employees. The 1992 Stock
Purchase Plan will terminate five years from the commencement of the initial
offering thereunder unless sooner discontinued or terminated.
Participating employees purchase shares with accumulated payroll
deductions. Each employee of the Company or subsidiary thereof with more than
six months of continuous service is eligible to participate in the 1992 Stock
Purchase Plan, except for certain employees with substantial stock interests
in the Company or with substantial rights to purchase stock accruing under the
1992 Stock Purchase Plan. The Board of Directors of the Company may change
the option price for any offering by increasing the percentage of fair market
value up to 100% or decreasing the percentage to not less than 85%. The
purchase prices of shares of common stock sold pursuant to the 1992 Stock
Purchase Plan to date have been not less than the lesser of (i) 90% of the
fair market value per share on the offering date or (ii) 90% of the fair
market value per share on the date of exercise.
Director Compensation. Each of the Company's directors receives an
annual retainer of $10,000 ($15,000 for the chairman) and receives $500 per
Board meeting attended. In addition, each director receives $400 per
committee meeting attended. Mr. Baxter is not compensated separately as a
director of the Company. Directors, trustees and executive officers of the
Company and its subsidiary are compensated separately by each institution.
Employment Arrangements. The Company entered into an employment
agreement dated as of January 1, 1991 with Peter J. Baxter, which agreement
was amended in November 1991. The term of the agreement is three years with
the term automatically extended for an additional year each year unless either
party elects to limit the agreement to its then existing term. During the
term of the agreement, Mr. Baxter is to be employed as President of the
Company. The agreement provides for a base salary of not less than $135,000,
provided that, in the event such base salary is increased, the base salary
will not be decreased thereafter during the term of the agreement. Under the
agreement, Mr. Baxter will be entitled to participate in compensation or
employee benefit plans adopted for executive employees generally. The
agreement also contains a prohibition against competition with the Company or
its subsidiary in the State of New Hampshire for a period of two years upon
termination. In the event of a change of control followed by either a
termination of employment or a change in authority, the agreement provides for
lump sum or periodic payments to Mr. Baxter equal to an amount such that the
present value of all such payments equals 2.99 times the average annual
compensation received during the five-year period prior to the change in
control and change in authority. At December 31, 1994, this equates to an
aggregate total payment of $486,920. Similarly, the Company entered into an
employment agreement dated September 1, 1993 with Paul D. Spiess. The terms
and conditions of this agreement are similar to that of Mr. Baxter's except
the minimum base salary is $140,000 and the amount payable to him in the event
of his termination following a change of control is 2.00 times the average
annual compensation. At December 31, 1994, this equates to an aggregate total
payment of $291,442. Additionally, CFX Mortgage, Inc. entered into an
employment agreement dated September 1, 1993 with Paul T. Pouliot. The terms
and conditions of this agreement were similar to that of both Messrs. Baxter
and Spiess except the minimum base salary is $100,000 and the change in
control payment is 1.5 times the average annual compensation. At December 31,
1994, this equates to an aggregate total payment of $151,125.
The Company and its subsidiary have entered into change in control
agreements with certain officers and employees. The agreements are
substantially similar to the provisions of Mr. Baxter's employment agreement
dealing with a change in control and a change in authority, with the multiple
of average annual compensation varying as set forth in such agreements. In
connection with the termination of an employment agreement with an executive
of the Bank, the Bank will fund certain continuing deferred compensation
obligations under an agreement through the purchase of life insurance on the
life of this executive.
Transactions with Management. Certain of the directors, trustees and
executive officers of the Company and its subsidiary are at present, as in the
past, customers of the Company's subsidiary and have transactions with the
Company's subsidiary in the ordinary course of business. In addition, such
persons are at present also owners or officers of corporations and business
trusts, or are members of partnerships, which are customers of the Company's
subsidiary and which have transactions, including loans, with the Company's
subsidiary in the ordinary course of business. Such loans are on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with others and do
not involve more than the normal risk of collectibility or present other
unfavorable features. The aggregate amount of such loans was $7,546,000 at
December 31, 1994. The Company's subsidiary expects, in the future, to have
banking transactions in the ordinary course of business with executive
officers, trustees and directors of the Company and its subsidiary, and their
associates, on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with unaffiliated persons.
The Bank obtained legal services during 1994 from Tower, Bean & Crocker,
a law firm with which Christopher V. Bean, a director of the Company, is
associated. The Bank made direct payments to Tower, Bean & Crocker for legal
services and expenses of $29,577 in 1994. In addition, the Bank collected
$87,659 from its customers that was paid to Tower, Bean & Crocker for legal
work performed in connection with real estate mortgage and collections matters
and as reimbursement for transaction costs such as recording fees, filing
fees, and other miscellaneous expenses. The total of these payments exceeded
five percent of the gross revenues of Tower, Bean & Crocker for the year.
The Bank expects to obtain legal services from Tower, Bean & Crocker in
the future.
Richard B. Baybutt, a director of the Company and a trustee of the Bank,
is the President of Baybutt Construction Corp. In 1994, Baybutt Construction
Corp. performed construction improvement projects on a number of the
properties owned or leased by the Company or its subsidiary. The total cost of
the work performed was $177,606.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and with the American Stock
Exchange. Officers and directors are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company and written representations that no additional Forms were required,
the Company believes all of its officers and directors complied with the
Section 16(a) filing requirements applicable to them in 1994.
II. INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Wolf & Company, P.C., ("Wolf &
Company"), independent public accountants, as the auditors for the Company for
the year ending December 31, 1995. At the meeting, the shareholders will vote
upon a proposal to ratify the selection of the firm as auditors.
The financial statements of the Company and its subsidiary for the years
ended December 31, 1994 and December 31, 1993 were audited by Wolf & Company.
Other services rendered during the year 1994 by Wolf & Company included tax
return preparation and tax planning consultations and services to the Company
in connection with filings with the Securities and Exchange Commission ("SEC")
pursuant to section 12 of the Exchange Act. Additionally, Wolf & Company
reported on the financial statements contained in a Registration Statement on
Form S-4 filed pursuant to the Securities Act of 1933, as amended (the "1933
Act") with the SEC in connection with the affiliation of Orange with the
Company. It is expected that representatives of Wolf & Company will be
present at the Annual Meeting of the Company and that they will have an
opportunity to make statements if they so desire and will be available to
respond to appropriate questions.
The financial statements of the Company and its subsidiaries for the
year ended December 31, 1992 were audited by Ernst & Young (now known as Ernst
& Young, LLP). Other services rendered during the year 1992 by Ernst & Young
included tax return preparation and tax planning consultations and services to
the Company in connection with filings with the SEC. The Audit Committee
decided, on January 27, 1993, to recommend to the Board that Wolf & Company be
engaged as the Company's independent auditors for 1993. On March 8, 1993, the
Board of Directors voted to engage Wolf & Company as independent auditors for
the Company for 1993. Ernst & Young was dismissed as the Company's
independent auditors as of such date.
None of the reports of Ernst & Young on the Company's financial
statements for the years 1991 and 1992 contained an adverse opinion or
disclaimer of opinion or was qualified or modified as to uncertainty, audit
scope or accounting principles. During the Company's fiscal years ended
December 3l, 1991 and December 31, 1992 and the interim period from January 1,
1993 to March 8, 1993, there were no disagreements with Ernst & Young on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreement(s), if not resolved to the
satisfaction of Ernst & Young, would have caused it to make a reference to the
subject matter of such disagreement(s) in connection with its report.
An affirmative vote of a majority of the shares of common stock of the
Company represented in person or by proxy at the Annual Meeting is necessary
for ratification of the appointment of Wolf & Company as auditors. The Board
of Directors of the Company recommends that you vote "FOR" ratifying the
selection of Wolf & Company. No determination has been made as to what action
the Board of Directors would take if the shareholders do not ratify the
appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF WOLF & COMPANY AS AUDITORS.
III. 1995 STOCK OPTION PLAN
On December 12, 1994, the Board of Directors of the Company adopted the
CFX Corporation 1995 Stock Option Plan (the "1995 Plan") as a performance
incentive for the directors, officers and other employees of the Company and
its subsidiaries. At the Annual Meeting, the adoption of the 1995 Plan will
be submitted to the Company's shareholders for ratification. The affirmative
vote of the holders of a majority of the shares of stock of the Company
present or represented by proxy at the meeting is required for approval of the
1995 Plan. The Board of Directors recommends that shareholders vote "FOR"
ratification of the adoption of the 1995 Plan. The Board believes that
implementation of the Plan will advance the interests of the Company and its
shareholders by securing for the Company the benefits that flow from providing
directors, officers and employees with the incentives inherent in common stock
ownership.
The 1995 Plan is similar to the 1986 Plan and will be administered by
the Stock Option Committee of the Board of Directors of the Company. A total
of 150,000 shares of Common Stock of the Company will be reserved for issuance
pursuant to the incentive stock options granted under the 1995 Plan and 75,000
shares of Common Stock of the Company will be reserved for issuance pursuant
to non-qualified stock options granted under the 1995 Plan. No options have
yet been granted under the 1995 Plan.
Both "incentive stock options" and "non-qualified stock options" may be
granted pursuant to the 1995 Plan. The Company intends that the "incentive
stock options" granted under the 1995 Plan will qualify under Section 422 of
the Internal Revenue Code. The federal income tax consequences of the
granting and exercise of the stock options are substantially the same to those
of the 1986 Plan.
The 1995 Plan is substantially similar to the 1986 Plan except in the
following respects:
(i) Under the 1995 Plan, incentive stock options may be granted to
both employees and non-employee directors of the Company. Non-employee
directors are not eligible to receive options under the 1986 Plan.
(ii) The 1995 Plan provides that if the market value of stock
covered by incentive stock options (determined as of the date of the
grant) first exercisable by any individual during any one year exceeds
$100,000, the stock options are to be treated in part as incentive stock
options and in part as non-qualified stock options, taking options into
account in the order in which they were granted. Under the 1986 Plan,
no additional options are allowed to be granted if the market value of
stock covered by incentive stock options already granted and first
exercisable during any one year exceeds $100,000.
(iii) All options granted under the 1995 Plan are required to have
an exercise price per share not less than the fair market value of
shares of Common Stock on the date the option is granted. The 1995 Plan
expressly specifies that fair market value for this purpose is the
closing price of the Common Stock on the American Stock Exchange on the
date the option is granted. Under the 1986 Plan, fair market value is
determined by reference to the mean between the highest and lowest
quoted selling prices on such date in the over-the-counter market, as
reported by any market makers in the Stock.
(iv) The 1995 Plan provides that if shares of stock acquired as a
result of the exercise of an incentive stock option are transferred
other than by will or by the laws of descent and distribution before the
later of the expiration of two years from the date the incentive stock
option was granted or one year from the date of the transfer of the
shares pursuant to the exercise of the option, the disposition of the
shares will result in the loss of favorable tax treatment with respect
to the disposition of the option under Section 421(a) of the Internal
Revenue Code. Under the 1986 Plan, any disposition of shares in a
manner inconsistent with the time periods set forth in the preceding
sentence is expressly prohibited, and the stock certificates relating to
such shares contain legends indicating this restriction.
If the 1995 Plan is approved by shareholders, the Company intends
promptly to cause the options issuable pursuant to the 1995 Plan and the
shares of Common Stock issuable upon the exercise of such options to be
registered under the 1933 Act.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE 1995
STOCK OPTION PLAN
IV. ADJOURNMENT OF ANNUAL MEETING TO PERMIT
FURTHER SOLICITATION OF PROXIES
In the event that there are not sufficient votes to approve one or more
of the nominees or proposals presented at the Annual Meeting at the time of
the Annual Meeting, such proposals will not be able to be approved unless the
Annual Meeting is adjourned in order to permit further solicitation of
proxies. A majority vote of the shares represented at the Annual Meeting is
required in order to approve any such adjournment. The Board of Directors
recommends that shareholders vote their proxies in favor of such adjournment
so that their proxies may be used for such purpose in the event it should
become necessary. Properly executed proxies will be voted in favor of such
adjournment unless otherwise indicated thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO PERMIT
FURTHER SOLICITATION OF PROXIES.
V. SHAREHOLDER PROPOSALS
To be included in the Proxy Statement for the next annual meeting,
shareholder proposals must be received by November 19, 1995.
The Company's Articles of Incorporation require shareholders to comply
with certain provisions in nominating persons for election to the Board of
Directors. In general, advance notice of a proposed nomination is required to
be received by the Secretary of the Company not less than 30 days nor more
than 60 days prior to any meeting of the shareholders. The Articles contain
certain other procedures which must be followed in making such nominations.
VI. OTHER MATTERS
Management knows of no other matters to be brought before the meeting.
However, should any other matter requiring a vote of the shareholders properly
come before the meeting, the persons named in the enclosed proxy will vote the
shares represented by the proxies on such matter as determined by a majority
of the Board of Directors.
By Order of the Board of Directors and President
/S/ CHRISTOPHER V. BEAN
CHRISTOPHER V. BEAN
Secretary
PROXY This proxy is solicited by the Board of Directors of PROXY
CFX CORPORATION
Proxy for Annual Meeting of Shareholders - April 19, 1995
The undersigned hereby appoints Peter J. Baxter and Christopher V. Bean,
and either of them, proxies of the undersigned, with full power of
substitution, to vote all the shares of Common Stock and Series A Preferred
Stock of CFX Corporation (the "Company") that the undersigned is entitled to
vote, at the Annual Meeting of shareholders of the Company to be held on
April 19, 1995, and at any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED IN
ITEM 1.
<TABLE>
<S> <S> <S>
ITEM 1. ELECTION OF DIRECTORS FOR The nominees of the Board of ITEM 2. Proposal to ratify the
THREE YEAR TERMS. Directors are: Richard B. Baybutt, appointment of Wolf & Company, P.C.
Christopher V. Bean, Elizabeth Sears as auditors for the calendar year of
FOR all nominees WITHHOLD Hager and L. William Slanetz. 1995.
listed above AUTHORITY (Authority to vote for any nominee
(except as marked to vote for all may be withheld by striking a line FOR AGAINST ABSTAIN
to the contrary) nominees listed through the nominee's name above.) [ ] [ ] [ ]
above
[ ] [ ]
ITEM 3. Proposal to approve and ITEM 4. Proposal to approve ITEM 5. In their discretion, on such
ratify the adoption of the CFX adjournment of the Annual Meeting if other matters as may properly come
Corporation 1995 Stock Option Plan. necessary to permit further before the meeting or adjournment
solicitation of proxies in the event thereof.
that there are insufficient
votes to approve one
or more of the foregoing nominees
or proposals at the time of the
Annual Meeting.
This Proxy will be voted as directed
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN herein. IF NO DIRECTION IS
[ ] [ ] [ ] [ ] [ ] [ ] GIVEN, THIS PROXY WILL BE VOTED FOR THE
NOMINEES LISTED IN PROPOSAL 1, AND FOR
PROPOSALS 2, 3 AND 4. The
undersigned to vote at the annual
meeting or any adjournments thereof.
Dated: _________________________, 1995
______________________________________
______________________________________
Signature(s)
Please sign here personally. If the
stock is registered in more than one
name, each joint owner or fiduciary
should sign personally. Only
authorized officers should sign for
a corporation.
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
[CFX LOGO]
Chairman Gaffey and I encourage you to attend the Annual Meeting of
Shareholders of CFX Corporation being held at the Keene Country Club on April
19, 1995 at 10:00 a.m. The meeting will provide you with the opportunity to
meet with members of the Board of Directors, Senior Management, and other
shareholders of CFX Corporation. During the course of the meeting, we will
provide a financial overview of the Company for 1994 and share our vision for
1995.
We look forward to seeing you there.
Sincerely,
/s/ PETER J. BAXTER
Peter J. Baxter
President and Chief Executive Officer
